📰 House Approves Cannabis Banking Reform (5th Time) as part of Defense Spending Bill

Cresco Labs acquires Cure Penn (PA) for $90M. SKYMINT acquires 3Fifteen Cannabis, secures $70M Term Loan and $8M Investment. Burb raises $4M. BDSA/Cannabis Market – $30.6B in 2021 to $62.1B in 2026.

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U.S. House Approves Marijuana Banking Reform As Part Of Defense Spending Bill. The U.S. House of Representatives approved an amendment to protect banks that service state-legal marijuana businesses from being penalized by federal regulators. It passed on a voice vote, and no member requested a roll call. The measure is now attached to large-scale defense spending legislation. This action comes hours after the House Rules Committee made in order the amendment from Rep. Ed Perlmutter (D-CO) for floor consideration. It was one of numerous drug policy proposals that lawmakers had hoped to attach to the National Defense Authorization Act (NDAA). This marks the fifth time in recent years that the the House has passed the cannabis banking reform, which has enjoyed broad support both as standalone legislation and while being tucked in as provisions of broader legislation. But while advocates support the proposal, some have made clear that they want to see more comprehensive changes to marijuana laws advance first, complicating the process.

Some cannabis firms see ‘disaster’ in federal legalization. Cannabis entrepreneurs spent decades longing for Washington’s blessing — but now a vocal corner of the industry is afraid federal marijuana legalization poses an existential threat. The prospect of lifting all federal prohibitions has some business owners, regulators and lawmakers afraid doing so too quickly will invite industry behemoths to eat up small companies and push minority-owned firms out altogether. Many states are trying to put guardrails up around their marijuana markets: Maine and Washington are intentionally limiting the industry to help protect small businesses. Others have created licensing requirements that intentionally help communities hurt by the war on drugs, including Massachusetts, which exclusively awarded cannabis delivery licenses to equity applicants in the state for three years. Some industry officials and advocates are requesting immediate descheduling and expunging of records paired with a phased-in approach to interstate commerce. Under such a plan, states such as Oregon and New York could potentially enter into an agreement where Oregon exports cannabis to New York. Or a state like Iowa could throw open the doors to any state that will allow its producers to export. But the borders will not be immediately dismantled, giving smaller businesses the time to adapt and survive.

BDSA Reports Global Cannabis Sales Surge 41% YoY in 2021; Will Surpass $62 Billion by 2026. BDSA updated its cannabis market forecast, a five-year rolling global forecast by country, state, province, channel, and category. Cannabis sales for 2021 will near $31 billion, an increase of 41% over 2020 sales. Further, BDSA forecasts global cannabis sales to grow from $30.6 billion in 2021 to $62.1 billion in 2026, a compound annual growth rate (CAGR) of more than 15%. BDSA forecasts cannabis sales in the U.S. to surpass $24 billion in 2021, a growth of 38% over 2020’s sales, and anticipates the U.S. to reach $47.6 billion in 2026, a CAGR of 14%.

Why Amazon wants to make sure everyone knows it's totally cool with smoking pot now. Amazon is actively lobbying the United States government to federally legalize cannabis. The announcement is the latest volley in Amazon's ongoing efforts to spur federal cannabis legalization in the United States, following an announcement back in June that it would no longer pre-screen employees for cannabis use. Amazon has already spent at least $5M lobbying on cannabis legalization and other issues from April to June of this year. So, why is Amazon so interested in legalizing weed in the US? At least part of the answer has to do with the Amazon warehouses that employ the vast majority of Amazon's hourly workforce. In its announcement, Amazon Senior VP of HR directly attributed the company's interest in cannabis legalization to hiring: "Eliminating pre-employment testing for cannabis allows us to expand our applicant pool," she said. Hourly employees had a turnover rate of about 150% every year, data reviewed by The Times indicated. Of the over 350,000 workers Amazon hired between July and October 2020, many stayed with the company "just days or weeks," the report said. The problem is reportedly big enough that some Amazon execs worried they would run out of hirable Americans.

New York’s marijuana regulatory board finally in place. New York’s governor appointed the final two members of the board that will oversee the state’s nascent recreational marijuana program, meaning there might soon be some movement in getting the state’s adult-use market up and running. Gov. Kathy Hochul completed the New York Cannabis Control Board by appointing: Reuben McDaniel, the president and CEO of the Dormitory Authority of New York State, and Jessica Garcia, the assistant to the president of the Retail, Wholesale Department Store Union. They join two previous appointees – Adam Perry and Jen Metzger—as well as previously appointed Tremaine Wright and Chris Alexander. Wright will serve as chair of the Cannabis Control Board and the Office of Cannabis Management, Alexander as executive director of both agencies.

Greener pastures: Marijuana jobs are becoming a refuge for retail and restaurant workers. The cannabis industry is riding a pandemic high: Marijuana dispensaries and cultivation facilities — deemed “essential” by many states at the beginning of the coronavirus crisis — became an early refuge for retail and restaurant workers who had been furloughed or laid off. The industry has continued to grow, adding nearly 80,000 jobs in 2020, more than double what it did the year before, according to data from the Leafly Jobs Report, produced in partnership with Whitney Economics. An estimated 321,000 Americans now work in the industry, a 32% increase from last year. Retail workers in particular are quitting at record rates, in search of consistent hours, better benefits and more opportunities to advance — which many say they’re finding in the legal cannabis industry.

Canadian Cannabis Sales Increased 46% Y/Y in July to Record $339 Million. Statistics Canada released July retail sales for the country this morning, with cannabis sales increasing from June, which had one less day. Sales of C$338.9 million, a record high, rose 6% from June, an acceleration in the sequential gains experienced over the prior three months. The record sales were up 45.6% from a year ago, the lowest annual growth to date and down from 58.5% in June.


Cresco Labs — Acquire Three High-Performing Pennsylvania Dispensaries. Cresco will acquire 100% of the outstanding equity interests in Bay, LLC d/b/a Cure Penn for an aggregate consideration of $90M. The Transaction is expected to close in Q4 of 2021. Cure Penn operates three dispensaries in Lancaster, Phoenixville, and Philadelphia. Cure Penn dispensary locations will be incremental and complementary to Cresco Labs’ four existing Sunnyside dispensaries in Pennsylvania and will add stores that outperforms the average revenues per-store in Pennsylvania.

SKYMINT — Acquires 3Fifteen Cannabis and Completes Concurrent $70M Debt Financing from SunStream Bancorp and $8M Investment from Merida Capital, Solidifying its Position as Michigan's top Cannabis Cultivator, Manufacturer, Retailer, and Employer. With the acquisition of 3Fifteen Cannabis - a portfolio company of Merida Capital with 12 dispensaries currently in operation throughout Michigan - SKYMINT now has the capability to serve nearly 90% of adult Michigan residents in a market valued at $3.2B that has embraced the freedom to consume cannabis recreationally since 2019. SKYMINT's newly expanded retail presence of 27 locations gives the Company the largest cannabis retail footprint across Michigan. No less than three additional SKYMINT storefronts are slated to launch in 2021, and 15 more locations are poised to open in 2022, further fortifying SKYMINT's position as Michigan's top vertically integrated cannabis operator. The Company has dominant market share in 4 key Michigan regions: Grand Rapids, (4 locations), Greater Lansing (4 locations), Detroit / Metro Detroit (5 locations), and Ann Arbor (2 locations). Combined, the companies will have two indoor cultivation facilities totaling 77,000 square feet with a third indoor cultivation facility—totaling 184,000 square feet - due to come online next year, and a 1,000-acre sustainable, sungrown farm (Michigan's largest outdoor cannabis farm).

Burb —$4 Million Funding Round to Expand Retail Operations In British Columbia and Launch Products In Ontario and United States. The funding was led by PE firm KarpReilly with participation from American record label 300 Entertainment CEO and Co-Founder Kevin Liles. Burb plans to deploy this capital to increase its network of cannabis retail stores in British Columbia (BC) and to support the launch of its private label, Burb-branded cannabis products across Canada and into California. The funding round closes on the heels of the Company's newly signed consumer packaged goods (CPG) brand licensing agreements with Canadian cannabis producers Citizen Stash and California-based cannabis group Martin Holdings, Founded by American Rap Artist, Songwriter and Entrepreneur Jason "Problem" Martin. Burb currently operates three licensed cannabis retail stores in Vancouver's lower mainland and recently received its fourth retail license in the city of Vancouver. The Company has a pipeline of BC-based stores under lease with licenses pending, in order to open and operate up to eight stores in the province.

📄Company Updates / Earnings

MedMen — Q4 2021

  • Revenue was $42.0M, up 55.4% Y/Y and up 18.5% Q/Q

  • Gross Margin was 46.9%, compared to 40.5% in the previous quarter, driven by the increased gross margin at its cultivation and manufacturing facilities. Retail Gross Margin Rate was 54.9%, compared to 55.6% in the previous quarter

  • General and administrative expenses were $33.5M

  • Corporate SG&A excluding store pre-opening costs totaled $12.1M, a 9.7% increase from the previous quarter

  • Net loss was $46.2M compared to a net loss of $9.7M in the previous quarter, which prior quarter included a $32.7M tax provision benefit

  • Retail Adjusted EBITDA Margin Rate from continuing operations was 22.0%

  • As of June 26, 2021, the Company had total assets of $472.5M, including cash and cash equivalents of $11.9M

Body and Mind — Commences Michigan Vertical Market Expansion. BaM, through wholly owned subsidiaries, has leveraged its expertise of navigating licensing and approval processes gained with other state and local authorities, adding Michigan to its growing list of license successes. The Company has leased a commercial building in Manistee, MI with the intent of developing a cultivation facility with 50,000 square feet of canopy as well as a production facility. Architectural plans are complete for phase one which is planned for 20,000 square feet of canopy, 5,000 square feet of processing and 5,000 square feet of multi-use and office space. The second phase of development is planned for 30,000 square feet of canopy. Body and Mind, through a wholly owned Michigan subsidiary, has received local and state licensing for its first Michigan dispensary, located in Muskegon. This is a social equity license granted in a limited license jurisdiction. Architect plans are complete, the Company has received its building permit, and construction has started on the leased building.

Ayr Wellness — Reminds Holders to Take Immediate Action Regarding Exercise of Warrants. Ayr is providing a reminder that the right to convert the Company’s share purchase warrants into shares of Ayr will expire on September 30, 2021. The Company is providing a further reminder the Warrants must be withdrawn from Clearing and Depository Services (CDS) to permit cashless or cash incentive exercises by the Expiry Date. Full details of the process for converting the Warrants were provided by the Company on August 31, 2021 and reiterated on September 21, 2021. Warrants not converted by September 30, 2021 will expire with no value to the holder of the Warrant.

SOL Global — Substantial Issuer Bid. The board has approved the launch and terms of a substantial issuer bid pursuant to which SOL Global will offer to purchase for cancellation up to $30M of its outstanding common shares. The Offer will proceed by way of a "Dutch auction". Holders of Common Shares wishing to tender to the Offer will be entitled to specify the number of Common Shares being tendered at a price of not less than $4.05 and not more than $4.25 per Common Share in increments of $0.05 per Common Share (Auction Tender).

Bhang — Collaboration with Belushi's Farm and Blues Brothers. Bhang has entered into a letter of intent with Jim Belushi's licensing company, GreenGlobe, to bring co-branded Bhang x Blues Brothers chocolates to the market. The terms of the agreement provides for a 50/50 split of royalty revenues. It also calls for Bhang to develop three additional edible products for GreenGlobe that will be the intellectual property of GreenGlobe with a royalty split of 80/20 in favor of GreenGlobe. The Company will also issue to GreenGlobe 1.5M shares of Bhang to be valued at the market price of the shares at closing of the definitive agreements. Additionally, the Company will provide GreenGlobe up to 12M warrants to purchase subordinate voting shares exercisable for a period of two years at C$0.12 per share. The warrants will be subject to a number of vesting provisions based on the performance of GreenGlobe under the contract.

Sundial — Has Acquired more than 10% of the outstanding Common Shares of The Valens Company. On September 17, 2021, Sundial acquired 100,000 Common Shares at a price of $3.00 per Common Share for total consideration of $300,000. Immediately before the completion of the Transaction, Sundial owned 18,571,300 Common Shares, representing ~9.99% of the issued and outstanding Common Shares on a non-diluted basis as at September 20, 2021. Following the completion of the Transaction, together with all previous acquisitions of Common Shares by Sundial, the Company now owns 18,671,300 Common Shares, representing ~10.00% of the issued and outstanding Common Shares on a non-diluted basis as at September 20, 2021. Sundial's average cost base for the Common Shares, including those acquired in the Transaction, is $2.665 per Common Share.


Planet 13 — Doubles Dispensary Floor Square Footage and Cash Registers at Las Vegas SuperStore. The Company doubled the size of the cannabis retail area and added 40 registers for higher sales volume and faster customer checkouts. In addition to doubling the points-of-sale, the Company added more premium display cases and new entertainment features, including an 80-feet wide by 20-feet tall LED wall showcasing immersive entertainment, like a giant cascading waterfall creating an incredible visual effect for customers.

Harvest — Opens Fourteenth Florida Dispensary in Port St. Lucie. Additional Harvest dispensaries in Florida are located in Gainesville, Kissimmee (two locations), Lehigh Acres, Longwood, North Jacksonville, North Miami Beach, North Port, Olympia Heights, South Jacksonville, South Miami Beach, Tallahassee, and West Palm Beach.

STIIIZY — Benicia (14th in CA). The retail space will include a 600 square foot art gallery, featuring an exhibition by Arts Benicia Presents that will feature works by artists with studios located in the historic Arsenal District of Benicia.

TILT — Opens Second Massachusetts Medical Cannabis Dispensary. TILT’s subsidiary, Commonwealth Alternative Care (CAC), to commence retail operations at its forthcoming Brockton dispensary, effective September 21, 2021, for the medical use of marijuana. CAC Brockton has also been granted a provisional Retail Establishment license, and anticipates adult-use operations to be fully approved and formally commence following final inspection by the CCC.

March and Ash — Chula Vista. This will be the Company’s 5th location. Other locations include Vista, San Diego (2), and Imperial.



Select — Introduces Breakthrough Vape Technology with Cliq by Select.

With a proprietary gravity-fed pod and ultra-tough stainless steel encasing combined with its premium design and convenient USB-C charging port, Cliq comfortably brings the best of Select's high-quality oil and innovative hardware into the hands of cannabis consumers. The contoured pod design ensures customers get every last drop of premium Elite cannabis oil, while the strong magnetic pod and device connection ensures a secure fit that closes with a signature "click" sound.

Cann x Sundae School — Launch Reserve Flavor.

The exclusive campaign consists of new Yuzu Elderflower-flavored cannabis products, streetwear merchandise and content. The limited-edition flavor features “flagrantly sharp yin with a delicate floral yang.” It comes in the same dosage as the original Cann: 2 mg THC and 4 mg CBD.

🧔People | 💻Hiring

Aurora Cannabis lays off 8% of its workforce. Aurora Cannabis says ~8% of its global workforce was laid off in the closure of a facility once touted as a “centre of excellence” for the company’s higher-margin cannabis 2.0 products. The move adds to mounting concerns about the Licensed Producer, coming on the heels of a decision to push back the release of its Q4 and FY 2021 financial results without explanation. The company laid off more than 1,000 workers last year, and has continued to cut staff and production in 2021.

GrowGeneration — Appoints Eula Adams to Board of Directors. Adams served most recently as CEO of Neuromonics, a global medical device company providing standalone and cloud based software and hardware solutions for the treatment of tinnitus. He previously served as President and COO of Xcore, SVP of Sun MicroSystems, COO of Pay By Touch and Western Union, and President of numerous divisions of First Data (Fiserv). Earlier in his career, Adams spent 19 years with Deloitte, where he was an Audit Partner.


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