Spannabis & NECANN Boston Postponed Due to Coronavirus

3/11/2020

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Organizers for Spannabis and the New England Cannabis Convention have postposed the events amid coronavirus fears, bringing the total of postponed cannabis industry events to at least seven. NECANN was scheduled for later this month at the Hynes Center in Boston, Massachusetts; Spannabis was scheduled to take place in Barcelona, Spain this weekend, from March 13-15.

Spannabis decided this morning to postpone the event after “extraordinary measures” were announced by top officials in Catalonia, Spain.

“Much to our regret, …. gatherings of more than 1,000 people at indoor or outdoor events have been banned, in a bid to curb the spread of Covid-19 coronavirus in Catalonia. … We have tried as hard as possible to hold Spannabis normally, but under these circumstances, we have no alternative.” — Spannabis organizers, in an emailed announcement

Organizers said Spannabis will return later this year in the fall but did not set an official date.

According to the Tuesday update on the NECANN website, co-founders Marc Shepard and Jeff Lawrence said they have not yet secured a new date for the event but indicated vendor registrations and pre-sale tickets would be honored for the new date. The update notes that two popular events – the NE Canna Community awards show and NECANN Competition awards – would also be postponed.

“We appreciate everyone’s patience and support during this incredibly difficult time and this decision, and look forward to working with everyone to make this year’s event as successful as it has been for the last five years.” – Shepard and Lawrence in a statement

The website still lists dates for planned conventions in Chicago, Illinois, Burlington, Vermont, Springfield, Massachusetts, Atlantic City, New Jersey, and Portland, Maine but Tuesday’s update does not indicate whether these planned events will go ahead as scheduled.

On Monday, three other cannabis industry events announced postponement, including the long-running NoCo Hemp Expo in Denver, Colorado – which was rescheduled for August – and the group’s planned Southern Hemp Expo in Nashville, Tennessee. The National Cannabis Risk Management Association event planned for Las Vegas, Nevada was also postponed.

Last week, Anaheim, California’s Expo West was postponed without a makeup date; while CannTech and PsyTech organizers said the Tel Aviv, Israel event would be pushed back until June.

The U.S. Centers for Disease Control and Prevention have suggested canceling large events and mass gatherings amid the outbreak.

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Survey Suggests 5mg is Ideal Cannabis Edible Dosage

3/11/2020

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A recent survey conducted by Canadian cannabis company Organigram found that Canadians’ ideal dosage for edible products is 5 milligrams or less per serving. The survey also found that those 35 and older were more interested in cannabis-infused baked goods and those 19-35 who were more interested in sweets, such as candies.

Greg Engel, CEO of Organigram, said the data was important in the wake of ‘Cannabis 2.0’ rollout in the nation which legalized so-called ‘alternative cannabis products,’ including edibles.

“Legalization has changed the way people think about cannabis consumption. Entering this new era of cannabis legalization and designing new product types, we couldn’t assume to know Canadians’ attitudes on edibles, so we asked them. … These insights will not only help our product teams make informed decisions around product design but will help us understand what Canadians need to know most.” – Engel in a statement

The survey found that women were more interested in sweets than men, 68 percent to 52 percent, respectively. In all, one in three Canadians expected to use edible cannabis products. Most consumers (54 percent) said they planned on using edibles at home alone, with 10 percent less saying they would use in private with friends. Almost 25 percent of respondents said they would use edibles in public spaces.

The survey also found that more than half of cannabis consumers – 53 percent – say thye need more information about edibles in order to make informed purchases, especially those 65 and older.

Canada legalized cannabis for adults in 2018 but edibles only became available in the regulated market last December.

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Study: 98% of Vaping Illness Patients Bought Illegal Products

3/10/2020

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The study was conducted by doctors from the California Department of Public Health (CADPH) and Centers for Disease Control and Prevention (CDC) with the goal of finding and analyzing the clinical characteristics and vaping exposures of patients hospitalized with EVALI. Data was gathered by the CADPH as it was reported from treating clinicians from August 8, 2019, to November 8, 2019.

The case series covered 160 patients’ medical data along with data collected from a survey completed by 86 (54%) of the patients via a standardized questionnaire. Of those 86 patients, only one patient said they purchased vape products from a legal source.

Of the 160 total patients, 62% were male and the median age was 27 years with an official age range of 14 to 70 years old. Of these cases, 46% of patients were admitted to the intensive care unit, four people died, and 29% required mechanical ventilation. Of those directly interviewed, 83% of patients admitted to vaping THC products, 43% vaped CBD products, and 47% vaped products containing nicotine. These patients were asked to report each brand, type, flavor and active ingredients in each product that was used over the 90-day period prior to hospitalization. Officials also collected the pods, vapes, and cartridges from patients after specifying the exact locations where products were purchased. Between the 86 directly interviewed EVALI patients, 130 products were collected.

Eighty-seven of the collected products were THC-only and 91% of those relied on pre-filled cartridges. There were 25 products that contained only nicotine with just 48% of those coming in the form of a pre-filled cart. 56% of THC cartridges in the study were labeled as using flavoring agents and 76% of nicotine vape products were labeled as flavored.

Patients commonly purchased nicotine products from a dispensary or vape shop, according to study data. EVALI patients who smoked THC-only vape cartridges or pods commonly purchased them from another person (44%). Many reported purchasing vape products from a dispensary (33%) and of these, 25% of those interviewed stated that the dispensary was licensed by the state of California. After further research, however, it was found that only four products (all of which were actually purchased by the same patient) came from a licensed adult-use dispensary. Aside from unlicensed dispensaries and friends, the patients had either purchased the contaminated vape products from pop up shops or couldn’t name their source.

After collecting patient data the study analyzed the products, 49 of which were THC-vapes. Between these, vitamin E or vitamin E acetate was found in 84% of vapes. All products tested under 100 parts per billion for heavy metals except one which tested positive for nickel. Low levels of pesticides were also found in 67% of THC containing vape carts including myclobutanil, bifenthrin, bifenazate, tebuconazole, metalaxyl, propiconazole, imidacloprid-urea, piperonyl butoxide, and trifloxystrobin.

The report highlights the fact that most of these contaminated cartridges and pods came from illegal sources, and the data supports the theory that vitamin E and/or vitamin E acetate is the likely culprit in EVALI cases presented in the last year. Researchers do note, however, that more research must be done to reach more conclusive answers.

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DOJ Memo Blocks Gun Sales to ‘Habitual Marijuana Users’ 

3/10/2020

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A recent memo from the Bureau of Alcohol, Tobacco, Firearms, and Explosives has rescinded a 2006 allowance for gun dealers in Michigan to accept a state-concealed pistol license in lieu of a federal background check. The change, first reported by Marijuana Moment, appears to specifically target “habitual marijuana users” among other disqualified individuals.

Before the memo, anyone with a concealed pistol license (CPL) was frequently considered qualified to purchase firearms in Michigan.

“Specifically, ATF learned that CPLs were and continue to be issued to applicants who were likely prohibited due to a conviction for a misdemeanor crime of domestic violence… and to habitual marijuana users. Although possession and use of marijuana is not unlawful under Michigan law, marijuana remains a ‘controlled substance’ under Federal law, and those using marijuana are prohibited from possessing or transporting a firearm.” — Excerpt from the ATF memo, via a Marijuana Moment report

The change is mostly a formality, however, as gun owners are already required by law to disclose whether or not they use cannabis or any other controlled substances.

According to the report, the change is more likely to affect people with misdemeanor domestic violence convictions, as the charges will show up on a federal background check — in fact, the changes would only directly affect cannabis consumers if they have a cannabis-related conviction on their record. Federal cannabis prohibition, however, will continue to disrupt the second amendment rights of cannabis consumers until the disconnect between state and federal laws has been resolved.

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Hemp Legalization Deal Reached in South Dakota

3/10/2020

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South Dakota Gov. Kristi Noem (R) and lawmakers have reached a deal to legalize hemp in the state, with the governor saying yesterday that $3.5 million has been secured in the budget for the state to “responsibly” start an industrial hemp program, the Associated Press reports.

The House passed industrial hemp legalization legislation last week; however, Noem had promised to veto any hemp reforms without the funds for “one-time and ongoing” costs associated with hemp legalization.

Noem vetoed a hemp legalization bill last year but indicated in January that she would sign a hemp bill so long as it included “guardrails” – including the $3.5 million, broad consent by growers for law enforcement inspections and a requirement they pay any costs associated with eradication of plants that test over the legal THC limits, and the banning of smokeable hemp products.

Rep. Lee Qualm (R), the bill sponsor, told the Argus Leader that the measure  approved by the House satisfies the governor’s ‘guardrails.’

Noem said that some of the funds for the hemp program – along with a pay raise for teachers and state employees – would come from underutilized Department of Health and Human Services program funds, according to the AP.

Noem had previously opposed hemp legalization, saying in an op-ed last year that it would legalize THC-rich cannabis “by default.” In her January op-ed, Noem Noem said that with U.S. Department of Agriculture regulations, a South Dakota tribe getting the go-ahead from the federal government, and bordering states having legalized the crop, the state should move forward with the reforms.

South Dakota‘s legislative session ends this week. The hemp bill is considered ’emergency legislation’ and requires a two-thirds majority to pass. If approved and signed by the governor, it would take effect immediately.

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Michigan Phasing Out Caregivers’ Access to Cannabis Licensees

3/10/2020

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Medical cannabis caregivers in Michigan will no longer be allowed to transfer or sell products to licensed cannabis growers and processors under new state guidance that sets a September 30 end date on the practice; the Marijuana Regulatory Agency announced last week that the “phase out process” for the practice was already in effect.

Under previous rules, caregivers were allowed to transfer products to some licensed operators in an effort to ensure that medical cannabis patients would not run out of product as the state moved into recreational sales. The MRA said that under-supply of medical cannabis was no longer a concern as almost 200 cultivators and more than 25 processors have been issued.

Caregivers were barred from transferring products to dispensaries on April 1, 2019.

“We have always put patients first when we make decisions regarding medical marijuana. This phase out process is an important next step in implementing the will of Michigan voters and making sure that patients continue to have access to their medicine.” – MRA Executive Director Andrew Brisbo in a statement

During phase one of the process, which runs through May 31, cultivators and processors licensed by the state who obtain flower, shake, and trim directly from the caregiver who produced it will not be subject to disciplinary action by the MRA if they are using seed-to-sale software, logging the transaction, and if the product has been tested, according to a separate March 1 bulletin.

Phase two, which begins June 1, adds another condition for those growers who are receiving products from caregivers, in addition to the phase one stipulations:

“The total weight of marijuana flower a licensee obtains from caregivers is less than or equal to the total weight of marijuana flower that the licensee harvested (both wet and dry) between March 1, 2020 and May 31, 2020 plus the projected harvest weight (dry) of all plants that are in the flowering process on May 31, 2020.”

The bulletin notes that these values would be different for each cultivation facility.

For processors:

“The total weight of marijuana flower that processors obtain from caregivers must be less than or equal to 50% of the total weight of marijuana flower the licensee obtained from caregivers between the dates of March 1, 2020 and May 31, 2020. The marijuana flower obtained from caregivers must be processed and may not be sold or transferred as marijuana flower.”

Caregivers will be unable to transfer to any licensed business by September 30, after which licensees will be subject to disciplinary action.

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Numerous Hemp and Cannabis Expos Postponed Due to Coronavirus

3/10/2020

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Multiple cannabis and hemp business conferences have been postponed due to the outbreak of the coronavirus, including the NoCo Hemp Expo in Denver, Colorado; the group’s planned Southern Hemp Expo; and the National Cannabis Risk Management Association in Las Vegas, Nevada. The announcements mark at least the fourth or fifth cannabis industry events to be affected by the spreading COVID-19 virus.

The NoCo Hemp Expo has been rescheduled for August, while new dates for the Southern Hemp Expo and the NCRMA have not yet been announced. Colorado’s Hemp Expo is in its seventh year, while the Southern Hemp Expo, originally scheduled for August in Nashville, Tennessee, is in its third year.

Morris Beegle, producer of NoCo Hemp Expo, said “the decision to shift the timing… has not been an easy one” and that organizers are also “exploring options for a potential digital conference.”

“The health and safety of all participants remains a top priority. We want to provide attendees, exhibitors, vendors, staff, industry partners, and others involved in the Expo enough time to rework their schedules and plan accordingly for the newly announced August dates. … We look forward to creating a robust, powerhouse event in August and appreciate everyone’s support.” – Beegle in a press release

In Nevada, NCRMA chairman Rocco Petrilli said in a press release, “Our responsibilities as a risk manager transcend our passion and desire to bring our membership together.”

“Though we are disappointed to have to postpone our event, as our leadership continued to monitor the developments, it became abundantly clear that this was the correct course of action,” Petrilli said. “Our hearts go out to families and communities that have been affected by the COVID-19. We hope our decision will help reduce the spread of this virus.”

Last week, Expo West organizers announced at the last minute they were postponing the event, which was planned in Anaheim, California on March 3-7 – they have not announced a new date. CannTech and PsyTech organizers also said last week that they had pushed back both of the events, set for Tel Aviv, Israel, to June.

NoCo said they are following Centers for Disease Control and the World Health Organization protocols for the situation and are collaborating with their partners, including the National Western Complex – where the event will be held – the Denver Coronavirus Task Force, and Gov. Jared Polis’ office, on the changes.

The CDC released coronavirus guidelines for mass gatherings and large events last week.

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Boston’s First Adult-Use Dispensary Opens Today

3/09/2020

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Boston, Massachusetts has its first adult-use cannabis dispensary after the Cannabis Control Commission gave the business final approval last week, according to a CBS Local report. The shop is also the first in the state to be opened by economic empowerment applicants.

The approval for Pure Oasis comes more than three years after voters approved adult-use cannabis legalization. Pure Oasis, located in the Dorchester neighborhood, is co-owned by Kobe Evans and Kevin Hart, who were awarded a provisional license last August.

“We are excited to reach this important moment where we will open our doors as the first retail cannabis business in Boston and as the first economic empowerment candidate in the Commonwealth of Massachusetts.” — Evans and Hart, in a statement to Boston.com

Evans is a native of Dorchester, which historically has high cannabis arrest rates — a key requirement for applicants to the state’s social equity program. Requirements for the social program include having a past drug conviction, or being the spouse or child of an individual with a drug conviction, or having lived in an “area of disproportionate impact” for at least five years, and having an income that doesn’t exceed 400 percent of the federal poverty level. Applicants must have lived in Massachusetts for at least 12 months.

Boston Mayor Marty Walsh (D) – who opposed the statewide reforms – warned potential customers that there would be lines, cars, traffic “chaos” and “confusion” associated with the dispensary, but city officials are planning to do the “best job [they] can possible” to limit those issues. According to the Boston Globe, the dispensary expects 1,000 customers per day and has rented a space next door to accommodate up to 100 people waiting in line indoors.

Boston is the capital of Massachusetts and its most populous city.

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California Cannabis Brand to Pay $1.1M Settlement for Illegal Grow

3/09/2020

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A former Salinas, California licensed cannabis cultivator has settled with the county District Attorney’s Office for $1.1 million for growing with an expired license, exceeding maximum canopy for their license, and removing plants from the grow site “in the middle of the night,” according to a press release from the Monterey County DA’s Office.

The case against California’s Top Shelf and California’s Top Shelf Family stems from a September 2018 site inspection by the California Department of Fish and Wildlife – due to the farm’s location near a wildlife habitat near the banks of a waterway – which found violations of Fish and Game Code. Upon further inspection, officials found the company’s cannabis license had expired the previous month and that the grow had exceeded their 10,000-square-foot allowance.

Law enforcement officials advised the company to cease operations and not remove any of the plants; however, officers found employees moving the plants to another location in the middle of the night which forced the Monterey County Sheriff’s Office and Department of Fish and Wildlife to use extra resources to immediately eradicate the operation.

Under the settlement, the company did not admit to any wrongdoing but was ordered to pay $1.1 million in civil penalties and another $100,000 to the Department of Fish and Wildlife, and nearly another $100,000 to the Monterey County Sheriff’s Office, the Resource Management Agency, and the Fish and Wildlife Department.

The settlement also imposes a permanent injunction on the business owners from cultivating without a license.

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VA Staff in Legalized States Can Be Fired for Cannabis Use

3/09/2020

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In a memo to employees, the Department of Veterans Affairs reiterated that employees can still be fired for using cannabis even in states where it has been legalized, according to a Military Times report. The rules apply to all department staffers, the memo says, specifying that all VA employees “refrain from using illegal drugs on and off duty.”

“There is no legitimate medical explanation for a marijuana positive test result, other than a verified prescription of certain FDA-approved drugs. A prescription for medical marijuana is not an acceptable medical explanation for a positive drug test.” – Veterans Affairs memo, via the Military Times

According to policies outlined in the report, VA physicians are required to record cannabis use in medical files but that information “is part of the confidential medical record and protected under patient privacy and confidentiality laws and regulations.”

VA press secretary Christina Mandreucci told the Times that the agency’s policies against cannabis use by employees is not meant to discourage patients from discussing their own cannabis use as the policy applies only to employees. VA doctors are not permitted to qualify patients for state-approved medical cannabis programs and cannabis possession on VA property is considered a federal crime.

“Marijuana is illegal under federal law,” the VA memo says. “Even though some states have legalized the use of marijuana for medicinal and recreational purposes, marijuana, marijuana extracts, and tetrahydrocannabinols are illegal for human use under federal law.”

The memo is signed by current VA Secretary Robert Wilkie.

Last year, former VA Secretary David Shulkin, an appointee of President Donald Trump, told Task & Purpose that the “time is now” for the agency to research medical cannabis.

In the interview, Shulkin said he believes that medical cannabis access could help prevent suicides by veterans because those suicides are often linked to chronic pain, depression, and substance abuse. He said that he believes “properly prescribed” medical cannabis “may have some real benefits in anxiety improvement, in pain management, and potentially, in the issue of substance abuse.”

Last year, the VA opposed three federal legislative proposals that would have allowed the agency to research medical cannabis and allowed veterans access to medical cannabis products under state-approved programs.

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Study: CBD May Slow Brain Cell Death

3/06/2020

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A study published ahead of print last month by Mary Ann Liebert, Inc. suggests that cannabidiol (CBD) can help to slow the decay of brain cells.

The study, titled “Neuroprotective Effect of Cannabidiol Against Hydrogen Peroxide in Hippocampal Neuron Culture,” investigated the potential neuroprotective and neurotoxic effects of CBD “in vitro,” meaning in a petri dish or neuron culture platform.

Researchers specifically investigated CBD‘s effectiveness against the neurotoxicity of hydrogen peroxide (H2O2), a molecule that has been considered as a potential culprit in severe pathological conditions such as cancer, strokes, and neurodegenerative diseases.

“Although CBD showed both neurotoxic and neuroprotective effects on hippocampal neurons in the in vitro setting, the use of low-concentrated … CBD, not causing toxic effects on the neurons, significantly rescued the neurons from the oxidative stress (H2O2), confirming its neuroprotection capability.” — Excerpt from the report

The report acknowledged that more research is needed, but the results appeared to confirm CBD’s neuroprotective potential. “Biological modes of CBD action on neurons have not been elucidated fully, but our work clearly confirmed that CBD was highly effective in neutralizing the H2O2-induced neurotoxicity on primary hippocampal neurons, which is intimately involved in the onset and progress of neurodegenerative diseases” like Alzheimer’s disease, Parkinson’s disease, Huntington’s disease, and amyotrophic lateral sclerosis (ALS), wrote authors Jungnam Kim et al.

Study authors noted that further research should investigate the effects of CBD from its various administration methods, including “ingestion, inhalation, and transdermal or topical delivery.”

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DEA Admits Legalization Reduces Black Market Demand

3/06/2020

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The Drug Enforcement Agency (DEA) admitted in its latest performance budget submission to Congress that state-legal cannabis markets have helped to reduce demand in illegal cannabis markets. The admission, reported first by Marijuana Moment, also appears to suggest that DEA believes the eventual legalization of cannabis is all but inevitable.

“After the 2017 legalization of medical marijuana in Florida resulted in retail distribution centers throughout the [area], the legalization of low-Tetrahydrocannabinol (THC) (10%) smokeable medical marijuana in March 2019 is anticipated to lead to a growing market for Florida-sourced low-THC marijuana. Yet, until high potency marijuana becomes legalized in Florida, we believe the impact will be minimal on the demand for high-THC marijuana from California and other states.” — Excerpt from the report

This admission appears to confirm that cannabis consumers prefer legal sources to the unregulated market — additionally, the agency used the word “until” instead of “if” when referring to the eventual legalization of adult-use cannabis in Florida, implying that even federal law enforcement recognizes the ineffectiveness of cannabis prohibition.

“Their framing clearly indicate that the days of prohibition are nearly over. We are living through the death rattles of prohibition,” Justin Strekal, political director of NORML, told Marijuana Moment.

Meanwhile, polls continue to indicate that an increasing number — currently, about two-thirds — of Americans believe that cannabis use should be legalized nationwide.

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California Lab Finds 80% of Illicit Vape Cartridges are Tainted

3/06/2020

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A San Diego, California cannabis testing lab is sounding the alarm after nearly 80 percent of illegal and counterfeit vape cartridges it tested were “unfit for consumption,” KGTV reports. The testing by Infinite Chemical Analysis Labs (InfiniteCAL) discovered 62 percent of cartridges failed for high pesticide levels, while 40 percent failed for lead.

According to the U.S. Environmental Protection Agency, there is no safe amount of lead for humans as the heavy metal negatively affects almost every organ and system in the body.

InfiniteCAL co-founder David Marelius told KGTV that one of the vape pens tested by the lab “had almost a hundred times the legal limit” of lead. Additionally,  about 20 percent of the tested products “had a significant amount” of vitamin E acetate, which the Centers for Disease Control linked last year to the vaping-associated pulmonary injury.

Marelius said that about half of the products tested contained less than 50 percent THC.

San Diego-based Platinum Vape has partnered with Mankind, a dispensary in the city, to ‘buyback’ illegally-produced cartridges in exchange for discounted cartridges from its line. Platinum Vape co-founder George Sadler said the illicit vape products do “so much harm to people, versus walking into a licensed store.”

“I think the exposure needs to be there for people to really understand what’s happening.” — Sadler to KGTV.

Last year, California regulators launched Phase 3 testing for the cannabis space that included testing for terpenoids, mycotoxins, heavy metals – including lead – and water activity. According to InfiniteCAL’s Josh Swider, vape products can become tainted even if the cannabis oil is clean due to cartridge hardware quality.

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Washington Officials Warn Against Cannabis Delivery ‘Loophole’

3/06/2020

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In a policy bulletin last week, Washington cannabis regulators said, explicitly, that retail cannabis home delivery is “not legal” despite language in the law that would appear to provide a loophole for the service.

According to the Liquor and Cannabis Board bulletin, “some companies claim to have found a way around the delivery prohibition” with the part of the law that states:

“The delivery by a person twenty-one years of age or older to one or more persons twenty-one years of age or older, during a single twenty-four hour period, for noncommercial purposes and not conditioned upon or done in connection with the provision or receipt of financial consideration, of any of the following marijuana products, is not a violation of this section, this chapter, or any other provisions of Washington state law.”

The bulletin clarifies that the “exception is specifically for non-commercial, and non-financial purposes.”

“It does not exempt licensees from their prohibition on home delivery, and there is no legal pathway for commercial delivery, delivery service, or a delivery app to be used to facilitate home delivery from retail licensed locations to customers.” – Washington Liquor and Cannabis Board, February 26, 2020, Bulletin No. 20-01

According to an Inlander report, the bulletin is targeting Pelican Delivers, which provides an app for retail cannabis home delivery in the state. Through the app, the company facilitates payment from the customer to a dispensary and provides a delivery driver, who is paid for the service, with the customer and the dispensary, the report says.

It’s unclear, however, who pays the driver, which has led to the confusion about the legality of the service as it could be argued that the driver is simply delivering a legal product but is not accepting cash from the customer; however, the LCD bulletin appears to clarify the agency’s position.

“Retail licensees cannot participate in home delivery, home delivery services, or apps for home delivery that violate any of the two stipulations [in the law],” the bulletin says. “If approached with proposals claiming to allow for legal home delivery, please contact your enforcement officer.”

Last year, regulators sent draft legislation to the members of the state’s cannabis industry that included adding retail delivery for producers that cultivate 2,000 square feet or less in an effort to give them a “leg up” over larger-scale producers, LCB spokesman Brian Smith told the Spokesman-Review last summer. That bill has yet to materialize in the Legislature.

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Former Canopy Growth Execs Launch Hemp and CBD Investment Firm

3/06/2020

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Former Canopy Growth CEO Bruce Linton has launched a new company, Collective Growth, focused on investment opportunities in the hemp and CBD space, Yahoo Finance reports. The firm is co-founded by Geoff Whaling, the current chairman of the National Hemp Association who worked with Linton at Canopy and supervised the company’s buildout of its New York Cultivation facility.

The venture aims to raise up to $150 million in an initial public offering as a special purpose acquisition company and filed Monday with the Securities and Exchange Commission to eventually list on the Nasdaq under the CGROU symbol, the report says.

“Where we have a space right now is hemp shouldn’t just be viewed as CBD. Hemp has so many virtues that are under-realized. What we want to take is the whole plant and create a profit from every element of it.” – Linton to Yahoo Finance

Linton will serve as the Chairman and CEO of the firm, while Whaling was named president. The leadership team also includes form Canopy Growth Chief Financial Officer Tim Saunders, who held the same role with Canopy for four years until last May, New Cannabis Ventures reports.

According to a Renaissance Capital report, the company plans to raise $150 million by offering 15 million units at a price of $10. Each unit comprises one Class A share and one-half of a redeemable warrant, which is exercisable at $11.50. At the proposed deal size, Collective Growth would hold a market value of $190 million, the report says.

Linton was ousted by Canopy Growth last July amid a shakeup at the company that saw four directors installed by Constellation Brands – an alcohol distributor that holds about 38 percent of the company’s stock. He was named executive chairman of Vireo Health in November.

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Scott Goldie: Scaling a Cannabis Farm in California

3/05/2020

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We recently interviewed Scott to ask about Goldenseed‘s award-winning products and his experience so far in the California marketplace. Scroll down to check out the biggest lessons he’s learned, which Goldenseed products have performed the best, Scott’s future plans for expansion, and more!

Ganjapreneur: What are some of the most popular Goldenseed products or genetics in the California market?

Scott Goldie: Our pre-roll terpene tip joints have been incredibly popular – winning two first place awards at High Times and Hempcon competitions and being picked up in close to 50 dispensaries already. In general, our flower has been well-received by the market due to the high terpene profiles and with many strains exceeding 20% THC. This year we will be expanding our product offerings significantly, leveraging the lifestyle brand we have created and our rapidly-expanding distribution. On the hemp side, we have highly-desired genetics that have very high CBD percentages with strong terpene profiles. Recently, we partnered with a company to manufacture hemp cigarettes.  They did a nationwide search and determined we had the best genetics for their product.

Does the brand have plans to acquire producer licenses in other states? Which markets?

One of the reasons we chose to do a stock offering to the general public was to build the brand nationally, even though we can’t sell cannabis products outside of California yet. When cannabis becomes legal at the federal level, we will have name recognition and a foothold in many states and we think this will give us a leg up on other brands. We’ve already had people apply to invest from more than 40 states and 14 countries, and we just got started with the stock offering. It will be nice to have investors across the country knowing who Goldenseed is, telling their friends, family and local dispensaries about us. Of course, with hemp and CBD products, we can already market around the country, which will also help us build name recognition. While we have explored several licensing opportunities on the West Coast, at this time we are focused on building our infrastructure and distribution here in California. As we become identified as an iconic California lifestyle brand, we think our message and product offerings will resonate and become highly-desired in other states. A parallel I like to draw is the desirability of a Napa Valley cabernet, a well-established icon coveted by wine aficionados throughout the country and even recognized by many casual wine drinkers. As we build the Goldenseed cannabis brand and expand our identity in other states through our stock offering, we feel licensing opportunities will be more likely.

How does Goldenseed acquire their genetics? Do you breed new strains or acquire genetics from reputable breeders?

Our grower has been growing for nearly four decades. Over that time period, he has amassed a library of some of the best genetics in terms of taste, appearance, aroma, yield, terpene profiles, THC content, grow time and disease resistance. While he has sourced some genetics historically, he takes great pride in being a breeder.  He is constantly on pheno hunts — cross-breeding and back-breeding to create the best and most consistent strains.

Goldenseed is almost completely vertically integrated — which aspects of the supply chain are owned or controlled in-house, and which aren’t?

Goldenseed is completely integrated at this point, starting with a worm farm that produces vermicompost for our plants, nursery, cultivation, manufacturing and retail products.  While we have a distribution license, we are currently using third party distributors to bring our products to the market.

Why did Goldenseed decide to start raising public funds using Regulation A fundraising?

In addition to name and brand recognition nationally, we really wanted to give everyday people a chance to join us on this journey at an early stage by investing – even a small amount.  Why should the wealthy and the well-connected be the only ones who get to invest in a company like ours at an early stage where there is growth potential? We saw this stock offering as a way to democratize the investment process for the little guy and to give them a chance to own a piece of something that they love and believe in. It’s heartening to hear from them as they go through the investment process and tell us how much it means to them to have a chance to invest in us and in the cannabis industry. To know we were the first U.S. grower to be able to do this after being qualified by the SEC is really special. A lot of people have told us they still can’t believe they can legally buy weed, much less own a farm that grows it!

What did it take to get SEC approval for a cannabis farm?

A lot of people thought we were crazy going to the SEC and asking them to qualify a stock offering for a company like ours that “touches the plant” — we grow it, we process it, we make and sell products. To ask a federal agency to review what we do — with cannabis illegal at the federal level — was intimidating at first. But we partnered with our securities lawyer, Kendall Almerico, who had a lot of experience with Regulation A, the law that allows a private company like ours to sell stock to the public, and he guided us through the grueling process. We had to submit detailed business plans, audited financial statements, contracts and hundreds of pages of documents that explain pretty much everything about Goldenseed. The management team had to undergo background checks. The entire process took a few months but the examiners at the SEC were very professional to work with. We made it through and proved a lot of people wrong. I think it is a sign that times are changing and hopefully we will see the federal ban on cannabis lifted soon. When that happens, Goldenseed will almost certainly already have a national footprint with investors all over the country, which we think gives us a leg up on all competitors.

What protections do investors have if the necessary funding isn’t raised?

We’re dedicated to making this company profitable and to providing each and every investor with a return on their investment. We are not relying on this stock offering alone to fund the business — we have products to sell and are in a lot of dispensaries already. We have already generated revenues even at our early stage. We have a big hemp harvest already in our processing facility that we plan to monetize. We just planted a new crop of cannabis plants to turn into pre-rolls and flowers to take to market. There are never any guarantees of course, and we all know any investment involves a level of risk. For instance, when you buy stock on the New York Stock Exchange sometimes that stock loses value and some of those companies even go bankrupt.  All an investor can do is put their money and their faith in a company they believe in, who does things the right way. We are doing everything we can to make sure we remain a company our investors, large and small, can be proud to be a part of.

With the proper funding what expansions and plans does Goldenseed plan to undertake?

We would eventually like our California lifestyle brand to be available in every state that allows the sale of recreational cannabis, once the federal ban is lifted.  We think people all over the country will identify with the quality of our brand and the roots of the cannabis industry in the state of California, and that Goldenseed will be a desirable and popular brand as a result. All along, maintaining the award-winning quality of our products and our sustainable and natural farming methods is a huge key. On the hemp side, we are presently planning to roll out hemp cigarettes nationally and internationally very soon, we recently announced a hemp clothing line with Zane Lamprey of Adv3nture, and a number of CBD products that we believe will be of the highest quality we can possibly make are in the works. Remember, our core management team has experience to manage the infrastructure needed to grow this company in a responsible, but fast way — without cutting corners on the quality of our products.

Thanks, Scott, for sharing your input and expertise with our readers! Learn more about Scott Goldie and Goldenseed at GSeed.com.

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Canopy Growth Lays Off 500 and Shuts Down Two Greenhouses

3/05/2020

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Two large Canopy Growth greenhouses were closed in Delta and Aldergrove, B.C. on Wednesday, leaving approximately 500 people without jobs, according to a statement by the Canadian cannabis provider. The two facilities consisted of about three million square feet of production space.

The company will also be stopping all plans for building a third greenhouse in Niagara-on-the-Lake. Canopy blames the closures on changes in federal law pertaining to outdoor commercial cultivation and slow growth in the recreational market.

The announcements come just a few months after Mark Zekulin resigned as CEO and respected investor David Klein was appointed to the position.

“When I joined Canopy Growth earlier this year, I committed to focusing the business and aligning its resources to meet the needs of our consumers. Today’s decision moves us in this direction, and although the decision to close these facilities was not taken lightly, we know this is a necessary step to ensure that we maintain our leadership position for the long-term.” — CEO David Klein, in a press release

According to some market analysts, Canopy Growth’s revenue is expected to reach $424.2 million CAD in 2020 and $725.8 million CAD in fiscal 2021. The publicly-traded company expects to lose around $700-800 million CAD from the employee layoffs in the quarter ending March 31, 2020. Also, they reported an EBITDA of 91.7 million Canadian dollars in the last fiscal quarter.

They are not expected to reach positive EBITDA by 2021 but the amount of debt is expected to continue shrinking exponentially at that time.

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Cannabis Market Launch Delayed In Maine Until June

3/05/2020

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Maine officials now predict the state’s first adult-use cannabis operator will open for business in June, three months later than originally expected, the Portland Press Herald reports.

Erik Gundersen, director of the Office of Marijuana Policy, said Maine is “very close” to wrapping up the licensing process after receiving 197 applications, 80 of which were deemed sufficiently complete. Once an applicant is approved, however, they still will need to secure local authorization before being fully licensed. Additionally, the state also still needs to approve at least one official testing laboratory.

State officials have decided to wait until there is enough infrastructure to support the industry during its early days before the official launch, hence the multi-month delay.

“(That) will allow product to go through the mandatory testing regime, go through the manufacturing process and allow retail stores to fully stock their shelves with a wide array of products. Hopefully, (we’ll) get enough products into the system to withstand the first day, the first weekend, the first week of demand so we don’t have a shortage like we’ve seen in other states.” — Gundersen, via the Press Herald

The delays have prompted major adjustments to the state’s expected amount of cannabis tax revenue in fiscal year 2020, which ends in June.

Maine voters passed an adult-use cannabis legalization initiative in 2016. Meanwhile, neighboring Massachusetts — which voted to legalize during the same election — launched its own adult-use marketplace in 2018.

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Treasury Secretary: Cannabis Cash ‘Creates Problems’ for IRS

3/05/2020

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Treasury Secretary Steven Mnuchin told lawmakers on Wednesday that the cash-only nature of the cannabis industry “creates significant problems” for the Internal Revenue Service and “creates risk” for IRS employees and “people in the community,” according to a report from The Hill.

During his testimony to the House Appropriations subcommittee, Mnuchin didn’t take a stance on the issue of cannabis banking at large but said the Treasury Department “has limited abilities” within the guidance from the agency’s Financial Crimes Enforcement Network (FinCEN) “to direct” the issue. Mnuchin urged lawmakers to “deal with” the issue “one way or another.”

“We have to build cash rooms to take in large amounts of cash where people owe us taxes, because we want to collect the taxes, and those entities are not banked.” – Mnuchin, in remarks to the House Appropriations subcommittee, Mar. 4, 2020, via The Hill

The 2014 policy guideline from FinCEN provides a pathway for cannabis operators in legal states to access traditional financial services but it’s largely at the discretion of the service providers.

In 2018, the agency reported more than 300 banks and about 100 credit unions were providing services to the space, but FinCEN’s rules were muddied by former Attorney General Jeff Sessions, who rescinded the Cole Memo, which had protected state-legal cannabis businesses from federal interference. Following the move by Sessions, FinCEN said their 2014 guidance remained in place; however, most banks, credit unions, and credit card processors still refuse to serve the industry.

Last September, House lawmakers passed the SAFE Banking Act, which would explicitly allow cannabusinesses access to financial services; however, that measure has not been voted on by the Republican-controlled Senate. Sen. Mike Crapo (R), the chair of the chamber’s Banking, Housing, and Urban Affairs Committee, does not support the legislation.

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Kentucky Senate Leader May Block Medical Cannabis Bill’s Progress

3/05/2020

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The chairman of Kentucky’s Senate Judiciary Committee, Sen. Whitney Westerfield (R), said the medical cannabis bill approved by the state House last week “won’t get a hearing” until he is “OK with it,” the Louisville Courier Journal reports. The measure passed the lower chamber in a 65-30 vote on February 20.

Westerfield said he still has questions about the legislation and said there are parts he “would want to change or at least have someone explain … why they’re in there in the first place.” Among his concerns, he said, are whether the bill would allow “people from other countries that have medical marijuana to get it” in the state, and whether using government agencies to choose which businesses would get a license would be “putting a thumb to the market.”

During the House vote, a slight majority of Republican lawmakers joined Democrats in approving the bill, which prohibits smokable forms of cannabis and home grows, and allows municipalities to opt-out of allowing industry operations, according to the Courier Journal.

Westerfield said he wasn’t sure whether the measure had the majority support among the Republican majority in the Senate to give it a hearing in the committee and that he planned on having a conversation with the caucus before he was prepared to move it forward.

Following the bill’s passage, Republican Senate President Robert Stivers described it as having a “narrow path” to approval in the chamber.

Rep. Jason Nemes (R), the bill’s sponsor, said Republican Senate leadership told him the measure would get a “fair chance” in the upper chamber.

“When you have an open mind and when you come to it in fairness, nine out of 10 people turn their opinions. And that’s what I expect it will be in the Senate as well.” – Nemes to the Courier Journal

In February, Foundation for a Healthy Kentucky polling found 90 percent of Kentuckians support medical cannabis legalization, including 95 percent of Democrats, 92 percent of independents, and 90 percent of Republicans.

According to the Courier Journal, medical cannabis reforms have been rebuffed in the state for 10 legislative sessions. The Kentucky legislative session adjourns on April 15.

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Israeli Cannabis & Psychedelic Events Delayed Due to Coronavirus

3/05/2020

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A cannabis conference scheduled for later this month in Tel Aviv, Israel has been postponed until June amid growing concerns over the COVID-19 coronavirus, organizers announced on Tuesday. A sister conference that focuses on psychedelics, PsyTech, was also postponed until June.

CannTech indicated the decision was made based on recommendations from the Israeli Ministry of Health, the World Health Organization (WHO), and the Centers for Disease Control and Prevention.

Saul Kaye, CEO of iCAN: Israel-Cannabis, said the organizers are “fully committed” to holding the events.

“Our number one concern is the health and safety of our attendees and speakers, our partners, our colleagues and our vendors. While we are disappointed to postpone both CannaTech Tel Aviv & PsyTech Summit, we are very confident it will be worth the wait.” – Kaye in a statement

The postponement of the event came one day after Expo West organizers announced their own delay but were not yet able to announce a new date. Expo West, a major natural products tradeshow that includes CBD brands, had been scheduled for this week in Anaheim, California.

The novel coronavirus has also disrupted vape cartridge supplies, such as coils and batteries, which come largely from China.

CannaTech is in its fifth year, while this is the first year PsyTech will be held.

According to Haaretz, Israel has had 15 confirmed cases of the coronavirus as of Wednesday, and officials have ordered a 14-day quarantine for all travelers returning from Germany, Spain, France, Switzerland, and Austria. The country has also banned gatherings of more than 5,000 people.

Out of the 15 confirmed cases of infected Israelis, eight are reported to have contracted the virus in Italy, while four contracted it from people in Israel who tested positive, according to the Haaretz report. The remaining three were aboard the Diamond Princess cruise ship, which was docked in a Japanese port.

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MLB Allows Cannabis Use But Not Cannabis Sponsorships

3/04/2020

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Major League Baseball (MLB) further clarified the league’s cannabis policies this week, confirming players’ right to use cannabis products during off-hours but announcing that, for now, players are not allowed to partner with or accept sponsorships from cannabis companies, ESPN reports.

The policy shift to allow cannabis use was announced in December but officials clarified in a memo last week that cannabis sponsorships, for now, are still off-limits. MLB said it plans to address the issue in the future but, “until such guidance is issued, any such investments or commercial arrangements are still considered to be prohibited in accordance with current practices.”

The league also clarified that players can still face repercussions for cannabis use: Players and team personnel who “appear under the influence of marijuana or any other cannabinoid during any of the Club’s games, practices, workouts, meetings or otherwise during the course and within the scope of their employment” will undergo a “mandatory evaluation” for a potential treatment program, according to the memo.

The league also clarified that players and employees can still face repercussions for cannabis use:

“If players or Club personnel appear under the influence of marijuana or any other cannabinoid during any of the Club’s game’s practices, workouts, meetings or otherwise during the course and within the scope of their employment, they will be referred to a mandatory evaluation under the applicable cannabinoid and alcohol treatment program.” — MLB memo, via Marijuana Moment

Previously, pro baseball players who tested positive for cannabis were subject to mandatory treatment and persistent offenders were charged up to $35,000 in fines per offense.

According to the report, twelve MLB teams — the A’s, Angels, Blue Jays, Cubs, Dodgers, Giants, Mariners, Padres, Red Sox, Rockies, Tigers, and White Sox — are based in cities where adult-use cannabis has been legalized. Medical cannabis, meanwhile, is available in every MLB location except for Georgia, Texas, and Wisconsin.

Major League Baseball is ahead of the National Football League in terms of updating its cannabis policies — the NFL is currently bargaining over a relaxed cannabis policy with the NFL Players’ Association.

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Florida Proposes Capping THC at 10% for Children

3/04/2020

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A proposal in Florida’s House of Representatives would cap medical cannabis THC content at 10 percent for patients under 21-years-old, the News Service of Florida reports. A nearly identical version of the measure stalled in the Senate earlier this week.

The measure, introduced by Rep. Ray Rodrigues (R) as an amendment attached to a Department of Health reform package, would also limit the daily dose of smokable medical cannabis products to .08 ounces (about 2.27 grams) and cap daily edible doses at 200 milligrams of THC with no single dose exceeding 10 milligrams, according to the bill text.

Patients under 21 would only be able to obtain products in excess of the THC cap if their physician gets permission from health officials or if they are terminally ill.

Ron Watson, a lobbyist who represents medical cannabis company MüV Florida, called the 10 percent cap “arbitrary” and “based on inconclusive research” which puts “the most vulnerable medical cannabis patients” in the state at risk.

“We believe a patient’s course of treatment should only be decided by a physician in collaboration with a parent and their child.” – Watson to the News Service of Florida

Children under 18 enrolled in the state’s medical cannabis program are already required to have approval from two doctors.

Sen. Gayle Harrell (R), the Senate Health Policy Chair who introduced a similar version of the bill in the Senate that was ultimately withdrawn after bipartisan pushback in the chamber’s Rules Committee, told reporters that she introduced the bill to see “how the THC limit for children would play out” in the committee but there was “no appetite” for the limit in the upper chamber.

The THC limits for children are a priority for Republican House leaders, according to the report, including Speaker José Oliva; however, the House proposal has not been vetted by any committee in the chamber.

Florida‘s legislative session ends March 13 and House lawmakers could pull the medical cannabis-related amendment from the reform package if they believe it wouldn’t pass in the Senate.

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800+ Rejected Medical Cannabis Applicants File Appeals in Missouri

3/04/2020

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More than 800 appeals have been filed by companies that were denied state licenses to operate a medical cannabis business in Missouri, with many of the appeals arguing that the scoring system used in the licensing process was flawed, the Associated Press reports. The state received 2,266 industry applications by at least 700 groups for just 60 cultivation licenses, 86 manufacturers, and 192 dispensaries.

Nevada-based Wise Health Solutions was hired to score the applications and some rejected applicants argue that the firm assigned different scores for the same answers on applications, the report says.

In an interview with KMOX, Joe Ingrande, who had hoped to open a dispensary in Bowling Green, called the process unfair. He and another investor spent about $60,000 in application and consultants’ fees and securing a potential building but said there was “too much ambiguity” with the testing process. Ingrande argued that in-state applicants were supposed to get priority in the process but many of the winners appeared to be out-of-state corporations.

A review by the St. Louis Post-Dispatch found that about two dozen groups that each won five or more licenses had ties to out-of-state cannabusinesses or the Missouri Medical Cannabis Trade Association, or MoCannTrade.

The process is also subject to at least one lawsuit challenging the constitutionality of the licenses, arguing that the cultivation license cap violates a state constitutional “right to farm,” according to an MJBizDaily report.

Lisa Cox, communications director for Missouri’s Department of Health and Senior Services which has hired three outside attorneys to assist the state’s legal team review of all the appeals, told MJBizDaily that the agency does not anticipate “any delays to the program rollout due to litigation.”

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