Cannabis Industry Daily News

Minnesota adds two medical cannabis qualifying conditions

Minnesota regulators are adding two conditions that qualify patients to receive recommendations for medical cannabis.

That brings the total to 17 conditions, which could help boost the bottom line for marijuana businesses in the state.

The Minnesota health department announced that chronic vocal or motor tic disorder and sickle cell disease will be added to the list of qualifying conditions, effective August 2021, according to Minneapolis-based news site Bring Me The News.

The conditions list already included Tourette syndrome, but people suffering from that condition experience both motor and vocal tics. The addition of chronic vocal or motor tics allows people with either disorder to receive a recommendation for medical cannabis.

A petition was denied to add anxiety as a qualifying condition in one of the more restrictive markets in the U.S.

Patients who suffer from either of the two newly added conditions can enroll for Minnesota’s medical marijuana program starting in July and receive a recommendation for MMJ a month later.

Marijuana MSO Jushi lists $76M in secured notes on Canadian exchange

Learn more about the state of the marijuana industry at MJBizCon 2020.

Multistate marijuana operator Jushi Holdings listed $76,352,000 worth of secured debentures for trade on the Canadian Securities Exchange.

The publicly traded notes were issued to some holders of that debt who swapped private notes for public notes, according to a news release issued Tuesday.

Senior secured notes worth $6,975,000 remain privately held.

The secured debt bears 10% interest per year, payable quarterly up to the maturity date of Jan. 15, 2023.

“With the capital that we have raised to date, we have strategically expanded into high-quality, high-growth markets and are well positioned to accelerate our momentum as we head into 2021,” Jushi CEO Jim Cacioppo said in the news release.

The Florida-based MSO recently announced a major expansion in Pennsylvania.

Jushi’s notes trade on the Canadian Securities Exchange under the ticker symbol JUSH.db.

The company’s shares trade on the CSE as JUSH.

Michigan adult-use cannabis sales exceed $400 million in first year

Learn more about the state of the marijuana industry at MJBizCon 2020.

Adult-use cannabis sales in Michigan totaled nearly $440 million in the first full year of the program and already are on pace to nearly double in the second year.

Sales have increased every month since the program launched on Dec. 1, 2019, Crain’s Detroit Business reported.

The figures were in line with estimates.

Marijuana Business Factbook projected in July that first-year sales would total $400 million-$475 million.

Demand in Michigan initially far outstripped supply, but cultivation capacity has increased dramatically since the launch of the program.

Only a small percentage of the state’s 1,764 communities have opted to allow recreational marijuana businesses, so the market has high growth potential.

Detroit, the most populated city in Michigan, only last week approved an ordinance to allow 75 recreational marijuana stores.

Medical marijuana caregivers have been phased out of the state’s retail supply chain, meaning licensed growers will supply all the marijuana to the recreational market.

Caregivers will still be allowed to grow for registered MMJ patients but won’t be allowed to sell excess inventory to retail stores anymore.

Marijuana Business Factbook projects that recreational marijuana sales in Michigan will total $1.9 billion to $2.4 billion by 2024.

Pennsylvania medical marijuana research venture gets OK from state

Pennsylvania regulators gave the green light to a company that intends to delve into medical marijuana research, potentially opening the door for much more industry product development.

Organic Remedies has been cleared by the state health department to start growing, producing and experimenting with medical marijuana at its facility in Carlisle, Pennsylvania, according to Harrisburg TV station WHTM.

Organic Remedies received a research grant agreement – partnering the company with the Philadelphia College of Osteopathic Medicine – to study MMJ’s effects on:

  • Chronic pain and opioid-use disorder.
  • General quality of life impacts.
  • Usage trends over time for patients.

The Enola-based company’s first harvest is underway, and the company anticipates a new product line before the end of the year.

In addition, Organic Remedies will be opening three new dispensaries around Pennsylvania, including one near its research headquarters in south-central Pennsylvania, on top of three existing dispensaries it already runs.

The company recently secured $22 million in funding for its vertically integrated research and business model from Florida-based Advanced Flower Capital in order to build out its cultivation facility and its three upcoming dispensaries.

Arkansas reaches $187 million in medical cannabis sales

Arkansas’ slow-starting medical marijuana market is growing, with more than 80% of the state’s dispensaries now open and sales reaching a cumulative total of $187 million since the program launched in May 2019.

That $187 million figure represents more than 28,674 pounds of cannabis sold since the program debuted, according to recent figures from the Arkansas Medical Marijuana Commission.

“We anticipate sales will reach 30,000 pounds by late December,” commission spokesman Scott Hardin wrote in a medical marijuana sales report shared with Marijuana Business Daily.

Arkansas’ yearslong path to a legal medical marijuana market has been fraught with delays.

The state’s top seller of medical marijuana to date, Green Springs Medical in Hot Springs, recently said product shortages are making it hard to meet patient demand and called for increased cultivation capacity.

According to the commission’s recent report, Arkansas currently has 31 operational medical marijuana dispensaries with another six “working toward opening,” including two in Pine Bluff and one each in Little Rock, Fayetteville, Osceola and Hardy.

Average daily medical marijuana sales in Arkansas are roughly $600,000, Hardin told MJBizDaily in September.

Nov. 20, 2020, was the market’s busiest day to date with sales of $850,000, the Arkansas Democrat-Gazette reported.

As of that date, Arkansas’ health department reported 60,013 active medical marijuana ID cards in the state.

VA recreational marijuana market would need 5 years to mature, report says

It would take up to five years for a recreational marijuana program to become fully established in Virginia if legalization efforts there proceed, a working group set up by state legislators predicts.

The group’s report follows comments earlier this month by Gov. Ralph Northam that he would push for an adult-use cannabis program during the 2021 legislative session.

According to the Richmond Times-Dispatch, the working group estimates the industry could generate $698 million to $1.2 billion in economic activity.

The panel – made up of four members of Northam’s cabinet and other senior government officials – is prioritizing the creation of a state agency to regulate a new cannabis market as well as collecting data on current marijuana use in the state.

The group also includes representatives from public health and law enforcement, according to the Times-Dispatch, but no civil rights advocates.

The group’s report recommends creating several licensing tiers, taking into account social equity concerns for locating facilities and dispensaries.

This all follows a Nov. 16 report from the General Assembly that found legalizing recreational cannabis could provide financial benefits to the state while helping end the impact of marijuana prohibition on people of color.

New Jersey court tosses medical cannabis licensing issue back to state

Learn more about state programs at MJBizCon 2020.

A court ruling in New Jersey could prompt regulators to resolve some of the lingering litigation over medical cannabis licensing in advance of the launch of a recreational marijuana program in the state.

A New Jersey appellate panel last week instructed the state Department of Health to reconsider the applications of companies rejected during the 2018 licensing round, according to Law360.com.

The ruling pertains only to appeals involving the state’s 2018 licensing round.

New Jersey also faces litigation over a 2019 licensing round to expand the state’s MMJ program. The lawsuit led to a freeze over additional licensing.

Licensing litigation could make it more difficult for the state to transition into an adult-use market legalized by voters in early November.

The standstill over additional medical marijuana licensing alone has led to concerns that existing operators won’t be able to meet pent-up demand when an adult-use market launches as soon as 2021.

New Jersey thus far has issued only 12 vertical MMJ licenses, and only 13 dispensaries are in operation.

The appellate panel called the scoring process during the 2018 licensing round flawed and sent the issue back to the state.

The panel added that it wouldn’t be satisfactory for the state to resolve the issue by awarding licenses to all the businesses that had appealed.

“We will not dictate to the department what it is that it should do following today’s remand, other than to hold that it must engage in some sort of additional process for receiving and considering the appellants’ contentions and must explain its determinations on those contentions,” the panel said, according to Law360.com.

Eight applicants alleged the scoring process was arbitrary.

Dawn Thomas, spokesperson for the state health department, told Law360.com that the agency is reviewing the ruling.

Georgia taking applications to produce ‘low-THC’ marijuana oil

Georgia regulators are taking applications to process and manufacture medical marijuana oil for the state’s limited program.

According to the Atlanta Journal-Constitution, the Access to Medical Cannabis Commission on Nov. 23 began the licensing process for businesses seeking to manufacture the “low-THC” MMJ oil that Georgia is making available to its 14,000 registered patients.

The two types of licenses – Class 1 and Class 2 – are awarded based on the size of the facility.

Manufacturers have until Dec. 28 to apply, and licenses are expected to be issued by March 2021.

Then, the next step in getting the program up and running is for the commission to create rules for licensing medical marijuana oil dispensaries

THC potency is capped at 5%, under Georgia law, and only six companies will receive permits to grow the limited medical marijuana – two Class 1 100,000-square-foot facilities and four Class 2 50,000-square foot facilities.

The program has taken a while to develop.

Georgia lawmakers approved the medical marijuana program in April 2019, and then regulators appointed Andrew Turnage as the program’s first executive director this past May.

Cannabis SPAC acquires Caliva and Left Coast Ventures, hires Jay-Z

New York-based Subversive Capital Acquisition Corp., a special purpose acquisition company (SPAC), said it has acquired two California cannabis companies and hired rapper and producer Shawn “Jay-Z” Carter to foster social equity in the industry.

The company is purchasing marijuana brand Caliva and cannabis investment firm and producer Left Coast Ventures.

The purchases will create a new parent company, TPCO Holding Corp., and include $36.5 million worth of equity commitments from new and existing shareholders, according to a news release.

Terms of the transaction, which is expected to close in January 2021, were not disclosed.

The merger of the two California companies creates a vertically integrated platform that includes cultivation, manufacturing, brands, retail and delivery – allowing TPCO to control its supply chain.

According to the news release, Caliva and Left Coast Ventures expect combined pro forma revenues of $185 million in 2020 and $334 million in 2021.

“California is the most powerful cannabis economy in the world, and we have a unique opportunity to consolidate the market,” Subversive Capital Acquisition Corp. (SCAC) Chair Michael Auerbach said in a statement.

The news release predicts TPCO will “have the greatest consumer reach of any cannabis company in California reaching 75% of consumers in the state by the end of 2021 and almost 90% by the end of 2022.”

SPACs are growing in popularity for private cannabis companies looking to raise money and become publicly traded. SCAC itself currently holds around $575 million in cash-in-trust.

Steve Allan, meanwhile, will serve as TPCO’s CEO.

Carter will serve as the holding company’s chief visionary officer, a role in which he will help guide brand strategy as well as lead the company with a goal of raising $10 million to invest in minority- and Black-owned cannabis companies, among other efforts.

TPCO will also contribute at least 2% of its net annual income to support social equity initiatives.

“The brands we build will pave a new path forward for a legacy rooted in equity, access, and justice. We’re creating something people can trust and we’re investing in our future, our people and our communities,” Carter said in the release.

Marijuana firm Vireo files prospectus to issue up to $200 million in securities

Minneapolis-based Vireo Health International said it has filed a preliminary prospectus in Canada to sell as much as 260 million Canadian dollars ($200 million) in securities if and when market opportunities permit.

Such a shelf offering doesn’t mean a company will sell the securities, but it gives a business the option when market conditions are ripe to do so.

Vireo’s prospectus is just preliminary and hasn’t yet become final for the purpose of actually selling the securities.

“Our balance sheet continues to strengthen, and we believe we have ample flexibility to continue executing our strategy pushing toward producing positive cash flow from operations,” Vireo CEO Kyle Kingsley said in a news release.

“This prospectus ensures that we are able to take advantage of a favorable equity market in the event that additional capital is deemed necessary in the future.”

The specific terms of any offering, and a description of how the proceeds will be used, will be set forth in a supplement filed with Canadian securities regulators.

Vireo said it filed the preliminary prospectus with securities regulators in every province of Canada with the exception of Quebec.

Vireo has operations in several key U.S. markets, including Arizona, New York and Pennsylvania.

The company generated $10.8 million in revenue for its second quarter ended June 30, up from $6.7 million in the same period of 2019. Vireo plans to release its third-quarter results on Nov. 25.

Vireo trades on the Canadian Securities Exchange under the ticker symbol VREO and on U.S. over-the-counter markets as VREOF.

California judge rules against cannabis billboard ads on interstate highways

Billboards for marijuana companies are commonplace in California, but that advertising option for cannabis businesses is about to shrink based on a district court judge’s ruling.

According to TV station KSBY, San Luis Obispo Superior Court Judge Ginger Garrett ruled on Nov. 20 that billboards on interstate highways are illegal under Proposition 64, the 2016 voter-approved ballot measure that legalized adult-use marijuana.

The ruling invalidates a 2019 regulation from the state’s Bureau of Cannabis Control (BCC) that permitted billboards advertising marijuana along highways that cross state borders, including both federal interstates and state highways.

The ruling will impact 35 highways, the San Luis Obispo TV station reported, including major thoroughfares such as Interstate 80, I-10, I-15 and I-5.

However, remaining billboard advertising options include highways that don’t cross state borders, so not all billboards advertising cannabis have been banned.

It’s unclear what the deadline will be to take down marijuana advertising on billboards along interstates, pursuant to the order, and the BCC did not indicate whether it would appeal the ruling.

Maine’s recreational marijuana sales reach $1.4 million in first month

Regulated recreational marijuana retailers in Maine sold $1.4 million worth of cannabis in the first month of adult-use legalization, which kicked off on Oct. 9.

The preliminary, unaudited sales data from Maine’s Office of Marijuana Policy (OMP) covers 31 days of sales through Nov. 8.

Roughly $260,000 of those sales were made on the four-day long weekend following the market’s debut, according to previously released figures from the state regulator.

The OMP’s online adult-use retail sales data dashboard shows 21,194 recreational marijuana transactions in the first month, including 16,294 transactions for the partial month of October and 4,900 transactions for the first eight days of November.

Maine collected $140,954 in sales tax during the first 31 days, according to the sales dashboard.

The data also shows that smokable marijuana products comprised 76% of sales in Maine’s first month, according to an OMP news release.

Concentrates accounted for 14% of sales, and cannabis-infused products comprised 10% of sales for the month.

As Maine’s recreational market launched, some licensed retailers told Marijuana Business Daily that supply was tight, wholesale prices were high and some cannabis-derivative products such as edibles were hard to source.

“While it is easy to focus solely on the numbers, it is important to note that the Office of Marijuana Policy’s primary objective is maintaining the high standard of public health and safety we have set for the adult-use program,” OMP Director Erik Gundersen noted in the news release.

Gundersen praised Maine’s recreational retailers for complying with COVID-19 public health protocols.

Maine is currently home to 11 adult-use marijuana retailers with active licenses, compared with eight active retail licenses when the market launched.