Cannabis Industry Daily News

Marijuana Business Factbook projects nearly $45B US market by 2025

The U.S. recreational and medical marijuana markets are on a trajectory to reach up to $45.9 billion in annual sales by 2025, or as much as twice the level of sales projected for this year, according to the newly released 2021 Marijuana Business Factbook.

U.S. adult-use and medical cannabis sales in 2021 are expected to reach $22 billion-$26.4 billion.

The new Factbook, available now, examines in detail the impacts from new markets, ongoing legalization across the United States and the coronavirus pandemic.

The latest edition includes 41 charts and a state-by-state overview of regulations, taxes, market conditions and what to watch for.

“2020 was an important year in cannabis,” Marijuana Business Factbook Editor Jenel Stelton-Holtmeier said. “Many marijuana businesses were declared essential during the pandemic, and more states legalized cannabis markets. 2021 will see more states join in, and their programs are getting started faster than we’ve previously seen.”

“There is no doubt that marijuana is big business,” added Chris Walsh, CEO of MJBizDaily.

“There is clear momentum for exponential growth, with New York and other states with dense populations starting legal sales.”

The ninth annual Factbook includes these key findings:

  • 100% of investors expect the industry to do better in 2021 than in 2020.
  • The cannabis industry will offer more than 400,000 full-time jobs in 2021.
  • An adult-use market in New York, the country’s financial hub, is expected to launch next year and reach annual sales of $2.5 billion by year five.

MJBizDaily’s annual Marijuana Business Factbook also provides these exclusive cannabis insights for investors, entrepreneurs and business owners:

  • Estimates of the U.S. cannabis industry’s total economic impact.
  • Comparisons of cannabis sales to those in other industries.
  • Annual revenue and operating costs for indoor cultivators.
  • Fastest-growing adult-use edibles and topicals.
  • 2020 revenue for cannabis retailers.
  • Global investment activity in the cannabis industry by company type and year.

For more information about the latest Marijuana Business Factbook or to download a copy, click here.

South Dakota high court to hear recreational cannabis case this month

The South Dakota Supreme Court is expected to hear the state’s voter-approved constitutional amendment to legalize recreational cannabis in April.

According to the Argus Leader of Sioux Falls, the high court will hear oral arguments in a challenge to the amendment on April 28.

This comes after attorneys representing the organization South Dakotans for Better Marijuana Laws appealed a lower-court ruling striking down the amendment.

In February, a district judge ruled the ballot measure was unconstitutional because it contained more than a single topic.

Then the South Dakota Attorney General’s Office dropped its defense of the adult-use marijuana amendment after earlier asserting in court that the initiative was constitutional.

Gov. Kristi Noem opposes the voter-approved effort to legalize marijuana and directed the lawsuit to try to kill the measure.

In addition, the governor is trying to add restrictions to the state’s medical cannabis program, which voters also approved.

Virginia lawmakers bump up some adult-use marijuana timelines

Legislators in Virginia approved measures that will allow the personal possession, cultivation and use of small amounts of marijuana beginning July 1, but a commercial market still isn’t permitted to begin until 2024.

Virginia Gov. Ralph Northam proposed the amendments to accelerate the timeline of a bill lawmakers passed in February to legalize adult-use marijuana. Northam wanted the changes before signing the legislative package.

Virginia will become the first state in the South to legalize a recreational marijuana market.

Jenn Michelle Pedini, executive director of Virginia NORML, called legalization “an incredible victory” but pledged to push for an earlier start to commercial sales.

“In the interest of public and consumer safety, Virginians 21 and older should be able to purchase retail cannabis products at the already operational (medical cannabis) dispensaries in 2021, not in 2024,” Pedini said in a statement.

“Such a delay will only exacerbate the divide for equity applicants and embolden illicit activity.”

Marijuana Business Daily projects that a recreational marijuana market in Virginia will generate $400 million to $500 million in sales in its first full year and $1.2 billion-$1.4 billion by its fifth year.

The measure emphasizes social equity licenses and would limit vertical integration to small businesses.

Green Thumb poised to build out $50 million cannabis facility in New York

Cannabis multistate operator Green Thumb Industries has won local financial incentives to build out a $50 million cultivation and processing facility in New York.

The Orange County Industrial Development Agency indicated in a news release Wednesday that the incentives were approved in March before New York lawmakers legalized a projected $2.5 billion-a-year recreational marijuana market.

The incentives include a sales and use tax exemption and a 15-year property tax abatement in anticipation that Chicago-based Green Thumb will create about 125 full-time employees at an office park in the town of Warwick.

Green Thumb plans to purchase the remaining eight lots available – about 40 acres – to build out a cultivation and manufacturing facility at the Warwick Valley Office and Technology Corporate Park.

“With Green Thumb Industries’ purchase of the remaining lots, we can expect a significant boost in our economy in 2021 and the complete build-out of the Park,” Town Supervisor Michael Sweeton said in the release.

The project is subject to regulatory approvals.

Green Thumb is one of 10 medical marijuana operators in New York. It acquired the vertical MMJ operation from Fiorello Pharmaceuticals for $59.6 million in 2019.

As such, Green Thumb now is positioned to participate in an adult-use industry that is expected to launch in 12-18 months.

Marijuana Business Daily projects that New York’s recreational marijuana market eventually will become the largest on the East Coast, reaching about $2.5 billion in sales a year by its fifth year.

Arkansas medical marijuana regulators sued over license sale

An Arkansas mayor and several other entities are suing state medical marijuana regulators and an MMJ company in connection with the sale and transfer of a license in November 2020.

The suit, filed this week in Jackson County Circuit Court, alleges fraud, conspiracy and breach of contract related to the sale of Natural State Wellness Enterprises Cultivation to Good Day Farm as well as a relocation of the growing facility from Newport to Pine Bluff, according to the Arkansas Democrat-Gazette.

Newport Mayor David Stewart and three other plaintiffs allege in the lawsuit that the Arkansas Medical Marijuana Commission didn’t provide proper notice that the license transfer would be considered at a meeting last fall.

The suit further claims Good Day Farm wasn’t a properly registered entity at the time the transaction was approved.

Regulators approved the sale on Nov. 10, 2020, according to Jonesboro TV station KAIT.

State corporation records show that Little Rock-based Good Day Farm registered as a limited liability company on Nov. 12.

One of the plaintiffs, the Northeast Arkansas Charitable Foundation, also argues that the foundation was owed $2 million from the sale, money that would go to nonprofit organizations in Jackson County.

Multistate operator Harvest Health & Recreation sold Natural State Wellness, a vertical operation, for $25 million to focus on Arizona’s new adult-use market.

Alex Gray, a Little Rock-based attorney for Good Day Farm, told the Democrat-Gazette that the company would “vigorously defend” the lawsuit.

“I believe in the integrity of the manner in which Good Day Farm obtained both the license and the approval of the relocation of the cultivation facility to Pine Bluff,” Gray wrote in a text to the newspaper.

Arkansas Medical Marijuana Commission spokesman Scott Hardin said the commission doesn’t comment on active litigation.

But Hardin did say the commission doesn’t have a rule requiring notification to communities when approving ownership changes.

Curaleaf gets $130M funding for stake in newly acquired global cannabis firm

Multistate cannabis operator Curaleaf Holdings secured $130 million in funding from an unidentified “strategic institutional investor” in exchange for a 31.5% equity stake in its new venture, Curaleaf International Holdings.

Curaleaf International was created to hold London-based medical cannabis company Emmac Life Sciences after a now-completed $286 million cash-and-shares acquisition announced in March, as well to “further its European expansion,” according to a news release issued Wednesday.

“The subscription will fund the entire cash portion of the Emmac acquisition consideration of $50 million with the remaining $80 million to be used to fund Curaleaf International’s current capital expenditures plan through 2022, as well as its pipeline of potential acquisitions,” the release noted.

“With its foreseeable expansion budget fully funded, Curaleaf’s new international business can focus on executing its further European expansion.”

Those plans include increasing cultivation capacity “in order to accommodate future growth related to the expansion of access to cannabis across the major European medical and adult-use, as well as export markets.”

The new strategic investor and Curaleaf have agreed that the Massachusetts-based MSO “will have control over operational issues as well as raising capital and the ability to exit the business,” according to the release.

“In addition, the strategic investor’s stake is subject to put/call rights which permits either party to cause the stake to be bought out by Curaleaf for Curaleaf equity starting in 2025.”

Former Emmac CEO Antonio Costanzo has been appointed CEO of Curaleaf International.

Curaleaf trades as CURA on the Canadian Securities Exchange and as CURLF on U.S. over-the-counter markets.

New marijuana alliance joins Koch brothers, social justice advocates

The Cannabis Freedom Alliance is the third national marijuana reform group announced in three months this year, but the difference with this one is its Republican participation – particularly the billionaire Koch brothers.

According to Politico, the alliance includes Americans for Prosperity, the political organization founded in 2004 by the Koch brothers to support Republicans and conservative causes.

The advocacy group also includes:

  • Reason Foundation, a libertarian think tank.
  • Global Alliance for Cannabis Commerce, which is run by a former staffer of Kentucky Republican Sen. Rand Paul.
  • The Weldon Project, a nonprofit dedicated to getting people with marijuana convictions out of prison.

Weldon Angelos, the founder of The Weldon Project, told Politico he was able to connect with Charles Koch last summer, and the two found mutual ground in their desire to get Congress to legalize marijuana.

Angelos believes the political influence wielded by the Koch brothers could prove key to getting legalization across the finish line, particularly with the 50-50 Democrat-Republican divide in the U.S. Senate.

Angelos called Americans for Prosperity the “perfect partner” to work with on federal legalization because of its support for “free and open markets” – in contrast to some marijuana corporate interests that prefer the various state-level oligopolies they currently enjoy without much in the way of outside competition.

The alliance plans to lobby Republican senators such as Paul and Utah’s Mike Lee, Politico reported. In addition, the group hopes to help shape a national marijuana regulatory system.

Also new to the federal MJ lobbying scene in recent months, with a dizzying array of business and activist stakeholders: the U.S. Cannabis Council and the Coalition for Cannabis Policy, Education and Regulation.

Cannabis REIT injects $30 million more into Pennsylvania grow expansion

A unit of multistate cannabis operator Jushi Holdings received an additional $30 million from Innovative Industrial Properties, a marijuana-focused real estate investment trust (REIT), for the first phase of expanding an MJ cultivation facility in Scranton, Pennsylvania.

Assuming full payment of the additional funding and completion of the expansion, the San Diego-based REIT said in a news release its total investment in the approximately 129,000-square-foot facility will be $45.8 million.

Jushi said in November 2020 that it would invest $50 million to expand the Scranton facility.

In an April 1 release, Jushi said the second phase of the planned expansion – being carried out by the company’s wholly owned subsidiary, Pennsylvania Medical Solutions – would add approximately 60,000 square feet to the building and increase total canopy to roughly 110,000 square feet.

“The estimated combined cost of the two phases of expansion has increased to $65 (million)-$70 million, from our prior preliminary total of $50 million,” Jushi said.

The facility is expected to total about 190,000 square feet once both phases of the build-out are finished.

The project, which is expected to create more than 100 jobs, is subject to certain milestones, approvals and permits, the release said.

Jushi operates eight Beyond/Hello retail dispensaries in Pennsylvania.

The company bought Vireo Health International’s cultivation facility in Pennsylvania in 2020 and recently expanded the grow’s indoor cultivation space.

Vice president: White House hasn’t yet ‘taken on’ federal marijuana reform

Marijuana reform advocates hope Vice President Kamala Harris eventually helps influence President Joe Biden to warm up to potential federal legalization.

But apparently those discussions haven’t yet taken place, even as Senate Majority Leader Chuck Schumer of New York gets closer to introducing a comprehensive marijuana reform bill.

“We haven’t yet taken that on,” Harris told the San Francisco Chronicle.

“Honestly, right now, we’ve been focused on getting people food, helping them stay in their apartments or in their homes, getting kids back to school, getting shots into arms,” Harris said.

“That has been all-consuming.”

Schumer said in a recent interview with Politico that he wants Biden to have some time to study the issue.

“But at some point, we’re going to move forward, period.”

Harris, a former San Francisco prosecutor and California attorney general, was criticized for overseeing offices that prosecuted hundreds of marijuana-related convictions.

But as a U.S. senator, she supported federal marijuana legalization and co-sponsored the SAFE Banking Act, which would allow financial institutions to serve cannabis businesses without fear of federal prosecution.

Workers at Rhode Island medical cannabis dispensary vote to unionize

Employees at Greenleaf Compassionate Care Center in Portsmouth, Rhode Island, became the first cannabis dispensary workers in the state to unionize, approving the move by an overwhelming vote of 21 to 1.

The employees, which include budtenders, delivery associates and online team members, voted to join United Food and Commercial Workers (UFCW) Local 328.

The UFCW also represents workers at Ocean State Cultivation Center in Warwick, Rhode Island, who unanimously ratified their first union contract in October 2020.

The UFCW, the major union representing cannabis workers, has been making inroads in the industry, especially in the Northeast, parts of the Midwest and California.

Greenleaf is the second unionized cannabis business in the state of Rhode Island.

UFCW officials said in a news release that several factors led workers at Greenleaf to organize, including a sudden elimination of the company’s employee incentive program and a significant reduction of staff benefits.

Workers also cited their lack of power in decision-making in an industry that is rapidly changing and growing.

Rhode Island is expanding its medical marijuana program and considering legalizing a recreational marijuana market.

Marijuana tech firm Fyllo completes $30 million Series B capital raise

Chicago-based ancillary marijuana company Fyllo said Tuesday it completed a $30 million Series B capital raise intended to fund further growth into the cannabis sector as well as other “highly regulated industries.”

In a news release, Fyllo said the raise brings its investment totals to almost $60 million.

The tech company, which specializes in marketing and compliance solutions, simultaneously announced the addition of Peter Kraus, the CEO of Aperture Investments, to its board of directors.

Participants in the recent funding round – which was led by JW Asset Management and Sol Global – included K2, Entourage Effect Capital, George Steinbrenner IV, Arcadian Capital Management, Salveo Capital and 2 NRP Managers, an investment group led by Ben Lurie.

Fyllo recently acquired CannaRegs for $10 million and DataOwl in a bid to rapidly expand its suite of services for cannabis businesses.

Trulieve to purchase Pennsylvania medical cannabis retailer for $60 million

Florida-based medical cannabis company Trulieve is spending $60 million to buy more MMJ dispensaries in Pennsylvania.

The multistate operator said Monday it will be purchasing Keystone Shops, a medical cannabis company with retail locations in PhiladelphiaDevon and King of Prussia.

The deal is comprised of $40 million in Trulieve subordinate voting shares and $20 million in cash.

There is no deferred payment or earnout period for the deal, which is expected to close during the second quarter of 2021.

“The Keystone Shops are located in a densely populated area of Pennsylvania and with their staff’s knowledgeable and customer-centric approach to patients, these dispensaries are valuable additions to our Pennsylvania portfolio,” Trulieve CEO Kim Rivers said.

In 2020, Trulieve purchased two Pennsylvania MMJ companies – PurePenn and Keystone Relief Centers – in a $66 million deal.

Adding the three dispensaries will grow Trulieve’s retail footprint to 83 dispensaries nationally.