Cannabis Industry Daily News

Another massive bust of illegal marijuana grows in California

By MJBizDaily Staff

California law enforcement officials this week announced two days worth of raids at several locations that produced the largest illegal marijuana grow operation in the history of the San Francisco Bay Area.


As of Thursday, the Alameda County Sheriff’s Office estimated that deputies had seized roughly 100,000 marijuana plants, 12,000 pounds of cannabis flower, about $10 million in cash and 37.6 tons of plants and materials from at least a dozen sites where search warrants were executed, The (San Jose) Mercury News reported.

The warrants and raids were the result of an 18-month-long investigation, and Alameda County Sheriff Sgt. Ray Kelly predicted the busts – and resulting arrests of several suspects – would have little to no impact on California’s thriving illicit cannabis market.

“There is nothing to stop them from doing it again,” he said. “It’s such a lucrative business.”

The history-making bust is one of several conducted already this year in California.

In June, authorities uncovered another huge unlicensed marijuana grow operation in Los Angeles County that was worth an estimated $1 billion.

Members of California’s legal marijuana market cite the underground market as one of the state’s biggest hurdles to success, but law enforcement officials say their hands are largely tied when it comes to effective crackdown efforts.

Oregon regulators suggest extending cannabis grow license pause until 2024

By MJBizDaily Staff

Oregon’s cannabis regulatory agency is recommending that state lawmakers continue a moratorium on new marijuana cultivation licenses until 2024.

In 2019, Oregon lawmakers voted to halt issuing new recreational marijuana licenses for two years, citing overproduction that was causing the market’s wholesale prices to tank.


The statutory moratorium expires next year.

Oregon Liquor and Cannabis Commission Executive Director Steve Marks said the moratorium extension will be recommended to the state Legislature and governor’s office.

In related news, the commission approved penalties for five cannabis companies that violated state rules.

The following companies will surrender their recreational marijuana licenses:

  • Clay Wolf, processor, seven violations.
  • Takilma Road Operator, producer, seven violations.
  • Hydroberry Holdings, producer, three violations.
  • River Dew Farms, producer, three violations.
  • Waterwheel Ventures, producer, three violations.

Marijuana MSO Trulieve to net $350M from 8% debt financing

By MJBizDaily Staff

(This story has been updated with the announcement that Trulieve has completed its acquisition of Harvest Health & Recreation.)

Florida-based marijuana multistate operator Trulieve Cannabis announced it is on the verge of raising $350 million of capital through the private sale of five-year notes at an 8% annual interest rate.


Trulieve said in a news release that it has received commitments for the senior secured notes and expects the deal to close Oct. 6, subject to conditions that include the approval of the Canadian Securities Exchange.

Separately, the company said it completed its acquisition of Arizona-headquartered Harvest Health & Recreation. When the all-stock purchase was announced in May, it was valued at $2.1 billion and billed as the largest U.S. marijuana transaction to date.

Despite the large acquisition, Trulieve has managed to keep its borrowing costs relatively low.

The 8% annual interest rate for the five-year notes is one of the lowest yet for a public MSO, and the $350 million raise is believed to be one of the biggest yet.

In general, large MSOs are enjoying lower interest rates on debt this year because of stronger balance sheets, improved liquidity and the sense that federal marijuana legalization is inevitable though perhaps not imminent.

Illinois-based Green Thumb Industries got what is believed to be the lowest annual interest rate for a public MSO this year of 7% on a $217 million, three-year loan.

Trulieve CEO Kim Rivers said in a statement that the financing will provide capital to retire a portion of Harvest’s higher-interest debt “and will allow us to use our combined cash on hand to aggressively pursue strategic growth initiatives across key markets.”

CBD labeling mix-up leads to Oregon recall, lawsuit over THC in tinctures

By MJBizDaily Staff

A labeling snafu by an Oregon subsidiary of Massachusetts-based Curaleaf initially led to a recall of cannabis tinctures and now has spawned a lawsuit by a consumer who unintentionally got high from THC from one of the tinctures, which was supposed to contain only CBD.


According to The Oregonian, state marijuana regulators learned that Select – which does business as Cura Cannabis and is owned by Curaleaf – apparently mixed up bottles of tinctures during the labeling process. That led to tinctures with high levels of THC being mislabeled as containing only CBD.

Curaleaf said the mix-up was simple “human error” at its manufacturing plant, The Oregonian reported.

The Oregon Liquor and Cannabis Commission (OLCC) ordered a product recall on Sept. 21 for at least 630 bottles of tinctures. But, according to The Oregonian, it’s unclear what penalties the company might face.

Then, on Sept. 29, a consumer who inadvertently got high from the mislabeled tinctures – Idaho resident Jason Crawforth – filed suit against the company in federal court.

Regulators are aware of at least 12 consumers who have used the recalled products, but Crawforth is the only one to file suit.

Nebraska medical cannabis advocates take another stab at legalization

By MJBizDaily Staff

Nebraska medical marijuana legalization advocates are trying yet again to pass an MMJ bill via a ballot measure.


Nebraskans for Medical Marijuana will start gathering signatures this weekend to get a measure on the November 2022 ballot, according to Lincoln radio station KLIN.

The organization gathered more than enough signatures to get a medical marijuana measure on the 2020 ballot, but the initiative was challenged for including more than one “subject.”

The state Supreme Court ruled that the measure was unconstitutional after a last-minute lawsuit filed by the sheriff of Lancaster County.

The advocacy group plans to circulate two petitions:

  • One would establish legal protections for patients who have a recommendation to use medical cannabis.
  • The other would establish a regulatory system for private businesses seeking to provide MMJ to patients.

Circulators have until the first week of July 2022 to collect roughly 250,000 signatures.

Marijuana real estate lender Pelorus closes $42.3 million notes offering

By MJBizDaily Staff

Pelorus Equity Group, a commercial real estate lender to marijuana companies, closed a $42.3 million private placement of senior unsecured notes from its real estate investment trust, Pelorus Fund.

The notes bear a 7% interest rate and are due in 2026.


The Pelorus Fund will use net proceeds from the offering to offer “a new stabilized lending program with three- to five-year amortizing loans to quality sponsorship,” the company said in a Wednesday news release.

Those loans will be offered “to current borrowers upon construction completion, as well as to new borrowers that meet the company’s underwriting criteria.”

Pelorus said the offering would be “the first in a series.”

Newport Beach, California-based Pelorus concurrently announced that the Pelorus Fund and its notes received a “BBB+” rating from credit rating service Egan-Jones Ratings Co.

The Pelorus Equity Group said that, as of late August, it had completed 55 cannabis real-estate loan transactions worth $204 million in eight states.

California adopts updated rules for cannabis industry

By MJBizDaily Staff

The California Department of Cannabis Control (DCC) said Wednesday it formally adopted an updated set of regulations for the state’s marijuana market, effective immediately.

According to a news release, the consolidated rules “create consistent standards for cannabis licensees across all license types by aligning application requirements, unifying terminology, and clarifying ownership and financial interest requirements.”


The updated regulations also include guidelines on how licensed businesses can legally share trade samples of cannabis goods inside the supply chain, a major change that many companies have been awaiting.

The new full text of the regulations are available here.

The update stems from the consolidation of three state agencies – which oversaw different sectors of California’s marijuana industry – into a single bureaucracy, the DCC. The DCC was established in July.

“We are working towards simplifying regulatory requirements and making it easier to operate within the legal market,” Nicole Elliott, director of the DCC, said in the release.

“The approval of these regulations puts us one step closer towards meeting this objective.”

Tumblr to allow marijuana businesses to advertise in CA, CO

By MJBizDaily Staff

(This story has been corrected to reflect that Tumblr is allowing CBD businesses to advertise nationwide.)

Social media company Tumblr is throwing open its doors for marijuana companies to advertise products on its platform – but only in California and Colorado for now – and for CBD businesses to do so nationwide.

Though not nearly as popular or widely used as counterparts Facebook, Twitter and Instagram, Tumblr, launched in 2007, has a sizable following among Gen Zers, according to a company news release issued Wednesday.


Tumblr’s decision could provide some companies with viable alternatives to larger social media platforms, which have been regularly shutting down marijuana business accounts for years because of the federal illegality of cannabis.

“Tumblr is working hand-in-hand with these brands … to find interesting ways to amplify themselves on the site,” according to the Tumblr release, citing a partnership with Canadian-based cannabis media website Civilized, which has an ad page on the platform.

According to Tumblr’s updated cannabis advertising policy, all such content must:

  • Be approved in advance by Tumblr.
  • Be sold through the company’s direct-sales team and not an intermediary.
  • Be geo-targeted exclusively to consumers 21 and older in California and Colorado.
  • Not be designed to appeal to kids.

Tumblr’s other rules for cannabis advertising include:

  • A strict ban on product giveaways.
  • Continued prohibition on any ads that are tobacco-related.
  • Bans on ads that encourage “unsafe or irresponsible use of cannabis,” such as smoking and driving.
  • Health and wellness claims are strictly forbidden.
  • Ads that show anyone under the influence of marijuana.

Pennsylvania lawmakers to again consider adult-use cannabis measure

By MJBizDaily Staff

Pennsylvania Democrats, as expected, are trying again to legalize adult-use cannabis through legislation.

State Reps. Jake Wheatley and Dan Frankel on Tuesday introduced House Bill 2050, which would create a recreational marijuana market with limited licensing, a social equity emphasis and a retail sales tax rate that would begin at 6% and gradually go up to 19% by the fifth year.


Pressure has increased on Pennsylvania to legalize recreational marijuana sales now that neighboring New Jersey is preparing to launch a market next year.

Pennsylvania Gov. Tom Wolf has been urging lawmakers to legalize recreational marijuana since last year.

But the GOP-controlled Senate still is considered a major obstacle, as it has been during previous efforts.

House Bill 2050, according to a Marijuana Policy Project summary, features:

  • A grant program to help minorities, women and small businesses benefit from the industry. Initial application and permit fees also would be lower to reduce financial barriers.
  • Limited licensing of no more than 50 growers, 50 processors and 100 retail permits with up to three locations each.
  • Up to 35 combination permits would be issued, and a combination licensee could seek up to three grower permits, up to five processor permits and 10 retail permits.
  • A retail sales tax rate of 6% for the first two years, 12% for the third and fourth year of the program and 19% thereafter. An additional retail sales tax rate of up to 3% could be charged by municipalities.
  • A 10% wholesale tax. But growers and processors that partner with Pennsylvania farms wouldn’t be required to pay that tax.

Marijuana M&A activity has been sizzling in Pennsylvania because of a robust medical cannabis market and the potential of adult use in the near future.

The 2021 MJBiz Factbook projects that MMJ sales will reach $775 million-$925 million this year. But sales could be affected after New Jersey’s recreational marijuana market launches.

Jushi to go vertically integrated in NV with purchase of marijuana retailer

By MJBizDaily Staff

Jushi Holdings is buying Las Vegas marijuana retailer The Apothecarium, the second of two Nevada MJ acquisitions the cannabis multistate operator has made recently.

Terms of the deal were not disclosed.


According to a news release, Jushi will acquire 100% of the equity of both the adult-use and medical marijuana retail operation.

The acquisition – coupled with an April 2021 purchase of Franklin Bioscience NV, which holds medical and adult-use cannabis cultivation, processing and distribution licenses – enables Jushi to become vertically integrated in Nevada.

That means Jushi now will operate vertically integrated cannabis companies in four states; Massachusetts, Pennsylvania and Virginia are the others where the Boca Raton, Florida-based company does business.

Jim Cacioppo, Jushi’s CEO, chair and founder, said in the release the company is looking forward to expanding its footprint in Nevada’s “high-growth, limited license market.”

$50 million minority-owned cannabis facility breaks ground in Detroit

By MJBizDaily Staff

Former NBA All-Star Chris Webber broke ground on a $50 million cannabis operations and training center in Detroit’s trendy Corktown neighborhood.

Players Only, a Black-owned business that Webber co-founded with entrepreneur Lavetta Willis, will focus on cannabis cultivation and retail, brand partnerships and content development.


Cookies U, part of California-based Cookies’ social impact program, will provide training and job placement services that focus on minorities and underrepresented communities, according to the Detroit Free Press.

The Detroit marijuana facility marks the first major announcement from Webber and Willis since February, when they and JW Asset Management founder Jason Wild launched a $100 million private equity cannabis fund to invest in underrepresented cannabis entrepreneurs.

The 180,000-square-foot facility will feature 60,000 square feet of cultivation space, an 8,000-square-foot dispensary and a private cannabis consumption lounge.

Webber announced an exclusive product distribution partnership with Michigan-based Gage Growth, which is in the process of being acquired by New York-based TerrAscend. Wild is TerrAscend’s executive chair.

“We will create, foster and provide a cannabis ecosystem that celebrates diversity, creates jobs, and benefits this community – focusing intensely on those who are being left behind,” Webber, a Detroit native, said in a news release.

“As social equity programs struggle in many states, we are here to support legacy operators who created the foundation for this industry so that they are included in future iterations of it while we wait on the politics to catch up.”

Village Farms eyes Dutch adult-use marijuana market via option deal

By MJBizDaily Staff

Village Farms International struck a deal that gives the British Columbia-based cannabis company an option to purchase an 80% stake in Netherlands-based Leli Holland B.V., one of 10 lottery winners selected to cultivate and distribute adult-use marijuana to retailers under a government-backed pilot program unique for Europe.

The option, which comes with a price tag of 50,000 euros ($58,400), is exercisable at the sole discretion of Village Farms, according to a news release issued Tuesday.


Exercising the option to acquire 80% of Leli’s shares will cost Village Farms 3.95 million euros, of which 950,000 euros will be payable immediately.

The remainder will be due in three installments, subject to the company reaching certain milestones.

In a research note, Stifel GMP analyst Andrew Partheniou wrote that the deal makes Village Farms “attractively positioned to be an early-mover in the one of the first European rec markets with an already established retail network.”

In an email to MJBizDaily, a Village Farms spokesperson said the decision to exercise the option is contingent on Leli’s own regulatory approval, including regulatory matters related to the Dutch supply experiment itself.

The pilot program involves 10 cultivators supplying almost 80 retailers, known as “coffee shops,” which currently operate in a system where sales are legally tolerated but cultivation is prohibited.

Ten municipalities are taking part in the program with all their coffee shops, but the growing locations do not necessarily need to be in those localities.

In a recent interview with MJBizDaily, Village Farms CEO Michael DeGiglio said any expansion by his company into Europe would have to include built-in consumers – in other words, markets where customers are included in the regulatory framework.

“The rec side is where we shine, and if the European Union opens up on rec, that’s where we want to play. Why? Because you have a built-in consumer (in Europe), which you don’t have on the medicinal side – you have to earn it,” he said.

DeGiglio said the Dutch experiment, which will go for four years, mandates that the coffee shops buy all their product from one of those 10 license holders.

“So, right there, you have a built-in customer who has to buy, regulated by the government,” he said.

If Village exercises the option to buy 80% of Leli’s shares, the two businesses plan to construct two indoor production facilities, according to the news release.

Village said the total supply of cannabis for the 10 producers that are participating in the experiment will be a minimum of approximately 65,000 kilograms (143,300 pounds) of dried flower annually.

“”Building on the successes of Pure Sunfarms in Canada, we look forward to leading the market in another legal, regulated recreational cannabis market, with an existing, large consumer base, in what we hope becomes a national and permanent policy,” DeGiglio said in the release.

“Europe, more broadly, represents a significant long-term opportunity in cannabis.”

Shares of Village Farms trade on the Nasdaq as VFF.