🥊 Mike Tyson and Ric Flair go viral with blunt rotation at Benzinga Conference

GrowerIQ raises $2.3M. Open Book Extracts raises $20-25M led by Btomorrow Ventures. Vermont issues initial adult-use dispensary licenses. MariMed, Cheeba Chews & Moxie enter MO. Wyld launches in OK.

👥 It was good to see some of you in Chicago at Benzinga, and especially those that were able to make it out Monday night for drinks. I’ll be at (MJ Unpacked, 9/28-30) and am starting to put together an event now, let me know if you’d be interested and I’ll send more details for an event on Wednesday, Sept. 28 from 8-11p.

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🌿 Industry

Benzinga Cannabis Capital Conference. Always good for headlines during his apprearances, Boris Jordan had not, one, but two notable predictions. He definitely got the audience thinking about Curaleaf’s Cannabis Infused Seltzer brand, Endless Coast (currently only available in MA as Jordan mentioned the infrastructure cost/density needed) saying “Personally, five to 10 years out, I think cannabis beverages will represent 50% of the industry.” Regarding rescheduling, he suggested “We’ve heard Senator Chuck Schumer say that he will do anything to keep tobacco companies out of cannabis, but, I’ll make a prediction, the minute that marijuana gets rescheduled, tobacco companies will be known as cannabis companies.” Mike Tyson and brand partner Ric Flair lit up during their panel and after outside TAO, garnering Tyson 2.0 plenty of earned media. Outside of these two major headlines, the conference was well attended by investors, executives and industry insiders and the setting at Palmer House made it easy to bump into familiar faces & names.

Barstool Sports @barstoolsports

Ideal blunt rotation

BDSA estimates Global Cannabis Sales to reach $57B in 2026. BDA expects U.S. cannabis sales to reach $42 billion in 2026, which will make up 75% of total global cannabis sales. And, despite concerns caused by inflation, legal cannabis sales in the U.S. will surge to $27 billion by the end of this year, a 7% jump over last year's sales of $25 billion. New markets will be the significant sales driver until 2026, as the number of non-legal states is rapidly dwindling. The BDSA forecasts were adjusted due to factors such as "erosion of price in environments with high retail per capita numbers."

Vermont issues 1st retail cannabis licenses. Businesses in Middlebury, Rutland and Burlington are the first in Vermont to secure licenses to sell cannabis for recreational use. The state Cannabis Control Board issued retail licenses to FLORA Cannabis in Middlebury and Mountain Girl Cannabis in Rutland ahead of an Oct. 1 deadline. The board also permitted Ceres Med, formerly Champlain Valley Dispensary, to move from medical to recreational sales.

Alabama Cannabis commission gets 221 initial business requests in first 2 weeks. Businesses have until Oct. 17 to file a request for business application with the commission. They will then receive applications, which are due at the end of the year. The state law says the commission can award up to 12 cultivator licenses, four processor licenses, four dispensary licenses, five integrated facility licenses and an unspecified number of secure transport and state testing laboratory licenses.

Minnesota could lose $46M without cannabis tax, study says. Minnesota Could be missing out on up to $46 million in untaxed sales of newly legal edible cannabis products, according to an analysis from the University of Minnesota Duluth. In July, edible cannabis products became legal in the state, but the legislation that opened up that door had minimal regulation and no taxation requirements. An analysis from UMD’s Bureau of Business and Economic Research found the state could collect anywhere between $40 million and as much as $46 million in revenue in the next year if the state had a 10% tax. Michigan, a state of about 10 million people, legalized recreational cannabis in 2018. It has a 10% tax on sales, and collected $210 million last year, according to the study. Past legal cannabis bills in Minnesota, which has a population of around 5.6 million, called for a 10% tax on sales. If Minnesota taxed legal edibles under the current law, the state could reasonably expect to see half of what Michigan collected in its first year of full-scale legalization of recreational marijuana, the study said. Minnesota would see lower revenues due to its lower population and limited scope of legalization.

Heat wave strains California operators amid power outages, disruptions. A nearly two-week heat wave punctuated the end of another challenging summer for California marijuana businesses. Some operators told MJBizDaily they experienced power outages and other daily disruptions stemming from excessive heat and a taxed power grid. Others delayed harvesting and staggered work shifts as emergency measures kicked in to combat what some climate scientists predict will be the hottest September on record in California, with temperatures topping 110 degrees inland and the high 90s along the coast. The state’s Department of Cannabis Control even took the rare step of asking legal marijuana businesses to voluntarily shut off lights and major power sources and use backup generators amid the excessive heat warnings.

Michigan Cannabis Sales Slip 1% Sequentially in August Despite Record Adult-Use. Michigan cannabis sales slipped 1% compared to July and increased 26% Y/Y to $207.9 million in August. As supply continues to expand, flower pricing for adult-use has seen a dramatic decline. In August, the average price of $1869 per pound fell 3.9% sequentially and fell 47.5% from a year ago. Michigan cannabis sales expanded 82.1% in 2021 to $1.79 billion and are up 26.1% thus far in 2022 at $1.45 billion.

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💵 Deals

GrowerIQ — Raises C$3M Seed Round to scale Cannabis ERP. GrowerIQ, a cannabis enterprise resource planning (ERP) platform recently closed an oversubscribed C$3M($2.3M) seed round. The round was co-led by Golden Section and MaRS IAF, with participation from LAGO, Delbridge, GTM Fund and Gaingels.

Open Book Extracts — Receives Strategic Investment from Btomorrow Ventures as Lead Investor in Series C Financing. The funding secured could total between $20—$25M (dependent upon achieving certain milestones). The second close of the round, the first part of which completed earlier this year, was led by the corporate venture unit of BAT – Btomorrow Ventures (BTV) – and includes other investors, will support ongoing research efforts at OBX, including toxicology, safety, and efficacy research on cannabinoid ingredients and finished products, leveraging OBX's broad range of cannabinoids from hemp and natural sources, including CBD, CBN, CBC, CBG, CBT, CBDa, CBGa, CBDv, and THCv. In addition to the funding, OBX and BAT have also signed a scientific collaboration agreement covering certain areas of future R&D.

Schwazze — Acquires certain assets of Lightshade. The proposed transaction includes the adult use Lightshade dispensaries in Aurora and Denver's Washington Park neighborhood. This acquisition will bring the Company's total number of Colorado dispensaries to 25. The consideration for the proposed acquisition is $2.75M and will be paid as all cash. The acquisition is expected to close in Q1 2023 after Colorado Marijuana Enforcement Division and local licensing approval.

BellRock Brands — Acquires Michigan Licensed Operator. BellRock has agreed to acquire one of its U.S. subsidiaries, JRMI27, a medical and adult use marijuana product manufacturer located in Jackson, Michigan.

Glass House Brands — Closes Morro Bay Natural Healing Center Dispensary Acquisition. With the closing of the Morro Bay dispensary transaction, Glass House will finish Q3 with 7 retail dispensaries. Glass House expects to issue on closing a total of ~2.0M new equity shares in conjunction with the closing of the Morro Bay acquisition. These shares will all be issued at $4.41 per equity share, the 25-day VWAP for Glass House Brands equity shares trading on the NEO Exchange calculated as of May 12, 2022, the date upon which definitive agreements were signed. Up to an additional 0.5M of equity shares may be payable to the NHC sellers subject to certain contractual lock-ups and escrow holdbacks.

Merida Capital Holdings x Azucarera El Viejo (Costa Rica). Azucarera El Viejo has entered into an agreement with Merida to build a medical cannabis cultivation, manufacturing and finished goods production facility on its land in Guanacaste, Costa Rica. The project is expected to begin in 2023.

1933 Industries — Arranges $1M Line of Credit at 11% Interest. 1933 Industries has obtained a line of credit of up to $1M, provided by Paul Rosen, Chairman and CEO of the Company. The Company has agreed to provide Rosen (Lender) senior first priority security interests in all of its assets as collateral for the Loan.

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📄 Company Updates

LeafLink — Launches Full-Platform Pricing Model To Help Cannabis Brands & Retailers Simplify Operations, Save 20% On Monthly Operating Costs. With LeafLink's new full platform pricing model, cannabis businesses can streamline and centralize operations for one predictable monthly cost, and reinvest the money they will save on wholesale margins directly back into growing their business. LeafLink's suite of offerings include: logistics and supply chain solutions, payment tools, an industry-leading marketplace that integrates with the other systems in the cannabis tech stack, advertising opportunities to maximize exposure to buyers, and real-time insights that give users wholesale reporting to make the strategic business decisions.

Headset — Expands Cannabis Data Insights to Massachusetts and Florida Markets. This expansion will mark Headset's fourteenth and fifteenth cannabis market reads based on aggregated Point of Sale data at the receipt level for the U.S. and Canadian markets. Headset Insights is also available in Arizona, Alberta, California, Colorado, Maryland, Michigan, Illinois, Nevada, Oregon, Washington, British Columbia, Ontario, and Saskatchewan. The platform will offer category-level data to better understand Florida's medical market, while the deeper Massachusetts read now allows cannabis businesses to leverage more granular data down to the SKU-level.

MariMed — Brings Brands and Products to Missouri and Michigan Market. MariMed will develop and manage a state-of-the-art production kitchen in Missouri. MariMed anticipates completion of the facility in Q1 2023 with wholesale sales to commence thereafter. MariMed intends to manufacture and distribute a select variety of its brands and products throughout Missouri, including its Betty’s Eddies fruit chews, a top-selling edible in every state where it is sold, its Bubby’s Baked soft and chewy baked edibles, and its Vibations: High + Energy powder drink mixes. For Michigan, MariMed has an agreement with 42 Degrees, to manufacture and distribute MariMed’s brands and products. 42 Degrees currently wholesales products into 340 dispensaries, representing ~75% of the operating dispensaries in Michigan. The agreement provides initially for the manufacture, sales, and distribution of MariMed’s Betty’s Eddies full-spectrum fruit chews into the adult-use market. The intention longer-term is to roll out other brands in MariMed’s portfolio, including Bubby’s Baked baked goods and Vibations: High + Energy powder energy drink mix.

Icanic — Closes Recapitalization Transaction and C$1.3M Private Placement. As of the closing of the Recapitalization Transaction on September 9, 2022, each Secured Debentureholder received: (i) 25% of the principal and interest outstanding on the 2019 Debentures in cash (~$3.7M); and (ii) a new secured debenture in the principal amount equal to 75% of the outstanding principal and interest (~$11.2M). The New Secured Debentures bear interest at 11% per annum and mature 24 months following the Effective Date. Interest on the New Secured Debentures is payable in cash on the New Maturity Date. The Company closed a private placement of C$1.3M. The Additional Secured Debentures bear interest at a rate of 11% per annum and mature twenty four months from the date of issue.

Tinley's — Adds New Clients to Its Long Beach Facility and Provides Corporate Updates. Tinley’s has entered into new contracts to manufacture infused beverages for two new clients, Gem + Jane, a brand licensed to House of Saka, and Moneta brand. Production at Tinley's Long Beach, California facility for both brands is expected in Q4 2022. Tinley's has received a wide range of benefits resulting from the strategic investment in the Company by Blaze Life Holdings. In addition to the $3.5M commitment announced on June 10, 2022, BLH has been providing dedicated operational and engineering support services to the Company.

SNDL and IM Cannabis — Complete SNDL's First International Export of Premium Dried Flower from Canada to Israel. SNDL has completed its initial international export of approximately 167 kilograms of premium dried flower from Canada to Israel as part of its total commitment with IMC. SNDL and IMC have agreed to the aggregate export of 1,000 kilograms of high-quality dried flower products for processing and distribution in the Israeli medical cannabis market.

PharmaCielo — Shipment of Dried Cannabis Flower to the Czech Republic, Representing the Company's First Shipment of Medicinal Grade Dried Cannabis Flower into the EU. The customer is an established cannabinoid-focused pharmaceutical distributor and clinical research organization in the country. The customer currently imports cannabinoids from The Netherlands and Canada.

urban-gro — New Stock Repurchase Program. The Company’s Board of Directors has approved a new stock repurchase program authorizing the repurchase of up to $2M of its common stock. The new repurchase program succeeds its prior $8.5M stock repurchase program that has since been completed.

AFC Gamma — Q3 2022 Dividend. The Board of Directors of AFC Gamma declared a quarterly dividend of $0.56 for the quarter ending September 30, 2022 per outstanding share of common stock, payable on October 14, 2022 to the common stockholders of record on September 30, 2022. The September quarterly dividend represents a 30.2% Y/Y dividend increase.

Chicago Atlantic Real Estate Finance — Q3 2022 Dividend. The Board of Directors has declared a regular quarterly cash dividend of $0.47. The dividend, which equates to an annualized rate of $1.88 per common share, is payable on October 14, 2022 to shareholders of record as of the close of business on September 30, 2022.

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🌱 Product

Wyld — Launches in Oklahoma. The Sooner State becomes the eighth U.S. state to offer Wyld products, joining Oregon, California, Colorado, Nevada, Arizona, Michigan and Washington. Wyld’s 100mg per container lineup offers Sativa-, Indica- and Hybrid-enhanced edibles in the following flavors: raspberry, huckleberry, marionberry, pomegranate, pear, elderberry, sour apple and sour cherry. In addition, the high-dose lineup supplies Sativa-enhanced raspberry and Indica-enhanced marionberry edibles as 1000mg per container products. Strawberry 20:1 CBD:THC + Hybrid enhanced and Peach 2:1 CBD:THC + Hybrid enhanced edibles will also be available as 100mg per container products in the future.

TILT Holdings — Brings Highsman to Massachusetts. Highsman is available to patients and adult-use consumers at TILT subsidiary, Commonwealth Alternative Care (CAC), locations in Brockton, Cambridge and Taunton, as well as at wholesale dispensary partner locations throughout Massachusetts. Highsman enters Massachusetts with its Game Time series, featuring new-to-market flower that Williams personally selected in collaboration with TILT’s cultivation team leadership. The series includes: Pregame, a collection of energizing and attention-grabbing Sativas; Halftime, a collection of balanced and restorative Hybrids; and Postgame, a collection of restful and recovery-focused Indicas.

Cheeba Chews — Brings Cannabis Edibles to Missouri. Cheeba Chews has expanded into Missouri via a partnership with Stash House Distribution. Products inlclude Mega Dose Taffy Chews (500mg), Extra Strength Green Hornet Gummies (500mg), ellness Line (100mg), Originals (100mg).

Moxie and Organic Remedies MO — Begin Cannabis Production in Missouri After Signing Strategic Alliance Agreement. The company will work with and advise ORMO as they use their local expertise to produce cannabis medicines and expand access to treatments for Missouri residents across the state. Moxie has developed products are available across California, Utah, Pennsylvania, and now Missouri.

The Parent Company — Launches FaZe Rain's RCVRY Cannabis Brand. RCVRY is a premium cannabis brand co-founded by Nordan Shat (aka FaZe Rain), Youtube star and co-founder of the popular esports and entertainment organization, FaZe Clan. RCVRY, created in partnership with The Parent Company's Caliva premium cannabis brand, will open up early access hosted by Merry Jane. The launch will include limited drop eighths of the "Rainz Runtz" strain, which was hand-selected by the RCVRY team in collaboration with TPCO and is the product of a meticulous process seeking exclusive flower. This strain gives off a faint berry-like smell and is part of the same lineage as the Zkittles and Gelato phenotypes. Rainz Runtz will be available in limited quantities exclusively at Calma dispensary in West Hollywood.

RIFF Cannabis Brand (Tilray Brands) — Launches Drumsticks. Specially produced in limited quantities, RIFF Drumsticks are made with Granddaddy Purp whole flower, featuring grape and berry aromas, rolled in unbleached paper, dipped in sticky distillate, and coated in a bed of kief to provide the ultimate elevated RIFF experience. Coupled with a high THC potency, these infused pre-rolls march to their own beat.

Akanda — Partners with Cookies to Bring Strains to European Consumers. Exclusive licensing agreement enables Akanda to cultivate, manufacture and sell Cookies branded products in Portugal, including operating Cookies branded pharmacy outlets. Akanda intends to initially produce EU GMP certified Cookies branded high THC medical cannabis products at its flagship indoor premium cultivation and manufacturing facility in Sintra, Portugal.

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🧔 People

Eaze — Appoints Cory Azzalino as CEO. Azzalino takes over for Ro Choy after serving as COO and Chief Strategy Officer, initially joining as SVP Finance.

Unrivaled Brands — Appoints Patty Chan as Interim CFO. Chan previously served as CFO for Upexi, a CBD manufacturing, distribution, wholesale and retail company.

YourWay Cannabis Brands — Jacob Cohen resigned as CEO. Cohen will continue to serve as President of Arizona Operations and as a director on the Company's board of directors. The Company's Executive Chairman, Jakob Ripshtein, will assume the position of Acting CEO, effective immediately. Ripshtein was appointed as Chairman of the Board in 2021 and as Executive Chairman earlier this year. He previously served as the President of Aphria.

Tinley's — Appoints Theodore Zittell as CEO, Names Richard Gillis as President Tinley's Brands USA. These appointments coincide with the dissolution of the Office of the CEO, which was comprised of members Theodore Zittell, Richard Gillis, and Douglas Fulton.

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🎙️ Interviews

Yahoo Finance @YahooFinance

"People are buying cannabis whether or not there's inflation," @Curaleaf_Inc Chairman @Boris_Jordan says. "However, they're changing their patterns of buying." Full interview:

High Returns: A Bostonian’s Guide to Investing in Cannabis (Boston Magazine)

Greenlight is Building a Footprint in the Midwest Ahead of Adult-Use (NCV)

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👋 Highly Objective is curated by Dai Truong, who leads Cannabis Investment Banking at Arlington Capital Advisors. Third-party information presented here and links to third-party content are for informational purposes only and are not intended as a recommendation, offer or solicitation for the purchase or sale of any financial instrument, security or investment.  The information provided is not warranted as to completeness or accuracy and is subject to change without notice. Linking to third-party sites in no way implies an endorsement or affiliation of any kind between Arlington Capital Advisors, LLC, or its affiliates and any third party.  The information in this blog constitutes my own opinions (and any opinions posted by guest bloggers from time to time) and it should not be regarded as a description of services provided by Arlington Capital Advisors, LLC or any affiliate.