Cannabis Industry Daily News

New Ohio SPAC raising $30.5 million for wellness acquisitions, including CBD

By MJBizDaily Staff

A new special purpose acquisition company (SPAC) started by Ohio marijuana industry players is raising money to acquire small wellness brands.

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Better For You Wellness has a term sheet with Williamsburg Venture Holdings for up to $30 million plus $500,000 from private placements, according to business publication Columbus Inno and a company news release.

The Columbus company is reportedly considering roughly 15 acquisition targets, possibly including CBD firms as well as health, nutrition and wellness companies.

“A lot of these (small wellness) companies just have been undercapitalized,” CEO Ian James told Columbus Inno.

James described Better For You as a “micro-SPAC.”

The blank-check company, which merged into publicly traded shell company Fast Track Solutions earlier this year, trades on over-the-counter markets as FTRK.

Better For You directors include celebrity former talk show host Montel Williams and Petland CEO Joseph Watson.

Crain buys cannabis financial news brand Green Market Report

By MJBizDaily Staff

Detroit-headquartered media company Crain Communications acquired Green Market Report, a female-founded digital outlet that covers financial news in the cannabis industry.

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The deal will be finalized Sept. 30, according to a Crain news release. Terms were not disclosed.

New York-based Green Market Report (GMR) was launched in 2017 by Debra Borchardt, a financial journalist and former Wall Street executive, and Cynthia Salarizadeh, a public relations expert and legal cannabis industry insider.

Borchardt will stay on to oversee GMR as the executive editor.

Green Market Report will join a Crain portfolio that includes 10 offices and more than 650 employees, the release noted.

New York’s marijuana regulatory board finally in place

By MJBizDaily Staff

New York’s governor appointed the final two members of the board that will oversee the state’s nascent recreational marijuana program, meaning there might soon be some movement in getting the state’s adult-use market up and running.

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Gov. Kathy Hochul, who has vowed to make up for “lost time” in launching a program that was approved by state lawmakers in late March, on Wednesday completed the New York Cannabis Control Board by appointing:

  • Reuben McDaniel, the president and CEO of the Dormitory Authority of New York State.
  • Jessica Garcia, the assistant to the president of the Retail, Wholesale Department Store Union.

They join two previous appointees – Adam Perry and Jen Metzger – as well as previously appointed Tremaine Wright and Chris Alexander.

Wright will serve as chair of the Cannabis Control Board and the Office of Cannabis Management, Alexander as executive director of both agencies.

New York’s adult-use market had been expected to launch as soon as spring 2022.

But that target date became unlikely when former Gov. Andrew Cuomo, who had been dragging his heels on appointing the Cannabis Control Board, stepped down and was replaced by Hochul.

Cresco to acquire Cure Pennsylvania’s 3 cannabis dispensaries for $90 million

By MJBizDaily Staff

Chicago-based marijuana multistate operator Cresco Labs announced a $90 million cash-and-stock deal to acquire Bay, also known as Cure Pennsylvania, and its three medical cannabis dispensaries.

Cresco did not specify how much of the acquisition would be paid for with cash and how much would be paid for with stock.

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The transaction, which is subject to approvals, is expected to close in the fourth quarter of this year, according to a Thursday news release.

Cresco said the dispensary operator “outperforms the average revenues per-store in Pennsylvania.”

Cure Pennsylvania’s three locations – in Lancaster, Phoenixville and Philadelphia – will add to Cresco’s four existing Sunnyside-brand dispensaries in Butler, New Kensington, Philadelphia and Pittsburgh.

The deal “is expected to expand our retail footprint in Pennsylvania, increase profitability, and strengthen our wholesale leadership position in the state,” Cresco CEO Charlie Bachtell said in a statement.

Recreational marijuana remains illegal in Pennsylvania, although the state’s medical marijuana market has become a hot target for cannabis mergers and acquisitions.

MSO Ayr Wellness recently announced an $80 million deal to buy three MMJ dispensaries in Pennsylvania.

Cresco shares trade as CL on the Canadian Securities Exchange and as CRLBF on the over-the-counter markets.

OK agricultural groups call for pause in medical marijuana grow licensing

By MJBizDaily Staff

A handful of Oklahoma agriculture associations and one law enforcement group sent a letter to the state’s medical marijuana regulators asking for a moratorium on new MMJ cultivation licenses.

“On behalf of Oklahoma’s farmers, ranchers and rural citizens, the undersigned organizations write with great concern for the explosive growth in the number of marijuana grow facilities in rural Oklahoma,” the groups wrote in their joint letter to the state’s Medical Marijuana Authority,

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Oklahoma has one of the loosest licensing schemes of any marijuana market in the country and more medical cannabis dispensaries (2,000-plus) than any other state.

The ag groups pointed out that, as of Sept. 3, Oklahoma regulators had issued 8,630 MMJ cultivation licenses, exceeding the number of wheat farms (6,510), pork farms (1,906), soybean farms (1,750), cotton farms (808) and dairy farms (471) in the state.

“This new industry is fundamentally changing rural Oklahoma. An immediate moratorium on issuing permits will give time to consider appropriate and proper actions to preserve rural Oklahoma,” according to the groups.

The groups are asking the state to pause issuing licenses until at least June 1, 2022, and, in the meantime, evaluate the MMJ industry’s impact on waste disposal, water availability and other issues.

The letter is signed by the:

  • Oklahoma Agricultural Aviation Association.
  • Oklahoma Cattlemen’s Association.
  • Oklahoma Dairy Producers Association.
  • Oklahoma Sheriffs’ Association.
  • Oklahoma Soybean Association.

US House endorses cannabis banking reform as part of defense bill

By MJBizDaily Staff

The U.S. House of Representatives on Tuesday night adopted by a voice vote a cannabis banking amendment as part of this year’s defense budget bill.

The National Defense Authorization Act for Fiscal Year 2022 still must be passed by the full House, but the approval of the so-called SAFE Banking Act amendment clears the way for cannabis banking reform to be in the final measure.

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It’s unclear, however, whether the U.S. Senate will similarly embrace the provision.

The U.S. House of Representatives passed cannabis banking reform by a strong bipartisan vote of 321-101 in April, but the Senate hasn’t taken up the issue.

Tucking the provision into a larger bill is an additional strategy to trying to get the measure passed by the upper chamber of Congress.

Cannabis banking and national defense might seem to be odd policy bedfellows, but Rep. Ed Perlmutter, a Colorado Democrat who has been the primary force behind the cannabis legislation, has always emphasized the security aspects of the legislation.

The SAFE Banking Act, he tweeted this week, “will strengthen the security of our financial system & keep bad actors like cartels out. Most importantly, it will reduce the risk of violent crime in our communities.”

SAFE would enable banks and other financial institutions to serve state-legal marijuana businesses without fear of federal reprisal.

Prospects for Senate passage appear brighter than in previous years, in part, because Democrats won slim control of the Senate in the November 2020 election.

State-legal marijuana businesses have struggled for years to gain access to traditional financial services such as checking accounts, payroll accounts and lines of credit.

U.S. Cannabis Council CEO Steven Hawkins, who also is executive director of the Washington DC-based Marijuana Policy Project, urged Congress to adopt the cannabis banking measure.

“Over $17 billion in legal cannabis was sold in the United States last year, overwhelmingly through cash transactions,” Hawkins said in a statement issued Tuesday.

“Forcing legitimate, well-regulated cannabis businesses to conduct most of their business in cash is anachronistic and a clear threat to public safety.”

Massachusetts mayor gets 6 years in prison for marijuana bribery scheme

By MJBizDaily Staff

The former mayor of a small Massachusetts town received a six-year prison term after his conviction earlier this year on charges including fraud and extortion tied to the licensing of local marijuana businesses.

Jasiel Correia, the ex-mayor of Fall River, was sentenced Tuesday by U.S. District Court Judge Douglas Woodlock for extorting hundreds of thousands of dollars from cannabis entrepreneurs hoping to win business permits.

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Correia was convicted in May on charges of wire fraud, extortion and extortion conspiracy, and prosecutors had asked for an 11-year prison sentence.

During the sentencing hearing, according to the Associated Press, the judge blasted Correia, saying that during his tenure as mayor, “City Hall was for sale.”

Correia, however, told reporters after his hearing that he turned down a plea deal because he’s innocent of the charges, the AP reported.

“The justice system has failed us,” Correia said after his sentence was handed down.

It’s not yet clear when his prison term will begin.

Cannabis REIT enters Missouri via sale-leaseback deal totaling $28.3M

By MJBizDaily Staff

Innovative Industrial Properties (IIP) said it extended its geographic footprint into Missouri through a sale-leaseback deal with CPC of Missouri-Smithville, a subsidiary of Massachusetts-based multistate operator Calyx Peak.

According to a news release, the San Diego-based real estate investment trust has agreed to pay CPC $1.5 million for an industrial property.

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CPC is expected to construct an approximately 83,000-square-foot cultivation and manufacturing facility at the site.

IIP, in turn, agreed to reimburse CPC up to $26.7 million for the construction costs.

Assuming full reimbursement, the REIT said its total investment in the property is expected to be $28.25 million.

CPC will lease the property back from IIP under a long-term deal.

Missouri represents the 19th state where IIP does business. The REIT owns 75 properties across the country.

Innovative Industrial Properties trades on the New York Stock Exchange under the ticker symbol IIPR.

Amazon expands on support for federal marijuana reform, workplace equity

By MJBizDaily Staff

E-commerce giant Amazon has stepped up its efforts to support federal marijuana reform and provide a more equitable workplace in terms of MJ policy.

In a blog post Tuesday, the company’s human resource chief noted two recent developments:

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  • Amazon’s endorsement of the Cannabis Administration and Opportunity Act proposed by U.S. Sens. Chuck Schumer of New York, Cory Booker of New Jersey and Ron Wyden of Oregon.
  • The company’s reinstatement of employment eligibility for former employees or applicants who were terminated or not considered because of random or preemployment marijuana screenings.

The developments follow a June announcement that Amazon was actively lobbying for the Marijuana Opportunity Reinvestment and Expungement Act of 2021, the U.S. House version of MJ reform, and excluding cannabis from preemployment drug screening for most positions.

In Tuesday’s blog, Beth Galetti, Amazon’s senior vice president of human resources, wrote of three reasons for the changes:

  • It’s difficult to implement an equitable national marijuana testing program when an increasing number of states are legalizing.
  • National data indicates preemployment marijuana screening disproportionately affects people of color.
  • Eliminating preemployment testing enables the company to expand its applicant pool.

Galetti wrote that having equitable hiring practices for all candidates is a social responsibility and furthers Amazon’s goal to be a leader and one of the world’s top employers.

“We are enthused by the notable momentum in the country toward recognizing that today’s status quo is unfair and untenable,” Galetti concluded.

“We look forward to working with Congress and other supporters to secure necessary reform of the nation’s cannabis laws.”

Michigan’s Skymint secures $78 million in financing, acquires cannabis retailer

By MJBizDaily Staff

Vertically integrated Michigan marijuana operator Skymint landed $78 million in funding while also acquiring 3Fifteen Cannabis, a retailer in the state, for an undisclosed sum.

Privately held Skymint did not disclose the terms of the loan or the equity investment.

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According to a Tuesday news release, a $70 million senior secured term loan from Tropics LP, a SunStream Bancorp affiliate, and an $8 million equity investment from Merida Capital Holdings will give Skymint “a strong balance sheet to execute on accretive opportunities in and outside of Michigan.”

3Fifteen, a recreational and medical marijuana retailer, was described as “a portfolio company of Merida Capital with 12 dispensaries currently in operation throughout Michigan.”

Merida CEO Mitch Baruchowitz will join Skymint’s board of directors when the deal closes.

The acquisition gives Skymint a total of 27 Michigan retail locations, according to the release, with at least 18 more under development.

Skymint also has two indoor cultivation facilities, with a third in the works, and an outdoor cannabis farm.

In its release, the Ann Arbor-based cannabis operator cited record-breaking adult-use cannabis sales in Michigan in July.

That banner month was also cited in the announcement of another recent Michigan acquisition, TerrAscend’s $545 million deal to acquire Gage Growth.

Chicago to allow expansion of recreational marijuana stores

By MJBizDaily Staff

Chicago is easing zoning restrictions that will allow recreational marijuana stores to expand.

The City Council on Monday voted to lift the cap of seven marijuana zones in the municipality while limiting the number of retail stores, Chicago real estate news site The Real Deal reported.

The city, the largest in Illinois, has permitted 18 adult-use cannabis retailers so far; there are 110 statewide.

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The approved proposal will also shrink the downtown zone where marijuana retailers aren’t allowed to operate, though they’ll still be banned from opening on a strip between Michigan Avenue and State Street as well as south Michigan Avenue.

Marijuana retailers can now open without special approval from Chicago regulators.

Retailers will be permitted where manufacturing operations are allowed as long as they are 650 feet from a residence.

This also means cannabis retailers can bypass the zoning lottery to sell marijuana.

More than 90% of Maine municipalities opt out of recreational cannabis sales

By MJBizDaily Staff

Maine’s recreational cannabis market continues to grow, even though less than 10% of the towns and cities in the state are allowing adult-use sales.

According to the Bangor Daily News, only 47 of Maine’s roughly 500 towns and cities have chosen to allow recreational marijuana retail sales.

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Only 29% of the state’s residents live in those municipalities.

Even with that limited market, the state posted its strongest sales month in August, totaling $10.2 million among the 53 licensed adult-use retailers.

Joel Pepin, president of the Maine Cannabis Industry Association, told the Daily News that municipalities are afraid of the unknown and don’t see much incentive in allowing cannabis retail.

Also, tax money generated by the industry doesn’t necessarily stay local. The state takes all the excise and sales taxes from marijuana retailers, Pepin said.