👋 Trulieve CFO resigns after <2 weeks
Trulieve files lawsuit to collect on a $23.8M loan to Ohio subsidiary. Cresco Labs files lawsuit claiming that GTI over former employee. Gron Ventures sues Cookies for mismanaging $15.5M investment.
💬 I’ve been posting interesting news that goes into the newsletter on LinkedIn, so follow there if you want more real-time information.
🌿 Industry
Cresco Labs files lawsuit claiming that GTI poached a top-level employee with a one-year non-compete. The lawsuit states that Christopher Tonge, a chemist who served as Cresco’s director of technical services, notified the company in May that he was resigning. He then took a similar job at GTI. — Chicago Sun Times
Tonge had signed an employee agreement with Cresco that “barred him from working for a substantially similar company” for a year
Tonge was integral to developing “a unique process” to extract cannabis oil from pot plants that “helps drive revenue while enabling significant cost savings,” according to the suit. “The process provides such value to Cresco that it has applied for two patents on it, on which Mr. Tonge is a co-inventor,” the suit notes
Tonge was allegedly recruited to GTI by Matt Ingram, its SVP Operations. Ingram previously worked at Cresco and has knowledge of the firm’s manufacturing operations and its contractual non-compete provisions, the suit states
Gron Ventures sues Cookies for mismanaging $15.5M investment. These latest claims–filed along with a request for a judge’s intervention in company business mirrors separate allegations against Cookies made in two other legal matters filed earlier this year. — MJBizDaily
The lawsuit claims Cookies “burned through cash and ran out of money” after “wildly missing its numbers” last summer and failing to support a $275M valuation
Plaintiffs also claim, Cookies “admitted at least 7 different transactions of self-dealing which were not previously” disclosed
This year, as lawsuits piled up, Cookies spent “most” of a separate $23M raised this spring from Entourage Effect Capital, and is currently trying to raise even more money, according to the investors
Further, the plaintiffs claim, earlier this year, Cookies plotted to transfer its “most valuable asset (its cannabis production rights)” to “yet another affiliate entity called Cookies Production, Inc.” led by Entourage Effect Capital, which would have rendered Gron Ventures’ investments in Cookies worthless
212 more adult-use cannabis retailers get go-ahead in New York and products can be sold at trade show-style events. The Cannabis Control Board last Wednesday nearly doubled the amount of conditional adult-use retail licenses. — Spectrum News
The 212 licenses were awarded to 46 applicants in Manhattan, 44 in Brooklyn, 28 in the Capital Region, 24 on Long Island, 18 in the Mid-Hudson region, 14 in Queens, nine each in the Finger Lakes, Western New York and the Bronx, five in Richmond, four in the Southern Tier and one each in Central New York and the Mohawk Valley
New vending opportunities could help farmers who have thousands of pounds of cannabis they haven’t been able to move because so few retailers are open. Cultivators will be able to offer joints and flower, while processors may provide gummies and other manufactured products at trade show-style events
Berkeley approves tax relief for legal cannabis businesses for next 2 years. In a unanimous vote, the City Council passed legislation that temporarily exempts the city's medical and recreational cannabis businesses from the collection of cannabis industry-designated taxes. — CBS News
The exemption, which will be retroactive to January 2023 and last until July 2025, is an attempt to keep legal cannabis alive in Berkeley and curb illicit activity
Instead of paying the previous tax rate—which was $25 per $1,000 of gross receipts for the calendar year—both medical and recreational cannabis businesses will instead pay the business license tax rate that most closely represents the nature of its operations, such as retail or manufacturing
Oregon’s New Aspergillus Testing Could Be an Inflection Point for the Cannabis Market—But It’s Complicated. With initial flower testing failure rates hovering around 23%, the latest policy shift has had dramatic consequences for growers across the state. — Cannabis Business Times
Oregon began mandating a new suite of compliance testing on March 1st, including benchmarks for harmful heavy metal content (mercury, arsenic, cadmium and lead) and microbiological contaminants (Aspergillus, E. coli, and salmonella)
On face value, this move simply brings Oregon up to speed on compliance testing, in line for the most part with other U.S. cannabis markets; Oregon has been slow to adopt new testing policies. But one microbiological contaminant threshold has caused a stir over the past few months: the testing for four pathogenic species of Aspergillus, a common mold
Despite flood losses, Vermont’s cannabis industry is ineligible for federal aid. Industry associations are working to assess losses up and down the supply chain to help them make their case to state legislators for additional aid. — VT Digger
Vermont’s cannabis industry got potentially even more unwelcome news: confirmation from federal officials that cannabis businesses would not be eligible for any of the federal disaster aid being made available to other types of businesses impacted by the historic flooding
Any FEMA business assistance program also disqualifies cannabis related-businesses for the same reasons
After yearslong wait, lawsuit filed as cannabis retailers ready to open in Ventura. Three winning dispensaries are suing Ventura to issue them permits and end the appeals of the runners-up. The appeals process for the five dispensaries not selected has gone on for more than six months. — VC Star
Embarc is doing relatively minor work in its leased building and should be ready to open within weeks after getting its permit
The Artist Tree, on the other hand, has extensive renovation work to do and probably couldn't open until about six months after it gets a permit
The third winner was Wheelhouse Cannabis, which bought a building in Ventura 2½ years ago, in a commercial and industrial stretch of Market Street
Missouri extends grace period for “plain packaging” rules meant to protect kids. The state is cracking down on just how appealing packaging can be. — News-Leader
New rules, governing the number and types of colors, symbols and text that can be displayed on marijuana products, go into effect next year. The deadline—now set for Jan. 31, 2024—was extended from the original date of July 30 to give manufacturers and dispensaries a longer grace period to sell existing products
DHSS' new rules limit packaging to one primary package color and up to two logos or symbols that can be of different colors. These logos or symbols cannot be larger than the clearly printed word, "Marijuana" in black or white text
Albanian Parliament legalizes medical cannabis despite harsh opposition. The Parliament voted 69-23 to allow limited and controlled growth of cannabis plants, a move harshly contested by the opposition. — AP
Cannabis cultivation flourished in Albania in the past as drug traffickers exploited a lack of strong governance in the post-Communist country
After coming to power in 2013, the left-wing Socialist Party government of Prime Minister Edi Rama set destroying cannabis plants as a main target
Over the next two years it destroyed cannabis plants with an estimated market value of ~$8.5 billion, more than two-thirds of the country’s annual gross domestic product at that time
💵 Deals
Body and Mind (BaM) Divests Ohio Dispensary for up to $10.725M. The Company’s wholly owned subsidiary, DEP Nevada, Inc. (DEP) has entered into an equity purchase agreement with FarmaceuticalRX, LLC, whereby DEP agrees to sell all of the issued and outstanding interests, equity, or profit interests in NMG OH 1, LLC (NMG OH), which owns and operates the Body and Mind Ohio dispensary, to the Purchaser. The total consideration for the transaction is $8.225 million in cash proceeds at closing with an additional $2.5 million in potential contingent proceeds.
Aurora Cannabis Sells Aurora Sun Facility to Bevo Farms, a wholly-owned subsidiary of Bevo Agtech for up to $15M. The sale of the Aurora Sun Facility was completed via Bevo Farms' acquisition of one of Aurora's wholly-owned subsidiaries. Aurora has a controlling interest in Bevo, one of the largest suppliers of propagated vegetables and ornamental plants in North America. Up to $15 million could be payable over time by Bevo Farms to Aurora in connection with the Aurora Sun Transaction, based on Bevo Farms successfully achieving certain financial milestones at the Aurora Sun Facility.
ACT Lab has obtained regulatory approval and completed the acquisition of the Florida lab operations and all related assets from Green Scientific. The addition of Florida places ACT LAB on a path to be operational in eight states in the eastern half of the U.S. by year end. Each lab is guided by a single, private ownership structure that employs a standardized set of testing methods and procedures that drive efficiency and supply chain predictability across states.
📄 Company Updates
Trulieve has filed a lawsuit to collect on a $23.8M loan from two Ohio borrowers. The first loans were originally agreed to on February 5, 2020, with a payment date of September 14, 2022, and the 15th extension of the loans expires this month. Harvest of Ohio operates three retail medical cannabis dispensaries as well as a cultivation license. Trulieve said the debt includes expenses such as capital expenses, operating expenses, cash funding, payroll for employees, licensing fees and rent for facilities. Trulieve is also not moving ahead on building a cannabis facility in Meriden, CT. Trulieve had conditional city approval to build two buildings—one at 24,200 sq ft and the other at 35,200 sq ft , on a roughly 20-acre lot that runs along Chamberlain Highway, near the Berlin border. The company purchased the property from WEA Meriden Square LLC for $750,000 last April.
Parallel’s subsidiary, Goodblend, shutter Pennsylvania operations. Goodblend Pennsylvania LLC notified the state that it will end operations Sept. 15 at a 342,810 sq ft site on Beaver Avenue that houses a medical marijuana cultivation and processing facility, putting 76 people out of work. The closure is scheduled nine days after Allegheny County Court of Common Pleas Judge Christine A. Ward is scheduled to hear arguments on a motion to set a trial date for Goodblend’s alleged failure to meet the terms of its lease.
🏬 Retail
New Día Cannabis Co. opens 11,200 sq ft dispensary & shopping experience with six mall-style kiosks. Partners include TILT Holdings, Greencare Collective, LC Square, Nimbus Cannabis, Pioneer Valley Cannabis, and Chill Medicate. Located directly across from Fenway Park’s Gate E, it will serve not only as a destination for local and tourist consumers but as a space for education and community building.
Nectar Markets opens first dispensary in Euclid, OH. The company has two other locations in Bowling Green and Cincinnati. Nectar currently has 40 locations in Oregon.
Dank 716 opens first dispensary in Buffalo. While Dank is the first WNY dispensary, there will eventually be 21 other conditional or CAURD dispensaries in the region.
Sunburn Cannabis opens Third Jacksonville Retail Location in Mandarin Neighborhood, its 11th in Florida. In addition to the Mandarin location, Sunburn has stores in Jacksonville Beach, Jacksonville Five Points, Fort Lauderdale, Key West, Orlando, Pensacola, Sarasota, St. Petersburg, Tallahassee, and West Palm Beach. The Company also operates cultivation gardens, post-harvest processing, and lab facilities in Eustis and Winter Garden, respectively. Sunburn has plans to open new locations later this year in Miami, Deerfield, Indialantic, Panama City Beach, and Tampa.
AYR Wellness opened three retail locations in Orange County, Florida. The opening of AYR Cannabis Dispensary locations Orlando (UCF), Winter Haven and Orlando (N. Orange Blossom Trail) expand the Company’s retail presence to 62 locations throughout Florida and brings AYR’s total footprint to 86 stores nationwide. AYR has opened 10 new dispensaries in FL through the first seven months of 2023.
Juva Life opens Redwood City, CA Dispensary. This follows the soft opening that occurred on June 23rd, 2023.
Trulieve opens Sanford, FL location.
🌱 Product
Ripple Launches Third Release of Live Rosin Ripsticks. Ripple has released its third offering in a series of small batch, live rosin collaborations. This latest drop is the result of a partnership with renowned cannabis extractor, DabLogic, and master artist, Ellie Paisley. Each package of Live Rosin Ripsticks contains 10 terpene-flavored powder packets designed to be poured directly onto the tongue, delivering a total of 100mg of full-spectrum THC (MSRP $24). Each package also features singular label art from Ellie Paisley, whose psychedelic sensibilities have graced live painting sessions for acts such as The Wu-Tang Clan, Ice Cube, and Dead & Co.
Flight vape cartridges recalled over banned chemical residues. The vape cartridges are manufactured by Sky Labs. More than 13,000 of these vape cartridges have been sold and about 2,200 are currently available for sale at 59 dispensaries.
Cresco Labs x Khalifa Kush Expand Partnership to Massachusetts. Khalifa Kush Flower and pre-rolls, including Khalifa Kush’s widely recognized KK and Khalifa Mints strains, will be available for purchase exclusively at Sunnyside dispensaries in Fall River, Framingham, Leicester and Worcester. An expanded product line is expected to arrive at additional retail partners soon.
🧔 People
Trulieve CFO, Tim Mullany, resigns after less than two weeks on the job. The company has appointed Ryan Blust, the Company's VP, Finance, as its interim CFO. Reasons cited for Mullany’s resignation was “personal reasons”. Trulieve has retained the services of an executive recruitment firm to commence a search for a new CFO.
Teamsters are calling on GTI to address its workers’ safety concerns in response to worker’s death at the company’s Rock Island grow operation on Friday, July 14. It is at least the second time a worker at a cannabis grow operation has died on the job in the U.S. Workers at GTI have filed at least five complaints with the Occupational Safety and Health Administration (OSHA) alleging serious safety and health violations, including two complaints that are under investigation at the Rock Island location. GTI has been previously cited by OSHA at other facilities for health and safety violations. GTI CEO Ben Kovler, addressed the situation, stating that “insinuations that Julie’s death was related to working conditions in our production facility” is an “attempt to push their own agenda by instilling fear and uncertainty on top of the grief we all feel.”
Curaleaf lays off 49 employees at its Winslow, NJ production facility. The company cited the slower-than-expected rollout of the sector, which has impacted the amount of product that can be sold, despite a strong market for it. In March, the Company closed its Bellmawr production facility for the same reason, laying off 40 employees. There are roughly 35 dispensaries opened today in NJ.
Verano appoints John Tipton, President of the Southern Region, and Charles Mueller to its Board in conjunction with the retirement of Mike Smullen. Following Mike Smullen’s resignation from the Board on July 19, 2023, the Board approved a proposal to increase in size from four to five members. Tipton served as President of the Company from February 2021 until June 2023, when he was named President of the Southern Region. Beginning in 1997, he served as CEO of Plants of Ruskin, LLC, which became a subsidiary of the Company upon its acquisition in February 2021 and the Company’s sizable entrance into the Florida market. Mueller has provided independent corporate tax consulting services to Tropicana Products and Cresa Partners Boston. From 1985 to 2021, he served in senior tax roles at PepsiCo, including as VP, State and Local Tax of the PepsiCo Corporate Division.
Cansortium appoints John Mazarakis to Board. Mazarakis replaces John McKimm on the Board, who resigned from the Board effective June 30, 2023. John Mazarakis is a Founding Partner at Chicago Atlantic.
🎙️ Interviews
What HERBL's collapse means for the future of cannabis policy | Hirsh Jain
Fig Farms expands its award-winning genetic footprint | CBE
Making the Green Greener w/ Jason Wild | The Plant Lady
The King Of Unlicensed Weed Dispensaries Declares War On New York | Forbes
TerrAscend CEO Ziad Ghanem and Chairman Jason Wild | The Water Tower Hour
Curio Wellness and the Maryland cannabis market | Proud to work in Cannabis
BeLeaf Medical settles into Missouri adult-use| CBE