🐘 Thailand's New Government to Ban Recreational Cannabis

Canopy Growth $30M private placement. Trulieve $25M loan. 4Front appoints CFO as new CEO. CA Testing Labs have to meet new requirements. Alabama issues TRO on all-inclusive facilities.

Jan 09, 2024

💭 Not a lot of news since the last newsletter (12/22), but I expect more interesting news in 2024 with it being an Election Year. Also, I plan to get back to 2-3 podcasts/month, see link to the latest one below with Metrc CEO Michael Johnson.

🌿 Industry

Thailand's New Government to Ban Cannabis for Recreational Use. The new Thai government has introduced a bill to amend the current cannabis legislation in order to ban the recreational use of cannabis — Forbes

The absence of regulations in the recreational market has led to a proliferation of dispensaries selling products without oversight
Under the proposed legislation, cannabis will be strictly for medical use, only allowing products with <0.2% THC

California temporarily shuts down testing at majority of Cannabis labs. As of Jan. 3, only 12 out of 38 labs met the new requirements, according to the DCC — SFGate

The DCC doesn’t expect the reduction in licensed labs to delay any products from hitting the market, and more labs will likely be approved in the future

MSOs lay out modest expansion plans for 2024. MSOs are curtailing retail expansion plans for 2024, a consequence of licensing caps, limited new market opportunities and ongoing capital concerns — MJBiz

The Cannabist Co. is built out and basically capped for the most part, but did single out three states for retail expansion in 2024: NJ, VA and MD
Cresco Labs plans to add stores in FL and convert people from the illicit market
Curaleaf has a Level 1 retail designation in OH, where it plans to add stores
PharmaCann is keeping NY at the top of its focus list
Verano thinks it can open up seven in NJ

Alabama court again temporarily delays Alabama licensing. A Montgomery County Circuit Judge blocked the AMCCfrom issuing licenses for all-inclusive facilities amid ongoing lawsuits — Alabama Reflector

The Judge stated that the commission’s third round of license awards in December, following two attempts earlier in 2023, started on “uneven grounds” because there are unresolved, ongoing litigation regarding the first two
The judge issued a hold on dispensary licenses, but denied a hold on cultivator licenses. Since there were more licenses than eligible applicants — unlike the decision regarding dispensary licenses — the court found that they still had an opportunity to win a license. No action has been taken on other license categories

Oklahoma regulators will have to send secret shoppers into at least 50 dispensaries a year to buy cannabis products, and then test them in labs

Mississippi undergoes mass re-testing of certain medical cannabis products after the regulators found discrepancies during an audit of COAs surrounding test results for pesticides and mycotoxins completed by Rapid Analytics

New Mexico regulators revoked the licenses of two cultivators for numerous violations (exceeding plant count limits) and levied a $1M fine against each

Connecticut sales of $127.5M through 10 months in 2023 across 27 dispensaries

New Mexico 2023 sales of $555.8M, $50.5M in December 2023

New Jersey added 57 operational dispensaries in 2023

Maine sales of $217M in 2023, up 36% Y/Y, although saturation will lead to closures

The DEA is telling lawmakers that it reserves the final authority to make any scheduling decision on marijuana following an ongoing review, regardless of what the U.S. Department of Health and Human Services (HHS) recommends

Ontario amends Ontario Regulation 468/18 Under the Cannabis Licence Act, 2018 to increase dispensary cap from 75 to 150 for retailers and their affiliates

💵 Deals

Canopy Growth $30M Private Placement. The company will sell 6,993,007 units at $4.29 each, with each unit consisting of one common share and one common share purchase warrant. The funds will be used for general corporate purposes, including paying down debt and improving working capital

Trulieve closes $25M commercial loan secured by a cultivation site in Florida. Trulieve will pay interest at a fixed rate of 8.31% for the duration of the five-year loan. Lenders were comprised of two banks, with First Federal Bank serving as lead agent. The Company intends to use the net loan proceeds for general corporate purposes

Body and Mind closes Markham, IL Dispensary Transaction. Approval regarding the ownership change was the final closing condition of the NMG IL4 transaction

MedMen completes sale of its non-core business operations in Arizona to an affiliate of MINT Cannabis. The pending sale of the Company’s assets in Nevada to MINT Cannabis awaits regulatory approval for completion

POSaBIT closes a non-brokered private placement for $650,000. The company issued 3,107,142 units at CAD$0.28 per Unit. This will fund the repayment of certain convertible promissory notes at maturity

Safe Harbor Financial Originates $9M First Lien Secured Loan for Major, MSO-Operated Cultivation Facility in Denver, Colorado. The $9M loan, which will refinance existing debt, is being funded by Safe Harbor and its partner financial institutions at market-competitive rates and terms for permanent financing

📄 Company Updates / Earnings

Tilray Brands Q2 FY 2024 Net Revenue of $194M, 34% Y/Y, 24% GM, Adjusted EBITDA was $10.1M, ($46M) Net Loss, $(30M) Operating Cash Flow

AYR Receipt of Senior Noteholder and Court Approval of Previously Announced Plan of Arrangement. All of the outstanding 12.50% senior secured notes due December 10, 2024 of the Company shall be exchanged with AYR Wellness Canada, a wholly owned subsidiary of the Company, for new 13.0% senior secured notes due December 10, 2026 of AYR Wellness Canada

Acreage launched Adult-Use operations in New York. The Botanist’s full product line, which includes flower, infused pre-rolls, edibles, capsules, and tinctures, is now available for wholesale purchase to eligible adult-use dispensaries across New York

Vangst partners with Cannabis Business Office (CBO) to create CannaBusiness Growth. CannaBusiness Growth is an educational program supporting social equity licensed cannabis entrepreneurs

Cronos enters the Australian market with its first shipment of cannabis flower to Vitura Health Limited (ASX: VIT). Cronos owns ~10% of the common shares of Vitura, formerly known as Cronos Australia, and will supply cannabis for Vitura

Humble & Fume initiates CCAA Proceedings in the Ontario Superior Court of Justice under the Companies' Creditors Arrangement Act (CCAA). Another Humble business, HC Solutions Holdings, is not an applicant in the Canadian insolvency proceedings. HC Solutions Holdings is a JV between Humble and Green Acre Capital Distribution Corp. that provides cannabis marketing and distribution solutions in California

Hara Supply passes three billion cones milestone since inception in 2015. The Company currently produces 1.2 billion cones per year, ~30% of U.S. cones

🏬 Retail

Orange County Cannabis Co. opens Hudson Valley's first dispensary / 45th in NY

Nirvana Center opens eighth AZ dispensary near Downtown Phoenix

Camden Apothecary is the first dispensary located inside of a Pharmacy

AWH opens dispensary in Piqua, OH, its 4th in Ohio. In 2022, AWH entered into a definitive agreement providing AWH the option to acquire 100% of the equity of Ohio Patient Access (OPA). OPA also owns and will operate two other provisionally licensed dispensaries; one operating dispensary in Sandusky, OH and one in Cincinnati, OH

Curio Wellness opens Far & Dotter dispensary in Olive Branch, MS. Far & Dotter Olive Branch is the Company's first retail location in Mississippi and third nationwide

Verano opens MÜV Yulee, the Company’s 74th Florida Location

Trulieve opens Crawfordville, FL and Crestview, FL dispensaries

🌱 Product

Curaleaf Expands Zero Proof™ Brand Portfolio with Launch of Stir Fast-Acting THC Beverage Mix. Stir by Zero Proof offers an approachable and sociable alternative to hard seltzer with controllable dosing at 5mg THC per sachet. The easy-to-stir beverage enhancer utilizes nanotechnology to provide a truer-to-flower experience with effects felt in as little as 15-30 minutes

Grön partners with iAnthus for New Jersey. Grön’s Pearls gummy will be produced in iAnthus’ Pleasantville, NJ facility and available throughout the State

Illicit Gardens and Monopoly Melts launches Hash Holes. Hash Holes are high-dose, small-batch hand-rolled joints containing 1.5 grams of flower from Illicit and .5g of solventless-extracted rosin from Monopoly Melts

WhistlePig releases Dank and Dry Old Fashioned Cocktail, a zero-proof bottled cocktail that swaps the alcohol for cannabis-derived terpenes. The terpenes are extracted from cannabis grown in whiskey barrels that's been isolated by Satori Premium Cannabis in Vermont

Village Farms completes first shipment and launch of two leading cannabis brands in UK. The Company’s Pure Sunfarms and Fraser Valley brands will be distributed by 4C LABS, a leading UK medical cannabis company focused on providing patients with world class medical cannabis products. The launch includes three of Village Farms’ most popular strains in Canada: Pink Kush, Jet Fuel Gelato and D. Burger

🧔 People

4Front appoints Andrew Thut as CEO to succeed Leo Gontmakher, who has served as CEO since May 30, 2020. Gontmakher will remain on the Board

Former Trulieve GC, Nicole Stanton, joins Dorsey & Whitney LLP as Partner