Cannabis Industry Daily News

MJBizCon experts share perspective on surviving uncertain marijuana markets

This session and other MJBizCon 2020 content is available on demand.

Three cannabis industry leaders revealed during the “Survival in Uncertain Markets and Preparing for New Markets” panel at MJBizCon 2020 on Wednesday how their firms are weathering the COVID-19 storm.

Bob Groesbeck, co-CEO of Planet 13 Holdings, outlined how the Las Vegas mega-dispensary quickly pivoted to 凯发在线app下载home delivery and curbside pickup focusing on local customers instead of tourists, allowing them to quickly bring back and redeploy laid-off employees.

“We’re just riding this thing out,” Groesbeck told the virtual audience. “I am optimistic.

“I’m very, very, very bullish once this pandemic passes, but none of us knows when. … The first two quarters of next year, we’re going to have to be very careful and very conservative.”

Raj Mukherji, CEO of New Jersey-based marijuana retailer CannTech, said constant communication with officials such as local law enforcement and state cannabis regulators has been a boon in uncertain times.

“When you need an inspection date moved because of how the pandemic affected your construction schedule, it’s helpful,” he said.

“It serves the community, it serves the municipality, and it serves you as an operator, as a regulated business, to have the lines of communication constantly open.”

Derek Peterson, founder of California-based multistate marijuana firm Terra Tech Corp., warned that MJ companies should be wary of cutting the consumer-facing aspects of their business in response to the pandemic.

“The business is still good out there, overall,” he said.

“From a top-line standpoint, it’s getting better again, because people are buying cannabis because they’re scared, and they have anxiety, and they’re stressed out and they need something to relax.”

With the endgame for the pandemic still unclear, Peterson said he expects “a little bit of a rocky road for us over the coming quarters” as firms focus on short-term survivability while preparing for future growth and M&A activity.

“It’s going to survivability while still trying to have some semblance of focus on how do we set ourselves up for growth in the future and M&A activity is going to be a thing, I think, that a lot of people are going to be considering more in the upcoming year,” he said.

“Because I think economies of scale are going to make more and more sense, and alignment and combinations are going to make more and more sense … Part of it’s going to be strictly necessity.”

Cannabis MSO Acreage inks $12 million loan to expand Illinois operation

Multistate cannabis operator Acreage Holdings said Wednesday it has agreed to a $12 million construction loan to complete the expansion of its cultivation and processing facility in the fast-growing Illinois market.

The financing is from The Pelorus Fund, a cannabis-focused real estate investment trust, and carries an annual interest rate of 16% over a term of 18 months.

Construction is expected to be completed in the second quarter of 2021.

New York-based Acreage is building out an existing 80,000-square-foot facility that will increase its wholesale and retail capacity in dried flower, oil extracts and THC-infused beverages.

The THC-infused beverage line utilizes intellectual property licensed from Canada-based Canopy Growth.

As previously announced, Acreage plans to launch Canopy Growth THC beverages in Illinois and California in summer 2021.

In September, Acreage raised $33 million of capital at 7.5% interest, the proceeds of which were used to pay off higher-interest debt, including a short-term loan with an exorbitant 60% interest.

The expensive short-term loan was used to acquire a vertical medical cannabis operation in New Jersey, where voters recently legalized adult use.

Federal marijuana legalization bill takes final step toward full House vote

Learn more about the state of the marijuana industry at MJBizCon 2020.

A U.S. House of Representatives panel on Wednesday paved the way for the full House to vote later this week on a measure to remove marijuana from the federal Controlled Substances Act.

The House Rules Committee, after about an hour of testimony, advanced the Marijuana Opportunity, Reinvestment and Expungement Act (MORE) for final consideration before the full chamber.

The action marked the final procedural step before an expected historic floor vote.

The MORE Act, if passed and enacted into law, would over time create billions of dollars of business opportunities and interstate commerce.

House approval is considered to be largely symbolic since the Republican-led Senate isn’t expected to take up the bill this legislative session.

And unless Democrats win control of the U.S. Senate through two runoff races in Georgia on Jan. 5, passage is unlikely in the next legislative session when Democrat Joe Biden is president.

Supporters stressed that under the MORE Act states still would control how to regulate commercial marijuana markets in their jurisdictions.

“The states will be able to do what they want to do without federal interference,” Rep. Earl Blumenauer, an Oregon Democrat and founder of the Congressional Cannabis Caucus, said during Wednesday’s hearing.

“This is an opportunity for the federal government to get in step with what’s happened across the country.”

The House Judiciary Committee advanced the MORE Act a year ago in a landmark vote.

The full House had been scheduled to vote on the MORE Act in September, but moderates put pressure on leaders to postpone the vote until after the election and instead focus on the coronavirus crisis and a COVID-19 relief bill.

CBD should not be regulated as a narcotic, European Commission says

Want to learn more about cannabis regulations in Europe? Check out the Europe Market Forum at MJBizCon, available on demand.

(A version of this story first appeared at Hemp Industry Daily.)

Low-THC cannabis producers can keep Europe on their radar as an export market in 2021 after the European Commission backed away from its preliminary stance that CBD should be treated as a narcotic.

In a statement sent to the European Industrial Hemp Association on Wednesday, the commission said hemp-derived cannabidiol should not be regulated as a narcotic and can therefore qualify as a food.

The decision comes as a relief to Europe’s cannabis industry, with makers of CBD foods and supplements no longer facing the prospect of a blanket ban across the European Union’s 27 member states.

CBD was included in the EU’s Novel Food Catalogue in January 2019.

Since then, the cannabis extract has required extensive testing and ization from food-safety ities before it can be marketed as food in the EU.

The European Commission, the EU’s executive branch, said in July it had stopped reviewing applications for premarket ization of CBD products while it decided whether CBD should be regulated as a narcotic.

The commission based its Wednesday announcement on the Court of Justice’ November ruling in which five judges declare that CBD derived from the entire hemp plant is not a narcotic under the 1961 Single Convention on Narcotic Drugs and therefore subject to European Union law on the free movement of goods among EU-member states.

Here is the commission’s full statement to novel food ization applicants:

“In light of the comments received from applicants and of the recent Court’s judgment in case C-663/184, the Commission has reviewed its preliminary assessment and concludes that cannabidiol should not be considered as drug within the meaning of the United Nations Single Convention on Narcotic Drugs of 1961 in so far as it does not have psychotropic effect. As a consequence, cannabidiol can be qualified as food, provided that also the other conditions of Article 2 of Regulation (EC) No178/2002 are met.”

Read more about the European market in “Hemp Cultivation in Europe: Key Market Details and Opportunities.”

– Monica Raymunt

Minnesota adds two medical cannabis qualifying conditions

Minnesota regulators are adding two conditions that qualify patients to receive recommendations for medical cannabis.

That brings the total to 17 conditions, which could help boost the bottom line for marijuana businesses in the state.

The Minnesota health department announced that chronic vocal or motor tic disorder and sickle cell disease will be added to the list of qualifying conditions, effective August 2021, according to Minneapolis-based news site Bring Me The News.

The conditions list already included Tourette’s syndrome, but people suffering from that condition experience both motor and vocal tics. The addition of chronic vocal or motor tics allows people with either disorder to receive a recommendation for medical cannabis.

A petition was denied to add anxiety as a qualifying condition in one of the more restrictive markets in the U.S.

Patients who suffer from either of the two newly added conditions can enroll for Minnesota’s medical marijuana program starting in July and receive a recommendation for MMJ a month later.

Marijuana MSO Jushi lists $76M in secured notes on Canadian exchange

Learn more about the state of the marijuana industry at MJBizCon 2020.

Multistate marijuana operator Jushi Holdings listed $76,352,000 worth of secured debentures for trade on the Canadian Securities Exchange.

The publicly traded notes were issued to some holders of that debt who swapped private notes for public notes, according to a news release issued Tuesday.

Senior secured notes worth $6,975,000 remain privately held.

The secured debt bears 10% interest per year, payable quarterly up to the maturity date of Jan. 15, 2023.

“With the capital that we have raised to date, we have strategically expanded into high-quality, high-growth markets and are well positioned to accelerate our momentum as we head into 2021,” Jushi CEO Jim Cacioppo said in the news release.

The Florida-based MSO recently announced a major expansion in Pennsylvania.

Jushi’s notes trade on the Canadian Securities Exchange under the ticker symbol JUSH.db.

The company’s shares trade on the CSE as JUSH.

Michigan adult-use cannabis sales exceed $400 million in first year

Learn more about the state of the marijuana industry at MJBizCon 2020.

Adult-use cannabis sales in Michigan totaled nearly $440 million in the first full year of the program and already are on pace to nearly double in the second year.

Sales have increased every month since the program launched on Dec. 1, 2019, Crain’s Detroit Business reported.

The figures were in line with estimates.

Marijuana Business Factbook projected in July that first-year sales would total $400 million-$475 million.

Demand in Michigan initially far outstripped supply, but cultivation capacity has increased dramatically since the launch of the program.

Only a small percentage of the state’s 1,764 communities have opted to allow recreational marijuana businesses, so the market has high growth potential.

Detroit, the most populated city in Michigan, only last week approved an ordinance to allow 75 recreational marijuana stores.

Medical marijuana caregivers have been phased out of the state’s retail supply chain, meaning licensed growers will supply all the marijuana to the recreational market.

Caregivers will still be allowed to grow for registered MMJ patients but won’t be allowed to sell excess inventory to retail stores anymore.

Marijuana Business Factbook projects that recreational marijuana sales in Michigan will total $1.9 billion to $2.4 billion by 2024.

Pennsylvania medical marijuana research venture gets OK from state

Pennsylvania regulators gave the green light to a company that intends to delve into medical marijuana research, potentially opening the door for much more industry product development.

Organic Remedies has been cleared by the state health department to start growing, producing and experimenting with medical marijuana at its facility in Carlisle, Pennsylvania, according to Harrisburg TV station WHTM.

Organic Remedies received a research grant agreement – partnering the company with the Philadelphia College of Osteopathic Medicine – to study MMJ’s effects on:

  • Chronic pain and opioid-use disorder.
  • General quality of life impacts.
  • Usage trends over time for patients.

The Enola-based company’s first harvest is underway, and the company anticipates a new product line before the end of the year.

In addition, Organic Remedies will be opening three new dispensaries around Pennsylvania, including one near its research headquarters in south-central Pennsylvania, on top of three existing dispensaries it already runs.

The company recently secured $22 million in funding for its vertically integrated research and business model from Florida-based Advanced Flower Capital in order to build out its cultivation facility and its three upcoming dispensaries.

Arkansas reaches $187 million in medical cannabis sales

Arkansas’ slow-starting medical marijuana market is growing, with more than 80% of the state’s dispensaries now open and sales reaching a cumulative total of $187 million since the program launched in May 2019.

That $187 million figure represents more than 28,674 pounds of cannabis sold since the program debuted, according to recent figures from the Arkansas Medical Marijuana Commission.

“We anticipate sales will reach 30,000 pounds by late December,” commission spokesman Scott Hardin wrote in a medical marijuana sales report shared with Marijuana Business Daily.

Arkansas’ yearslong path to a legal medical marijuana market has been fraught with delays.

The state’s top seller of medical marijuana to date, Green Springs Medical in Hot Springs, recently said product shortages are making it hard to meet patient demand and called for increased cultivation capacity.

According to the commission’s recent report, Arkansas currently has 31 operational medical marijuana dispensaries with another six “working toward opening,” including two in Pine Bluff and one each in Little Rock, Fayetteville, Osceola and Hardy.

Average daily medical marijuana sales in Arkansas are roughly $600,000, Hardin told MJBizDaily in September.

Nov. 20, 2020, was the market’s busiest day to date with sales of $850,000, the Arkansas Democrat-Gazette reported.

As of that date, Arkansas’ health department reported 60,013 active medical marijuana ID cards in the state.

VA recreational marijuana market would need 5 years to mature, report says

It would take up to five years for a recreational marijuana program to become fully established in Virginia if legalization efforts there proceed, a working group set up by state legislators predicts.

The group’s report follows comments earlier this month by Gov. Ralph Northam that he would push for an adult-use cannabis program during the 2021 legislative session.

According to the Richmond Times-Dispatch, the working group estimates the industry could generate $698 million to $1.2 billion in economic activity.

The panel – made up of four members of Northam’s cabinet and other senior government officials – is prioritizing the creation of a state agency to regulate a new cannabis market as well as collecting data on current marijuana use in the state.

The group also includes representatives from public health and law enforcement, according to the Times-Dispatch, but no civil rights advocates.

The group’s report recommends creating several licensing tiers, taking into account social equity concerns for locating facilities and dispensaries.

This all follows a Nov. 16 report from the General Assembly that found legalizing recreational cannabis could provide financial benefits to the state while helping end the impact of marijuana prohibition on people of color.

New Jersey court tosses medical cannabis licensing issue back to state

Learn more about state programs at MJBizCon 2020.

A court ruling in New Jersey could prompt regulators to resolve some of the lingering litigation over medical cannabis licensing in advance of the launch of a recreational marijuana program in the state.

A New Jersey appellate panel last week instructed the state Department of Health to reconsider the applications of companies rejected during the 2018 licensing round, according to Law360.com.

The ruling pertains only to appeals involving the state’s 2018 licensing round.

New Jersey also faces litigation over a 2019 licensing round to expand the state’s MMJ program. The lawsuit led to a freeze over additional licensing.

Licensing litigation could make it more difficult for the state to transition into an adult-use market legalized by voters in early November.

The standstill over additional medical marijuana licensing alone has led to concerns that existing operators won’t be able to meet pent-up demand when an adult-use market launches as soon as 2021.

New Jersey thus far has issued only 12 vertical MMJ licenses, and only 13 dispensaries are in operation.

The appellate panel called the scoring process during the 2018 licensing round flawed and sent the issue back to the state.

The panel added that it wouldn’t be satisfactory for the state to resolve the issue by awarding licenses to all the businesses that had appealed.

“We will not dictate to the department what it is that it should do following today’s remand, other than to hold that it must engage in some sort of additional process for receiving and considering the appellants’ contentions and must explain its determinations on those contentions,” the panel said, according to Law360.com.

Eight applicants alleged the scoring process was arbitrary.

Dawn Thomas, spokesperson for the state health department, told Law360.com that the agency is reviewing the ruling.

Georgia taking applications to produce ‘low-THC’ marijuana oil

Georgia regulators are taking applications to process and manufacture medical marijuana oil for the state’s limited program.

According to the Atlanta Journal-Constitution, the Access to Medical Cannabis Commission on Nov. 23 began the licensing process for businesses seeking to manufacture the “low-THC” MMJ oil that Georgia is making available to its 14,000 registered patients.

The two types of licenses – Class 1 and Class 2 – are awarded based on the size of the facility.

Manufacturers have until Dec. 28 to apply, and licenses are expected to be issued by March 2021.

Then, the next step in getting the program up and running is for the commission to create rules for licensing medical marijuana oil dispensaries

THC potency is capped at 5%, under Georgia law, and only six companies will receive permits to grow the limited medical marijuana – two Class 1 100,000-square-foot facilities and four Class 2 50,000-square foot facilities.

The program has taken a while to develop.

Georgia lawmakers approved the medical marijuana program in April 2019, and then regulators appointed Andrew Turnage as the program’s first executive director this past May.