Arkansas Businesses Sue State Over Hemp-Derived THC Ban

8/08/2023

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Four Arkansas businesses are suing the state of Arkansas over its ban on hemp-derived THC products, THV11 reports. Abtin Mehdizadegan, an attorney for the plaintiffs, said the law violates the federal Farm Bill of 2018 and federal protections of interstate commerce.

“I believe all of our clients support reasonable regulation of these substances. This law doesn’t do that.” — Mehdizadegan to THV11

State Sen. Tyler Dees (R) told THV11 that the law aims to keep THC products out of the hands of children. He said he is “not surprised to see a lawsuit by those worried more about their profits than the protection of children and other consumers.”

Arkansas Attorney General Tim Griffin told THV11 that he supports the law and plans to defend it in court.

Mehdizadegan said he believes “the entirety of the act needs to be enjoined and set aside” and that lawmakers need “to come back and come up with something workable that treats hemp for what it is as an agricultural commodity.”

The ban took effect August 1. It covers hemp-derived delta-9 THC, delta-8 THC, and delta-10 THC and each is now included on the state’s controlled substances list. The law also includes provisions requiring any retailer that wishes to sell any hemp-derived consumable products to get a permit from Arkansas Tobacco Control.

The lawsuit was filed in federal court.

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Jesse Ventura Considering Launching Cannabis Brand in Minnesota

8/08/2023

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During a cannabis expo in late July, former Minnesota Gov. Jesse Ventura said he is interested in launching a cannabis brand. Ventura, a former professional wrestler, actor, military veteran, and longtime cannabis advocate, said he wants “to be the first major politician in America who puts his likeness, face and everything behind cannabis.” 

“I want involvement in this, I want involvement in the state of Minnesota. Minnesota grown, Minnesota produced, and promoted by Minnesota’s governor – or former.” — Ventura, Canna Connect MN, 7/29/23 

Ventura testified in front of lawmakers as they considered the bill to legalize cannabis, which ultimately passed. Provisions of the law took effect August 1, but retail sales are not expected until 2025.  

“This is an ego thing for me. I want to have my name considered with cannabis,” Ventura said during his remarks. “…One of the things that’s important for me, is I want to see Minnesota succeed here. … I would prefer … to put my name with Minnesota companies and make cannabis a prosperous business in Minnesota, by Minnesotans, keeping the money in Minnesota.”   

Ventura served as Minnesota governor from 1999 and 2003 and had floated the idea of legalizing cannabis during his tenure. He was present during the signing of the legalization bill by Gov. Tim Walz (D) in May. 

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Ohio Advocates Submit Additional Signatures to Put Cannabis Legalization Question to Voters

8/08/2023

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The Ohio group seeking to put a cannabis legalization question to voters says it has collected nearly 10 times the number of additional signatures it needed to put the issue to voters, WOSU reports. The Coalition to Regulate Marijuana Like Alcohol was told last month by officials they were 679 valid signatures short of the goal and had an August 4 deadline to gather the remaining signatures.   

Tom Haren, spokesman for the coalition, told WOSU the group collected 6,545 more signatures and submitted them to the Ohio Secretary of State to be verified.  

“This submission validates what we’ve said all along: regulating marijuana is popular in Ohio.” — Haren, in a statement, via WOSU 

The Secretary of State’s office still has to verify the signatures and if at least 679 are validated, the question will appear on special election ballots in November. 

The ballot measure proposes allowing adults 21-and-older to buy and possess up to 2.5 ounces of cannabis and to grow plants at home. A 10% tax on cannabis sales would support administrative costs, addiction treatment, municipalities with dispensaries, and social equity and jobs programs. 

If approved by the Secretary of State’s office, the cannabis legalization question would require only a simple majority to pass. 

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Florida AG’s Court Filing Says Cannabis Legalization Question ‘Misleads’ Voters to Benefit Trulieve

8/07/2023

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In a new brief filed with the Florida Supreme Court challenging the proposed constitutional amendment to legalize cannabis in the state, lawyers for Attorney General Ashley Moody said the proposal “misleads” voters to benefit Trulieve, the state’s largest medical cannabis company, the Tampa Free Press reports. Trulieve has contributed most of the $40 million to the Smart & Safe Florida political committee, which is leading the legalization campaign. 

In the brief, Solicitor General Henry Whitaker said the ballot summary “misleads in ways that, though sometimes subtle, are likely to influence voters – and to do so in a way that entrenches the sponsor’s monopolistic stranglehold on the marijuana market to the detriment of Floridians.” 

In a statement, Trulieve defended the ballot language as “clear, states the chief purpose of the amendment and – without a doubt – covers one and only one subject.”  

“For these reasons, we trust the court will agree that the voters of Florida should have the opportunity to vote to allow adults in Florida the freedom to use cannabis for their personal consumption.” — Trulieve, in a statement, via the Free Press 

Moody is asking the state Supreme Court to toss the question. The state Supreme Court will ultimately determine whether the ballot initiative covers only a single subject and is not confusing to voters and whether it will put to voters. 

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New York Veterans Claim State Not Following Cannabis Law’s Social Equity Provisions

8/07/2023

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A lawsuit filed last week by New York-based military veterans claims the state Office of Cannabis Management (OCM) has kept Conditional Adult-Use Retail Dispensary (CAURD) licenses from disabled veterans and other minority group that the state law “prioritizes,” Spectrum News reports. The lawsuit was filed in the state Supreme Court. 

“The [Marijuana Regulation and Taxation Act] had already established a goal to award 50% of all adult-use licenses to social and economic equity applicants,” the veterans said in a press release. “But instead of following the law, OCM and [Cannabis Control Board] created their own version of ‘social equity’ and determined for themselves which individuals would get priority to enter New York’s nascent adult-use cannabis market.” 

In the press release, co-plaintiff Carmine Fiore said the veterans felt “used” to get the law passed. 

“Then, once it was passed, we were cast aside for another agenda,” Fiore said in the statement.  

The plaintiffs seek to prevent the state from continuing the CAURD program’s planned expansion “because it has no basis in the MRTA.”   

The lawsuit claims that the cannabis regulators overstepped their authority by creating the licensing category for people with convictions because that decision was not approved by the Legislature and that the decision violates the state constitution. 

The MRTA initially set aside 150 CAURD licenses; however, last month OCM approved an additional 212 CAURD licenses, bringing the total to 463. 

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Former Adelanto, California Mayor Sentenced to 14 Months for Cannabis-Related Bribes

8/07/2023

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The former mayor of Adelanto, California was sentenced on Friday to 14 months in federal prison for taking bribes from cannabis interests, the Los Angeles Times reports. Richard Kerr. 66, was charged in 2021 for taking more than $57,000 in bribes and kickbacks while mayor for approving ordinances and securing permits for cannabis-related businesses.  

Kerr was voted out of office in 2018 after the Federal Bureau of Investigation (FBI) raided his home as part of the corruption probe. He was first elected in 2014.  

In February, Kerr pleaded guilty to one count involving wire fraud. According to his plea agreement, the illegal payments from Kerr’s “co-schemers” – described as an attorney and various business people – were disguised as donations to a charity fund or to his election campaign, the report says.  

U.S. District Judge John W. Holcomb imposed a lighter sentence than the 46 months sought by prosecutors. Holcomb said he took into account Kerr’s age, health, his service as a U.S. Marine, and family obligations in his sentencing.  

The judge ordered Kerr to surrender to federal custody in November to begin serving his sentence. 

Last year, a jury convicted Jermaine Wright, Adelanto’s former mayor pro tem, of taking a $10,000 bribe from an FBI agent posing as a cannabis entrepreneur. Wright was sentenced to five years in prison. 

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Raekwon’s Cannabis Company Approved to Renovate Historic Newark Building for Consumption Lounge

8/04/2023

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Newark, New Jersey’s Central Planning Board on Tuesday approved plans by Architect Rachael Grochowski and Hashstoria to renovate a historical building in the city – the former home of engineering firm A.R. Meeker & Co and Stoutenburgh & Co. Newark Clothiers – for a cannabis consumption lounge.    

Hashstoria is co-founded by Raekwon of the Wu-Tang Clan, civil rights attorney Bakari Sellers, and radio, tv personality, and mental health advocate Charlamagne tha God. Hashstoria currently has locations in Astoria, Gladstone, and Springfield, Oregon. 

The building, located at 799-805 Board Street, dates back to 1839 and is in Newark’s Four Corners Historic District and has undergone several modernizations throughout the years. revival. The Landmark and Historic Preservation Commission greenlit the plans to renovate the facade of the building in February. 

In a statement, Grochowski, of RHG Architecture + Design, said the project “represents an exciting opportunity to merge history, community, and innovation.” 

“Design plays a crucial role in elevating the overall cannabis experience, and we are committed to creating an environment that offers a sophisticated, inclusive, and enjoyable experience. The cannabis industry is undergoing a remarkable transformation, driven by the vision and creativity of innovative designers and creatives, leaders from across the industry who are revolutionizing cannabis consumption. We are so excited to craft a space that harmonizes aesthetics, functionality, and sensory engagement, ultimately enhancing the journey of both seasoned cannabis enthusiasts and the cannabis-curious alike.” — Grochowski in a press release 

New Jersey passed a bill in December 2022 to allow cannabis consumption lounges but has not yet developed regulations or issued licenses and there are currently no lounges operational in the state.  

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Vermont Cannabis Retailers Launch Fundraiser for Businesses Impacted by Floods

8/04/2023

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Members of Vermont’s cannabis industry are launching fundraising efforts to raise money for business owners affected by severe flooding in the state last month, Vermont Public Radio reports. Due to the federal criminalization of cannabis, Vermont’s cannabis companies are ineligible for federal disaster aid for losses caused by flooding; they are, however, eligible for state grants. 

The fundraising program, called A Higher Calling, is led by the Cannabis Retailers Association of Vermont and people who donate can get a pre-rolled joint made of donated flower. It will include a two-day fundraising music festival next month in Cabot. Half of the sales from the concert will go directly toward cannabis recovery, according to a Valley News report. 

Todd Baily, the association’s president, told VPR that the flooding affected more than three dozen cannabis businesses in the state, with losses in the tens of millions of dollars. 

“We’ve heard as high as 20,000 square feet of canopy. For the cultivators that has been lost. That’s significant. We have not even concluded year one of the legal market. So not only were they impacted by this flooding, they’re impacted by the fact they’re a small business that’s still in startup phase.” — Baily to VPR 

Baily said that anyone operating a cannabis business that was impacted by the floods can apply for funds and that if the organization can raise enough funds, they “will support everyone.” 

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RAW Donates $100K to JUSTÜS Foundation

8/04/2023

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RAW Rolling Papers has donated $100,000 to the JUSTÜS Foundation, a nonprofit that facilitates the entry of legacy cannabis operators into the legal market. The donation, part of the RAW Seeds Fellowship grants, will be awarded to three legacy operators who were negatively impacted by the justice system due to cannabis laws. 

To be eligible to apply for the fellowship, a legacy operator is defined as, “An individual who commercialized cannabis for the majority of their income, or sacramentally or ceremonially distributed cannabis, outside of the legal framework, during the period of prohibition, predating legalization by 5 years.” The three grants will be up to $20,000 per awardee and will be used to start legal cannabis businesses. 

The JUSTÜS Foundation is committed to helping legacy cannabis operators transition into the legal cannabis market. The foundation’s educational programs include: “The Woman Warrior Initiative,” “Safe Smoke Sesh Series,” “Octogacy,” “Mental Health First “The Revolutionary Cannabis Series,” “Cannabis Accounting Roundtables,” and “JUSTÜS JUMP Ins.” 

In a statement, RAW founder Josh Kesselman, said the company takes “great pride in supporting and empowering the pioneers who laid the foundation of this industry.” 

“As the industry undergoes a significant transformation, emerging from the shadows and embracing legality, it is crucial that those who built it from the ground up are the beneficiaries, along with the communities they come from. While major companies are rushing to take advantage of new laws legalizing cannabis, we need to support the small entrepreneurs who are the true lifeblood of this industry.” — Kesselman in a press release 

Scheril Murray Powell, JUSTÜS Foundation COO, described the organization as “in the barrier removal business.” 

“Legacy integration is the fast track to diversifying the legal cannabis market. By giving legacy cannabis operators the tools and resources needed to succeed, we contribute to the creation of a robust, compliant, inclusive, and high performing industry which provides health and wellness to society,” Powell said in a statement. “By empowering these undervalued cannabis business executives, we propel them to the front lines of the health equity movement and the creation of economic growth for jurisdictions around the world. The JUSTÜS Foundation outreach and support of underserved communities such as Rastafari community, social equity participants, and legacy operators is unprecedented.” 

Also included in the program, up to $15,000 may be awarded in smaller grants to multiple legacy operators. This grant will also be used to launch legal cannabis businesses, or to facilitate a career in the legal cannabis industry. 

Steve DeAngelo, founder of The JUSTÜS Foundation, added that “The men and women who carried cannabis through the dark years of prohibition should be treated like heroes – not criminals.” 

“Instead of being excluded from the legal cannabis industry, legacy operators should be warmly welcomed into it. They should be honored as the brave pioneers and accomplished experts they truly are, not ostracized or excluded because they have been convicted for breaking unjust laws that should never have been passed,” he said in a statement. “These grants will help return opportunities to legacy cannabis entrepreneurs that shouldn’t have been taken away from them in the first place. We look forward to seeing our grant recipients thrive and rise, to become leaders of the industry, and to inspire and assist other members of the legacy community to follow their example. Together, we will build a cannabis industry we can truly be proud of.” 

The grant window opened August 1. Those eligible can apply through August 31 at RawJustus.com. 

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First-Month Adult-Use Cannabis Sales in Maryland Near $85M

8/03/2023

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First-month adult-use cannabis sales in Maryland totaled nearly $85 million in July, according to Maryland Cannabis Administration (MCA) data. Flower comprised the bulk of the sales – more than $51.1 million. 

Concentrate sales topped more than $22.1 million, followed by infused edibles at more than $6.3 million, infused non-edibles at more than $4.8 million, shake and trim at $554,104, and plants at $3,535.  

In an interview with Forbes, Ben Burstein, a strategist at wholesale cannabis marketplace LeafLink, said that the sales figures put the state on track to see between $700 million and $800 million annually in cannabis sales. If the sales meet those totals, Burstein said it would make Maryland “one of the top-performing markets this year.” 

So far, the MCA has converted the licenses of 95 medical cannabis dispensaries to allow them to serve adult-use cannabis customers, the agency reported last month. State regulators have also licensed 42 cannabis cultivators and manufacturers to produce adult-use cannabis products. 

Data from the MCA and seed-to-sale tracking firm METRC, show that licensed cannabis retailers realized $84.95 million in sales of adult-use cannabis and medical cannabis between July 1 and July 30, the report says. Comparatively, medical cannabis sales last July totaled just over $43 million. 

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Oklahoma Supreme Court Justice Hears Arguments in Case Challenging Medical Cannabis Business Fees Hike

8/03/2023

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Arguments in the case challenging a recently passed law that hikes medical cannabis licensing fees for businesses were heard by Oklahoma Supreme Court Justice John Kane on Tuesday, the Tulsa World reports. The plaintiffs claim the increases are unconstitutional because the law is a revenue-raising measure, but lawmakers did not follow the rules governing the passage of such measures. 

The lawsuit, filed by Jed Green, founder of Oklahomans for Responsible Cannabis Action, and three companies against the Oklahoma Medical Marijuana Authority on June 30, contends that “The Legislature’s hike in the fee structure represents an extraordinary leap in the amount of revenue that the State will collect through medical marijuana business licensing.” 

Under the new law, annual fees are assessed through a tiered licensing program that ranges from the current $2,500 to more than $50,000. 

William Flanagan, assistant solicitor general for Attorney General Gentner Drummond, on Tuesday asked the court not to take the case, arguing that the bill is not a revenue-raising measure but that the fees are going to a regulatory purpose and will hemp officials improve public safety and decrease the cannabis supply in the state, the report says. A Cannabis Public Policy Consulting study commissioned by the Oklahoma Medical Marijuana Authority published in June found Oklahoma cannabis growers produced 64 times more medical cannabis than the market demanded. 

“The rapid expansion of the industry has provided opportunities for organized crime, and the boom has made it difficult for regulators to keep up,” the state said in its response to the lawsuit. “To address the oversupply of marijuana in the State, the Legislature enacted House Bill 2179 to raise some of Oklahoma’s uniquely low licensing fees to a level in line with that of other states.” 

Stephen L. Cale, an attorney for the plaintiffs, said the matter is of constitutional and public concern and that the state Supreme Court should take the case because the bill has a statewide impact. 

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Wayne State University Launches Cannabis Chemistry Undergraduate Certificate Program

8/03/2023

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Michigan’s Wayne State University this fall semester will begin offering a cannabis chemistry undergraduate certificate. The 15-credit hour program will focus on instrumentation, standard operating procedures, business and law practices, and science behind the testing and regulation of cannabis.

The certificate program will be housed in the College of Liberal Arts and Sciences and administered by the Department of Chemistry. It will require five classes and a research course.

In a statement, Andrea Matti, assistant professor of teaching in the chemistry department and director of the certificate program, said the program was necessary because the cannabis products sold throughout the state need to be “tested properly and is ethically sound.”

“We’ll teach students how to use the necessary instruments, properly dilute and prepare solutions, and analyze data – all that goes into analytical chemistry. It’s teaching the chemistry of measurements and how they are obtained.” — Matti in a press release

Techniques and instrumentation specific to the cannabis industry will be stressed during the program, and the skills will be applicable to a wide range of areas such as pharmaceutical research.

“It’s a field for our students who like chemistry, but don’t want to go into health sciences,” Matti said. “We’re teaching students the research methods. Testing facilities use a lot of high-pressure liquid chromatography – or HPLC – to test regulations, so we’re ensuring students are well versed in that instrument, the theory behind it and troubleshooting it.”

Currently, there are six accredited independent cannabis safety compliance facilities registered to operate in Michigan, and Gov. Gretchen Whitmer has $4.4 million in her proposed 2024 budget for a state-operated cannabis testing lab.

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Adult-Use Cannabis Sales in Illinois Reach $136M in June, Highest Total This Year

8/02/2023

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Illinois adult-use cannabis sales in June topped $136 million – the highest total of the year and the third highest ever, according to Cannabis Regulation Oversight Officer (CROO) data. In-state cannabis consumers spent $102 million in the month of June, while out-of-state consumers spent $34 million.   

Medical cannabis sales in the state remained flat in June at $27 million, the same total as May and down $1 million from April’s totals.   

Adult-use sales in June were up $3 million from May and $4 million more than April’s sales total. The state saw sales fall from $128 million in January to $120 million in February. The sales drop is likely due to adult-use sales commencing in nearby Missouri, which has the lowest excise tax on cannabis products at 6%, according to Tax Foundation data. Comparatively, Illinois imposes a 7% excise tax of value at wholesale level; a 10% tax on cannabis flower or products with less than 35% THC; a20% tax on products infused with cannabis, such as edible products; and a 25% tax on any product with a THC concentration higher than 35%. 

The price of cannabis flower at dispensaries across Illinois remained at $10 per gram for the third consecutive month. 

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Cannabis Research Company Planning Lawsuit Against DEA for Failure to Follow Federal Law

8/02/2023

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MMJ International Holdings Corp is preparing a lawsuit against the Drug Enforcement Administration (DEA) claiming the agency is violating the law by not responding to its application to grow pharmaceutical cannabis to support its research. MMJ, which has two Food and Drug Administration (FDA) investigational drug applications to research its developed soft gelatin capsule in clinical trials for multiple sclerosis and Huntington’s disease, filed its application nearly five years ago. 

MMJ alleges that the DEA’s inaction on its application is in violation of the Controlled Substance Act (CSA) and the Marijuana and Cannabidiol Research Expansion Act (MCREA), which was signed into law in December 2022. 

Late last month, Megan Sheehan of Sheehan & Associates, representing MMJ, sent a warning letter to DEA Deputy Assistant Administrator Matthew Strait, and DEA regulatory chief Ricardo Quintero, informing them that they were in violation of the law. 

In the letter, Sheehan argued that DEA’s failure to process MMJ’s bulk manufacturing application for almost five years was a violation of both the CSA and the MCREA. She also argued that DEA’s attitude toward the application, which was reported that they “would get to it when they get to it,” was in violation of DEA policies and procedures, MMJ said in a press release. 

In general, the consequences for violating federal laws and regulations can include fines, penalties, and other legal sanctions. In this case, if the DEA is found to have violated the CSA or the MCREA, it is possible that the agency could face fines or court-ordered injunctions, or the court could order the DEA to process MMJ’s bulk manufacturing application and take other actions to address the agency’s failure to comply with federal law.   

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New Mexico Regulators Seek Injunction Against Cannabis Business Accused of Diverting Product

8/02/2023

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The New Mexico Regulation and Licensing Department on Tuesday filed a petition seeking a preliminary injunction against Sawmill Sweet Leaf, LLC, alleging the company has been diverting cannabis out of state and manufacturing cannabis concentrate without a permit.  

In a statement, Linda Trujillo, superintendent of the Regulation and Licensing Department, said “A key component of compliance actions is the ability to suspend licenses immediately if they pose an instant threat to the health, safety and lives of consumers.” 

“While the licensee in question will still receive due process through a formal hearing, we can now ensure New Mexicans are protected from dangerous products or a life-threatening explosion in the interim.” — Trujillo in a press release 

Regulators are accusing Sawmill Sweet Leaf of operating an unlicensed closed-loop extraction system at its facility in Albuquerque. The business does hold a Cannabis Manufacturer II license which allows it to manufacture edibles or topical cannabis products but does not allow for any type of extraction.   

Evidence obtained by the Cannabis Control Division alleges that the products being sold by Sawmill Sweet Leaf out of state have not been tested. 

As a result of House Bill 384, which became effective on June 19, 2023, a new provision was added to the state’s Uniform Licensing Act allowing licensing agencies to seek a preliminary injunction if a licensee engages in unlawful activity that poses an immediate threat to public health and safety. 

The petition was filed in the Second Judicial District Court in Bernalillo County. A hearing has not yet been set.  

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Adult-Use Cannabis Now Legal In Minnesota

8/01/2023

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Minnesota’s adult-use cannabis law takes effect today, August 1, making it the 23rd state to pass sweeping cannabis legalization reforms. Under the new law, adults in Minnesota aged 21 and older can possess up to two ounces of cannabis flower in public and up to two pounds of cannabis in the privacy of their own homes. Legal cannabis consumers can also home-grow up to eight plants with a maximum of four flowering plants at once.

Additionally, the law includes automatic expungement provisions for cannabis misdemeanors or petty possession charges. There are an estimated 66,000 Minnesotans with misdemeanor cannabis charges eligible for automatic expungement, Minnesota Public Radio reports.

August 1 also marks the first day of recreational sales for NativeCare, a medical cannabis dispensary in Minnesota’s Red Lake Nation that announced last month it would commence adult-use sales once the reforms have formally taken effect. The retailer is expected to be the first operational adult-use cannabis retailer in the state.

The Minnesota Office of Cannabis Management will oversee the licensing of medical and adult-use cannabis operators and set up regulations for the licensed production, manufacturing, and distribution of both cannabis and hemp-derived consumer products. Adult-use licenses for the rest of the state are not expected until sometime next summer, with statewide sales likely launching in January 2025.

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Federal Lobbying Spending by Cannabis Industry Down

8/01/2023

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Federal lobbying efforts by cannabis industry operators is down, according to a Stat News report. Curaleaf spent nearly 40% less on lobbying in Washington, D.C. in the first half of the year than it did at its peak in 2019, the report says, while Columbia Care and Pax Labs eliminated their lobbying teams entirely.  

In a statement to Stat, Aaron Smith, co-founder and CEO of the National Cannabis Industry Association (NCIA), which lobbies lawmakers, called it a “cruel irony” that “businesses are forced to cut back on their government relations spending when in fact that advocacy [is] what’s needed in order for the industry to actually succeed.” 

The NCIA has spent $100,000 on lobbying so far this year, according to federal disclosures outlined by Stat. The group spent $285,000 on lobbying in the first six months of 2019. 

The U.S. Cannabis Council spent $150,000 on lobbying efforts last quarter and plans to spend as much, or more, a spokesman told Stat. The group has also launched a super PAC. David Culver, the group’s senior vice president of public affairs, told Stat the group wants to “be a big tent organization.”  

“Everybody realizes that if we have a singular and unified industry voice … that we’re gonna have a lot more success.” — Culver to Stat 

The American Trade Association for Cannabis and Hemp began lobbying in late 2019 and has also modestly increased its lobbying in recent months, spending $50,000 so far this year on lobbying; in 2022, the firm spent a total of $50,000 for an entire year of lobbying. 

Two firms focused on lobbying for cannabis reforms – the Cannabis Trade Federation and the Global Alliance for Cannabis Commerce – appear to have folded entirely, the report says.  

Adam Goers, the senior vice president of corporate affairs for Columbia Care, told Stat that while “there may be less company spending” on lobbying, what does get spent “is more pragmatic” and “much more focused.”

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Cresco Labs and Columbia Care Terminate $2B Merger

8/01/2023

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Multi-state cannabis operators Cresco Labs and Columbia Care on Sunday announced they would not be completing their merger, saying the companies could not complete “the divestitures necessary to secure all necessary regulatory approvals.” 

In March, Cresco had agreed to acquire Columbia Care in a $2 billion deal, which would have created the largest multi-state operator in the U.S. Neither company will pay any penalties or fees related to the decision, which the companies described as mutual.   

In a statement, Cresco CEO Charles Bachtell said that despite the termination of the deal, the company remains committed to its “Year of the Core strategy” which Bachtell described as “restructuring of low-margin operations, improving competitiveness and driving efficiencies in markets” where Cresco maintains “leading market share, and scaling operations to prepare for growth catalysts in emerging markets.”   

“In light of the evolving landscape in the cannabis industry, we believe the decision to terminate the planned transaction is in the long-term interest of Cresco Labs and our shareholders.” — Bachtell in a press release 

Nicholas Vita, CEO and co-founder of Columbia Care, called ending the deal “the best path forward” for the company’s employees, customers, and shareholders. 

“Over the last 16 months we have reviewed every aspect of our business, remained decisive and have made substantive changes that significantly improved our operations – positioning us with significant strategic and operational strength at this inflection point in the company’s history,” Vita said in a statement. “We are looking forward to realizing the benefits of these changes as well as focusing on the opportunities in our outstanding footprint in markets with embedded upside; diversified portfolio of brands; our award-winning national retail brand, The Cannabist; recently implemented operational and organizational efficiencies; proactive balance sheet management activities; and meaningful equity capital markets initiatives that will propel Columbia Care into one of the most profitable and resilient companies in the industry over the next several years.” 

The companies also terminated a deal to sell some divested operations in New York, Massachusetts, and Illinois to an entity owned by Sean “Diddy” Combs for up to $185 million. 

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One of Connecticut’s Four Cannabis Producers Sold Following Foreclosure

8/01/2023

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One of Connecticut’s four licensed cannabis producers was sold last week, according to a filing with the Securities and Exchange Commission (SEC). NewCo, a subsidiary of DXR Holdco, purchased Theraplant, which was in foreclosure, for an undisclosed sum. 

According to the filing, Theraplant had $4,107,400 worth of property in foreclosure. NewCo indicated those obligations would be “satisfied in full” but that $5 million in other financial obligations “remain outstanding.”  

Theraplant’s chief financial officer, Bernard Wang, was fired in connection with the deal.  

In a statement to CT News Junkie, Department of Consumer Protection spokesperson Kaitlyn Krasselt said the ownership change “did not impact [Theraplant’s] operations and they are continuing to supply the market without incident.” 

“Maintaining appropriate market supply, particularly for medical patients, remains a priority for the department and once notified of a proposed change in ownership the department reviews the transaction for any supply impacts and works with licensees to ensure adequate supply.” — Krasselt to CT News Junkie 

Greenrose Holding Company, Theraplant’s previous owner, last August disclosed $24 million in losses to the SEC during the first half of 2022 and the company also faced a debt collection lawsuit in Arizona, according to a CT News Junkie report.  

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Oklahoma Cannabis Producer Arrested After Regulators Find About 4k Untagged Plants

7/31/2023

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Oklahoma medical cannabis regulators last week uncovered approximately 4,000 untagged cannabis plants and more than 630 pounds of untagged cannabis at a licensed grow facility leading to the arrest of the licensee.  

The inspection at Gold Leaf Acres by the Oklahoma Medical Marijuana Authority (OMMA) was sparked by an anonymous complaint. Agents also found harvest rooms on the property that were not disclosed prior to the inspection.  

The licensee was charged with drug trafficking offenses and obstructing an officer.  

In a statement, OMMA Executive Director Adria Berry said the agency had to “act fast” on the tip and that the arrest was made at the Tulsa International Airport and assisted by U.S. Marshals.

“Public health and safety are among our top priorities. I applaud the diligent efforts made by our compliance inspectors and enforcement agents to uphold those standards while stopping potential large-scale diversion… there’s one less bad actor operating a business that jeopardizes public health and the integrity of our medical market.”  — Berry in a press release 

Oklahoma’s medical cannabis program is considered one of the country’s most permissive and last session lawmakers passed several bills aimed at curbing the diversion of medical cannabis products. According to a Cannabis Public Policy Consulting study commissioned by OMMA released last month, Oklahoma medical cannabis growers may be producing 64 times more cannabis than needed for the state’s patient population. The report suggests that the oversupply is “very likely adding to an illicit market both at the point of cultivation and the point of retail sale.” 

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Oregon Cannabis Growers Sue Over State’s Mold Testing Requirements

7/31/2023

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The Cannabis Industry Association of Oregon, Southern Oregon Family Farms, and Cannessentials Farm filed suit last week to block the Oregon Health Authority’s (OHA) new cannabis testing requirements for Aspergillus, the Bend Bulletin reports.

The plaintiffs claim that the new testing rules — which require Oregon cannabis licensees to have their products tested for Aspergillus mold — are overreaching and harmful to the industry. The new rules took effect on March 1 and since then, many organic cannabis cultivators in the state have failed the Aspergillus testing.

“The current testing requirements are inconsistent, confusing and exorbitantly costly, leading to disastrous financial consequences for cannabis businesses across Oregon. The industry, unique and invaluable to Oregon’s culture and economy, is being pushed to the brink of financial collapse by these regulations. This situation calls for urgent intervention to ensure survival of this thriving industry.” — Oregon Cannabis Industry Association statement, via press release

Aspergillus mold can lead to a lung infection called aspergillosis in people with weakened immune systems or lung diseases, according to the report, although most people breathe in aspergillus spores every day without issue.

Plaintiffs argue the new testing requirements have led to increased costs for consumers and lowered the overall quality of products (cannabis flower which fails the test can be remediated, although the process is both costly and can be ineffective), and all without actually serving to protect Oregon cannabis consumers.

Per the press release: “No clear link has been established between the consumption of cannabis products and aspergillus-related health issues, warranting further research before enforcement of costly and overly restrictive rules.”

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Australia’s Hemp Black Signs $9M Annual Supply Deal with Under Armour

7/31/2023

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Hemp Black, a subsidiary of Australia-based Ecofibre, today signed a $9 million annual supply deal with Under Armour Inc, which will see the firm supply specialty yarn made from its trademarked eco6 hemp biochar to the global sports apparel brand, Business News Australia reports. Simultaneously, Hemp Black entered into an agreement with U.S.-based Cruz Foam to manufacture a sustainable, biodegradable packaging material for its customers. The initial three-year agreement includes expectations for annual revenue of $3 million at full production. 

Both announcements coincide with the release of Ecofibre’s June quarter results, which reported a 46% year-on-year spike in revenue for Hemp Black at $4.9 million. 

Ecofibre CEO Eric Wang told Small Caps that Cruz Foam is “an innovative company with patented technologies that will help revolutionize sustainable packaging in the U.S.” 

“Hemp Black and Cruz Foam are committed to delivering sustainable product solutions for our customers, and we look forward to supporting [the company] as its business expands.”— Wang to Small Caps 

Hemp Black’s eco6 hemp biochar is recognized as negative emission technology aimed at replacing petroleum-based products. The initial deal with Under Armour is for three years and includes the acquisition of $6.74 million in specialized manufacturing equipment to be financed by the sportswear company, according to Small Caps. The first machine will be commissioned in early 2024 while a second machine is expected to be acquired within the first 18 months of production. Annual revenue per machine at full capacity is expected to be around $9 million, the report says. 

Wang told Small Caps that the deal with Under Armour falls into the company’s aspirations to “work with Tier 1 clients (such as Under Armour) on large-scale opportunities.” 

Hemp for the eco6 line is grown in the U.S. 

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Two Missouri Community Colleges Now Offering Cannabis Courses

7/31/2023

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Two Missouri community colleges are now offering cannabis courses, the Kansas City Star reports. Missouri’s Metropolitan Communication College (MCC) is partnering with cannabis education company Green Flower for three not-for-credit online classes to offer certificates, while St. Louis Community College (STLCC) is offering three in-person, for-credit classes.  

The MCC programs include cannabis cultivation specialist, cannabis retail specialist, and cannabis extraction and product development specialist. 

The courses are not for college credit and each nine-week course costs $750. 

Richard Wallace, MCC’s director of continuing education, told the Star that the college was approach by Green Flower last year, ahead of the state’s vote to legalize cannabis for adult use.  

“We were able to see that this is something that we might need to, kind of, get ahead of and start offering some of these programs.” — Wallace to the Star 

The STLCC offerings include an introductory lecture, a cultivation course on growing techniques with a lab component, and lab methods course on extraction techniques. The courses have space for 24-30 students and have all been filled when they have been offered. 

Patrick Vogan, an assistant professor in the horticulture program who co-taught the cultivation course this spring with a manager of a local cannabis cultivation facility, noted that students in the classes have a “whole range” of knowledge coming into the class. 

“About a quarter of the students in the class were already working in the industry and were looking for ways to refine and add to their skill sets,” he told the Star, “whereas many of the other students had no experience cultivating cannabis.” 

Vogan added that “Students just want a good practical knowledge that will help get them employed in the industry.” 

  

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U.S. House Amends Military Spending Bill to Let VA Doctors Recommend Medical Cannabis

7/28/2023

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The U.S. House of Representatives on Tuesday voted to add an amendment to the must-pass National Defense Authorization Act (NDAA) to end the Veteran Administration’s (VA) prohibition on providers assisting military veterans in accessing state-legal medical cannabis.  

The amendment, introduced by Rep. Earl Blumenauer (D-OR), passed unanimously by a voice vote. Blumenauer is the founder and co-chair of the Congressional Cannabis Caucus. 

“Medical cannabis literally saves lives. It is shameful that we continue to force veterans to seek care outside of the VA to access the therapeutic potential of this source of relief. Today, the House took a critically overdue step to remedy this disservice to veterans and begin to heal the impacts of the war on drugs on our nation’s veterans.” — Blumenauer in a press release 

Blumenauer was successful in getting a similar amendment on the 2016 version of the NDAA to pass the House and Senate in 2016, only to see the policy removed from final negotiations. 

Earlier this month, Florida Rep. Matt Gaetz (R-FL) introduced an amendment to the NDAA that would end cannabis testing for military members. Rep. Tony Gonzales (R-TX) also introduced an amendment that would allow military members to possess, use, or consume any product containing hemp; and Rep. Robert Garcia (D-CA), proposed an amendment that would prohibit the denial of security clearances by an agency if an individual used cannabis in a state where it is legalized. 

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