Cannabis Industry Daily News

Plaintiffs drop text-message suit against California marijuana courier Eaze

A consumer lawsuit filed against California marijuana delivery giant Eaze was formally dropped after the two sides reached a settlement agreement.

According to Law360, the two plaintiffs who agreed to withdraw the suit they filed in 2018 are now “hashing out the details” of a settlement.

The case had been on hold because both Eaze and the plaintiffs asked a judge in 2020 not to rule until the U.S. Supreme Court decided on a related case involving Facebook and automatic telephone dialing systems.

The Supreme Court ruled unanimously in April that autodialing machines “use a random or sequential number generator.”

That ruling is expected to have a major impact on the number of spam-related lawsuits involving text messages brought against marijuana businesses such as Eaze under the federal Telephone Consumer Protection Act (TCPA), Law360 reported.

Eaze contended during the suit that at least one of the plaintiffs had signed up for messages from the company and therefore was bound by its terms of service. Those terms include mandatory arbitration in the event of a legal dispute such as this. Eaze also argued the other plaintiff had received messages stemming from a “third party error.”

This is at least the second such lawsuit filed against Eaze.

The first was also filed in 2018, and was sent to arbitration.

US senator seeks $4 million to combat illegal cannabis activities in Oklahoma

A U.S. Senator from Oklahoma requested $4 million in federal funds to help the state fight illegal cannabis operations.

Sen. Jim Inhofe, a Republican, made the request to the U.S. Justice Department, the Associated Press reported, citing comments made by Inhofe’s chief of staff during an Oklahoma Sheriffs Association meeting.

The funding request, if approved, would be used by the Oklahoma Bureau of Narcotics and Dangerous Drugs (OBN) to create a special unit that would work with sheriffs to crack down on illegal operations such as organized crime, according to Inhofe’s chief of staff, Luke Holland.

Oklahoma has one of the most wide-open medical marijuana markets in the country.

As of July 1, Oklahoma was home to 12,105 licensed medical marijuana businesses, including 8,247 growers, according to state figures.

Oklahoma law enforcement officials have been conducting a wide-range investigation into illegal operations, including legal growers that might be involved in cross-border illicit sales.

State regulators have acknowledged that low barriers to entry have made such illegal operations enticing.

A track-and-trace system, which was supposed to launch earlier this year, could help curb some of the activity but is tangled in litigation.

Oklahoma is not the only state where law enforcement officials are seeking to aggressively crack down on illicit activities.

Los Angeles County authorities announced this week the largest seizure of illegal marijuana in California history, worth an estimated $1 billion, as part of a federal, state and local investigation.

California authorities seize $1 billion of illegal marijuana

Los Angeles County authorities announced the seizure of the largest illegal crop of marijuana in state history, worth an estimated $1 billion.

According to The Associated Press, L.A. sheriff’s deputies seized 373,000 marijuana plants and 33,480 pounds of cannabis flower, which have a combined value of about $1.2 billion on the illicit market.

The seizure is the result of a 10-day law enforcement investigation that culminated in search warrants being served June 8 on 200 facilities in the Antelope Valley area, north of Los Angeles.

The raids were a joint operation between the L.A. sheriff’s department, the U.S. Drug Enforcement Administration, the California Department of Fish and Wildlife and multiple other local law enforcement agencies, the Valley Post News reported.

There were 131 arrests made in connection with the raids, and 33 firearms and $20,000 in cash was also seized.

The 200 facilities were all run by “cartel members,” the Valley Post News reported, and L.A. Sheriff Alex Villanueva said criminals were stealing ground water and threatening local residents.

“What we want to do is send a clear and loud message to the cartels and anyone doing illegal operations in the High Desert, your days are over and we’re coming for you,” Villanueva said.

Nevada reappoints three members to cannabis regulatory board

Nevada reappointed three members to the compliance board that oversees the state’s cannabis industry.

According to a news release, Nevada Gov. Steve Sisolak announced the reappointment of the initial three members of the Nevada Cannabis Compliance Board:

  • Jerrie Merritt, a senior vice president with the Bank of Nevada.
  • Dennis Neilander, a former chair of the state’s Gaming Control Board.
  • Justice Michael Douglas, a former chief justice of the Nevada Supreme Court. Douglas also will continue in his role as chair of the five-person cannabis board.

Last year, Sisolak appointed former Nevada Dispensary Association Executive Director Riana Durrett and Reno-based physician Dr. Bryan Young as the final two members of the CCB to serve four-year terms.

Douglas, Merritt and Neilander will each serve a four-year term.

State offer spurs medical marijuana enrollment in West Virginia

The number of registered medical marijuana patients in West Virginia has exceeded 2,300 as the state girds for a market launch later this year.

State officials said 2,305 residents took advantage of an offer by a June 30 deadline to receive a three-year MMJ card, an effort by regulators to gauge program interest, the MetroNews in Charleston reported.

Those who register by Sept. 30 can get a medical marijuana card good for two years, while those who register after Oct. 1 will receive only a one-year card.

Physicians must recommend qualifying patients.

Separately, Florida-based Trulieve said Wednesday that it has started cultivation at a 100,000-square-foot facility in Huntington.

Other operators have said market sales are likely to begin in the fourth quarter, depending on laboratory testing, according to The State Journal in Clarksburg.

State regulators awarded 10 cultivation, 10 processing and 100 dispensary licenses beginning in late 2020 and handed out a testing lab license in March.

West Virginia is one of the slowest states to launch a medical cannabis program.

More than four years already have passed since medical marijuana legislation was signed into law in April 2017. Banking issues in part delayed the program.

The recently released 2021 MJBizFactbook projected that West Virginia’s MMJ program could hit $5 million to $6 million in sales in the first full year.

NewLake enters $20.5 million real estate deal with Arizona cannabis firm

Cannabis real estate financier NewLake Capital Partners announced a deal to acquire land in Phoenix and lease it to Arizona-based, vertically integrated marijuana operator The Mint.

The $20.5 million deal includes $2.4 million to purchase the land and $18.1 million allotted for tenant improvements, according to a Wednesday news release.

The Mint will use the property to build a 130,757-square-foot marijuana cultivation and processing facility, the release noted.

The lease was described as a “long-term, triple net” agreement, meaning The Mint will pay ongoing expenses for the property.

In April, NewLeaf acquired an industrial property in Massachusetts that will also be leased to The Mint for use as a cultivation and processing facility.

Connecticut-based NewLake recently merged with New York-based cannabis real estate investment trust GreenAcreage, creating a major player in marijuana real estate.

Missouri posts record medical marijuana sales of $16.4 million in June

Missouri’s medical marijuana dispensaries sold nearly $16.4 million worth of product in June, bringing the yearly total in the state to more than $70 million.

Medical marijuana sales in Missouri launched in October 2020, and 126 dispensaries are now selling cannabis across the state, according to Quincy, Illinois, TV station KHQA.

A total of 201 medical cannabis businesses, including manufacturers, laboratories and transporters, operate in Missouri.

In all, 375 facilities have medical marijuana permits.

The market could reach $225 million-$300 million in sales this year alone, according to the 2021 MJBizFactbook.

Missouri’s MMJ program has had its share of hiccups, however.

In a recent development, a federal judge in Missouri ruled in favor of a Pennsylvania investor who sued regulators over a residency requirement for MMJ business owners.

The Parent Co., Glass House terminate $50 million cannabis investment deal

The Parent Co.’s planned $50 million strategic investment in California cannabis company Glass House Group has been broken off.

The Parent Co., based in New York, did not give a reason for the deal’s termination in a news release, beyond saying that it was “terminated by the parties effective (July 2) and the strategic investment will not be completed at this time.”

According to the released, The Parent Co. “will consider future partnership opportunities as Glass House purchases and completes the retrofit of its greenhouse cultivation facility in southern California.”

The investment, announced in May, would have seen The Parent Co. buy a 6.2% stake in Glass House in exchange for access to cannabis supply from Glass House and retail shelf space for Parent Co. products in Glass House retail stores.

Glass House was recently acquired by Mercer Park Brand Acquisition Corp., an acquisition that was already in the works when The Parent Co. and Glasshouse announced the investment deal.

Saint Regis is first New York tribe to legalize recreational marijuana sales

A Native American tribe in New York state said it has legalized recreational marijuana and will “soon” begin legal sales.

According to Watertown TV station WWTI, the Saint Regis Mohawk Tribe, which has a reservation near the Canadian border in upstate New York, signed off on a new tribal ordinance allowing members of the tribe to launch adult-use marijuana businesses.

Recreational marijuana sales will begin in the near future by the tribe in Akwesasne, New York.

The tribal council told WWTI that it will be licensing its own cannabis companies to individual members of the tribe instead of making the businesses tribally owned.

The ordinance follows a popular tribal vote in 2019 under which members authorized recreational marijuana commerce, but the operations launch had to wait until the state Legislature legalized adult-use cannabis, which happened in March.

The tribe spent the past two years working on industry regulations, including product quality assurance.

Fully legitimate retailers have yet to open, though a tribal spokesman acknowledged that some sellers jumped the gun and had already begun adult-use sales.

The tribe “filed civil actions” in Tribal Court on July 1 against seven illegal operators, WWTI reported, and is asking that the businesses be shut down and fined $1,000 for each day they violate cease-and-desist orders.

Under the Saint Regis Mohawk ordinance that legalized a recreational industry, businesses that began operating early had to close by July 1 or be forbidden to enter the licensed market.

Comprehensive cannabis licensing changes pass California Legislature

California lawmakers have given final approval and sent to the governor a sweeping budget bill that makes several major changes to the state’s cannabis regulatory system, including a much-needed extension of the provisional licensing program.

Gov. Gavin Newsom is expected to sign the so-called “governor’s trailer bill,” Assembly Bill 141.

Despite the changes to the regulatory system, marijuana industry insiders said they fall short of what’s necessary to keep the sector stable.

That means lawmakers are expected to take marijuana reform back up in August after a monthlong summer recess that begins in mid-July, said Amy Jenkins, lobbyist for the California Cannabis Industry Association (CCIA).

Some of what the bill accomplishes:

  • Consolidates the three current regulatory agencies – the Bureau of Cannabis Control, CalCannabis within the Department of Food and Agriculture as well as the Cannabis Manufacturing branch within the Department of Public Health – into a single agency, the new Department of Cannabis Control.
  • Extends the life span of the provisional licensing program, allowing provisional permits to be renewed until Jan. 1, 2025.
  • Allows for trade samples of marijuana products to be shared among businesses free of charge.

Jenkins said she’s nervous because many marijuana businesses remain in limbo, unable to count on their provisional licenses being extended next year.

That’s because AB 141 doesn’t allow for compliance with state environmental regulations in counties that have created their own regulatory paths for MJ businesses.

Jenkins said that unless lawmakers take the issue back up in August and pass at least one more bill to allow exceptions for certain counties – including Calaveras, Mendocino, Sonoma, Trinity and Yolo – marijuana businesses in those locales holding provisional licenses could be forced to shut down in 2022 when those permits expire.

That’s one reason the CCIA submitted a letter of opposition to the bill to legislative leaders only two days before it passed the full Legislature.

“We’ve won the battle but not the war,” Jenkins said.

“Can we get this fixed in a way that ensures that all of our provisional license holders have a path to annual licenses? That is uncertain.”

However, Jenkins and other industry advocates said lawmakers have committed to fixing that issue come August.

“I’m pretty confident it’s going to get addressed,” said Genine Coleman, executive director of the Origins Council, which represents cannabis farmers all over California. “The language in the bill … absolutely needs cleanup.”

As of Friday morning, Newsom had not yet signed the bill into law, but Jenkins and others fully expect him to do so.

– John Schroyer

Mississippi high court won’t rethink its overturn of medical marijuana vote

The Mississippi Supreme Court rejected a final appeal by medical marijuana advocates to reconsider a landmark ruling in which the court struck down a voter-approved MMJ bill because of a technicality.

According to Mississippi Today, the high court on Thursday released a final decision in which it cited a time period last November when parties failed to act on an opportunity to intervene on the ruling.

The decision effectively marks the end of the road for legal appeals to the Mississippi Supreme Court’s May decision to overturn a popular medical marijuana legalization ballot measure, which voters approved by a nearly 3-to-1 margin last year.

The high court found that backers violated a law requiring that signatures be gathered from five congressional districts in the state, even though Mississippi has had only four congressional districts since the 2000 Census.

Mississippi law governing ballot measures was simply never updated to reflect the change.

Meanwhile, Mississippi lawmakers have expressed some interest in passing a medical marijuana law of their own, though that wouldn’t happen this year unless the governor calls a special session of the Legislature.

Cannabis companies reach settlement in acquisition lawsuit

A settlement has been reached in a lawsuit brought by cannabis investing consultant Arcadian Capital related to marijuana company Cura Partners’ acquisition by multistate MJ operator Curaleaf.

Cura Partners was acquired by Curaleaf in 2019 in a deal initially valued at nearly $950 million. The deal was later amended to reduce the value of the acquisition.

Arcadian Capital claimed in a federal court lawsuit that it was owed 3%, or about $11.7 million, of the acquisition in light of a 2018 consulting agreement between Arcadian and Cura.

Portland, Oregon-based Cura argued that the contract was a sham because Arcadian provided no consulting services after an initial meeting.

Cura and Beverly Hills, California-based Arcadian posted a joint notice this week asking the court for a dismissal hearing, legal news outlet Law360 reported.

“The parties are currently in the process of documenting the settlement and expect to file a stipulation of dismissal within the coming weeks,” according to the notice obtained by Law360.

The notice did not specify any details of the settlement between the Arcadian and Cura Partners.