MjLink Cannabis Business News and Press

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The newly established Nevada Cannabis Compliance Board (CCB) met for the first time on July 21, kickstarting a new era for the state’s industry. Notably, the board signed off on a disciplinary settlement that will revoke six of CWNevada’s 14 business licenses.

Watch the full video below.

CWNevada owns Canopi Cannabis Dispensaries, and the punishment against the company includes a $1.25-million fine and a $1.5-million bill for back taxes. The action stems from a series of lawsuits that accused CWNevada of withholding payment from its employees, breaking contracts with business partners and destroying evidence in ongoing civil cases. A state investigation into CWNevada’s activities began in 2018.

Proceeds from the sale of the eight remaining CWNevada licenses will benefit the employees in question. Company owner Brian Padgett will be barred from any of that incoming cash.

“These sums are extremely important to Nevada and its citizens given the state’s budget deficits and high unemployment rates,” court-appointed receiver Dotan Melech wrote in a letter to the CCB. Throughout the first part of the meeting, many such letters were read into the record. A number of local public officials and former CWNevada employees came out in support of the receiver’s proposed discipline.

A former security manager, for example, wrote that he had moved away from his family in Florida to take a “lucrative and secure job” with CWNevada. From early May to early July 2019, he was not paid. According to his public comment at the CCB meeting, he is owed approximately $12,000.

LAKELAND, Fla., July 22, 2020 /PRNewswire/ -PRESS RELEASE- Modern Canna Labs announced it has received its certified marijuana testing laboratory license from the Florida Department of Health, Office of Medical Marijuana Use. This certification comes after the OMMU adopted an emergency rule requiring licensed medical marijuana treatment centers to only use a certified lab for product testing.

"We were the first lab involved in Florida's medical marijuana rule development process and have been working closely with this department since 2014. It is wonderful to see how far our state's medical marijuana program has come," said George Fernandez, founder and CEO of Modern Canna. "Since the beginning, we have stressed the importance of reporting out data that is verifiable, reproducible, and legally defensible. Quality data is the core foundation of any laboratory and the initial building-block for producers who truly care about growth and sustainability."

Both of Modern Canna's facilities are in Lakeland, Florida, and account for over 12,000-square-feet of lab testing space. One facility is ISO 17025 accredited, solely dedicated to testing for MMTC's in Florida. The other facility is NELAP certified, specializing in environmental testing. Modern Canna is currently the only Leafly Certified Lab Partner in the Southeastern United States. Leafly is the world's largest cannabis information resource, dedicated to combating inconsistency in cannabis testing.

"More than anything, I'm just really happy for our team. Years of hard work went into this, and we are honored to be in this position," Fernandez went on to say. "We've done a great job employing people who are not only incredibly talented in the lab, but who are also morally and ethically sound. Everyone truly cares about our clients and the work we do." As Modern Canna lab director Jini Curry explained, "The future of medical marijuana in Florida relies not only on the MMTCs who produce the products but also on the CMTLs who perform the quality control testing."

Opponents of an adult-use cannabis legalization measure in Arizona have filed a lawsuit to keep the issue off the state’s 2020 ballot, according to a Tucson.com report.

The lawsuit, filed in Maricopa County Superior Court, challenges the measure’s 100-word description, alleging that it misled people into signing the petition to put the issue before voters this fall, the news outlet reported.

Smart and Safe Arizona submitted more than the required number of signatures in early July to qualify its initiative for this year’s ballot, and expects to find out by mid-August if enough signatures are valid to receive the official green light from the state.

The lawsuit aims to convince judges that the measure is not legally fit for a public vote, Tucson.com reported, and points to issues related to the measure’s definition of “marijuana,” as well as how the law might impact impaired driving in the state.

The Oklahoma attorney general’s office announced earlier this month that the state will temporarily suspend the enforcement of certain cannabis business regulations that threatened to close some medical cannabis dispensaries, according to The Oklahoman.

The Oklahoma State Department of Health and the Oklahoma Medical Marijuana Authority (OMMA) will temporarily halt the enforcement of certain residency and location requirements for cannabis businesses after some operators sued the state over the legality of the rules, the news outlet reported.

The class-action lawsuit asks an Oklahoma County district court judge to permanently block the state from enforcing the residency and location regulations, which mandate that cannabis business owners must be Oklahoma residents for at least two years and that dispensaries must be positioned more than 1,000 feet from schools, according to The Oklahoman. Both regulations took effect Aug. 29, 2019.

Now, as the lawsuit makes its way through court, the OMMA has agreed not to consider the residency or location requirements while reviewing business license renewal applications if a business owner initially applied for the license before the new law took effect, the news outlet reported.

Regulators will also reconsider any license renewal applications that were previously rejected due to these regulations, according to The Oklahoman, as long as the businesses applied for the licenses before the new laws were implemented.

No industry is immune from COVID-19’s impact, not even state-compliant cannabis. When the pandemic began, most states with legal cannabis programs designated cultivation, manufacturing and dispensary businesses and workers “essential.” However, these essential businesses are still illegal in the eyes of the federal government. As a result, CARES Act funding and other coronavirus-specific federal debt relief measures have not been available to state-compliant but federally illegal cannabis companies.

Compounding liquidity issues, the tight capital-raising environment for cannabis companies before COVID-19 is now ever tighter, while operating expenses have increased. For cannabis operators with existing debt, the terms were already onerous by necessity, as traditional commercial lending terms have long eluded most cannabis businesses. The pandemic has undoubtedly forced upon certain operators difficult decisions regarding the short-term viability and long-term prospects of their operations.

Despite many states’ efforts to maintain access to medical cannabis—and in most cases, adult-use dispensaries—stay-at-home orders and consumer caution have meant that in some cases, patients and customers haven’t been frequenting retailers, dispensaries and provisioning centers as often as previously. Additionally, limited onsite capacities due to social distancing requirements have reduced the number of customers that some businesses are able to serve each day.

In this challenging business environment, cannabis operators and pre-operators could find themselves in need of contractual relief from existing debt. One option is a receivership, where a court-appointed receiver or trustee steps in to temporarily manage a company and its assets. Many people only think of receiverships as something initiated at the request of creditors to help them recover money owed. However, receiverships might also be initiated by a business owner in financial distress as part of a restructuring process, or to help avoid bankruptcy. In that situation, you might think of receivership as a sort of “time out” for the troubled business.

One potential drawback of a receivership is that while it’s in place, a business owner’s management and operational authority is substantially reduced. However, the business owner may, with court permission, still participate in operational aspects that help the business’s bottom line. Though the receiver must be an independent party, a business owner might also have a role in deciding who the proposed receiver will be.  

Is receivership an option you should consider? Here are eight things you need to know:

The Massachusetts House of Representatives has released its version of a police reform bill, which proposes directing tax dollars from the state’s Marijuana Regulation Fund to police training.

Shaleen Title, commissioner of the Massachusetts Cannabis Control Commission, tweeted about that version of the bill and a subsequent amendment that would in addition, but not instead, direct tax dollars to restorative justice and other measures.

People were heard: @RepLizMiranda has filed an important amendment (Amendment 86 to H. 4860) that would direct an equal or greater amount of cannabis tax revenue to programming for restorative justice, jail diversion, workforce development, + technical assistance. Good first step https://t.co/k1xTo6mIk7

Cannabis Business Times and Cannabis Dispensary spoke with Kobie Evans, co-owner of Pure Oasis in Boston, about the bill.

He said the decision to direct tax dollars from the larger police reform bill to police training looked like a compromise to try to “appease both sides. But I think that it still represents the fact that a lot of people, especially lawmakers, are somewhat tone-deaf as it relates to racial injustice and over-policing—and the disparity that exists between people of color that are engaged by the police and our white counterparts who receive far less scrutiny and far less apprehension."

Cannabis is often used as probable cause, legitimately or illegitimately, for police to interact with people of color, he said.

PA Options for Wellness CEO and President Tom Trite says he and his team have always been committed to cannabis education, research and a true medical model, which makes Pennsylvania’s medical cannabis research program a natural fit for the Lower Paxton Township-based company.

Trite testified at the Pennsylvania House and Senate hearings on developing regulations for the state’s medical cannabis program. He then finalized the business plan for his vertically integrated company in 2014  with the goal of supporting anecdotal information surrounding medical cannabis with double-blind studies.

“I think it took them way too long to get to the research portion, but they’re there now and we’re excited to work with others within the industry, too, to provide research,” Trite says. “We … feel it’s a great need, both in Pennsylvania as well as nationally.”

RELATED: Ethos Cannabis and Jefferson University Launch Their First Studies Under Pennsylvania’s Medical Cannabis Research Program

Trite entered discussions with Dr. Kent Vrana, chair of the Penn State College of Medicine’s Department of Pharmacology, in 2015. The university, called an “academic clinical research center” under Pennsylvania’s medical cannabis research program, selected PA Options as its “clinical registrant” partner in 2019.

As cannabis brands expand, partnerships with trusted cultivators is crucial to ensure product consistency in new markets and keeping up with customer demand.

Cookies, the cannabis brand founded by Bay Area rapper and entrepreneur Berner, recently entered a cultivation partnership with Veritas Fine Cannabis, a cannabis cultivator based in Denver. Veritas is the exclusive grower of Cookies cannabis strains in Colorado for at least the next three years, according to a deal signed in October 2019. Cookies products launched in Colorado in July.

Jon Spadafora, head of marketing and sales at Veritas, said expanding can be risky for a company if it doesn’t ensure it is picking responsible partners.

“It was important for Cookies to find someone driven by quality,” Spadafora said. “As you expand one of the biggest concerns you have is maintaining the quality that got you where you are, as you start talking about gardens that you don’t have control over.”

For Cookies’ part, the company had no concerns that Veritas would be an unreliable partner.

“Veritas is one of the kind of gold standard partners and operators, especially in Colorado,” Tori Cole, VP of marketing at Cookies, said. “They have some fire products. When we saw some photos and videos, and saw the test results, we said, ‘Oh my God, this is exactly what our flower should look like.’”

After several years of operating Plant & Planet Law Firm, working with plant breeders, ag companies and research institutions to protect genetics and cultivation technologies, Dale Hunt realized there was a limit to the services his firm could provide, and cannabis breeders needed more help to commercialize their genetics and work with other areas of the cannabis supply chain.

This led him to partner with cannabis industry pioneers Ethan Russo and Robert C. Clarke to create Breeder’s Best, a cannabis IP-licensing company that focuses on intellectual property protection for independent plant breeders looking to license their IP to global markets.

Here, Hunt, now the founder and CEO of Breeder’s Best, shares insight into the new company and its goals, as well as common issues that cannabis breeders face in patenting their genetics and drafting licensing agreements with other areas of the industry.

Melissa Schiller: What inspired the launch of Breeder’s Best? What is the company’s focus, and what issues in the industry does it aim to address?

Dale Hunt: As I started having conversations with plant breeders, it became really clear that they knew they needed protection for what they had created, but just getting a patent on something doesn’t make it rain money—you still have to have a way to get people to want access to the plant and pay royalties on the patent. Most of these breeders didn’t have any protection on what they produced. Most cannabis breeders didn’t really have good intellectual property protection. The independent breeders that didn’t have tons of money and didn’t have a big network in business needed somebody to help them not just protect their varieties, but bring them out to the market.

I kept finding that there was this limit to what my law firm could do, and that there was more that these breeders needed. I asked one breeder if he’d be interested in working with a sponsor if I could find someone who could help him commercialize his varieties, and he was absolutely intrigued. I thought about that for a while and I talked to a few people in the industry, and the model that’s analogous is to provide a service to breeders that’s somewhat like a record label or a music label for an artist. The independent artist is a creative person who is good at creating things, but they’re not necessarily interested in marketing, production, scheduling and all the legal work. They just want to be able to create. In a very similar way, I think the best plant breeders I know are so focused on that and so passionate that they don’t also want to be running a business. They just want to create great new cannabis varieties.

In mid-July, the hard work of New Approach Montana campaigners paid off: County-level data showed that a sufficient number of the organization’s more than 130,000 signatures had been verified in order to place two adult-use cannabis legalization measures before voters in November. 

That was no small task. In the midst of the coronavirus pandemic, social distancing guidelines made it difficult to gather the required signatures across an already sparsely populated state. In late April, a court ruling prevented the campaign from moving to an electronic signature drive—further dampening prospects.

But New Approach Montana prevailed. “We overcame the odds by running the most innovative signature drive ever seen in Montana,” campaign officials wrote on Facebook in July. “Now, we are focused on building support with voters from across the state.”

On the table are two complementary ballot initiatives. Statutory Initiative 190 would establish a system to regulate and tax cannabis for adult use, while Constitutional Initiative 118 would authorize Montana to set the legal age for consumption at 21. As campaign officials have stated, the two issues are meant to pass together.

“The good news is that, as of today, the official county numbers show that our campaign collected enough valid signatures to qualify both of our initiatives for the ballot. That’s an incredible achievement, and we’re grateful to everyone who supported that effort,” New Approach Montana leaders wrote to supporters via email. “But here’s the bad news: this is going to be a tough fight, and due to the challenges we faced in the signature drive, we were forced to spend far more than we planned. And now, we’re behind our fundraising goals.”

Looking ahead, Dave Lewis, retired Montana state legislator and budget director for three Montana governors, said in a public statement that these issues could really galvanize a state budget that’s been hammered by economic shutdowns this year.

As the cannabis industry continues to borrow from other commercial sectors while blazing its own trail, it’s only natural that the edibles market would fuse more synchronously with restaurants and the movement toward fresh, organic ingredients. At Good Things Coming, that’s the name of the game. 

Chef Aaron Chamberlin has worked for the past 33 years at restaurants across the U.S., including the two he still runs in downtown Phoenix. He brings that experience to the edibles business he co-founded last year. 

“I remember tasting an edible for the first time that was coming from a dispensary about three years ago. And I was shocked at how disgusting it tasted. That was intriguing for me because I knew that I could make things taste good.”

It was a simple idea. Chamberlin was a new medical cannabis patient in Arizona, someone who’d converted to the plant after a stint with prescription medication years earlier had rubbed him the wrong way. “I just basically wasn't the same person that I was in the past,” he says. “I eventually bumped into a doctor who asked me if I've used cannabis as a medical tool and as medicine.”

He hadn’t, but the opportunity to learn more about the medical benefits of cannabis seemed hopeful.

When Arizona legalized medical cannabis in 2010, Chamberlin was pleased to see the state legitimize the plant’s value to patients like him.

The California Bureau of Cannabis Control (BCC) has sent a report to the state legislature on equity grant funding.

The $40 million in grants were “authorized by the California Cannabis Equity Act of 2018 (Equity Act) and the Budget Act of 2019,” according to a notice the BCC sent to its email subscribers about the report.

“To date, the state has awarded $40 million to local jurisdictions in equity grant funding to support local equity programs,” according to the report. “The Bureau was initially appropriated $10 million in equity grant funding. In October 2019, the Bureau awarded those equity grant funds to 10 local jurisdictions.”

According to the report, BCC distributed the $10 million as follows:

City of Coachella - $500,000.00

County of Humboldt - $1,338,683.13

On July 21, the U.S. Food and Drug Administration (FDA) released a much-anticipated document that the federal Office of Budget and Management (OBM) had been reviewing since late May. 

While the document did not provide an update on regulating consumer cannabidiol (CBD) products, as some in the hemp industry had hoped, it did provide guidance on regulating cannabis in drugs as well as present a new way to calculate tetrahydrocannabinol (THC) in finished products.

The nine-page document, titled “Cannabis and Cannabis-Derived Compounds: Quality Considerations for Clinical Research, Draft Guidance for Industry,” covers sources for clinical research, information on quality considerations and other recommendations for those pursuing investigational new drug (IND) applications and new drug applications (NDAs) for both cannabis and hemp-derived compounds.

Prior to the U.S. Agriculture Improvement Act of 2018 (the 2018 Farm Bill) legalizing hemp and its derivatives, those who wanted to conduct clinical research on any type of cannabis needed to source it from the National Institute on Drug Abuse (NIDA) Drug Supply Program (DSP), which is grown under contract by the University of Mississippi at the National Center for Natural Products Research. 

The document clarifies that those pursuing INDs and NDAs for hemp—defined to contain no more than 0.3% THC—and its derivatives are now open to source from anywhere compliant with a state or federal hemp plan. Meanwhile, those seeking INDs and NDAs for non-hemp cannabis compounds must still source it from NIDA.

“A range of stakeholders have expressed interest in development of drugs that contain cannabis and compounds found in cannabis. Recent legislative changes have also opened new opportunities for cannabis clinical research. As that body of research progresses and grows, the FDA is working to support drug development in this area,” says FDA Principal Deputy Commissioner Dr. Amy Abernethy. “It is critical that the FDA continues to do what we can to support the science needed to develop new drugs from cannabis.” 

LAS VEGAS, Nev., ACCESSWIRE, July 17, 2020 -PRESS RELEASE- Planet 13 Holdings Inc., a vertically-integrated Nevada cannabis company, announced today that it has entered into an asset purchase agreement to acquire cannabis inventory, equipment and tenant improvements from West Coast Development Nevada, LLC.

Pending regulatory approval will acquire the Nevada cannabis licenses at a 45,000-square-foot indoor cultivation and production facility in Las Vegas, Nevada. Planet 13 will pay $1.156 million for the cannabis inventory, and $3 million for the operating assets, licenses, equipment and tenant improvements, of which payment is comprised of $0.5 million in cash and $2.5 million of common shares in the capital of Planet 13. This will result in the issuance by the company of 1,374,833 Consideration Shares based on a 10-day VWAP, all of which are being held in escrow until the closing. The license transfer under the purchase agreement is contingent on approval by the State of Nevada's Cannabis Control Board, and upon receiving such approval the Consideration Shares will be released from escrow to WCDN.

Concurrent with the signing of the agreement, Rx Land, LLC, an entity owned by Planet 13's co-CEOs, Bob Groesbeck and Larry Scheffler, separately acquired the Las Vegas facility for $3.3 million. On the second closing, Planet 13 will enter into a lease agreement with RX Land for the facility.

"We've been pursuing additional premium indoor cultivation to expand our Medizin flower line, including our proprietary strain Chloe. Medizin sells out each harvest days after it hits the SuperStore shelves. This agreement allows us to add 25,000 square feet of indoor cultivation immediately, with the ability to expand up to 45,000 square feet in the future," said Scheffler. "We look forward to expanding our supply and offering it in third party dispensaries for the first time."

"In another example of Planet 13's patience and ability to execute for our shareholders, we've identified an opportunity to assume control of a fully built out indoor cultivation facility at a price that will be accretive," Groesbeck said. "Larry and I are paying $3.3 million of our own money to purchase the land and building, through RX Land, to preserve Planet 13's cash while offering an ongoing lease well below the rate set by cannabis REITS."

The Facility has 25,000 square feet under active cultivation with the ability to expand to 45,000 square feet. Effective immediately Planet 13 will assume management of the Facility allowing the Company to plant Medizin strains, including award-winning proprietary strain Chloe.

California lawmakers are considering a bill that would impose fines on businesses that provide aid, such as building space or advertising platforms, to illegal cannabis operations in an effort to combat the state’s illicit market, according to a Los Angeles Times report.

Assemblywoman Blanca Rubio (D-Baldwin Park) introduced the legislation, which would fine those who knowingly provide assistance to illegal cannabis retailers up to $30,000 per day, according to the news outlet.

The bill has been unanimously approved by the California Assembly, and the Senate is expected to vote on the measure after lawmakers reconvene later this month, the Los Angeles Times reported.

Rhode Island has licensed its first medical cannabis testing facility, according to a Providence Journal report.

Green Peaks Analytical, located in Warwick, is the first third-party business licensed to test products for pesticides, metals and solvents. The Rhode Island Department of Business Regulation will establish a timeframe over the next six weeks by which all medical cannabis products will also be tested for potency, Providence Journal reported, and at a later, to-be-determined date, products will also be tested for contaminants.

Until now, the state’s licensed cultivators and dispensaries conducted their own testing or contracted with private, unlicensed laboratories, according to the news outlet.

NECANN Online Debuts September 14-16 Three fall NECANN shows in VT, MA and NJ rescheduled to 2021 MASSACHUSETTS: The New England Cannabis Convention (NECANN) today announced it will host the largest Digital Cannabis Industry Event in the world September 14-16, while also rescheduling three fall conventions to new dates in 2021. NECANN Online will feature Read the full article...

Mississippians for Compassionate Care, the group behind Medical Marijuana 2020, has succeeded in putting a medical cannabis measure, Initiative 65, in front of Mississippi voters this November. State legislators have also introduced a competing measure, Alternative 65A, to appear on the ballot. Voters can choose between those two options or choose not to legalize medical cannabis in the state.

Medical Marijuana 2020 gathered 105,686 certified signatures, more than the required 86,185, for its initiative to appear on the ballot. The group gathered signatures from Mississippi’s five congressional districts from 2000, as is required by state law, and qualified for the ballot in January, said Jamie Grantham, communications director for the campaign.

“Our medical marijuana program here in Mississippi is going to be a robust program in that patients who need help will actually have access to regulated, safe, secure medical marijuana,” Grantham said. “It is going to be a strictly regulated program made especially for Mississippi. It'll be regulated by the Mississippi Department of Health, and medical marijuana treatment centers here in Mississippi will be the only places that medical marijuana will be available.”

The state representatives behind Alternative 65A could not be reached for comment by Cannabis Business Times and Cannabis Dispensary.

According to a January 2019 survey from Millsaps College and Chism Strategies, 67% of respondents supported Medical Marijuana 2020’s proposal.

Medical Marijuana 2020 has a steering committee that Grantham said includes “influential leaders in the community, like physicians, religious leaders, veterans, law enforcement, business leaders.” Seventy-seven committee members are listed on the campaign website.

The Arkansas Department of Finance and Administration has reported that medical cannabis sales have surpassed $100 million since the program’s launch in May 2019, according to The Sentinel-Record.

The state’s 68,069 registered patients have spent $109.65 million and have purchased 17,447 pounds of medical cannabis to date, the news outlet reported.

Twenty-six of the state’s 33 licensed medical cannabis dispensaries are now operational, according to The Sentinel-Record, and four new retailers opened this month, including Patient Services Co. in Monticello, Delta Cannabis in West Memphis, Enlightened Cannabis for People in Arkadelphia and Enlightened Cannabis for People in Herber Springs.