Cannabis Industry Daily News

New York: Medical cannabis ‘essential,’ not subject to closures

(This story has been updated to reflect that San Francisco marijuana operations can re-open.)

New York state health regulators on Tuesday declared licensed medical cannabis businesses to be “essential” services, allowed to remain open if nonessential businesses are ordered to close because of COVID-19.

Although New York is just one jurisdiction, it could be a signal for how other states will treat licensed MMJ businesses during the coronavirus pandemic.

Some businesses across the country have been concerned that they could be forced to close temporarily, putting both their financial health and patient health at risk.

For example, the city of San Francisco on Monday ordered all marijuana businesses to cease operations, deeming them “nonessential.” Later, however, it reversed its decision and said they were essential operations and could re-open.

In New York Department of Health guidance , regulators strengthened safety and health protocols for registered MMJ businesses.

Key aspects include:

  • Allowing operators to dispense from the doors of their facilities, as long as exchanges are on camera and patient ID cards are validated.
  • Permitting operators to expand home delivery without prior approval until April 16 (for those already approved for home delivery). The state recommends delivery drivers wear masks and gloves and use their own pens for signatures.
  • Encouraging businesses to have patients set up appointments in order to avoid overcrowding in dispensaries.

– Jeff Smith

Florida lawmakers nix THC cap for younger medical marijuana patients

The Florida Senate killed a provision that would have limited THC in medical cannabis to 10% for patients younger than 21, which could have been costly to businesses.

A number of states recently moved to restrict THC, but so far the measures have failed.

Still, the trend is worrisome as businesses would be required to make potentially costly adjustments to cultivation and processing methods.

Cannabis businesses also complain that there’s no scientific basis for arbitrary THC caps and that patients with some medical conditions benefit from high THC products.

Initially, Florida’s speaker of the state House wanted to cap THC in all medical marijuana at 10%.

The Florida House voted to include the cap for patients younger than 21 in a broader health care package, but the Senate stripped out the provision before acting on the bill late Friday.

– Jeff Smith

California’s Indus secures $14.5 million for cannabis expansion

Indus Holdings, a California-based vertically integrated marijuana company, said it secured up to $14.5 million in loan financing to complete a greenhouse and boost the company’s profitability path.

Indus, which said it will close the deal in April, also will use the proceeds for renovations and as general working capital “to become profitable and self-sustaining.”

Geronimo Capital and Merida Capital are providing the financing.

Geronimo is led by George Allen, the former president of multistate marijuana operator Acreage Holdings.

Last May, Indus, which trades on the Canadian Securities Exchange as INDS, announced its intention to expand its operations outside of California to Nevada and Oregon.

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.

What are your thoughts on closing marijuana stores over coronavirus?

Coming Soon
If you run a U.S. shop, are you planning to close?
If you run a U.S. shop, are you planning to close?
If you run a U.S. shop, are you planning to close?

Organic Alternatives, a cannabis operator in Fort Collins, Colorado, closed voluntarily over worries about the spread of coronavirus – and many more marijuana shops likely could do the same soon despite the loss in sales they’ll experience.

Concerns around marijuana retailers closing also could lead to a run on cannabis stores where consumers buy out products over fears that businesses will remain shuttered.

Read what actions an industry expert believes cannabis retailers should consider in response to the coronavirus pandemic.

For more of Marijuana Business Daily’s ongoing coverage of the coronavirus pandemic and its effects on the cannabis industry, click here.

Oklahoma medical marijuana shop hit by trademark suit

An Oklahoma bank filed a federal lawsuit against a Tulsa medical cannabis dispensary for trademark infringement.

In a lawsuit filed in the Northern District of Oklahoma, the Bank of Oklahoma accused the Dank of Oklahoma dispensary of using a variation of the institution’s logo that it registered as a trademark in 1975, the Tulsa World reported.

The Oklahoma legal action underscores the importance of why cannabis companies in any state should take the time to look into licensing agreements as they conceive business names and marketing plans.

Dank of Oklahoma’s logo – a marijuana leaf and the slogan “What’s in your dank account?” – were “clearly intended to evoke the services offered” by the bank, according to the filing.

The Bank of Oklahoma’s counts against the dispensary, include:

  • Trademark dilution.
  • Infringement.
  • Unjust enrichment.

The bank is seeking an injunction preventing Dank of Oklahoma from using the “confusingly similar” name and slogan and asks that the dispensary relinquish similar social media accounts, according to the newspaper.

The suit also seeks punitive damages and profits from Dank of Oklahoma.

The Tulsa World could not reach Dank of Oklahoma by phone, and the dispensary’s Twitter account has not been active since at least January.

Another Tulsa medical marijuana dispensary was sued for copyright infringement in July.

Maine issues conditional licenses to 31 adult-use cannabis companies

As Maine prepares for recreational marijuana sales to begin in a few months, regulators have issued 31 conditional adult-use cannabis licenses – 16 of them to retailers.

In addition to the stores, the Office of Marijuana Policy said it is mailing the licenses to:

  • Ten marijuana cultivation facilities.
  • Four manufacturing facilities.
  • A nursery.

The agency’s director, Erik Gunderson, said mailing the conditional licenses “moves us another step closer” to honoring a pledge to launch adult-use sales in the state.

Earlier this month, state officials indicated sales would begin in June, although initial plans called for launching sales in March.

Once the operations have a conditional license and local approval, they must receive an active license from the state to grow, manufacture, test or sell marijuana products, according to OMP spokesman David Heidrich.

The agency expects to issue active licenses as early as April, officials said.

The state has been reviewing more than 200 applications from those seeking to enter the adult-use marijuana industry.

However, launching recreational cannabis sales is contingent on the licensing of one or more labs to handle the state’s mandatory testing requirements.

Maine is working with five “prospective” testing facilities, Gundersen said.

– Associated Press

Alabama Senate passes medical cannabis bill

The Alabama Senate on Thursday passed a medical marijuana bill that would license 34 dispensaries across the state.

The bill also would permit people with a doctor’s recommendation to use MMJ for 15 conditions.

In addition, the measure allows medical cannabis in forms such as pills, skin patches and creams but not in smoking or vaping products.

Senators voted 22-11 for the bill sponsored by Republican Sen. Tim Melson after five hours of debate.

The legislation now moves to the Alabama House of Representatives, where its fate is uncertain.

The Senate approval was a moment of optimism for medical marijuana advocates who for years made little headway in the conservative-leaning state.

In 2013, a medical marijuana bill won the so-called “Shroud Award” for the “deadest” bill in the House of Representatives.

Melson said he is optimistic about the bill’s chances this legislative session.

“Things have changed. We learn as we go in life and people have realized there are benefits,” Melson said before the debate.

The bill faces opposition from Alabama Attorney General Steve Marshall, who sent lawmakers a letter noting that marijuana remains illegal under federal law.

Last year, a Senate-passed bill stalled in the House.

“We are just in a wait and see mode,” Alabama House Speaker Mac McCutcheon, a Republican, said.

– Jeff Smith and Associated Press

Marijuana firm Tilray plans $90 million capital raise amid market turmoil

Canadian cannabis producer Tilray on Thursday announced a share offering to raise $90.4 million, which the Nanaimo, British Columbia company says will be used for general corporate purposes.

Tilray priced 7.25 million class 2 common shares – and 11.75 million prefunded warrants to purchase common shares – at $4.76 per share.

That is a 20% discount to the previous day’s closing price of $5.95.

The offering comes with additional warrants, exercisable six months after issuance at $5.95 per share, with a term of five years.

The offering is expected to close March 17.

Tilray’s recent stock decline has outpaced the broader market, which has experienced significant market turmoil due to the coronavirus pandemic.

Shares of Tilray have fallen 75% in the past month.

The S&P/MX International Cannabis Index has retreated 40% over the same period.

Tilray, founded in 2014, is yet to generate a profit.

The company has reported net losses of $7.8 million, $67.7 million and $321.2 million for 2017, 2018 and 2019, respectively.

Tilray’s adjusted EBITDA loss of $35.3 million in its latest quarter was 33% lower than the previous quarter.

“We intend to continue to expend significant funds to increase our growing capacity, complete strategic mergers and acquisitions, invest in research and development, expand our marketing and sales operations to increase our base of registered patients and meet the compliance requirements as a public company,” the company said in a regulatory filing.

As of Dec. 31, 2019, Tilray said it had cash and cash equivalents of $97 million.

Tilray trades as TLRY on the Nasdaq.

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.

– Matt Lamers

Cannabis group’s CEO stepping down

(This story has been updated to reflect that the American Trade Association of Cannabis and Hemp remains independent.)

Marijuana industry veteran Neal Levine announced on Thursday that he is resigning as the CEO of the Cannabis Trade Federation, a national coalition of MJ-related businesses.

Before being tapped as CEO of Washington DC-based CTF in June 2018, Levine had been co-founder of the New Federalism Fund.

CTF was created in April 2018, when Levine’s group and the independent American Trade Association of Cannabis and Hemp agreed to collaborate in order to promote pro-marijuana laws and policies at the federal level.

In a statement, Levine said his initial plan was to serve as CEO of CTF for two years. It was “never my intent to run it long-term,” he said.

He added that, with “the election heating up” and federal legislative movement starting to slow down, “now is the perfect time to make a transition.”

Levine will remain in the CEO post until a successor is hired.

He also joined the board of CTF and has agreed to serve as a senior strategic adviser for the group.

Levine did not provide any other details about his plans after he steps down as CEO.

US House panel approves medical marijuana bills to help veterans

A key U.S. House committee on Thursday advanced a bill that would increase access to state-legal medical cannabis for military veterans, which could increase MMJ sales.

The House Veterans’ Affairs Committee approved the bill, the Veterans Equal Access Act, by a 15-11 vote.

The bill specifically would allow VA doctors to provide medical marijuana recommendations and opinions to veterans.

Committee members also approved by a voice vote a bill called the VA Medicinal Cannabis Research Act that would expand MMJ research of conditions diagnosed in veterans including: 

  • Chronic pain.
  • Post-traumatic stress disorder.
  • Opioid addiction.

The bills still need to be passed by the full U.S. House and Senate and signed by President Trump in order to be enacted.

Experts see these two marijuana reform bills as having the best chance to advance this election year, as they do have some bipartisan support.

Don Murphy, director of federal policies at the Marijuana Policy Project, said in a statement that the committee support marks another step forward for federal cannabis reform.

“Now that a majority of states have legalized cannabis for medical use, it is indefensible to restrict veterans’ ability to access medical cannabis through their VA providers while members of Congress can use their federally subsidized health insurance to obtain medical cannabis recommendations from their doctors,” he said.

– Jeff Smith

Poll: Top China cannabis supply chain threat amid coronavirus?

Coming Soon
Beyond cannabis vaping hardware, which part of the marijuana industry’s supply chain sourced from China do you think will suffer the most from the coronavirus fallout?
Beyond cannabis vaping hardware, which part of the marijuana industry’s supply chain sourced from China do you think will suffer the most from the coronavirus fallout?
Beyond cannabis vaping hardware, which part of the marijuana industry’s supply chain sourced from China do you think will suffer the most from the coronavirus fallout?

With nearly all hardware for marijuana vape products sourced from China, the coronavirus outbreak highlights how delicate the supply chain is for marijuana businesses in the sector.

Industry analysts estimate 90%-95% of all components that comprise a cannabis vaporizer are manufactured in factories in Shenzhen, China, and of the remaining 5%-10% of supplies that may be sourced domestically, U.S. manufacturers lack the ability to serve the cannabis market.

Check out what marijuana industry experts told MJBizDaily’s Bart Schaneman about dealing with the dependance on Chinese supplies in a post-coronavirus world.

Harvest Health confirms $85.8 million Have A Heart marijuana deal

Harvest Health & Recreation, the Arizona-based multistate cannabis operator, confirmed its $85.8 million plans to acquire Interurban Capital Group, owners of the Seattle-based Have a Heart dispensary company.

The company first announced its intention to acquire Have A Heart in January. That same month, Harvest said it was terminating its planned acquisition of Falcon International.

Meanwhile, Harvest also announced the resignation of Jason Vedadi, its executive chairman. His departure is part of the company’s “ongoing efforts to create long-term shareholder value,” Harvest said in a news release. Vedadi will remain at Harvest as a strategic adviser, however.

Current independent board member Mark Barnard will assume duties as chairman, Harvest said.

Harvest shares were down about 30% following the announcements.

The company trades on the Canadian Securities Exchange under the ticker symbol HARV and on the over-the-counter markets as HRVSF.

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.