MjLink Cannabis Business News and Press
A bill to legalize adult-use cannabis in New Mexico cleared a key Senate committee Jan. 28.
NM S.B.115 passed the Senate Public Affairs Committee in a 4-3 vote, according to U.S. News & World Report.
The legislation, introduced in the Senate on Jan. 16 by Sen. Jerry Ortiz y Pino (D-Albuquerque), would legalize adult-use cannabis in the state, automatically expunge many cannabis-related convictions and subsidize medical cannabis for low-income patients, among other provisions.
The initial draft of the bill would also override local governments who are against legalization in an effort to shut down the illicit market, according to U.S. News & World Report.
The legislation now advances to the Senate Judiciary Committee, where its fate is uncertain, the news outlet reported. Committee Chairman Sen. Joseph Cervantes (D-Las Cruces) has expressed concerns about adult-use legalization in the past, according to U.S. News & World Report.
The European Union (EU) is urging EU member nations to vote in favor of three World Health Organization (WHO) cannabis rescheduling recommendations ahead of the March session of the United Nations Commission on Narcotic Drugs (CND).
Should the recommendations ultimately gain approval, it would be a small, but positive step forward for international cannabis companies like Somai Pharmaceuticals, an Ireland-based holding company with wholly-owned subsidiaries located in the EU that cultivate and distribute cannabis products. (The company was previously known as Soma Pharmaceuticals.)
Currently, cannabis and cannabis resin are categorized as both Schedule I and Schedule IV under the Single Convention on Narcotic Drugs of 1961.
“The 1961 Narcotics Act of Europe is similar to [the Drug Enforcement Administration’s (DEA)] Schedule I in contextual handling of narcotics as a pharmaceutical or dangerous drug,” Somai Pharmaceuticals Chairman of the Board Michael Sassano told Cannabis Business Times.
Among the WHO recommendations supported by the EU’s executive branch is one that would remove cannabis and cannabis resin from Schedule IV, which would ultimately recognize that cannabis and cannabis resign have medicinal value.
While directors and officers of cannabis-touching companies may no longer have to worry about losing their freedom for choosing to work in the industry, they still have to worry about losing their personal assets through civil litigation. That’s right—their personal assets!
Cannabis businesses run a higher risk of facing a “D&O claim” or a lawsuit aimed directly at the directors and officers of the company rather than at the company itself. In some cases, fighting a D&O claim is so expensive it can bankrupt both a company and its owners. D&O claims in all industries have been steadily increasing for the last two decades and unsurprisingly, more and more of these claims are now popping up in cannabis. It is essential for any business taking the risks of working in the industry to plan ahead and protect themselves from this sort of expensive and damaging litigation.
Fortunately, cannabis businesses have the ability to safeguard their business with specialized D&O insurance coverage. D&O insurance coverage provides broad balance sheet protection for the organization in addition to asset protection for the directors and officers who may be held personally liable for their actions. Lawsuits can be filed by a variety of stakeholders, which is why potential claims can arise from various scenarios. Some common D&O risk scenarios include:
● Shareholder actions or derivative claims
● Reporting errors
● Misrepresentation of prospectus
The U.S. cannabis industry is in a time of rapid transition–business models are changing, investors are questioning projections, legalization is advancing, new talent is entering the industry and technology is rapidly evolving.
It’s an exciting time to be in cannabis. Here’s what we think growers can look forward to in 2020.
While each state market is idiosyncratic, there are some general trends. We acknowledge that our outlook is weighted toward the California market, which is not only where we are based, but is also far and away the largest state recreational cannabis market in the county.
Expanded Legalization
States, counties and cities will continue to open their doors to commercial cannabis operations in 2020. Arizona, Connecticut, Montana, New Jersey, New Mexico, New York and Vermont are all considering legalizing adult-use cannabis. Some of these states may open up to commercial cannabis in 2020. Additionally, there’s a movement toward establishing medical marijuana markets in many states, some of which have historically been averse, including Alabama, Idaho, Kentucky, Mississippi and Virginia.
WASHINGTON, D.C. – PRESS RELEASE – In response to an outbreak of respiratory illnesses primarily associated with unregulated cannabis vape cartridges found in the illicit market in recent months, the National Cannabis Industry Association (NCIA) Policy Council, with the help of experts in several fields, has produced an extensive report that explores the known and potential causes of the condition and offers ways for producers, regulators and lawmakers to prevent such issues from occurring in the legal regulated market. NCIA is also sharing this report with key congressional committees.
The report--titled “The Key to Consumer Safety: Displacing the Illicit Cannabis Market - Recommendations for Safe Vaping”--discusses topics such as vaporizer liquid formulations, vaporizer delivery devices, possible contaminants and best practices for testing. It also recommends ways to displace the illicit market and make sure that unregulated products don’t find their way into the legal market, including decreasing the financial burdens that prevent legal providers from being competitive with the illicit market, methods for identifying counterfeit products, creating more accessible pathways for unlicensed operators to enter the regulated market, and increasing non-criminal enforcement against illegal cultivation sites.
“The cannabis industry has a serious and disruptive illicit market problem that is directly affecting public health and safety. While the Center for Disease Control has not yet definitively determined the proximate cause for every injury or death, the overwhelming preponderance of the evidence points to additives in illicit market products,” the report states. “NCIA’s Policy Council urges consumers to only purchase regulated and tested cannabis products from the state-legal market. Reliable vaping products manufactured using suitable vaporizer hardware and liquid formulations created from high quality ingredients are common in the legal cannabis market. The same cannot be said for the unregulated market. We must stop the flow of illicit, unregulated, and untested products to consumers. ... We also need to lower taxes, so that the legal market can fairly compete with the illicit market. This effort will take a collaborative approach, with law enforcement, state-legal cannabis businesses, and state cannabis taxing and licensing authorities working in concert.”
Earlier this month, the CDC ended its “state of emergency” regarding this illness, known as EVALI, as the number of new cases being reported has sharply declined. While discussing the sources for the products linked to specific cases, the agency inaccurately grouped regulated cannabis businesses with completely unregulated businesses such as illegal pop-ups and unlicensed storefronts as the sources for 16% of the cannabis products associated with EVALI cases. This is despite the fact that only a handful of cases have been associated with licensed businesses, which are greatly outnumbered by unlicensed stores in California.
Cannabis is legal for adults in eleven states as well as the District of Columbia and the territories of CNMI and Guam, and 33 states as well as several territories have comprehensive medical cannabis laws. The substance is legal in some form in 47 states. Dozens of states are set to consider cannabis-related legislation or ballot initiatives this year.
LOS ANGELES, Jan. 28, 2020 /PRNewswire/ -- PRESS RELEASE -- Driven Deliveries has announced the company's letter of intention (LOI) to purchase Northern California-based legacy cannabis distribution company, Humboldt Heritage Inc. (HHI), and its subsidiaries, Humboldt Sun Growers Guild LLC (HSGG) and Grateful Eight LLC (G8). The acquisition will galvanize a powerful, synergistic alliance between the two California-based cannabis companies, resulting in California's largest farm-to-consumer, vertically-integrated operator. The acquisition is expected to an additional $20M to the company's 2020 revenue forecast.
In addition to adding to DRVD's topline revenue from HHI's current distribution operations, DRVD and its Ganjarunner delivery service will gain exclusive access to 18 unique brands including Cuba Libre, Lost Creek, Rambling Rose and Humboldt Edge Farms.
Moreover, Driven's customer base will have access to products from more than 200 famed Humboldt farms. By leveraging the fully integrated supply chain, DRVD anticipates a gross margin improvement of over 13% for vertically-produced products. Additionally, by leveraging economies of scale through the combined entities, DRVD expects a gross margin improvement of over 6% from products and materials purchased in bulk.
Further, Driven intends to leverage the brands the Humboldt Sun Growers Guild services, including its in-house brand, True Humboldt, family-run Sunrise Mountain Farms, and women-owned Juniper into its Ganjarunner delivery service.
"Driven looks forward to bringing Humboldt Heritage and the Humboldt Sun Growers Guild into our company portfolio," says Christian Schenk, CEO of Driven Deliveries. "As a vertically integrated cannabis company complete with 90 minute delivery to 92% of California, distribution was the only missing piece to our portfolio puzzle. There is no better cannabis on the market today that can match the quality and consistency produced by the Humboldt Sun Growers Guild. This acquisition brings not only DRVD, but also California's cannabis consumers closer to the multi-generational, heritage farmers growing cannabis in the world-renowned Emerald Triangle."
CONCORD, N.H. — PRESS RELEASE — The House Criminal Justice and Public Safety Committee approved a bill Jan. 28 (13-7) that would legalize possession and limited cultivation of cannabis for adults 21 and older in New Hampshire. A full House vote on H.B. 1648 is expected to take place on Thursday, Feb. 6.
H.B. 1648 would allow adults 21 and over to possess up to three-quarters of an ounce of cannabis, five grams of hashish, and up to 300 mg of cannabis-infused products (currently a violation punishable by a civil fine). It would also permit cultivation of up to six plants (including up to three mature ones) at home in a secure location that is not visible from other properties. A summary of H.B. 1648 is available here.
The House of Representatives passed a similar bill in 2019, H.B. 481, that would have legalized cannabis in the state. That bill, which unlike H.B. 1648 would have created a regulated and taxed market, ultimately died in the Senate after being referred for “interim study” by the Senate Judiciary Committee.
Polls published by the University of New Hampshire Survey Center in 2019 found that an overwhelming amount (68%) of Granite Staters are in favor of legalizing cannabis. Notably, support for legalization is more popular than any elected official in the state.
Matt Simon, New England political director at the Marijuana Policy Project, said, “Like most Granite Staters, this committee understands that it’s time for New Hampshire to stop prohibiting cannabis. Adults in the 'Live Free or Die' state should not be punished for their choice to use a substance that is objectively less harmful than alcohol. Now that New Hampshire is literally surrounded by jurisdictions where cannabis is legal for adults, our current policies can no longer be justified in any way. It’s time for the House, Senate and Gov. Chris Sununu to work together and move cannabis policies into the 21st century.”
Tahoe Hemp LLC has filed a lawsuit against Carson City, Nev., after the city attempted to block the company from growing hemp on property owned by the city, according to a Washington Times report.
Tahoe Hemp filed the lawsuit in state court Jan. 15 and is accusing Carson City of breaching a contract with the property’s former owner, according to the news outlet.
The company wants to grow hemp on a portion of the former Buzzy’s Ranch property, which used to be a public outdoor recreation area.
The Carson City Board of Supervisors has argued that when the city purchased some of the property in 2010, it used, in part, money it had received from a state land grant, which prohibits any use of the land aside from preserving the open space or its cultural or wildlife resources, Washington Times reported.
Tahoe Hemp has argued that the previous owner of the property, Jarrad Trust, maintained agricultural rights on the land when the city purchased it, according to the news outlet. Trust entered into a leasing agreement with Tahoe Hemp, and the company then applied with the Nevada Department of Agriculture to grow hemp on 100 acres of the property.
Dozens of cannabis-related bills have been introduced in Hawaii’s legislature this year, after the deadline to introduce new legislation passed last week.
Twenty-one new measures have been proposed, with ten introduced in the House and 11 in the Senate, according to a West Hawaii Today report. Eighteen bills in the House, and another 18 in the Senate, have been carried over from the 2019 legislative session after stalling or being deferred, the news outlet reported.
Two of the House bills aim to extend the state’s current industrial hemp pilot program to create a permanent program in the state, a proposal that passed the legislature last year before being vetoed by Gov. Davie Ige, West Hawaii Today reported. Hawaii’s current hemp program will expire in 2021.
Another hemp-related measure in the House would require labeling for hemp products and would clarify that cannabis dispensaries in the state can sell these products, according to West Hawaii Today.
Other legislation in the House would make minor adjustments to the state’s medical cannabis dispensary system, the news outlet reported, such as allowing dispensaries to sell cannabis cuttings, seeds and edible products. Another bill would allow naturopathic physicians to certify patients for Hawaii’s medical cannabis program.
The Cherokee Nation, one of the largest tribes in the U.S., has formed a work group to study various facets and potential benefits of hemp and cannabis.
Under Cherokee law, it is currently illegal to use or possess cannabis on all tribally owned properties. The tribe, based in Tahlequah, Okla., recently revised its workplace drug use policy to protect employees and applicants who possess a valid medical marijuana patient license. Oklahoma legalized medical cannabis in 2018.
“As chief, I want well-informed policy, and the team we have assembled will be a great asset in that regard. I believe there are opportunities for Cherokee Nation, our businesses and our citizens to benefit from this emerging industry. But we need to move forward carefully and responsibly and in absolute strict adherence to the law in order to ensure success and sustainability,” said Cherokee Nation Principal Chief Chuck Hoskin Jr. in a press release.
The new group, called the “Executive Work Group on Hemp, Cannabis and Related Opportunities,” will explore opportunities for cannabis in commerce, health care and agriculture. The group plans to study legal and ethical implications of hemp and cannabis use and growth, as well as the role they may play in the tribe’s health services system.
The group will also study the opportunities for Cherokee citizens to raise, process and sell hemp and cannabis.
Ultimately, the group will make recommendations on updating internal Cherokee Nation policies and statutes regarding the growth and use of the crops.The work group will report its recommendations to the principal chief and council of the Cherokee Nation no later than May 31.
TEL AVIV, Israel and BETHESDA, Maryland, Jan. 27, 2020 /PRNewswire/PRESS RELEASE -- Cannabics Pharmaceuticals Inc. (OTCQB: CNBX), a leader in personalized cannabinoid medicine focused on cancer and its side effects, announced today that in a series of tests conducted at the company's High Through-put Screening (HTS) facility in Israel, it has been shown that the cannabinoids CBC (cannabichromene) and CBG (cannabigerol) both exhibit anti-tumor properties, tested on human gastrointestinal cancer cells.
CBC is an additional non-intoxicating cannabinoid and is one of the naturally occurring phytocannabinoids. It bears a host of potential positive therapeutic qualities and may promote antimicrobial, anti‐inflammatory, analgesic, and neurogenesis activity. It is particularly found in younger cannabis plants, albeit in small quantities.
In these tests, the HTS platform was utilized to screen the necrotic effects of a variety of cannabinoids on human gastrointestinal cancer cells, in addition to other cancer types previously tested. CBC and CBG were both shown to induce significantly higher rates of necrosis in these cancer cells compared to other cannabinoids, thus strengthening previously obtained results.
Dr. Yaakov Waksman, the company's head of cannabinoid research, said, "My working assumption is that these results show that a correlation may exist between a cannabinoid's Topological Polar Surface Area (TPSA) value and its ability to induce anti-tumor activity, diminishing cancer cell's viability rates. CBC and CBG, as neutral cannabinoids, were both found to have a TPSA value which allows the cannabinoid molecule to penetrate a cancer cell's membrane, whereas their acidic form (CBCA and CBGA) - do not. This could explain the difference in anti-tumor activity rates demonstrated".
Related: Pre-Clinical Study Suggests CBG Is More Effective Than CBGA on Stomach and Bone Cancers
Dr. Eyal Ballan, CTO and Co-Founder, commented, "Gastrointestinal cancers are amongst the leading and most wide-spread causes of cancer-related deaths worldwide. We are intrigued by the results we have obtained in the lab, and our aim is to consider placing an emphasis on this organ system, and to further explore the differential anti-tumor properties of cannabinoids. We believe that these preliminary results vindicate our vision; which is to bring personalization into cannabinoid-based cancer treatments."
]]>NOVATO, Calif., Jan. 27, 2020 /PRNewswire/ -- PRESS RELEASE -- Trym, a cannabis farm management and compliance software company, has announced integrations with Argus and TrolMaster environmental control systems.
Traditionally, cannabis growers have used environmental controls as isolated systems. By tracking and linking environmental conditions to each batch of plants, Trym enables growers to see the cause-and-effect relationship between their grow conditions and resulting yields.
"We know how important environmental data is to running a cultivation business, as well as to our analytics. To ensure our customers have the highest degree of information about their operations at all times, we constructed the most flexible IoT integration I've seen in cannabis," said Matt Mayberry, CEO of Trym. "We're now able to execute new hardware integrations in hours rather than weeks, providing our customers the freedom to select the systems that make the most sense for their businesses."
Trym can now monitor and link Argus and TrolMaster sensor data, like temperature, humidity and CO2, to the plant batches grown in their respective rooms or zones. In addition to environmental monitoring, cultivators can schedule employee tasks, like planting, feeding and harvesting, and review harvest analytics, all from their Trym account.
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 entered into a non-brokered credit agreement for a senior secured term loan in an initial aggregate principal amount of up to US$100 million, with a mutual option to increase the size of the facility to a maximum of US$200 million. The company expects to complete an initial drawdown of up to US$100 million on or about Jan. 30, 2020, subject to the satisfaction of customary funding conditions.
The proceeds from the senior loan will be used to fund the expansion of operations in Illinois, closing and integration costs associated with pending acquisitions, and other strategic growth initiatives in key markets.
“This agreement reflects the strength and growth potential of the national platform Cresco has built as well as our ongoing commitment to execute a superior capital agenda for the benefit of shareholders,” said Charlie Bachtell, CEO and co-founder of Cresco Labs. “Through this deal, we have diversified the company’s funding sources, improved our cost of capital in a non-dilutive manner and given ourselves flexibility in a dynamic capital environment. As we enter 2020 and our business continues to increase its positive free cash flow, Cresco is well-positioned to continue growing its foothold in the most strategic cannabis markets in the U.S., while building the most important company in the industry.”
Terms
Commitments under the senior loan are provided by a broad syndicate of lenders, including U.S. based institutional investors, demonstrating confidence in Cresco’s strategic position and reflecting the strong growth outlook for the US cannabis industry. Members of the company’s management and board of directors will also be participating as investors in the senior loan. Each commitment under the senior loan may be for an 18-month or 24-month term, at the lender's option. Loans made on the initial closing date will bear interest at a rate of approximately 12.7% per annum for 18-month loans and approximately 13.2% for 24-month loans, payable quarterly in arrears. The terms of the senior loan were negotiated at arm’s length with the agent and lead investor and include customary restrictive covenants.
LEAMINGTON, ON, Jan. 24, 2020 /CNW/ - PRESS RELEASE - Aphria Inc. has announced that it has entered into an agreement to accept a strategic investment from an institutional investor, pursuant to which the significant investor has agreed to purchase 14,044,944 units of the company at a price of C$7.12 per unit for aggregate gross proceeds to the company of C$100,000,001.
Each unit is comprised of one common share of Aphria and one-half of one common share purchase warrant of Aphria. Each warrant will entitle the significant investor to acquire one common share at a price of $9.26 for a period of 24 months from the closing date of the offering.
The company intends to use the net proceeds from the offering to finance international expansion, working capital and general corporate purposes.
The units and the securities comprising the units are being offered pursuant to a shelf registration statement (including a prospectus) previously filed with and declared effective by the U.S. Securities and Exchange Commission (SEC) on Nov. 26, 2019 and, in Canada, will be offered and sold in Ontario only by way of a prospectus supplement to be filed in each of the provinces and territories of Canada.
The offering is expected to close on or about Jan. 31, 2020 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the Toronto Stock Exchange and the New York Stock Exchange.
Maine legislators will consider at least a dozen cannabis-related bills during the legislature’s 2020 session, with some of the legislation proposing changes to the state’s adult-use cannabis program, which has yet to open.
The bills include legislation to reduce the required 1,000-foot school buffer for dispensaries to 300 feet, changes to how adult-use cannabis is taxed and a proposal to allow state-licensed retailers to deliver adult-use cannabis to customers’ homes, according to a Portland Press Herald report.
Another key piece of legislation would allow dispensaries to sell both medical and adult-use cannabis from the same storefront, and would eliminate the residency requirement for business licenses next year, the news outlet reported.
Maine voters approved adult-use cannabis legalization in 2016, and the state hopes to launch an adult-use market this spring. The Office of Marijuana Policy has received 156 adult-use business license applications and has flagged 70 as complete enough for official departmental review, the Portland Press Herald reported.
Applications that receive conditional state approval require authorization from a host community before the state will award a final state license, and so far, 32 Maine municipalities have agreed to allow some type of adult-use cannabis business, according to the news outlet.
New York Gov. Andrew Cuomo has amended a cannabis legalization plan that was unveiled last week in his state budget proposal.
Cuomo’s revised plan includes new efforts related to regulation, taxation and encouraging illicit cannabis suppliers to join a legalized system, according to The Buffalo News.
A research center at Colorado State University has received a $1.5 million donation from a Golden-based company that produces CBD products, according to a La Junta Tribune-Democrat report.
The donation will be used to fund research, cover operating costs and purchase equipment, according to the news outlet.
The research center is dedicated to studying the chemical compounds in hemp, and will allow faculty, as well as undergraduate and graduate students, to study the formulation of cannabinoids, separation efficiencies, efficacy testing and more, the La Junta Tribune-Democrat reported.
Researchers at the facility plan to work in partnership with Panacea Life Sciences, a company founded by a university alumna that manufactures CBD products, according to the news outlet.
The research center will be located in the College of Natural Sciences on the university’s Fort Collins campus, and is expected to open this spring.
Tennessee Sen. Raumesh Akbari (D-Memphis) introduced legislation Jan. 24 that would legalize adult-use cannabis in the state, according to a local News Channel 3 report.
S.B. 1849 would allow retail sales and levy a 12% tax to support education and infrastructure, and would allow customers age 21 and older to purchase up to a half ounce of cannabis. State regulators would be charged with creating rules for commercial sales.
The Massachusetts Legislature’s Joint Committee on Cannabis Policy voted Jan. 24 to advance legislation that would more heavily regulate host community agreements, or the arrangements between municipalities and the cannabis businesses they host.
The agreements are a necessary step in the licensing process for cannabis businesses, but the state’s Cannabis Control Commission has not had the authority to oversee the agreements, according to a MassLive.com report.
The state of New York seems on the cusp of legalizing recreational adult-use cannabis. Governor Andrew Cuomo (D) last week released a budget outline that includes the proposed legalizing and taxing marijuana—a move that echoes his annual State of the State address, in which he pledged to legalize marijuana in 2020. But even in the midst of what seems like cause for celebration, the state’s medical marijuana leaders remain cautious and even a bit concerned—and with good reason, according to Karen O’Keefe, director of state policies for the Marijuana Policy Project.
“New York initially got medical marijuana very wrong,” O’Keefe says. “At Cuomo’s insistence, the program initially excluded pain patients, prohibited whole plant cannabis, and allowed only five vertically integrated licenses—with four locations each—in a state with nearly 20 million people. Large amounts of capital were needed to [get] a license, and licensees lacked diversity. New York over-regulated and drove up costs. The result was that about half of patients who bought cannabis from dispensaries never went back a second time—even after having jumped through hoops to get the state ID card. Unregulated cannabis was cheaper and more accessible.”
While many of those issues have been addressed (under Cuomo’s administration), O’Keefe says the state’s regulations remain “on the restrictive side,” and “it will be worth keeping a close eye to ensure the unnecessarily restrictive, unsuccessful model for medical marijuana isn’t repeated.”
Hillary Peckham, chief operations officer of Etain—a women-owned medical marijuana business with locations throughout New York—believes input from the state’s medical operators will be crucial in “creating a program with products and business practices that keep both consumers and public safety at the forefront.” And she wants medical operators, such as Etain, to “have the opportunity to produce these products for the adult-use program as well as the medical program.”
Adam Goers, vice president of corporate affairs at Columbia Care—a medical cannabis provider in New York as well as 10 other states, Puerto Rico, and Washington, D.C.—says his team has spoken with the state’s social justice groups, law enforcement, community leaders, faith leaders, and policy makers—some in the governor’s office—in an effort to weigh in on the regulations.
“We have a lot of hard work to do until the end to push this [legislation] through,” Goers says, adding that, “ultimately, I think everyone is in a position at the end of this to declare victory.”
