Cannabis Industry Daily News

Oklahoma now enforcing medical cannabis product testing

Oklahoma medical marijuana regulators are administering laboratory testing after a three-month grace period to ensure enough licensed labs are in place amid the coronavirus pandemic.

The mandatory testing requirements apply to all marijuana products sold by a grower or processor.

The Oklahoma Medical Marijuana Authority lists 21 licensed labs across the state for a market that the new Marijuana Business Factbook projects will reach $700 million-$860 million in sales this year.

Sales in 2019 were estimated at $345 million.

The enforcement of the testing requirement, explained in this video, comes after the state issued its first product recall in May and then extended that recall in late June.

A processor or grower is required to retain test results and related records for at least two years.

A medical marijuana dispensary customer may request to see the test records, or what is called a certificate of analysis, to ensure the quality and potency of the product being purchased matches the label.

2020 Marijuana Business Factbook studies sales trends, COVID-19 impact

COVID-19 changed the way many businesses operate – and the cannabis industry is no exception, according to data available exclusively in the latest Marijuana Business Factbook.

The 2020 edition, available now, takes a deeper look at how the pandemic impacted the industry, including shifts in consumer behavior and preferences.

Understanding how and what customers want to buy is critical for building consumer loyalty – and, with it, long-term business success – particularly in a time of rapid change.

The eighth annual Factbook also includes:

  • Analysis of business opportunities and multiyear forecasts for every U.S. state with a legal recreational and/or medical market.
  • Financial and operational metrics for different segments of the marijuana industry, including cultivators, product manufacturers, retail and investing.
  • A new purchasing option that allows you to key in solely on the segments that directly impact your business.

For more information about the latest Marijuana Business Factbook or to download a copy, click here.

Nebraska medical cannabis legalization well on its way to voters in November

Nebraska medical marijuana advocates gathered more than 182,000 signatures for an initiative petition campaign, despite challenges stemming from the coronavirus pandemic.

Organizers needed only 122,000 signatures to place medical marijuana legalization on the November ballot, more than 10% of the eligible voters in the state, according to the Lincoln Journal Star.

Signature-collection efforts were put on hold during the COVID-19 outbreak, but organizers were able to gather 123,000 signatures in June. Signatures came from all 93 counties in the state.

If the necessary number of signatures are validated by the Secretary of State’s office, voters then will decide on whether to allow Nebraskans to use, possess, access and produce cannabis for serious medical conditions. A recommendation from a doctor or nurse practitioner would be required.

Once voters have their say, the initiative will pass easily, according to a spokesperson for Nebraskans for Sensible Marijuana Laws, which spearheaded the petition drive.

New regulatory agency takes reins of Nevada’s marijuana industry

Nevada’s Cannabis Compliance Board is getting up and running this month in a transition of oversight power from the original industry regulator, the state Department of Taxation.

According to KUNR Public Radio, the new board will be in charge of company site inspections, overseeing marijuana lab testing and more.

The transition began last year at the behest of Gov. Steve Sisolak after allegations of licensing favoritism in the state.

Tyler Klimas, the executive director of the new Cannabis Compliance Board, told KUNR that there’s been a six-month run-up to the transition that’s involved a lot of “reorganization” and staffing hires.

He also told the Reno radio station that:

  • The Nevada cannabis industry has taken a “big beating” because of the coronavirus outbreak.
  • The board is dedicated to helping the industry “get back to normal.”
  • All future licensing will be “very public, very transparent.”

Schwazze walks away from two Colorado cannabis deals

Denver-based Schwazze, formerly Medicine Man Technologies, said it has terminated acquisitions of two Colorado marijuana businesses – cultivator Los Sueños Farms and concentrates company Dabble Extracts.

Schwazze, a vertically integrated operator, said in an investor news release it moved quickly on the deals and, thus, did limited due diligence after Colorado enacted a law last year that opened up the state’s cannabis industry to outside money.

“However throughout the company’s rigorous M&A process, key business and valuation issues were identified, and as such, the company decided to no longer pursue the acquisitions of Dabble and Los Sueños Farms,” Schwazze said in its statement.

The company didn’t elaborate on what those business issues were or how different the valuations were from what the company had initially anticipated. The terms of those deals were not been revealed.

Those aren’t the first Schwazze deals to collapse.

Colorado-based Strawberry Fields and Colorado Harvest Co. both terminated deals to sell retail outlets to Schwazze.

Schwazze agreed to pay $31 million for Strawberry Fields and $12.5 million for Colorado Harvest.

However, Schwazze said it remains in negotiations for other previously announced acquisitions and recently announced it had signed definitive acquisition agreements to purchase 14 Star Buds retail locations in Colorado for $118 million in cash and stock.

Schwazze CEO Justin Dye said in the statement that the company is confident in its ability to grow organically and through future M&A opportunities.

The company, which trades on the over-the-counter markets as SHWZ, changed its name to Schwazze in April to reflect a marijuana pruning technique it developed.

San Francisco, Oakland advise marijuana firms about possible attacks

San Francisco and Oakland cannabis companies were warned this week that expected July Fourth weekend protests could lead to more burglaries, akin to how some criminals targeted marijuana businesses during Black Lives Matter marches in May.

In a warning bulletin, the San Francisco Office of Cannabis wrote that “several protests” scheduled for the holiday weekend could create a “strain on police resources,” and the agency advised companies to “take necessary precautions.”

And in Oakland, city staff emailed all licensed marijuana businesses to “make sure everyone is aware that there could be an increased risk this weekend,” Oakland Police Capt. Randell Wingate said.

“I have heard … that there’s talk of hitting some of the (cannabis business) locations again” by organized criminals, Wingate said.

He added that there hasn’t been specific intelligence that more robberies will occur but that there’s an “increased risk this weekend” that the city wanted to spread awareness throughout its legal cannabis industry.

The San Francisco bulletin noted that marijuana businesses are allowed to move inventory to different locations “to prevent theft during a disaster” and also included multiple police contacts, phone numbers and names of officers in case of emergency.

It also advised that businesses:

  • Board up or reinforce points of entry and doors to prevent break-ins.
  • Confer with security providers to enhance deterrence measures.
  • Make sure video surveillance is working properly.
  • Avoid confrontations with intruders and call 911 if necessary.

A spokesperson for the San Francisco Police Department wrote in an email to Marijuana Business Daily that, “at this time, we cannot confirm credible threats that speak to the targeting of cannabis dispensaries.

“We are proactively attaining and updating the emergency contact information for all businesses with storefronts that may be damaged and victimized during looting or violent protests.”

Oakland’s Wingate said the email warning to its cannabis companies was very general and noted that he and other city staff are working to improve lines of communication between the industry and law enforcement.

For the weekend, the Oakland Police Department “has increased our staffing and resources throughout the city to ensure safety, deter crime and take enforcement actions,” Oakland Police Public Information Officer Johnna Watson wrote in an email to MJBizDaily.

“There are multiple events planned in the city over the holiday weekend,” Watson wrote, ‘and we will be patrolling all areas, residential and commercial, as our efforts continue to ensure a safe weekend for all.”

Adult-use cannabis legalization in AZ appears headed for November ballot

Based on signatures submitted to the state this week, an industry-backed initiative to legalize a commercial recreational marijuana market in Arizona appears likely to get on the November ballot.

The group, Smart and Safe Arizona, submitted 420,000 signatures with the Arizona Secretary of State, according to alt-weekly Phoenix New Times.

The signatures still must be verified, but the group has a large cushion: 237,645 valid signatures are required to make the ballot.

There is concern that the initiative, which limits the number of licenses per county, would give priority to existing medical cannabis operators and favor multistate operators.

But Smart and Safe did add 26 social equity licenses to the initiative language.

The initiative calls for a 16% retail sales tax on marijuana products.

Voters rejected an adult-use legalization measure in 2016 by a slim margin, but proponents have said they believe support has increased sufficiently since then for the measure to pass.

A poll published last December found that 51% of likely voters approved legalization, and 42% opposed.

Some stiff opposition remains, especially from the Arizona Chamber of Commerce and Industry.

In a June 25 news release, Chamber President Glenn Hamer declared that “more harm than good” would result from legalization.

He claimed that legalization would hurt the state’s workforce-development efforts by increasing workplace accidents and lowering productivity.

Employees at Massachusetts marijuana firm vote to unionize

Employees at New England Treatment Access, a cannabis company based in Massachusetts, voted to form a union under the United Food and Commercial Workers – becoming the latest marijuana industry workers to affiliate with the UFCW.

Sixty workers at NETA’s grow facility in Franklin cast the votes to unionize, the Boston Business Journal reported.

If the vote is certified by the Massachusetts Department of Labor Relations, the union will negotiate contracts on behalf of the employees.

NETA had 750 employees in 2019, according to the Business Journal. The UFCW represents 1.3 million people in multiple industries.

Other workers in the cannabis industry have unionized, including a recent vote at Cresco Labs in the Chicago area.

Cannabis firms should use data, backups to strengthen supply chain

Cannabis companies that rely on the international supply chain need to keep a watchful eye on their suppliers and avoid spreading their businesses too thin, industry experts said Wednesday on the third, and final, day of Marijuana Business Daily‘s virtual conference, MJBizConNEXT Direct.

The marijuana industry has seen a disruption to the global supply chain from the coronavirus pandemic, but some companies that rely on products from overseas have fared better than others.

“People in the cannabis industry run their supply chain too lean,” said Beau Whitney, chief economist and director of Oregon-based Whitney Economics.

It only takes running out of one part to shut down your entire revenue stream, he added. Often, producers or suppliers will run out of inventory, then try to make up for it by rushing an order.

“If you’re expediting everything, you’re expediting nothing,” Whitney said.

Those comments came during a panel discussion titled, “Critical Planning: Building the Resilience of Your Supply Chain.”

Arnaud Dumas de Rauly, co-founder and CEO of New York-based vape manufacturer The Blinc Group, agreed, saying scrambling to order “is the worst possible scenario.”

He explained that shipping freight by sea is 5% of the cost of the product and air freight is 10-11%, which is a “huge difference and can have a huge impact financially.”

Cannabis companies need to use data to pinpoint and problem-solve delays throughout the supply chain, De Rauly said.

“Even data as basic as time of departure and time of arrival” – if you have that for six months – can help a business evaluate its product timetables, he added.

Whitney recommended marijuana businesses have at least a one-month buffer for some products and agreed that knowing lead times for shipments is very important.

“Understanding your suppliers and the risks associated with them is really critical,” Whitney added.

If you can drive costs out of your billed materials and streamline your supply, he said, “that’ll be the difference between success and failure.”

– Bart Schaneman

MJBizDaily offers new way for marijuana firms to spread their word

Marijuana businesses now can announce new product releases, staff changes and other company news through a new, paid news release section on MJBizDaily.com.

“Our reporters cover industry news, but businesses should have a way to control their own ability to get product and company news to our audiences,” said Pamela Moore, vice president of publishing at Marijuana Business Daily.

“Readers also benefit; this will be a useful, centralized way to hear about innovations in the cannabis space.”

News releases will be featured under Company News Releases on both the MJBizDaily.com homepage and a special page that’s included in the website’s navigation bar.

“The product goes well in combination with exhibiting at our events,” said Mary Pemberton, MJBizDaily‘s vice president of sales.

“Companies can announce new products in a news release and let buyers know they can learn more at the show. It’s also a nice, lower-priced option in these uncertain times.”

Marijuana Business Daily also will consider news releases from not-for-profits working in the B2B cannabis sector for free publication, based on the discretion of the editorial staff, as a way to support the industry more fully.

To announce your company news on MJBizDaily.com, contact the Marijuana Business Daily sales team at [email protected] or 720-213-5992, ext 2.

For questions about not-for-profit announcements, contact Moore at [email protected].

Arkansas adds two medical cannabis growers to fast-growing market

Arkansas medical cannabis regulators voted to issue two additional cultivation licenses in response to some supply concerns in the rapidly growing market.

With the addition of New Day Cultivation and River Valley Relief, the state now has awarded the maximum eight cultivation licenses allowed under a 2016 ballot initiative that legalized MMJ in Arkansas.

But only three growers currently are in operation.

The Arkansas Medical Marijuana Commission had faced a July 10 deadline to decide whether to issue the full number allowed, according to the Arkansas Democrat-Gazette.

The commission also awarded four additional dispensary licenses.

As of June 30, Arkansas’ nearly 64,000 qualified MMJ patients had spent a total of $520,000 a day, or a little more than $8 per person, the newspaper reported, citing state records.

The new edition of the Marijuana Business Factbook, released this week, projects that Arkansas MMJ sales, after a slow start last year, will reach $175 million-$215 million in 2020. Arkansas registered $30 million in medical marijuana sales in 2019.

Cresco closes $29M sale-leaseback deal on MA marijuana facility

Cresco Labs, a multistate cannabis operator headquartered in Chicago, has entered into its fifth sale-leaseback deal with San Diego-based Innovative Industrial Properties (IIP), this time for a vertically integrated marijuana facility in Massachusetts.

According to a news release, the deal is worth $29 million and includes $21 million for tenant improvements.

“IIP has proven to be a reliable partner, and we are thrilled to work with them for a fifth lease. This transaction, along with our expanded real estate partnership with IIP, is allowing us to continue building out Cresco’s presence” in Massachusetts, Michigan and Ohio, Cresco CEO Charlie Bachtell said in the release.

The sale-leaseback agreement follows similar deals struck between Cresco and IIP in Illinois, Michigan and Ohio, including at least two such deals in June worth $17 million.

In all, Cresco has made at least $92 million from sale-leaseback deals to date.

Much of that money has been reinvested in company operations, according to the release, and though IIP will now own the Massachusetts facility, Cresco will continue to oversee operations.

IIP, a real estate investment trust (REIT), has been on a marijuana real estate buying spree for years and has closed similar deals with many cannabis multistate operators, including Green Thumb Industries and Vireo Health.

Cresco trades on the Canadian Securities Exchange under the ticker symbol CL and on the U.S. over-the-counter markets as CRLBF.

IIP trades on the New York Stock Exchange as IIPR.