Cannabis Industry Daily News

Cannabis firm Canopy Growth to follow Aphria onto Nasdaq, departing NYSE

Sessions at MJBizCon’s Passholder Days were devoted to the Canadian market, with topics ranging from the role of small producers to global opportunities for Canadian companies to roundtable discussions about retail, processing and cultivation. It’s all available to you on demand.

Smiths Falls, Ontario-based Canopy Growth is swapping one stock exchange for another, departing the New York Stock Exchange (NYSE) in favor of the Nasdaq in an effort to save money.

Canopy, which reported a loss of 128 million Canadian dollars ($97 million) in its most recent quarter, said the move is effective after market close on Nov. 13.

The company’s first day of trading on the Nasdaq is expected to be Nov. 16.

“Making the transition to Nasdaq also provides us with greater cost-effectiveness and access to a suite of tools and services that will help us connect more efficiently with our current and future investors,” CEO David Klein said in a news release.

Canopy follows the lead of Aphria, which made a similar move earlier this year to lower costs.

The Nasdaq generally has lower ongoing listing fees than the NYSE, “with an order of magnitude for the annual saving of the low-hundreds of thousands of dollars,” Jefferies analyst Owen Bennett wrote of the Aphria transition in May.

After the transition, Canopy shares will continue to trade as CGC, the symbol it currently uses on the NYSE.

Canopy also trades as WEED on the Toronto Stock Exchange.

Massachusetts recreational marijuana sales top $1B despite COVID closures

Recreational marijuana retailers in Massachusetts surpassed $1 billion in gross sales almost two years after the market began operating.

According to information reported in the state’s seed-to-sale tracking system Metrc, the 80 adult-use marijuana stores in Massachusetts hit the benchmark at the close of business on Oct. 30, the Cannabis Control Commission (CCC) announced Tuesday in a news release.

“This sales milestone represents licensees’ ability to successfully support a safe, accessible and effective adult-use industry, and I am pleased the resulting tax benefits will have a significant impact on communities throughout the Commonwealth,” CCC Chair Steven J. Hoffman said.

Marijuana sales in Massachusetts tallied $444.9 million for 2019.

Since Jan. 1, 2020, cannabis companies have already surpassed that total, generating $539 million in gross sales despite two months of closures as a result of the COVID-19 pandemic.

Since Massachusetts’ first two marijuana stores opened in 2018, 82 more have received notices from the CCC to begin operations statewide and are in the process of opening.

Another 201 stores with provisional or final license approval are completing the CCC’s inspection and compliance procedures.

Hackers steal information on cannabis growers

This article has been updated to include a response from GrowDiaries. 

Hackers exposed roughly 3.4 million user records, including usernames, email addresses and IP addresses, of marijuana cultivators at GrowDiaries.com, an online community where growers blog about their plants and can sell seeds to other growers.

The security breach happened Sept. 22 and was reportedly discovered Oct. 10 by Volodymyr Diachenko, a database security researcher.

Diachenko said he immediately reported the security breach to GrowDiaries, which secured it five days later.

Diachenko published a report about the incident on LinkedIn on Nov. 3.

The IP addresses span a range of provinces and countries, Diachenko wrote.

The attack poses different threats to users, Diachenko wrote, including phishing attacks and attempts to use the stolen information on other applications.

A representative from GrowDiaries disputed Diachenko’s report in an email, asserting that the company “never acknowledged the incident” and that the data that was allegedly compromised was only test data.

GrowDiaries also said it is based outside of the United States, and has about 30,000 accounts.

Marijuana operator TerrAscend signals profit, rising revenue for third quarter

North American marijuana operator TerrAscend released preliminary third-quarter financial results this week, indicating it expects to report a profit and strong revenue growth.

The Toronto- and New York-based company released unaudited financial results for its third quarter ended Sept. 30, showing:

  • Adjusted EBITDA of nearly 18 million Canadian dollars ($13.7 million), up 56% over the previous quarter.
  • Sales of CA$51 million, up 8% from the previous three-month period.

TerrAscend – a licensed producer in Canada, with operations in California, New Jersey and Pennsylvania – will report its financial results in advance of a Nov. 19 conference call.

Most of the company’s sales are in the United States.

For the quarter ended June 30, TerrAscend’s net sales in Canada were CA$5 million, compared with CA$42 million in the U.S.

Shares of TerrAscend trade on the Canadian Stock Exchange under the ticker symbol TER.

Global small-scale cannabis cultivation survey could offer business insights

An international survey aims to uncover new information about small-scale cannabis cultivation around the world, and the research team’s findings could provide valuable information for both commercial marijuana producers and businesses that serve the 凯发在线app下载home MJ cultivation market.

More than 3,000 people have already responded to the latest International Cannabis Cultivation Questionnaire from the Global Cannabis Cultivation Research Consortium (GCCRC), said researcher Daniel Bear, a GCCRC member and professor of criminal justice at Humber College in Toronto.

The survey is meant to capture information about a wide variety of small-scale growers, not large commercial producers.

“Anybody from the individual who’s got two plants in a tiny 凯发在线app下载homemade grow tent to the person who has, maybe, 40 or 50 plants on the back of a rural property,” Bear said.

He said the research team is specifically interested in learning more about how and why small-scale growers cultivate and what they do with their harvests, with an eye to improving government cannabis policy in a largely unstudied area.

A previous survey in 2012 captured data about personal marijuana cultivators, Bear added, but the legal cannabis landscape has changed significantly since then.

Even though the survey isn’t intended for commercial purposes, Bear believes the research team’s findings could ultimately provide important insights to businesses that serve the 凯发在线app下载home cannabis cultivation market with growing supplies or starting materials.

“I think there’s a lot of opportunities to engage with this market of 凯发在线app下载home growers, to understand what that market looks like, and to understand their needs better,” Bear said.

For commercial cannabis producers, Bear believes the survey results could shed light on why some consumers prefer to grow their own marijuana instead of buying from licensed producers.

“People who grow cannabis because they’re dissatisfied with the public offerings are potentially lost customers,” he said.

Anonymous, country-specific surveys are available for respondents in Australia, Austria, Belgium, Canada, Denmark, Finland, France, Georgia, Germany, Israel, Italy, the Netherlands, New Zealand, Portugal, Switzerland, the United Kingdom, Uruguay and the United States, with a general survey available to respondents elsewhere.

The research results should be released late next spring, Bear said.

Solomon Israel can be reached at [email protected]

Marijuana grow firm projects $50M revenue increase through acquisition

GrowGeneration Corp., a Denver-based marijuana cultivation company that owns a chain of specialty hydroponic and organic garden centers, signed an agreement to purchase The GrowBiz, a group of hydroponic garden centers with five stores in California and Oregon.

Terms were not disclosed, but GrowGeneration estimates a $50 million increase in revenue from the deal, according to a news release.

GrowGeneration expects the deal to close “before fiscal year-end 2020.”

The acquisition will bring the total number of GrowGeneration hydroponic garden centers in California to 10 and in Oregon to two.

“We look forward to building on their combined experience and expanding our commercial footprint,” said Darren Lampert, GrowGeneration’s CEO.

“The GrowBiz acquisition represents our continued investment in purchasing the ‘best of breed’ hydroponic operations in the U.S. and strengthening our management team with seasoned veterans from our industry.”

Before founding The GrowBiz, Ross Haley served as CEO of Hawthorne Gardening Co., a division of Ohio-based Scotts Miracle-Gro, and General Hydroponics.

If the deal goes through, Haley will become a senior strategic adviser for GrowGeneration.

MedMen sues Pasadena, California, over rejected retail cannabis application

California-based MedMen filed suit against the city of Pasadena, claiming that its application for a cannabis retail location was improperly disqualified.

According to the Pasadena Star-News, MedMen called the city’s decision “arbitrary, capricious and unlawful” and chalked up the ruling as sour grapes from a competitor, Sweet Flower.

The city originally qualified for one of the six retail MJ permits up for grabs last year – because of turnover at the company’s executive level since its permit was initially awarded.

MedMen, headquartered in Los Angeles, claims in the lawsuit that, after the original scoring, it entered into a “non-terminable, 10-year lease” for roughly $6.5 million and had already spent $700,000 on various expenses related to the licensing process.

The company further argued that turnover at the executive level doesn’t constitute a change in ownership because the company itself still owns all the assets related to the Pasadena enterprise, according to the Star-News.

MedMen is also not alone in suing Pasadena over its marijuana licensing process; two others from the pool of six original license winners also have filed suit against the city.

NJ marijuana legalization could have ‘snowball’ effect, industry official says

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

A vote by New Jersey residents Tuesday to legalize recreational marijuana could create a “snowball” that rolls down the East Coast and picks up more states along the way, predicted one industry insider.

Speaking on an election panel Monday during Marijuana Business Daily‘s Passholder Days Forum, Rob DiPisa – partner and co-chair of the cannabis law group at New Jersey-based Cole Schotz – said he expects legalization in the state to create a “ripple effect” that would carry all the way to Maryland and Virginia.

But DiPisa also pointed out that the rollout of  a recreational program in New Jersey wouldn’t be without its challenges.

New Jersey has only 12 medical marijuana operators, which are expected to have first crack at recreational sales.

“The big concern is, when adult use comes online, are those operators going to be able to serve that big wave of demand, not only in New Jersey but from neighboring states?” he asked during the session, titled Election Week 2020: What’s at Stake for Cannabis?

A recreational marijuana industry in New Jersey – with a population of nearly 9 million people – would reach $850 million-$950 million in sales a year by 2024, according to a Marijuana Business Daily projection.

The other burning question in the region: What would New York do if New Jersey voters approve Tuesday’s legalization initiative?

DiPisa expects New York Gov. Andrew Cuomo would propose recreational legalization during the April budgeting process.

DiPisa also cautioned that New York would encounter obstacles – perhaps even larger ones – similar to those in New Jersey.

He noted that New York’s medical marijuana market faces even heavier regulations than New Jersey’s program.

The state needs to loosen the regulations and get the medical marijuana program “firing on all cylinders,” DiPisa said.

Bart Schaneman

Oglala Sioux tribe approves legal cannabis market

The Oglala Sioux tribe voted to implement laws and regulations for tribal members to develop legal cannabis businesses on the Pine Ridge Reservation in South Dakota.

According to NORML, the tribal council passed a law on an 11-8 vote that will allow tribal members to sell and grow cannabis and allows for social consumption lounges for both tribal members and non-members.

The law also allows the use of cannabis for both patients and non-patient-adults 21 or older.

“By creating a Lakota economy through tribally enrolled member ownership, we are able to help provide the services and opportunities our people desperately need,” said Jennilee Rooks, candidate for Tribal Council from Eagle Nest District.

The Pine Ridge ordinance is set to take effect in less than a month.

Pine Ridge Indian Reservation is located in the poorest county in the country with an average annual income below $7000 per year, therefore the economic impact from small cannabis businesses could benefit tribal members.

Meanwhile, South Dakota residents will vote Tuesday on whether to legalize both medical and recreational cannabis.

Harvest Health snags three more medical marijuana licenses in Arizona

Harvest Health & Recreation said Monday it is acquiring three vertical medical marijuana licenses in Arizona as part of a settlement with Devine Hunter, boosting the multistate operator’s market-leading dispensary total from 15 to 18.

The settlement resolves litigation filed by Arizona-based Harvest in March to compel Devine to close on the sale of six MMJ licenses as agreed to in February 2019. Terms of that deal weren’t disclosed.

According to a news release, the settlement includes a repayment by Devine of $10.45 million owed to Harvest in connection with the acquisition agreement.

Harvest said no new equity, debt or cash was paid as part of the settlement or license acquisition.

In addition to the three licenses, Harvest said it has acquired a right of first refusal for four additional vertical MMJ licenses in Arizona.

“We are pleased to settle this dispute without payment of any additional capital, and we are very excited to focus on bringing three new locations online as soon as practicable,” Harvest CEO Steve White said in a statement.

Harvest’s now 18 dispensaries are supported by four cultivation sites and two processing facilities.

Arizona voters are deciding on whether to legalize adult use, and existing MMJ operators such as Harvest will get priority status if a recreational marijuana market is approved.

Judge dismisses California cannabis racketeering suit

A federal judge dismissed a $200 million civil racketeering lawsuit filed by a Southern California cannabis farmer against another grower, ruling the claim had no standing because marijuana is illegal under federal law.

The case was an unusual twist on lawsuits that have been filed against marijuana cultivators under the Racketeer Influenced and Corrupt Organizations Act (RICO).

Most RICO suits have been filed by anti-cannabis individuals seeking to shut down marijuana cultivation operations on the claim they lower property values because of odors and security concerns.

But the California case involved former marijuana business partners.

Plaintiff Francine Shulman, a Santa Barbara County businesswoman, filed the suit in June 2019 alleging that operators of Vertical Companies, a Los Angeles-based marijuana cultivation firm, schemed to defraud her and steal her 1,500-acre farm.

U.S. District Judge André Birotte Jr. ruled that it is unlikely that RICO “was designed to provide redress” for federally illegal activities, Law360.com reported.

New Jersey recreational marijuana sales wouldn’t start right after election

New Jersey’s top medical marijuana regulator squashed the idea that recreational marijuana should be available immediately if an adult-use market is approved in Tuesday’s election.

According to NJ.com, Jeff Brown, the chief of the state health department’s Medicinal Marijuana Program, said “opening up sales even a few months after the election would be a disaster and would really hurt access for patients who need this as medicine.”

Brown’s comments are in response to Sen. Nick Scutari’s statement this week that legislators and regulators might be able to “flip the switch” and allow adult-use stores to begin sales immediately after the vote.

Only 12 growers operate in relatively small facilities in the state, so meeting the surge in demand from New Jersey’s population of 8.9 million plus surrounding states would clean out the stores and hinder MMJ patients’ access if the program is rolled out too hastily, Brown reasoned.

He said the state’s medical marijuana program has about 10,000 pounds of medical marijuana available, both extracts and flower.

MMJ patients bought around 2,500 pounds in September and October, so at that rate, only about four months of supply is available.