HEMPCRETE: LEADING CANNABIS’ SUSTAINABILITY REVOLUTION

A negative carbon footprint, favorable thermal and structural properties, and wide-ranging construction applications make Hempcrete a truly disruptive building material. According to American Lime Technology, hempcrete is a bio-composite made of the inner woody core of the hemp plant (Shiv) mixed with a lime-based binder. The hemp core has a high silica content which allows it to bind well with lime, a property unique to hemp among all natural fibers. The result is hempcrete, a lightweight cementitious insulating material weighing about one-seventh or one-eighth of the weight of concrete. Hempcrete is not brittle like regular concrete, thus eliminating the need for expansion joints typically required for absorbing vibration and temperature-induced expansion and contraction in structures. It is fire- and pest- resistant, and is highly useful in earthquake-prone areas, as its low density renders it resistant to cracking under movement. Further, walls made from hempcrete are breathable and allow moisture to pass through, which makes it highly resistant to mold. It is also an ideal insulator, thanks to its low thermal conductivity and wind-resistant properties. Buildings made from hempcrete stay cool in the summer and warm in the winter, resulting in considerable energy savings. But the most important property of hempcrete is its negative carbon footprint – unlike most other building and insulation materials, hempcrete sequesters CO2 for every cubic meter of material used (see chart below). The Center for Clean Air Policy (CCAP) estimates that buildings account for ~40% of global energy consumption – in such a scenario, hempcrete’s ability to reduce the carbon footprint of the construction sector makes it one of the most environmentally friendly and sustainable building materials. Favorable structural, thermal, and environmental properties mean that hempcrete can be used to form roofs and walls, and also serve as an insulator. This combination of advantageous construction properties and multiple applications means that hempcrete will be a key contributor to the 34% CAGR growth of the global industrial hemp market to $26.6 billion by 2025.

Hempitecture (U.S.) and HempFlax (Europe) are the key hempcrete companies that sustainability-focused cannabis investors should evaluate and monitor. Idaho-based Hempitecture built the U.S.’ first public-use building made of hempcrete and is at the forefront of driving hempcrete adoption. Apart from a lack of processors (supply), one of the key challenges facing the sector is the lack of testing standards for the use of hemp building materials, which deters builders and contractors from trying hemp-derived products. Hempitecture has taken the lead in solving this problem – earlier this year, it became the first hempcrete company to record a perfect score in a fire resistance test carried out by the American Society for Testing and Materials (ASTM). Hempcrete scored 0, the best possible rating on a 0 to 450 scale. This is important since results from the specific test, ASTM E 84-19B, are used by code officials and regulatory agencies for the acceptance of interior finish materials and building materials, and a perfect score gives Hempitecture a big competitive advantage over peers. In Europe, which has a more evolved hemp market from a supply and regulatory viewpoint, the key player to watch is the continent’s largest independent hemp grower and processor HempFlax. Netherlands-based HempFlax acquired German natural insulation manufacturer Thermo Natur GmbH & Co. earlier this year to diversify into the hempcrete market. Hemp insulation currently accounts for just 0.5% of the 3.3 million tons of insulation used each year in the construction industry, but its adoption is expected to rise in the coming years as the European Union works toward its goal of becoming a climate-neutral economy by 2050. As a result, the construction sector – which accounts for ~50% of all extracted material and is responsible for >35% of all waste generated in the EU –  will migrate toward more sustainable building materials like hempcrete, and HempFlax, which cultivates 2,200 hectares (5,436 acres) of hemp per year, will be in prime position to benefit.

Chart 1: Hempcrete Has a Negative Carbon Footprint, Unlike Most Other Building/Insulation Materials That Emit CO2 Source: Intro-Blue, ResearchGate, Green Building Canada

Chart 1: Hempcrete Has a Negative Carbon Footprint, Unlike Most Other Building/Insulation Materials That Emit CO2
Source: Intro-Blue, ResearchGate, Green Building Canada

CORRECTION

We apologize for the error in The Stash last week, which incorrectly articulated the cash terms that Canopy will pay Acreage upon the revised acquisition terms.  Details of the new deal are here.  However, to clarify the $37.5million is not a replacement for the $300 million that Acreage has already received from Canopy, rather it is incremental as cash compensation to shareholders and convertible securities holders upon the “Triggering Event” – Federal legalization.

CANNA NEWS

COVID-19

Handful of cannabis-related firms received coronavirus stimulus money. Roughly a half-dozen companies with ties to the cannabis industry received $3.5 million to $8.7 million from the federal government’s Paycheck Protection Program designed to help small businesses keep workers employed during the COVID-19 pandemic. According to Law360, the following ancillary companies received the PPP loans based on a government database made public last week: Anne Holland Ventures, publisher of Marijuana Business Daily, $1 million-$2 million; Akerna (KERN), a cannabis compliance technology company, $2 million-$5 million; The Arcview Group, a cannabis investment research firm, $150,000-$350,000; Canna, a marijuana consulting firm doing business as Canna Advisors, $150,000-$350,000; and Hemp Temps, a hemp and marijuana staffing agency, $350,000-$1 million. Read More (Marijuana Business Daily)

Bipartisan state treasurers call for marijuana banking protections in next coronavirus bill. A bipartisan coalition of state treasurers sent a letter to congressional leaders, asking that they include marijuana banking protections in the next piece of coronavirus relief legislation. The letter, led by Oregon Treasurer Tobias Read, says that the current pandemic has underscored the need to pass the Secure and Fair Enforcement (SAFE) Banking Act, which would protect banks that service the cannabis industry from being penalized by federal regulators. The letter explains how the use of cash “is particularly dangerous” for the millions of registered medical cannabis patients” because the virus can live on surfaces, including cash and coin, for extended periods of time.” Read More (Marijuana Moment)

One-third of young adults may be at risk of severe COVID-19, especially if they smoke or vape. One-third of young people across the country may be at risk of getting seriously sick with COVID-19, especially if they smoke or vape, according to a UCSF study published Monday in the Journal of Adolescent Health. Smoking was the most common risk factor for severe COVID-19 complications among otherwise largely healthy young people, the study found. For young men, smoking or vaping may more than double the potential of being hospitalized, needing intensive care, or even dying from the virus. For young women, who suffer more from other risk factors, smoking or vaping could increase the possibility 1½ times. Read More (San Francisco Chronicle)

STATE AND REGULATORY NEWS

Three cannabis legislation predictions ahead of the 2020 election. Prediction No. 1: None of the current “big fix” proposals will pass Congress before the election. Congress is unlikely to pass major cannabis legislation before the presidential election. Prediction No. 2: Even if banking relief becomes law, the full integration between cannabis and banking sectors will take years. On the one hand, opening the banking system would almost certainly be a net positive to the cannabis industry. On the other hand, there are  two potentially confounding factors to unimpeded industry growth. First, many cannabis companies have established banking relationships at this point. Second, there is no guarantee that even if allowed to do so, large financial institutions will choose to do business with cannabis companies. Prediction No. 3: Mississippians will vote for medical cannabis, but their wishes will be thwarted. Mississippi will wait at least another year for a medical cannabis program. Read More (Cannabis Business Times)

Does the cannabis industry have a monopoly problem? The cannabis still isn’t federally legal in the U.S., but could the industry be at risk of a monopoly? In a word, say industry insiders: No. That’s mainly because cannabis remains hugely fragmented, with manufacturers prohibited from sending products across state lines. While some companies do work in multiple states, David Feldman, a New York-based attorney who works with cannabis companies on mergers and acquisitions, estimates that the dominant multi-state operators (MSOs, in industry parlance) are about a dozen strong. For now, it’s federal prohibition, not the Department of Justice, that keeps cannabis from being at any significant risk of a monopoly. Read More (Quartz)

Visibility into marijuana sales and revenue in Washington state remains murky. Visibility into sales and production in Washington’s legal cannabis market has been obscured since late 2017 due to issues with LEAF, the state’s plant and inventory tracking system produced by Akerna (KERN) (formerly MJ Freeway). However, a recent analysis by data scientist Jim MacRae, who has been observing Washington’s market for years, shows that the Evergreen State joined its Pacific Northwest neighbor in seeing strong March sales. According to state data obtained by MacRae, March’s pre-tax retail sales in Washington reached over $112.8 million, a record high for the state and only the second time that monthly revenue has topped the $100 million mark. March’s sales are up by roughly 25% from the month prior. Read More (Cannabis Benchmarks)

Public companies dominate the rapidly growing Florida medical cannabis market. Florida has 22 medical marijuana treatment centers (MMTCs) currently approved, though not all are operational. Authorizations are made in three stages, including cultivation, processing and dispensing. Of the 22 MMTCs, 15 are permitted to dispense. The 15 dispensing MMTCs include the 7 detailed below, of which 6 are public companies, as well as 8 additional ones. Of the additional MMTCs, 5 are publicly traded, including Acreage Holdings (ACRGF), which owns The Botanist, Bluma Wellness, which operates as One Plant, Columbia Care (COLXF), Green Thumb Industries (GTBIF), and MedMen (MMNFF). Trulieve (TCNNF) is the clear market leader, with 20% of the dispensaries and substantial leadership in both extracted products and flower, and it derives almost all of its revenue from Florida. Read More (New Cannabis Ventures)

Chart 2: Florida Medical Cannabis Patients Source: Intro-Blue, New Cannabis Ventures, OMMU

Chart 2: Florida Medical Cannabis Patients
Source: Intro-Blue, New Cannabis Ventures, OMMU

Virginia lawmakers announce plans to legalize marijuana, one day after decriminalization takes effect. A group of Democratic legislators on July 2 announced plans to introduce a bill to legalize and regulate a commercial cannabis market in the state. While the measure isn’t set to be filed until next year, lawmakers framed legalization as necessary in the fight for social and racial justice. On July 1, the state’s new marijuana decriminalization policy took effect. The law, approved by lawmakers earlier this year and signed by Gov. Ralph Northam (D), removes criminal penalties for low-level marijuana possession. Under the change, having up to an ounce of cannabis is now punishable by a $25 fine and no threat of jail time or a criminal record. Prior Virginia law punished simple marijuana possession with up to 30 days in jail, a $500 fine and a long-term criminal record. Read More (Marijuana Moment)

Shelf space at a premium as more brands enter cannabis space and retailers use pay-to-play practices. As more brands enter the marijuana products marketplace, competition for retail shelf space in key adult-use markets such as Colorado and Washington state is intensifying. While the number of new brands – and, consequently, the amount of new products – continues to rise, growth in the number of retail stores has not kept pace, according to the 2020 edition of the Marijuana Business Factbook. This has fostered a pay-to-play mentality among marijuana retailers, with some now charging brands a fee to occupy shelf space in states such as California and Nevada. Known as slotting fees, the practice requires brands to pay anywhere from $500 to $15,000 a month for premium space on cannabis retailers’ shelves. The use of slotting feels coincided with the rise in popularity of vape products, which was a major contributor to the retail shelf space crunch. Read More (Marijuana Business Daily)

Chart 3: Colorado and Washington State Adult-Use Cannabis Markets – Number of Retailers & Brands Per Category by Year Source: Intro-Blue, Marijuana Business Daily, Headset

Chart 3: Colorado and Washington State Adult-Use Cannabis Markets – Number of Retailers & Brands Per Category by Year
Source: Intro-Blue, Marijuana Business Daily, Headset

California enacts tax warrants in fight against illicit marijuana businesses. In California’s ongoing battle against the illicit cannabis market, the state’s central tax collection agency served a dozen tax warrants to illegal marijuana retailers in Southern California in recent weeks. Roughly $1 million in underground marijuana products and about $100,000 in cash was seized during the actions, which were taken in conjunction with the state Highway Patrol. A tax warrant, also known as a lien, allows the government to claim your personal property or assets to satisfy unpaid taxes. Warrants were served over the past few weeks in Los Angeles and San Bernardino counties, the California Department of Tax and Fee Administration (CDTFA) said in a news release. Read More (Marijuana Business Daily)

Illinois and Maryland achieve record cannabis sales in May. In May 2020, Cannabis combined sales in Illinois’s medical and adult use channels totaled $77.9 million, growing 13 percent since April. May sales represented a new milestone despite stringent social-distancing measures that remained in place through the month. Year-to-date through May, sales have reached $335.5 million. In May 2020, Cannabis sales in Maryland’s medical dispensaries reached $38.6 million, increasing by more than 13 percent from April. Compared to the previous May, sales in Maryland grew by nearly 98 percent as new operators have expanded access throughout the state. Year-to-date through May, sales reached $163.4 million, representing a $77.9 million increase from the same period last year. Read More (New Cannabis Ventures)

Chart 4: Illinois – Monthly Dispensary Sales Source: Intro-Blue, New Cannabis Ventures

Chart 4: Illinois – Monthly Dispensary Sales
Source: Intro-Blue, New Cannabis Ventures

 

Chart 5: Maryland – Monthly Dispensary Sales Source: Intro-Blue, New Cannabis Ventures

Chart 5: Maryland – Monthly Dispensary Sales
Source: Intro-Blue, New Cannabis Ventures

Cannabis sales soar in five western states during May. During May, the ninth month after the onset of the vaping crisis and the third month of the pandemic impacting the market, sales across the five markets totaled $735.4 million, up 14% from April’s $644.9 million. March had spiked to $666.0 million from $579.9 million in February as customers purchased cannabis ahead of store closures and concerns about limitations on access. Overall sales growth from a year ago among the five Western markets ranged from -6% in Nevada to as high as 87% in Oregon. Arizona continued its strong growth, rising 58%, while Colorado accelerated to 32%. California saw solid growth, increasing 15%. Growth in concentrates, which represented 25-35% of sales by market, has continued to improve in recent months but remains below the 26-38% share of sales in August before the vaping crisis hit. Read More (New Cannabis Ventures)

Chart 6: Arizona – Monthly Dispensary Sales Source: Intro-Blue, New Cannabis Ventures

Chart 6: Arizona – Monthly Dispensary Sales
Source: Intro-Blue, New Cannabis Ventures

 

Chart 7: California – Monthly Dispensary Sales Source: Intro-Blue, New Cannabis Ventures

Chart 7: California – Monthly Dispensary Sales
Source: Intro-Blue, New Cannabis Ventures

 

Chart 8: Colorado – Monthly Dispensary Sales Source: Intro-Blue, New Cannabis Ventures

Chart 8: Colorado – Monthly Dispensary Sales
Source: Intro-Blue, New Cannabis Ventures

 

Chart 9: Nevada – Monthly Dispensary Sales Source: Intro-Blue, New Cannabis Ventures

Chart 9: Nevada – Monthly Dispensary Sales
Source: Intro-Blue, New Cannabis Ventures

 

Chart 10: Oregon – Monthly Dispensary Sales Source: Intro-Blue, New Cannabis Ventures

Chart 10: Oregon – Monthly Dispensary Sales
Source: Intro-Blue, New Cannabis Ventures

Illinois adult-use cannabis market continues to be hampered by supply issues. Six months in, the supply concerns continue for adult-use cannabis sales at Nature’s Treatment of Illinois in Milan. While some of it is an understandable growing pain of a state wading into recreational sales, Matt Stern, CEO and NTI’s owner, continues to point to the way the state set up its industry. Major cannabis companies such as Green Thumb Industries (GTBIF), with a cultivation center in Rock Island, are what’s known as multi-state operators, or vertically-integrated businesses that grow cannabis and own retail dispensaries to sell it. So, an independent dispensary like Nature’s Treatment of Illinois, with its original Milan location and its second location in Galesburg, is at the mercy of cultivators. Read More (The Quad City Times)

Court rules Humboldt marijuana growers cannot be sentenced under federal law as drug dealers. Federal prosecutors cannot punish two Northern California marijuana growers for violating U.S. drug laws because Congress has protected pot suppliers who follow the state’s medical marijuana law, ruled by a federal appeals court. In a 2-1 ruling, the Ninth U.S. Circuit Court of Appeals in San Francisco upheld a federal judge’s decision that two men whose property in Humboldt County was raided by federal drug agents in 2012 had complied with California’s medical marijuana law and could not be sentenced as drug dealers under federal law. Both men had pleaded guilty to federal charges in 2014, a year before Congress barred the Justice Department from spending money to interfere with a state’s medical marijuana law. Read More (San Francisco Chronicle)

U.S. cannabis spot index up 0.4% to $1,441 per pound, August forward unchanged at $1,430 per pound. The simple average (non-volume weighted) price increased $12 to $1,654 per pound, with 68% of transactions (one standard deviation) in the $897 to $2,411 per pound range. The average reported deal size was nominally unchanged at 2.1 pounds. In grams, the Spot price was $3.18 and the simple average price was $3.65. The average reported forward deal size was 35 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 48%, 33%, and 19% of forward arrangements, respectively. Read More (Cannabis Benchmarks)

Chart 11: Cannabis Benchmarks U.S. Spot Index Source: Intro-Blue, Cannabis Benchmarks

Chart 11: Cannabis Benchmarks U.S. Spot Index
Source: Intro-Blue, Cannabis Benchmarks

 

Chart 12: Cannabis Benchmarks U.S. Implied Forward Curve Source: Intro-Blue, Cannabis Benchmarks

Chart 12: Cannabis Benchmarks U.S. Implied Forward Curve
Source: Intro-Blue, Cannabis Benchmarks

 

Chart 13: Cannabis Benchmarks U.S. Spot Price by Medical or Recreational Source: Intro-Blue, Cannabis Benchmarks

Chart 13: Cannabis Benchmarks U.S. Spot Price by Medical or Recreational
Source: Intro-Blue, Cannabis Benchmarks

Ontario set to end cannabis delivery, curbside pickup despite ongoing pandemic. A temporary emergency order allowing Ontario’s private-sector cannabis retailers to engage in curbside pickup and delivery will be allowed to expire, the provincial government said – even though the COVID-19 pandemic is far from over. “As our province carefully moves towards recovery, the (emergency order) to temporarily allow for cannabis retail curbside pickup and delivery will end when the Declaration of Emergency expires along with other temporary measures that had been put in place to support people and business during the public health emergency,” Richard Clark, communications director for Ontario’s minister of Finance, wrote in an email to Marijuana Business Daily. Clark did not say exactly when the order would be allowed to expire. The end of the emergency order could present a new challenge for Ontario’s small but growing number of cannabis store operators, some of whom saw the opportunity to offer curbside pickup and home deliveries as a lifeline in uncertain times. Read More (Marijuana Business Daily)

Canadian cannabis inventory soars to new high, indicating more pain ahead for producers. Federally licensed producers in Canada are stockpiling more cannabis than ever, new figures from the Canadian government show, indicating that some producers are in store for more financial pain as the market looks for equilibrium. Deeper industrywide cuts might still be needed for the large producers to shed excess production, even as the industry continues to see impressive month-on-month retail sales growth. As of April, Canadian cultivators and processors had amassed roughly 620,144 kilograms (1.4 million pounds) of unpackaged cannabis inventory – defined as marijuana in stock that is not packaged for sale to consumers at the retail level. In addition, roughly 85,014 kilograms of packaged inventory was being held in April by federal license holders, retailers and wholesalers. Read More (Marijuana Business Daily)

Chart 14: Dried Cannabis Inventory in Canada  Source: Intro-Blue, Marijuana Business Daily

Chart 14: Dried Cannabis Inventory in Canada 
Source: Intro-Blue, Marijuana Business Daily

Northwest Territories (NWT) government slashes legal cannabis product prices to fight the robust illicit market. In the NWT, legal cannabis products can be purchased online through the provincial government’s sales site or from five liquor stores distributed across the territory. NWT faces some of the highest retail prices in Canada, and by a significant measure. Crowdsourced data collected by Statistics Canada shows the average price at CAD $10.65 per gram in 2019 and 2020, well above the national average. With a lack of convenient physical retail infrastructure and high prices, the NWT government made the tough decision of trading revenues for a thriving legal supply network. The NWT government has decided to cut the price of legal cannabis products by 10%. This is a bold move, but a necessary one to grow market share. Cannabis Benchmarks believe the NWT approach will be seen as a successful pilot project, and other major provinces will follow suit. Read More (Cannabis Benchmarks)

Chart 15: Cannabis Prices in Canada  Source: Intro-Blue, Cannabis Benchmarks

Chart 15: Cannabis Prices in Canada 
Source: Intro-Blue, Cannabis Benchmarks

COMPANY NEWS

Clever Leaves claims first EU-GMP cannabis certification in Latin America. Clever Leaves, an international cannabis company with its main operations in Colombia, said it obtained EU-Good Manufacturing Practice certification “to produce Active Pharmaceutical Ingredients (API), semi-finished and finished cannabis products for medical purposes” in its Colombian facilities. The certification is “expected to broaden Clever Leaves’ ability to serve international markets,” according to the news release. EU-GMP is an essential requirement to exporting medical marijuana – particularly extracts – for commercial and medicinal purposes to markets in the European Union. “Any manufacturer of medicines intended for the EU market, no matter where in the world it is located, must comply with GMP,” the European Medicines Agency website stipulates. Read More (Marijuana Business Daily)

Organigram becomes latest cannabis producer to slash jobs, production target. Organigram (OGI) cut its workforce by about 25% and said production levels will be below capacity “for the foreseeable future.” Organigram described the cuts in a news release as “an effort to better align its production capacity to prevailing market conditions.” The New Brunswick-based company first warned that the COVID-19 pandemic could lead to layoffs and production decreases in late March. Subsequently, Organigram temporarily laid off about 400 employees in early April. At the time, those layoffs represented about 45% of the company’s workforce. The layoffs will affect about 220 employees, Organigram said, “including a small number who are not on temporary layoff.” Read More (Marijuana Business Daily)

Aphria issues shares to Emblem after settling supply dispute. Aphria (APHA) has issued more than 1.6 million common shares to Emblem Cannabis, a subsidiary of Aleafia Health (ALEAF), as part of a previously announced settlement. Aphria signed a deal in 2018 that called for it to provide 175,000 kilograms of cannabis to Emblem over five years. Emblem later claimed that Aphria had not met its supply obligations and cancelled the agreement, kickstarting arbitration. As part of their settlement, announced June 25, Emblem was to receive $10 million worth of stock, $15 million in cash and a waiver of claimed receivables. Read More (BNN Bloomberg)

Lift & Co. offloading assets as COVID-19 shakes the cannabis sector. Lift & Co. (LFCOF) has laid off nearly all of its staff and is seeking an “asset-light” strategy amid what it described as pressure from the COVID-19 pandemic. But sources said it began winding down operations before the pandemic, after funding fell through late last year. Lift’s struggles are in part a reflection of the cannabis sector as a whole, which, now in its second year of legalization in Canada, has failed to meet investors’ expectations. The Logic spoke with four people with direct knowledge of the company, who asked not to be named out of concern for their job prospects in the tight-knit cannabis industry. They said Lift has since laid off nearly all of its staff; the few who have stayed to help it through its transition, including CEO Matei Olaru, are forgoing wages in exchange for stock options. Read More (Financial Post)

More hurdles for MedMen in Arizona, California – and in court. Bad news continues to pile up for California-based MedMen Enterprises (MMNFF). After the multistate operator’s founders stepped down from leadership roles in January, their replacements have continued to struggle to right the ship, and just last month, MedMen lost a medical marijuana business license in Virginia. Recently, MedMen has been further hit with: 1) A lawsuit filed in May that so far has resulted in at least the temporary closure of two MedMen-branded Arizona stores, in Tempe and Scottsdale, 2) The potential loss of a retail license in Pasadena, California, and 3) A new demand for $600,000 in legal fees from former Chief Financial Officer James Parker, who’s demanding the payment in an ongoing lawsuit he filed against MedMen in January 2019. Combined, the three new hurdles could easily cost the company millions. Read More (Marijuana Business Daily)

Village Farms International partners with Dutch enterprise to pursue first legal recreational cannabis market in Europe. Village Farms International (VFFIF) announced that it has executed a definitive agreement with DutchCanGrow (DCG), a Netherlands-based cannabis enterprise, to become one of six equal shareholders in DCG owning just under 16% each, with a seventh shareholder owning 5%. DCG is pursuing the opportunity to become one of a limited number of licensed cannabis growers (up to a maximum of 10) when the Dutch government permits the first legal recreational cannabis market in Europe under its 10-city experiment to investigate closed cannabis supply chains. If successful in receiving a license from the Dutch government when awarded later this year, DCG plans to construct and operate a specialized cannabis greenhouse facility in the Netherlands and develop, produce and market a variety of safe, high-quality cannabis products to supply this new legalized market. Read More (Newswire)

HEXO launches medical cannabis products in Israel. Hexo Corp. (HEXO) announced that it has launched medical cannabis products in Israel through a 24-month agreement with leading Israeli medical cannabis company, Breath of Life International (BOL). “For the first time, HEXO’s high-quality medical cannabis is available to medical patients outside of Canada,” said Sebastien St-Louis, CEO and co-founder of HEXO. “Launching the HEXO brand in Israel is a testament to the continued work we are doing to expand our international footprint and find new markets for our award-winning products.” HEXO completed the first shipment of 493 kilograms amidst tightening international borders, a significant reduction in air cargo availability, and increased safety measures within its facilities due to the global COVID-19 pandemic. Medical patients in Israel are able to access some of HEXO’s bestselling flower products packaged in a 10-gram format and designed exclusively for the Israeli market, including bilingual (English and Hebrew) packaging and labels. Read More (GlobeNewswire)

The Green Organic Dutchman provides update on EU-GMP certification. The Green Organic Dutchman Holdings (TGODF) announced that its Ancaster facility has obtained a European Union Good Manufacturing Practice (EU-GMP) certificate enabling it to commence exports to Germany. Under this EU-GMP certificate, valid until December 31, 2020, TGODF can commence exporting its premium certified organic products for validation in preparation for commercialization in 2021.  The company anticipates validation will be completed by the end of the year, subsequently enabling export of medical cannabis products for commercial purposes to Europe and other jurisdictions. Read More (Newswire)

Aleafia completes outdoor planting on 66 acres. It appears that poor sector tailwinds have yet to slow down Aleafia Health (ALEAF) and their cultivation plans. The company issued a corporate update, announcing that they had completed the planting of their outdoor crop, while simultaneously scaling up their greenhouse operations. With respect to their outdoor initiatives, Aleafia Health now has 66 acres fully planted acres of outdoor cannabis, a significant increase from last year’s 13 acres. While the company hasn’t planted to its entire 86-acre capacity, yields from what is planted should result in more than enough product sitting on company shelves in an environment where bulk wholesale sales have been obliterated. The company also announced that it has completed construction on its new 30,000 square feet of indoor drying and storage space, along with site-wide irrigation. Read More (the deep dive)

EARNINGS

KushCo Holdings’ Q3 revenue declines 46% to $22.3 million as adjusted EBITDA improves. KushCo Holdings (KSHB) reported financial results for its fiscal third quarter ended May 31, 2020. The company reported that its revenue had dropped by 46% as the company shifted gears to focus on larger, more financially stable customers. The compare reported revenue of $22.3 million, which missed analyst estimates and was far lower than what even the company had forecast it would report. Net losses increased to $13 million, but the company’s expenses fell by 50%. The drop in expenses was partly due to the pandemic. Adjusted EBITDA totaled ($2.7) million compared to approximately ($7.5) million in the prior year period and approximately ($14.8) million in the prior quarter. Read More (New Cannabis Ventures)

AYR Strategies pre-announces Q2 revenue at $28.4 million. Ayr Strategies (AYRSF) announced preliminary financial and operating results for the month of June and three months ended June 30, 2020. Revenue for June is expected to set an all-time monthly record at approximately $12.7 million, representing a 14% increase over the Q1 monthly average and a 46% increase over June 2019. Revenue for the second quarter is expected to be approximately $28.4 million, which represents a 15% decrease from the prior quarter due to COVID-related closures in April and May. Read More (New Cannabis Ventures)

Jushi Holdings’ total revenue jumped 43% to $8.6 million in the first quarter. Jushi Holdings (JUSHF) announced its financial results for the first quarter ended March 31 and is pre-announcing its second quarter 2020 revenues. The company reported that its total revenue increased 43% sequentially to $8.6 million in the first quarter, while the company delivered a net loss for the quarter of $15.8 million. The net losses were down slightly from the fourth quarter’s net losses of $17 million. Jushi said that it expects to report total revenue of $15.0 million in the second quarter, an increase of 74% sequentially. Jushi said it is also reaffirming its 2021 revenue guidance of $200 to $250 million. Read More (GlobeNewswire)

New Brunswick retailer Cannabis NB posts second profitable quarter. New Brunswick’s government-owned marijuana retailer, Cannabis NB, posted its second consecutive profitable quarter, reporting a gain of CAD $1.4 million ($1 million) for the period ended June 28. Cannabis NB is the only legal cannabis retailer in the province, which has a population of roughly 780,000. Total sales for the quarter were CAD $16.3 million, an increase of 16% over the previous quarter. In a statement, Cannabis NB president and CEO Patrick Parent attributed the improved quarterly results to “aggressive cost-cutting measures (and) renegotiating prices with our suppliers which were passed on to our customers as well the addition of weekly promotions.” Read More (Marijuana Business Daily)

CAPITAL MARKETS

SEC orders halt to High Times IPO. The U.S. SEC has reportedly told Hightimes Holding to halt its initial public offering after the company missed a June 12 deadline for filing its audited annual report. Attorneys Stephen Weiss and Megan Penick of Michelman Robinson LLP — who both work as securities lawyers for High Times — confirmed that the company cannot accept additional sales until the annual report is filed and publicly available for investors. The most recent High Times annual report was filed in June 2019 and showed that the company had raised just $15 million of its $50 million goal. Read More (Ganjapreneur)

Schwazze walks away from two Colorado cannabis deals. Denver-based Schwazze, formerly Medicine Man Technologies (MDCL), said it has terminated acquisitions of two Colorado marijuana businesses – cultivator Los Sueños Farms and concentrates company Dabble Extracts. Schwazze, a vertically integrated operator, said in an investor news release it moved quickly on the deals and, thus, did limited due diligence after Colorado enacted a law last year that opened up the state’s cannabis industry to outside money. “However, throughout the company’s rigorous M&A process, key business and valuation issues were identified, and as such, the company decided to no longer pursue the acquisitions of Dabble and Los Sueños Farms,” Schwazze said Read More (Marijuana Business Daily)

This VC firm predicted big cannabis would shrink. What happens next? Narbe Alexandrian did not see COVID-19 coming, and that’s okay. As chief executive officer of the cannabis venture capital firm Canopy Rivers (CNPOF), he’s not in the business of predicting pandemics. What he did see prior to 2020 were cracks forming in the business model that has dominated legal cannabis in Canada since its inception: vertically integrated licensed producers. Many of the largest cannabis players were having a tough 2020 before the economic wallop of COVID-19. So far, the year has been marked by mass layoffs and lacklustre financial results. Producers face scarce financing options, unforgiving capital markets and resilient illicit sales. Plans for global expansion and trial-backed pharmaceuticals years in the making have been shelved as investors demand tighter controls on spending and clearer paths towards consistent profits. Just about everyone is pulling back. For Alexandrian, it’s proof of something he’s been saying for a while now. Read More (Yahoo!)

Marijuana tissue-culture technology company raises more than $15 million. Conception Nurseries, a Sacramento, California-based cannabis genetics firm, raised $15 million with the addition of approximately $12 million in a Series A funding round to help add scale and automation to its operation. According to Green Market Report, the funding round was led by New York-based cannabis data group Viridian Capital Advisors with facilitation by broker-dealer Pickwick Capital Partners. Raises of this amount are particularly noteworthy during the global coronavirus pandemic. Conception CEO Kevin Brooks said the company’s goal is to help cultivators by bringing tissue-culture technology, also known as micropropagation, to the cannabis industry. Read More (Marijuana Business Daily)

A new ETF issuer on the Swiss stock exchange: SIX welcomes Rize ETF. The newly tradeable ETFs from Rize ETF are focusing on thematic market trends with growth stories: medical cannabis and cyber security. Rize ETF developed both ETFs in cooperation with the index provider Foxberry and the respective thematic experts New Frontier Data and Tematica Research. These products offer investors additional opportunities to diversify their portfolios and dip into the ever-thriving segment of equity-themed ETFs available at SIX. Liquidity for the 2 ETFs is provided by Société Générale. Rize ETF specializes exclusively in thematic ETFs and offer purpose-built products, to balance long-term returns with exposure to companies that have a positive impact on the world. Read More (Mondo Visione)

Horizons ETFs rebalances marijuana-focused index ETF suite. Horizons ETFs Management (Canada) has completed the quarterly rebalance of the constituent holdings of the Horizons Marijuana Life Sciences Index ETF (TSX: HMMJ) and the Horizons U.S. Marijuana Index ETF (NEO: HMUS). Horizons said it added Agraflora Organics (PUFXF) and cbdMD (YCBD) to its HMMJ ETF, while in its HMUS ETF, it added cbdMD and removed Halo Labs (AGEEF). HMMJ is up about 15.6 percent over the past three months, while its U.S. counterpart is up about 23.8 percent over that same period. HMMJ seeks to replicate the performance of the North American Marijuana Index. This index is designed to provide exposure to the performance of a basket of North American publicly listed life sciences companies with significant business activities in the marijuana industry. Read More (Newswire)

Cannabis lawyer Bob Hoban: Fortune 500 companies fear missing out on weed boom. WeedWeek asked Bob Hoban that at one end of the spectrum, you have Altria (MO) (tobacco giant) and some of the big alcohol companies that have moved into cannabis and spent a lot of money on it. What’s his impression of some of the other companies for whom cannabis isn’t so mission critical but has potential? Bob Hoban said: “There’s this notion of FOMO, right? The fear of missing out applies to large corporations as well. They’re intrigued by the opportunity and how to position these products. Product developers within these companies have maybe studied it. But for decision makers, THC, CBD, all this stuff is really something they don’t understand. [A major pet retail chain] put CBD pet products on the shelves. Then the other one wants to know, why is my competitor selling this? What do they know? What do they think? What’s the risk? Are they really making any money off of it? That’s the FOMO, the opportunity. That’s the thing that companies want to figure out.” Read More (Green Entrepreneur)

MEDICAL CANNABIS

Oklahoma now enforcing medical cannabis product testing. Oklahoma medical marijuana regulators are administering laboratory testing after a three-month grace period to ensure enough licensed labs are in place amid the coronavirus pandemic. The mandatory testing requirements apply to all marijuana products sold by a grower or processor. The Oklahoma Medical Marijuana Authority lists 21 licensed labs across the state for a market that the new Marijuana Business Factbook projects will reach $700 million-$860 million in sales this year. Sales in 2019 were estimated at $345 million. The enforcement of the testing requirement comes after the state issued its first product recall in May and then extended that recall in late June. Read More (Marijuana Business Daily)

Louisiana’s medical marijuana market is about to grow with ‘tens of thousands’ of plants. Nearly a year after medical marijuana went from seed to shelves at nine pharmacies in Louisiana, there is a second player in a market that’s about to get a larger pool of patients suffering from a wide-open range of medical conditions. Southern University medical marijuana licensee Ilera Holistic Healthcare shipped out its first tinctures and topical creams to pharmacies this month, joining LSU licensee Wellcana Group, which put its first tinctures on shelves last August. Within two weeks of Wellcana hitting the retail market last year, nearly 5,000 patients entered the program, with 1,500 receiving the drug at prices between $80 and $200 to treat only about a dozen medical conditions. Ilera is adding competition to a market in which the pharmacies have struggled with high wholesale prices and slim profit margins, while patients have complained about an unaffordable therapy that’s held back its use. Read More (The Advocate)

As Pennsylvania’s medical cannabis sales soar, recreational market prospects brighten. Pennsylvania’s medical cannabis market, praised for its smooth operation, is expected to nearly double to $400 million-$500 million in sales this year and reach $1 billion in sales within three or four years. Buoyed by the market’s success, current licensees have become acquisition targets even in the current tough economic climate – with deal prices moving north of $25 million in some cases, experts say. Pennsylvania, the fifth-most-populated state in the country, also is increasingly viewed as a market poised to legalize recreational marijuana. That could occur within the next year via the state’s Legislature, according to industry observers, as lawmakers seek out revenue sources to replenish state coffers depleted by the coronavirus pandemic. Read More (Marijuana Business Daily)

Chart 16: Projected Sales for Pennsylvania’s Medical Marijuana Program Source: Intro-Blue, Marijuana Business Factbook

Chart 16: Projected Sales for Pennsylvania’s Medical Marijuana Program
Source: Intro-Blue, Marijuana Business Factbook

History of cannabis use associated with lower BMI, greater exercise frequency in those age 60 and older. Researchers with the University of Colorado at Boulder measured differences in BMI and exercise behavior in 28 cannabis consumers and 136 matched controls who participated in an eight-week exercise intervention trial. All of the subject in the study were age 60 or older. Authors reported: “Results of this analysis indicated that compared to older adult non-users, older adult cannabis users had lower BMI at the beginning of an exercise intervention study, engaged in more weekly exercise days during the intervention, and were engaging in more exercise-related activities at the conclusion of the intervention. Although preliminary, these findings suggest that it may be easier for older adults who endorse using cannabis to increase and maintain their exercise behavior, potentially because cannabis users have lower body weight than their non-using peers. At minimum, the evidence suggests that cannabis use does not hinder older adults’ ability to engage in physical activity, to participate in a supervised exercise program, or to increase their fitness as a result of physical activity.” Read More (NORML)

Ohio adds first medical cannabis condition since program launch. While rejecting anxiety and autism spectrum disorders, Ohio medical marijuana regulators officially added cachexia to the list of conditions for which doctors in the state can recommend MMJ for treatment. Cachexia, or wasting syndrome, is the first condition added to the MMJ qualifying conditions list by the State Medical Board of Ohio. State lawmakers set the other 21 qualifying conditions when they passed legislation legalizing medical marijuana sales in 2016. In their final signoff on cachexia, board members once again decided against adding anxiety and autism spectrum disorders to the list. The board ruled that the risks for those patients might outweigh the possible benefits. Read More (Marijuana Business Daily)

Canadian hospitals launch medical cannabis trial. University Health Network, a hospital network in Toronto, Canada, has launched its first clinical trial to assess the effectiveness of medical cannabis. Conducted over six months, the study hopes to include 2,000 patients from across Canada who live with chronic pain, insomnia, anxiety, and depression. Dubbed the Medical Cannabis Real-World Evidence (MC-RWE) clinical trial, the study will provide patients with a range of tested products, including edibles and extracts, to treat their conditions with. Symptom changes will be tracked through four standard questionnaires, which participants will receive at least CAD $5 ($3.68) for completing. Recreational cannabis consumers and those already registered with the trial’s sponsor, Medical Cannabis by Shoppers, are excluded from becoming participants. Read More (Analytical Cannabis)

CBD/HEMP

White House completes review of CBD guidance from FDA. The White House recently completed its review of pending Food and Drug Administration (FDA) guidance on marijuana and CBD research—though it remains to be seen whether the draft document will ultimately be released to the public. FDA submitted its proposed plan—titled “Cannabis and Cannabis-Derived Compounds: Quality Considerations for Clinical Research”—to the Office of Management and Budget (OMB) in May. Few details are known about its contents, but an FDA spokesperson previously told Marijuana Moment that it could inform the agency’s approach to developing regulations for the marketing of CBD. Read More (Marijuana Moment)

A tale of two markets: Hemp-derived CBD in the U.S. and Europe. Industry observers note that the European and U.S. approaches to the hemp sector come from very different attitudes regarding the plant. “Hemp is really [considered] a derivative of medical marijuana in Europe; they’re not legally distinct; in most cases they don’t necessarily have separate regulatory phases,” Eric Jasinski, chief operating officer of Tikun Olam U.S. The EU, Jasinski said, tends to regulate products based on their active ingredients, whereas in the U.S. hemp is tainted both politically and socially by its association with its cannabis cousin, marijuana, despite containing negligible amounts of THC. In Europe, “they’re regulating CBD even more so than the plant, hemp,” he stated, “because hemp is more widely used in Europe in an industrial context.” Read More (Hemp Benchmarks)

10 reasons hemp entrepreneurs can still be optimistic about the industry. Kristen Nichols, the editor of Hemp Industry Daily, said at the Hemp Industry Daily Conference Direct: “The reason hemp industry is so optimistic is because of the toolbox that exists now that did not exist before”. The reasons are: 1) Real agronomy has finally come to cannabis through university extension services afforded to hemp as a legal commodity crop to improve crop science and production. 2) Crop protection options – pesticides and biopesticides registered for hemp through the U.S. Environmental Protection Agency for safe application and consumption. 3) U.S. Department of Agriculture involvement with resources to research and develop the hemp industry. 4) Crop insurance is now available – both privately and government-backed – to help mitigate risk. Read More (Marijuana Business Daily)

Where hemp meets the road: Automotive bioplastics. Hemp lends itself particularly well to automotive bioplastics due to its high cellulose content (hemp hurds are approximately 80% cellulose), while being 3.5x stronger than petroleum-based plastics and 5x times lighter though still biodegradable. Swedish biocomposites developer Trifilon won last year’s European Industrial Hemp Association (EIHA) Product of the Year award for its BioLite product, which is made of 30% hemp fibres and positioned as a yet lighter alternative to carbon fibre. Faurecia, a French automotive parts supplier, provides the likes of Renault with some hemp-based PLA; the company expects its products to be 100% plant-based by 2023. The trend is on the rise, with pressure for wider adoption of bioplastics fueled by both consumer expectations and by the need of automakers to overhaul waste management. Read More (New Frontier Data)

Chart 17: Global Production Capacities of Bioplastics Source: Intro-Blue, New Frontier Data

Chart 17: Global Production Capacities of Bioplastics
Source: Intro-Blue, New Frontier Data

Canadian cannabis firm acquires Massachusetts CBD producer. Vancouver, British Columbia-based Future Farm Technologies (FFRMF) says it has finished its consolidation with High Purity Natural Products, a Southbridge, Massachusetts, company that makes white-label CBD and hand sanitizer. The companies announced their merger on July 6. Future Farm Technologies specializes in indoor marijuana production but plans to grow and process hemp in the U.S. The terms of the merger include Future Farm acquiring 100% of outstanding membership units of High Purity, which is now a wholly owned subsidiary. Future Farm is also giving High Purity’s outstanding membership units a total of 15 million common shares of Future Farm. Read More (Hemp Industry Daily)

Canadian marijuana firm settles hemp joint venture in time for 2020 production. A Canadian marijuana company planning to start hemp production, Pac Roots Cannabis, has settled a joint venture in British Columbia in time to grow and sell hemp products in 2020. Pac Roots announced the joint venture with privately held Rock Creek Farms. The new company is called the Outdoor Premium Hemp Joint Venture, which is growing hemp on 100 acres. The joint venture is 60% owned by Pac Roots, which is spending $450,000 on the deal, and 40% owned by Rock Creek Farms, which contributed two commercial leases for the growing space, plus cultivation equipment. Read More (Hemp Industry Daily)

Canadian hemp company buys stake in German growing operation. A Canadian hemp company has bought a 5% ownership stake in a German hemp company with an outdoor growing operation of more than 1,200 acres. EuroLife Brands, based in Toronto, said it is issuing 500,000 common shares valued at $250,000 and a cash payment of $35,000 for its initial stake in Farmhus GmbH. As part of the deal, EuroLife has the right to increase ownership in Farmhus GmbH to up to 20%. Farmhus GmbH has a “state-of-the-art outdoor hemp facility” near Dresden and approximately 110,000 kilograms of existing hemp biomass, already harvested and processed, in its storage inventory. The company also has specialized harvesting and cleaning machinery, as well as drying machinery and drying rooms. Read More (Hemp Industry Daily)

FDA: Many CBD products contain far less, sometimes more, than advertised. Testing of CBD-infused products conducted by the U.S. FDA found that many are mislabeled, containing far less or more CBD than advertised and in some instances THC that wasn’t supposed to be there. Of the 102 products tested this year that were labeled as having CBD, 18 had less than 80% of the amount indicated, while another 46 were within 20% of the amount advertised. Thirty-eight products had more than 120% of the CBD indicated. The results were included in an undated letter to Congress that Hemp Industry Daily obtained. An FDA spokesman confirmed the letter but declined to comment on the findings. In all, the FDA tested 147 products. Not all were labeled as having CBD, but 138 contained at least some amount of the cannabinoid. Of the 147 products, 72 contained some THC, although the concentrations were low. Read More (Hemp Industry Daily)

Chart 18: Results of FDA Tests for Cannabinoid Levels in Various Products Source: Intro-Blue, Hemp Industry Daily, U.S. FDA

Chart 18: Results of FDA Tests for Cannabinoid Levels in Various Products
Source: Intro-Blue, Hemp Industry Daily, U.S. FDA

Elixinol’s new CEO defends CBD focus, offers leadership advice for economic downturn. Elixinol has decided to throw its weight behind its CBD products and abandon a more diversified portfolio of hemp offerings. Given the current economic downturn and CBD market volatility, Elixinol CEO Oliver Horn absolutely believe it’s the right strategy for a number of reasons. He said: “First of all, it’s a very volatile environment at the moment, and the CBD industry has been hampered by the lack of regulation and stiff competition and fragmentation of the market. But the reality is, if we didn’t have a single-minded focus, and [instead] deployed our resources in three different categories, we wouldn’t be successful in any of them.” Read More (Hemp Industry Daily)

Rylie’s Sunshine partners with Front Range Biosciences for hemp field trial program. Front Range Biosciences, a Colorado-based agricultural biotech company, has partnered with Rylie’s Sunshine, a Delaware-based CBD tincture company operated by 14-year-old activist Rylie Maedler and her mother, Janie, for the latest in a series of hemp field trials to determine which hemp varieties perform best in certain regions of the country. “At the highest level, it’s really a way for us to support what we think is a really exciting and worthwhile cause for the industry,” Front Range Biosciences CEO Dr. Jon Vaught told Cannabis Business Times and Hemp Grower. “It’s about advancing the science and developing a better understanding of … cannabinoids and how they can hopefully have a positive impact on … people who are struggling with some really challenging health issues.” Read More (Cannabis Business Times)

RETAIL

Is this the socially distanced dispensary of the future? What do dispensaries look like in the new pandemic world? One family-owned medical cannabis storefront in Stroudsburg, Pennsylvania, has been built out to keep its customers and employees as safe as possible—not just temporarily, but for the long-term. Enter the third location of Keystone Canna Remedies (KCR), a dispensary that serves the medical community in the Poconos, the first in the region. Ryan Welty of RGW Architecture designed and built the space, with the goal of fostering “social distancing without negatively impacting overall patient experience.” KCR Stroudsburg offers extra layers of safety in both its design and policy measures, which include efficient use of space to expedite patient flow, tempered glass partitions, physical distancing markers, pharmacy consultation rooms designed to accommodate 6-foot distancing, pre-order options, designated parking for curbside transactions, patient limits within indoor waiting, and more. Read More (Green Entrepreneur)

Chart 19: Socially Distanced Entryway Source: Intro-Blue, Green Entrepreneur

Chart 19: Socially Distanced Entryway
Source: Intro-Blue, Green Entrepreneur

 

Chart 20: Space for Seating Source: Intro-Blue, Green Entrepreneur

Chart 20: Space for Seating
Source: Intro-Blue, Green Entrepreneur

 

Chart 21: Private Consultation Space Source: Intro-Blue, Green Entrepreneur

Chart 21: Private Consultation Space
Source: Intro-Blue, Green Entrepreneur

 

Chart 22: Safety First Source: Intro-Blue, Green Entrepreneur

Chart 22: Safety First
Source: Intro-Blue, Green Entrepreneur

Thousands more pot shops needed to end illicit market: Fire & Flower CEO. Canada needs to open as many as 4,000 cannabis stores, more than triple the current number of licensed outlets, if policymakers want to eliminate the illicit market, according to the head of one of the largest marijuana retailers in the country. Trevor Fencott, chief executive officer of Fire and Flower Holdings (FFLWF), said that Canada would need to mirror what other legal markets such as Colorado have done to compete directly with the illicit market, where one cannabis store would be open for every 10,000 people served. That would result in Canada needing to open about 3,500 to 4,000 cannabis stores. “The most efficient market out there is the illicit market. It’s not regulated, but it is efficient,” Fencott said in a phone interview with BNN Bloomberg. “Prohibition or enforcement alone don’t work. You need to compete with the illicit market head-on economically.” Read More (BNN Bloomberg)

Iqaluit gets closer to first cannabis store. Nunavut is one step closer to opening its inaugural cannabis store. Nuna Cannabis Store, the first applicant to make it this far in the process, has just entered the public notice period for its proposed store at 1501 Federal Road in Iqaluit, the territory’s capital. Starting June 1, the province began accepting applications for enclosed cannabis stores and integrated cannabis stores, and Patricia Peyton of Iqaluit submitted hers right away with the hope of opening Nuna Cannabis Store. The proposed store would be an enclosed cannabis store, meaning that it would be a stand-alone retail business prohibited to anyone under the age of 19 and patrons won’t be able to handle the product until they buy it. Read More (Cannabis Retailer)

PRODUCTS

Ohio’s ‘craft’ marijuana growers want state OK to expand, say products are selling out. Fire Rock and four other small-scale “craft” cultivators have asked permission to double their space. They say they are constantly selling out of their product and struggle to meet a state inventory requirement of at least 10 pounds of marijuana. But the Ohio Department of Commerce officially denied those requests in late June because the agency hasn’t requested applications to expand. That’s in part because although some growers are low on product, the market as a whole is not. On June 24, commerce officials denied the requests. The letter noted a rule saying the director must make a request for expansion based on several factors, including patient population and product inventory. Read More (Dispatch)

Dynaleo will make cannabis-infused vegan gummies for Canadian market. Dynaleo, an Edmonton, Alta., manufacturer of cannabis-infused gummies, has signed a letter of intent with its first international partner. Dynaleo, part of Canopy Rivers’ (CNPOF) portfolio of cannabis companies, made the announcement a week after it received its Standard Processing License from Health Canada. “We are pleased to have entered into a non-binding letter of intent with Pantry, a premium cannabis-infused food brand. This agreement complements our already existing relationships with cannabis brands in Canada,” says Michael Krestell, executive chairman. According to the agreement, Dynaleo will manufacture and distribute cannabis-infused vegan gummies under the Pantry brand within the Canadian market. Read More (Food in Canada)

Convenience stores eagerly await cannabis products. The cannabis industry doesn’t want to admit it but they should. Convenience stores are salivating to sell cannabis and with their powerful lobbying arm they could be successful. Of course, they can’t touch cannabis until its federally legal, but if cannabis gets descheduled then all bets are off for the cannabis industry as it currently exists. There are 153,000 convenience stores in the U.S., not counting independent bodegas, and these outlets sell the bulk of the country’s cigarettes. The stores are already accustomed to selling a heavily regulated product like tobacco. Convenience stores make very little profit from the gasoline sales and cigarette sales have declined as consumers are smoking less tobacco. The main profits come from soda and food sales. These products pair nicely with cannabis purchases. Read More (TheStreet)

Increasing popularity of 7/10 exemplifies rise in cannabis concentrates. July 10, also known as 7/10 or Oil Day, is the cannabis industry’s second annual “holiday.” Although not as popular or as well celebrated as 4/20, July 10 has picked up steam in recent years thanks to the rising popularity of concentrated cannabis products. Sales data from various markets show that as sales continue to grow across markets and flower continues to dominate the product category lists, concentrates are one of, if not the fastest-growing, product segment. The Colorado Marijuana Enforcement Division’s (MED) 2019 annual report noted 40,229 pounds of concentrate products were sold across both the medical and adult-use markets that year, up nearly 128% from 2016 when 17,647 pounds of concentrate products were sold. In comparison, in 2019, 350,429 pounds of flower products were sold across both the adult-use and medical markets, compared to 335,640 pounds of flower in 2016, an increase of only 4.4%. Read More (Cannabis Business Times)

Chart 23: Pounds of Concentrate Sold Monthly to Consumers as of December 31, 2019 Source: Intro-Blue, Cannabis Business Times, Colorado Marijuana Enforcement Division 2019 Annual Report

Chart 23: Pounds of Concentrate Sold Monthly to Consumers as of December 31, 2019
Source: Intro-Blue, Cannabis Business Times, Colorado Marijuana Enforcement Division 2019 Annual Report

 

Chart 24: Units of Concentrate Sold Monthly to Consumers as of December 31, 2019 Source: Intro-Blue, Cannabis Business Times, Colorado Marijuana Enforcement Division 2019 Annual Report

Chart 24: Units of Concentrate Sold Monthly to Consumers as of December 31, 2019
Source: Intro-Blue, Cannabis Business Times, Colorado Marijuana Enforcement Division 2019 Annual Report

Millions of dollars in cannabis vape product inventory remains in quarantine in Massachusetts. The Massachusetts Cannabis Control Commission (CCC) is asking the public to help the agency determine what it should do about the more than 619,000 vaporizer products – representing millions in potential revenue for retailers and manufacturers – that were quarantined between September 25 and December 12, 2019. Ellen Rosenfeld, president of CommCan, a vertically integrated cannabis company licensed under the medical and adult-use programs with two dispensaries, says she has 35,000 products in quarantine that represent a potential of $2.4 million in sales revenue for the company, which she owns with her brothers Marc and Jon. Cannabis Control Commission executive director Shawn Collins says the agency has been working on a resolution for what to do with the quarantined vape products, including sending small batches to licensed testing laboratories, but has not been able to determine if they are safe to sell because heavy metal test results have been “all over the map.” Read More (Cannabis Business Times)

SOCIAL

‘Lazy stoner’ stereotype smashed by study finding marijuana consumers exercise more. A new study of older Americans found that cannabis consumers tended to do more formal exercise and engage in more physical activities than non-consumers during the course of a four-month trial. While authors cautioned the findings are preliminary, they contribute to a growing body of evidence challenging the lazy-stoner stereotype. “Compared to older adult nonusers,” says the study, out of the University of Colorado at Boulder, “older adult cannabis users had lower [body mass index] at the beginning of an exercise intervention study, engaged in more weekly exercise days during the intervention, and were engaging in more exercise-related activities at the conclusion of the intervention.” Read More (Marijuana Moment)

INTERNATIONAL

Mexico to implement 3-year-old medical cannabis law as full legalization delayed. Mexican authorities plan to finalize medical cannabis regulations in the next two months, the Secretariat of Health of the country said in a news release. The General Health Law of Mexico, amended in mid-2017, authorized cannabis for medical use – including products high in THC. However, that amendment did not create any specific rules or regulations to facilitate a functioning market. Instead, it mandated the Health Secretariat to issue regulations within 180 days. Three years later, Mexico is one of several nations that is credited for having legalized medical cannabis, but the country effectively has no domestic market because of a lack of regulations. Experts say it is uncertain whether Mexican authorities will create the necessary rules for a functional market within the promised two-month window. Read More (Hemp Industry Daily)

The cannabis certification game: Do you have what it takes to be a global player? CGMP in the U.S., GMP-EU in Europe and Guide-104 GMP in Canada are more or less the same. (VII). To manufacture drugs or active pharmaceutical ingredients in Canada, you will need Guide-104 GMP. If you’re going to want to sell medicine in the European Union, your facility needs EU-GMP certification. (VIII)Which means that you might need to update standard operating procedures (SOPs) for GMP compliance. Companies wanting to reach international markets should strive to implement GMP certifications to assure the success of their strategy. However, trying to reach every market might be a formula for failure. Read More (Benzinga)

Dutch cannabis supply to Germany partially restored after short delay. Dutch medical cannabis shipments to Germany have partially been restored after a short delay, and some German wholesalers started receiving flower deliveries in recent days, Marijuana Business Daily has learned. MJBizDaily confirmed that at least three German wholesalers – clients of the Dutch Office of Medicinal Cannabis (OMC) – received their June order at the end of last two weeks or so far last week. On June 11, the OMC said the order could be delayed up to six weeks “due to additional testing.” Because of the large dependency on Dutch flower, there was a looming possibility of supply interruption, but so far, MJBizDaily hasn’t seen any meaningful shortages among the pharmacies we regularly survey. Read More (Marijuana Business Daily)

Chart 25: Destination of Medical Cannabis Sold by the Dutch Office of Medical Cannabis Source: Intro-Blue, Marijuana Business Daily

Chart 25: Destination of Medical Cannabis Sold by the Dutch Office of Medical Cannabis
Source: Intro-Blue, Marijuana Business Daily

Colombian cannabis firm signs deal to bring CBD skincare line to Spain. A Colombian company has inked a deal to put its CBD skincare product line on the shelves of hundreds of drug stores across Spain. Khiron Life Sciences (KHRNF) reached the deal with cosmetics distributor Red Yellow Red to bring its Kuida CBD product line to 2,350 stores across four distributor groups, according to a statement. The deal represents access to a combined 20,000 stores in Spain and Portugal. “Red Yellow Red have a large and compelling distribution network, and a robust sales and education program that aligns with our proven market entry approach to help more consumers integrate Kuida into their daily skincare regimen,” Tejinder Virk, the president of Khiron Europe, said in the statement. Read More (Hemp Industry Daily)

Jamaica to lower cannabis industry entry barriers for small farmers. Jamaica is preparing to lower entry barriers to the medical cannabis industry for small and subsistence farmers. A proposed new permit would cut fees for those farmers and allow for variations to strict infrastructure and security requirements. The Cannabis Licensing Authority (CLA) is undertaking consultations on the draft policy, called the Cultivator’s (transitional) Special Permit Policy, which is currently in an advanced stage of completion. The CLA said the permit is geared toward small or subsistence farmers who find the current licensing system for cannabis cultivators to be too challenging or expensive to navigate. Subsistence farmers typically grow crops for use by their families. “Read More (Hemp Industry Daily)

Israel passes Germany as world’s largest importer of medical cannabis flower. Israel overtook Germany as the No. 1 importer of medical cannabis flower in the world so far this year, according to data compiled by Tel Aviv-based Israeli Cannabis Magazine and Marijuana Business Daily. As of July, Israeli imports surpassed 6 metric tons, Oren Lebovitch, editor of Israeli Cannabis Magazine, told MJBizDaily. He gathered the import numbers from companies’ public disclosures as well as replies he received from several executives involved in the import side of the transactions. As of early June, almost 4,000 kilograms (8,818 pounds) of flower had been imported into Israel. Israel and Germany will likely be the only markets outside North America in which more than a metric ton of high-THC flower will be sold this year. Australia is the only significant importer of high-THC oil. Read More (Marijuana Business Daily)

CANNA SCIENCE

Cannabis cravings are produced throughout the brain, study finds. Cannabis cravings are not solely produced in one area of the brain, according to a new study. Instead, say researchers, these cravings are signaled through multiple brain networks. Published in the journal Human Brain Mapping, the new study could help determine how brain network patterns may change once consumers reduce their cannabis intake. To make their findings, the researchers from the Center for Brain-Health, University of Texas at Dallas, first recruited 144 participants, 54 of whom were deemed “chronic” cannabis consumers while the remaining 90 were classed as non-consumers. The researchers found that connections between certain parts of the brain were much more variable in the cannabis consumers. Read More (Analytical Cannabis)

New cannabis extraction technology may change the industry. KADI Botanical recently revealed their Phase II Centrifugal Electrostatic Precipitator Extraction (CEPE) technology, an emerging technique that extracts botanical compounds from biomass by evaporating compounds directly from dry botanical matter — all without the use of solvents. This extraction technology is still in the works and will undergo extensive analytical testing in the coming months. What makes this technology ground-breaking is that you can gain cannabis extract entirely through one machine – only using dried cannabis flower and a carrier fluid. Such efficient technology could completely change the cannabis industry – however, it’s too early to tell for certain at this point. Read More (Extraction Magazine)

Chart 26: The CEPE Patented Technology Source: Intro-Blue, Extraction Magazine

Chart 26: The CEPE Patented Technology
Source: Intro-Blue, Extraction Magazine

TECHNOLOGY

Tech innovations promote responsible cannabis consumption. Today’s cannabis consumers, especially medical patients, want to know the details of what they are inhaling. Although many vaping companies have raced to create a better vaping experience, many of these devices require proprietary cartridges, which create bottlenecks in production, distribution, and sales. Enter Mode, a startup technology, which is more than a run-of-the-mill battery. Mode is a smart vaporization device and companion app that’s compatible with 99% of standard (510 threaded) cartridges used by numerous brands and provides valuable usage data directly to the user. With Mode, consumers receive detailed information regarding dosage and concentrate characteristics. By inputting the potency data of the cartridge into the app, the device uses a real-time algorithm to calculate the precise dose based on the amount of material vaporized. Read More (Cannabis Tech)

LEGAL & IP

Cannabis firms see jump in insurance costs to protect leaders as investors sue. Canadian and U.S. cannabis companies are facing a spike in already high costs of insurance to protect top executives from personal liability, following a slew of lawsuits by disgruntled investors alleging fraud and misinformation, with more such action expected. Some of the biggest cannabis companies, including Medmen Enterprises (MMNFF), Canopy Growth (CGC), CannTrust Holdings (CTST), Aphria (APHA) and Columbia Care (COLXF), have faced shareholder litigation, accusing leaders of false claims, failing to act in the interest of all shareholders and attempts to defraud investors. “More frequently we’re seeing prospective investors and board members requiring (directors’ and officers’) coverage in place prior to engaging with a company in order to ensure adequate protection in the event of…litigation,” said Charles Grodecki, senior vice president at insurance brokerage AmWINS Brokerage of the Carolinas. Read More (Reuters)

Canadian cannabis companies sued over product mislabeling. A class-action lawsuit over packaging mislabeling filed in a Calgary court is taking aim at some of the Canadian cannabis market’s biggest names. Tilray (TLRY), Aurora Cannabis (ACB), Aleafia Health (ALEAF), Hexo Corp. (HEXO), Cronos Group (CRON), Organigram Holdings (OGI), MediPharm Labs (MEDIF) and their various subsidiaries and brands are all named as defendants in the documents filed in the Court of the Queen’s Bench of Alberta. In the statement of claim dated June 16, 2020, the plaintiff, Lisa Marie Langevin from Calgary, Alberta, claims that the named companies sold cannabis products to consumers and patients “with THC or CBD content levels that were drastically different from the amount advertised on the label.” Read More (Cannabis Business Times)

A new era of protection: the PVPO, plant patents, and more. There are more channels than ever before for companies investing in plant breeding programs — a chance to reap a return on investment. Currently, in the U.S., there are three options on the table, each with subtly different coverage: Plant variety protection (PVP), plant patent, and utility patent. The PVP includes seeds, tubers, and asexually propagated plants, and covers growers for 20 years. Importantly, this option also offers global coverage. The PVP specifically explores distinct plant qualities. As the PVPO explains, “Upon receiving applications, we examine them to establish that they are new, distinct, uniform and stable.” Only when all these qualifiers have been satisfied, do they approve the application. Hemp patents (plant patents) are an alternative if the PVP is cost-prohibitive or unappealing. Read More (Cannabis Tech)

SUSTAINABILITY

Illinois social equity program flawed, advocates say, but it is best in cannabis industry so far. Illinois’ social equity provisions for cannabis companies are considered among the most forward-thinking in the country, yet some advocates and business insiders say the rules don’t go far enough to promote minority participation in the industry. These same industry officials fear the program could be ripe for abuse. Just exactly how well the social equity initiatives will work remains unclear. Illinois marijuana regulators and industry officials looked to other state programs when drafting the social equity regulations, taking from other markets what they deemed worked and developing their own rules to foster diversity in cannabis business ownership. The three main components of the state’s social equity provisions are: 1) The applicant originates from an under-resourced area or one disproportionately impacted by the war on drugs. 2) The applicant or a family member of the applicant was directly impacted by police enforcing anti-marijuana laws. 3) The applicant hires 51% of employees from a distressed neighborhood negatively affected by the war on drugs. Read More (Marijuana Business Daily)

Water conservation in cannabis cultivation. There have been notions raised on high water consumption in marijuana cultivation, even to blaming water decline levels in towns to cannabis. However, according to the Chairman of the National Hemp Association, the plant only requires much water at the early stage of growth, beyond which it develops into one of the most drought-tolerant plants. Regardless of this quality, as with every other plant, water is a necessary factor for its growth, but with the current dwindling state of the planet, certain features are needed to curtail the hazard and help restore the planet. Water Conservation Systems are broadly divided into two types: Municipal and Agriculture. Of these two types, various strategies can be employed to improve the hydrosphere. Below are some of the strategy methodologies based on their type: Municipal – Conservation pricing, installing low flow water fixture, and implementation of educational campaigns. Agriculture – Rainwater harvesting, use of modern irrigation methods, and laser leveling. Read More (Cannabis Tech)

CANNA FACTS

Chart 27: CBD Oil vs. Hemp Oil: What is the Difference? Source: Intro-Blue, Visual Capitalist

Chart 27: CBD Oil vs. Hemp Oil: What is the Difference?
Source: Intro-Blue, Visual Capitalist

CANNA CAPITAL MARKET TRENDS

Chart 28: Weekly Summary (June 22 - June 26, 2020) Source: Intro-Blue, Viridian Capital Advisors Chart 28: Weekly Summary (June 22 - June 26, 2020) Source: Intro-Blue, Viridian Capital Advisors Chart 28: Weekly Summary (June 22 - June 26, 2020) Source: Intro-Blue, Viridian Capital Advisors

Chart 28: Weekly Summary (June 22 - June 26, 2020) Source: Intro-Blue, Viridian Capital Advisors

Chart 28: Weekly Summary (June 22 – June 26, 2020)
Source: Intro-Blue, Viridian Capital Advisors

 

Chart 29: Cannabis Capital Raises by Week (2020) Source: Intro-Blue, Viridian Capital Advisors

Chart 29: Cannabis Capital Raises by Week (2020)
Source: Intro-Blue, Viridian Capital Advisors

 

Chart 30: Cannabis M&A by Week (2020) Source: Intro-Blue, Viridian Capital Advisors

Chart 30: Cannabis M&A by Week (2020)
Source: Intro-Blue, Viridian Capital Advisors

CANNA PRICES – WEEKLY TREND

Chart 31: U.S. Cannabis Market Prices Source: Intro-Blue, Cannabis Benchmarks Price Index

Chart 31: U.S. Cannabis Market Prices Source: Intro-Blue, Cannabis Benchmarks Price Index

Chart 31: U.S. Cannabis Market Prices
Source: Intro-Blue, Cannabis Benchmarks Price Index

 

Chart 32: U.S. Implied Forward Prices (Week Ending July 10, 2020) Source: Intro-Blue, Cannabis Benchmarks Price Index

Chart 32: U.S. Implied Forward Prices (Week Ending July 10, 2020) Source: Intro-Blue, Cannabis Benchmarks Price Index

 

Chart 33: Canada Cannabis Spot Index Source: Intro-Blue, Cannabis Benchmarks Price Index

Chart 33: Canada Cannabis Spot Index
Source: Intro-Blue, Cannabis Benchmarks Price Index

CANNA BRANDS AND PRODUCTS RANKING – STATE IN FOCUS: WASHINGTON

Chart 34: Best-Selling Flower Brands and Products in Washington Source: Intro-Blue, Headset

Chart 34: Best-Selling Flower Brands and Products in Washington
Source: Intro-Blue, Headset

 

Chart 35: Best-Selling Edibles Brands and Products in Washington Source: Intro-Blue, Headset

Chart 35: Best-Selling Edibles Brands and Products in Washington
Source: Intro-Blue, Headset

 

Chart 36: Best-Selling Vapor Pen Brands and Products in Washington Source: Intro-Blue, Headset

Chart 36: Best-Selling Vapor Pen Brands and Products in Washington
Source: Intro-Blue, Headset

 

Chart 37: Best-Selling Beverage Brands and Products in Washington Source: Intro-Blue, Headset

Chart 37: Best-Selling Beverage Brands and Products in Washington
Source: Intro-Blue, Headset

 

Chart 38: Best-Selling Capsule Brands and Products in Washington Source: Intro-Blue, Headset

Chart 38: Best-Selling Capsule Brands and Products in Washington
Source: Intro-Blue, Headset

 

Chart 39: Best-Selling Topical Brands and Products in Washington Source: Intro-Blue, Headset

Chart 39: Best-Selling Topical Brands and Products in Washington
Source: Intro-Blue, Headset

CANNA INDEX

Chart 44: U.S Cannabis Index Source: Intro-Blue, The Marijuana Index

Chart 44: U.S Cannabis Index
Source: Intro-Blue, The Marijuana Index

 

Chart 45: Canada Cannabis Index Source: Intro-Blue, The Marijuana Index

Chart 45: Canada Cannabis Index
Source: Intro-Blue, The Marijuana Index

Important Disclosures

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