MjLink Cannabis Business News and Press
East Fork Cultivars, a small, family-owned and operated craft hemp and cannabis farm in Takilma, Ore., has been raising capital through a network of small lenders mostly consisting of 30 or so close friends and family members.
But in the age of COVID-19, when personal finances are particularly tight, the company is looking to new sources of debt via Steward, a crowdsourcing fundraising website made specifically for small, sustainable farms.
Contrary to the Kickstarter model of crowdfunding where “investors” are purchasing advanced orders of products without getting their money back or an equity stake, Steward acts as a mechanism for individuals to invest as little as $100 into “human-scale farms,” according to Steward’s website. Steward investors can either receive an equity stake in the farm or receive interest payments on the loan they provide—it all depends on the type of debt the given farm is looking to raise.
East Fork Cultivars currently is conducting its first raise on Steward, a “modest” amount of $50,000, according to Mason Walker, CEO of East Fork Cultivars. “Mostly it's the proof of concept, just to see if people would have interest in it,” he told Hemp Grower in an interview.
The Oregon company mainly raises funds through unsecured debt—loans that are not backed by equity but yield interest rates. “That has allowed us to keep tight ownership control,” Walker said. Through its network of close investors, East Fork Cultivars offers an average of 8% APR on investments. With Steward, the hemp farm is offering a 10% annual return and plans to use the capital to expand the company’s breeding program, fund organic certifications for its entire hemp supply chain, and help the team expand into the retail vertical with its certified-organic hemp products.
There are different requirements and conditions for different types of equity, including SEC filings and increased diligence for equity investments. For farms looking to raise funds, “figuring out what type of capital you want is the best place to start,” Walker shared. “Do you want to pay a higher interest rate for unsecured debt that has fewer restrictions or balance sheet implications, or do you want to get cheaper debt that's secured against your assets?”
After submitting more than 420,000 signatures July 1 to qualify an adult-use cannabis legalization measure for Arizona’s 2020 ballot, Smart and Safe Arizona’s campaign organizer, Stacy Pearson, is confident that the initiative will appear before voters this November.
The group needed to collect 237,645 valid signatures by July 2 to place its statutory measure on this year’s ballot, and despite setbacks stemming from the ongoing COVID-19 pandemic, Smart and Safe not only met, but dramatically exceeded, its goal.
“Everything’s tracking, so we’re confident that we’ll be on the ballot and we’ll win in November,” Pearson told Cannabis Business Times and Cannabis Dispensary.
Smart and Safe was the first of four initiatives in Arizona to submit signatures to the state, she added, so its initiative will be the first one processed. The state has until July 29 to perform a cursory examination of the signatures and submit a random sampling of 5% of the total to the county, which then verifies the sample line by line. The county then sends a validity number back to the state, and Pearson said Smart and Safe should know by mid-August whether its initiative is officially certified for the November ballot.
This week, the Hawaii Legislature passed legislation that would allow the sale of cannabis edibles, sending the bill to Gov. David Ige for his signature. Elsewhere, in Illinois, the state collected more than $52 million in cannabis tax revenue during the first six months of legal adult-use sales.
Here, we’ve rounded up the 10 headlines you need to know before this week is over.
Nebraska: Nebraskans For Medical Marijuana has submitted well over the roughly 121,000 signatures required to put the group’s constitutional amendment legalizing medical cannabis in front of Nebraska voters this fall. The campaign hopes to find out by mid-August if enough of the signatures they submitted are valid to qualify for a ballot initiative this November. Read moreNevada: Green Therapeutics LLC and Meridian Companies LLC have filed a lawsuit against Australis Capital Inc. in Nevada’s Eighth Judicial District Court in Clark County— against which Australis announced it plans to “vigorously defend” itself. The plaintiffs’ complaint, which has been heavily redacted, states that “… Australis stole … from Plaintiffs under false pretenses, has breached the contracts, and has acted in a manner inconsistent with the implied covenant of good faith and fair dealing.” Read moreMissouri: The state’s medical cannabis program director says sales could launch as soon as this fall. Two cultivation facilities, one in Earth City near St. Louis and another in Perryville, were given the green light to plant their first crops last month, which means product could be ready within the next few months. Read moreHawaii: Lawmakers have passed a bill that would allow the state’s eight medical cannabis licensees to sell edibles. The legislation now goes to Gov. David Ige for his signature. Read moreIllinois: The state collected roughly $52.8 million in cannabis tax revenue during the first six months of legal adult-use sales, including approximately $34.7 million in cannabis excise taxes and $18 million in sales taxes. The figures shatter Gov. J.B. Pritzker’s budget estimates, which predicted the state would collect $28 million in cannabis tax revenue by June 30. Read moreFlorida: The Florida Supreme Court ordered a second round of arguments this week in a case over whether the state properly implemented a 2016 constitutional amendment that broadly legalized medical cannabis. The lawsuit, filed by Tampa-based Florigrown, challenges the constitutionality of a 2017 law that implemented the constitutional amendment, particularly provisions related to the business licensing process. Read moreNew Mexico: Ultra Health, one of New Mexico’s largest medical cannabis producers, has sued the state’s Department of Health over its new medical cannabis regulations. The company is asking the district judge to request that the department repeal and rewrite several of the rules which it deems “arbitrary and capricious.” Read moreNew Jersey: The New Jersey Treasury Division of Taxation recently announced that, effective July 1, sales tax on medical marijuana is reduced to 4% from the previous 6.625% sales tax rate (the rate imposed under the state’s “Sales and Use Tax Act”). The tax reduction is the first of three scheduled tax reductions designed to eliminate the sales tax on medical cannabis sales in the Garden State. Read moreArkansas: The state’s five existing medical cannabis cultivators have filed a lawsuit to challenge the Arkansas Medical Marijuana Commission’s decision to issue three additional cultivation licenses. The lawsuit requests an injunction against the issuance of the new licenses, or that they be voided if they have already been awarded. Read moreRhode Island: The Department of Business Regulation will start accepting applications July 17 for six new medical cannabis dispensary licenses. The application period will be open through Dec. 15, and new licensees will be chosen through a lottery, although a date has not been set for awarding the licenses. Read moreThe Rhode Island Department of Business Regulation will start accepting applications July 17 for six new medical cannabis dispensary licenses, according to a Providence Journal report.
The application period will be open through Dec. 15, the news outlet reported, and new licensees will be chosen through a lottery, although a date has not been set for awarding the licenses.
“We’re going to have more information about the process once we have the chance to access the volume [of applicants],” Department of Business Regulation Director Pamela Toro told the Providence Journal. “Maybe the beginning of the year.”
The six additional retailers muse be located in six specific regions per state law, according to the news outlet, and likely won’t be operational until the end of 2021.
Arkansas’ five existing medical cannabis cultivators have filed a lawsuit to challenge the state’s decision to issue three additional cultivation licenses, according to an Arkansas Times report.
The Arkansas Medical Marijuana Commission voted last month to release the remaining cultivation licenses permitted by law, as well as four additional dispensary licenses.
The lawsuit, filed by Osage Creek Cultivation, Delta Medical Cannabis, Bold Team, Natural State Medicinals Cultivation and Natural State Wellness Enterprises, alleges that the new cultivation licenses violate rules that additional licenses should only be issued if it is determined that the existing cultivators are unable to adequately supply the state’s dispensaries, Arkansas Times reported.
The suit also claims that because regulators waited more than 24 months to issue the new licenses, a new application process is required by law, rather than choosing licensees from the pool of original applicants, according to the news outlet.
Defendants named in the lawsuit include the Arkansas Finance and Administration Department, the Alcoholic Beverage Control Division, the Medical Marijuana Commission and the three new cultivation licensees: Carpenter Farms Medical Group, River Valley Relief Cultivation and New Day Cultivation, Arkansas Times reported.
New company brings together cannabis industry leaders including attorney-scientist Dale Hunt, researcher-physician Ethan Russo, and botanist-author Robert C. Clarke CALIFORNIA: Cannabis industry pioneers, Dale Hunt, PhD, JD, Ethan Russo, MD, and Robert C. Clarke have joined forces to create Breeder’s Best, the first cannabis company to focus on intellectual property (IP) protection for independent plant Read the full article...
Portland’s Office of Community & Civic Life named Dasheeda Dawson as its new cannabis program supervisor earlier this month, in some ways ushering in a new chapter of the city’s Social Equity Grant program.
Portland voters passed a 3% tax on adult-use cannabis in 2016, and since then, more than $6 million of the tax revenue has funded infrastructure improvements, drug rehabilitation, small business support, economic opportunities and technical assistance for business owners from communities disproportionately impacted by the war on drugs.
Dawson, who has over a decade of business development, strategic management and brand marketing experience, as well as more recent experience as a cannabis industry educator and strategy expert, hopes to build on the city’s existing vision of equity to further strengthen the Social Equity Grant program.
Here, Dawson discusses her new role and her goals for expanding the program to support more underserved entrepreneurs.
Melissa Schiller: What is the Office of Community & Civic Life’s role in Portland’s cannabis program?
Dasheeda Dawson: Portland, or Oregon in general, was one of the first states to legalize medical marijuana and then adult-use, so the program’s been around since 2015. [I believe] where cannabis regulation happens is often the mindset in which it’s regulated. Portland has put the regulation of the program under the Office of Community & Civic Life, which also oversees liquor and noise and other community-based components. The cannabis program, since its inception, is the core licensing and compliance oversight for the cannabis industry in the city of Portland.
Helping to build a brand-new industry is generally a once-in-a-lifetime experience, but for Michael Cohen, co-founder and president of The Pass, a vertically integrated adult-use cannabis operator in Massachusetts, the cannabis industry gave him a second opportunity to be at the start of something big.
Cohen launched one of the first internet ad buying agencies in 1996, when online advertising was in its infancy.
“I was part of this string of industry professionals where we were all true believers,” Cohen says. “People would say, ‘I don’t get online advertising, I would never click on one of those banners.’ We would tell people, ‘This is the future of marketing,’ and three years later, it was just booming.”
Cohen sold the company and turned to consulting and investing as he waited for his next business opportunity. Now, almost 20 years later, he’s found it in the cannabis industry.
Cohen and his partner have been building their cannabis business for nearly three years, and currently hold three licenses in Massachusetts for cultivation, processing and retail. They operate indoor and greenhouse cultivation facilities in Sheffield, Mass., in Berkshire County, and have a provisional license for an outdoor grow site. The Pass opened its first dispensary location in the Berkshires July 17 and has the option to open two more storefronts with its current retail license.
Out in the Mojave Desert, a hemp farm is stirring in the dry wind. After inking a partnership last year and trying out a small-scale crop experiment, the teams at Glass House Farms and Cadiz Inc. are watching their first real attempt at the industry come to fruition.
Together, the two companies formed SoCal Hemp Co.
Graham Farrar, president of Glass House Farms, says that hemp offers many relatively inexpensive opportunities to learn more about the cannabis plant.
“I look at things through the lens of cannabinoid products,” he says. “We’re just starting to scratch the surface of what cannabinoids are all about.”
Hemp, of course, is legally defined to exclude anything higher than 0.3% THC content. But every other cannabinoid is fair game. And while CBD has the spotlight right now, Farrar points to minor cannabinoids like CBC, CBN and CBG as notable compounds that will play a role in new product innovation. Zooming out further, there are untold possibilities for additional cannabinoid development (alongside breeding hemp varieties for specific terpene and flavonoid profiles). The opportunities are vast.
To accomplish that, Glass House Farms partnered with publicly traded water supplier Cadiz Inc. in 2019. The company owns 9,600 fertile acres in the Mojave Desert, all sitting atop a natural aquifer. Farrar says that Cadiz boasts the land, water and sunshine required for agriculture on this scale; Glass House brings the operational expertise. The two companies will split proceeds from future hemp sales.
Over Father’s Day weekend in 2013, Jawara McIntosh, son of reggae musician Peter Tosh and himself a father of four, was arrested for marijuana possession. After making bail later that year, he was given a plea deal of 20 years in prison, but finding it outlandish, proceeded through years of pretrial motions. Over time, he received more favorable offers. Then, despite his devout Rastafari religion, Jawara struck a plea deal in 2017 for a six-month sentence, lest he “be made an example of,” as his sister Niambe McIntosh tells the story.
Jawara lived in the Bergen County, New Jersey, jail for a month and a half in 2017 for the possession charge, his first, before a fellow inmate attacked him, causing him to suffer a traumatic brain injury. Today, he can’t talk or walk, and he needs 24-hour care.
After the attack, the family visited the intensive care unit. When they arrived, Jawara’s face was swollen, tubes were stuck down his throat. He wore, as dictated by the legal system, a brace on his neck and a handcuff on his ankle.
“It was devastating to see that here he is fighting for his life, but treated like an animal, with a handcuff on his ankle,” said Niambe McIntosh, executive director of the Peter Tosh Estate. “And when we asked the hospital about the handcuff and if we could remove this—that’s not helping his medical condition—they told us that the prison had hierarchy over the hospital. And we were also told that we were lucky that we could visit my brother.”
Jawara’s is one of the many stories shared during Marijuana Policy Project’s July 15 virtual live event “Reimagining Justice: Race, Cannabis & Policing,” streamed on Facebook and YouTube and using the hashtag #ReimaginingJustice. The speakers throughout the three-and-a-half-hour event spoke about how politicians made cannabis use illegal through racist motives and policies; how police use the plant as a weapon against Black and brown people; what a better image of justice can look like; and how to reverse harms.
Panel 1: Cannabis Criminalization and Oppressive Policing in Communities of Color
The New Jersey Treasury Division of Taxation recently announced that, effective July 1, sales tax on medical marijuana is reduced to 4% from the previous 6.625% sales tax rate (the rate imposed under the state’s “Sales and Use Tax Act”). The tax reduction is the first of three scheduled tax reductions designed to eliminate the sales tax on medical cannabis sales in the Garden State.
The 4% sales tax rate will apply through June 30, 2021, when the tax rate will be reduced to 2% until June 30, 2022. Then, effective July 1, 2022, medical marijuana sales will not be taxed.
The tax reductions resulted from the passage of the Jake Honig Compassionate Use Medical [Marijuana] Cannabis Act, named after the late Jake Honig, “a 7-year-old from Howell for whom medical marijuana provided the only relief from an inoperable brain tumor,” according to a recent New Jersey Herald article. Gov. Phil Murphy signed the act into law July 2, 2019, “to dramatically reform New Jersey’s Medicinal Marijuana Program (MMP) and expand patient access to medical marijuana,” according to a statement from the governor’s office.
“Activists have decried the policy of instituting any tax on medical marijuana purchases as ‘criminal,’ since over-the-counter and prescription medicines at traditional pharmacies are exempt from New Jersey sales tax,” the NJ Herald reported.
The Herald article cited comments made by Sen. Robert Singer in 2019, as the bill was headed for a vote: “How dare we use the term ‘medical’ and charge poor people and working people and families sales tax on something that helps them feel better.”
According to the act, municipalities may adopt ordinances to impost a “transfer tax,” not to exceed two percent of the medical cannabis price, on medical cannabis sales made at local dispensaries.
Ultra Health, one of New Mexico’s largest medical cannabis producers, has sued the state’s Department of Health over its new medical cannabis regulations, according to a Santa Fe New Mexican report.
The lawsuit alleges that the department “simply copied and pasted regulations from other states without considering how those out of state regulations would or could perform in the real world in New Mexico,” the news outlet reported.
Ultra Health is asking the district judge to request that the department repeal and rewrite several of the rules which it deems “arbitrary and capricious,” according to the Santa Fe New Mexican.
The company filed the lawsuit July 10 after the state published its new regulations June 23, the news outlet reported. Ultra Health’s complaints target the state’s new rules on testing and labeling requirements, hemp, and the department’s criteria for suspending and revoking producers’ licenses.
The Florida Supreme Court ordered a second round of arguments July 14 in a case over whether the state properly implemented a 2016 constitutional amendment that broadly legalized medical cannabis, according to the Miami Herald.
The lawsuit, filed by Tampa-based Florigrown, challenges the constitutionality of a 2017 law that implemented the constitutional amendment, particularly provisions related to the business licensing process. Florigrown was denied a business license and alleges that aspects of Florida’s medical cannabis law improperly limit the companies that can participate in the industry, according to the Miami Herald.
RELATED: A Florida Cannabis Business Wants to Eliminate the State’s Cap on Medical Marijuana Licenses
The Supreme Court heard arguments in May, the news outlet reported, but the new hearing will focus on whether the 2017 law is an unconstitutional “special” law, which is generally intended to benefit specific entities and is prohibited under Florida law, according to the Miami Herald.
Florigrown and the Florida Department of Health must now file additional briefs on the issue, the news outlet reported, and another round of arguments is scheduled for Oct. 7.
Illinois collected roughly $52.8 million in cannabis tax revenue during the first six months of legal adult-use sales, according to a Chicago Tribune report.
The state collected roughly $34.7 million in cannabis excise taxes and $18 million in sales taxes, the news outlet reported. A portion of the sales tax revenue will be shared with local governments, according to the Chicago Tribune, while about $25.9 million will be deposited into the state’s general fund, with a portion earmarked for reinvestment into communities impacted by the war on drugs.
The figures shatter Gov. J.B. Pritzker’s budget estimates, which predicted the state would collect $28 million in cannabis tax revenue by June 30, the news outlet reported.
Illinois’ cannabis sales surpassed $47 million in June, which set a new record for the highest monthly sales figures in the state.
Total adult-use cannabis sales have topped $239 million since sales launched Jan. 1, the Chicago Tribune reported.
BROOMFIELD, Colo., July 14 -PRESS RELEASE- The Colorado Department of agriculture has expanded its list for pesticides that can be used on cannabis. Any pesticides not on the list that are used on cannabis puts the producer in of the Pesticide Applicators' Act has been updated. The products added to the list are: Decco AG PAA, Mite-Phite ZM, Fortify Miticide and VaRx Brand MaxRx
The department reviews pesticide labels upon request, and maintains the list with products “we have reviewed that we believe could be used on marijuana without violating 35-10-117(1)(i).” The list currently has over 400 approved pesticides.
To view the updated list, click here for a pdf or click here for an Excel form. For questions regarding this change, contact Laura Quakenbush at (303) 869-9060 or email [email protected].
]]>Patricia Rosi, the CEO of Wellness Connection of Maine, has left her role to take a new position with the company’s parent company, Acreage Holdings, according to a Portland Press Herald report.
Rosi has served as Wellness Connection’s CEO since 2013 and will now become Acreage Holdings’ vice president of marketing, the news outlet reported.
Wellness Connection operates four of Maine’s eight medical cannabis dispensaries, as well as a cultivation facility in Auburn, the Portland Press Herald reported. Wellness Connection declined to respond to the news outlet’s inquiries about who will act as CEO in Rosi’s absence.
The Hawaii Legislature passed a bill July 10 that allows the state’s eight medical cannabis licensees to sell edibles, according to a Big Island Now report.
The legislation would also allow publicity for educational and scientific events, as well as the remediation of cannabis flower in certain instances, the news outlet reported.
The bill now goes to Gov. David Ige for his signature.
Medical cannabis sales could launch in Missouri as soon as this fall, according to a Missourian report.
Two cultivation facilities, one in Earth City near St. Louis and another in Perryville, were given the green light to plant their first crops last month, the news outlet reported, which means product could be ready within the next few months.
“If you do the math, 90 days from those time frames, you are looking at September and October,” Lyndall Fraker, director of the state’s medical cannabis program, told the Missourian. “That’s when I think you will be seeing quite a few dispensaries ready to sell product.”
Fraker told the news outlet that three additional cultivators have requested inspections, and he expects more requests for final inspections and certifications in the coming months.
Missourians for a New Approach’s 2020 ballot initiative to pass adult-use cannabis legalization in the state ended because of the coronavirus pandemic that has swept the nation. Now, the group is looking ahead to the 2022 ballot.
Dan Viets is an attorney who chairs the group’s advisory board and is both secretary of the National Organization for the Reform of Marijuana Laws (NORML) and that organization’s state coordinator for Missouri.
Viets noted a recent Gallup poll showed that 70% of Americans consider smoking cannabis to be morally acceptable. “By November of 2022, I think—I'll just speak for myself on this point—but I think we will probably be approaching the same support we had for medical in 2018, and that was 66%," he said.
He contributes that prediction to the following: “It's partly the aging of the population, but it’s also the fact that across the nation, obviously, cannabis is now much more accepted.”
Viets said the task of gathering signatures from 8% of voters in six out of Missouri’s eight congressional districts, as governed by state law, required numerous resources but was feasible until the pandemic struck.
Other groups gathering signatures for separate initiatives were able to continue to do so, but Missourians for a New Approach still had a ways to go to reach the signature requirement, which, according to the Springfield News-Leader, is around 160,000.
