Editor-in-Chief

Debra BorchardtJuly 23, 2021
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4min4570

After the market closed on Thursday, Red White & Bloom Brands Inc. (OTC: RWBYF) delivered its fourth quarter and full year 2020 financial results. Revenue for the fourth quarter of 2020 increased 158% to $15.7 million versus $6.1 million in the third quarter of 2020. RWB said the increase in revenue was primarily driven by the reporting of the first full quarter post-closing of the PV acquisition.

For the full year 2020, revenue increased to $23.3 million versus zero in 2019. The company also noted that adjusted sales for the year which excludes RWB Michigan, RWB Florida and RWB Illinois was approximately $37.8 million driven primarily by the Platinum Vape acquisition (the Company recognizes revenue from California and MAG in its entirety and only packaging revenue from Michigan).

RWB also reported that for the full year a net loss of $18.6 million vs $12.5 million in 2019. The company attributed the increase in net loss to the net effect of a number of non-cash items, including an increase of $15.3 million in depreciation and amortization, a one-time listing expense of $31.7 million, a $9.8 million provision in G&A for a possible contingent earn-out payable and an offset in part by a gain of $53.6 million on the revaluation of the company’s put/call agreement with PharmaCo.

Brad Rogers, CEO and Chairman said, “We set out at the beginning of 2020 with a three-year plan for our success; our strategy was to establish a foundation for the overall company and identify the core states to operate in and a plan to scale in those states. We have set the foundation for our core states including Michigan, Illinois, Florida and California. In 2021 we look to expand through an asset light approach in other states, such as Arizona, and complete the integration of our M&A targets while gaining operational synergies from all we have accomplished over the last 18 months. For the balance of 2021 and throughout 2022, the Company will focus on the continued growth of our topline revenue and bottom-line results through expansion of our house of brands that continue to gain momentum, fortification of our vertically integrated businesses, and the synergies from our M&A success.”

Looking Ahead

RWB said that once all of the acquisitions are closed, RWB, and RWB brands will be available in six of the top 10 states in the US, measured by cannabis revenue, with sales in 2020 exceeding $8.8 billion.


Debra BorchardtJuly 22, 2021
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GrowGeneration Corp . (NASDAQ: GRWG ) continues to gobble up regional hydroponic stores as the chain keeps growing. This week alone, the company has announced the acquisition of a California operation and one in Oregon.

Mendocino

Today the company announced its acquisition of Mendocino Greenhouse and Garden Supply, a Northern California -based hydroponic garden center, located in Mendocino, California. It is said to be the largest cannabis-producing region in the country including MendocinoHumboldt, and Trinity counties. GrowGen said that sales are expected to surpass $8 million annually.

“As the country’s largest legal cannabis market, California continues to be a critical market for GrowGeneration,” said Darren Lampert, GrowGen’s CEO. “The Emerald Triangle continues to represent tremendous market potential. We are proud to expand our presence in the area through a highly respected and leading hydroponics store such as Mendocino Greenhouse and Garden Supply. ”

Founded by Nick Halfacre in 2005, Mendocino Greenhouse and Garden Supply has provided Northern California growers with specialty hydroponic supplies and professional horticultural consultation services. Mendocino Greenhouse and Garden Supply’s team of eight employees will join GrowGen’s team of over 600 grow professionals as part of the transaction, while Mr. Halfacre will stay on as the garden center’s General Manager.

Said Halfacre, “Mendocino Greenhouse and Garden Supply was founded by growers for growers, and that ethos is at the center of everything we do. We look forward to continuing to provide best-in-class supplies and services under the GrowGeneration name.”

Oregon

Just two days ago, GrowGen said it was buying Aqua Serene, a southern Oregon-based hydroponic garden center with stores in Eugene and Ashland, Oregon. Aqua Serene is one of Oregon’s largest indoor/outdoor garden centers, with revenue of over $14 million annually. The Aqua Serene team of 10 employees will join GrowGen’s team.

“As the country’s fourth-largest legal cannabis market, Oregon continues to be a critical market for GrowGeneration,” said Lampert. “The Oregon market, in particular, represents tremendous market potential, with over thirteen hundred recreational producer cultivation licenses in the state. GrowGen is proud to expand its presence in the area through the acquisition of highly respected and leading hydroponics stores such as Aqua Serene.”


Debra BorchardtJuly 21, 2021
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Cannabis software company Akerna (NASDAQ: KERN) has released its 2021 Mid Year report that highlights upcoming trends as well as recapping the first half of the year. These trends include interstate commerce, the importance of brands, and the quickly growing power of the female consumer.

Interstate Commerce

Scott Sozio who serves as Head of Corporate Development for Akerna wrote that while consolidation and access to capital have been important issues they are laying the groundwork for interstate commerce and the importance of brands. Sozio said, “The recently proposed Cannabis Administration and Opportunity Act (“CAOA”) contemplates interstate commerce. Whether the bill passes or not, interstate commerce is now part of the conversation, and operators large and small will have to develop their plans for how they will compete when state borders open.” He suggested that the consolidation that is happening in the industry today has been focused on accumulating assets and planting as many flags in as many states as possible. He believes this focus will shift to a geographically strategic production location that is positioned to service a national footprint. 

“The first evidence that the larger operators are positioning for interstate commerce came earlier this year when Curaleaf acquired Los Suenos, the largest outdoor grow in Colorado. The announcement noted that the transaction would provide Curaleaf with one of the largest outdoor cannabis cultivation facilities in the U.S. while building on its strategy of constructing low-cost supply chains critical to eventual interstate commerce,” he wrote in the report.  Sozio thinks there will be more acquisitions of strategic supply as companies begin building their national footprints now. 

Big Brands

Akerna thinks that the brands being built today could become the cannabis household names of the future. However, the company said many questions have yet to be answered. “Will a successful California brand resonate in Florida? Will the product be consistent from one state to the next? As in any industry, there will be national brands and niche brands.” There are brands that are flexing their muscle now as they begin to compete on a national stage. Cannabis brand Cookies was recently named by Ad Age as one of the Hottest Brands of 2021. The company is both creating its own dispensaries and selling its product in multiple states. It’s a strategy that many other brands are sure to try to replicate.

Girl Power

James Arhrendt Business Intelligence Architect at Akerna also noted in the report the growth of the female consumer in the cannabis industry. “Since 2019, females have steadily increased their percentage of sales, a total of 3.2%. While that may seem like a low number, it’s actually a significant change considering the vast numbers of cannabis consumers – 14.9 million have purchased in 2021 so far.” Like the rest of the market, women are also buying mostly flower. Even though flower purchases account for 44% of the female spend, concentrate purchases are taking preference over edibles. 

Akerna found that the concentrate category showed a direct correlation between age and the percentage of sales share for females. The report noted that the younger age groups spend more (14% of sales for under 30), and the sales percentage gradually drops in each age group as you increase in age (60+ age group only spends 5%). “Edibles also correlate with age but in an inverse relationship to concentrates. For the under 30 female age group, edibles are only 5.37% of their sales, 30-40 its 6.93% of their sales, and this trend continues up as the 60+ age group spends 19% of their sales on edibles.”

So, it seems that as the importance of the female customer grows, brands and companies will want to adapt and address the desires of this group. Money talks and if this group is gaining importance, it will also gain power.


Debra BorchardtJuly 21, 2021
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July 10 or Dab Day is turning into a dud day. It’s also called “oil” day and the idea is that 710 upside down spells oil. It’s supposed to be a day that celebrates vaping and consuming oil or concentrate cannabis products. No one is sure where or how the holiday got started or how it went from Oil Day to Dab Day. Still, dispensaries and brands have been game to throw a Dab Day party, but the consumers seem less than impressed.

Headset Sees Decrease

Headset provided Green Market Report with data from this year’s 710 sales and cannabis sales actually decreased. Concentrate sales did increase and were the only category to do so. All data for the US is from CA, CO, NV, OR, PA, and WA and all data for Canada is from AB, BC, and SK

Total Sales Growth

On Dab Day 2021 (7/10/21) total US cannabis sales decreased by -10.4% over an average of the previous four Saturdays. Canadian cannabis markets also saw a decrease in sales of -2.6% over the same time frame.

Category Sales Growth

In the U.S., concentrates sales increased by 24.1% and were the only category that enjoyed positive growth. “Vapor pens, which we’ve seen also get a little lift from ‘Dab Day’ in the past, decreased in sales by – 13.5%. Unlike the US, ‘Dab Day’ was not as successful in Canada; Concentrate sales decreased by -5.1%. Vapor Pens also didn’t see a lift during Dab Day within Canada, with a sales decrease of -2.0%.”

Concentrate Segment Growth

In the US on Dab Day 2021, Rosin products had the strongest growth, increasing in sales by 213% over the previous four Saturdays. Crystalline / THCA / CBDA (+75.3%) was the next most successful segment.

Dab Day Discounts

There was certainly a concerted effort to get consumers on board with celebrating. Dispensaries and brands were running promotions like crazy. According to Headset, “Dab Day was a fantastic day for American Concentrate fans to stock up on products this year. In the US the average discount on Concentrates grew by a whopping 52%, rising from 14.6% during the previous four weeks to 22.3% on 7/10/2021.

Eaze Data Confirms Dud Day

Cannabis delivery company Eaze data also confirmed that sales fell this July 10 versus last year’s July 10. Considering the country was mostly in lockdowns at this time last year, that’s a real rejection of the Dab Day party.

Chart provided by Eaze

Dud Day

There are many reasons why Dab Day just isn’t resonating with consumers.

First, it falls too soon after the Fourth of July. Cannabis sales for the fourth are typically pretty high and consumers likely have no need to make more purchases. Headset reported that this year on the 4th of July, total cannabis sales in California, Colorado, Nevada, Oregon, Pennsylvania, and Washington increased by +8% during 7/1- 7/4 compared to the previous four weeks. “Pennsylvania and California markets saw the largest increase with +12% growth, while Nevada’s market shrank -5.4% over the holiday weekend. All cannabis categories grew in sales compared to the previous four weeks, and Tinctures were the most successful cannabis products with +23.6% growth. Edibles (+16.4%) and Beverages (+14.5%) also saw significant growth. Within the Edibles category, the ‘Cookies’ segment performed particularly well with +19.4% sales growth.”

By referring to it as Dab Day versus oil day, the vape category tends to get cut out of the picture. That would explain why concentrate sales got a boost, but vape sales fell.

It feels like a made-up holiday and that lack of authenticity doesn’t sit well with cannabis consumers.

Cannabis marketing firm Wick & Mortar’s CEO Jared Mirsky said, “Honestly I think the entire idea behind 710, which is oil flipped upside down, is kinda ridiculous and only makes the industry look unprofessional. We have to be more clever than this moving forward if we are going to make larger strides towards destigmatizing cannabis for everyone else who has yet to become a brand’s loyal consumer. Don’t get me wrong, I am a heavy consumer and take dabs daily, but not for one second do I take 7/10 seriously as I believe many others don’t either and only comes off now as a sales tactic.”

In Closing

It’s unlikely that 710 will fade away. The industry is built on the back of partying and any excuse to consume is a good one. Still, the hoopla could end up dying down as dispensaries and brands learn that it isn’t paying off. Maybe Mirsky is right, the industry could get more creative, and if it wants to create a special holiday akin to 420, it should pick a date further from an established holiday.


Debra BorchardtJuly 20, 2021
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Michigan-based Gage Growth Corp. (CSE: GAGE) has added another high-profile name to its dispensaries. A couple of weeks ago it was Wiz Khalifa and his brand, Khalifa Kush (“KK”) that Gage said it was going to develop and launch in the state of Michigan in an exclusive deal. Now Gage and Pure Beauty have entered into an exclusive five-year partnership agreement to launch Pure Beauty’s line of premium cannabis products in Michigan, pending Michigan. Pure Beauty is a California-based boutique cannabis brand that combines art, culture, and style with sustainable and social justice practices.

“We are thrilled to announce this partnership with one of the top brands in cannabis,” said Fabian Monaco, CEO of Gage. “Brand recognition is key to winning in the cannabis industry and with the addition of Pure Beauty to our brand portfolio, we look forward to creating and delivering the highest-quality cannabis products and experiences to our customers and patients.”

Pure Beauty was founded by the same masterminds behind Marley Natural. Pure Beauty prizes indoor-grown, high-quality flower and combines them with fresh, beautiful packaging. Most of the company’s packing is paper because the company is concerned about waste. “We spent a year and a half perfecting a child resistant mylar bag that is made from plant starch and are pretty proud of this.”

Like the Wiz Khalifa deal, Gage will be the exclusive producer, processor, wholesaler, and retailer of Pure Beauty branded products in Michigan. Gage and Pure Beauty will work to develop and commercialize a product lineup that includes flower, a full range of pre-rolls, extracts, beverages, and edibles that will be sold at Gage branded provisioning centers (dispensaries).

“Our mission is to bring unique, high-quality products to market while being mindful of the social and environmental implications intrinsic to the cannabis industry,” said Imelda Walavalkar, CEO of Pure Beauty.  “As a brand that cares deeply about art and culture, we felt very aligned with Michigan’s distinct and thriving culture, specifically with Gage, who we find to be among the best cultivators and operators in the nation. We are confident they will execute at the highest level as they share our commitment to social justice.  We could not be more excited about this partnership.”

Pure Beauty has lofty goals when cultivating its flower. “All of the water used in our cultivation is collected from the air, we pull no water from California tap. Why? Because a single cannabis plant needs approximately 150-250 gallons of water to reach flowering state. Our cultivation has no runoff; even “safe” fertilizers and nutrients will contaminate surrounding water supplies making life inhabitable for indigenous species. And we love animals. We also love bugs and use them, like rolly pollys, earthworms and nematodes along with friendly bacteria, fungi and protozoa to create a “soil food web” which helps naturally prevent disease and plant-eating predators by working with the plant to provide nutrients and protection. And when we are done we donate all used soil to public parks. Because why not? Parks are great and we should all support them. And yes, we talk to our flower. These thoughtful cultivation practices and the good energy surrounding our flower in their life cycle creates robust terpene profiles, with a strong nose that—when you smoke it—you will understand the world in a different way.”

 


Debra BorchardtJuly 19, 2021
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The Green Market Report Cannabis Company Index has added six companies to the Index and published its second-quarter recap report. The Index experienced an overall 8% decline in the second quarter due to the drop in valuations of the companies. Year-to-date the Index is still up 27%. The second-quarter stock performance was almost the polar opposite from the first quarter. The first quarter saw the Index companies delivering mostly positive returns. In the second quarter, most of the Index companies turned in negative results with only a handful in the green zone. Consolidation continues in the industry and the gap between small and large companies seems to be widening.

New Company Additions

The Index will be adding the following companies for the third quarter: Ayr Wellness (OTC: AYRWF), Curaleaf (OTC: CURLF), Fire & Flower (OTC: FFLWF), Gage Cannabis, Turning Point Brands (NYSE: TPB), and Verano (OTC: VRNOF). In May, Ayr Wellness Inc. (OTCQX: AYRWF) reported its financial results for the quarter ending in March with revenue rising 74% to $58.4 million. The company said it was in the early innings of its 2021 strategic transformation having closed on acquisitions like Liberty Health Sciences and adding the fourth largest retail footprint in Florida. 

It’s hard to explain how Curaleaf wasn’t already in the Index, but it is now. In May, Curaleaf reported its first-quarter total revenue increased by 170% to $260 million versus $96 million in the first quarter of 2020. Growth in retail revenue was primarily due to strong organic growth across Curaleaf’s footprint, the opening of six new stores across Florida, Maine, and Pennsylvania, and the rapid acceleration of revenue growth in Arizona after the introduction of adult-use sales in January of 2021. In June, Fire & Flower Holdings Corp. (OTCQX: FFLWF) reported that in its first quarter ending in May the company saw its revenue rising 90.7% to $44.1 million. The company said it was the fourth consecutive quarter of positive Adjusted EBITDA of $2.3 million as compared to an Adjusted EBITDA loss of $1.4 million for the first quarter of 2020.

In Michigan, Gage Cannabis (CSE:GAGE) has managed to get itself on the radar of several research analysts this summer and all agree that the company is a buy. Eight Capital, Viridian Capital Advisors, and PI Financial have all issued reports with Buy ratings and target prices ranging from C$4.25 to C$7.50. Gage also reported that its revenue increased 1,972% for the full year of 2020 to $39.9 million versus $1.9 million in the fiscal year 2019.  Gage also noted that at this time it has eight cultivation facilities in operation today (three Gage operated and five contracted cultivation assets) and is expecting to expand to 13 cultivation facilities by year-end.

For a company that mostly sells papers, Turning Point Brands (NYSE: TPB) is turning into a behemoth in the cannabis industry. The company announced during its recent earnings results that it was increasing its guidance for 2021 net sales to a range of $422 million to $440 million. This is up from the previous guidance of $412 million to $432 million. In May, Verano Holdings Corp.  (OTCQX: VRNOF) reported that its revenue on a pro forma basis as if the AltMed acquisition were completed on January 1, 2021. With that in mind, the first quarter of 2021 revenues increased 117% from the first quarter of 2020 to $143 million. Verano has completed the acquisitions of Territory, Emerald, and Local Joint, all in Arizona, giving it the third-largest retail footprint in the state with six active storefronts plus two cultivation facilities.

Index Removals

The Index is removing the following companies for the third quarter: Aphria, Zynerba Pharmaceuticals, Aleafia Health, Auxly, Akerna Corp., and Slang Worldwide. The landscape for available cannabis companies to be placed in the index continues to grow. The choices for larger companies with better revenues have allowed for Green Market Report to be more discerning in its choices.

Aphria was removed because it was acquired by Tilray. Zynerba is true biotech and won’t have revenues until its products hit the market, which could be some time from now. Aleafia’s revenue declines have been disappointing. Auxly’s debt could become a problem even though the company has managed to extend maturities. The revenue just doesn’t seem to support this much debt and the company could run into trouble. Akerna has struggled to show improving revenue and while the company is valiantly making acquisitions to get there, the Index has found better candidates. The same could be said for Slang, which continues to strengthen the company. The management is making great moves, but the Index is looking to larger names with bigger revenue streams. 

In Closing

While the second quarter was rough for cannabis stocks. The third quarter looks to be turning around and hopefully, valuations will continue to recover. The catalysts for the industry are overwhelmingly positive. New Jersey sales could begin in 2021 giving the state a jump on capturing the New England market. Then New York and New Mexico are both set for April 2022. Sales for these states are expected to be in the millions.

As retailers are slowly able to recover from COVID lockdowns and restrictions, more sales records are bound to be broken. Canadian retailers that suffered from store closures in the first quarter and are happy to be opening their doors once again. In the U.S., tourism is on the rise and people who have been stuck at home are ready to get out of town and party.

 


Debra BorchardtJuly 15, 2021
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After the markets closed on Wednesday, The Valens Company Inc. (TSX: VLNS) (OTCQX: VLNCF) delivered its second-quarter financial results ending May 31, 2021. Valens reported that its revenue increased 16.1% to $20.5 million versus $17.6 million in the second quarter of 2020. The net loss was $8.6 million in the quarter versus $3.5 million for the same time period in 2020.

Tyler Robson, Chief Executive Officer, Co-Founder and Chair of The Valens Company, said: “We believe that our business model remained resilient despite ongoing challenges presented by the pandemic, and our strategy continued to demonstrate its effectiveness as we gained significant market penetration across the country. We are proud to share that in the second quarter alone, Valens had 132 SKUs listed in Canada – a 76% increase in comparison to 75 SKUs listed in the first quarter of 2021. This material growth in SKU listings stands in stark contrast to many of our competitors in the sector and is a testament to the innovation and quality we are bringing consumers and retailers.”

The adjusted EBITDA was $(5.0) million in the quarter versus $2.7 million, or 15.3% of revenue in 2020 for the second quarter. President Jeff Fallows said: “Predictably, our accelerated launch of a targeted portfolio of high-volume SKUs resulted in an increase in costs which impacted our adjusted EBITDA in the quarter. However, we expect these costs to produce accelerated revenue and margin growth in the coming quarters particularly as we achieve greater utilization of our largely completed manufacturing platform.”

Green Roads

In June, Valens entered the US market with the acquisition of Green Roads for $40 million. With the Green Roads acquisition, Valens more than triples its total addressable market and secures a global leadership position in the cannabis health and wellness vertical with one of the largest CBD brands by market share. Additionally, the acquisition strengthens Valens’ capabilities to supply global markets with an expanded product offering and increased speed to market with a US-based manufacturing and cGMP certified co-manufacturing platform. Valens said it plans to invest approximately $10 million into Green Roads to strengthen its resources across various business lines, including sales and marketing. Valens said that in the back half of the year, it will introduce Green Roads’ CBD products to the Canadian market.

Looking Ahead

Fallows added, “We continue to dedicate efforts and remain keenly focused on completing our listing on the Nasdaq which we expect to be completed in the third quarter of the 2021 calendar year, and which has been fortified by our US entry. These initiatives will be instrumental in advancing global market opportunities and will lead to Valens accomplishing its strategic and operational growth objectives which we believe will be transformational for the company, generate additional sources of sustainable revenue, and drive shareholder value. We continue to maintain a strong balance sheet as we successfully raised additional capital from our bought deal financing which closed after the quarter. This equity raise provides Valens with the capital to pursue its strategic initiatives, specifically by taking an opportunistic approach to additional accretive acquisitions and to further secure our entrance into additional Cannabis 2.0 and 3.0 product verticals.”

The company noted that its recent $46 million bought deal financing was closed subsequent to quarter-end on June 1, 2021. The company said it plans to use the bulk of the net proceeds, $28 million, to pursue opportunistic acquisitions and business expansion opportunities across North America and international markets. The remaining proceeds will be used for capital expenditures, working capital, and other global general operating expenses.

Robson concluded by saying, “Importantly, we are seeing this momentum continue into the third quarter with an additional 40 SKUs accepted by the provincial boards with shipments during the third and fourth quarters. These new listings include products from four newly entered categories during the second quarter, such as flower, pre-rolls, topicals, and edibles, with many of them already receiving high consumer acclaim. Additionally, we have enhanced our platform with increased technical capabilities and greater efficiency to develop and commercialize winning products, which we expect will drive revenue growth in the second half of fiscal 2021. We look forward to continuing to drive new product innovation in the sector, specifically in the flower, pre-roll, beverage, concentrates, and edibles categories. With our recent distribution wins into New BrunswickManitoba, and Yukon, we are positioned well to capitalize on these investments.”


Debra BorchardtJuly 14, 2021
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While Florida-based cannabis company Trulieve (OTC: TCNNF) is not involved in the trial of businessman John “J.T.” Burnette, the company can’t help but get mentioned in the trial. Burnette is the husband of Trulieve CEO Kim Rivers and she has been attending the hearings as noted with court drawings. The Tallahassee Democrat has been covering the case and reported that on Monday, “Federal prosecutors laid out their case against businessman John “J.T.” Burnette during the first day of his public corruption trial, telling jurors that he and former Tallahassee City Commissioner Scott Maddox conspired together out of greed.”

According to the case, Burnette and Tallahassee City Commissioner Scott Maddox flew to Vegas in December 2016, where they met up with undercover agents posing as Mike Miller, owner of Southern Pines Development, an FBI front company; Mike Sweets, a medical marijuana entrepreneur, and Brian Butler, a “green energy” businessman.  Burnette is being charged with racketeering, extortion, fraud and making false statements. He is also accused of arranging $40,000 in payments to a consulting firm owned by Maddox friend Paige Carter-Smith but alleged to be secretly controlled by Maddox from an out-of-town vendor called Southern Pines Development. The company, which was eyeing potential development projects in town and wanted Maddox’s official help, turned out to be an FBI front. Burnette had wanted advice from Sweets for Rivers.

The Tallahassee Democrat reported that Maddox and Carter-Smith, former head of the Downtown Improvement Authority, pleaded guilty to bribery charges in 2019 and that both will testify against Burnette.

Trulieve Connection

To be clear, Trulieve is not connected to the case. Burnette though was involved in the construction of many Trulieve facilities. In 2018 his construction company received payments of
$8.7million and in the first three quarters of 2019 the construction company was paid almost $28 million. Trulieve has said in a statement, “JT Burnette is a minority owner in the construction business. Trulieve has retained the services of Burnette Construction company, as well as other construction companies over time. These service providers are chosen
because they are knowledgeable, experienced, and provide high-quality services at favorable terms. These business relationships are completely separate from the indictment case against J.T. Burnette. All transactions have been approved by independent board members and the value is provided in our public disclosure documents. They are arms-length and below market in cost to Trulieve.”

Burnette’s lead attorney, Tim Jansen told jurors this week, “He’s trying to help his wife out with Trulieve. So he contacted Mike Sweets for marijuana advice.” The Tallahassee Democrat reported, “The advice turned out to be helpful, Jansen said, adding that jurors will hear more about that.” Some shareholders have faulted Trulieve for not disclosing more information about the case, while others believe the company has adequately addressed it. The trial is expected to last several weeks.

Grizzly Report

In December 2019, stock short-seller Grizzly Reports issued a scathing report on Trulieve and highlighted the accusations that prompted the current trial. In January 2020, Trulieve filed a lawsuit in Florida state court against GRIZZLY RESEARCH LLC alleging, among other claims, defamation for publicly disseminating false and libelous statements about Trulieve to manipulate the stock price and further its own financial interests. The case has supposedly stalled due to the pandemic.

 


Debra BorchardtJuly 14, 2021
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Senate Majority Leader Chuck Schumer (D-NY), Senate Finance Committee Chairman Ron Wyden (D-OR), and Sen. Cory Booker (D-NJ) released the full text of their federal draft marijuana legalization bill called the Cannabis Administration and Opportunity Act. This massive piece of legislation is clocking in at a hefty 163 pages and a public comment period is open until September 1.

In general, the legislation aims to deschedule cannabis, expunge prior records, fund equity programs, remove collateral consequences, and transfer regulatory authority for marijuana to the Food and Drug Administration and other federal agencies. Only consumers over the age of 21 would be allowed to buy legal cannabis and adults would be limited to purchases of up to 10 ounces. The bill would also impose a federal tax on marijuana products and put some of that revenue toward grant programs meant to support people from communities most impacted by prohibition who want to participate in the industry.

“Cannabis prohibition, a key pillar of the failed war on drugs, has caused substantial harm to our communities and small businesses, and especially for communities of color,” Wyden said. “It’s as simple as this: Senators Booker, Schumer, and I want to bring common sense to the federal government, end prohibition and restore the lives of those hurt most and set them up for opportunity.”

The legislation proposes to federally deschedule cannabis, expunge prior convictions, allow people to petition for resentencing, maintain the authority of states to set their own marijuana policies, and remove collateral consequences like immigration-related penalties for people who’ve been criminalized over the plant.

The Coalition for Cannabis Policy, Education, and Regulation (CPEAR) said in a statement, “The draft demonstrates a commitment to ensure a national legal cannabis market that is equitable, with protections for the small and minority-owned businesses that have been crucial for establishing legal markets in states across the country.

In addition to those items, the CAOA would transfer regulatory authority over cannabis to the Food and Drug Administration (FDA), the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), and the Alcohol and Tobacco Tax and Trade Bureau (TTB) from the Drug Enforcement Administration (DEA).

“The days of federal prohibition are numbered,” said NORML Executive Director Erik Altieri. “These actions by Senate Majority Leader Schumer and Senators Booker and Wyden reflect the fact that the supermajority of Americans are demanding that Congress take action to end the cruel and senseless policy of federal prohibition. It is time for legislators to comport federal law with the laws of the growing number of states that have legalized the plant, and it is time for lawmakers to facilitate a federal structure that allows for cannabis commerce so that responsible consumers can obtain high-quality, low-cost cannabis grown right here in America without fear of arrest and incarceration.”

Dasheeda Dawson, Chair of Cannabis Regulators of Color Coalition (CRCC) and Cannabis Program Supervisor at City of Portland OR said, “The introduction of the Schumer, Wyden and Booker draft legislation is the first serious look at cannabis legalization for the Senate and I am hopeful that the equity-centered policy reform and regulation led by our members at the state and local levels will continue to shape this historic bill. Across the country, we have seen the positive impact of sharing our informed insights, testimony and proposed amendments aligned with our organization’s founding principles. As active stakeholders overseeing policy and implementation in the existing cannabis industry, CRCC will continue to actively engage with the Senators’ teams, providing industry best practices and cannabis competency gained from our collective and diverse experiences.”

Controlled Substance

One provision within the legislation is a requirement that the attorney general removes cannabis from the Controlled Substances Act within 60 days of the bill’s enactment. However, it continues to allow states to choose prohibition if they like. This would mean that it would still be federally illegal for a company to send cannabis to a state that has chosen prohibition. However, the states apparently wouldn’t be able to stop businesses from shipping cannabis products across state lines to other states where cannabis is legal.

Nancy Whiteman, CEO, Wana Brands said, “Federal decriminalization would also enable manufacturing and then shipping across state lines which would greatly benefit brands like Wana. Supply chains will become more efficient and cost-effective as plants would be grown in appropriate outdoor climates and other materials could be sourced across markets. For a company like Wana, it means that we would be able to manufacture and ship out of regional or national facilities instead of recreating the wheel in every market.”

Government agencies would all get in on the act. The Bureau of Labor Statistics would begin compiling data on jobs and employers. The U.S. Department of Health and Human Services (HHS) would be required to work with the National Institutes of Health (NIH) on ways to promote cannabis research. The  HHS would also work with the U.S. Department of Transportation (DOT) on data collection for marijuana-impaired driving while also supporting research into “an impairment standard for driving under the influence of cannabis.”

Feedback

The public will have until September 1 to comment on the language of the bill. Marijuana Moment drilled down to summarize the main points for feedback:

-Measuring the potency of cannabis products, the overlap of definitions for hemp and marijuana, regulations for synthetic THC, regulatory responsibilities for various federal agencies and FDA funding.

-Coordinating federal and state law enforcement responsibilities for cannabis, state “primacy regarding cannabis regulation” and interstate commerce.

-Balancing efforts to reduce barriers to entry to the marijuana industry while mitigating the influence of illicit cannabis operators.

-Determining whether cannabis products should go through a premarket review before being marketed.

-How to deal with international treaty obligations with respect to marijuana.

Interested parties are encouraged to submit comments on these and other issues to Cannabis_Reform@finance.senate.gov by September 1.

Next Steps

The legislative draft that the Senators came up with was based partially on a bill that the House passed in December.  It included similar language that would remove some federal penalties, feature a form of expungement and address social equity issues. The House vote at the time was split mostly down party lines and very few Republicans voted for the bill. It seems expungement is a sticking point for many Republicans. The likelihood of this legislation getting the votes in the Senate is low. Even Schumer suggested it was merely a jumping-off point to start the conversation.

“We’d certainly listen to some suggestions if that’ll bring more people on board,” Schumer said. “That is not to say we’re going to throw overboard things like expungement of records — very important to us — and other things like that, just ’cause some people don’t like it.”


Debra BorchardtJuly 13, 2021
Borat.jpg?fit=960%2C640&ssl=1

4min9281

Sacha Baron Cohen, the creator of the character “Borat” has sued privately-owned Massachusetts cannabis company Solar Therapeutics Inc. and the company’s President Edward Dow III for $9 million. Cohen is angry that his likeness as the character Borat was used without his permission on a billboard that was placed on a busy highway. The lawsuit claims that by using Cohen’s image it looks as if he is endorsing cannabis products.

The case states, ” Mr. Baron Cohen never has used cannabis in his life. He never would participate in an advertising campaign for cannabis, for any amount of money. Mr. Baron Cohen never has been involved in advertising any commercial products or services anywhere in the United States or the United Kingdom, despite countless opportunities to do so.”

Solar Therapeutics owns one dispensary in Somerset Massachusetts and has two more planned to open in 2021. The company describes its product as sustainable cannabis.

Cohen Is Anti-Cannabis

Using Cohen’s image is an odd choice for a cannabis company as the comedian has consistently stated his aversion to the plant. “The reason why Mr. Baron Cohen never has used cannabis is that he does not believe it is a healthy choice. With his “Ali G” character, portrayed by Mr. Baron Cohen in the HBO television series Da Ali G Show, Mr. Baron Cohen has spent much of his career making a mockery of “stoner” culture – a culture which the Defendants’ Billboard overtly celebrates. In addition, Mr. Baron Cohen was born into an Orthodox Jewish family; he is an Observant Jew; and he is proud of his cultural heritage. He does not wish to be involved in the heated controversy among the Orthodox Jewish community about whether cannabis can be used under Jewish traditions, customs, and rules – a controversy in which many rabbinical leaders have stated that cannabis use is a violation of Jewish law.” He also notes in the court case that cannabis is still federally illegal and a controversial product that he has no desire to promote.

On April 24, 2021, Mr. Baron Cohen’s attorney sent a cease-and desist letter objecting to Defendants’ wrongful actions and Solar Therapeutics said that they removed the Billboard three days later on April 27, 2021. However, the case claims the company has declined to compensate Mr. Baron Cohen for the exploitation of his image and his Borat character for the benefit of the Defendants and their revenues. the case claims that Solar Therapeutics makes $26 million a year.

Deciding on $9 Million

The actor also explained in the case how the damage amount of $9 million was decided. Citing the example of celebrity Kim Kardashian receiving $300,000 per tweet for simply mentioning brand names on Twitter and noting that a jury awarded $8.9 million to basketball star Michael Jordan against a grocery company for a magazine advertisement that included Mr. Jordan’s image without his permission.

 


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