Cannabis Industry Daily News

Kentucky House advances medical cannabis legalization bill

The Kentucky House of Representative voted to legalize medical marijuana sales in the state.

The bill, which passed 65-30, now moves to the state Senate.

The House and Senate are controlled by Republicans.

The House vote represents the first time a medical marijuana bill has passed either legislative chamber in Kentucky.

The bill has a “narrow path” to be passed in the next round, Senate President Robert Stivers said.

The Senate also might consider making changes to the bill.

Under the House bill, which a committee overwhelmingly approved earlier this month, medical marijuana could be recommended by doctors to treat conditions including:

  • Chronic pain.
  • Epilepsy.
  • Multiple sclerosis.
  • Nausea.
  • Vomiting.

– Associated Press

Sol Global subsidiary gets $15M loan to build FL medical marijuana facility

Toronto-based cannabis company Sol Global Investments on Friday said a company it owns secured a $15 million construction loan to fund construction of an 88,327-square-foot indoor medical marijuana cultivation, processing and lab facility.

CannCure Investments, which Sol Global acquired in 2018, received the construction loan from Advanced Flower Capital.

The loan will be secured by a mortgage and other security interests.

Ontario-based CannCure will build the facility on its One Plant site in Indiantown, Florida. One Plant formerly was known as 3 Boys Farm.

Sol Global trades on the Canadian Securities Exchange as SOL.

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Harvest expands medical cannabis market reach by buying Arizona rival

Arizona’s largest medical cannabis company, Harvest Health & Recreation, grew its footprint in the state by acquiring competitor Arizona Natural Selections.

Under terms of the deal, Harvest received:

  • Vertical licenses for three operating MMJ dispensaries and a fourth location to be opened.
  • A 55,000-square-foot grow facility.
  • A 322-acre site containing a 70,000-square-foot greenhouse and 25 acres that are zoned for marijuana cultivation.

Harvest, a Phoenix-based multistate cannabis operator, didn’t disclose the purchase price, saying only that it acquired Arizona Natural Selections’ licenses for a “non-material” amount of stock.

With the acquisitions, Harvest operates 14 of the roughly 120 medical marijuana dispensaries in the state, according to the Arizona Republic.

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Australis ends purchase of Colorado CBD firm after lurid charges emerge

Australis Capital, a cannabis investment firm based in Las Vegas, terminated its planned acquisition of hemp company Folium Biosciences in the wake of shocking headlines that surfaced regarding the Colorado company it was going to purchase only two months ago.

Australis, a spin-off of Canadian marijuana producer Aurora Cannabis, said in a news release it is ending the planned purchase of Folium because of “recently discovered new relevant information with regard to Folium, and, on that basis, AUSA has decided to not proceed with the merger.”

Australis did not provide additional details about its decision.

Folium, a Colorado Springs-based hemp and CBD producer, made headlines recently with sensational stories of murder-kidnap plots, factory explosions and lawsuits, according to the Colorado Springs Independent.

Australis, which has invested in Folium since last April, said at the time the proposed deal with Folium presented an “exciting and unique opportunity” for the company.

The deal’s termination comes after Australis announced the January departure of Chief Financial Officer Michael Carlotti. It’s unclear whether the two events are related.

In a brief news release issued Jan. 17, Australis said Carlotti’s employment had been “terminated” effective Jan. 16.

The company gave no explanation for the move.

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Multistate operators hog Missouri medical cannabis licenses

Missouri granted medical marijuana licenses to some of the largest multistate cannabis operators in the U.S., leading to a flurry of complaints from applicants who were rejected.

A Missouri cannabis trade group also won a coveted license, according to an analysis of state records by the St. Louis Post-Dispatch.

The influx of multistate operators seeking medical marijuana licenses in Missouri first came to light during a July review by the newspaper.

According to the Post-Dispatch’s recent review of records related to the issuance of 338 licenses to grow, process or sell medical marijuana in Missouri, multistate operators were among the big winners:

  • Justice Group of Pennsylvania was awarded 11 licenses.
  • Harvest Health & Recreation of Arizona received seven.
  • Grassroots OpCo, which is tied to Illinois-headquartered Grassroots Cannabis, won eight.
  • Bloom Medicinals of Florida was awarded eight.
  • Standard Wellness, which is based in Ohio and also has licenses in Utah, received six.
  • Holistic Missouri, which is tied to Washington DC-based Holistic Industries, was awarded six.
  • Verano Holdings, an Illinois-based MSO that is being acquired by Harvest Health, was issued four.

The state has received complaints from hundreds of applicants whose license requests were rejected.

The unsuccessful applicants contend Wise Health Solutions, the independent company hired by the state to evaluate more than 2,000 applications from 700 groups, had conflicts of interest and committed scoring discrepancies.

– Associated Press

Investment experts shed light on marijuana prospects in 2020

The cannabis investing landscape has changed significantly in the past 12 months.

A year ago, the industry saw a record number of deals of record size; now, capital has become a precious commodity.

Join Craig Behnke, an analyst for Marijuana Business Daily’s Investor Intelligence, and Scott Greiper, president of Viridian Capital Advisors, at 2 p.m. ET Wednesday, Feb. 26, for a free webcast examining the state of cannabis industry investing and where it might be headed.

Behnke and Greiper will discuss:

  • Where activity is taking place – and who’s investing in whom.
  • Key facts and figures about capital raises and M&As during the second quarter.
  • How these investment moves are changing the North American cannabis landscape.

Register for this special webcast here.

California extraction firm that serves cannabis sector sells for $50 million

(This story and headline have been updated to better describe Delta Separations’ connection to the cannabis industry.)

Gibraltar Industries, a diverse manufacturing company based in Buffalo, New York, paid $50 million for the assets of Delta Separation, an ethanol extraction equipment manufacturer that sells to the cannabis industry.

Delta Separations, headquartered in Santa Rosa, California, sells directly to hemp, marijuana and biomass processors.

The buyers of Delta’s materials produce botanical oil extracts for numerous consumer products, according to a filing with the U.S. Securities and Exchange Commission.

Gibraltar’s acquisition of Delta – a privately held company with 2019 revenues of $46 million – was first reported by New Cannabis Ventures.

Delta is the second company in the extraction space acquired by Gibraltar. Last October, Gibraltar purchased Ohio-based C02 extraction equipment company Apeks Supercritical for $12.6 million.

Grassroots Cannabis inks $19.7 million sale-leaseback deal

NewLake Capital Partners is buying and leasing back 10 marijuana retail stores in six states from Chicago-based Grassroots Cannabis in a deal valued at up to $19.7 million.

NewLake, which also is headquartered in Chicago, has closed on six of the sale-leaseback deals with Grassroots’ parent company, GR Companies.

The company plans to purchase the other four stores within the next 45 days.

NewLake is paying $15.5 million for the stores.

Grassroots, however, is expected to make $4.2 million in improvements to the properties, bringing the total deal to $19.7 million.

The portfolio consists of nine medical marijuana dispensaries and one adult-use cannabis store.

NewLake declined to identify the states where the stores are located.

Sale-leasebacks are an increasingly popular way for marijuana companies to raise instant cash.

However, most sale-leaseback deals are for large, industrial properties like cultivation centers and warehouses and not for smaller, retail stores.

This deal marks the third real estate acquisition by NewLake but the first with Grassroots.

Grassroots, meanwhile, is expected to soon become the property of Massachusetts-based marijuana giant Curaleaf.

Curaleaf reached an agreement last July to buy Grassroots for $875 million in stock and cash, and the deal is expected to close in early 2020.

For analysis and in-depth looks at the investment trends and deals driving the cannabis industry forward, sign up for our premium subscription service, Investor Intelligence

Scatterday appointed CEO of marijuana tech firm Tilt Holdings

Tilt Holdings, a Massachusetts-based cannabis company with a focus on technology, on Wednesday installed Mark Scatterday as permanent CEO.

He had served as the company’s interim CEO since May 2019.

In another move, Tilt announced that Chief Operating Officer Tim Conder also will serve as company president.

Scatterday told Marijuana Business Daily last September that, in his interim role, he planned to focus capital “where it is really needed” and grow the company’s business in constrained markets such as Massachusetts.

On Wednesday, he said he plans to grow the “business around a refined strategy of technology and innovation.”

Scatterday had a busy start as interim CEO, including:

Before joining the company as interim CEO, Scatterday was the founder and CEO of Jupiter Research, a vaping technology company acquired by Tilt in January 2019.

Colorado marijuana sales soar to $1.75 billion in 2019

Colorado’s recreational and medical cannabis retailers sold a record $1.75 billion in product last year, increasing the state’s total to a whopping $7.79 billion since the 2014 launch of adult-use sales.

Adult-use and medical marijuana sales in the state increased 13% from 2018, according to figures the Denver Post obtained from Colorado’s Marijuana Enforcement Division.

Retailers in the state sold more than $144 million in marijuana products in December alone, a 6.7% increase from the final month of 2018.

However, Colorado’s best month for sales in 2019 was August, when the state’s cannabis stores sold $173 million in product, according to the newspaper.

Those sales numbers come on the heels of Marijuana Business Daily findings that Colorado marijuana growers are seeing strong prices for wholesale flower as the cultivation side stabilizes.

New Mexico banning nonresident medical cannabis sales

In a move that could hurt sales at medical marijuana dispensaries in New Mexico, the state is ending the program that allowed MMJ cards for nonresidents.

The Legislature approved a bill phasing out the nonresident program in mid-year.

The legislation is supported by Gov. Michelle Lujan Grisham.

More than 600 people from Texas, Arizona and other states have enrolled in New Mexico’s medical marijuana program, after Grisham signed a state statute into law allowing MMJ sales to those who don’t live in New Mexico.

State health officials, however, urged legislators this year to reinstate the requirement.

They were concerned about federal intervention if stores were allowed to sell MMJ to residents of states where it was not legal.

House lawmakers voted 44-19 to restore the residency requirement.

Ultra Health, with more than 20 medical marijuana dispensaries in New Mexico, objected.

Last August, Ultra Health, based in Bernalillo, New Mexico, won a court battle to require the state to issue cannabis cards to nonresidents.

Nonresidents who are enrolled in New Mexico’s MMJ program would be allowed to keep their cards for three years until they expire, without the possibility of renewal, according to the state’s Health Secretary Kathyleen Kunkel.

– Associated Press

Republican legislators urge key US senator to oppose marijuana banking

A dozen Republican members of the U.S. House of Representatives are urging U.S. Senate Banking Committee Chair Mike Crapo to oppose legislation that would allow financial institutions to provide banking services to the marijuana industry.

The 12 legislators voted against the so-called SAFE Banking Act last September, though the measure was approved by the full House in an overwhelming 321-103 vote.

The bill would enable financial institutions to serve cannabis-related businesses without fear of federal reprisal.

Crapo, a Republican from Idaho, is considering his own, more restrictive version of the SAFE Banking Act.

The 12 Republicans wrote in a letter to Crapo that they “have reservations with the unprecedented approach of allowing banking access for a Schedule 1 drug, in addition to increasing investment in marijuana enterprises even as they remain federally illegal.”

In January, the four lead sponsors of the successful cannabis banking bill in the House sent their own letter to Crapo asking him to move the issues forward in the Republican-controlled Senate.

That letter was signed by two Democrats and two Republicans.