Massachusetts Archives - Green Market Report

Julie AitchesonJulie AitchesonMarch 2, 2021
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5min1730

Cannabis business consulting firm Nucleus One recently released the findings of their February 2021 Massachusetts Adult-Use Marijuana Market Report. Nucleus-One tracks and analyzes data from the Cannabis Control Commission of Massachusetts. February’s report heralded good news for the Commonwealth’s cannabis industry after a short-lived decline in sales in 2020. Since the decline, December and January 2021 saw unprecedented sales, with over 98 active retailers in the state. This growth is due to higher sales in product categories other than flower shares, which hit an all-time low in December. 

The Commonwealth’s uptick isn’t confined to the retail space, as the largest Massachusetts operator (measured by active agents), NETA, and its parent company Parallel prepare to go public following a SPAC Agreement with Ceres Acquisition Corp. On the regulatory front, the CCC published new Medical and Adult Use Regulations in January, which will create a more hospitable environment for this thriving market. Also supportive of 2021’s promising growth are Northampton’s move to waive the community impact fee of 3% on gross sales for cannabis businesses and upcoming discussions about eliminating the vertical integration requirement for medical operators.

The last ten years saw a dramatic increase in consumption and there is every reason to believe that the trend will continue. The number of final licenses granted is up 134 percent from January 2020, with January 2021 sales up 68 percent from the previous year. The number of employees in Massachusetts’ cannabis industry rose by 72 percent from last year, and operators harvested 48 percent more plants than a year earlier.

Licensing can be a long, laborious and expensive process for entrepreneurs to navigate, but on that front, too, there is encouraging news. The number of final licenses in the Commonwealth has more than doubled over the past year and a record 25 final licenses were granted in January. A total of 724 licenses have been approved and 389 provisionally approved across the Commonwealth, though marijuana is still banned or partially banned in over 120 communities in the state. Boston in particular has the highest number of pending retailer licenses, with Brockton coming in a strong second. Smaller operators make up the majority of the 571 new active agents added by the Commonwealth, with all but 8 of the top 25 operators increasing their number of active agents compared to data from December

With daily sales averaging $2.8 million in January 2021, the Massachusetts adult-use market is now worth $1 billion annually, which is certainly correlated with the spike in the number of retail locations from 33 in December 2019 to 94 by December 2020. Sales benefited from a holiday shopping boost, and have sustained that momentum at around $30k per day per store well into 2021. Despite changing buyer behavior, such as steep declines in daily sales on Thursdays and Fridays attributed in part to the pandemic and disrupted commuting routines, overall numbers remain strong with more than $1.26 billion worth of cannabis products sold through the adult use market between November 2018 and February 2021. With big operators like NETA going public, favorable regulations making the books, and a user-friendly licensing process welcoming more new businesses to the market, the future is bright for Massachusetts’ cannabis economy.

 


StaffStaffFebruary 23, 2021
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7min3700

Massachusetts lawmakers are moving forward to decriminalize psychedelic drugs. The effort began at the city level when Somerville and Cambridge adopted measures that would make possession of psychedelics a low law enforcement priority. Now it has moved to a state-wide initiative.

Cambridge

Cambridge’s city order read, “Drug policy in the United States and the so-called “War on Drugs” has historically led to unnecessary penalization, arrest, and incarceration of vulnerable people, particularly people of color and of limited financial means, instead of prioritizing harm-reduction policies that treat drug abuse as an issue of public health. Entheogenic plants, which include a spectrum of natural plants, fungi, and natural materials, have been used for centuries by people in different cultures to address conditions including substance abuse, addiction, post-traumatic stress disorder (PTSD), elements of Persistent Traumatic Stress Environment (PTSE) conditions, chronic depression, end-of-life anxiety, grief, cluster headaches, and tendencies toward recidivism, as well as to improve mental and socio-emotional health.”

The city resolved that the Middlesex County District Attorney  should “Cease the prosecution of persons involved in the use, possession, or distribution of entheogenic plants and the use or possession without the intent to distribute of any controlled substance.” It went on to say that the use and possession of all controlled substances should be understood first and primarily as an issue of public health by city departments, agencies, boards, commissions, and all employees of the city and that it should be the policy of the City of Cambridge that the arrest of adult persons for using or possessing controlled substances shall be amongst the lowest law enforcement priority for the City of Cambridge.

State

Marijuana Moment reported that the state Senate version of the legislation, SD 2248, was introduced Friday by Sen. Julian Cyr (D) and was virtually identical to the House bill. Both measures are titled “An Act Relative to Harm Reduction and Racial Justice.” This bill stated, “No person knowingly or intentionally shall possess a controlled substance unless such substance was obtained directly, or pursuant to a valid prescription or order, from a practitioner while acting in the course of his professional practice, or except as otherwise authorized by the provisions of this chapter.” It also limits any fines to $50.

A separate House bill introduced by Mike Connolly (D) on Friday would move even further than decriminalization and would set the stage for regulated sales of certain drugs. The House bill, HD 3829 language states that an interagency task force would be created to study the public health and social justice implications of legalizing the possession, consumption, transportation, and distribution of naturally cultivated entheogenic plants and fungi. The task force will be made up of 21 members.

“The task force shall: (i) compile and review research regarding the physiological and psychological effects of entheogenic plants and fungi; (ii) compile testimony and data on the experiences of communities across the United States—including Somerville (MA), Cambridge (MA), Denver (CO), Oakland (CA), Santa Cruz (CA), Ann Arbor (MI), sovereign native lands, Washington D.C. and Oregon. The task force shall file a report of its findings and recommendations, together with drafts of legislation necessary to carry those recommendations into effect, by filing the same with the clerks of the senate and the house of representatives, the chairs of the senate and house committees on ways and means, the senate and house chairs of the joint committee on public health, the senate and house chairs of the joint committee on the judiciary, the senate and house chairs of the joint committee on public safety and homeland security not later than June 2022.”

“Our coalition owes these bills to our volunteers across the Commonwealth,” the group Bay Staters for Natural Medicine, which was behind the successful local decriminalization efforts in Somerville and Cambridge, told Marijuana Moment in a statement. “From the vicious pain of opioid addiction and cluster headaches to the exclusion of people of color from the mental health care system, it’s your stories of redemption and hope that have created this movement.”

“I’m looking forward to a dialogue in Massachusetts to identify the most effective and evidence-based public health and harm reduction strategies that should replace the failed drug war,” Shaleen Title, a former Massachusetts cannabis regulator and longtime drug policy activist, told Marijuana Moment.

Vermont

Vermont, which borders Massachusetts is also laying the groundwork for some sort of decriminalization. The Vermont Digger reported that Chittenden County State’s Attorney Sarah George was suggesting laws to that effect as a means to combat addiction issues. Rep. Selene Colburn, P/D-Burlington said, “a bill to decriminalize drugs across the board was still being drafted but would be introduced in the Legislature later this session at a press conference.”

 

 

 


Video StaffVideo StaffNovember 25, 2020

1min2930

Rebelle Dispensary in Great Barrington MA is quickly making a name for itself. The group is led by Charlotte Hanna who is committed to social equity causes. The dispensary turns over a percentage of its profits for social equity causes. Rebelle also prides itself on its retail design acumen and product curation. Check out the latest entrant to Massachusetts cannabis retail.


Video StaffVideo StaffAugust 17, 2020

1min18954

Curaleaf is rolling a new look to its dispensaries. Green Market Report visited the dispensary in Ware Massachusetts recently to see it in person. The old clinical looking medical dispensary has been replaced with a sleek, modern store for recreational consumers. This interview is an extended version with Curaleaf Massachusetts President Patrik Jonsson who spoke with GMR’s Debra Borchardt. The new design is discussed, along with bot the Select and Grassroots acquisitions


Video StaffVideo StaffAugust 17, 2020

1min10770

Curaleaf’s medical marijuana dispensaries used to have a decidedly clinical look about them. That has changed. Curaleaf’s adult-use stores have leveled up to a new modern stylish look. Green Market Report went on a road trip to Ware, Massachusetts to check out the new store look and talk to Curaleaf Massachusett’s President Patrik Jonsson. Thank you for watching the Green Market Report! Be sure to subscribe to our channel on YouTube.


Kaitlin DomangueKaitlin DomangueJuly 8, 2020
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7min12390

Adult-use stores in Massachusetts closed for business on March 24th and reopened on the 25th of May. Sales were significantly higher than usual in the two weeks leading up to the closing of the adult-use market’s retail stores in Massachusetts. The day before closing, March 23rd, sales spiked 60% because of customers trying to stock up before the lockdown. 

A new report issued by Nucleus One, a Massachusetts-based B2B cannabis company offering a variety of services, has reviewed the COVID-19’s impact on the state’s cannabis industry. 

Ellen Rosenfeld, President of CommCan, said: “Every worse thing that could have happened, happened.” Like other states, the Massachusetts adult-use marijuana program lost a lot of money. Their sales revenue shortfall totaled to $116 million, with a tax revenue shortfall of $19.3 million. The stores were closed for 61 days and lost $1.9 million in sales each day they were closed. 

CommCan specifically lost $2 million over the two months the stores were closed and NETA saw an 85% drop in sales during that time. Additionally, the number of medical marijuana patients increased by more than 20% as new medical patients were able to become certified through telehealth. 

COVID-19’s Impact on Production 

There was an initial decrease in the number of registered cannabis employees in the state starting March 23rd. On May 12th, recovery began and there is now a record-breaking number of 4,500 employees. 

Plant harvest began to rebound dramatically after May 29th and reached new heights in late June at 1,400 plants a day. 

Reopening after COVID-19 

Adult-use stores in Massachusetts experienced “pent-up demand” after reopening, causing various issues and overwhelmed order systems. According to Thomas Winstanley, the Marketing Director at Theory Wellness, after the initial boom, “it has been a bit sluggish compared to last year.” Staff and customers must adhere to social distancing guidelines as well as wear face coverings. 

There are a few reasons that can be attributed to lackluster sales. Fear and social anxiety, longer wait times, and using alternative channels and the black market to purchase cannabis. 

Applications and Licensing 

The Cannabis Control Commission (CCC) has approved 477 applications so far, with the total applications reaching 6,009. The majority of approved applications have been for retail operations, with cultivation facilities following closely behind. Manufacturing facilities are the third-highest number of applications Massachusetts has seen for the adult-use market. 

148 retailer licenses are pending across Massachusetts, with 172 provisionally approved as of June 4th, 2020. 51 retail stores are in operation across the state as of June 30th, 2020. 

Retail Trends 

Eight new adult-use stores have opened since May 25th – and sales bounced back close to pre-COVID levels in June. The recovery can be largely attributed to curbside pick-up orders that retail stores have made available. Daily sales per store have declined by 28% compared to pre-COVID. Additionally, weekend sales have decreased significantly. 

Flower accounts for 47.3% of sales in 2020, edibles account for 16.4%. The product mix has not changed too drastically after reopening, but flower and pre-roll sales picked up in June. 

Cultivation 

There are currently 32 active cultivation operations across the state of Massachusetts, with 98 provisional licenses in place and 15 final licenses. 7.6 million square feet of cultivation space has been provisionally licensed. 

There are 130 indoor cultivator applications compared to only 16 outdoor cultivation applications. 

Delivery 

As of June 4th, CCC reported 16 delivery applicants. 190 communities have allowed adult-use delivery in Massachusetts, with deliveries limited to: 

  • The municipality which the delivery licensee has identified as its place of business
  • Any municipality which allows for adult-use retail within its borders
  • Any municipality which, after receiving notice from the Commission, has then notified the Commission that delivery may operate within its borders
  • Deliveries to any other residence that benefits from federal funds, hotels or bed and breakfasts are forbidden 

Ayr Strategies

One multi-state operator with businesses in Massachusetts, Ayr Strategies (OTC:AYRSF), has reported that its sales have already begun rebounding. This week, the company said that its medical dispensary sales continue to increase, with June revenue up 76% from the first-quarter monthly average despite adult-use retail dispensaries reopening in late May. Ayr reported that its average transaction volume was up 40% per day compared to first-quarter monthly average, with the average spend per ticket up 20% compared to first-quarter monthly average; gross margin levels were approximately 70%.

Ayr CEO Jon Sandelman said, “In Massachusetts, our record-setting month of June was achieved even as our wholesale business sold only approximately 65% of our monthly capacity. In normalized markets, we sell everything we produce each month, so we are entering the summer months with valuable inventory to sell into the recreational market in Massachusetts, which is repairing post the Q2 COVID shutdown. The number of operating dispensaries in the state has increased 25% since the stores reopened in late May, with Ayr currently selling to 82% of those new stores and a total of 36 out of the 55 dispensaries in the state.  We are now seeing wholesale demand steadily increase across our portfolio and expect the market growth to further accelerate our wholesale business.


Kaitlin DomangueKaitlin DomangueNovember 27, 2019
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6min13580

A year has passed since Massachusetts began sales its sale of legal adult-use cannabis and while the state showed no interest in rushing the matter, customers showed their interest as they rushed to the stores.  

It was a long road to get there. Massachusetts voters said yes to Question 4 in November of 2016, effectively legalizing cannabis for adult recreational use. In 2017, Gov. Charlie Baker signed a bill changing the law, successfully setting back the start of recreational sales by six months. After many other snags, the state’s Cannabis Control Commission finally approved key regulations in March of 2018. By October of 2018, just four cannabis shops had their licenses approved, with only two being open at the time of Massachusetts’ launch of retail cannabis sales. 

In 2017, the Massachusetts Department of Revenue had estimated that the state could collect anywhere between $44 million and $82 million in marijuana tax revenue in the fiscal year of 2019. Those estimates were based on what the state described as a “reasonable number” of dispensaries, which all admit was much lower than hoped and the DOR scaled back those original estimates. 

The program got off to a good start. Customers spent $2.2 million in the first five days of sales, with $440,000 being spent on the first day. The total number of units sold was 56,380, with an average price per unit of $39.33. 

One year later, the state reported that licensees generated $393.7 million in gross sales and that 33 dispensaries had been licensed. The customer demand is high, but the inventory is low. There aren’t many licensed cultivators in the state of Massachusetts, leaving little room for excess. Because the state has been slow to license businesses, only two testing facilities are in operation throughout the entire state, causing additional issues for dispensaries. 

“AmeriCann recognized years ago that Massachusetts was positioned to become one of the strongest cannabis markets in the country,” stated AmeriCann CEO Tim Keogh. “We expect to play an important role in providing much-needed cannabis going forward, with the recent completion of our initial building at our Massachusetts Cannabis Center development.” Building 1 at the MCC development is a 30,000 square foot cultivation and processing facility, 100 percent of which will be occupied by Bask, Inc., an existing Massachusetts licensed vertically integrated cannabis operator. 

“Marijuana Retailers and consumers should be commended for participating in an extremely smooth rollout of the legal adult-use cannabis industry in Massachusetts for the first year,” Commission Chairman Steven J. Hoffman said. “Hundreds of millions of dollars in sales are one measure of success, but I am even prouder of the way in which Marijuana Establishments have worked with the Commission to gain and preserve compliance with our regulations and patrons continue to inform themselves about the law and their responsibilities when they visit Massachusetts stores.” The state also said that another 54 Retailers with provisional or final license approval are in the process of completing the Commission’s inspection and compliance procedures towards that end. 

Canaccord Genuity senior analyst Bobby Burleson said, “Massachusetts has been a slower rollout than people had hoped originally. There were a lot of stale expectations out there. It was certainly partially due to the slowdown in Massachusetts, but also the immaturity of the cannabis sector as a public sector. The companies might have been dealt with better if they had more history.”

Burleson went on to say that additional operators are getting licenses and more dispensaries are opening closer to population centers like Brookline and Newton, which are suburbs of Boston. “We are increasing our 2019 estimate to approximately $600 million from $578 million. By 2022 we continue to forecast Massachusetts sales to exceed $1.2 billion.” 

Some companies like Sland Worldwide (SLNG) scaled back its efforts in the state as the program launch crawled at glacier speed. Still, others remained committed and are in for the long game. The state hasn’t reported the amount of taxes that were collected for the first year.


Debra BorchardtDebra BorchardtFebruary 5, 2019
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5min13770

Illinois-based Verano Holdings, LLC has acquired Four Daughters Compassionate Care Inc. of Sharon, Massachusetts and its provisional medical cannabis licenses for an undisclosed amount. The first cultivation and dispensary facilities in Sharon are expected to open in six to nine months. The company said it would hire 50-75 employees locally and train them for these sites in 2019

“We’re excited to join forces with the Four Daughters team to build upon the solid foundation of support and host agreements they secured within each of the communities, and put construction on the fast track to help bring Four Daughters’ dream to fruition,” stated Sam Dorf, Verano’s Chief Growth Officer. “This transaction continues Verano’s strategy to create a brighter way for health and wellness with high quality, organic branded products for cannabis patients, consumers and their communities through the acquisition of licenses and/or partnerships with operators in highly regulated, limited license states.”

Four Daughters Compassionate Care was co-founded by Brian and Lynne Striar, whose family has longstanding roots in the Sharon Community. The Striar family members, including the namesake’s four daughters, Stephanie, Kimberly, Nicole, and Robin, who have been heavily involved in cannabis advocacy, will be active members of Verano’s local operational management team. The dispensaries operate under the name Zen Leaf.

As a result of the acquisition, Verano has begun building a cultivation and production facility in Sharon Massachusetts. The company is also renovating an adjacent building for the dispensary. The acquisition marks Verano’s expansion into an additional adult-use market and its expanding geographic footprint into the Northeast from its current 10 operating facilities in Illinois, Maryland, Nevada and Florida, with 45+ licenses under active development in Florida, Michigan, Ohio, Puerto Rico, and Maryland.

Four Daughters Assets

The statement noted that the FDCC assets in the transaction included: 

  • The medical cultivation and production facility and medical dispensary now under construction in Sharon, with local approval for additional recreational facilities  
  • Real estate and community host agreements in Plymouth for an adult use dispensary
  • Real estate and community host agreements in Halifax for a 180,000 sq. ft. adult-use cultivation greenhouse and a 20,000 sq. ft. processing facility  

Community Involvement

Verano said that it would continue sharing a percentage of its profits with the Town of Sharon in perpetuity, a holdover from FDCC. “We will be providing the training to enable local residents to manage and staff a broad array of full- and part-time positions from the moment the doors open,” noted Ron Goodson, Verano President and Chief Operating Officer. “Whether you have experience in the cannabis industry or not, this provides a great opportunity to get your foot in the door and learn about the world’s fastest growing industry, and the plant that has the power to positively impact human health and wellness.”

Nevada Lawsuit

Verano had no new comments regarding the recent lawsuit filed in Nevada by Naturex and BB Marketing. The $135 million lawsuit is alleging that Verano cut its Nevada partners out of an application process. George Archos, Verano’s CEO, said in a statement to the Las Vegas Review that “based on what we know of the allegations … we do not believe the complaint has merit. We intend to defend aggressively against these claims.”

Verano owns 50% of Naturex, which was founded by Michael and Robert Frey. The brothers claim they submitted all of their information to Verano for an application on behalf of Naturex. Verano said it didn’t have all the information needed to submit the application. However, it did submit an application through Lone Mountain Partners, which is the Verano local entity. Lone Mountain was awarded 11 retail licenses.


Debra BorchardtDebra BorchardtJanuary 16, 2019
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4min35230

Ascend Massachusetts was awarded the first conditional-use permit for adult-use cannabis retail sales in the city of Boston. The flagship store will be the first adult-use retailer to operate within a major East Coast metropolitan city and is expected to open by the end of the year.

Massachusetts legalized adult use cannabis sales, but it took two years to license operators and open stores. When sales began on November 20, 2018, only two locations had been approved resulting in traffic headaches and customer lines. Still, the state managed to log $7 million in sales in just the first three weeks. A new report by ArcView Research and BDS Analytics projects that cannabis spending in Massachusetts will reach $1 billion by 2022 and that it will be the fifth biggest market in the U.S.

“Ascend Massachusetts is honored to be chosen as the first company awarded a license for an adult-use retail store by the city of Boston,” said Andrea Cabral, CEO of Ascend Massachusetts, which is a wholly own subsidiary of Ascend Wellness. “A core value of our company is to positively impact our neighborhoods and communities. We are proud to have the support of leaders and organizations across Boston and Massachusetts in this endeavor.”

No doubt that support helped sway the approval process.  Ascend managed to get letters of support from State Senator Joseph Boncore (D); State Representative Aaron Michlewitz (D); Boston City Councilors Josh Zakim and Ed Flynn; The Downtown North Business Association; as well as a letter of non-opposition from the West End Civic Association.

The store will be located in downtown Boston close to Faneuil Hall, a site built in 1742 for merchants and where the Sugar Act was protested in 1764 and established the doctrine of “no taxation without representation.” The store will be multi-leveled and designed by the Andrus Group, which has designed stores for Apple, Tesla, and Burberry. The designers noted that the store will combine innovation with education in order to create an engaging in-store experience for shoppers.

James Andrus, principal at The Andrus Group said, “This is a unique project that builds upon our experience in creating highly visited retail locations that serve the needs of tourists, consumers, and the community.”

So far, five retail locations have been approved in the state. There are still about 200 completed applications waiting for the state’s review and approval.

“We are proud of the work that Andrea and her team did to secure and plan our location,” says Abner Kurtin, CEO of Ascend Wellness. “We are gratified by the confidence the City of Boston has in Ascend Massachusetts to create best-in-practice and best-in-class adult-use retail for the Boston community.”

Ascend Wellness is a private multi-state operator located in three states: Illinois, Michigan, and Massachusetts. The Massachusetts CEO Cabral was the Executive Secretary of Public Safety in Massachusetts where she oversaw 14 public agencies. She was the twice-elected Sheriff of Suffolk County and the first female sheriff in Massachusetts’ history.


Debra BorchardtDebra BorchardtDecember 6, 2018
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3min15040
Ascend has plans to become the leading cannabis operator in the Massachusetts, Michigan and Illinois markets and it just got a big jump on the effort. This vertically-integrated cannabis operator completed its latest equity fundraising round.
Ascend raised $40M with the completion of this round and is developing licenses in three major cannabis states that are just beginning to build their markets: Massachusetts, Michigan, and Illinois. Combined, they create the largest market east of the Mississippi, which is equivalent in size to California or Canada, two of the most profitable Cannabis regions in the world.
The company’s chief executive officer Andrea Cabral started her career in Massachusetts law enforcement before getting appointed as the state’s top public safety official in 2012. As the leader of the company, she is sensitive to hiring people with minor arrest records in a demonstration of the company’s commitment to social justice.
“We are thrilled to be investors in Ascend, and to see such a warm reception to the dispensary locations under approval,” says Emily Paxhia, the Co-Founder and Managing Director of Poseidon Asset Management. “Ascend’s focus on a customer-centric retail environment will help to demystify the cannabis experience and create a new paradigm of cannabis retail.”
Ascend Wellness said it currently has plans for three high-end, licensed adult-use cannabis retail locations in three metro-area Boston locations. Additionally, the company said it plans to develop a significant retail presence throughout these emerging markets as it solidifies itself as a leading U.S. Cannabis operator.
“We are delighted to announce our initial round of funding,” says Abner Kurtin, founder of Ascend. “With a potential 30 million cannabis consumers in these three strategic markets, Ascend is poised to be one of the largest operators in the country. With our plans for best-in-class retail experiences and the development of global brands and partnerships, we could not be more excited for the future of Ascend.”
Leading this funding round are Poseidon Asset Management, Salveo Capital, JM10 Partners, and Shire Capital Advisors. Proceeds from the capital raised will be used to build out locations in these markets and acquire future assets.


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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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