MjLink Cannabis Business News and Press
The Ohio Bureau of Criminal Investigation is ready to start testing cannabis plants and oils in drug cases, thanks to new equipment that will help technicians distinguish between hemp and marijuana.
For the past nine months suspected illegal marijuana cases weren’t prosecuted in numerous cities across the state -- such as Columbus and Hunting Valley in Northeast Ohio -- because the Ohio General Assembly legalized hemp and there were no public crime labs in the state that had the testing ability to distinguish between the two plants, which are part of the same cannabis genus.
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Laura Hancock ~ Cleveland.com ~
Canopy Growth has announced 200 more layoffs in Canada, the U.S. and the UK in the Canadian LP’s latest phase of scaling back its operations, according to a Yahoo Finance Canada report.
“Although difficult, the decisions that have been made over the last few months are to allow Canopy Growth to remain focused on the areas where we are winning and ensure that we are delivering the highest quality products to our consumers in every market where we operate,” CEO David Klein told the news outlet.
In early March, Canopy announced a “production optimization plan,” which included the closure of two greenhouse facilities in Canada and the elimination of roughly 500 employees.
“Although difficult, [the] decision was made in order to align Canopy Growth’s supply with consumer demand and improve production efficiencies over time,” Klein told Cannabis Business Times at that time.
The company cited the slow rollout of Canada’s adult-use cannabis market and the timing of outdoor cultivation licensing as primary reasons behind its restructuring.
Now, experts say these market conditions might exacerbate a phenomenon that was already taking off in the cannabis industry prior to the coronavirus outbreak: vulture investing.
Vulture investment funds—investors that target “distressed assets” (companies that are near/at insolvency)—have been taking more interest in the cannabis industry, according to Hilary Bricken, attorney at Harris Bricken. These investors are “wheeler-dealer” types, she says, and take on more risk in exchange for a much larger stake in the company (in equity deals) or massive interest rates (in debt deals). They also generally attach more conditions to their investments, including taking ownership of the assets should the company continue to struggle (or, worse yet, after the company finds success).
“Their whole model is to go after these businesses that are hurting,” Bricken tells Cannabis Business Times, “and here in California, that is not going to be difficult to find because the industry was already suffering before coronavirus.”
Since January, she has seen a handful of new equity funds pop up that are targeted toward distressed assets. In a March 4 interview with CBT, Joe Caltabiano, former president of Cresco Labs, stated his interest in working with distressed assets after resigning from the company he helped launch. He has since launched an equity fund called “JSC Fund” which targets distressed assets.
Since January, Bricken says, “very aggressive vulture investors and funds based around only debt buy-ups [have] come to me not for representation—they already have attorneys—but asking ‘Do you have deals? Do you have deals that you can bring to us? Do you know anyone that’s dying or hurting?’
“There has been an uptick, it’s not rampant, but it’s starting to become the finance vehicle of the year, and it’s probably not going to stop in the wake of the pandemic,” she adds.
Apothio sued Kern County for allegedly destroying $1 billion worth of its hemp crop. Now, officials within the city of Arvin—located in Kern County—are working to attract Apothio and other hemp businesses.
On April 28, Arvin, Calif., city council voted via teleconference to introduce a hemp ordinance that would provide local jurisdiction over hemp cultivation and manufacturing to the city. Mayor Jose Gurrola made a motion to approve the introduction of the ordinance, and council passed it with a 5-0 vote.
The city’s planning commission read the ordinance on April 27, permitting council to waive its own first reading on April 28. Another reading will take place during the next council meeting on May 12. if approved then, the ordinance would go into effect 30 days later, said Pawan Gill, Arvin director of administrative services, prior to the council meeting.
City officials’ decision to regulate hemp for commercial, educational and scientific purposes follows the alleged government destruction of 500 acres of hemp that Apothio LLC grew near Arvin.
Apothio sued Kern County, the Kern County Sheriff’s Office (KCSO), the California Department of Fish and Wildlife (CDFW) and multiple individuals. Its complaint said it can legally grow crops testing higher than the federal 0.3%-THC limit because it is an established agricultural research institution (EARI).
Arvin’s decision to work with the hemp industry on community development and obtain tax revenue wasn’t initially sparked by the recent destruction, but it was expedited by it, Gill said. “We've been talking to the industry for two years,” she said. “This was … a catalyzing moment where we said, ‘Okay, we shouldn't put this off anymore.’”
Illinois regulators announced April 29 that they will delay issuing new adult-use cannabis dispensary licenses due to the COVID-19 pandemic, according to a Chicago Tribune report.
The Illinois Department of Financial and Professional Regulation planned to award 75 new adult-use dispensary licenses May 1, but will now wait until the governor’s disaster proclamations expires, the news outlet reported. Gov. J.B. Pritzker is expected to sign a new order in the coming days to extend the proclamation through May 30, according to the Chicago Tribune.
More than 700 applicants, including many social equity applicants, applied for the 75 available licenses, the news outlet reported. Applications were due Jan. 1, and the licensing round aimed to provide new business operators access to Illinois’ adult-use industry, according to the Chicago Tribune. (Only existing cannabis businesses were able to serve the state’s adult-use market when it launched Jan. 1.)
Once the new licenses are issued, licensees will have 180 days to secure a location for their dispensaries, the news outlet reported, and the state must then inspect the facility before giving the retailers final approval to open.
Illinois has also extended the deadline for cannabis infuser, craft grower and transporter licenses to April 30 due to the pandemic, with plans to award the licenses by July 1.
Medical marijuana has technically been legal in Missouri since January 1, but dispensaries have been unable to open until they meet seed-to-sale requirements.
In the midst of Governor Mike Parson's COVID-19 briefing this afternoon came the answer to a question that has been on everyone's minds since the crisis began.
Specifically: When the hell do the medical marijuana facilities open?
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Daniel Hill ~ Riverfront Times ~
Tax relief is hard to come by in the cannabis industry, to say nothing of broader financial assistance at all. In California, however, State Treasure Fiona Ma tells CBT that a sales tax extension and a $50,000 bridge loan are available to small business owners working in the cannabis industry.
Gov. Gavin Newsom signed the 90-day extension into law last month, giving small business owners until late July to file and pay their first-quarter sales taxes. At the state level, cannabis sales tax comes in at 7.25%.
On top of that, Ma says that small businesses may keep up to $50,000 of their sales tax payments for a year, effectively using the cash as a no-interest bridge loan between now and next summer. The $50,000 would need to be paid back in installments by June 30, 2021. This bridge loan is available to businesses will less than $5 million in annual revenue.
Ma is clear: This isn’t part of the typical tax refund process. It’s a separate plan that business owners must opt into with the state’s taxing authority.
For more information on how to sign up for this bridge loan program, visit the California Department of Tax and Fee Administration’s website.
“This is pretty much the only relief besides the 90-day extension and payment requirement for our federal and California income tax returns,” Ma says. “But for California, unlike the federal government with 280E, California cannabis businesses can deduct their ordinary business expenses—not just cost of goods sold.”
Non-alcoholic CBD-infused beverages are the fastest-growing segment of the "drinkables" market, largely driven by the growing demand for wellness products as a replacement for soft drinks and alcohol.
The global market for cannabis-infused beverages could reach nearly three billion dollars within the next five years, according to a new report by Grand View Research.
The report predicts that the infused beverage market will grow at a Compound Annual Growth Rate (CAGR) of 17.8 percent, eventually reaching $2.8 billion in annual sales by 2025.
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Chris Moore ~ MerryJane.com ~
Millions of people across the U.S. can legally buy pot at dispensaries — but scientists aren’t allowed to study it.
Early in Dr. Sue Sisley’s medical career, military veterans with post-traumatic stress disorder told her that smoking marijuana prevented nightmares and helped them sleep.
Sisley, a primary care physician and psychiatrist in Scottsdale, Arizona, who has treated vets for two decades, said she was initially skeptical of her patients’ claims, but their families vouched that pot was helping with their symptoms.
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Tyler Kingkade ~ NBC News ~
Denver-based Medicine Man Technologies announced last week that the company was rebranding itself as Schwazze to bring the business in line with its new vision and strategic focus following a very busy bout of growth last year.
When Colorado Gov. Jared Polis signed HB19-1090 into law last year, allowing cannabis licensees to be owned by publicly traded companies, Schwazze started building out its cannabis supply chain through a series of strategic acquisitions.
The company kicked off 2019 with an agreement in January to acquire MedPharm Holdings LLC, an intellectual property development and holding company focused on cannabis research and product development, and days later announced plans to acquire Medicine Man Denver, which operates an indoor cultivation facility and four dispensaries in Colorado.
In June, Schwazze announced its acquisition of outdoor cultivator Los Sueños Farms, as well as Purplebees, an infused products manufacturer and dispensary. The following month, the company unveiled plans to acquire Dabble Extracts, a Colorado-based cannabis concentrate company.
The U.S. Food and Drug Administration (FDA) has sent warning letters to two companies operating in the CBD space for violating the Federal Food, Drug and Cosmetic Act (FD&C Act), according to a news release from the agency.
The FDA said in the release that it sent a warning letter to BIOTA Biosciences, LLC “for marketing and distributing injectable CBD products as well as an injectable curcumin product.” The company claimed that its products could be used as an alternative to opioids and also marketed its products “for serious diseases,” according to the FDA.
The agency also issued a warning letter to Homero Corp, doing business as Natures CBD Oil Distribution, “for marketing and distributing CBD products as a treatment to opioid addiction as well as other diseases.”
“The opioid crisis continues to be a serious problem in the United States, and we will continue to crack down on companies that attempt to benefit from selling products with unfounded treatment claims,” said FDA Principal Deputy Commissioner Amy Abernethy in a prepared statement. “CBD has not been shown to treat opioid addiction.”
The FDA has approved only one CBD product, Epidiolex, and has not evaluated the efficacy, dosage, side effects nor safety concerns relating to any unapproved CBD products, according to the release.
The companies have 15 days to respond to the FDA with a statement of how they will address the violations.
LOS ALAMOS, NM, April 29, 2020 / - PRESS RELEASE - Trait Biosciences Inc., a biotechnology research organization providing innovative technology to the hemp and cannabis industry, has announced that the U.S. Patent and Trademarks Office has allowed the company protection for its Trait Amplified technology that increases trichome production and up-regulates the production of cannabinoids.
This is the newest of more than 90 patents held, applied for or licensed to Trait within cannabinoid research. Specifically, the patent notes that:
The World’s Most Recognized Cannabis Brand Expands Portfolio into the World’s Largest Cannabis Market CALIFORNIA: Hightimes Holding Corp., the owner of High Times, the most well-known brand in cannabis, announced the execution of a definitive agreement to acquire certain equity and assets with respect to 13 planned and operational California dispensaries from Harvest Health & Read the full article...
WASHINGTON: The Washington State Liquor and Cannabis Board (WSLCB) Friday issued an emergency suspension for Smoking Exodus, a vapor product retailer, after an investigation found multiple violations of their state licenses and violations of state and federal drug laws. The suspension is for the licensee listed below: Smoking Exodus:1382 SE Lund Avenue, Suite 150, Port Read the full article...
Cannabis production in Mexico is making a comeback, and this time it’s cartel-free. Independent farmers are now producing high-quality “ethical” weed -- without the involvement of the country’s violent cartels.
As the country prepares to create a legal weed market, cannabis producers and dealers in Mexico told VICE that interest in finer types of homegrown weed, marketed with names such as Cronica (chronic), Blue Dreams or Purpura (purple), is growing among consumers in major cities.
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Deborah Bonello and Miguel Angel Vega ~ Vice.com ~
Researchers have developed a way to determine the viability of pollen germination in marijuana plants, as well as a simple method of storing cannabis pollen for long periods of time, according to a new study.
For marijuana cultivators, the results could prove useful, helping them avoid potentially costly mistakes in the process and ensuring consistency and quality in their crops across growing cycles.
Ensuring long-term storage of pollen is important for cultivators because of the central role it plays in generating seeds.
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Kyle Jaeger ~ MarijuanaMoment.net ~
A Massachusetts appeals court has sided with Cambridge in a lawsuit over the city’s cannabis licensing moratorium, according to a MassLive.com report.
Revolutionary Clinics, a licensed medical cannabis dispensary that has been operational since 2018, sued Cambridge last year over a city ordinance that allows only economic empowerment applicants to receive adult-use dispensary licenses for the first two-years of the licensing process in an attempt to ensure those disproportionately impacted by prohibition have access to the industry.
A Middlesex Superior Court judge ruled in January that licensed medical cannabis dispensaries in Cambridge must be able to immediately seek licensure in the adult-use market, arguing that the city’s ordinance was in direct conflict with state law, as well as the Cannabis Control Commission’s adult-use cannabis regulations.
The appeals court vacated that decision April 24, when Associate Justice Joseph M. Ditkoff ruled that nothing in Cambridge’s ordinance conflicts with regulations surrounding priority applicants and that the evidence of economic harm resulting from the ordinance was minimal, MassLive.com reported.
Denver has established a working group to issue recommendations on the city’s cannabis policies and licensing process, according to a Westword report.
In an April 27 memo, the city’s Department of Excise and Licenses announced the Marijuana Licensing Work Group (MLWG), a 24-member advisory board made up of industry and community stakeholders who will “review, discuss, and make recommendations on policy direction and possible marijuana licensing laws, rules and regulations.”
Colorado Gov. Jared Polis signed two measures into law last year that allow the state’s municipalities to license cannabis delivery and social consumption businesses within their jurisdictions, and the MLWG is charged with reviewing licensing opportunities for these facilities, Westword reported.
The MLWG will also address social equity in Denver’s cannabis industry, according to the news outlet, as the new delivery and social consumption licenses could offer an opportunity to diversify the market.
The working group is scheduled to meet virtually on May 14, May 28, June 11 and June 25, Westword reported. The MWLG must ultimately present its formal recommendations to Mayor Michael Hancock’s administration, as well as the Department of Excise and Licenses’ Office of Marijuana Policy.
As U.S. states and municipalities responded to the COVID-19 pandemic, Nevada’s tribal communities crafted their own approach to social distancing and flattening the curve, and tribal cannabis businesses have not been immune to the challenges that much of the industry has experienced during this unprecedented crisis.
At the start of the pandemic, many of Nevada’s tribes declared a state of emergency and closed their borders to limit the number of visitors and minimize outside contact, Laurie Thom, enforcement director for the Inter-Tribal Marijuana Commission (ITMC) tells Cannabis Business Times.
The ITMC is an oversight commission for the Tribal Marijuana Enforcement Division, which regulates Nevada’s tribal cannabis industry. The commission currently has representation from the Ely Shoshone, Lovelock Paiute, Walker River Paiute and Yerington Paiute tribes.
“We are helping tribes enter this industry with compliance, safety and good foresight, trying to always look ahead be ready for that next change because the cannabis industry changes so fast, and it is hard for tribes to stay abreast of what’s going on on their own,” Thom says.
The ITMC consists of an administrative division, which reviews and distributes Nevada’s cannabis regulations to the tribes for approval, and an enforcement division, which ensures businesses maintain compliance with each tribe’s rules.
CHICAGO--(BUSINESS WIRE)--PRESS RELEASE--Cresco Labs, one of the largest vertically integrated multistate cannabis operators in the United States, has announced that it has reached a mutual agreement to terminate the purchase agreement dated Sept.16, 2019, to acquire certain assets from Tryke Companies, LLC.
Cresco Labs CEO and Co-Founder Charlie Bachtell said, “Our acquisition of Tryke has been impacted by regulatory delays, a decline in capital markets, and now COVID-19, which brought additional risk to this transaction. Given these events, we feel the resources previously targeted for this transaction are better invested in our existing markets, where we have high visibility and certainty of return on capital.”
Bachtell added, “The decisions we have made over the past year have de-risked Cresco, leaving us with one of the most experienced management teams, and one of the strongest balance sheets to deploy into our high-return, core markets. We know that times of uncertainty come with opportunity. Terminating the agreement puts Cresco in a position to better manage any potential future implications from COVID, take advantage of the current macro environment and succeed in achieving our goal of building the most important cannabis company in the U.S.”
The terminated agreement was for a purchase consideration of approximately US$282.5 million, including approximately US$55 million in cash. Cresco has agreed to pay equity valued at $1.25 million as total consideration for the termination of the agreement. With the termination of the agreement, Cresco has no outstanding acquisitions or major CAPEX obligations, leaving Cresco’s balance sheet unencumbered.
