📰 House Committee Approves Farm Bill Amendment To Ban Intoxicating Hemp
📰 House Committee Approves Farm Bill Amendment To Ban Intoxicating Hemp
US Cannabis use outpaces daily alcohol consumption. AFC Gamma x Grön credit facility. Glass House withdraws defamation suit against Catalyst. Theraplant subject of several investigations.
🌿 Industry
House Committee Approves Farm Bill Amendment To Ban Delta-8 THC / Intoxicating Hemp. An amendment to the new Farm Bill may put an end to the gray market for intoxicating hemp-derived products. — Forbes
The U.S. House Committee on Agriculture voted last Thursday to approve an amendment proposed by Republican Rep. Mary Miller that would ban intoxicating hemp-derived and synthesized cannabinoid products
Some cannabis companies and trade groups are pushing Congress to close a loophole that allows the production and sale of intoxicating substances derived from legal hemp. The hemp industry has a very different ask for lawmakers: leave the federal definition of hemp unchanged
As a result, the amendment would federally ban all hemp-derived products like delta-8 THC, semi-synthetic cannabinoids like HHC, as well as synthesized products like THC-O, disrupting a $28 billion gray industry
Specifically, it distinguishes between two categories of hemp: 'hemp grown for cannabinoid extraction,' used for producing non-intoxicating substances, and 'industrial hemp,' used for non-cannabinoid purposes like food, fiber, and research. This new definition contrasts with the 2018 Farm Bill's all-inclusive definition of hemp
US Cannabis use outpaces daily alcohol consumption, study shows. A long-running US survey of the country’s drinkers and cannabis users has found the daily use of Cannabis has outpaced alcohol for the first time. — AP
In 2022, 17.7M people reported using marijuana daily or near-daily compared to 14.7M daily or near-daily drinkers, according an analysis of national survey data
“A good 40% of current cannabis users are using it daily or near daily, a pattern that is more associated with tobacco use than typical alcohol use,” said the study’s author, Jonathan Caulkins, a cannabis policy researcher at Carnegie Mellon University
"I'm Stuck," which operates 7 unlicensed cannabis dispensaries, faces $15.2M fine. Owner David Tulley is accused of illegal cannabis sales and skirting cannabis regulations. — CNY Central
Daniel Haughney, who is the director of enforcement for the Office of Cannabis Management, said the investigation began with law enforcement tips in 2022
The $15.2M, which includes $10,000 per day for selling cannabis without a license, $20,000 per day for continuing unlicensed sales after receiving a Notice of Violation, a $5,000 penalty for removing the notice of violation from the Lyons location, and costs incurred by the AG's office in this case, totaling $1,325
“This significant fine sends a clear message to illicit operators that the state will vigorously enforce cannabis regulations to ensure the safety and integrity of the industry,” said Haughney
Medical Marijuana farming could move from Louisiana universities to private companies. The two public universities that have held exclusive rights over medical marijuana farming in Louisiana could soon lose their duopoly after the Legislature approved a bill that will fully privatize cultivation in the state. — Louisiana Illuminator
Louisiana issues only two medical marijuana grower licenses each year. They are currently held by LSU and Southern University. That’s been required by law since the state enacted its medical marijuana program in 2015
To get their cannabis farms up and running, the colleges partnered with Good Day Farm and Ilera Holistic Healthcare. McMath’s bill will transfer the cultivator licenses to those companies and allow them to keep them as long as they file for renewal each year
Good Day Farm’s primary shareholder is shipbuilding magnate Donald “Boysie” Bollinger, one of the wealthiest persons in Louisiana. The company’s president is John Davis, husband of state Rep. Paula Davis, R-Baton Rouge
New York quietly halts $200M cannabis social equity fund. The Social Equity Cannabis Investment Fund, which was overseen by DASNY, came under fire last month after a report by local nonprofit news outlet The City alleged that DASNY entered into an agreement that allowed Chicago Atlantic to provide $50M to the fund at a 15% interest rate. So far, the fund has signed 24 leases. From now on, the cannabis fund will only lease dispensary locations already acquired by Chicago Atlantic to potential licensees.
Canada March sales up 7.1% to C$414.1M from February, up 1.9% Y/Y
Vermont now has 81 dispensaries statewide—12 of them alone are located in Burlington, with another two set to open soon. Many are concentrated downtown, in some cases just feet away from each other. PhytoCare, a medical cannabis dispensary acquired from Curaleaf in Bennington, VT, is closing down due to several challenges.
💵 Deals
AFC Gamma provides senior secured credit facility to Grön. Grön intends to use the proceeds from the new credit facility to expand its business into new states. AFC Gamma will hold the entire credit facility, which consists of a first-lien term loan secured by all assets of Grön.
Glass House Brands Files Base Shelf Prospectus. The Shelf Prospectus allows Glass House to offer from time to time over a 25-month period, equity shares, preferred shares, debt securities, subscription receipts, warrants and units comprised of more than one of the foregoing securities, or any combination thereof, in all of the provinces and territories of Canada.
Agrify $13.8M Debt-to-Equity Conversion in order to regain Compliance with Nasdaq. In connection with the conversions, CP Acquisitions, an entity affiliated with and controlled by Raymond Chang, the Chairman and CEO of the Company, and I-Tseng Jenny Chan, a member of Agrify’s Board of Directors, converted $11.5M of its senior convertible note into a Pre-Funded Warrant exercisable at issuance for up to 8,561,644 shares of common stock. GIC Acquisitions, an entity affiliate with and controlled by Mr. Chang, converted $2.3M of its junior secured note into a Pre-Funded Warrant exercisable at issuance for up to 3,225,807 shares of common stock. Each Pre-Funded Warrant includes adjustment provisions in the event that Agrify conducts any equity financing during the twelve month period following conversion, subject to shareholder approval. This follows Agrify and Nature’s Miracle’s decision to mutually agreed to terminate the agreement and plan of merger, previously announced on May 16, 2024, given unfavorable market conditions.
📄 Company Updates / Earnings
Eaze Restructures, will continue to operate during “foreclosure.” Eaze’s largest investor, Jim Clark, foreclosed on the company after the company tripped a covenant on one of its loans. Cory Azzalino, Eaze’s CEO, told SFGATE that the foreclosure is a dispute among the company’s investors, as it could result in Eaze investors aside from Clark losing their equity rights to the company. Azzalino said it would not affect the company’s operations and said the company was still in a healthy financial position.
Glass House Withdraws Defamation Suit, Citing Catalyst Financial Viability Concerns and Harassment Threats to Customers. The company cited Catalyst CEO Elliot Lewis claiming on LinkedIn about his company’s practice of systematically paying less excise taxes than what the state would want, paying $2M less in one quarter alone. If this number is consistent throughout the year, it would mean that Catalyst would be paying $8 million a year less in excise taxes than most, if not all, other cannabis retailers in the State with comparable sales. Glass House said Catalyst’s claims will be proven false through the defeat of the separate litigation Catalyst filed against Glass House for unfair competition. Elliot pushed back on the company’s liquidity position, citing that it is in a better position then when the lawsuit started and that Glass House didn’t actually address the claims against diversion of its products.
Theraplant, CT's first cannabis producer, subject of “several' investigations.” The state Department of Consumer Protection has opened an investigation but declined to divulge the nature of the investigations. The department currently has several cases open against DXR Finance 3, (formerly licensed as Theraplant), while cases are in the investigation or enforcement stage, the information related to the case is deemed confidential.
WM Technology Q1 2024 and FY 2023. Revenue for Q1 2024 was $44.4M as vs. $46.4M in Q1 2023, Adjusted EBITDA increased to $9.6M from $7.1M vs. Q1 2023, Net income increased to $2.0M vs. a net loss of ($4.0M) in Q1 2023. Cash increased to $35.7M as of March 31, 2024. Revenue was $188.0M for FY2023 vs. $215.5M in FY2022, Adjusted EBITDA was $36.9M vs. $(9.6M) in FY2022, Net loss was ($15.7M) vs. net loss of ($82.7M in FY2022.
🏬 Retail / Cultivation
Green Horizons celebrated the opening of the first phase of its one million square foot state-of-the-art cultivation campus in Coachella, CA. This first phase is expected to produce 35,000 lbs. a year of premium sun-grown cannabis at a disruptive low-cost basis. A second cultivation and manufacturing phase will break ground shortly on the consolidated campus, adding an additional 125,000 sq. ft.
Beer World to open dispensary in Catskill, NY. Beer World is looking to convert part of the beer store into a dispensary. To convert the building into two businesses, the business will extend the existing entranceway and canopy covering it, to make a larger entrance that will have two sets of doors: one for Beer World and one for the dispensary.
nuEra opens DeKalb, IL dispensary. The 5,000 sq ft retail space is situated opposite Northern Illinois University was previously occupied by Book World.
Shangri-La opens Norwalk, CT’s second dispensary. The first dispensary in the city, Fine Fettle, beat Shangri-La to market by about a month when it opened on March 21. The company also broke ground on its second Norwalk location, a drive-thru dispensary that will be built ground-up. Shangri-La is planning additional Connecticut dispensary locations in East Hartford, Plainville, and Waterbury, a cultivation and manufacturing production facility in Stratford, and a separate manufacturing production facility.
Conservatory Cannabis partners with Tony Mart Presents for free pop-up summer music events at the South Jersey Shore. Tony Mart's was a legendary club at the Jersey Shore from 1944. Until its closing in 1982, it housed 130 entertainers.
Curaleaf opens Miami North Biscayne Dispensary. The location marks the Company's 62nd dispensary in Florida and 146th nationwide.
Danville becomes the 30th Illinois town with multiple cannabis dispensaries. The Vermilion County seat is home to two, with Seven Point opening 0.2 miles away from Sunnyside (Cresco Labs).
4Front opens Mission Dispensary in Norridge, IL. This dispensary serves Norridge, Harwood Heights, Schiller Park, and the neighborhoods close to Chicago O'Hare.
Monterey, CA approves permits for four dispensaries. The permits were given to Element 7, Off the Charts, Monterey Responsible and Compliant Retail and Monterey Pacific Retail Holdings.
Flora Farms Stateline Dispensary near the Arkansas border Flourishes. The location has 14 registers and 50 employees. Flora Farms now has 320 employees, half at cultivation locations and the other half throughout dispensaries across Missouri.
🌱 Product
Bob Marley x Jeeter Collaboration launches in AZ, CA & MI. After successful partnerships with Dwyane Wade and Ricky Williams, Jeeter is collaborating with the Marley family in honoring Bob's legacy. Jeeter has chosen to honor Bob Marley's legacy by creating a product which is an homage to his favorite guitar, reimagined through the Jeeter lens. The guitar case features a faux leather material with gold-stamped details, a red velvet interior wrap, and a 4.2g vintage doobie-style joint with a Jeeter signature ceramic tip that emulates the joints Bob liked to roll.
Tyson 2.0 x G Pen Hyer Vaporizer x Stündenglass. Both products are fully customized throughout with Tyson 2.0 colorways.
List of CA Cannabis Recalls by DCC for possible contamination of Aspergillus.
🧔 People
Embattled New York Cannabis chief Chris Alexander resigns. His resignation follows Gov. Kathy Hochul’s announcement on May 12 that she would not reappoint Alexander to his job at the end of his three-year term in September. State Sen. Jabari Brisport, a Brooklyn Democrat, said he was insulted that Hochul appeared to use Alexander as a “scapegoat” for the office’s issues.
Investigation into NY Cannabis regulator Damian Fagon still going. The New York Inspector General’s Office is investigating Office of Cannabis Management Chief Equity Officer Damian Fagon, who remains on administrative leave amid allegations of retaliation and selective enforcement brought to light by a NY Cannabis Insider investigation. The OCM suspended Fagon in March after NY Cannabis Insider reported about Jenny Argie, a Hudson Valley processor who was the subject of the first and only public recall in the state.
Glass House appoint John "Jay" D. Nichols Jr to Board. Most recently, Nichols served as Chairman of the Board and Interim CEO at Protective Insurance Company, where he oversaw the acquisition of the company by Progressive Insurance Company. Prior to that, he was the CEO of Axis Reinsurance., where he was tasked with the turn-around of the company's global reinsurance business after significant losses in 2011.
Ispire names Jim McCormick as CFO. Most recently, he consulted for UMBRLA, Redbird Bioscience, Cars & Credit Master, Abstrax Tech, and Thought Leaders. Before that, he served as COO and CFO of KushCo from August 2017 to January 2019, and as President of Ignite International after that until December 2019.
Tinley's CEO Theodore Zittell steps down, Larry Weintraub appointed as new CEO. Zittell will continue as a director on Tinley's board and serve as Chairman. Weintraub co-founded Fanscape, the first social media marketing agency, which he ran as CEO until its sale to Omnicom in 2014. Following the sale, Weintraub assumed the role of Chief Innovation Officer within Omnicom's creative agency, TMA (The Marketing Arm).
🎙️ Interviews
How Jeeter Became The Kings Of The Pre-Roll Joint | Forbes (paywalled)
How Florida Will Change the National Cannabis Landscape | Cannabis Law Now
Trulieve’s Market Strategy: Kim Rivers on Expansion and Advocacy | TDR
Rescheduling Reactions and Earnings Review with CannaVestments | Higher Exchanges
Your coverage on the Mary Miller amendment to the Farm Bill is misleading: YES, it would federally ban all hemp-derived products like delta-8 THC, semi-synthetic cannabinoids and synthesized products like THC-O, as you noted.
BUT it would also ban intoxicating hemp products derived from naturally from hemp. There's not a lot of that, but enough that it has sparked a massive increase in the # of beverages with low-dose hemp-derived THC.
All of those products, jobs, and taxes are jeopardized by this amendment. It must be defeated.