Cannabis Industry Daily News

South Dakota bars medical marijuana companies from advertising

By MJBizDaily Staff

South Dakota lawmakers finalized rules prohibiting advertising of medical marijuana products and eliminating a potency cap on smokable flower.

An interim rules committee solidified the half-dozen remaining regulations for the medical cannabis program that went into effect July 1, the Grand Forks Herald reported.

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The state health department drafted nearly 150 rules that the bipartisan, bicameral committee approved in September. But six were sent back for revision.

Health department Secretary Kim Malsam-Rysdon told the Herald the finalized rules will “help clarify that we have restrictions in place (on advertising) until such time that this product is not illegal at the federal level.”

The potency cap for flower came from a proposed rule that sought to ban inhalation of products containing higher THC levels.

The committee also finalized a measure that removed doctors from the role of certifying who can home grow cannabis. Previously, the health department wanted to require a medical professional to sign off on who could home grow.

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However, a doctor will still need to be involved if someone wants to grow more than three plants at home.

Another rule also eases a regulation that would have barred the bulk transfer, without prepackaging, of any marijuana product out of safety for children.

The health department’s rules will now allow flower to be shipped in a container up to 10 pounds.

The agency is required by South Dakota law to be prepared by Nov. 18 to issue medical marijuana registration cards to patients.

Tilray latest Canadian firm to strike cannabis supply deal in Luxembourg

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Tilray reached a deal with Luxembourg’s Ministry of Health to supply the small European country with medical cannabis, the company announced Tuesday, becoming the third Canadian cannabis producer since 2019 to supply the burgeoning market.

Tilray, which has offices in Leamington, Ontario, and New York, will provide a variety of pharmaceutical-grade medical marijuana products such as extracts and dried flower, according to the announcement.

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“We believe that Tilray’s growth potential in the European Union represents a $1 billion opportunity, and today’s announcement affirms that we are turning potential into performance,” CEO Irwin Simon said in a statement.

Previous deals to supply Luxembourg included:

  • Aurora Cannabis, in May 2019, said it had become the “exclusive supplier” of medical cannabis to Luxembourg.
  • Rival producer Canopy Growth, in October 2019, announced its own “exclusive” deal to supply the country.

Few details of Tilray’s arrangement were disclosed, including financial terms, and the company didn’t say whether the deal was exclusive.

Some details were released in August via a parliamentary query.

The Ministry of Health said it had requested 3 million euros ($3.5 million) from the Ministry of Finance to buy 30 kilograms (66 pounds) of medical cannabis this year.

That included:

  • 28.5 kilograms of product containing 18% THC and less than 1% CBD.
  • 2.25 kilograms of product containing 10% THC and 10% CBD.

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Luxembourg will need more if it hopes to match supply with demand.

The country suffered a supply shortage in 2021, the Luxembourg Times reported, after doctors prescribed 140 kilograms in 2020.

Luxembourg recently backpedaled on its plan to establish Europe’s first fully regulated recreational marijuana market.

An early plan called for the country to establish an adult-use market “inspired by the Canadian model.”

Instead, Luxembourg plans to allow home cultivation of up to four plants for personal use.

Retail will not be permitted.

The move is still a milestone for Europe, as Luxembourg would be the first country in mainland Europe to permit and regulate adult-use marijuana home cultivation.

But it’s short of original expectations.

Legalizing recreational marijuana was part of the coalition agreement of the current government, which called for the production, purchase, possession and consumption to be regulated within Luxembourg’s borders.

Shares of Tilray trade on the Nasdaq as TLRY.

Matt Lamers can be reached at matt.lamers@mjbizdaily.com.

Florida judge rules online marijuana ordering sites may resume business

By MJBizDaily Staff

Florida Judge Suzanne Van Wyk threw out a state marijuana industry rule that prohibited Leafly and other websites from facilitating online medical cannabis dispensary orders.

The rule, which the state health department warned MMJ businesses about in a February memo, elicited a lawsuit from Seattle-based Leafly.

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The Leafly suit maintained that the company wasn’t violating any state laws by helping medical marijuana patients place orders.

According to the memo, licensed MMJ businesses in Florida were barred from working with “Leafly, or any other third-party website, for services directly related to dispensing” medical cannabis.

But Van Wyk disagreed with the regulators’ interpretation of state law and ruled that there was no such prohibition, the News Service of Florida reported.

According to Van Wyk’s ruling, “the statute does not address third-party websites or online ordering.”

“The (health department memo) constitutes the department’s interpretation that online ordering is a service directly related to dispensation of medical marijuana; thus the letter implements the statute and prescribes policy,” the judge wrote.

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In a statement emailed to MJBizDaily, Leafly CEO Yoko Miyashita said she was “thrilled” with the outcome.

“We look forward to working with our partners to restart Leafly Pickup throughout Florida effectively immediately,” Miyashita wrote.

Van Wyk further dismissed assertions by state attorneys that Leafly lacked standing to sue over the matter and found that the company had “sustained cancelation of real contracts.”

Leafly estimated during the litigation that the memo had cost the company at least $300,000 in canceled contracts with MMJ businesses in Florida.

Many of those businesses backed out of contracts after the February memo, which warned that violations could cost licensees as much as $5,000 per incident.

Leafly alone had contracts with 277 Florida MMJ dispensaries before the February memo, the company’s chief operating officer said during legal hearings, according to the News Service of Florida.

I Heart Jane, another online MMJ ordering site, was also affected by the memo and online ordering ban.

Massachusetts Cannabis Advisory Board gets five new members

By MJBizDaily Staff

Massachusetts Treasurer Deborah Goldberg added five people to the state’s Cannabis Advisory Board, including three reappointments and two new appointees.

The board, which has 25 members, is tasked with making recommendations to the state’s Cannabis Control Commission regarding the regulation and taxation of marijuana in Massachusetts.

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Members serve two-year terms.

The state cannabis law requires the governor, treasurer and attorney general to each appoint five members to the board.

According to a news release announcing the new members, the treasurer’s appointees are required to have expertise in marijuana cultivation, retailing, product manufacturing, laboratory sciences and toxicology as well as providing legal services to marijuana businesses.

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The three members reappointed by Goldberg are:

  • Amanda Rositano, an expert in marijuana product manufacturing.
  • Alan Balsam, an expert in laboratory sciences and toxicology.
  • Michael Dundas, an expert in marijuana cultivation.

The treasurer’s two new appointees are:

  • Marion McNabb, an expert in marijuana retailing.
  • Laury Lucien, an expert in providing legal services to marijuana businesses.

McNabb and Lucien replace two original board members, Shanel Lindsay and Jaime Lewis, who declined to reapply, according to Goldberg’s spokesperson.

Beringer Capital buys majority stake in financial site covering marijuana

By MJBizDaily Staff

Toronto-based private equity firm Beringer Capital acquired a majority stake in Benzinga, a business website covering various sectors, including marijuana.

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Financial terms of the sale were not disclosed.

According to a Monday news release announcing the transaction, Detroit-based Benzinga has 100 employees and its website has “nearly 25 million readers each month – spanning more than 125 countries worldwide – and organizes industry conferences to connect individual investors with public companies.”

“Benzinga is just entering the second inning of what we will build. Partnership with Beringer drastically accelerates the timeline to realize our ambitions of what we can provide investors globally,” Jason Raznick, founder and CEO of Benzinga, said in a statement.

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Canaccord Genuity advised on the transaction.

The deal comes one month after Detroit-headquartered media company Crain Communications acquired Green Market Report, which covers financial news in the cannabis sector.

California cannabis company sues over ‘Breez’ trademark

By MJBizDaily Staff

A trademark battle is in the wind in California over the use of  Breez – and Breeze – as a cannabis product brand.

Oakland-based Promontory Holdings sued The Breeze Brand of Los Angeles in state court, claiming infringement over Promontory’s California-registered “Breez” trademark, Law360 reported.

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Promontory sells popular CBD-THC combo mints, tincture sprays and tablets under the “Breez” brand, while The Breeze sells CBD gummies and vape pens under “Breeze.”

The lawsuit, filed in Orange County Superior Court, could cast light on the legal strength of a cannabis trademark in California.

Promontory’s lawsuit, according to Law360, claims that the value of its Breez brand has been harmed and will continue to be harmed because of customer confusion.

The complaint says that Breez consistently is ranked as one of the top cannabis brands in California by the independent firm BDS Analytics.

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Promontory registered the Breez trademark in December 2020, according to California secretary of state records. That registration doesn’t expire until 2025.

Officials from the Breeze Brand couldn’t be reached for comment by MJBizDaily.

‘Big Business,’ marijuana culture need each other, industry insiders agree

By MJBizDaily Staff

Five marijuana industry insiders – ranging from the CEOs of multistate operators to a farmer in California’s Emerald Triangle – agreed that while there’s been friction between business interests and grassroots activists, both sides need each other and can work together for the wider legalization movement.

Still, there’s room for improvement, the participants noted during a panel discussion at MJBizCon.

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The panel – dubbed “Clash of the Titans” – focused on the culture wars that have long characterized divisions between the activists of the pro-cannabis movement and the industry’s corporate executives.

“Big business cannot survive without what cannabis culture has brought to the table,” said Wanda James, owner of Denver-based Simply Pure, a vertically integrated cannabis company.

James lambasted much of the industry, arguing that women and minorities have had too hard a time getting a toehold in the business.

She decried that as a disservice to the legacy of the marijuana plant and its cultural roots.

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Two MSO panelists – Curaleaf Holdings CEO Joe Bayern and Ayr Wellness co-Chief Operating Officer Jennifer Drake – insisted their companies are based in cannabis culture, adding that they want to empower everyone who feels an affinity for cannabis.

“Setting up this dichotomy of ‘Big Business versus cannabis culture’ is a false dichotomy,” Drake said.

“There’s going to be plenty of room for everyone to succeed.”

More generally, panelists agreed that more can be done to encourage collaboration between business interests and advocates who want policies that cover such areas as home cultivation, medical marijuana caregivers and support for minority entrepreneurs.

– John Schroyer

California cannabis business owner pleads guilty to bribery, tax evasion

By MJBizDaily Staff

Cannabis businessperson Helios Dayspring entered formal guilty pleas to federal criminal charges, apparently ending a lengthy corruption saga involving multiple marijuana companies and local California officials.

According to the Santa Maria Times, Dayspring appeared in court on Friday via Zoom to enter guilty pleas for one charge of bribery and one of tax evasion.

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He agreed to a plea deal in July, and the town of San Luis Obispo subsequently revoked the business license of one of his four stores.

Dayspring, the owner of Natural Healing Center and 805 Agricultural Holdings, bribed a former San Luis Obispo County supervisor in exchange for favors. He also was found to have not paid federal taxes or reported any income for a five-year span.

The supervisor he bribed – Adam Hill – committed suicide in 2020.

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Dayspring was also accused of attempting to bribe the mayor of Grover Beach, but the mayor declined the bribe.

Dayspring is slated to be sentenced Feb. 11 in Los Angeles.

He faces a maximum penalty of 13 years in prison and a $500,000 fine as well as the $3.4 million he has agreed to pay the IRS in back taxes.

Oregon marijuana processor fined $100,000 for skirting packaging rules

By MJBizDaily Staff

Oregon regulators fined a recreational marijuana processor $100,000 for allegedly sidestepping packaging and labeling rules.

In a news release, the Oregon Liquor and Cannabis Commission (OLCC) said it voted to uphold the decision of a state administrative law judge who found Luminous Botanicals sold vials of marijuana tincture that were not in compliance with the agency’s rules.

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The OLCC said the labels on the tinctures “were not properly affixed” and could fall off, which could lead to an unsuspecting consumer inadvertently using the product.

“Small vials of marijuana product don’t provide any distinction on whether or not the product is from the legal or illegal market,” OLCC Executive Director Steve Marks said in the release.

The OLCC said it worked with Luminous Botanicals for more than a year to find a solution, but the company continued to sell products that violated state rules.

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Luminous Botanicals did not immediately respond to an MJBizDaily request for comment.

The OLCC charged the company with a violation for each sale of the trial-sized vial and offered to settle the case for $30,000 instead of the maximum $100,000 penalty.

Luminous’ legal counsel argued that the company had been exemplary in its dealings with the OLCC but misunderstood the rules and made an innocent error.

The counsel argued the company deserved leniency in the form of a warning, instead of a fine. The OLCC disagreed.

Future of cannabis sales relies on data-driven, targeted marketing, expert says

By MJBizDaily Staff

Sending promotions for cannabis concentrates to a longtime shopper who buys only flower is not just a waste of resources.

Such blanket marketing practices also could drive consumers to look for a different company that better understands their preferences, Lisa Buffo, founder and CEO of the Cannabis Marketing Association, told an audience during MJBizCon in Las Vegas.

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Buffo addressed how marijuana companies can amplify their branding while customizing experiences to retain consumers.

She noted that using good data – such as what a specific customer buys at a dispensary – helps foster a sense of loyalty, keeps individual shoppers returning and potentially drives others to your brand.

“Your customers can turn into promoters who then attract strangers,” said Buffo, who referenced a report by software developer and marketer HubSpot that said the biggest threat to a company’s growth is bad customer experience.

“We all have a low tolerance for a bad customer experience,” she added.

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One of the best ways to mitigate the problem is to ask employees for points of friction in the company, because they often have a better handle on such issues than executives, Buffo said.

The staff’s perspective about internal friction might not be customer-facing, but it can point to poor internal processes or lack of communication within the organization.

“I have seen companies eliminate friction and see enormous returns,” she said. “Eliminating friction can be better than any kind of marketing program.”

Buffo noted data that showed less than 30% of Americans participate in the regulated marijuana industry.

Rather than trying to woo consumers from other businesses, she urged companies to focus on people who don’t currently buy cannabis at all.

If only 10% of that population started using cannabis somewhat regularly, it would make a world of difference in sales, Buffo said.

“There is a big opportunity to find customers out there,” she added.

(Video and slides from Buffo’s presentation will be available to MJBizCon‘s full-conference and digital-only passholders through the end of 2021.)

– Kate Lavin

Rhode Island’s medical marijuana dispensary lottery set for Oct. 29

By MJBizDaily Staff

Rhode Island’s lottery to more than double the number of medical cannabis dispensaries in the state is scheduled to take place Oct. 29, according to a public notice from state regulators.

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The lottery, according to the Associated Press, will choose five new dispensary operators, bringing the total to eight.

The state Office of Cannabis Regulation preapproved 23 companies to participate in the drawing.

A blindfolded former FBI agent will select numbered balls from a transparent tumbler, the AP reported.

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A lottery to choose the owner of a ninth store will be conducted at a later date, according to the notice.

The Oct. 29 lottery will be livestreamed via Zoom.

Florida official calls for probe into Black farmer cannabis license

By MJBizDaily Staff

Florida’s agricultural commissioner is calling for the state’s top prosecutor to investigate a new rule that provides for a Black farmer medical marijuana license, saying it is discriminatory against Black farmers and “beyond unacceptable.”

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Agricultural commissioner Nikki Fried, who also is running for governor, is critical of a nonrefundable $146,000 application fee for the license and other extensive requirements, according to a letter to Florida Attorney General Ashley Moody.

The application fee is more than double what was paid by the initial group of MMJ operators in the state.

Florida marijuana regulators passed an emergency rule last week to establish a process for issuing an MMJ license for one Black farmer in the state’s fast-growing, billion-dollar industry.

The state’s 2017 medical marijuana law required a license to be issued to a Black farmer who was part of a class action discrimination lawsuit in the late 1990s against the U.S. Department of Agriculture.

Litigation, including a challenge to the 2017 provision by a Black farmer outside the class, has held up additional MMJ licensing in Florida.

Fried questioned whether the new rule was created with “discriminatory intent.”

“Because Black farmers have lost out on this time spent waiting for their chance to apply, they now face significant barriers to entry in the now-established Florida medical marijuana market,” Fried wrote in her letter, which also was addressed to Florida’s Chief Inspector General Melinda Miguel and the state’s Joint Administrative Procedures Committee chairs.

“The fact that Black farmers in Florida had to wait years for FDOH (Florida Department of Health) to release a rule that more than doubles their application fees is not only an affront to the legislature’s directive but is beyond unacceptable.”