MjLink Cannabis Business News and Press

Canadian cannabis giant Aurora Cannabis announced March 22 that it plans to acquire TerraFarma, the parent company of Thrive Cannabis.

Thrive, founded in 2018 and based in Simcoe, Ont., is known for its flagship adult-use brand, Greybeard Cannabis Co., which produces small-batch craft cannabis flower and concentrates.

Aurora will acquire all of TerraFarma’s issued and outstanding shares for $38 million in cash and Aurora shares, according to a press release announcing the deal.

Thrive will also be eligible for up to $20 million in shares, cash or both, if it reaches certain revenue targets within two years.

"As consolidation among licensed producers accelerates, it's vital that any transactions we make, now or in the future, be strategic, accretive, and centered around adding exceptional talent and brands that align with our path to profitability," Aurora CEO Miguel Martin said in a public statement. "In these respects, Geoff and the Thrive team have a track record seldom found elsewhere in the Canadian market. They are truly exceptional cultivators who have gained trust with consumers and developed products that have been recognized and acclaimed by Canadian budtenders and industry peers. We see a unique opportunity to leverage their expertise to deliver near and long-term benefits for both our recreational and medical markets.”

LAFAYETTE, Colo. – urban-gro, Inc. (Nasdaq: UGRO) (“urban-gro” or the “Company”), a fully integrated architectural, engineering and cultivation systems integration company focused on the indoor Controlled Environment Agriculture (“CEA”) market, today announced that it has signed a definitive agreement to acquire Emerald Construction Management Inc. (“Emerald C.M.”), a 37-year old Colorado-based construction management firm providing comprehensive construction and supervisory services, from initial design through final build-out. Emerald C.M. expects 2021 revenues of $26.5 million and adjusted EBITDA of $1.2 million. The total purchase price for the transaction, inclusive of a maximum $2.0 million contingent earnout, is $7.0 million. urban-gro will fund the transaction with a combination of $2.5 million in cash and up to $4.5 million in equity. The transaction is expected to close within 60 days, pending successful completion of due diligence, and the Company expects the acquisition to be immediately accretive to earnings in 2022. 

Bradley Nattrass, chairman and CEO of urban-gro, commented, “The Emerald C.M. acquisition represents an important step in our strategy to supply the global indoor CEA market with turn-key design-built facilities. The market for mid-sized turnkey cultivation facilities and vertical farms is underserved, proving urban-gro a unique opportunity to bring the expertise and experience that is needed to deliver high-performance facilities. This acquisition enables us to get our clients to market more quickly while maintaining elite service levels.”  

Nattrass continued, “Beyond completing our turn-key strategy, the addition of Emerald C.M.’s contracts and project pipeline provides us with incremental opportunities to generate significant waterfall revenue by providing our current services and equipment solutions to Emerald C.M.’s existing clients. Coupled with our strong balance sheet and positive cash flow, we are in an ideal position to build upon our momentum in the global CEA industry while simultaneously enhancing shareholder value.”

Jim Dennedy, president and COO of urban-gro, added, “Today, many controlled environment agriculture companies are served by a variety of providers, many of which lack the depth in human resources, systems maturity, and financial stability to satisfy the requirements that are inherent in large and complex construction projects. The acquisition of Emerald C.M. not only strengthens our capabilities and services offerings, but also enables us to provide our clients with a single point of accountability to manage their project needs.” 

Christopher Cullens, CEO of Emerald C.M., said, “This union will provide immense value to all our CEA and non-CEA clients as they will be able to take advantage of the expertise, scale, and the complete suite of professional services that urban-gro offers. We’ve developed a strong partnership with urban-gro, and I couldn’t be more excited for both our clients and my team to experience what the combined company will offer. There is a gap in the global CEA industry, more specifically with the design build of indoor mid-sized CEA facilities, and we now have the ideal solution to fill it.”

An M&A agreement involving two of the biggest vertically integrated cannabis companies in the world was announced March 23.

Chicago-based Cresco Labs Inc. entered a definitive arranged agreement to acquire New York-based Columbia Care to the tune of roughly $2 billion, pursuant to which Cresco will acquire all of the issued and outstanding shares of Columbia Care in a transaction that is expected to close in the fourth quarter of 2022, Cresco announced early Wednesday morning.

If finalized, the acquisition would involve one of the largest price tags in the industry, rivaling that of Trulieve’s $2.1-billion deal to acquire Harvest Health last year (announced in May and completed in October), and of Tilray’s blockbuster merger with Aphria in May 2021, which created a company that had a combined market cap of US$8.2 billion at the time.

Based on closing stock prices March 22, Cresco and Columbia Care had a combined market cap of $2.94 billion, trailing only Curaleaf ($4.78 billion), Green Thumb Industries ($4.28 billion) and Trulieve ($3.53 billion).

“We are incredibly excited to announce this transformative transaction today at a very important time in the development of this industry,” Cresco Labs CEO Charles Bachtell said in a press release. “This acquisition brings together two of the leading operators in the industry, pairing a leading footprint with proven operational, brand and competitive excellence. The combination is highly complementary and provides unmatched scale, depth, diversification and long-term growth.”

He added, “The combination of Cresco Labs and Columbia Care accelerates our journey to become the leader in cannabis in a way no other potential transaction could.”

Hope Wiseman, owner of Mary & Main, a medical cannabis dispensary in Prince George’s County, Md., is excited about the future of her business.

Wiseman and company are in the process of introducing Mary & Main’s parent company, Wise Co., to the world with an eye toward expansion to a future adult-use market in Maryland, as well as national expansion through industry partnerships.

“I think we’re ready for people to start looking at us as more than just a medical dispensary operator because we have aspirations and plans in the works that are going to position us as much more than that,” Wiseman tells Cannabis Business Times.

A key component of these plans is creating opportunities for other Black entrepreneurs, and especially Black women, to operate cannabis businesses.

“As far as women in the industry, there’s been a pretty steep decline of women involvement from an ownership standpoint, in the C-suite, … but I’m excited to see women jump back in [and] take the reins, and there are some really strong women who are doing great work in the space right now,” Wiseman says. “I’m proud to be among those ranks, and at the end of the day, Wise Co. is looking to create opportunities for other Black operators and other women operators in the space. Me, as a young Black woman in the space, I realize that there are not very many like me. … I’m focused on making sure that Black women have a space in the cannabis industry, and that is a pillar of Wise Co. and our mission. That’s definitely who we look to partner with as we are building this national ecosystem.”

San Bernardino County, Calif., is backing attempts at the state level to crack down on illicit cannabis grows.

The county is supporting legislation in the California Assembly and Senate that would increase fines for illegal cannabis cultivation and target groundwater pollution caused by illicit grow sites, according to the Mohave Valley Daily News.

“Illegal cannabis farming is devastating the desert communities of San Bernardino County,” Curt Hagman, chairman of the San Bernardino Board of Supervisors, told the news outlet. “The county is determined to stop this terrible damage to the environment and to protect the lives and property of our residents from lawless criminals.”

The county has also requested $10 million in state funding to help clean up environmental damage at hundreds of illegal cultivation sites, the Mohave Valley Daily News reported.

California voters legalized cannabis in 2016 through Proposition 64, which allows the home cultivation of six plants for personal use and reduces the penalty for illegal cannabis cultivation from a felony to a misdemeanor.

After the Nebraska Supreme Court struck down the organization’s medical cannabis legalization measure before the 2020 election, Nebraskans for Medical Marijuana is making a run at the November 2022 ballot.

Up against a July 7 deadline to gather 87,000 signatures, the group hosted more than 100 signing events in 35 cities last weekend, according to a local KETV report.

The Nebraska Supreme Court ruled that the organization’s 2020 ballot initiative violated the state’s single subject rule, and Nebraskans for Medical Marijuana has since filed two separate medical cannabis initiatives with the Secretary of State.

The first would require the Nebraska Legislature to enact laws to protect doctors who recommend cannabis to their patients, as well as patients who possess and use medical cannabis, from criminal penalty.

The second initiative would require the Legislature to pass legislation to establish a regulatory framework that legally protects businesses that produce and sell medical cannabis.

A group of budtenders who voted in October to organize at the Solar Therapeutics cannabis dispensary in Somerset, Mass., unanimously ratified their first union contract March 21.

The contract comes roughly five months after the cannabis retail workers voted, 10-4, to join the United Food and Commercial Workers (UFCW) Local 328, which represents roughly 11,000 workers in a variety of industries in Massachusetts and Rhode Island.

RELATED: Cannabis Workers at Solar Therapeutics in Somerset, Mass., Vote Yes to Join Union

The ratified contract includes a three-year agreement with a focus on gaining full-time opportunities, improving benefits, raising wages and securing workplace protections.

Andrea Areias Nooth, a budtender at the Somerset location, served as a member of the worker negotiating committee.

“I am truly proud of my co-workers for working together to get this done as we help shape the future of the cannabis industry,” Nooth said in a Local 328 press release. “The work put in to get to this point was definitely worth it, and I know this momentum will continue with other dispensaries around the country as this industry grows. Never be afraid to stand up for what you deserve.”

Three medical cannabis bills in Maine are headed to the state’s full Legislature for possible consideration after receiving unanimous approval from the Veterans and Legal Affairs Committee, according to a local WABI report.

The legislation would ensure patients have access to telehealth services and allow caregivers to sell medical cannabis plants, the news outlet reported.

One of the bills would also require legislative review of the Office of Marijuana Policy’s (OMP) changes in administrative rules that protect patient or caregiver privacy, according to WABI.

“The Office of Marijuana Policy is working with the community and listening to us,” Paul McCarrier, a member of the Cannabis Council of Maine, told the news outlet. “They’re going to be working with us to keep the prices for patients fair and low and to make sure that patients can continue to access that therapeutic cannabis.”

The bills now advance to the full Legislature.

An Oklahoma bill proposes giving medical cannabis excise tax dollars derived from licensed businesses to law enforcement officials to help oversee inspections of those licensed businesses.

House Bill 3530, in part, aims to allocate the first $5 million collected from the state’s 7% excise tax on medical cannabis sales each year to a County Sheriff Public Safety Grant Revolving Fund created under the bill, according to the legislation’s text.

The measure, sponsored by Rep. David Hardin, is part of a bill package that Oklahoma House lawmakers unveiled earlier this month, which includes a 12-point plan aimed at cleaning up the state’s medical cannabis program and combating the illicit market.

RELATED: Oklahoma House Unveils Plan to Combat Illicit Cannabis

As Rep. TJ Marti outlined in a March 7 press conference, one of the points to that plan includes a grant program for sheriffs’ departments that will fund law enforcement efforts in every county. The plan also calls for annual inspections for all state-licensed grow sites, in addition to allowing Oklahoma Medical Marijuana Authority (OMMA) officials to conduct unlimited inspections of any site.

Specifically, the $5 million in annual funding to law enforcement under H.B. 3530 would provide sheriff’s offices the financial means to have deputies present during OMMA inspections.

Name: Hughes Pope

On March 9, New York State’s Cannabis Control Board (CCB) and Office of Cannabis Management (OCM) published draft regulations that spell out the eligibility criteria and application process and requirements to obtain a conditional adult-use retail dispensary license. These regulations are now subject to a 60-day public comment under New York’s State Administrative Procedure Act (SAPA) before being adopted into law. In total, these regulations require an application to include 34 separate pieces of information, as well as “any additional information requested by [OCM].”

Additionally, the proposed regulations require the applicant to “attest” to 16 conditions, including that the applicant “has entered into a labor peace agreement with a bona fide labor organization actively engaged in representing employees in the cannabis industry and understands that the maintenance of such a labor peace agreement shall be an ongoing material condition of the license.” To further protect employees, the proposed rule requires “each party to the agreement has signed such agreement prior to the license being granted.” Future retail dispensary licensees will be subject to the same requirements as these impending conditional licensees.

So, what does that mean for applicants?

Those seeking an adult-use retail license in New York must first identify a suitable local cannabis employee union as counterparty and then negotiate and execute a legally binding LPA with it. These are no small feats for entrepreneurs without labor law knowledge.

What is a Labor Peace Agreement?

Generally, a Labor Peace Agreement (LPA) is an agreement or contract between the employer and a labor union, where they both waive certain rights under the National Labor Relations Act (NLRA) related to union organizing, such as a union pledging not to strike, in exchange for certain conditions. In New York State and City, LPAs are already required for hotels, convention centers, food and retail establishments at covered development projects, government human services contracts, and food, retail, news/gifts, and duty-free concession stands.

Other labor peace agreement concessions can include card check (employer recognition of the union based on signed cards instead of secret ballot election results); neutrality (employer refraining from expressing negative opinions about a union and intervening in an organizing campaign); and workplace access (an employer allows outside union organizers).

Denver approved the first social equity hospitality license for a cannabis consumption lounge, city officials announced March 21.

Tetra Lounge operated as a private social club during the past few years but closed down after a new licensing mandate went into effect last year, NBC-affiliate News 9 reported.

Tetra’s license approval this week—which now awaits the successful completion of required inspections before the business can start operating—comes nearly a year after city council members overhauled the local cannabis industry by passing two measures last April.

One of those measures set forth a path to license cannabis consumption facilities, such as bars and clubs, where customers could bring cannabis to consume, or the facilities could sell small amounts of cannabis for consumption. That measure also opened the door for the city to implement cannabis tour buses and shuttles.

RELATED: Cannabis Delivery Legislation Passed in Denver

Before that overhaul, Denver allowed people to use cannabis at private clubs without a licensing system. Now, the city requires establishments to acquire licenses to offer on-site consumption.

The Mississippi Cannabis Trade Association is trying to ensure medical cannabis access for all those who need it—even patients in cities that have opted out of the state’s medical cannabis program.

The industry group is holding signature drives in local municipalities that have opted out of hosting medical cannabis businesses to give voters a chance to opt back in, according to a local WAPT report.

Mississippi voters approved medical cannabis legalization by more than a two-thirds majority in the 2020 election, but the state’s Supreme Court overturned the measure in May 2021 due to a signature-gathering technicality.

Sen. Kevin Blackwell and Rep. Lee Yancey then fought to restore the will of their constituents through legislation to legalize medical cannabis. The bill cleared the Legislature in January and Gov. Tate Reeves signed it into law in February.

The law allows Mississippi’s counties and municipalities to opt out of hosting medical cannabis cultivators, processors and dispensaries within three months of the bill being signed into law, but residents can petition for a special election to overturn their city’s decision.

Cannabis dispensary employees in Manistee, Mich., a Lake Michigan coast city in the northwest part of the state, unionized earlier this month with the United Food and Commercial Workers (UFCW) Local 876.

The organized workers at the Authentic 231 retail facility in Manistee operate under vertically integrated cannabis company Left Coast Holdings (Heritage Farms), which owns multiple dispensaries throughout the state.

Left Coast ownership initiated the unionization, according to a UFCW press release.

Local 876 President Dan Pedersen said the Authentic 231 workers represent the first cannabis dispensary in the state to organize.

“UFCW 876 looks forward to building a strong relationship with both owners and workers of Authentic 231, in providing job guarantees and protections to this rapidly growing industry,” Pedersen said in the release. “It is UFCW 876’s goal this effort serves as a model for sustaining unionizing efforts, by building stronger communities with stronger jobs.”

Left Coast ownership served as the facilitator in seeking a union for its employees, as well as the development of a Labor Peace Agreement to extend the upcoming bargaining agreement for all locations, according to UFCW.

TORONTO, March 21, 2022 – PRESS RELEASE – Cronos Group Inc., an innovative global cannabinoid company, announced that its board of directors has appointed Mike Gorenstein as chairman, president, and CEO, effective March 21, 2022, in connection with Kurt Schmidt’s retirement.

“Mike is a visionary leader who knows Cronos better than anyone,” said Jim Rudyk, lead independent director of Cronos. “He is uniquely positioned to oversee the implementation of our strategic and operational realignment initiatives as we create a highly differentiated branded cannabinoid platform to drive long-term success. A key element of our plan is being ready for entry into the U.S. cannabis market once federally permitted—with Mike leading that charge every step of the way.”

Rudyk added, “On behalf of the board of directors, I would like to thank Kurt for his stewardship through the challenges of the pandemic and broader industry headwinds. We are grateful for his contributions to Cronos and wish him all the best in his retirement.”

Gorenstein previously served as chairman, president and CEO of Cronos until September 2020, when he transitioned to the executive chairman role. In addition, he is a co-founder and passive member of Gotham Green Partners.

“I am excited to return as CEO and accelerate progress by leveraging the innovative and daring approach that Cronos was built on,” Gorenstein said. “We positioned Cronos to have the best tools to succeed in this market with our evolving asset-light supply chain, an organically growing brand in Canada, differentiated IP with a focus on rare cannabinoids, and one of the strongest balance sheets in the industry. Now it is time to use those tools to deliver meaningful shareholder value.”

Gorenstein’s immediate areas of focus include:

Although demand for adult-use cannabis soared throughout 2021 in Michigan, falling retail prices have left some business executives uncertain of their future in an increasingly competitive market.

From flower, vapes, edibles and a host of other products, Michigan dispensaries sold $124.6 million of adult-use cannabis in January 2022, representing an 84.8% increase from the $67.4 million sold in January 2021.

But during that same one-year timeframe, the average retail flower price dipped from $323.68 to $152.74 per ounce at adult-use dispensaries, a 52.8% price decrease, according to Michigan’s Marijuana Regulatory Agency (MRA).

The percent decrease for medical flower was nearly the same. The average retail price per ounce for medical flower dipped from $252.04 in January 2021 to $119.64 in January 2022, representing a 52.5% decrease.

Michigan was the eighth state to launch adult-use cannabis sales in the U.S. when licensed dispensaries began opening their doors to customers in December 2019. During that inaugural month of adult-use sales, the average retail price of flower was $516.21 per ounce, according to information from Metrc, the state’s seed-to-sale tracking provider.

Cannabis business executives from Buchanan and Niles—cities in the southwestern part of the state—remain skeptical of those falling prices making any kind of meaningful rebound in the near future, the South Bend Tribune reported.

South Dakota Gov. Kristi Noem signed five medical cannabis bills into law March 18 to create what she calls a “safe and responsible” medical cannabis program that is focused on patients, according to the Associated Press.

South Dakota voters approved ballot measures in 2020 to legalize both medical and adult-use cannabis in the state, although the South Dakota Supreme Court overturned the adult-use law last fall.

Noem fought this year for several changes to the state’s medical cannabis program, AP reported, and home grow provisions have been a particularly hot topic for the Legislature.

RELATED: South Dakota Lawmakers Divided on Allowing Home Cultivation in Medical Cannabis Program

The state’s voter-approved medical cannabis law placed no maximum cap on the number of plants patients could grow at home, but after some debate, lawmakers passed Senate Bill 24, compromise legislation that limits patients to four plants—two mature and two immature.

As more than 20 chief executives from top cannabis companies spent last week in Washington, D.C., urging U.S. lawmakers to pass the SAFE Banking Act, the inaction of those lawmakers was felt on the other side of the country.

A male worker at the World of Weed dispensary in Tacoma, Wash., was fatally shot during an attempted robbery just after 10 p.m. March 19, according to multiple local news sources.

Police officers attempted to save the worker’s life, but he died on scene from a gunshot wound, according NBC-affiliate King 5 News and CBS-affiliate KIRO 7 News. That was the third fatal incident involving a dispensary robbery in less than a week in the western part of the state, King 5 reported.

On March 16, two suspects robbed a Green Theory dispensary at gunpoint in a suburban neighborhood of Bellevue, Wash., and fled the scene with cash and products as a third suspect drove a getaway vehicle. Police chased the suspects through Renton and into South Seattle, where they took two people into custody, but the third person ran and hid in the shed of a nearby home, Fox 13 Seattle reported.

A Seattle SWAT officer gave a verbal warning for the third suspect, a 19-year-old, to show his hands, but that suspect fired at officers, who returned fire, the news outlet reported. The suspect was hit and died at the scene.

“Any decision to pursue a suspect is highly scrutinized, and we balance the threat posed by the suspects with the risk the pursuit poses to the community,” Bellevue Police Chief Wendell Shirley told Fox 13. “In this case, these suspects were armed and extremely dangerous, and we needed to get them into custody to prevent further harm.”

While Virginia lawmakers could not agree on a path to commercial adult-use cannabis sales this year, the General Assembly passed legislation to restrict the sale of certain THC products in the state.

Senate Bill 591, which is now headed to Gov. Glenn Youngkin, permits only the state’s licensed cannabis retailers to sell products containing more than 0.3% or 0.25 mg of THC per serving, as well as products containing more than 1 mg of THC per package, according to a Virginia Mercury report.

The restrictions apply to any naturally occurring or synthetic version of THC, including delta-8, the news outlet reported.

RELATED: Virginia Lawmakers Look to Regulate the Sale of Cannabinoid Products Containing THC

Virginia legalized adult-use cannabis last year, and while the law’s personal possession and home grow provisions took effect July 1, 2021, the state has yet to launch commercial adult-use sales.

One of the largest cannabis companies in the world by market cap is seeking out its first medical cannabis retail facility in Florida.

Las Vegas-based Planet 13 Holdings, a vertically integrated multistate operator, announced March 17 its plans to set up a medical dispensary in the town of Orange Park, a suburb on Jacksonville’s south side.

The planned location is on a busy retail corridor next to a Walmart Superstore and near the scenic St. John’s River, a popular destination for tourists and local residents, according to the company.

“We’ve been heads down working hard on our Florida expansion,” Planet 13 co-CEO Bob Groesbeck said in a press release. “We are progressing well on locating and working on both cultivation and retail under a dual track plan to bring both online at the same time. This is the first signed lease of our initial six planned neighborhood style stores all focused on major population centers and heavily trafficked retail locations.”

The move will expand upon Planet 13’s Nevada footprint, which includes its Las Vegas dispensary that became the largest in the world at 112,000 square feet when it opened in 2018, and it’s 55,000-square-foot retail facility in Orange County, Calif. The company has multiple “superstores” in each state as well as cultivation, production and distribution licenses.

The pathway to its Florida expansion opened when Planet 13 entered into an agreement with a subsidiary of Harvest Health & Recreation Inc. in September to acquire a license for $55 million to operate as a Medical Marijuana Treatment Center (MMTC) in the state. Regulated by the Florida Department of Health, MMTCs are the only businesses authorized to dispense medical cannabis to qualified patients and caregivers in the state.