Cannabis Industry Daily News

Founder Andy Williams exits cannabis firm Medicine Man Technologies

Marijuana pioneer Andy Williams announced on Friday he is leaving Denver-based Medicine Man Technologies, the vertically-integrated MJ company he founded in 2014.

Williams, who was president and vice chairman, is leaving Medicine Man to focus on cannabis medical and genetic research, the company said in a release.

He also will pursue new opportunities in the cannabis industry.

His departure comes after Dye Capital, a private equity firm based in Boca Raton, Florida, provided a significant cash injection into Medicine Man.

Justin Dye, managing general partner at Dye Capital, became Medicine Man’s CEO in December.

Williams, in a statement, said he is confident Medicine Man “will continue to deliver on its aggressive growth strategy and will become a global leader in the near future.”

Last year, Medicine Man went on a $300 million buying spree.

Dye said in a statement that Medicine Man is on schedule to close its pending acquisitions in the first half of this year.

Williams was named CEO of Medicine Man last April, after the abrupt death of Brett Roper, who had held the top position.

Union takes action against iAnthus marijuana subsidiary in MA

A labor union filed a complaint with Massachusetts regulators alleging that multistate cannabis operator iAnthus Capital Holdings violated state law.

In its filing to the state Department of Labor Relations, Local 1445 of the United Food and Commercial Workers Union said New York-based iAnthus issued written warnings to two pro-union employees at a cannabis cultivation and procession facility for minor alleged infractions that “do not normally lead to discipline,” The Boston Globe reported.

The warnings were issued by managers at an iAnthus subsidiary in Holliston, Massachusetts, Mayflower Medicinals.

Mayflower managers also advised some of the workers to stop participating in organizing activities that are legally protected, the union claimed in the filing.

An iAnthus spokeswoman told the newspaper that Mayflower employees “will have the opportunity to decide whether they want union representation.”

She also said employees have the “right to collectively bargain.”

Efforts to unionize cannabis operations have been growing across the U.S., with some marijuana companies embracing them and others opposing them.

Southern California cannabis growers sued over odors

Multiple marijuana growers in Southern California have been sued by residents of a city in south Santa Barbara County that charge smells from greenhouses led to health issue.

The growers need to seal their greenhouses and use “carbon-based filtration methods,” according to the lawsuit filed by residents of Carpinteria, a small seaside community.

The plaintiffs allege in the suit that vapor-phase systems used by the greenhouses to deal with odors caused eye irritations and makes allergies and asthma worse, KEYT-TV reported.

One of the plaintiffs said the marijuana smell scares away prospective buyers for his house, which has been on the market over the past two years.

The residents are not seeking money from the growers.

Rather, they would probably dismiss or settle the action if the growers replace their filtration system and the mitigated the odors, according to the complaint.

The growers did not have an immediate response to KEYT-TV, as they had not yet seen the suit as of Thursday night.

Odors from marijuana cultivation facilities have been a growing problem nationwide, leading to a number of municipalities and MJ businesses to take actions to address the problem.

Associated Press

Florida legislators seek partial THC cap in medical marijuana

Florida would cap the amount of THC in medical cannabis at 10% for patients younger than 21 under a state Senate bill amendment filed Friday, a move that could be disruptive to the state’s fast-growing MMJ industry.

The measure, however, isn’t as stringent as a proposal floated by Florida House lawmakers to cap all medical cannabis at 10%.

That proposal would require growers to destroy any flower and genetics higher in THC and remove the flower and concentrates from dispensary shelves.

Still, the Senate amendment, which has some exceptions, such as for the terminally ill, could require challenging and likely costly business adjustments.

Jeffrey Sharkey, president of the Medical Marijuana Business Association of Florida, called the amendment a “big problem” but added that “many members of the Senate will fight it.”

The bill is scheduled to be taken up by the Senate Rules Committee on Monday.

Sharkey wrote in an email Friday to Marijuana Business Daily that any THC cap “undermines the medical assessments and dosage recommendations made by physicians for their patients.”

– Jeff Smith

NY-based cannabis firm iAnthus takes group to court in Canada

Vertically integrated multistate marijuana operator iAnthus Capital Holdings is taking legal action against an international investor group that claimed the New York company has defaulted on a $25 million convertible debt deal.

The legal action, filed in a court in Ontario, Canada, centers around claims that iAnthus has not kept to the terms of a deal struck last year with Oasis Investments, an Austin, Texas-based group with headquarters in Hong Kong.

iAnthus strongly denies the Oasis allegations.

“We are disappointed with Oasis’ attempt to extract value at the expense of our shareholders and other stakeholders, and we will pursue any and all remedies available to us as a result of Oasis’ self-interested behavior,” iAnthus Chief Financial Officer Julius Kalcevich said in a statement.

The company, which operates marijuana stores in a number of states, including Florida, Arizona and New Mexico, trades on the Canadian Securities Exchange as IAN.

Its stock has fallen from a year high of 8.20 Canadian dollars ($6.10) to about CA$1.

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Vermont House advances recreational marijuana bill

The Vermont House of Representatives on Thursday took the next procedural step to legalize adult-use cannabis sales in the state.

A marijuana legalization bill that the House passed in a 90-54 vote a day earlier, was approved Thursday by the chamber in a voice vote on the third reading.

The bill now goes back to the Senate, which passed its own version on a 23-5 vote about a year ago.

The Senate likely will call a conference committee to resolve differences with the House version.

The final bill then would go to Republican Gov. Phil Scott for his signature.

Whether the governor would sign the bill is an open question.

Multistate cannabis operator MedMen reports $96 million loss

California-based MedMen Enterprises, a once-thriving multistate marijuana retailer, released a “grim” quarterly financial report that detailed a whopping $96.4 million net loss in its fiscal 2020 second quarter.

That loss was 49.3% greater than the $64.6 million loss the company reported during the same period in 2018. Its most recent quarter ended Dec. 28, 2019.

On a brighter note, the company, which has marijuana stores in five states, reported that its second-quarter revenues of $44.1 million rose 49.8% from $29.42 million a year earlier.

Still, Craig Behnke, an equity analyst at Marijuana Business Daily’s Investor Intelligence, described both the company’s quarterly results and its outlook as “grim.”

MedMen faces “an incredibly difficult task” because it needs “massive revenue growth” at a time it plans “deep structural spending cuts,” Behnke said.

Interim CEO Ryan Lissack said in a statement that MedMen plans to “continue to cut costs” while embarking on a “path to profitability.”

MedMen’s cost-cutting including a December announcement that it was laying off 20% of its corporate-level staff.

The company’s next chapter “will be defined by financial discipline and strategic growth,” Lissack said.

Lissack took the reins of MedMen on an interim basis after co-founder Adam Bierman resigned as CEO on Feb. 1. Bierman also gave up his voting control of the company.

The company trades on the Canadian Securities Exchange as MMEN and on the U.S. over-the-counter markets as MMNFF.

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Judge temporarily halts Arkansas medical marijuana licensing

An Arkansas judge has temporarily stopped the state from issuing more medical marijuana licenses in response to a lawsuit filed by a cannabis firm whose MMJ dispensary license application was rejected by regulators.

Pulaski County Circuit Judge Wendell Griffen granted a temporary restraining order sought by Medicanna.

The Pine Bluff-based company sued the Arkansas Medical Marijuana Commission and two other state agencies after it was bypassed for a license to sell medical marijuana.

Medicanna contended in the complaint that the state was wrong in awarding a license to another company that received a lower score on its application.

The judge could decide whether to grant a preliminary injunction against the state at a March 3 hearing.

– Associated Press

California cannabis delivery giant Eaze raises $35 million

Eaze, a big player in California’s marijuana delivery industry, said it raised $35 million in its bid to become a vertically integrated company and launch its own cannabis retail brands.

The raise, which comes after the San Francisco-based company laid off about 20% of its workforce last October, comes in two forms:

  • A $20 million Series D funding led by FoundersJT.
  • A $15 million bridge loan led by Eaze stakeholder Rose Capital and DCM.

The company also has the ability to raise another $20 million in Series D funding.

While Eaze will continue to deliver marijuana products from other companies, its new strategy will provide a “more sustainable and profitable” path as it expands its existing business, CEO Ro Choy said in a statement.

“Verticalization is Eaze’s second act,” he noted.

To get a foothold in the new business direction, Eaze said that, in January, it acquired DionyMed’s rights to California marijuana retailer Hometown Heart, which has outlets in Oakland and San Francisco.

Toronto-based DionyMed filed a lawsuit against Eaze last June, alleging the delivery service used wire and bank fraud to process credit card and debit card payments from customers buying marijuana though its online platform. Eaze denied the charges.

Eaze said that in the coming weeks it will launch its own line of brands in partnership with licensed marijuana retailers across California.

On its website, Eaze says it has more than 600,000 registered customers and has completed more than 5 million marijuana deliveries.

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Regulators want funding to speed up Massachusetts marijuana licensing

Massachusetts regulators are seeking additional money from the state in order to cut in half the time required to obtain a cannabis business license.

The Cannabis Control Commission’s goal in the next budget year is to cut the average time for an initial license review from 121 days to 60 days, the State House News Service reported.

To achieve that goal, the CCC needs an additional $2.8 million to hire up to 34 new full-time employees.

With the additional personnel, “we can increase the number of (marijuana) licenses and we can increase the amount of tax revenue that we generate, so I believe it is a good investment,” agency Chair Steve Hoffman said.

Massachusetts recreational marijuana sales reached almost $400 million in its first year after a Thanksgiving week launch in 2018.

Pennsylvania approves four firms to grow cannabis for research

Four more medical marijuana companies – including multistate operator Curaleaf – have been approved by Pennsylvania regulators to grow MMJ that state universities can use for research.

Curaleaf, which is based in Massachusetts but seeking a license to sell medical marijuana in Pennsylvania, is contracted to grow MMJ for the Perelman School of Medicine at the University of Pennsylvania, according to the Tribune-Review.

The state health department also approved three Pennsylvania-based companies for MMJ research collaborations:

  • Laurel Harvest Labs, partnering with Lewis Katz School of Medicine at Temple University.
  • CannTech, partnering with Lake Erie College of Osteopathic Medicine.
  • Organic Remedies, partnering with Philadelphia College of Osteopathic Medicine.

Those four alliances coupled with three partnerships approved last June bring Pennsylvania within one of its limit of eight entities that are permitted under state law to grow, process and supply marijuana to research institutions.

Only the University of Pittsburgh School of Medicine still is seeking to contract with a medical marijuana cultivator.

The results of such research partnerships could encourage more physicians to recommend medical marijuana and eventually lead to increased sales.

Medical marijuana sales in Pennsylvania topped $132 million in 2018, the MMJ program’s first year.

Tainted marijuana sold by 30 Nevada retailers

Nevada issued a health advisory for 20 different contaminated cannabis products that were sold at 30 retail marijuana stores across the state.

The retailers sold marijuana flower and pre-rolls that failed an independent laboratory’s microbial testing for mold, yeast and bacteria, the Reno Gazette Journal reported.

The marijuana, grown by six different cultivators, initially passed testing by Las Vegas-based lab Cannex.

Cannex was shut down in December by the Nevada Department of Taxation after the lab was found with two strains of marijuana containing three times the allowable limit of yeast and mold.