🥨 Germany adult-use cannabis legal as of April 1st
FL adult-use will appear on ballot. VA Governor vetoes adult-use cannabis sales bill. Goodness Growth Holdings divests Vireo Health NY. Funding: Open Book Extracts (OBX), Flyers Cocktails, PCA.
💬 This is a longer than usual newsletter as it covers news since March 27th. Normally I publish weekly on Tuesdays but pushed this to Friday as the next two newsletter will also come out on Fridays since I’ll be at MJ Unpacked next week and Benzinga the following week (use code “HIGHLY50” for 50% off tickets if you still need a ticket).
🌿 Industry
Germans celebrate as recreational cannabis use becomes legal. There was music and dancing at the Brandenburg Gate in central Berlin, where attendees waved placards and blew clouds of smoke into the air. — CNN
The move makes Germany the third country in Europe – after Malta and Luxembourg – to legalize cannabis for recreational use, removing cannabis from the official list of banned substances
Germany has said it intends to pursue a “second pillar” of legalization, which would focus on regional pilot projects with commercial supply chains.
However, it’s unclear if the government has the time and political capital to achieve the second pillar before the next elections, slated for October 2025
Adult-use legalization will appear as ballot measure in Florida. Florida’s state Supreme Court ruled 5-2 in favor of the decision. — Florida Supreme Court Opinions
Many executives, experts, and advocates believe the proposal will surpass the required 60% approval threshold, citing generally broad support across demographics
Observers said Trulieve is likely to spend another $20–$25M on the campaign before Election Day. Six other MSOs have committed to $15M in additional campaign funds: Verano, Curaleaf, AYR Wellness, Cresco Labs, GTI and INSA
Headset project sales of $1.7B for Trulieve, $652M for Curaleaf, and $464M for Ayr Cannabis in the first 12 months of adult-use (June 2025 through May 2026)
Judge walks back order invalidating all of New York’s cannabis regulations. The decision came in a lawsuit brought by Leafly, which challenged the state’s rules barring dispensaries from advertising on third-party platforms. — AP
State Supreme Court Justice Kevin Bryant sided with Leafly in declaring the state’s rules were arbitrary, capricious and therefore in constitutional
His ruling initially appeared to void not just the advertising rules in question but the state entire regulatory regime for being “unconstitutionally vague”
The decision was later amended to show that the judge voided the state rules dealing only with so-called third-party platforms such as Leafly that help cannabis companies promote their products
Virginia Governor Vetoes Adult-Use Cannabis Sales Bill. Republican Gov. Glenn Youngkin says ‘Cannabis is bad for Virginians’ and questions legalization’s impact on youth health and safety in veto message. — Cannabis Business Times
Gov. Glenn Youngkin vetoed a cannabis sales bill a month after Virginia’s Democratic-controlled General Assembly passed the legislation almost entirely along party lines. The bill would have allowed licensed dispensaries to begin selling cannabis to those 21 and older on May 1, 2025
In Virginia’s medical market, GTI, The Cannabist Co. and Jushi are the only three licensed businesses, operating a combined 22 dispensaries
Alabama Senate bill would increase medical cannabis production licenses. The sponsor says it aims to end litigation against the state’s Medical Cannabis Commission, but an attorney said it would make things worse. — Alabama Reflector
SB 276, sponsored by Sen. David Sessions, R-Grand Bay, would increase the maximum number of dispensary licenses from 4 to 7; require the AMCC to issue 15 licenses for integrated facilities and increases the maximum number of processor licenses from 4 to 6
It would also require the AMCC to confirm any licenses granted by the commission from June to December 2023 by June 15. The An appeals process is outlined in the legislation, with a timeline, to the Alabama Court of Civil Appeals
Whitt Steineker, attorney with Bradley doubts that this legislation is going anywhere as there are other reasonable revisions that could improve Alabama’s medical cannabis program
The state of Missouri has revoked licenses for nine cannabis facilities over “ineligibility.” The revocation from the Missouri Division of Cannabis Regulation came as a response to the state’s voter-approved regulatory program that allows for such licenses. — Heartlander News
“While owning and operating a license may include contracting for management services or consulting services, the lack of knowledge, control, agency or decision-making demonstrated by the individuals whose information was used to meet eligibility does not meet even the most generous interpretation of owning and operating a business,” DCR Director Amy Moore said in a press release
Theraplant and Verano owes CT a combined $2M after failing to open up retail outlets within the statutorily mandated time frame. Theraplant owes the state $1.5M, while Zen Leaf in Meriden (Verano) owes $500K. — Middletown Press
There is a $3M fee to convert from a medical cannabis producer or medical cannabis dispensary to a hybrid medical and recreational cannabis facility. That fee can by law be reduced if the owners open two joint ventures with individuals approved by the state’s Social Equity Council
Zen Leaf Meriden and Theraplant were notified that they did not meet the deadline or requirements to pay the reduced license conversion fee
Steve Mazeika, Verano’s VP Communications cited the 20-mile setback rule that stipulates equity joint venture dispensaries cannot be located within 20 miles of each other as well as additional regulatory requirements and restrictions as contributing factors. However, Kristina Diamond, spokesperson for CT's Social Equity Council, said the 20-mile restriction only applies to equity joint ventures that are retailers or hybrid retailers that share a common financial backer or owner
BeLeaf Medical is arguing the post-harvest employees at its Sinse facility in St. Louis are agricultural workers and don’t have the right to unionize. The decision could have national ramifications on labor law, with the company hoping to block their effort by asking the federal government to intervene. — Missouri Independent
Agricultural workers aren’t protected under the 1935 National Labor Relations Act, which ensures employees have the right to unionize without fear of retaliation
Twice so far this year, National Labor Relations Board Regional Director Andrea Wilkes – who oversees a swath of six states in the Midwest — has ruled against BeLeaf’s argument. Last week, BeLeaf filed a request for the national five-member board appointed by the president to review Wilkes’ decisions
PAX introduces new program to reduce plastic waste in partnership with rePurpose Global, the world’s leading Plastic Action Platform. Through this program, PAX is the first cannabis company to achieve Plastic Negative certification across all existing product lines. — PAX
For every PAX item customers buy, twice as much plastic waste will be removed from nature through rePurpose Global’s vetted impact project, Paraíso de Ballenas
PAX is supporting the recovery of low-value ocean-bound plastic in Colombia—including transportation, sorting, and making sure it’s properly recycled
LeafLink Wholesale Cannabis Pricing Guide 2024. Average cartridge price per gram fell by -11.8% in 2023, from $20.42 to $18.02, the largest national average change of all the categories. Pre-rolls were the only category that held steady with a very slight -0.12% decrease, drastically different from the 12% drop in 2022.
💵 Deals
Goodness Growth Holdings divests Vireo Health of New York to ACE Ventures. Ace plans to acquire assets of Goodness Growth Holdings subsidiary, Vireo Health of New York (VireoNY), pending the satisfaction of closing conditions, including secured capital commitments and regulatory approval. Terms of the transaction include a purchase price between $3.0–$5.0M for Vireo Health of New York’s licenses, inventory and assets, as well as Ace’s assumption of the lease agreement with IIP for the Johnstown, NY cannabis cultivation and manufacturing campus. Ace has agreed to assume VireoNY’s financial liabilities, including its operating losses, beginning on April 1, 2024. These activities are expected to be supported initially by a $2.5M unsecured loan from Goodness Growth to VireoNY.
Platform Cannabis Advisors (PCA), which helped launch Flower Power Dispensers near Central Park in NYC raises undisclosed amount from Poseidon. PCA was founded last year by two former officials at New York's Office of Cannabis Management (OCM) who were familiar with the state regulations. PCA's model is to provide real estate and other services to CAURD licensees in exchange for an undisclosed portion of the revenue from the business. The CAURD license holder keeps 100% of the equity in its business. PCA also provides general advisory services, access to expert licensing and compliance consultants, accounting and chief financial officer support, an interest-free line of credit and other perks.
Open Book Extracts (OBX) raises $2M subordinate secured convertible note from Organigram as part of $15M Round. The most recent investors include KEY Investment Partners and Lago Innovation Fund. Existing investors of OBX include BT DE Investments Inc., a subsidiary of British American Tobacco plc. (BAT). If OBX completes a future equity raise of at least US $5 million, the Note will convert into equity at a 20% discount to the price of that financing round. OBX also partnered with Azuca for a range of fast-acting, hemp-derived delta-9 THC ingredients.
Flyers Cocktail closes Seed Preferred Round from Delta Emerald Ventures, Mindset Capital. The company grew revenue 250% in the last nine months and expanded to nine states and over 10,000 retail accounts.
Petalfast acquires Flow Distribution, Arizona’s Largest Cannabis Distributor. Founded in 2017, Flow has been a trusted partner for some of the state's most successful and well-known cannabis brands, such as Stiiizy, Wana and 22 Red, providing full statewide sales coverage, marketing, warehousing and logistics services.
Smoakland acquires Sublime, which manufactures pre-rolls, vaporizers, extracts and edibles. The acquisition includes Sublime’s employees, its manufacturing facility and license. Financial terms weren’t disclosed, but it was an all-cash deal in exchange for 100% equity, Chang Yi, Smoakland’s CEO and chief legal officer, told MJBizDaily via email. Smoakland has its Smoakland and Sierra Hillz brands; Sublime is known for its Fuzzies brand.
Flora Growth to acquire TruHC in an all-stock deal for $6.4M. Flora's wholly-owned subsidiaries have been active in Germany since 2017, obtained the first medical cannabis license in Germany and are responsible for selling the first gram of medical cannabis in the country. The combined company will leverage TruHC's extensive German network and best-in-class EU-GMP production facility to become the preeminent German supplier of cannabis products. The company also sold 1.7M shares for gross proceeds of ~$3.2M.
Imperial Brands converts over $123M in total debt to shares resulting in 19.8% ownership in Auxly. Auxly completes conversion of $123.4M of principal and accrued interest under the 4.00% unsecured convertible debenture of the Company due September 25, 2026. Imperial has converted $121.9M of the principal amount outstanding under the Debenture at an exercise price of $0.81 for 150,433,450 common shares and (ii) $1.56M of accrued interest under the Debenture into 90,882,667 Shares at a price of $0.017, resulting in Imperial holding an equity position in the Company of approximately 19.8%.
Organigram raises C$28.8M. The Company sold 8,901,000 Units at a price of C$3.23 per Unit, which included 1,161,000 Units sold pursuant to the exercise in full of the Underwriters’ over-allotment option. Each Unit is comprised of one common share and one-half of one Common Share purchase warrant exercisable to acquire one Common Share for a period of four years following the closing date of the Offering at an exercise price of C$3.65 per Warrant Share. The company also announced its SHRED brand surpasses $200M in LTM revenue ending February 2024.
📄 Company Updates / Earnings
Schwazze Q4 & FY 2023 Financial Results. FY2023 Revenue of $172.4M; Q4 Revenue of $43.3M (down from $46.7M in Q3 2024); Income from Operations of $3.3M; Adjusted EBITDA of $53.4M (31% margin); Q4 Adjusted EBITDA was $11.0M (25.3% margin). As of December 31, 2023, cash and cash equivalents were $19.2M, total debt was $156.8M.
Glass House Brands Q4 & FY 2023 Financial Results. 2023 Revenue was $160.8M, up 89% Y/Y, Adjusted EBITDA of $24.5M. Q4 Revenue was $40.4M, up 35% Y/Y, Adjusted EBITDA was $3.8M. Cash of $32.5M. 2024 guidance of $215–$220M, which is 35% Y/Y growth at the mid-point of guidance, Adjusted EBITDA to exceed $50M and operating cash flow to be in the mid–$30M range.
Goodness Growth Holdings Q4 & FY 2023 Financial Results. 2023 Revenue of $88.1M, up 18.1% Y/Y, EBITDA of $17.0M (19.3% margin). Q4 Revenue of $24.2M, excluding discontinued operations up 34.4% Y/Y, $5.7M EBITDA (23.7% margin). Cash of $16.0M, current liabilities were $179.5M, including $88.3M in liabilities held for sale related to the Company’s businesses in the State of New York.
Leafly Q4 & FY 2023 Financial Results. Q4 Revenue was $9.7M, compared to $12.1M in Q4 2022. Adjusted EBITDA was $1.2M compared to adjusted EBITDA loss of ($4.2M) in Q4 2022. $15.3M in cash. FY2023 Revenue was $42.3M compared to $47.4M in 2022. Adjusted EBITDA was a loss of ($2.3M) compared to adjusted EBITDA loss of ($23.2M) in 2022. Ended year with 4,075 retail accounts vs. 5,806 in 2022, down (30%).
Safe Harbor Financial Q4 & FY 2023 Financial Results. 2023 revenue increased 85% to $17.6M, Net loss was ($17.3M). Q4 revenue increased 25% to $4.5M, Net income was $2.5M. Cash of $4.9M.
Tenacious Labs and Artemis Growth Partners Join Forces to Create Europe’s Largest Cannabis Investment Platform. Artemis Growth Partners received a significant minority investment from the private office of Bacardi shareholder, Adrian Clarke. The investment is part of a broader transaction that creates Europe’s largest cannabis investment platform to be named Artemis Tenacious Group. The investment by Clarke, in conjunction with additional major capital support by the private offices of the family to luxury goods global retailer Duty Free Shoppers founder and philanthropist, the late Chuck Feeney.
People’s California Responds to Allegations from Blüm Holdings. This business dispute involves People’s California’s November 2021 sale of retail assets, including People’s OC dispensary, to Unrivaled Brands, a wholly-owned subsidiary of Blüm. The sale’s total value was assessed at ~$80M, but to date, Blüm has failed to deliver on ~$50M of this value. When Unrivaled failed to pay for the retail assets, People’s California was forced to sue. In March 2023, the parties signed a settlement agreement, wherein People’s California agreed to take a reduced amount. But to-date, Blüm has failed and refused to pay, and still owes People’s California more than $23M. Under the settlement’s terms, Unrivaled must now sell People’s OC in order to meet a portion of its payment obligations. People’s California has also started foreclosing on a property owned by Unrivaled, located at 3242 Halladay Street in Santa Ana, California, which was pledged as security in the settlement.
Eaze may face worker strike in lead-up to 4/20. Four chapters of the United Food and Commercial Workers Union in California have been negotiating with Eaze on behalf of more than 500 cannabis delivery drivers since last August, according to a statement from the UFCW. Employees recently voted to reject Eaze’s “last, best, and final” contract offer, which it made on March 19. That vote authorizes the UFCW to initiate an employee strike, the union said.
Green Flower lands Western Washington University for Cannabis Product Development and Design Certificate. The program includes Cannabis 101: History and Practice Across Industries and two levels of Cannabis Extraction, Products, and Design. The programs offered under the WWU and Green Flower partnership run online for 24 weeks and start at $499 per month.
Revolutionary Clinics faces lawsuit accusing the company of owing $279,570 in unpaid rent at its dispensary in Cambridge’s Central Square. Revolutionary Clinics operates its retail dispensaries under the brand name Rev Clinics and its indoor Fitchburg cultivation under the name Rev Farms.
🏬 Retail / Manufacturing
Berner’s on Haight is no longer a Cookies-branded dispensary in San Francisco. The brand and dispensary terminated its licensing agreement, the dispensary had been a Cookies branded dispensary since 2020. It will re-launch as Blaze on Haight.
Terrabis opens its second Illinois dispensary in Plainfield, IL. Terrabishas five dispensaries and a manufacturing facility in Missouri. The Plainfield dispensary follows Terrabis’ successful opening of the largest dispensary in Southeast Illinois in June 2023.
Embarc opens first dispensary in Fontana, CA. Cynthia Peña-Rodriguez, a social worker with a master’s degree from USC, owns the dispensary along with Embarc CEO, Lauren Carpenter. The Fontana location is in a building owned by Cynthia's parents, Enrique and Leticia Peña, first-generation Mexican-Americans who raised their family in Fontana and built a successful grocery business in La Puente. The building was purchased as an investment by Enrique and Leticia.
High Seas opens in Costa Mesa, CA. The dispensary features a 1,200 sq ft lobby and 2,500 a sq ft shopping lounge with marine life in aquariums.
Two Buds, which straddles the Bronx-Mount Vernon border, is the first Jamaican-owned and operated Bronx dispensary. The Miller brothers settled in the Woodlawn neighborhood after moving to the United States from Jamaica.
Texas Original opens medical cannabis prescription pickup in Sugar Land, TX. Across the state, 5,000 to 6,000 orders are placed per month through Texas Original.
Curio Wellness Launches Manufacturing Operations In Missouri. Located in Maryland Heights, MO, the 130,000 sq ft facility will begin manufacturing and product distribution this month, with cultivation operations to commence in 2H 2024.
🌱 Product
Phylos Launches Elite Seeds: High-Potency, Production-Ready F1 Hybrid Seeds for Controlled Environments. Phylos accelerates the conventional breeding process by using genetic markers to look for plants with desirable consumer and agronomic traits. By selecting plants at the seedling stage, Phylos can analyze the same number of plants as a facility 50x larger. Successive cycles of inbreeding and high throughput genotyping tools ensure the most inbred, stable parent lines are used to create truly uniform F1 hybrid seeds.
Timeless Vapes x iAnthus for NJ. New Jersey is the sixth U.S. market where Timeless operates, following AZ, CA, MO, OH and OK. Timeless is celebrating its entry into The Garden State with the debut of its 'Greetings from New Jersey' flip case and battery in homage to the state's landmarks. In addition to the flip case, Timeless's core strains are now on shelves in New Jersey dispensaries, including Sweet Island Skunk, Jungle Punch, Blue Dream, Cactus Chiller, Watermelonz, and Blackberry Kush.
The Bloom Brand x Yield Distribution and Exhale Systems for MI. Through this partnership, Yield will be entering into an exclusive agreement with Exhale Systems, Bloom’s producer and license partner, to distribute and sell Bloom products across Michigan. From iconic varieties such as Maui Wowie and Pineapple Express to the legendary King Louie and Grandaddy Purple (GDP). Additionally, Bloom’s seasonal Live and Live Rosin lines will provide Michigan consumers with seasonal rotations of exotic strains. All lines will be available in convenient 0.5g & 1.0g formats.
The Cannabist Company x Flower by Edie Parker in 6 markets. The Cannabist Company will introduce Flower by Edie Parker’s products, including pre-rolls, vapes, and edibles, to six new markets: AZ, CA, CO, DE, FL, and VA, and launch a new line of edibles in IL, MA, NJ and NJ. Flower by Edie Parker is now available in 14 states. Select Edie Parker smoking accessories and handbags will also be available dispensaries.
SunMed Growers brings Belushi’s Farm to Maryland. The collaboration combines SunMed’s sustainable cultivation practices with Belushi’s hand-harvested, legacy strains to bring high quality cannabis to Maryland consumers.
CLS partners with Basin Mixtures to bring City Trees Vape Brand into New York. With sales of over 1 Million carts/month in Nevada, City Trees is confident these flavors will be top performers in NY.
🧔 People
iAnthus CFO Philippe Faraut Resigns. Faraut has served as the Company's CFO since November 2022. The Company has appointed Justin Vu to serve as Interim CFO, Vu joined iAnthus in early 2023 as Senior Vice President of Finance.
Leafly appoints Jeffrey Monat and Andres Nannetti to its Board of Directors. Monat has been an investor in cannabis companies since 2013, funding both cultivation and ancillary businesses. He has served as an independent director of Lowell Farms since January 2022. Nannetti brings more than twenty-five years of domestic and international business leadership. He also has experience as both CEO of companies and private equity principal investor for organizations that span the entire cannabis sector from cultivation to manufacturing.
🎙️ Interviews
Look out California, Florida is going to be the market | High Rise
Christine Smith: The Maven of Edible Experience | Cannabis Now
Fast Five Q&A: Lauren Carpenter, Co-founder and CEO of Embarc | GreenState
Cantrip's Journey Through the Hemp-Derived Looking Glass | Cannabis Law Now
Greenlight CEO John Mueller | CBE
Fantastic update Dai, thank you!