MjLink Cannabis Business News and Press

California Sen. Mike McGuire may soon introduce a bill that would do away with the state’s cultivation tax, according to the North Bay Business Journal.

On Dec. 8, McGuire said he plans to introduce legislation in early 2022 to eliminate the tax.

“The bottom line is this: Cultivation taxes are crushing small farmers throughout the North Coast,” McGuire said, according to the paper. “Basing it off the weight doesn’t account for when the market collapses. It’s simply not sustainable.” (The state taxes cultivators per an ounce-weight basis.)

This comes on the heels of a recent vote by the board of supervisors for the city and county of San Francisco to suspend the local cannabis business tax through the end of next year. Market observers and trade associations have noted cash flow issues throughout the entire state as illicit operators rake in billions more compared to the regulated industry.

In 2019, according to Statista, California’s legal cannabis industry was valued at $3.1 billion, while its illegal market was valued at $8.7 billion.

A higher excise tax for point-of-sale transactions could replace the state cultivation tax, McGuire said, per the North Bay Business Journal.

CLEVELAND, OH (December 8, 2021) – The award-winning trade magazines Cannabis Business Times and Hemp Grower announce the promotions of Patrick Williams to Managing Editor of Cannabis Business Times, and Andriana (Andi) Ruscitto to Associate Editor of Hemp Grower. These promotions will help support the continued growth of the publications, which serve the burgeoning cannabis and hemp markets. 

Williams, who joined the magazines’ parent company GIE Media in 2017, worked as Associate Editor and Senior Editor for sister publications Greenhouse Management and Produce Grower. He then worked as Senior Editor for Cannabis Business Times and Cannabis Dispensary before taking on the role of Managing Editor of Hemp Grower in February 2021. Previously, he was a freelance writer for B2B and consumer media and an editorial intern on the GIE Media publication Golf Course Industry. Williams graduated from Kent State university in 2015 with a bachelor’s degree in journalism.

“Patrick has brought forth tremendous skill and enthusiasm to his work since he began his career at GIE Media. His background combines strengths in traditional horticulture and cannabis, and his talents range from precision editing to conceptualization of timely and influential article ideas that will help continue Cannabis Business Times’ significant industry impact and growth trajectory,” Editorial Director Noelle Skodzinski said. “We look forward to his future achievements in his new role of Managing Editor.”

“I’m very much looking forward to returning to Cannabis Business Times in this exciting and fast-paced role,” Williams said. “We’re already working ahead on 2022 content that will highlight the stories of industry innovators and provide valuable insights to cannabis cultivators, retailers and manufacturers.”

Ruscitto joined GIE Media as an assistant editor of Cannabis Business Times, Cannabis Dispensary and Hemp Grower in January 2021. Before joining GIE, Ruscitto attended Kent State University, where she worked in the university communications and marketing department as an editor for the Kent State Today. Ruscitto graduated from Kent State in December 2020 with a bachelor's degree in public relations and a minor in marketing.

“Andi’s reporting and writing skills are strong, and she has quickly proven what an asset she is to our cannabis and hemp publications,” Hemp Grower Editor Theresa Bennett said. “We’re looking forward to seeing her career develop through her contributions to our print magazine.”

A recent vote to suspend the San Francisco local cannabis business tax through the end of next year earned unanimous support for the measure, as KPIX reports. It was a proposal that city supervisor Rafael Mandelman said would help licensed businesses compete and, ideally, thrive against the pull of the illicit market.   

The tax was set to go into effect Jan. 1, the result of a 2018 ballot measure that local voters approved. The original ballot language proposed a 1-5% tax on gross receipts, citywide.

However, a lot has happened in the last three years in California.

Increased taxation—from the state level on down to counties and municipalities—has tied up cash flow and handcuffed licensed operators to a hefty financial imbalance, according to market observers and trade associations monitoring the post-Prop. 64 situation. Meanwhile, illicit operators are raking in $8 billion annually—double the market size of the licensed, regulated and taxable cannabis landscape in the state.  

“Cannabis businesses create good jobs for San Franciscans and provide safe, regulated products to their customers,” Mandelman said in a public statement. “Sadly, the illegal market is flourishing by undercutting the prices of legal businesses, which is bad for our economy as illegal businesses pay no taxes while subjecting workers to dangerous conditions and consumers to dangerous products. Now is not the time to impose a new tax on small businesses that are just getting established and trying to compete with illicit operators.”

If you walk into The Kremlin, you can be hit by the warm, welcoming smell of cannabis—just make sure you’re in the Bay Area around harvest time, not Moscow.

The Kremlin is Unrivaled Brands’ cultivation facility in Oakland, Calif., where the vertically integrated multi-state operator recently harvested its first crop.

The company launched The Kremlin in September. The facility is set to become the main production hub for the company’s Korova brand, which is positioned as high-quality, high-potency indoor flower in California’s market, and features exotic genetics like Alien Blackout, Russian Doll, and Baby Yoda. The company expects the facility to produce 3,500 pounds of cannabis annually, per a Dec. 6 press release.

“The facility has performed tremendously right off the bat and we couldn’t be happier with it,” Uri Kenig, Unrivaled Brands’ COO told Cannabis Business Times.

Unrivaled Brands has cultivation and distribution operations in both California and Oregon, as well as retail and delivery services in the Golden State. In Nevada, Unrivaled is a partner with NuLeaf, an indoor cultivation operation.

The Kremlin consists of four flowering rooms decked with 60 high-pressure sodium (HPS) lights apiece. Plants are grown in 6-inch rockwool cubes, but Brian Linal, the company’s cultivation director, is experimenting with different media. In addition to producing sellable product, the first harvest at the Oakland facility set a baseline against which Linal intends to compare results from different inputs.

Tilray announced this week that the company will acquire Colorado-based Breckenridge Distillery for an undisclosed sum. The plan, executives say, is to launch THC-infused spirits whenever the U.S. legalizes cannabis.

Breckenridge Distillery was founded in 2008. The company is most well known for its bourbon whisky blends.

"Tilray’s strength lies in our ability to identify and significantly expand leading CPG lifestyle brands that resonate powerfully with consumers,” Tilray CEO and chairman Irwin Simon said in a public statement. “Breckenridge Distillery is an iconic addition to our platform in this respect based on its portfolio of award-winning spirits, passionate consumer engagement, and a strong sales and distribution network. We see tremendous potential for Breckenridge and our existing SweetWater brand to complement each other, expanding their respective reach and driving further profitable growth in our beverage alcohol segment.”

SweetWater is a Georgia-based brewery that Tilray acquired last year via the blockbuster merger with Aphria.

The Breckenridge Distillery announcement continues Tilray’s plan to “leverage [a] growing portfolio of U.S. CPG brands to launch THC-based product adjacencies upon federal legalization in the U.S.,” as Simon said in his public statement.

Texas hemp companies are fighting back against the state’s recent ban on delta-8 THC.

The ban stems back to a statement made by Texas Department of State Health Services (DSHS) in late October clarifying that delta-8 is a Schedule I controlled substance and is illegal under H.B.1325—legislation signed into law by Gov. Gregg Abbott in 2019 to legalize the cultivation of hemp in Texas, Hemp Grower previously reported. 

DSHS' statement reads: "Texas Health and Safety Code Chapter 443 (HSC 443), established by House Bill 1325 (86th Legislature), allows Consumable Hemp Products in Texas that do not exceed 0.3% Delta-9 tetrahydrocannabinol (THC). All other forms of THC, including Delta-8 in any concentration and Delta-9 exceeding 0.3%, are considered Schedule I controlled substances."

Companies have since filed lawsuits in attempt to reverse that ban, and they succeeded temporarily. But the state and attorney general have worked to reverse that, leaving the parties to work out the issue through lawsuits currently moving through courts.

The state’s tumultuous and somewhat history with delta-8 is one that started even before the DSHS stepped in.

The Debate Over Delta-8’s Legality in Texas

In its THEMES 2022 handbook, which focuses on cannabis and 13 other areas, investment bank Cowen stated that its analysts view U.S. federal cannabis legalization as inevitable and provided various industry predictions.

Cowen analysts estimate in the report, published Dec. 6, that the U.S. cannabis industry’s total available market will reach $84 billion in 2026.

Below are some other observations, views and predictions outlined in the report.

States’ Growth

Whether U.S. federal legalization occurs in 2022, which as the THEMES report declares “is conceivable … either as a result of bipartisan legislation ahead of the November midterm elections, or potentially in the lame duck period,” states with large populations are still growing their cannabis markets and garnering public support, analysts say.

In addition, states have served as leaders in how they incorporate social justice into their legalization efforts, according to the report, which notes the policymaking intent of social equity programs.

The Cannabis Travel Association (CTAI) will host its annual virtual Cannabis Travel Summit from Dec.14-15.

The summit, Cannabis Travel: Now and Next, will feature a range of guest speakers, cannabis travel data, educational sessions and presentations, networking opportunities, and more, according to the association. Barb Newton, president and CEO of the California Travel Association, will be this year's keynote speaker.

The event will also share CTAI's 2021 State of Cannabis Travel Data Publication, with contributing sources from Headset, New Heights Cannabis, MMGY Travel Intelligence, and association team members.

"As a global travel industry rebuilds from the devastation of COVID-19, the essential cannabis-related travel trend offers a tremendous opportunity," said CTAI Founder and Chairman Brian Applegarth. "Our annual summit brings us together as a community to exchange information, network, voice concerns, share successes, and problem-solve together at the intersection of cannabis and travel."

Interested attendees can register for the event online here.

As federal legislators continue to debate the finer points of a broad spending bill, the National Defense Authorization Act (NDAA), a newly published version of the legislation excludes cannabis banking reform language that had been previously included. 

Marijuana Moment first reported the news on Tuesday. 

The U.S. House has repeatedly passed the framework of the SAFE Banking Act, which would provide a legitimate legal avenue for financial institutions to work with private cannabis businesses. The addition of the banking reform language in the NDAA was the House’s latest attempt to get this policy approved as law.

The U.S. Senate, meanwhile, had not yet acted on any version of the banking reform bill. And as the NDAA works its way through the legislature, U.S. senators won’t have a chance to chime in on the SAFE Banking Act at this point, either.

“I'm disappointed #SAFEBanking is not included in the NDAA bill text released today,” U.S. Rep. Ed Perlmutter, a sponsor of the banking reform bill, tweeted. “The Senate insists on burying its head in the sand and deny every opportunity to reform our outdated cannabis laws to align state and federal law to improve public safety.”

Terpenes are responsible for individual plants' signature taste and smell.

For example, while cannabis plants produce hundreds of terpenes, some are more commonly expressed than others, said Shaye Donald, a horticulturist in the professional technical services team at Hawthorne Gardening Company. 

"We've got a lot of data from one of our partners up here in Canada, A&L Labs Canada. They conduct testing to show how much terpene content your flowers have," Donald said. "Some of the data that they have shows that the most common terpenes found in [plants] are myrcene, caryophyllene, limonene, humulene, linalool and pinene. There's a whole bunch of other ones, but those are the ones we are primarily concerned with." 

Donald said it's vital for growers, producers and breeders to know what the most common terpenes found in their cultivars are because the combination of the different molecules plays a crucial role in the final products' effects, scent and flavor.

"It is the combination of these different terpenes that contribute to giving the consumer that subjective experience of, ‘This strain smells like citrus,’ or, ‘This one smells fruity or skunky.’ These scents are largely driven by the terpene content," he said.

Aside from terpenes' role in the plant's flavor and smell, they also contribute to its growth and environment. For example, plants naturally produce terpenes to help protect themselves, as they work to prevent disease, restore damaged plants, attract pollinators, repel pests and more, Donald said.

Terpenes are complex organic molecules that are produced by an abundance of organisms. In plants specifically, they play a vital role in growth and development by attracting pollinators, repelling predators and preventing disease.

"Terpenes are volatile organic compounds (VOCs), which means that they're airborne, and [will] dissolve into the air and travel pretty great distances," said Shaye Donald, a horticulturist in the professional technical services team at Hawthorne Gardening Company. "[This] is important for plants because they don't get the luxury of moving around. … They're very costly molecules for the plant to produce, … [and] they're very energy-dense molecules, so it takes a lot of energy to produce them."

Donald breaks down the critical role terpenes play in a plant's environment and development and describes how Hawthorne's Terpinator plant nutrient product is designed to help improve terpene concentration in plants.

Cannabis Business Times: Why do plants produce terpenes?

Shaye Donald: Plants produce terpenes for a wide variety of different reasons. One of the main purposes that plants create terpenes is in response to different types of stress. A big one is to deter or even poison pests. If pests such as insects are exposed to terpenes, they [can] get repelled or even die. Products containing terpenes have been used in many different pesticides, [such as] those based on essential oils. Essential oils are loaded with terpenes, which is the primary reason they smell so much.

Terpenes also are beneficial to plants when it comes to other biotic stressors like pathogens. Similar to pest prevention, certain terpenes will inhibit the growth or establishment of disease-causing organisms. 

In a court case involving a recent product recall in Michigan, Michigan Court of Claims Judge Christopher Murray granted Viridis Laboratories a preliminary injunction for a recall of products that one of its labs tested, but denied a preliminary injunction for a recall at another of the company’s labs, according to the Detroit Free Press.

RELATED: Michigan Marijuana Regulatory Agency Issues Recall for Several Cannabis Products

The Dec. 3 decision means that about half the recalled product will be released from recall.

The recall pertaining to products tested at Viridis Laboratories, located in Lansing, was upheld. The recall pertaining to products tested at Viridis North in Bay City was overturned. Both labs share ownership but are separate LLCs, according to the Detroit Free Press.

The Marijuana Regulatory Agency (MRA) issued a bulletin on Dec. 3 stating that the recall on Viridis North products had been enjoined and that the agency “will release the administrative holds on all products” that were recalled after the lab tested them.

Previously, the MRA cited in its original Nov. 17 recall notice that consumers of the recalled products who have lung diseases or weakened immune systems are at the highest risk of developing aspergillosis.

Former boxer Mike Tyson’s foray into cannabis has been well documented. Now, he’s entering the market with a brand of his own: Tyson 2.0.

“It’s really all about the love of the medicine,” Tyson told CNBC, insisting that his brand will focus on the pain relief side of the market (including both emotional and physical benefits). “I put a great deal of time in agriculture and discovering the right strain.” 

All Tyson 2.0 products require approval from the man himself, according to the company’s CEO, Adam Wilks. Tyson will serve as the chief brand officer of Tyson 2.0.

The brand, replete with boxing imagery and Tyson’s own widely recognized face, launched in late November in Colorado as a partnership with multistate operator Columbia Care.

“Because of Mike Tyson’s passion for cannabis, and the insight he brought to this brand through his own positive outcomes, we knew we needed to bring this product line, which has such a broad appeal, to market as quickly as possible. We’re thrilled to be able to ramp up our partnership when we did,” Jesse Channon, Columbia Care’s chief growth officer, said in a public statement. “It is also perfectly fitting that we are launching in Colorado, one of our largest markets, and look forward to leveraging our experience and scale to bring it to fruition across the country.”

RELATED: Beyond the Show with Jesse Channon 

We predict that 2022 will be another favorable, yet unpredictable, year for the cannabis industry, which is expected to hit $30 billion in sales. Creative, nimble and well-capitalized businesses will thrive, while new entrants in established markets may struggle to gain footing amid banking and tax obstacles.

One thing is clear: momentum for federal legalization is building as consumers and the industry demand reform.

Consumption Lounges and Tourism

As the market matures, consumers will push for elevated experiences, such as consumption lounges. Up until now, consumers have been forced to imbibe in private because using cannabis in public is illegal in most states. Nevada, which recently passed legislation allowing adults to smoke or eat cannabis in consumption lounges, is now the eighth state to legalize pot lounges. The first Vegas lounges are expected to open mid-2022. While lounges have been extremely slow to open and remain rare, these communal spaces will de-stigmatize the plant, boost sales and potentially support social equity. For example, Denver will only allow social equity applicants to apply for new license types, including hospitality licenses that allow for cannabis consumption. Next up, cannabis hotels and restaurants, farm and dispensary tours, cannabis-spa packages, and cultivation classes.

New Product Offerings

Flower will remain king in most markets, but canna-beverages will explode as consumers emerge from the pandemic ready to socialize in larger groups. Innovative technologies are improving nanotechnology and emulsion techniques, while many Americans are seeking non-alcoholic alternatives. Canna-beverages may fill that void as a lower-calorie, non-hangover-inducing option.

Diverse Cannabinoids and Psychedelics

THC and CBD will remain on top, but some of the 100-plus lesser-known cannabinoids, such as delta-8 THC, THC-O, THCP, CBN and CBG, will hit shelves and consumers’ consciousness. These compounds will continue to be studied to determine their specific benefits and identify how they can be used to treat various conditions and achieve new highs. Cannabis has also paved the way for legalizing psilocybin mushrooms and other psychedelics, as many start to explore the therapeutic potential of these plants, and grassroots organizers push for decriminalization and legalization using cannabis’ path as a guide.

ESG Focus

Cannabis companies that can successfully implement environmental, social and governance (ESG) measures to not only establish comprehensive and forward-looking policies but also mitigate operational and reputational risks will set themselves apart in attracting consumer demand and capital investors. ESG will continue to prove its staying power in 2022 and companies that are ahead of the curve will be rewarded. As ESG standards continue to develop and become more formalized, however, companies should understand that establishing an ESG program will be an iterative process and require real commitment.

MIAMI, Florida, December 6, 2021 - PRESS RELEASE - Ayr Wellness, Inc. (Ayr), a vertically integrated multistate cannabis operator, announced it has received a Temporary Certificate of Occupancy (TCO) to begin operations in its Phoenix, Ariz., cultivation facility.

"Ayr continues to execute on its plan for growth, with this Phoenix cultivation facility being the latest project to come online," said Jonathan Sandelman, Ayr founder, chairman and CEO. "Our talented cultivation team has already received great reviews for the Kynd premium flower being grown in our Chandler, Arizona facility, and we look forward to scaling production with this larger space. The flower produced will supply our three Oasis dispensaries, as well as our growing wholesale business in the state."

The first crop was planted over the weekend, with its first harvest projected for mid-March 2022.

The company anticipates receiving local and regulatory approvals for additional sections of the cultivation facility in the coming weeks.

After producing cannabis products for more than a decade, Colorado edible product manufacturer Cheeba Chews is formulating new products that its chief marketing officer said just wouldn’t have been possible without the 2018 U.S. legalization of hemp.

Two of those launched this year: a 1:1:1 cannabigerol (CBG), CBD and THC taffy, and a 2:1 THC and tetrahydrocannabivarin (THCV) taffy.

Eric Leslie, co-owner and chief marketing officer at Cheeba Chews, told Hemp Grower that while fully hemp-derived products aren’t the company’s best sellers, new opportunities have arisen for it to combine hemp-based cannabinoids with THC in state-legal cannabis.

“Hemp gives us a chance to build a portfolio of products that aren’t just THC-derived in a regulated market, but also drive it through the regulated market—introduce more of the people to the plant,” Leslie said.

Ups and Downs in the Hemp Market

Cheeba Chews, which sells state-legal cannabis product in Colorado, California, Massachusetts, Nevada and Oklahoma, has had variable experiences working with hemp edible products as the company has adjusted to a sales model that works.

In the hemp space, Cheeba Chews’ Hemp Taffy is sold primarily direct-to-consumer via ecommerce, Leslie said. The manufacturer’s hemp site markets both full-spectrum CBD hemp taffy in multiple flavors, and a Sleepy Chew CBN (cannabinol) taffy that contains CBD, CBN and melatonin.

The big news this week involves yet another stab at federal cannabis reform. This time, the HOPE Act comes from U.S. Reps. Alexandria Ocasio-Cortez (D-N.Y.) and Dave Joyce (R-Ohio).

The bill would “incentivize state and local governments to expunge the criminal records of tens of millions of Americans who have previously been convicted of marijuana offenses,” according to the team at NORML.

Passage of the bill would also allocate $20 million to the U.S. Attorney General to do just that.

“This bipartisan effort represents the growing consensus to reform marijuana policies in a manner that addresses the harms inflicted by prohibition,” NORML Political Director Justin Strekal said in a public statement. “It provides cash assistance for state and localities that are wisely choosing to remove these stigmatizing records. There is no justification for continuing to prevent tens of millions of Americans from fully participating in their community and workforce simply because they bear the burden of a past marijuana conviction.”

We’ve rounded up some of the key cannabis headlines from the week right here.

And elsewhere on the web, here are the stories we’ve been reading this week:

Minnesota medical cannabis patients will soon be able to access infused edibles in the form of gummies or chews. The Minnesota Department of Health (MDH) announced that the new product offerings will become effective Aug. 1, 2022. 

"Expanding delivery methods to gummies and chews will mean more options for patients who cannot tolerate current available forms of medical cannabis," said Jan Malcolm, Minnesota commissioner of health, in a press release.

Beginning March 2022, medical cannabis patients will also have access to flower; a "rulemaking for dried raw cannabis is also currently in process," the release states.

Additionally, that state did not add any new qualifying conditions to its medical cannabis program this year.

"The New Mexico Finance Authority (NMFA) Oversight Committee has approved a loan program to help licensed cannabis microbusinesses succeed—specifically those living in rural communities or disproportionately affected by previous cannabis law enforcement.

"Through the Cannabis Microbusiness Loan Program, NMFA looks forward to providing access to capital to help even more New Mexicans benefit from the economic opportunities created by the legalization of adult-use cannabis,” NMFA CEO Marquita Russel said. “This program will give New Mexico small businesses, particularly in rural and economically disadvantaged communities, a tool to make this industry more accessible and help get their businesses off the ground.” 

According to a New Mexico Regulation and Licensing Department (NMRLD) press release, the $5-million “Cannabis Microbusiness Loan Program” will provide business loans of up to $250,000 for small-scale businesses, with the average loan being $100,000. 

"There is a minimum 5 percent equity requirement, and the loans will be fully collateralized. Loan terms will go up to 5 years, and interest rates will vary from 2 to 3 percent,” the release states.

"The Cannabis Control Division, throughout our ongoing open and transparent rulemaking process, has listened to and really heard concerns that it’s hard for microbusinesses to access the capital needed to start a successful business,” said Linda Trujillo, superintendent of the Regulation and Licensing Department, which houses the Cannabis Control Division. “This administration is committed to creating a thriving cannabis industry that incorporates New Mexico’s values of social equity and fairness. We are grateful to be able to work with the New Mexico Finance Authority to put forward this loan program to make good on our commitment to social equity in this exciting new industry.”

With adult-use cannabis sales beginning in the state no later than April 1, 2022, applications for the loan program will open Feb. 1, 2022, and will be reviewed monthly. The first loans are expected to be awarded by March.

Representatives Alexandria Ocasio-Cortez (D-NY) and Dave Joyce (R-OH) introduced legislation to expunge the criminal records of tens of millions of Americans who have previously been convicted of cannabis offenses.

The Harnessing Opportunities by Pursuing Expungement (HOPE) Act will appropriate $20 million to the US Attorney General to financially assist state and local governments with reviewing and expunging cannabis convictions.

More than 350,000 Americans were arrested by state and local law enforcement for cannabis-related offenses in 2020, according to the FBI's Uniform Crime Report. Of those arrests, 91% were charged with simple possession. State and local police have arrested an estimated 7.3 million Americans since 2010 for violating cannabis laws.

Over the past two years, more than a dozen state legislatures have enacted laws facilitating the expungement of low-level cannabis convictions, leading to the vacation of an estimated 2.2 million cannabis-related convictions during that period.

"As we continue to advocate for the decriminalization and legalization of marijuana, this bipartisan bill will provide localities the resources they need to expunge drug charges that continue to hold back Americans, disproportionately people of color, from employment, housing, and other opportunities," says Rep. Alexandria Ocasio-Cortez (D-NY).