Hemp Weekly

Marijuana MSO Trulieve to net $350M from 8% debt financing

(This story has been updated with the announcement that Trulieve has completed its acquisition of Harvest Health & Recreation.)

Florida-based marijuana multistate operator Trulieve Cannabis announced it is on the verge of raising $350 million of capital through the private sale of five-year notes at an 8% annual interest rate.

Trulieve said in a news release that it has received commitments for the senior secured notes and expects the deal to close Oct. 6, subject to conditions that include the approval of the Canadian Securities Exchange.

Separately, the company said it completed its acquisition of Arizona-headquartered Harvest Health & Recreation. When the all-stock purchase was announced in May, it was valued at $2.1 billion and billed as the largest U.S. marijuana transaction to date.

Despite the large acquisition, Trulieve has managed to keep its borrowing costs relatively low.

The 8% annual interest rate for the five-year notes is one of the lowest yet for a public MSO, and the $350 million raise is believed to be one of the biggest yet.

In general, large MSOs are enjoying lower interest rates on debt this year because of stronger balance sheets, improved liquidity and the sense that federal marijuana legalization is inevitable though perhaps not imminent.

Illinois-based Green Thumb Industries got what is believed to be the lowest annual interest rate for a public MSO this year of 7% on a $217 million, three-year loan.

Trulieve CEO Kim Rivers said in a statement that the financing will provide capital to retire a portion of Harvest’s higher-interest debt “and will allow us to use our combined cash on hand to aggressively pursue strategic growth initiatives across key markets.”

Oregon regulators suggest extending cannabis grow license pause until 2024

Oregon’s cannabis regulatory agency is recommending that state lawmakers continue a moratorium on new marijuana cultivation licenses until 2024.

In 2019, Oregon lawmakers voted to halt issuing new recreational marijuana licenses for two years, citing overproduction that was causing the market’s wholesale prices to tank.

The statutory moratorium expires next year.

Oregon Liquor and Cannabis Commission Executive Director Steve Marks said the moratorium extension will be recommended to the state Legislature and governor’s office.

In related news, the commission approved penalties for five cannabis companies that violated state rules.

The following companies will surrender their recreational marijuana licenses:

Clay Wolf, processor, seven violations.

Takilma Road Operator, producer, seven violations.

Hydroberry Holdings, producer, three violations.

River Dew Farms, producer, three violations.

Waterwheel Ventures, producer, three violations.

Another massive bust of illegal marijuana grows in California

California law enforcement officials this week announced two days worth of raids at several locations that produced the largest illegal marijuana grow operation in the history of the San Francisco Bay Area.

As of Thursday, the Alameda County Sheriff’s Office estimated that deputies had seized roughly 100,000 marijuana plants, 12,000 pounds of cannabis flower, about $10 million in cash and 37.6 tons of plants and materials from at least a dozen sites where search warrants were executed, The (San Jose) Mercury News reported.

The warrants and raids were the result of an 18-month-long investigation, and Alameda County Sheriff Sgt. Ray Kelly predicted the busts – and resulting arrests of several suspects – would have little to no impact on California’s thriving illicit cannabis market.

“There is nothing to stop them from doing it again,” he said. “It’s such a lucrative business.”

The history-making bust is one of several conducted already this year in California.

In June, authorities uncovered another huge unlicensed marijuana grow operation in Los Angeles County that was worth an estimated $1 billion.

Members of California’s legal marijuana market cite the underground market as one of the state’s biggest hurdles to success, but law enforcement officials say their hands are largely tied when it comes to effective crackdown efforts.

Cole Memo author joins National Cannabis Roundtable as adviser

The National Cannabis Roundtable announced the formation of a new advisory board this week, and its members include former Deputy U.S. Attorney General James Cole, the author of several influential U.S. Department of Justice memos that paved the road for the modern U.S. marijuana market nearly a decade ago.

Cole joins several other major political figures from both sides of the aisle already associated with NCR, including:

Former House Speaker John Boehner, a Republican.

Former Secretary of Health and Human Services Kathleen Sebelius, a Democrat.

Former U.S. Sen. Cory Gardner, a Colorado Republican.

“Cannabis reform is incredibly complicated not least because of the robust state marketplaces, which have

developed under federal prohibition,” Cole said in a news release.

Cole added that he’s “looking forward” to being part of the federal legalization debate as Congress continues grappling with marijuana-related bills such as the MORE Act, the SAFE Banking Act and the Cannabis Administration and Opportunity Act.

Cole, who served in the Obama administration’s DOJ from 2010 to 2015, was the principal author of three separate memos.

The most influential of those likely was in 2013, after Colorado and Washington State voters approved recreational legalization in 2012. The memo effectively gave both states the green light to go ahead with marijuana sales to all adults 21 and older without federal intervention.

Though all of Cole’s memos were rescinded in 2018 by then-Attorney General Jeff Sessions, their permissiveness allowed the cannabis industry to truly take root across the country without fear of reprisals by the U.S. Drug Enforcement Administration.

And that climate has led the marijuana business to its current status as one of the fastest-growing industries in the nation.

Report: Female, minority executives lose ground in marijuana industry

By Jenel Stelton-HoltmeierThe percentage of executive positions held by women and minorities in the U.S. cannabis industry fell between 2019 and 2021, according to a new report now available from MJBizDaily.

Notably, in 2021, the percentage of women who hold executive positions, 22.1%, fell below the average recorded across the larger U.S. business landscape, 29.8%, according to the 2021 report, “Women & Minorities in the Cannabis Industry.”

Previously, the portion of executive positions held by women in the cannabis industry – 36.8% in 2019 – consistently outpaced that of mainstream businesses.

This shift isn’t driven solely by a decline in female cannabis executives.

The latest data from the U.S. Bureau of Labor Statistics indicates that women hold a higher percentage of these roles in the broader economy – up to nearly 30% from only 21% in 2018.

Image of Women & Minorities report cover

The new report from MJBizDaily, “Women & Minorities in the Cannabis Industry,” can be  downloaded here for free.

The percentage of executive positions held by minorities fell to 13.1% in 2021, down from 28.0% in 2019 but in line with the average across all U.S. businesses.

This is despite increased focus at the state level to improve racial diversity within the cannabis industry.

In previous years, minorities held a higher proportion of executive positions at cannabis businesses than they did at mainstream companies.

Industry experts suggest that competitive markets tend to favor businesses with white men in ownership and leadership positions, primarily because of their established access to capital.

In addition, more executives from mainstream sectors are opting into the cannabis industry as a new opportunity, accelerating the increase of white men in power positions.

AFC Gamma expands Justice Cannabis loan to $75 million

Marijuana industry finance company AFC Gamma significantly boosted a loan to Chicago-based Justice Cannabis Co., increasing it from the $22 million figure announced in May to $75.4 million.

Justice Cannabis plans to use the additional capital to further develop cultivation and processing operations in New Jersey and Pennsylvania, purchase assets and refinance existing debt.

Florida-based AFC Gamma committed an additional $43.4 million, and another $10 million was syndicated to an affiliate, according to a news release.

The loan is secured by a first-lien mortgage on Justice Cannabis-owned real estate in New Jersey and Pennsylvania, and other commercial interests. The interest rate wasn’t disclosed.

AFC Gamma CEO Leonard Tannenbaum said in the release that the increase in the senior secured credit facility reflects the lender’s belief that Justice Cannabis “has one of the best license stacks for a multistate operator.”

New Jersey and Pennsylvania both have “favorable supply and demand dynamics,” Tannenbaum added.

New Jersey approved a recreational cannabis market earlier this year and is preparing for a 2022 launch.

Pennsylvania’s medical cannabis industry has been sizzling, although price competition has increased.

Pressure is increasing on Pennsylvania to legalize adult use to keep pace with neighboring New Jersey.

Lawmakers in Pennsylvania recently introduced an adult-use bill, but the measure could face stiff opposition in the GOP-controlled state Senate.

The Parent Co. agrees to buy marijuana firm Coastal for up to $56.2M

The Parent Co. said Monday it agreed to acquire 100% of the equity of California-based Coastal Holding Co. in a cash-and-stock deal worth up to $56.2 million, adding a new wrinkle to a set of lawsuits filed by the co-founders of MedMen Enterprises against five Coastal co-owners.

In a news release, San Jose, California-based The Parent Co. said it will pay for the transaction with up to $16.2 million in cash and another $20 million in its common stock upon signing management-services agreements at each Coastal location and another $20 million in stock “contingent upon the successful transfer of Coastal’ s cannabis licenses.”

The vertically integrated operator also said it will inherit a minority stake that Coastal holds in a Southern California dispensary and an option to purchase the remainder of that business for $9 million in cash.

The transactions are expected to close next year.

But there’s a potential stumbling block: Former MedMen executives Adam Bierman and Andrew Modlin, who are minority owners of Coastal, have sued other co-owners to halt the sale of the company.

Coastal holds eight marijuana business licenses around Southern and Central California for retail, delivery, distribution and manufacturing.

Los Angeles-based attorney Hilary Bricken said last week that litigation like what Coastal is facing might be enough to cause potential buyers to change their minds.

According to court records, one would-be buyer of Coastal has backed out of a similar acquisition deal struck earlier this year.

The Parent Co. said in the release that the Coastal deal would expand its California retail store and delivery depot footprints to 11 and six, respectively, and position the company “with the second largest operating retail dispensary and delivery hub in the State with an expanded reach to over 80% of California’s population.”

The Parent Co., known formally as TPCO Holding Corp., trades on the NEO Exchange in Canada under the ticker symbol GRAM.U and on the over-the-counter markets as GRAMF.

Cannabis MSO Ascend Wellness to acquire two Ohio dispensaries

New York-based cannabis multistate operator Ascend Wellness Holdings is expanding its vertically integrated medical marijuana operation in Ohio.

According to a news release, Ascend Wellness has:

Completed the acquisition of BCCO, a medical marijuana dispensary operating as Ohio Provisions in Carroll.

Entered into an agreement to acquire Coshocton-based dispensary Ohio Cannabis Clinic.

Terms of the deals were not disclosed.

Columbus is the closest big city to the two dispensaries.

“With adult-use legislation currently under consideration (in Ohio), now is an opportune time to scale our footprint,” said Abner Kurtin, CEO and chair of Ascend Wellness.

Ascend also owns cultivation and processing facilities in Monroe, Ohio.

Ohio regulators recently announced that medical marijuana growers may request an expansion of their cultivation operations, which could ease product shortages, boost sales and allow cultivators to better meet patient demand.

Oklahoma medical marijuana chief calls for more inspectors, regulations

Oklahoma’s medical marijuana market is one of the loosest in terms of regulations of any agency in the state, but the program’s new chief cannabis regulator is looking to change that.

In what she’s calling a “hard reset” of the program, according to NPR affiliate KOSU, Oklahoma’s new Medical Marijuana Authority director, Adria Berry, is hiring more inspectors and creating new policies.

Berry began her role as director on Aug. 30.

By Dec. 1, the regulatory agency aims to hire 40 more compliance inspectors as well as six “peace officers” to work with the state’s narcotics bureau to root out illegal marijuana businesses.

Less than 40% of the state’s licensed cannabis companies have been inspected this year, according to Berry.

Berry also said the program has had a 25% increase in cannabis license applications over the past year, the radio station reported.

Barrett Brown, deputy director and legislative liaison for the regulatory agency, also said state lawmakers might consider adding a license cap.

Cannabis firm Agrify buys two Sinclair Scientific brands for at least $50 million

Ancillary cannabis business Agrify said it acquired two marijuana- and hemp-related equipment and services brands from Sinclair Scientific for at least $50 million.

The acquired brands are:

Precision Extraction Solutions, described as “the industry leader in cannabis and hemp extraction equipment, technology, lab design and site planning.”

Cascade Sciences, which produces processing equipment such as vacuum ovens and evaporators.

“These leading brands have collectively worked with over 30 multi-state operators and over a thousand cannabis and hemp customers,” Agrify said in a Monday night news release.

Agrify said it expects the acquired brands to generate roughly $40 million in revenue in 2021.

“As a result of this transaction, Agrify now has a physical presence in seven states with a growing number of clients and business partners distributed throughout the country.”

The $50 million acquisition includes $30 million in cash and $20 million of Agrify stock.

The price might increase to up to $65 million based on Cascade and Precision’s performance for 2021.

Billerica, Massachusetts-based Agrify produces hardware and software for use in cannabis cultivation and other crops.

The company went public in January and raised additional capital through an underwritten public offering in February.

Agrify shares trade as AGFY on the Nasdaq exchange.

Marijuana technology company Akerna raises $20 million

Colorado-based marijuana technology company Akerna raised $20 million of capital to support a recently announced acquisition, future growth and investments in its enterprise software infrastructure.

The debt financing with existing institutional investors follows Akerna’s $17 million deal to buy 365 Cannabis, a Las Vegas-based marijuana business management software company.

Akerna, which trades on the Nasdaq as KERN, said it will net $14.6 million from the financing. The details:

The three-year notes have a face value of $20 million, bear no interest but are being issued at a discount of 10%, or $2 million. The notes are to be repaid in monthly installments beginning Jan. 1, 2022.

The notes will be convertible into Akerna stock at a price of $4.05 a share. Akerna currently is trading at about $2.70 a share.

The net proceeds of $14.6 million reflects deductions from the loan discount and $3.3 million to pay off previous convertible notes and other expenses.

Akerna indicated that $4.5 million of the proceeds from the capital raise will be used to close the company’s acquisition of 365 Cannabis.

US judge tosses investor lawsuit targeting cannabis producer Sundial

(A version of this story first appeared at Hemp Industry Daily.)

A federal judge in New York cleared Sundial Growers of wrongdoing in a lawsuit filed by angry investors who said the Calgary, Alberta-based cannabis producer misled them about plans to export hemp and CBD to the European Union.

Sundial was accused of being dishonest when it said it was acquiring a British company that could “almost immediately” start exporting hemp and CBD products to the European Union, Law360 reported.

The plan was beset by delays, however, and Sundial sold the U.K. company (Bridge Farm) in 2020.

A group of investors sued Sundial in New York, seeking more than $7 million.

But a federal judge dismissed the case, saying that Sundial’s discussions about exporting hemp and CBD into Europe were “accompanied by meaningful cautionary language” and that Sundial isn’t responsible for the investors’ losses.

Sundial trades on the Nasdaq as SNDL.

Illinois recreational marijuana sales already nearing $1 billion for 2021

Recreational marijuana sales in Illinois have reached nearly $1 billion, and three months remain in the calendar year.

According to monthly data released by the Illinois Department of Financial and Professional Regulation,  the state’s adult-use industry sales were at just over $997 million at the end of September.

That total is leaps and bounds over 2020, when Illinois’ recreational cannabis businesses brought in $669 million for the entire year.

Illinois rec sales didn’t go above $100 million in any month in 2020, the year the market launched. But sales have exceeded that threshold every month in 2021 with the exception of January and February.

The high-water mark so far this year is July, when sales reached $127.7 million; in 2020, the top month for rec sales was December, with $86.8 million.

Though the agency doesn’t release medical marijuana sales figures, the Chicago Tribune reported that the MMJ program in Illinois has grown significantly as well, with patient numbers increasing by roughly 30% since a year ago.

As in most medical marijuana markets, chronic pain was the most-cited reason for patients’ need for MMJ, at 31%. Next came post-traumatic stress disorder (16%), migraines and osteoarthritis (10% each) and cancer (5%).

Cannabis financier AFC Gamma to raise $100 million in new notes offering

Cannabis real estate lender AFC Gamma announced plans to raise $100 million through an upcoming debt offering.

According to a Wednesday news release, net proceeds from AFC Gamma’s offering of senior unsecured notes will be used:

“To fund loans related to unfunded commitments to its existing borrowers.”

To originate new loans and for working capital and other general corporate purposes.

The senior unsecured debt will be due in 2027.

The Florida-based company did not specify the interest rate of the notes.

The timing of the offering, as well as the exact terms, “will depend on market conditions and other factors,” the release noted.

AFC Gamma priced a March initial public offering on the Nasdaq exchange to raise nearly $119 million.

The company also priced a June underwritten public offering to raise at least $56 million.

This year, AFC Gamma has loaned money to cannabis companies such as Justice Cannabis of New Jersey, Nature’s Medicines of Arizona and BeLeaf Medical of Missouri.

Shares of AFC Gamma trade as AFCG.

Massachusetts permits hemp sales by marijuana retailers

(A version of this story first appeared on Hemp Industry Daily.)

Hemp growers in Massachusetts can now sell hemp extracts and smokable flower to the state’s more than 200 licensed marijuana retailers, a move that should allow MJ stores to serve a wider selection of consumers.

A new rule that took effect Monday gives Massachusetts hemp farmers instructions for testing and labeling their products for sale to adult-use or medical marijuana shoppers.

The change was made by Massachusetts lawmakers late last year. The change applies only to farmers growing hemp in Massachusetts.

Out-of-state hemp products remain off-limits for Massachusetts marijuana retailers.

The new rules require hemp products sold in Massachusetts dispensaries to carry labels that include:

Manufacturer name and address.

THC and CBD concentrations.

A warning that the product “has not been tested, analyzed, or approved by the Massachusetts Department of Agricultural Resources or the FDA (U.S. Food and Drug Administration).”

The law did not end a prohibition on processing hemp and marijuana products at the same locations.

Marijuana manufacturers will need licenses from the state agriculture department before producing products listed as hemp or hemp-derived.

Massachusetts has roughly 65 hemp farmers on 407 acres and 95,000 indoor square feet this year.

The state is home to about 168 recreational marijuana retailers and 68 medical marijuana dispensaries.

Those retail outlets sold about $1.4 billion-$1.7 billion worth of product last year, according to the 2021 MJBizFactbook.

New York eases medical cannabis rules to allow sale of smokable flower

At its first meeting, New York’s marijuana regulatory agency amended the state’s medical cannabis program, including broadening the sale of flower and who can recommend MMJ as a treatment.

The newly formed, five-member Cannabis Control Board will allow a wide range of medical professionals to recommend medical cannabis, from midwives to dentists, according to the Buffalo News.

Allowing smokable flower for patients likely will provide a revenue boost for the state’s medical cannabis companies as flower is typically more affordable than infused products and is a familiar format for new consumers.

The MMJ program has 150,000 New Yorkers certified to obtain medical marijuana, but that number likely will increase with the new changes as well as the permanent removal of a $50 registration fee for patients and caregivers.

All of this is happening before the launch of recreational marijuana sales, which lawmakers say will begin in about 18 months.

Trulieve plans massive marijuana production plant with $2 million PA grant

Florida-based Trulieve Cannabis reportedly is planning to build a mammoth, half-million-square-foot cultivation and processing operation at a former steel mill in Pennsylvania with the help of a $2 million state redevelopment grant.

The plan, first reported by the Pittsburgh Post-Gazette, comes on the heels of Trulieve completing the acquisition of Arizona-based Harvest Health & Recreation and raising $350 million of capital at an 8% annual interest rate.

The financing deal closed on Wednesday.

The Pennsylvania project also reflects an emerging trend in which marijuana multistate operators obtain government incentives to revitalize economically distressed areas.

Illinois-based Green Thumb Industries is receiving tax incentives to build out a $50 million marijuana cultivation and processing facility at a former prison in Warwick, New York.

Trulieve has completed more than $120 million worth of acquisitions since 2020 to enter and expand its presence in the fast-growing Pennsylvania MMJ market. The company lists six Pennsylvania medical marijuana dispensaries on its website.

Harvest Health has had one of the largest retail presences in Pennsylvania, with 11 MMJ dispensaries listed on its website and a 12th “coming soon” to Pittsburgh.

The 2021 MJBizFactbook projects the Pennsylvania MMJ market will hit $775 million to $925 million in sales this year.

Trulieve purchased three buildings at the former U.S. Steel Tube Works and 37 acres of land from the Regional Industrial Development Corp. for $10.3 million, the Post-Gazette reported, citing RIDC President Don Smith.

Trulieve intends to build an MMJ processing and cultivation facility totaling at least 508,000 square feet, according to the report. The timeline and total project cost weren’t provided.

The announcement also comes just a week after Pennsylvania lawmakers introduced an adult-use legalization bill.

Gov. Tom Wolf has been pushing for legalization, and there’s increasing pressure to do so now that neighboring New Jersey has legalized recreational marijuana and is working toward launching a market next year.

However, a GOP-controlled state Senate could be a formidable obstacle to the measure passing this year.

Tilray CEO open to M&A in Canada as cannabis revenue misses target

Canadian cannabis producer Tilray reported net revenue of $168 million (210 million Canadian dollars) for the June-August quarter, the first full quarter of sales after the merger between Aphria and Tilray closed earlier this year.

The revenue was shy of analysts’ expectations, who had forecast quarterly sales of over $170 million.

Tilray’s net loss grew to $34.6 million in the quarter, more than 60% higher than the same period one year ago.

However, adjusted EBITDA, another measure of profitability, was $12.7 million.

In a conference call with retail investors and analysts, CEO Irwin Simon acknowledged that Tilray’s market share in Canada was only 16% in the company’s first fiscal quarter, but he said the company had maintained the leading market share in Canada this summer.

Before the merger, the two businesses had commanded almost 20% of Canada’s overall market together, according to regulatory filings.

Simon suggested Tilray might have to dip into the M&A pool to achieve his goal of owning almost one-third of Canada’s market.

“I’ve said we want to (have) 30% market share (in Canada). Originally, I felt we could do that on our own. There may have to be acquisitions and more consolidation in this marketplace,” the CEO said on the call.

“With 507 (licensed producers) out there, there’s got to be some more consolidation. Yes, Tilray would be open for other acquisitions in the Canadian market if it made sense.”

In the first fiscal quarter, Tilray’s cannabis revenue jumped 31.2% from the previous quarter to $70.5 million.

But as Canaccord Genuity analyst Matt Bottomley noted, the previous quarter included only about one month of sales from the original Tilray.

Bottomley estimates the latest cannabis sales were likely flat, or only slightly higher, compared to the previous quarter.

Cannabis revenue made up less than half of Tilray’s overall sales.

By category, net sales in the quarter consisted of:

Cannabis revenue of $70.5 million, or 42% of sales.

Distribution revenue of $67.2 million, or 40% of sales.

Beverage alcohol revenue of $15.5 million, or 9% of sales.

Wellness revenue of $15 million, or 9% of sales.

Tilray reported gross medical cannabis revenue of $8.4 million for the June-August period, significantly lower than the $6.4 million in the same three months of 2020.

Gross recreational cannabis sales were $69 million, up from $57 in the year-ago period.

Wholesale cannabis gross revenue of $1.7 million was about half of 2020’s $3.8 million.

Revenue from international cannabis products was $10.3 million. No comparable figure was provided for 2020.

During the call, Simon told investors and analysts that “we’re the largest grower of cannabis in the world today and have the ability to grow over 265,000 kilos (of cannabis annually).”

Tilray said it has generated annualized cost savings of $55 million so far this year after announcing its plan to shut down a “flagship facility in Nanaimo, British Columbia.

The closure is part of the company’s plan to save money after its merger with Aphria.

Shares of Tilray trade on the Nasdaq as TLRY.

Item 9 to acquire Colorado marijuana retailer for Unity Rd. franchise

Vertically integrated cannabis company Item 9 Labs signed a deal to buy an unspecified licensed marijuana store in a Denver suburb for an undisclosed sum.

The location will become the first corporate-owned store under Item 9’s dispensary franchise brand Unity Rd. “and is anticipated to open within the next 4-6 months,” Item 9 said in a Thursday news release.

Phoenix-based Item 9 closed its acquisition of Denver-headquartered One Cannabis Group and its Unity Rd. franchise model in March.

Unity Rd. is one of several cannabis retail franchise brands aiming to make inroads in multiple states.

Item 9 said the upcoming corporate-owned Unity Rd. store in Adams County, Colorado, is still awaiting regulatory approvals.

The acquisition is part of a broader acquisition strategy in Colorado, according to the release.

“The company plans to convert acquired dispensaries into Unity Rd. shops, operate them internally and sell them to an existing or future franchise partner.”

“Our eyes are set on Colorado and building up the Unity Rd. brand to become one of the main players in the market,” Item 9 Chief Strategy Officer Jeffrey Rassas said in a statement.

“We’re in multiple ongoing negotiations with other Colorado dispensaries to become Unity Rd. shops.”

The franchisor is also targeting Arizona, Montana and Oklahoma “as part of these development efforts,” according to the release.

Item 9 shares trade on over-the-counter markets as INLB.

CA city revokes cannabis shop license after owner pleads guilty to bribery

The coastal California town of San Luis Obispo announced it was revoking a business license for Natural Healing Center, a cannabis shop whose owner, Helios Dayspring, pleaded guilty to two felony charges this summer.

Natural Healing Center had not yet opened for business but was poised to do so as one of three retailers granted an initial permit, San Luis Obispo TV station KSBY reported.

The store now will not be allowed to open because of the criminal case.

“Natural Healing Center would never have received the permit had we known then what we know now,” San Luis Obispo’s deputy city manager, Greg Hermann, said in a news release.

“Operators who participate in illegal activities are not welcome in San Luis Obispo.”

Dayspring pleaded guilty in July to one charge of filing a false federal tax return and one charge of bribery for allegedly paying off a county supervisor who later took his own life.

After the charges against Dayspring were announced, another company he runs – 805 Agricultural Holdings – was fined $40,000 by Santa Barbara County officials for violating cultivation regulations at a marijuana grow facility, KSBY reported.

Natural Healing Center operates cannabis stores in Grover Beach, Morro Bay and Lemoore and has another slated to open in Turlock, according to the TV station.

Marijuana MSO 4Front expands in Massachusetts with $55M acquisition

Marijuana multistate operator 4Front Ventures signed a definitive agreement to acquire Massachusetts-based cultivator New England Cannabis Corp. (NECC) for $55 million, a move intended to expand 4Front’s wholesale operation in the state’s fast-growing adult-use market.

Arizona-based 4Front said in a news release that the purchase will be funded with $25 million in cash and 25 million shares of stock.

The cash portion will be financed partly through proceeds from the sale of $15 million of three-year convertible notes, 4Front said. That deal is being led by Navy Capital.

The NECC acquisition will more than double 4Front’s total flower canopy in Massachusetts to 30,000 square feet, with the potential of adding 10,000 square feet.

The acquisition, which is expected to close in the fourth quarter, also will roughly triple 4Front’s kitchen, processing and distribution space.

4Front is trading at slightly more than $1 a share on the U.S. over-the-counter markets under the ticker symbol FFNTF. The company also trades on the Canadian Securities Exchange as FFNT.

Adult-use sales in Massachusetts are on a record pace and on the verge of exceeding $1 billion for the year.

Sales to date this year total $985 million, according to the state Cannabis Control Commission.

Oklahoma advocates file two ballot initiatives to legalize adult-use cannabis

A cannabis advocacy group in Oklahoma filed two initiative petitions to legalize adult-use sales and replace the state’s medical marijuana regulatory agency.

Oklahomans for Responsible Cannabis Action will have 90 days to gather 178,000 signatures for each initiative, barring any legal challenges, according to The Oklahoman.

The adult-use petition would allow anyone 21 or older to possess up to 8 ounces of marijuana purchased from legal retailers and to grow up to 12 plants that would not count toward the 8-ounce limit.

Anyone wishing to exceed the limits set by the amendment would need a marijuana business permit.

The other petition would create an Oklahoma State Cannabis Commission to regulate the industry, replacing the Medical Marijuana Authority.

The current regulatory agency was created under the state health department.

One of the advocacy group’s goals is to create an agency independent from the health department “to increase transparency and create a structure that could be functional,” the Tulsa World reported.

Marijuana MSO Curaleaf faces more Oregon suits over THC-CBD mix-up

Marijuana multistate operator Curaleaf now has been hit with four federal lawsuits in connection with a product-labeling snafu in Oregon that resulted in some customers ingesting high-THC instead of CBD wellness drops.

The case, which involves the Select brand in Oregon, underscores the importance of sound quality-assurance processes.

Curaleaf completed its acquisition of Portland-based Cura Cannabis, which owned the Select brand, in February 2020.

According to the lawsuits filed between Sept. 29 and Oct. 6, at least three people went to hospital emergency departments after suffering adverse reactions.

One elderly man was taken to emergency because of concerns he was having a stroke. He wound up allegedly undergoing an unnecessary surgery to remove what doctors believed was a potentially infected hematoma in his leg.

The Oregon Liquor and Cannabis Commission, which issued an expanded product recall on Sept. 24, said 13 people reported taking the mislabeled drops.

Massachusetts-based Curaleaf told MJBizDaily on Friday that it doesn’t comment on litigation.

But a spokeswoman emailed a copy of a statement the company issued late last month, which attributed the mix-up to an “unintentional human error at our facility that led to the production of a batch of CBD drops that were actually THC drops and vice versa.”

Curaleaf said it has worked with Oregon regulators to recall the two batches in question. They were produced in May.

Approximately 500 bottles of CBD-labeled drops that contained elevated THC were sold before the recall as well as 630 bottles of THC-labeled drops that contained CBD but little or no THC, the company said.

The Oregonian reported that some customers who took drops from the mislabeled bottles might have received more than 30 milligrams of THC.

Curaleaf apologized to customers affected by the mistake and said it is “grateful” to regulators and individuals “who brought this serious matter to our attention.”

“In response to this event, as initial steps, we are reviewing production practices and controls to improve quality assurance processes, and conducting additional training sessions with our production team beginning immediately and continuing regularly,” Curaleaf said in its statement.

Oregon requires marijuana products to be tested, but the testing is done before packaging.

State regulators continue to investigate but, in the meantime, have allowed Curaleaf to continue normal business operators in Oregon, according to The Oregonian.

Each of the four lawsuits against Curaleaf, filed in U.S. District Court in Portland by the same attorney, seek punitive damages up to 1% of Curaleaf’s net worth.