Cannabis Industry Daily News

California treasurer lays out first steps toward state marijuana bank

Following up on a plan he announced last year, California state Treasurer John Chiang on Tuesday outlined the foundation for a public bank for cannabis businesses so they won’t have to operate on a cash-only basis.

According to the San Francisco Chronicle, Chiang and state Attorney General Xavier Becerra have been working in concert on a cost-benefit analysis to figure out if such a venture would actually work.

Advertisement

So far, the plan is to “conduct a feasibility study” in which:

  • The treasurer’s office would focus on costs, benefits and risks.
  • The attorney general’s office would look at legal and regulatory issues surrounding a public MJ bank.

The study would deliver recommendations to policymakers by the end of the year, the Chronicle reported, including on how such a bank would be funded and structured, as well as whether it would have a physical location or operate entirely online.

Chiang, who is running for governor of California, is also working with 19 other states that have legal MJ industries in hopes they could establish similar financial institutions.

However, the jury is still out on whether state-level banking systems will work quickly enough for the cannabis industry or in the long run with marijuana still federally illegal.

Nevada’s top recreational marijuana regulator stepping down

The director of the Nevada Department of Taxation, who also serves as the chief regulator of the state’s fledgling adult-use marijuana industry, has announced her resignation.

Deonne Contine will leave Feb. 9 to pursue an opportunity in the private sector.

Advertisement

Gov. Brian Sandoval said he will appoint Contine’s successor in the near future.

The governor said Contine’s experience, skills and hard work served the state well as she oversaw the July 1 launch of recreational marijuana sales, which became legal under a voter-approved initiative.

Nevada’s rec cannabis industry generated $21 million in the first month of sales, and they have remained strong.

– Associated Press

High Times moves to raise $50M by selling shares at $11 each via IPO

The parent company of the longtime cannabis-centric publication High Times magazine has filed paperwork to raise $50 million by selling shares at $11 each.

The initial public offering, disclosed in a filing with the Securities and Exchange Commission, reinforces that the magazine’s parent company still intends to obtain a listing on the Nasdaq if possible.

The IPO will be done through a a so-called Regulation A+ offering, a relatively new funding technique aimed at smaller investors.

Advertisement

The company – Hightimes Holding Corp. – has been planning the move since mid-2017.

But it remains to be seen if a Nasdaq listing can be accomplished.

If Hightimes Holding doesn’t make the cut, it will be listed on the over-the-counter markets or on the Toronto Venture Exchange, Crowdfund Insider reported.

Hightimes Holding Corp. has watched its financial fortunes tumble over the past few years, according to the SEC filing.

The company went from net income of $3.4 million in 2014 to a net loss of $2.9 million in 2016.

For the nine months ended Sept. 30, 2017, the consolidated net loss of the Hightimes Group was roughly $16 million.

However, nearly $7 million of that red ink resulted from a nonrecurring, noncash stock compensation charge and an additional $2.7 millon noncash charge, according to the SEC filing.

Move afoot to test Arizona’s medical cannabis for mold, pesticides

A Republican lawmaker has persuaded nearly the entire Arizona legislature to sign on in support of his proposal to require medical marijuana to be tested for mold and agricultural chemicals.

The proposal from Sen. Sonny Borrelli would appropriate $2 million from the state’s huge medical marijuana fund to do the testing.

Advertisement

Borrelli has 78 co-sponsors for the measure, including the Republican and Democratic leaders in the House and Senate. There are 90 members of the legislature.

Borrelli’s proposal would require the state Department of Agriculture to test for pesticides and other chemicals, paid for with the $2 million from the MMJ fund.

The Health Services Department would set up testing to ensure marijuana is free of mold and also would potentially write rules on potency testing.

Laura Bianchi, who heads the cannabis department at Scottsdale-based Rose Law Group, said the lack of a testing requirement is a “huge gap” in the state’s MMJ program, which launched in late 2012.

She noted that many retailers are doing testing either in-house or through third-party labs.

Because the lawmaker’s proposal amends a law approved by voters in 2010, it will require approval from 75% of the legislature.

– Associated Press

Maine panel moves to delay medical marijuana rules

A Maine legislative panel wants to delay medical marijuana rules that would crack down on caregivers, who are playing an increasing role in the state’s MMJ industry.

The Legislature’s Health and Human Services Committee unanimously voted to support a bill to delay regulations that caregivers say could harm Maine’s medical marijuana industry, the Portland Press Herald reported.

Advertisement

The rules, set to become effective Feb. 1, would allow Maine to conduct surprise inspections of medical marijuana providers and to inspect some users’ homes with a day’s notice.

The owners of a medical marijuana shop and two MMJ users recently filed a complaint in federal court to stop Maine from implementing the regulations.

Aside from the caregivers, whose number increased by 42% in 2016, Maine has eight licensed, vertically integrated cannabis businesses.

The bill to delay the rules until July would need speedy approval from both houses and Republican Gov. Paul LePage.

The governor has said Maine’s medical marijuana program needs reform.

– Associated Press

Enormous Michigan marijuana business park ahead of schedule

A 130-acre business park aiming to be the largest medical marijuana industrial center east of the Mississippi River is well on its way to becoming operational in the second quarter of 2018, another sign that the state’s MMJ industry is thriving.

The venture, known as Harvest Park, will be located in Windsor Township, just south of the state Capitol in Lansing.

So far, 63 acres on 10 lots have been sold to licensed growers, processors or other businesses, Mlive.com reported.

Advertisement

Lots for the next 67 acres are currently for sale, according to Mlive.com.

“We expected to open phase two sometime within the second quarter of 2018, and the response has far exceeded our expectations,” Managing Director Jeff Donahue said in a news release.

He added that the company’s goal is for Harvest Park to become “the epicenter” of the state’s MMJ industry.

Michigan, long home to a widespread MMJ program that services more than 200,000 registered patients, is also poised to legalize recreational later this year if a proposed ballot measure succeeds in November.

That could make the state a cannabis industry hub in the Midwest.

Colorado hemp grower wins processing appeal

A western Colorado town is changing its land development rules to allow CBD extraction from hemp, a change prompted by a hemp grower who appealed zoning rules that allowed him to grow hemp but not process it.

David Cox, who is licensed to grow 100 acres of hemp, successfully argued that processing hemp is similar to the “processing of fruits and vegetables,” according to The (Grand Junction) Daily Sentinel.

Advertisement

Cox plans to extract CBD from his hemp using propane and butane on his property in Palisade, a town on the banks of the Colorado River known for fruit production.

Town trustees agreed to change the code to specifically allow the extraction of oils from plants. The ruling extends beyond hemp to lavender and sage, the newspaper reported.

Colorado is the nation’s top hemp producer, turning in nearly 10,000 acres last year, according to the advocacy group Vote Hemp.

Much of Colorado’s hemp is grown on Colorado’s Western Slope, where there is plentiful agricultural land but many local bans on marijuana production.

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

Bronnor marijuana vape pens recalled in Colorado over ethanol concerns

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

Colorado-based Bronnor Corp. has voluntarily recalled cannabis vaporizer pens over concerns about possible ethanol contamination.

The Colorado Department of Taxation issued a public safety advisory Jan. 24 stemming from potentially unsafe levels of residual ethanol in a Bronnor-manufactured product, Bullet Concentrates, according to Denver alternative weekly Westword.

Advertisement

The potential contamination of 26 vape pens from four different batches prompted Bronner to recall the product. The products were limited to the Colorado market.

Bronner spokeswoman Jennifer Price told Marijuana Business Daily the situation stemmed from “conflicting results from separate laboratories.”

She said the company is submitting the product for “further testing for definitive clarification” about the possible contamination.

Denver-based Bronnor manufactures infused products for Colorado companies that don’t have the facilities to do so. The company’s products include vaporizer cartridges, edibles, topicals and tinctures.

Colorado is beginning mandatory testing of cannabis products in February for residual solvents, including ethanol.

Hearing for Colorado marijuana operator Sweet Leaf postponed; more arrests

By Bart Schaneman , Editor

A hearing for Colorado cannabis retail chain Sweet Leaf, whose business licenses were suspended after December raids, has been postponed until March, and more arrests have been made.

The Sweet Leaf hearing in front of the Denver Department of Excise and Licenses was scheduled for Jan. 12, but the company has been granted a continuance until March 14.

Sweet Leaf noted in its continuance request that, “due to the sheer number of licenses and the attendant allegations, the hearing will likely be a lengthy evidentiary hearing with multiple witnesses.”

According to documents obtained by Marijuana Business Daily, Sweet Leaf’s lawyers requested the continuance, citing the sheer amount of evidence involved in the case.

Advertisement

Meanwhile, two more of the company’s budtenders have been charged with misdemeanors, according to the Denver District Attorney’s office.

That brings to 15 the number of Sweet Leaf employees who have been arrested for allegedly selling too much marijuana in multiple sales to the same customers.

The Dec. 14 raid resulted in the closure of Sweet Leaf’s Denver-area retail stores and suspension of 26 of the company’s business licenses, including cultivation facilities.

Sweet Leaf continues to operate two retail stores in Denver suburbs as well as its Portland, Oregon, outlet.

US cannabis firm MedMen to go public in Canada to ‘add jet fuel’ to growth plan

Count California-based MedMen as the latest U.S. marijuana company looking to Canada to raise money.

The management and investment firm, which operates dispensaries and production facilities in California, New York and Nevada, plans to go public in Canada later this year, CNBC reported.

The company will list its shares on the Canadian Securities Exchange (CSE).

The move into Canada will “add jet fuel” to MedMen’s growth strategy, company spokesman Daniel Yi told Marijuana Business Daily.

“You are opening access to investors globally,” he said.

Advertisement

In going public in Canada, MedMen follows in the footsteps of New York-based iAnthus Capital Holdings, Denver-based International Cannabrands and Alternate Health, which is headquartered in Texas.

Those three companies are traded on the CSE, which allows issuers to do business in the United States provided they meet risk disclosure requirements. (The United States remains off-limits for companies listed on Canada’s two largest stock markets, the Toronto Stock Exchange and Venture Exchange.)

MedMen is currently in a bridge financing stage and plans to list its shares in the early second quarter.

The company has the potential to be one of the biggest listings on the CSE.

Toronto investment company Captor Capital (CSE: CPTR) signed a letter of intent this week to purchase 3% of MedMen for $30 million, which would value MedMen at roughly $1 billion.

Yi said MedMen’s strategy involves building businesses from the ground up. Going public in Canada will give the company more resources to acquire licenses.

“In order to purchase those licenses and turn those dispensaries into MedMen-branded unique retail concepts requires capital, and that’s what going to Canada allows us to do,” Yi said.

Alternate Health, iAnthus and International Cannabrands are traded on the CSE under the symbols AHGIAN and JUJU.A, respectively.

Matt Lamers can be reached at mattl@mjbizdaily.com

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

Oregon marijuana businesses face tougher penalties for selling to minors

The agency that regulates Oregon’s marijuana market has passed new rules that include heavier penalties for cannabis retailers and employees who sell product to minors.

Effective immediately, first-time offenders will face 30-day license suspensions or a $4,950 fine, the Portland Business Journal reported.

The new fine is triple the previous amount for the same offense and triple what alcohol retailers face if they sell to minors.

Advertisement

Penalties will increase with subsequent violations, while workers who sell to minors could lose their state industry work permits.

The Oregon Liquor Control Commission, which oversees the state’s marijuana program, said the tougher penalties were in response to the low rates of compliance with state rules, according to the Business Journal.

The commission conducted six stings in December that found that 21% of businesses sold to underage customers.

That’s higher than the 77.8% compliance rate the OLCC found in six recent decoy operations designed to detect illegal alcohol sales to minors, the Business Journal reported.

Because marijuana is a Schedule 1 drug under federal law, cannabis businesses must be held to a higher standard than their counterparts in the alcohol sector, a commission spokesman told the publication.

The new penalties will be in effect for six months, after which the commission will consider whether to extend them.

That decision will depend, at least in part, on how well marijuana businesses comply with the rules forbidding sales to minors.

CBD, hemp changes advancing in state capitols

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

Federal confusion about CBD and hemp is giving state lawmakers in three of the most conservative parts of the country a reason to back cannabis legislation that addresses the cannabidiol conundrum.

Indiana’s Senate voted this week to legalize all CBD oil products in Indiana that contain up to 0.3% THC, Indianapolis TV station WTHR reported.

The bill was expanded from 0% THC after confusion about CBD’s legal status prompted police citations followed by official apologies.

Indiana’s governor said this week he won’t enforce a late January deadline to take products off shelves because the legislature is still debating CBD’s legal status.

Advertisement

Another Midwestern state, Missouri, is taking another look at authorizing hemp production.

According to Missourinet, hemp legislation now has the backing of the Missouri Farm Bureau after failing in the state last year.

And in Georgia, where some epilepsy patients can possess CBD oil but no one can make it, a state House committee gave unanimous approval this week to a bill to allow limited cannabis cultivation, The (Macon) Telegraph reported.

Georgia’s governor, Republican Nathan Deal, opposes cannabis cultivation for CBD oil.

But Republican House Speaker David Ralston joined lawmakers in other conservative states in calling on Congress to resolve the confusion.

Though Congress has authorized hemp production since 2014, the Drug Enforcement Administration says that CBD oil derived from hemp remains illegal, an interpretation being challenged next month in federal court.

“Maybe it’s time that the emphasis be put on Washington as opposed to the state level,” Ralston said.

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