🧾 NY Initiates Assessment of the Office of Cannabis Management (OCM), Executive Put on Administrative Leave
🧾 NY Initiates Assessment of the Office of Cannabis Management (OCM), Executive Put on Administrative Leave
Kamala Harris Calls For Cannabis To Be Rescheduled "As Quickly As Possible." Döhler Ventures Invests in Vertosa. C21 Acquires Deep Roots (NV). Alabama Faces Continued Delays.
The next Benzinga Cannabis Capital Conference (April 16-17th) is in less than a month, if you’re planning on being there next month but haven’t secured tickets yet, I’ll be running another raffle for 3 free tickets to subscribers. Just reply to this email or next week’s email to enter. With all the recent news/momentum around the Cannabis industry, this feels like a must attend.
🌿 Industry
NY Governor Hochul Initiates Assessment of the Office of Cannabis Management and Taps Commissioner Jeanette Moy to Lead Effort. The plan will assess OCM’s Organization, Identify Opportunities for Improvement, and Begin the Implementation of a Long-Term Strategic Plan. — Governor.NY
Commissioner for the Office of General Services Jeanette Moy will serve as lead and executive sponsor of the effort
Commissioner Moy will embed in OCM for a minimum 30-day sprint to assess the agency’s organization. As part of the plan, several goals have been identified, including:
Top-down review of organizational structure, processes, and systems with a focus on improving OCM license processing times and application-to-opening timeframes for new cannabis retailers and businesses
Develop key performance metrics and an executive-level licensing dashboard to provide the Executive Chamber with a timely, accurate, and comprehensive picture of licensing activity for legal retailers
Identify and implement changes to policy, procedure, and regulation (within the bounds of the MRTA) to streamline the licensing process and simplify application and review for prospective licensees
Develop three-month and six-month action plans with organizational change initiatives, milestones, and actions to continue improving agency functions while developing a world-class licensing and regulatory agency for New York States’ cannabis industry
Damian Fagon, OCM's Chief Equity Officer, has been placed on administrative leave in light of allegations of retaliatory behavior stemming from a lawsuit filed by one of NY's operators (more below)
Person at Center of NY Office of Cannabis Management enforcement sues state agency. Jenny Argie, one of New York’s first licensed cannabis processors, is seeking immediate relief and an injunction after the OCM pulled her products from shelves and issued a stop-work order at her Hudson Valley facility after finding she used an unauthorized method to make her products. — Syracuse.com
Argie claims the OCM acted in “retaliatory, arbitrary and capricious” ways, and said her company will go out of business by the end of March if the stop-work order and quarantine on her products are not lifted
NY Cannabis Insider chronicled Argie’s situation and found it wasn’t unique: over a dozen sources also claimed that the OCM had practiced retaliatory behavior or used fear tactics to prod industry stakeholders to stay quiet or not speak up about problems they saw in the marketplace
Kamala Harris Calls For Cannabis To Be Rescheduled "As Quickly As Possible." The VP called on the federal government to move “as quickly as possible” to change the way it officially classifies cannabis. — HUFFPOST
“I cannot emphasize enough that they need to get to it as quickly as possible,” Harris said. “We need to have a resolution based on their findings and their assessment. This issue is stark when one considers the fact that on the schedule currently, marijuana is considered as dangerous as heroin ― as dangerous as heroin ― and more dangerous than fentanyl, which is absurd, not to mention patently unfair”
Harris was speaking at a meeting at the White House with people who received pardons from President Joe Biden for marijuana-related offenses. Rapper Fat Joe and Kentucky Gov. Andy Beshear (D) were also in attendance
Theory Wellness, Rebelle and Farnsworth Fine Cannabis Company sues Great Barrington for ~$6M. The companies are accusing local officials of improperly collecting fees for years from Host Community Agreements (HCAs). — Masslive
In addition to a 3% sales tax, municipalities can charge the companies another 3% of their gross sales to offset any new government spending caused by the cannabis businesses, such as traffic mitigation or expanded public safety needs
But cannabis companies say their impact on the wider community is the same as any other business. Rather than addressing specific community impacts tied to cannabis sales, as state law requires, companies have complained the fees often go toward common municipal expenses
Some municipalities, including Boston and Northampton, have decided to stop collecting community impact payments altogether
Alabama’s medical cannabis industry faces continued delay from lawsuits. Due to recent lawsuits and motions, the process of getting an official medical cannabis program will be delayed at least another five weeks. — Yellowhammer
Unsuccessful applicants Southeast Cannabis Company, TheraTrue, Jemmstone, Alabama Always, Insa, and Bragg Canna, have all filed multiple lawsuits against the Commission, and have all now sued the Commissioners themselves
The unsuccessful applicants have raised several claims over the past ten months, primarily accusing the Commission of failing to comply with the Compassion Act and the Commission’s own regulations
CA Department of Cannabis Control (DCC) adopted emergency regulations to implement Senate Bill 833. Under the new regulations, eligible cultivation licensees can make certain changes to their license including: Reducing the size of a cultivation license, Placing the cultivation license in limited operations status, and making a one-time change to the expiration date of a processor, nursery, or cultivation license.
High Hopes docuseries following two brothers running MMD dispensary in Los Angeles to debut on Hulu April 20th. Jimmy Kimmel’s Kimmelot banner exec produces with a six-episode series. — The Hollywood Reporter
High Hopes is described as a “workplace reality series following Belarus-born brothers Slava and Mishka and their stoned crew through the trials and tribulations of taking their cannabis business to new heights. As one of the oldest cannabis dispensaries in Hollywood, MMD attracts a wild mix of weed-loving customers and is a home away from home for their OG employees who work hard and smoke harder! This season builds to their biggest day of the year—4/20—as the gang attempts to expand nationwide and release their own top-shelf cannabis brand. Will they find what they’re looking for or will their hopes go up in smoke?”
Nothing for the Swim Home: How The Entelechy of Cannabis Companies Is Shaping Their Future Success. Shifting focus from the "A-pot-calypse" to a more optimistic outlook for the cannabis industry's future, Merida Capital Holdings’ Founder and Managing Partner Mitchell Baruchowitz emphasizes the resilience and strategic acumen of "thrivalists," firms that have not only survived but thrived, attributing their success to a no-looking-back philosophy and essential insights for navigating the industry's challenges from 2021 to 2024. In his latest commentary, Mitch underlines the importance of leveraging the lessons learned during the industry's rapid evolution and the critical role of adapting to market demands and operational efficiencies.
Colorado sales in January were essentially flat at $115.4M, down <1% M/M
In the sample of 2,186 12th-grade students, 11.4% said they had used delta-8 THC in the past year, while 30.4% of the participants reported using Cannabis. Of the 295 students who reported that had they used delta-8 in the previous year, 68.1% used it at least three times, 35.4% had used it at least 10 times, and nearly 17% used it at least 40 times. Close to 91% of the delta-8 users also reported using Cannabis.
💵 Deals
Döhler Ventures invests in Vertosa—A Strategic Partnership to Develop Innovative Life Science Beverages. Döhler is a global provider of natural ingredients, ingredient systems and integrated solutions. The companies announced a strategic research and development partnership for the food, beverage and nutrition industries. While Vertosa will continue to handle its Cannabis and Hemp infusions, Döhler will develop natural ingredients and ingredient blends to complement Vertosa's offering. Those blends can contain everything from natural flavors, natural colors, juices, botanical extracts to sweetening solutions.
C21 acquires Deep Roots in Reno, NV and Private Placement of Convertible Debenture Units. Deep Roots has a 6,500 sq ft, purpose-built, operational retail cannabis dispensary located in Southern Reno, NV. The Company also announces a non-brokered private placement of principal amount C$1,000 secured convertible debenture units of the Company for aggregate gross proceeds of up to C$4,000,000. The company plans to integrate and rebrand this dispensary, purpose-built in 2021, under the Silver State Relief banner.
Curaleaf International Expands into Czech Republic with Astrasana Pharma Partnership. The partnership with Astrasana Pharma s.r.o will see Curaleaf International’s EU-GMP flower made available to patients via Pilulka Pharmacy, a leading healthcare provider in the region.
📄 Company Updates
Verano issues Revised Q4 and FY 2023 Financial Results. Subsequent to the filing of the original press release on February 29, 2024, the Company obtained new information related to the fair value of its Massachusetts cultivation facility and recorded a corresponding $9M fixed asset impairment. As a result, the Property, Plant and Equipment, net balance has been reduced by $9M and net income has been reduced by $5M as a result of the impairment, net of tax effects.
Cresco Labs Q4 revenue of $188M, down 2% Y/Y, Adjusted EBITDA of $55M (29% margin). FY2023 Revenue of $771M, down 8.5% Y/Y, Adjusted EBITDA of $174M (23% margin), $109M of cash, $386M debt.
TerrAscend Q4 Net Revenue was $86.6M, up 25.5% Y/Y, Adjusted EBITDA of $19.6M (22.7% margin), FCF of $7.9M. FY2023 Net Revenue of $317.3M, up 28.0% Y/Y, Adjusted EBITDA of $68.8M (21.7% margin), FCF of $23.4M. The company also initiated a comprehensive evaluation in early 2023, and based on legal interpretations, the Company has changed its tax position to challenge its tax liability under Section 280E, resulting in the reclassification of $59.2M of tax liabilities, as of December 31, 2023, to long term liabilities and an uncertain tax position on the balance sheet.
AYR Wellness Q4 Revenue of $114.8M, up 0.3% Q/Q, Adjusted EBITDA of $29.8M (25.9% margin) FY 2023 Revenue up 10% to $463.6M, Adjusted EBITDA of $114.0M (24.6% margin). Ended the year with a cash balance of $50.8M. Q1 2024 Guidance from flat to modest growth compared to Q4 2023, with a continuation of achieving the Company’s targets of 25% Adjusted EBITDA margin. The Company expects gradual improvement from the residual impact of cultivation challenges in Florida, while continuing to build wholesale revenues. AYR expects to further ramp revenue, adjusted EBITDA and operating cash flow later this year.
Jushi Q4 Revenue of $67.8M, down (11.8%), Adjusted EBITDA of $11.3M (16.7% margin), $31.3M cash, FY 2023 Revenue of $269.4M, down (5.2%), Adjusted EBITDA of $40.8M (15.1% margin). The company closed four underperforming stores in California and Pennsylvania.
Planet 13 Q4 Revenues were $23.0M vs. $24.8M in Q4 2022, down (7.5%). The decline in revenue was driven by lower sales at the SuperStore and a decline in wholesale revenue in Nevada; Gross profit was $11.0M (47.8% GM) vs. $10.7M (43.0% GM) in Q4 2022, driven by a decrease in product discounting at retail; Adjusted EBITDA of $1.3M. FY2023 Revenues were $98.5M vs. $104.6M in FY2022, down (5.8%); Adjusted EBITDA of $1.4M as compared to Adjusted EBITDA loss of ($7.5M) in FY2022. Cash of $17.3M. Regarding the El Capitan Advisors lawsuit—the company has recovered $3.4M and expects to recover an additional $2M in short order and continues to work with a special-purpose receiver to collect the remaining $16.5M as well as damages.
TILT Holdings Q4 Revenue was $37.5M compared to $44.3M Y/Y, Adjusted EBITDA was $(1.6M), FY2023 Revenue was $166.0M compared to $174.2M Y/Y, Adjusted EBITDA was $2.1M. Cash of $5.4M, $52.2M Notes Payable.
Springbig Q4 Revenue of $6.8M, up 1% Y/Y, Adjusted EBITDA loss of $(0.2M). FY2023 Revenue of $28.1M, up 5% Y/Y, Adjusted EBITDA loss was $(3.6M),
Tilray received approval for the first medical cannabis extract, Tilray Oral Solution THC 5 CBD 20, in Portugal.
🏬 Retail
The Bronx Joint opens in South Bronx. While Bronx Joint is the South Bronx's first legal dispensary, it's just the third in the entire borough. The Bronx’s first legal dispensary, Statis Cannabis Co., opened in Crotona in July 2023. Hush became the borough’s second legal storefront, opening in Allerton back in December 2023.
The Cannabis Place Opens in Middle Village, Queens, NYC.
TRP opens Cookies Chicago. TRP partnered with social equity licensee, Mint Ventures, to open Cookies Chicago in the West Loop.
Fine Fettle to open in Norwalk, CT. This will be the city’s first recreational dispensary, its local competition, Shangri-La, has not provided a new anticipated opening date since late January, it previously expected to open in late February.
Holistic Re-Leaf opens Morris County, NJ’s second dispensary. Rockaway Townsquare mall, part of a complex just off Route 80, includes additional retail strips, standalone stores, restaurants, a hotel and a multiplex theater.
AWH opens Monaca, PA dispensary, its third in the State. Ascend Monaca, located conveniently off route 376 in the Pittsburgh suburbs of western Pennsylvania is similar to the Company's other locations in Scranton and Wayne, will be an outlet dispensary.
🌱 Product
Jones Soda brand Mary Jones launches Fizzy Tabs. Coming in 100 milligram packs that contain 40 individual 2.5 milligram tablets, Mary Jones' new edible is a great option for even the most casual cannabis consumer and those on-the-go.
LEVEL x TILT Holdings for PA market. Beginning in April, TILT will roll out LEVEL’s signature PROTABTM 25mg 10-count (250 mg) box, and PROTAB 100TM 100mg 10-count (1000 mg) pack.
Ivy Hall Launches Exclusive Cannabis Flower Line, Ivy Premium. Ivy Hall, the first dispensary to operate under the Illinois Social Equity Program launched Ivy Premium. Cultivated flower for adult-use consumers searching for the best in refined, high-quality cannabis. The flower will be exclusively available at its eight dispensaries.
B Noble recently acquired Germany-based CanPharma, providing access to distribute medical cannabis in the UK and EU, after expanding to nine states in the US. Sherbinski will serve as head of genetics for B Noble in EU and Canada.
CanPay launches RemotePay, a new payments integration that allows consumers to prepay for their cannabis purchases when ordering online or through an app from participating dispensaries. CanPay provides an easy-to-use app that allows consumers to pay for purchases at cannabis retailers with a simple debit from their checking account using the Automated Clearing House (ACH) network. Now, consumers will also be able to prepay for orders with CanPay on participating merchant's websites and apps, either through one-click payments or via guest checkout.
🧔 People
Trulieve Cannabis has filed a lawsuit against former CFO for misappropriating hundreds of thousands of dollars tied to personal expenses. The lawsuit claims Alex D’Amico expensed vacations, luxury apparel and even legal fees as business-related activities.
Tilray adds Prinz Pinakatt as CMO to focus on challenger beer brands. Pinakatt was previously SVP, Global Head of Danone Waters and also served as AIro Brands CMO from September 2019—June 2020.
🎙️ Interviews
“We have amended and submitted revised, amended 2020, 2021 and 2022 tax returns. And so those are in process as we speak. And we expect that the refund due based on amended tax returns will cover any existing tax liability we have for 2023. And on a go-forward basis, currently, we are paying our quarterly estimated federal taxes, non-280E taxes.” — Ascend CEO John Hartmann speaking to GMR
What's Ahead for Cannabis in 2024 | High-Rise
Inside The Cannabis Industry’s $75 Million Pre-Roll Empire | Forbes
Meet The Women Behind Gotham: Joanne Wilson | Benzinga