By John Schroyer
A marijuana-related ancillary company applies for a listing on the Nasdaq, New Mexico prepares to bump up the number of medical cannabis companies, and pesticide concerns resurface in Denver.
Here’s a closer look at several notable developments in the marijuana industry over the past week.
MassRoots Shoots for the Sky
A fast-growing, cannabis-focused social networking site and app might break major ground for the marijuana industry.
Colorado-based MassRoots announced on Monday that it’s applying to get its shares listed on the Nasdaq Capital Market.
It’s far from certain that the company will actually make it onto the exchange. If MassRoots does, however, it will result in a net gain for the entire marijuana industry, said stock analyst Paul Cohen. It also might pave the way for other companies to follow suit.
“The fact that there would be a company listed on the Nasdaq would really help the industry,” Cohen said, noting that marijuana stocks are down significantly this year. “Just having a company run by a bunch of kids being listed will actually help the industry and give it some credibility.”
Cohen’s firm, Cohen Grassroots Research, tracks publicly traded cannabis companies. He said he has no idea if MassRoots stands a decent chance of making it onto the Nasdaq because he’s not familiar with the business’s financial records, but he hopes the company can pull it off.
“There are very few really solid public companies in this industry. We follow 283 of them, and there are only a handful of them that are solid, decent businesses in good markets,” Cohen said. “So these guys are unique. One of the good things is they’re young, they’ve got a lot of good energy.”
New Dispensaries in New Mexico
The New Mexico Department of Health is slated to issue more permits within the next month for MMJ producers to start growing and opening dispensaries, and the industry in the state breathed a sigh of relief when the announcement was made this week that finalists have been chosen.
“We’ve been waiting patiently for years for this to happen,” said David Valdez, owner of Brief Relief, a patient consulting service in Albuquerque. “The demand is growing. There’s a lot more patients in the program now… Even after we get these new producers, they’re going to have to either allow these producers to produce more, or they’re going to have to have more licenses.”
New Mexico state law allows individual licensed producers to grow between 150 and 450 cannabis plants, Valdez pointed out, although those license holders can open as many dispensaries as they want.
One dispensary, New MexiCann Natural Medicine, has four locations, Valdez said.
“But it’s not like they can open a grow location for every store they open. Every store will be stocked from the same grow,” Valdez said.
The number of registered patients in New Mexico has jumped dramatically in the past two years, from roughly 10,000 in early 2014 to 16,700 currently, according to the state’s health department. There are currently 24 dispensaries operating around the state, and the New Mexico Department of Health announced that it’s considering 17 finalists for producer licenses.
The only questions left are how many new licenses the agency will sign off on, and where winners will eventually open dispensaries. Valdez said he’s not sure if many will even be permitted to open locations in Albuquerque because the city is already saturated with dispensaries, while there are more remote locations in the state that have underserved patients.
Pesky Pesticide Problems
Pesticides are turning into a pest themselves for a number of marijuana growers.
Two more companies had sizable amounts of product quarantined this week by Denver officials concerned about public health, which highlights the ongoing legal complexity of pesticide use in the cannabis industry.
Because of a lack of clear guidance from both the state and federal governments on which pesticides are allowed for use in commercial cannabis growing, this issue has come up at least twice now and involved at least 10 Colorado companies that have had their product either seized or destroyed. The cost to the businesses is likely in the hundreds of thousands of dollars, if not millions.
The most recent case involves MMJ America – which also was involved in an earlier quarantine by the city – and Mountain High Suckers. Both companies were reportedly selling marijuana products tainted with a pesticide called spinosad, which is used to fight spider mites and other small insects. But spinosad is not on a list of pesticides approved for commercial marijuana use by the Colorado Department of Agriculture.
But the list is more like an advisory compilation, as opposed to formal legal direction, an agency spokesperson told Marijuana Business Daily earlier this year. There’s also been no direction on pesticides for marijuana growers from the U.S. Environmental Protection Agency, which hasn’t signed off on any such chemical treatments for cannabis.
That has obviously left growers in a sort of legal limbo, wondering whether it’s worth gambling an entire crop to push the envelop when it comes to fighting pests.
Some growers insist on using organic practices, which means minimizing the use of chemicals in the growing process. It’s doable, but not always easy, which is why some commercial operations try to save time and money with pesticides.
John Schroyer can be reached at [email protected]