⏸️ New York Cannabis Licenses Still On Hold
⏸️ New York Cannabis Licenses Still On Hold
Alabama re-awards licenses, removing Verano. Poseidon ETF shuts down. Former Trulieve CFO Alex D’Amico wrongly expensed up to $400K. Dutchie sued by ScanSource. Kiva & AYR Wellness partner in Florida.
💬 I’ll be attending Benzinga Cannabis Capital Conference next month (September 27-28) and in case any readers are on the fence, I’ll be giving away three free tickets to the event—just reply to this email with name/company/title and I’ll do a random drawing at the end of the week and will email you back if you’ve won. For those that don’t win the free tickets, use “HIGHLY20” for 20% off tickets.
🌿 Industry
Judge’s stay on lawsuit means New York cannabis licenses still on hold. New York won’t issue any more adult-use cannabis retail licenses for at least another two weeks until the latest legal challenge is resolved. — MJBizDaily
After hearing arguments on Friday from state cannabis regulators and attorneys representing a group of military veterans shut out from applying for a retail license, New York Supreme Court Justice Kevin Bryant gave both parties two weeks to work out an arrangement
If they cannot, the parties will appear again in court in late August, Bryant ruled
The ruling sides with a group of service-disabled veterans, who filed a lawsuit arguing that a priority licensing program for entrepreneurs impacted by marijuana enforcement was unconstitutional
Alabama Medical Cannabis Commission voids all previously awarded licenses, votes on new ones. Alabama Medical Cannabis Commission voids previously awarded licenses on June 12. — NBC
Exercising its authority and discretion in licensing, the Alabama Medical Cannabis Commission (AMCC) nominated applicants and voted to re-award medical cannabis business licenses
Insa Alabama, which was eighth in the June voting, replaced Verano while the other four original integrated license winners remain the same
The Alabama Cannabis Commission awards new licenses even as it reveals the number and scope of scoring errors were greater than first reported
Poseidon cannabis ETF to shut down less than 2 years after launching. The AdvisorShares Poseidon Dynamic Cannabis ETF is shutting down less than two years after launching. — MJBizDaily
The actively managed fund will liquidate its assets and distribute the proceeds to shareholders on Sept. 1
The ETF has decreased by nearly 90% since it launched in November 2021 under the ticker symbol PSDN (NYSE Arca), declining from $9.33 to $1.00
New York’s first Cannabis Growers Showcase opens in New Paltz. New Yorkers are able to consume cannabis, and farmers are able to grow it, but very few people are able to sell it yet. — Hudson Valley One
This “showcase” model is being used to help move that product while the bureaucratic wrinkles are being ironed out, by bringing in a licensed dispenser to do the selling
Cultivators aren’t allowed to sell to anyone but dispensers, in the stratified scheme set up by state regulators, and once more dispensaries are up and running these markets will no longer be used
Entrepreneurs flood Missouri cannabis regulators with microbusiness applications. 1,601 applications have been submitted to the state for 48 available microbusiness facility licenses. — STL Today
The 48 winners—16 dispensaries and 32 wholesale growers and manufacturers—will be determined by a lottery and announced in October
Additional awards of at least 48 microbusiness licenses are envisioned in 2024 and 2025 under the constitutional amendment
City Says Fresno Businessman Lied to PD. Has Cannabis License Revoked. Truffle Tree 420 was one of five social equity applicants. — GV Wire
Eddie Rodriguez qualified by having a low household income, with a past conviction for a cannabis crime
On April 27, 2023, the city council, awarded Truffle Tree a $75,000 loan, a $33,000 grant, and an additional $114,006 from state grants for start-up costs
Truffle Tree 420 received preliminary approval for its commercial cannabis permit and has an active conditional use permit application with the planning department
Dutchie is being sued by ScanSource for not paying $24.8M in unpaid products. According to Law360, Dutchie placed an order with ScanSource for touchscreen monitors, computers, and components that ScanSource purchased from Elo Touch Solutions. — Green Market Report
ScanSource said in its lawsuit that the order included customizations, such as the Dutchie name etched into the devices, which made the products nonrefundable and not cancelable. Dutchie signed a supplemental agreement in 2021 stating it understood the policy
Through June 2022, the lawsuit claims that Dutchie continued to place more orders. However, on Nov. 10, 2022, Dutchie asked ScanSource to quit placing orders and to stop all production. At this point, ScanSource had already taken delivery for many of the custom products and was warehousing them until Dutchie could tell it where to ship the products
ScanSource says that it paid Elo $10.6M for the products. Altogether ScanSource claims that Dutchie owes it $20.5M for the already-ordered products that are being warehoused and $4.3M for the Forecast-Based Custom Products
Metrc Urges Colorado State Court to Dismiss Dispensary’s Lawsuit. Filed by National Green Source in Denver District Court in June, the lawsuit seeks declaratory and injunctive relief and damages. — JD Supra
National Green claims that, since April, Metrc has refused to honor its orders for the RFID inventory tags that it needs to comply with Colorado’s marijuana regulations amid a dispute over a bill for allegedly unpaid “support fees”
National Green claims that, through counsel, Metrc contacted it in February 2022 to collect what Metrc then described as $28,800 in unpaid “support fees.” National Green’s complaint further alleges that it disputed the bill in March 2022, but that Metrc did not provide supporting statements until March 2023
Metrc sought payment for “monthly reporting fees” amounting to $26,640, discrepancies that Metrc did not explain, and that some of the statements sought fees as far back as March 2014, approximately four years before National Green obtained its first state cannabis license. National Green alleges that, after it refused to pay the bill in April, Metrc refused to honor its RFID tag orders
Chula Vista will reprocess company’s cannabis applications to comply with court order. The city has until Oct. 2 to rescore Caligrown’s applications, though it has already awarded the maximum number of permits. — San Diego Union Tribune
Caligrown sued the city in 2020 over its rejected applications to open dispensaries in Districts 1, 3 and 4
Two years later, an appeals court sided with the company and ordered the city to rescind its denial and process them again. If Caligrown is approved for a permit, it is unclear what impact the decision could have on currently permitted companies
That’s because Chula Vista already has issued the maximum number of licenses. Its ordinance allows up to eight dispensaries to open with a maximum of two storefronts in each of the city’s four districts
AZ dispensaries recalling gummies over salmonella. The product being voluntarily recalled is grape-flavored Cloud 9 gummies from Nirvana Center. — Tucson Sentinel
In addition to previous recalls in Arizona, including recalls in June and July, cannabis products have been recalled for salmonella and/or aspergillus contamination in several states, including CA, MI, FL and Canada
Michigan reported $276.7M ($270.6M adult-use + $6.1M medical) in July sales
Massachusetts reports $136M in July adult-use sales
💵 Deals
Goodness Growth Holdings has entered into consulting, licensing and wholesale agreements with two additional dispensaries in Maryland that are owned and controlled by HA-MD LLC and currently operate under the Ethos brand name. The agreements will result in the two Ethos dispensaries in Hampden and Rockville being, upon regulatory approval, rebranded to Green Goods® and include an option to acquire the two dispensaries if and when allowed by applicable law and regulations.
Greenlane completed total repayment of the remaining balance of $4.3M between Greenlane and WhiteHawk Capital Partners. With this repayment, Greenlane has fulfilled its commitments as outlined in the original $15M Asset Based Loan, resulting in the release of its obligations and collateral as specified within the terms. Greenlane also has acquired ~$3.0M in cash pursuant to the terms of future receivables financings with two private lenders. Greenlane will make weekly payments under the future receivables financings and is scheduled to repay the amounts due under the future receivables financings in ~6–8 months. On February 21, 2023, Greenlane reduced the $15M loan facility by over 40% to ~$8.5M, while also receiving more than $4.8M from the sale of its Employee Retention Credit.
📄 Company Updates / Earnings
Curaleaf Q2 2023 Net Revenue of $338.6M, a Y/Y increase of 4%, excluding discontinued operations, up 1% sequentially. Gross profit of $146.5M (43% GM). Net loss of ($71.2M) or net loss per share of ($0.10). Adjusted EBITDA of $70.0M (21% margin). Cash Flow from Ops of $8M. $85.0M cash and $574.1M debt. More here
Trulieve Q2 202 Revenue of $282M. Achieved adjusted EBITDA of $79M (28% margin), Cash of $160M, $544.5M Private Placement Notes, $102.1M Notes Payable.
GTI Q2 2023 Revenue of $252M increased 2% sequentially. Net income of $13M, Adjusted EBITDA was $76M (30% margin). Cash of $149M, debt of $289.9M. More here
Verano Q2 2023 Revenue of $234M increased 5% Y/Y and 3% Q/Q. Gross profit of $115M (49% GM). Net loss of $(13M), Adjusted EBITDA of $72M (31% margin). Cash flow from operations of $24M. Cash of $103M and debt of $420M.
Ascend Wellness Holdings Q2 2023 Gross revenue increased 28.4% Y/Y and 7.0% sequentially to $151.0M. Adjusted EBITDA was $21.3M (17.3% margin). Cash of $68.0M and net debt was $241.8M. More here
Columbia Care Q2 2023 revenue of $129M, representing 4% sequential growth, Adjusted EBITDA increased 24% sequentially to $20.3M (15.7% margin). More here
Jushi Q2 2023 reports revenue of $66.4M, down (5%) sequentially and (9%) Y/Y. Achieved reduction of over 50% in retail labor hours relative to last year's peak following the implementation of an optimized retail labor model. More here
Acreage Holdings Q2 2023 consolidated revenue of $58.1M, an increase of 3.8% compared to Q1 2023 and decrease of (5.3)% when compared to Q2 2022. The Y/Y was somewhat offset by revenue growth in both New Jersey and Connecticut.
Glass House Brands Q2 2023 Revenue was $44.7M, up 54% sequentially and 171% Y/Y. Gross margin was 55% versus 41% in Q1 2023. Adjusted EBITDA was $9.5M.
Schwazze Q2 2023 Revenue of $42.4M, up from $40.0M in Q1 2023; Adjusted EBITDA of $13.8M (33% margin), generated $2.7M of OCF. Cash of $19.9M, Debt of $155.4M.
TILT Holdings Q2 2023 Revenue was $41.6M compared to $47.1M in the prior year period. The company had a $15.7M non-cash write down expenses related to inventory, investment and loans receivable. More here
Planet 13 Holdings Q2 2023 Revenue of $25.8M, compared to $24.9M in Q1 2023 and $28.4M in Q2 2022 (down 9.1%), Gross profit was $11.9M (46.0% GM). Net loss of ($4.3M), Adjusted EBITDA of $3.0M. Cash of $40.5M.
Goodness Growth Holdings Q2 2023 revenue of $19.2M excluding discontinued operations, up 10.6% Y/Y. More here
Lowell Farms Q2 2023 Net revenue decreased 47% to $7.0M as compared to $13.2M for Q2 2022 and $7.5M for Q1 2023, a decrease of 7%. Gross margin was (4.8%). Net loss was ($0.1M). Adjusted EBITDA of ($1.2M). More here
WM Technology Q2 2023 Revenue of $50.9M vs. $58.3M in the prior year period. Average monthly paying clients was 5,609, as compared to 5,537 from the prior year period. Average monthly revenue per paying client was $3,022, as compared to $3,509 from the prior year period. Cash totaled $24.6M as of June 30, 2023, with no debt.
Leafly Q2 2023 Revenue of $10.7M, down 11% from Q2 2022. Total operating expense was $10.2M, a 48% reduction from $19.5M in Q2 2022. Net loss was ($1.4M). Adjusted EBITDA of $0.1M. $14.1M in cash. More here
Springbig Q2 2023 Revenue of $7.2M, up 12% Y/Y. Gross profit was $5.7M (79% GM). Net loss was $(2.0M). Adjusted EBITDA loss was $(1.1M). $726K cash. More here
Jones Soda reports Mary Jones revenue doubled to ~$400,000 in Q2 2023 from $200,000 in Q1 2022.
Chicago Atlantic Q2 2023 total loan commitments of ~$329.2 million across 25 portfolio investments. Had total gross originations of $1.9M in the quarter, all of which was funded to existing borrowers.
AFC Gamma Q2 2023 GAAP net income of $12.1M or $0.59 per basic weighted average common share. Declared dividend of $0.48 per common share.
GrowGeneration Q2 2023 Net sales increased 12% Q/Q to $63.9M (26.8% GM), Net loss of ($5.7M) and Adjusted EBITDA of $0.9M
Hydrofarm Q2 2023 Net sales decreased to $63.1M from $97.5M in Q2 2022, driven by a 32.5% decline in volume of products sold. The decrease in volume of products sold was primarily related to oversupply in the cannabis industry.
urban-gro Q2 2023 Revenue of $18.8M, up 12% sequentially and up 16% Y/Y. Net Loss of ($5.4M) and Adjusted EBITDA of ($2.0M). Cash of $8.6M.
Safe Harbor Financial Q2 2023 Revenue of $4.6M compared to $1.9M in Q2 2022. Total deposits increased 36% to $1.1B compared to $808.4M in Q2 2022.
CEA Industries Q2 2023 Revenue was $1.1M compared to $3.0M for the same period in 2022. The decrease was primarily attributed to lower revenue recognition and an overall reduction in capital expenditures by cannabis operators.
Greenlane Holdings Revenue for Q2 2023 decreased to $19.6M compared to $24.0M in Q1 2023. Net loss was ($10.5M) compared to ($10.2M) in Q1 2023. Adjusted EBITDA loss for Q2 2023 was ($5.8M) compared to a loss of ($6.8M) for Q1 2023.
Canopy Growth Q1 FY2024 Revenue increased 3% Y/Y to $109M. Gross margin was 5% vs. (5%) in Q1 FY2023. Net Loss was ($42M). Adjusted EBITDA loss was ($58M).
Aurora Cannabis FY2024 Q1 revenue was $75.1M, up from $50.1M in the prior year period. The increase is mainly due to growth in global medical cannabis business and plant propagation business. More here
Cronos Group Q2 2023 Net revenue of $19.0M decreased by $2.6M from Q2 2022. Gross profit of $3.1M decreased by $1.2M from Q2 2022. Adjusted EBITDA of $(15.9M).
Leafly and Greenline (BLAZE) new integration enhances efficiency, streamlines operations for cannabis retailers. With this new integration, retailers can eliminate the need to manage multiple dashboards. Leafly pickup and delivery orders will now seamlessly sync to the Greenline POS system—saving time and increasing operational efficiency. Other key features of the integration include: Real-Time Menu Sync, Unified Sales Data and Enhanced Order Management.
CannVerify and Confident Cannabis Partner to Streamline Lab Results Sharing. Through this integration, brands leveraging CannVerify’s services can now seamlessly connect their Confident Cannabis lab results, making it easier than ever to provide customers with vital information about product quality, safety, and potency. With a simple scan of a QR code, customers will have immediate access to the COAs, gaining valuable insights and assurance about the products they are purchasing.
🏬 Retail
GTI/RISE Dispensaries Debuts Revitalized Brand Identity. The refreshed brand identity and store designs were inspired by the upward momentum of the cannabis industry rising into the dawn of a new day. The dispensary design captures an optimistic and empowering aesthetic to create a bird-centric brand mark that embodies the healing and transformative qualities of cannabis. The brand mark is accompanied by a bold, vibrant color palette inspired by the cannabis plant and its products, as well as a raw, textured aesthetic that is disruptive and irreverent.
Grasshopper Club opens dispensary in South Loop (Chicago, IL). Grasshopper Club opened its first shop in Logan Square and is seeking to open a third dispensary but hasn’t settled on a spot.
Schwazze opens R.Greenleaf in Hobbs, NM. This opening along with the recent acquisition of Everest brings Schwazze's total number of New Mexico retail dispensaries to 33. Since April 2020, Schwazze has acquired, opened, or announced the planned acquisition of 62 cannabis retail dispensaries (bannered as Star Buds, Emerald Fields, R. Greenleaf, Standing Akimbo, and Everest) as well as eight cultivation facilities and three manufacturing plants across Colorado and New Mexico.
🌱 Product
Jeeter Celebrates Dwyane Wade NBA Hall Of Fame Induction with limited-edition products. The Hall of Flame box will be available to adults in CA, AZ, and MI. The cost is $80 MSRP and the box mimics a basketball in a full-grain faux leather design. There will be 15 boxes signed personally by Wade available across three dispensaries (Purple Lotus, Wellgreens CA, Curaleaf) for the first 5 customers.
Kiva and AYR Wellness enters three-year, exclusive licensing and retail agreement in Florida. The agreement will bring Kiva’s edibles (Camino Gummies, Camino Sours, Lost Farm Gummies, Lost Farm Chews, Camino Chews and Petra Mints) to the Florida market for the first time via AYR’s 62+ retail locations across the state.
Wana enters Mississippi. The company’s 17th market.
LEUNE enters Montana. The company’s 6th market
Curaleaf’s Select brand has expanded its product offerings with the launch of Select Liquid Diamonds. The high potency oil combines clean flavor with crisp terpene profiles and is now available at all Curaleaf retail locations in Florida.
🧔 People
Trulieve is evaluating options after discovering former CFO, Alex D’Amico, wrongly expensed up to $400,000 in personal expenses. The company’s audit committee investigated the former CFO’s expense reimbursement submissions after he resigned in June, according to regulatory filings. The money has not been paid back, the report noted.
Ispire appoints Michael Wang as Co-CEO. Wang previously served as CFO. Concurrently, Daniel J. Machock was appointed as the new CFO. Machock previously worked at Appetize Technologies, and Chrome River Technologies.
🎙️ Interviews
The Future of Legal Marijuana, Allison Siegel, CULTA | What’s Working in Washington
Boris Jordan, Chairman, Curaleaf | Pounding The Table
Leadership, Strategy, and Growth, John Hartmann, CEO, Ascend Wellness | High Rise
Michael Johnson, CEO, Metrc | Accountfully