MjLink Cannabis Business News and Press
The New Mexico Cannabis Control Division (CCD) has issued its first adult-use retail and manufacturing licenses, according to a department press release.
“With each day New Mexico’s adult-use cannabis industry is growing,” CCD Director Kristen Thomson said in a public statement. “Bringing manufacturers and retailers online is an important milestone that allows more businesses, entrepreneurs and communities to maximize the economic opportunities adult-use cannabis sales will provide. These three licensees alone plan to hire nearly 130 full- and part-time workers.”
The first retail licenses were awarded to two Albuquerque-based businesses, Enchanted Botanicals and Dulce Cannabis.
Enchanted Botanicals plans to open two locations in the city, one in Nob Hill and one at San Mateo and Menaul, while Dulce Cannabis plans to open a location on Carlisle Boulevard in Albuquerque.
RELATED: New Mexico Issues First Adult-Use Cannabis Licenses
Delta-8 remains to be a popular conversation amongst those in the cannabis and hemp industries in 2022.
States are continuing to take different approaches to regulating delta-8–with some already implementing bans and others filing legislation to regulate and tax its sales.
And Ohio has joined in on the recent delta-8 action, as the state's Medical Marijuana Control Program (MMCP) recently filed proposed rule updates with the General Assembly’s Joint Committee on Agency Rule Review.
One of the proposed rule changes includes updating the definition of THC and the definition of THC content to include delta-8 and other related isomers specifically.
The proposed definition of THC in the document is as follows:
"Tetrahydrocannabinol" or "THC" means all naturally or artificially derived tetrahydrocannabinols, or any structural, optical, or geometric isomers, or analogs of tetrahydrocannabinols. This includes, but is not limited to, Delta-1 tetrahydrocannabinol; Delta-6 tetrahydrocannabinol; Delta 3,4 tetrahydrocannabinol; Delta-8-tetrahydrocannabinol; Delta-9 tetrahydrocannabinol; Delta-10 tetrahydrocannabinol; and any other cannabinoid that the Department determines to have an intoxicating or psychoactive effect.
NEW YORK, Jan. 18, 2022 –PRESS RELEASE – Columbia Care Inc., one of the largest andmost experienced cultivators, manufacturers and providers of medical andadult-use cannabis products in the United States, has hired Derek Watson as chieffinancial officer. Watson brings more than 30 years of finance and leadershipexperience to the role, including in strategy, investor relations, informationtechnology, tax, treasury, accounting, financial planning and analysis,operational improvement, and risk management.
“The search for our new CFO was ahighly selective and competitive process,” Columbia Care CEO Nicholas Vitasaid. “This role is pivotal to our growth and will be the most importantleadership position as we navigate what the future holds for banking,investments and funding in the cannabis industry. We have found the right matchin Derek and are thrilled to welcome him on board next week. His decades ofexperience will serve him well, and his hands-on dedication to collaborationand innovation are exactly what we need in a CFO to take us into the next phaseof our company.”
Vita added, “We are extremelygrateful to Michael Livingstone for stepping in as interim CFO, and to ourentire finance team for supporting this transition.”
Prior to joining ColumbiaCare, Watson served as the chief financial and commercial officer at Tastes onthe Fly, a private equity-backed, national consumer retail company based inCalifornia. He has also held CFO roles at two other consumer companies, StarrRestaurants and Samba Brands, and as CFO and VP of strategic initiatives atSchindler Elevator, the U.S. subsidiary of Schindler Holding AG.
Watson began his career atKPMG where he spent 20 years providing audit and consulting services, includingas a partner and practice leader, and served private and Fortune 500 companiesacross a variety of industries while based in London, Prague, New York andPhiladelphia.
“Columbia Care is already aleader in this evolving industry and has significant long-term growthopportunities,” Watson said. “I am privileged to join an innovative leadershipteam focused on expanding its market presence, and I look forward to workingclosely with all stakeholders to drive continued success.”
TORONTO and WARREN, Mich., Jan. 18, 2022 (GLOBE NEWSWIRE) -- PRESS RELEASE -- Red White & Bloom Brands Inc., a multi-state cannabis operator and house of premium brands, via its RWB Michigan LLC wholly owned subsidiary, has closed on a lease assignment for a 15,000-square-foot manufacturing/processing and distribution facility in Warren, Mich. and has been issued both Medical and Adult Use licenses. Operations at the facility commenced this week. RWB will immediately begin manufacturing medical and adult use cannabis products with all necessary equipment already installed and inspections completed.
“This Warren facility allows us to centralize distribution for our ‘house of premium brands’ in Michigan and finally report all of our Platinum Vape wholesale sales on a much less confusing and straightforward basis,” announced RWB CEO and Chairman Brad Rogers. “We will be expanding the wildly popular Platinum Vape brand to include gummies and chocolates to capitalize on the existing brand equity we command in Michigan. The facility provides the production capacity to expand sales of our award-winning brands from the 250+ Michigan dispensaries that carry them to the state’s 400+ dispensaries.”
Hiring 30 Full-Time Employees
RWB Michigan will now begin to hire 30 full-time employees in the coming weeks, with intentions to grow the workforce in Warren to 50 in 2022. A wide variety of positions are available including many higher-paid, skilled positions ranging from frontline employees to PhDs specializing in product formulations. To apply, email inquiries and credentials to [email protected]. In addition, visit www.RedWhiteBloom.com for more information and the job fair links once they are available.
Platinum Vape Product Expansion
NORWOOD,Mass., Jan. 18, 2022 – PRESS RELEASE – MariMedInc., a leading multistate cannabis operator focused on improving livesevery day, announced it signed a definitive agreement to acquire Green GrowthGroup Inc., holder of a provisional cannabis craft license in Illinois. Thetransaction is subject to customary closing conditions and regulatoryapprovals. Terms of the deal were not disclosed.
Thistransaction will enable MariMed to add cultivation, manufacturing anddistribution to its existing retail cannabis operations in the state. MariMedwill bring its full product portfolio of award-winning and top-selling brands,genetics and products to one of the top cannabis markets in the United States.
“Thisacquisition allows MariMed to be a vertically integrated cannabis operator inIllinois, where we already operate four high-performing Thrive-brandeddispensaries,” MariMed CEO Bob Fireman said. “It is an important part of ourstrategic growth plan to increase our revenue and profits by expanding in thehigh-growth states in which we currently operate. Illinois regulations providefor our company to own up to 10 dispensaries and three craft licenses.”
“Beingvertical in Illinois will improve our gross margins at our retail stores andprovide the company wholesale revenue from the sale of our branded products toother dispensaries,” added Jon Levine, chief financial officer of MariMed. “Thecompletion of this transaction, in addition to the recently announcedacquisition of a Maryland cannabis business, are both important steps in theexecution of MariMed’s strategic growth plan.”
Forthis craft license, the company will acquire a building to develop up to 14,000square feet of canopy for cultivation, build an extraction lab to produceconcentrates, and build a production kitchen for the manufacture of edibles andother derivative products. A transportation license also being acquired willenable the company to wholesale its products throughout Illinois.
Thecompany intends to manufacture and distribute in Illinois its proprietarybrands and products, including its Betty’s Eddies fruit chews, whichwas one of the top-selling edibles in the state until 2019 through a third-partylicensing agreement, its award-winning Nature’s Heritage flower andconcentrates, its Bubby’s Baked soft and chewy baked edibles, andmore.
New Mexico regulators have temporarily doubled the number of cannabis plants that licensed producers can grow ahead of the state’s adult-use launch, according to NM Political Report.
The emergency rule went into effect Jan. 13 and increases the maximum number of mature cannabis plants from 10,000 to 20,000, the news outlet reported.
“The Division has considered demand estimates provided by applicants and licensees in the cannabis industry,” Kristen Thomson, director of New Mexico’s Cannabis Control Division, wrote in documents filed with the state’s Commission of Public Records, according to NM Political Report. “Projected market demand shows that the demand for regulated cannabis will increase year-to-year as more cannabis consumers move from the illicit market to the regulated market. The supply of medical cannabis will become increasingly threatened without an adequate supply of plants.”
New Mexico is slated to launch legal adult-use cannabis sales in April, and plant count limits have been the source of controversy in the state’s medical program since it launched in 2014.
RELATED: Carver Family Farm Plans to Bring Quality, Variety to New Mexico’s Adult-Use Market: The Starting Line
Delaware Rep. Ed Osienski has filed a new adult-use legalization bill with changes that he believes will increase its chances of passing, according to a Delaware Public Media report.
The Delaware House Health and Human Development Committee approved Osienski’s adult-use legalization proposal last year, but the bill ultimately stalled after debate over a social equity fund included in the legislation.
RELATED: Delaware Lawmaker Will Reintroduce Cannabis Legalization Bill in January
This year’s proposal, House Bill 35, does not include the fund, which would have helped social equity applicants establish businesses in the cannabis industry, according to Delaware Public Media.
In its place, Osienski has proposed that a portion of the tax revenue generated from legal cannabis sales support the Justice Reinvestment Fund, which aims to address the effects of the war on drugs on many of Delaware’s communities, the news outlet reported.
The Arkansas Medical Marijuana Commission moved to tweak the number of medical cannabis dispensaries allowed in each of the state’s eight designated zones Jan. 13, paving the way for regulators to grant the last of the state’s 40 retail licenses.
The last two dispensary licenses will go to Green Remedies Group, which will locate in Garland County, and T&C Management, which will operate in Texarkana, according to an Arkansas Business report.
The 2016 voter-approved constitutional amendment that legalized medical cannabis in Arkansas allowed the state to license a maximum of 40 dispensaries, the news outlet reported, and the Medical Marijuana Commission has since licensed 38 retailers in eight designated zones across the state.
Six of the eight zones have five dispensaries each, but Zone 6, which includes Garland County, and Zone 8 in Southwest Arkansas, only have four retailers each, Arkansas Business reported.
Medical Marijuana Commission Chairman James Miller proposed last week that regulators should add an additional dispensary in each of those two zones, according to the news outlet, and the rule change allowed the commission to consider dispensary applications received in 2017, which were rejected when retail licenses were initially issued.
TALLAHASSEE, Fla., Jan. 18, 2022 – PRESS RELEASE – Trulieve Cannabis Corp., a leading and top-performing cannabis company in the U.S., announced an expanded partnership with Connected Cannabis Co., a premier cannabis cultivator. Through this agreement, Trulieve will be the exclusive producer, processor and retailer of Connected branded products throughout Florida.
Connected branded products will be available later this year exclusively at Trulieve's 111 Florida dispensaries. Trulieve already partners with Connected in Arizona.
"Trulieve is excited about expanding our partnership with Connected as we continue seeking ways to benefit our patients," Trulieve CEO Kim Rivers said. "Connected maintains a portfolio of proprietary top-shelf strains that our customers and patients desire in other markets, and we anticipate a similar response in Florida."
Connected has been building a proprietary genetics portfolio of premium strains and meticulously cultivating cannabis at scale since 2009. With more than a decade of industry experience, Connected is known as a leading brand in the cannabis space and a pioneer in the industry.
"We're proud to expand our successful partnership with Trulieve to bring our award-winning Connected and Alien Labs products to the East Coast," Connected co-founder Caleb Counts said.
Sam Ghods, CEO of Connected, added, "We value their leadership as the top operator in the state and share their commitment to providing customers with the best products possible."
CHICAGO, Jan. 18, 2022 – PRESS RELEASE – Cresco Labs, a vertically integrated multistate operator and the No. 1 U.S. wholesaler of branded cannabis products, is expanding its Sunnyside brand in Pennsylvania with a new store located at 28 W. Skippack Pike in Ambler. This location becomes the company’s 10th store in Pennsylvania and 47th dispensary nationwide.
“We are thrilled to be opening our 10th store in Pennsylvania, a continuation of our strategy of going deeper in our footprint and tailoring to individual state dynamics,” Cresco Labs CEO and co-founder Charlie Bachtell said. “With our CPG and wholesale focus, we’ve been able to take the top market share in Pennsylvania according to Headset. Adding additional fully owned retail will support our brand building and provide more access to Cresco Labs’ amazing products for patients across Pennsylvania.”
Located in the borough of Ambler, north of Philadelphia, the dispensary is a few miles away from the Pennsylvania Turnpike, a superhighway transporting thousands of people daily east-west across the state. Sunnyside Ambler resides in an area home to large facilities operated by major pharmaceutical companies, including Johnson & Johnson, Merck and Janssen.
The dispensary will be open 9 a.m.-6 p.m. Monday through Thursday, and 9 a.m.-7 p.m. Friday and Saturday. Patients can place online orders, browsing live inventory, on www.Sunnyside.shop and pick up orders in-store the same day. Store phone is 267-405-2622.
For more information about Sunnyside, visit www.sunnyside.shop.
]]>In December, the team at Cresco Labs’ Social Equity and Educational Development (SEED) initiative gathered at the site of a formerly licensed dispensary in Chicago, near Wrigley Field. While the company had moved its neighborhood retail location up the street to a new 10,000-sq.-ft. space, the old spot was still on the books. A plan emerged.
The idea, unveiled on that December morning, was to open the Illinois Cannabis Education Center—to use the brick-and-mortar dispensary bones as a way of reeling in and training people who are interested in contributing to the industry.
Chima Enyia, executive vice president of SEED, points to the four pillars of this Cresco Labs initiative: education, entrepreneurship, workforce development and restorative justice. All four will form the support structure for the new platform.
“When we talk about, the Cannabis Education Center, we're not the first or the last to dive into social equity work,” he says. “There are plenty of community organizations who have been doing this work, who have been doing a phenomenal job at fighting this fight, and we really just wanted to lend our support in the effort in the ways that we can. We moved a dispensary from one location to another, and instead of getting rid of that dispensary facility, we decided to transition that into a full scale cannabis education center. Essentially, we have everything in it but the cannabis. Right now, the average person in Illinois can't walk into a dispensary and walk in behind the desk or behind the counter or go into the vault and see how those things operate.”
Once the Illinois Cannabis Education Center, that’s what the space will become: an immersive industry training ground. Students and community members interested in getting into the business will have a place to work out their training and technique behind the counter. Everything from customer engagement to inventory tracking (via BioTrack software) is on the table.
RELATED: Beyond the Show: Chima Enyia
NEW YORK, Jan. 18, 2022 – PRESS RELEASE – Surfside Solutions Inc., an end-to-end marketing technology that aggregates first-party data across all customer touchpoints, announced the launch of real-time ecommerce measurement to the Surfside Attribution Platform, a self-service measurement tool that allows dispensaries, brands and delivery companies the ability to visualize online sales that are directly attributed to their digital and traditional media campaigns.
The addition of ecommerce measurement to Surfside's Attribution Platform allows customers to visualize campaign metrics, store visitation and ecommerce sales in one single view. Real-time ecommerce attribution combined with retail foot traffic measurement provides advertisers with a complete picture of the path to purchase, offering transparency and insight to aid in better media optimization decisions.
"Our biggest goal at Surfside is to turn first-party data into an asset for media performance and sales for our advertisers," Surfside co-founder Michael Blanche said. "By clearly visualizing exactly which channels, ad creative and audiences are driving the strongest return on ad spend, real-time ecommerce attribution allows our clients to use their own sales data to improve the performance of their marketing initiatives."
With the addition of real-time ecommerce attribution, users can:
Change attribution windows to measure ad performance. Adjust attribution windows from one hour to 30 days and anywhere in between to truly understand ad performance through multitouch attribution. Optimize campaigns as they happen. Integrating the measurement platform to the Surfside DSP (advertising platform) allows campaign optimizations based on ecommerce events, like completed checkout, or abandoned carts to bring back relevant consumers. See the customer journey at scale. Easily calculate overall lifetime value by seeing how and when customers begin the journey, how long it takes them to make a purchase, and how ads impact the buying cycle. Measure omnichannel media across multiple platforms. Surfside's attribution platform can measure media across any third-party platform, tying advertisements from desktop, mobile, tablet, OOH, TV and more to ecommerce and store visitation results in one dashboard.As customer journeys get more complex and attribution gets more crucial than ever, Surfside continues to build best-in-class reporting to give advertisers the control they need to understand ad performance alongside overall business metrics. By offering a truly real-time view of ecommerce sales and return on ad spend in a single dashboard, real-time ecommerce attribution makes advertising with Surfside as transparent as possible.
]]>Republican Tennessee lawmaker Chris Hurt introduced legislation Jan. 11 that would regulate and tax cannabis products, including delta-8, in the state.
The measure, House Bill 1690, would regulate psychoactive hemp-derived cannabinoids, accounting for products that contain more than 0.1% total THC (or total amount of delta-9 THC, the primary psychoactive compound found in cannabis, in products). According to the bill text, this includes, but is not limited to:
Delta-8 THC; Delta-10 THC;Hexahydrocannabinol (HHC);Tetrahydrocannabiphorol (THCp); Tetrahydrocannabinol acetate ester (THCo); and Tetrahydrocannabivarin (THCv)Essentially, “H.B. 1690 would do three things: create a licensing requirement for retailers and wholesalers, establish a 6.6% excise tax on the wholesale of hemp-derived cannabinoids and limit [the] sale of psychotropic hemp-derived products like delta-8 to those 21 and older,” according to the Nashville Post.
Hurt and Joe Kirkpatrick of the Tennessee Growers Coalition (TGC) collaborated to write the bill.
The measure would require wholesalers and retailers who sell such products to apply for an annual license through the state’s department of agriculture (TDA), which would cost $200. Based on the outline of the licensing structure, Kirkpatrick said he would expect to gather roughly $160,000 a year in fees, the Post reports.
Kirkpatrick also estimated that the 6.6% tax excise could generate $4-5 million in annual revenue for the state. According to the Post, Hurt and Kirkpatrick would like to see the money collected from fees and wholesale tax be used to help the TDA ensure product safety.
On Dec. 2, 2021, Kansas Attorney General Derek Schmidt released an opinion declaring delta-8 THC is illegal to possess or sell in Kansas under specific circumstances.
The opinion reads: “Delta-8 tetrahydrocannabinol (Delta-8 THC) comes within the definition of a Schedule I controlled substance and is unlawful to possess or sell in Kansas unless it is made from industrial hemp and is contained in a lawful hemp product having no more than 0.3% total tetrahydrocannabinols (THC). Unlawful hemp products include cigarettes, cigars, teas, and substances for use in vaping devices. Delta-8 THC derived from any source other than industrial hemp is a Schedule I controlled substance and unlawful to possess or sell in Kansas. Other federal and state laws and regulations place additional limits on the legality of products containing THC and other cannabinoids.”
Schmidt’s opinion on delta-8 has already started to play out in one city in Kansas, Hays, where law enforcement could begin taking products that fit Schmidt’s description off shelves or ask shop owners to voluntarily turn in their products, according to a Butler County Times-Gazette article.
The article states that Hays Deputy Police Chief Brian Dawson “made clear” that law enforcement may arrest anyone they discover possessing illegal delta-8 products.
And Robert Anderson, an attorney from Ellis County (where Hays is located), reportedly wrote to local shops that sell delta-8 on Dec. 29, 2021, asking them to turn in all illegal delta-8 products to law enforcement. He also noted that those who do so would not risk Schedule 1 possession charges, according to the news outlet.
According to the news outlet, Anderson said the situation is “a mess” in an interview with Kansas News Service.
After Mississippi Gov. Tate Reeves played games with calling a special session last fall, the state Senate did not pussyfoot on passing medical cannabis legislation this week.
Making quick work on approving the Mississippi Medical Cannabis Act in committee, the upper chamber took up the legislation, Senate Bill 2095, on the Senate floor Jan. 13 and ultimately sent a stern message to the House and governor via a 46-5 vote for passage. The approval came just two days after the legislation was officially introduced for this session.
The bill, which Sen. Kevin Blackwell has been working to craft since early 2021, would allow registered patients in the state to access up to 3.5 grams of medical cannabis flower, 1 gram of concentrate or 100 milligrams of THC in an infused product per day—or roughly 3.7 ounces of flower per month.
The proposed possession limit created rift between the Legislature and Reeves, who requested reducing the limit by half before he’d call a special session last fall. But that was just one of several requests the governor made, Blackwell told Cannabis Business Times last week. Reeves originally made nine requests, seven of which the Legislature accommodated, but then he kept coming back with more, and more, demands, Blackwell said.
Blackwell and Rep. Lee Yancey—both Republicans—did not budge on the possession limit for the compromise bill they agreed upon last fall, and Reeves never called the special session. The legislative effort by Blackwell and Yancey was intended to accomplish the goals of November 2020’s voter-approved Initiative 65, which the state’s Supreme Court struck down on a signature-gathering technicality in May 2021.
RELATED: Mississippi Supreme Court Overturns Voter-Approved Ballot Initiative for Medical Cannabis
When Garret Schwartz, co-founder and CEO of recycling solutions provider Resinate, saw a documentary about plastic waste and its impact on the ocean, he started asking questions about the current state of recycling in his home state of Arizona, as well as in the broader United States.
“I didn’t realize how much plastic was just not getting recycled, how much was going into the environment,” he told Cannabis Business Times. “I started asking about why and just wondering, what is happening in Arizona and in the U.S. that is contributing to the dysfunction? … What is a valuable resource that is not being recycled that could be recycled that we could focus on? Where is a problem worth solving within this dysfunction?”
RELATED: How Ocean Cannabis Company is Cleaning the Ocean, One Vape Cartridge at a Time
Schwartz and his business partner, co-founder and Chief Operating Officer Brandon Schwartz, started educating themselves on how recycling works and how plastic moves from a business or a household into a sorting facility, and then to a plastic processor or manufacturer. They wanted to find a way to acquire and process some of the material into something new.
“There’s a lot of opportunity for a better system to exist,” Schwartz said. “That’s what we’d like to focus on. The future of that can be built with help from businesses.”
CINCINNATI, Jan. 13, 2022 – PRESS RELEASE – Prospiant, the agtech business unit of Gibraltar Industries Inc., announced the launch of its most universal innovation to date, the Delta Ethanol Extraction CUP-5. The Delta CUP-5 is designed to address the specific needs of small-scale cannabis processing facilities, prototype labs and education research labs. It combines closed-loop cold alcohol extraction technology with mechanical centrifugation, ensuring a high-purity end product.
The Delta CUP-5 is the first extraction unit in the industry that meets the needs of smaller cannabis processors. It manages plant material (depending on mill size) in batches as small as 3.5 pounds and can complete the extraction process in two to 12 minutes. In addition, it is easy to clean and simple to use. The operation of the unit is similar to running a washing machine.
Prospiant is an industry leader in ethanol-based extraction equipment. In 2019, the company offered the first systems that met the UL certification to ANSI/CAN/UL/ULC 1389 for use in the U.S. and Canada and in 2020 was awarded a patent for the Delta CUP platform. Now, the Delta CUP-5 becomes a standout in the CUP series with its easy-to-use design and unique features.
Delta CUP-5 innovations include:
It does not have a hazardous location (HazLoc) requirement or require a C1D2 environment, unlike other extraction systems. The 220-volt, single-phase, low-power CUP-5 runs on a minimal 1.5 horsepower. It can run on power almost anywhere.It uses proven ethanol technology, requiring only 5 gallons per run.It is a small but highly powerful extraction unit.“The Delta CUP-5 is a solution for small processors looking to add ethanol to their extraction portfolio and for businesses increasing ethanol production through an existing Prospiant Delta CUP series system,” said Mark Dunson, group president of Prospiant. “The system is uniquely designed for ease of operation and flexibility in scale, avoiding the need for a special facility. With the touch of a button, the automated program menu of the Delta CUP-5 runs the single-phase cycle to the user’s specifications.”
Columbus, OH – PRESS RELEASE – The Coalition to Regulate Marijuana Like Alcohol submitted 29,918 additional signatures in support of an initiated statute legalizing the adult use of marijuana to the Ohio Secretary of State’s office today.
After submitting 206,943 signatures on Dec. 20, 2021, the Coalition was notified that it needed to collect approximately 13,000 additional signatures to qualify the initiated statute proposal. The Coalition mobilized quickly and easily collected more than twice that number.
“We feel confident that we will meet the signature requirements and look forward to the legislature taking up an issue that a majority of Ohioans support this year,” said spokesman Tom Haren. “We encourage the public to visit our website, www.JustLikeAlcohol.com, to learn more about the proposed statute.”
Once local Boards of Elections validate at least 13,062 signatures, and the Secretary of State Certifies them, the statute will be presented to the Ohio General Assembly. The legislature will then have four months to consider the legislation. Should legislators opt not to pass the bill as-is, the Coalition to Regulate Marijuana Like Alcohol can collect an additional 132,877 signatures to present the issue to Ohio voters on the Nov. 8th, 2022 ballot.
California has been dubbed the largest adult-use cannabis market in the world, but those playing by the rules continue to forge ahead while remaining handcuffed by the state’s tax structure and retail shortage.
Despite being on pace to record its highest yearly sales mark—with adult-use cannabis retail tallying $3.9 billion in taxable sales through the first three quarters of 2021—California’s reality on the ground is that the illicit market still outperforms the legal one because of a price gap caused by oppressive tax burdens and multilayered bureaucracy as barriers to entry.
Last year, the Legislative Analyst’s Office—a nonpartisan fiscal and policy research institute for California’s Legislature—estimated that adult-use cannabis businesses operate in less than one-third of jurisdictions statewide.
But that could all change under Gov. Gavin Newsom’s budget proposal released Jan. 10—pending what’s in the details. Nevertheless, Newsom signaled he’s ready to reform the cannabis program’s tax structure and retail shortage.
“The administration intends to further develop a grant program this spring that will aid local governments in, at a minimum, opening up legal retail access to consumers,” Newsom wrote in his 400-page budget summary. “Further, the administration supports cannabis tax reform and plans to work with the Legislature to make modifications to California’s cannabis tax policy to help stabilize the market; better support California’s small, licensed operators; and strengthen compliance with state law.”
While many California cannabis businesses, especially small farms, have faced an uphill battle since 2016’s voter-approved Proposition 64 was enacted—and the subsequent adult-use sales launch in January 2018—many of their struggles originate from hand-tying policies that predate Newsom’s governorship. His term began in January 2019.
What are some best practices for cannabis businesses looking to make the switch from medical to adult-use sales in newly legal markets?
For multistate cannabis operator Jushi Holdings Inc., it all comes down to navigating each state’s political climate and retail trends while maintaining control of the supply chain through vertical integration and implementing an omnichannel approach to reach patients and consumers.
With more than two dozen medical and adult-use dispensaries nationwide, Jushi is currently evaluating opportunities to transition from medical to adult-use sales—or strengthen its adult-use presence—in several of its markets.
“There are so many different variables that you can leverage the playbook, but you also have to have a different strategy in each market,” Trent Woloveck, Jushi’s chief commercial director, tells Cannabis Business Times.
In Virginia, for example, Jushi opened its first medical cannabis dispensary in December 2020, and has seen patient growth over the past year with the passage of a medical cleanup bill during the last legislative session and the legalization of flower in the state’s medical cannabis program.
