Report: Colorado’s Ebbu Allegedly Violated State Investment Laws

10/15/2019

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Ebbu, a Colorado-based cannabinoid technology company, is alleged to have misled investors and violated Colorado cannabis investment rules, according to a WeedWeek report based on leaked emails and internal company documents.

Under Colorado‘s adult-use cannabis rules, investors in licensed cannabis companies are supposed to undergo background checks by the state, including fingerprinting and financial disclosures. It appears that Ebbu, however, may have for years promoted an illegal “gifting” investment strategy for investors who wish to remain truly anonymous.

In one specific case from 2013, WeedWeek uncovered evidence of a $140,000 investment given to Ebbu co-founder Michael “Dooma” Wendschuh by an individual only characterized as “E.” One week later, Dooma invested $140,000 into the company without mentioning “E.” According to leaked emails from two months later, the company’s lawyer Christian Sederberg — who co-founded cannabis law firm Vicente Sederberg — was unwilling to participate in similarly structured investment deals.

Ebbu, founded in 2013, was first known for its plan to release a “Feelings” line of cannabis products, which would have each elicited specific sensations/effects such as Energy, Chill, Bliss, etc. The idea has been shared by other cannabis companies, but no company to date has been able to successfully follow through on such effect-specific products. Ebbu has since pivoted to cannabinoid research and was acquired last year by Canadian powerhouse Canopy Growth for approximately $250 million, where Ebbu is focusing on hemp genetics.

WeedWeek said Ebbu executives did not respond to statement requests for their story; Ebbu likewise did not immediately respond to Ganjapreneur’s request for a comment regarding the investment allegations.

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Denver’s Bonsai Cultivation Issues Flower Product Recall

10/15/2019

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Denver cannabis company Bonsai Cultivation has issued a recall of its flower, shake, trim, and pre-roll products due to excessively high yeast and mold counts, Denverite reports. The Denver Department of Public Health & Environment says stores and consumers should throw the products away.

“DDPHE opened an investigation after identifying multiple samples of marijuana plant material had failed total yeast and mold sampling from multiple retail store locations. DDPHE is investigating this issue and overseeing the recall process to remove potentially contaminated products from commercial circulation.” – DDPHE, in a statement, via Denverite

At least 45 retail stores, cultivation facilities, and manufacturing facilities throughout Denver are affected by the recall. Products bought between Apr. 30 and Oct. 14 could be affected.

It’s the third recall by Denver cannabis companies this year. In April, Lightshade Labs LLC issued a voluntary recall over yeast and mold which affected flower, shake, trim, and pre-rolls. DDPHE said that investigation was opened following consumer complaints. Affected Lightshade products were sold at five Denver retailers, one Federal Heights retailer, and two Aurora retailers.

In July, Universal Herbs LLC voluntarily recalled pre-rolls of Blue Cookie strains sold at the company’s Denver location over yeast and mold counts.

There have been no confirmed illnesses associated with any of the recalled products but the agency said that potential health impacts depend on the product, duration and frequency of use, and level of exposure.

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California Gives $3M to UC San Diego for CBD Research

10/15/2019

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California is giving the University of California, San Diego $3 million to study CBD, the San Diego Union-Tribune reports. The funds will be split between five research projects aimed at exploring the efficacy of CBD to treat psychosis, rheumatoid arthritis, insomnia, alcohol dependence, and anorexia nervosa.

The studies are being conducted by UCSD’s Center for Medicinal Cannabis, which is already studying CBD treatment for children with severe autism.

The funds for the five research projects were taken from cannabis taxes derived from legal sales at licensed dispensaries. The autism study is funded with a $4.7 million grant from the Ray and Tye Noorda Foundation of Lindon, Utah. That gift is still the largest private donation for medical cannabis research in the U.S.

“Within the medical community, there is a lot of interest in the role of medical cannabis and CBD. There is a hope that it could be yet another useful agent in some of these conditions, which are difficult to treat or disabling.” – Igor Grant, director of the UCSD cannabis center, in a statement, via the Union-Tribune

UCSD researchers have been studying medical cannabis since 2000 and has published two studies. In 2007, the center reported that smoked cannabis was effective in treating neuropathic pain; that study was published in the journal Anesthesiology. In 2012, a clinical study at the center found smoked cannabis reduced some symptoms of multiple sclerosis. That study was published in the Canadian Medical Association journal. ‘

The department currently has three cannabis-related clinical trials in progress including the effect of cannabis and endocannabinoids on HIV neuropathic pain, and the effect of vaporized cannabis on neuropathic lower back pain, and one to evaluate the effects of driving under the influence of cannabis.

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California Gov. Approves Cannabis Tax Overhauls

10/14/2019

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California Gov. Gavin Newsome (D) signed a bill into law on Saturday that will override the infamous Section 280E of the Internal Revenue Code, which has blocked cannabis businesses from taking advantage of the usual tax deductions afforded to other American businesses, Tom Angell reports for Forbes.

Despite the growing hype around the industry, cannabis businesses nationwide have long struggled to break even or stay afloat due to Section 280E. AB-37, proposed by Assemblymember Reggie Jones-Sawyer (D-Los Angeles), would relieve a significant amount of that pressure for California cannabis companies.

“This bill, for each taxable year beginning on or after January 1, 2020, and before January 1, 2025, would specifically provide in the Personal Income Tax Law for nonconformity to that federal law disallowing a deduction or credit for business expenses of a trade or business whose activities consist of trafficking specified controlled substances only for commercial cannabis activity…” — Excerpt from AB-37

AB-37 was approved alongside many other cannabis-related bills, including one bill instructing officials to create and submit an industrial hemp program satisfying the USDA’s requirements and another bill implementing cannabis compassion programs to benefit low-income medical cannabis patients.

The governor, however, chose to veto legislation that would have allowed the use of medical cannabis products in hospitals, saying the bill departed too far from federal laws and would risk losing federal Medicare and Medicaid funding. “It is inconceivable that the federal government continues to regard cannabis as having no medicinal value,” said Newsom.

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Dietary Supplement Industry Calls for CBD Protections

10/14/2019

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Four U.S. dietary supplement trade associations have signed and delivered an open letter to Congress calling for clarification on CBD product marketing and sales, according to a press release.

The groups — the American Herbal Products Association (AHPA), Consumer Healthcare Products Association (CHPA), Council for Responsible Nutrition (CRN), and United Natural Products Alliance (UNPA) — call specifically for Congress to, “pass legislation to clarify that CBD derived from the hemp plant is a lawful dietary ingredient if the dietary supplement containing the CBD meets established product safety and quality criteria.”

“These actions are urgent given the strong consumer interest in CBD, the growth in products and sales, and the need for clarity among consumers, retailers, and manufacturers about the legal status of these products,” the letter reads.

“While FDA has been working to craft its policy on hemp-derived products…it could take three to five years for even an expedited rule-making process to establish a legal regulatory pathway for use of CBD in dietary supplements and conventional foods. Given the rapidly growing marketplace of products…it is crucial that Congress take quick action to clarify the legal status of hemp-derived CBD dietary supplements…[and]…essential for FDA to have the resources it needs to protect the public from unsafe CBD products.” — Excerpt from the letter

Hemp was legalized at the federal level last December and, while the FDA has been working since toward the release of new CBD regulations, the industry remains in a somewhat limbo state with CBD awareness and demand only continuing to rise among consumers.

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Oregon Enacts 6-Month Flavored Vape Ban

10/14/2019

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Oregon authorities established new rules on Friday that follow up on an executive order issued by Democratic Gov. Kate Brown on October 4, which called for a statewide ban on flavored nicotine and cannabis vaporizer products, Marijuana Business Daily reports. The ban will take effect starting tomorrow, October 15.

According to Oregon health officials, five of the nine individuals who have fallen ill with the vape-linked pulmonary disease in Oregon had purchased THC vape products from the legal cannabis industry; two of the nine affected patients have died.

Retailers who continue to sell the banned products will receive a written warning and recommendations for becoming compliant before facing civil penalties of up to $500 per day. Cannabis retailers who fail to honor the ban will also run the risk of losing their license, according to Steve Marks, executive director of the Oregon Liquor and Cannabis Commission (OLCC).

Starting October 15, the OLCC will also gain the new ability to require cannabis licensees to send specific product samples over to regulators for testing.

Oregon is the third state to issue a vaporizer ban; Washington recently established a 120-day temporary ban on flavored vaporizer products, while Massachusetts last month approved a more sweeping, four-month ban on all THC and nicotine vape products. Regulators in Colorado, meanwhile, recently proposed stricter rules for THC vape products.

The CDC has released data suggesting that the majority of patients affected by the national, vape-linked pulmonary disease used counterfeit or unregulated cannabis vaporizer products.

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California Gov. Signs Bill Allowing Medical Cannabis in K-12 Schools

10/11/2019

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California Gov. Gavin Newsom (D) has signed a bill allowing K-12 students to use medical cannabis at school, the Los Angeles Times reports. The law allows parents in some school districts to bring medical cannabis products to their children at the campus but does not allow those products to be in smokable or vapeable form.

A similar measure was vetoed by former Republican Gov. Jerry Brown in 2018. Under the previous state laws, students or parents could not bring medical cannabis within 1,000 feet of campus and parents had to pick up their child to administer medical cannabis and bring them back.

Los Angeles Unified School District board member Jackie Goldberg told the Times that she believes medical cannabis “ought to be available as a need if the student’s family gets a prescription or a recommendation from a medical doctor.” She indicated the board would ask the district’s health officials for possible policy recommendations.

The measure was opposed by anti-cannabis groups and the California Police Chiefs Association. Scott Chipman, of the group Americans Against Legalizing Marijuana, called the bill a “stunt” and said there was “absolutely no reason” students couldn’t use medical cannabis outside of school hours, adding that the Food and Drug Administration has approved an epilepsy drug that is taken in the morning and evening.

The police chiefs association opposed the law as they seek “to prevent any youth under the age of 21 from accessing all types of cannabis products.”

“While we understand some parents may choose to treat their student’s illnesses with cannabis, we are opposed to allowing parents or guardians administer the drug to their student while on school grounds.” – California Police Chiefs Association, in a statement, to the Times

Sen. Jerry Hill (D), the bill’s sponsor, said the bill is for students “for whom medicinal cannabis is the only medication that works.” He said it would prevent patients from disrupting their studies or those of their classmates.

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Washington Regulators Ban Flavored Vape Products

10/11/2019

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The Washington State Board of Health took action on October 10 following an executive order by Gov. Jay Inslee (D), issuing emergency rules banning all flavored vaping products in the state. The rules come on the heels of a nationwide outbreak of vaping related pulmonary disease.

According to the CDC, there have been 1299 vaping related illnesses and 26 vaping-related deaths across the country. The Washington ban covers both nicotine and THC flavored vaped products. The current ban lasts one hundred and twenty days, but the Governor is asking the legislature and the Board to work together to write legislation to permanently ban the sale of flavored vaping products.

In a letter to the Board of Health, The Cannabis Alliance, Washington’s largest cannabis trade organization, said it supported the governor’s efforts to address the teen vaping epidemic.

“The lack of regulation on the nicotine vapor industry and the high use of synthetic and artificial flavors in e-juice products have attracted youth to these products in staggering numbers,” Alliance members wrote. “It’s also clear that the illicit and unregulated cannabis marketplace has no oversight or transparency into the products that our youth and others are accessing on the street.”

The Alliance clarified, however:

“The majority of products in the regulated cannabis industry do not utilize strong “youth targeting” flavors. The regulated cannabis industry has a very high youth-access compliance rate (~95%); higher than alcohol by a significant percentage. The regulated cannabis industry is committed to being transparent about their products, the process of making them, and what goes into them. The regulated cannabis industry is committed to working with the state to keep people from seeking products in the unregulated market.” — Excerpt from Cannabis Alliance letter to Washington Board of Health

Additionally, The Washington State Liquor and Cannabis Board has asked all regulated licensees to display signage explaining the ban, disclose all ingredients used to manufacture vaping products, and cooperate with the ongoing “epidemiological investigation” into the cause of the vaping crisis.

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Texas Shuts Down Dispensary Application Website

10/11/2019

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The Texas Department of Pubic Safety has abruptly suspended the medical cannabis application process without an explanation just one week after it had opened it up, the Texas Tribune reports. The agency had indicated it would accept applications from Oct. 1 through Nov. 1.

“The Department’s Compassionate Use Program is not accepting applications at this time,” the department’s website says.

“The department will continue to assess dispensing capacity requirements, along with the need for any additional licenses, as we work through recent legislative changes to the program.” – A DPS spokesperson, in an email to the Tribune

In 2017, just three companies were approved to dispense medical cannabis in the state out of 43 that applied. Only Surterra Texas, Cansortium Texas, and Compassionate Cultivation were approved by DPS in the first application round two years ago.

Jax Finkel, executive director of Texas NORML, said it was a “concerning” move by the agency, and that doctors, patients, and the general public were given “no notice and no clear communication.”

State Rep. Stephanie Klick (R), who sponsored the measure to expand the state’s medical cannabis law last session, said the delay was “temporary.”

“Hang tight for now,” Klick told the Tribune. “This is likely just a temporary delay until we know which of the incurable neurodegenerative conditions are appropriate to be included on the list.”

Klick said that officials are trying to determine new patient count estimates after the state added incurable neurodegenerative diseases to the qualifying condition list, which she said could take months.

In May, lawmakers added seizure disorders, multiple sclerosis, spasticity, amyotrophic lateral sclerosis (Lou Gehrig’s Disease), autism, terminal cancer, and incurable neurodegenerative diseases such as Alzheimer’s, Parkinson’s, and Huntington’s diseases to the state’s medical cannabis program.

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Quebec to Appeal Home Grown Cannabis Ruling

10/11/2019

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The Quebec government will appeal a September court decision that ruled the province’s ban on home cannabis cultivation is unconstitutional, the Canadian Press reports. Last month, Superior Court Justice Manon Lavoie ruled that the ban equals criminal legislation, which is under federal jurisdiction.

Under Canadian federal law, citizens are allowed to grow up to four plants in their home but Quebec ultimately banned home cultivation under provincial regulations.

Following the ruling, Julien Fortier, the attorney who brought the case, called it a “very technical” decision and warned that the government could bring an appeal or try to rewrite the law in a constitutional way.

Quebec Premier Francois Legault told Airdrie Today that the government “will go right to the limit in the courts to do what we think is good for Quebecers.” He added that both major provincial parties – Coalition Avenir Quebec and Liberals – agree on the ban.

Lionel Carmant, Quebec’s junior health minister, said the province’s stance is different than the rest of the nation and officials support a public health approach to cannabis use and avoid trivializing cannabis use. He added that property owners “think it would be bad for their apartment rentals to permit the growing of cannabis in the home.”

Manitoba has also banned home cannabis cultivation.

Among Canadian provinces, Quebec has taken a conservative approach to cannabis policy and legalization. In July, the government announced a ban on THC-infused candies and confections and capped edible potency at 5 milligrams of THC per unit and 10 milligrams of THC per package; drinkable products are capped at 5 milligrams per container and cannabis-infused topicals will also be banned temporarily. The government is also planning on raising the legal age to purchase and consume cannabis from 18 to 21-years-old.

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American Trucking Associations Propose Policies for Legal Cannabis

10/10/2019

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The American Trucking Associations is endorsing policies to help the industry operate while states legalize cannabis for medical and recreational purposes. The trade association is calling on the government to continue allowing for cannabis testing for employees and roadside tests for drivers, in addition to lifting federal restrictions on cannabis research, and the creation of a “marijuana victim’s compensation fund.”

The ATA says that loosening federal restrictions on research would allow for studies that focus on the impact of cannabis-impaired driving.

“ATA has long been an advocate for reducing impaired driving – in all its forms – so it only makes sense that we would call upon state and federal governments to consider the impact of increased use of marijuana on our roadways.” — ATA President and CEO Chris Spear, in a press release

The compensation fund would be paid for by cannabis industry operators, such as dispensaries, cultivators, and manufacturers. 

According to a Transport Topics report, the policies were developed by the ATA’s Controlled Substances, Driver Health and Wellness Subcommittee. The ATA has previously called on the government to allow alternative drug testing methods, backing the creation of a national database for positive alcohol and drug test results, and strengthened anti-impaired driving laws.

“This policy allows us to, while recognizing that the modern world is changing, advocate for strong, safety-oriented policies backed by sound science and data,” Spear said in a statement.

According to the ATA, more than 93 million Americans live in a place with legal adult-use cannabis.

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Oklahoma Approves 200,000 Medical Cannabis Applications

10/10/2019

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Oklahoma officials have approved medical cannabis applications for at least 200,000 patients, according to a KFOR report. It’s an average of 3,500 approved applications per week since the Oklahoma Medical Marijuana Authority began accepting applications last year.

Under state law, patients must pay $100 to obtain the license once their application is approved.

Last month, new rules for medical cannabis took effect in the state including seed-to-sale tracking requirements, rules prohibiting physicians from making recommendations in a dispensary, preventing municipalities from barring medical cannabis businesses, and language explicitly allowing medical cannabis patients to possess firearms.

The firearm provision was included due to federal law prohibiting those who buy firearms from using “illegal drugs” — a question asked on federal gun background check forms.

The law also allows employers to consider a patient’s status if they work in “safety sensitive” positions such as firefighting, heavy machinery operation, or handling hazardous materials.   

The rules also require product testing; however, the state has yet to open up applications for testing laboratories. 

Last year, police in Adair County arrested a registered medical cannabis patient. According to a News9 report, that charge was ultimately dismissed.

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ACLU Sues Pennsylvania County for Blocking Parolee Patient Access

10/10/2019

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The Pennsylvania American Civil Liberties Union is suing Lebanon County over its decision to prohibit people on parole and probation from using medical cannabis, the PA Post reports. The county announced earlier this month they would no longer allow registered patients to use cannabis if they were on probation or supervised release.  

The ACLU says at least seven other counties in the state have policies barring people on parole and probation from using medical cannabis and they hope the Lebanon County case has statewide implications. The group says county officials are not immediately detaining people but could put them in violation proceedings if they test positive for cannabis during their mandated check-ins. 

State ACLU Legal Director Vic Walczak said that the state’s medical cannabis law “makes no exception for people on probation.” He estimates that there are about 60 medical cannabis patients in the county that could be impacted by the lawsuit. The group filed the lawsuit as a class-action and is seeking a preliminary injunction which would prevent the county from implementing the new rules. 

“Judges may not agree with the medical marijuana law. They may not support anybody using marijuana. But they must follow the law.” – Walczak, to the PA Post

Lycoming, Indiana, Jefferson, Forest, Elk, Potter, and Northampton counties are also accused of prohibiting medical cannabis patients who are on parole or probation but the ACLU has not filed any lawsuits against those counties.

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MedMen Terminates PharmaCann Acquisition Deal

10/09/2019

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MedMen Enterprises Inc., which operates cannabis companies throughout the U.S., has terminated a deal to acquire PharmaCann, LLC, who will pay termination fees to the firm via the transfer of three entity licenses in Illinois and Virginia.

Adam Bierman, MedMen co-founder and chief executive officer, said the termination of the deal is “in the best interest” of the company’s shareholders “to deepen, rather than widen, our Company’s reach.”

“Looking at the PharmaCann portfolio today, Illinois has emerged as the most attractive opportunity for our longer-term, strategic growth plan. The addition of those assets, without dilution, is a win for MedMen and our shareholders.” – Bierman, in a statement

PharmaCann still holds licenses for 26 retail stores and 5 cultivation and processing facilities in New York, Illinois, Massachusetts, Pennsylvania, Ohio, and Maryland.

In a press release, PharmaCann described the termination of the agreement as “mutual” and Executive Officer Brett Novey indicated that the company had tripled its revenues over the last year.

The deal was announced last year as the largest U.S. cannabis industry acquisition to date at $682 million in stock.

MedMen also announced that it had terminated Chief Financial Officer Michael Kramer and appointed Chief Corporate Development Officer Zeeshan Hyder to the role. The company credited Hyder with working with the CEO to take the firm public on The Canadian Securities Exchange and raising $500 million in capital for direct investment into the business. MedMen stock was down 13.54 percent at the end of trading yesterday following the announcements.

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Maryland Firm Harvests East Coast’s First Outdoor Cannabis Crop

10/09/2019

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The East Coast’s first outdoor commercial cannabis crop cultivated by Culta is being harvested in Maryland, the Baltimore Sun reports. It’s a 1-acre multimillion-dollar “experiment” in a part of the country ill-suited for outdoor cultivation where licensed producers usually grow indoors and in greenhouses.

The plants from the harvest will be used for concentrates, tinctures, and vape cartridges, rather than raw flower. The crop was grown on a site contaminated by the 1989 Cambridge Butter Fire and Culta had to clear four inches of contaminated soil from the site that was scarred by a multiday grease fire.

Mackie Barch, the owner of Culta, said the harvest was “a race against the clock” as the weather begins to turn on the East Coast. If the company sees profits with the crop it could perfect its process and corner the market in “sun-grown” cannabis on the East Coast. Sun-grown cannabis is often marketed as more sustainable than its indoor-grown counterparts.

In Maryland, many municipalities have banned outdoor cultivation over odor concerns and other states have their own restrictions due to safety concerns.

Brian Vicente, a Colorado-based cannabis attorney and industry consultant, told the Sun that most states don’t allow outdoor cultivation when their cannabis programs go online.

“There’s a sort of rule of thumb that when marijuana first becomes legal, it gets regulated like plutonium.” – Vincente, to the Sun

Culta had to employ 12 seasonal workers to help harvest the crop and the buds were flash-frozen or cured depending on how they would be used. The company’s experiment involves “pheno-hunting” in an effort to see what plants grow well in the climate. They estimate that about 90 percent of the variants planted in the plot will not be used again because they are not hardy or distinct enough. The other 10 percent will be cloned and replanted alongside the next experimental crop.

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Australian Government Investing $3M for Medical Cannabis Studies

10/09/2019

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The Australian government is investing AU$3 million to study the benefits of medical cannabis for pain, symptom, and side effect management for cancer patients, according to a Health Europa report. The funds come from the federal Medical Research Future Fund.

“There have only been a limited number of well-designed clinical studies on medicinal cannabis, and we need to increase the evidence base to support medical professionals to make their decisions.” – Minister for Health Greg Hunt, via Health Europa

Hunt indicated that there are more than 11,000 registered medical cannabis patients in the country, the majority of which had been approved this year. The nation’s first medical cannabis cultivation license was approved in March 2017; there are now 78 total licensees in Australia, the report says.

Hunt credited Australian actress Olivia Newton-John with helping to “shine a light on the benefits associated with medical cannabis.” Newton-John, 71, has been diagnosed with breast cancer three times since 1992. She told a crowd during Melbourne’s annual Wellness Walk and Research Run on Oct. 6 that she is “feeling fantastic” through a combination of cancer treatment and medical cannabis use, according to an Independent report.

Recreational cannabis use remains illegal throughout most of Australia; however, last month the Australian Capital Territory approved reforms allowing residents 18-and-older to grow two plants and possess up to 50 grams of cannabis. Hunt has said that the federal government does not support recreational cannabis legalization.

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WeedClub, a Division of Farmhouse Inc., Announces Oct. 15 Cannabis Networking Event in San Francisco

10/08/2019

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Farmhouse CEO to Deliver Cannabis Fundraising 101, Host VC Lightning Talks and @420 Pitches (Speed Round) on Oct 15 at WeedClub® in the Twitter Building in San Francisco, California.

SAN FRANCISCO, CA, Oct. 3, 2019 — WeedClub®, a division of Farmhouse Inc., is pleased to invite cannabis and hemp industry stakeholders to its office at Runway in the Twitter Building on October 15 for an evening of growth stage and investor-related content.

Event Registration Link:

https://www.eventbrite.com/e/weedclub-presents-fundraising-101-vc-lightning-talks-420-pitch-speed-round-at-runway-tickets-74025958635

The evening will begin with freestyle networking so that the previously fractured cannabis supply chain can be united together, along with other stakeholders such as: Investors, Service Providers, Startups and Growth Stage companies.

After participants have met key influencers during the networking segment of the event, Farmhouse, WeedClub and Extract Co-Founder Evan Horowitz will deliver a live Presentation: Cannabis Fundraising 101.

Then, currently active investors on the WeedClub Platform will deliver from-the-heart overviews of what they are looking for as they evaluate Founders and Companies.

Evan Horowitz said, “All attendees are welcome to ask questions and participate in a deeper conversation as we work together as one industry to solve critical problems. Founders will learn more ways to find investor alignment, and Investors will discover new businesses to add to their portfolios.”

To Register for the October 15, 2019 WeedClub® Event at Runway in the Twitter Building, WeedClub® Presents: Fundraising 101, VC Lightning Talks, @420 Pitch Speed Round please visit Eventbrite at:

https://www.eventbrite.com/e/weedclub-presents-fundraising-101-vc-lightning-talks-420-pitch-speed-round-at-runway-tickets-74025958635

Interested in Pitching? Submit your company at https://www.weedclub.com/pitch

WeedClub® Friends in High Places! is a Division of public company Farmhouse Inc. $FMHS

Follow us for regular updates at https://twitter.com/420

Join WeedClub® @ https://weedclub.com

Disclaimer: Ganjapreneur’s CEO and Cofounder is a shareholder of Farmhouse Inc.

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Report: Hemp-Derived CBD Could Reach $23 Billion by 2023

10/08/2019

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The hemp-derived CBD market could be worth $23 billion by 2023, which works out to about $40,000 per acre at the farm level, according to a Brightfield Group report outlined by Successful Farming. In the Hemp Cultivation Landscape study, analysts estimate that 285,000 acres of industrial hemp was cultivated in the U.S. this year — an increase of 72 percent from last year.

The report suggests that about 87 percent of hemp acreage will be used for CBD processing this year, while they expect that share to drop to 82 percent by 2023. In all, the researchers anticipate 2.7 million planted acres of hemp by 2023.  

Researchers found that Colorado is growing the most hemp in the U.S. with an estimated 42,500 acres. Colorado is followed followed by Oregon (29,859), Montana (29,400), Tennessee (20,000), and Arizona (18,000). By 2023, the report maintains Colorado and Oregon in the top spots, with an estimated 313,059 acres and 275,357 acres, respectively. California would rank third (252,487), followed by Arizona (243,786) and Tennessee (243,786). 

The report also found that farmers are spending, on average, $300 to $350 per acre for fertilizer but that some farmers are spending as little as $85 while others spent up to $1,000. The report notes that some farmers do not believe fertilizer is necessary for hemp cultivation. 

The analysis points to four risks for hemp cultivation: difficulty finding clones or feminized seeds, the lack of processing equipment causing it to be a labor intensive crop, lack of traditional markets, and cross-pollination and pollen drift issues.

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Maine Adult-Use Cannabis Sales Expected by March

10/08/2019

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Maine is on track to commence adult-use cannabis sales by March 2020, the Associated Press reports. The adult-use market was approved by voters in 2016 but regulations were vetoed by then-Gov. Paul LePage twice until his second veto was overridden by lawmakers.

State cannabis regulators released their industry rules in late April and the Maine Office of Marijuana Policy is expected to adopt final rules for the industry within two months.

David Heidrich, an OMP spokesman, told the AP that the state is expecting revenue from cannabis sales beginning March 15 but the agency will only be able to act quickly on complete applications from municipalities that have opted into adult-use cannabis sales; so far, just 15 of Maine’s 455 municipalities have opted in. 

Under a law signed by Gov. Janet Mills (D) in June, Maine has among the strictest residency requirements for cannabis businesses in the nation. Owners or those who own a majority interest in the company must have lived in the state for four years in order to get a license; although, the rules do allow out-of-state companies to control Maine cannabusinesses.

Analysts suggest that Maine’s market will be larger than its New England counterpart, Massachusetts, with a customer base of about 173,000 and projected revenues of $107 million by 2020. Massachusetts budget officials expect $84 million in cannabis sales in the state by 2020. 

Heidrich said his office expects to begin accepting applications by the end of the year.

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Canadian Cannabis Company Targeted By U.S. Class-Action Lawsuit

10/08/2019

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Canadian licensed cannabis company Sundial Growers Inc. is being sued in the U.S. for allegedly failing to disclose that a customer returned $1.9 million — about a half-ton — worth of cannabis, according to a MarketWatch report. Zenabis Global, the company that reportedly sent the cannabis back to Sundial and terminated its agreement with the firm, claims that the cannabis was of poor quality and contained bits of rubber gloves and visible mold.

The lawsuit is a class action and alleged that Sundial “made false and misleading statements” about its product. The lawsuit claims that Sundial “failed to supply saleable cannabis in line with contractual obligations to Zenabis Global Inc,” and that the company’s statements about its “businesses, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.”

The transaction occurred around the time that Sundial went public on the Nasdaq on Aug. 1 with a $1 billion valuation and after raising $143 million, MarketWatch reported on August 20. The Initial Public Offering did not disclose that Sundial had a half-ton of product returned and did not mention the issue during a presentation in Toronto, Ontario, the report says. It had disclosed to the Securities and Exchange Commission that it had received C$3.3 million in penalties for not delivering cannabis to partners as promised in 2018. Shares had sold for $13 in the IPO. 

In a statement to the CBC, Sundial said they “are aware of the complaints” but do not comment on active litigation.

“… We believe that the claims are without merit and the company intends to vigorously defend itself. Sundial remains focused on what has made us successful: the growth of our business through a commitment to producing safe, innovative and high-quality products.” – Sundial, in a statement to the CBC

Philip King, an attorney with New York-based Rosen Law Firm, said in the U.S. these lawsuits are rare but are taken seriously by market regulators.

“In a claim like this, it’ll be the defendant’s obligation to demonstrate that the price declines were caused by something other than the misstatement in the offering,” Kim told the CBC.

Zenabis has declined to comment due to “disclosure rules” but indicated they had included “all material information” about the return in their second-quarter results. 

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Kushy Punch Raided; Authorities Allege Unregulated Market Dealings

10/07/2019

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A licensed California cannabis company is accused of manufacturing products for the illicit market after the Department of Consumer Affairs served a search warrant last week at Kushy Punch’s Los Angeles facility, according to a Leafly report. Authorities seized gummies and disposable vapes in the company’s packaging in the enforcement action.

Bureau of Cannabis Control spokesperson Alex Traverso told Leafly that the agency confiscated “thousands of illegal vape carts worth millions of dollars.” The seizure comes amid a nationwide breakout in pulmonary illnesses that have been linked to cannabis and nicotine vape products.

A source told Leafly that the company had two manufacturing facilities – one for legal, and one for illegal products. The source claims that the illicit market products are manufactured using “untested black market oil that is heavy in pesticide.” The BCC was informed of the illegal facility based on a tip that “checked out 100 percent.”

“Based on the tip, there is a legal side of things and an illegal side of things. We’re still investigating both sides of the equation. If this is something we’re seeing linked back to someone who has a license I would be surprised if they had a license much longer.” – Traverso, to Leafly

Ruben Cross, CEO for Kushy Punch, said that the allegations are “completely false” in an email to Ganjapreneur. “BCC went into an old storage warehouse and found two-year-old disposable vapes with dead batteries than have been off the market even before regulations came around and they assumed we are selling vapes to the black market,” Cross said.

Kushy Punch provides products in both the medical and recreational markets.

NORML co-director Ellen Komp told Leafly that the trend of companies selling products illegally “started happening … when California’s pesticide regulations kicked in.”

“It stands to reason that not everyone might have destroyed all their expensive products [that wouldn’t have passed testing],” she told Leafly.

There has been a long-standing rumor in California about licensed operators who deal in the state’s unregulated cannabis industry. The investigation is ongoing.

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Washington Cannabis Regulators Extend MJ Freeway Contract

10/07/2019

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The Washington State Liquor and Cannabis Board (WSLCB) has granted MJ Freeway a two-month contract extension to maintain the state’s traceability system, Leaf Data Systems (LDS). There will be no more updates to the system for the foreseeable future, according to an email sent by Deputy Director and Executive Sponsor  Megan Duffy.

The WSLCB will use the two-month extensions to negotiate a contract with MJ Freeway to maintain the troubled Leaf Data Systems only. This latest development comes on the heels of a complete Leaf Data Systems shut down in mid-July 2019 and scraps the timeline for LDS completion released by the LCB in April earlier this year.

Additionally, in the email, Deputy Director Duffy acknowledges the uncertain future of Leaf Data Systems.

“…LCB is looking to take stock of developments in public policy and other factors that will affect cannabis activities over the next three to five years. As more states enter this arena, Cannabis 2.0 is the LCB’s effort to look ahead to anticipate how that and other developments may affect us. As part of the effort, the LCB is currently working internally to strategically envision what that future of traceability looks like. We are engaging with a small group of industry stakeholders to gain some initial insight and, later, we’ll be engaging our broad stakeholder base.” — LCB email excerpt

MJ Freeway was first granted the contract to complete Leaf Data Systems in 2017 after BioTrack THC and the LCB were unable to negotiate a new contract. Since then, LDS has been plagued by multiple issues, leaving Washington without a reliable, state-run traceability system for nearly two years. 

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Virginia Attorney General Calls for Cannabis Legalization

10/07/2019

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Virginia Attorney General Mark Herring tweeted last week that it is time for the state “to move toward legal, regulated adult use” of cannabis. Herring’s tweet included a link to a University of Mary Washington poll that found 61 percent of Virginians supported legalizing cannabis.

In 2017, a poll by the university found just 31 percent favored cannabis legalization.

It’s the second time this year Virginia’s top cop has come out in favor of cannabis law reforms – in a June op-ed in the Daily Press, Herring said prohibition “is needlessly creating criminals and burdening Virginians with convictions” and called for broad decriminalization.

Herring pointed to state crime data that shows low-level cannabis arrests in the state rose dramatically from 2003 to 2017, from 13,000 to 28,000. The number of first-time cannabis convictions also spiked from 6,500 in 2008 to 10,000 in 2017, Herring said, adding that prosecutions and incarcerations associated with cannabis criminalization cost the state $81 million annually “in addition to the staggering human and social costs.”

Gov. Ralph Northam, a Democrat who included cannabis law reforms in his campaign platform, has maintained his position on decriminalization. There are at least two cannabis legalization bills in the Legislature; last year, however, lawmakers defeated two bills that would have decriminalized cannabis in the state.

Del. Steve Heretick (D), a former federal prosecutor and former president of the Virginia Board of Medicine who introduced the failed decriminalization bill last year, told the Virginian-Pilot that he plans on introducing a tax-and-regulate measure next session. Heretick did tell the Virginian-Pilot that he doesn’t think that the state is ready for legalization “today” but that “it’s coming,” which is why he filed the bill. Heretick said he also plans on introducing a decriminalization measure – which has already been defeated four times in the state.

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USDA Awards Grant to Hemp Pollen Migration Researchers

10/07/2019

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The U.S. Department of Agriculture has awarded a $500,000 grant to Virginia Tech and University of Tennessee, Knoxville researchers studying the transport of pollen from genetically modified hemp and switchgrass, the Augusta Free Press reports. The team will use mathematical models and drones to study how the plants’ pollen travels.

David Schmale, a professor in the School of Plant and Environmental Sciences at Virginia Tech’s College of Agriculture and Life Sciences, said the models are “critical to establishing appropriate isolation distances for GE crops and making informed regulatory decisions.”

Shane Ross, professor in the Kevin T. Crofton Department of Aerospace and Ocean Engineering in Virginia Tech’s College of Engineering, said understanding how pollen travels is important for the future of the hemp industry.

“Long-distance pollination is of concern due to the possibility of unintended cross-contamination between different hemp varieties, such as those used for fiber and for CBD (cannabidiol).” – Ross, to the Free Press

Ross said the team’s main goal is to understand exactly how far the pollen travels.

“Using sensors onboard drones, we can collect pollen and forecast its movement at different altitudes and distances from source fields,” Ross said. “Our models take input like the size of the pollen grains, the wind conditions for that day, humidity, temperature, and things like that. Then they can forecast the trajectories of the pollen grains and where they’ll get deposited.”

Schmale indicated that the researchers were initially only going to focus on switchgrass but added hemp to the project due to the rise in interest in the crop, specifically for CBD. He added that this type of research has never been conducted on hemp.

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