Cannabis Industry Daily News

The Parent Co. agrees to buy marijuana firm Coastal for up to $56.2M

By MJBizDaily Staff

The Parent Co. said Monday it agreed to acquire 100% of the equity of California-based Coastal Holding Co. in a cash-and-stock deal worth up to $56.2 million, adding a new wrinkle to a set of lawsuits filed by the co-founders of MedMen Enterprises against five Coastal co-owners.


In a news release, San Jose, California-based The Parent Co. said it will pay for the transaction with up to $16.2 million in cash and another $20 million in its common stock upon signing management-services agreements at each Coastal location and another $20 million in stock “contingent upon the successful transfer of Coastal’ s cannabis licenses.”

The vertically integrated operator also said it will inherit a minority stake that Coastal holds in a Southern California dispensary and an option to purchase the remainder of that business for $9 million in cash.

The transactions are expected to close next year.

But there’s a potential stumbling block: Former MedMen executives Adam Bierman and Andrew Modlin, who are minority owners of Coastal, have sued other co-owners to halt the sale of the company.

Coastal holds eight marijuana business licenses around Southern and Central California for retail, delivery, distribution and manufacturing.

Los Angeles-based attorney Hilary Bricken said last week that litigation like what Coastal is facing might be enough to cause potential buyers to change their minds.

According to court records, one would-be buyer of Coastal has backed out of a similar acquisition deal struck earlier this year.

The Parent Co. said in the release that the Coastal deal would expand its California retail store and delivery depot footprints to 11 and six, respectively, and position the company “with the second largest operating retail dispensary and delivery hub in the State with an expanded reach to over 80% of California’s population.”

The Parent Co., known formally as TPCO Holding Corp., trades on the NEO Exchange in Canada under the ticker symbol GRAM.U and on the over-the-counter markets as GRAMF.

AFC Gamma expands Justice Cannabis loan to $75 million

By MJBizDaily Staff

Marijuana industry finance company AFC Gamma significantly boosted a loan to Chicago-based Justice Cannabis Co., increasing it from the $22 million figure announced in May to $75.4 million.

Justice Cannabis plans to use the additional capital to further develop cultivation and processing operations in New Jersey and Pennsylvania, purchase assets and refinance existing debt.


Florida-based AFC Gamma committed an additional $43.4 million, and another $10 million was syndicated to an affiliate, according to a news release.

The loan is secured by a first-lien mortgage on Justice Cannabis-owned real estate in New Jersey and Pennsylvania, and other commercial interests. The interest rate wasn’t disclosed.

AFC Gamma CEO Leonard Tannenbaum said in the release that the increase in the senior secured credit facility reflects the lender’s belief that Justice Cannabis “has one of the best license stacks for a multistate operator.”

New Jersey and Pennsylvania both have “favorable supply and demand dynamics,” Tannenbaum added.

New Jersey approved a recreational cannabis market earlier this year and is preparing for a 2022 launch.

Pennsylvania’s medical cannabis industry has been sizzling, although price competition has increased.

Pressure is increasing on Pennsylvania to legalize adult use to keep pace with neighboring New Jersey.

Lawmakers in Pennsylvania recently introduced an adult-use bill, but the measure could face stiff opposition in the GOP-controlled state Senate.

Report: Female, minority executives lose ground in marijuana industry

The percentage of executive positions held by women and minorities in the U.S. cannabis industry fell between 2019 and 2021, according to a new report now available from MJBizDaily.

Notably, in 2021, the percentage of women who hold executive positions, 22.1%, fell below the average recorded across the larger U.S. business landscape, 29.8%, according to the 2021 report, “Women & Minorities in the Cannabis Industry.”


Previously, the portion of executive positions held by women in the cannabis industry – 36.8% in 2019 – consistently outpaced that of mainstream businesses.

This shift isn’t driven solely by a decline in female cannabis executives.

The latest data from the U.S. Bureau of Labor Statistics indicates that women hold a higher percentage of these roles in the broader economy – up to nearly 30% from only 21% in 2018.

Image of Women & Minorities report cover

The new report from MJBizDaily, “Women & Minorities in the Cannabis Industry,” can be  downloaded here for free.

The percentage of executive positions held by minorities fell to 13.1% in 2021, down from 28.0% in 2019 but in line with the average across all U.S. businesses.

This is despite increased focus at the state level to improve racial diversity within the cannabis industry.

In previous years, minorities held a higher proportion of executive positions at cannabis businesses than they did at mainstream companies.

Industry experts suggest that competitive markets tend to favor businesses with white men in ownership and leadership positions, primarily because of their established access to capital.

In addition, more executives from mainstream sectors are opting into the cannabis industry as a new opportunity, accelerating the increase of white men in power positions.

The free report, “Women & Minorities in the Cannabis Industry,” can be downloaded here.

Cole Memo author joins National Cannabis Roundtable as adviser

By MJBizDaily Staff

The National Cannabis Roundtable announced the formation of a new advisory board this week, and its members include former Deputy U.S. Attorney General James Cole, the author of several influential U.S. Department of Justice memos that paved the road for the modern U.S. marijuana market nearly a decade ago.


Cole joins several other major political figures from both sides of the aisle already associated with NCR, including:

  • Former House Speaker John Boehner, a Republican.
  • Former Secretary of Health and Human Services Kathleen Sebelius, a Democrat.
  • Former U.S. Sen. Cory Gardner, a Colorado Republican.

“Cannabis reform is incredibly complicated not least because of the robust state marketplaces, which have
developed under federal prohibition,” Cole said in a news release.

Cole added that he’s “looking forward” to being part of the federal legalization debate as Congress continues grappling with marijuana-related bills such as the MORE Act, the SAFE Banking Act and the Cannabis Administration and Opportunity Act.

Cole, who served in the Obama administration’s DOJ from 2010 to 2015, was the principal author of three separate memos.

The most influential of those likely was in 2013, after Colorado and Washington State voters approved recreational legalization in 2012. The memo effectively gave both states the green light to go ahead with marijuana sales to all adults 21 and older without federal intervention.

Though all of Cole’s memos were rescinded in 2018 by then-Attorney General Jeff Sessions, their permissiveness allowed the cannabis industry to truly take root across the country without fear of reprisals by the U.S. Drug Enforcement Administration.

And that climate has led the marijuana business to its current status as one of the fastest-growing industries in the nation.

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.