Cannabis Business Times and Cannabis Dispensary spoke to several executives at prominent U.S. firms to get their thoughts on performance this year, the prospects of banking reform, social equity and the future of American cannabis after a record-setting first half of 2021.
Growth Persists Despite Legal Uncertainty
Despite an ongoing pandemic and economic uncertainty, American cannabis remains hot. Curaleaf, a leading U.S. multi-state operator (MSO) with more than 100 dispensaries across 23 states, reported a scorching 166% year-over-year increase in revenue for Q2. The company is on track to break $1 billion in sales revenue for the 2021 fiscal year.
Leadership identified the company’s multi-state presence and focus on product quality as drivers of growth.
“Our focus on delivering high quality products that meet the needs and wants of our patients and customers is one of our biggest priorities as Curaleaf continues to scale,” said CEO Joe Bayern in an email to CBT and CD. “We are investing in new form factors based on consumer needs, including new innovations within the vape, concentrate or oral, ready-to-drink beverage and topical categories.”
Smaller firms did just as well. Arizona-based TILT Holdings saw a 33% year-over-year increase in revenue, while Illinois wholesale leader Cresco Labs broke $100 million in quarterly retail sales, a 157.6% increase year-over-year.
Deputies discovered theillegal grows during week one of the county’s “Operation Hammer Strike,” aninvestigation to attack the existing unlawful cannabis cultivation in SanBernardino County.
According to Police 1, 13 search warrants were issued for week one of theinvestigation, and the deputies served at four California cities: Hesperia,Piñon Hills, Phelan and Landers.
Deputies from multiple patrolstations and members of the Marijuana Enforcement Team at the San BernardinoCounty Sheriff's Department conducted the raids Monday through Thursday,according to Police 1. The investigation came after lawenforcement received multiple complaints from residents about outdoor cannabiscultivations in those specific areas.
According to the news outlet,authorities discovered over 10,000 cannabis plants, approximately 1,335 poundsof processed cannabis, more than $30,000 in cash, one electrical bypass, and 39greenhouses.
Officials arrested and cited12 individuals for “suspicion of cultivation of cannabis over California'ssix-plant maximum,” Police 1 reported.]]>
According to Kezi 9 News, the DINT discovered an estimated $50 millionworth of illegal cannabis at a facility operating under the disguise of a legalhemp operation.
Law enforcement did not findany hemp plants on the property but uncovered approximately 150 greenhousescontaining nearly 50,000 cannabis plants, the news outlet reported.
Several vehicles, tents, twoRV’s and two swimming pools were found on the premises. The pools were used tohold water tanks, which were being fed by water pumps from a nearbycreek, Kezi 9 News reported. The property was also reportedto be filled with trash, containers, fertilizers and even human waste.
Upon the arrival of theinvestigation, several workers fled the location, but the operation"manager" was quickly identified, Kezi 9 News reported.The 44-year-old man was charged with Unlawful Possession and UnlawfulManufacture of Marijuana and placed in the Douglas County jail.
At this time, theinvestigation is ongoing and additional charges may be pending, accordingto Kezi 9 News.
The decision aims to rectify a “clerical oversight” slipup on data entry that wrongfully excluded applicants from a three-part lottery process that awarded 185 retail licenses—110 social equity licenses were allocated between a pair of lotteries held July 29 and Aug. 5, while 75 licenses for businesses with the top application scores was held Aug. 19.
Unless nullified in court, the results from those original three lotteries are final, according to a statement the Illinois Department of Financial and Professional Regulation (IDFPR) released Sept. 3.
“Any such licenses [from a corrective lottery] will be in addition to any licenses awarded based on the original lotteries,” the IDFPR release stated. “Thus, unless a court rules otherwise, the department does not intend to alter or change the results of the original lotteries when it conducts the corrective lotteries, but instead intends to award additional licenses where necessary to redress errors that resulted in the improper exclusion of applicant entries in the three original lotteries.”
Nonetheless, IDFPR cannot issue those 185 licenses unless Cook County Circuit Judge Moshe Jacobius lifts a standing court order blocking the rollout. During an Aug. 16 hearing, Jacobius said there was a possibility the state would have to redo its entire lottery process.
Also in that hearing, Jacobius ruled that WAH Group LLC was one of the unfairly excluded applicants from the first lottery held July 29. WAH Group originally filed a suit with HAAAYY LCC, but those two applicants now intend to file amended complaints that represent their separate allegations against the lottery process, according to the Chicago Sun Times.
“We have licensed 57 investors for medicinal cannabis production from Germany, Switzerland, Canada and as well some local players,” the agency told the news outlet. “Companies have been licensed for cultivation and processing of medicinal cannabis and they own 100% of their investment.”
ZIDA indicated that cannabis production has launched at some of the licensed farms already, according to Bloomberg. The agency is working with the Ministry of Lands and the Medicines Control Authority of Zimbabwe to ensure quality in seed imports.
Zimbabwe legalized medical cannabis in 2018, and the Treasury forecasts that cannabis sales will reach $1.25 billion this year, Bloomberg reported.
At the same time, as Marijuana Moment reported, the Mexican legislature plans to address the recurring question of cannabis legalization in that country—one that holds the potential for the world’s largest cannabis market.
In both cases, the promise is real. This means big business—and, more importantly, great reforms in civil rights and criminal justice.
These headlines also serve as a reminder that cannabis won’t remain a series of fragmented markets for too much longer. U.S. legalization is being bandied about, of course, and business owners will one day need to reckon with the broader supply and demand curves outside their relatively small corner of the global industry.
What does that mean?
It’s hard to say, but it does mean that everyone in the business should keep an eye on the horizon. The cannabis industry is only getting bigger. There’s plenty of room for everyone who feels a calling to this plant, and it will surely remain an industry in which the important of listening to one another cannot be overstated.
The Washington State Liquor and Cannabis Board (LCB) stated in a press release that the governor has reinstated these allowances for health and safety reasons.
According to the press release, allowances reactivated for cannabis retailers include curbside services, retail walk-up windows and the distribution of hand sanitizers and masks in-store.
The LCB is also temporarily relaxing its current restrictions on minors and is allowing children under 16 years old to be on licensed premises under three specific conditions:The person under 16 years of age is a child or grandchild of the licensee,The person under 16 years of age is not engaging in any work or act of employment for the licensed business,The person under 16 years of age does not possess any products associated with the production, processing, or sales of marijuana.
All allowances are effective immediately until Oct. 31, and LCB plans to revisit all regulations at the end of October to determine if they need to be extended.]]>
Learn Sativa University's (SATU) hands-on program has been in operation for roughly four years. The university started in a 1,000-square-foot building, but has recently expanded to a 5-acre cannabis farm and training facility in Apopka, Fla., said Patrick O'Brien, SATU founder and CEO.
The primary purpose of the college is pretty "straightforward," O'Brien said.
"We aim towards two paths, and we're looking for two types of individuals: either ones looking to land rewarding careers in the industry, or individuals looking to start businesses. Whether it be in cultivation, dispensary, or anything along those lines, we can assist with business plans, curriculum and everything from top to bottom," he said.
He said that the campus features an indoor climate-controlled grow and a 50,000-square-feet outdoor greenhouse where students can learn through hands-on training. The college also offers online training for those who cannot attend in person.
SATU's hands-on and online courses include Marijuana Cookbook, Marijuana Laws, Marijuana Careers, Marijuana History, Marijuana Growing and Dispensary Management.
CHICAGO – September 3, 2021 — PRESS RELEASE — Cresco Labs Inc., a vertically integrated multistate operator and a U.S. wholesaler of branded cannabis products, has announced the closing of the company’s previously announced acquisition of Cultivate.
Transaction HighlightsApproximately 42,000 square feet of active flowering canopy, bringing combined canopy in-state to approximately 64,000 square feet. The transaction also includes space available to further expand cultivation capacity.Three operational dispensaries located in Leicester, Framingham and Worcester, bringing combined retail storefronts in-state to four. Concurrent with closing, the company’s Fall River retail location has transitioned to medical sales only. Greater operating platform to pursue market share growth in the largest adult-use cannabis market in the northeast. The Massachusetts’ market structure offers a unique opportunity to wholesalers given limited cultivation licenses, robust pricing, and abundant retail stores throughout the state.
“The closing today constitutes another important step for Cresco Labs as we deepen our presence in large, attractive states like Massachusetts and increasingly tailor and strengthen our state-level strategies to optimize growth and profitability. Expanding operations in the most strategic U.S. cannabis markets is at the heart of our growth strategy and we’re thrilled to have the opportunity to show what can be achieved through a maximized footprint in Massachusetts,” said Charlie Bachtell, CEO and co-founder of Cresco Labs. “We have been thoroughly impressed with the Cultivate team and the quality of their operations. We look forward to a productive and efficient integration process to carry their historical strong momentum into the fourth quarter and beyond.”
DENVER (Sept. 2, 2021) – PRESS RELEASE – Wana Brands, an edibles manufacturer, is partnering with Medicine Man dispensaries along with CDPHE to host COVID-19 vaccination clinics throughout the Denver metro area during Summer of Quick Tour’s September stops.
“We are excited to partner with Wana and the CDPHE to host mobile vaccination events at every Medicine Man store,” said Sally Vander Veer, co-owner and CEO of Medicine Man. “The cannabis industry has a lot to be grateful for. As a business lucky enough to have been deemed essential, we feel a social responsibility to do our part by spreading awareness and making the vaccine easily accessible. It’s simply the right thing to do.”
Wana Brands’ partnership with CDPHE and Medicine Man is part of the ongoing effort to make vaccination an easy, convenient option while increasing the state’s vaccination rate to protect against further outbreaks and deaths.
“While summer is winding down, the Delta variant is gearing up. It is more necessary than ever to provide access to the COVID-19 vaccine,” said Nancy Whiteman, CEO of Wana Brands. “We are using the launch of Wana Quick as a call to action to support issues important to the communities we serve, and we cannot think of a more important issue than protection against the coronavirus. We are grateful for the partnership with Medicine Man and the tireless public servants at Colorado’s health department, without whose help this effort would not be possible.”
November 2021 marks three years since adult-use cannabis sales launched in 2018, and already, the state’s dispensaries have reported more than $2 billion in sales.
The state’s seed-to-sale tracking system showed $2,009,007,478 in gross sales at the close of business Aug. 31, according to a MassLive.com report.
“This milestone speaks to the success of licensees that have interacted with the Commission from the application stage, maintained compliance with our strict regulations, and contribute every day to communities across the Commonwealth,” Cannabis Control Commission Executive Director Shawn Collins told the news outlet. “This number also underscores the entire agency’s tireless efforts, particularly those of our hardworking staff, to thoughtfully regulate a safe, accessible and effective adult-use marketplace that keeps critical tenets of our mission—public health, public safety and equity, among others—front of mind.”
The state currently has 165 adult-use retailers, as well as three delivery services, MassLive.com reported.
During the first year of adult-use sales, from November 2018 through November 2019, the state had 33 operational dispensaries that generated $393.7 million in sales, according to the news outlet. The state’s retailers reached $1 billion in sales in November 2020, despite being shut down for roughly three months at the beginning of the COVID-19 pandemic.
OTTAWA and TORONTO, Sept. 01, 2021 (GLOBE NEWSWIRE) -- PRESS RELEASE -- HEXO Corp. and 48North Cannabis Corp. have announced that they have completed the previously announced arrangement, pursuant to which HEXO has acquired all of the issued and outstanding common shares of 48North by way of a court-approved plan of arrangement under the Canada Business Corporations Act.
Under the terms of the arrangement, each former shareholder of 48North is now entitled to receive 0.02366 of a common share in the capital of HEXO for each 48North Share held immediately prior to the completion of the arrangement. It is anticipated that the 48North Shares will be de-listed from the TSX Venture Exchange as of the close of trading on or about Sept. 2, 2021.
In order to receive the consideration, registered holders of 48North Shares will be required to deposit their share certificate(s) representing 48North Shares, together with a duly completed letter of transmittal, with TSX Trust Company, the depositary under the arrangement. Shareholders whose 48North Shares are registered in the name of a broker, dealer, bank, trust company or other nominee should contact their nominee regarding the receipt of the consideration.
Further information about the arrangement is set forth in the materials prepared by 48North in respect of the special meeting of 48North shareholders held on Aug. 17, 2021, which were mailed to 48North shareholders and filed under 48North's profile on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
A panel of South Dakota lawmakers recommended Aug. 1 that the state Legislature should prohibit patients from growing medical cannabis at home.
Initiated Measure 26, which voters approved in the November 2020 election to legalize medical cannabis in the state, included language to allow registered patients to grow a minimum of three plants at home, according to a KELO report.
However, the South Dakota Legislature’s Medical Marijuana Subcommittee voted 6-4 to recommend a ban on home cultivation, the news outlet reported. Now, the issue will go before the full Marijuana Study Committee, which is made up of eight senators and 16 representatives.
Any changes to Initiated Measure 26 that are ultimately approved by the committee will also need passed by the state Legislature, which has largely resisted making changes to the voter-approved initiative, according to an Argus Leader report.
“I don't think they have the votes to get anything like that done in the long run," Sen. Mike Rohl (R-Aberdeen) told the news outlet.
"Our goal across our footprint is to develop scale and meaningful presence in each of our markets," said Jonathan Sandelman, Ayr Wellness founder, chairman and CEO. "[This] announcement builds on our already strong position in Pennsylvania, where we have built a tremendous foundation since entering the state just a few months ago. Our three Ayr Wellness stores, open an average of less than six months, are run-rating at over $7 million in annualized revenue per dispensary, and our cultivation facilities are producing some of the best-reviewed flower in the state."
"With such great momentum in this market, we are expanding our retail presence with the acquisition of PA Naturals, a three-store operation in central Pennsylvania with some of the best-operating metrics in the state and a complementary footprint to our existing six licenses. We look forward to welcoming the great people of PA Naturals to the Ayr team," he concluded.
PA Naturals has locations in the college towns of Bloomsburg and State College, as well as Selinsgrove, PA, and operates under the retail banner "Nature's Medicine." The acquisition is expected to close in Q4 2021, and the Company expects to rebrand the dispensaries under the AYR Wellness banner shortly after completing.
Ayr intends to purchase 100% of the membership interests of PA Natural. The transaction terms include upfront consideration of $80 million, made up of $20 million in stock, $25 million in seller notes and $35 million in cash. An earn-out of up to $40 million, based on 2021 EBITDA hurdles, is payable in Q1 2022 and includes a maximum additional cash payment of $10 million, with the remainder paid in stock and notes.
The acquisition is subject to customary closing conditions and regulatory approvals. Operations of PA Naturals will remain unchanged pending the closing.]]>
Panama has become the first Central American country to legalize medical cannabis.
The nation’s 44-member national assembly unanimously approved legislation Aug. 30 to legalize and regulate the medical use of the drug, according to a Reuters report.
The bill, which Assembly President Crispiano Adames lauded as “innovative,” would allow registered patients with certain medical conditions to access cannabis for treatment, the news outlet reported. It also paves the ways for additional cannabis research in the country.
With the assembly’s approval, the legislation now awaits President Laurentino Cortizo’s signature.
The Company's Class A common stock "Greenlane Shares" will continue to trade on the Nasdaq Global Market under the ticker symbol "GNLN." Each KushCo stockholder is entitled to receive 0.3016 of a Greenlane Share for each share of KushCo common stock held on Aug. 31, the transaction's effective date. Holders of Greenlane Shares before the transaction completion will continue to hold their Greenlane Shares with no adjustment as a result of the transaction.
KushCo's common stock has ceased trading on the OTCQX effective as of the close of trading on Aug. 31.
"I am proud to announce the successful closing of our transformative merger and would like to thank our combined teams for all of their hard work over the past few months," said Nick Kovacevich, Greenlane chief executive officer. "As we turn the page to an exciting new chapter as Greenlane, I am more confident than ever in our ability to build the industry's leading ancillary cannabis company by leveraging our size, scale, strategy, and talent to take advantage of the significant growth opportunities that lie ahead. The substantial progress both companies have made in our combined 26 years of history positions us at the forefront of a rapidly evolving landscape. I look forward to the road ahead with our new colleagues and am excited to report our continued progress in the months and years to come."
"I am thrilled by the strong support our customers, employees, and shareholders have shown for this transformative merger and excited to welcome Nick and our new colleagues to the Greenlane team," said Aaron LoCascio, Greenland co-founder and president. "I am convinced that together we will continue to drive innovation and build the industry's leading ancillary cannabis company that is incredibly well positioned to provide both exceptional service to our customers and create long term value for our shareholders."
Hochul nominated former Drug Policy Alliance staffer Chris Alexander for executive director of the new Office of Cannabis Management (OCM) and former New York Assemblywoman Tremaine Wright for chair of the Cannabis Control Board (CCB) during a special legislative session that convened Sept. 1.
Established within New York’s Division of Alcoholic Beverage Control, the OCM will operate as an independent entity with exclusive jurisdiction to oversee not only the adult-use cannabis regulatory structure but also the state’s existing medical cannabis and hemp programs. The five-member CCB will govern the office.
Hours after Hochul announced her picks to head the OCM and CCB, the Senate confirmed her appointees. Now, after months of being stalled, MRTA’s authoritative arm is free to move forward with oversight infrastructure for licensure, cultivation, production, distribution, sale and taxation.
Drug Policy Alliance Executive Director Kassandra Frederique said in a statement she applauded the nominations.
The Michigan Regulatory Agency (MRA) released 116 pages of proposed rules Aug. 30 that would create new license types and reduce licensing fees for the industry.
The new regulations would establish an educational research license to allow educators and researchers to grow and purchase state-licensed cannabis for use in studies.
The proposed rules would also create a new class A microbusiness license to expand the state’s current microbusiness license type, which is meant for smaller, vertically integrated businesses. Only seven cannabis microbusiness licenses have been issued since 2019, according to an MLive.com report.
The new microbusiness license would increase the number of plants that businesses can grow from 150 to 300, and allows licensees to purchase edibles or concentrates from licensed processors. In-house processing would be prohibited under the new license, according to MLive.com.
At this time, it remains unclear when adult-use sales will begin in the state; however, the approved regulations lay out the requirements for those looking to apply for a New Jersey cannabis license.
The CRC will issue licenses for cannabis retailers, manufacturers, distributors, wholesalers, cultivators and delivery services, according to the rules. During two years after Feb. 22, 2021, the CRC will not approve more than 37 cultivation licenses—excluding microbusinesses and expanded alternative treatment centers (ATCs)—however, the CRC may accept and review additional licenses during that time, as long as the issued license number does not exceed 37.
After 24 months, the CRC will review current cultivation license holders, accept new applications, and issue new licenses to meet market demands, according to the rules.
Priority applicants include diversely owned businesses, social equity businesses and impact zone businesses.
Applicants with 50% or more ownership from someone who was previously convicted of a cannabis offense, has lived in a economically disadvantaged area for five years or makes 80% or less of the average median household income are considered part of the social equity business category.