🏬 Alabama Award Licenses to 21 Companies
🏬 Alabama Award Licenses to 21 Companies
HERBL's financial situation. Teamsters Local 777 files additional Unfair Labor Practice charges against GTI. SF Dispensary Moratorium. TerrAscend acquires Peninsula Alternative Health (MD) for $22M.
🌿 Industry
HERBL’s Dire Financial Situation. Rumors started circulating a few weeks ago and a few people have told me that a number of employees were laid off last week in non-critical parts of the company. The company is operating with a skeleton staff, as it continues to work with its bank(s), dispensaries and attempts to shore up funding.
WeedWeek (paywalled) wrote about brands calling for payments from retailers to be halted to the distributor. This comes after Kikoko announced they had parted ways with HERBL, effective immediately, on Wednesday
In a LinkedIn post from Darren Story (Coastal Sun Farm), brands are banding together to get paid on products that have already been sold to HERBL, who is responsible for collecting for brands. In a LinkedIn post from Elliot Lewis (Catalyst), he notes that “HERBL is out” and calls for a tax holiday
I’ve heard $10M+ in Account Receivables (AR), Nehemiah Mitchell (Royal Greens) says one of the larger retailers with 10-15+ locations is not paying HERBL $3M+
According to Pitchbook, HERBL last raised an undisclosed amount from Echo Capital Group in November 2021. Prior to that, HERBL raised $120M from Salveo Capital, Measure 8 Venture Partners, Gotham Green Partners, KEY Investment Partners in September 2019. And $2M prior to that from Salveo Capital
Brands working with HERBL include: Cosmic Fog, Kinda High, Extrax, Ball Family Farms, Glass House Farms, Birdies, Big Pete's Treats, Oasis, 40 Tons, Money Trees, Leisuretown, Ciencia Labs, Ball Family Farms, Revelry, among others.
💭 [Note: If anyone in the CA Cannabis ecosystem would like to further discuss and/or a deep dive at what happened and which companies are impacted, please reach out]
Alabama Medical Cannabis Commission awards business licenses to 21 companies. In total, 90 different companies applied for a license. — AMCC
Integrated Facility License: Flowerwood Medical Cannabis, Southeast Cannabis Company, Sustainable Alabama, TheraTrue Alabama, Verano Alabama
Cultivator License: Blackberry Farms, Gulf Shore Remedies, Pure by Sirmon Farms, Twisted Herb Cultivation
Processor License: 1819 Labs, Enchanted Green, Jasper Development Group, Organic Harvest Lab
Dispensary License: CCS of Alabama, RJK Holdings AL, Statewide Property Holdings AL, Yellowhammer Medical Dispensaries
Secure Transport License: Alabama Secure Transport, International Communication, Tyler Van Lines
State Testing Laboratory License: Certus Laboratories
In Holyoke, buildings bought for the cannabis industry sit idle as buzz fades. In 2020, packaging manufacturer Sonoco Products Co. sold its Holyoke plant to marijuana manufacturer Pleasantrees for $3 million. In March, Pleasantrees sold the property to real-estate investors for $5M. “They never built it out,” said Kevin Jennings, president of Jennings Real Estate Services. [MassLive]
Aaron M. Vega, Holyoke director of planning and economic development, estimates there are 20 properties across Holyoke that were purchased or leased by the cannabis industry but are now unused
The city issued 36 special permits, only 10 companies are in business today
The list includes a closed Hampden Papers complex which was sold to GTI for $4.55M in 2021. GTI never expanded its operations
Teamsters Local 777 files additional Unfair Labor Practice (ULP) charges against GTI. The charges come after the workers embarked upon the longest ULP strike at a cannabis retailer in U.S. history. — Teamster
The charges were brought because the company spied on the workers by reading messages in a private Discord server during the 13-day ULP strike
The company has also been diverting hours from part-time workers who exercised their right to strike and giving them away to temporary workers
San Francisco Lawmakers Unanimously Pass Dispensary Moratorium. The city will prohibit new cannabis businesses citywide for the next four years. Existing stores and applicants in the pipeline won’t be impacted by the ban. — The San Francisco Standard
There are about 32 licensed medical cannabis dispensaries and 31 adult-use dispensaries citywide, and 100+ additional applications are being processed
BDSA expects the U.S. Cannabis Market to grow 12% in 2023, reaching $29.6 billion. The U.S. market is forecasted to reach $45B in sales by 2027. — BDSA
The total global legal cannabis industry is predicted to reach $36.7B in 2023 (with 80% of sales from U.S. markets), growing at a CAGR of 13% from 2022 to 2027
Missouri legal cannabis sales are forecasted to reach $1.4B in 2023. The State reported $120.9M in May sales.
New York legal cannabis sales are projected to total $631M for 2023. New York is projected to reach $2.5B by 2027, a 71% CAGR between 2023 to 2027
Minnesota sales to grow at a CAGR of 68% from 2023 to 2027 to $875M. Adult-use sales expected to begin in Florida in 2025 and reach $4.3B by 2027
Roadblocks and Red Tape: New York’s Cannabis Effort at a Crossroads. The state solicited entrepreneurs with cannabis convictions to open the first legal dispensaries, but the effort has fallen behind. — New York Times
In a letter to regulators and the governor’s office last month, a coalition of dozens of the prospective dispensary operators described being blocked by the state from selecting their own storefront locations
Some licensees have found locations on their own only to be outbid by the state or told it was too close to a location the agency was already interested in
Officials from the OCM said in a recent meeting with growers that they hoped to soon be able to allow farmers and retailers to start selling Cannabis at farmers’ markets and events like concerts
New York regulators raid unlicensed marijuana stores, enact new rules. Gov. Kathy Hochul announced the launch of a multi-agency enforcement effort and the first product seizures in New York City. — MJBizDaily
Seven stores were issued violations for selling unlicensed marijuana products and ordered to cease operations, the New York Post reported. They also each face up to a $10,000 daily fine
The enforcement developments came a day after the OCM announced that retail stores will open this month in Farmingdale and Syracuse
NJ revokes Harmony Foundation’s cultivating and manufacturing licenses over $700K in unpaid fees. The state Cannabis Regulatory Commission voted to revoke three of the four licenses it awarded to Harmony back in December — a cultivator license at its Secaucus location, and cultivator and manufacturing licenses at its Lafayette, Sussex County, location. — CBE
Commission officials said that Harmony did not pay the $700,000 that was due for those licenses, prompting them to vacate it. However, Harmony will still be able to continue its retail operation in Secaucus since the fee for that license — $100,000 — was paid in February
Officials said that Harmony may submit new applications if they wish to continue those types of operations
Canada’s unsold cannabis inventory balloons to 1.5B grams / 3.2M lbs. That’s an increase from 1.3 billion grams in December 2021. [MJBizDaily]
The retail price of cannabis has fallen by almost 30% since 2018, when Canada legalized adult-use sales, according to Statistics Canada’s Consumer Price Index
Other estimates suggest the overall price decline is more severe. Wholesale prices in the country tumbled more than 40% last year alone, according to the Canadian Cannabis Exchange (CCX), a live trading platform for B2B wholesale Cannabig
The total area within federally licensed sites where indoor/greenhouse cannabis cultivation activities occurred measured 1,595,724 square meters in December 2022, ~30% lower than the all-time high of 2,217,216 square meters in May 2020
Illinois & Michigan Cannabis Sales Stall in May. Illinois adult-use cannabis sales in May were up sequentially to $100.0M, but the 0.6% gain was less than the expansion of the number of days by 3.3%. The gain was 2.3% from a year ago. — [NCV]
After increasing 106% in 2021 and then 13% in 2022, YTD adult-use sales are up 3.9% in the first five months to $648.0M
During May, sales to non-residents were similar to April’s level at 24.7%
Michigan sales also stalled, declining (0.1%) in May to $245.9M (with adult-use up 0.3% sequentially to $238.9M)
💵 Deals
TerrAscend Expands Retail Footprint in Maryland with Acquisition of Peninsula Alternative Health for $22M. The transaction will add a second dispensary to the Company’s Maryland footprint in advance of adult-use sales, which will begin on July 1, 2023. Under the terms of the agreement, TerrAscend will acquire Peninsula Alternative Health for total $22.1M ($1.5M cash, with the remainder in a combination of existing debt, a seller’s note, and stock). Peninsula Alternative Health is one of the highest performing medical dispensaries in Maryland with a net revenue run rate of ~$14M (1.57x EV/run-rate Revenue). Strategically located near the Delaware border in Salisbury, Maryland, the 8,500 sq ft dispensary has no direct competitor within a 25-mile radius.
CULTA to acquire Greenhouse Wellness and Kannavis in Maryland. There are no plans to immediately relocate the dispensaries, and CULTA intends to onboard and retain their staff to ensure that in addition to their current success, they can also represent and encompass the core values of CULTA. The official date of acquisition is dependent on state approval of the transfer of ownership. In a recent Green Market Report article, they mentioned Culta owner Mackie Barch was ordered to use his “best efforts” to sell shares of CULTA in order to settle the $6M debt owed to his co-owner plus $665,000 for federal and state taxes.
nuEra Cannabis acquires Ieso Cultivation Facility in Illinois. One of only 20 full-scale cultivation licenses in Illinois, Ieso’s cultivation facility spans over 36,000 sq ft of canopy, reaching a maximum of 210,000 sq ft of flowering canopy. This acquisition coincides with the relaunch of the nuEra premium product line featuring new flower strains like Cobra Milk, Fire Berries, and The Glove, as well as improved versions of popular strains such as Don Shula and Jungle Cake. The facility also boasts a fully operational extraction lab and an infusion operation producing a full range of products including vaporizers, concentrates, edibles, and more.
LeafLink Forms Strategic Investment Partnership with Leafgistics to Advance Logistics Offering for California Market. This agreement establishes an exclusive partnership in the state of California, where Leafgistics will plan inventory, and coordinate the movement and storage of wholesale cannabis products. As part of this collaboration, LeafLink has made an undisclosed investment in Leafgistics. Leafgistics offers services that include secure transportation and distribution, inventory management, precise order fulfillment, cash consolidation, and more. With fulfillment centers in San Diego, Los Angeles, and Santa Rosa, totaling 150,000 cubic feet of storage space, Leafgistics provides essential visibility into each step of the distribution process through a pioneering warehouse management system. In addition, Leafgistics provides value-added services such as retail-ready labeling and kitting, and delivery within a 24 hour turnaround in metropolitan areas.
Sunderstorm Acquires Nevada's Abide Brands (Bounti Vapes).
Nevada-based Abide Brands is the maker of Bounti Vapes, one of the top-selling vape brands in the state. The acquisition allows Sunderstorm to add valuable team members and a new product category to its Nevada portfolio. This is the first acquisition for the California-based company, and marks the start of a new phase of growth that will include expanding its categories nationally.
Schwazze has acquired certain assets of Sucellus, LLC, pursuant to which the Company will manage Everest (NM). The transaction includes retail dispensaries, cultivation, and manufacturing facilities. Established in 2016, Everest has 14 dispensaries (Albuquerque, Santa Fe, Las Cruces, Los Lunas, Sunland Park, Belen, and Texico), one cultivation facility and one manufacturing plant in New Mexico. Everest's cultivation and manufacturing facilities are both located in Albuquerque. Upon closing, Schwazze's New Mexico operations will include 32 dispensaries, four cultivations, two manufacturing facilities and over 400 employees statewide.
Green Check Verified acquires Komplyd. Green Check Verified (GCV) provides compliant cannabis banking solutions and business services. Komplyd has a purpose-built compliance-as-a-service platform designed for business applications targeting the cannabis industry.
Red White & Bloom and Aleafia Health Execute Binding Letter Agreement for Business Combination. Under the terms of the Letter Agreement, each outstanding common share in the capital of Aleafia will be exchanged for 0.35 of a common share in the capital of an RWB Share. Upon the completion of the Proposed Transaction, existing RWB shareholders are expected to own ~76% of the Combined Company resulting from the Proposed Transaction and Aleafia shareholders are expected to own ~24% of the Combined Company. Aleafia generated C$40M in revenue for CY2022, which on a pro forma basis, increases the Combined Company’s revenue by 41%. The Combined Company is anticipated to realize synergies of ~$10M. Products are expected to be available in ~3,000 dispensaries across Canada and MI, FL, CA, AZ, and MO.
GABY will not be Proceeding with Proposed Transaction with HempFusion. As per HempFusion's press release dated June 1, 2023, HempFusion has ceased its manufacturing, research, and development operations, has terminated the majority of its employees, and will no longer be shipping its products and accepting any new orders. HempFusion is exploring its options under applicable bankruptcy and insolvency legislation. GABY was to acquire HempFusion for C$1.3M in stock. Brands (HempFusionTM, Sagely NaturalsTM and apothecannaTM) were sold in ~15,000 stores (CVS, Walgreens, Publix, Whole Foods, Sprouts Farmers Market, and Kroger) generating $5.4M of net revenue in 2022.
📄 Company Updates
Canopy Growth Provides Update on Management Cease Trade Order and Provides Estimate for Reporting of Q4 and FY2023 Financials. The company was granted the MCTO on June 2, 2023, following the Company's announcement on May 26, 2023 that the Company has initiated an internal review of the financial reporting matters related to BioSteel. It has determined that it will need to restate its (i) audited consolidated financial statements for the fiscal year ended March 31, 2022, included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2022 and (ii) unaudited consolidated financial statements for the quarterly periods ended June 30, 2022, September 30, 2022 and December 31, 2022, included in the Corporation's Quarterly Reports on Form 10-Q for such quarterly periods. While the Company is continuing to work diligently to complete the BioSteel Review and the Restated Financial Statements it will not report its Annual Report on Form 10-K for the fiscal year ended March 31, 2023 on or before the expiration of the 15 calendar day extension provided by Rule 12b-25(b) but expects to file on or before June 23, 2023.
The Parent Company Reminds Shareholders to Vote in Favor of the Proposed Business Combination with Gold Flora and Provides Additional Disclosure. The Definitive Circular, as well as other relevant filings containing information about the Company and the Business Combination, can be accessed on its IR page. George Allen (ex-Chairman at Lowell Farms) has been publicly against the deal, and even shared his letter to TPCO CEO Troy Datcher with Green Market Report.
StateHouse Extension of Series A debt obligations to June 19th, 2023. The Company continues to engage in discussions related to potential future financing options. In addition, the Company's Series A debtholders have granted StateHouse a further extension to June 19, 2023 on repayment of the Company's outstanding debt obligations owing to the Series A Debtholders.
Jushi Receives Requisite Holder Approval to Amend 12% Second Lien Notes and Warrants Issued in Connection with Previously Announced Debt Financing. Requisite holders have consented to certain amendments to the Company’s 12% Second Lien Notes and detached warrants expiring December 6, 2026. The Notes and Warrants were originally issued in connection with the Company's previously announced debt financing of ~$73.5M aggregate principal amount of Notes which initially closed December 2022. The Amendments include the removal of the covenant, upon a change of control, giving the right to holders of Notes to require the Company to repurchase the Notes for 105% of outstanding principal and accrued and unpaid interest, and a reduction of the exercise price of the Warrants for each subordinate voting share from $2.086 to $1.00.
Fire & Flower Files for CCAA Protection. Fire & Flower and its subsidiaries, which includes Friendly Stranger , Pineapple Express Delivery and Hifyre, have received an order for creditor protection from the Ontario Superior Court of Justice under the Companies' Creditors Arrangement Act (CCAA). In order to fund the CCAA proceedings and other short-term working capital requirements, the Fire & Flower Group has executed a facility agreement with 2707031 Ontario Inc., an affiliate of Alimentation Couche-Tard (ACT), pursuant to which the DIP Lender has agreed to advance a debtor-in-possession loan in the amount of C$9.8M (DIP Loan). The continued availability of the DIP Loan is conditional on, among other things, certain conditions being satisfied, including the Initial Order remaining in effect.
Greenlane Effectiveness of Previously Announced Reverse Stock Split. The company effected a one-for-10 reverse stock split of its Class A common stock, par value $0.01 per share.
Flora Growth Effects Reverse Stock Split. As a result, every 20 common shares issued and outstanding will be automatically reclassified into one new common share.
springbig Launches Loyalty Integration with Cova. Consumers have the option to redeem offers and rewards through their smartphones or with retail staff at checkout. The integration empowers dispensary employees to enroll customers into the loyalty program and redeem springbig rewards at checkout.
🏬 Retail
RYTHM Premium Cannabis (GTI), Sacred Rose and Dayglo Present The Miracle in Mundelein, an Unprecedented Two-Day Concert with Legal Onsite Cannabis Consumption. The Miracle in Mundelein is a two-day event that merges the worlds of cannabis and music. The Miracle is the first concert in Illinois to openly welcome onsite cannabis consumption. The event aims to unite people and foster an environment of inclusivity and camaraderie around the shared love of music and cannabis. In addition to music, the event will offer concert-goers unique experiences like a dab bar, cannabis beverage garden, joint rolling and chilled bongs.
Santa Monica’s first cannabis dispensary opens, six years after the original application request. Local Cannabis Company is owned by MA-based Calyx Peak and marks the first time the organization has opened an outlet west of Kansas City. Per the Santa Monica municipal code, the dispensary will be limited to medical use only. Adult use is on the agenda for Tuesday’s Council meeting.
MariMed opens Thrive Wellness Dispensary in Tiffin, OH. This is the Company’s first operational dispensary in the state and the 11th that MariMed owns or manages across five states. The dispensary, the first in Seneca County, a western Ohio county has 54,000 residents. The Company was awarded a provisional dispensary license in 2022 and intends to explore additional opportunities to grow its operations in Ohio to the maximum allowable by state regulations.
🧔 People
Verano Key Leadership Promotions to Executive Team (President, COO, GC, CMO). Darren Weiss, currently COO, Chief Legal Officer and GC has been elevated to the role of President. Darren has served as COO with the Company since February 2021 and as General Counsel since 2017. John Tipton will transition to the role of President of the Southern Region, supporting the Company’s continued expansion across Florida and new markets in the Southeastern U.S. With Darren’s transition to President, Trip McDermott, EVP Operations, has been promoted to COO. Verano’s current Deputy General Counsel, Laura Kalesnik, has been elevated to the role of Chief Legal Officer and General Counsel. David Spreckman has been promoted to CMO from his position as EVP Marketing.
Acreage CEO Peter Caldini to step down. Dennis Curran, COO, has been appointed CEO and will assume the role on July 1, 2023. Curran joined Acreage in March 2022, bringing over 35 years of experience across sales, distribution, and marketing. He previously served as an executive with GSK Consumer Health and P&G.
TILT Holdings Board Changes. D’Angela “Dia” Simms stepped down from the Board and Arthur “Art” Smuck was appointed to the Board. Dia Simms, a 20-year veteran in the spirits industry, stepped down from the Board to focus on her growing business. Art Smuck, a cannabis and supply chain expert, previously COO at HERBL, was appointed as a director to fill the vacancy. Before HERBL, Smuck was CEO of FedEx Supply Chain, a subsidiary of FedEx focused on supply chain and third-party logistics.
Jeffrey Schultz joins Foley Hoag as Partner in NY Office. Schultz was previously Partner at Feuerstein Kulick LLP and prior to that, General Counsel, CCO and Partner at Navy Capital.
SNDL appoints new CFO. Alberto Paredero-Quiros has held senior management roles for Mondelez, Novartis, Newell Brands, and Procter & Gamble.
Unrivaled Brands Board Transitions. Two Directors, Nicholas Kovacevich and Eric Baum, will resign from the Company’s board of directors, effective July 1, 2023.
🗣️ Interviews
How does NY cannabis evolve from here? with with Jeffrey Schultz | High Rise
Nancy Whiteman, CEO, Wana | CNBC make it
The Juicy Fields Scandal | The Cannabis Conversation
MariMed Leadership Talks Path to Profitability | Green Market Report
Tilray CFO Takes to Reddit After Refinancing Deal | Green Market Report