Cannabis Industry Daily News

Cannabis firms Tilt, Ayr pay nearly $300,000 each in MA settlements

Marijuana companies Tilt Holdings and a subsidiary of Ayr Wellness are paying $275,000 and $295,000, respectively, to the Massachusetts Cannabis Control Commission (CCC) to settle separate allegations of regulatory infractions.

Both settlements were approved June 17, legal news website Law360 reported.

The Tilt settlement involved allegations that the company’s former parent, Sea Hunter Therapeutics, used subsidiaries to control five medical marijuana treatment centers when it was allowed to control only three, between 2016 and 2018.

Phoenix-based Tilt admitted responsibility for the wrongdoing, according to Law360.

Tilt CEO Gary Santo said In a news release that the end of the investigation “marks the turning of a page for Tilt.”

“In light of the CCCs decisions, Tilt is now positioned to complete the licensing process and increase its retail footprint in Massachusetts with the opening of two additional dispensaries in Cambridge and Brockton following final inspection and approval by the Commission,” the release noted.

Toronto-based Ayr’s Massachusetts subsidiary, Sira Naturals, was alleged to have allowed an unlicensed delivery service called Stalk & Beans to deliver cannabis products for unaffiliated businesses under Sira’s license, according to Law360.

On top of the $295,000 fine, one of Sira Naturals’ Massachusetts licenses is subject to a one-year probationary period.

Ayr said in a  news release that Sira did not admit any regulatory violations in relation to the settlement and that it “appreciates the important clarifications that the settlement provides.”

Marijuana hydroponics firm buying nutrient business for $161 million

Marijuana hydroponics equipment and supplies company Hydrofarm Holdings Group struck a deal to acquire organic nutrient and grow media company Aurora Innovations for $161 million.

This marks Hydrofarm’s third acquisition this year.

The Fairless, Pennsylvania-based cannabis ancillary said in a news release it will bankroll the deal using a combination of cash and approximately $26 million in stock.

Along with Aurora Innovations, the acquisition includes Aurora International and Gotham Properties, all based in Eugene, Oregon.

The companies manufacture and supply organic hydroponic products, including grow media and nutrients.

Hydrofarm said Aurora could generate about $60 million in net sales in 2021.

The acquisition expands Hydrofarm’s growing nutrient and grow media portfolio, including its first organic nutrient and soil brand.

Hydrofarm also gains domestic manufacturing and distribution capabilities on both U.S. coasts along with a peat moss-harvesting operation in Canada.

“Aurora’s pioneering R&D lab work in plant nutrition over the past 10-plus years has led to the development of innovative products that improve yields for growers, while simultaneously advancing science in a meaningful way,” Bill Toler, chair and CEO of Hydrofarm, said in the release.

Shares of Hydrofarm trade as HYFM on the Nasdaq exchange.

More cannabis workers vote to join unions in Illinois

Several Illinois-based marijuana facilities opted to unionize through votes by employees, both the Teamsters and the United Food and Commercial Workers announced.

On Thursday, employees at Sunnyside dispensary in Champaign, Illinois, voted to join the UFCW Local 881, according to a news release.

Sunnyside marks the third marijuana facility owned by Cresco Labs where employees voted to join the union. That moves comes on the heels of the company’s Sunnyside shop in Lakeview and at a cultivation facility in Joliet.

The UFCW Local 881 also noted in its release that a pair of other Illinois marijuana shops, Windy City Cannabis on Weed Street and Ascend in downtown Springfield, also voted recently to join the union.

On Friday, workers at Modern Cannabis in Chicago’s Logan Square neighborhood voted to join the Teamsters, according to a news release.

That marks the second shop owned by Modern Cannabis in Chicago to unionize just this month, after employees at the company’s River North location also voted to join the union.

The unionization wins come as organized labor is increasingly making inroads with cannabis workers nationwide.

Detroit’s adult-use marijuana ordinance ‘likely unconstitutional,’ judge says

A judge suspended an ordinance in Detroit that would have given preference to long-term residents applying for adult-use marijuana business licenses.

U.S. District Judge Bernard Friedman on Thursday granted an injunction that will temporarily halt processing of recreational cannabis applications in the city, according to the Detroit Free Press.

The ordinance, as written, “gives an unfair, irrational and likely unconstitutional advantage to long-term Detroit residents over all other applicants,” Friedman wrote in an opinion.

The city intended to issue as many as 75 retail licenses, 35 consumption lounge permits and 35 microbusiness licenses, with at least 50% of the licenses earmarked for so-called “Detroit Legacy” residents.

Those who have lived in the city 10-14 of the past 30 years must meet additional conditions, including having previous marijuana convictions or a parent with a prior record.

The judge’s action is in response to a lawsuit filed by Crystal Lowe, who wanted to apply for an adult-use retail license but didn’t meet the ordinance requirements, even though she has lived in Detroit 11 of the past 30 years.

According to the Associated Press, Friedman said that “while there is no right to obtain a business license in the state of Michigan, there is a right to be considered for such a license in a fair, reasonable and nondiscriminatory manner.” The judge cited a 1984 decision, the AP reported.

Detroit officials told the Free Press that the city “will review the decision and develop a revised plan to address the concerns raised in the opinion.”

Florida high court nixes second try at recreational cannabis ballot measure

The Florida Supreme Court torpedoed a second attempt by activists seeking to get an initiative to legalize recreational cannabis on the state’s 2022 ballot, ruling that a proposed ballot measure was “misleading.”

According to the Miami Herald, the court ruled 5-2 that the summary of the measure was unclear, thus barring the initiative from consideration for the statewide ballot.

The defeat comes after:

  • Sensible Florida, the group behind the measure, had already gathered nearly 30,000 signatures of the requisite 891,589 in support of putting the initiative on the ballot.
  • The same court ruled by a 5-2 margin in April that a different ballot measure with the same recreational legalization intent was also “misleading.”

The group supporting that ballot measure, Make it Legal, had progressed even further in the signature-gathering phase with more than a half-million signatures.

The rulings – and the fact that recreational cannabis backers would have to start from scratch to get a measure before voters in 2022 – mean the chances of adult-use legalization happening in the state anytime soon are quickly narrowing.

In addition, it’s also unlikely that a wealthy donor will be able to fund an expensive signature-gathering drive after Gov. Ron DeSantis recently signed a bill that prohibits donations of more than $3,000 by any one person until a given initiative has qualified for the ballot, the Associated Press reported.

Marijuana online firm Leafly seeks to raise up to $30M in securities offering

Leafly, an online marijuana guide and cannabis news website, is planning to raise up to $30 million in a securities offering.

The offering includes securities such as debt, convertible debt and options to acquire securities, according to the Wednesday filing with the U.S. Securities and Exchange Commission.

Seattle-based Leafly had already sold nearly $22.9 million of the securities to 33 investors as of Wednesday, the regulatory filing shows.

The filing does not specify the purpose of the $30 million raise.

However, a Leafly spokesperson told MJBizDaily that the company would use the money to “continue to stay focused on building out our consumer marketplace” with initiatives that include “scaling in local markets and ensuring sustained brand dominance on the East Coast as legalization trends accelerate market growth.”

Leafly laid off staff in January and in March 2020 and closed its Germany operations in February 2020.

The company also launched a cannabis delivery platform in April 2020.

Leafly was spun off from private equity firm Privateer Holdings in 2019.

– Solomon Israel

Cannabis tech platform Weedmaps joins Nasdaq with $579 million infusion

Cannabis advertising platform Weedmaps started trading on the Nasdaq on Wednesday in the wake of the completion of its merger with special purpose acquisition company Silver Spike Acquisition Corp.

The transaction brought California-based Weedmaps, a leading but sometimes controversial online marketplace for cannabis consumers and businesses, $579 million in gross proceeds, according to a news release.

In connection with the closing of the deal, Silver Spike changed its name to WM Technology. Its Nasdaq ticker symbol is MAPS.

Shares were up 9% Wednesday at more than $20 each.

The transaction was approved unanimously by Silver Spike’s board of directors. It also was approved by stockholders at a special meeting last week.

Chris Beals, Weedmaps chief executive officer, said in a release that the merger will enable the company to accelerate its growth as it benefits from ongoing legalization across the country.

For the year ended Dec. 31, 2020, the company generated net income of $39 million on $162 million in revenue.

Weedmaps, which has been operating as WM Holding Co., has run into issues with regulators in recent years.

In early 2018, California regulators ordered the company to stop carrying advertising from illegal cannabis retailers.

Weedmaps also was the focus of a federal investigation at least partially tied to its relationships with licensed and apparently illicit California companies.

California marijuana grow workers unionize with Teamsters

Employees at a California marijuana cultivation facility owned by Israel-based Tikun Olam voted to join the Teamsters, the union announced.

According to a news release, 39 employees at the grow operation – located in Adelanto, California – are now part of the Teamsters Local 1932 in San Bernardino, which has roughly 14,000 members.

The vote, according to the Teamsters release, is the “first Agricultural Labor Relations Board election victory for cannabis workers in Southern California.”

It’s also the second such recent win for the Teamsters: Workers at a Chicago marijuana shop, Modern Cannabis, voted in May to join the union.

The United Food and Commercial Workers union has been organizing marijuana industry workers for years, not only in Southern California but around the United States, so the Teamsters are likely playing catch-up to the UFCW in the cannabis space.

Unhappy with recreational cannabis bill, Connecticut governor threatens veto

Connecticut Gov. Ned Lamont has been pushing for recreational cannabis to be legalized in his state, but in a turn of events, he is threatening to veto a measure he says doesn’t adequately address equity issues.

The comments from the governor’s office came as the state Senate passed a measure Tuesday night by a 19-12 margin at the beginning of a special legislative session.

House lawmakers are scheduled to tackle the issue Wednesday.

The Senate measure “does not meet the goals laid out during negotiations when it comes to equity and ensuring the wrongs of the past are righted,’’ Paul Mounds, Lamont’s chief of staff, said, according to the Hartford Courant.

The disagreement is over how an equity applicant would be defined.

An earlier version of the bill supported by the governor gave preference to individuals from geographic areas disproportionately harmed by the war on drugs.

The measure passed by the Senate uses household income, residency and previous cannabis convictions as criteria, the Courant reported.

The comments from the governor’s office raise questions about whether an acceptable measure will pass and be signed into law this year.

Texas governor signs limited medical marijuana expansion bill into law

Texas Gov. Greg Abbott signed into law legislation that will slightly expand the state’s restrictive medical marijuana program to make MMJ available to additional patients and allow for marginally more THC in regulated medicinal cannabis products.

House Bill 1535, signed into law Tuesday, will take effect Sept. 1.

The new law permits the use of low-THC marijuana for patients with post-traumatic stress disorder as well as any form of cancer, instead of only terminal cancer.

Those two illnesses add to a short list of medical conditions that can warrant a cannabis authorization in Texas.

The law will also raise the THC cap on regulated MMJ in Texas from 0.5% to 1%.

That cap was lowered by the Texas Senate, watering down a House version of the bill that would have raised the THC limit to 5%.

The bill also paves the way for a new research program to study the use of low-THC medical marijuana.

Texas’ medical marijuana program listed only 6,051 registered patients as of May.

– Solomon Israel

Cannabis MSO Columbia Care to buy Denver-based Medicine Man for $42M

New York-based multistate operator Columbia Care said Tuesday it agreed to acquire Medicine Man, a vertically integrated marijuana grower and retailer in Denver, in a cash-and-stock deal worth $42 million.

According to a news release, the transaction will deliver Medicine Man’s four retail shops and a 35,000-square-foot cultivation facility for $8.4 million in cash and $33.6 million in stock.

Medicine Man is not affiliated with Medicine Man Technologies. The latter company in 2020 rebranded as Schwazze and ended its affiliation as the consulting arm of Medicine Man.

The acquisition will further expand Columbia Care’s marijuana industry footprint of licenses in 18 states, including an earlier acquisition of The Green Solution in Colorado, and the European Union.

According to the release, Columbia Care already runs 92 dispensaries and another 30 cultivation facilities globally.

Columbia Care’s release cited Medicine Man’s solid sales performance year-over-year as one of the primary reasons for the deal and said the business is “outperforming the broader Colorado market” in both annual sales growth in 2020 and year-to-date sales figures.

Shares of Columbia Care trade as CCHW on the Canadian Securities Exchange and the NEO Exchange and as CCHWF on the U.S. over-the-counter markets.

Proposed bill would decriminalize all drugs federally, not just marijuana

Two members of the U.S. House of Representatives on Tuesday unveiled a measure to end criminal penalties at the federal level for the possession of all drugs, including marijuana.

The Drug Policy Reform Act, which is expected to be formally introduced in the next few days, underscores how decriminalization and legalization are advancing at the federal level – even though it’s uncertain how far this bill will get.

The announcement by Democratic Reps. Bonnie Watson Coleman of New Jersey and Cori Bush of Missouri came two days ahead of the 50th anniversary of President Richard Nixon’s declaration of a federal “war on drugs.”

“We have an opportunity to put this dark chapter in history behind us,” Watson Coleman said during a news conference organized by the Drug Policy Alliance.

The lawmakers said they are just beginning to work to get more support, such as a Senate sponsor of a companion bill.

However, it remains to be seen whether the measure will get a hearing in the U.S. House.

The bill also would:

  • Shift regulatory authority from the U.S. attorney general to the secretary of Health and Human Services.
  • Reinvest in health-focused approaches to treating substance abuse.
  • Expunge drug records and provide for resentencing.
  • Issue incentives to states to follow suit in decriminalizing all drugs.