MjLink Cannabis Business News and Press

Cannabis cultivators are up against many day-to-day challenges, from compliance and legal issues to plant health. Nutritional, physiological and pest issues are among those that can negatively impact cannabis crops, but knowing the potential problems and how to identify them will help cultivators treat them early, before too much damage is done.

Here, Dr. Brian Whipker, professor of floriculture at North Carolina State University, provides insight into common disorders that affect cannabis plants and shares tips on how to diagnose them.

Cannabis Business Times: What are some of the most common nutritional, physiological and pest issues that affect cannabis crops?

Dr. Brian Whipker: Nutrition-wise, nitrogen rates are probably the biggest [concern], [followed by] the substrate pH. I think those two are the biggest ones, and then, what kind of nutritional balance do people need?

Physiological [issues include] guttation, [or] water droplets appearing on the leaves, and then you can get salts on there.

Pest-wise, the biggest pests that we run into [are] broad mites, russet mites, spider mites and hemp aphids. Those are probably the biggest pests [in greenhouses]—I know people are trading those around.

Colorado lawmakers and other state officials have launched several campaigns aimed at providing more guidance and protection for financial institutions that serve the state’s legal cannabis industry, according to a Westword report.

While federal prohibition continues to deter financial institutions from working with state-legal cannabis businesses, Colorado Gov. Jared Polis and the Department of Regulatory Agencies (DORA) have announced initiatives to “increase the number of financial service providers in Colorado who serve the state’s legal marijuana and industrial hemp industries,” the news outlet reported.

Polis and DORA have released a new report titled “Roadmap to Cannabis Banking and Financial Services,” which outlines their goals of providing regulatory guidance and reducing barriers to loans, lines of credit and account access for cannabis businesses. The report also includes strategies to help banks serve the industry without violating federal drug, money laundering and racketeering laws, Westword reported.

To achieve these goals, the report suggests regular meetings for stakeholders, as well as exploring new ways that financial institutions can serve cannabis businesses through money transferring, pushing for more federal protections, and working with state-chartered banks and credit unions.

Colorado Reps. Matt Gray and Hugh McKean have introduced a bill, H.B. 1217, which would allow state-chartered banks and credit unions to loan money to cannabis business owners, Westword reported. Although the legislation would protect financial institutions at the state level, larger banks with national operations would still need guidance from the federal government before providing services to the cannabis industry, according to the news outlet.

Illinois adult-use cannabis sales reached nearly $40 million in January, the first month of legal sales, according to an NBC Chicago report.

Data released by the Department of Financial and Professional Regulation shows that January sales totaled $ 39,247,840.83 and dispensaries sold more than 970,000 items, according to the news outlet.

Illinois residents purchased over $30.6 million worth of cannabis products last month, NBC Chicago reported, while out-of-state visitors purchased over $8.6 million.

The state is currently accepting applications for Cannabis Infuser, Transporter and Craft Grower licenses through Feb. 14.

The Federal Bureau of Investigation (FBI) notified the Missouri Department of Health and Senior Services (DHSS) last year that the agency will not have access to the national fingerprint background check database, which means the state’s licensed medical cannabis companies cannot perform background checks on prospective employees during the hiring process, according to The Kansas City Star.

When voters passed the state’s adult-use cannabis legalization initiative in 2018, a provision was added to the Missouri Constitution that requires the DHSS to confirm that owners, officers, managers, contractors, employees and other support staff hired by licensed medical cannabis facilities have not committed a felony, which would disqualify them from working in the industry, The Kansas City Star reported.

DHSS received permission from the FBI to access its background check database to screen its medical cannabis business license applicants, according to the news outlet, but the department has not received the green light to access the database to screen the licensees’ employees.

The FBI indicated that it would reconsider this position if Missouri passed a law that codifies a requirement for background checks, according to the news outlet. The DHSS then requested that lawmakers propose legislation to get such a law on the books, and Missouri Rep. Lane Roberts proposed a bill, H.B. 1896, which received a legislative hearing Jan. 29.

If the bill does not ultimately pass or if the FBI does not change its stance, the DHSS plans to have employees attest on the penalty of perjury that they have not committed any felony offenses, The Kansas City Star reported.

Although it originated in Japan as a manufacturing practice for Toyota, lean management has permeated nearly all industries in companies across the globe. The practice is all about continuous improvement by analyzing and refining processes to eliminate inefficiencies. But the philosophy has another foundational pillar that is just as important as constantly improving: respect for people.

Mason Walker, the co-owner and CEO of East Fork Cultivars, an Oregon craft cannabis and hemp company, began integrating lean practices into his business nearly three years ago. Walker will be discussing how lean management tactics improved his business, as well as how they can be applied to your own cannabis or hemp operation, at the Cannabis Conference 2020. Here, he delves deep into what lean management is, how he uses it in his business and how he’s made it all about people.

Hemp Grower: Can you start off by telling me a little bit about how East Fork Cultivars has adopted lean management practices?

Mason Walker: Back in 2017, we were just starting to make the leap from being somewhat of a garden-scale farm to a commercial-scale farm. We started working with a lean consultant and just putting in place some of the basic daily management tools that are part of the lean philosophy, like project management tools and shared language around continuous improvement and organization. 

We started to use the “Five S” approach to organization and the hierarchical meetings that lean utilizes, which is mostly focused around a daily huddle that's very structured. We started to roll out all these tools at our farm, and it was incredible to see the small, scrappy farm able to really systematize the things that we weren't excited to do and we knew weren't adding value, like transplanting clones or trimming flower—those kinds of things that are very repetitive. We basically figured out how to do them really efficiently so we could focus on the things we enjoy more.

To me, lean is really a philosophy around continual improvement, first and foremost. It's the view that small, consistent, integrative change can add up to much better systems. In practical use, both in daily management but also in higher level philosophy, our organization is all about openness to change, to questioning the way we do things, and to providing what we call psychological safety, which is an assurance that if people screw up, we don't blame them. We blame the system, and we use a screwup as an opportunity to reevaluate the system and improve it. That's how we have adopted lean. We're in our third year of learning lean, and it's still a pretty core part of our operational identity. 

HG: Can you give me a specific example of where you’ve implemented lean management and how it's changed your operations?

MW: 2016 was our first year as a commercial cannabis farm. In that fall and winter, we thought we would be able to sell our entire crop primarily as trimmed cannabis flower. We're kind of unique in that we've been participating in an adult-use recreational market for five years now, but we're entirely focused on low-THC (tetrahydrocannabinol) cannabis. So, in 2016, we grew in our first commercial cannabis crop, and we speculatively trimmed it all. We started to go out into market with that trimmed flower, but at the time, CBD (cannabinol) was barely in people's lexicon. We had put all of this labor and time and energy into trimming—we're talking probably $100,000 for labor into making this value-added product that there wasn't yet a market for. 

For her birthday, one of Mary Biekert’s daughters asked for something she’d never gotten before: a marijuana tour of Chicago.

So there was Biekert on a recent Saturday night, with her two adult daughters in a private smoking lounge in the city where a tour bus had dropped them off, getting lessons in how to roll a joint and smoke a bong.

The daughters, who live near St. Louis, had brought their own pot after spending three hours in line to buy from a licensed store in downstate Collinsville.

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Robert McCoppin ~ Chicago Tribune ~ 

Military veterans are using marijuana to treat chronic pain, post-traumatic stress disorder, anxiety and depression, among other ailments, according to recently released survey data.

But the cost of medical marijuana, which isn’t covered by insurance, is a barrier, even if cannabis is used as an alternative to pharmaceuticals.

Final results from the 2019 Veterans Health and Medical Cannabis Study, which looked at 201 veterans in Massachusetts and 565 respondents nationwide, were presented at the Cannabis Advancement Series held Wednesday at Babson College in Wellesley.

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Susan Spencer ~ Telegram.com ~

Colorado Gov. Jared Polis (D) unveiled a plan on Monday to aimed at expanding the number of banks and credit unions that work with the marijuana industry.

At a press conference announcing the new “Roadmap to Cannabis Banking & Financial Services,” Polis was joined by state regulators and Rep. Ed Perlmutter (D-CO), the chief sponsor of pending congressional legislation that would shield banks from being penalized solely because they accept state-legal cannabis business accounts.

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Kyle Jaeger ~ MarijuanaMoment.net ~ 

First Product from Asheville Hemp Project Brand Highly Efficiency Delivery Method NORTH CAROLINA: Asheville Hemp Project (AHP), an Asheville, NC-based hemp cultivator, is unveiling its new CBD Mint Gum. The launch marks the first consumer product for the brand, with other SKU’s in the pipeline. Asheville Hemp Project aims to connect consumers to the source of the Read the full article...

TORONTO, Feb. 03, 2020 (GLOBE NEWSWIRE) -- PRESS RELEASE -- Golden Leaf Holdings Ltd. a cannabis solutions company and dispensary operator built around the recognized brands of Chalice Farms, has signed a definitive agreement for its wholly-owned subsidiary, TZ Acquisition, Inc., an Oregon corporation, to acquire Tozmoz, LLC, an Oregon limited liability company.

Founded in 2015 as one of the first Oregon Liquor Control Commission (OLCC)-licensed processors in Oregon, Tozmoz established itself as one of the premier cannabis extractors in the state. Tozmoz offers multiple extraction processes including CO2, hydrocarbon and ethanol, and both short path and wiped film distillation. Additionally, Tozmoz provides product manufacturing and formulation, as well as packaging services, providing clients OLCC-approved products ready for wholesale distribution and retail sale.

“We have been working with Tozmoz for years now and this acquisition fits squarely into our product-focused business strategy,” said Jeff Yapp, Golden Leaf Holdings’ CEO. “The core of this business is about the highest quality products on the market, like our Elysium Fields line of live resin cartridges and tinctures and our recently launched Chalice Farms RXO lines. This acquisition will allow us to take what we’ve been doing well, and continue to build and further expand our diverse portfolio of products. In our ‘crawl, walk, run’ model of business development, we believe Tozmoz is at the 'run' stage.”

Pursuant to the terms of the Asset Purchase Agreement, Golden Leaf purchased substantially all of the assets of Tozmoz, including the facility located in Clackamas, which serves as the headquarters for multiple extraction options as stated above, for consideration of US$2.8 million consisting of cash and advances totaling US$675,000, an earnout of up to US$400,000 and GLH stock (29,166,667 shares at US$.06 per share). GLH has previously made certain payments to Tozmoz so that only approximately US$227,000 of cash will be due at closing. The earnout of US$400,000 may be paid to Tozmoz quarterly beginning in July 2020, based upon 30% of up to US$1.2 million of third-party revenue generated from the assets acquired by GLH.

Since its founding, Tozmoz generated revenue by toll-processing for clients including GLH. The attractive gross margins on the GLH business will now be earned by GLH. In addition, Tozmoz will continue to serve, and is growing revenue from, third-party white-label processing. Tozmoz has contributed to GLH product development for the company’s tinctures and Elysium products. Their expertise will integrate with GLH’s existing product research and development abilities.

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 closed the recently announced non-brokered credit agreement for a senior secured term loan in an initial aggregate principal amount of US$100 million, with a mutual option to increase the size of the facility to a maximum of US$200 million. 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. A broad syndicate of lenders participated in the senior loan, including U.S.-based institutional investors together with members of the company’s management and board of directors.

Charlie Bachtell, CEO and co-founder of Cresco Labs, commented, “The closing of this financing is an important event and was driven by the incredible opportunities we at Cresco have before us. We have worked to create a credit facility that strengthens our balance sheet in a non-dilutive manner--with no warrants nor convertibility to equity. This transaction demonstrates that capital is available to the top operators in this industry who demonstrate a disciplined strategic focus, a responsible allocation of capital, and a track record of operational execution. We are especially pleased to have closed the transaction with such a high-quality group of investors who have displayed a dedicated commitment to the long-term success of Cresco as we continue to execute our vision--to build the most important company in cannabis.”

Terms

The senior loan is for either an 18-month or 24-month term, at the lender's option. The loans 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.

EDMONTON, Feb. 3, 2020 /CNW/ - PRESS RELEASE - Aurora Cannabis Inc. has announced that its Aurora River production facility, located in Bradford, Ontario, has received European Union Good Manufacturing Practice (EU GMP) certification. EU GMP certification is granted to companies whose production facilities demonstrate a high degree of quality and consistency in their manufacturing procedures and is a requirement for the export of medical cannabis products into most European markets.

In addition, Aurora has announced it has received all necessary approvals from local regulators in Germany for sales of its medical cannabis products, following a temporary sales suspension on certain products in December 2019. Aurora will fulfill existing sales orders from inventory currently held in Germany, ensuring local patients will have immediate access to medicine from their preferred pharmacy.

"Aurora is leading the development of medical markets across Europe and around the world," said Terry Booth, CEO of Aurora. "The EU GMP certification of our River facility further validates our strategy focused on purpose-built facilities, designed and constructed exclusively for the production of high-quality, pharmaceutical grade cannabis. I congratulate our team on successfully working with regulators and licensing bodies to ensure Aurora's facilities and products are in accordance with local and international standards that will allow for greater access to the highest quality medical cannabis products to patients who need them."

Designed for large scale, high quality production, Aurora River has a cultivation capacity of 28,000 kg per year across its 17 fully-planted, independently climate-controlled grow rooms. The EU GMP certification of Aurora River enables the company to allocate both a greater quantity of dried and extracted product to international markets as well as introduce new products grown and produced in the facility. To date, Aurora has received EU GMP certification for three of its 10 Canadian production facilities. Aurora River joins Aurora Mountain, located in Mountain View County, Alberta with a production capacity of 4,800 kg a year, and Aurora Ridge located in Markham, Ontario with a production capacity of 7,000 kg a year, in achieving this important certification.

The state's recreational marijuana retailers generated nearly $40 million worth of sales and taxes during the first month of operations.

That's according to a news release from the Illinois Department of Financial and Professional Regulation, which announced sales figures for January reached $39,247,840.83.

Of that, $30.6 million was sold to Illinois residents. The other $8.6 million was generated by out-of-state buyers.

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Jake Griffin ~ DailyHerald.com ~ 

A newly discovered cannabis compound has been shown in the lab to potentially be 30 times more potent than THC, the most studied psychoactive compound in marijuana.

Whether the new cannabinoid, named tetrahydrocannabiphorol, or THCP, will deliver 30 times the high of THC — or any high at all — is unclear.

Italian scientists also discovered a second previously unknown compound they named CBDP. It appears to be a cousin of CBD, the medicinal compound known for its anti-inflammatory, antioxidant and anticonvulsant activity. 

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Kristen Rogers ~ CNN.com ~

Cannabis is disrupting the way we look at medicines -- but more people need to be educated about cannabis before it becomes commonly accepted as a medicine.

Patient access to medical cannabis prescriptions in the UK is not easy to obtain.

Only a handful of patients are currently receiving cannabis through private prescriptions, and very few clinicians are actually able to contextualise the use of medical cannabis or CBD for their patients.

One of the obstacles patients are facing is clinicians’ lack of education and comfort in prescribing. They are hesitant to suggest medical cannabis to their patients.

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Cannabis delivery service provides access to broader Sacramento market CALIFORNIA: ManifestSeven, California’s first integrated omni-channel platform for legal cannabis, today announced the acquisition of The People’s Kush, a legal cannabis delivery service based in Davis, California. The People’s Kush will be integrated into M7’s retail arm Weden, which has storefront and delivery operations across the state, Read the full article...

A New Mexico court has ruled that the state’s licensed medical cannabis producers can claim a tax deduction for prescription medication, which could affect both patients’ costs and the state budget, according to an Albuquerque Journal report.

The recent ruling, handed down by a three-judge panel in a unanimous decision, overturned a hearing officer’s previous decision, according to the news outlet. The 11-page ruling determines that medical cannabis meets the definition of a prescription drug under the state’s tax code since physicians are required to certify that patients have a qualifying condition before they can enroll in the state’s medical cannabis program, the Albuquerque Journal reported.

The court also found that the state’s medical cannabis laws and its allowable tax deduction for prescription drugs are meant to make medication more accessible to patients, according to the news outlet.

New Mexico’s medical cannabis producers paid roughly $24 million in gross tax receipts over the past three years, the Albuquerque Journal reported, and the taxes are generally passed on to patients, who may now see a decrease in the cost of medical cannabis products.

The ruling could leave the New Mexico Taxation and Revenue Department on the hook for millions of dollars; the agency has been denying the state’s medical cannabis producers’ applications for gross receipts tax refunds for years, the Albuquerque Journal reported, and the ruling means that lawmakers will have to allocate enough funding to cover the tax claims this year or next year, if the ruling is not appealed.

When people hear that Mark Sunderland—chief innovation officer of Hemp Black and Thomas Jefferson University’s vice president of innovation and technology—is tinkering with hemp textiles, they assume he’s designing T-shirts, Sunderland says. But his research goes far beyond soft, short-sleeved shirts, and for good reason: Hemp just can’t compete with cotton.

In order to create hemp T-shirts—or towels, curtains and underwear, for that matter—innovators would compete against materials like cotton that have permeated society and stores for decades. And “that would be a very poor direction to go in,” Sunderland tells Cannabis Business Times. “Looking at applications or research that involve trying to take the fiber off the [hemp] stalk and processing it into a yarn to make a material became very daunting. The commercial industry partners are not there yet and that kind of technology would … not be used for a very long time.”

So, four years ago, when Sunderland joined Jefferson University’s hemp project at the Lambert Center for the Study of Medicinal Cannabis and Hemp—a center that researches the applications of hemp across many industries—he thought outside of the box, or, in this case, outside of yarn.

The researchers took the hurd—the whey portion of the hemp plant—and processed it down into nanoparticles, creating a “a building block for new fibers and new yarns going forward, so that these materials can be brought into the existing commercial supply chain,” Sunderland explains.

In 2016, Australian philanthropist Barry Lambert gave $3 million to the university to create the Lambert Center for the Study of Medicinal Cannabis and Hemp. Last April, Lambert gifted another $2 million to the university to set up the Lambert Innovation Fund within Jefferson’s Innovation Pillar, which will advance novel uses for hemp in medical and other industries.

Today, the university continues to research hemp, but what started at the campus has also grown into Hemp Black, a hemp technology company and subsidiary of Ecofibre that operates separately from but also maintains a partnership with the university, explains Michael Savarie, Hemp Black’s sustainability Enterprise Catalyst and graduate of Thomas Jefferson University.

Dave Bowman, known to the cannabis world as Subcool, died on Feb. 1. He had been ill for quite some time, battling Alpha-1 antitrypsin deficiency and emphysema, as well as the fallout from a divorce and a California wildfire that took nearly everything he’d worked to create in cannabis. As recently as late 2019, he was working toward a return to the cannabis scene he so passionately supported throughout his life.

The news hit the industry hard, displaying the ripple effects of Subcool’s influence on breeders across the world. Subcool, born Montgomery Ball, went on to develop Team Green Avenger Seeds (TGA Subcool Seeds/TGA Genetics/The Dank) and pioneer cultivars like Jack the Ripper and Space Queen. 

"My primary original goal was to create a line of marijuana seeds that grew out to be high-yielding, fruit-flavored hybrids," he told Big Buds in 2016. "The first fruit taste and scent we perfected was lemon. Then came grape, cherry, and orange. Pretty soon, we were working with chocolate tastes and scents. I was so excited about these cultivars and I gave them out to other professional growers to see what they said. People told me they loved these strains. Not just the taste and scent, but also their new kinds of highs."

He developed his organic recipe for Super Soil, always fine-tuning the lessons he'd learned in order "to achieve perfection," he wrote. 

In 2017, Subcool and his wife saw their Santa Rosa, Calif., home destroyed by wildfire. They lost more than 4 million cannabis seeds and all of their breeding plants. By that point, the two had begun to make plans to formally separate; the wildfire made things much worse.

In September 2019, High Times published a profile on the iconic breeder, focusing on a new cultivation facility he and his team were building in a former bowling alley. 

A Massachusetts judge ruled Jan. 24 that licensed medical cannabis dispensaries in Cambridge must be able to immediately seek licensure in the adult-use market in an order that has received mixed reactions from industry stakeholders.

Revolutionary Clinics became a licensed medical dispensary (called a Registered Medical Dispensary, or RMD, in Massachusetts) with a business in Cambridge after the state legalized medical cannabis in 2012, said Zachary Berk, partner in Boston-based Saul Ewing Arnstein & Lehr’s Litigation Department and a member of the firm’s National Cannabis Practice Group. Berk was one of three of the firm’s attorneys who helped secure a favorable ruling for Revolutionary Clinics.

When Massachusetts passed its adult-use cannabis laws in 2016, one of the provisions indicated that pre-existing RMDs like Revolutionary Clinics would be able to convert their medical cannabis licenses into what the state calls a “co-located” license, which would allow the businesses to sell to both the medical and adult-use cannabis markets from their shops.

“The only delay that was permitted in that conversion right was to allow cities and towns to adopt zoning regulations related to adult-use cannabis—just typical time-, place-, and manner-type zoning regulations,” Berk told Cannabis Business Times.

As time passed without many cities and towns adopting ordinances to regulate the adult-use market, the attorney general’s office became involved and mandated that municipalities had to adopt zoning rules by Dec. 31, 2018, Berk said. The deadline passed without Cambridge adopting an ordinance.