marijuana Archives - Green Market Report

William SimpsonWilliam SimpsonJuly 17, 2018
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3min7520

With President Trump signaling his likely support for the bipartisan Congressional effort to ease the U.S. ban on cannabis in legal markets, the country as a whole could benefit immensely.

By giving states the rights to determine the best course with cannabis, business valuations could go through the roof. For example, under the current laws, Golden Leaf Holdings, a cannabis company with cultivation, production, and retail operations that is publicly traded in Canada, is unable to be publicly traded on the Nasdaq. Conversely, Canadian cannabis companies are already allowed on the Nasdaq, giving them a significant advantage in the globally booming market.

The most significant progress for businesses would come with the easing of Internal Revenue Code 280E, which has, by and large, blocked cannabis businesses from tax deductions, credits and banking in general. The passing of this bill would be a tremendous step for states with legalized markets. American cannabis entities struggle daily to make retail an efficient platform, while barely breaking even under the current regulations. The Treasury Department demanding money from a market they deem illegal needs to end.

Most significantly, ending the federal ban could represent a step in the right direction towards addressing systemic criminal justice issues that unjustly target minorities, which is far more important than any business-related outcome.

This measure is far from a single, fix-all solution. Even if the bill became law tomorrow, businesses wouldn’t be able to reap the benefits right away. If cannabis remains a Schedule 1 narcotic, banks will continue to be hesitant to opening accounts for businesses. The same goes for standard business practices like shipping across state lines.

Furthermore, nothing federally-approved changes local and state laws. This means issues stemming from occupancy, zoning, packaging and other regulations will still loom over businesses. Too many voices in cannabis could leave the industry at the whim of political agendas and powerful competitor lobbies, including tobacco, alcohol and pharma.

While the bipartisan bill does provide the U.S. a step in the right direction for both the cannabis industry and its citizens, we must remember that it still is just one incremental step in the process. Plenty of work is left to be done on federal, state and local levels to revise regulations for businesses and citizens in states with legal markets. That said, the possible passing of the bill should be championed for the huge victory it would represent. With hope, it would be far from the last one to come.

 


Jack SmithJack SmithMay 23, 2018
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6min18350

BDS Analytics has issued a new report on the public attitude towards marijuana in Colorado and there has been a strong movement towards more positive perception, as the state continues to embrace its cannabis culture.

The study, which was conducted from Jan. 16, 2018-Feb. 13, 2018 and ensured all participants were 21 or older, noted there has been “a substantial increase” in Colorado adults consuming marijuana, compared to the first-quarter of 2017. The researchers also found that adults were more open to exploring cannabis in different forms, though they did have prior cannabis experience or were open to using it in the future.

Colorado continues to be among the few states with legalized marijuana for recreational use and it’s clear its residents are taking advantage of that. The state saw a 12 percent increase in dollar sales year-over-year from the first-quarter of 2017 to the first quarter of 2018, according to retail sales that BDS tracks.

Among those who are consuming, BDS found Colorado’s consumers as skewing slightly older and more likely to be male. The consumers are also more likely to see it as medicine, consider themselves “connoisseurs” and claim that cannabis is part of their everyday routine.

There’s also been a shift in using it towards health and wellness benefits, especially for pain management and belief.

Here are 9 of the most interesting facts from BDS Analytics’ findings about the Colorado cannabis market.

1. Consumption is going up.

BDS found that 35 percent of Colorado residents consumed marijuana in the first-quarter of this year, as opposed to just 25 percent in the first-quarter of last year.

2. Rejectors are less likely to support it now.

Marijuana became legal to purchase in Colorado in 2014 for anyone over the age of 21 for any purpose, making it the first place in the world to have that distinction. Since then, however, rejectors have become more entrenched in their thinking.

Just 63 percent of rejectors would support legalization now, compared to compared to 80 percent in the first-quarter of 2017. In total, 85 percent of respondents think there should be some form of legal marijuana use. Perhaps not surprisingly, 99 percent of consumers who’ve used marijuana in the past six months think it should be legal in some form.

3. Health benefits.

Sixty-eight percent now believe marijuana has some health benefits, including 68 percent who believe it can relieve pain, 61 percent believe it can help with the side effects of chemotherapy and 55 percent believe minors should use it if okayed by a doctor and with parental consent.

4. Relaxation usage going down.

People who said they were using it for relaxation benefits went down year-over-year. Thirty percent said they were using it for relaxation (things like managing anxiety or stress) in the first-quarter, compared to 34% in the first-quarter of 2017.

5. An evening hit.

Consumption of marijuana is favored mostly in the evening, though the study noted that consumers are partaking in their usage throughout the day.

6. Methods are shifting.

The way people are consuming marijuana is shifting, if just a bit. They continue to prefer inhaling it, but topical use is also growing. 79 percent of consumers inhaled it in the first-quarter of 2018, compared to 67 percent in the first-quarter of 2017.

7. Gummy divine.

For those who prefer to consume it using edibles, gummy candies reign supreme.

Fifty-four percent of respondents say they have consumed gummy candies in the past six months. Forty-nine percent say they have consumed baked goods, 44 percent say they’ve eaten chocolate candy and 36 percent say they’ve eaten hard candy in the past six months.

8. Topical.

Salves are the most preferred way to consume it by topical consumers, but lotions and creams also receive heavy usage. Thirty-four percent say salves or balms are the most preferred way to use it.

However, of those who have applied it topically in the past six months, lotions comes in at 45 percent, creams at 43 percent and salves or balms at 41 percent.

9. Where to buy?

Overwhelmingly, Colorado consumers prefer to purchase their marijuana from a dispensary, at 90 percent, compared to 88 percent in Q1 2017.


Debra BorchardtDebra BorchardtMay 6, 2018
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5min18440

This past Saturday the 47th Annual NYC Cannabis Parade and Rally attracted an enthusiastic crowd that openly smoked marijuana despite it being illegal in New York state. The rally was excited to have New York gubernatorial candidate Cynthia Nixon speak to the crowd at Union Square. It was also nice to see the women in cannabis represented at the event by the networking organization Women Grow and women-owned Etain Health.

Statements from other speakers were as follows:

NY State Senator Jesse Hamilton:
“Nine states and the District of Columbia have decided to legalize and regulate marijuana. By joining these states, New York would allow law enforcement to prioritize real public protection needs. Alongside broken windows policing, our outdated marijuana laws direct police resources, court time and the justice system’s authority at people who are not violent, not dangerous and do not pose a threat to the public. We must continue to work towards the day that New York rejects the deeply flawed policies of the past, embraces sensible reform and passes the Marijuana Regulation and Taxation Act.”
NY State Assembly Member Richard Gottfried:
“We need to move beyond the outdated and broken marijuana prohibition model
to a sensible tax-and-regulate system. But that’s only part of the solution.
Even in states with legal adult marijuana use, there is still evidence of unequal law enforcement practices targeting minority communities. We must ensure that those most victimized by the criminalization of marijuana benefit from the social and political progress around the issue, including reforming criminal justice processes and ensuring widespread participation in the marijuana business boom.”
NYC Council Member Jumaane Williams:
“We must expand out medical marijuana program to include all those who can benefit from its use,” adds Council Member Williams. “We also should rapidly move towards the full legalization of marijuana, expunge state criminal records of past users and create a pathway for all New Yorkers to benefit economically from this industry, not just a select few chosen by the Governor.”
NYC Council Member Donovan Richards:
“It’s a weird time when New York City finds itself to the right of former House Speaker John Boehner, but unfortunately that is where we are with about 17,000 marijuana arrests in 2017. We must stop the practice of flooding our prisons with marijuana offenders and disproportionally impacting communities of color now. Marijuana is not a threat to our public safety and our youth cannot wait any longer as one minor mistake can stick with them for the rest of their life”
Stuart Appelbaum, President of the Retail, Wholesale and Department Store Union (RWDSU):
“I have no doubt that recreational marijuana will soon be legal in New York – as it should be. The criminalization of marijuana has resulted in racial and social injustice because of its disparate enforcement and has denied its use as another tool in the war against opioid abuse. And we need to make sure that when it is legalized that workers in the industry are treated with dignity and respect, and have a union voice. The sooner marijuana is legalized the better.”

History

The event was founded by the Yippies (Youth International Party) in 1971. It has served as the flagship for the multi-decade mass movement for cannabis legalization and has taken place in various locations around the city over the years, including Washington Square Park, Battery Park and Dag Hammarskjold Plaza. The Event moved to Union Square Park in 2012. The mission of the event is to promote marijuana legalization federally and specifically in the New York Metro area, end discriminatory arrest practices and the mass incarceration of citizens and improve the state’s overly restricted medical cannabis program. The NYC Cannabis Parade & Rally is the founding chapter of the Global Marijuana March, which takes place in hundreds of cities in the U.S. and around the world in May and June.


William SumnerWilliam SumnerMarch 29, 2018
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3min13451

Cannabics Pharmaceuticals announced today that it has received positive results from a pre-clinical study on the anti-tumor effects of cannabinoids on cancerous tumor cells. Using cancer cells taken from patient blood samples, researchers found that the cells were sensitive in various ways to both THC and THCA, which are the main active compounds in cannabis.

To find this out, researchers isolated circulating tumor cells, which are cancer cells that have detached from the main tumor and circulate throughout the body, in blood samples taken from breast cancer and prostate cancer patients. They then treated the cells with either THC or THCA and then monitored cell viability over time.

Researchers found that the compounds had different cell killing effects based on the dosage, type of cancer, and the substance’s composition. In a statement, Dr. Eyal Ballan, Cannabics co-founder and chief technology officer, praised the study results.

“The results of this latest study further validate Cannabics’ ability to perform cannabinoid sensitivity tests on liquid biopsies and indicate in vitro antitumor activity of these compounds, which should be further examined in clinical studies. While the current use of medical cannabis is largely used for palliative purposes when it comes to cancer, we are seeing a growing number of clinical studies on the antitumor effects of cannabinoids and predict we will start to see eventual FDA approvals of cannabinoids to treat various types of cancer. Our goal is to support the personalization of these treatments with our drug sensitivity and therapy monitoring tests,” commented Ballan.

These latest results come as Israelis await a decision from the country’s embattled Prime Minister, Benjamin Netanyahu, as to the status of medical cannabis exports. Earlier in February, Netanyahu rejected moves to allow medical cannabis exports, sending the issue back to advisers for further assessment. Although Israel’s Agriculture, Finance, and Justice ministries are strongly in favor of the measure; it is unclear as to how Netanyahu will rule. A decision is expected in the coming weeks.


Debra BorchardtDebra BorchardtJanuary 12, 2018

3min11540

Marijuana stocks continued the November rally into December as investors loaded up on stocks ahead of California’s legalized recreational sales. The U.S. Marijuana Index jumped 50% and the Canadian Marijuana Index climbed 65% for the month of December. Of course, this was all before the move by Sessions. Following that action, the North American Index fell from a high of 377 on January 9 to lately trading at a level of 327. The Canadian Index fell from a high of 1096 on Jan. 9 to 908 and the U.S. Index has fared the best only slipping from 103 on the ninth to just 100.

Aphria Inc. (APHQF) reported rising revenue and profits for the second quarter. Revenue for the three months ending November 30, 2017, was C$8,504 versus C$5,227 in the same period of the prior year, an increase of over 60% and C$6,120 in the first quarter of fiscal 2018, an increase of almost 40%. Gross profit for the second quarter was C$6,202, compared to C$4,121 in the same quarter in the prior year and C$7,904 in the previous quarter.

MedReleaf (MEDFF) announced a $100 million bought deal with Canaccord Genuity Corp. and GMP Securities. It is expected to close January 31. MedReleaf plans on using the net proceeds to finance construction of additional cannabis production and manufacturing facilities in Canada as well as in other jurisdictions with federal legal markets.

Origo Acquisition Corp. (OACQ) filed to change its name to High Times Media and convert from a Cayman Islands company to a Nevada corporation and change its symbol. Origo merged with High Times Holding Corp., the publisher of High Times Magazine in July of 2017. Following the merger, the company would like to be listed on the Nasdaq exchange under the symbol HITM.

And finally, Colorado said that in November dispensaries sold $119.6 million of cannabis products, a 9.5% increase over last year. Can’t wait to see what California dispensaries start reporting.


Debra BorchardtDebra BorchardtSeptember 12, 2017
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3min9070

Canadian-based private company The Green Organic Dutchman announced on Tuesday that it had entered into an agreement with a group led by PI Financial Corp. for a private placement valued at C$20 million. The deal consists of 4,242,500 units of the company at C$1.65 for gross proceeds of C$7 million.

In addition to that deal, the company will engage in a non-brokered offering of 7,879,000 units at C$1.65 for gross proceeds of C$13 million. In a statement, the company outlined the warrants associated with the units as such, “Each Unit will consist of one common share and one-half common share purchase warrant. Each whole Warrant is exercisable into one Common Share  at the exercise price of $3.00 per share and has an expiry date that is the earlier of (a) 36 months from the date the Common Shares commence trading on a recognized stock exchange, and (b) February 28, 2021.”

So far, The Green Organic Dutchman has raised C$41.5 million from 2,400+ retail shareholders. The company has positioned itself to be one of the lowest cost producers in Canada specifically due to its low-cost power solutions. It noted that Quebec has some of the least expensive power in Canada that includes government incentives.

It recently secured a 75-acre property near Montreal with the ability to expand to 820,000 square feet. The company is currently financing phase 1 of its expansion of 220,000 sq. ft. which will include an indoor and hybrid greenhouse facility and add an annual capacity of 22,000kg or product. The company also has a newly designed extraction laboratory that is expected to be online in the fourth quarter. This lab has the capacity to process up to 12,000kg of raw material per year and produce C$170 million worth of organic cannabis oils.

The Green Organic Dutchman is known for its organic products that are free from pesticides, herbicides, and synthetic nutrients. Organic cannabis commands a 28% premium pricing over regular cannabis and the  Canadian organic industry has grown by 38% from 2013-2015.

 

 

 

 


Ken NischKen NischSeptember 12, 2017
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4min20001

Traditional brick-and-mortar retailers are facing major challenges due to ease of credit cards, federal postal services, and potentially even other types of shippers. This has made the cannabis industry essentially immune to the challenges that other physical retailers have. This doesn’t mean that marijuana retailers don’t need to be experiential or try harder, but rather it suggests that the physical store experience can be a primarily offensive direction in order to create brand awareness and dominance, versus substantially being defensive as it is for most retail today in trying to counter-impact the online business.

Also new to the cannabis category in the aspect of retail is individual vs “branded house” product. Think of the spice section in your local grocery store with red caps of the iconic McCormick brand dominating, rather than the individual flavor profiles themselves dominating. Cannabis started out with the contrary, with the flavor and experience profile of the individual product defining it rather than a dominant brand umbrella defining it. However, this contrast with cannabis where the flavor profile is the brand, and the sense of origin, etc. comes secondary, has been changing rapidly now with the growth of celebrity and lifestyle branding. Think Whoopi Goldberg, Cheech and Chong, Willie Nelson, etc. where the flavor profile is through the eyes of Willie, Whoopi, and Cheech. This represents a big change in the industry where ultimately certain brands will be common across distributors and retailers versus each individual retailer essentially creating their own “special sauce” unique to their environment. With the advent of cross retailer branding, the individual brand of the retailer will become more critical (versus relied on price or uniqueness to drive the consumer from a destination standpoint).

Important in terms of future growth will be a key and differentiated brand identity. As legalization continues to become more flexible and market driven, formats such as shop-in-shop concepts as well as event and lifestyle pop-up concepts (cannabis meets food truck, etc.) will arise. Cannabis will grow into other delivery spaces for pet, spa and treatment applications; home furnishings; and luxury accessories and consumables. Today’s fairly cut and dry approach to reception, consulting, selection and transaction will become more complicated (in a positive way), impacting everything from staffing to seasonality, to requirements for flexibility beyond today‘s primarily transactional environment.

Due to many cases of landlord reluctance, particularly national landlords, to accommodate companies within the cannabis space, they’ve often been relegated to second or third tier locations, industrial parks, or the capital intensive activity of purchasing or building a freestanding facility. The next generation of locations will most likely become part of lifestyle assortments, like adjacencies such as Lululemon, Whole Foods, the local gym, etc. with the cannabis retailer to be a welcome and lifestyle appropriate co-tenant to many of the national tenants, particularly in the wellness, leisure and food segments.

Society has already made a significant change in the perception of cannabis as a medication, and as perceptions continue to evolve in the world of cannabis through the rest of 2017, the brick-and-mortar concept has been integral to the movement. Thus, allowing the public access to these products in an entirely new type of space. The design concept of the physical environment provides the retail dispensary model an opportunity to create interactive experiences, as well as personal connections. The mental perception shift in medical and recreational clients alike will continue to open a door to societal growth and appreciation of cannabis.


StaffStaffSeptember 4, 2017
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3min6170

mCig Inc. (MCIG) delivered its fiscal 2018 first quarter results on Tuesday with revenue increasing 1,249%. Total sales for the quarter ending July 31 were $3.1 million and net sales were $400,000, six times greater than the same quarter a year ago.

While the company posted a press release of its results, there was no formal filing of documents on either the OTC Market Homepage or the company’s website.

Paul Rosenberg, MCIG’s Chief Executive Officer said, “We will continue to evolve and grow. We are exploring licensing opportunities in Nevada, California, Oregon, Florida, and Massachusetts. MCIG’s past performance has become a disruptive force in the cannabis markets in which we serve. It is our goal to be the trendsetters for the future.”

In the press release, MCIG said it posted its fifth consecutive quarter of bottom line profitability and noted that last year the company recorded a net loss of $170,736, while this year it posted net income of $77,953. The company went on to say it is experiencing profitability in each operating segment and continues to develop its 420Cloud social network platform.

mCig recently released its annual audited report for the fiscal year 2017 at the end of August. The company reported that its gross profit for the year was $1.8 million, a nice jump over the previous year’s $290,773. Revenue for the year was $4.7 million, also topping last year’s $1.7 million. During the year, mCig acquired seven companies and sold one asset.

At the time, Rosenberg said, “This has been a record year for mCig and its shareholders. MCIG has seen tremendous improvements in revenue, gross profits, net profits, cash position, CAGR, and shareholder value. MCIG has done this with no toxic debt. With our new and innovative solutions that are projected to have a significant impact on our future financial statements rolling out shortly, the MCIG story will continue to be exciting.”

The stock was lately trading at 19 cents and got a lift from the earnings announcement, however, it is still lower than its 52-week high of 50 cents.


Debra BorchardtDebra BorchardtAugust 31, 2017
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3min6490

Toronto-based Golden Leaf Holdings (GLDFF) reported its second quarter earnings on Tuesday with net revenue falling to $2.1 million from $2.5 million for the same time period in 2016. The 9% decline was blamed on supply constraints across the company’s portfolio.

The net loss for the second quarter was $1.7 million, which was higher than last year’s loss of $1.1 million for the same time period. Gross profits improved to $402,124 from last year’s $217,300.

“It is a key corporate objective for Golden Leaf to establish a greater retail presence, driven by the acquisition of Chalice Farms. We expect this will deliver higher operating margins for the Company, as well as from a proven, retail-focused operating blueprint to successfully broaden Golden Leaf’s market share and to capitalize on the substantial growth opportunity that lies before us,” said Mr. William Simpson, the new Chief Executive Officer of Golden Leaf. “To kick start our strategic plan, we undertook a comprehensive review of the business to identify opportunities to streamline costs. Already, we have made reductions to the work force and have made progress toward consolidating all corporate and commercial operations to Portland, Oregon. These steps are expected to improve our cost structure while maintaining the capacity to support our core expansion strategy.”

Golden Leaf is consolidating its headquarters to Chalice Farms in Portland OR and constructing a processing facility. Three dispensaries are under construction in Oregon and should be opened in the first quarter of 2018. In Nevada, Golden Leaf expects to begin sales of its cannabis brands to dispensaries in Nevada before the end of 2017. In Canada, the company expects to close on the acquisition of MMGC by the end of the third quarter and begin to grow operations shortly thereafter. It expects to launch retail operations in Canada in the second quarter of 2018.

As a result of all these acquisitions, operating expenses jumped to $3 million from last year’s $2.5 million. This month Golden Leaf entered into a private placement transaction with Canaccord Genuity for C$10 million and C$2 million in bridge loan financing.



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