MjLink Cannabis Business News and Press

Schwazze, formerly operating as Medicine Man Technologies, Inc., a vertically-integrated Colorado cannabis company, today provided a business update. Specifically, the company shared the pro forma financial results that reflect the acquisition of Mesa Organics, which closed on April 20, 2020, and announced the termination of previously named term sheets including “the Dabble Term Sheet” with Cold Baked, LLC and Golden Works, LLC, the “Los Sueños Term Sheet” with Los Suenos, LLC and Emerald Fields Grow, LLC, and the “Farm Boy Term Sheet” (as part of the Los Sueños Farm acquisition) with Farm Boy, LLC and Baseball 18, LLC.

Pro Forma Financial Results Including Acquisition of Mesa Organics

The company provided unaudited condensed combined pro forma financial results for the first three months of 2020, the full year 2019, and balance sheet as of March 31, 2020. These financial results reflect the acquisition of Mesa Organics, which closed on April 20, 2020. The company believes that providing the pro forma results will enable shareholders to evaluate its ongoing performance more accurately.

Nancy Huber, Chief Financial Officer of Schwazze said, "We are excited to have Mesa Organics and the extraction and manufacturing business, Purplebee’s, as a cornerstone in the vertically integrated platform we are building in Colorado. In the pro forma 2019 Income Statement, Mesa Organics was accretive to Schwazze by $0.09 cents per share, and we believe this business will continue to be accretive to our overall platform. Additionally, since the closing of the acquisition, we have made significant progress in integrating the Mesa Organics and Purplebee’s operations. We are excited about the opportunity ahead and look forward to sharing our results going forward.”

The unaudited condensed combined pro forma results including standalone Schwazze and Mesa Organics historical results, and explanatory notes were included in a Form 8-K/A filed with the U.S. Securities and Exchange Commission on July 2, 2020.

Acquisition Strategy Update

A group of cannabis dispensary applicants plan to drop their lawsuit over Los Angeles’ licensing process after the city agreed to process the next 100 applicants in line for licenses, which could double the number of permits issued during this licensing round, according to a Los Angeles Times report.

The Social Equity Owners and Workers Association and one of its members filed the lawsuit earlier this year to force Los Angeles cannabis regulators to vet all the dispensary applications it received last fall under its first-come, first-serve process, which has been marred by controversy.

When the Department of Cannabis Regulation (DCR) launched its latest licensing round in September to issue 100 additional cannabis retail licenses to social equity applicants, some stakeholders alleged that some applicants gained early access to the online application system while others were locked out due to slow internet speeds.

The licensing process has since underwent an audit, which determined that the DCR took “reasonable and appropriate” steps to ensure fairness.

Regulators have amended the rules for its cannabis licensing process per a settlement agreement with the Social Equity Owners and Workers Association, and City Council approved the changed last week.

The Ohio State Medical Board voted July 8 to add cachexia, or wasting syndrome, to the list of qualifying conditions for the state’s medical cannabis program, although it rejected adding autism and anxiety, according to a Cincinnati.com report.

The board’s decision follows recommendations from an Ohio State Medical Board committee, which recommended adding cachexia last month, while also rejecting autism and anxiety as new qualifying conditions.

This is the second year in a row that the board has rejected autism and anxiety, arguing that cannabis may do more harm than good for those patients, Cincinnati.com reported.

The board’s decision takes effect immediately and marks the first time a new condition has been added to the program since it launched in 2016, according to the news outlet.

Illinois’ cannabis sales reached over $47.6 million in June, which now holds the record for the highest sales figures in the state, according to a Daily Herald report.

Dispensaries sold 994,545 items last month with customers spending $48 on average per sale before tax, the news outlet reported.

The Illinois Department of Revenue is expected to release tax figures later this month, but reported that May’s cannabis taxes and associated sales taxes generated $12.5 million in revenue, according to the Daily Herald.

Illinois has collected $52.7 million in cannabis tax revenue to date, the news outlet reported, which has surpassed budget estimates of $28 million.

Cannabis sales have topped $239 million since adult-use sales launched Jan. 1, according to the Daily Herald.

While April 20 is known internationally as a day to celebrate everything cannabis with parties, sales and other events, a lesser-known cannabis holiday is emerging as an opportunity to educate consumers about products beyond flower. 

This Friday, July 10, is known as 7/10 Day or OIL Day, and has become an industry holiday to honor cannabis concentrates like shatter and rosin. (710, when flipped 180 degrees, spells OIL.) 7/10 or OIL Day does not have the awareness or huge number of sales of 4/20, but concentrate producers and sellers still prepare weeks in advance.

A class-action lawsuit over packaging mislabeling filed in a Calgary court is taking aim at some of the Canadian cannabis market’s biggest names. Tilray, Aurora Cannabis, Aleafia Health, Hexo Corp., Cronos Group, Organigram Holdings, MediPharm Labs Corp. and their various subsidiaries and brands are all named as defendants in the documents filed in the Court of the Queen’s Bench of Alberta.

In the statement of claim dated June 16, 2020, the plaintiff, Lisa Marie Langevin from Calgary, Alberta, claims that the named companies sold cannabis products to consumers and patients “with THC or CBD content levels that were drastically different from the amount advertised on the label.”

Health Canada regulations allow for a 15% variance in cannabinoid content from what producers list on product labels. In other words, a product’s actual potency is required to be within 85%-115% of what is listed on the label. In the claim, Langevin’s attorney states that independent lab verification of the defendants’ products should potency ranging from 52% to 119% of what was advertised.

(As of press time, Organigram declined to comment, citing a policy of not speaking on current legal proceedings, and the other named defendants did not reply to a request for comment.)

In the filing, Langevin claims to have bought a 30ml bottle of cannabis tincture produced by a Tilray subsidiary on Feb. 13, 2020. The product was labeled as containing 10.4 milligrams of THC per milliliter (10.4mg/ml) and included its packaging date (Feb. 3, 2019), but did not include an expiration date. After following the recommended dosage from the budtender to avoid “greening out,” Langevin claimed to have felt no psychotropic effects. After increasing the dosage slightly on five more occasions to no avail, Langevin allegedly asked a friend, Dr. Darren Clark, a PhD in neuroscience who was familiar with cannabis, about the issue. After sampling the product and also feeling no effect, Clark tapped Dr. Shaun Mesher, a biochemist. Further lab analysis by Mesher showed the product only had 46% of the labeled amount of THC.

A second bottle with the same lot number (although with a March 2, 2019, packaging date) was tested, revealing the product only had 79% of the labeled THC, which spurred Langevin and the doctors to test a wider array of products. The results are found in the filing:

Facing a shortage of funding and unforeseen circumstances stemming from the COVID-19 pandemic, two groups that hoped to place adult-use cannabis legalization initiatives on Arkansas’ 2020 ballot have refocused their efforts on the 2022 election.

Arkansans for Cannabis Reform and Arkansas True Grass had to gather nearly 90,000 signatures by July 3 to get their proposed constitutional amendments before voters this fall, but the feat proved too much once the coronavirus crisis descended on the U.S. this past spring.

“Without enough funding and with the COVID, it just went south real quick,” Arkansans for Cannabis Reform Executive Director Melissa Fults told Cannabis Business Times and Cannabis Dispensary, adding that the group managed to collect roughly 35,000 signatures before the deadline.

Arkansans for Cannabis Reform had been relying on mail-in petitions after a judge ruled in May that ballot initiative campaigns could gather signatures remotely, but the state’s attorney general filed an appeal, and an appeals court placed a stay on the original ruling until the case is heard.

“Once they put out that stay, we were done,” Fults said. “There was no option for us.”

Facing a shortage of funding and unforeseen circumstances stemming from the COVID-19 pandemic, two groups that hoped to place adult-use cannabis legalization initiatives on Arkansas’ 2020 ballot have refocused their efforts on the 2022 election.

Arkansans for Cannabis Reform and Arkansas True Grass had to gather nearly 90,000 signatures by July 3 to get their proposed constitutional amendments before voters this fall, but the feat proved too much once the coronavirus crisis descended on the U.S. this past spring.

“Without enough funding and with the COVID, it just went south real quick,” Arkansans for Cannabis Reform Executive Director Melissa Fults told Cannabis Business Times and Cannabis Dispensary, adding that the group managed to collect roughly 35,000 signatures before the deadline.

Arkansans for Cannabis Reform had been relying on mail-in petitions after a judge ruled in May that ballot initiative campaigns could gather signatures remotely, but the state’s attorney general filed an appeal, and an appeals court placed a stay on the original ruling until the case is heard.

“Once they put out that stay, we were done,” Fults said. “There was no option for us.”

LOS ANGELES, July 8, 2020 /PRNewswire/ -PRESS RELEASE- Cookies, aninternational lifestyle and cannabis brand, is pleased to announce the launchof a new cannabis brand, "COLLINS AVE," in partnership with raplegend Rick Ross. The COLLINS AVE brand includes three specially curatedstrains featuring flavor profiles inspired by Ross' identity.  

Ross, along with fellow rap artist and Cookies founder Berner, have taken ahands-on approach to this new brand, with strains named, "CollinsAve," "Pink Rozay" and "Lemon Pepper." These choicesof genetics are representative of Ross' connection to Miami and will featureunique illustrations inspired by each flavor profile. The Cookies assortmentincludes Indica (Collins Ave) and Hybrid (Pink Rozay) varieties, while Lemonadewill exclusively feature "Lemon Pepper" on its award-winning Sativamenu.

"When it comes to branding and building something long term, Ross getsit," Berner said. "We have a very similar work ethic and both havespread our wings outside of the music business and what I like most about thispartnership is it all happened 100% naturally.  Ross and I met back in theearly 2000's at my dispensary in San Francisco.  I never tried to force amusic collaboration or anything. When we linked back up recently, everythingfell right into place and we are both looking to kill it.  Expect a crazymenu on Collins Ave side with a group project to smoke and ride to."

"I want to be a force within the cannabis industry and bring a superiorquality product to the masses, particularly my people in the South," saidRoss.   "I'm honored to be in partnership with Berner and Cookies,who, in my opinion, are the best in the business.  I love the product andtruly stand behind it.  Watch what we do!"

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AKRON, Ohio, July 8, 2020 /PRNewswire/ -PRESS RELEASE- AT-CPC of Ohio, LLC, one of Ohio's leading Level 1 Medical Marijuana Cultivators and Processors, formally announced today its separation from Calyx Peak Companies. AT-CPC of Ohio is now wholly owned and operated within Ohio and has rebranded under the name Klutch Cannabis.

Klutch Cannabis also introduced its list of brands and new product lineup. Ohio patients will soon be able to purchase products under the following:

Klutch Cannabis, which will feature a wide range of flower and processed products, with a focus on variety and accessibility for Ohio patients. Klutch Select, which will feature a premier line of flower and processed products showcasing some of the most limited, sought after and award-winning genetics in the world. Klutch Mind and Body, which will function as a wellness line and will feature products formulated to resemble more traditional medical and wellness products, such as tinctures, capsules, lotions and other new creative forms of medicine currently being developed in house. Josh D, which will continue to showcase original, award-winning OG Kush varietals and other rare genetics made famous by legendary California breeder Josh Del Rosso.

Overall, Klutch will continue to differentiate itself by offering rare, coveted, and premium strains of cannabis, along with a premier line of inventive processed products showcasing some of the best medicine Ohio has to offer.

"At a time when the cannabis industry is reeling from economic hardship and the remnants of prohibition, the Klutch family of brands has been born out of our commitment to double down on the promise we've made to Ohio patients," said Klutch's founder and CEO, Adam Thomarios. "Our entire team works tirelessly to bring patients some of the best medicine available on the market. We take pride in that commitment every day, always."

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PETALUMA, Calif.--PRESS RELEASE--Hydrofarm Holdings Group Inc., an independent wholesaler and manufacturer of hydroponics equipment and commercial horticultural products, today announced an exclusive distribution partnership with Rare Dankness Nutrients, a provider of high quality growing nutrients for commercial applications.

Rare Dankness has developed an innovative formulation of crop nutrition that delivers simplified dry nutrients and amplified terpene profiles. The Rare Dankness product line offers cost-effective and versatile formulas designed to work with all hydroponic growing systems, injectors and fertigation systems. Rare Dankness provides growers with clean crop nutrition products that are pH balanced, addressing major issues currently faced by growers, including bio film, filter clogs, nutrient fallout and high costs associated with premixed bottled nutrients.

“Rare Dankness offers growers of all sizes access to innovative nutrition products that will improve crop health, yields and economics for our customers,” said Bill Toler, CEO of Hydrofarm. “We are pleased to expand our product offering through this exclusive partnership and look forward to growing our businesses together.”

Scott Reach, founder of Rare Dankness Nutrients added, “Hydrofarm is the leader in the hydroponics industry with an extensive network of retail partners and customers. This exclusive partnership will allow us to bring Rare Dankness products to growers nationwide to help them maximize the potential of their grow operations.”

For additional information about Rare Dankness, please visit: www.raredanknessnutrients.com

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Pennsylvania Lt. Gov. John Fetterman has expressed his support for legalizing adult-use cannabis to help the state’s $3.2 billion deficit, according to a CBS Pittsburgh report.

“If only there was a widely-consumed unregulated cash crop, wholly confined to the black market, that could generate billions of dollars + 1000’s of jobs + help PA farmers,” Fetterman said on Twitter last week.

He anticipates that the tax revenue from adult-use sales could generate nearly a half a billion dollars annually, CBS Pittsburgh reported.

“There’s already a thriving marijuana market in PA,” Fetterman told the news outlet. “Why not make it legal, why not make it safe and why not make it taxable to help PA get back on its feet?”

Gov. Tom Wolf announced his support for legalization last fall, and although lawmakers have since put forth legalization proposals, legislative leadership remains reluctant to advance any of the bills.

Southern University is one of two medical cannabis license-holders in Louisiana. As part of the state’s legislation, the school must partner with a private business to grow and distribute products. The school’s expertise is meant as a research-grounded backbone for the business enterprise.

Pennyslvania-based Ilera Holistic Healthcare contracted with Southern University in late 2018 to begin cultivating cannabis and developing products for Louisiana patients. (The school had previously contracted with Advanced Biomedics, which didn’t get far with its cannabis cultivation plans.)

Now, Ilera is bringing its products to market. According to the Baton Rouge Advocate, Ilera is making its tinctures and topicals available to Louisiana’s nine licensed dispensaries (“pharmacies” in the state’s terminology). As the state law is written, flower is not permitted. 

“The more products which come on board, the cheaper the cost becomes and the easier access for patients,” H&W Dispensary owner Henry Ruston told the newspaper. “One of the biggest challenges we had was changing the stigma of marijuana. We had a lot of patients in pain and they were thinking of marijuana as smoking up and stuff, but this is something you just put under your tongue.”The other player in the state’s medical cannabis market is Louisiana State University, which first worked with GB Sciences out of Nevada to cultivate its plants. In late 2019, GB Sciences sold its Louisiana subsidiary to Wellcana Group.

While the state’s medical cannabis law was approved by legislators in 2016, the path to a competitive marketplace has been slow. Along the way, companies have come and gone, while patients have railed against regulators and businesses for delaying access to medicine. Even now, with Ilera formally entering the retail end of the supply chain, prices remain high across the state. 

Beginning next month, however, physicians in Louisiana will be allowed to recommend medical cannabis for any condition that is “debilitating to an individual patient and is qualified” to be treated. The thinking is that this will open the marketplace to more patients and galvanize the supply-and-demand curves.

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A federal court case involving plaintiffs Solace Enterprises LLLP, Aether Gardens and Telloni Holdings Limited and defendants Trinidad Consulting and Cannadips has been stayed following mediation on June 18, according to federal court records. The parties are working together on a settlement.

The plaintiffs alleged the defendants owed them $1.2 million in loans, according to the original complaint, while the defense claims Trinidad and Cannadips expected royalties.

Solace Enterprises LLLP does business as Aether Gardens and in some court documents is referred to as Solace Holdings LLLP. The company holds two active production licenses and two active cultivation licenses in North Las Vegas, Nev., to service the adult-use and medical cannabis markets, according to Nevada’s Cannabis Compliance Board. A Solace Enterprises LLLP hemp processing license has expired, according to Cannabiz Media.

Founded in 2018, Aether Gardens aims to become “the leader in brand development, white label manufacturing & research providing both medical & recreational cannabis consumers with the best experiences,” according to its website, where the company describes plans to develop a 90,000-square-foot “state-of-the-art manufacturing facility” for cultivation, extraction and production.

Cannadips possesses an active “Manufacturer Annual Infusions” license in Arcata, Calif., according to Cannabiz Media. Two Cannadips “Manufacturer Temporary Infusions” have expired, along with all other licenses of the same type in the state, according to the site. A Trinidad Consulting LLC “Manufacturer Temporary Infusions” license in Humboldt County has also expired, per the website.

Established in 2016, Cannadips manufactures a cannabidiol (CBD) dip product and is “shifting the paradigm of tobacco by providing a great-tasting, nicotine-free alternative tobacco product,” according to its website. The product is formulated with “American hemp” and “rooted in Humboldt.”

Former Steep Hill Labs CEO and Chairman Jmichaele Keller is suing the company and its investors to block the sale of certain assets to competitor EVIO, Inc., alleging that the transaction would “dismantle Steep Hill and strip shareholders of value,” according to a press release issued by PryorCashman LLP, a Los Angeles-based law firm representing Keller.

The deal “includes a series of internal transactions that would dilute existing shareholders from 100% of Steep Hill’s equity down to just 4%,” Keller’s attorney, PryorCashman’s Thomas Vidal, said in a public statement.

Keller initially filed the suit earlier this year in San Francisco Superior court, accusing Steep Hill and various stakeholders—including Merida Capital Partners, Mitch Bryan Baruchowitz, Jeffrey Monat, Gotham Green, Richard Jacinto II, Stephen Joseph Finfer, Randy Slifka, Jane Wright-Mitchell and Dr. Andrew Rosenstein—of abuse of fiduciary duty, abuse of control, corporate waste, fraud and concealment, misrepresentation of stock ownership and proxy voting, and more.

Keller alleges that Steep Hill’s board and management “ran the company into the ground” and “squandered between $75 million and $200 million of shareholder value” after ousting him from the company in August 2018, according to PryorCashman’s announcement.

Keller’s complaint and the subsequent PryorCashman press release made public the previously confidential details of the transaction between Steep Hill and EVIO, according to a press release issued by Steep Hill this week.

California-based Success Centers launched roughly 40 years ago to assist youth released from detention centers with life skills and employment. Now, the organization has expanded to the cannabis industry, where it helps connect employers with qualified job seekers in the Bay Area with a focus on social equity.

Success Centers assists job seekers in multiple industries, from construction to the arts, and hosts Employer Spotlight hiring events to connect employers with job seekers. To serve the cannabis industry specifically, Equity for Industry Program Manager Angela White has created the Budding Industry Job Shop, where several employers give presentations about their companies and what a day in the job looks like.

“We’ll have the job description pulled up, and what’s different is we’ll have questions from the audience of job seekers,” White says. “We want to have a good retention rate. We don’t only want people hired at these companies, but we want them to feel comfortable and safe and … to be a good fit there.”

Following the events, employers interview potential candidates, and Success Centers is an active participant in the process, ensuring job seekers have all the necessary resources.

Under San Francisco’s Equity Program, cannabis dispensaries must staff 35% of their operations with social equity applicants, and Success Centers works specifically with these companies to connect them with verified candidates.

CLEVELAND, Ohio, July 7, 2020 -PRESS RELEASE- Cannasure Insurance Services, a cannabis and hemp industry insurance company, announced Tuesday it has hired Jim McErlean as director of business development.

McErlean has more than 20 years of sales, product and distribution management experience in the property and casualty insurance industry.

"We are extremely pleased to welcome Jim to the Cannasure team," said CEO Patrick McManamon. "He is a highly talented and well-respected business executive, and his knowledge, focus and business discipline will be instrumental in our product and service expansion initiatives for the rapidly growing cannabis and hemp sectors. Jim's depth of distribution and channel management, along with his experience in strategic product development and implementation, will be essential as we continue to build out our proprietary programs for these dynamic industries."

Prior to joining Cannasure, McErlean served as Western U.S. business development manager at NSM Insurance Group. His career experience includes retail brokering and specialty product and program development in the craft brewing, construction, and habilitation sectors. He also served on the board of the National Association of Home Builders.

"What excites me most is how bold and forward-thinking this company is," McErlean said. "Cannasure took the initiative to commit exclusively to the cannabis and hemp industry very early on. It blazed the path that has led to the development of meaningful coverage and services designed to protect the businesses in this every-changing marketplace. I look forward to helping Cannasure advance its expansion efforts, geographic and otherwise, and build upon its reputation as the most sought-after cannabis and hemp MGA in the space.”

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The Oklahoma Medical Marijuana Authority (OMMA) has announced that it will begin enforcing more stringent laboratory testing rules in the state’s medical cannabis market, according to a local KOCO report.

The OMMA indicated in April that it would require medical cannabis products sold by a processor or grower to be tested by a state-licensed laboratory, but the deadline was extended to July to ensure there are enough licensed labs to meet the demand, the news outlet reported.

“All medical marijuana products had required testing for a very long time now, but the requirement that it goes to a lab that’s licensed by OMMA is a new enforcement,” OMMA Deputy Director Kelly Williams told KOCO.

There are now 21 licensed labs in the state, according to the news outlet, and dispensaries must retain test results on their inventory for a minimum of two years.

(June 11, 2020) - PRESS RELEASE - Portland’s Office of Community & Civic Life (Civic Life) has named Dasheeda Dawson as its new Cannabis Program Supervisor. Dawson has over a decade of business development, strategic management and brand marketing experience. More recently, she has worked as an industry educator, senior executive leader and strategy expert for multiple cannabis businesses, municipalities and media outlets across the country.

In 2016, Portland voters passed a 3% tax on recreational cannabis. Since then, over $6M has gone toward street infrastructure improvements; DUII training; drug rehabilitation; small business support, economic opportunity, and technical assistance for business owners from communities disproportionately impacted by cannabis prohibition; record-clearing; and other efforts.

Civic Life is charged with administering the city’s Social Equity Grants, to deliver on the promise made to Portlanders in Measure 26-180 to provide “support for neighborhood small businesses, especially women-owned and minority-owned businesses, including but not limited to business incubator programs, management training, and job training opportunities; and providing economic opportunity and education to communities disproportionately impacted by cannabis prohibition.”

“The war on drugs, predominantly waged against Black and Brown men, has long been a tool of racial oppression,” Dawson said in her welcome statement to agency partners. “Marijuana possession and sale, whether perceived or real, has provided an excuse for over-policing, state violence, and law enforcement interactions that far too often end in death for people of color. In fact, cannabis prohibition has led to Black Americans being almost four times as likely to be arrested for possession relative to our white counterparts and remains one of the top reasons for deadly police interactions in our communities. Understanding the role marijuana prohibition has played in my own life has fueled my global cannabis strategy, education and advocacy work for the past four years. I look forward to actively collaborating with all partners and stakeholders to continue building and elevating both the cannabis community and the City of Portland.”

Under her leadership, Dawson affirms that the Cannabis Program will work to uphold the core tenets adopted by the Cannabis Policy Oversight Team (CPOT) and included in its 2019 Annual Cannabis Policy Report:

The war on drugs has caused disproportionate harm to Black, Indigenous, and other communities of color. Cannabis should be used as a tool to direct capital resources into these same communities for the purpose of restitution and restoration.The Bureau is committed to adopting policies, regulations and programs that support equitable access to the cannabis industry, so that communities and individuals that have experienced the greatest harm from prohibition can share in the industry’s wealth.The City’s processes around cannabis regulation and policy development will be informed, acknowledging the long history of trauma and race-based inequities, particularly the multi-generational impact of cannabis criminalization.Impacted communities and stakeholders will play a key role in solution-finding, policy and program development, and decision-making.Strategic recommendations and execution will require City investments of time and resources.

Virginia Del. Jennifer Carroll Foy has announced plans to legalize cannabis in a special session of the legislature, if the legislation wins approval from the Speaker of the House, according to a WTOP report.

A cannabis decriminalization law took effect in Virginia on July 1, and Carroll Foy told the news outlet, “If we can decriminalize, we can legalize.”

The Democrat, who represents areas of Prince William and Stafford Counties, has indicated that racial disparities in the enforcement of cannabis possession laws are also a driving force behind her legalization push, WTOP reported.

The legislation would legalize the possession of less than a half ounce of cannabis, according to the news outlet, and if the bill isn’t taken up in the special session, Carroll Foy plans to introduce it in Virginia’s 2021 legislative session.