🏛️ Biden pardons thousands convicted on federal and D.C. marijuana possession charges

Stiiizy distances itself from Tony Huang. Theory Wellness transitions into ESOP. MINT Cannabis acquires AZ/NV assets from MedMen. Curaleaf on TSX. Trulieve appoints new CFO. Snoop Dogg enters D9 Bev.

Dec 22, 2023

💬 Last week was extremely busy so this newsletter is recapping news from the past two weeks, but should still capture any relevant news over that time period. It also worked out for some key news like today’s pardon and an update on the LA Times Stiiizy story. Have a great time celebrating the holiday season and expect the next newsletter to come out January 2nd if there is any important news between now and then. Also, I’ll continue to drop 3-4 podcasts a month (last two with urban-gro and FloraWorks and next week will be Metrc).

🌿 Industry

Biden Pardons Thousands Convicted Of Marijuana Charges On Federal Lands, D.C. The categorical pardon builds on a similar round issued just before the 2022 midterm elections that pardoned thousands convicted of simple possession — AP

Friday’s action broadens the criminal offenses covered by the pardon. Biden is also granting clemency to 11 people serving what the White House called “disproportionately long” sentences for nonviolent drug offenses
Biden, in a statement, said his actions would help make the “promise of equal justice a reality”

Theory Wellness transitions into ESOP to avoid 280E tax provision. The move that will save the company and its workers “millions” a year — GMR

“It essentially is a much more robust retirement plan for employees,” he said. “Over time, your employees vest into ownership based on tenure. It’s done in a democratic way, in the sense that simply your ownership is based on your payroll. It avoids executives getting paid at multiples from your entry-level worker; everyone is getting an ownership stake in the company.” — Chief Strategy Officer Nick Friedman

An ESOP is a government program that Friedman said is structured similarly to 401k retirement plans, making it exempt from both state and federal taxes

California AG says Interstate cannabis sales put State at risk of federal enforcement. A letter from California AG Rob Bonta to state regulators all but ended marijuana industry hopes of interstate cannabis commerce — MJBizDaily

In a 36-page letter sent to the Department of Cannabis Control (DCC), the state’s chief cannabis regulator, Bonta wrote that marijuana activity between legal out-of-state businesses and California licensees could result in “significant legal risk to the State of California under the federal Controlled Substances Act”
Hopes for interstate cannabis sales rose in September 2022, when Gov. Gavin Newsom signed Senate Bill 1326 to create interstate commerce pacts

Stiiizy President denies allegations of illicit marijuana operations, sales associated with co-founder Tony Huang. Stiiizy denies connections to illegal business practices detailed in a lawsuit and LA Times article — MJBizDaily

Stiiizy President Tak Sato said Huang has not held a formal position within the company since December 2020, though he still serves in an advisory role
The denials were in response to a recent Los Angeles Times story alleging that Huang leased several buildings to unlicensed retailers in and around L.A. and helped funnel Stiiizy products through illicit retail channels while serving as a top executive for the company
Weedweek reported that former Stiiizy CEO Jon Avidor filed a lawsuit in September contending Huang and other co-founders ran a criminal enterprise of at least 18 unlicensed marijuana stores in the L.A. area

11 of Missouri’s 48 Cannabis Microbusiness License Winners Deemed Ineligible. Regulators may revoke the social-equity cannabis licenses issued in October after finding they didn’t meet eligibility requirements. — Missouri Independent

Nine were dispensaries and two were wholesale facilities. Among those who could face license revocation is Canna Zoned, a Michigan company that secured two of the 16 dispensary cannabis licenses — in Columbia and Arnold
State records show Canna Zoned was connected to 104 out of the 1,048 applications that were entered into a lottery selection for the dispensary licenses
Cannabis Business Advisors was connected to more than 400 dispensary applicants, including six winners. The state couldn’t certify the eligibility for all six of the licenses connected to the firm’s clients
A Missouri firm, Amendment 2 Consultants, is connected to more than 80 dispensary applicants and two winners, one was deemed ineligible

Fourteen companies contest license denials by Alabama Medical Cannabis Commission. The deadline to request such a hearing was December 15. AMCC awarded 20 licenses to various companies in every category besides integrated facilities at their meeting on December 1st — 1819 News

Fees required to request an investigative hearing were initially $30,000 to $50,000, depending on the category, but those fee requirements were waived when AMCC passed new rules and procedure changes in October
The deadline for investigative hearing requests from denied integrated facility applicants isn't until December 26. Five were issued on December 12th, one of which was to Trulieve

New Pennsylvania law could increase medical marijuana dispensary permits by 20%. Up to 30 new medical dispensaries could open under a bill signed into law by the state’s Democratic governor, a potential expansion of 20% — MJBizDaily

Under Senate Bill 773—which Gov. Josh Shapiro signed into law Dec. 14, as promised—as many as 10 independent MMJ growers now qualify to apply for a dispensary license
Until now, Pennsylvania law capped the dispensary license holders at 50

National Cannabis Roundtable releases inaugural Corporate Social Responsibility (CSR) report for 2022-2023, “Better Tomorrow Than Today.” — NCR

The National Cannabis Roundtable is an alliance of cannabis companies, as well as ancillary services and solutions providers, who seek cannabis reform that nurtures the nascent domestic industry, protects consumers, and advances social equity
his comprehensive report highlights the collective efforts of NCR and its member companies to create positive impact in the cannabis industry and the communities they serve in the areas of criminal justice reform, equity in business opportunity, workforce utilization, and health disparities

Arizona dispensaries have generated $1.13B in sales through October 2023, a 4% decline compared to the same period in 2022

Missouri dispensaries sales total $1.22B in the first 11 months

Maryland sales of $56M in November, up 1.5% from October

Rhode Island sales totaled $105M since recreational sales launched in December 2022

Canadian sales rose to $448.6M CAD in October ($336M), up 15% Y/Y

Florida could issue 22 new medical cannabis licenses within the next six months

The French Laundry sent a cease and desist letter to Maven Genetics for using its trademarked name for a strain

TD Cowen projects Cannabis sales of $37 billion in 2027, with 20M consumers added

Wisconsin could potentially legalize limited Medical Marijuana program this session

Mississippi cannabis lab, Steep Hill Mississippi, alleged that cannabis products sold in gasoline stations and convenience stores contain potentially dangerous contaminants and far more delta-9 THC than is legal

💵 Deals

MedMen exits Arizona and Nevada, selling non-core assets to MINT Cannabis. The transactions consist of the sale of MedMen’s wholly-owned operating subsidiary in Arizona (Scottsdale Talking Stick Dispensary and Mesa Cultivation Facility) and its two operating dispensaries located in Clark County, Nevada. These sales are the result of MedMen’s previously announced strategic review and evaluation of divestiture opportunities of its non-core assets

Glass House Brands closes $15 million Series D Preferred Stock Offering. The final closing of the Offering included ~$4.1M of new capital in addition to the $10.9M raised from the first tranche of the Series D Preferred Stock offering that closed on August 23, 2023. Holders of the Series D Preferred Stock will be entitled to an annual cash dividend at a rate of 15% for the first five years after the date of initial issuance and 20% annually thereafter

Canopy Growth completes divestiture of This Works skincare and wellness brand to Inspirit Capital, a London-based investment firm. Headquartered in London, England, This Works offers a range of high-quality natural skincare and sleep solution products to consumers around the world. The transaction is valued at up to £9.3MM ($15.9MM CAD) including cash. Canopy Growth will receive an upfront consideration of £2.7 MM ($4.6 MM CAD) in cash and in other consideration, a loan note issued by the buyer, and a contingent earn-out

POSaBIT raises $650K private placement, selling up to 3,107,142 units of the Company at a price of $0.28 per Unit. Proceeds will be used to fund the repayment of certain convertible promissory notes at maturity. Each Unit will be comprised of one Common Share and 0.88 Common Share purchase warrants at a price of CAD$0.40 per Warrant Share for a period of 60 months

Safe Harbor Financial originates $1.2M First Lien Secured Loan for Real Estate Acquisition and Construction for High Collective Bridgeport, CT Property

urban-gro’s wholly-owned construction subsidiary, UG Construction has finalized a $10M interest-only revolving asset-based lending facility (ABL)

LFTD Partners (LIFD) and its wholly owned subsidiary Lifted Made jointly borrowed $3,910,000 from Surety Bank, DeLand, Florida, and Lifted Made closed on the purchase of its main operations building in Kenosha, WI for $1,375,000

📄 Company Updates / Earnings

Curaleaf has complied with all the conditions listed in the conditional listing approval delivered by the Toronto Stock Exchange (TSX) in connection with the listing of its subordinate voting shares on the TSX, trading started on on Thursday, December 14

Curaleaf commenced sales of wholesale adult use products across the state of New York as a result of receiving approval from the New York State Office of Cannabis Management (OCM) on Friday, December 8. As of December 12, Curaleaf will offer five vape, edible and flower offerings from its Select and Grassroots brand portfolios, including Select Briq Essentials, Select X Bites, Select Nano Bites and Grassroots flower

Etain obtains approval to commence sales to New York's adult-use market. The Company will now be able to provide its assortment of products (flower, pre-rolls, vapes, and edibles) to the adult-use market as well as maintain its medical operations. In addition to expanding into adult-use wholesale operations, the Company anticipates opening its first co-located medical and adult-use retail dispensary in early 2024, followed by two additional co-located adult-use retail dispensaries in Q2/Q3

POSaBIT filed its application to list shares on the TSX

StateHouse issued 734,000 RSUs to certain directors, officers, and employees

Green Flower partners with Kent State for cannabis-related certificate programs

Canopy Growth shares will be consolidated at a 1 for 10 ratio. The Consolidation is being implemented to ensure that the Company continues to comply with the listing requirements of the Nasdaq

Body and Mind Q1 2024 (FY2024 ended October 31, 2023) revenue of $5.5M vs. $5.8M in Q1 FY2023, a 7% decline, GM improved to 37.4% vs. 14.7% in Q1 FY2023

C21 Q3 2023 revenue of $6.9M (40% GM), CFO remained at $2.7M YTD, $1.9M cash

Agrify Q2 2023 revenue was $5.1M vs. $19.3M for Q2 2022, $308K cash as of 6/30/23

🏬 Retail

Theory Wellness launches Cannabis Beverage Dispensary in Medford, MA

Crystal Nugs opens first Black woman-owned dispensary in midtown Sacramento

Sanctuary Cannabis launches medicinal dispensary in Scotch Plains, NJ

Garden Greenz opens in Jersey City, NJ

MMD and Airfield Supply open in Redwood City, CA, joining Embarc and Juva

Cookies opens third Fresno, CA dispensary, joining Embarc and The Artist Tree

Eaze/Green Dragon opens eight dispensaries in Florida. Green Dragon now has 36 medical marijuana dispensaries across the state, continuing its expansion in the Florida market with the goal of opening 50 locations by the end of 2024

13 more dispensaries to open in New York, bringing total to 37 adult-use dispensaries

GTI opens RISE Dispensary Port Orange, FL, its 90th Retail Location in the Nation. In addition to RISE Port Orange, there are 13 other RISE Dispensaries in Florida, including locations in Bonita Springs, Brandon, Clearwater, Crystal River, Deerfield Beach, Fruitland Park, Hallandale Beach, Kendall, Oviedo, Pinellas Park, Sun City Center, Tampa and West Palm Beach, with delivery services available at each location

AYR Wellness opens two Florida retail stores located in Leesburg and Fort Myers. The opening of these dispensaries expands AYR’s retail presence to 64 locations in Florida and 91 locations nationwide

Embarc recognized as #1 in Adweek’s Top 10 Cannabis Marketing Campaigns of 2023

🌱 Product

Snoop Dogg enters Hemp Beverage category with Do It Fluid

Coda Signature exits Colorado, citing market declines and significant oversupply

4Front Ventures debuts cannabis flower brand The Hunt, expanding MA Product Portfolio. The Hunt's product lineup, which features exclusive offerings of rare, limited and small-batch phenotypes, is now available for purchase at 4Front's Mission Dispensaries in Georgetown, Worcester, and Brookline, MA, and at partner dispensaries across the Bay State. Each strain drop of The Hunt is only available for a limited time, while supplies last; the Company expects to introduce the new offering to Illinois cannabis consumers in Q1 2024

Acreage launches The Botanist Gummies in New York. Simply crafted with all-natural fruit flavors and colors, The Botanist THC-infused gummies deliver a consistent combination of deliciousness and effectiveness in various cannabinoid blends. The gummies are available in a 10-pack format in three fruit flavors and ratios, including Red Raspberry, Peach Nectarine and Mandarin Orange

Toast enters Arizona through partnership with Sweet O’z. Launched products include 1g pre-rolls, 0.35g minis pre-roll, 0.6g & 1.2g infused pre-rolls and infused flower. Toast products will be available in select Cookies and Nirvana locations.

Tilray launches cannabis wellness brand, Solei. Joining its list of elevation essentials, Solei introduces three new cannabis-infused tea blends, including Decaffeinated Jasmine Green Tea, Spiced Starlight, and Chai Rooibos

Tilray launches cannabis-infused premium belgian chocolates with Chowie Wowie Edibles Brand. In Canada, Chowie Wowie is currently the #2 cannabis infused chocolate brand nationally, according to Hyfire

Cronos launches Lord Jones® Live Resin Vapes in two different hardware options

KayaPush partners with Treez to streamline operations and provide actionable insights to drive revenue and profitability with real time sales reports and heatmaps to help customers be highly efficient with labor

🧔 People

Trulieve appoint Wes Getman as CFO. Getman has over 25 years' experience in accounting and finance in both corporate and advisory roles for private and public companies including Blue Bird Corporation, Grant Thornton, and PwC

Acreage VP F&A Philip Himmelstein will assume the Interim CFO as Carl Nesbitt has elected to step down from his role to pursue new opportunities

Goodness Growth General Counsel and Chief Compliance Officer, Michael Schroeder, departs to accept an external opportunity at Venture Medical

Akanda appoints new CFO Charn Deol. Deol's recent experience includes being a director or in management of Canadian private and public companies including Bayridge Resources, Amber Brands, Green Battery Minerals and Neotech Metals

Lowell Farms board member Brian Shure resigns for personal reasons