MjLink Cannabis Business News and Press
PITTSBURGH, Dec. 23, 2020 /PRNewswire/ -- PRESS RELEASE -- Workers at CannTech LLC voted overwhelmingly to ratify their first-ever union agreement this week. The three-year agreement includes retirement benefits, wages and LGBTQ non-discrimination language.
"We're thrilled to sign this agreement with CannTech!" said UFCW Local 1776 President Wendell Young IV. "Medical cannabis patients will soon be able to look for the 'Union Label' on CannTech products as well as on the door of their soon to open dispensaries across the Commonwealth."
CannTech operates a clinical research medical cannabis grow facility in Warrendale, Pa., just north of Pittsburgh, and is preparing to open five medical cannabis dispensaries throughout the state of Pennsylvania. All workers at these facilities will be represented by UFCW Local 1776.
Young added, "I'm glad that CannTech management respects worker's rights to organize and has risen to the occasion, signing this outstanding agreement and raising standards for cannabis workers in Pennsylvania. The medical cannabis industry is one of Pennsylvania's essential businesses and has seen rapid growth during the Covid-19 pandemic. We are proud to represent these frontline workers."
Local 1776 members at CannTech are part of the thousands of workers in the cannabis industry across the county represented by UFCW. In Pennsylvania, UFCW 1776 represents workers at Harvest (formally Franklin Labs) and Jushi (formerly Vireo).
A Missouri judge has upheld the state’s medical cannabis rules after rejecting a lawsuit brought by a family arguing that the state’s limit on cultivation licenses violated their “right to farm,” according to a St. Louis Post-Dispatch report.
The Missouri Department of Health and Senior Services (DHSS) issued 60 medical cannabis cultivation licenses in December 2019, and Paul Callicoat and his family sued the department after their application to turn their 70-acre Sarcoxie property into a cultivation site was denied.
The Callicoat’s lawsuit argued that the state violated a right-to-farm amendment in the Missouri Constitution by limiting the number of licenses issued, although Cole County Circuit Judge Patricia Joyce wrote in her ruling that “the department’s regulations fall squarely within its constitutional delegation of authority,” according to the St. Louis Post-Dispatch.
Joyce said the rules limiting the number of medical cannabis cultivators are “appropriate” and “will protect patient safety,” the news outlet reported. She added that the licensing cap is based on population data and can be lifted in the future if needed.
The Callicoat family plans to appeal, according to the St. Louis Post-Dispatch.
There’s no argument that the cannabis market currently is dominated by delta-9-tetrahydrocannabinol (Δ9-THC), the intoxicating cannabinoid prized for its medical and recreational effects. Cannabidiol (CBD) is another major cannabinoid found in drug cannabis and hemp varieties that catapulted the cannabis plant into the mainstream (thanks to CNN’s Dr. Sanjay Gupta’s expose on Charlotte Figi, a child with intractable epilepsy who found the semblance of a normal life by using CBD).
That said, these are by no means the only valuable compounds found in the cannabis plant, nor are they the only ones that cannabis consumers are interested in purchasing.
According to a survey conducted by Brightfield Group, the vast majority of U.S. cannabis consumers would be “likely” to purchase cannabis products that heavily featured minor cannabinoids like cannabichromene (CBC), cannabinol (CBN) and cannabigerol (CBG), among others. In fact, the majority of survey participants (~3,500 respondents) said they would be “very likely” to purchase products based on all of these minor cannabinoids.
Researchers are beginning to take a closer look at those and other minor cannabinoids in the hopes of finding the next great medical discovery. Here’s a glimpse into what they found in 2020.
Cannabinol (CBN)
CBN is an up-and-coming cannabinoid in terms of marketability, with a handful of companies already vying to sell CBN supplements to consumers, often marketed as sleep aids. This reputation stems in part from how CBN is formed through the degradation of THC and the belief that “old” cannabis is more sleep-inducing than fresher samples. However, little research actually has been done to confirm the molecule’s sedative effect. In fact, in an interview with Leafly, Dr. Ethan Russo, Director of Research and Development at the International Cannabis and Cannabinoids Institute, suggested that the higher presence of sesquiterpenoids and loss of monoterpenoids are what give older, CBN-rich cannabis its drowsy effect.
It’s been quite a year for retail cannabis. Despite medical and recreational dispensaries maintaining “essential” status throughout most of the country, the global pandemic has seen hundreds of thousands of lives lost and millions of jobs cut in the restaurant, hospitality and travel industries.
The holidays give everyone an opportunity to spread some seasonal cheer. Cannabis dispensaries are celebrating the season by offering competitive prices on interesting combinations of products and new ways to stay connected to one another after a challenging year socially.
Cannabis Business Times and Cannabis Dispensary rounded up some of our favorite holiday deals from dispensaries across the country aiming to provide consumers with a more cheerful holiday.
The Green Solution: The (Holiday) Solution
The Green Solution, with 21 locations in Colorado including Denver and Pueblo, has launched “The (Holiday) Solution.” The $60 bundle allows consumers to choose five edibles by NectarBee, a Colorado-based cannabis brand that specializes in concentrates. Popular edible varieties include hazelnut chai truffle, butterscotch lozenges, mint swirl brownies and more. The company also produces six flavors of infused-drinks including cherry soda, ginger ale and root beer.
Chalice Farms: Holiday in Color
Prominent Oregon cannabis company Chalice Farms recently introduced the “Holiday in Color” pre-roll pack which includes six 0.3-gram pre-rolls in various strains including Purple Punch, Duct Tape, Dosi Doh and Hazmat OG. Chalice Farms is also wrapping up its “12 Days of Holiday” campaign, which offers consumers a deal on a different type of product each day from Dec. 13 through Dec. 24. Many specials were designed in conjunction with Oregon manufacturer partners like Buddies Brand, Mana Extracts and OreKron.
The+Source: Holiday Gifts & Promotions
At The+Source, a Nevada cannabis brand with locations in Reno and Las Vegas, shoppers can choose from great holiday-themed products including the new CANN social tonics in flavors like grapefruit rosemary and lemon lavender. Also available are infused pretzel bites by multi-state manufacturer Body and Mind (BaM), which are dipped in chocolate and butter caramel. To help spread holiday cheer to those who need it most, shoppers at The+Source can also choose to round up the cost of their purchase to the nearest dollar and donate the difference to Three Square, a Nevada-based food bank and rescue program that provides meals for people in need.
It came hand-in-hand with the rise of cannabis delivery: Online ordering was already a vibrant part of the retail sector, but the coronavirus pandemic turned this digital option into a handy tool for customers eager to streamline their transactions.
Dispensaries created in-house solutions or, in many cases, partnered with ecommerce platforms to facilitate pre-orders and curbside pickup. The sudden swing toward online ordering also gave retailers a chance to encourage customer to peruse the website and navigate toward educational offerings or branded merchandise—ancillary interactions that budtenders would otherwise tee up in the brick-and-mortar environment.
A cannabis dispensary’s website could be used to reflect and enhance the in-store experience.
“If you are a dispensary that offers a very boutique, up-scale experience, your website should really match that, and the experience that they have within the website should really match that,” KindTyme co-founder Ryan Michael told us. “If you are more of a counter-culture, maybe you’re by a skate park and you feed toward that end of the industry, then you want to make sure that the website experience mimics that as well.”
The pivot also paid dividends for retailers interested in harnessing consumer data to grow their business. Jushi Holdings’ BEYOND/HELLO dispensaries began leaning into sales trends, which helped the company reevaluate its cultivation strategies and genetics selection.
“You’re looking at this digital environment today, and you’re facing all these silos of data,” Jushi’s chief creative director, Andreas Neumann, told us earlier this year. “If you connect all that, you can create products for the people and focus on what they want.”
Gino Kenny of Solidarity – People Before Profit has announced that the party will introduce a bill in Ireland next year to legalize cannabis, according to an Irish Central report.
“Next year People Before Profit will bring forward legislation to end the prohibition of cannabis in Ireland,” Kenny wrote on Twitter. “This will be the first time in eight years that a bill to legalise cannabis will be before the Dáil. Looking forward to the debate ahead in 2021.”
Kenny has been a longtime advocate for cannabis, Irish Central reported, and has fought for medical cannabis access since he was elected to the Dáil in 2016.
Kenny played a major role in launching Ireland’s current five-year medical cannabis pilot program, which allows patients with certain conditions to apply to use medical cannabis, according to the news outlet.
Two new members have been appointed to the Massachusetts Cannabis Control Commission, according to a MassLive.com report.
Gov. Charlie Baker, Treasurer Deborah Goldberg and Attorney General Maura Healey have announced the appointments of Nurys Z. Camargo and Bruce Stebbins to the five-member board, which oversees the state’s cannabis industry.
Camargo and Stebbins will each serve five-year terms, MassLive.com reported, and will replace Shaleen Title, whose term ended Sept. 1, and Kay Doyle, who left the board in May.
Camargo has served as AT&T’s Director of External Affairs in Massachusetts since 2013, and is also the former Senior Policy Advisor for the Massachusetts Executive Office of Public Safety and Security, according to MassLive.com.
Stebbins has served as a commissioner on the Massachusetts Gaming Commission since 2012, the news outlet reported, and has also served as Springfield’s business development administrator.
The U.S. Senate voted Dec. 16 to pass S. 2032, the Cannabidiol and Marijuana Research Expansion Act, which would allow the attorney general to increase the number of federally licensed entities authorized to cultivate cannabis for research purposes.
The bill, primarily sponsored by Sens. Chuck Grassley (R-Iowa), Dianne Feinstein (D-Calif.) and Brian Schatz (D-Hawaii), is a combination of the Cannabidiol Research Expansion Act, which was previously introduced by Grassley and Feinstein, and the Marijuana Effective Drug Studies Act, which was previously introduced by Schatz, according to a press release from Grassley’s office.
Currently, only the University of Mississippi is authorized to cultivate cannabis for use in FDA-approved clinical studies.
“Existing regulations make medical marijuana research difficult and have prevented us from understanding exactly how medical marijuana can be used safely and effectively to treat various conditions,” Feinstein said in a public statement. “Our bill streamlines the research process and paves the way for marijuana-derived medications that are FDA-approved to treat serious medical conditions, like intractable epilepsy, in a way that will keep consumers safe.”
The U.S. House voted Dec. 9 to pass a similar bill, H.R. 3797, the Medical Marijuana Research Act, which would allow authorized scientists to access cannabis from state-approved cannabis programs for clinical trials.
NEW YORK--(BUSINESS WIRE)--PRESS RELEASE--Columbia Care Inc. has signed a definitive agreement to acquire Green Leaf Medical, LLC, a privately held, fully-integrated cannabis multi-state operator (MSO) based in the mid-Atlantic region, for approximately $240 million with the potential for additional performance-based milestone payments.
Following the close of two acquisitions that established Columbia Care as a market leader in the two largest cannabis markets in the world, California and Colorado, the acquisition of Green Leaf expands Columbia Care’s operational scale and footprint in four key, limited license markets by materially enhancing the scale and capabilities of its seed-to-sale operations. Subject to the regulatory approval process, Columbia Care will be one of the largest and most efficient operators in Pennsylvania, Maryland, Ohio and Virginia. Founded in 2014 by Philip Goldberg and Kevin Goldberg, Green Leaf is one of the largest private MSOs in the United States and a market leader in the Mid-Atlantic region with cultivation, extraction, processing and retail operations across its four-state footprint. In addition to its dispensary footprint, Green Leaf also brings a leading wholesale market position in both Pennsylvania and Maryland, where its products are most widely sold under its nationally recognized gLeaf brand, including extracts and pre-rolls. Green Leaf facilitates online ordering, its operational home delivery services in Maryland and Virginia, and proprietary inventory and order management capabilities via its gLeaf Marketplace platform.
“This combination affirms Columbia Care’s position as one of the largest cultivators, manufacturers and retailers in four key states - Pennsylvania, Virginia, Ohio and Maryland - three of which are expected to convert from medical to adult use in the next 24 months. Green Leaf complements our retail footprint and brings wholesale leadership through which we can drive our portfolio of brands and unique products. The transaction is immediately accretive to gross margin, Adjusted EBITDA and Cash Flow from Operations,” said Nicholas Vita, CEO of Columbia Care. “Ohio and Pennsylvania are already two of our top performing markets by revenue and Adjusted EBITDA, and this transaction makes us one of the largest, most scaled wholesale and retail operators. In Maryland and Virginia, Green Leaf materially expands our wholesale footprint, retail dispensary network and the scope of our home delivery services. Acquiring Green Leaf immediately converts Maryland to an Adjusted EBITDA positive market. In addition, it accelerates our growth and profitability in Virginia, Ohio and Pennsylvania. No organization in the industry will be better positioned to serve patients and customers in the Mid-Atlantic than Columbia Care. We are proud to partner with the Green Leaf team and organization and look forward to delivering the best suite of products and services available in the market.”
Commenting on the acquisition, Philip Goldberg, Green Leaf’s CEO and co-founder, stated: “Columbia Care is the ideal partner to take Green Leaf through its next phase of growth. In conjunction with its existing scale and market-leading strategy across its portfolio, Columbia Care’s dedication to ensuring optimal accessibility and product quality aligns with our values and will improve our ability to serve and expand our customer base throughout the mid-Atlantic.”
Kevin Goldberg, co-founder, general counsel and president of Green Leaf added: “We are excited to have the opportunity to expand the gLeaf brand beyond the Mid-Atlantic region, and our partnership with Columbia Care gives us the ability to accomplish this quickly and efficiently. As founders and shareholders, we’ve built one of the best organizations in the industry, and we wanted to partner with a like-minded company in terms of its mission, values and culture. We look forward to joining Columbia Care’s leadership team to capitalize on the many operational synergies across each of our markets and deliver unparalleled results.”
TORONTO, Dec. 22, 2020 (GLOBE NEWSWIRE) -- PRESS RELEASE -- Ayr Strategies, a vertically integrated cannabis multi-state operator, today announced the proposed acquisition of Liberty Health Sciences, a vertically integrated operator in Florida, in a stock-for-stock transaction valued at $290 million. Additionally, Ayr announced the proposed acquisition of the membership interests in GSD NJ LLC, a licensed operator in New Jersey, for upfront consideration totaling $101 million. Including these and other pending transactions, Ayr will have operations in seven states covering 73 million people, which include four adult-use markets and three medical markets.
“Today’s announcements represent a transformational next step for Ayr as a leading multi-state operator in the U.S.,” said Jonathan Sandelman, chairman and chief executive officer of Ayr Strategies. “Our strategy has always been to go deep in the best markets, targeting attractive assets in limited-license states with large populations, where we can build a vertically integrated presence and have a significant edge. New Jersey will be a leading force in adult-use legalization in 2021, and we look forward to working with the regulators to ensure a safe and robust roll-out of the adult-use program. Florida has one of the country’s most robust and rapidly growing medical programs, and we are acquiring one of the largest operators in terms of store count.
“2021 will be a year of material growth for Ayr in the adult-use market. In Massachusetts, Ayr is already a market leader in wholesale and medical sales and will open three adult-use stores in the under-served Greater Boston area in 2021. Two of our newest states – New Jersey and Arizona – will roll out adult-use for the first time, and Ayr is excited to help lead that transition.”
Sandelman continued, “Our assets are the most productive in the industry, and we intend to bring this same operational excellence to Florida and New Jersey. We see an incredible opportunity to elevate Liberty’s cultivation, product selection and dispensary experience to the level of quality, productivity, selection and service we have consistently achieved in our existing markets with the deep bench of talent and know-how we already have in place. We are thrilled that our disciplined and targeted approach to expansion has enabled us to build this terrific footprint from a position of strength, with a team that consistently demonstrates operational excellence and great support from our debt and equity investors.”
Transaction Highlights
Florida
The Supreme Court of the United States will make a decision in Facebook v. Duguid, expected by June 2021, and industry stakeholders believe the SCOTUS call will affect the way businesses of all kinds build relationships with their customers. It will have an especially significant impact on the cannabis industry.
If the court defines an automated telephone dialing system as a system using stored information collected from customers—rather than one that stores or dials randomly-generated phone numbers—then companies that call or text their clientele without first obtaining permission could face millions of dollars in penalties.
The consequences may be detrimental to growing cannabis dispensaries and brands, because texts are often a primary method of contact with a mostly Millennial market.
Lawren Zann, partner at Greenspoon Marder LLP, explained that litigators have already created an industry initiating Telephone Consumer Protection Act (TCPA) complaints. “It’s happening at rates we had previously not dreamt of,” he said. Cannabis companies are a particular target, “led by plaintiff’s attorneys who view the cannabis industry as the next Gold Rush.”
Consumer outreach could get even more challenging, depending on the SCOTUS ruling. “If the Supreme Court goes against Facebook’s position, it’s going to embolden the plaintiffs and the attorneys,” he said.
According to Zann, some smaller cannabis companies already struggle to stand up to legal action, regardless of whether or not they are in the wrong. “They’ve lost millions of dollars settling out of court,” he said.
In 2020, industry members have been meeting virtually to discuss opportunities for minority participation in the cannabis space, including at the ownership level. Organizations such as Minorities for Medical Marijuana (M4MM), Minority Cannabis Business Association (MCBA) and Marijuana Policy Project (MPP) held events where speakers addressed the murder of George Floyd in Minneapolis and other killings of people of color, as well as their desire for social equity and criminal-justice reform.
Racial disparities in cannabis industry participation reflect a broader statistics in agriculture. The National Young Farmers Coalition issued a report in December 2020 titled “Land Policy: Towards a More Equitable Farming Future.” It states that in the U.S., “White individuals account for 95 percent of all farmers, own 98 percent of farmland, and receive the vast majority of agriculture-related financial assistance.”
The report provides specific call-to-action items for federal, state and local policymakers to support Black, Indigenous and People of Color (BIPOC) farmers. On the state level, these include steps to “[p]ass state legislation to help farmers manage their student loan debt so they can better access capital for land purchases” and to “[i]mprove and expand land access finance options.”
As capital remains a barrier to entry for minorities looking to enter or expand their opportunities in the state-legal cannabis space, Cannabis Business Times and Cannabis Dispensary recently caught up with industry stakeholders to discuss the financial aspects of minority participation in state-legal cannabis in 2020.
License Acquisition Before Investment
There is value in plant-touching businesses obtaining a license before trying to raise large amounts of capital, Seun Adedeji, owner and CEO of Elev8 Cannabis, a retail company with stores in Oregon and Massachusetts, recently pointed out to CD.
“For newcomers that are trying to get into the cannabis industry, my biggest advice to them is, one, find what aspect of the cannabis industry you're looking to go to—example: if you're looking at retail—let's say it costs you $1 million,” Adedeji said. “Instead of trying to raise the whole million, try to get assets, try to find ways to leverage, raise a little bit of capital, raise $50,000, get [the] right attorney. Win the license, then use the license and go raise against the license. The license is what has value.”
As this incredibly tumultuous year comes to a close, so does another year of cannabis features and b2b journalism at Cannabis Business Times. Here, the CBT editors take a look back on their favorite stories of 2020.
Eric Sandy, Digital Editor
The Case for Cannabis Biodiversity – Tomorrow in Cannabis, February 2020
Kenneth Morrow’s columns are always a joy to read. Each month, he casts a bright spotlight on some of the deepest sources of tension in the legal cannabis industry. In February, his column took up the mantle of genetic biodiversity—and what the licensed business landscape was losing in its quest to meet broad consumer demand. “Cannabis genetics follow trends and fads, but what value is lost in the genetics the industry has overlooked?” he asked. It’s a good question, and one that growers will continue to ponder as the marketplace expands (with four states legalizing adult-use cannabis in 2020!) and as consumer interests evolve (much like any other commercial space). “We must balance the need for marketable products while not losing sight of the long-term value of having genetics that might hold the key to disease or pest immunity,” Morrow writes. “Therefore, it’s up to all of us to collect, protect and preserve all available cannabis genetics of today for tomorrow.” Read more
Brian MacIver, Senior Editor
A Cultivator’s View: ‘The Wolves Have Gotten Bigger’ -- Guest Column, March 2020
Leif Abel, owner of Greatland Ganja in Alaska’s Kenai Peninsula, penned this column in the special 5-year anniversary issue of Cannabis Business Times as a follow-up to his column in the publication’s first ever issue (bit.ly/5_years_later). In this March 2020 article, Abel looks back on the “[poor], idealistic, unaware little fella working frantically like there is an end in sight” that is his younger self. He reflects on the metaphorical (and likely some very real) wolves that kept him awake as he was getting ready to launch his business. While he vanquished those wolves, bigger ones have filled the ranks, he details—such is the nature of the cannabis industry. The column is an ode to the challenges that the industry has overcome, those that lie ahead, and the perseverance it takes to make it as an independent cannabis cultivator. Read more
According to executives from cannabis edibles manufacturers Wana Brands and Dixie Brands, the companies’ biggest takeaway in 2020 was that edibles—and particularly gummies—could continue their steady growth, even in the wake of a global pandemic.
“Over time, the gummy has continued to be a pretty massive part of the edibles industry,” Wana Brands Chief Marketing Officer Joe Hodas told Cannabis Business Times and Cannabis Dispensary.
Edibles represent roughly 15% of sales in the legal cannabis market, according to a recent webinar from BDSA. The U.S. edibles market is dominated by candy, which makes up 67% of edibles sales, according to the webinar, and gummies are the most popular form of candy, making up 85% of candy sales.
Despite limited travel and remote working conditions due to the COVID-19 pandemic, Wana was able to capitalize on the popularity of the gummies category this year through its launch in Oklahoma, Maryland and Canada, and it plans to launch into Florida and Missouri by the start of 2021.
To conduct the necessary training with its partners in the new markets, Wana created a video series covering product formulations, SOPs and more.
DETROIT, Dec. 16, 2020 /PRNewswire/ -- PRESS RELEASE -- Gage Cannabis Co., a cannabis brand and operator in Michigan, has announced it has secured a minimum investment of US$20 million from funds advised by JW Asset Management, LLC as part of the company's Regulation A, Tier 2, equity financing.
JW Asset Management's investment will provide Gage with resources to accelerate the expansion of its retail and cultivation footprint, pursue accretive acquisitions, and help position and solidify Gage as the leading cannabis operator in the state of Michigan. JWAM has been an active investor in the cannabis sector since 2014, investing in many of the industry leaders, including TerrAscend Corp., where Jason Wild's strategic involvement and support has been instrumental in driving tremendous value for shareholders.
"JW Asset Management is widely recognized as one of the premier investors in the cannabis sector. Their participation provides Gage with a strong balance sheet that enables us to further establish our brand in one of the fastest-growing cannabis markets in the United States," said Fabian Monaco, president of Gage. "We are confident in executing on our 2021 goals, driven by the growth of both the cultivation and dispensary arms of our business. We are fortunate to have developed a strong relationship with JWAM and are grateful for their support as we capitalize on the opportunities ahead in Michigan."
Wild, founder and president of JWAM added, "Gage has rapidly established a strong footprint in Michigan and I'm thrilled to participate in their growth. I'm confident that Gage's experienced team will continue to execute on the opportunity ahead."
Gage's Michigan footprint has grown significantly since their first retail opening in the state in September 2019. Today, the company supports five provisioning centers (dispensaries), three cultivation facilities and one processing facility across the state of Michigan, with plans to double its retail footprint by the end of the first quarter of 2021. Earlier this month, Gage had its first harvest at its flagship Monitor Township cultivation facility with a second harvest scheduled for this week.
The first tranche of approximately US$10 million of the US$20 million commitment from JWAM has been received by the company. Gage expects to receive the remaining funds prior to year end 2020. In consideration for JWAM's participation in the offering (US$1.75 per share), the company has agreed to issue an equivalent number of warrants to purchase subordinate voting shares of the company. Each warrant shall entitle the holder to purchase one subordinate voting share in the capital of the company for US$2.60.
Everything changed in March 2020. The sudden stay-at-home orders across the U.S. altered the landscape of daily life, and yet the consumer marketplace couldn’t simply stop. Delivery, then, became a powerful force for commercial businesses. Cannabis was no different.
Because of the “essential business” tag that many states extended to cannabis retailers, it fell to dispensary owners to pivot and meet their customers in new places.
“What's happening in delivery was something that was going to happen anyway,” Ganja Goddess CEO Zachary Pitts told us. “The pandemic just jumped us ahead a couple of years. This happened in every aspect of our economy.”
From Amazon Prime to Uber Eats, delivery on a mass scale was more visible than ever this year. Companies like Ganja Goddess, which operates a delivery service in California (with a hub in Oakland), followed suit. Already, delivery was a powerful force in cannabis.
Global events simply pressed the fast-forward button this trend. In 2020, Pitts’ company reported 100% revenue growth from the year prior. Several important days stand out:
“Ganja Goddess experienced a more than 100% growth year-over-year [around the 4/20 holiday], along with a 275% increase in growth and 350% uptick in orders from the year prior on its California-based statewide online cannabis shopping, delivery and lifestyle platform on 4/20,” according to the company. Cyber Monday came up as the company’s second-biggest sales day, with 200% growth year-over-year.
To those following the mergers and acquisitions of cannabis companies, 2020 was a different sort of year. Capital markets were already running dry by January, so executive teams and investors began getting creative in connecting dollars to companies.
Enter SPACs: special purpose acquisition companies, which act as blank checks for investors interesting in pooling their money for a designated goal. In our industry, SPACs function as a way for investors to align their money and identify a target company for acquisition. The net effect is actually a reverse merger, whereby the resulting company takes on the SPAC “shell” and operates as a publicly traded enterprise. (See below for SPAC Alpha's 2020 year-to-date report on SPAC moves.)
At the tail end of 2020, Schulze Special Purpose Acquisition Corp. landed a deal with Clever Leaves, a sprawling cultivation and distribution company with bases in Colombia, Portugal, Canada, Germany and the U.S.
“We believe that Clever Leaves is now among the best-capitalized companies in the cannabis industry and is well-positioned for substantial growth and profitability based upon its disruptive, low-cost and vertically integrated operating model,” George J. Schultze, chairman and CEO of the SPAC, said. “We look forward to working with its outstanding and highly accomplished management team to create significant value over time.”
It’s a $205-million deal, which puts it in the upper echelon of recent cannabis transactions.
Among SPACs, though, this is not uncommon. Cannabis-related SPACs held more than $2 billion in assets in 2020. Because of that, these new investment packages aren’t necessarily a dime a dozen; they’re built to target high-value investments that have a healthy future as a publicly traded firm.
This week, President Donald Trump announced the resignation of Attorney General William Barr, who is expected to officially step down next week. Elsewhere, in New Jersey, the state legislature sent a bill to Gov. Phil Murphy to implement the state’s adult-use cannabis program.
Here, we’ve rounded up the 10 headlines you need to know before this week is over.
Federal: President Donald Trump announced the resignation of Attorney General William Barr Dec. 14, while simultaneously announcing that Barr’s current deputy attorney general, Jeffrey Rosen, will become acting attorney general when Barr officially steps down next week. Rosen will fill the role of attorney general until President-Elect Joe Biden is sworn into office Jan. 20, although Biden has not yet chosen an attorney general. Read moreSouth Dakota: South Dakotans for Better Marijuana Laws, the group behind Amendment A, the state’s voter-approved adult-use cannabis legalization measure, has filed a response to a lawsuit that challenges the constitutionality of the ballot initiative. The group argues in its court filing that the case should be dismissed because voiding Amendment A would overturn the will of the people. Read moreKentucky: Rep. Jason Nemes has announced plans to reintroduce a medical cannabis legalization bill in the upcoming legislative session. The Kentucky House of Representatives passed House Bill 136 in February, marking the first time a bill to legalize medical cannabis has received a full House vote in the state, and Nemes says support in the House has only increased since then. Read moreSouth Carolina: Lawmakers have pre-filed bills in both the House and the Senate to legalize medical cannabis. The bills, both called the “South Carolina Compassionate Care Act,” mirror legislation that was considered during the 2019 legislative session, when the Senate ultimately voted to table to legislation. Read moreArizona: The Arizona Department of Health Services has announced draft rules for the state’s forthcoming adult-use cannabis market. The draft regulations largely mirror the framework of the state’s medical cannabis program, and Arizona’s existing medical cannabis operators can seek licenses in the adult-use market beginning in January. Read moreCalifornia: Columbia Care has closed its acquisition of Project Cannabis—a vertically integrated business based in California. The transaction comprises $52.5 million in Columbia Care stock and another $16.5 million that’s expected to come from the sale of Project Cannabis’s real estate assets. Read moreNew Jersey: Members of the New Jersey state Assembly and Senate have given final approval to legislation permitting the possession of marijuana by adults and regulating its commercial production and retail sales. Each of the measures now awaits the signature of Democratic Gov. Phil Murphy. Read moreVermont: Gov. Phil Scott is calling for applicants for the new, three-member Cannabis Control Board that will establish and regulate an adult-use cannabis industry in the state. The board will be comprised of one chair and two members, which will be appointed by the governor after being vetted by the Cannabis Control Board Nominating Committee. Read moreCanada: Aphria and Tilray announced this week that they have entered into a definitive agreement to combine their businesses and create the world’s largest global cannabis company based on pro forma revenue. Following the completion of the arrangement, the combined company will have principal offices in the United States (New York and Seattle), Canada (Toronto, Leamington and Vancouver Island), Portugal and Germany, and it will operate under the Tilray corporate name with shares trading on NASDAQ under ticker symbol “TLRY.” Read moreInternational: The Chamber of Deputies, Mexico’s lower house of Congress, has received an extension on a Supreme Court-imposed Dec. 15 deadline to approve a cannabis legalization bill, again delaying the country’s much-anticipated legalization vote. Mexico President Andres Manuel Lopez Obrador said during a news conference that lawmakers asked for an extension because they needed more time to make revisions to the bill, and Lopez Obrador now expects approval on the legislation in early 2021. Read moreThe Arkansas Department of Finance and Administration has reported that medical cannabis sales in the state have surpassed $200 million, according to a KATV report.
Patients have purchased 30,648 pounds of medical cannabis since the first dispensary opened in May 2019, the news outlet reported.
Green Springs Medical in Hot Springs has sold the most cannabis in the state to date at 3,414 pounds, according to KATV.
This year, the oldest members of Gen Z turned 23. That means the legal cannabis industry is about to be bombarded with new customers—members of a distinct generation with new tastes and emerging cultural touchstones.
The HQ Cannabis Brand Affinity report was issued in December 2020 by Headquarters, a strategic advisory studio focused on driving growth for businesses and brands entering the California cannabis market, in conjunction with The Statement Group. The report lays out the lifestyle trends and spending power found among Gen Z (and millennial) customers.
Gen Z is defined as anyone born between 1997 and 2012-2015 (depending who you ask). As of January 2020, according to the report, Gen Z spending power clocked in at $143 billion.
So, what does the younger set gravitate toward? The big topics include: hip-hop and R&B, fashion, social influencers and gaming.
READ MORE: Gen Z and Millennials: A New Age of Cannabis Consumers
“Gen Z and millennial lifestyle cannabis consumers—an often tough-to-reach consumer group—make up a significant share of the cannabis market today,” said Headquarters CEO Daniel Abrahami. “As we head into the holiday season and New Year, these consumers are only expected to take a greater share of the market. … Our hope is that cannabis brands leverage this proprietary data to gain the competitive advantage they’re looking for in this highly competitive space.”
