Cannabis Industry Daily News

MI marijuana rules changes include new licenses, lower fees, social equity

The Michigan Marijuana Regulatory Agency released a set of proposed rules for cannabis business, including two new license types and reduced fees.

The two new licenses include an educational research permit and a newly expanded microbusiness license, reported.

The agency is also proposing the following reduction in fees:

  • From $6,000 to $3,000 for marijuana business license applications.
  • From $40,000 to $24,000 for Class C cultivation permits and processor licenses.
  • From $21,000 to $15,000 for retail, testing lab and transporter permits.

The agency also announced a new social equity plan – the Joint Ventures Pathway Program – designed to partner qualified applicants with licensed recreational marijuana companies, the Detroit Metro Times reported.

More information about that program is available here.

Amazon Web Services outage disrupts Treez cannabis clients in AZ, CA

Cannabis software provider Treez confirmed its retail point-of-sale software suffered a “partial service degradation,” affecting dozens of marijuana retail outlets in the Western United States.

Oakland, California-based Treez attributed the issue on Tuesday to a network outage at major cloud computing platform Amazon Web Services (AWS), according to an email sent to clients and shared with MJBizDaily.

Reports about performance issues started coming in at about 11:05 a.m. PT, and service was restored by 1:45 p.m. PT, according to details posted on the Treez website.

Web service outage tracker received hundreds of AWS outage reports on Tuesday.

In an interview with MJBizDaily, Treez CEO John Yang said the SellTreez software outage impacted roughly 100 cannabis retailers in Arizona and California.

Yang said the software has 99.9% uptime.

“Certainly we don’t want to have any outages whatsoever and further invest into redundancies when outages occur,” he said.

“The recovery time was prolonged, this time, due to (AWS) being down and affecting a number of other services, so that recovery and workarounds took a little longer.

“Therefore, we need to improve there, and we will improve there, and we will harden our services.”

Treez software powers roughly 40% of the California cannabis retail market in terms of gross merchandise value, according to Yang, as well as about 30% of the Arizona market and 20% of the Michigan market.

The privately held company raised $13 million in a 2020 investment round with Intrinsic Capital Partners.

In August, Treez announced it had been placed on the Inc. 5000 list of the fastest-growing private firms in the U.S.

– Solomon Israel

Would-be marijuana growers flood New Mexico with nearly 900 applications

Applications to grow recreational marijuana in New Mexico have only been open for a week, and the state already has received nearly 900 submissions.

The New Mexico Licensing and Regulation Department has received 897 initial applications, Albuquerque TV station KOAT reported.

The superintendent of the department, Linda Trujillo, told KOAT the agency plans to approve as many applications as it can.

However, applicants still must meet certain criteria, including access to water rights or a water municipality.

Most industrial areas will allow cannabis production zoning unless the business is less than 300 feet from a day care or a school.

Applicants will likely know the status of their permit within four or five days after filing their paperwork, Trujillo said.

Once permits are approved cultivators can start growing up to 8,000 plants, depending on license type.

The deluge of applicants comes after medical marijuana operators in the state expressed concern there could be a cannabis shortage when New Mexico’s adult-use market launches, likely in April 2022.

Missouri medical cannabis operator snags $23 million loan for expansion

Missouri medical cannabis operator BeLeaf Medical raised $23 million to expand its cultivation facilities in the state.

Florida-based AFC Gamma is providing the loan.

The funds are being used to purchase a cultivation facility in Jonesburg and then expand that operation and two others, according to a news release.

The loan will be secured by the Jonesburg operation.

BeLeaf has nearly completed construction of 25,000 square feet of canopy at its locations and plans to add 16,000 square feet.

AFC Gamma CEO Leonard Tannenbaum noted in a news release that BeLeaf is one of the early entrants in Missouri’s MMJ market and “is well-positioned to utilize its first-mover status to take advantage of the many opportunities in the state.”

Missouri medical marijuana sales in July exceeded $20 million a month for the first timey.

Cumulative sales since the market launched last October totaled $91.4 million through July, according to state data.

Massachusetts high court sides with marijuana business owner in dispute

A Massachusetts marijuana dispensary owner won a potentially landmark case when the state’s Supreme Judicial Court ruled that she can operate as a for-profit business – despite local restrictions designed to keep her shop as a not-for-profit.

According to Court House News Service, Ellen Rosenfeld started her CommCan medical marijuana dispensary before the state legalized recreational cannabis sales and changed the business structure in 2018 from a not-for-profit to a for-profit entity.

A neighboring business promptly sued Rosenfeld, citing a local ordinance that required all marijuana businesses to be not-for-profits.

Massachusetts’ high court ruled unanimously that state law – which allows for-profit marijuana business models – trumps the bylaws of the town of Mansfield, where Rosenfeld’s dispensary is located.

The Supreme Judicial Court ruling also sided with Rosenfeld in a lawsuit Mansfield filed against her.

The town’s suit sought to prevent her from running a for-profit marijuana store by arguing that she wasn’t actually “engaged” in cannabis sales when the lawsuits were filed in 2018 because her shop wasn’t operational at that point.

However, the high court rejected that argument and ruled in favor of Rosenfeld.

The case could prove to be a milestone, at least in Massachusetts, when it comes to questions of how far a municipality or county can layer regulations on top of state-level marijuana rules.

Cannabis business Lowell Farms raises $18 million in equity private placement

Vertically integrated California cannabis company Lowell Farms announced the completion of a nonbrokered equity private placement worth $18 million.

“Proceeds from the offering are contemplated to be used for working capital purposes, automation investments, and expansion into new markets,” Salinas-based Lowell Farms said in a Tuesday news release.

The offering includes 18 million units of Lowell Farms for $1 each.

Each unit comprises one subordinate voting share and one-half of a share purchase warrant.

Each warrant can be exercised to acquire one share for $1.40 until Aug. 30, 2024, “subject to adjustment in certain circumstances.”

Company insiders purchased 2.9 million units in the offering.

“This financing allows the Lowell Smokes brand, one of the strongest cannabis brands in the country, to expand geographically and increase scale in its home state of California,” Lowell Farms Chair George Allen said in a statement.

Lowell Farms, formerly known as Lowell Herb Co., was acquired by Indus Holdings in February in a deal worth $39 million.

Shares of Lowell Farms trade as LOWL on the Canadian Securities Exchange and as LOWLF on over-the-counter markets.

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.