📰 US Senate Committee votes 14-9 to advance SAFER Banking Act
📰 US Senate Committee votes 14-9 to advance SAFER Banking Act
Square x Jane partner for eCommerce (Canada). Curaleaf eyes TSX. NY to grant 1,500 new licenses. Trulieve President retires. SNDL forms SunStream USA. Green Horizons raises $24M. Katalys raises $5.4M.
💬 Great to see some of you in Chicago for Benzinga last week. As I heard from a few people about the cadence of this newsletter, reminding everyone that I typically try to get this out weekly, but sometimes it' goes 10-14 days between emails if there’s a holiday (Labor Day) or industry conference (Benzinga). I will still make sure to capture all relevant industry news, you might just be seeing it a week late.
I’ll spare you my thoughts on Benzinga as I’m sure you’ve seen 20+ Linkedin post on the subject at this point—but I highly recommend attending as it was time well spent.
🌿 Industry
Senators Advance Cannabis Banking Reform Bill (SAFER) for First Time. Banking, Housing, and Urban Affairs voted to advance legislation, the SAFER Banking Act, which allows financial institutions to more readily establish relationships with state-licensed cannabis businesses. — NORML
Although members of the House have passed an earlier version of the legislation (SAFE) on seven prior occasions, this marks the first time that Senate members have voted in favor of the measure
The Senate Committee passed The Secure and Fair Enforcement Regulation (SAFER) Banking Act with a 14-9 vote on Wednesday, September 27, after weeks of negotiations and revisions to reach a bipartisan agreement
New York’s cannabis regulator is looking to grant 1,500 new licenses. This should help alleviate a surplus of Cannabis that producers have built up amid a lack of legal channels for sales. — BNN Bloomberg
The regulator will grant more licenses to get stores open to help sell off a significant surplus of cannabis biomass
Officials at the agency said they’re prepared to offer around 1,500 new licenses across the supply chain. The state’s market is growing quickly as more businesses come online despite bureaucratic delays and a lack of funding options
Retail sales in July and the first three weeks of August totaled $34.1 million, more than the first six months of the year combined, according to the agency
Georgia Miscounts Cannabis Patient Numbers. The state’s Public Health Department reported 30,000-plus active patients but now says there are only roughly 13,000 for the low-THC oil program. — CBT
Georgia’s only two medical cannabis operators might be temporarily maxed out on the number of dispensaries that can open following reports that a state department overstated active patient numbers
Trulieve and Botanical Sciences, which hold Class 1 production licenses to cultivate cannabis and sell low-THC oil to qualified patients, currently hold five dispensary licenses each from the Georgia Access to Medical Cannabis Commission (GMCC)
The commission can issue a sixth retail license per production licensee when the state’s registry reaches 25,000 patients and an additional retail license per production company for every 10,000 patients added after that
Mississippi Medical Cannabis Market Update. It has been over a year since Mississippi began accepting applications for medical cannabis licenses in July of 2022. Since then, the Mississippi cannabis industry has steadily grown, with the first legal sales beginning in January 2023. — Vicente
As of August 1, 2023, there were 185 licensed medical cannabis dispensaries, the majority of which are in the Jackson area. Many are still in the process of becoming operational
Many of the dispensaries licensees from the first tranche of applications in July of 2022 should be opening in the next six months
As of September 18, 2023, Mississippi has licensed 121 cultivation facilities, establishing a competitive environment with average prices for cannabis flower at ~$10-15/gram
Growers and brands fear that if signed into law, Assembly Bill 1207 will make it even more difficult for them to exist in an already tumultuous market. — CBT
A.B. 1207 defines “attractive to children” to mean the following, according to the bill text:
Use of images that are attractive to children, including, but not limited to, images of any of the following, except as part of required health warnings;
Cartoons, toys, or robots; Any real or fictional humans; Any fictional animals or creatures; Fruits or vegetables, except when used to accurately describe ingredients or flavors contained in a product
Any likeness to images, characters, or phrases that are popularly used to advertise to children
Any imitation of candy packaging or labeling, or other packaging and labeling of cereals, sweets, chips, or other food products typically marketed to children
The terms “candy” or “candies” or variants in spelling such as “kandy” or “kandee.”
Brand names or close imitations of brand names of candies, cereals, sweets, chips, or other food products typically marketed to childrenAny other image or packaging that is easily confused with commercially available foods that do not contain cannabis and are typically marketed to children
Anything else that the department determines in regulation to be attractive to children
Anything else that is attractive to children in light of all relevant facts and circumstances
Trulieve Kickback Allegations Highlight Systemic Problems in Arizona. There are 169 recreational and 137 dual medical-recreational dispensaries in Arizona, 8 large companies run about half of them (Trulieve, Curaleaf Holdings, Mint Cannabis, JARS Cannabis, and Nirvana Cannabis) — GMR
Because those larger players have their own in-house brands, there’s no incentive to provide shelf space to small, independent brands. Rather, the only reason that an estimated 300 or more independent brands even exist in Arizona is because they’re allowed to sublease space at facilities owned and run by the same vertically integrated companies that also own many of the dispensaries
In addition, larger operators trade shelf space, that’s created a perfect storm that breeds the type of corruption outlined in the Trulieve case
MA Cannabis Control Commission votes to put new restrictions on payments to municipalities. In a victory for social justice businesses, if municipalities lift their caps on the number of licenses they allow, at least half of the new licenses must be reserved for social equity applicants. — Telegram
Municipalities that cannot attract those types of applicants have the right to seek waivers. Licensees must also formulate plans on how they can positively impact communities harmed by the war on drugs
Commissioners voted to approve changes in regulations governing community impact fees and host community agreements. Under the revisions, all impact fees charged to cannabis businesses must be reasonably related to the business, pertain to actual negative impacts and any funds spent by municipalities to abate the impact must be documented, with itemized receipts
Investigations by the Massachusetts Cannabis Business Association found many municipalities had charged a full 3% of gross annual sales as a community impact fee—regardless of the business’s impact on a municipality
FinCEN reports that 812 banks and credit unions reported that they are actively working with cannabis companies. It represents a significant rise from last year’s numbers, 553 banks—11% of all U.S. banks—and 202 credit unions. — HIGH TIMES
According to quarterly data provided by The Financial Crimes Enforcement Network (FinCEN), a bureau of the United States Department of the Treasury, over 800 banks and credit unions have filed paperwork with the U.S. government acknowledging their relationships with licensed cannabis businesses
“Rescheduling cannabis to Schedule III may allow dispensaries to accept credit card payments,” Richard Laiderman, former head of global treasury for VISA and Co-Founder and chair of StandardC, said. Credit card payments may supplant cash transactions if this occurs, reducing the risks and costs associated with cash-only operations”
Oregon cannabis products recalled over Aspergillus contamination will soon be sold. Last month, a court suspended state restrictions on four strains of the fungus Aspergillus in Cannabis. — OPB
The cannabis industry had argued that the mold was too common to avoid. The decision left over 2,000 pounds and 60,000 pre-rolls of recalled cannabis in limbo, as the Oregon Liquor and Cannabis Commission awaited further guidance from the Oregon Health Authority
U.S. Latinos spend about $2.5 billion on cannabis, national study reveals. In partnership with Q & A Research, the National Hispanic Cannabis Council (NHCC) conducted its 2023 U.S. Hispanic Cannabis Awareness & Perception Study. — NJ.com
A key finding from the survey is that 40% of respondents use cannabis on a monthly basis, indicating that potentially 2.5 million Hispanic “acculturated” or “bicultural” adults across the country may be regular cannabis users
Missouri announces winners of 48 cannabis microbusiness licenses. Missouri’s Division of Cannabis Regulation (DCR) posted the results of the random lottery drawing to award microbusiness licenses to applicants. — MO DCR
This is the first of three separate rounds of microbusiness licenses to be awarded
More than 1,600 applicants applied between July 27-Aug. 10. Six microbusiness license applicants will be selected within each of the eight Missouri congressional districts. Of the six in each district, two will be microbusiness dispensaries, and four will be microbusiness wholesale facilities
💵 Deals
SunStream USA formed in anticipation of SunStream's signing of restructuring documentation with Surterra Holdings d/b/a Parallel. SunStream is a joint venture sponsored by SNDL Inc. SunStream USA is anticipated to be a U.S. platform, with one or more independent third-party investors, which will be independently managed and governed. SunStream or its designee, subject to regulatory and listing exchange approval, is vetting an opportunity to own non-voting and non-participating exchangeable securities in SunStream USA, which would include the right to exchange such securities into common equity or equity-like securities in the future if certain conditions are met.
On September 21, 2023, Talladega LP, a partnership, wholly owned by affiliates of SunStream, together with other secured creditors of Parallel, signed a strict foreclosure agreement with Parallel and certain of its subsidiaries. Pursuant to the Foreclosure Agreement, subject to the satisfaction of closing conditions, including regulatory approvals, CDXX TransCo, LLC will foreclose upon certain of Parallel's cannabis operations in Florida, Massachusetts, Texas, and Nevada that were pledged as collateral under Parallel's existing debt instruments. In Q2 2023, Parallel's net revenue was $52 million or $208 million annualized.
Green Horizons secures additional $24M financing. In addition, the company is preparing to unveil the first 101,787 sq. ft. of its ambitious 1,000,000 sq. ft. cultivation and CPG campus. Co-founder Michael Meade, invested another $37M through his firm, Meade Development, enabling the construction of Phase I. The company is set to roll out its Phase II expansion in 2024, adding 125,000 sq. ft. that will house its corporate headquarters and additional facilities.
Katalys, formerly RevOffers, is a commerce media platform that merges content, commerce, and performance marketing technology, raises $5.4M. KEY Investment Partners, WGD Capital, and GreenAxs Capital participated in the round.
Curaleaf Prices C$16M Offering. The Company is making the Offering to satisfy a condition required for a potential listing of the subordinate voting shares on the Toronto Stock Exchange (TSX) and plans to use a portion of the proceeds to fund working capital requirements of its international business operated by Curaleaf Holdings International and for general corporate purposes.
Trulieve makes open market purchase of 57,000 of its $1,000 face value senior secured notes due October 6, 2026 for $47.6M. This represents a 16.5% discount to par, plus accrued interest.
Tilray Brands closes acquisition of eight beer and beverage brands from Anheuser-Busch, including the breweries and brewpubs associated with them. The acquired businesses include Shock Top, Breckenridge Brewery, Blue Point Brewing Company, 10 Barrel Brewing Company, Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider Company, and HiBall Energy.
LEEF Brands closes acquisition of 1,900 Acre Ranch in Santa Barbara County for Cannabis Cultivation. The Company has acquired the Ranch for a purchase price of $5.5M with $1.1M due at closing. The Company separately entered into a five-year promissory note agreement with Salisbury Canyon Ranch LLC to vendor finance $4.2M on which interest only payments will be made for a period of 24 months at an interest rate of 4% per annum.
📄 Company Updates
Square Enters the Cannabis Market in Canada by Partnering with Jane Technologies for eCommerce. As part of this offering, Square has announced an Early Access Program for licensed cannabis dispensaries, which allows authorized cannabis sellers in Ontario to begin testing the Square for Retail point of sale (POS) solution in stores ahead of the service being launched more widely.
“At Square, we’re always looking to solve sellers’ pain points and we know cannabis dispensaries have limited options when it comes to reliable and integrated commerce tools,” said Roshan Jhunja, Head of Retail at Square. “Sellers are looking for an easy-to-use, fully integrated omnichannel solution to help them run their businesses in person and online. We’ve been fortunate to partner with Jane to develop a robust online offering and encourage cannabis dispensaries to test our software, hardware and payment solution in person through our Early Access Program.”
GTI CEO and Chairman Benjamin Kovler gifted 20,000 Super Voting Shares and 1,500,000 Subordinate Voting Shares to former spouse. Following the transactions, Kovler, together with his joint actors, holds beneficial ownership or control or direction over 148,254 Super Voting Shares, which represent 62.6% of the class, and 271,767 Subordinate Voting Shares, which represent 0.13% of the class. Following the transactions, assuming the conversion or exercise of all vested options, warrants and Super Voting Shares that Kovler holds beneficial ownership or control or direction over, Kovler holds beneficial ownership or control or direction over 15,615,267 Subordinate Voting Shares, which represent 6.87% of the class (calculated on a partially diluted basis).
Ripple Proposes Colorado Marijuana Rule Change to remove the requirement that all METRC tags contain RFID chips. This long-overdue proposal will save Colorado marijuana businesses millions of dollars annually without any risk to the public health or safety. The Company has been doing business in Colorado since 2016 and spends ~$20,000 per year for METRC RFID tags — hundreds of thousands of RFID tags since 2016 — and our usage pales in comparison to cultivation operators who often spend upwards of $100,000 per year on these tags. Since the founding of Ripple, no regulatory agency has ever used RFID to read METRC tags in our facility.
Leafly, Stage One Dispensary and an individual consumer, jointly filed a legal challenge to certain portions of the recently adopted Adult Use Regulations in New York. The New York Attorney General’s Office agreed to a stay, and the court entered an order to that effect, which blocks the enforcement of the challenged regulations against Leafly and fully operational licensed cannabis dispensaries in New York State. Leafly is the only third-party platform that the stay expressly allows to continue offering paid advertising services, display retailer product pricing, and transmit orders to licensed cannabis retailers in New York. As a result, while the stay is in effect, licensed retailers in New York will continue to have access to advertising and marketing tools to help them succeed in the legal cannabis market, and provide consumers with access to critical information as they make purchasing decisions.
StateHouse Holdings to begin selling a portfolio of Kikoko branded products through its in-house sales team and Harborside and Urbn Leaf dispensaries in California.
C21 Investments Q2 Revenue of $7.2M, flat year-over-year (State of Nevada cannabis sales were down 5% over the comparative period). Gross Margin of 40%, up 410 basis points sequentially, Retail Gross Margin of 47%, Cash Flow from Operations of $1.6M. Cash of $2.3M.
Unrivaled Brands intends to oppose an application for a writ of attachment filed by 1149 South LA Street Fashion District, LLC and 1135 South LA Street Fashion District, LLC. The complaint and application for writ of attachment are based on alleged breaches of a cannabis retail lease and assignment of that lease.
Gold Flora completes first phase of cost-saving initiatives. The company has made significant reductions in marketing expenses, professional services, personnel expenses, and G&A expenses. In addition, the Company has nearly eliminated its reliance on third-party vendors for biomass, manufacturing, and distribution. Gold Flora has closed several non-profitable delivery locations and has optimized its real-estate footprint by exiting leases or, where attractive, subleasing underutilized space. The changes translate into annualized cost savings of ~$30 million, surpassing the Company's initial cost-savings target of $20-$25 million.
Simplifya, Ceylon Solutions and Shield Compliance launch Cannabis OneClick. OneClick is a marketplace for licensed cannabis and hemp operators to quickly and easily find the top-rated and most experienced service providers in the industry. The services available on the Cannabis OneClick platform include banking, insurance, legal, compliance, payroll, delivery, cash logistics, point-of-sale, software development, and search engine optimization.
FundCanna partners with NABIS to be the company’s preferred lending partner. Nabis partners can get financing approvals in as little as 24 hours.
UC Asset has entered into an MOU to build an 8,000 sq ft cannabis property for medical cannabis cultivation in Oklahoma. The MOU is a three party non-binding agreement between UC Asset, a contractor, and a tenant.
4Front Ventures partners with The Weldon Project. Through this partnership, 4Front customers can round up their purchase to the nearest dollar at the point of sale at all Mission dispensaries to donate to The Weldon Project and Mission [Green].
SLANG Worldwide approved the grant of 3,236,640 incentive stock options to the independent directors. The Options are non-transferable and exercisable until September 22, 2028, at CAD$0.05 per Option, subject to vesting provisions, with one-third vesting on the date of grant and one-third vesting on each anniversary of the date of grant.
🏬 Retail
Dr. Greenthumb’s opens West LA Dispensary.
The Artist Tree to open first dispensary in El Sobrante, CA.
iAnthus starts medical sales at MPX-NJ in Pennsauken, NJ and opens MPX-NJ Gloucester Township, NJ for adult use sales. iAnthus has 3 locations in New Jersey and 36 across the U.S.
RIPT Dispensary and FLWR to open in Jersey City, NJ.
Molly Ann Farms launches Passaic County, NJ’s second dispensary.
Three dispensaries, including Cookies, set to open in Bloomington-Normal, IL.
Green Mountain Cannabis Works opens in Manchester, VT.
Renew Cannabis opens dispensary and cultivation in Berkley, MA.
Lume Cannabis opens new store in Menominee, MI. The Menominee location is Lume’s sixth new store this year, following recent openings in Traverse City, Birch Run, Holly, Southfield and Berkley.
Sleepy Dinosaur, CO could be the state's cannabis capital. There isn't much to this town a short drive from the national monument of the same name. A couple of gas stations, a liquor store and a small motel line the two main drags, Brontosaurus Boulevard and Stegosaurus Freeway. But this community of about 315 and its four marijuana dispensaries — one shop for every 79 residents — is a contender for the title of cannabis capital of Colorado. Dinosaur, nestled in the northwest corner of the state, is a five-minute drive to the Utah line and a couple of hours away from Wyoming. In 2021, the town collected about $1.4 million in cannabis-related taxes and licensing fees. Sedgwick is another border town that has banked on Cannabis, with three stores and a population of 172. The town sits in the northeastern corner of the state, less than 10 minutes from Nebraska.
Santa Fe, NM now has 43 dispensaries. About 30 more than the city had when recreational cannabis became legal in New Mexico in April 2022.
Trulieve opens Medical Cannabis Dispensary in Evans, GA, it’s 5th in the State.
🌱 Product
Hoodie Analytics Unveils New Market Intelligence and Product Data Management Platform. New tools include dispensary analytics, product velocity metrics, store-level segmentation and wholesale systems integration.
Treez launches three new FinTech Offerings. Treezpay One Application is a streamlined online application process that allows retailers to apply and get expedited approval for multiple compliant TreezPay cashless payment products, including integrated card and direct ACH payment solutions. General availability of its proprietary ACH payments product, Swifter ACH Payments, to streamline financial services with fully compliant digital payment solutions. And PayLater Embedded Financing, a tech-enabled, integrated lending service.
Leafly launches API for order integration. The solution allows any cannabis POS system to take control of the integration process and seamlessly integrate with Leafly.
GTI to launch RYTHM Artist Series, a collection of strains that are chosen (and smoked) by artists spanning multiple genres of music. Inspired by the artists’ lifestyle and brand, each product aligns with their specific tastes, consumption preferences, and desired effects, and is complemented by its own unique strain name and packaging design. The RYTHM Artist Series will feature product launches by Mitchell Tenpenny, State Champs, Marcus King, and Tinashe.
Weekenders Cannabis launches in New York State.
Ric Flair and Carma HoldCo launches in Mississippi with Southern Sky Brands.
Chicago Bears Legend Jim McMahon Launches Revenant in Illinois.
Native Roots launches pumpkin spice vape pen.
Mary Jones is now available at dispensaries in Washington.
Evol by Future launches in Nevada with Redwood Cultivation.
🧔 People
Trulieve President Steve White steps down as President. White will continue to serve as a strategic advisor to the Company until his anticipated retirement at the end of this year.
GTI adds Richard Reisin, former EVP and Director at Carylon Corporation and Hannah Ross, COO at Edie Parker to Board. Reisin formerly served as EVP and Director at Carylon Corporation, a national organization of regional operating companies that offer a wide range of specialized services including sewer maintenance, industrial services, and water management for municipalities, utilities, and industrial companies. Ross is the COO of Edie Parker and also been a Partner at Beehouse, an investment firm that has allocated over $300M in cannabis.
Suspended Massachusetts Cannabis Control Commission Chair Shannon O’Brien files lawsuit alleging punishment is unlawful. O’Brien filed a lawsuit seeking an injunction barring the suspension and demanding she be reinstated as CCC chair. In the complaint, O’Brien alleges the suspension was done “without notice, without articulated reason, and without any opportunity to be heard, all of which is required by the clear and unambiguous provisions of Massachusetts law.”
Minnesota’s first recreational marijuana legalization program director lasted less than two days. Erin DuPree asked Gov. Tim Walz to withdraw her appointment to be the director of the Office of Cannabis Management after two news stories revealed that she had sold disallowed products in her hemp store and has a series of tax liens and unpaid debts from previous businesses. Minnesota's legislative auditor has opened a preliminary look into the failed cannabis director hiring.
Jesus Burrola exits as CEO at POSIBL. Hector Salazar will assume the CEO role.
Thomas Owens joins Grön as COO. He was previously VP Operations at WYLD.
Goodness Growth Holdings CFO, John Heller, departs.
TILT Holdings Interim CEO Tim Conder will transition to permanent CEO.
🎙️ Interviews
Live at Benzinga Chicago 2023 with Kris Krane | High Rise
CAURD priority under new regs, social lounges | Jeffrey Hoffman