😮Not one, but two (Cannalysis, Steep Hill) lawsuits in the Cannabis Lab Testing Space

U.S. Cannabis Retail Market Size ~$17B in 2020, ~$33B in 2024. AZ gets enough signature for adult-use ballot. Cannalysis / Steep Hill lawsuits from outsted CEOs.


U.S. Cannabis Retail Sales on pace to grow 40% ($~17B) in 2020, up to~$33B by 2024. Retail sales of medical & recreational cannabis in the U.S. are on pace to eclipse $15B by the end of 2020, an increase of ~40% over 2019 sales, according to exclusive projections from the 2020 edition of the Marijuana Business Factbook.

MMJ sales in Florida and Oklahoma are expected to surpass $1B each by 2021, placing them among the most valuable and rapidly growing cannabis markets in the U.S. – medical or otherwise.

Arizona submits 420,000 signatures for adult-use ballot. The filing by Smart and Safe Arizona is far more than the 237,645 valid signatures needed to send the issue to voters. That provides plenty of wiggle room if some of the petitions are declared invalid. But it becomes only the first step in trying to convince Arizonans once again that they want to allow adults to buy and possess up to an ounce of marijuana or 12 plants. A similar measure failed four years ago by ~4% amid an extensive campaign over whether easier access by adults leads to greater teen use. There also was a fear by employers that it would allow workers to show up on the job still under the effects. The Arizona Chamber of Commerce and Industry already has positioned itself to oppose the 2020 measure. Campaign Chairman Chad Campbell said the concern by the business community has been taken into account. He said this year’s version contains specific provisions allowing employers to enact and enforce policies “restricting the use of marijuana by employees or prospective employees.”

Ousted Testing Lab CEO Accuses New Leadership of Fraud. Brian Lannon, co-founder and former CEO of California cannabis testing lab Cannalysis, has filed suit against the company he founded and its new leadership over allegations of breached fiduciary duties, wrongful termination, and fraud. Cannalysis made headlines in 2019 for a $22.6 million fundraising round headed by CanLabs; Lannon was removed from his post about two months later.

Planned Asset Sale of Cannabis Laboratory Steep Hill in Ongoing Legal Dispute. A proposed complex transfer of assets between subsidiaries of privately-held cannabis testing company Steep Hill and competitor EVIO would dismantle Steep Hill and strip shareholders of value, an attorney for Steep Hill’s former CEO and Chairman Jmichaele Keller said. Earlier this year, Keller filed suit in San Francisco Superior Court against Steep Hill and various insiders, alleging abuse of fiduciary duty, abuse of control, corporate waste, fraud and concealment, and misrepresentation of stock ownership and proxy voting, as well as other wrongful activities.

Defendants involved in the suit with Steep Hill include Merida Capital Partners, Mitch Bryan Baruchowitz, Jeffrey M. Monat, Gotham Green, Richard Jacinto II, Stephen Joseph Finfer, Randy Slifka, Jane Wright-Mitchell and Dr. Andrew Rosenstein. The suit questioned the validity of all actions taken by the company’s Contested Board and Contested Management since 2018 because of improprieties in ousting Keller. As a result, the Board and management are “contested.”

Virginia Lawmakers plan to legalize Marijuana, one day after Decriminalization takes Effect. A group of Democratic legislators on Thursday announced plans to introduce a bill to legalize and regulate a commercial cannabis market in the state. While the measure isn’t set to be filed until next year, lawmakers framed legalization as necessary in the fight for social and racial justice.

Organigram warns of declining sales and writedowns, cuts 220 jobs. Organigram said it has permanently reduced its workforce by about 25%, impacting ~220 employees, including a small number who were not previously laid off temporarily. Organigram has a total workforce of 609 employees, including 84 employees remaining on temporary layoff who may be recalled if and when needed as the business requires. The staffing changes come as the company shifts production at its main Moncton indoor production facility, where 433 of its staff are based. Organigram intends to slow production there in order to introduce new high-THC strains to meet market demand.

Curaleaf Unveils Nationwide Expansion Plans for Select Brand. The Select brand will expand into new markets (Maine, Massachusetts, Ohio and Florida). Select is currently distributed in Oregon, California, Nevada, Arizona, Colorado, Michigan, Maryland, Oklahoma and Connecticut. With this summer's addition of four more states, the brand will be available in 13 markets and is on track to become the first nationally recognized consumer cannabis brand.

San Diego creates new marijuana business regulatory agency. San Diego has joined cities like Los Angeles, Sacramento and San Francisco in creating a cannabis-specific agency to oversee its marijuana industry. The city’s upcoming Cannabis Permitting Bureau will have an annual operating budget of just under $1 million and a staff of nine full-time employees to focus on licensing as well as industry oversight, according to the San Diego Union-Tribune.

How Canopy Growth is using Martha Stewart and other celebs to become the Unilever of weed. One thing people like is celebrity, and Canopy has worked over the years to build up an impressive number of hands-on partners. Stewart was introduced to Canopy by her pal Snoop, who had partnered with Canopy on his Leafs by Snoop brand. There’s also Seth Rogen and Evan Goldberg’s Houseplant brand, which launched in March 2019. And late last year, Drake became a 60% owner of Canopy subsidiary More Life Growth Co.

New Mexico Changes Regulations on Receprocity. New Mexico’s Medical Cannabis Program will officially begin allowing out-of-state medical cannabis patients to possess and purchase medical cannabis while in New Mexico. Patients with proof of authorization from a medical cannabis program outside New Mexico, also known as reciprocal participants, were allowed to purchase medical cannabis from New Mexico dispensaries on July 1, 2020, without paying any additional fee. Reciprocal participants may purchase and possess up to 230 units or 8 ounces of cannabis in a 90-day period.

Cannabis Cultivators Industry Research. Five years of data from Cannabis Business Times' exclusive research report reveals shifts in the type of facilities cannabis growers are using to cultivate their crops and a trend toward expansion and larger plant canopies.

Dixie Brands will change name. Following the Dixie Chicks dropping the word from its name, Dixie Brands has followed suit. No new name has been selected. The Company is currently going through an RTO ($43.2M) w/ BR Brands (expected completion in Q3 2020), after having gone through its own RTO in November 2018.


IIP — Upsized $225M Public Offering. 2,683,363 shares of its common stock at $83.85 per share for gross proceeds of ~$225.0M.

GrowGeneration — $42.0M upsized Public Offering. GrowGeneration, the largest chain of stand-alone specialty hydroponic and organic garden centers, (27 locations), announced the pricing of an underwritten public offering of 7,500,000 shares of its common stock at an offering price of $5.60 per share. The Offering was upsized from the previously announced offering size of $35.0M. The Company intends to use proceeds to expand its network of hydroponic/garden centers through organic growth and acquisitions, and for general corporate purposes.

Curaleaf — C$27.5M Private Placement. The private placement of up to C$27.5M subordinate voting shares of the Company at a price of C$7.70 per Subordinate Voting Share. The Offering is being conducted in connection with the anticipated closing of the proposed and pending acquisition of GR Companies, Inc. d/b/a ‎Grassroots. Net proceeds of the Offering are intended to be used to fund Grassroots's high-return expansion projects, replenish its working capital as well as for general corporate purposes.  

MedMen defers cash interest / modifies lease agreements. MedMen executes definitive agreements with certain lenders, including Gotham Green Partners, Stable Road Capital, and the Company’s most significant landlord, Treehouse REIT. The Plan will defer ~$32M in cash commitments over the next 12 months and provide additional balance sheet flexibility in exchange for highest interest rates and warrant coverage..

THC-Infused Gummy Manufacturer Dynaleo enters into LOI w/ Pantry. The Canopy Rivers portfolio has agreed to manufacture and distribute cannabis-infused vegan gummies under the Pantry brand within the Canadian market. Production is expected to begin in later this year at Dynaleo's 27,000 square-foot facility.

springbig integration with Dutchie to Include Cannabis Delivery and Rewards in One Platform. For dispensaries that use Dutchie and springbig, this new integration allows customers who are enrolled in a dispensary's loyalty program to access their available points and rewards available and redeem them directly in Dutchie, which will help businesses increase sales and improve customer retention. Springbig and Dutchie users will now be able to redeem their loyalty points at eligible dispensaries through delivery and pick-up orders, nullifying the need to physically visit the store in order to use rewards. Consumers no longer have to transition between apps or visit the store to check the status of their rewards - all of that information will be conveniently located directly in the Dutchie app and platform.

IIP acquires Massachusetts Property and expands Real Estate Partnership with Cresco Labs. The Massachusetts property consists of ~118,000 square feet of industrial space was acquired for ~$7.8M. IIP / Cresco entered into a long-term, triple-net lease agreement for the property which intends to operate the property as a regulated cannabis cultivation, processing and dispensing facility upon completion of redevelopment. Cresco is expected to complete additional tenant improvements for the property, for which IIP has agreed to provide reimbursement of up to $21.0M. Assuming full reimbursement for the tenant improvements, IIP’s total investment in the property will be ~$28.8M. This sale-leaseback transaction marks IIP’s fifth acquisition and lease with Cresco, with prior IIP acquisitions and leases for four of Cresco’s licensed cannabis cultivation and processing facilities in Illinois, Michigan and Ohio.

High Times to acquire California Cannabis Delivery Service Mountain High. The primarily stock based transaction will bring cannabis distribution infrastructure and personnel to the High Times® brand ahead of the rebranding of the first High Times retail store. The closing of the deal will provide Hightimes with distribution depots servicing the Northern and Southern California markets, and a platform for launching its own products.


Aurora Cannabis co-founder Terry Booth retires from board of directors. Booth stepped down as chief executive in February, but had remained a member of the board of the cannabis company. The move comes as Steve Dobler, another co-founder of the company, prepares to retire as president and a director of the company at the end of the month.

Vireo Health Appoints John Heller as CFO. Heller joins Vireo after serving as CFO of Lift Brands ( wellness franchise with 2,500+ clubs) since 2016. He also recently held senior executive positions at Life Time Fitness. Heller replaces Shaun Nugent, who has accepted a new role (after 6 months) at a company outside of the cannabis industry.

14th Round hires Paul Bozoki as CFO in preparation for IPO. 14th Round is a design, manufacturing and branding/marketing company that has built products (mostly vape) for brands (Kiva, dosist, Pacific Stone, Select, Heavy Hitters, MedMen). Bozoki has spent the past decade as a fractional CFO at several publicly traded and private development stage companies.

🏬New Store Openings / Product Launches

HBO partners with Kanha (Sunderstorm) to launch gummies. The 10mg THC gummies are made by the marijuana company Kanha and will be available at select California dispensaries as well as via delivery from Eaze. Each blend was developed to produces effects the network says reflect the personalities of the four main characters from “Close Enough,” which will be streaming on HBO Max starting July 9. The show has nothing to do with Cannabis but HBO is embracing consuming Cannabis while enjoying comedies.

Sweetflower opens 4th overall location in Westwood (LA).

Trulieve - Fort Pierce, FL (51st in State).

Windy City Cannabis - Chicago, IL. The Weed Street dispensary is the second recreational-only dispensary to open in the city, joining Cresco Labs’ Sunnyside dispensary.

TerrAscend opens 3rd Apothecarium Dispensary in PA. The newly renovated, 5,000 square foot medical dispensary is located at 2701 Lincoln Hwy East, Thorndale, PA.

Cultivate - Framingham, MA.

ShowGrow - San Diego, CA / Body and Mind - West Memphis, AR.

🤷‍♂️Somewhat Relevant

Oregon Psilocybin measure has enough signatures for November ballot. This development is one of the latest examples of the success of the psychedelics reform movement after Denver became the first place in the U.S. to deprioritize enforcement of laws against psilocybin last year.

From “doing things” to doing things profitably: Outdoor Voices' plans for growth. New board Chairwoman Ashley Merrill doesn't want to change the brand's values, just its operations.

The Largest Pizza Hut and Wendy’s Franchisee Is Expected to Declare Bankruptcy. NPC International, which owns over 1,200 of Yum Brands (NYSE:YUM) Pizza Hut restaurants and nearly 400 for Wendy's(NASDAQ:WEN), may file for Chapter 11 protection. Then company has $1B in debt and missed interest payments on $800M of debt back in January.

Who writes this newsletter? ➡️ Dai Truong