MjLink Cannabis Business News and Press

PRESS RELEASE - The Organically Grown Cannabis (OG) standard by the Cannabis Certification Council (CCC) has now reached the critical public phase.

With the support of the OGC Technical Advisory Committee, the CCC has now made the first draft of the OGC standard available for public review and comment. The draft standard is available via request and via the website. The OG standard is designed as the baseline organic standard for legal commercial cannabis producers around the world. In addition to the standard itself, the Council is developing a unique seal that consumers will be able to easily identify in retail environments and that will deter fraud in the marketplace.

“The OG seal will be the first of its kind in the cannabis marketplace, offering consumers heretofore unprecedented transparency and assurance about the quality and origin of their product,” said Rudy Ellenbogen, CEO of Whole Grow and Technical Advisory Committee member.

The comment period will remain open for six weeks, at which point all comments will be reviewed and considered for publication in the final version of the OG standard, expected to be published this October. Public review and input before completion of a standard is protocol in the creation of any meaningful certification. Six weeks is ample time for thorough public consideration and feedback.

“The CCC is dedicated to educating both the industry and consumers about clean, sustainable production and this milestone in the development of the OG standard is a great benchmark of our success. Organic demand outpaces supply and there’s no reason to believe the same won’t be true in cannabis,” said Amy Andrle, CCC board member and owner of L’Eagle Services, a vertically integrated cannabis company in Denver, Colo.

The Food and Drug Administration (FDA) is moving forward with plans to understand and oversee the booming CBD industry. A new call for bids is seeking a contractor to collect and assess samples of products containing CBD and other cannabinnoids (outside of the state-legal cannabis market.) The news was first reported by Marijuana Moment. 

“The purpose of these studies will be to develop a better understanding of the quantities of CBD and associated cannabinoids and their distribution,” according to the FDA. See the full document below.

All year, the hemp and CBD industry has awaited word from the FDA on what sort of rules might govern the production and manufacturing of these products (CBD-infused beverages and food, balms, tinctures and more). Last month, the administration submitted a draft enforcement policy to the White House. It’s unclear what the document lays out for the industry.

“My best guess is they’re going to give some guidance that will take immediate effect, and then discuss the plans for the regulatory process, which would probably take a few years,” Jonathan Miller, general counsel for U.S. Hemp Roundtable, told Hemp Grower. “But we’re grasping at straws here, because even some of our most powerful friends on the Hill haven’t seen this. We’re just holding our breath.”

This new request for a contractor to come in and collect CBD samples represents a more concrete structure for FDA research into the very questions the administration is trying to answer. How is CBD consumed? What does the market look like before firm federal regulation? How should CBD and other cannabinoids be understood as ingredients in food and drugs?

Tommy Chong’s place in the cannabis culture is legendary. Indeed, “Cheech & Chong’s Up In Smoke” was the piece that introduced many to the friendlier, less “Reefer Madness”-y side of the plant. After making the Cheech & Chong brand synonymous with cannabis, both figuratively and literally, Chong is turning his attention to selling the product that helped him find fame.

In this interview, Chong explains why he and his partners, Five Point Holdings, chose to focus their first launches in five states, details his day-to-day involvement in the business, and reveals which Beatle he has yet to get high with.

[Editor's note: This interview has been edited for length, style and clarity.]

Brian MacIver: How long have you been wanting to launch a dispensary line and why did you feel that now was the right time to jump into the dispensary business?

Tommy Chong: Well, legalization kind of took everybody by surprise, ‘cause we'd been sort of groomed to that black market thing, and everything was set up for the black market and that market was booming. All of a sudden, it's a [legal] business. So right away the get-rich-quick schemers raised all kinds of money with bogus brands. They [had] no plan. All they [wanted] to do is raise money and that's what they [did].

So we've been taking our time—just relax, no rush. We turned down a lot of fly-by-night deals because it wasn't right. We're doing it right where we're starting slow and small, we're owning the business. There's no debt involved in our offerings. We're going to grow slow, but we're going to grow steady. And now we have a chance to become, really, the biggest marijuana retail outlet in the world—at least the most recognizable, for sure.

We got really good people spearheading our drive to get our pot shops up and running. And it looks like we're going to have one in San Francisco and one in L.A.

U.S. District Judge Nancy Torreson ruled Aug. 14 that Portland, Maine, cannot prioritize local cannabis businesses in its adult-use licensing process, according to a Bangor Daily News report.

Wellness Connection of Maine, which operates dispensaries in Portland, Brewer, South Portland and Gardiner, along with its Delaware-based investor, High Street Capital Partners, filed a civil lawsuit in U.S. District Court in June, alleging that Portland’s cannabis ordinance, which offers a residency bonus for license applicants who have lived in Maine for at least four years, is “unconstitutional” and “discriminatory” to non-local businesses.

Torreson sided with Wellness Connection in her decision, which determined that there was “sufficient threat” that Wellness Connection would be at a disadvantage when competing for adult-use dispensary licenses in Portland, Bangor Daily News reported.

Maine’s Office of Marijuana Policy announced Aug. 14 that the state’s adult-use cannabis sales can launch Oct. 9, nearly four years after Maine voters approved legalization in 2016.

The list for pesticides that can be used on cannabis without being a violation of the Pesticide Applicators' Act has been updated. Please note the following products have been added:

Captain Jack's Neem Oil Ready to UseHeligenMagic Flower Bud Finisher & Pest ControlPride Lands DefenseProtection PlusSeican

To view the updated list, click here for a pdf or click here for an Excel form. For questions regarding this change, contact Laura Quakenbush at (303) 869-9060 or email [email protected].

The Colorado Department of Agriculture (CDA) is currently reviewing pesticide labels upon request and maintaining a list of products whose label it has reviewed that it believes could be used on marijuana without violating 35-10-117(1)(i), as long as the applicator follows the label directions.

Please be sure to review the list; pesticide products may be removed from the allowed products list if the registrant has not renewed their pesticide product with the Department. Use of unregistered pesticides on cannabis would be a violation of the Pesticide Applicators' Act.

Stay Informed

AUGUSTA – PRESS RELEASE – On Friday, Aug. 14, the Office of Marijuana Policy, a part of the Maine Department of Administrative and Financial Services, unveiled plans for the issuance of Maine’s first active licenses for adult use marijuana establishments. The Office intends to issue the first active licenses to recreational cannabis businesses on Tuesday, Sept. 8, 2020. Retail sales of adult use marijuana to consumers 21 years of age or older will be permitted starting on Friday, Oct. 9, 2020.

The issuance of active licenses will continue the Office of Marijuana Policy’s structured rollout of Maine's nascent adult use industry, which had been indefinitely postponed in April in response to the COVID-19 pandemic.

“The public’s health and safety are at the forefront of every decision we make at the Office of Marijuana Policy,” said OMP Director Erik Gundersen. “While we were poised to launch this new industry earlier this year, we were unwilling to sacrifice the high standards we have set for this program by launching during an emerging public health pandemic and in the absence of a testing facility. With the support of the public health community, municipalities across the state, and the industry we regulate, we have used the last few months to ensure this new industry is introduced to Maine consumers in a manner that is as responsible as possible.”

Active licensure is the culmination of a three-step application process which also includes conditional licensure and local authorization, respectively. An active license is required for adult use establishments to come into possession, process and sell adult use marijuana, including initiating plant transfers from Maine’s existing medical marijuana program.

It is expected adult use licensees will utilize the time between active licensure and Maine’s retail sales launch date to harvest and process marijuana, ensure those products satisfy the mandatory testing requirements, and move product through the supply chain to stock retail store shelves. Additionally, businesses which will conduct retail sales will prepare to implement and support social distancing and other public health guidance at a time when public interest may attract a significant consumer presence to their retail locations.

This week, adult-use cannabis legalization measures officially qualified for the ballots in Arizona and Montana, sending the issue before voters this November. Elsewhere, in Vermont, lawmakers appear poised to consider legislation to legalize cannabis sales during an upcoming budget session.

Here, we’ve rounded up the 10 headlines you need to know before this week is over.

Michigan: The Michigan Regulatory Agency has issued a recall for nearly 3,200 pre-rolls processed in a Bay City facility after a processing plant employee was accused of licking the product. The recall includes various brands, and the affected pre-rolls were sold through medical and adult-use retailers in Bay City, Hazel Park, Detroit, Traverse City, Ann Arbor, Lansing, River Rouge, Ferndale, Quincy, Lowell, Negaunee and Lapeer between June and Aug. 3. Read moreArizona: Maricopa County Superior Court Judge James Smith has rejected claims that the 100-word summary on an initiative to place an adult-use cannabis legalization measure on Arizona’s 2020 ballot was misleading, meaning the issue can be placed before voters this November.  Arizonans for Responsible Drug Policy filed a lawsuit last month to keep the measure off the state’s ballot, claiming that the initiative’s description misled people into signing the petition to put the issue before voters this fall through its definition of “marijuana” and how the law might impact impaired driving in the state. Read moreOklahoma: The Oklahoma Medical Marijuana Authority (OMMA) has appointed a new director as former director Travis Kirkpatrick was recently named deputy commissioner of prevention and preparedness at the Oklahoma State Department of Health. Kirkpatrick, who will oversee the OMMA from his new position, chose Kelly Williams as the OMMA’s new director. Read moreOhio: The state’s medical cannabis sales have reached $100 million so far this year, doubling the sales figures from last year, the program’s first year in operation. As of July 20, the state’s licensed dispensaries had sold more than $156 million worth of cannabis products since the first sales launched in January 2019, an increase from the cumulative $56 million in sales as of December. Read moreCalifornia: A long-running dispute between a slate of California cities and the state itself landed in trial Aug. 6, with a Superior Court judge seeming to underscore that state law will prevail over local rule. At issue: whether cannabis delivery services may operate in jurisdictions that have otherwise banned commercial cannabis activity. Read moreMassachusetts: The state’s updated medical cannabis regulations allow caregivers to support more patients, but the new rules sparked controversy among industry stakeholders at a public hearing last week. At an Aug. 3 hearing, officials from the Massachusetts Patient Advocacy Alliance (MPAA) voiced opposition to the Cannabis Control Commission’s new rules, which would allow caregivers to support up to 10 medical cannabis patients each. Read morePennsylvania: The state’s Medical Marijuana Advisory Board held a virtual meeting this week to discuss permanently adopting temporary regulations that were established earlier this year in response to the COVID-19 pandemic. The possible changes include allowing dispensaries to permanently provide curbside service to deliver medical cannabis to vehicles, as well as removing a rule that one caregiver may only support a maximum of five patients. Read moreIllinois: The Department of Financial and Professional Regulation has established a tiebreaker process for awarding 75 conditional adult-use cannabis dispensary licenses. The permanent rules were filed in June and approved by a legislative rules committee this week, which will allow the state to issue the conditional licenses in the coming weeks. Read moreVermont: Lawmakers are hoping to consider legislation to legalize adult-use cannabis sales in a budget session that begins Aug. 25. Earlier this year, both the House and Senate approved versions of a bill that would establish a taxed-and-regulated system for legal cannabis sales, but both chambers had to work out the differences in their legislation before sending a final bill to Gov. Phil Scott, an effort that was derailed by the COVID-19 pandemic. Read moreMontana: The Secretary of State has certified an adult-use cannabis legalization measure for the state’s November ballot, verifying that New Approach Montana’s two complementary initiatives have gathered enough signatures to appear before voters this year. Statutory Initiative 190 would establish a system to regulate and tax cannabis for adult use, and Constitutional Initiative 118 would authorize the state to set the legal age for consumption at 21. Read more

SACRAMENTO – PRESS RELEASE – The Bureau of Cannabis Control (Bureau) announced today that the Cannabis Advisory Committee will hold a two-day virtual meeting on Thursday, August 20 and Friday, August 21, 2020. The focal point of the meeting will be to discuss and provide recommendations for consolidating the three licensing authorities regulations into one comprehensive set of regulations applicable to California’s cannabis industry. 

The agenda for these meetings can be found on to the Bureau’s website at the following link: https://bcc.ca.gov/about_us/meetings/agendas/2020082021_cac.pdf 

WEBEX INFORMATION: Those looking to participate in this meeting and provide public comment can join the WebEx meeting by following the instructions posted here - https://bcc.ca.gov/about_us/meetings/materials/webex_howto.pdf 

This information will be used as part of the process for the plan announced by Governor Newsom in January to establish one Department of Cannabis Control to serve as the regulator for the cannabis industry and as the single point of contact for licensees and local governments.  

The Cannabis Advisory Committee advises the Bureau, the California Department of Food and Agriculture, and the California Department of Public Health on the development of regulations that help protect public health and safety and do not perpetuate the illegal market for cannabis. 

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The Montana Secretary of State has certified an adult-use cannabis legalization measure for the state’s November ballot, verifying that New Approach Montana’s two complementary initiatives have gathered enough signatures to appear before voters this year, according to a Great Falls Tribune report.

Statutory Initiative 190 would establish a system to regulate and tax cannabis for adult use, and Constitutional Initiative 118 would authorize the state to set the legal age for consumption at 21.

New Approach Montana gathered more than 50,000 signatures for the statutory initiative and more than 80,000 signatures for the constitutional initiative, and submitted the signatures for certification in June, Great Falls Tribune reported.

RELATED: Montana Legalization Campaign Looks Ahead to November Ballot Issue

The Governor’s Office of Budget and Program Planning has estimated that, if passed, the measure could generate $3.5 million in tax revenue in fiscal year 2022, with the market growing to $38.5 million in 2025, according to the news outlet.

When Kelly Perez and Courtney Mathis launched their consulting company, kindColorado, six years ago to help cannabis companies build social responsibility and social equity programs, they quickly realized that more was needed to advance the equity and racial justice conversation in the industry.

Through working with businesses to build their community engagement programs, Perez and Mathis were able to slowly introduce discussions about ways to more directly address equity. Then, two years ago, the duo went a step further to launch Cannabis Doing Good, a separate company dedicated to helping cannabis businesses craft their own unique approaches to racial justice, sustainability and social responsibility.

The goal is threefold, Mathis says. First, Cannabis Doing Good aims to build a network of purpose-driven companies through the launch of a membership program and a consumer-facing business directory.

“For example, if you’re in Illinois and you’re looking to shop a black-owned business, women-owned business or a LGBTQA business, you can do that,” she says. “If you’re looking for a brand that has sustainable packaging or you’re looking for a brand that contributes to your local food bank, you can find companies in our purpose-driven business directory [and] use your dollars to support them.”

The second goal, Mathis says, is to showcase companies that are supporting equity through a Cannabis Doing Good awards program.

When they transported her from one prison to another, the officers shackled her around her wrists, waist and feet. Evelyn LaChapelle shuffled in half steps.

“You're in the middle of a runway with no one else, with the world not even knowing you're there. They don't even allow you to tell your family ahead of time, like, ‘Hey, I'm being transported today,’” said LaChapelle, who served prison time for a non-violent cannabis offense. “So, I'm … getting on an unmarked plane … and we're getting moved like cattle.”

Prison wasn’t exactly what she expected. She didn’t constantly fear getting stabbed or killed, as many inmates in other lockups do. But she cried early on when she realized what her diet would consist of: meat sticks mixed in ramen noodles. The outlook was grim. “Surviving is almost null and void in there,” she said.

LaChapelle served four years of her seven-year sentence for depositing profits from an illicit cannabis operation into her bank account. She was released Feb. 1, 2019, and given four years’ probation. She now works as an event planner, as she did prior to her time in prison.

LaChapelle is an adviser with the Last Prisoner Project (LPP), a nonprofit founded by Steve and Andrew DeAngelo and Dean Raise. In that role, she shares her story, brings awareness to the issue of people being incarcerated for cannabis and promotes the work of LPP.

Registered as a 501(c)(3) in 2019, LPP’s mission is to free the approximately 40,000 prisoners incarcerated for non-violent cannabis offenses in the U.S, with the help of individuals, organizations and the cannabis industry. Its team engages in multiple initiatives, such as lobbying and gathering petition signatures to convince government to release prisoners, and seal and expunge their records; and setting up scholarships for inmates and their family members.” LPP refers to the prisoners it works with as “constituents.”

Vermont lawmakers are hoping to consider legislation to legalize adult-use cannabis sales in a budget session that begins Aug. 25, according to a Seven Days report.

Earlier this year, both the House and Senate approved versions of a bill that would establish a taxed-and-regulated system for legal cannabis sales, but both chambers had to work out the differences in their legislation before sending a final bill to Gov. Phil Scott.

RELATED: Vermont Legislature Getting Close to Legalizing a Tax-and-Regulate Adult-Use Cannabis Market

The COVID-19 pandemic largely derailed lawmakers’ efforts to finalize their proposal, Seven Days reported, but now, ahead of the upcoming budget session, some legislators are looking to legal cannabis sales to aid Vermont’s economic recovery.

Lawmakers have until the end of September to finalize the state’s spending plan, and if legal cannabis sales are ultimately excluded from the proposal, the legislature would have to restart the process to establish a taxed-and-regulated cannabis market next year, according to Seven Days.

The Illinois Department of Financial and Professional Regulation has established a tiebreaker process for awarding 75 conditional adult-use cannabis dispensary licenses, according to a Daily Herald report.

The permanent rules were filed in June and approved by a legislative rules committee Aug. 11, the news outlet reported, which will allow the state to issue the conditional licenses in the coming weeks.

Illinois’ adult-use cannabis law mandates that dispensary applicants can score up to 250 points on their applications, and there are a limited number of licenses available in each of the state’s Bureau of Labor Statistics Regions, according to the Daily Herald.

The new rules establish a randomized tiebreaker process in the event that two or more applicants in a given region receive the same score, the news outlet reported. The first name pulled will have the first right to the conditional license, the second name will have the second right and so on, and if some or all of the chosen applicants abandon their claim, the leftover licenses will go to the applicants with the next highest scores.

Conditional licensees will have 180 days to find a location for their dispensaries, pass a final inspection and pay a licensing fee, at which point they will receive a permanent license to open their retail locations, the Daily Herald reported.

Long-term business plans can easily fall to the back burner when you’re busy tackling what’s right in front of you. But poor planning always manifests in one way or another: Just ask anybody who’s stuck in rush hour gridlock on a highway system that’s decades past its prime. 

The same goes for hemp and cannabis cultivation facilities.

Before breaking ground on a new facility or renovating an existing one, you’ll want to have a fully fleshed-out plan in place for scaling up your operations down the line. Success in this industry requires a long-term vision. 

When you’ve already put your time, sweat and money into securing that coveted license and grow site, you want to be sure your efforts aren’t wasted. Because when wholesale prices drop and competition gets fierce, your days will be numbered if you’re not equipped to make up for lost revenue.

The initial capital required to design and build a cultivation facility is steep, to be sure. Understandably, it can be very tempting to spend the bare minimum required to get your facility up and running and start generating cash flow as quickly as possible.

But trust me, that mindset won’t do you any favors. Cutting costs up front doesn’t set you up for sustainable, long-term growth—something that just about every business needs to stay on a successful trajectory. Having the ability to scale up without taking your business offline for lengthy facility renovations always proves critical.

Auxly’s Kolab Project is bringing vape recycling bins to Canadian dispensaries—Superette and Inner Spirit, to start—in a partnership with Greentec, one of the country’s electronic waste recycling businesses.

It’s a collaborative solution to a problem that has vexed the young cannabis industry. Vape cartridges run dry, and the empty products constitute electronic waste (“e-waste”) because of the battery connection. If a customer simply tosses them in the trash, e-waste products like vape cartridges may contribute to soil and water pollution.

“Vape recycling poses the same challenges that all e-waste poses,” Auxly CEO Hugo Alves says.

But the scale of this particular issue is growing. Alves is quick to point out the significant market share held by the vape category in Canada and the U.S. He estimates that vape carts account for 14% of cannabis sales in Canada, and that upwards of 10 million vape carts will have been sold by the end of next year.

To solve the problem, Alves and his team turned to Greentec, which maintains a suite of certifications for handling e-waste. Alves says that this is key: Cannabis remains a tightly regulated industry, of course, and businesses that are interested in striking up these sorts of recycling partnerships must work with an organization that has the credentials to do so. 

“By working directly with producers through this program,” Greentec president and CEO Tony Perrotta said in a public statement, “we ensure these materials are recycled to the highest health, safety and environmental standards.” 

Industry groups have come together in collaboration with UMass Dartmouth to develop the Cannabis Corporate Social and Environmental Sustainability Survey to gather input from cultivators in the U.S. and Canada about attitudes toward sustainability practices and corporate social responsibility.

Study partners include Enlighten Your Grow, Trella and Cannabis Center of Excellence.

The project’s overall goal is to better understand cannabis cultivators’ corporate responsibility efforts to address the harm cased by the war on drugs, as well as reduce the industry’s energy and environmental footprint.

Information collected through the study, which has been approved by the UMass Dartmouth Institutional Review Board, will be used to develop best practices, education materials and policy memos to facilitate positive change.

The anonymous survey will remain open until Dec. 31, and insights will be shared publicly in early 2021.

Pennsylvania’s medical marijuana advisory board held a virtual meeting Aug. 11 to discuss permanently adopting temporary regulations that were established earlier this year in response to the COVID-19 pandemic, according to a FOX43 report.

The possible changes include allowing dispensaries to permanently provide curbside service to deliver medical cannabis to vehicles, the news outlet reported, as well as removing a rule that one caregiver may only support a maximum of five patients.

In addition, regulators considered allowing doctors to conduct remote consultations with patients to certify them for medical cannabis, as well as allowing patients to purchase a 90-day supply of cannabis rather than a 30-day supply, as is allowed under current law, according to FOX43.

Since the launch of Pennsylvania’s medical cannabis program in February 2018, 390,000 patients have registered in the program and 230,000 have active certifications, the news outlet reported.

Joe Biden, the presumptive Democratic nominee for the 2020 presidential election, announced U.S. Sen. Kamala Harris (D-CA) as his vice president pick yesterday.

The move rallied political voices on social media (both positive and negative) and generally brought the spotlight back onto the Democratic ticket for a moment, a rare opportunity in the midst of both a global pandemic and a vocal incumbent campaign. And while cannabis hasn’t played much of a role in the run-up to the 2020 presidential election, it remains an underlying open question: Will the U.S. legalize cannabis sometime during the next four years? 

Harris

The question was posed during the Democratic debates, by which point Harris had established herself as a new voice on Capitol Hill in favor of legalization and reform.

Most notably, Harris cosponsored the Marijuana Justice Act in 2018 (and again, in a new version of the bill, in 2019) and sponsored the MORE Act in 2019. Both of those bills seek federal legalization with a specific social justice bent. The U.S. House, according to industry chatter, is planning a vote on the MORE Act next month.

“Times have changed—marijuana should not be a crime,” Harris said when the MORE Act was introduced in the U.S Senate and House. “We need to start regulating marijuana, and expunge marijuana convictions from the records of millions of Americans so they can get on with their lives. As marijuana becomes legal across the country, we must make sure everyone—especially communities of color that have been disproportionately impacted by the War on Drugs—has a real opportunity to participate in this growing industry.”

In her time as California attorney general, however, she wasn’t articulating such a clear-eyed vision of a just and equitable cannabis industry. She took a “top cop” stance on law enforcement (her words) and prosecuted nearly 2,000 cannabis cases during her time in the AG’s office. Cannabis is illegal, her record would argue, and so her work was to go after men and women possessing and selling it.  

In a court petition filed July 20, the federal government is suing the California Bureau of Cannabis Control (BCC) for cannabis business records in connection with a criminal investigation that Harris Bricken attorney Hilary Bricken says took an interesting turn after the BCC refused to provide the information.

The U.S. Drug Enforcement Administration (DEA) and Department of Justice (DOJ) served an administrative subpoena to the BCC at the end of last year, which it later withdrew and re-issued in January, requesting information about six “entities,” which includes three state-licensed cannabis businesses and each company’s owner. The information, which includes cannabis licenses, license applications and shipping manifests for the licensees from Jan. 1, 2018 through Jan. 9, 2020, will be used as part of a federal criminal investigation into alleged violations of the Controlled Substances Act (CSA).

In response to the subpoena, the BCC indicated in a letter that it would not turn over the requested documents because the subpoena doesn’t show relevance and its scope is not reasonable.

“States are free to check the feds and ensure that they’re following procedure, that everything’s constitutional,” Bricken said, adding, “I’m surprised there’s a fight over this particular subpoena, though. They just don’t have the facts, and they don’t have the law. It makes me question why the California [attorney general] is spending time and taxpayer dollars fighting off the inevitable because the bar is very clearly so low for the DEA [and] DOJ to get this information to mount a criminal investigation when the conduct is already federally illegal.”

The DEA has, for the last several months, urged the BCC and California attorney general to cooperate, to no avail, which is why the matter has landed in federal court, where the feds are asking a judge to enforce the subpoena against the BCC.

BOCA RATON, Fla., Aug. 11, 2020 (GLOBE NEWSWIRE) -PRESS RELEASE- Jushi Holdings Inc., a multi-state cannabis and hemp operator, announced the closing of a previously announced agreement to acquire 100% of the equity of Pennsylvania Medical Solutions, LLC (PAMS), a Pennsylvania grower-processor previously owned by a subsidiary of Vireo Health International, Inc.

Through this acquisition, Jushi adds PAMS and its 90,000 square-foot cannabis cultivation and processing facility, enabling efficient wholesale distribution to the 89 dispensaries currently operating across the Commonwealth, including the company’s eight operational BEYOND/HELLO dispensaries. The facility is currently being upgraded to increase the total amount of high-quality, indoor cultivation area to approximately 45,000 square-feet with the property having the capacity to further expand the indoor cultivation by an additional 25,000 square-feet bringing the total to 70,000 square-feet.

"We are thrilled to close this acquisition ahead of our original schedule. The acquisition will allow us to provide high-quality, indoor-grown dried flower and concentrates products to the Commonwealth’s patients, who continue to experience constrained supply and high prices," said Jim Cacioppo, Chairman and Chief Executive Officer of Jushi. “With our successful recent financing, we are well capitalized to optimize the Facility’s production and continue to build-out our Pennsylvania retail footprint. Jushi, through its subsidiaries, has the collective rights to operate up to 15 dispensaries.”

Upon closing, Jushi paid Vireo US $16.3 million in cash, a US $3.8 million seller note, and assumed a US $17 million facility associated with a long-term lease obligation. No equity was issued in connection with this acquisition. Jushi funded the cash portion of the Agreement with the proceeds from the debt financing, which Jushi announced on June 22 and July 31, 2020. Further to our July 31 announcement, approximately US$30.3 million in cash proceeds have been received and have been released from escrow. Navy Capital Green Management, LLC led the debt financing round with an US$11.5 million investment. 

As part of the Agreement, upon closing Jushi received an assignable purchase option to acquire 100% of the equity of Pennsylvania Dispensary Solutions, LLC, a Pennsylvania medical marijuana dispensary permittee in the Commonwealth’s Northeast region. PADS currently operates two medical marijuana dispensaries in Scranton and Bethlehem, with the right to operate one additional dispensary in the region. The option expires 18 months from closing, and is subject to certain closing conditions, including approvals from all applicable regulatory authorities.

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