CANNABIS LEGALIZATION IS GATHERING MOMENTUM
Passage of the Blumenauer-McClintock-Norton-Lee amendment last week and the planned vote on the MORE Act in September validate our thesis that COVID-19 has accelerated the cannabis federal legalization timeline. In our April 15 Stash report we discussed COVID-19 as a net positive for the marijuana industry as, among other things, it will accelerate cannabis’ federal legalization timeline. Regulatory developments over the last week support our thesis. The House of Representatives on Thursday passed an amendment – known as the Blumenauer-McClintock-Norton-Lee amendment – that would prevent the Department of Justice from interfering with state-legal recreational and medical cannabis programs, another step toward giving states more autonomy in designing and running their cannabis programs until federal legalization is a reality. The measure passed with a 254-163 vote, with 31 Republicans voting in its favor, signifying the bipartisan support that cannabis is gathering. The week also saw Senator Tina Smith (D-MN) file a new bill – titled the Substance Regulation and Safety Act – that would deschedule cannabis and require the U.S. Department of Health and Human Services (HHS) to develop rules that treat marijuana the same as tobacco. Finally, in what could be 2020’s biggest regulatory development regarding federal legalization, news sources (here and here) have reported that the U.S. House is planning a vote on the MORE Act next month. The Act, which aims to decriminalize marijuana at the federal level by removing it from the list of Schedule 1 controlled substances, was approved by the House Judiciary Committee in November, and investors have since been waiting for further movement on it. The pandemic has resulted in a very tight legislative calendar and the fact that a cannabis bill is being considered for vote in such an environment reflects the importance of federal legalization of cannabis, a key to the $50bn+ illicit-to-legal value migration in marijuana sales and one whose overall economic impact could top $130bn by 2024, according to the Marijuana Business Factbook.
Legalization is gaining steam at the state level too with four key markets – New Jersey, Arizona, Mississippi, and South Dakota – headed to the ballot in November.
- New Jersey. The New Jersey Marijuana Legalization Amendment will legalize the recreational use of marijuana for adults 21 and older, and will also legalize the cultivation, processing, and sale of retail cannabis. A July survey by Brach Eichler and DKC Analytics found that 68% of registered voters in the state support adult-use cannabis legalization, up from 61% in April, suggesting that New Jersey is on track to launch adult-use sales in January 2021. The legalization will open a $1bn+ market for cannabis operators who are already laying the groundwork in anticipation. Most notable among them being leading MSO Acreage Holdings (ACRGF) that recently acquired Compassionate Care Foundation, one of New Jersey’s 12 licensed marijuana businesses, and is in the process of tripling its cultivation capacity in the state as well as expanding its product line and retail presence. New Jersey is also important to the broader legalization efforts on the East Coast – including New York – so a favorable outcome in the November vote will have positive implications beyond the Garden State.
- Arizona. The Smart and Safe Act Arizona aims to legalize adult-use cannabis and apply a 16% tax on marijuana sales in the state. If successful at the ballot box, the Act would expand the already-big Arizona cannabis market (CY20 medical cannabis sales are expected to be >$750mn – one of the largest in the U.S.) due to the addition of recreational sales. A June survey by HighGround Public Affairs found that 65% of citizens favor the Act, suggesting that its chances of passage are high. Such a move would benefit existing cannabis operators the most since license-acquisition costs are expected to be very high, ranging from $5 million-$8 million for a troubled operation to $10 million-$30 million for a strong business, according to the Marijuana Business Daily. So a vote for adult-use could end up benefiting incumbent market leaders like Harvest Health & Recreation (HRVSF) and Curaleaf (CURLF) more than the others. That said, the November ballot is yet to be confirmed given a lawsuit which seeks to block the measure. The lawsuit will be heard in the coming weeks and is a key event to monitor for companies and investors.
- Mississippi. Citizens of this traditionally conservative state can choose from two options– Initiative 65 and Initiative 65A – related to legalization of medical cannabis in November. Initiative 65 proposes to amend the Mississippi constitution to allow qualified patients with medical conditions, certified by licensed physicians, to use medical marijuana. This initiative covers 20 qualifying conditions, including PTSD, cancer, glaucoma, and epilepsy. Initiative 65A, on the other hand, would “restrict smoking marijuana to terminally ill patients; require pharmaceutical-grade marijuana products and treatment oversight by licensed physicians, nurses, and pharmacists,” i.e. a much more limited version of Initiative 65. Voters will first choose whether they are in favor of legalization of medical marijuana or not, and then decide whether they prefer 65 or 65A, assuming those in favor have more votes.
- South Dakota. November will also see residents of South Dakota vote on both medical marijuana (through Measure 26) and recreational marijuana (through Constitutional Amendment A) on the same ballot. Measure 26 will establish a medical marijuana program for individuals with a physician-certified debilitating medical condition. Constitutional Amendment A, on the other hand, could legalize the recreational use, possession, and distribution (up to one ounce) of marijuana for individuals 21 and older, and will also require the state legislature to create a medical marijuana program and legalize the sale of hemp by April 1, 2022. The market opportunity for these measures is smaller compared to those in other states but it could add another state to the legalization map of the U.S. cannabis market.
Summer business: Sales hold up as consumer dynamics shift. This summer will lack the usual outdoor events, sports games, concerts and festivals that make it the cannabis industry’s holiday season. But insiders suspect sales will hold up anyway. “We don’t expect the normal seasonal pattern to be massively disrupted,” said Roy Bingham, executive chairman and co-founder of cannabis data firm BDSA. Before the pandemic, BDSA had projected a $16.3 billion in total U.S. sales for 2020, up from $12.4 billion last year. The projection still seems accurate, although sales may be slightly higher, despite COVID-19, Bingham said. Read More (WeedWeek)
Cannabis cultivators and dispensaries roll out reopening plans as states loosen coronavirus-related restrictions. As states begin loosening their coronavirus-related restrictions, growers and retailers are looking for ways to keep their employees and customers safe while reopening their businesses. Nevada’s dispensaries are now permitted to reopen at 50% capacity, says David Farris, Planet 13’s (PLNHF) VP of Sales and Marketing. The dispensary has re-launched in-store sales (with a state-mandated cap of 50% capacity or 10 people—whichever was fewer for each dispensary) and continues to offer delivery and curbside pickup. Elsewhere, in Massachusetts, adult-use cannabis dispensaries, which were shut down for about two months, began reopening Memorial Day with curbside sales, and on June 8, they were permitted to open their doors to customers for in-store sales. Read More (Cannabis Dispensary Mag)
As federal $600 weekly jobless benefit expires, cannabis sales at risk. The U.S. government’s temporary lifeline to tens of millions of unemployed workers – $600 a week in extra jobless benefits – has likely boosted cannabis sales across much of the country amid the coronavirus-induced recession. But that benefit expired July 31, and no new deal was in place to renew the weekly payment in some form. Industry experts said the loss of that additional money in the pockets of Americans might well put at least a temporary damper on cannabis sales, which so far have held up relatively well during the pandemic. The $600 weekly payments began in April. Read More (Marijuana Business Daily)
Marijuana banking protections excluded from senate coronavirus relief legislation. Senate leadership unveiled their latest round of coronavirus relief legislation—and unlike the version approved by the House, it does not include provisions protecting banks that service the marijuana industry from being penalized by federal regulators. There was some hope that the Senate would put the bipartisan banking language in their version—at the very least to secure a victory for its sponsor. In the end, that did not materialize. Read More (Marijuana Moment)
How COVID-19 created a weed windfall for dark web dealers across Europe. Much like their legal counterparts in Canada, dark web dealers in Europe noticed an increase in cannabis sales in the early months of the pandemic, according to a recent analysis from the European Monitoring Center for Drugs and Drug Addiction. Published in June in the Journal of Addiction Medicine, the preliminary study explored the impact of COVID-19 on illicit dark web drug markets serving a mostly-European clientele. Most European countries still prohibit adult-use cannabis, and medical cannabis is often tightly controlled — rendering dark web weed a hotter commodity across the pond. Sales on illicit markets such as Versus, Cannazon, and Agartha shot up from 11,036 in January to 14,289 in March — an increase of just under 29.5 percent. Read More (420 Intel)
STATE AND REGULATORY NEWS
U.S. pot legislation suddenly seems more likely. The U.S. could legalize marijuana at the federal level as soon as 2021 if Joe Biden is able to win the presidential election and Democrats take control of the Senate. It’s a dramatic change in expectations from three months ago when it appeared Donald Trump would most likely win re-election, and CIBC analysts had put the odds of meaningful reform at “near-zero” for 2020 and “unlikely” for 2021. “A fact that has become incredibly obvious from a chaotic 2020 is how quickly things can change,” analysts led by John Zamparo wrote in a note. “We stand by our statement for 2020, but for 2021, well, when the facts change, we change our minds.” Read More (BNN Bloomberg)
Marijuana legalization may not be a blue state issue. Despite the overwhelming support of voters, the Biden-Sanders task force recommendations stop short of marijuana legalization. Why? Isn’t this a blue issue? It’s been said that marijuana legalization is the “superweapon” that Biden refuses to use. The mere fact that Biden refuses to use this superweapon is indicative of Democratic policy, which has consistently favored the pharmaceutical industry and regulatory policy lane. This overall conservative approach to marijuana by the Democrats in the upcoming election is strategic – lay low and don’t say anything controversial. It’s unfortunate to watch the Democrats not see the opportunity for social progress by using cannabis as a vehicle for change. Read More (Forbes)
Biden proposes federal aid to help states expunge marijuana records. Presumptive Democratic presidential nominee Joe Biden said that criminal records for marijuana convictions represent a major systemic barrier to economic opportunity that’s had a disproportionate impact on communities of color. Biden, who continues to oppose legalizing cannabis, said that more states should “recognize the significant costs to their economy when people with certain non-violent criminal records can’t fully contribute to their full talents and capacity.” However, “even when the states want to give that person a second chance and seal or expunge a certain non-violent criminal record, the record keeping-systems are so outdated, they don’t know how to do it.” Read More (Marijuana Moment)
Democratic party delegates reject marijuana legalization amendment to 2020 policy platform. The Democratic National Committee’s (DNC) platform committee rejected an amendment calling on the party to support marijuana legalization as an official 2020 policy plank. Several delegates testified in favor of the proposal, arguing that legalization and ending the war on drugs will help resolve racial inequities and stimulate the economy. But following discussion of the measure, it was shot down in a 50-106 vote, with three abstentions. The panel opted to keep the language included in a draft platform that was released two weeks ago. That document calls for decriminalizing cannabis possession, automatic expungements of prior marijuana convictions, federal rescheduling through executive action, legalizing medical cannabis and allowing states to set their own laws. Read More (Marijuana Moment)
States experience record surge in retail marijuana sales. Retail sales of cannabis products reached all-time highs during the months of April and May, according to data compiled by the firm New Frontier Data. Analyzing retail sales data from 24 state markets, authors reported, “Average consumer monthly spending rose to record highs in April and May, reaching $290 and $296, respectively.” Authors highlighted record sales totals in several states. In Oregon, retails sales of marijuana products totaled an estimated $100 million in May, the single-highest monthly ever reported in the state. In Colorado, marijuana-related sales in May totaled $192 million, also a record high. Sales of medical cannabis products in Florida and Oklahoma have also maintained month-over-month growth during this same time period. Read More (NORML)
Recreational cannabis sales in Michigan crack $200 million in 2020. Michigan’s recreational marijuana industry has reached another milestone. Nearly seven full months into 2020, Michigan’s adult-use cannabis industry has sold more than $200 million in recreational marijuana products. Since adult-use sales began, sales numbers have been rising nearly every week. The Marijuana Regulatory Agency says for the past two months cannabis businesses have been reporting between $10 million to $14 million in weekly sales. Since last December, recreational sales have generated nearly $35 million in excise and sales tax revenues. Read More (Michigan Radio)
New Jersey marijuana companies invest in infrastructure buildouts ahead of recreational vote. Amid the ongoing expansion of New Jersey’s medical marijuana market as well as the anticipated victory of recreational legalization at the ballot box in November, some of the state’s cannabis companies are investing heavily in cultivation build-outs and other infrastructure to meet an expected surge in demand. Many industry insiders anticipate the New Jersey marijuana market will be one of the hottest on the East Coast once recreational sales actually begin – assuming voters approve the fall ballot measure. Insiders concede, however, sales might not happen until 2022. Read More (Marijuana Business Daily)
Maine now hopes to start recreational marijuana sales by year-end. Maine’s potential $300 million a year recreational marijuana program now is expected to launch sales by the end of the year, according to state officials. That would be more than four years after Mainers legalized adult use, with recent delays stemming from the coronavirus pandemic. The launch date is based on the first group of grow, processing and testing facilities operating by the end of September, the Portland Press Herald reported, citing state regulators. That timeline would allow several months for the marijuana to be cultivated, processed and stocked in retail stores. Read More (Marijuana Business Daily)
Rhode Island governor to renew push for adult-use cannabis legalization. Rhode Island Gov. Gina Raimondo will continue trying to legalize adult-use marijuana in the state. She sees legal recreational sales as a possible revenue generator, she told Cranston TV station WJAR. “I was in favor of it last year, so I’m continuing to be in favor of it,” Raimondo said during a teaser interview. “I’m going to put it back again.” The Democratic governor floated the idea of adult-use legalization in late 2018, arguing that the state is losing business opportunities and revenue to neighboring states such as Massachusetts. Raimondo included tax revenue from adult-use legalization in her budget earlier this year. She likely will face opposition, however, because key Senate leaders said in December they would oppose legal rec sales. Read More (Marijuana Business Daily)
Major cannabis companies shun Oklahoma. Oklahoma has essentially been shunned by the largest multi-state operators (MSO’s) in the country. Most legal states tend to have a handful of MSOs who plant their flags and make a big showing. Cresco Labs (CRLBF) in Illinois or Trulieve (TCNNF) in Florida and great examples of this. However, Oklahoma is a massively fractured market when it comes to ownership and the jury is out on whether it’s a good idea or not. 1906 CEO Peter Barsoom said, “The financial success of MSOs is dependent on regulatory arbitrage. Keeping competition out, prices high, and vertical integration requirements. So if those are the requisites of success for an MSO, Oklahoma is not an attractive market. The business model of most MSOs is dependent on a supply-constrained large arbitrage between the cost to cultivate cannabis and the cost the consumer/patient pays.” Read More (Green Market Report)
California bill would give banks a safe harbor for pot business. Banking institutions and accountants offering services to cannabis businesses would have a safe harbor in California law under one of the weed-related bills awaiting state lawmakers’ action when they return to Sacramento. One measure (A.B. 1525) says financial services, including public accounting firms, don’t commit a crime under any California law “solely by virtue of the fact that the person receiving the benefit of any of those services engages in commercial cannabis activity as a licensee” under state law. The bill would permit, with the cannabis business license holder’s permission, a state or local licensing authority, state or local agency, or joint powers authority to share regulatory and financial information with a financial institution to facilitate commercial banking. Read More (Bloomberg Law)
California cannabis and taxes: A shining city on the coast. On July 21, the Costa Mesa City Council passed a new resolution by a sweeping vote of 6 to 1 to bring forth a ballot measure to residents this November to legalize retail cannabis in the city. Council Member John Stephens told that the Council worked closely with the sector from the beginning to arrive at a palatable tax rate of between 4% and 7%, taking lessons from the manufacturer and distributor tax issue. The theory behind the proposal is that opening up for retail will create a larger base of sales in Costa Mesa, which will then lead to more business for the existing manufacturers and distributors and a more financially workable model for the industry and city. The plan’s fate now rests in the voters’ hands. Read More (Forbes)
Three Nevada marijuana retailers accused of selling contaminated flower. Nevada regulators are investigating three recreational cannabis stores for selling tainted flower, part of a larger, ongoing problem for the state regarding testing of marijuana products. The state’s Cannabis Compliance Board (CCB) and the Department of Taxation told all Nevada cannabis retailers in March to stop selling Cherry OG F3 because the flower failed lab tests for mold, coliforms, enterobacteriaceae and aspergillus. The stores were directed to destroy or return the cannabis to the grower, but the stores resumed selling the product in May, according to the CCB. Roughly 375 grams of the strain were sold in May and June at three cannabis shops in Las Vegas: Waveseer of Las Vegas (Jenny’s Dispensary), Paradise Wellness Center (Las Vegas ReLeaf), and Desert Aire Wellness (Sahara Wellness). The CCB said it has received no reports of anyone getting sick from consuming the Cherry OG F3 flower. Read More (Marijuana Business Daily)
Illinois recreational marijuana licensing delays lengthen. The next round of adult-use cannabis licensing in Illinois remains up in the air thanks to a delay in the application scoring process caused by the coronavirus crisis. The delays could be especially costly for cultivators and infusers that, unlike retail applicants, had to secure locations in advance. A state official indicated that KPMG, which is being paid $6.7 million to evaluate the applications, is still working on scoring the applicants, the Chicago Tribune reported. No timeline for awarding licenses has been made, but the official indicated to the newspaper that it could be September before the 75 store licenses are awarded. It could be even longer before the 40 grower permits and 40 processor licenses are issued. The retail licenses were to be awarded in May and the others in July, so the ongoing delays are expected to reach at least four months. Read More (Marijuana Business Daily)
Some WHO cannabis recommendations draw strong opposition at recent UN meeting. Two of the World Health Organization’s (WHO) cannabis scheduling recommendations might face an uphill battle getting adopted later this year by the United Nations’ Commission on Narcotic Drugs (CND). That revelation stems from an analysis of statements made by U.N.-member states at a recent two-day CND meeting. Still, many in the cannabis industry are hoping for a positive outcome at the end of the year, when a vote is planned. The reason: If the two recommendations discussed at the CND meeting in June are approved, international trade in certain CBD preparations is expected to become more free. That’s because such products would be subject to fewer international controls. And that, in turn, could boost sales. Read More (Marijuana Business Daily)
U.S. cannabis spot index down 0.8% to $1,480 per pound, August forward closes up $25 to $1,500 per pound. The simple average (non-volume weighted) price decreased $12 to $1,726 per pound, with 68% of transactions (one standard deviation) in the $919 to $2,533 per pound range. The average reported deal size was nominally unchanged at 2.2 pounds. In grams, the spot price was $3.26 and the simple average price was $3.81. The average reported forward deal size was 30 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 43%, 32%, and 25% of forward arrangements, respectively. Read More (Cannabis Benchmarks)
Canada’s cannabis industry contributes $8.65 billion to economy in May: StatsCan. Canada’s cannabis industry generated about $8.65 billion for the country’s economy in May, according to the latest data from Statistics Canada. The legal cannabis industry contributed about $4.66 billion to Canada’s gross domestic product as of May, StatsCan said. That’s up 11 percent since the same period a year earlier. Meanwhile, the illicit market continues to trend downward and is estimated to contribute $3.92 billion to the country’s economy, down about 13 percent since May 2019, according to StatsCan. Read More (StatsCan, BNN Bloomberg)
Canada added 50 cannabis stores in July. The Canadian cannabis industry is growing up with more than one thousand retail outlets now open across the country. This is an immense milestone, as there were only 361 stores open at the end of July 2019. With the increased physical retail presence, cannabis is becoming more visible and, presumably, more normalized in Canadian society. To be exact, Cannabis Benchmarks count 1,012 licensed retailers, with an average monthly growth rate of 6% in 2020. This solid growth rate comes despite many store applications and openings being delayed due to COVID-19 shutdowns. The 50 store increase in July was distributed almost equally across Alberta, British Columbia, and Ontario. However, Alberta store counts seem to be hitting a saturation point, while Ontario store openings are taking off after a slow start. Cumulative Canadian sales for legal retail cannabis in 2020 are set to hit C$2.28B. This is almost double 2019’s sales tally of C$1.19B, according to Statistics Canada. Read More (Cannabis Benchmarks)
Looking to expand retail footprint, CV Sciences launches non-CBD products. CV Sciences (CVSI) is starting a line of non-CBD products in an attempt to expand to more stores. The San Diego-based company announced it was launching “CV Acute,” a line of dietary supplements than don’t contain any cannabis-derived ingredients. It’s the first of several products expected to be released as part of the company’s attempt to expand into wellness sales channels closed to CBD and other cannabinoids. The company didn’t elaborate on where the new line would be sold. “This new non-CBD product line will open markets and sales channels … including major e-commerce retailers not currently accessible by CBD-based products,” CV Sciences said in a statement. Read More (Marijuana Business Daily)
cbdMD expands sponsorship with professional golfer Bubba Watson. cbdMD (YCBD) announced that it is expanding its exclusive CBD partnership with 12-time PGA Tour winner and two-time Masters Champion Bubba Watson. The partnership will continue through the end of 2022 and includes prominent logo display and collaboration both on and off the golf course. Bubba will serve as a main headliner of the brand’s premier athletic sponsorship program, “Team cbdMD,” within its upcoming marketing and advertising campaigns. Since signing Bubba Watson in May 2019, cbdMD has tracked the consumer habits of CBD throughout the golf community and intends to utilize this extensive data in targeted marketing and media advertising campaigns. Read More (Business Wire)
Cresco Labs announces appointment of Carol Vallone to its board and the retirement of Brian McCormack. Cresco Labs (CRLBF) has appointed Carol Vallone to its board of directors, effective immediately. Ms. Vallone is a well-known business leader, former CEO, and corporate board director, with a strong track record in launching, scaling, and managing global companies. In joining the Cresco Labs board of directors, Ms. Vallone will become the second female member of the board and will serve alongside Michele Roberts, the executive director of the NBA Players Association, who was elected in April. The company also announced that Brian McCormack, vice chairman of the board, has retired from the company’s board of directors as part of the planned board refreshment process. Read More (Business Wire)
Zenabis announces appointment of permanent chief executive officer. Zenabis Global (ZBISF) announced the appointment of Shai Altman as president and chief executive officer (CEO) of the company, relieving Kevin Coft, Interim CEO, from that position effective 1 September, 2020. Mr. Altman has over 20 years of leadership experience in the consumer-packaged goods industry across several categories and countries around the globe. “Zenabis is pleased to welcome Shai to the team as CEO,” said Daniel Burns, chair of Zenabis. “His deep and varied experience across the entire spectrum of leadership and operations, and in particular his experience in CPG in Canada and globally, make him incredibly well-suited to contribute to Zenabis’ continued growth.” Read More (Newswire)
Organigram launches Trailblazer Snax, the largest competitively priced cannabis-infused chocolate bar in Canada. Organigram Holdings (OGI) announced the launch of its most recent cannabis 2.0 product Trailblazer Snax, a premium-quality, value-priced, cannabis-infused chocolate bar. Available in both mint and mocha flavors, the 42g bar with 10mg of THC is competitively priced and the largest cannabis-infused chocolate bar currently available in Canada. With each bar consisting of five sections, the company expects it will appeal to chocolate lovers, consumers looking to share and individuals looking to control their dosage. Organigram has made a significant investment in chocolate innovation and product development. Read More (Business Wire)
FSD Pharma announces decision to surrender Health Canada licenses for subsidiary FV Pharma Inc. FSD Pharma (FSDDF) announced that it has notified Health Canada of the company’s decision to forfeit the licenses of its wholly-owned subsidiary, FV Pharma, and suspend all activities by FV Pharma within 30 days of the notification date. FSD Pharma has begun the process of liquidating all FV Pharma assets, including the sale of the company’s cannabis production facility in Cobourg, Ontario. “It is now clear to us that our shareholder value is best served in closing down our medicinal grade cannabis operation in Cobourg, Ontario and reinforcing steps to advance pharmaceutical R&D efforts on our lead compound FSD201 (ultra-micronized PEA) and continuing to explore the acquisition of other compelling compounds to expand our drug development pipeline,” said Raza Bokhari, MD, executive co-chairman & CEO. Read More (Business Wire)
Emerald Health to sell Quebec subsidiary for $21 million. Emerald Health Therapeutics (EMHTF) and Quinto Resources announced that they have entered into a share purchase agreement dated July 30, 2020 in respect of the sale of Emerald’s wholly-owned subsidiaries, Verdélite Sciences and Verdélite Property Holdings. The subsidiaries together own and operate a premium 88,000 square foot craft cannabis production indoor facility in St. Eustache, Québec. Pursuant to the agreement, Quinto will purchase all of the issued and outstanding shares of the subsidiaries in consideration for a cash purchase price of $21,000,000, subject to a 90-day working capital adjustment and certain other adjustments. Closing of the transaction is anticipated to occur on or before August 31, 2020. Read More (New Cannabis Ventures)
Khiron passes 1,000 patient prescriptions in Colombia. Khiron Life Sciences (KHRNF) issued a corporate update, chief among which included the announcement that the company has seen its medical patient prescription figure cross the 1,000 mark in Colombia alone as the company continues to dominate the Latin American market. Furthermore, the firms own telehealth platform accounted for 55% of those prescriptions to date, with the platform being effective in expanding the geographic presence of its patients. Khiron’s foothold on the Colombian market doesn’t stop there however, with the firm being the only firm in the country to date that is authorized to sell both high and low THC formulations of medical cannabis within the country. Read More (the deep dive)
Aphria reports quarterly EBITDA growth, net loss in Q4. Aphria (APHA) reported strong quarterly EBITDA growth, despite coronavirus-related impairment charges from its international operations that contributed to a net loss. The company reported adjusted EBITDA of CAD $8.6 million ($6.4 million) for the quarter ended May 31, up 49% from the third quarter. Net revenue grew by 5% from the previous quarter to CAD $152.2 million, with net cannabis revenue of CAD $53.1 million as gross adult-use revenue increased by 27% over the previous quarter. Aphria’s average gross selling price for a gram of recreational cannabis decreased by 4.4% quarter-over-quarter to CAD $5.23. The company cited increased consumer demand for its Good Supply value brand and “price reductions in key markets to solidify market share.” Read More (Marijuana Business Daily)
GTEC Holdings posts 36% sequential decline in Q2 revenue, takes $197,000 loss. Kelowna, B.C.-based craft cannabis producer GTEC Holdings (GGTTF) reported its second-quarter earnings, posting a 36 percent decline in revenue to $1.5 million from the prior three-month period. It also booked a net loss of $197,000, better than the $815,000 net loss reported in the prior quarter, the company said. The company CEO Norton Singhavon said in a statement the revenue decline was attributed to the COVID-19 pandemic as well as packaging bottlenecks. Read More (GTEC Holdings)
Delta 9 provides preliminary Q2 results, sees sales rising as much as $13.2 million. Cannabis retailer and producer Delta 9 Cannabis (VRNDF) reported preliminary second-quarter results, stating the company anticipates revenue for the quarter will come in between $12.7 million and $13.2 million. That would be a slight improvement from the $11.7 million in sales the company reported in its prior quarter. The Winnipeg-based company stated that according to its expected revenue and production costs, it should generate positive cash flows from its operations in its current fiscal year. Delta 9 will report its second-quarter results on August 14. Read More (GlobeNewswire)
Scotts Miracle-Gro increases guidance as Hawthorne sales hit $300 million. Scotts Miracle-Gro (SMG) reported fiscal third-quarter sales increased 28% to $1.49 billion, beating analyst estimate for $1.3 billion (Yahoo! Finance). Hawthorne sales increased 72% to $302 million versus $176 million for the same time period a year ago. The U.S. consumer increased by 21% to $1.08 billion from $889.1 million. The continued strength of the business in fiscal 2020 caused Scotts to increase its guidance for full-year sales, adjusted earnings, and free cash flow. The new sales forecast for fiscal 2020 is for 26-28% growth and is estimating the U.S. consumer segment grows 20-22%. Hawthorne sales are forecast to grow 55-60%. Scotts had said back in June, that it expected U.S. consumer sales to increase 9-11% in fiscal 2020 and Hawthorne to increase 45 to 50%. Read More (Green Market Report)
Liberty Health Sciences Q1 revenue increases 234% to CAD $18.4 million. Liberty Health Sciences (LHSIF) announced its financial results for the first quarter ended May 31, 2020. The company’s consolidated net sales in 1Q20 were CAD $18,440,756, compared with CAD $5,520,561 in 1Q19 while the company reported adjusted EBITDA of CAD $4,583,269, compared with negative adjusted EBITDA of CAD $3,646,809 during the same time period. The company has opened 26 dispensaries to date throughout Florida and has signed lease agreements for another ten new locations to open. As Liberty continues to accelerate expansion of new dispensary locations, the company has increased its cultivation and processing capacity on its 387-acre state-of-the-art Liberty-360 facility, which is comprised of 300,000 square feet of greenhouse processing and production space. Read More (New Cannabis Ventures)
Cannabis investment vehicles long for high times. With valuations across the industry in a continuing slump from highs in early 2019, special purpose acquisition companies (SPAC) are scrambling to find viable acquisition candidates that fit their revenue and valuation mandates, raising pressure on these managers and their investors, advisors said. “They are starting to come up against their termination dates and they will start getting desperate,” said Hershel Gerson, CEO of ELLO, who advises on cannabis mergers and acquisitions, capital raises and other deals. And now, with the industry still struggling with growing pains, fewer companies are available for SPAC transactions at last year’s valuations, leaving many SPACs struggling to find acquisition candidates with substantial revenue and profitability metrics. Read More (Forbes)
Hemp companies in financial trouble have legal bankruptcy options not offered to marijuana operators. Hemp companies have experienced a perfect storm of obstacles since legalization in late 2018—an uncertain regulatory environment, overproduction in 2019, ongoing challenges with access to banking and financial services and, now, COVID-19. In short, the odds are stacking up against hemp entrepreneurs. Bill Hilliard, CEO of Winchester, Kentucky-based Atalo Holdings, a hemp and CBD company that filed for Chapter 7 bankruptcy protection in April, said the current, challenging state of the hemp market stems from a number of factors that are beyond the control of most hemp companies, including regulatory uncertainty due to a delay of guidelines from the U.S. FDA and the continued struggle to secure financial services from lenders and credit card-processing companies. Read More (Hemp Industry Daily)
Bankruptcy lessons learned from a Kentucky hemp pioneer. Bill Hilliard, CEO of Winchester, Kentucky-based hemp company Atalo Holdings, said while the uncertainties confronting the hemp industry have cost many companies dearly—especially over the past year—there is much to learn from the outcome. “People need to know that there are great opportunities in the hemp industry, and I think those opportunities still exist, but I think they need to be tempered with a little bit of rational thinking as to what are the best ways to pursue those opportunities. They’re just not as expansive as they once were,” Hilliard said. “My advice is to have a controlled growth strategy as opposed to just grow as fast as you can. I think a lot of hemp companies grew to stay ahead of the competition as opposed to growing in order to create a valid marketplace.” Read More (Hemp Industry Daily)
Aphria announces $100 million at the market offering. Aphria (APHA) announced that it would be conducting an at-the-market offering for gross proceeds of up to $100 million, despite a reported cash balance of CAD $497.2 million. The distribution of such shares is to occur on both the Nasdaq and the TSX. The program announced will remain in place until December 22, 2021 at the latest, with net proceeds from the financing to fund Canadian and international expansion, working capital, and general corporate purposes. Or, as the company says, to repay indebtedness. The distribution will be made pursuant to an agreement entered into between Aphria, Jefferies, and Canaccord Genuity, whom will be conducting the share sales on the open market. Read More (the deep dive)
Cannabis layoffs will likely continue as market stabilizes. Thousands in the cannabis industry have lost their jobs on the heels of the COVID-19 pandemic. Canopy Growth (CGC) and Aurora Cannabis (ACB) announced layoffs and office closures, respectively. Startups Flowr (FLWPF) and Leafly also blamed coronavirus fears for their job cuts. Some cannabis companies, such as Wana Brands, have begun rehiring furloughed employees. However, job reductions appear to be on tap for the foreseeable future, sources told Benzinga. “In light of the COVID-19 pandemic and the escalation in cases in the U.S., it’s difficult to say when job reductions will end,” said Nichole McIntyre, human resources director of Urban-Gro. Read More (Benzinga)
Jushi upsizes debt financing to $33.3 million. Florida-based multistate marijuana and hemp operator Jushi Holdings (JUSHF) increased a debt financing announced in late July by roughly $18 million, citing strong demand from shareholders and management. The debt financing, which was meant to fund Jushi’s $37 million purchase of grower-processor Pennsylvania Medical Solutions (PAMS) from Minneapolis-based MSO Vireo Health International (VREO-CA), was previously worth $15.25 million However, Jushi said that the debt financing had closed on $33.3 million worth of subscription receipts, yielding $27.8 million in cash proceeds. “This debt raise solidifies our balance sheet and provides ample liquidity to support our rapid expansion in the high-quality markets that we operate in today,” Jushi CEO Jim Cacioppo said in a news release. Read More (Marijuana Business Daily)
SEC complaint: 400 investors defrauded of $25 million for supposed marijuana farm, CBD extraction facility. The U.S. SEC is accusing six individuals of fraudulently raising $25 million from 400 investors for a part in a supposed marijuana farm and CBD extraction facility. The money was raised from people across the country between September 2017 and February 2019, according to the complaint filed in California federal court. The accused individuals are all from California or Arizona and their companies were all based in California. The lawsuit alleges that one group of companies raised about $12.3 million from approximately 226 investors for a marijuana farm in Salinas, California. Another group of companies raised about $13.2 million from approximately 211 investors for an extraction facility to produce CBD, also in Salinas. Read More (Hemp Industry Daily)
Cannabis breeders are widely undervalued. This company wants to change that. One of the most significant factors that will determine a cannabis plant’s quality (and therefore its value) is its genetics. Unfortunately, current cannabis market dynamics have made it very difficult for breeders to be fairly compensated and adequately incentivized for sharing their contributions. Due to cloning, breeders are not able to protect and monetize their prized genetics. That’s a major problem—not just for breeders, but for the entire cannabis community. For this reason, three cannabis industry pioneers have started a business that offers a solution. Breeder’s Best seeks optimized chemovars (“chemical varieties” that are erroneously termed “strains” in common parlance) to help the plant meet its full therapeutic potential, thereby making cannabis safer and better. The company is the brainchild of cannabis researcher Dr. Ethan Russo, botanist and author of Marijuana Botany & Cannabis: Evolution and Ethnobotany, Robert Clarke, and plant scientist turned intellectual property (IP) attorney, Dale Hunt, Ph.D. Read More (Green Entrepreneur)
Medical marijuana sales in Rhode Island climb again. Sales of medical marijuana in Rhode Island climbed again in the fiscal year that ended in June, the third consecutive year of increased sales. The Department of Business Regulation estimates Rhode Island’s three dispensaries sold almost $60 million in medical marijuana, up from $53.5 million the year before, the Providence Journal reported. The department calculates the amount based on revenues from the state’s 4% surcharge imposed on medical marijuana sales. Last year, state legislators passed a budget that included plans to open six new dispensaries in Rhode Island. Interested applicants can apply to be included in a lottery that will distribute the new licenses. The six new dispensaries will not be allowed to cultivate their own marijuana initially, unlike the three existing dispensaries. Rhode Island levees a $500,000 licensing fee on dispensaries, one of the highest in the country. Read More (WHDH 7News)
Medical marijuana in Oklahoma a huge hit. Oklahoma’s booming medical cannabis sales continued in June, but it seems that the meteoric growth observed this spring is slowing. Based on tax collection information from the Oklahoma Medical Marijuana Authority (OMMA), June’s medical cannabis sales in the state reached nearly $80 million, another new record for the young market. Similar to May, it is likely that retail medical cannabis sales in Oklahoma in June outpaced adult-use sales in all but the big four Western markets. June sales in Oklahoma are up by 8% compared to over $73.8 million in May. In April and May of this year, however, sales grew by 25% and 20%, respectively. Given the slowing growth rate, it is possible that sales in the state are approaching a peak. While new demand is entering the market, the number of new businesses licensed to meet it is also on the rise. Read More (Cannabis Benchmarks)
As Maryland’s medical marijuana market ascends, diversity issues linger. The medical cannabis market in Maryland is flourishing, with sales rapidly moving toward half a billion dollars a year. Experts credit that success, in part, to clear and transparent regulations – and regulators who have balanced compliance with patient access. But a huge lingering issue looms: litigation and investigations into a 2019 licensing round that was designed to boost diversity in the industry. Four cultivation and 10 processing licenses hang in the balance, as does the state’s reputation to provide fair access to minorities and women. With huge state funding shortages because of the massive impact of the coronavirus crisis, Maryland is under increasing pressure to legalize recreational marijuana. Read More (Marijuana Business Daily)
Hemp-CBD wholesale products show price stability through July 2020. After observing substantial price declines virtually across the board since spring 2019, Hemp Benchmarks price assessments have in recent months shown stabilizing rates for numerous wholesale products that are part of the hemp-CBD supply chain. For example, from April through this month, the aggregate price for CBD Biomass has remained stable. Wholesale prices for smokable bulk CBD Flower have also steadied since April. This month also saw prices tick upward for most forms of extracted CBD products covered in Hemp Benchmarks’ reporting, with that for THC Free Distillate seeing the most notable increase. In addition, COVID-19 is causing shipping costs to rise. Read More (Hemp Benchmarks)
Louisiana industrial hemp hit hard by southern blight. Louisiana’s first industrial hemp crop is getting hammered by a fungal disease called southern blight. LSU AgCenter plant doctor Raj Singh says the disease is caused by a soilborne fungus called Sclerotium rolfsii. “The pathogen has a wide host range and is known to cause disease on more than 500 plant species in 100 plant families,” Singh said. “Some of the economically important vegetables include tomatoes, potatoes, peppers, eggplants and cucurbits.” The fungus also affects a wide variety of woody ornamentals, annual and perennial herbaceous, and bedding plants. Hemp plants infected with southern blight start to wilt initially and later on turn brown and eventually die, Singh said. Read More (KATC)
Navy bans hemp shampoo for sailors and marines as part of broader CBD prohibition. The Navy is expanding its CBD and hemp ban for sailors and marines to cover topical products like shampoos and soaps derived from the federally legal crop, going beyond a previous prohibition focused on consumable preparations such as oils and tinctures. In its new memo, the Navy clarified that “use” of banned products “includes the use of topical products containing hemp, such as shampoos, conditioners, lotions, lip balms, or soaps.” That language did not appear in either of its earlier hemp policy notices, including one released earlier this month. It’s not clear what’s behind the rule’s expansion, but military branches have been consistently warning service members about consuming hemp-derived cannabinoids despite the crop’s federal legalization under the 2018 Farm Bill. Read More (Marijuana Moment)
California pharma company announces plans to buy CBD beauty, pet brand. Oxnard-based CURE Pharmaceutical (CURR) said it had reached an agreement with Los Angeles-based Sera Labs to acquire 100% of the privately owned company for $20 million. The offer consists of $19 million in CURE stock and $1 million in cash, with an additional $4 million of working capital to support Sera Labs’ growth, according to the company’s statement. The deal is expected to close in the fourth quarter of this year, pending a definitive agreement and customary closing conditions, the statement said. “Our acquisition of Sera Labs will add to CURE a growing brand portfolio and monetization platform that fits remarkably well with CURE’s development capabilities, products, and existing market verticals,” CURE Pharmaceutical CEO Rob Davidson said in a statement. Read More (Hemp Industry Daily)
CBD a safe treatment for cannabis use disorders, study finds. People with cannabis use disorders can safely use cannabidiol, or CBD, to reduce their reliance on the drug, a study published by The Lancet Psychiatry found. Although the Phase 2 study was designed to assess safety – and not effectiveness – of CBD for cannabis use disorder, preliminary findings indicate that a daily dose of 400 or 800 milligrams helps people with the condition abstain from using the drug, researchers said. However, they cautioned against “self-medication” with commercially available products because they do not contain enough CBD — usually about 25 mg. — and have not been tested for quality and safety. “Our study provides the first causal evidence to support CBD as a treatment for cannabis use disorders,” study co-author Dr. Tom Freeman said in a statement. Read More (United Press International)
Tough fiber: Hemp making (slow) inroads into the textile market. Attentive shoppers walking through a Macy’s department store last winter might have spotted a rarity in the bedding department: hemp sheets, advertised as being 100% made from the plant’s fibers. The sheets were a rarity because such textiles are “a brand-new category” in the market, according to Michael Twer, who founded Delilah Home, the Weddington, North Carolina-based company that makes the product. Currently, 100% hemp textiles cannot be made in the U.S. because of a lack of equipment. “The U.S. does not have the machines or the technology yet to produce the high-quality textiles that I want to produce,” said Twer. Twer and others say its possible prices for hemp textiles will come down eventually. The demand is there, he said, but there isn’t enough processed hemp fiber. That’s because making hemp textiles is an arduous and expensive process, especially when the right machinery isn’t readily available. Read More (Hemp Industry Daily)
Federal scientists launch hemp program to help standardize testing methods. A federal science agency has unveiled a new program to help commercial and forensic labs agree on the techniques, technologies, and reference standards used to test hemp. Beyond this initial goal, the scientists behind the new initiative at the National Institute of Standards and Technology (NIST) plan to help standardize the testing methods used for cannabis products, such as edibles, tinctures, and balms. “The main goal is to promote improvement in analytical measurements and collaboration throughout the community,” told Brent Wilson, a research chemist at NIST and member of its Cannabis Quality Assurance program. Read More (Analytical Cannabis)
FDA reissues post on recall of lead-contaminated CBD oil from Florida manufacturer. The U.S. FDA has updated a post on its website to spread the word about a Florida company that recalled a batch of CBD oil after a state agency tested the product and found that it contained dangerous levels of lead. Summitt Labs is voluntarily recalling Lot #730 Batch #K018 of its Kore Organic Watermelon CBD Oil Tincture, sold in a 30-milliliter bottle. According to the FDA, the Florida Department of Agriculture and Consumer Services tested a random sample and found the product to contain lead levels at 4.7 parts per million. The FDA noted that it had updated the post to correct the lot number and batch number of the contaminated product, but reports from May appear to indicate that the correct lot and batch were cited in the original FDA posting. The Tampa-based CBD maker had already issued an immediate voluntary recall for the product at the consumer level in May. Read More (Hemp Industry Daily)
Ontario to open second cannabis warehouse ‘by September,’ analyst says. Ontario’s lone cannabis wholesaler and distributor received the green light from the provincial government to expand its privately operated distribution network when necessary, an Ontario Cannabis Store spokesperson told Marijuana Business Daily. A new distribution warehouse could come sooner than later, according to one analyst, potentially providing the slack the system currently lacks to open stores faster and giving a much-needed boost to stores and producers. “Ontario is expected to open a second distribution warehouse by September, which we believe should drive an increase in sell-in” in the fourth quarter of 2020, Bank of Montreal analyst Tamy Chen wrote in a note to investors, citing industry sources. Sell-in refers to sales by federally licensed producers to the provincial distributor. Read More (Marijuana Business Daily)
How can Ontario retailers compete with the illicit market? There are many reasons why fighting the illicit market should be a top priority for governments. According to the Ontario Chamber of Commerce, the province will lose about $180 million in economic activity because licensed cannabis retailers are not allowed to provide delivery or curbside pickup services. Ontario’s government has said many times that it is committed to wiping out the illicit cannabis market. Ontario’s licensed cannabis retailers want to help the government do that, but they lack the tools to succeed. It is time for the provincial government to step up and support small business owners struggling to compete with the illicit cannabis market by removing the cap on new store authorizations, allowing licensed retailers to permanently offer home delivery through online sales, and by working with the OCS to ensure a more competitive pricing framework. Read More (Cannabis Retailer)
Cannabis edibles maker Medically Correct ends deal with Schwazze. Medically Correct, a longtime Denver-based marijuana edibles maker, announced it will not proceed with a proposed acquisition by Schwazze (MDCL). It’s one of several such deals to fall apart in recent months for Schwazze, also based in Denver. “Our decision to terminate this acquisition comes as we shift our focus toward the development and national expansion of our new brands,” Bob Eschino, president of Medically Correct, noted in a news release. “We want to continue to work alongside Schwazze as an ally in the space.” Schwazze, formerly Medicine Man Technologies, went on an acquisition spree in 2019 and looked to be growing into a behemoth in Colorado. Read More (Marijuana Business Daily)
CALIHASH aims to give pre-rolls a new name with its line of ice water hash hybrids. CALIHASH aims to kill, or rather revive, two birds with one stone with its new line of ice water hash-infused pre-rolls. Being a premium, California-based hash brand that specializes in ice water solventless extraction – a method synonymous with purity and safety from its manual nature and lack of chemicals and concomitant residues – the company believes its infused (hash + flower) pre-rolls have all the makings to help consumers see hash and pre-rolls in a new light. “We address the more poignant negativity by explaining our process, clean water and ice = clean hash. Mostly people just don’t know and once we explain our basic process and tenants as a company, they are immediately converted to fans,” Michael Domecq, CALIHASH’s CEO, explains. Read More (Extraction Magazine)
U.S. cannabis employment could climb nearly 50% in 2020, surpassing computer programmers. The number of people working in the U.S. cannabis industry is expected to jump to 240,000-295,000 by the end of 2020, slightly higher than the number of computer programmers employed in the U.S. The anticipated rise in cannabis employment represents a nearly 50% increase over 2019 levels, which was estimated at 165,000-210,000 in the newly released Marijuana Business Factbook. Cannabis employees include people directly working in the sector, such as budtenders and extraction technicians, as well as employees of ancillary companies – think consultants and lawyers – who support the marijuana industry. Sustained sales growth, especially in recreational markets, will continue to fuel job growth in the cannabis industry. The Marijuana Business Factbook estimates that between 2020 and 2024, the industry will add nearly 250,000 full-time equivalent jobs. Read More (Marijuana Business Daily)
Paraguay to begin hemp marketing soon. Paraguay’s Ministry of Agriculture says marketing hemp products in the country could start as soon as December, with the help of a government program. The announcement came recently after Moises Bertoni Hicar, a deputy in the ministry, met with the Association of Roseño Producers, a group that represents 164 growers, Hemp Today reported. Last year, the Ministry of Agriculture approved a request from a farming and agriculture consulting firm, Healthy Grains SA, to import seed varieties from Hungary, France, China and the U.S. With the assistance of the Paraguayan Institute of Agrarian Technology, Healthy Grains is conducting trials to determine which seeds are more adaptable to the country’s soil and climate. Read More (Hemp Industry Daily)
Australia’s medical cannabis market: Lots of potential, yet few patients. By the numbers, Australia’s medical cannabis market is booming: In 2017, only 457 patients on the continent had access to medical cannabis. By December 2020, the market will support a projected 25,000–30,000 active patients, and based on the current rate of growth Australian health regulators expect the number of medical cannabis prescriptions to reach at least 70,000. While Greg Hunt’s, Australia’s Minister of Health, goal for Australia as a global supplier of medicinal cannabis products appears to be making headway, there remain challenges at home: Chiefly, that Australia is not supplying Australian patients with medicinal cannabis products. According to the Medicinal Cannabis Industry Australia (MCIA), the amount of cannabis licensed and permitted to be cultivated does not reflect the actual amount of medicinal cannabis currently available. The MCIA estimates that at least 95% of current prescriptions and approvals for medical cannabis are being supplied by imported products; the health department estimates that in 2019 approximately 10% of prescriptions involved locally cultivated and manufactured products. Read More (New Frontier Data)
Netherlands receives 149 applications for recreational cannabis grow trial. The Dutch government received 149 applications to grow adult-use marijuana to be sold to coffee shops in the 10 municipalities that are part of an upcoming experiment. The applications now will be evaluated by the government, which recently communicated that “a maximum of 10 growers” are expected to be selected “in early 2021.” Applications were accepted from July 1 to July 28. Applicants were required to submit various documents, including a cultivation proposal detailing a candidate’s capability to grow at least 6,500 kilograms (14,330 pounds) of flower per year as well as security and business plans. However, successful applicants won’t be obligated to grow 6,500 kilograms during the trial nor meet a production quota. Rather, supply and demand will regulate how much adult-use cannabis growers effectively produce and sell. Read More (Marijuana Business Daily)
German imports of cannabis flower up in first half of 2020 versus 2019. Germany imported 4,126 kilograms (9,096 pounds) of medical cannabis flower for pharmacy dispensing during the first half of 2020, an increase of more than 60% compared to the same period last year, new government data shows. A small part of the imported flower could’ve been re-exported to other European countries, including the Czech Republic, Italy, Luxembourg, Malta and Poland. According to data from Germany’s Federal Institute for Drugs and Medical Devices (BfArM), the nation’s imports of medical cannabis flower during the first half of this year were up 63% versus the same period in 2019. Read More (Marijuana Business Daily)
European-grown cannabis flower variety now available to German pharmacies. Berlin-based CanPharma is believed to be the first company to offer in Germany “a German brand of medical cannabis flower sourced from a non-Canadian (owned) production facility,” the firm’s chief financial officer told Marijuana Business Daily. According to CFO David Attwood, the flower is produced in Europe in an EU-Good Manufacturing Practice-certified facility. He declined to reveal the country or the identity of the supplier, citing confidentiality obligations. He also declined to comment on the quantities of medical cannabis that already have been imported. Attwood said the product is already available in Germany, with the first deliveries to pharmacies having been made in late July. The new product underscores an increasing intra-EU trade – in this particular case, independent from Canadian producers – and an increasing competition in the flower segment. Read More (Marijuana Business Daily)
Switzerland refunds $36 million in taxes levied on low-THC cannabis growers, sellers. Swiss customs officials have returned approximately CHF 33 million ($36 million) to low-THC cannabis flower producers and sellers after a court said their products were unconstitutionally taxed as a tobacco substitute. CBD sellers in Switzerland had taken legal action to protest the 25% sales tax imposed on their goods as tobacco substitutes, according to a June 5 report from the Neue Zürcher Zeitung newspaper. The Federal Supreme Court in Lausenne ruled in January that there was no legal basis to impose tobacco tax on the CBD products. “After an in-depth analysis of the judgments, the Federal Customs Administration has now decided to reimburse all manufacturers in question of the tobacco tax in question,” the customs agency wrote on its website in June. Read More (Hemp Industry Daily)
Cannabis light: The confusing illusion of legal marijuana in Rome. “Cannabis light” is a strain of cannabis that has a very low level of THC. AP News aptly describes cannabis light as the “decaf coffee” of marijuana. Though it is marketed as a marijuana-style product, it is more closely related to hemp. The common THC level of cannabis light is 0.2% to 0.6%. In Italy, cannabis light is sold in a dried form that looks identical to marijuana—so much so that it must be labelled as a collector’s item to evade laws regarding the sale of marijuana, and every package comes with a “not suitable for smoking” sticker. Cannabis light dispensaries can be found all over central Rome, and all of Italy. Many are stationary shops, while others come in the form of discreet vending machines. Read More (Wanted in Rome)
Thai hospitals get the go-ahead to produce traditional cannabis medicines. Thailand is warming to cannabis with the announcement that some hospitals can now legally produce traditional medicine containing cannabis as long as a traditional Thai medicine expert is on duty to prepare them. The traditional medicines are treatments for common illnesses in some provinces, says the Department of Thai Traditional and Alternative Medicine in Bangkok Post. The medicines can only be from among the 16 recipes permitted by the Thai government that include cannabis as the base ingredients, said Marut Jirasetthasiri, director-general of the department. Read More (Regina Leader-Post)
Willow Biosciences announces it has commenced its pilot to produce its first cannabinoid. Willow Biosciences (CANSF) announced that it has commenced its 500-liter pilot production run to deliver samples of its first cannabinoid, cannabigerol (CBG), in Q3 of 2020. “This is a significant milestone for Willow and is a result of 16 months of hard work and scientific breakthroughs from our science team,” said Trevor Peters, Willow’s chief executive officer. “We will be the first company to biosynthetically produce material amounts of cannabinoids when our samples of CBG are ready in Q3 of this year. This pilot is ahead of schedule in part due to our industry-leading science team, but also due to strong demand from major global consumer packaged goods entities. In our discussions with companies manufacturing consumer products with cannabinoids as ingredients, it is clear that there is significant demand for ultra-pure, pharmaceutical grade cannabinoids.” Read More (Newswire)
West Virginia professor gets $200K from feds to study THC changes in hemp plants. Federal agriculture authorities have awarded $200,000 to a West Virginia University professor to study what leads to inconsistent levels of THC in hemp plants, sometimes above what’s legal. Michael Gutensohn, an assistant professor of horticulture will be collaborating with two former WVU faculty members for the project, which includes seeing what genetics and environmental factors lead to THC accumulation in plants. The study is funded by a research arm of the U.S. Department of Agriculture, the National Institute of Food and Agriculture. Gutenshon says evidence that environment plays a role in a hemp plant’s THC level has been circumstantial and not scientifically analyzed, according to the West Virginia Explorer. Read More (Hemp Industry Daily)
Advances in cannabis dewaxing technology transform production. Cannabis naturally produces fats, lipids, and waxes, but in concentrates, they pose issues. Not only do fats and lipids cloud up a cannabis concentrate, but they mean the substance is less potent. Typically dewaxing involves completely dissolving a sample in a solvent. Traditional dewaxing methods are effective at purifying samples but inconvenient. While before it could take an entire day to wait for freezing samples, there are now superior methods. A few years ago, Jon Thompson of United Science wanted to innovate the world of dewaxing. His solution was to take ineffective Buchner burners, glass tubes, and replace them with stainless steel. The technology behind DrainDroyd also prevents fats and lipids from reabsorbing into the concentrate. While the DrainDroyd proves to be one of the most efficient options on the market, artisan producers are finding themselves in love with live resins. While producers may get particular in the production of cannabis concentrates, the quality and rate of production only improve every year. Read More (Cannabis Tech)
Getting onboard with the coming cannabinoid caravan. In a New Frontier Data’s cannabinoid webinar, Stephen Groff, founder of Groff North America, said that they have been approved by both the U.S. FDA and the DEA as an authorized Schedule I researcher permitted to conduct trials on the antimicrobial properties of cannabis. Given the established regulatory obstacles associated with obtaining U.S. federal approval for cannabis-related research, the news was welcomed as a major milestone by both the legal cannabis industry and research communities. “I think this represents at least the first crack in what has been a major dam to advancing U.S.-based cannabis research,” noted chief knowledge officer John Kagia of New Frontier Data. Read More (New Frontier Data)
Cannabinoid profiling in the cannabis lab. Cannabinoid profiling is about more than just measuring the potency of a strain or a product. With over 70 known cannabinoids present in the cannabis plant – many of which are pharmacologically active – alongside numerous other terpenes and phytochemicals, it is important that researchers and testing staff look at more than just the THC content when examining cannabis material. “There is ongoing research about the pharmacological actions of various cannabinoids and other cannabis constituents,” says Dr Holly Johnson, chief science officer at the American Herbal Products Association. “Looking at the wider fingerprint of cannabinoids and other phytochemical constituents of a given extract may be of interest to consumers seeking certain types of benefits.” Read More (Analytical Cannabis)
SP Industries announces partnership agreement with Ecodyst to distribute single sample evaporation systems. SP Industries CEO Brian Larkin has announced the signing of a partnership agreement with Ecodyst (NC, U.S.). In making the announcement Larkin stated, “This new partnership enables our SP Genevac brand to be the comprehensive, one-stop-shop for all evaporation solutions. Ecodyst’s revolutionary single sample evaporator line complements our SP Genevac world-renowned centrifugal evaporators for parallel sample evaporation and together lets us work with customers more effectively to help streamline and accelerate the drug discovery process.” Read More (Cannabis Business Times)
Staying compliant—and profitable—with Fyllo. Previously, cannabis company legal teams were left to compile registries of applicable laws and regulations on their own. But over the past few months, the compliance situation changed dramatically, and for the better, thanks to an upstart technology company known as Fyllo. Leveraging its expertise in data collection and customized marketing, Fyllo has created an exciting and revolutionary suite of technology products, grouped under the umbrella of its Fyllo Compliance Cloud. The company’s automated software can rapidly and thoroughly scan cannabis laws and regulations –both current and proposed– at the local, state, and federal levels. Fyllo Compliance Cloud users can then order customized reports that cover all the rules and regulatory edicts that apply to their products, product listings, and advertisements. Read More (Cannabis Tech)
LEGAL & IP
How to assess cannabis operator intangible assets. In the last year, a lot of attention has been given to the amount of goodwill on cannabis companies’ balance sheets. Goodwill is often a misunderstood concept. The intent of goodwill is to capture the value of acquired assets that are hard to quantify. When a significant portion of the deal is allocated to goodwill, the acquisition strategy becomes murky – not that it necessarily means the acquirer overpaid – but analysts should try and get a better understanding of the motivation for the deal and the types of acquired assets that are captured in goodwill. Read More (New Cannabis Ventures)
Massachusetts recreational cannabis social equity-boosting measures fail. Efforts to increase social equity funding for adult-use marijuana applicants in Massachusetts and diversify the industry have stalled in this year’s state legislative session. Massachusetts lawmakers declined to endorse a number of last-minute amendments designed to bolster the state’s retail cannabis social equity programs, the Boston Business Journal reported. Massachusetts’s adult-use cannabis program includes social equity provisions, but the efforts have been slow to develop. In fact, the state’s first adult-use store with social equity owners didn’t open its doors until January. Lack of capital often is cited as the biggest barrier. Read More (Marijuana Business Daily)
As Maryland’s medical marijuana market ascends, diversity issues linger. The medical cannabis market in Maryland is flourishing, with sales rapidly moving toward half a billion dollars a year. Experts credit that success, in part, to clear and transparent regulations – and regulators who have balanced compliance with patient access. But a huge lingering issue looms: litigation and investigations into a 2019 licensing round that was designed to boost diversity in the industry. Four cultivation and 10 processing licenses hang in the balance, as does the state’s reputation to provide fair access to minorities and women. With huge state funding shortages because of the massive impact of the coronavirus crisis, Maryland is under increasing pressure to legalize recreational marijuana, said Bridget Hill-Zayat, a Hoban Law Group attorney who is licensed to practice in Maryland, New Jersey and Pennsylvania. But, she cautioned, “I think there are issues absolutely that have to be addressed, including minority ownership.” Read More (Marijuana Business Daily)
Oregon’s easy cannabis licensing rules allow for some social equity, but more funding needed. Oregon’s social equity provisions might be lacking compared to other statewide programs, but some industry analysts cite the relatively low barrier to entry for cannabis entrepreneurs as one way the regulations foster racial diversity. The analysts also point to Oregon’s largest city, Portland, as pushing the conversation forward in terms of greater opportunities for minority cannabis entrepreneurs. The state’s cannabis regulations, for good or ill, are well-known in the industry for offering some of the lowest licensing fees and, for several years, not limiting the number of permits. Those provisions led to an oversupply of wholesale marijuana flower, a steep drop in prices and the departure of companies from the fiercely competitive market. Read More (Marijuana Business Daily)
Hemp concrete: From Roman bridges to a possible material of the future. The use of hemp for civil construction is not new either. Nowadays, although there are legal barriers in many countries, the use of hemp as a construction material has had encouraging results, with research demonstrating its strong thermoacoustic and sustainable qualities. Hemp can be shaped into fibrous panels, coverings, sheets, and even bricks. The innovativeness of hemp concrete as a building material lies in its function as a multi-performance material. It can entirely replace mineral aggregates in conventional concretes, and historically it was added to concretes and mortars to avoid retractions in plaster or clay brick. The mechanical performance of hemp concrete is, however, far inferior to traditional concrete or steel. Read More (ArchDaily)
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