💻 Dutchie crashes on 4/20 (again)
Constellation Brands convert to Exchangeable Shares in Canopy Growth. Vangst acquires CannabizTemp. Cann signs Marketing Deal with Barstool Sports. Joe Biden and Kamala Harris Tweet on 4/20 @ 4:20p.
💭 Great seeing some of you at Benzinga last week. I thought the conference was well attended (2,000+) and the energy/enthusiasm was at the highest level for a Cannabis conference over the past 18-24 months. Notably, hemp beverages were prominent in the exhibit hall and throughout conversations. You’ll definitely catch me at the next Benzinga in the Fall. In the meantime, I’ll be spending more time in NY, NJ and OH (let me know if you plan to be there for Day 1 of recreational sales).
🌿 Industry
Dutchie goes down on 4/20 for second consecutive year. The issue seems to stem from their Bluegate server and was resolved after several hours. — Highly Objective
Bloom Brothers (Pittsfield, MA) CEO Nathan Girard estimates they lost ~$25,000 through the 4 hours and 34 minutes that Dutchie was down. Last year, Dutchie offered credit to customers based on a formula for losses, but at $12,000/year for eCommerce and Back Office, Girard will not be taking the credit a second time
Curio Wellness (Far & Dotter and Pharmkent in Maryland) Co-Founder Wendy Bronfein estimates they lost ~$80,000 in sales, in addition to ~1000 preorders that had to be canceled and reallocated to inventory for compliance
Competitors (Treez, Flowhub, BLAZE, Flourish Software) took the opportunity to convince customers they should switch POS providers
💭 I’ll be digging further into this so if you have any thoughts on the POS landscape and/or plan on switching from Dutchie, please reach out.
Cannabis Funding Is Still Way Down From Its Highs. While many sectors have seen less investment recently, the declines in cannabis deals started earlier and have been particularly steep. Funding to the space actually peaked five years ago. — Crunchbase
Cannabis seizures at checkpoints by US-Mexico border frustrate state-authorized Cannabis industry. The U.S. Border Patrol is asserting its authority, confiscating Cannabis at Border Patrol checkpoints in southern New Mexico. — AP
Several couriers have been sidelined for “secondary inspection” and fingerprinted at Border Patrol checkpoints
Matt Kennicott of High Maintenance said seizures by Border Patrol started in February without warning and create uncertainty about shipments that include samples for consumer-safety testing
Joe Biden and Kamala Harris Tweet about Cannabis at 4:20p on 4/20. The comments are the latest sign the administration plans to continue to focus on the popular issue ahead of the November election. — Marijuana Moment
Don't Compete—Collaborate. How Cannabis Partnerships Are Driving Growth. Entrepreneurs behind fast-growing cannabis companies share how they're growing their brands, and their industry, together. — Inc.
Jeeter says collaborations have become a core part of the company's success. For 4/20, the company offered limited edition pre-rolled joints and held its third-annual "high dining" event. This year, the event featured an acoustic tribute to Bob Marley performed by his grandson, Skip Marley, as part of a larger collaboration between Jeeter and the Marley estate
Blazy Susan launched a Grateful Dead collaboration in November 2023, which has since sold more than $1 million of deadhead-branded rolling papers, ashtrays, and cannabis grinders
Desert Hot Springs will Allow Customers to Consume at Dispensaries. The city council unanimously voted to allow these consumption spaces in its commercial, industrial and mixed-use districts. — Desert Sun
This would allow dispensaries and other types of cannabis businesses—such as cultivators — to have tasting rooms or tourist and education components
It previously approved marijuana entertainment facilities, spaces that offer entertainment with the addition of a cannabis retail space and/or cannabis consumption area (bowling alleys, theaters or concert venues)
But there had been no demonstrated interest in cannabis entertainment or hotel facilities" This new ordinance would remove "cannabis entertainment" as a use type in the city's zoning rules and replace it with "cannabis consumption"
JuicyFields’ Nearly $700 Million Cannabis Scam Case Leads To 9 Arrests. Europol reported that on April 11, over 400 law enforcement officers in 11 countries executed nine arrest warrants and conducted 38 house searches. — Forbes
Judicial assessments show that the losses stemming from fraudulent investments in the promoted cannabis cultivation crowdsourcing platform reached €645M ($684M) and involved 186,000 individuals worldwide, mainly European online investors. However, unreported damages may exceed this figure significantly
Investigations suggest JuicyFields might have defrauded its users by falsely asserting partnerships with major cannabis cultivation operators, employing a Ponzi scheme by using recent deposits to cover older ones, and successively freezing accounts and disappearing with funds
Forbes drops third-annual Cannabis 42.0 list. Forbes interviewed dozens of investors, entrepreneurs, executives, analysts and business owners, studying sales data and financial documents to identify the 42 leaders.
USA TODAY/Ipsos poll shows that Florida’s Amendment 3 to legalize cannabis for adult-use has the support of only 49% of the state’s adult residents. The poll of 1,000 Florida adults was conducted between April 5–7. The survey included 369 Republicans, 264 Democrats and 316 independents, with a reported margin of error of 4.1%.
Numerator, which provides market intelligence services, released the Modern Cannabis Consumer report (based on 6,000 self-reported users), shedding light on how cannabis use impacts broader consumer behaviors. One takeaway is that Gen Z is significantly more likely to opt for vape cartridges (55%) or infused beverages (21%).
Michigan reports March sales of $288.8M, up 10.6% sequentially.
Missouri reports March sales record of $124.7M.
💵 Deals
Constellation Brands Convert to Exchangeable Shares in Canopy Growth. In connection with the creation of the non-voting and non-participating exchangeable shares in the capital of Canopy Growth (Exchangeable Shares), on April 18, 2024, Greenstar and CBG, each a wholly-owned subsidiary of Constellation Brands (CBI), exchanged all 17,149,925 common shares in the capital of the Company they collectively held for 17,149,925 Exchangeable Shares for no consideration. As a result of the CBI Exchange, the CBG Group no longer holds any Common Shares. Each Exchangeable Share is convertible, at the option of the holder, into one Common Share. The Exchangeable Shares are not traded on a public market and represent an interest in Canopy Growth directly, not Canopy USA.
Vangst acquires CannabizTemp, CannabizTeam's Temp Staffing Division. Vangst launched Vangst GIGS, an on-demand hiring platform, in 2018 to address the cannabis industry's variable labor and hiring needs. Since launching Vangst GIGS in 2018, Vangst has filled over 200,000 cannabis GIGS across 19 States. The acquisition of CannabizTemp brings Vangst's total customer count to over 1,700. The acquisition was 50% cash, 50% stock. CannabizTeam will continue operating their executive search business, and continue placing executives into the cannabis industry.
Coda Signature assets acquired by Canvas 1839 Group. Coda exited Colorado in late 2023 but will now be reintroduced into the Colorado market by Canvas 1839. The company also owns Escape Artists. Coda had also exited Massachusetts and Ohio.
Nature’s Miracle and Agrify Agree to Merge. Nature's Miracle, a leader in vertical farming technology and infrastructure, has entered into a term sheet to acquire 100% of all the outstanding shares of Agrify, a leading provider of innovative cultivation and extraction solutions. AGFY equity is valued at $6,350,528, or $0.4185 per share. Pursuant to the term sheet with Agrify, Nature’s Miracle agreed to purchase ~$750,000 of horticultural LED lighting goods from Agrify prior to the closing of the acquisition. Nature’s Miracle also executed a term sheet related to the current debt of Agrify held by two entities controlled by Raymond Chang, Agrify’s CEO. Pursuant to the term sheet, Nature’s Miracle will purchase all of the outstanding indebtedness from the entities with a combination of cash and Nature’s Miracle stock.
Elevate Cannabis secures $25M Senior Secured Financing from Chicago Atlantic. Elevate is a multi-location, vertically integrated operator headquartered in Missouri.
Curaleaf Closes Northern Green Canada Acquisition for Initial $16M in Stock. Northern Green Canada (NGC) is a vertically integrated Canadian licensed cannabis producer focused primarily on expanding in the international market through its EU-GMP certification. The accretive acquisition amplifies the Company's strategic advantage in established European markets including Germany, Poland and the United Kingdom and provides a foothold in the emerging markets of Australia and New Zealand. Terms of the acquisition of NGC include an initial payment at closing of the Company's Subordinate Voting Shares valued at ~$16M. An earnout may also be paid in 2025 based upon 2024 performance of NGC's operations, up to 50% of which will be cash and the rest paid in additional shares.
📄 Company Updates
Cann x Barstool Sports Marketing Deal. The media partnership is set to run across various popular Barstool brands including Fore Play, the #1 golf podcast, Bussin' With The Boys, Chicks in the Office and Spittin' Chiclets. Cann will be integrated into the podcasts, custom social media and video content across their marketing verticals.
StateHouse Provides an Update on Application for Management Cease Trade Order. The Ontario Securities Commission (OSC) has denied the Company's application for a voluntary management cease trade order (MCTOas the Company does not meet the criteria for an MCTO. The Company filed the application for a voluntary MCTO with the OSC due to an anticipated delay with its Annual Filings.
Ben & Jerry's Doubles Down on Cannabis Justice Advocacy and Calls for Cleared Records, Starting with Arizona. The Vermont ice cream maker is supporting ACLU's call for state governors across the country to grant sentence reductions or pardons, legally known as clemency, to people serving cannabis-related sentences. Even in states like Arizona, which legalized cannabis use and voted for expungement in 2020, there are still at least 200,000 people with cannabis convictions on their records.
Eaze avoids potential 4/20 strike. CEO Cory Azzalino says the company reached a fair deal with UFCW on behalf of their employees, where they’ll continue to earn more than $25/hr with tips and enjoy a robust benefits package. He also called on Local and State Representatives in California to support 1) Lowering the State excise tax to 5%, 2) Cutting licensing fees to under $10,000 per license, 3) Capping local taxes at 4%, and 4) Stop charging tax-on-tax with local, state, sales and excise taxes compounding.
Stiiizy Sued Over Delta-8 Products. The class-action case is being brought by Taylor Byron in Illinois and Taylor Berry in Missouri, who both claim the products are not legal hemp, but instead regulated cannabis containing more THC than allowable by law. The complaint alleges that the Stiiizy products contain significantly more than the allowable 0.3% THC. They claim that an independent laboratory test performed on the Stiiizy Skywalker OG Pen Delta-8 showed that the product contained 3.57% Delta-9 THC. The lawsuit goes on to state that the labeling is incorrect and that Stiiizy profits financially from misrepresenting its products.
🏬 Retail
Numerous dispensaries held their openings on/around 4/20, which includes ConBud Cannabis Dispensary (Bronx, NY), Urban Leaf (Midtown East, NY), Big Gas Cannabis (New Paltz, NY), Sweet Flower (Fresno, CA), Dr. Green Thumb’s (Fresno, CA), Haven (Fresno, CA), Rebelle (Boston's South End, MA), Natural Apothecary (Belleville, NJ), Sunburn Cannabis (Miami, FL), Calyxeum (Detroit, MI), SPARC (Napa, CA), JARS Cannabis (Chesterfield, MI), Shangri-La (Norwalk, CT).
Ethos Cannabis will close its flagship Center City (Philadelphia, PA) location. The business is exploring a replacement location but that might not be in Center City. The decision to shutter was not due to poor sales or foot traffic but the building owner cutting short the company’s lease by several years. The financing that the building owner secured does not allow for cannabis companies in the building.
🌱 Product
Carmelo Anthony launches StayMe7o Cannabis under the umbrella of Grand National. The cannabis-focused agency is built with Lowd Cannabis’ CEO and Founder Jesce Horton and Chief Creative Director Brandon Drew Jordan Pierce. The agency will focus on brand creation, expansion, strategy, and marketing efforts. StayMe7o will be on shelves at two Native-owned and Black-owned dispensaries in Oregon, Natural Wonders and Green Muse.
The Flowery release "40 OG" with Miami Heat legend Udonis "UD" Haslem. The flower packaged in 3.5-gram glass jars will soon be available at Florida locations. The Flowery team hunted down a unique "OG cross strain" of cannabis for Haslem, who Peguero says has been a supporter of the company since its early days.
Grön launches in New York. Grön has partnered with Omnium Canna for processing, which holds the distinction of being the first licensed minority-owned cannabis processor and extractor in the United States, certified by the USPAACC.
Sunburn Cannabis introduces Bill's Reserve, a new premium flower line named for the CEO's notorious father. Orange Mintz is the first strain in the company’s new "Bill's Reserve" line of premium flower. A cross between Orange Push Pop and Animal Mints—with over 33% THC and 2.5% terpenes.
TYSON 2.0 Partners with PHCANN International in Germany and the UK. PHCANN International (PHCANN) is a multinational pharmaceutical company committed to providing high-quality cannabinoid-based products worldwide. They will exclusively cultivate, manufacture and distribute TYSON 2.0 branded THC products such as flower, concentrates and consumables across Germany and the UK.
Clearleaf Launches SampleDirect Platform alongside Cova, Greenline, a BLAZE® Company, and TechPOS. SampleDirect offers brands and sales brokers a seamless solution for exchanging product information and facilitating sample distribution across 3000+ licensed cannabis stores in Canada. Simultaneously, it provides retailers with a simple tool to explore and sample products, informing their inventory decisions and increasing product knowledge, while empowering them to take more control of the sampling request process.
🧔 People
Wana Brands Nancy Whiteman steps down as CEO, CMO Joe Hodas appointed CEO. Hodas has been at the company for four years. Whiteman’s transition is happening close to the formation of Canopy USA (CUSA) which will enable Canopy to exercise its option to purchase Wana and bring its three US entities—Jetty and Acreage—into one integrated company.
Jushi appoints Todd West as COO. West brings over 25 years of operations management experience in retail, manufacturing, and wholesale, including five years in cannabis with his most recent role being EVP Operations at Cresco Labs.
Trym appoints Benjamin Wong as CEO. Current CEO, Matt Mayberry will transition into an advisory role. Wong is a Co-Founder and previously was a PM at SunPower.
Canopy Growth Board Members Resign in connection with CBI Conversion. Garth Hankinson, Judy Schmeling and James Sabia (collectively, the "CBG Nominees") each provided notice to the Company of his or her decision to resign from the Board effective immediately (the "CBI Resignations"). Each of the CBG Nominees had been a nominee of the CBG Group under the Investor Rights Agreement. As a result, CBI no longer holds any governance rights in relation to Canopy Growth
High Tide and CFO Sergio Patino have agreed to transition the CFO role to a new candidate. As part of Patino's transition, he will remain engaged with the Company for a mutually agreed upon period.
StateHouse appoints Felicia Snyder as Independent Chair of the Board. In connection with the appointment, Matthew Hawkins has stepped down from the Board. Snyder is one of three board members and is currently co-CEO of Arcana, an experiential hospitality brand. Snyder was a founding executive at Tokyo Smoke.
Safe Harbor Financial adds CEO Sundie Seefried to Board. Seefried was appointed in order to fill the vacancy created by John Darwin’s resignation as a member of the Board. The size of the Company’s Board remains at seven members.
🎙️ Interviews
Michael Bronfein, Curio Wellness | Investment Reports
Xzibit On Growing His Brand In The Cannabis Industry | BET
Canopy Growth CEO talks U.S. entrance via trio of acquisitions | GMR