🏬 NJ Cannabis Regulatory Commission (CRC) reverses course on Curaleaf license decision

Schwazze acquires Denver dispensary for $10.5M. Uber Eats x Leafly partner for Cananbis delivery in B.C. Fire & Flower x ACT enter into Master Licensing Agreement. Flora Growth CEO resigns.

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🌿 Industry

The United States of Weed. An updated map/look at where legalization stands, state by state. — Rolling Stone

Source: Rolling Stone

Cannabis industry will add $100 billion of economic impact to US economy in 2023. — MJBiz Factbook

• $160B+ in additional spending will be added to the U.S economy in 2027, thanks to the opening and/or expansion of new recreational and medical markets in states such as New York, Maryland, Missouri and Kentucky

• For every $10 consumers and patients spend at marijuana retailers or dispensaries, an additional $18 will be injected into the economy

The LeafLink Wholesale Cannabis Pricing Guide 2023. Dive deep into exclusive pricing data from 13 US cannabis markets across flower, cartridges, concentrates, edibles & ingestibles and pre-rolls. — LeafLink

• On a multi-state average, wholesale prices declined y/y in 4 out of 5 category, with edibles & ingestibles remaining stable at +3.4%, while pre-rolls were -12.4%, cartridges -12.6%, concentrates -24.0%, and flower -41.4%

• The report offers a state-by-state look at the most popular category, most/least competitive category, pricing changes, # of active retailers, pricing rank and score

Oversupply has Pennsylvania marijuana store owners not feeling the buzz. Since reaching $14.53/gram in July 2021, cannabis prices have declined to $9.81/gram as of March 2023. — Pittsburgh Post-Gazette

• A steeper decline was reported in wholesale prices, which plummeted to $4.09/gram from $10.65/gram in January 2021 (down 62%)

• Pennsylvania has 898,992 patients and 173 dispensaries

• Total sales since 2018 and as of March 30 were $7.3 billion

Vangst 2023 Jobs Report. The annual survey of employment in America’s legal cannabis industry. Vangst and Whitney Economics have partnered to produce a state-by-state tally of jobs supported by legal cannabis. — Vangst

• 417,493 full-time equivalent jobs supported by legal cannabis as of early 2023, down -2% from 2022, which was up 33% from 2021 and up 32% from 2020

• Cannabis jobs by sector: 31% Cultivation, 23% Retail, 20% ancillary, 17% processing/manufacturing, 7% wholesale, 2% distribution, <1% testing labs

• Whitney Economics expects the market to grow 11.8% in 2023 to $29.2B and 20% in 2024 to $35.1B, assuming new markets begin to bring in more legal consumers

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💵 Deals

Schwazze to acquire Medical Dispensary in Denver, Colorado, from Standing Akimbo for $10.5M. The $10.5M consideration will be paid as $1.0M in cash and $5.5M in stock at closing, and $4.0M in deferred cash payments. As part of the Standing Akimbo acquisition, Schwazze plans to open a Colorado Springs medical dispensary acquired in 2022 under the Standing Akimbo banner.

Fire & Flower and Alimentation Couche-Tard Enter Into Master Licensing Agreement. Fire & Flower will have the exclusive right of first opportunity to negotiate with Couche-Tard with respect to entering new retail cannabis businesses and franchise arrangements in Canada, as well a potential retail expansion to additional legal cannabis markets outside of Canada. Couche-Tard has exclusively committed to developing Fire & Flower branded retail cannabis stores in Ontario under the Master Licensing Agreement. The first five Fire & Flower branded retail cannabis stores will be recently opened co-located stores, adjacent to Circle K convenience stores in the Greater Toronto Area that are currently operating as MC Cannabis Inc. and will be re-branded to Fire & Flower.

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📄 Company Updates

NJ CRC Board Reverses Itself and Fully Approves Curaleaf's Adult Use License Renewals After Legal Challenge. The CRC Board's decision came after first voting to vacate their decision from Thursday, April 13th, when they attempted to deny Curaleaf's adult use license renewals. In previously attempting not to renew Curaleaf's adult use licenses, the CRC Board had disregarded the Commission's staff recommendation to renew Curaleaf's adult use licenses and the fact that the company has no pending violations. As part of the approval, Curaleaf will be providing the Commission with additional information regarding its labor practices and confirm its ongoing compliance with New Jersey law.

The CRC previously denied Curaleaf’s recreational license renewal because of the closure of a cultivation facility in Bellmawr, resulting in layoffs for 40 employees. Curaleaf provided comments on Friday, April 14, with Chairman Boris Jordan saying they would seek “any legal means necessary.”

Uber Eats and Leafly partner to bring cannabis delivery to British Columbia. Leafly has been empowering the cannabis marketplace in Canada for more than four years and currently support 850+ cannabis retailers in British Columbia. Currently, thirteen retailers are participating.

Tilray Brands Ranks #9 on the Brewers Association List of Top Producing Craft Brewers in the United States. The company’s U.S. Beer division consisting of SweetWater Brewing Company, Alpine Beer, Green Flash Brewing, and Montauk Brewing Company, is now #9 on the Brewers Association 2022 annual report of top 50 craft brewing companies in the U.S., based on beer sales volume. The Brewers Association, the trade association representing American craft brewers, released its annual production figures for the U.S. craft brewing industry naming the largest fifty out of 9,553 total operating craft breweries in the U.S.

Canopy Growth Refinances C$100M of Notes due 2023. The Company agreed to acquire and cancel C$100M aggregate principal amount of the Existing Notes held by Constellation Brands in exchange for: (i) a cash payment in the amount of unpaid and accrued interest owing under the Existing Notes; and (ii) a promissory note in the aggregate principal amount of C$100M payable on December 31, 2024. The Promissory Note will bear interest at a rate of 4.25% per year, payable on maturity of the Promissory Note.

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🏬 Retail

Curaleaf opens Boca Raton Glades, its 59th dispensary in FL and 151st nationwide. The Company is also expanding its Grassroots brand of cannabis flower and pre-rolls into the state.

Cresco Labs (Sunnyside) opens second location in Miami, FL. The Company has grown 29 dispensaries in Florida and 64 dispensaries nationwide.

GTI (RISE Dispensaries) opens 7th dispensary in New Hope, MN. The company’s other stores are in Eagan, Hibbing, Mankato, St. Cloud, St. Paul and Willmar.

GTI (RISE) opens 79th retail location in Grove City, PA. GTI currently operates a cultivation and manufacturing facility in Danville where the Company produces its branded products including RYTHM premium flower and full-spectrum vapes and Doctor Solomon’s medical-grade drops and lotions.

Ascend Opens 1st Outlet Store in Tinley Park, IL. The dispensary is Ascend's ninth in the state of Illinois and 27th across its six-state footprint. Ascend's outlet store offers everyday low pricing and “flower at a fraction” of the price. The outlet joins Ascend's four outlets across the portfolio in Grand Rapids, MI; Scranton, PA; Wayne, PA; and New Bedford, MA.

Sunburn Cannabis opens 10th FL Location in Key West. The company also launched two new products, Piattella Aged Water Hash and Live Rosin Nectar. Piattella Hash is a type of aged hash made using a traditional technique from Spain known as the "Piattella'' method, which involves rolling or pressing cannabis resin collected from trichomes into thin sheets or plaques, and then aging it to produce next-level effects and aroma. Sunburn's Rosin Nectar is an edible cannabis concentrate infused with live rosin, created through a solventless extraction process that separates trichomes using only ice and water. Rosin Nectar is strain-specific, with unique cannabinoid profiles still intact, delivering a more potent and consistent experience, and will be available in Watermelon, Cherry, Blueberry, Peach and Mango flavors.

Senecas open Nativa Cannabis, first Nation-owned dispensary in NY. The 2,500 sq ft dispensary is next to the Nation-owned Seneca One Stop fuel station and convenience store.

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🌱 Product

Zen Cannabis will create "THE BIG ZEN," the largest, most potent, dominantly-dosed and most expensive cannabis chocolate bar ever made. In the Zen 'Cannafactory,' "BIG ZEN" will take 360 hours with twelve people whipping the megabar up six hours a day. The 420 pound treat will take twelve 40 gallon vats of their decadent milk chocolate and over 100 pounds of cannabis flower to make, with the 9 by 4 feet bar packing a potency of 4,200,000 mgs of THC. Zen Cannabis makes edibles and beverages and is available in OK, CA, MO, and MA.

Fairwinds Cannabis (WA) Offers Limited-Availability Sriracha Tincture for 4/20. CEO Wendy Hull says that Fairwinds is a wellness-focused company, and the team places an emphasis on product formulations and intellectual property development led by a team of four scientists. Fairwinds is well known in Washington for tinctures, topicals, capsules and, of course, the excitement it builds around 4/20.

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🧔 People

Flora Growth CEO Luis Merchan resigns, Hussein Rakine appointed as CEO. To fill the vacancy, the Board has appointed JustCBD founder, Hussein Rakine, as CEO and member of the board of directors. Hussein Rakine founded Just Brands LLC in 2017 and served as its CEO until it was acquired by Flora in February 2022.

MariMed adds Kathleen Tucker to the Board. Since 2016, she has served as the CEO of Presence Enterprises, LLC, a distributor of CBD-infused health and wellness supplements and products. From 2015 to 2016, she was COO of one of MariMed’s operating subsidiaries and for the two years prior, served as COO of 3C Compassionate Care Center, a medical cannabis dispensary.

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🎙️ Interviews

Timeless Vapes Co-Founder Rocky Huang | Highly Objective (updated)

TILT Holdings CEO Gary Santo | TDR

Making sense of what Canadian LPs are doing lately | High Rise

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👋 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.