Cannabis Industry Daily News

AR rejects sale of medical cannabis licenses for unopened stores

Arkansas regulators nixed the sale of two medical marijuana dispensary licenses, displeased that the owners didn’t take significant efforts toward opening the operations.

The Arkansas Medical Marijuana Commission unanimously voted to reject the sale of Pine Bluff Agriceuticals and Arkansas Patient Services, according to Arkansas Business.

Commissioner Travis Story argued that allowing license holders to sell their licenses who made almost no progress in opening their stores six months before renewal is unfair to license applications who almost qualified.

“It’s frustrating when it seems that (some dispensary licensees) haven’t even taken the first step,” Story told the publication.

“To sell it before renewal, it raises a fundamental fairness issue.”

Rhode Island governor proposes adult-use marijuana in budget

Rhode Island Gov. Gina Raimondi is proposing to legalize recreational cannabis, despite opposition from legislative leaders.

Her annual budget proposal would create an adult-use MJ program controlled by the state.

The first marijuana stores would open in March 2021.

Under the Democratic governor’s plan, the state would:

  • Determine the location of retail facilities.
  • Control inventory through subcontracting.
  • Establish retail pricing.
  • Limit the potency of available products.

Her administration believes this be would the strictest regulatory structure in the U.S.

However, Democratic Senate President Dominick Ruggerio opposes legalization because he feels there are too many unresolved issues.

Democratic House Speaker Nicholas Mattiello wants the proposal to be considered separately from the budget.

– Associated Press

High Times plans to open first cannabis stores, hires president

Iconic marijuana publication High Times on Thursday announced plans to open its first cannabis retail stores, in Las Vegas and Los Angeles, as part of its diversifying strategy.

High Times said it will enter those markets by acquiring retailers that are licensed there. The deals are subject to regulatory approval.

The Los Angeles-based company plans to sell marijuana products in those stores that are supplied by what it described as “top cannabis brands.” It also will carry memorabilia with the High Times logo and other licensed products.

The company also announced it had appointed a new president, Paul Henderson, who formerly was CEO of California-based marijuana firm Grupo Flor.

Grupo Flor in November laid off employees as a cost-cutting move.

Before joining the cannabis industry, Henderson had run business units at Goldman Sachs, GE Capital and Apple.

Earlier this month, High Times appointed Stormy Simon, former president of online retailer Overstock.com, as its CEO.

Alaska governor axes head of marijuana oversight board

Mark Springer, chair of the agency that regulates legal marijuana in Alaska, has been replaced by Gov. Mike Dunleavy.

Springer has been a critic of Dunleavy, a Republican.

Casey Dschaak of Dillingham, Alaska, will replace Springer on the Marijuana Control Board, with a term set to begin March 1.

A spokesman for Dunleavy said he has no information about why Springer is being replaced

Springer was one of two members in November who voted against Erika McConnell’s firing as director of the control board.

The Alcoholic Beverage Control Board, which shared McConnell as its director, had previously voted for her dismissal.

Both boards had to agree for her to be removed.

Dunleavy has had a contentious relationship with the Marijuana Control Board, saying after he took office that he planned to repeal the agency. He later tabled the action, at least for the 2019 legislative session.

– Associated Press

New Jersey court reiterates that medical cannabis applications on hold

A two-judge appellate court in New Jersey upheld its ruling that the state’s Department of Health must halt its review of nearly 150 applicants seeking to operate new medical marijuana businesses.

The ruling means those who applied for a medical marijuana license last summer will need to continue to wait at least until the spring, according to NJ.com.

“This is yet another win for our clients, all of which have properly followed the (health department’s) procedures and have systematically and unfairly been disqualified from receiving permits for medical marijuana ATCs (Alternative Treatment Centers),” cannabis attorney Joshua Bauchner said in a statement.

Some licenses were denied because of technical errors. Bauchner challenged the decision in court, arguing the applications should be issued based on merit.

In December, the court granted a stay in the 2019 application process for new medical marijuana businesses. That led to the appeals process and the delay in awarding licenses.

The state health department, however, believed it did not need to stop scoring applications that had passed an initial review. The court told the department it had misinterpreted its order.

A hearing on the matter is expected to take place at the earliest on March 2.

New Mexico gov again pushes adult-use marijuana legalization

Legalizing recreational marijuana is one of New Mexico Gov. Michelle Lujan Grisham’s legislative goals for 2020, a move she contends would be a huge economic boon for the state.

After adult-use legalization stalled in New Mexico’s Legislature in 2019, Grisham, a supporter of the bipartisan effort, vowed to revive legalization this year.

Grisham, a Democrat, posted on her state website that her plans for legalizing recreational cannabis in New Mexico would include:

  • Establishing a regulatory framework for its use.
  • Public safety considerations.
  • Public health safeguards.
  • Protecting the state’s existing medical marijuana program.

Grisham said that legalizing recreational marijuana is supported by 75% of New Mexicans, according to a recent poll.

The governor said that legalizing MJ is projected to create 11,000 jobs and New Mexico and would generate hundreds of millions of dollars in revenue.

16% of cannabis vaping illnesses tied to store purchases, CDC says

Sixteen percent of patients in three states who developed lung injuries after vaping marijuana obtained the products from stores, according to a report from the Centers for Disease Control and Prevention (CDC).

The CDC said the report reinforces its recommendations not to use THC in e-cigarettes or vaping products, USA Today reported.

The report is based on 809 patients in Illinois, Wisconsin and Utah who provided data on where they obtained THC-containing products.

The buying breakdown was:

  • 131 patients, or 16%, reported acquiring their products from only commercial sources.
  • The majority, 627, cited “informal” sources such as family, friends and in-person or online dealers.
  • Fifty-one, or 6%, obtained the products from informal sources as well as from commercial retailers.

Commercial sources, according to the CDC, include:

  • Recreational marijuana stores.
  • Medical cannabis dispensaries.
  • Vape or smoke shops.
  • Pop-up stores.

Consumers might not know whether stores or dispensaries are actually licensed, even in states where adult-use marijuana is legal.

In California, for example, the Bureau of Cannabis Control seized nearly 10,000 illegal vape pens from unlicensed retailers in two days last month, according to the CDC.

For more of Marijuana Business Daily’s ongoing coverage of the vaping crisis, click here.

Illegal marijuana grows raided in California

More than 15,000 cannabis plants were destroyed and six people were arrested during raids on illegal grows in Southern California, the state’s latest move in its fight against a flourishing black market.

Thirteen search warrants involving marijuana cultivation were served by Riverside County sheriff’s deputies and state Department of Fish and Wildlife personnel in the unincorporated Aguanga area, about 55 miles north of San Diego.

In addition to the eradicated plants, 2,356 pounds of processed marijuana and 14 firearms were seized, the sheriff”s department said.

– Associated Press

Cannabis giant Curaleaf ‘upsizes’ debt offering to $300 million

Curaleaf Holdings, a multistate marijuana operator based in Massachusetts, said Wednesday it closed a debt offering after increasing its size to $300 million from $275 million.

When the initial deal was announced last month, it was believed to be the largest amount of debt raised in the U.S. marijuana industry.

The notes on the debt, raised from a syndicate of lenders, carry an annual interest rate of 13%, with a maturity of 48 months from closing.

The proceeds will be used to:

  • Refinance existing debt.
  • Pay transaction fees and expenses from previously announced acquisitions.
  • Fund capital expenditures and for general corporate purposes.

Curaleaf CEO Joseph Lusardi said “upsizing” the deal strengthens the company’s balance sheet without diluting existing shareholders.

For analysis and in-depth looks at the investment trends and deals driving the cannabis industry forward, sign up for our premium subscription service, Investor Intelligence.

New Jersey court rules company must reimburse medical marijuana costs

In a ruling that could “fortify medical marijuana programs,” the appellate division of the Superior Court of New Jersey decided that workers compensation law requires an employer to reimburse MMJ costs to a worker suffering from chronic pain.

In a 31-page opinion about the case – Hager v. M&K Construction – the judges concluded the order requires the company to reimburse the petitioner for the purchase of the MMJ, not to “aid and abet petitioner’s possession of an illegal substance,” as the company argued.

The court said it finds “no conflict between the CSA (federal Controlled Substance Act) and MMA (the New Jersey Compassionate Use Medical Marijuana Act.)”

Steve Schain, a senior attorney in the Philadelphia office of the Hoban Law Group, wrote in an email to Marijuana Business Daily that the decision is a “terrific step forward for Jersey.”

Schain said the ruling not only will “fortify medical marijuana programs” but also would be relevant for the “inevitable launch” of recreational cannabis sales in New Jersey.

He added that “with more work comp laws requiring coverage, health insurance carriers will soon be required to follow suit and provide coverage for medical marijuana treatment costs.”

Cresco Lab cannabis growers in Illinois plan to join union

Employees at an Illinois marijuana cultivation facility owned by Chicago-based multistate operator Cresco Labs are the first cannabis workers in the state to unionize.

Laborers at Cresco’s facility in Joliet voted 58-32 to be represented by the United Food and Commercial Workers Local 881.

The vote affects about 100 of the 130 workers at the facility.

Cultivation workers who tend to cannabis plants were not eligible to vote because farm workers are covered by federal labor laws, according to Crain’s Chicago Business.

Zach Koutsky, legislative and political director for Local 881, called the vote at one of the largest cultivation facilities in Illinois a “precedent-setting victory.”

The vote at Cresco’s grow facility follows a previous unsuccessful unionization effort in Illinois.

In December, the Teamsters lost a close vote to unionize production workers at a cultivation facility that is run by Chicago-based Green Thumb Industries, according to Crain’s.

The failed vote came after Green Thumb refused to recognize a unionization effort in October, saying the Teamsters had not allowed the workers to have a say.

Audit finds problems with Minnesota’s medical marijuana program

The two vertically integrated medical marijuana companies that serve the entire MMJ market in Minnesota lack formal contracts with a testing laboratory as well as other issues, according to a report from the state’s Office of the Legislative Auditor.

According to Minneapolis TV station WCCO, an audit of the Minnesota Department of Health, which oversees the state’s medical marijuana program, found that its “internal controls were generally not adequate to safeguard financial assets and ensure compliance with selected legal requirements for the medical cannabis program.”

Minnesota Medical Solutions, which is owned by Minneapolis-based multistate operator Vireo Health and LeafLine Labs, are responsible for all the cultivation, production and distribution of medical cannabis in the state.

The health department’s shortcomings, according to the audit, included:

  • Failure to ensure that Minnesota Medical Solutions and LeafLine Labs had a formal contract with a testing laboratory.
  • Inadequate controls to ensure the two companies accurately tracked and tested medical marijuana before sale.
  • Lack of controls to help prevent and detect diversion or loss of medical marijuana by the two companies.

As of the end of 2019, 18,249 people were enrolled in the state’s medical marijuana program. That’s a 27% increase over the 14,398 enrollees as of Dec. 27, 2018.