Kentucky Archives - Green Market Report

StaffNovember 15, 2022
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The Daily Hit is a recap of cannabis business news for Nov. 15, 2022.

ON THE SITE

California Cannabis Debt Bubble on Verge of Bursting

A slow but steady years-long trend of licensed marijuana companies in California not paying all of their bills might be nearing its climax, industry insiders warned, and a wave of business failures is on the way if (when) the debt bubble explodes. Read more here.

Kentucky Governor Provides Pathway for Medical Cannabis Use

The governor of one of last states holding out on medical cannabis signed an executive order today permitting possession and use of the product. Kentucky Gov. Andy Beshear signed the order Tuesday, pardoning “any and all persons” accused of marijuana possession after the order’s effective date of Jan. 1, 2023, provided certain conditions were met. Read more here.

Michigan’s Canapa Valley Farms Closes on $17 Million Deal With Pelorus

Pelorus Equity Group closed a $17.3 million debt financing agreement with Vassar Acquisitions Property Management and its cannabis operating entity, Canapa Valley Farms. The money will be used for building out Canapa’s state-of-the-art 90,000-square-foot greenhouse and 8,500-square-foot processing facilities. Read more here.

Cresco Labs Slashes Losses Despite Significant Headwinds

Sales for Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) (FSE: 6CQ), a vertically integrated, multistate operator, ticked down in the third quarter ended Sept. 30 to $210 million, in part due to the company’s exit from third-party distribution in California. Read more here.

Halo Stretches Margins Despite Lower Q3 Revenue

Halo Collective Inc. (NEO: HALO) (OTCQB: HCANF) posted results that showed rising margins despite lower revenue, driven by cost-cutting measures amid a congested supply side in California and Oregon. Revenue totaled $5.5 million, down 36% from $8.7 million in the same quarter last year. Read more here.

IN OTHER NEWS

Decibel Cannabis Company

Decibel Cannabis Company Inc. (TSXV: DB) (OTCQB: DBCCF), a premium cannabis producer, achieved 5.3% national market share in October 2022, which places Decibel as the sixth-largest LP in Canada by market share. The company reported $18.3 million of total net sales in Q3, with a sequential decline of 1% over Q2 2022 and an increase of 37% over Q3 2021. Read more here.

Trees Corp.

Trees Corp. (NEO: TREE) increased its revenues in the third quarter by 60% from the first quarter of 2022, while total gross profit has increased by 78% over the same period due to a strengthening retail gross profit margin percentage. Read more here.

Stone Road

Stone Road, a California-based line of premium, sustainably grown cannabis products, announced a partnership with Gamut Cannabis to bring Stone Road’s line of products to Michigan in early 2023. This marks the rapidly growing brand’s fourth market launch, as it continues to expand into legal states across the U.S. Read more here.


Debra BorchardtMarch 27, 2018
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On Monday, the hemp industry received a big boost from U.S. Senate Majority Leader Mitch McConnell (R-KY) and Kentucky Commissioner of Agriculture Ryan Quarles (R-KY) as the two politicians announced they would be introducing legislation to support Kentucky’s hemp industry. The most important piece of the legislation is that hemp would be removed from the list of controlled substances and legalized as an agricultural commodity.

“Hemp has played a foundational role in Kentucky’s agricultural heritage, and I believe that it can be an important part of our future,” Senator McConnell said. “I am grateful to join our Agriculture Commissioner Ryan Quarles in this effort. He and his predecessor, Jamie Comer, have been real champions for the research and development of industrial hemp in the Commonwealth. The work of Commissioner Quarles here in Kentucky has become a nationwide example for the right way to cultivate hemp. I am proud to stand here with him today because I believe that we are ready to take the next step and build upon the successes we’ve seen with Kentucky’s hemp pilot program.”

The original Farm Bill said that it was okay to grow cannabis plants that had little ability to get people high. The DEA (Drug Enforcement Administration) did not agree with this definition and has consistently pointed out that both plants come from the same genus and are therefore they are same plant and so subject to the Controlled Substances Act. A court case ruled against the DEA’s stance, but it continues to insist it is in the right.

Declining cigarette sales have caused tobacco crops to become less profitable as sales drop. Kentucky farmers had been searching for a replacement commodity and found it in hemp. In 2014, McConnell spearheaded a provision to legalize hemp pilot programs in the Farm Bill. The program has proved to be popular among farmers who have pressured McConnell to make it easier to farm hemp.

If the U.S. Department of Agriculture approves the plan, the Hemp Farming Act of 2018 will help Kentucky take the lead on hemp production by removing the current barriers to full-fledged farming. In addition to opening the fields for hemp, it will give researchers the chance to apply for federal grants from the Department of Agriculture.

“Here in Kentucky, we have built the best Industrial Hemp Research Pilot Program in the country and have established a model for how other states can do the same with buy-in from growers, processors, and law enforcement,” Commissioner Quarles said. “I want to thank Leader McConnell for introducing this legislation which allows us to harness the economic viability of this crop and presents the best opportunity to put hemp on a path to commercialization.”

The Hemp Market

The Hemp Industries Association (HIA) reported that in 2015, retail sales for hemp products reached $600 million, which is much lower than the $5.4 billion for marijuana sales in 2015 as reported by Arcview. HIA says that hemp sales on average grow by 15% each year and that most of that growth can be attributed to more people buying hemp-based body products and supplements.

Congress has blocked the DEA from interfering with state agencies and hemp growers with regards to hemp. The USDA has been blocked from prohibiting the transportation, sales or use of industrial hemp. Despite these measures, hemp was still subject to drug laws and hemp growers have to get permission from the DEA. In addition to that, harvesting and processing is labor intensive, which can drive up costs. Since the U.S. has been out of the hemp game for some time, harvesting innovations haven’t occurred.

A study by the University of Wisconsin-Madison concluded that hemp production “is not likely to generate sizeable profits” and also noted that international competition would affect the U.S. Most of the hemp for these sales was imported from China and Canada. Hemp imports for 2015 were nearly $78.2 million according to U.S. trade statistics.
 


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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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