Week in Review: Cannabis firm iAnthus can’t make interest payments, MA gov sued, COVID-19 causes slide in adult-use marijuana sales & more

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 protected]

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

4 comments on “Week in Review: Cannabis firm iAnthus can’t make interest payments, MA gov sued, COVID-19 causes slide in adult-use marijuana sales & more
  1. Pat on

    The MA. governor is making the right call. Just because other state’s are allowing recreational sales to to go on doesn’t mean it’s right and in the publics’ best interest in this time of Covid-19. In fact in makes total sense. Why wouldn’t a decrease in foot traffic at any establishment have the same effect in reducing this pernicious contagion’s effects? Of course it would. But, these businesses come from a walk that don’t give a damn about their respective communities. Just the buck ( at the expense of the citizenry ). I went to 2 well known ca. dispensary’s in recent days. No one was wearing a mask at one of the places ( Not much different at the other…). And, coming within normal distancing during the transactions ( 2-3ft ) for prolonged periods. Recreational weed is NOT a priority. They can go get their endorphins up by going out for a jog or a bike ride, a hike, etc.. Small price to pay to help in protecting your fellow man/woman. Esp. those whom have chronic conditions that would make them susceptible to succumbing to the disease. Stand your ground governor. Let these owners spend down their reserves (fighting this frivolous and with without merit lawsuits ); and go out of business.

    Reply
    • Laurie on

      I disagree. I am disabled & was able to stop all narcotics that I had been taking for 13 years with adult use marijuana . Our state doesn’t offer quality medical marijuana products & is far behind Massachusetts in progress. Iam on a blood thinner& cannot take anti inflammatory medication. I also can take limited amount of Tylenol. As my supply of Marijuana products dwindles I am in increasing pain& my functioning level deteriorates on a daily basis. As long as the dispensaries are closed I will have level 5-8 pain. So your belief the govenor is doing the right thing is ignorant. I’m an older adult that’s been able to stop a number of toxic medication because of the dispensaries.

      Reply
      • Pat on

        Laurie, I think you didn’t properly read and understand the article. I’m with you. You’re a “medical” not recreational user, right? But, it seems ( you imply ) as if the “recreational” cannabis seems to be meeting your needs. Hmmmm.. Not sure what state you are from. I was referring to MA. If other states that don’t have an adequate medical cannabis program or don’t have one at all, it’s a shame. Move if it’s that bad for you. Or grow it ( your favorite strain )/have someone grow it for you. The point I was making is that we have a pandemic going on. That means WE as a country have to do all we can to minimize its transmission. By allowing recreational sales, increases unnecessary foot traffic and therefore potential exposures to people like you. Dispensaries often don’t distinguish who is medical vs. recreational. They are mostly there to make as much money as they can. By allowing medical and recreational users to congregate in long lines, in closer quarters once inside a dispensary whose personnel often don’t engage in CDC Covid-19 guidelines, could lay to waste your purpose in going to one of these places. They should have delivery only option, for recreational if they need to have “fun” that badly; and allow ONLY medical folks all the options to safe access to their medicine in the usual manner. Hopefully, you live close enough to another state that is more permissive and has good quality medicine to meet your needs, where you/or someone else can travel to and get you enough to meet your needs until this unfortunate scourge passes us over. The key word here is: “US.” It’s a lot more about the: “ME.” And it seems too many in this country don’t get this concept.

        Reply

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