Cannabis Industry Daily News

Proposed changes to Michigan cannabis caregiver rules spur protest

A series of bills introduced this month in the Michigan Legislature – and supported by large marijuana businesses – was met with backlash from angry medical cannabis patients who want the caregiver system in particular to remain untouched.

The legislation is purportedly aimed at cracking down on the state’s illicit cannabis market.

The situation pits big industry players against grassroots activists and MMJ patients, with the former arguing more regulation is needed to ensure a stable market and the latter rejoining that the current program works fine as is, and that the proposals are nothing more than a grab for market share.

According to MLive.com, the trio of bills introduced on Sept. 14 would:

  • Shrink the number of allowed patients per MMJ caregiver to one from five.
  • Reduce the overall number of marijuana plants each caregiver is allowed to cultivate, to a total of 24 plants, which includes a cap of 12 patients with one plant each and another 12 for personal caregiver use.
  • Decrease the amount of MMJ caregivers are allowed to have on hand at any point in time, to 5 ounces from 15.

The Michigan Cannabis Manufacturers Association is the highest-profile supporter of the bills.

Opponents, however, include Michigan Caregivers United, the Michigan chapter of NORML, at least some of the state’s legacy MMJ companies, hundreds of protesters that showed up at the state capitol to protest the bills and at least one Democratic state lawmaker from Detroit, the Lansing State Journal reported.

Marijuana company Hexo achieves carbon-neutral goal

(A version of this story first appeared at Hemp Industry Daily.)

Canadian cannabis producer Hexo Corp. has reached its target to become carbon neutral within three months, the company announced.

The publicly traded, Ottawa, Ontario-based company spent at least $784,000 (999,647 Canadian dollars) to meet its goal to become carbon neutral by September.

Hexo purchased carbon offset credits from Offsetters, a Vancouver sustainability and carbon-management provider.

To date, the company says it has offset nearly 26,000 metric tons of carbon (28,660 tons in the U.S.), including 19,610 metric tons in operational emissions and 6,355 metric tons of carbon generated by its 12,000 employees.

By next month, Hexo estimates it will have purchased credits to offset 71,000 kilograms (156,528 pounds) of plastic, which equates to more than 3.5 million plastic bottles.

The company estimates a per-employee cost of CA$1,000 to offset its employees’ emissions; however, it did not disclose how much it cost to offset operational emissions or plastic.

“I’m tremendously excited by it,” Sebastien St. Louis, co-founder and CEO of Hexo, told Hemp Industry Daily.

“I hope that other companies see this as a bit of a challenge and a bit of a wake-up call, and I hope we get others following suit. But I’m extremely proud of what we’ve been able to accomplish at Hexo.”

The company has also closed its acquisitions of Ontario-based cannabis producers Redecan and 48North, for a combined $450 million, and has plans to carry its carbon neutrality targets into both of those businesses and into its U.S. businesses, according to a company statement.

Primarily a marijuana company that is expanding into hemp, Hexo launched a line of hemp-derived CBD beverages in Colorado earlier this year through Truss Beverages, a joint venture with Molson Coors.

“Now we’re carbon neutral, but … I’m also concentrated on actually continuing to make our footprint smaller, so as Hexo gets bigger, we have an ability to make more impact,” St. Louis said.

“We’re looking at green energy sources, like, obviously in Quebec we use hydroelectric power mostly, but now, in Ontario, we’re … starting to look at renewable sources of power for our next expansion. So how can that contribute to making us have a smaller footprint, even than we have today, while we continue to offset.”

St. Louis said the time is now to act on the planet’s climate crisis, and he’s hoping to use his platform to influence other companies in the cannabis space and beyond to join in the effort.

“I personally feel that not enough is being done on a global scale or anywhere to fix this problem, and it’s time for us to wake up as a society,” St. Louis said.

Political infighting, he said, is causing delays, and while individuals can make small impacts, it’s going to take commitment by corporations to make a difference.

“What I hope will happen is that we get other corporations in the cannabis space,” St. Louis said.

Hexo Corp.trades on the Nasdaq as HEXO and Toronto Stock Exchange as HEXO.

Laura Drotleff can be reached at laura.drotleff@hempindustrydaily.com

New York officials ‘shocked’ by cannabis MSO Vireo’s electrical needs

Marijuana multistate operator Vireo Health reportedly needs more electricity for its new New York cultivation and processing facility than the technology park can provide.

The Leader-Herald newspaper in Gloversville in upstate New York reported that Fulton County industrial development officials were “shocked” to learn from Vireo that the county-financed electrical transmission line into Tryon Technology Park isn’t sufficient for the MSO’s needs.

Minneapolis-based Vireo is constructing a 325,00-square-foot cultivation and processing facility in preparation for an expanding medical cannabis market and the state’s forthcoming recreational marijuana market. Vireo is one of 10 MMJ operators in the state.

It’s unclear how the situation will be resolved. The report indicates that Fulton County Industrial Development Agency officials believe that based on Vireo’s request, an additional transmission line and substation will be needed at a cost that could exceed $4.5 million.

Vireo didn’t immediately respond to a MJBizDaily query for comment Friday.

The development agency’s executive director, James Mraz, was quoted as saying that the primary electrical line installed at the technology park cost $650,000, and was partly funded by a state grant.

He told the Leader-Herald that such a line has been adequate in the past at other county business parks, except in the case of a yogurt plant that required a transmission line upgrade.

“Vireo’s project is going to utilize a large amount of electricity, and it’s, in essence, more than what that standard line can provide,” Mraz told the newspaper. “When it was learned what the size of the (electrical) demand from Vireo was — which is the driving issue here, their demand beyond what the line can provide — it was shocking.”

Ohio to allow medical marijuana growers to expand operations

Ohio regulators will now allow medical marijuana growers to request an expansion of their cultivation operations, a move that could ease product shortages, boost sales and allow cultivators to better meet patient demand.

The Cincinnati Enquirer reported that permission to expand will be granted to growers who have maxed out their space and can prove they need more room to meet demand.

The growers also must be in good standing with regulators, including the Ohio Department of Commerce.

Ohio has 20 cultivators who are licensed for up to 25,000 square feet of canopy and 15 cultivators who can grow up to 3,000 square feet.

The new rules would allow licensees to expand to 75,000 square feet and 9,000 square feet, respectively.

Regulators have not yet issued details about how the growers can request expansion.

In September, the Ohio Board of Pharmacy initiated plans to more than double the number of dispensaries, adding 73 to the current 58.

The state’s program is also contending with restrictive patient-purchase limits and low patient participation, but more supply could help lower costs for consumers and increase overall sales.

 

Acreage exits Oregon by selling cannabis stores for $6.5 million

Marijuana multistate operator Acreage Holdings agreed to sell four Oregon retail stores for $6.5 million, a transaction that completes the sale of the MSO’s facilities in the state as it continues to focus on core markets.

The buyer is Portland-based Chalice Brands, which will increase its retail footprint from 12 to 16 stores in Oregon.

In a news release, New York-based Acreage noted its Oregon operations had been “negatively affecting the company’s bottom line and utilizing management resources.”

The terms of the sale agreement include a $250,000 cash payment at the time of the signing, and a 10-month, $6.25 million promissory note bearing an annual interest of 6% for the first five months and 10% for the remaining five months.

The stores are in Portland, Eugene and Springfield, and branded under Cannabliss.

“This is a fantastic opportunity for Chalice to edge closer to our goal of achieving our targeted market share in the state of Oregon while entering the Eugene market … ,” Jeff Yapp, CEO of Portland-based Chalice, said in a news release.

Earlier this year, Acreage sold its vertical marijuana operation in Florida for $60 million and last year it sold its North Dakota medical marijuana assets and land in Massachusetts as part of a cost-cutting move.

“The sale of our Oregon operations represents another strategic step in our previously announced operating strategy,” Acreage CEO Peter Caldini said in the news release.

That strategy involves “driving profitability, strengthening our balance sheet, and accelerating our growth in our core markets.”

Acreage currently lists operations or management service contracts in 12 states, with core markets including Illinois, Massachusetts, Michigan, New York, New Jersey and Pennsylvania.

The company posted a net loss of $3.3 million in the second quarter of 2021 on revenues of $44.2 million.

Acreage trades on the Canadian Securities Exchange as ACRG.U and on the U.S. over-the-counter market as ACRGF.

Glass House closes $93M California marijuana greenhouse purchase

California marijuana and hemp company Glass House Brands finalized its acquisition of a Ventura County greenhouse facility for $93 million in cash – $25 million less cash than the original price – plus stock.

The stock component of the deal includes 6.5 million Glass House shares issued to the unidentified original holder of an option to buy the facility, at a price of $10 per share, subject to a lockup agreement.

A further 3.5 million shares may be issued “upon satisfaction of certain contractual indemnity obligations,” and the option holder could earn up to $75 million worth of earnout shares.

The Southern California facility includes about 5.5 million square feet of canopy across six greenhouses on a 160-acre agricultural property, according to a Wednesday news release.

It also features an on-site well, water-treatment facilities and natural-gas cogeneration to produce power, heat and carbon dioxide.

Glass House plans to retrofit the facility to convert two greenhouses and packaging facility by the first quarter of 2022, “with initial planting expected to follow shortly thereafter, contingent on regulatory approval.”

After those upgrades, the company said the facility “is expected to conservatively produce over 180,000 dry pounds of sellable cannabis.”

“The Southern California facility is an absolute unicorn and will give us the ability to produce the highest quality cannabis at the lowest possible cost,” Graham Farrar, Glass House’s chief cannabis officer and president, in a statement.

“This should allow us to thrive no matter what the competitive environment looks like.”

Glass House is based in Long Beach and has an office in Toronto.

The company, formerly known as Glass House Group, closed its merger with Mercer Park Brand Acquisition Corp., a special purpose acquisition company, in late June.

Glass House shares trade as GLAS on the NEO Exchange in Canada and as GLASF and GHBWF on the over-the-counter markets.

Georgia seeks medical cannabis oversight from ag department

Georgia regulators are asking for help from the Department of Agriculture in overseeing the state’s limited medical marijuana program.

During the first meeting of the Medical Cannabis Commission’s Oversight Committee, the Newnan Times-Herald reported, Rep. Micah Gravley noted that marijuana “is an agricultural product. We’re an agricultural state.”

Georgia approved limited medical marijuana in 2019, but the program has been slow to roll out.

The commission awarded six marijuana cultivation licenses this summer, and the legislative process to award dispensary permits is underway.

But, according to the Times-Herald, state Agriculture Commissioner Gary Black leans in favor of hemp and not medical marijuana.

The newspaper pointed out, however, that Black is seeking Georgia’s 2022 Republican nomination for the U.S. Senate, so the state could have a new ag commissioner next year.

Gravley also said the commission should focus on finding labs to test cannabis for the legal program.

New York tribe opens applications for adult-use marijuana retail licenses

A Native American tribe in upstate New York is taking applications for adult-use marijuana retail licenses and said it plans to respond to each application within two weeks of filing.

The Saint Regis Mohawk Tribe, which has a reservation near the Canadian border in Akwesasne, approved recreational marijuana in a community referendum in December 2019 and is keen on launching sales as soon as possible.

However, prospective licensees must first submit an adult-use cannabis business preclearance form if they haven’t done so already, the tribe said in a news release.

“Unlike other tribal territories, the Tribe’s Adult Use Cannabis Ordinance provides eligible tribal members with the opportunity to help develop this new industry for the benefit of the community,” Tribal Chief Michael Conners said in the release.

“Tribal licensing builds upon our business community’s history of keeping revenue in Akwesasne to support community programs and services.”

Akwesasne is a six-hour-plus drive north from New York City.

Former New York Gov. Andrew Cuomo signed recreational marijuana into law in late March, but nearly six months later, the state program is only starting to make progress in developing its oversight commission.

Tribal Chief Ron LaFrance noted in the news release that tribally licensed cannabis retailers thus will have the opportunity to make their products available in advance of state-licensed businesses.

Governor’s recall-election wins means status quo for California cannabis sector

California Gov. Gavin Newsom eased the concerns of some in the cannabis industry Tuesday night when he won in a landslide over conservative activists who had forced an off-year recall election.

With roughly two-thirds of the ballots counted, the Associated Press reported, Newsom was winning easily by 30 points.

His victory likely ensures things will not change for the California cannabis industry – at least for one more year. Newsom will be up for reelection in November 2022.

The recall election spurred divided opinions in the state’s cannabis industry, with many – including marijuana consultant Jackie McGowan, who was among the 46 candidates trying to unseat the governor – arguing that Newsom has done little to advance MJ business interests since taking office.

But plenty of others – including several major trade groups and labor unions that work closely with marijuana businesses – allied themselves with Newsom and worked on the governor’s behalf to garner votes.

Newsom backers in the marijuana industry noted that he:

  • Was the first governor to categorize the state’s cannabis businesses as “essential” at the start of the COVID-19 pandemic in 2020, a move that arguably led other governors to take similar action, and allowed the industry to continue operations uninterrupted.
  • Consolidated California’s three cannabis regulatory agencies into a single entity that will oversee the industry, ostensibly more effectively.

Newsom’s critics in the cannabis space, however, maintain that the governor has fallen short on such political goals as reducing state taxes and helping expand the industry’s footprint around the state.

– John Schroyer

FDA, CDC issue delta-8 THC warnings after 100-plus end up in hospitals

More than 100 people in the United States have been hospitalized this year after consuming delta-8 THC products, federal health regulators warned Tuesday.

The hospitalizations included pediatric intensive-care unit admissions and were among more than 600 calls to local poison control centers, according to the U.S. Food and Drug Administration.

The U.S Centers for Disease Control and Prevention issued its own public health alert Tuesday about delta-8 THC, warning that such products are frequently mislabeled.

“The rise in delta-8 THC products in marijuana and hemp marketplaces has increased the availability of psychoactive cannabis products, even in states … where non-medical adult cannabis use is not permitted under law,” the CDC warned, adding that poison-control centers have added a new code for delta-8 THC exposure.

No fatalities have been reported. The warnings did not elaborate on product names connected to any hospitalizations.

Delta-8 THC is an isomer of the psychoactive cannabinoid that occurs naturally in the cannabis plant, delta-9 THC.

Delta-8 THC is rare in nature but can be easily synthesized from CBD, giving rise to products that offer intoxicating effects without needing to be sourced from marijuana, which isn’t legal in all states and remains illegal under federal law.

The FDA warned, without elaborating, that delta-8 THC “may have potentially harmful by-products (contaminants) due to the chemicals used in the process.”

Canopy Growth to offer CBD vapes for sale in Circle K stores

Canadian cannabis producer Canopy Growth Corp. is entering the CBD vape market and will distribute the products exclusively at Circle K locations in the U.S.

The deal announced Tuesday places Canopy’s new Whisl line of CBD vapes at more than 3,000 locations across the United States beginning Oct. 1.

The CBD is made from U.S.-grown hemp and comes in 200-milligram pods that target specific moods.

“We want to empower consumers to quickly achieve focus, calmness or prepare for sleep with a modern CBD solution that is fast-acting and can fit seamlessly into anyone’s daily routine,” Andy Lytwynec, Canopy’s vice president of global vape business, said in a statement.

The Circle K chain is making increasing moves into the CBD space, adding ingestible forms as well as topicals, vapes and smokable hemp in various locations.

Circle K is owned by Alimentation Couche-Tard, a retail network based in Laval, Quebec, Canada.

Couche-Tard operates about 9,900 convenience stores in North America, approximately 5,900 in the U.S. and the rest in Canada.

The company also operates or licenses convenience stores in 22 other countries or territories worldwide.

Canopy Growth, based in Smiths Falls, Ontario, trades on the Toronto Stock Exchange as WEED and on the Nasdaq as CGC.

Cannabis software firm Akerna inks $17 million acquisition

Denver-based cannabis technology company Akerna signed an agreement to acquire a marijuana business management software firm for $17 million in cash and stock.

Akerna will pay $4 million in cash and $13 million in stock to acquire 365 Cannabis with a potential earnout of $8 million, according to a news release.

The $17 million acquisition price works out to 2.1 times 365 Cannabis’ past 12 months of revenue.

The acquisition is expected to close by year-end and is subject to customary closing conditions.

Akerna said in the release that the acquisition of 365 Cannabis, which is headquartered in Las Vegas, will provide Microsoft capabilities to enhance Akerna’s enterprise resource planning platform, which includes financial and tax compliance software.

Cannabis 365 has more than 85 clients, including such U.S. and Canadian cannabis producers and retailers as PharmaCann, Revolution, Sundial Growers and Kiaro.

Akerna’s holdings include MJ Freeway, a seed-to-sale software platform.

Akerna, which trades on Nasdaq under the ticker symbol KERN, was down about 4% as of midday trading Tuesday.