Cannabis Industry Daily News

California county offers $10,000 grants to cannabis farmers

By MJBizDaily Staff

Officials in Humboldt County, California, launched a program to help bolster the community’s struggling – but legal – cannabis farmers.

According to the Eureka Times-Standard, county officials have authorized $2 million in grant monies for marijuana growers to be dispersed in $10,000 increments “per service” for those who qualify.

Advertisement

The program is called Project Trellis.

But only about 200 of the roughly 900 cannabis farmers deep in the heart of Northern California’s legacy marijuana growing region would qualify for any of the grant money, said Natalynne DeLapp, executive director of the Humboldt County Growers Alliance.

And even so, the grant money might not be enough to stave off financial disaster for farmers that are facing a wholesale market price crash, she said.

“Unless we want an extinction event, which means losing our legacy farmers, it is imperative for the county to maximize funding allocations directly into the hands of our farmers,” DeLapp told the Times-Standard.

Applications for grant money must be submitted by 5 p.m. Sept. 17 to the Humboldt County Office of Economic Development.

Once the paperwork is in, it might take 60 days or more for an application to be approved, the newspaper reported.

Delivery platform Eaze to acquire CO, FL marijuana retailer Green Dragon

By MJBizDaily Staff

California-based marijuana delivery platform Eaze struck a deal to acquire multistate cannabis retailer Green Dragon.

Eaze, which is privately held, did not disclose the value of the transaction in a Wednesday news release.

Advertisement

Denver-based Green Dragon is also privately held. The company’s website lists 15 cannabis retail outlets in Colorado and one medical marijuana dispensary in Florida with a second location planned in that state.

“The combined company will operate 42 delivery and storefront retail locations and serve markets with a combined value of nearly $10 billion,” Eaze noted in the release.

The transaction requires regulatory approval at the local and state levels, according to the release.

In a statement, Eaze CEO Rogelio Choy said Green Dragon’s Colorado operations “and expansion into Florida’s booming market adds key operational capabilities to our national footprint and cements our leadership as California’s largest (multistate operator).”

According to the release, Green Dragon “plans to have at least 20 locations secured in Florida by the end of 2021.”

In addition to its California operations, Eaze has announced plans to launch its cannabis delivery platform in Michigan.

Illinois hit with another lawsuit over cannabis licensing

By MJBizDaily Staff

Another lawsuit has been filed against the state of Illinois over its cannabis licensing process, this time by two companies that claim they were “forced” to relinquish lottery spots for retail permits by a state agency.

According to the Chicago Sun-Times, Suite Greens and So Baked Too allege in the suit against the Illinois Department of Financial and Professional Regulation that agency officials pushed them to give up coveted spots in one of three lotteries for marijuana retail permits.

Advertisement

Both companies have nine spots, or chances, to win in the final lottery of the three, but they allege they should have an additional three, according to the lawsuit.

The third of the three lotteries is scheduled for Aug. 19, but it likely will be delayed after a judge last week ordered regulators not to issue any new licenses until a ruling is handed down on one of the many lawsuits filed against Illinois’ licensing process.

The suit filed by Suite Greens and So Baked Too requests that a Cook County court judge force the state to give them back the three spots they relinquished but doesn’t ask that the licensing process be halted or redone.

Among the lawsuits filed in Illinois by would-be marijuana licensees:

  • Michigan-based Sozo Illinois filed a federal lawsuit in July in an attempt to stop the licensing process.
  • Three businesses connected to Justice Cannabis filed a federal lawsuit in July, alleging they had been wrongly left out of one of the lotteries.
  • High Haven Dispensary filed a state lawsuit in August, claiming the company should have received more social equity points than it got during the license application process.

Scotts Miracle-Gro arm invests $3.2M in marijuana ag-tech venture

By MJBizDaily Staff

Ohio-based Scotts Miracle-Gro’s new marijuana investment subsidiary, The Hawthorne Collective, has made another deal.

The Collective invested $3.2 million in Washington state-based Dewey Scientific, a fledgling ag-tech endeavor that is seeking to boost the genetic diversity of cannabis crops in the Pacific Northwest.

That follows last week’s announcement that The Hawthorne Collective was making a $150 million strategic investment in Toronto-based RIV Capital, which is eyeing the U.S. cannabis market.

Advertisement

Scotts Miracle-Gro, a lawn and garden giant, said The Collective purchased a warrant to buy equity in Dewey, founded in 2018 by three Washington State University plant scientists.

Dewey, which combines genomics, data science and traditional breeding methods, plans to use the funds to expand its research and development activities.

Dave Swihart, Scotts Miracle-Gro senior vice president of global technology and operations, said in a news release that the company has been collaborating with Dewey Scientific for the past two years, “refining the breeding of hemp crops to advance crop yields and quality.”

“We’ve experienced firsthand the impact of their genomic breeding technologies,” he added.

Illinois, Michigan establish monthly cannabis sales records in July

By MJBizDaily Staff

Midwest cannabis states Illinois and Michigan set sales records for their respective markets last month, with Illinois hitting $128 million and Michigan reaching $171 million.

Advertisement

Illinois’ sales benefited from the Lollapalooza music festival, according to the Chicago Tribune, and Michigan from a continuance of the COVID-19 purchasing bump most U.S. cannabis businesses have experienced, the Detroit Metro Times reported.

Illinois’ former record sales point was in May, when retail marijuana transactions in the state reached $116.4 million.

Michigan’s banner month – a combination of $128 million in adult-use sales and $43 million in MMJ sales – broke the record of $149 million set in June.

Missouri and Maine also set new cannabis sales records in July, with the former reaching $21 million in medical sales and the latter hitting $9.4 million in recreational sales.

Trulieve reiterates support of marijuana CEO amid husband’s conviction

By MJBizDaily Staff

Marijuana multistate operator Trulieve Cannabis distanced itself from the conviction of CEO Kim Rivers’ husband on five public corruption charges connected to his real estate development business.

“We have consistently maintained that neither Trulieve nor our CEO are involved in the case,” Trulieve said in a Twitter post in response to J.T. Burnette’s conviction on Friday.

Advertisement

The statement also noted that Florida-based Trulieve’s board of directors “continues its strong support” of Rivers and her strategic vision for the company.

Rivers added in a personal tweet that she had “never been more confident in the future of Trulieve nor more proud of what we have built over the past five years. I look forward to the future and am grateful for your support. Onward!”

After a lengthy trial, Burnette was convicted on five of nine charges, including extortion and mail fraud, as part of a larger public corruption investigation.

Burnette was accused of giving or arranging a total of $140,000 in bribes between 2014 and 2017 to a then-Tallahassee city commissioner to advance Burnette’s real estate redevelopment interests in the city, according to local media reports.

Testimony came up at the trial that Burnette boasted to undercover FBI agents that he worked with a then-state legislator and friend in 2014 to tweak medical cannabis licensing criteria that would prevent certain competitors from winning permits.

But Trulieve, which won one of the initial MMJ licenses in Florida, hasn’t been charged with any wrongdoing.

Trulieve has become the dominant operator in Florida’s medical marijuana market with 87 dispensaries and half the smokable-flower sales in the state.

The company, one of the few profitable marijuana companies in the United States, is in the process of acquiring Arizona-based Harvest Health & Recreation in an all-stock deal initially valued at $2.1 billion.

Harvest closes $29.5 million Maryland sale-leaseback deal with cannabis REIT

By MJBizDaily Staff

Multistate cannabis operator Harvest Health & Recreation closed a sale-leaseback transaction, selling a cultivation and processing facility in Hancock, Maryland, to Innovative Industrial Properties in a deal valued at $29.5 million.

Harvest received $16.6 million for the property and anticipates completing unspecified improvements totaling $12.9 million, which will be reimbursed by the California-based real estate investment trust (REIT).

Advertisement

“Maryland is one of our core markets with significant future growth potential,” Harvest CEO Steve White said in a news release.

“We look forward to expanding our wholesale operations and providing continuing support for our retail locations in Maryland after additional capacity comes online.”

Arizona-based Harvest operates medical marijuana dispensaries in the Maryland communities of Halethorpe, Lutherville-Timonium and Rockville. Those are supported by a cultivation and processing facility in Hancock.

Harvest’s release did not specify how the company intends to use the proceeds from the facility sale.

Innovative Industrial Properties, which owns dozens of properties across at least 17 states, previously completed a sale-leaseback deal with Harvest in Florida.

Harvest shares trade on the Canadian Securities Exchange as HARV.

Innovative Industrial Properties lists its shares on the New York Stock Exchange as IIPR.

Marijuana real estate investor NewLake closes on $100 million IPO

By MJBizDaily Staff

Connecticut-based NewLake Capital Partners, which provides real estate capital to state-licensed marijuana operators, said it closed on an initial public stock offering of more than $101 million.

Advertisement

The offering of 3.9 million shares of stock was priced at $26 a share, according to a news release.

The company expects the shares to trade on the U.S. over-the-counter markets.

Net proceeds will be used to acquire assets that fit in with the company’s strategy, NewLake said.

Three of the investment company’s recent deals have focused on the Arizona and Massachusetts marijuana markets:

  • In August, NewLake reportedly spent $8.8 million on four properties in Fitchburg, Massachusetts. The company declined to disclose its plans for the facilities, three of which were co-owned by a medical cannabis company.
  • In July, NewLake said it was investing up to $20.5 million to acquire land and help construct a 130,757-square-foot cultivation and processing facility in Phoenix. The facility will be leased and operated by The Mint, a Tempe, Arizona-based vertically integrated, multistate operator.
  • In April, NewLake acquired a 40,000-square-foot industrial property in Palmer, Mass. for $1.6 million and committed $3 million to renovate it into a cultivation and processing facility, also with The Mint as the tenant.

Cannabis MSO PharmaCann plans stock offering, report says

By MJBizDaily Staff

Chicago-based cannabis multistate operator PharmaCann reportedly intends to go public in the fall with an initial stock offering that could be valued at more than $1 billion.

PharmaCann, which has operations in six states in the eastern half of the U.S., has “confidentially” started the paperwork with securities regulators for an IPO with a likely plan to list its shares on the Canadian Securities Exchange and the U.S. over-the-counter markets, Reuters reported Monday.

Advertisement

According to the report, PharmaCann wants to raise capital in advance of New York launching its recreational marijuana market.

“We have no comment on this anonymous report by Reuters,” Jeremy Unruh, PharmaCann’s senior vice president of public and regulatory affairs, wrote in an email to MJBizDaily.

PharmaCann is one of 10 medical marijuana operators in New York. The company also has operations in Illinois, Maryland, Massachusetts, Ohio and Pennsylvania.

PharmaCann was poised to be acquired in 2018 by Los Angeles-based MedMen Enterprises in a $682 million all-stock deal, but the transaction collapsed a year later.

The development of New York’s adult-use market has fallen months behind under scandal-ridden Gov. Andrew Cuomo, who resigned last week amid allegations of sexual harassment and assault.

While industry experts believe that the incoming governor, Kathy Hochul, is more supportive of adult-use legalization, it remains unclear whether cannabis will be one of the former lieutenant governor’s top priorities and whether she can act quickly enough to prevent further delays.

A key step is Hochul appointment a chair of the Cannabis Control Board. But the appointment needs to be approved by the state Senate, which isn’t in session.

Any fast-tracking of an adult-use marijuana program likely would benefit existing MMJ operators such as PharmaCann, industry experts said.

Ex-mayor indicted on corruption charges tied to CA marijuana licensing

By MJBizDaily Staff

(This story has been updated to correct the monetary sum of alleged bribes and kickbacks.)

The former mayor of a Southern California city has been indicted by federal prosecutors for bribery and wire fraud charges stemming from a corruption case tied to marijuana business licenses.

Richard Kerr, the former mayor of Adelanto in the desert northeast of Los Angeles, was arrested Friday after federal agents served a search warrant at his home, the Victorville Daily Press reported.

Advertisement

Kerr is accused of taking nearly $60,000 in bribes and kickbacks related to local marijuana licensing.

An investigation into the former mayor’s work with marijuana businesses began in 2018, after an arrest the previous year of Adelanto’s vice mayor in connection with a bribery scheme tied to the city’s cannabis permitting process.

According to an indictment unsealed last week, FBI investigators allege that Kerr and co-conspirators began their scheme at least as far back as 2015 and then began accepting bribes from marijuana business executives hoping to win coveted permits.

Kerr has pleaded not guilty to all charges filed against him. But he could face up to 160 years in prison if convicted on all charges, the Daily Press reported.

Canadian cultivator Village Farms acquires Colorado CBD firm for $75M

By MJBizDaily Staff

Canadian greenhouse produce grower Village Farms International acquired privately held CBD company Balanced Health Botanicals (BHB) in a deal worth $75 million.

Denver-based BHB focuses on hemp-derived CBD products and owns CBD e-commerce platform CBDistillery and CBD skin-care brand Bota.

Advertisement

The CBDistillery website receives more than 30,000 monthly orders and has “a significant repeat customer base,” according to a news release.

The deal will give Village Farms “immediate entry into the U.S. CBD market in a consumer products category adjacent to the high-THC cannabis market, as well as the broader consumer packaged goods wellness arena,” according to a Monday news release.

Vancouver, British Columbia-headquartered Village Farms already owns 100% of Pure Sunfarms, a profitable Canadian cannabis producer.

The $75 million acquisition includes $30 million in cash and $45 million in Village Farms shares.

Village Farms said the deal would be immediately accretive to its net income, with BHB expected to add annualized sales of more than $30 million in 2022.

“Importantly, the addition of the Balanced Health platform provides us with another potential pathway to participate in the U.S. high-THC cannabis market, when permitted to do so,” Village Farms CEO Michael DeGiglio said in the release.

DeGiglio cited Village Farms’ plans “to convert our more than 5.5 million square feet of high-tech greenhouse facilities in West Texas – one of the most favourable environments for cannabis cultivation in the continental U.S. – for large-scale, low-cost production of cannabis.”

Village Farms trades as VFF on the Nasdaq and the Toronto Stock Exchange.

Ayr Wellness to enter infused cannabis product market via $20M acquisition

By MJBizDaily Staff

Marijuana multistate operator Ayr Wellness said it agreed to purchase Cultivauna, which makes the Levia brand of cannabis-infused seltzers and tinctures.

Advertisement

According to a news release, Ayr intends to purchase 100% of the equity in Boston-based Cultivauna for $20 million, including $10 million in cash and the rest in stock.

An additional $40 million will be paid in shares based on performance in 2022 and 2023.

“Infused beverages, done right, will be game changing to the mainstreaming of cannabis in the U.S.,” said Jonathan Sandelman, CEO of Ayr Wellness, which has offices in New York and Toronto.

This is the latest in a growing number of acquisitions for Ayr, including the purchase of llinois-based Herbal Remedies Dispensaries for approximately $30 million and the $17 million purchase of two Nevada cannabis businesses.