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🏙️ New York Cannabis Control Board (CCB) Approves 50 Additional Dispensary Licenses
👨AWH appoints John Hartmann (BuyBuy Baby) CEO. 💳 Silver Spike Leads $35M Senior Secured Credit Facility for Jeeter. 🚚Financial Stability for California Cannabis Coalition (FSCC) formally launches.
LMC (53K subs on YouTube) has created some interesting documentaries on Cannabis and teased one that he may have on Catalyst vs. Glass House if he gets enough comments on the twitter post, check it out here and comment if you’re interested.
🔫 This was the IG post from Catalyst CEO Elliott Lewis that put things in motion.
New York cannabis regulators approve 50 additional adult-use licenses. The Cannabis Control Board issued 50 additional licenses to operate adult-use dispensaires, which now sits at 215 licenses awarded. — Syracuse.com
Significantly shortened waiting period for Registered Organizations (ROs) to enter the recreational market, scrapping an initial three-year waiting period and allows for registered organizations to open one co-located medical and adult-use dispensary by the end of 2023 followed by a 2nd and 3rd store after June 2024
ROs must dedicate a minimum of 50% of shelf space available for adult-use products cultivated and processed by licensees that are not ROs until 2025 (and 40% thereafter)
Market entry fees for ROs: $5M at licensure, $5M within 180 days of opening a second store, $5M when $100M in revenue is achieved and $5M when the company reaches $200M in revenue
Vicente LLP is doing a live session today (Wednesday, May 17) at 1 p.m. ET to dive into the following topics:
Summary of significant changes from the first draft of the regulations
How the new regulations will impact capital raises and M&A
Anticipated timeline and content of adult use applications
Overview of license types (including canopy tiers)
Summary of how existing operators can obtain a license in New York (including license caps)
Florida Attorney General Asks State Supreme Court To Block Marijuana Legalization Initiative From 2024 Ballot. About a week after the Smart & Safe Florida campaign said that they’ve collected enough raw signatures to qualify for the 2024 ballot, Florida Attorney General Ashley Moody (R) transmitted the measure to the court, with an opinion challenging its constitutionality. — Marijuana Moment
Specifically, Moody is claiming that the initiative violates the state Constitution’s single subject rule, which requires ballot proposals to be narrowly focused on an individual issue. She made the same argument against a 2022 legalization measure, and the Supreme Court subsequently invalidated it
Trulieve, which is heavily supporting the Smart & Safe Florida campaign, has contributed more than $38 million to date
Minnesota Legislature reaches deal on legalized recreational cannabis, vote likely in final days of session. The final deal will legalize cannabis for recreational use, but also allow for new state-licensed businesses that will grow, manufacture and sell at dispensaries. — CBS News
The deal is "locked," after Tuesday's conference committee with no additional changes. When the compromise bill gets to the floor, it's an up-or-down vote. No further amendments can be added
On Tuesday, the committee agreed to the final areas of the proposal: taxes and spending. There will be a gross receipts tax of 10% on marijuana products. That's an increase from the House's initial proposal of 8%
California cannabis companies hire credit group to monitor retailers over unpaid invoices. The Credit Management Association (CMA), a nonprofit based in suburban Los Angeles, is analyzing accounts receivables and other documents from more than a dozen distributors and brands. — MJBizDaily
The CMA plans to email each of the distributors and brands a “do not sell list” of 25 California retailers that don’t pay their bills on time
Companies on the “do not sell” list owe at least an estimated $625,000—likely indicating that retailers and delivery providers statewide (including those not on the list) collectively owe more than $1 million in unpaid invoices
Sunderstorm (Kanha) has utilized collection agencies as a last resort, with varying success. Given the 20% cut, any debt resolution likely results in a business loss
California state assembly member Philip Ting hopes to ease the state’s cannabis credit crises with one of the nation’s first credit laws (AB 766) for Cannabis sales, which levies stiff penalties against operators skirting credit agreements
Financial Stability for California Cannabis (FSCC), a new coalition composed of industry stakeholders (wholesalers, brands and producers that represents ~45% of the state’s industry by sales volume) formally launches to raise awareness and offer solutions to severe credit issues that threaten the industry’s stability
Oklahoma Extends Ban on New Medical Cannabis Businesses Until 2026. The state’s ban on issuing new medical cannabis licenses was extended to Aug. 1, 2026, two years after the initial expiration date. — Cannabis Business Times
As of May 1st, there are 365,667 registered medical patients, 1,497 caregivers, 6,675 growers, 2,865 dispensaries, and 1,805 processors in Oklahoma, according to the Oklahoma Medical Marijuana Authority
$21 Million Worth of Legal Cannabis Sold in Connecticut in April. $11.4 million in sales for medical marijuana and $10.2 million was for adult use. — NBC CT
Details on Products and Average Price: 314,985 products sold to MM patients, 259,499 products sold to adult-use consumers, Average product price for medical marijuana patients: $36.51, Average price of adult-use products: $39.58
Two budding Texas cannabis companies pop open new THC-infused seltzers.
Bayou City Hemp Company (BCHC) has teamed up with 8th Wonder Brewery, Distillery, and Cannabis to manufacture these nonalcoholic beverages for statewide distribution. They have previously worked together since 2021 to pioneer the first-ever hemp-infused seltzer in the state. — CultureMap
In addition to BCHC's THC-infused ranch water and paloma seltzers, a few of the beverages that will be available all throughout Texas include 8th Wonder's Trillionaire, Lil Bit, and Wonder Water
To ensure the beverages are compliant with Texas law, they have been formulated using BCHC's proprietary technology with hemp-derived Delta 8 and Delta 9 THC
2023 Emerald Cup. The Emerald Cup celebrated its 19th awards show at the Craneway Pavilion in Richmond, California, on May 13, 2023. — Forbes
Covers almost 50 categories with close to 100 judges; winners include Fig Farms, Ridgeline Farms, Sol Spirit Farm, Rosin Tech Labs, Queen Mary, Space Gems
Farechild Events launch The Emjays Cannabis Awards in association with MJBizCon. The fully produced show will consist of a red carpet entry, 24 award categories with different “celebrity” presenters for each category, live music performances and an afterparty.
The event will take place on Thursday, November 30th (during MJBizCon) at the Palms Hotel & Casino Las Vegas—with seating capacity for up to 2263 guests
Clio Cannabis Juries for 2023 Awards. Three leaders will serve as chairs across Marketing & Advertising, Film & Advocacy and Design & Innovation.
Early deadline for entries is on May 26 followed by a final deadline on July 21. Post judging rounds in August and September, winners will be announced later this fall
Silver Spike Leads $35M Senior Secured Credit Facility for Jeeter. Jeeter currently operates in CA, AZ, and MI.
Rainbow Realty Group x Sweet Leaf Madison Capital Completes $9 Million Loan to California-based Cannabis Company. The property owner/borrower is a seasoned California operator that owns a portfolio of high-end and authentic legacy cannabis brands including BLEM and Cali Lotus. The leadership team has been successfully operating in the cannabis industry for over a decade and continues to build one of the most prolific businesses in California. Its superior craft cannabis demands a market price more than three times the average flower price in California.
📄 Company Updates
💬 Given the amount of Cannabis earnings being reported around the same time, I’ve decided to move them all to a separate post (online only as I’ll continue to update it). Click below or here to view earnings results and screenshots of key metrics for the latest round of earnings.
AYR Wellness Amends GSD NJ and Sira Naturals Earn-Out. The earn-out formula and payment terms under the MIPA were amended as follows:
The first $10 million will continue to be payable in cash, the next $14 million, which was to be satisfied by issuing 12.5% promissory notes due September 2024 with interest and principal payments, will instead be satisfied by issuing 13.5% promissory notes due December 2026 with monthly interest-only payments until May 2024 (with 1% monthly amortization thereafter)
The remaining portion, which up to a potential maximum amount of $72.75 million based on sales of GSD, was to be satisfied by issuing shares based on a 15% discount to the then market price, will instead be satisfied by (i) issuing an aggregate of 3,797,468 shares or shares of CSAC Acquisition NJ Corp. that are exchangeable for shares at any time or from time to time at the discretion of the holder, at a price equal to $0.79 per shares by May 19, 2023; and (ii) a cash payment to the NJ Counterparties of ~$10.2 million to be made at a future time based on circumstances related to negotiations with other debtholders.
In addition, the Company reached an agreement with the Sira Counterparties to amend the payment terms under the equity exchange agreement (EEA) relating to the acquisition of Sira Naturals. The payment terms under the EEA, which were expected to result in a cash payment of $27.5M on or before May 1, 2024, has been amended to be paid on the later of (i) the date that is ten calendar days following the maturity date of AYR’s 12.5% senior notes due December 10, 2024 (as may be amended or extended); or (ii) May 1, 2026, but in no event later than December 10, 2026. The unpaid portions of the EEA earn-outs will bear interest at a rate of 6% per annum with 10% annual amortization.
RIV Capital Provides Update on Revised New York Cannabis Market Draft Regulations and Operational Milestones. The company plans to enter the New York wholesale market in early Q4 2023. RIV Capital expects to launch adult-use retail sales by year end at one of its flagship locations, with two additional locations to follow in 2024. It also intends to complete expansion of Etain's Chestertown cultivation and production facility, with planting expected in the coming weeks.
FLUENT moves U.S. Headquarters to Tampa, FL. The Company is moving its headquarters from Miami to the Westshore District of Tampa, Florida. Over the next four months, the Company plans to create more than 30 new jobs in administration, finance, human resources, marketing, sales, operations and other key roles, with an average salary of $100K.
Metrc Receives Notice of Intent to Award Cannabis Track-And-Trace Government Contract from the State of Illinois. This would mark Metrc’s 24th government contract to date, once finalized, and the fourth time the Company would take over a government contract from an incumbent vendor.
Treez Enters New Jersey Cannabis Market With SilverLeaf Dispensary. With only 38 dispensaries, the market is in its infancy. The move by Treez to enter the state of New Jersey is part of a strategic approach to continue its expansion into additional state markets like it has in Massachusetts, Illinois and New York.
Aeropay partners with KindTap to Offer the Cannabis Industry Consumer Credit for Purchases. In addition to bank-to-bank transfers, Aeropay now offers customers a second payment option, compliant digital credit through KindTap. The credit offering’s flexible payment terms allow customers to pay their bill within 30 days with no interest, or to pay their bill over a period of monthly installments. To protect customers from credit card debt, the credit solution, powered by KindTap, grants credit lines of up to $1,500 with shorter repayment terms to make money management more effortless. The interest rate added onto KindTap’s revolving balances is 18%, a lower rate than most traditional credit cards.
Petalfast Launches Second Selling Division to Service Increased Demand in California Cannabis Market. The announcement comes amidst significant growth for Petalfast, which recently expanded into the Massachusetts and Arizona markets, as well as announced new partnerships in 2023 with American Weed Co., Emerald Sun, FIND WUNDER, Freshly Baked, HighTide, Old Pal, Sip Elixirs, Solis and Yummi Karma.
ACT Laboratories expands to Florida with acquisition of Green Scientific. Following the acquisition, Rafael Bombonato, Chief Compliance Officer and Interim CEO of Green Scientific, will become VP of Quality for ACT Laboratories and Diana Asensio, currently Green Scientific’s Lab Director for Florida, will continue in the same role for ACT Laboratories.
Manhattan’s Gotham Cannabis Dispensary Goes for Luxury Vibe. Gotham, a new cannabis dispensary that opened last week on East Third Street between Bowery and Second Avenue, seems to be angling for that niche with its minimalist design, selection of high-end home goods, and cannabis accessories in the front of the store, never mind a concierge-like experience. Flower, edibles, vaporizers, pre-rolls, and tinctures are on the 2,800-square-foot store’s shelves as well as collaborations with New York-based brands like Edie Parker, Flowerhouse, House of Puff, and Rose New York x David Zilber of Noma.
Jersey City Cannabis Board approve four additional dispensaries. Despite a pending six-month moratorium imposed by the City Council on the establishment of new entrants into the local market, four new cannabis businesses were approved by the Jersey City Cannabis Control Board at their most recent meeting. The Garden on Summit, Barthelemy Farms LLC, Altalune, and Retreat NJ all received enough votes to proceed forward just days before the May 15 moratorium.
Exclusive Brands opens 10th dispensary in Oxford, MI. The new store will feature brands, including Kushy Punch, Platinum Vape, Terpene Tanks, Church Cannabis Co., Neno’s Naturals, Strain Kings, MKX, The 8th by White Boy Rick, FLAV, Packwoods, Breeze and more.
Schwazze closes transaction to acquire certain assets of Cannabis Care Wellness Centers, LLC and Green Medicals Wellness Center #5, LLC (d/b/a "Smokey's") for $7.5M. The transaction includes dispensaries in Garden City, CO and Fort Collins, CO. This acquisition brings the Company's total number of Colorado dispensaries to 27.
Willow Industries Expands Business Services with Launch of New Consulting Arm: Willow Scientific. Willow Industries, the leader in cannabis kill-step and decontamination technology, has launched Willow Scientific, a new tiered suite of microbial consulting services that offers a proactive approach for long-term success by addressing and solving contamination at the source. Leveraging its team of cannabis microbiology experts, Willow Scientific consists of three tiers of stand-alone consulting services, including: in-person consultation with respect to facility assessments; microbial management plans; and customized best practices such as good manufacturing practices, standard operating procedures, sanitation standard operating procedures and other solutions to improve overall operational efficiencies and cleanliness.
Timeless Vapes x Good Day Farm Partner with DJ Stewart to Support Head for the Cure Foundation. DJ Stewart is a skateboarder and activist from Kansas City, MO who after beating his battle with brain cancer decided to dedicate himself to working with Head for the Cure. In an initiative to support the foundation, Stewart and Timeless collaborated with Kansas City artist John F. Malta through Timeless's Artist Legacy Program to design a limited-edition vaporizer flip case and battery combo inspired by Stewart's love for skateboarding and his resilience in the face of cancer. Available exclusively at Good Day Farm locations in Missouri, all proceeds from the flip case and battery will benefit Head for the Cure.
Toast x The Nirvana Group — Expands Partnership, Product Launches in Oklahoma and New Mexico. The two companies first began working together in 2021, with The Nirvana Group’s wholesale operation, Argent Cannabis, signing on as Toast’s Oklahoma distribution partner. As part of their latest collaboration, The Nirvana Group will assume the role of Toast’s manufacturing partner in Oklahoma, as well as in New Mexico, marking the latter brand’s first foray into the state’s year-old adult-use market.
TeaPot™ Introduces Newest Style of Cannabis-Infused Iced Tea – Mango Green Tea. TeaPot (Boston Beer Company) cannabis-infused iced tea brand continues its expansion across Canada. TeaPot has launched its newest flavor, Mango Green Tea. After Teapot made its debut in Canada in late 2022, Lemon Black Tea garnered the esteemed title of Best New Product, as voted by Canadian consumers.
AWH appoints John Hartmann as Permanent CEO, President/Interim Co-CEO becomes Advisor, CRO departs; adds Sam Brill as Director. After an exhaustive search, led by Russel Reynolds, the Board has appointed John Hartmann as the new CEO of the Company. Hartmann has served as President of BuyBuy Baby and CEO of True Value Company. Additionally, Hartmann has served on the boards of various public and private companies: Boyd Group Services, Inc (TSX: BYD) and HD Supply, Inc (a wholly-owned subsidiary of The Home Depot). Frank Perullo, a Co-Founder, who previously served as President and Interim Co-CEO, will continue to serve on the Board, and will transition to a Strategic Advisor role. Chris Melillo, Chief Revenue Officer and the Company have mutually decided to part ways. Sam Brill has served as the President and CIO of Seventh Avenue Investments (SAI) since August 2017. SAI is the PE arm of a single-family office in NYC with a multibillion-dollar asset portfolio.
Würk Names Deborah Saneman CEO. Scott Kenyon will remain Executive Chairman. Deborah Saneman has served as COO for the past two years. Prior to Würk, she spent two decades in financial services, consulting and payroll, even serving as president of the Independent Payroll Providers Association. In the last 12 months alone Würk has moved $4 billion and continues to grow in market share, holding over 70% of the combined medium and enterprise HRIS technology market. Additionally, Würk works with 80% of the nation’s top MSOs.
Planet 13 appoints Lee Fraser as Board Member and Audit Committee Chair. Fraser is an accomplished CFO and finance and accounting executive with 20+ years of experience at publicly traded companies and private businesses. He has overseen financial reporting, large-scale construction projects and managed real estate portfolios for Warner Bros., Fox Corp. and many others.
Lowell Farms CFO, Brian Shure, Departs. Tessa O’Dowd, who has been serving as SVP Finance, will assume the role of the Company’s Interim CFO, effective immediately.
How NYC’s slow legal weed rollout created a boom in ‘gray’ market shops | CNBC
Hirsh Jain on Stakeholder Capitalism | Twitter/@mayortoby
Missouri Cannabis: Growth, opportunity, and obstacles | Greenway
Carlos Santana on Mirayo's (TPCO) Present And Future | Forbes/Javier Hasse
Seth Yakatan on the Opportunity in Cannabis | Cannabis Investing Podcast
MJ Unpacked CEO George Jage on Trade Shows | CBE
Rocky Mountain Reagents, The GMP Collective, Final Bell | The Hoban Minute
Verano COO Darren Weiss on Navigating a Tight Capital Market | CBE
Ayr Wellness CEO David Goubert | Twitter/@stock_mj
👋 Highly Objective is a weekly Cannabis newsletter and podcast 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.