Jack Smith, Author at Green Market Report

Jack SmithOctober 23, 2018


A new study shows that 69.5% of Las Vegas residents approve of legalized marijuana. While marijuana is legal in the state, usage has now surpassed more than the 50 percent mark, implying that people are becoming more comfortable with it as time goes on.

The study, produced by Consumer Research Around Cannabis for Green Market Report, shows that 52.2 percent of approximately 1.4 million respondents approve of marijuana use for both recreational and medicinal purposes. An additional 16.7 percent approve of it for medicinal use, though they have no opinion or disapprove of recreational use, while 0.6 percent approve of recreational use and have no opinion or disapprove of medicinal usage.

Just 14.7 of respondents disapproved of cannabis in both recreational and marijuana settings and 12.2 percent did not have an opinion either way.

Marijuana became legal for recreational use at the start of 2017 and acceptance of it has jumped since late 2017, as 52% of respondents said they had used or bought it in the fall, up from 44 percent in the spring.

Who’s Buying

Cannabis consumers range all parts of the spectrum, covering a wide range of demographics. Nearly half of the adult population 21 and over, 772,000, said they were cannabis consumers. They are approximately 45 years in age, have an average household income of $53,263, and have an average home value of just over $278,000. Forty-one percent of consumers are married, while 49 percent have kids at home.

By comparison, the 1.49 million people living in the market average 47 years old, 45% are married and 46% have children, making the numbers comparable.

“The percentage of adults A21+ that are currently using cannabis for medical reasons has increased to 18.1% from 14.3%,” the study said. “Top health reasons for consuming cannabis include: treating temporary/minor pain, chronic pain management, alleviating mental health issues, to assist with sleep and to treat a non-pain medical condition.”

18% of the consumer in the greater Las Vegas area have been buying cannabis in order to treat addiction problems. This could be for alcohol or opioids. According to the most recent data, Nevada ranks in the top ten states for drug and alcohol abuse. Nevada is also the second in the country for non-medical use of hydrocodone and oxycodone. Per capita sales of oxycodone have increased 366% in the last 10 years, while sales of hydrocodone have increased 233%.

Actual Sales

For the fiscal year 2018 (July 2017-June 2018), the Nevada Department of Taxation reported that it collected $27.3 million in wholesale cannabis taxes and $42.5 million in retail taxes. Taxable sales reported by adult-use retail stores was $529.8 million.

If spring is considered April, May, and June, sales increased from $47.5 million in April to $48.3 million in June. Nevada has only reported sales through July 2018, but the numbers continue to climb to $48.4 million. If the CRAC is accurate then the state is in for a very generous fall.

The Vegas cannabis market continues to grow as big retailers like MedMen continue expanding their retail footprint and the new enormous Planet 13 dispensary prepares to open on November 1. This dispensary will cover 16,500 square feet inside a 40,000 square foot cannabis entertainment destination. A cannabis superstore is surely going to generate big sales.

Jack SmithSeptember 24, 2018


Acreage Holdings, one of the largest vertically integrated cannabis companies in the U.S., announced its plans to go public, entering into a reverse takeover with Applied Inventions Management.

As part of the deal, announced Friday, all of the existing security holders of both companies will swap their economic interests for new stock. Applied will cut its existing Class B shares on the basis of one and one half and its existing Class A shares will be swapped on a one-for-one basis.

In addition, the Class A shares will be renamed “Class A Subordinate Voting Shares” and given certain rights and restrictions. The Class B shares will also have certain rights and restrictions when they are swapped.

A new voting class of stock, the “Class C Subordinate Voting Shares,” will be created pursuant to the deal closing.

Any holders of Acreage’s existing convertible debt will convert into debt of the new company, which will be known as Acreage Holdings. The combined company will have a new board of directors and “all outstanding Acreage Holdings warrants will be amended for warrants of the Resulting Issuer.”

Headquartered in New York Acreage has licenses in several states, where cannabis is legal. It also “owns or operates cultivation, processing and dispensary operations and has one of the largest footprints of any cannabis company in the U.S.”

After the deal closes, Kevin Murphy, who is CEO of Acreage Holdings and is expected to be the CEO of the new company, will “own all of the outstanding Class C Multiple Voting Share of Acreage Holdings, Inc., which is anticipated to represent up to approximately 86.2% of the total votes ascribed to all of the Resulting Issuer’s outstanding shares.”

In addition to Murphy being its CEO, George Allen will be the company’s Chairman of the Board and Glen Leibowitz will be its CFO. On the company’s board of directors will be former Speaker of the House John Boehner and former Massachusetts Governor, Bill Weld.

Jack SmithSeptember 19, 2018


The cannabis market has received a bit of good press recently, as Coca-Cola said it is “eyeing” the cannabis-infused drink market, following Constellation Brands investment in Canopy Growth last month.

But it’s one sub-sector of the market, cannabis concentrates, which may be the true star of the show.

Cannabis market intelligence and consumer research firm BDS Analytics has issued a new report showing that cannabis concentrates are expected to hit sales of $2.9 billion in 2018, up 49 percent year over year. That would make the concentrate market the second largest, behind only flower, according to the report.

“As the cannabis industry matures, we’ll likely see new product categories catch fire with consumers,” said Troy Dayton, CEO of the ArcView Group in a statement. “Concentrates are the first category to do that, but it’s just the beginning of a revolution in how cannabis is consumed now that it’s becoming legal around the world.” Arcview partnered with BDS on the report.

By 2022, concentrate sales are expected to nearly surpass flower sales in terms of size, at $8.4 billion, compared to $8.5 billion for flower sales.

“For consumers, it’s a discreet and healthier choice that will likely make cannabis consumers of people who would never dream of inhaling smoke,” Tom Adams, Editor in Chief of ArcView Market Research wrote in the report. “That will cause the category to represent ever more retail display space, and likely spawn vape-only stores and on-premises consumption venues.”

Adams added that concentrates are able to cut costs at different parts of the supply chain, making them more efficient to extract and distribute.

“But the main savings will be at the agriculture level, where expensive warehouse and greenhouse grows designed to provide pretty buds give way to traditional outdoor growing of a commodity crop. The cost savings—and broader consumer appeal of concentrates—will prove critical as the legal market struggles under the weight of heavy tax and regulatory loads to compete with the illicit market,” he wrote.

The concentrate market, which includes products such as vaping, is expected to grow to 27 percent of all U.S.-related cannabis sales in 2018. That’s a stark contrast from 2014, when it was just 10 percent of cannabis sales, indicating healthy and growing consumer demand for these products, experiencing 70 percent annual growth.

Of that exceptional growth, 58 percent of spending will come from prefilled vaporizers, deemed to be a “market dominance likely to grow over the next five years.”

“Technology is revolutionizing a product category that began as hand-rubbed hash in the Middle East centuries ago,” said Adams in the statement.

Adams continued: “We believe the growth of the concentrate market will continue as the cannabis industry evolves and consumers look toward new and innovative delivery methods that fit their lifestyles.”

Jack SmithSeptember 11, 2018


Treez, a point of sale software (POS) provider, which could be described as the Oracle of the marijuana industry, announced it has raised $11.5 million in a new Series A funding round.

The new funding, which brings the total funding the company has raised to $15 million, was led by Intrinsic Capital Partners, which provided $10 million of the funding by itself. Also providing investments are AFI Capital Partners and Welcan Capital.

Treez CEO John Yang said that the capital raise allows the company to grow and expand in the burgeoning cannabis market while giving dispensaries, commercial and retail sellers their tech solutions all under one roof. “We’re thrilled that our funding has put us in a position where we can continue to expand our team, invest in beneficial partnerships, and bring more creative retail management solutions to this rapidly growing industry,” said Yang in a statement.

Yang continued: “When we created Treez, we understood the impact our technology could have within the cannabis industry—ushering in a new era of automated compliance, data-driven insights, and a more modern, integrated cannabis ecosystem.”

In addition, the firm will use the new funds to “expand its footprint, pursue market expansion opportunities and invest in partnerships that will help seamlessly connect each link in the supply chain.”

The POS market is expected to surge over the next few years, as consumers continue to move away from cash and more small businesses get accustomed to new systems and upgrade existing ones. According to Grand View Research, the mobile POS market is expected to grow 17 percent annually until 2024, due largely to “small specialty and retail businesses find tablets a powerful substitute for the traditional point-of-sale systems,” Grand View wrote in its report.

Treez, which launched just two years ago, describes itself as an “enterprise software platform solution company for retailers in the cannabis space,” according to its CrunchBase page.

Based in Fremont, Calif., it was founded by Yang, Shareef El-Sissi and Wayne Lee. It had raised $1.2 million prior to the Series A funding.

Jerry Stahlecker of Intrinsic said that the Pennsylvania-based equity firm looks at businesses that are transforming the cannabis industry and noted that Treez fits the bill.

“We’re excited to invest in a team that has delivered the industry’s leading enterprise retail management technology and look forward to supporting Treez in growing its market share and developing broader industry solutions,” Stahlecker said.

Jack SmithSeptember 6, 2018


Nearly 8 months after raising $10 million in a Series B financing, California-based Canndescent has raised an additional $13 million, as it seeks to further expand on its way to becoming “the Hermes of cannabis.”

With the new financing, the company will look to expand its cannabis flower (which it says is the number one selling brand in California) and bring them to new products, such as vaping and ingestibles over the next 12 months.

In the short term, specifically defined as the next month, Canndescent will announce a second brand after it had a successful soft launch over the summer.

“We’re excited to offer the best of California to other legal states and to reimagine other cannabis categories the way we reconceptualized flower,” CEO Adrian Sedlin said in a statement.

Sedlin continued: “Our new investors share our vision of more products, more brands, and more states, and their investment comfortably bridges us to our Series C equity round to occur in the next 6 months.”

Merida Capital led the Series C convertible offering. Mitch Baruchowitz, a managing partner at Merida, said the team was impressed after having met Canndescent four years ago, leading to them ultimately making an investment. “The decision to make it one of our first cultivation investments and lead the round was solidified by their strong governance and leadership,”   Baruchowitz said in the statement.

Also participating in the round was Altitude Investment Management, which also provided financing in the company’s Series B funding round. “We took a small position in Canndescent’s Series B raise and have increased our investment tenfold based on the milestones the company has achieved in such a short period of time,” John Brecker, a Partner at Altitude Investment Management said.

Canndescent is part of the self-described “cannabis 2.0 charge,” and is bringing cannabis into the mainstream in a variety of ways, including luxury and lifestyle marketing.

Sedlin has said previously he wants to make his company “the Hermès of cannabis” and expects to be selling more than $50 million worth by next year, according to a 2017 interview with CNBC. The company’s Instagram page reflects this premium lifestyle mentality, akin to that of a luxury retailer more than a weed company.

According to data from Crunchbase, the company raised $6.5 million in 2016, including from Sedlin himself.

Jack SmithAugust 8, 2018


Despite the overwhelming majority of Californians being happy with the legal cannabis market, there is still a significant percentage of residents who buy marijuana illegally, due in large part to high taxes on the substance.

A new report from Eaze Insights shows that 84 percent of Californians are “satisfied” with the legal marijuana market, but approximately 20 percent have purchased illegal or illicit marijuana in the past three months. Concerning to regulators and the state’s finances is that 84 percent of that segment of the population is “highly likely to repeat that behavior in the future due to the illicit market having cheaper products and no tax.”

Part of the concern is that although consumers would like to purchase marijuana legally if, given the option, the taxes are a major concern for many consumers. According to the California Department of Tax and Fee Administration, marijuana has a 15 percent excise tax, though recent reports have suggested the state is looking at cutting taxes as a way of driving legal means of consumption.

Approximately 85 percent of Californians have purchased cannabis from “unlicensed sources,” but most of them cited factors such as lower prices and a lack of taxes for the reasons those purchases were made.

Other consumers say they have purchased from illegal marijuana vendors because it’s “hard and time-consuming” to find legal businesses. Approximately 1 in 7 respondents said it was “not easy to identify licensed cannabis businesses.”

Although the picture has been painted with some negative brushes, there are changes that can be made that will positively affect California’s burgeoning weed economy.

If taxes were decreased by 5 percent, that could drive much of the illegal market into the legal market, Eaze notes. The town of Berkley took that initiative early on when it lowered its city tax on cannabis from 10% to 5%.

“A 5% decrease in the overall tax rate in CA could bring twice as many CA consumers to only purchase cannabis from licensed businesses (from 16% to 32%),” Eaze wrote in an email obtained by Green Market Report. “Conversely, a 5% increase in the overall tax rate in CA would drive twice as many CA consumers to only purchase from unlicensed businesses (12% to 23%).”

Use cases in the state include wellness (treating or coping with illnesses such as cancer) and consumers are increasingly becoming more sophisticated in the types of cannabis they consume.

“They care the most about consistent product quality,  fair pricing, packaging, safe access and a great customer experience, the same way they care about those things for more traditional consumer products,” the email obtained by GMR said.

Jack SmithAugust 3, 2018


Despite initial fears that Colorado’s regulated marijuana market might only fulfill part of the demand from consumers, a new study shows those fears are overblown.

The study, produced by The Colorado Department of Revenue (DOR)’s Marijuana Enforcement Division, shows that in 2017, the regulated market was able to meet both resident and visitor demand for cannabis. That compares to 2014, when only 65 percent of consumption came from the regulated market. The new data shows that consumers are moving from marijuana flower, towards concentrates, which highlights a competitive market.

“This update improves upon the original 2014 market study methods and uses official market data to provide an updated insight to and assessment of Colorado’s regulated marijuana markets through 2017,” said Mike Hartman, DOR executive director in a statement provided to Green Market Report.

Hartman added: “This report gives me comfort that the licensed, regulated commercial marketplace is working well and is part of the state’s continuous effort to monitor a comprehensive marijuana regulatory framework, improve transparency and use data to inform the public about Colorado’s marketplace.”

In 2017, 340.7 metric tons of flower were regulated in the state. 301.7 metric tons went towards sales to consumer, while 34 metric tons went towards inventory and the remaining 6 were for residual marijuana.

The Colorado market continues to be a competitive and diverse area for consumers, with no one company dominating the market. The DOR report actually noted that the 10 largest operators in the state saw a decline in market share, coming in at 23.1 percent in 2017, down from 25.4 percent in 2016 and 26.6 percent in 2015.

Prices are also coming down, as the market remains extraordinarily competitive. Marijuana flower prices have “declined slowly,” according to the DOR, while the price of a standard serving of THC has “declined more rapidly.”

Though pricing trends are largely coming down, there are still some variances in different parts of the state. In mountain and border towns, consumers will pay between $8.30 and $11.75 per gram for flower, compared to $5.79 per gram for the average.

In 2017, flower comprised 61.8 percent of the market, while concentrate made up 27.3 percent, trim accounted for 5.9 percent, with infused edibles and infused non-edibles accounting for 4.9 percent and 0.3 percent, respectively.

Other highlights from the study include Colorado’s attitude towards using technology to make it easier to respond to ever-changing consumer needs, while also keeping up with regulations.

“Colorado is the first state to use inventory tracking data to understand market dynamics; the first to use flower equivalent measures; and the first to compare supply, demand, and consumption to monitor regulatory performance,” Adam Orens, Founding Partner of Marijuana Policy Group, said in a release accompanying the study.

Orens added that the findings are important to show that the cannabis market can be regulated effectively and is a sign of the “evolution of regulated cannabis markets – where governments are monitoring market data and adjusting policy accordingly.”

Jack SmithAugust 2, 2018


Even though California recently surpassed the U.K. to become the world’s fifth largest economy, the cannabis economy in the Golden State could soon be surpassed by that of the Empire State, a new study shows.

The study, published by Joblift, shows that cannabis growth in California is “steadily declining,” while New York is experiencing strong growth. New York is now third in terms of gross domestic product and is experiencing a “surge in medical marijuana job postings,” with the study saying it could hold “the most potential for overall growth in the sector.”

Pennsylvania, Massachusetts and New York are seeing the most job growth, New York seeing two times more job postings (155 vs. 67) in the first half of 2018, compared to the prior year. Massachusetts and Pennsylvania are also seeing strong growth in job postings, with the Keystone State seeing a five-fold surge in openings to 82. Massachusetts saw a jump by a factor of four in the same time frame.

California, the first state to legalize medical marijuana, had 856 job openings last year, while Florida and New York rounded out the top three, with 295 and 236 openings, respectively.

“The medical marijuana sector is one that everyone should keep an eye on,” says Matt Kopjak, Managing Director of the US Market at Joblift said in a statement. “The medical sector, in general, is incredibly lucrative; medical marijuana should be no different. It has the potential to create employment opportunities for a wide variety of professionals and, based on our numbers, could prove to be a boon to the American labor market.”

A recent study by BDS Analytics, shows that marijuana is expected to be legal in 35 states by 2021, employ 414,400 people and generate $40 billion annually in profits.

The medical marijuana industry is experiencing strong job growth throughout the country, with a 24 percent jump in posting over the first half of 2018, compared to the first half of 2017. In total, there were 3,367 medical marijuana-related postings over the past 12 months.

Interestingly enough, the marijuana industry is actually surpassing the strong growth seen in the entire U.S. labor market, at a time of strong economic growth. On Wednesday, ADP said the U.S. economy created 219,000 jobs, easily surpassing economists’ expectations of 185,000. The U.S Bureau of Labor Statistics will release its official report on Friday.

It’s likely that a good percentage of jobs will continue to go towards medical professionals, such as doctors, nurses or pharmacists. Joblift determined that 15 percent of the aforementioned 3,367 job openings were for medical professionals. However, Joblift also notes that other areas will continue to see a surge in listings, such as delivery drivers, marketing and sales, graphic designers and other areas.

“While at present it seems that the industry favors highly-skilled workers, there are indicators that it will create opportunities across the board,” Joblift wrote in the statement.

Jack SmithJuly 25, 2018

Though marijuana remains illegal in New Mexico for recreational use, the growth seen for medicinal purposes has surged in 2018, surpassing $50 million in sales, due in large part to a huge rise in patient enrollments.
According to data compiled by the New Mexico Department of Health (NMDOH), the 35 commercial cannabis producers in the state reported $51 million in sales in the first six months of the year. That marks a 27 percent increase year-over-year.
That jump in sales of which five providers accounted for 78 percent of the increase, was due in large part to patient enrollment in the Medical Cannabis Program, which had 54,857 active cardholders as of June 30th, an increase of 24 percent year over year.
“Providing patients with affordable, safe, and accessible medicine has been the intention of legislators since the inception of the program,” said Duke Rodriguez, CEO and President of Ultra Health in a statement. “Moving forward, success will be defined by the quality of life of the physical, mental and social well-being of each patient rather than merely the number of patients served.”
Ultra is one of the key producers in the state, with patient sales ahead of the other licensed providers for a third consecutive year. It generated $7.7 million in sales in the state, up nearly 80 percent year-over-year, while PurLife also reported strong figured. Combined, the two accounted for 48 percent of new business in the first half of 2018.
In the first half of 2018, patients bought 7,557 pounds of marijuana, up 12 percent over the same time frame in 2017.
The growth throughout the state is widespread, with several counties experiencing significant jumps in enrollment. Counties such as Grant, Otero, Curry, Sante Fe and Dona Aña all experienced 20 percent or more growth in cardholder figures. Grant topped the charts with 42 percent growth.
The growth throughout the state is a good sign for producers, but it’s also a sign that demand is outpacing supply. The state’s licensed producers “are unable to totally meet New Mexico patients’ demand for safe and legal cannabis,” so it may be forcing them to seek their cannabis elsewhere, such as the “unregulated illicit market,” the statement added.
There’s also the concern that wholesale transactions are becoming a burden for the cannabis industry. The Lynn & Erin Compassionate Use Act gave licensed producers the exclusive authority “to produce, possess, distribute and dispense cannabis,” but there is no mention of any limit on the aforementioned activities.
In 2013, NMDOH announced a maximum cap of 450 plants allowed per producer, but in August 2016, Ultra sued the NMDOH, saying that the cap needs to be adjusted higher.

Jack SmithJuly 12, 2018


Kush Bottles (OTC: KSHB) said third-quarter revenue rose 173 percent year-over-year as organic growth continued to remain strong and the company’s acquisition strategy is paying off.

Santa Ana, Calif.-based Kush Bottles, which sells everything from packaging to supplies to vaporizers and accessories for the cannabis industry, saw third-quarter revenue climb to $12.9 million, up from $4.7 million in the year-ago period. Gross margins took a hit, falling to 28.3 percent, down from 35.5 percent, as the vaporizer and cartridge segments continue to see increased competition.

Kush Bottle’s Chairman and CEO Nick Kovacevich said in a statement the results were driven by “organic growth across all our major markets and product lines as well as the inclusion of our new operating company Summit Innovations.”

During the quarter, which ended on May 31, Kush closed on its acquisition of Summit Innovations, which expands Kush’s offerings into the hydrocarbon and solvent market. The company also acquired a digital creative agency, The Hybrid Creative, which Kovacevich said has a big roster in both the cannabis and traditional industries.

Net loss during the quarter was $258,837 and the company finished the period with $3.6 million in cash, up from Aug. 31, 2017, due in large part to a $6 million investment from Merida Capital Partners in February 2018.

Kush, which describes itself on its website as “the nation’s largest and most respected distributor of packaging, supplies, and accessories,” also said its new Nevada-based distribution center will allow it to further expand and better serve its customers.

After the quarter, the company raised $32.9 million, which Kovacevich said gives the company a “financial foundation for continued expansion in support of our growth strategy.”

Kovacevich highlighted that the company has laid the foundation for its growth as a result and will increase staff to help meet its customers’ needs.

“The introduction of a number of innovative new proprietary products, as well as increased investment in research and development, further strengthens the sustainability and defensibility of the Company,” Kovacevich added. “During the quarter, the company witnessed strong growth in our custom branded products as customers seek differentiated brand building solutions and we believe there is significant opportunity to continue to increase sales in this regard.”

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