Week in Review: Cannabis firm iAnthus’ CEO resigns, High Times’ retail move, IL delays adult-use marijuana licensing & more

Just Released! Get realistic market forecasts, state-by-state insights and benchmarks with the new 2024 MJBiz Factbook member program, now with quarterly updates. Make informed decisions.

New York-based multistate marijuana operator iAnthus’ CEO Hadley Ford stepped down after the company’s internal investigation found he should have disclosed personal loans that constituted a “potential or apparent” conflict of interest.

MJBizDaily takeaway: The iAnthus case is a reminder to publicly held cannabis companies of the importance of transparent disclosures and strict adherence to conflict-of-interest rules.

In fact, the lack of adequate disclosure about significant events, including financial matters, is a key factor sparking a doubling in class action securities claims against marijuana and CBD companies from 2018 to 2019, according to a report issued this week.

Recently, iAnthus was sued by law firms seeking to develop class action claims for an alleged failure to disclose adverse information in a timely way – including events leading to a recent $4.4 million interest payment default.

Iconic MJ publication branches into retail

High Times Holding Corp., known for its pioneering cannabis magazine, made a major pivot into retail, announcing an $80 million deal to acquire 13 operating and planned stores across California. The seller, Arizona-based Harvest Health & Recreation, will become a significant shareholder in Los Angeles-based High Times Holding.

MJBizDaily takeaway: Though High Times has struggled to diversify its business in recent years, the company is making a high-stakes attempt to strike under a new retail-focused CEO. The retail stores will take advantage of High Times’ iconic brand.

The timing could be perfect, or the endeavor could prove extremely challenging in a state that is saturated with competition and, according to California Gov. Gavin Newsom, already is in a coronavirus-induced recession.

How confident investors feel in High Times’ diversification strategy and future growth will be revealed in the company’s long-delayed effort to offer public stock.

Illinois adult-use licensing slowed by coronavirus

As expected, Illinois delayed awarding 75 additional cannabis retail licenses because of the COVID-19 crisis.

MJBizDaily takeaway: Existing operators will continue to control the new recreational marijuana market in the state, which generated $110 million in cannabis product sales in the first three months after its January launch.

The state is limiting retail licenses, which should bode well for the new entrants when they are licensed.

However, they likely will enter the market at a time when investment capital remains tight, the economy is poor and product supply remains constrained. It also might be difficult in some areas to wrest market share from the existing operators, which will be well-entrenched by then.

Nevada, Ohio approve curbside pickup

Nevada is now allowing marijuana dispensaries and stores to offer curbside pickup as the state begins to ease some of its coronavirus restrictions. Ohio announced the same for its medical marijuana dispensaries.

MJBizDaily takeaway: This could be a big sales-spurring move, especially in Nevada, which allowed delivery-only purchases in recent weeks as part of some of the most stringent coronavirus measures in the country. Nevada has grown into about a $700 million-a-year recreational and medical cannabis market.

Alberta nears saturation; Ontario ripe for opportunity

Fire & Flower, one of Canada’s leading cannabis retailers, said it is closing three stores in the province of Alberta. The move will allow the company to focus resources and license-cap allocation to stores with higher profit potential, officials said.

The company also said it is expanding its store count in Ontario.

MJBizDaily takeaway: Alberta – with 449 points of sale for adult-use cannabis – is the only Canadian province to reach the one-per-10,000-people mark observed in other mature markets. That means the province is nearing, or already at, a point of saturation.

On the other hand, Ontario leads Canada with a 96% deficiency in cannabis stores, a researcher has found. That province still needs an additional 1,400 points of sale, which presents bountiful opportunities for entrepreneurs.

Jeff Smith can be reached at jeffs@mjbizdaily.com

Marijuana Business Daily’s international editor, Matt Lamers, contributed to this report.

For more of Marijuana Business Daily’s ongoing coverage of the coronavirus pandemic and its effects on the cannabis industry, click here.