Week in Review: Netflix + cannabis, Tennessee eyes MMJ & Israel-Canada partnership targets US

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By Bart Schaneman, John Schroyer and Omar Sacirbey

Netflix develops marijuana strains to promote its shows, Tennessee plans to study the impact of medical cannabis, and Israeli and Canadian firms partner to do business in the United States.

Here’s a closer look at some notable developments in the marijuana industry over the past week.

A matter of taste

A California medical marijuana dispensary’s move to team up with Netflix to develop 12 strains of cannabis is the type of strategy other MJ companies might want to pursue.

Hooking up with a mainstream company to develop new cannabis strain and products can pay dividends – if it’s done right.

“As long as it’s done tastefully, there’s a phenomenal opportunity for retailers to have a short run on selling whatever product is part of the promotion,” Denver-based cannabis consultant Ean Seeb said.

Indeed, West Hollywood-based Alternative Health Herbal Services reportedly sold 27 pounds of the new marijuana strains in three days.

A similar partnership between a marijuana company and a movie several years ago had mixed results.

In 2014, filmmaker Kevin Smith’s film “Tusk” joined with Los Angeles MMJ dispensary Buds & Roses to sell two strains named for the movie.

While “Tusk” wasn’t a hit, the dispensary benefited from the press and in-store visits from Smith, Seeb pointed out.

However, he added, depending on a show’s theme, such a pairing could bring negative publicity to a marijuana business.

“There is the potential harm with associating yourself with something that may not be furthering the industry in the best fashion,” Seeb said.

Netflix has been in the media spotlight lately – so even if the shows with the marijuana tie-in aren’t successful, the partnership will likely be fruitful for Alternative Health, he said.

“If you couple the press (Netflix is) able to attract along with something that is kind of the belle of the ball right now – cannabis,” Seeb added, “… it should be a boon on business for all organizations involved.”

Are you serious, Tennessee?

Tennessee lawmakers have taken a hesitant step toward legalizing medical marijuana by forming a special committee to “study the potential impacts” of such a move.

While MJ industry observers could be tempted to write this off as a delay tactic by politicians not eager to take up a still-controversial subject, there are signs the committee’s recommendations could be taken seriously.

For instance, House Speaker and gubernatorial candidate Beth Harwell has said her views on MMJ have evolved since her sister used it in place of opioids to treat pain from a broken back.”

And the two Republicans leading the committee – Sen. Steve Dickerson and Rep. Jeremy Faison – co-sponsored an MMJ legalization bill earlier this year that would have allowed for 50 cultivation operations statewide. Each grow site would have been permitted up to three dispensaries apiece for a maximum of 150 MMJ storefronts.

That’s a decent-sized MMJ program and industry for a state with a population of almost 7 million.

The question is whether Dickerson and Faison can sway enough of their Republican colleagues to support a legalization bill, since they weren’t able to do so this year.

There’s also the fact that Tennessee lawmakers will get to observe how neighboring Arkansas – a new entrant to the MMJ state club – rolls out its MMJ program.

If Arkansas – which has similar political leanings and demographics to Tennessee – has little to no hiccups, that could influence the Volunteer State to move forward the way Dickerson and Faison want.

Or, if MMJ opponents in Tennessee win out, the legislature could simply put off legalizing MMJ for another year.

International flair

The U.S. marijuana industry became more international this week when Canadian Bioceutical Corp., a canna-centric business services firm, teamed up with an Israeli cultivation business to launch and run production sites in Arizona, Nevada, Massachusetts and Maine.

Such alliances are likely to become more commonplace.

“The U.S. market is the biggest legal market in the world right now,” said Hadley Ford, managing partner of iAnthus Capital, a New York-based cannabis-centric holding company that trades publicly in Canada.

“So if you’re an entrepreneur that has a technology that can be used in cannabis, or if you’re a cannabis entrepreneur in another country like Uruguay, Canada or Israel, it doesn’t go unnoticed that a market of this size is moving to full legalization.”

There are daunting complications to doing business with U.S. companies – federal cannabis prohibition and the inability to export or ship products across state lines, for example – but such entanglements are well worth the hassle if it means making inroads in the American cannabis market, Ford said.

“Entrepreneurs are pretty clever people, and they’re going to find a way to get a foothold, whether in management contracts, equipment, know-how, expertise, capital,” said Ford, who expects to “a lot of” foreign entrepreneurs to try to break into the U.S. market.

Ford also believes Israel will be behind a significant amount of foreign activity in the United States.

Israel recently approved the export of medical marijuana. The country also is considered a pioneer in MMJ research, and Ford said a growing number of “orphan drug pharma companies there that are developing stuff.”

“I think you’ll see (more partnerships) through time,” Ford added.

Bart Schaneman can be reached at barts@mjbizdaily.com

John Schroyer can be reached at johns@mjbizdaily.com

Omar Sacirbey can be reached at omars@mjbizdaily.com