Multistate marijuana operator iAnthus defaulted on interest payments, in part blaming the coronavirus.
In addition, the New York-based company revealed that its CEO is being investigated for a potential, but unidentified, conflict of interest. The company also postponed its financial results.
MJBizDaily takeaway: COVID-19 aside, the disclosures from iAnthus are additional red flags for a company that already was facing capital issues as well as litigation with an investor.
With that in mind, it is hard to square CEO Hadley Ford’s claim that “our business has never been stronger.”
Closing adult-use cannabis stores prompts lawsuit against Massachusetts governor
Republican Massachusetts Gov. Charlie Baker has been sued by marijuana businesses for requiring recreational cannabis stores to be closed during the coronavirus crisis.
MJBizDaily takeaway: The lawsuit is the latest in a string of criticisms against Baker for not classifying adult-use marijuana stores as “essential” businesses that can remain open during the COVID-19 pandemic.
His reasoning – that out-of-state visitors might shop at the stores and spread the virus – is not a position embraced by other states that allow medical and recreational marijuana sales.
Illinois recreational marijuana sales hit $110 million in three months
Adult-use cannabis stores in Illinois sold almost$110 million in marijuana products in the first quarter, according to regulators.
MJBizDaily takeaway: Since legal recreational marijuana sales began in Illinois on New Year’s Day, monthly sales have ranged from a low of $34.8 million in February to a high of $39.2 million in January.
Even though sales dropped 8.4% in March versus January’s, regulators praised the “consistent” monthly sales. Still, the coronavirus wasn’t on anybody’s radar screen in January, so it is difficult to draw conclusions about what would have happened if sales were taking place in a virus-free environment.
Cannabis drug Epidiolex gets good news from DEA
The U.S. Drug Enforcement Administration said this week that Epidiolex, a cannabis-derived drug that treats rare kinds of epilepsy, is no longer considered a controlled substance by the agency. The scheduling change comes two years after the U.S. Food and Drug Administration first approved the CBD treatment.
MJBizDaily takeaway: The DEA just said that a derivative of marijuana shouldn’t be considered a controlled substance. Let that sink in.
Regardless of how limited the DEA’s announcement is, the Epidiolex decision has enormous implications for marijuana entrepreneurs interested in pharmaceutical uses of the plant.
Lowered barriers to cannabis extracts in medicine – even extracts derived from marijuana, not hemp – could prompt a flood of research interest in MJ to treat ailments beyond epilepsy.
COVID-19 impacts adult-use cannabis sales
Recreational marijuana sales in Colorado and Nevada, on a year-over-year basis, declined in March. That is the first time that has happened, according to data from Seattle-based Headset. And while marijuana sales rose in California and Washington state in March compare to a year earlier, the increase wasn’t as large as expected.
MJBizDaily takeaway: Clearly, the coronavirus disrupted typical sales patterns, as recreational marijuana stores increasingly turned to strategies such as curbside pickups and drive-thru windows to reduce the spread of the virus. This is a trend that surely will continue through April, as some typically huge 4/20 celebrations go virtual.
Marijuana stores in Canadian province get boost
Private-sector cannabis stores in Ontario, Canada’s largest market, were ordered to close their doors on April 3. Days later, the province backtracked somewhat by allowing the stores to engage in e-commerce and delivery. The caveat is that the province will not be issuing any new store authorizations for the time being.
MJBizDaily takeaway: A total shutdown of physical retail stores in Ontario, even for a couple of weeks, would have been devastating for an industry that relies heavily on in-store sales to fund growth.
At the very least, Ontario’s decision to allow stores to conduct e-commerce and curbside pickup ensures the short-term survival of many businesses. It will allow the industry to maintain steady grown, albeit at a much slower pace. In the short term, opportunities exist for existing retailers to specialize in delivery and curbside pickup.
John Rebchook can be reached at email@example.com
For more of Marijuana Business Daily’s ongoing coverage of the coronavirus pandemic and its effects on the cannabis industry, click here.