🏪 Columbia Care rebrands as The Cannabist Company
🏪 Columbia Care rebrands as The Cannabist Company
The Bettering Company raises $6.7M. Columbia Care $25M private placement. Canopy Growth $25M private placement. GrowerIQ raises $803K. Safe Harbor Financial originates $3M loan.
🌿 Industry
Cannabis Stock Rally Burns Short Sellers for $105 Million. In the last 30 days, short sellers have plowed $91 million into new positions betting that Cannabis stocks will decline, according to a report from S3 Partners LLC. — Bloomberg
Despite the recent surge, pot stocks are down 91% from their all-time highs reached in October 2018
New York regulators vote to allow the state’s medical marijuana operators to apply for adult-use retail licenses. Multistate operators who years ago snapped up a majority of the state’s 10 “registered organization” permits will enter what could be the largest market on the East Coast. — MJBizDaily
Under the resolutions the Office of Cannabis Management, regulators will accept applications seeking a retail or microbusiness license from Oct. 4 through Dec. 23.
Regulators also will accept applications from registered organizations during a still-unspecified window “to be set by the Office”
Two separate suits against OCM are still pending: the one filed by the MSOs and another by service-disabled veterans shut out from the CAURD program
One of the companies applying for a medical cannabis license in Alabama is suing the Alabama Medical Cannabis Commission (AMCC) for defamation. The company claims the inaccurate evaluations of several license applicants implied one of the company’s owners or senior directors had a criminal record. — WBRC
The lawsuit from Medella LLC asks a judge to issue an injunction preventing the Commission from “continuing to make defamatory statements against Plaintiff,” and asks for damages
At issue is the overview of evaluations of the applicants given to Commission members that included a column labeled “Pass/Fail Items noted,” with letters of the alphabet included to indicate different kinds of pass/fail issues
The letter “A,” according to the summary/key given to Commissioners, indicated “Criminal Conviction History (felony or controlled-substance-related misdemeanor /ten years)”
Canadian cannabis retail evolving, consolidating 5 years after legalization. Nearly five years after legalizing recreational marijuana at the federal level, Canada has ~3,800 dispensaries. — MJBizDaily
There are 1,700+ retail licenses issued in Ontario and nearly 1,000 dispensaries in Alberta, the two provinces with the most stores
Several large Canadian cities still don’t allow cannabis retail, such as Markham and Vaughan, Ontario, or Surrey and Richmond, B.C, resulting in retail deserts where brick-and-mortar stores can’t operate
On top of the cannabis industry’s usual pitfalls, Canadian retailers must confront: Public-sector retail monopolies that preclude private-sector stores in some jurisdictions, most prominently Quebec, Provincially owned wholesale monopolies in most provinces that extract revenue from the supply chain through product markups, affecting retailers and producers and exerting great power over prices, Municipalities that have opted out of retail sales continue to leave gaps in legal cannabis availability in some areas
Trulieve filed a civil racketeering lawsuit against two of its former purchasing managers in Arizona, as well as five other Arizona cannabis businesses. The company alleges they engaged in “kickback schemes” that gave the brands access to valuable shelf space at the company’s 21 Arizona dispensaries. — GMR
Trulieve alleges that the pair received nearly $1 million, though that could be higher and formed their own individual corporations to route the kickback funds
Other defendants in the case include: YourWay Cannabis Brands and two of its subsidiaries, Labtronix dba Venom Extracts and YourWay Cottonwood, Nature’s Wonder and Healing Resources and Consulting Inc
Trulieve said in the lawsuit that each of the listed companies paid the two in exchange for shelf space at its dispensaries. And those are just the ones that the company says it’s aware of, indicating the “civil conspiracy” may have included even more brands that agreed to pay kickbacks to the pair
New York regulators seem to take lenient approach to financing rules. The New York Cannabis Control Board puts strict limits on which people or entities can hold a financial interest in certain Cannabis businesses. — Syracuse.com
These “True Parties of Interest” rules (TPIs) were designed to prevent monopolies in New York’s cannabis industry, and set rules prohibiting certain financial interests among both sides of the state’s two-tier market (supply, retail)
However, Chicago Atlantic – the sole private lender to New York’s $200 million social equity fund for Conditional Adult-Use Retail Dispensaries (CAURDs), owns at least 15 million shares—or a little more than 10%—of Vireo Health
According to New York State’s Dormitory Authority (DASNY), this relationship with Chicago Atlantic doesn’t violate TPI standards because the firm is a lender to the entire fund, rather than to individual CAURD businesses
Criticisms of Office of Cannabis Management Scrubbed from Public Video. The entire public comment period was removed from the video when it was posted on YouTube by the Office of Cannabis Management. — The City
Hours of public comments largely critical of these missteps and more are missing from the video posted online by the state agency
They should have posted all of the meeting including the public comment portion in order to be compliant with the state’s open meeting law
Under the open meetings law, state agencies must stream public meetings and then post them online in a reasonable timeframe. The committee is responsible for oversight of that law
A small-scale, preliminary study by researchers at the University of Colorado-Boulder suggests developing a breathalyzer test for cannabis users will be a challenge, if possible at all. Published earlier this year in the Journal of Breath Research, the “proof of concept” study was the first step in a project between the university and the National Institute of Standards and Technology to develop a standardized practice for detecting cannabis impairment. — Denver Gazette
“In our pilot research, we found that in regular cannabis users, their breath around an hour after use is not looking a whole lot different than their baseline measure on days that they haven’t used at all,” Cinnamon Bidwell, a CU Boulder professor of Psychology and Neuroscience, said in a news release
“That suggests that this isn’t going to be easy, and a lot more careful research needs to be done to get it right.” CU Boulder received a $600,000 grant from National Institute of Standards and Technology to continue its research
Michigan sales down slightly from record of $276.7M to $276.3M in August
New Mexico sales of $48.2M in August
LeafLink projects Maryland will reach $700-800 million in sales in its first year
💵 Deals
The Bettering Company raises $6.7M for Next Generation Cannabis Edibles. The Bettering Company is a new luxury cannabis edibles brand offering chef-curated edibles that use real fruits, herbs, teas, spices, jams and are consistently infused. The new funding brings the company’s total funding to date to over $11M. Founded by Mark Cozzi and Drake Nickell, the company’s initial seed round in 2022 included participation from seasoned early stage consumer packaged goods investors including Peter Rahal. The Bettering Company's products will be available for purchase at dispensaries in Illinois in fall 2023. The Company intends to expand to other states including New Jersey and New York.
Columbia Care has entered into subscription agreements with institutional investors for $25 million. The company sold 22,244,210 units at a price of C$1.52 per Unit. The Investors will have the option to purchase $25 million in additional Units at a price equal to the Issue Price for up to 45 days.
Canopy private placement offering for $25 million. The company sold 22,929,468 units at $1.09. The Investors also hold an over-allotment option to acquire up to an additional 22,929,468 Units at a price per Unit of $1.09 for $25 million at the discretion of the Investors at any time on or before November 2, 2023.
GrowerIQ raises $803K in funding from The Government of Canada. The company raised the capital from the Federal Economic Development Agency for Southern Ontario (FedDev Ontario). GrowerIQ's platform is a cannabis production management platform used by cannabis facilities in over 12 countries.
Safe Harbor Financial originates $3 million loan for a Washington-based organic, THC-infused beverage company to support its expansion into the California market. The credit facility is secured by a first lien on the beverage company’s state-of-the-art bottling plant in Washington.
Shayne Lynn of High Fidelity claims SLANG Worldwide “used unlawful sharp practices to hoodwink” him before taking over his company in 2021. Filed in Vermont Superior Court last month, the suit accuses SLANG, its cofounder and former board chair Peter Miller, and its former CEO Christopher Driessen of fraud and negligent misrepresentation related to the deal. Lynn once held two of Vermont’s five medical marijuana licenses and operated stores under the name Champlain Valley Dispensary and Southern Vermont Wellness. He later changed the name to CeresMED, which operated under a parent company, High Fidelity.
📄 Company Updates
Columbia Care changes legal name to The Cannabist Company Holdings Inc. and will rebrand to The Cannabist Company. Cannabist was launched in 2021 as the Company’s national retail brand, which now accounts for 36 locations across the country. The Company will continue the process of converting its retail portfolio to the Cannabist brand across the country in 2024.
Canopy Growth ceased funding the BioSteel business unit furthering the company’s business transformation and focus on North American cannabis leadership. BioSteel’s business was a significant drag on Canopy Growth’s profitability and cash flow, representing ~60% of the Company’s Q1 FY2024 Adjusted EBITDA loss. The decision by BioSteel to seek creditor protection means that Canopy Growth will limit the further funding obligations in respect of the BioSteel business unit.
Leafly sues New York’s Office of Cannabis Management (OCM) over claims the OCM unfairly targeted third-party platforms in adopting regulations that hamstring the industry and restrict retailers’ ability to market and promote products.
Safe Harbor Financial Financial Launches New Line of Credit Products for Cannabis Businesses. Under these new and expanded programs, Safe Harbor, operating jointly with its financial institution partners, will offer credit facilities ranging from $25,000 to $1 million at market-leading, normalized rates. In many cases, these lines of credit can be obtained without hard collateral.
Ispire Fiscal Full Year 2023 Revenue from cannabis vaping products was up 100.4% to $40M. Revenue from tobacco vaping products was up 10.9% to $75.6M. Overall Revenue Increased 31.2% to $115.6M. Gross profit of $21.1M (18.3% GM). Net loss of ($6.1M). As of June 30, 2023, cash and cash equivalents of $40.3M.
High Tide reports Q3 2023 Revenue of $124.4M, Adjusted EBITDA of $10.2M, Free Cash Flow of $4.1M, Net loss of ($3.6M). Cash of $25.7M as of July 31, 2023.
Cronos Group shipped its first order of bulk cannabis, which will be sold under the PEACE NATURALS® brand in Germany. In July, Cronos signed a distribution agreement with Cansativa Group, one of the leading distributors of medical cannabis in Germany. Cansativa is a market leader in the medical cannabis market and is a driving force in the German cannabis industry. Cansativa has a network of approximately 2,000 pharmacies domestically; they currently supply around 300,000 patients in Germany's medical market.
Aurora Cannabis repurchases an aggregate of $9.6M principal amount of its convertible senior notes at a total cost, including accrued interest, of $9.6M satisfied by the issuance of an aggregate of ~13.5M Shares. Following completion of these repurchases, Aurora will have $29.2M of Notes outstanding.
🏬 Retail / Distribution
Nabis partners with Eaze to streamline distribution channel. This agreement positions Nabis as the vital link between Eaze’s 13 localized delivery fulfillment hubs serving consumers across California. Nabis also added Variety Drugs, Seven Leaves, Kinda High, Dizzies and Huxleys, Kikoko, and Cosmic Fog for distribution.
Parkway Dispensary (The 1937 Group) and Molly's Joint opens Indoor/Outdoor Cannabis-centric Entertainment Complex in Tilton, IL. The complex is located just south of Danville and 30 miles east of Champaign/Urbana.
Blounts&Moore (Market 96) opens first dispensary in Oswego, IL. Blounts&Moore, has six adult-use retail licenses, two craft grow licenses and a transporter license, plans to open additional dispensaries, including one in Chicago's South Loop neighborhood in the fall.
Earth & Ivy stands out among the 48 adult-use only dispensaries to open in New Jersey with youngest owners in the state.
Cheech and Chong Launch Dreamz Dispensary Partnership in New Mexico.
Cresco Labs Opens 33rd Florida Sunnyside in Jacksonville, 70th Store Nationwide.
Trulieve opens Dispensary in Pace, Florida.
🌱 Product
BLAZE launches apps for dispensaries. The new offering provides dispensaries with native mobile e-commerce applications for iOS and Android as a new way to connect with customers which include 📲 Unlimited Push Notifications, 🏅 Order Tracking and Rewards and ⚡️ Convenient Prepayment.
4Front Ventures expands Island product offerings. The lineup features a new 7g size of Island's premium flower and the soon-to-be-released Island Classic Single Strain 1g Pre-Rolls, both offered in four distinct strains – Garlic Z, Banana Puddintain, Grease Monkey, and Duct Tape.
Distru partners with Pistil Data. Through this collaboration, the Pistil application is seamlessly integrated into Distru's platform, allowing mutual customers to access critical data inside Distru where business operations are managed and save considerable time from switching between tools.
MariMed launches Bubby’s Baked Blueberry Muffin. The Company’s new Blueberry Muffin bites are soft and baked in small batches, a made-from-scratch ode to breakfast. They join the popular Bubby’s Baked line inspired by the original pot brownie recipe and are available at select dispensaries in MA, MD, and DE.
Punch Edibles enters NY market.
TICAL Official enters New York market through partnership with Central Processors NY and Adirondack Hemp Company
Planet 13 Launches New Line of Medizin Solventless Live Rosin Vape Cartridges. The first premium strains, GMO and Silver Reserve Live Rosin Cartridges, are initially available at Medizin Las Vegas and online.
Aurora Cannabis launches TASTY'S, designed to deliver on taste, potency, and price. TASTY'S is the newest brand to join Aurora's portfolio of brands loved by Canadian cannabis consumers, including Greybeard, San Rafael '71 and Daily Special.
🧔 People
Axel Bernabe exits role as NY Office of Cannabis Management chief of staff and senior policy director.
Charlotte's Web appoints Bill Morachnick as CEO. He replaces CEO Jacques Tortoroli who has elected to resign from his role.
Jennifer Mandzuk, ex-Theraplant CEO hired as CT's Program Manager for Cannabis.
Additional oversight requested at MA CCC. This comes after Treasurer Deborah Goldberg suspended CCC Chair Shannon O'Brien for undisclosed reasons.
IM Cannabis CFO Itay Vago resigns. The Company has commenced a formal search for a new CFO and Vago is anticipated to support the transition through the publication of the Q3 2023 results.
🎙️ Interviews
Embarc CEO Lauren Carpenter | Cannabis Business Times
Prodigy Processing Solutions CEO Marc Beginin | CBE
Naturae CEO Nicolas Guarino | Cannabis Business Times
Method Man | Forbes
Woody Harrelson | Redheaded Blackbelt