Cannabis Industry Daily News

Ohio adult-use marijuana campaign cleared to begin gathering signatures

A group attempting to legalize adult-use marijuana in Ohio on Monday received a thumbs-up from the state to begin the signature-gathering process in order to place their ballot question before voters next year.

The state Ballot Board certified the Coalition to Regulate Marijuana Like Alcohol’s proposed ballot measure as a single subject, according to a news release.

That clears the way for the group to begin collecting the 132,887 signatures of registered voters needed to force state lawmakers to consider enacting their proposed law.

If lawmakers decline to enact the measure, then the campaign can gather an additional 132,887 signatures to qualify for the 2022 election, The (Cincinnati) Enquirer reported.

The proposal would add 40 new marijuana cultivation licenses and 50 more retail permits, and more could become available after two years of a functioning market, depending on demand, The Enquirer reported.

Under the Coalition to Regulate Marijuana Like Alcohol’s proposed measure, existing medical cannabis operators “could automatically get licenses for the recreational side,” according the newspaper.

State lawmakers are already weighing a bill that would legalize recreational marijuana, but it’s unclear whether the bill has enough support to pass.

Arkansas medical cannabis companies take issue with traceability system

Medical cannabis business owners in Arkansas are complaining about inaccuracies in the state-mandated, seed-to-sale tracking system.

The Arkansas Democrat-Gazette reported that industry members shared with a legislative subcommittee their concerns involving BioTrackTHC, a subsidiary of Colorado-based Helix that the state pays to monitor traceability.

The vice chair of the state’s Medical Marijuana Oversight Subcommittee said she was told that data in the BioTrack system wasn’t accurate and the company was unresponsive.

The state signed a $560,000 contract with the traceability company in 2017. The contract can be renewed each year through 2024.

“There have been several occasions in which we have contacted Biotrack to assist in the resolution of issues. When a concern is brought to our attention, we document it and do everything we can within our authority to provide support,” Scott Hardin, spokesman for the state Department of Finance and Administration, told the newspaper via email.

BioTrackTHC officials could not be reached for comment.

Maryland marijuana operator rebrands, starts franchise program

Maryland-based marijuana operator Curio Wellness rebranded its retail business under the entity Far & Dotter and started taking applications for franchises in Maryland and nine other hot markets as it aspires to capitalize on a cannabis retail trend.

Far & Dotter, which is Swedish for father and daughter, reflects Curio’s founding by a father-daughter team, Michael and Wendy Bronfein.

Meanwhile, Curio said it is taking applications for franchises in Florida, Illinois, Maryland, Massachusetts, Michigan, Missouri, New Jersey, Ohio, Pennsylvania and Virginia.

That moves ties into Curio’s December announcement it was launching an investment fund to support potential franchisees, especially women, minorities and disabled veterans.

The idea is to provide startup loans for the entrepreneurs who, in turn, will repay the loans with a portion of their retail earnings until they secure a 100% ownership in a franchise.

Another tribe entering Michigan’s recreational cannabis market

The Grand Traverse Band of Ottawa and Chippewa Indians in Michigan joined the state’s recreational cannabis market.

According to the Record Eagle of Traverse City, a tribal ordinance approved in 2019 by members went into effect on Aug. 29 and will allow tribal-controlled businesses to develop vertically integrated company models.

Adult-use businesses will be allowed on Grand Traverse Band (GTB) lands in northern Michigan encompassing six counties.

According to the Record Eagle, the tribe’s entry into the adult-use industry follows many other Native American tribes across the U.S., including several others in Michigan:

  • Earlier this year, the Sault Tribe of Chippewa Indians opened a recreational marijuana store in Michigan’s Upper Peninsula and plans to open another five.
  • In 2020, the Bay Mills Indian Community opened an adult-use cannabis shop, also in the Upper Peninsula.

The GTB has not announced where its retail locations will be set up. But by law, they must be on tribal lands such as reservation property in or near Peshawbestown, the Record Eagle reported.

Marijuana MSO Ascend Wellness borrows at least $210 million

New York-based marijuana multistate operator Ascend Wellness Holdings said it secured a loan of at least $210 million at a 9.5% per annum interest rate.

The senior secured debt will be used to repay “substantially all” of Ascend’s outstanding debt, except for roughly “$12 million of outstanding acquisition payments with near zero interest rates,” the company said in a Monday news release.

The money will also be used to finance Ascend’s pending investment in MedMen NY and “support (Ascend’s) future growth and acquisition initiatives.”

The loan, payable quarterly, is secured by a first lien against all of Ascend’s assets. It will mature in four years.

Ascend can increase the loan by up to $65 million, “subject to certain conditions.”

“With our strong balance sheet and successful track record, we are well positioned to implement our growth strategies to take advantage of the significant market opportunity ahead and drive strong value for our shareholders,” Ascend CEO Abner Kurtin said in the release.

Vertically integrated Ascend has assets in Illinois, Massachusetts, Michigan, New Jersey and Ohio.

Before closing the new loan, the company had $104.2 million in cash and equivalents on hand at the close of its second quarter on June 30.

Ascend’s shares trade as AAWH on the Canadian Securities Exchange and the U.S. over-the-counter markets.

Nevada suspends cannabis company’s cultivation license

Nevada regulators said Friday they suspended the cannabis cultivation license of Green Cross of America, effective immediately, calling the operation a “threat to public health and safety.”

According to a news release, inspectors from the Nevada Cannabis Compliance Board visited the company’s grow in Pahrump on Wednesday and found more than 400 marijuana plants that were either untagged or not properly entered in the state’s seed-to-sale tracking system, a violation of industry regulations.

The release also cited unspecified “security and other significant deficiencies” as reasons for the suspension.

The board voted during an emergency meeting Thursday to suspend Green Cross’s license.

The company will have to submit a plan of correction to the board and “take all necessary corrective actions” within 10 business days of the suspension in order to restore the permits, according to the release.

Colorado recreational marijuana prices may rise if voters OK tax hike

A ballot question is going before Colorado voters in November that, if successful, would raise the state taxes on recreational marijuana products and potentially create a new barrier for adult-use sales.

The measure, Initiative 25 – also called the Learning Enrichment and Academic Progress Program Initiative (LEAP) – was approved for the Nov. 2 election by the secretary of state this week, the Colorado Sun reported.

If voters approve the measure to help fund education, a new 3% sales tax would go into effect Jan. 1, 2022, which would increase to 5% by January 2024.

The state already has a 15% excise tax and a 15% sales tax for adult-use marijuana products.

The tax change would have no effect on medical marijuana prices, however. MMJ products are subject to a 2.9% sales tax but not the 15% excise tax or the 15% sales tax levied on rec cannabis.

Alabama medical cannabis program might roll out slower than expected

The launch of Alabama’s medical cannabis program could be delayed until 2023.

The state’s Medical Cannabis Commission met for the first time this week, and the chair of the board said the program rollout could take longer than expected, reported.

A representative from the Alabama agriculture department said he didn’t expect licenses for medical marijuana cultivation to be issued before Sept. 1, 2022.

That would mean licensed cannabis wouldn’t be ready for sale until the next year.

Medical marijuana in Alabama is to be grown in greenhouses, which usually takes 3-4 months.

MJBizDaily projects that Alabama’s medical marijuana program could generate $80 million-$90 million in sales in its first year once it gets going and $450 million-$545 million in annual sales by its fourth year.

MA marijuana firm to pay $300,000 for inadequately compensating workers

A marijuana operator with three stores in Massachusetts agreed to pay nearly $300,000 in restitution and penalties after the state determined 282 employees were owed “premium pay” for work done on Sundays and holidays.

The Massachusetts attorney general’s office, which conducted the investigation, also issued a citation to Massachusetts-based Theory Wellness CEO Brandon Pollock and the company’s chief financial officer, Nicholas Friedman, for violating the state’s wage and hour laws.

The case shows the importance that marijuana operators know and abide by the nuances of a state’s hourly wage provisions.

Massachusetts labor law requires employees in certain retail businesses to be paid “premium pay” for working on Sundays and certain holidays.

In 2021, that rate was set at 1.2 times the regular hourly rate, according to a news release issued by the state AG’s office.

Theory Wellness, in a statement to Chicopee TV station WWLP, said it cooperated with the attorney general’s office and described the failure to pay premium rates as “inadvertent payroll errors.”

In a statement, the company implied those errors partly stemmed from the difficulty in hiring a traditional payroll service provider because marijuana is illegal federally.

“The complexities of a cannabis company are vast with a litany of traditional business-related resources, such as mainstream payroll providers that handle setting up pay rates, unwilling to provide services due to our classification federally,” Theory Wellness said in a statement provided to WWLP.

“This audit has been an opportunity to correct our policies and reaffirm our commitment to our team members, who make Theory what it is today.”

The state said the AG’s Fair Labor Division began an investigation in December 2020 after a worker filed a complaint about not getting premium pay.

Cannabis e-commerce platform I Heart Jane nets $100 million of capital

Jane Technologies, a leading cannabis e-commerce platform, said it raised $100 million of equity to expand its footprint, strengthen existing software and introduce new technologies.

The California-based company, which does business as I Heart Jane, said in a news release that the funding was led by Honor Ventures, with participation from Third Point Ventures, Gotham Green Partners, L2 Ventures, Delta Emerald Ventures and Artemis Growth Partners.

Jane previously raised $30 million of capital, bringing the total amount of funding to roughly $130 million, according to the release.

More than 2,100 dispensaries in 36 state legal markets participate in Jane’s platform, which enables consumers to browse constantly updated store menus and customer product reviews and to place orders to be picked up.

Jane also expanded outside the U.S. for the first time with its July launch in Canada via cannabis retailer High Tide.

Colorado AG warns of marijuana market ‘disruption’ if US reform isn’t done right

In a wide-ranging letter to members of Congress, Colorado Attorney General Phil Weiser warned there could be “potential resulting disruption” to the existing state-legal marijuana markets if federal legalization isn’t structured carefully.

In particular, Weiser singled out the suggested 25% national marijuana tax rate included in Senate Majority Leader Chuck Schumer’s recently introduced bill, the Cannabis Administration and Opportunity Act.

Weiser warned that such a high tax rate could cost states valuable tax revenue of their own and force them to chop budgets on social equity programs or for other programs that rely on marijuana taxes.

Weiser also cautioned Congress that a new national marijuana market should be “rolled out in stages” in order to protect small businesses, particularly from being overrun by Big Tobacco.

“If a national market is not rolled-out carefully and in stages, large companies, particularly existing tobacco-focused companies, will be able to move into new markets immediately, displacing and pushing out smaller players,” Weiser wrote.

“Many cannabis companies are small and/or minority-owned; without phased implementation, we are concerned these businesses will be pushed out of the market thus diminishing the social equity principles behind any federal market rollout.”

FBI investigating Nevada cannabis business licensing process, report says

Federal agents have been scrutinizing the Nevada cannabis licensing process to determine if any corruption was involved in the awarding of business permits.

According to the Las Vegas Review-Journal, FBI agents have been speaking with Nevada marijuana industry executives for at least a year.

The investigation is focused on potential “pay-to-play” situations that might have arisen since the state legalized recreational cannabis in 2016, the newspaper reported.

One former state lawmaker, Chad Christensen, who co-owns Pisos dispensary in Las Vegas, told the Review-Journal he spoke with FBI agents for roughly 45 minutes last December about his suspicions of corruption during the licensing process.

The newspaper cited two other anonymous industry sources who reported similar conversations with FBI agents, who asked “whether bribes or campaign contributions were used to influence the distribution of cannabis licenses.”

In addition, the Nevada attorney general’s office was notified in February 2020 of a joint investigation being run by the state Department of Public Safety and federal authorities.

The federal probe could be fueled by an ongoing legal battle over 64 marijuana business licenses that were awarded in 2018 to 17 businesses from a pool of 127 applicants, the Review-Journal reported.

In 2019, Nevada Gov. Steve Sisolak appointed a task force to “root out corruption or criminal influences” in the state’s marijuana industry.