Cannabis Industry Daily News

5 senators urge panel to keep cannabis banking in defense spending bill

By MJBizDaily Staff

Five U.S. senators from both parties who serve on the Senate Armed Services Committee signed a letter urging the leaders of that panel to throw their support behind the SAFE Banking Act.

The fate of the cannabis banking measure is likely to be decided in December via a conference committee, with members from both the House and Senate negotiating the terms of the final National Defense Authorization Act (NDAA), an omnibus defense spending bill for the 2022 fiscal year.

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The senators’ letter requests that the chairs and ranking members of the committee all push to keep the cannabis banking measure included in the final version of the bill, which is considered the SAFE Act’s most likely route to success in the current congressional session.

“The House of Representatives has passed the SAFE Banking Act five times, most recently as an amendment to the NDAA, and we ask you to ensure that the text of that amendment remains in the final conference version of the bill to be considered by the House and the Senate,” the letter requests.

“This will help cannabis-related businesses, create jobs, and strengthen public safety in our communities.”

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The cohort of lawmakers includes Democratic Sens. Gary Peters of Michigan, Jacky Rosen of Nevada and Mark Kelly of Arizona, Republican Kevin Cramer of North Dakota and independent Angus King of Maine. King caucuses with the Democrats.

The five senators’ message follows a similar letter signed by 21 governors earlier this month.

Marijuana giant Curaleaf now faces 7 suits in Oregon over CBD-THC mix-up

By MJBizDaily Staff

Marijuana multistate operator Curaleaf Holdings continues to be hit with federal lawsuits in Oregon from customers claiming they required medical attention after taking CBD drops that actually contained THC.

Seven suits now have been filed in U.S. District Court in Oregon in connection with a mix-up of the company’s Select CBD Drops, according to court records.

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In the latest suit, filed Nov. 19, Ayuba Agbonkhese alleged that he required “immediate medical treatment in the emergency room, and experienced harm including the belief he was going to die, shaking, racing heart, psychosis, discomfort, and distress, and interference with life activities.”

The seven lawsuits, each filed by attorney Michael Fuller, are seeking damages of up to 1% of Curaleaf’s net worth.

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  • How cannabis extraction companies can reduce energy costs
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  • Cannabis lighting Glossary of Terms
  • Buyers checklist

Massachusetts-based Curaleaf has attributed the mix-up to an “unintentional human error at our facility that led to the production of a batch of CBD drops that were actually THC drops and vice versa.”

The company has apologized, worked with Oregon regulators to recall the two batches in question and said it is reviewing its production processes to prevent future mix-ups.

– Jeff Smith

Ayr Wellness to acquire two Chicago cannabis stores for at least $55 million

By MJBizDaily Staff

Marijuana multistate operator Ayr Wellness announced a deal to acquire Dispensary 33, which operates two retail cannabis stores in Chicago, for at least $55 million.

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According to a Monday news release, the $55 million price tag includes:

  • $12 million in cash.
  • $3 million in seller notes.
  • $40 million worth of Ayr shares.

An unspecified additional earnout payment will be based on financial milestones through 2022.

The acquisition will give Ayr “a presence in two of Chicago’s most desirable neighborhoods,” Jonathan Sandelman, CEO of the Miami-based company, said in the release.

The Chicago retail deal follows another Ayr acquisition in Quincy, Illinois, earlier this year in which the company will pay roughly $30 million to buy Herbal Remedies Dispensaries.

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Ayr’s release said the company also has a social equity partner that has been tapped for a retail license in Bloomington, Illinois.

“We will continue to seek opportunities to expand in Illinois,” Sandelman said.

The company recently raised about $150 million in capital after its acquisition spree this year.

Ayr, which has offices in New York and Toronto, trades on the Canadian Securities Exchange as AYR.A.

Oregon authorities seize ‘epic’ amount of illegal marijuana worth $500 million

By MJBizDaily Staff

Oregon state police last week confiscated roughly 500,000 pounds of unlicensed cannabis with an estimated value of $500 million that had been stored in five separate warehouses.

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In a news release, authorities:

  • Called the bust “epic.”
  • Said the raids and seizures in White City took two full days.
  • Detained and interviewed more than 100 people.

The Oregon state police said in the release that “this is a very involved investigation and will be ongoing for several weeks.”

The bust is part of an ongoing crackdown on illegal marijuana cultivation operations in California and Washington state.

Key insights to inform decisions: MJBizFactbook 

Say hello to marijuana business data, curated by the editors of MJBizDaily to help cannabis industry leaders make informed decisions.

  • U.S. marijuana industry financials
  • Licensing, funding and investment trends
  • State-by-state guide to regulations, taxes and opportunities
  • Insights for business and investment strategy

In Washington state, authorities destroyed roughly 13,000 pounds of illicit cannabis earlier this month.

And in Southern California, authorities seized approximately $1 billion worth of illegal marijuana in June.

– John Schroyer

Cannabis MSO MedMen appoints third CEO in two years

By MJBizDaily Staff

Michael Serruya has been appointed interim CEO and board chair of MedMen Enterprises, the California-based cannabis multistate operator announced Monday.

His appointment marks the company’s third CEO in less than two years.

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Serruya takes the reins of CEO from Tom Lynch, who was chosen in March 2020 to revamp the company after the ouster of CEO Adam Bierman and fellow co-founder Andrew Modlin in January 2020.

According to a news release, Lynch will continue his role as manager of MedMen Boston and MME Newton Retail.

He said in the release that MedMen is “now in growth mode” and predicted that Serruya will be able to “achieve company-wide profitability in 2022.”

Serruya is described in the release as a “seasoned cannabis investor with extensive retail experience,” including a former role as CEO of Coolbrands and Kahala Brands. Those non-marijuana businesses have portfolios that include mainstream brands such as Weight Watchers, Tropicana, Blimpie Subs and several ice cream companies.

He joined MedMen’s board of directors in August as part of a $100 million investment deal by Serruya Private Equity.

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  • Pros and cons of common benching systems
    Help weigh out the best choice for your greenhouse benching system with this overview.
  • Cannabis greenhouse Glossary of Terms
    What is evaportranspiration? Download the guide to find out and learn more technical jargon unique to greenhouse and the cannabis industry.

 

Serruya said in the release that his focus will be on plans to expand MedMen “across the United States, Canada and internationally.”

MedMen trades on the Canadian Securities Exchange under the ticker symbol MMEN and on over-the-counter markets as MMNFF.

Gage raises $55 million to fuel its marijuana growth in Michigan

By MJBizDaily Staff

Michigan-based Gage Growth said it raised $55 million of capital through a one-year secured loan to help finance retail acquisitions and growth in the state.

The annual interest rate of the loan is set at the greater of 7% plus the prime lending rate, or 10.25%, according to a news release.

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The prime rate currently is 3.25%, meaning the loan is at a 10.25% annual rate, payable monthly.

Gage CEO Fabian Monaco said in the release that the deal, which is secured by a first lien on the company’s assets, provides the company with “maximum flexibility to execute on near-term acquisition opportunities.”

The financing comes as New York- and Toronto-based multistate operator TerrAscend is buying Gage in an all-stock deal initially valued at $545 million.

The $55 million loan was arranged by Canaccord Genuity Corp. and Chicago Atlantic.

Gage has operations in Michigan and Canada.

Growing is all about the lighting: MJBizDaily Lighting Buyers Guide 

Read our exclusive guide for strategies and tips from expert cultivators who have amassed decades of experience studying horticulture lighting. Curated by MJBizDaily.

Inside:

  • Horticultural professionals debunk 8 common lighting myths in cannabis
  • How cannabis extraction companies can reduce energy costs
  • Why experts say the future of horticultural lighting is in LED technology
  • Cannabis lighting Glossary of Terms
  • Buyers checklist

The company’s portfolio includes regulatory approvals for 19 cultivation licenses, three processing permits and 15 retail licenses in Michigan, according to a news release.

Gage’s website lists 10 retail outlets in operation in Michigan, with five more coming soon.

Gage shares trade on the U.S. over-the-counter markets as GAEGF and on the Canadian Securities Exchange as GAGE.

Uber Eats offers click-and-collect cannabis service in Canada

By MJBizDaily Staff

Uber Canada launched a click-and-collect service in Ontario in partnership with cannabis retailer Tokyo Smoke, marking Uber’s much-anticipated entry into the regulated marijuana industry.

The service does not offer delivery.

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Instead, consumers will be able to use the Uber Eats app to place orders and then collect products in-person at one of Tokyo Smoke’s 35 stores in Ontario, the biggest adult-use market in Canada by sales.

Tokyo Smoke, a subsidiary of cannabis giant Canopy Growth, and Uber Canada launched the exclusive partnership Monday, they announced in a news release.

Ontario consumers already had the ability to order click-and-collect directly from stores, but this is the first time Uber has listed a cannabis retailer on its popular app.

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Get strategies and tips from expert processors on choosing cannabis extraction systems, costs, safety precautions and more. Curated by MJBizDaily.

Inside:

  • How to choose between solvent-based and solventless extraction methods
  • Learn which strains are most efficient for each extraction process
  • Tips on safety precautions from design to training to protective equipment

“This is an innovative arrangement between Uber Eats and Tokyo Smoke, which is the first cannabis merchant to list itself using the Uber Eats software, across Uber’s global business,” according to the release.

Uber Eats said it has a new “cannabis” category, under which Tokyo Smoke can be found.

Canopy acquired Tokyo Smoke’s parent company, Hiku Brands, in 2018 for $250 million.

New York transit rules now prohibit marijuana ads on subways, buses

By MJBizDaily Staff

(This story has been updated to note that New York’s adult-use marijuana market is now expected to launch in 2023.)

An updated version of the New York Metropolitan Transit Authority’s advertising policies now includes a ban on marijuana product ads on subways and buses.

According to Morning Brew, the updated guidelines were released after the settlement of a lawsuit in which sex-tech company Dame claimed the institution’s ban on sex-related ads were discriminatory.

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Marijuana had not merited a specific mention in previous versions of the MTA’s rules, but the updated regulations bar any ads related to marijuana or hallucinogenic mushrooms.

The new policy is a result of “recent developments in the decriminalization of cannabis in New York,” according to minutes from a November MTA board meeting, Morning Brew reported.

Key insights to inform decisions: MJBizFactbook 

Say hello to marijuana business data, curated by the editors of MJBizDaily to help cannabis industry leaders make informed decisions.

  • U.S. marijuana industry financials
  • Licensing, funding and investment trends
  • State-by-state guide to regulations, taxes and opportunities
  • Insights for business and investment strategy

At least one licensed medical marijuana company in New York – Vireo Health – began advertising in the New York subway system in 2017.

The state had been expected to launch a recreational marijuana market as soon as 2022 after an adult-use legalization bill was signed into law in March – but that timeline appears to be slipping.

New York’s top marijuana regulator said recently the recreational market won’t get off the ground for at least another 18 months, meaning the program won’t launch until mid-2023.

Canada’s High Tide to acquire 80% of Colorado CBD firm NuLeaf Naturals

By MJBizDaily Staff

Canadian cannabis retail, CBD and accessory company High Tide announced a deal to acquire 80% of Denver-based CBD wellness product producer and distributor NuLeaf Naturals.

High Tide also has an option to acquire the remaining 20% of the Colorado company.

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The agreement announced Monday is worth slightly more than $31.2 million, which values NuLeaf at more than $39 million, according to a news release.

High Tide is paying in shares and will have a three-year call option to acquire the remainder.

NuLeaf’s owners also have an 18-month put option to sell the rest of the company to High Tide.

If High Tide acquires the remainder of NuLeaf, it will pay in cash.

NuLeaf Naturals produces hemp-derived CBD and other cannabinoid products, including tinctures, softgels and topicals, and sells them in retail stores and through an e-commerce website.

High Tide said NuLeaf generated $19.4 million in revenue in the year ended Sept. 30, with $16.3 million of that revenue from direct-to-consumer e-commerce.

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Maximize your output and quality with the right equipment. Curated by the editors of MJBizDaily, our new, free Greenhouse Components Buyers Guide helps you choose wisely and covers irrigation, automation and ROI.

Inside:

  • Cannabis greenhouse buyers checklist
    Keep track of everything you need.
  • Pros and cons of common benching systems
    Help weigh out the best choice for your greenhouse benching system with this overview.
  • Cannabis greenhouse Glossary of Terms
    What is evaportranspiration? Download the guide to find out and learn more technical jargon unique to greenhouse and the cannabis industry.

 

“With the purchase of NuLeaf, we are now further vertically integrated in our CBD business, just like we have been with regard to consumption accessories,” High Tide President and CEO Raj Grover said in a statement.

This year, Calgary, Alberta-based High Tide has acquired Milwaukee-based FabCBD and United Kingdom-headquartered brand Blessed CBD.

High Tide also owns a number of online cannabis accessory retailers and operates more than 100 retail marijuana stores in Canada.

High Tide shares trade as HITI on the TSX Venture Exchange and the Nasdaq.

Canopy shakes up management after reporting weak marijuana sales

By MJBizDaily Staff

Struggling Canadian marijuana giant Canopy Growth is shaking up its senior management team only weeks after notifying shareholders it no longer expects to be profitable this year.

Chief Financial Officer Mike Lee and Chief Product Officer Rade Kovacevic will be stepping down from their positions on Dec. 31, the Smiths Falls, Ontario-based company announced Friday.

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No reason for their departures was provided.

“These decisions reflect management and the board’s vision for building a best-in-class organization that is well-positioned to deliver long-term growth and shareholder value,” CEO David Klein said in a statement.

“We appreciate Mike and Rade’s contributions to advancing Canopy Growth to our position as a cannabis industry leader.”

The high-ranking departures come just weeks after Canopy’s chief legal officer, Phil Shaer, left the company.

Canopy has experienced significant market-share erosion over the past two years, with the company currently sitting at less than 10% of Canada’s market.

Despite record monthly growth in Canada over the past year, Canopy failed to meaningfully increase its cannabis revenue.

The company’s net cannabis revenue for the quarter ended Sept. 30, 2020, was CA$92.3 million. One year later, sales were only CA$95.3 million.

Canopy said it initiated an external search for both roles.

Growing is all about the lighting: MJBizDaily Lighting Buyers Guide 

Read our exclusive guide for strategies and tips from expert cultivators who have amassed decades of experience studying horticulture lighting. Curated by MJBizDaily.

Inside:

  • Horticultural professionals debunk 8 common lighting myths in cannabis
  • How cannabis extraction companies can reduce energy costs
  • Why experts say the future of horticultural lighting is in LED technology
  • Cannabis lighting Glossary of Terms
  • Buyers checklist

In the meantime, the company appointed Judy Hong as interim CFO and Tara Rozalowsky as interim chief product officer.

Hong previously served as Canopy’s vice president of investor relations and competitive intelligence.

Rozalowsky was VP of beverages and edibles.

Canopy shares trade as WEED on the Toronto Stock Exchange and CGC on the Nasdaq exchange.

Nevada suspends cannabis grower’s license for multiple violations

By MJBizDaily Staff

Nevada regulators suspended the license of a recreational cannabis grower for storing cannabis while operating under expired business licenses and not being able to account for large quantities of marijuana products that had been logged into the state’s seed-to-sale tracking system.

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The state Cannabis Compliance Board voted unanimously Thursday to suspend The Harvest Foundation’s license, effective immediately.

To get the order lifted, the company must submit a correction plan for board approval within 10 business days from Nov. 18.

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MJBizDaily Cannabis Extraction Buyers Guide 

Get strategies and tips from expert processors on choosing cannabis extraction systems, costs, safety precautions and more. Curated by MJBizDaily.

Inside:

  • How to choose between solvent-based and solventless extraction methods
  • Learn which strains are most efficient for each extraction process
  • Tips on safety precautions from design to training to protective equipment

The Harvest Foundation is not allowed to resume operations until regulators have confirmed the problems have been corrected.

Company officials could not be reached for comment.

This is the fourth marijuana license suspension by Nevada regulators in 2021.

Schumer touts marijuana legalization bill for entrepreneurs, not ‘big boys’

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By MJBizDaily Staff

U.S. Senate Majority Leader Chuck Schumer said his federal marijuana legalization bill is modeled in part after New York’s and intended to provide opportunities to small businesses and minorities, not the “big boys.”

“We don’t want the big boys to come in after all the pain (incurred in communities during the war on drugs) … and make all the money. Makes no sense,” Schumer, a New York Democrat, said in a conversation this week with the state’s Cannabis Control Board chair, Tremaine Wright.

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The interview, posted on YouTube, was hosted by Green Enterprise, which is produced and operated by Black Enterprise and Digital Venture Partners.

Schumer emphasized that his proposed Cannabis Administration and Opportunity Act is intended to ensure that smaller businesses and businesses of color have access to financial services and that revenue from federal marijuana taxes be reinvested in disadvantaged communities.

“We’re taking a page from New York’s book and trying to do basically what you did (at the national level),” he told Wright.

Schumer has worked with Sens. Cory Booker of New Jersey and Ron Wyden of Oregon on the legalization measure.

The proposed legislation is seen as a long shot in a Senate that has a 50-50 Democratic/Republican split.

But Schumer waxed optimistic.

Key insights to inform decisions: MJBizFactbook 

Say hello to marijuana business data, curated by the editors of MJBizDaily to help cannabis industry leaders make informed decisions.

  • U.S. marijuana industry financials
  • Licensing, funding and investment trends
  • State-by-state guide to regulations, taxes and opportunities
  • Insights for business and investment strategy

To those who have asked if there’s a chance to pass the measure, “the answer is yes,” Schumer said.

“We’re getting some Republican support, and the country is realizing that all the myths about marijuana are just that – myths.”

He noted that voters in one of the most conservative states in the country – South Dakota – legalized marijuana during the 2020 elections.

“If they can do it, everyone can do it,” Schumer said.

“I think we have a real shot, and we’re going to keep working at it until we get it done.”

– Jeff Smith