Canadian Cannabis Company Cronos Group to Exit U.S. CBD Market

6/02/2023

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Canadian cannabis company Cronos Group Inc. on Wednesday announced plans to end its hemp-derived CBD operations in the U.S. by the end of this year’s second quarter. The company said the decision will “improve its cash flow in the near term and position itself to directly enter the U.S. THC market when the necessary changes in U.S. regulatory conditions occur.” 

The move is part of a larger plan by Cronos to improve its cash flow and streamline its operations.  

In a press release, Mike Gorenstein, Cronos chairman, president, and CEO said the company believes that “one day, the U.S. will be one of the most important cannabis markets in the world” but that Cronos’ “resources are best spent on staying laser-focused on becoming cash flow positive by driving cost savings and process efficiencies” for its “borderless adult-use products.”  

“We have the best balance sheet in the cannabis industry, with $836 million in cash and short-term investments and zero debt as of March 31, 2023. Achieving our goal to generate positive cash flow in 2024 will advance our industry-leading cash balance and put us in the best position to win in the U.S. once regulatory conditions change.” — Gorenstein in a statement 

Cronos also announced that starting in the second quarter of the year it intends to report its financial results under one consolidated segment and will no longer report the U.S. and rest of world as separate segments. The firm is also increasing its previously announced 2023 operating expense savings target from a range of $10 to $20 million to a new range of $20 to $25 million, partially due to its decision to wind down and exit its existing U.S. operations. 

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Harrison Bard & Fredrik Rading: Custom-Branded Cannabis Pre-Rolls

6/01/2023

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The humble pre-roll is perhaps the most approachable and ubiquitous consumer product in the cannabis industry — when made properly and with high-quality ingredients, pre-rolls can be the perfect treat for seasoned consumers and rookies alike.

In this written Q&A, Harrison Bard and Fredrik Rading, the co-founders of Custom Cones USA, discuss the business advantages of offering pre-rolls, the evolution of pre-roll technology, and misconceptions about the product offering. The interview also covers consumer demographics for preroll purchases, Harrison and Fredrik’s predictions for the future of the pre-rolls industry, and more!

Scroll down to read the full interview.

Ganjapreneur: For cannabis producers, processors, and vertically integrated businesses, what are some of the benefits of offering pre-rolls as a product line?

Harrison Bard (HB): Vertically integrated companies have the ability to earn higher margins, as long as they are able to operate efficiently. Based on our research conducted with Headset, we found that house brands typically earn between 5%-9% higher margins, with Colorado house brands earning up to 12.7% higher margins so far in 2023.

Fredrik Rading (FR): Pre-rolls in general produce higher margins compared to other product categories due to their low production costs. Vertically integrated operators have the ability to earn even higher margins by cutting out the middleman and running more in-store promotions on pre-rolls without hurting their bottom line.

HB: Pre-rolls are one of the most popular add-on items at the point of sale. Headset data tells us that when a customer purchases flower, vape products, edibles, or a beverage, they will add-on a pre-roll 15.5% to 23.3% of the time. In fact, in every one of these product segments, pre-rolls either have the highest attachment rate or are within a single percentage point of the leader. Vertically integrated companies control both the product and the messaging at the point of sale, so they have the ability to really drive sales.

One of the common trends across all state cannabis markets right now is that many producers are struggling financially. Compared to other types of cannabis products, how cost-effective are pre-rolls for manufacturers?

FR: One of the best things about pre-roll production is how inexpensive it is compared to growing flower, making edibles, or extracting concentrates. You don’t need a lot of space or expensive equipment, and you avoid the risks that come with cannabis production. With growing, if one thing goes wrong you can lose an entire harvest. For pre-roll production, you can just buy flower from trusted growers and avoid the stress and added expense. Extraction equipment is very expensive and requires special rooms built to strict codes, and edibles require a commercial kitchen with lots of equipment. A starter kit that includes all the pre-roll machines you need to produce thousands of pre-rolls per shift can be purchased for under $6,000. The only added expense is a table for the equipment to sit on and the pre-rolled cones.

HB: Pre-rolls also have the least amount of price compression in the industry. The Headset data shows average pre-roll prices are down 11% in the US, which is the least of all categories. On the other hand, flower prices are down 24% on average across the country. We know that pre-roll multi-packs further decrease your labor and packaging costs, as you don’t need to individually package each pre-roll. So, from a purely financial standpoint, pre-rolls make the most sense to expand into compared to any other product category.

What are some of the different options that a brand has when venturing into the pre-roll category?

FR: There are so many! Pre-rolls are the most customizable category in the cannabis industry. Brands have the ability to showcase specific cultivars and are presented with a plethora of choices when it comes to the size, shape, paper type, filter type, packaging, and branding of their pre-rolls.

HB: Infused pre-rolls are currently the fastest growing segment in the pre-roll market with an impressive year-over-year growth of 1,426% in Canada and 22% in the US. Multi-packs, mini pre-rolls, hemp blunt wraps, and high-end pre-rolls with glass/wood/ceramic filter tips are also gaining popularity. When you consider that cannabis sales in 2022 were down by -1% in the US and slowed to 7% growth in Canada, it makes the growth in the pre-roll market even more significant.

FR: As pre-rolls become more popular, consumers are looking for new options and producers are trying their best to keep up with demand. The leading pre-roll companies offer multiple lines of pre-rolls in order to reach a larger demographic by offering different price points and smoking experiences.

Do automated pre-roll machines work more efficiently than manual pre-roll loaders? How does a manufacturer know when to make the switch from manual to automated?

HB: We typically recommend thinking about automated pre-roll machines once you are at 50k to 100k pre-rolls sold per month. However, there are a lot of limitations when it comes to using automated pre-roll machines and they are not as easy as just pushing a button and walking away. Compared to making about two to three thousand pre-rolls per 8-hour shift with one tabletop pre-roll machine, you can produce about one to two thousand pre-rolls per hour on an automated machine.

FR: However, automated machines are extremely finnicky and you will need to both grind your cannabis finer than you normally do, as well as dry out your flower to a lower moisture content. If you are not carefully monitoring and controlling the particle size and moisture content of your flower – you are not ready to bring in automation. Also, if you want to use the freshest, stickiest materials, automation is not the way to go.

HB: These machines can make one type of pre-roll exceptionally fast, but it takes time to configure them for a new project. Operators must consider the impact of shutting down for repairs or cleaning, when you have to stop the machine to create a different type of pre-roll, you are losing productivity. The benefit of using smaller, manual filling machines is that they can easily be adjusted, and, if you can have multiple of them, production doesn’t stop when one goes down, needs cleaning, or needs to be adjusted for a different type of pre-roll. There’s now also automation to just infuse the pre-rolls, so you can infuse any type and size of joint, regardless of how it was made.

FR: Also, when you are first setting up your pre-roll brand, you’ll want to experiment with packaging sizes to determine what price points generate the most sales in your market. Automated machines don’t allow you that flexibility, so launching with smaller, table-top pre-roll machines makes sense when starting out, so you can discover and hone in on exactly what your product portfolio will be.

How has the popularity of pre-rolls among consumers changed over the past few years, and what do you foresee for this category over the next 3-5 years?

HB: When the first medical markets started opening, the price of flower was high and producers did not have an easy way to create pre-rolls. Pre-rolls were not as popular amongst consumers, so they unfortunately became a place for producers to put their trim and shake. As markets matured, the price of flower went down and more machines were made that allowed producers to easily create better pre-rolls. This created a situation where the quality of pre-rolls rose, and the price dropped, making pre-roll sales skyrocket.

FR: Pre-rolls used to be the fourth or fifth biggest category, but they are now a strong second to pure flower in Canada and third in the US behind vapes. New pre-roll products are constantly being created, and producers are always looking for new shapes, flavors, papers, and filters to grab the consumers’ attention.

HB: Another interesting point about pre-rolls and consumer preferences is that each state goes through a distinctive product lifecycle for pre-rolls after legalization. During the first 1-2 years, 1-gram 109mm pre-rolls will dominate the market. Since the price of flower in new markets is high, the cost to produce multi-packs results in very high costs for the consumer and producer. As the price of flower and subsequently oil comes down in the next 3-4 years, you’ll begin to see pre-roll multi packs and particularly infused pre-roll multi-packs blossom and take a larger percentage of the market share.

Which consumer demographics tend to purchase pre-rolls the most?

FR: An interesting thing about pre-rolls is that, when it comes to wallet share, they are the most consistent product segment across all age demographics. Whereas other products either show a significant increase or decrease in popularity with each new generation, pre-rolls steadily hover between 12.8% and 14.5% in each.

For example, two of the most popular products for older generations to purchase are flower and edibles, but both of those become noticeably less and less popular with each new generation. Younger generations prefer to spend their money on vape products, so much so that vape products have actually overtaken flower as the biggest category for the Gen Z demographic! You’ll also notice that wellness products like capsules and topicals are more popular with older generations.

HB: These trends in market share make perfect sense. Of course, older generations would be more interested in wellness products, as life tends to get more uncomfortable with age. It also makes sense that vaping would be more popular with the younger crowd, as they highly value convenience and older generations are not as used to the vape format. Pre-rolls break the trend and continue to remain a consistent part of every generation’s purchasing habits, and that is yet another reason why the pre-roll category as a whole continues to grow.

Among diehard connoisseurs, cannabis pre-rolls have occasionally been lampooned for containing mostly shake or low-quality flower. Do you foresee this stereotype being invalidated as more brands invest in higher-quality pre-rolls, or will there always be a division in the market between “cheap” pre-rolls and “high-end” pre-rolls?

FR: As with most things, like coffee, wine, and beer for example, there will always be a cheap $1-$3 option, mid-level options, and higher-end craft options. Right now, there are lots of companies that are completely devoted to making high-quality pre-rolls, but there are also pre-roll companies selling hundreds of thousands of $1-$3 pre-rolls. Like any type of cannabis product, there is always going to be an economically focused selection. In other words, low quality pre-rolls will be a choice instead of the norm.

HB: The division between cheap and high-end pre-rolls will be distinguished by product innovation as more pre-roll producers create infused and non-infused pre-rolls with premium materials like ceramic tips, wood filters, and special paper types that are difficult, if not impossible, for consumers to roll at home. When die-hard consumers, who would otherwise never buy pre-rolls, start to see product innovation and formats they can’t easily roll themselves at an affordable price, pre-rolls will earn even more market share.

What do you think the pre-roll category will look like after federal legalization?

FR: Federal legalization will allow the pre-roll category, and the cannabis industry overall, to function like any other regulated industry. New automated machinery will continue to be invented to make pre-roll production more efficient, and brands will start to consolidate as the market expands across the world. However, craft brands will still thrive, but just like in craft beer, these niche brands will get acquired by and merge with large MSOs and LPs.

HB: I know it’s a nightmare scenario for most cannabis professionals, but federal legalization will probably pave the way for big tobacco to become leaders in the pre-roll industry. They already have billions invested in cannabis, they have all their distribution channels already in place, and they have the resources necessary to impact policy and production. One-way brands can stay ahead of tobacco companies is by continuing to develop customer loyalty through product innovations. Launch creative new products and smoking experiences at a faster rate than a multi-billion dollar operator. It’s not impossible when you have an advantage over knowing the ins and outs of the cannabis industry and are closer to the customer.

Who are some brands that you think are doing an exceptional job in the pre-roll category right now, and why do they stand out?

FR: Jeeter does an excellent job with branding and marketing, quickly becoming the number one pre-roll in California and many other new states. If there is a niche in the pre-roll market, you can bet that Jeeter has a product in that category, like flavored, infused, glass tipped, and mini pre-rolls.

HB: Juicy Joints is a Washington brand that exclusively produces pre-rolls. They focus on keeping prices low and potency levels high. They offer a wide range of flavored and infused pre-rolls, which consumers love. Mixing low prices, high cannabinoid percentages, and flavored products has been a winning formula in the cannabis industry, and they’re doing it really well.

FR: If you are looking for a craft cannabis brand that focuses on producing the best pre-rolls, you can’t go wrong with Fire Bros. As one of the premiere growers in the state of Washington, Fire Bros. has a reputation for making high quality pre-rolls. Their most recent offering is a multi-pack of five pre-rolls that allows you to get either a single cultivar or a variety.

Thank you, Harrison and Fredrik, for answering our questions! Our readers can visit CustomConesUSA.com to get in touch or learn more.

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Florida Supreme Court to Review AG’s Challenge to Cannabis Legalization Ballot Proposal

6/01/2023

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The Florida Supreme Court will review the legal challenge against the state’s upcoming adult-use cannabis ballot proposal brought by state Attorney General Ashley Moody, The Capitolist reports. In a legal filing to the court earlier this month, Moody argued that the “the proposed amendment fails to meet the requirements” of constitutional amendments but did not lay out her arguments.  

According to the Florida Courts’ information system, opponents must file their briefs on or before June 12, and after the deadline, the court will determine whether to conduct oral arguments on the matter. 

The “Adult Personal Use of Marijuana” amendment proposal is backed by Smart & Safe Florida. The group is seeking to put the issue to voters in 2024. The campaign has already collected more than the required number of petition signatures to trigger the state Supreme Court review and is nearing the threshold required to put the issue on 2024 ballots.    

Moody is maintaining a previously-established position from 2019 – the last effort to legalize cannabis in the state which was blocked by the state Supreme Court – and insists that the amendment should not reach the ballot, saying that it violates the state’s single-subject rule on ballot initiatives. 

The proposal would remove criminal liability or civil sanctions for the non-medical use of cannabis and authorize all licensed Medical Marijuana Treatment Centers in the state to produce and sell adult-use cannabis products. 

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Arizona Appeals Court Rules that Some Convictions for Cannabis Sales are Eligible for Expungement

6/01/2023

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The Arizona Court of Appeals on Tuesday ruled that some convictions for cannabis sales are eligible for expungement under the state’s adult-use cannabis legalization law, AZ Mirror reports. In the unanimous opinion, Judge Brian Furuya reversed a previous ruling from a Maricopa County Superior Court judge that denied expungement of a man’s 2014 cannabis sales conviction. The appellate court order forces the trial court to grant the expungement petition.  

The appellate judges concluded that, because transportation of cannabis is now eligible for expungement, and because transportation of cannabis for personal use has not been a crime in Arizona since 1987, voters must have meant to include transportation of cannabis for sales to be eligible for expungement.    

In a statement, Martin Hutchins, lead attorney and program manager for the Reclaim Your Future campaign, said the decision will allow people who have been convicted of cannabis sales “to mitigate the generational impact of their involvement with the criminal legal system, which affects Black and Brown people and people of lower socioeconomic status at disproportionate rates.” 

“Today’s decision is a great embodiment of the will of the Arizona voters who elected to undo the harms caused by the overpolicing of marijuana laws. There are many people who were charged with for-sale offenses before the passage of Prop. 207 even when they had minimal amounts of marijuana because other factors led officers to assume the person was some sort of dealer. The state and the cannabis industry is now making millions on marijuana sales, so it’s fortunate that people who were believed to have committed a sales-related offense can now benefit from expungement.” — Hutchins, in a statement, via AZ Mirror 

The case was brought on behalf of Ethan Sorensen who was arrested in 2014 for possession of about two-thirds of an ounce of cannabis and was charged with felony possession of cannabis for sale and felony possession of drug paraphernalia. As part of a plea agreement, Sorensen pleaded guilty to solicitation to commit possession of cannabis for sale, a felony, which was later reduced to a misdemeanor after he completed his probation.

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New Hampshire Lawmakers Give Up on Effort to Legalize Cannabis Sales Through State-Run System

6/01/2023

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New Hampshire lawmakers on Tuesday gave up on an effort to come to a deal on allowing adult-use cannabis sales under a state-control model that was backed by Gov. Chris Sununu (R), WMUR reports. Sununu had pitched the plan after the state Senate voted 14-10 earlier this month to reject a House-approved legalization bill.

The House Commerce Committee couldn’t agree on how to proceed with a plan to implement the state-control system for cannabis, with a major issue being how the state would treat the medical cannabis operators. 

Cannabis advocates in the state and medical cannabis companies said they wanted more clarity written into the legislation rather than through a bureaucratic rulemaking process. Timothy Egan, of the New Hampshire Cannabis Association, said stakeholders “want to know the rules” before they begin investing in businesses. 

“I don’t think you can create the hopes and dreams of a businessperson on ‘Oh, we’ll get to the rules later.'” — Egan via WMUR 

Earlier this month, after years of opposition to cannabis legalization in the state, Sununu said during an interview with WMUR’s CloseUp that allowing cannabis sales through state-run shops could help “harm reduction” efforts in the state. During the interview, Sununu described cannabis legalization in the state as “probably inevitable in some way or form.” He added that the system would prevent so-called “Marijuana Miles,” which he described as the strings of “pot shop, after pot shop, after pot shop” that have popped up in Massachusetts and Maine.   

Republican House Majority Leader Jason Osborne told WMUR that “Until people are ready to get together and compromise and not demand that their preferred state of the world is the only thing they will accept, we’re not going to get anywhere.” 

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European Cannabis Social Clubs Explained

6/01/2023

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Editor’s note: This contribution was submitted by Michael Sassano, CEO and Chairman of the Board for Somai Pharmaceuticals LTD, a European biotech firm that distributes cannabinoid-based pharmaceuticals throughout the European Union and globally.

As recreational cannabis talks increase all around Europe, the term “social clubs” keeps getting bandied about. The formal understanding is that social clubs are not-for-profit associations that cultivate their own cannabis for their members. Like any private club’s concept, the idea is to bring the illicit market indoors. This mom-and-pop style approach has a mixed bag of interpretations and results associated with it across the European cannabis social club scene.

The Historic Dutch Cannabis Coffee Shop Model

The oldest versions of the European cannabis social club — which is not a social club but an important pre-cursor — are Amsterdam’s cannabis coffee shops. The basic premises are a place to relax with friends and like-minded individuals who enjoy the social aspect of cannabis consumption: A place to consume cannabis where there are drinks, food and/or games — a social experience. Still, even the Netherlands has yet to lead the growing and commercial buying of cannabis down a fully legal pathway, and cannabis products are still frequently bought secretly from home grow-style grey market sellers.

Despite ten legal pilot programs winning licenses almost three years ago, there has not been any success in curbing grey-market sales. One issue is governmental delays; another is that coffee shops worry it will take years to get the quality of genetics smaller growers have worked to perfect for decades; another is that pricing cannot compete with products like Moroccan hash. Whatever the reason, the coffee shop model has contracted over time, going from 730 coffee shops in 2005 to fewer than 500 today.

Unsanctioned Spanish Cannabis Social Club Membership

Barcelona and the Catalonia area have tolerated the largest grey-market social clubs and are similar models to those currently proposed by countries pursuing adult-use cannabis sales. There are roughly 1600 social clubs in Barcelona and Catalonia designed to serve their members. Some are small, and others multistory well-decorated hangout zones. Regardless of the vibe, all products sold are from the grey market with no check on quality standards. To make matters worse, these clubs struggle to pay employees because membership programs have little to no commercial viability. Profit is not even conceivable, and many operators express that the rules must change to survive.

The harsh reality is a similar contraction to that in the Dutch cannabis coffee shops will eventually occur as people struggle to upkeep rent and minimal employee bases to service clients.

Many EU cannabis social club memberships help cover the products’ cultivation and other manufacturing costs.

Malta’s Not-For-Profit Private Cannabis Social Clubs

Proper legal social clubs started in Europe with Malta. The program has been in the works for a few years, and the recent regulations set to accept up to 500 cannabis clubs with many limitations, including that the cannabis club must cultivate cannabis in-house for its members and that consumers can only belong to one club at a time. Legal registration began at the end of February 2023, and applicants can apply to Malta’s Authority for the Responsible Use of Cannabis (ARUC). These “not-for-profit” clubs are, exactly as they sound, private membership clubs that do not inspire significant investments or a viable economic model. In function, it is much like a bar that brews or distills beer or liquor on-premise — albeit one that is not-for-profit — as it allows members to purchase and consume cannabis on the property.

Does Malta’s Cannabis Club Model Make Economic Sense?

Many European cannabis operators question the logic of reducing Maltese quality standards essentially to home-grow status. Others question Malta’s ability to combat the legacy grey market, particularly given the costly alternative of cultivating in-house, the undesirability of operating a nonprofit business, and that it is easier for most consumers to continue buying from the streets.

As seen in the United States and Canadian markets, there is no doubt that the grey market proliferates as decriminalization takes effect. Advancing innovative products like vaporizers and faster-acting formulas from established regulated companies are ways to compete with grey markets directly. For these markets, flower will remain a challenging competitive category because small home growers can provide both low pricing and high-quality care. Additionally, clubs may only appeal to a specific demographic — like older people or professionals who may prefer a corporate product — and leave out others.

Germany Still Debating Social Clubs and Dispensaries

Germany has proposed the broad strokes of something similar to the Maltese cannabis social club model. Although a legislative step forward, there is little enthusiasm for investing in a not-for-profit business. Additionally, it’s dubious how Germany expects to conform to higher standards through small home-grown cultivation.

Questions remain about what will happen to the booming German medical cannabis market. It must conform to the highest European Union Good Manufacturing Practice (EU-GMP) pharmaceutical standards that require pharmacies to sell magistral preparations only. There is already a massive need for more institutional grower quality assurance. The general belief is that smaller growers with little regulation can cater to craft growers better than standardized, larger-scale, regulated growers. Market observers project that flower may be sold in social clubs while extracts remain medicinally distributed. As a second program pillar, Germany has proposed U.S. and Canadian-style dispensaries. Again, it is still being determined if Germany will be part of a medical program that allows access to the higher-standard global products, if this, too, becomes a local home-grown market, or other possibilities.

Swiss Social Cannabis Clubs in Early Stages

Switzerland has already chosen and started its ten Zurich-based social clubs with the same not-for-profit membership model as other European countries. The program is attached to the University of Zurich to monitor the progress as a medical experiment. This medical experiment road allows Switzerland to explore recreational-style acceptance through the social club model without infringing on the United Nations medical-approved cannabis standard voted on in December 2020. The Zurich program is already expanding to other regions.

The same questions that plague other European markets remain about the Swiss model’s economic viability and whether it will combat or feed grey markets. Additionally, police and politicians do not have the will and capabilities to enforce punitive measures since the basic premise of decriminalization is that nobody should be arrested for using cannabis.

EU Social Cannabis Clubs: Prioritize Quality Standards

As more countries such as the Czech Republic, Luxembourg and Portugal follow the social club model and movement, there is little doubt that progress is happening. However, tremendous doubts remain about this unproven model’s future success for consumer quality standards, innovation capabilities, or creating a pathway that reduces the legacy grey market.

It is hard to imagine social clubs will be anything more than a slight step forward without the potential to generate the capital required to achieve the goals European governments envisioned. Still, this is one step in a series of steps, and while politicians aren’t necessarily all-in on cannabis reform currently, time has a way of enabling progress.

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Illinois Budget Bill Would Decouple State Tax Laws from IRS Code 280E

5/31/2023

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Illinois’ budget bill includes provisions that eliminate the state’s conformity with Internal Revenue Service (IRS) Code 280E which will allow state-licensed cannabis businesses to take some normal business deductions, according to a report from Tenth Amendment Center. Section 280E prohibits businesses from deducting otherwise ordinary business expenses from gross income associated with the “trafficking” of Schedule I or II substances, as defined by the federal Controlled Substances Act, and applies to cannabusinesses in states that have legalized cannabis. 

The bill also includes language to direct funding to a cannabis development fund and extend the deadline for conditional cannabis business licensees to find a storefront. 

The budget bill was approved this week by both chambers of the Illinois legislature and Gov. J.B. Pritzker (D) is expected to sign it into law. 

Earlier this month, New Jersey Gov. Phil Murphy (D) signed a standalone bill to allow the state’s cannabis companies to deduct normal, management-related business expenses from their taxes.  

Minnesota’s newly-signed adult-use cannabis law also decouples the state’s tax regime from IRS Code 280E. 

In a National Cannabis Industry Association policy paper, Henry Wykowski, a California attorney who works with cannabis clients on tax issues, said that “Section 280E de-incentivizes people from filing tax returns” and “penalizes people who are trying to be transparent and operate within the law.” 

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California Senate Passes Psychedelic Decriminalization Bill

5/31/2023

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The California Senate last week approved a bill to decriminalize the possession of some psychedelic substances by individuals 21-and-older, including psilocybin, psilocyn, DMT, ibogaine, and mescaline, KTXL reports. The measure moves next to the state Assembly.  

The bill would also repeal laws prohibiting the cultivation of “spores or mycelium capable of producing mushrooms or other material which contain psilocybin or psilocyn,” but the bill’s decriminalization of mescaline specifically excludes peyote derivatives. The ban on peyote derivatives is due to the fact that the plant is “nearly endangered” and is commonly used in spiritual ceremonies by Native Americans, according to the bill text. 

In an interview with the California Globe earlier this month, Sen. Scott Weiner (D) said the psychedelics covered under the bill “are not addictive drugs.” 

“And these are drugs that have significant potential in helping people to navigate and to become healthy who are experiencing mental health, challenges substance use challenges. We know that cities in California and elsewhere have passed resolutions to categorize enforcement of these particular criminal laws as the lowest law enforcement priority. This is an important step for California. This is about making sure that people have access to substances that they need that are not addictive.” — Weiner to the Globe 

Under the measure, psychedelics would continue to be barred from school campuses and the substances could not be provided to people under 21. 

A similar bill passed the state Senate in 2021 but was never considered by the full House.  

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Jointly and Cova Collaborate to Transform Cannabis Retail with Jointly Matches, the First Goal-Based Data-Driven Sales Platform

5/31/2023

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Los Angeles, California – May 30, 2023 – Jointly, a cannabis discovery and software company, today announced a groundbreaking partnership with Cova, a leading provider of cannabis point of sale (POS) software. This collaboration offers cannabis retailers access to Jointly Matches, Jointly’s new software for retailers that empowers budtenders to make data-informed product performance recommendations.

Jointly Matches is fueled by nearly a half a million goal-specific product performance ratings, collected from users of Jointly’s mobile consumer app, where consumers learn to find success with cannabis by practicing what Jointly calls “Purposeful Cannabis Consumption.”

“We are excited to partner with Cova to offer cannabis retailers a tool that will help them match their customers with the right products, more easily and more often,” said David Kooi, CEO and Co-Founder of Jointly. ”Cannabis retail is about helping people live better. People shop for cannabis to find relaxation, to relieve everyday stress, sleep better, stimulate their creativity, enjoy exercise or recover from it, relieve everyday pain, and more. Our software aims to assist budtenders in aligning customers with the best-suited products for their individual needs, drawing from our unique data about what works most effectively.”

Key benefits of the Jointly-Cova partnership include:

  • Enhanced Consumer Experiences: Jointly’s data show that the quality of a person’s cannabis experience is determined about 50% by their chosen product and 50% by creating the conditions for a good experience (by controlling for factors like dose, setting, hydration, time of day, etc.). When consumers are matched with the right products for their goals, they’ll experience superior outcomes.
  • Empowered Budtenders: Budtenders, armed with goal-specific product performance data, are freed to nurture more value-added aspects of the customer relationship, no longer needing to suggest products without data to back up their recommendations.
  • Boosted Sales: When consumers are confident in their purchases and understand the various benefits and effects of cannabis, they tend to make larger and more frequent purchases.
  • Purposeful Time Spent In Store: Offering a goal-based, effects-oriented framework for shopping that prioritizes product performance, attention is deflected away from less productive concepts like indica vs sativa, shopping based on highest THC percentage, or being swayed by enticing packaging or pricing.

The Jointly-Cova partnership is now available to all licensed US cannabis retailers.

About Jointly
Jointly is the cannabis discovery company. Powered by a proprietary data platform, the company was created on the premise that purposeful cannabis consumption is the key to unlocking a better you. Cannabis enthusiasts use the platform to discover new products and reflect on their experiences to reveal insights that help them reach their goals. Their product ratings power Jointly’s goal-specific cannabis product recommendation engine. That engine helps cannabis retailers sell more cannabis to more people more easily, for all the great reasons people shop and consume.
For additional information, visit jointlybetter.com/retail-solutions.

About Cova
Cova builds innovative software solutions for cannabis retail. Its award-winning suite includes dispensary POS, eCommerce, payments, inventory management, and advanced analytics—tech designed to simplify compliance and streamline complex operations. A focus on ease of use, industry-leading reliability, and enterprise-proven scalability have made Cova the most-trusted cannabis retail platform in North America, powering 2,000 locations.
For additional information, visit covasoftware.com.

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New York Regulators Approve Settlement of Lawsuit Blocking Cannabis Licenses

5/31/2023

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The New York Cannabis Control Board (CCB) on Tuesday voted to settle a lawsuit brought by a Michigan company that has so far prevented the awarding of cannabis licenses in five regions for seven months, Spectrum News reports. The lawsuit filed by Variscite NY One had affected 63 of the 150 licenses set to be awarded to social equity applicants and prohibited licenses from being granted in the region along with Brooklyn, Central New York, the Finger Lake region, the Mid-Hudson Area, and Western New York, although in March a New York Appeals Court Judge narrowed the injunction to just the Finger Lake region.  

State Sen. Jeremy Cooney, who chairs the Senate Cannabis Subcommittee, told Spectrum News that he is “relieved and pleased” about the settlement. 

“Hopefully, we can put this roadblock for the Finger Lakes Region behind us and focus on creating safe and legal access to recreational cannabis for adults in Greater Rochester. Public safety cannot be achieved in our state until all New Yorkers – including those of us in the Finger Lakes Region – can walk into a legal dispensary and purchase cannabis products that have been tracked and tested.” — Cooney via Spectrum  

In a statement, Aaron Ghitleman, spokesman for the Office of Cannabis Management, noted that while the board had voted to authorize the settlement, the agreement has not yet been finalized and regulators would have “more to share” once the deal clears final approval.

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Cannabis Automation: Post-Harvest Processing and Machine Bucking

5/31/2023

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In the ever-evolving cannabis industry, cultivators are seeking economies of scale to help process their harvests. Growers increasingly demand reliable and efficient harvesting solutions. For larger-scale farms and commercial operations, the post-harvest process was traditionally very time-consuming and cumbersome. As new technologies are introduced with advanced features, cultivators are able to reduce their processing time and increase consistency with their products.

At the beginning of the post-harvest process, cannabis flowers are removed from their stems to be prepped for drying, curing, trimming, and ultimately, retail sale. Traditionally, cannabis was processed by hand and required hours of manual labor with the high possibility of inconsistent results. Experienced workers had to meticulously remove the delicate flowers from their stems without damaging or breaking apart the buds.

With modern cannabis buckers like the Mobius MBX, cultivators and processors can drastically reduce the time from harvest to sale while improving their waste management and overall process workflow. The design and technology behind the MBX ensure precision bucking with minimal labor and errors during the process. Flowers are carefully separated from their stems and stalks, and the buds gently fall to a collection tote below the machine at a rate of up to 150 lbs per hour.

Improving Efficiency With A Cannabis Bucker

One of the most significant advantages of the Mobius MBX Bucker is its ability to increase productivity while minimizing waste. The MBX has an integrated stem chipper that cuts the stems into small pieces, reducing the size and output volume of green waste material by 25x. The chipped stems are collected below the machine and easily disposed of for reduced waste disposal and transportation costs.

By centralizing waste management, cultivators can streamline their operations and maintain a more efficient workflow. This not only reduces the costs and hassles associated with bucking but also aligns with the industry’s growing emphasis on sustainability and responsible practices.

Machine bucking lends itself to faster processing times, operating at impressive speeds while ensuring no damage to the flower. By automating the bucking process, cultivators can process larger volumes of cannabis at a time, reducing their post-harvest processing cycle. With consistent performance and uniform results from a bucking machine, cultivators not only save time, but they also deliver higher yields of premium-grade flower.

As the cannabis industry continues to expand, the need for automation equipment like the Mobius MBX Bucker becomes more apparent. Cultivators can optimize their workflow, save money and time, and ultimately deliver a superior product to the market.

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Minnesota Gov. Signs Adult-Use Cannabis Legalization Bill

5/30/2023

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Minnesota became the 23rd state to legalize adult-use cannabis today after Gov. Tim Walz (D) signed the state’s legislature-approved legalization proposal, according to a Northern News Now report.

The 300-page bill legalizes adult-use cannabis for adults aged 21 and older, setting the personal possession limits at two ounces of flower in public and up to two pounds at home. The proposal also legalizes the home growing of up to eight plants with a maximum of four flowering plants at a time, and includes automatic expungement provisions for cannabis misdemeanors or petty possession charges. 

Under the proposal, cannabis possession and cultivation will become legal on August 1 while adult-use licenses are not expected until the summer of 2024. When Minnesota retailers and other operators launch their businesses — expected sometime in 2025 — commercial cannabis products will carry an additional 10% tax from the state.

The proposal also creates a new Office of Cannabis Management, which will oversee the licensing of medical and adult-use cannabis operators and set regulations for those industries, as well as for hemp-derived consumer products.

The legalization bill’s success marks the end of a years-long effort by the Minnesota Democratic–Farmer–Labor Party, which took full control of the state government in 2022 and this year has secured multiple legislative victories.

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Hemp Building Materials Included in National Mall’s Innovative Housing Showcase

5/30/2023

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Hemp building materials, including hempcrete, will be on display on the National Mall in Washington, D.C. as part of the annual Innovative Housing Showcase. The showcase takes place June 9-11. 

The hemp building materials – including hempcrete, hemp blocks, hemp wood flooring, hemp wool batt insulation, hemp rebar, geopolymer hemp stucco, and quickcrete – will be exhibited by the US Hemp Building Association (USHBA). 

In a press release, Ray Kaderli, USHBA president, noted that in Europe, hemp has been used in building materials for 30 years.   

“Hemp building materials displayed on the National Mall will turbocharge education and answer questions on this remarkable building solution. This showcase will move the industry forward.” — Kaderli in a statement 

The USHBA has also announced a partnership Mandi Kerr of Utah-based Global Hemp Association to make key relationships with congressional staffers during the showcase. Kaderli said the partnership “provides advocacy for the total supply chain of industrial hemp from the seed to the walls of a building.” 

“Global Hemp Association has provided advocacy and leadership for the genetics and farming of industrial hemp to build our agricultural supplies,” he said. “US Hemp Building Association provides advocacy for the raw materials made into building materials. The whole supply chain is represented.” 

Hemp building materials will be showcased as part of the Department of Energy’s emphasis on plant-based decarbonizing building materials. 

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Weill Cornell Medicine Conducting NIH-Funded Study on Cannabis’ Effect on Brains of People with HIV

5/30/2023

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Weill Cornell Medicine has been awarded a five-year, $11.6 million grant from the National Institute on Drug Abuse (NIDA) of the National Institutes of Health (NIH) to study what effects cannabis — and compounds derived from it — may have on the brains of those living with HIV. 

Researchers are attempting to determine whether cannabis exacerbates HIV’s effects on the brain, or protects against them. 

In a press release, principal investigator Lishomwa Ndhlovu, a professor of immunology in medicine in the Division of Infectious Diseases at Weill Cornell Medicine, said researchers “know that the virus may cause changes within the brain, but it’s not clear yet how the use of cannabis might interact with the infection.” 

Studies have found that people living with HIV frequently use cannabis, recreationally or to treat symptoms related to HIV. Cannabis has anti-inflammatory properties that researchers speculate could reduce the chronic, harmful inflammation caused by the virus. Researchers believe this inflammation contributes to the long-term health problems, including cognitive deficits, that people living with HIV may experience. 

To examine the interaction between cannabis and HIV, the researchers will focus on several brain regions, including the hippocampus, where new neurons form, in a process critical to learning and memory. Using brain tissue samples collected from human patients after death and from nonhuman animal models, they intend to look at gene activity and the mechanisms controlling it within individual cells. 

In a statement, Michael Corley, assistant professor of immunology in medicine in the Division of Infectious Diseases, said “It’s unclear how different types of brain cells react to cannabis in the context of HIV” and that new single-cell technologies will allow researchers to map the changes at a resolution high enough to examine the effects on specific cell types. 

The project is a component of NIDA’s SCORCH program, which seeks to investigate how substances that can lead to addiction may modify the effects of HIV in the brain, at the level of individual cells. This cannabis research is the second SCORCH project based at Weill Cornell Medicine. 

 

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New York to Allow Cannabis Farmers’ Markets

5/29/2023

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In a move aiming to address the state’s cannabis supply chain glut, the New York Office of Cannabis Management (OCM) announced last week that industry operators will be allowed this summer to host cannabis farmers’ markets in order to sell more product, according to a NY Cannabis Insider report.

The plan, announced by OCM Director of Policy John Kagia during a meeting with the Cannabis Association of New York, will see the state’s conditionally licensed growers and retailers team up to organize the farmers’ markets’ assembly and operation. Ultimately, the markets should create an opportunity for cultivators to sell their oversupply as there are currently just 13 operational retailers in the state, and shelf space is too crowded for the millions of dollars worth of cannabis products that the state’s growers have produced, the report said.

“A minimum of three growers and a retailer can organize events where growers can sell flower and pre rolls … and do so through a retailer, but at non-storefront locations.” — Kagia, via NY Cannabis Insider

Regulators still have to finalize details for the farmers’ market program and that process could take at least a month, the agency said.

The state’s adult-use cannabis industry has so far been wrought with legal challenges and delays, which prompted at least one out-of-state company to cancel its New York expansion plans. Meanwhile, a recent MPG Consulting report found that the slower-than-expected adult-use cannabis roll-out could cost the state up to $2.6 billion in lost tax revenues over the next eight years.

Earlier this month, lawmakers dedicated $16 million of the state’s annual budget toward cracking down on unlicensed cannabis dispensaries.

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Colorado Gov. Signs Psychedelics Legalization Bill

5/29/2023

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Colorado Gov. Jared Polis (D) signed a psychedelics legalization and decriminalization proposal last week, Westword reports. The new law will take effect on July 1.

The proposal, Senate Bill 23-290, is the Legislature’s response to Proposition 122, the successful Colorado ballot initiative passed last year to legalize psychedelic mushrooms and establish state-regulated “healing centers” where patients can consume psilocybin in a controlled environment. Prop 122 had called for the legalization of therapeutic psilocybin use and decriminalized the personal cultivation and use of natural psychedelics including magic mushrooms, DMT, ibogaine, and non-peyote-based mescaline, but ultimately left implementation and regulation responsibilities to lawmakers.

Introduced by Colorado Senate President Stephen Fenberg (D), SB 290 establishes restrictions for the personal cultivation of psilocybin mushrooms and other natural psychedelics and creates new regulations and criminal penalties to address unlicensed dealers. Additionally, the bill puts the state Department of Revenue in charge of overseeing the licensed manufacturing, testing, and distribution of psychedelics in the state.

Neither SB 290 nor Prop 122 created carveouts for local governments to ban the psychedelics industry outright but officials can still enact “time, place, and manner restrictions” on such businesses, the report said. The bill does not allow for the public consumption of psychedelics.

Psychedelic medicine advocates in the state have argued that the new law sets too many restrictions on unlicensed activity and communal use.

Oregon became the first U.S. state to allow therapeutic psilocybin use earlier this year after voters there approved a medical psychedelics legalization measure in 2020.

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Bipartisan Cannabis Legalization Bill Introduced In Ohio

5/26/2023

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A bi-partisan bill to legalize cannabis has been introduced in Ohio by state Reps. Casey Weinstein (D) and Jamie Callender (R) would allow the cultivation, purchasing, and possession of cannabis by Ohioans over the age of 21, and allow for the expungement of conviction records for previous cultivation and possession offenses.

The measure includes a 10% tax on sales which would be distributed in part to support primary and secondary education, support communities that host dispensaries, combat drug dependence and illegal drug trafficking, and into the state general fund. 

“It’s time for Ohio to act on this before we fall too much further behind our neighbors. Adult-use is good for our economy, good for our justice system, and the right thing to do. Ohioans are ready to legalize cannabis, and I am proud to offer this bipartisan bill to get it done.” — Weinstein in a press release 

In a statement, Callender added that the U.S. is “increasingly heading towards the de-scheduling of cannabis products at the federal level” and “Ohio has an opportunity to get ahead of the curve in developing its cannabis industry.” 

“Through the expansion of Ohio’s successful Medical Marijuana program to all Ohioans, we will not only be building upon best practices from around the country but utilizing the lessons learned here in Ohio,” he said.  

Under the bill, Ohio’s Medical Marijuana Control Program would be extended to also regulate the cultivation, processing, and sale of adult-use cannabis products. It would be renamed the Division of Marijuana Control to reflect its role in running both the medical cannabis and adult-use programs and be housed within the Department of Commerce. 

The legalization bill is still awaiting a committee assignment. 

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Report: More Than 90% of California Cannabis Infected with Hop-Latent Viroid

5/26/2023

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More than 90% of cannabis in California is infected with a pathogen that effectively destroys the plant and could wreak havoc on the state’s industry, according to an SF Gate report. Hop-latent viroid (HLVd) shrivels cannabis plants, reducing how much weight they produce by as much as 30%, and cutting THC in the plant by as much as half, the report says.

The pathogen was first documented in cannabis in 2019 and it is estimated to have infected most of the state’s cannabis. In 2021, Dark Heart Nursery announced the results of a formal survey that found, after 200,000 tissue tests, 90% of California facilities included in the research had HLVd, according to a Cannabis Business Times report.

The pathogen has also been found at cannabis grows in Massachusetts, according to an NPR report from February.

Tests have been developed to determine whether a plant is infected with the pathogen — one by Oakland’s Purple City Labs can be conducted on-site and delivers results in just a few hours.

If a plant is infected by HLVd, it must be destroyed, Nick Masso of Massachusetts-based Indo Labs told NPR.

“You cannot recover from hop latent viroid,” he said.

The pathogen spreads quickly because cultivators often use cuttings from a mother plant to propagate more plants, but the new plants are already infected, and the viroid spreads exponentially.

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Montana Gov. Signs Bill Extending Moratorium on Cannabis Licenses

5/26/2023

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Montana Gov. Greg Gianforte (R) on Tuesday signed legislation extending the state’s moratorium on cannabis licenses for another two years, KTVH reports. Under the law, the moratorium only allows medical cannabis companies that were licensed as of 2020 to obtain adult-use licenses. 

The measure does include language that will allow 16 medical cannabis providers to join the state’s adult-use market, which had been in limbo due to the timing of the adult-use licensing process and the first moratorium.

Gianforte also signed a bill allowing the state’s tribes to expand their medical cannabis operations in the same way as other businesses that hold cannabis licenses in the state. Each of the state’s eight tribes was guaranteed one cannabis license; however, state regulators determined that, because of the way the law was worded, those licenses would be limited to a very small cultivation area. The bill signed by the governor clarifies those rules.  

The legislation also increases the licensing fees for businesses that operate multiple dispensaries from $5,000 for each dispensary to $5,000 for the first, $10,000 for the second, and a $5,000 for each additional location.  

Additionally, the bill includes provisions requiring that any physician who certifies more than 39 patients for medical cannabis cards in a single year undergoes a review by the state.  

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German Parliament Member to Discuss Cannabis Reforms at ICBC Berlin

5/25/2023

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Back in 2021, mere weeks before what would prove to be a historic election for cannabis policy in Germany, the International Cannabis Business Conference (ICBC) hosted a panel of sitting federal lawmakers to discuss German cannabis policy. It was the first time in history that all major parties in Germany were represented in a panel discussion specific to national cannabis reform.

As we learned weeks after the historic panel discussion, a new governing coalition was elected in Germany and many of the ideas that were previously discussed at ICBC Berlin then started to enter the wider conversation regarding legalization in Europe’s largest economy. Once again, the German Cannabis Business Association (BvCW e.V.) is hosting the political discussion presentation at the upcoming ICBC Berlin 2023 event, which takes place on June 29th and 30th.

The Speakers

The political discussion at ICBC Berlin, which is titled ‘Cannabis Policy Reform Efforts in Germany’, will touch on a variety of cannabis political issues, including the development of stimulant regulation, adult-use legalization, medical cannabis policy, commercial hemp, and CBD.

Jürgen Neumeyer, managing director of Branchenverband Cannabiswirtschaft (BvCW e.V.), will serve as the moderator of the discussion. Joining Mr. Neumeyer will be Dr. Kirsten Kappert-Gonther, MdB. Dr. Kappert-Gonther is a German psychotherapist and politician (Green Party) who has served as a member of the Bundestag since the 2017 German federal election.

Dr. Kirsten Kappert-Gonther, MdB currently serves as the acting Chairwoman of the Health Committee of the German Bundestag and Spokeswoman for Cannabis Policy of the Bündnis90/Die Grünen Parliamentary Group in the German Bundestag.

Timely Discussion

Jürgen Neumeyer and Dr. Kirsten Kappert-Gonther’s discussion is being held at a crucial juncture for cannabis policy in both Germany and throughout the European continent. Adult-use cannabis legalization is not only on the move in Germany; to a lesser extent, the same can also be said about several other countries in Europe when it comes to legalization efforts.

Malta was the first country to pass a national legalization measure in Europe, although, any butterfly effect resulting from Malta’s legalization has yet to materialize. The real domino that European cannabis observers are anxiously waiting to fall is, of course, Germany. The country is home to the fourth-largest economy on earth and carries tremendous weight in continental politics.

When Germany legalizes, a butterfly effect is all but guaranteed to occur, and it will create a marker in time by which the life of Europe’s emerging cannabis industry will forever be measured by.

Attend ICBC Berlin

The International Cannabis Business Conference is the leading cannabis business-to-business (B2B) event series on the planet, with previous conferences occurring in several countries on multiple continents. The event series is owned and operated by cannabis advocates that believe in celebrating cannabis culture, in addition to providing world-class cannabis industry education and networking opportunities.

In addition to the B2B event, which is the largest of its type in Europe, the International Cannabis Business Conference will also hold a Global Investment Forum in Berlin on June 27th.

Over 5,000 cannabis leaders from over 80 countries will be represented at the International Cannabis Business Conference in Berlin and that includes representatives from every sector of the industry as well as leading international cannabis policymakers and industry service providers. Attend the International Cannabis Business Conference in Berlin to network with investors, entrepreneurs, industry regulators, and international policymakers and take your industry pursuits to the next level.

Secure your tickets now before the event sells out!

 

 

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Michigan Considers Dropping Pre-Employment Cannabis Drug Tests for Most State Jobs

5/25/2023

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The Michigan Civil Service Commission earlier this month proposed a rule change that would drop pre-employment drug testing for cannabis. The proposal would not change the requirements for safety-sensitive jobs, such as state police or commercial vehicle drivers.  

“If approved, they would not impact current testing policies applicable to test-designated positions or those applicable to employees, nor would they change current prohibitions on an employee’s use of drugs while on duty or reporting for or being on duty with a prohibited level of drugs present in the employee’s bodily fluids.” — Michigan Civil Service Commission, in a statement, via Click on Detroit 

Adult-use cannabis has been legal in Michigan since 2018. The rules requiring cannabis testing as a pre-employment requirement in Michigan were implemented in 1998, according to an official communication from State Personnel Director John Gnodtke.

The memo also notes that ending pre-employment testing for cannabis “would not affect the availability of reasonable-suspicion or follow-up testing for marijuana of classified employees, including candidates who become employees.” The memo says that, since the passage of adult-use cannabis laws in the state, approximately 350 applicants for classified positions have tested positive for cannabis in pre-employment testing and current state rules require rescission of the employment offer and a three-year ban from appointment to other state positions in such a situation.

“While many of these sanctions have since lapsed, a few hundred remain in effect. The commission could adopt rule language allowing amnesty through rescission of continuing sanctions based on a pre-employment drug test for a non-test designated position with a positive result for marijuana,” the memo says. “Such action would not result in employment for these candidates but would allow them to apply for classified positions rather than waiting three years after being sanctioned.” 

The commission is currently seeking public comments on the proposal.

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Federal Jury Inducts Conman for Fraud Related to Fake Hemp Farm

5/25/2023

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A federal grand jury in Los Angeles, California on Tuesday indicted Mark Roy Anderson on five counts of wire fraud after he collected $9 million from investors for a hemp farm that never existed, the Los Angeles Times reports. Anderson launched the purported business after he was released from prison in May 2019, after serving more than 11 years for an oil investment scam. 

Prosecutors said Anderson used the money collected from investors for Harvest Farm Group to buy a $1.3 million property in Ojai and another $2.3 million on personal expenses, including more than $650,000 for vintage and luxury automobiles, $13,000 for chartered private jet flights, and $142,000 for other high-end merchandise, according to Federal Bureau of Investigation (FBI) investigators in the criminal complaint. 

Anderson has a history of scams dating back to 1988 when he swindled an individual to pay him $400,000 for an interest in a Beverly Hills office building that he falsely claimed to own. He also scammed another individual to pay $175,000 for an interest in a La Jolla building that he didn’t own. For those, and other financial crimes, Anderson pleaded guilty to grand theft and other charges and was sentenced to four years in prison, the report says. 

Also in the 1980s, Anderson ran a Ponzi-style scheme to cheat investors in a scheme claiming he was restoring historic buildings around the country – he was sentenced to seven more years in prison for those crimes. 

In November 2020, Anderson was released under three-year court supervision, a condition of his probation was that he not engage in investment projects; but by then, the hemp investment scheme was already in motion, according to the FBI. 

Anderson was arrested on May 9 and remains in jail. 

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Delaware Lawmakers Budget $4.1M for Adult-Use Cannabis Rollout

5/25/2023

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A Delaware legislative committee on Tuesday approved $4.1 million for funding the regulatory rollout of the state’s adult-use cannabis industry, WMDT reports. The funding approved by the Joint Finance Committee (JFC) will help establish the regulatory infrastructure needed within the state government to begin the adult-use cannabis licensing and oversight process.  

Of the $4.1 million, $2.2 million is expected to be ongoing, recurring funding, with $1.9 million in one-time costs. The funding will be included in legislative budgets that need to be adopted by lawmakers and Gov. John Carney (D). Carney is facing a September 29 deadline to name a Marijuana Control Commission and regulations for adult-use cannabis licensing are due by July 1, 2024.

Under the state’s legalization law, the Marijuana Control Commissioner must begin issuing 30 retail and five testing licenses no later than February 1, 2025 – the deadline requirement in the regulatory framework of the legislation, meaning that it could happen sooner but no later than that date.

Delaware State Rep. Ed Osienski (D), who sponsored the adult-use legislation, told WMDT that “things could move a litter faster” than the dates set forth in the law.

The final budget must be approved by the General Assembly by July 1.

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SEC Shuts Down $60M ‘Ponzi-Like Scheme’ Tied to Non-Existent Cannabis Farm

5/24/2023

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The U.S. Securities and Exchange Commission (SEC) on Tuesday shut down a “Ponzi-like scheme” by WeedGenics and its owners. The agency said WeedGenics owners Rolf Max Hirschmann and Patrick Earl Williams, a rapper known as “BigRigBaby,” raised more than $60 million from the scheme and used the majority of the funds to make $16.2 million in Ponzi-like payments and to enrich themselves.  

According to the complaint, since at least June 2019, Hirschmann and Williams promised investors they would use funds raised to expand WeedGenics facilities, which they guaranteed would produce up to 36% returns; however, Hirschmann and Williams never owned or operated any facilities.  

The complaint alleges that when Hirschmann and Williams received investors’ funds, they transferred the money through multiple accounts to enrich others and for personal use such as entertainment, jewelry, luxury cars, and residential real estate. In an attempt to avoid detection, Hirschmann, acting as the face of the company, used the fake name Max Bergmann when he communicated with investors, while Williams, as vice president of the company, worked behind the scenes while spending investor funds on his more public rap career, the SEC alleges.

Michele Wein Layne, director of the SEC’s Los Angeles Regional Office, said that the actions by the duo “demonstrates that, despite the defendants’ extensive efforts to avoid detection, the SEC has the ability to uncover fraud to protect investors.” 

“Rolf Hirschmann and Patrick Williams allegedly had no real company, no product, and no business, yet despite this, they promised investors everything and then delivered nothing.” — Wein Layne in a statement 

The court granted the SEC emergency relief against the company, Hirschmann, Williams, and several relief defendants, including a temporary restraining order, an order freezing their assets, and appointment of a temporary receiver over the company. A hearing is scheduled for June 2 to consider whether to issue a preliminary injunction and appoint a permanent receiver, the SEC said in a press release. 

The SEC’s complaint charges Hirschmann and Williams with violating the antifraud provisions of the securities laws and seeks permanent injunctions, conduct-based injunctions, disgorgement with prejudgment interest, civil penalties, and orders barring them from serving as officers and directors of other firms. The agency is also seeking disgorgement with prejudgment interest from the named relief defendants. 

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