MjLink Cannabis Business News and Press

Liberty Health Sciences, a vertically integrated medical marijuana company with operations in Florida, announced in a Nov. 19 press release that it has reached an agreement to settle a class-action suit. The “memorandum of understanding [is] regarding settlement of the securities class action that was commenced against it in the United States in 2019,” the release states.

The settlement figure is $1.8 million US, according to the release, which states: “The settlement is made without any admission or finding of liability and is subject to court approval. There is no assurance that the settlement agreement will receive court approval.”

An attorney representing Liberty wrote in a letter to the judge, overseeing the case in the U.S. District Court for New York’s Southern District, that “Plaintiffs anticipate filing a motion for preliminary settlement approval by January 8, 2021.”

RELATED: How to Raise Capital Without Running Afoul of the SEC

Investors alleged in their January 2019 complaint that Liberty violated securities law. They claimed that Liberty, headquartered in Toronto, Ontario, Canada, “has had longstanding ties” with Aphria, another Canadian cannabis company. Of the “Class Period” between June 28, 2018, and Dec. 3, 2018, the complaint states:

Aphria announced that it sold off its Liberty stake in September 2018, according to the complaint. Then, Quintessential Capital Management and Hindenburg Research published the report “Aphria: A Shell Game with a Cannabis Business on the Side,” alleging a scheme by Aphria to acquire shell companies and sell them off at, as the legal complaint states, “artificially inflated prices.”

Rhode Island lawmakers are considering a cannabis legalization proposal that was put forth by Gov. Gina Raimondo in January in an effort to combat the state’s budget deficit, according to The Boston Globe.

When Raimondo included the cannabis legalization proposal in her state budget plan earlier this year, Senate leadership opposed the plan, which would establish state-run cannabis retailers, The Boston Globe reported.

During the Nov. 6 Senate Democratic caucus, however, lawmakers seemed more receptive to legalization to counteract the economic fallout from the COVID-19 pandemic, according to the news outlet.

Raimondo’s budget proposal projected roughly $21.8 million in revenue from cannabis sales in fiscal year 2020, The Boston Globe reported, as well as $21.1 million in 2021 and $39.6 million in 2022.

The Rhode Island Legislature has not yet approved a budget due to delays stemming from the COVID-19 pandemic, according to the news outlet, and the Senate Finance Committee met Nov. 18 to hear testimony on budget articles, including the one addressing cannabis legalization, although the issue is not expected to be taken up until 2021.

A California judge has dismissed a lawsuit that sought to overturn a rule that allows cannabis companies to deliver statewide, even into municipalities that have banned cannabis sales, according to an AP News report.

Although the state has allowed licensed cannabis deliveries in “any jurisdiction” within California, the group of local governments behind the lawsuit argued that the state did not have the authority to regulate cannabis sales within their jurisdictions, the news outlet reported.

RELATED: California Municipalities Go to Trial Against the State in Cannabis Delivery Lawsuit

Fresno County Superior Court Judge Rosemary McGuire sided with the state Nov. 17, ruling that the state’s delivery regulations and local ordinances “do not occupy the same field and are not in conflict,” and without a conflict, the case could be dismissed, according to AP News.

Cannabis deliveries may now continue under state regulations, the news outlet reported, although McGuire noted in her ruling that state law “does not impact the rights of any of the [local governments] to regulate cannabis or cannabis delivery,” and that “local jurisdictions can impose regulatory and health and safety standards that are stricter than state laws."

An audit of the Utah Department of Agriculture and Food (UDAF) under the leadership of former commissioner Kerry Gibson has found issues with the state’s medical cannabis cultivation licensing process, according to The Salt Lake Tribune.

The audit offers numerous recommendations, the news outlet reported, including that the UDAF reassess the eight cannabis cultivation licenses that were issued last year.

According to the audit, Gibson appointed six individuals to serve on an evaluation committee charged with choosing the eight licensed growers, and a statistical analysis of the scoring of the applications found that the numbers for two of the panelists were “highly correlated,” The Salt Lake Tribune reported.

The audit found that the two committee members in question—Natalie Callahan, Gibson’s former director of operations and agriculture programs, and Kelly Pehrson, Gibson’s deputy—ranked the same seven applicants in a similar order, according to the news outlet.

The audit also discovered that there were “significant adjustments” to the initial scores given by the other panelists, which brought the scores in closer alignment with those given by Callahan and Pehrson, The Salt Lake Tribune reported.

The Mexico Senate approved a cannabis legalization bill Nov. 19, sending it to the lower house of Congress, the Chamber of Deputies, which must now pass the legislation by a Dec. 15 deadline, according to an RTL Today report.

The Senate passed the bill with 18 votes in favor, 18 votes against and seven abstentions, the news outlet reported.

RELATED: Mexico’s Senators Consider Cannabis Legalization Bill

The legislation would legalize the possession of up to 28 grams of cannabis and allow licensed businesses to sell it, while adults would be authorized to grow up to six plants at home, according to RTL Today.

The bill would also establish the Mexican Institute for Regulation and Cannabis Control within the country’s Health Ministry to oversee the adult-use cannabis program.

New Jersey lawmakers passed two different versions of an adult-use cannabis bill out of Assembly and Senate committees Nov. 19, and must now agree on a unified proposal before the legislation can receive floor votes, according to an NJ.com report.

The Assembly Appropriations and Senate Budget and Appropriations Committees both approved the bill, S.21/A.21, in 8-4 votes, the news outlet reported, but the legislation that advanced in the Senate excluded a provision that passed in the Assembly that would limit the number of licenses for adult-use cultivators in the early years of the industry.

Lawmakers hoped to hold floor votes on the legislation in both chambers next week, but the votes will be delayed as lawmakers work to reach a consensus, according to NJ.com.

Sen. Nicholas Scutari (D-Union) introduced the bill earlier this month, just days after voters approved a cannabis legalization initiative on Election Day, to implement New Jersey’s adult-use cannabis program.

After some delays due to criticism from social justice advocates, who argued that the bill did not go far enough to address the harms caused by the war on drugs, the legislation appeared to be back on track after lawmakers added amendments to generate more revenue for programs in minority communities, NJ.com reported.

Caliva, a vertically integrated cannabis company employing more than 400 people in cultivation, manufacturing and dispensary operations across California, is working to provide career training and mentorship to released prisoners and other people struggling with poverty and homelessness.

The business and partners Chrysalis and Success Centers, both non-profit organizations, have begun to assist recently released prisoners in California to reenter society. The three entities plan to eventually expand their work together to support people who are homeless and have low incomes.

Between March 11 and Nov. 12, 2020, the state of California has released 21,657 people from prison in response to the COVID-19 pandemic, according to the California Department of Corrections and Rehabilitation.

"When we heard the news that California state prison systems would be releasing hundreds of thousands of people to slow the spread of COVID-19, we knew we had to take action to help make a difference in our community,” Caliva CEO Dennis O’Malley stated in a press release announcing the program. “We're fortunate enough to be in a position where we were able to hire some candidates already and have been extremely impressed by the talent thus far.”

Working with Chrysalis and Success Centers, Caliva aims to help everyone enter the workforce, according to the press release. However, the release states, “it is necessary to recognize that the War on Drugs has disproportionately affected BIPOC communities.”

Chrysalis helps people who have been through the criminal justice system with “case management and basic needs resources as well as transitional jobs” that will help them rejoin the workforce, Molly Moen, vice president of development and communications at Chrysalis, told Cannabis Business Times and Cannabis Dispensary.

The Community College Cannabis Vocational Pilot Program managed by the Illinois Department of Agriculture was created as a solution to prepare students for a career growing, studying or working in the cannabis industry. When Project Evolve students were accepted into the Cannabis Dispensary Operations program at Olive-Harvey, one of the City Colleges of Chicago, hopes were high.

The Project Evolve program provides qualifying students with full scholarships and resources that lead them to high-wage and in-demand occupations, with Cannabis Dispensary Operations being one of nine areas of study to choose from. Olive-Harvey’s certificate is one of two City Colleges of Chicago cannabis certificates under the Community College Cannabis Vocational Pilot Program. Wilbur Wright Community College offers a Cannabis Technician Program with a focus on processing, infusing and testing.

The pilot program is seen as a component of broader workplace training platforms for the cannabis industry—as well as a piece of the Illinois social equity vision.  

According to the Economic Policy Institute, Black Americans had the highest rates of unemployment in the nation at 6.3% in the first quarter. Black Illinois residents, in particular, saw an increase in unemployment rates from 6.7% in Q1 to 20.7% in Q2. These statistics are significant because workforce development programs are charged with providing skills training to address the low-wage worker paradigm and unemployment/underemployment cycles in which Black workers seem to be stuck. Many students were expecting the growth of the adult-use cannabis industry to create a pathway to entry-level positions, and certificate completion was the first step in that direction.

As of May 2020, Illinois ranked 10th in the nation for legal marijuana jobs, according to a Leafly report. Illinois has 9,176 legal marijuana jobs and is estimated to grow that number to 63,000 by 2025, according to New Frontier Data, with an expectation of two non-technical jobs to every one technical job (not including ancillary businesses). Illinois’ industry and job opportunities were expected to grow in 2020 with the state adding up to 75 new adult-use dispensaries by May 1. As the state postponed the distribution of licenses due to the coronavirus pandemic and legal challenges to the state’s retail licensing regime, prospective early-career cannabis professionals again found themselves wading in uncertainty.

Students attending classes were abruptly transitioned to emergency remote education. Online classes while accessible, unearthed other areas of need to keep students engaged. Laptops, hot-spots and software support became an integral part of the program. Yet even with the support in place for students to complete the certificate, a question remains: Will students be able to find full-time employment?

Cannabis licensing can be extremely competitive, and with new states legalizing this fall and potentially more to come as we head into next year, applicants should know when—and how—to challenge a cannabis license denial, which can occur for a variety of reasons.

Vicente Sederberg hosted a Nov. 12 webinar on just this topic, where experts outlined when to consider a licensing appeal and how to navigate the appeals process in various markets.

Here are some key takeaways from the webinar, from appeal-worthy issues to details on specific appeals processes in Massachusetts, California and Colorado.

When to Appeal

Common reasons to challenge a cannabis license denial include an unfair or unlawful licensing process, arbitrary and capricious grading, and bias or corruption, according to Jerrico Perez, senior associate with Vicente Sederberg.

Perez pointed to Florida as an example of an unfair or unlawful licensing process, where the Florida Supreme Court heard a second round of arguments last month in a lawsuit that challenges the constitutionality of the state’s 2017 medical cannabis law.

PRESS RELEASE - 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:

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

PRESS RELEASE - Ridder has developed the Ridder Light Diffusion RLD 15 FR O screen together with Duijvestijn Tomaten, a tomato cultivator in Pijnacker. For Duijvenstijn’s new five-hectare unlit greenhouse, the grower needed a screen fabric that would protect the tomato crop against excessive incoming sunlight on hot summer days and offer the best possible ventilation. Together with the grower and the installer, Schermned, a new screen fabric was developed to meet the specific requirements of the grower.

Extra protection on sunny summer days

RLD 15 FR O is composed of a combination of diffusing bands and has an open structure. When the sun is shining directly onto the screen, the fabric provides a shading factor of 13%, which gives the crop additional protection from excessive solar irradiation, but thanks to its diffusing properties, it also enables the moderated light to penetrate deeper into the greenhouse. The open structure of the fabric ensures the best possible ventilation and heat regulation.

An alternative to chalk

A movable screen installation made with Ridder RLD 15 FR O fabric is a much more flexible alternative to chalking or coating the greenhouse roof. After all, a movable screen installation can be opened on overcast days, so that no precious sunlight is lost. And the screen cloth also has advantages when it comes to temperature control and regulating incoming sunlight.

New legislation in Utah would allow more doctors to recommend medical cannabis, according to a FOX 13 report.

The bill, which is sponsored by Rep. Ray Ward (R-Bountiful) and Senate Majority Leader Evan Vickers, would allow physicians to recommend cannabis for up to 15 patients, or up to 275 patients if a doctor receives specialized training through the state, the news outlet reported.

Qualifying patients in Utah have struggled to find doctors willing to recommend medical cannabis, according to FOX 13, with some physicians hesitant to process the required paperwork for only a handful of patients and others uncomfortable recommending cannabis to their patients at all.

The new legislation would not only allow doctors to recommend cannabis to more patients, but would also allow them to refer patients to the state’s medical cannabis pharmacies, where pharmacists can make specific product recommendations, FOX 13 reported.

The bill also adds cannabis to Utah’s controlled substances database, according to the news outlet, which allows doctors, pharmacies and law enforcement to track prescriptions for substances such as opioids.

As votes for the presidential race continued to be tallied, cannabis emerged as a clear winner in the 2020 election as five states—Arizona, Montana, Mississippi, New Jersey and South Dakota—passed legalization measures, leaving many to wonder what comes next for these new markets.

In one historic night, the U.S. cannabis landscape shifted dramatically as Arizona, Montana and New Jersey passed adult-use legalization, Mississippi passed medical cannabis legalization and for the first time, one state—South Dakota—passed both medical and adult-use legalization at the same time.

All five of the newly legalized states are significant in their own way and could each play a role in the future of continued reform efforts, according to industry stakeholders.

New Jersey, for example, could be the tipping point for adult-use legalization in the tri-state area, as New York and Pennsylvania consider policy reform efforts heading into 2021, according to Steve Fox, counsel at Vicente Sederberg and managing partner of VSS Strategies, Vicente Sederberg’s policy and public affairs consulting affiliate.

“I serve as an adviser to the Cannabis Trade Federation, and we actually just put out an alert where I described these ballot initiatives as domino initiatives, noting that they were likely to lead to other states following that,” Fox says. “I think the Northeast, with New York, Connecticut, Maryland [and] Pennsylvania, … have good prospects for moving forward as early as next year.”

PHOENIX, Nov. 16, 2020 /PRNewswire/ -- PRESS RELEASE -- Harvest Health & Recreation Inc., a vertically integrated cannabis company and multi-state operator in the U.S., has completed the divestiture of its dispensary and cultivation assets in Arkansas.

Natural State Wellness Dispensary, LLC and Natural State Wellness Enterprises, LLC, which own and operate a medical dispensary and cultivation facility, were sold on Friday, Nov. 13, 2020. The total purchase price paid by the buyer was $25 million. Following repayment of approximately $1.9 million in loans associated with the assets, the portion of net proceeds received by Harvest for its interests totaled approximately $12.9 million in cash. Harvest retains ownership of the real estate for the dispensary and cultivation facilities.     

"We are pleased to have completed this divestiture as part of our strategic plan to streamline our business and focus on core markets," said Chief Executive Officer Steve White. "The additional cash on our balance sheet adds flexibility at a time when we are pursuing growth opportunities such as recreational sales in Arizona."

Following the completion of this divestiture, Harvest maintains its 2020 guidance of greater than $225 million in revenue.

A cannabis decriminalization bill has stalled in the New Jersey Assembly after the Senate added an amendment that would lessen the penalty for the possession of up to one ounce of psilocybin, or psychedelic mushrooms, according to an NJ.com report.

The Senate approved the measure Nov. 16 in a 29-4 vote, but the Assembly canceled a vote on the bill, A.1897/S.2535, due to the added provision that would make possessing up to one ounce of psilocybin a disorderly person offense punishable by a six-month jail sentence, the news outlet reported. Under current law, the offense carries a prison sentence of three to five years.

“The Senate took an extraordinarily important step today by passing decriminalization, but, unfortunately, the Assembly’s decision to pull its scheduled vote means marijuana arrests—and all of the harmful, tragic consequences of racially disparate enforcement they come with—will continue until consensus can be reached,” ACLU-NJ Policy Director Sarah Fajardo said in a public statement.

Lawmakers are working to establish an adult-use cannabis program in the state after voters approved a legalization initiative on Election Day. They must pass a decriminalization measure to stop cannabis-related arrests as they work on separate legislation to regulate adult-use sales.

Lawmakers have pulled an adult-use bill amid criticism from social justice advocates, who said the legislation does not go far enough to promote diversity and inclusion in the industry. Advocates also criticized the legislation for not designating cannabis tax revenue for programs in communities disproportionately impacted by the war on drugs, NJ.com reported.

Virginia Gov. Ralph Northam has announced plans to introduce an adult-use cannabis legalization bill when the General Assembly reconvenes in January, according to The Virginia Mercury.

Northam signed a decriminalization bill in May to reclassify the possession of one ounce or less of cannabis to a civil penalty punishable by a maximum fine of $25, and the General Assembly passed legislation last month to prohibit police stops based on cannabis odor.

Northam’s most recent push for cannabis policy reform is in response to a Joint Legislative Audit & Review Commission study on the potential impacts of legalization in the state, The Virginia Mercury reported.

The study revealed that adult-use cannabis legalization could generate more than $300 million in annual tax revenues by the fifth year of the program, according to the news outlet, as well as reduce cannabis-related arrests by 84% when combined with decriminalization. The study also found that legalization could create more than 11,000 jobs in the state.

Also outlined in the study were ways policymakers could promote social equity, such as prioritizing minority entrepreneurs from communities that have been disproportionately impacted by the war on drugs, according to The Virginia Mercury.

TerrAscend, a multi-state cannabis operator with a presence in Pennsylvania, New Jersey, California and Canada, has announced that the company will expand to Maryland through the acquisition of HMS Health, LLC and HMS Processing, LLC, one of the state’s licensed medical cannabis cultivators and processors.

The acquisition, announced Nov. 6, is strategically and geographically advantageous for the company, according to Ryan McWilliams, CFO of Ilera Healthcare, which was acquired by TerrAscend last year.

“Geographically, Maryland is kind of an obvious fit, and there are so many similarities across all these Northeastern cannabis markets in terms of the fact that they’re all medical but on the verge of going recreational,” McWilliams told Cannabis Business Times and Cannabis Dispensary. “There’s a very limited availability of these licenses in each of these states, so when there was an opportunity to acquire a new one that is strategically and geographically advantageous for the organization, we were immediately very interested in that opportunity.”

HMS currently operates a 22,000-square-foot cultivation and processing facility in Frederick, Md., which produces flower and oil products for the state’s medical cannabis market. The facility will also be able to produce edibles upon receiving regulatory approval.

“Looking ahead, we’ve done our due diligence and met all of the current operators of the HMS facility, and [we] are very impressed by what they’ve been able to do,” McWilliams said, adding that TerrAscend plans to integrate HMS’ employees into its operations.

In 2020, many Americans are protesting criminal justice funding and tactics—some for the first time, growing and diversifying this coalition.

Leaders from the cannabis industry and industry-adjacent organizations have written and spoken about how the architects of the War on Drugs used cannabis as a means to imprison people of color and opponents of the Vietnam War and some of the effects of prohibition that continue today.

Seven out of 10 Americans now support legalization. Fifteen states and Washington, D.C., have legalized cannabis for adult use, and 36 states and D.C. have legalized medical cannabis, not including CBD-only states. Only a handful of states have not decriminalized.

However, prohibition continues to lead to disproportionate arrests of Black people, restrict job prospects and other opportunities in society for those who are arrested, and prevent prisoners from providing for their families. In states where cannabis is legal for adult use, people are serving time for cannabis offenses for which they were arrested before legalization.

Legalization activists continue the push to legalize cannabis federally, and in the meantime, in individual states, these efforts are gaining momentum, as evidenced by the fact that six pieces of legislation passed in five states last week to legalize adult-use and medical cannabis.

Also, on Election Night, voters decided on several criminal justice measures. Below are descriptions of some of them and how they relate specifically to cannabis.

On Nov. 12, Ohio medical cannabis regulators and the Medical Marijuana Advisory Committee (MMAC) held a virtual meeting to discuss the Ohio Medical Marijuana Control Program.

Regulators shared numerous updates, including about cultivation, processing, testing, dispensing and patients.

Ohio Department of Commerce update

Ohio’s Department of Commerce regulates cultivators, processors and testing labs. Greg McIlvaine, senior policy adviser for the Ohio Department of Commerce, oversees that department’s role in the medical cannabis program and gave a presentation during the meeting.

Twenty-five cultivators, 24 processors and three labs are currently operational in Ohio, McIlvaine said. Because of Ohio House Bill 197, “COVID-19-response legislation,” he said provisional licensees have until Dec. 1 to take action on their licenses. The department expects provisional licensees to have their final inspections and certificates of operation soon after the deadline, he added.

“The Commerce team also continues to implement accountability measures to ensure quality testing, including review of testing labs’ standard operating procedures and evaluation methods, as well as engagement with METRC, which is our seed-to-sale tracking system, to implement configurations and other updates to better track licensees’ testing results,” McIlvaine said.

McIlvaine called attention to an October mandatory product recall of dark chocolate Encore Edibles sold by Canton processor Mother Grows Best. He said the edibles “exceeded the regulatory thresholds for cadmium.”

New Jersey lawmakers have pulled a bill to implement the state’s adult-use cannabis program amid criticism from social justice advocates, according to a WHYY report.

“The bill that was introduced was an egregious, audacious, insidious white man money grab,” Charles Boyer, director of Salvation and Social Justice and pastor of Bethel AME Church in Woodbury, told the news outlet.

Boyer criticized the number of licenses designated in the legislation for Black and Latino communities, instead calling for more opportunities for people in communities most impacted by the war on drugs, as well as for individuals with prior low-level drug convictions, WHYY reported.

New Jersey Sen. Nicholas Scutari (D-Union) introduced the bill, S.21/A.21, Nov. 6, just days after voters passed a legalization initiative on Election Day. The legislation, which largely mirrored an unsuccessful legalization bill Scutari sponsored last year, outlined how the state’s newly legal adult-use cannabis industry would operate.

The bill passed committees in the Senate and Assembly Nov. 9, WHYY reported, and Scutari and Senate President Steve Sweeney issued a joint statement after the hearing indicating that adult-use cannabis tax revenues should go to the communities most impacted by systemic racism in the criminal justice system.