The state may now start issuing licenses in four additional regions, including Brooklyn.
The state may now start issuing licenses in four additional regions, including Brooklyn.
Axel Bernabe responds to concerns that the TPI rules will restrict funding for the industry.
The Daily Hit is a recap of the top financial news stories for March 2, 2023.
New York Doubling Social Equity Cannabis Retail Licenses to 300
New York marijuana regulators announced at the Thursday meeting of the state Cannabis Control Board that they will be doubling the number of “justice-involved” retail permits, from 150 to 300. The executive director of the New York Office of Cannabis Management said the change was due in part to many qualified applicants paying for their own retail locations instead of relying on the state to provide shops. Read more here.
Consternation in New York Over Social Equity Loan Uncertainty
Mixed messaging, changing policies, and a lack of clarity on how exactly the state of New York intends to finance scores of social equity cannabis shops has several marijuana industry stakeholders in the Empire State crying foul. Read more here.
Florida Adult-Use Marijuana Campaign Halfway on Signature Gathering
A campaign led by Florida cannabis giant Trulieve to legalize adult use marijuana in the state is nearing the halfway mark in its signature gathering to qualify for the 2024 ballot. The campaign – Smart & Safe Florida – has collected more than of the 891,589 voter signatures it needs to make the general election ballot. Read more here.
Pervasip to Spin Out Artizen Cannabis
Pervasip Corp. (OTCPK: PVSP) is spinning off its cannabis company, Artizen, after struggling to get the financing it needed. Pervasip acquired Artizen in September 2021 when its share prices were higher and the company secured a $3 million preferred equity financing on fixed price conversion terms. However, CEO German Burtscher said in a letter to shareholders that an equity infusion was still needed and hoped that by spinning Artizen out to the OTC Market Place, it could justify a valuation of $50 million. Read more here.
‘Days of Fat Margins And Easy Money’ Are Over, Says GTI Chief
The Green Rush is all but over, proclaimed Green Thumb Industries (CSE: GTII) (OTCQX: GTBIF) CEO Ben Kovler this week in the company’s fourth-quarter earnings call. Kovler said more industry contraction is on the way, despite market forecasts that project continuing growth. Read more here.
Pelorus Equity Group
The Pelorus Fund, a privately held mortgage real estate investment trust with specialty lending to cannabis-use and cannabis-related properties, recorded two new originations in the fourth quarter, for a total value of $63 million, taking the total portfolio of loan commitments from $301 million to $372 million, for 23.6% growth for the quarter. Read more here.
Cansortium Inc. (CSE: TIUM.U) (OTCQX: CNTMF), a vertically integrated, multistate cannabis company, closed a non-brokered private placement offering of 30 million units of the company at a price of $0.10 per unit for aggregate gross proceeds of $3 million. The company said it will use the net proceeds for general corporate and working capital purposes. Read more here.
License holders say they have yet to see documentation on the program.
New York has been conspicuously silent about cannabis sales.
A second New York dispensary is set to open in Manhattan more than two weeks after the state saw its first legal adult-use sale.
The “Union Square Travel Agency: A Cannabis Store,” will be located at the former home of an old Chase bank on the corner of Broadway and East 13th Street, across from the Union Square subway station.
The store plans to open in February, but have a soft opening on Friday at a facility with an entrance at 62 East 13th St. while the main 5,000-square-foot space is being built out.
Of the proceeds, 51% will go to the Doe Fund, which provides housing, career training and counseling to marginalized populations in New York City. Additionally, the store will only sell products cultivated in the state with a focus on women and BIPOC-owned businesses.
The dispensary will be open from 10 a.m. to 10 p.m. on weekdays and 10 a.m. to 11 p.m. on weekends, seven days a week.
The first legal adult-use dispensary opened Dec. 28 at a former Gap retail store in lower Manhattan near Astor Place. The historic opening marked a long-awaited launch of a state marijuana market that many analysts project could become one of the country’s most promising.
Despite the proliferation of numerous illegal shops throughout the state, Gov. Kathy Hochul announced on Dec. 21 that Housing Works, is a minority-controlled nonprofit that focuses on helping those with HIV and AIDS, would be the first of 36 recently licensed dispensaries to begin selling cannabis to the general public. Housing Works has been known for running a small chain of charitable retail outlets.
The state is expected to issue an additional 139 licenses in the coming months for about 900 applicants. The state reserved its first round of retail licenses for applicants with marijuana convictions or their relatives, plus some nonprofit groups.
It also planned a $200 million public-private fund to aid social equity applicants with real estate, though its status and how much progress has been made is not exactly clear. Industry stakeholders told Green Market Report in November that there’s been little news on how much progress has been made by fund managers in actually raising capital or getting state monies deposited, so that actual retail spaces can be leased for social equity cannabis companies.
The Dormitory Authority of the State of New York then missed its Dec. 30 deadline to report to the governor, the legislature and the public on its status and details about the social equity program and its relationship with the firm it selected as a fund manager. A DASNY spokesperson told NY Cannabis Insider last week that the agency “will have the report out soon.”
The New York Office of Cannabis Management, also extended the license application window for marijuana testing labs to March 31, from its originally scheduled closure of New Year’s Eve.
Chris Alexander, the executive director of the OCM, told the Cannabis Control Board at a public meeting in December that adding that the state is still looking for top-notch lab candidates.“That is a cornerstone of the market that we’re building,” he said.
Alexander also said that the state is rolling out more resources to support the legal marijuana market and to suppress the thriving illicit trade, including:
The flood of jobs related to the new industry have yet to materialize.
Housing Works will begin sales in Manhattan next week.
Questions remain on how payments will be processed for delivery.
The Daily Hit is a recap of cannabis business news for Dec. 8, 2022.
New York Appeals Cannabis Licensing Injunction to Second Circuit
New York cannabis regulators are taking a licensing fight to the next level – literally. On Thursday, Attorney General Letitia James filed a notice to request that the Second Circuit Court of Appeals throw out an injunction issued by a federal judge that brought retail marijuana licensing to a halt in five of the state’s regions. Read more here.
New York Regulators Choose Harlem for First Recreational Dispensary Site
The Dormitory Authority of the State of New York (DASNY) revealed the news during a meeting on Monday, when agency CEO Reuben McDaniel III said the office had signed its first lease for an adult-use marijuana store at 248 W. 125th St. Read more here.
Stiiizy Accused of Inflating THC Potency, Misleading Marketing
Counsel representing “millions” of former customers who purchased cannabis products with inaccurate THC-content labels filed the class action lawsuit against Ironworks Collective Inc. and Stiiizy LLC, saying that the companies overcharged consumers by illegally selling products whose THC content was represented as substantially higher than it actually was. Read more here.
Presidential Cannabis Accused of False Advertising on THC Claims
Another cannabis company is accused of overinflating the amount of THC in its cannabis products. The same law firm that filed the allegations against Stiiizy, Dovel & Luner, is also accusing VO Leasing Corp., which makes, sells, distributes, and markets the “Presidential” brand. Read more here.
Brittney Griner Gets Released from Russian Prison
Several news outlets reported that professional basketball player Brittney Griner was released from a Russian prison as part of a prisoner swap. President Joe Biden announced on Twitter that he had spoken to Griner and that she was safe and on her way home. Read more here.
The Flowr Corp.
The Flowr Canada Holdings ULC , a subsidiary of The Flowr Corp., has entered into a binding agreement with Avant Brands K1 Inc, formerly, 1000343100 Ontario Inc., pursuant to which Avant will acquire all of the shares of The Flowr Group (Okanagan) Inc. and certain other assets of the company, comprising substantially all of the assets of the company, for total consideration of $5,115,000 plus the amount of the closing DIP loan and the assumed liabilities. Read more here.
Cannabis Global Inc.
Cannabis Global, Inc. (OTC: CBGL), a licensed Los Angeles-based manufacturer and distributor in the cannabis sector, announced the successful conclusion of debt settlement negotiations with two debtholders resulting in the elimination of approximately $813,000 of long-term debt from the company’s balance sheet. Read more here.
Jushi Holdings Inc.
Jushi Holdings Inc. (CSE: JUSH) (OTCQX: JUSHF), a vertically integrated, multistate cannabis operator, closed its previously announced private offering of approximately $69 million aggregate principal amount of its 12% second lien notes and detached warrants to purchase up to approximately 16 million of the company’s subordinate voting shares at an exercise price of $2.086. The company used the gross proceeds from the offering together with approximately $9 million of cash on hand to repurchase and redeem all of its outstanding existing 10% senior secured notes due January 2023. Read more here.
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