Cannabis Industry Daily News

Illinois awards 70 permits in flurry of adult-use cannabis business licensing

Illinois regulators on Monday issued 70 additional adult-use cannabis business licenses, including permits to an initial 32 craft cultivators, 28 to processors and 10 to transporters.

More than 80% of the licenses issued fall under the category of social equity ownership as the state tries to make good on its pledge to diversify the industry and provide opportunities to individuals and communities most harmed by the war on drugs.

More than two-thirds of the new licensees identify as nonwhite, according to a news release by the Illinois Department of Agriculture.

A list of the licensees is available here.

The awards come on the heels of the state issuing 55 retail licenses.

“With the issuance of these first licenses, Illinois is expanding access to people and communities that were previously shut out,” Toi Hutchinson, the governor’s senior adviser on cannabis, said in a news release.

“We look forward to seeing businesses get off the ground in the months ahead.”

The 19-month-old, booming adult-use industry in Illinois currently is controlled by existing medical marijuana operators.

Acquisition propels Green Thumb into RI medical marijuana market

Green Thumb Industries said it closed a deal to acquire one of only three operational medical cannabis dispensaries in Rhode Island, further advancing the Chicago-based company’s national industry footprint.

According to a news release issued Monday, Green Thumb Industries (GTI) is acquiring CanWell Processing and Mobley Pain Management and Wellness Center. Both companies hold stakes in Summit Medical Compassion Center, a nonprofit MMJ dispensary in Warwick, just south of Providence.

Terms of the deal were not disclosed.

GTI’s acquisition is notable because Rhode Island currently has only three licensed MMJ dispensaries, called compassion centers. The state has approved the licensing of six more compassion centers, but a lottery to award those permits is currently stalled.

The acquisition also brings GTI’s footprint to almost 50% of the operational cannabis markets in the United States, with interests in California, Colorado, Connecticut, Florida, Illinois, Maryland, Massachusetts, Nevada, New Jersey, New York, Ohio, Pennsylvania and Virginia.

“Entry into the Rhode Island cannabis market further strengthens Green Thumb’s position on the East Coast,” GTI Chief Executive Officer Ben Kovler said in the release, adding that the deal “provides immediate scale within a limited license market and sits squarely in our enter, open, scale strategy to expand.”

GTI has been on an acquisition spree for some time now, including a recent purchase of Liberty Compassion, a vertically integrated MMJ operator in Massachusetts.

Cannabis grow-supply giant buys Michigan garden center chain

GrowGeneration Corp., a Denver-based specialty hydroponic and organic garden center giant, said it is buying HGS Hydro, a chain of hydroponic garden centers with six stores across Michigan and a seventh store slated to open in the fall.

Terms of the deal weren’t disclosed.

The acquisition adds to a string of recent purchases by GrowGeneration, including gardening stores in California and Oregon.

If the HGS Hydro deal goes through, it will bring the total number of GrowGeneration hydroponic garden centers in Michigan to 14 and the total number of stores nationwide to 65, according to a news release.

“Michigan is one of the fastest growing states for medical and recreational cannabis sales,” Darren Lampert, GrowGen’s CEO, said in the release.

“The addition of HGS Hydro will propel Michigan to GrowGen’s second largest state behind California.”

Marijuana MSO Jushi Holdings awarded $14.4 million in Florida dispute

Marijuana multistate operator Jushi Holdings said it won a $14.4 million interim arbitration award in connection with a claim that a Florida medical cannabis licensee improperly terminated a franchise agreement in 2018.

A three-person American Arbitration Association panel found that San Felasco Nurseries terminated the franchise agreement with Jushi without cause and in bad faith, according to a news release.

The interim award is subject to a final decision by the arbitration body.

Arizona-based Harvest Health & Recreation acquired San Felasco later in 2018, depriving Jushi of potential royalties, the Florida-headquartered MSO claimed.

San Felasco became a Harvest subsidiary.

Harvest now operates 11 MMJ dispensaries in Florida through that license, according to the state’s weekly update.

The panel’s interim decision calls for Jushi to receive $10.6 million in damages as well as $3.7 million in pre-award interest and post-award interest at a 12% annual rate.

Christine Hersey, Harvest’s director of investor relations, told MJBizDaily on Monday that the company isn’t commenting about the case.

Harvest is in the process of being acquired by Florida-based Trulieve in a deal initially valued at $2.1 billion.

Jushi CEO Jim Cacioppo said in the release that the arbitration panel’s decision reflects Jushi’s ability to “successfully navigate through this complicated and highly regulated industry.”

– Jeff Smith

Ohio lawmakers introduce bill to legalize recreational cannabis

Two Democratic state lawmakers in Ohio on Friday introduced a bill to legalize recreational cannabis.

According to Toledo TV station WTVG, the measure would establish a 10% excise tax on gross receipts of marijuana retailers.

The bill sponsors – state Reps. Casey Weinstein and Terrence Upchurch – said they’re hopeful the measure will pass with bipartisan support.

But at least two Republican lawmakers told WTVG they’re staunchly opposed to legalizing recreational marijuana.

The move follows an announcement earlier this week that a group of cannabis advocates have launched a campaign to put adult-use cannabis on Ohio’s 2022 ballot.

The Coalition to Regulate Marijuana Like Alcohol filed formal paperwork with the Secretary of State’s office to get the ball rolling on the campaign, reported.

The adult-use bill introduced Friday has similar provisions, including the excise tax rate.

The situation could prove to be a repeat of 2016, when medical marijuana supporters in Ohio were able to force the state Legislature to pass an MMJ legalization measure simply by organizing their own campaign.

Once lawmakers approved a bill, the backers suspended their campaign. There are rumblings that could be the goal this time as well.

Apple platform offers another California marijuana company app

After changing its terms of service this summer, the Apple App Store has added at least three California marijuana company apps, starting with Eaze, then The Parent Co. and now Emjay.

According to a news release, the app for marijuana delivery service Emjay debuted on the Apple platform on July 29, allowing cannabis customers to browse businesses’ MJ menus and place orders for deliveries in Los Angeles, San Diego and San Francisco.

The company has plans to improve the app and add even more features, according to the release.

Because Emjay anticipated Apple’s policy change, CEO Chris Vaughn said, the company was ready to act.

“We’re thrilled to now be live on the App Store, be one of the first native iOS applications for cannabis shopping and to be able to provide a more convenient and seamless experience for our customers,” Vaughn said in the release.

Finally! Illinois awards 55 new recreational cannabis retail licenses

Fifty-five recreational cannabis store licenses were awarded in Illinois, including 36 in the Chicago area, after a yearlong delay in actualizing the state’s vaunted social equity program.

Up to this point, existing medical marijuana operators have controlled the 19-month-old, billion-dollar adult-use market, while additional retail licensing has been tangled up in litigation.

An additional 130 retail licenses are to be awarded via two lotteries over the next month.

It’s uncertain how quickly the new licensees will be able to build out their stores, pass final inspections and start operations.

Then there’s the challenge of carving out a viable market share – although new entrants will be aided by robust market growth, with sales exceeding $100 million a month.

The existing MMJ operators that enjoy the first-mover advantage currently operate 110 retail stores.

The 55 new licensees were selected in a lottery out of 662 applicants, according to a news release by the Illinois Department of Financial and Professional Regulation.

The winners included a group, Westside Visionaries, headed by state Sen. Rickey Hendon, according to Crain’s Chicago Business.

Hendon is known for his advocacy efforts to increase minority ownership in the cannabis industry.

Another winner, according to Crain’s, was a company called Haaayy, which had sued the state over the application process.

Haaayy and the Wah Group, in fact, won a court stay this week preventing the state from issuing final licenses.

But Haaayy will drop that effort now that it has won a license, its attorney told Crain’s. It’s unclear what the Wah Group will do.

Marijuana industry veteran Kris Krane leaving 4Front Ventures

Kris Krane, co-founder of 4Front Ventures and president of Mission Dispensaries, is stepping down after nearly 11 years with the Arizona-based multistate operator.

The transition was months in the making, according to a news release, with Krane staying on as strategic adviser.

4Front doesn’t plan to immediately fill Krane’s post as president of Mission Dispensaries.

“In the last 11 years, we went from a few people in a room with an idea, to building a national, vertically integrated cannabis operator with operations and facilities in strategic medical and adult-use cannabis markets, including California, Illinois, Massachusetts, Michigan and Washington,” Krane said in the release.

“I feel incredibly fortunate to have played an instrumental role in 4Front’s journey.”

Rhode Island’s medical cannabis business license lottery delayed again

Rhode Island regulators have again delayed a lottery for medical cannabis business licenses.

The lottery, which was expected to take place next week, was postponed because of an ongoing administrative appeal by a rejected lottery applicant, the Providence Journal reported.

It is the second delay for the much-anticipated lottery, which was originally supposed to take place last spring.

According to the newspaper, the head of the state’s Office of Cannabis Regulation said the lottery won’t be scheduled “until that appeal has run its course.”

When the appeal will run its course isn’t clear, but it could become clearer “in a couple weeks,” regulatory chief Matthew Santacroce said.

The Department of Business Revenue (DBR), which oversees the Office of Cannabis Regulation, earlier this year selected 24 companies from 28 applications to participate in the lottery, the Journal reported.

The four companies that failed to make the cut were Enlite RI, Livity Compassion Center, The Edward O. Hawkins Center and Atlas Enterprises.

Atlas Enterprises filed the appeal that is holding up the lottery, according to a previous report by Providence TV station WPRI.

Regulators are still figuring out how the lottery will work, the Journal reported, because the DBR did not receive any bids from companies to oversee the process.

Mississippi lawmakers drafting medical marijuana measure

A Mississippi Senate committee is close to finishing draft legislation to legalize medical marijuana, two months after the state’s highest court struck down a voter-approved, business-friendly bill, Lt. Gov. Delbert Hosemann said.

The development leaves open the possibility that Gov. Tate Reeves could call a special session later this summer to address the issue, according to WAPT-TV in Jackson and other media.

The governor might feel pressure to do so after voters in the Deep South state approved MMJ legalization by an overwhelming margin at the ballot box in November.

The measure, however, isn’t expected to be nearly as pro-business as the voter-approved version. Full details of the potential Senate bill weren’t disclosed.

The 2021 MJBizFactbook had projected that a medical marijuana program built on the Mississippi ballot referendum would generate $265 million in sales in the first full year and $800 million annually by the fourth year.

Hosemann indicated that the Senate bill will include taxes on MMJ sales as well as an opt-out provision for cities and counties, according to WAPT.

The lieutenant governor noted during an address at the Neshoba County Fair that three legislative committees already have held hearings this summer on the issue.

626 qualify for Illinois cannabis retail licenses on rescored applications

Candidates for a lottery to receive cannabis retail store licenses in Illinois jumped to 626 after the state rescored applications.

Only 21 applicants qualified for the lottery last year, but 97% now qualify for the social equity bonus, the Chicago Tribune reported.

The first of three scheduled lotteries will award 55 licenses out of a pool of 937 total candidates who submitted more than 4,500 applications. That lottery is set for July 29.

The eligible applicants qualified by scoring at least 85% of the maximum 250 points, instead of needing a perfect score, which was required last year.

Under the law that legalized recreational marijuana in Illinois, social equity applicants received a 20% bonus on their score.

An Aug. 5 drawing, also for 55 licenses, is set for social equity applicants who live in an area impacted by the war on drugs or have past arrests for marijuana-related offenses as well as scored 85% on the state’s scale.

Then, on Aug. 19, comes the originally planned lottery for 75 licenses that were expected to be issued in 2020.

California marijuana business owner to plead guilty to bribery charges

A marijuana businessman in California agreed to plead guilty to two felony charges tied to his companies, including a retail chain called Natural Healing Center.

According to a news release from the U.S. attorney for the Central District of California, Helios Raphael Dayspring was charged with one count of filing a false federal tax return and one count of bribery for paying a San Luis Obispo County supervisor $32,000 between 2016 and 2019 in exchange for favors.

In addition to Dayspring’s guilty pleas, he will pay $3.4 million in restitution to the Internal Revenue Service, prosecutors said.

Dayspring, who is scheduled for an Aug. 25 court hearing, could face up to 13 years in prison.

The former county supervisor Dayspring allegedly bribed – Adam Hill – committed suicide in August 2020.

Prosecutors also said that Dayspring tried to bribe a former mayor of Grover Beach in 2017, allegedly offering $100,000 in exchange for help securing marijuana retail permits in that city. The then-mayor, who was not identified, did not respond to Dayspring’s offer, prosecutors said.

Dayspring’s business footprint included upwards of 18 cannabis farms, all in San Luis Obispo and Santa Barbara counties, according to The Tribune, as well as four retail stores. It’s unclear yet what will become of Dayspring’s businesses.