Cannabis Industry Daily News

Marijuana investment firm 4Front Holdings raises $6M for out-of-state growth

Cannabis investment and management firm 4Front Holdings has raised $6 million toward its multiple-state expansion.

The funds were raised through the issuance of convertible notes.

According to a news release, 4Front manages operating licenses in emerging, state-legal medical cannabis markets.

Here’s what you need to know:

  • The company – which has offices in Phoenix and Boston – manages MMJ dispensaries carrying the Mission brand and also develops medical cannabis products.
  • 4Front, which opened the first Mission-branded dispensary last summer in Chicago, and its partners are building out dispensaries in Illinois, Massachusetts, Maryland and Pennsylvania.
  • Last spring, 4Front raised $4 million through convertible loans that convert into equity.

Maryland credit union to cannabis businesses: We’re open

An aptly named credit union in Maryland is ready and willing to serve the state’s medical marijuana businesses.

And it’s doing so with the knowledge it has some federal support.

The Bulldog Federal Credit Union, a federally chartered institution founded in 1968 in Washington County, made its announcement less than a week after Attorney General Jeff Sessions revoked the Cole Memo, which gave marijuana businesses some protection from federal interference.

Sessions’ decision raised fears that the relatively few financial institutions that serve marijuana businesses might drop those accounts and those that were thinking about working with cannabis companies could pull back.

But as Reuters points out, the Financial Crimes Enforcement Network (FinCEN), an agency within the U.S. Treasury Department, has not rescinded the guidance it issued in February 2014 parallel to the Cole Memo.

The (FinCEN) guidelines outline how banks can serve state-compliant marijuana businesses.

According to a news release, Bulldog has developed a program that follows compliance procedures outlined by state and FinCEN guidelines and can serve compliant MMJ businesses across Maryland, which was home to 48 licensed growers, processors and dispensaries through Dec. 19.

Bulldog’s announcement is the second recent instance of a Maryland financial institution serving marijuana companies.

Severn Savings Bank, a community bank in Annapolis, has opened accounts for at least four marijuana businesses.

Las Vegas pulls back on plans to allow public cannabis lounges

Las Vegas’ plans to allow public consumption of marijuana have been tabled “indefinitely” after Attorney General Jeff Sessions last week rescinded federal protections for states with recreational cannabis laws.

Officials for the city and Clark County, where Las Vegas is situated, had delayed further talks about public consumption from September until the new year.

The city had plans to open consumption lounges in March or April, according to the Las Vegas Sun.

But Sessions’ revocation of the Obama-era protections “sparked more questions than answers,” Assistant City Attorney Bryan Scott told the newspaper.

County officials now will “wait ‘indefinitely’ for an opinion from county counsel Mary Anne Miller” on Sessions’ pronouncement, according to the Sun.

Nevada’s marijuana industry has been pushing for consumption lounges since the state legalized recreational cannabis in 2016.

Interest in cannabis lounges is particularly strong in Las Vegas, where more than 40 million tourists visit each year.

But casinos are bound by federal gaming laws and, thus, forbidden from allowing cannabis consumption in their establishments, including hotel rooms.

So marijuana entrepreneurs have been pushing the state to allow businesses to open and offer tourists places to consume.

Vermont legislature passes recreational cannabis bill; gov says he’ll give OK

Vermont’s legislature on Wednesday became the first in the United States to pass a bill legalizing recreational marijuana.

The legislation, H.511, allows those 21 and older to possess up to an ounce of cannabis and to cultivate a limited number of plants.

However, the measure passed by the majority Democratic legislature does not include provisions for business licenses and sales.

Republican Gov. Phil Scott said he will sign off on the legislation, according to Vermont Public Radio.

If the governor follows through, Vermont’s initial adult-use industry will function similarly to Washington DC’s, which allows possession and home cultivation but not sales.

Vermont Public Radio also reported that supporters of a movement to tax and regulate marijuana – essentially creating a full-fledged recreational market – consider H.511 the first step toward their goal and vow to push ahead.

Passage of the bill was significant because the lawmakers weren’t deterred by U.S. Attorney General Jeff Sessions’ recent revocation of key federal protections for states with recreational marijuana programs.

– Associated Press and Marijuana Business Daily

Toronto firm buys operator of US medical marijuana ‘evaluation centers’

A Toronto company billing itself as the “WebMD of medical cannabis” has acquired Massachusetts-based Canna Care Docs, which certifies MMJ patients in 21 “evaluation centers” across nine states.

Sail Cannabis funded the Canna Care acquisition with proceeds from a brokered private placement led by Canaccord Genuity worth about 4 million Canadian dollars ($3.2 million), Sail CEO Pradyum Sekar told Marijuana Business Daily.

Financial terms of the acquisition were not disclosed.

Sekar described Sail’s community platform as the “WebMD of medical cannabis” but added, “we also have tools on top of that so you’re not just reading information – you can book appointments, communicate with other members.

“Physicians can also use the system to run their clinics and manage care of their patients.”

He said Sail’s software uses “clinically data-driven tools” to help determine the right strain, product, dosing and methodology.

In Canada, the platform is currently being used in over 40 cannabis clinics and by primary care physicians.

Sail has been operating in Canada since 2016 as a private company and has seen over 30,000 patient encounters, according to a news release.

Canna Care uses the Sail platform and has certified over 250,000 patients for medical cannabis.

To sign up for our weekly Canada marijuana business newsletter, click here.

Colorado hemp producer leaving for Arkansas’ new market

A hemp grower and CBD manufacturer in Denver is shifting operations to Arkansas, which will allow hemp cultivation and processing for the first time this year.

Tree of Life Seeds is owned by Arkansas natives who said they set up shop in Colorado in 2015 to learn the ins and outs of the hemp industry.

They planned to return home when Arkansas legalized hemp production.

CEO Jason Martin told Marijuana Business Daily that as more states authorize for-profit hemp production, Colorado could see more companies depart to establish a presence in new markets.

“We’re able to do something really different” in Arkansas, Martin said. “We’ve learned what went wrong everywhere else so far.”

Tree of Life makes CBD supplements and develops hemp strains with high amounts of cannabidiol.

The company plans to grow hemp in Arkansas and also contract with other farmers to produce high-CBD hemp.

To sign up for our weekly hemp business newsletter, click here.

Colorado marijuana edibles maker Wana Brands expands into Arizona

(This story has been updated from an earlier version.)

As the first step of a plan to expand into six marijuana states in 2018, edibles maker Wana Brands has established a presence in Arizona.

According to a news release, the Colorado company’s gummies are now available in medical cannabis dispensaries throughout the state.

Wana Brands’ products will be manufactured and distributed through an agreement with AltMed Arizona.

In the coming year, Wana Brands plans to sell products in Illinois, Florida, Maryland, Pennsylvania and California as well as Canada.

Wana Brands’ edibles already are available in Colorado, Nevada and Oregon, highlighting the fact cannabis is becoming more than a single-state industry.

The edibles maker’s announcement comes after two other prominent infused-products companies – Colorado’s Dixie Brands and California’s Bhang Chocolate – announced in late 2017 they would be leaving the Arizona market.

Dixie said its exit from Arizona would be temporary while it reevaluated market strategy and partnerships.

Bhang also called its departure from Arizona a short-term move. The company lost its local licensee and couldn’t produce or distribute products in the state.

Jesce Horton steps down as director of Minority Cannabis Business Association

(This story has been updated from an earlier version.)

Citing a desire to spend more time with his family, a founding member and longtime leader of the Minority Cannabis Business Association (MCBA) has resigned as the organization’s executive director and board chair.

Jesce Horton, 34, who helped found the MCBA  in 2015, tendered his resignation last month, according to a Jan. 8 news release from the organization.

During Horton’s tenure, the MCBA partnered with Marley Natural to wipe clean the cannabis-related criminal records of 100-plus individuals and helped draft a groundbreaking model for a race equity-focused MJ legalization bill.

In 2014, Horton founded a marijuana cultivation company, Panacea Valley Gardens, and co-founded the Panacea dispensary, both in Portland, Oregon.

The organization is conducting a search for a permanent director, according to the news release.

In other MCBA news, the organization has elected a 16-person board of directors for 2018 and promoted Shanita Penny to board president.

Penny is a management consultant who previously served as vice president of the board.

US attorneys in two East Coast states differ on Sessions’ anti-marijuana stance

The top federal prosecutor in Massachusetts refuses to rule out a crackdown on legal marijuana businesses in the state after U.S. Attorney General Jeff Sessions rescinded the Cole Memo last week.

According to The Boston Globe, the U.S. attorney for Massachusetts, Andrew E. Lelling, said he cannot “provide assurances that certain categories of participants in the state-level marijuana trade will be immune from federal prosecution.”

Meanwhile, the U.S. attorney in Delaware, David C. Weiss, said taking action against his state’s medical marijuana industry is “certainly not a priority,” The News-Journal reported.

Delaware currently has two operational MMJ dispensaries and two more in the works.

The statement by Massachusetts’ U.S. attorney follows a declaration by Gov. Charlie Baker that the state plans to push ahead with its impending recreational cannabis program, despite Sessions’ action.

Like Delaware, Massachusetts has an operational MMJ program.

It’s worth noting that the Obama-era guidelines revoked by Sessions don’t change anything for MMJ businesses. They currently are operating under the protections of the Rohrabacher-Blumenauer Amendment.

Detroit freezes medical marijuana business licensing process

Detroit is delaying action on new medical marijuana licenses because of a pending lawsuit, prompting fears that about 60 dispensaries in the city will have to close their doors.

The lawsuit was filed by seven to 10 businesses that were denied medical marijuana dispensary licenses over zoning issues, the Detroit Free Press reported. The businesses say the city denied the licenses using outdated zoning rules.

A lawyer for the city wrote in a memo to other Detroit officials that it would be “wasteful and confusing to the public” to process marijuana applications until the lawsuit its resolved.

But Michigan has set a Feb. 15 deadline for prospective MMJ companies to apply for business licenses.

The application period began Dec. 15 for companies seeking licenses for dispensaries, cultivators, processors, transporters and testing labs.

If Detroit won’t accept applications, the dispensaries currently doing business under an old city ordinance would have to close by Feb. 15, according to the Free Press.

Detroit marijuana business owners suspect the city is stalling.

“Their plan all along was to not take the applications so no one could stay open,” Michael Stein, attorney for the businesses challenging their denials, told the newspaper.

Detroit voters decided last year to roll back restrictive zoning ordinances blamed for the closure of at least 186 dispensaries.

$3.2 million hemp processing plant in New York gets state funding

A new $3.2 million facility near Binghamton, New York, is the first in the United States to receive some form of government assistance to promote the processing of hemp.

The hemp processing plant, an unnamed project slated to open later this year, is receiving $650,000 from the state, Binghamton TV station WIVT reported.

It is the first award from New York’s $5 million fund designated to boost the processing side of the hemp industry.

The exact site of the Binghamton-area plant hasn’t been announced.

The plant will prepare hemp fibers and oils for further manufacturing, New York Assemblywoman Donna Lupardo told the TV station.

The grant, announced by Gov. Andrew Cuomo, is thought to be the nation’s first government investment in hemp processing.

Cuomo has said he wants New York state to lead the way in processing hemp.

“The emerging industrial hemp industry has the power to transform the agricultural economy,” Cuomo’s office said in prepared remarks.

New York is offering another $5 million for research into the hemp plant, including $2 million to develop certified seed.

“To avoid long-term dependence on seed from other states and countries, (New York) must begin to produce its own unique seed,” Cuomo said.

To sign up for our weekly hemp business newsletter, click here.

Etain gets OK to produce expanded medical marijuana line in New York

New York medical marijuana company Etain is the first to receive state approval to expand its product line.

Etain now can manufacture cannabis goods such as lozenges and flower ground for vaporizers, the New York Daily News reported, and the company hopes to have the new products available by March.

Regulators recently OK’d expanding MMJ product lines in hopes of providing a boost to a New York program that’s been slow to get on its feet.

The state’s program has been constrained by a limited number of business permits – only five licensed companies are operating so far with five more expected to open in 2018 – and a lack of patient and doctor participation.

Here’s what you need to know:

  • Etain will also produce – pending approval by the state health department – a water-soluble marijuana powder.
  • A health department spokesperson told the Daily News that the products still need to undergo “rigorous testing” before they may be sold.
  • Etain operates dispensaries in Murray Hill and Yonkers.
  • New York’s medical marijuana program has 40,286 certified patients.