Massachusetts Archives - Green Market Report

StaffSeptember 26, 2022
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6min14081

The Daily Hit is a recap of cannabis business news for Sept. 26, 2022.

ON THE SITE

California Regulator Says Illegal Cannabis Business Should Pay $128 Million

California’s cannabis regulation authority wants a group of business owners to pay $128 million in collective penalties for manufacturing and selling unlicensed products in the state for more than a year – which the state says the defendants admitted in court. Read more here.

Green Thumb Accused of Sex and Age Discrimination

Green Thumb Industries (OTC: GTBIF) was accused of sex and age discrimination by a former employee that worked in a Rise dispensary in Pennsylvania. Carrie Baker filed the complaint on Sept. 22 alleging that she was “forced out” for not fitting with the corporate culture, which was described to her as young, single men. Baker is in her mid-fifties and said she was passed over for a shift supervisor role given to a substantially younger male co-worker. Read more about the case here.

Hemp-Derived Delta-8 Skirts Laws, Raises Health Concerns

At least a dozen states have banned the hemp-derived product, including Colorado, Montana, New York and Oregon, which have legalized marijuana. But delta-8 manufacturers call the concerns unfounded and say they’re driven by marijuana businesses trying to protect their market share. Read more here.

Incubator 1871 to Launch Cannabis Program

1871 is getting into weed. The startup incubator at the Merchandise Mart plans to launch a cannabis-industry innovation lab, bringing startups together with larger companies. The four-month program will launch in January in partnership with Grown In, a Chicago-based startup focused on providing cannabis training. Read more here.

Berner’s Cookies Heads to Pennsylvania, Wiz Khalifa Takes on Florida

TerrAscend said that it has entered into a multi-year agreement with TRP – the cannabis holding and operating company with the exclusive rights Cookies products – to cultivate and manufacture Cookies products in the Keystone State. Read more.

Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) will launch Khalifa Kush medical cannabis products in Florida this weekend — part of an exclusive partnership with multi-platinum selling artist Wiz Khalifa. Read more.

IN OTHER NEWS

UK-Based Cannabinoid Product Producer Looks to Acquire Cannaray Brands, Love CBD Health

Cellular Goods (LSE: CBX), UK-based wellness company providing lab-produced cannabinoid products, has signed a letter of intent to acquire Cannaray Ltd, the owner of Cannaray Brands Ltd and Love CBD Health Ltd. Under the terms of the deal, Cellular Goods will complete a reverse takeover of the Cannaray subsidiaries and acquire 100% of the issued share capital. Read more here.

Amazon Still Says No to Drugs, Boots Marijuana Businesses

Amazon says its guidelines around drugs and drug paraphernalia are longstanding and state that products can’t be primarily designed for making, preparing or using a controlled substance. For example, grinders that are equipped with features specifically for marijuana-related use are not allowed on the platform. Read more here.

4Front Ventures Launches Premier California Cannabis Brand in Massachusetts

4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF), a vertically integrated, multistate cannabis operator and retailer, has brought its premier California cannabis brand, Island Cannabis Co., to Massachusetts. Following the company’s acquisition of Island in April, 4Front began cultivating 11 new Island flower strains at its state-of-art flower facilities located in Holliston, Georgetown and Worcester, Massachusetts. Read more here.


StaffJuly 7, 2022
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The dispensary tip jar continues to grab the headlines with the latest news of a settlement between Massachusetts cannabis company Bud’s Goods and Provisions and the state’s Fair Labor Division of the Attorney general’s office. The popular cannabis dispensary agreed to repay numerous current and former employees as part of a $33,000 settlement with the Massachusetts Attorney General following a complaint from an employee that the company kept tips from its budtenders. 68 employees who worked between March 1, 2021, and the end of 2021 will receive between $20 and $1,500.

“Our employer is taking our tips,” wrote Victoria-Lynne Rushton in a complaint submitted to the Attorney General last year. “They have us put the tips into a lock box, we do not see the money and we’re not told what was made each shift.”

The Attorney General’s Fair Labor Division cited Bud’s Goods & Provisions and its CEO Alex Mazin, individually, for violating the state’s law against improper tip deductions on May 3. “Every employee in Massachusetts is entitled to workplace benefits and protections, which is why our office’s Fair Labor Division works actively to protect earned wages, hold employers accountable to our laws, and inform and educate businesses about their obligations,” said a spokesperson for the Attorney General. “We are committed to ensuring a level playing field for honest employers and a fair environment for workers.”

The employees complained that the money wasn’t fairly distributed. The evening workers felt that they earned the highest tips but had to share those tips with co-workers that didn’t interact with the public. The money was typically used to buy food for the employees. This created another issue because they accused the company of buying food during the day and by the time the evening employees arrived, the food had been sitting out all day. This especially irked the evening crew who believed they earned the higher tips.

To Tip Or Not To Tip

This settlement comes at the same time as Curaleaf (OTC: CURLF) recently pushed back against an employee lawsuit that sued the company for the contents of a tip jar. Former employee Morgan Heller filed a complaint in March accusing the company of not giving the employees $126,000 that had been collected in tip jars. Heller says the managers took the money instead. Curaleaf wants the Illinois federal court to dismiss those claims saying it never agreed to pay those tips to workers in the first place. Curaleaf’s position is that tips were not part of the employment agreement and had told the employees as such.

A Curaleaf spokesperson said, “It’s unfortunate that this disagreement has become a legal matter, but facts are facts. No managers (or anyone) at Curaleaf ever stole tips and Curaleaf strongly denies the allegations in the complaint. As with any lawsuit, allegations are made and fact-finding occurs throughout the course of the litigation. We stand by our decision to request this baseless lawsuit be dismissed.”

Mass Fights For Cannabis Workers

Massachusetts has proven itself to be on the side of the cannabis workers. Last year, the AG’s Fair Labor Division began an investigation in December 2020 following a complaint from a worker about premium pay. Fair Labor’s investigation determined that 282 employees were owed hundreds of thousands of dollars in premium pay for work performed on Sundays and covered holidays. Under the terms of the settlement with the AG’s Office, Theory Wellness has agreed to pay in full (roughly $300,000) the premium wages owed to impacted employees. The company cooperated with the investigation and has since come into compliance with the premium and holiday pay laws.


Debra BorchardtSeptember 13, 2021
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The former mayor of Massachusett’s town Fall River Mayor Jasiel Correia could face 11 years in prison for shaking down cannabis license applicants. The corrupt mayor was found guilty in May for stealing from investors with regards to an app he developed, but also for extorting money from cannabis applicants. He was convicted of 21 of the 24 counts he faced. On Friday, the government suggested Correia should be sentenced to 11 years in prison, then 24 months’ supervised release, $298,190 in restitution to certain SnoOwl investors. In addition, they are requesting that he pay $20,473 in restitution to the IRS, forfeit $566,740, and a final mandatory special assessment of $2,100.

In the government filing, which was posted on Law360, it was noted that Correia remained defiant despite having 33 witnesses testify against him saying that the truth would come out. Correia even suggested he refused a plea deal because he was innocent, but the government said no such deal had been offered.

Marijuana Vendors

The sentencing request noted that several immunized marijuana vendors testified at trial that “they felt forced to pay Correia a bribe if they wanted a license to operate in Fall River. While the marijuana vendors are not victims under the Crime Victims’ Rights Act due to their participation in the extortion conspiracies, it is nevertheless worth noting the adverse collateral consequences each has had to endure, including lost business opportunities, retaining counsel and obtaining immunity, and having to testify publicly, subject to effective cross-examination.”

The filing highlighted Matthew Pichette who provided emotional testimony regarding the humiliation his family endured when the bribe he agreed to pay (designed as campaign
contributions) became public, including the formal matter involving his wife that was initiated by the Office of Campaign Finance, ultimately resulting in a $5,000 fine. The filing also stated that “like Pichette, Charles Saliby testified that he was never able to open his business, despite all the money he had invested, “[b]ecause the Cannabis Control Commission deemed me unsuitable because of my involvement with Jasiel Correia.”

Impact Fees

The Mayor was able to extort the applicants through a Massachusetts “community impact fee.” The state allowed communities to charge cannabis companies 3% as a way to cover higher costs associated with the new businesses. While some states used the money for things like traffic improvements, Correia took the money for himself. Correia managed to get $600,000 in illegal cash payments from four cannabis applicants looking to get his approval.

The mayor’s former chief of staff Genoveva Andrade pled guilty in December for shaking down the applicants. Andrade admitted to helping Correia get $150,000 in exchange for a critical approval letter from the city, which would have allowed for an adult-use dispensary. Andrade also paid Correia nearly $23,000 in bribes in order to be named chief of staff. Andrade’s plea deal was rejected by a judge in June.

 

 


StaffSeptember 13, 2021
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Jushi Holdings Inc. (CSE: JUSH) (OTCQX: JUSHF) has closed its previously announced acquisition of Massachusetts-based Nature’s Remedy in a deal valued at $91.2 million. Jushi also noted that the deal was revised resulting in 4.3 million fewer shares issued to Nature’s Remedy. However, Jushi did pay an additional $2.9 million in cash to acquire excess inventory worth $17.5 to $22.5 million at prevailing wholesale prices.

“We are excited to officially enter the Massachusetts market, adding Nature’s Remedy, a vertically integrated business operating high-quality, well-managed assets” said Jim Cacioppo, Chief Executive Officer, Chairman, and Founder of Jushi. “With its strong, defensible retail position and a scalable cultivation footprint, Nature’s Remedy offers significant opportunities for us to expand and grow our presence in this rapidly maturing adult-use market. I look forward to working with our new colleagues to introduce our complete line of industry-leading brands and products into the wholesale market and at Nature’s Remedy’s retail stores.”

Nature’s Remedy

Nature’s Remedy currently operates two retail dispensaries, in Millbury, MA and Tyngsborough, MA, and a 50,000 sq. ft. cultivation and production facility in Lakeville, MA, with approximately 22,000 sq. ft. of high-quality indoor flower canopy and state-of-the-art extraction and manufacturing capabilities. The company expects to execute on the significant opportunity to expand Nature’s Remedy’s wholesale revenue in the fourth quarter, driven by additional cultivation capacity as well as the planned resale of excess inventory at the Lakeville Facility.

Deal Terms

Jushi acquired Nature’s Remedy for an upfront payment of $91.2 million, which included $40.0 million in cash, approximately $34.7 million in stock, an $11.5 million unsecured three-year note and a $5.0 million unsecured five-year note. Jushi has also agreed to issue up to an additional $5.0 million in stock and a $5 million increase to the principal balance of the 3-Year Note upon the occurrence or non-occurrence of certain conditions after the closing date, bringing the total potential consideration for the acquisition paid by the company to $101.2 million. The revised purchase price represents a multiple of 2.7 to 3.0x Nature’s Remedy’s expected full-year 2022 EBITDA of US$34 to US$38 million.


Julie AitchesonMarch 2, 2021
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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.

 


StaffFebruary 23, 2021
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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 StaffNovember 25, 2020

1min1010

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.


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