Virginia Archives - Green Market Report

StaffStaffMay 3, 2021
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Green Thumb Industries Inc. (GTI) (OTCQX: GTBIF) is buying Virginia-based  Dharma Pharmaceuticals LLC for an undisclosed amount. the acquisition is expected to close in the second half of 2021. Dharma was the first operator to provide medical products to Virginia’s patients in 2020 and is strategically positioned to scale in the emerging adult-use market. Last month, Virginia became the first Southeastern state in the United States to legalize adult-use cannabis after the Virginia General Assembly approved legislation.

“Change is happening. We are seeing sweeping cannabis reform across the country in favor of expanded access. This momentum has finally reached the first state south of the Mason-Dixon line to ratify adult-use cannabis sales and we are excited to work with the Dharma team in Virginia,” said Green Thumb Founder and Chief Executive Officer Ben Kovler. “This industry will create consequential economic opportunities and social change in a part of the country that remains void of legal access to cannabis today. We look forward to serving Virginia’s current medical patients, and future adult-use consumers, while supporting the tremendous positive impact that the legal cannabis industry can have on local communities.”

Currently, Virginia has only legalized medical marijuana and while adult use has been also legalized, sales won’t begin until January 2024. With a population of nearly 8.5 million, Virginia is expected to generate over $1.5 billion in legal cannabis sales, which would create significant tax revenue for the Commonwealth and employ thousands of Virginians.

GTI has been rapidly expanding throughout the U.S. Once this deal is closed, the company will have a presence in 13 markets: California, Colorado, Connecticut, Florida, Illinois, Maryland, Massachusetts, Nevada, New Jersey, New York, Ohio, Pennsylvania, and Virginia. GTI noted that as one of only five licenses in the Virginia medical cannabis market, Dharma is licensed to grow, process, and retail cannabis directly to consumers. In a statement, the company said that the acquisition includes an existing production facility and retail dispensary located in Abingdon, VA. Green Thumb will also have the opportunity to open up to five additional retail locations in the Commonwealth.

Kevin Gibbs, Partner and Head of Operations of Merida Capital Holdings, which is the current majority-equity owner of Dharma, added, “Over the past two years our team has worked hard to introduce the first medical cannabis products to Virginia’s patients. Together with Green Thumb, Dharma’s offering will expand to prepare for the introduction of adult-use sales in the first market in the Southeastern United States.”

 


Debra BorchardtDebra BorchardtApril 8, 2021
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Virginia is now the 17th state to legalize cannabis for adult use and the fourth state to do so by passing a bill through its state legislature versus going to the voters. On Wednesday, Virginia lawmakers approved a bill that will legalize, regulate, and tax cannabis sales for adults 21 and over.   It will probably be another two years before the state sees any retail sales.

“Virginia legislators are proving that it is possible to work swiftly to pass legislation that will not only legalize cannabis but also address the disproportionate harm caused by decades of prohibition,” said Steve Hawkins, MPP’s executive director. “Virginia is just the latest state to end cannabis prohibition and replace it with sensible legalization and regulation for adults 21 and over. MPP is proud to have played an important role in three of the four states where legislatures have voted to legalize cannabis — Vermont, Illinois, and now, Virginia.” Newly released statewide polling data finds that 68 percent of registered voters in Virginia, including majorities of Democrats and Republicans, support legalizing marijuana for adults.

MPP said that in addition to legalizing cannabis for adults 21 and over, the law will establish a Cannabis Equity Reinvestment Fund that will be used to support persons, families, and communities that have been disproportionately affected by enforcement of cannabis laws. Legal possession and personal cultivation will begin on July 1, 2021.

You can find a summary of the bill here.

“It’s encouraging to see that legislators in so many states are embracing regulation as an alternative to failed prohibition policies,” said Matt Simon, MPP’s senior legislative analyst. “Virginia is the first state in the South to legalize cannabis, and we can be certain that others will follow as public support continues to grow.”

NORML Development Director Jenn Michelle Pedini, who also serves as the Executive Director of Virginia NORML, said: “This is an incredible victory for Virginia. Legalization will bring an end to the thousands of low-level marijuana infractions occurring annually in the Commonwealth — ending a discriminatory practice that far too often targets Virginians who are young, poor, and people of color.”

Size of Market

A state-commissioned report suggested that “Depending on demand and the tax rate selected, commercial marijuana could produce $31–$62 million during the first full year of sales, depending on the state’s chosen tax rate (figure). By the fifth year of sales, commercial marijuana could produce $154–$308 million in tax revenue. If the state set the marijuana sales tax at 25 percent, there would eventually be an estimated $177–$300 million in net tax revenue after operational costs ($147–$250 million if the marijuana sales tax rate was set at 20 percent).” The report also said that Virginia’s marijuana industry could eventually be responsible for creating approximately 11,000 to more than 18,000 jobs (0.3 to 0.5 percent of the state’s workforce).

“Virginia Alcohol Board Control Authority could need $7–$9 million annually to hire approximately 85 to 105 staff. Creating a new agency could cost $9–$12 million annually to hire approximately 110 to 140 staff. VABC would also be able to implement its new responsibilities faster than a new agency.”

Activists Celebrate A Win

Majority Leader Charniele Herring added: “It is a huge day for equity in the Commonwealth. Virginia is now the first state in the South to legalize recreational marijuana use, and I am so proud to have been able to carry this monumental legislation. I am ever grateful for the commitment and advocacy from NORML on this topic. Getting Virginia to this day would not have been possible without their hard work and dedication to the cause.”

Senator Adam Ebbin said: “The passage of SB1406 caps off years of struggle to reform our broken and outdated marijuana laws and begins the deliberate steps to repeal the harms of the failed prohibition. I am thankful to NORML, the Governor, and my colleagues for moving this 283 bill from inception to passage over the last four months, and look forward to continuing to partner with them to establish a regulated, equity focused, adult-use marketplace in the coming years.”

“Virginians were very clear that they are ready for legalization this year, sending over 8,800 emails in support of these measures,” Pedini added.


Debra BorchardtDebra BorchardtMarch 1, 2021
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The cannabis community is certainly pleased to see that the state of Virginia has legalized adult-use cannabis, but it will be some time before sales can begin. Still, despite support for the legislation it looked to be a nail-biter to the end. The Virginia House and Senate lawmakers were in agreement on passing the law, but they differed on just exactly what it would look like.

The two sides have been working over the past few weeks to reach a compromise, which was beginning to look less possible. Then on Saturday, it seemed the law just managed to squeak through. Marijuana Moment reported, “The Senate voted 20-19 to approve the conference committee report on its bill as well as the identical version for the House legislation. The House voted to approve the conference report on its bill, 48-43, with two abstentions. When considering the Senate version, the House voted 47-44, with one abstention.”

The next stop for the legislation goes to Democratic Gov. Ralph Northam, who supports legalization. However, it will be some time before Virginians will actually be able to purchase adult-use cannabis in the state.

Sales Begin January 1, 2024

Another major area of contention dealt with how the state would approach cannabis possession in the time between the bill’s signing and implementation of legal sales going into effect. Under both versions, the adult-use market wouldn’t launch until January 1, 2024 to give the state time to establish a regulatory agency to oversee the program. While the Senate had wanted to make the legalization of simple possession and home cultivation take effect starting on July 1 of this year, negotiators ultimately agreed to delay it to coincide with commercialization in 2024.”

One company that was intently focused on the outcome of this legislature was Jushi Holdings (OTC: JUSHF). In the fall of 2020, Jushi, through its 100% owned Virginia-based pharmaceutical process permit holder, Dalitso LLC, started operations at its 93,000 sq. ft. cultivation, manufacturing, processing and retail facility in Manassas, and opened the first of six dispensaries operating under the company’s retail brand, BEYOND / HELLO on December 1, 2020. Dalitso is currently one of only five applicants to have received approval for a pharmaceutical processor permit issued by the Virginia Board of Pharmacy, and the designated area for Dalitso to operate is Health Service Area II, in Northern Virginia, which has a population of approximately 2.5 million people or nearly 30% of the state’s population. This area includes two of Virginia’s most densely populated counties, Fairfax and Prince William County.

“The adult-use cannabis legislation passed by the Virginia General Assembly is a critically important first step on the path toward legalization,” said Jushi CEO and Founder Jim Cacioppo. “These bills begin to accomplish fundamental justice and equity priorities as well as promote public health.  Jushi appreciates the General Assembly’s commitment to address these complex issues, especially the passion shown by Senators Adam Ebbin and Louise Lucas and Delegate Charniele Herring in answering Governor Ralph Northam’s call for legalization.
Adding flower to Virginia’s medical cannabis program is a critical advance and Jushi applauds Delegate Cliff Hayes and Senator Louise Lucas on this achievement.  We expect that around the end of the year, this new legislation will allow pharmaceutical processors to make medicines available at much lower price point and expand access to patients who could otherwise not afford sustained medical cannabis therapy.”


Cynthia SalarizadehCynthia SalarizadehOctober 12, 2017
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For anyone who truly understands the art of influence, they understand that the most effective form of communication for any brand, idea or movement is grassroots based and best achieved through basic word of mouth, and ideally in person. That is the secret sauce to influential bodies for anything I can think of.  This is also what defines our nation’s capitol, Washington D.C. This is the heart of where our federal government resides and therefore where cannabis requires the most influence and lobbying effort on a federal level.

In our fourth study for the Green Economics series, analyzed in collaboration with our partner data provider Consumer Research Around Cannabis, we took a look at the consumer profile and opinions of those who live and operate in the D.C. Market. We dove into what the patterns and data provided on their opinions and behavior. What we found was a little more than interesting indeed.

The data that was collected used a sample size of 1,368 survey respondents within the D.C. Market that representing an estimated 5,187,362 adults and includes adjacent portions of Virginia, Maryland, and West Virginia along with the District of Columbia. Of that group 8.0% of the market responded that they had purchased cannabis from a legal retailer/dispensary.

In response to what the numbers revealed for this market, Jeffrey Stein of Consumer Research Around Cannabis stated that, “I think it’s clear that the data debunks many of the negative connotations attached to cannabis use – whether for medicinal or recreational use.  They are well educated, have good jobs and are financially sound.  Cannabis consumer data like this should be a wake-up call to government officials and companies that have thus far ignored this growing consumer group.”

The legal cannabis consumer was 30% more likely to be employed full-time versus the average adult in the D.C. market. As far as the occupations for this consumer, we found that almost 32.3% are considered professional, 55.3 % are labeled “white collar” while only 7.5% were considered “blue collar”, 30.5% own businesses, are a partner in a business or are at the level of corporate officer. These are occupations that are far from what the old stereotype of a “stoner” was thought to be doing with their careers.

In regard to political affiliation, 48% of the D.C. market cannabis consumer consider themselves as Independents, which is 16% higher than the local DC market average.  They are less likely than average to have voted Democrat last time around (77 index, 23% less likely vs. the average DC market adult).  They are also slightly less likely to consider themselves liberals than the average (96 index, 4% less likely vs. the average DC market adult).

When looking at the income of cannabis consumers in the D.C. Market, we see that almost 76% of them make a household over $50,000 a year or more, with 37% saying they are making over $100,000. As far as education, the numbers were impressive. 68.3% have at least an undergraduate degree or more with 36.3% have advanced degrees, which is 47% higher than the market average for D.C.

What we found extremely interesting in this study, was that that 38% are more likely to have a government job than the average person. Of that amount of government employees, 64% approve of either legalized adult use or medical only regulation, with 11% disapproving of legalization of both. Almost 25% are of no opinion on the issue.

“Considering Washington DC is where our federal legislation is created, results that indicate a significant number of government employees favoring the legality of its consumption as well as consuming it themselves, is clear indication that prohibition is outdated,” said Stein.

Government employees represent 17.9% of cannabis consumers who use cannabis for relaxation when alone, 20.5% purchase cannabis to enhance their experiences on their free time and with friends, and 18.1% buy cannabis to use it for its ability to suppress depression and anxiety.

Of the people who visited a cannabis retailer or dispensary 3 or more times a month. 34.1% were government employees. This same group represented 31.2% of customers who visited 3 or more times a week. 37.3% spending between $100-299 on flower and 50% spending $300 or more on concentrates are government employees.

So, we can conclude that a large segment of the D.C market cannabis consumer is smart, comfortably employed, educated, a government employee or professional, and loves their concentrates! Let’s hope this sophisticated group can help influence on federal policy toward cannabis prohibition in a positive way. They are arguably positioned best to help influence advance the industry with better legislation best.


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