📝 Ohio releases proposed rules for adult-use market
📝 Ohio releases proposed rules for adult-use market
Planet 13 restates financials, secures partial settlement in lawsuit and sells VidaCann FL license for $9M. MA operator recovers $1.2M in community impact fees. Vivien Azer departs TD Cowen.
I’m headed down to Miami Beach today for CannaDataCon (February 1st-2nd), put on by Delta Emerald Ventures. Content is focused on the intersection of Cannabis x Technology, exploring topics such as Making the Switch from Cannabis to Hemp, Aged Inventory and Matching Distribution with Demand and Simplifying the Cannabis Retail Ops Tech Stack. Look forward to seeing you there if you’re attending in person, you can also register for the livestream here
🌿 Industry
Ohio releases proposed rules for recreational market. The 11-page document includes proposed fees for various business licenses, details on how the application process would work and how medical cannabis businesses could transition to a dual license to also serve adult-use consumers — MJBizDaily
Under the proposed rules, Level 1 cultivators would be licensed for three dispensaries and Level 2 growers would be issued one
Existing MMJ retailers would be issued one additional dispensary license, but the operator is prohibited from common or controlling ownership in any cultivation or processing business—which is omitted for Level 1 and Level 2 cultivators
Caroline's Cannabis has recovered $1.2M in community impact fees under its HCA with Uxbridge, MA. In April 2022, Caroline’s filed suit seeking a refund of the community impact fees it had paid to the Town — Foley Hoag
Caroline’s argued that the Town had failed to maintain and provide required documentation of the costs the Town incurred that were “reasonably related” to the operation of Caroline’s marijuana retailer business, as required by both statute and Caroline’s HCA
The complaint alleged that, for years, Caroline’s requested this information and, for years, the Town was unable to provide sufficient detail to demonstrate a reasonable relationship between the fee and Town costs
Gov. Kathy Hochul 'fed up' with slow cannabis rollout. The New York State Cannabis Control Board suddenly canceled a meeting at which many dispensary license applicants had hoped to receive approval to move forward — Spectrum News
Gov. Kathy Hochul's office said Friday she did not demand the cancellation, but did reach out to voice displeasure after learning the board was only ready to approve three new retail licenses at the scheduled meeting
Hochul said the expectation was the board would consider more than 400 retail and grower licenses before the scheduled meeting. The slow and clumsy pace has led to plenty of criticism from applicants who are getting tired of waiting
Mississippi restrictions on medical marijuana advertising upheld by federal judge. U.S. District Judge Michael P. Mills said he agreed with Mississippi’s argument that since the possession of marijuana remains illegal under federal law, it is not a “lawful activity,” and therefore does not enjoy the constitutional protections granted to some forms of commercial speech — AP News
The state cannot prevent dispensaries from placing “appropriate signs” on their properties or displaying products they sell on their websites
All other advertising restrictions are up to the state Health Department, which prohibits dispensaries from advertising or marketing “in any media”
Minnesota needs to issue 375+ adult-use cannabis licenses. — MJBizDaily
Under a legalization bill signed into law in May by Gov. Tim Walz, the state’s Office of Cannabis Management (OCM) is required to issue one dispensary per 12,500 residents, meaning at least 381 retail licenses will need to be issued
Proposals include: eliminating requirements to secure real estate during initial application, removing local municipalities from the business licensing process, consolidating the supply chain for both the medical and adult-use markets, issuing temporary licenses, particularly for social equity applicants
Rules set for cannabis consumption lounges in NJ. The NJ Cannabis Regulatory Commission last week approved rules for cannabis consumption areas — NJSN
A consumption area must be attached to a dispensary, customers must be at least 21 or older, medicinal patients must be allowed to bring their own cannabis into the location, and food cannot be sold on the premises. Patrons will be able to bring food or have it delivered, and food trucks will be allowed
New York now has 59 adult-use dispensaries
Uber, Colorado Governor, Amazon, PayPal and others report Marijuana Lobbying on Banking, Rescheduling and more
Minnesota appointed First Cannabis Chief with incomplete background check
Massachusetts sales of $1.8B in 2023, up 1.8% over 2022
Missouri December sales of $123.3M
Arkansas 2023 sales of $283M, up from $276M in 2022
Ohio medical cannabis sales of $484M in 2023
Maine 2023 sales of $216.9M, up from $158.9M in 2022
💵 Deals
4Front closes Senior Secured Debt to Equity Conversion. The amendment to the loan and security agreement with its senior secured lender, LI Lending, LLC, as previously announced on January 8, 2024, under which the Lender converted ~44% ($23M) of the principal amount of its debt into class A subordinate voting shares of the Company at a conversion price of $0.094. The terms of the remaining loan balance with the Lender remained unamended
Planet 13 to Sell Its Medical Marijuana Treatment Center (MMTC) License in Florida to SGW FL Enterprises, LLC in Connection with the Previously Announced Definitive Agreement to Acquire VidaCann. The Company will sell the license for $9M cash due on closing. The proposed transaction is expected to close in Q1 2024, subject to customary closing conditions, including the receipt of regulatory approvals and the simultaneous closing of the acquisition of VidaCann
Petalfast has secured $8M from several family offices with deep roots in the beverage alcohol industry. The Company plans to expand into additional adult-use markets in the West, Midwest and Eastern U.S
Curaleaf sells Cultivation to Mammoth Farms. The 36-acre cultivation in Pueblo County has been bought and sold a few times since opening in 2015, most recently to Curaleaf in 2021. Curaleaf shut down its Colorado operations less than two years later
Michigan-operator Comco Wellness set to be sold to a stalking horse bidder for $1.9M. The stalking horse bidder is an affiliate of Farm Marcellus, a Cultivator in Kalamazoo with four Class C grow licenses. Comco entered receivership in April 2023 after Puerto Rico-based lender Anewsha Holding Group and LeafLink filed a complaint. LeafLink alleges in the lawsuit that Comco has ~$5.6M in unpaid invoices
Organigram closes First Tranche from BAT Investment. This is the first of three tranches of the previously announced C$124.6M follow-on strategic equity investment from BAT. Pursuant to the first tranche closing, the Investor acquired 12,893,175 common shares at C$3.22/share for gross proceeds of C$41.5M. The remaining 25,786,350 shares subscribed for shall be issued at the Per Share Price in two further equal tranches on or around August 30, 2024 and February 28, 2025
Neatleaf, a first-of-its-kind cultivation management platform that uses data, AI, and robotics to help the cultivation industry manage their crops and improve their yields, raises $4M led by AgFunder. The company's flagship product, the Neatleaf Spyder, is a fully autonomous robotic platform that scans indoor cultivation crops generating millions of data points on plant health and growth metrics. This data is analyzed and turned into actionable insights for the cultivation team to assess, monitor, and remedy
The Cannabist Company intends to repurchase up to $25M of principal amount of 6.0% senior secured convertible notes due June 2025. The company will purchase the notes from certain offshore institutional investors to conditionally effect such repurchase for common shares of the Company
SpringBig secured $8.0M of debt financing with a syndicate of lenders consisting of $6.4M 8% Secured Convertible Note due 2026 and $1.6M 12% Secured Term Loan due 2026. Proceeds from the Convertible Note and Term Loan will be used to repurchase entirely the outstanding existing Senior Secured Convertible Note due 2025 for a discounted amount of ~$2.9M and for general corporate purposes. The net proceeds after repurchasing the Existing Note is estimated to be $4.6M
Tinley's closes $1.5M Private Placement. The company sold 58,660,000 units at $0.025/Unit for gross proceeds of $1,466,500 and the settlement of $533,500 of outstanding indebtedness of the Company pursuant to the issuance of an additional 21,340,000 Units to certain creditors
Tilray Brands completes acquisition of Truss Beverage from Molson Coors. Since acquiring the remaining 57.5% equity ownership from Molson Coors in August 2023, Tilray has transitioned all cannabis beverage operations to its London, Canada manufacturing facility, maximizing utilization, and lowering costs. Tilray plans to operate the state-of-the-art Truss Beverage facility in Belleville, Ontario to explore the production of new beverage innovations and to expand its beverage portfolio
📄 Company Updates
Planet 13 secured partial settlement with Casa Verde Capital for the release of $3.4M of the WAB Funds. On January 16, 2024, the court entered an order directing the Sheriff's Office to release these funds to the Company. The remaining ~$2.1M of the WAB Funds are still in the possession of the Sheriff's Office while litigation is ongoing. The Company has not relinquished any right to the Remaining Levied Funds and continues to pursue their return. A hearing on the ultimate disposition of the Remaining Levied Funds is scheduled for April 29, 2024.
On January 22, 2024, the Company initiated a lawsuit in Santa Monica, California against El Capitan, El Capitan's founder and CEO, Andrew Nash, Casa Verde, Casa Verde's Managing Member Karan Wadhera, and Jamie Nash, the spouse of Andrew Nash seeking ~$16.5M in compensatory damages and other relief. The Company alleges that each Defendant is liable for their involvement in a scheme to defraud the Company of funds managed by El Capitan in its capacity as the Company's fiduciary. The Company is vigorously pursuing its rights against Defendants and intends to act quickly to enact all necessary remedies available
—Link to detailed lawsuit documens and write-up from GMR
Planet 13 to Restate Certain Previously Issued Financial Statements. As a result of the preliminary information obtained in connection with an ongoing internal investigation, the Audit Committee of the Board of Directors concluded that the Company's previously issued audited consolidated financial statements as of and for the years ended December 31, 2022 and 2021 and for the quarters ended March 31, 2023, June 30, 2023 and September 30, 2023 should no longer be relied upon due to material errors due to the believed misappropriation of ~$22.0M of the Company's funds held by El Capitan Advisors
Organigram Completes First Shipment to Germany. The Company sent its first shipment of bulk dried flower to Sanity Group. This is part of a multi-year agreement with Sanity Group
Lowell Farms Surrenders California Cannabis Cultivation Facility. The site had been home to four greenhouses totaling ~255,000 sq ft. Lowell Farms said that on January 12, 2024, its subsidiary Cypress Holding Company surrendered possession of a 10-acre property in Salinas, California that it had been leasing since April 1, 2017
🏬 Retail / Cultivation
Glass House Brands has begun cultivation in its newly retrofitted Greenhouse 5 at the SoCal Farm. Greenhouse 5 is expected to produce ~250,000 lbs. of cannabis annually, increasing the company’s production capacity to 600,000+ pounds annually, an expansion of 70%+ vs. current capacity. First revenue is expected by early Q2 2024
Embarc opens Meyers (South Lake Tahoe, CA) and Indio, CA dispensary. These are the company’s 11th and 12th stores opened in CA
Union Square Travel Agency opens Downtown Brooklyn and rebrands to The Travel Agency: A Cannabis Store. The Travel Agency Downtown Brooklyn will open a pop-up situated while building out their permanent space next to the pop-up
Curaleaf commences adult use sales at its Hudson Valley, NY location both in-person and through delivery. Curaleaf Hudson Valley is the Company's first adult use dispensary in the state
Verano opens Zen Leaf Abington, Verano’s largest dispensary based on square footage. With 17 affiliated dispensaries statewide, Zen Leaf Abington enhances Verano’s Philadelphia area footprint including Zen Leaf locations in Chester, Clifton Heights, Malvern, Sellersville, West Chester, Wynnewood, and northeast Philadelphia
FLUENT Cannabis opens 34th Medical Cannabis Dispensary in Cocoa, FL. Patients will be able to choose from the Company’s full house of brands such as MOODS, Black Line, Freedom Town Holdings, Smokiez Edibles and FLUENT Care
Acreage relocates third CT dispensary to Vernon. This is the first dispensary in the borough of over 30,000 residents
The Cake House will be the first dispensary to open in Encinitas, CA since residents approved Measure H in 2020. In 2022, the city chose four cannabis enterprises through a lottery process out of 200 applicants: The Cake House, ECR Encinitas4, STIIIZY and Siesta Life Encinitas
Body and Mind has been approved by the State of New Jersey Cannabis Regulatory Commission for an Annual Class 5 Cannabis Retailer license. The state approval combined with local preapproval allows Body and Mind to advance the Lawrenceville, NJ dispensary which is being developed in an existing 4,100 sq ft building in the Lawrenceville township area north of Trenton, NJ
NOXX opens Peoria, IL dispensary. The NOXX Cannabis brand opened two cannabis dispensaries in Grand Rapids, MI in 2022
🌱 Product
Grön Launches Tangelo Sugar-Coated Pearls infused with CBC. Tangelo is the latest addition to the Grön portfolio of Sugar-Coated Pearls, expanding the product line to seven flavors and various cannabinoid ratios. Tangelo Sugar-Coated Pearls with CBC are now available in AZ, MO, NV, NJ, and OR
Willow Industries launches Air Filtration System to Support Plant Health and Employee. WillowAir is an air filtration system designed to capture and remove airborne contaminants, providing safer workplaces for employees and a direct solution to one of the main factors in contaminated product: Air Quality
Humboldt Seed Company releases OG Kush Triploid and Donutz Triploid cannabis seeds to the U.S. market. Triploid seeds offer a 3-5% increase in THC, 10-20% increase in flower yields, 10-15% increase in fresh frozen live rosin yield, shorten flowering time by 5-10 days and virtually eliminate crop losses due to pollination
The Bettery Company launches Oat Milk & Himalayan Salt Dark Chocolate. This is the Company’s second edibles product, it currently offers six gummies flavors
Binske adds MA as 7th State. The brand plans to launch next in NJ, IL, & NY. Binske is exclusively for sale at the Ascend with additional dispensaries after
Houseplant x OCB launch Houseplant by OCB. The long-term partnership and product collaboration will allow cannabis consumers to elevate their smoking experience with a line of sustainable, meticulously crafted rolling papers and cones in bamboo, brown rice, and classic varieties
The Cannabist Company x Revelry to Brand to the East Coast. The Cannabist Company will introduce Revelry’s pre-roll joints to NJ in the coming weeks and will continue to roll out across the Company’s dispensary and wholesale networks in additional states, including MA and PA, pending regulatory approval
TerrAscend expands Valhalla product offering to include one of the first 100mg edibles in PA. Valhalla’s 100mg quick-acting will be available at all Apothecarium locations and additional dispensaries throughout Pennsylvania
Texas Original launch Elevate beverage product, the first medical cannabis product in Texas infused with cannabigerol (CBG). Elevate, Texas Original’s first beverage product, is a one-to-one mixture containing equal parts CBG and THC, along with other potentially beneficial ingredients like ginger juice and turmeric
Cronos’ Spinach® brand closed 2023 as the #1 flower brand in Canada with a 6.9%market share in Q4. It was the #4 best-selling flower brand in 2022
🧔 People
Vivien Azer, Analyst covering the beverage, tobacco, and cannabis sectors for Cowen/TD Cowen departs. She’s taking time off and writes that Cannabis is “still set to be the most disruptive consumer trend of my lifetime”
Fyllo|Semasio appoint Jeff Ragovin CEO as company rebrands. Fyllo is expanding beyond cannabis and will shift its focus from targeted ad compliance in highly regulated verticals to more general contextual targeting
Organigram adds Karina Gehring to Board. Gehring is one of two directors (including Simon Ashton) designated by British American Tobacco (BAT) as nominees to the Company’s Board
Springbig adds new board members following completion of debt financing. Matt Sacks, Co-Managing Partner of Lightbank, and Shawn Dym, a co-lead investor in the debt financing through Shalcor Management have both joined the board
MedMen CEO Ellen Deutsch Harrison stepped down as CEO. Richard Ormond has been appointed Chief Restructuring Officer. Furthermore, Michael Serruya, Executive Chairman of the Board, has also stepped down from the Board
StateHouse Director J. Roy Pottle resigned from Board. The Company does not expect to fill the vacant board position at this time
Tinley's appoints Shreyas Balakrishnan to Board. Balakrishnan is CEO of the Company's strategic partner, Blaze Life Holdings. Prior to joining BLH, he spent almost 20 years with AB-nBev, last serving as President of Cutwater Spirits
🎙️ Interviews
How Do You Make a Weed Empire? Sell It Like Streetwear | New York Times
What’s Next for Cannabis Investors? | Cannabis Investing Network
Boris Jordan, Curaleaf, talks regulatory change and possible consolidation | BNN
The Entrepreneurial Journey from Pharma to Cannabis | Proud to Work in Cannabis