The gap between federal and state regulations can form a dangerous trap for buzzing entrepreneurs – Here’s how to navigate the green void.
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Start low. Go slow. Don’t crossfade.
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Trulieve just acquired Harvest Health & Recreation, officially making them the largest cannabis company in the nation.
Trulieve finalized this purchase today for $2.2 billion. The company, based out of Tallahassee, and founded to be a medical cannabis entity, the largest legal cannabis company to date.
“Trulieve is primarily a vertically integrated, ‘seed-to-sale’ company in the U.S. and is the first and largest fully licensed medical cannabis company in the State of Florida,” according to a press release. “Trulieve cultivates and produces all of its products in-house and distributes those products to Trulieve-branded dispensaries throughout the State of Florida, as well as directly to patients via home delivery. Trulieve is also a licensed operator in California, Massachusetts, Connecticut, Pennsylvania and West Virginia.”
Separately, Trulieve and Harvest Health & Recreation reported a combined income of $317.6 million in the second quarter of the year, not a small chunk of change. Truileve also gained a major cash acquisition with their $350 in debt financing back in June, and Harvest received $55 million recently from a licensing sale in Florida. Trulieve brought in $289 million in cash and cash alternatives as of June, and Harvest brought in $71 million.
Trulieve brought in $215 million in revenue during the second quarter, with income of almost $41 million. Harvest reported more than $102 million in revenue, for the combined $318 million.
To date, this is the highest among public reporting cannabis companies in this country, putting Trulieve at the top.
“Today’s announcement is the largest and most exciting acquisition so far in our industry, creating the most profitable public multi-state operator. Importantly, our companies share similar customer values with a focus on going deep in core markets. This combination offers us the opportunity to leverage our respective strong foundations and propel us forward with an unparalleled platform for future growth,” stated Kim Rivers, Chief Executive Officer of Trulieve.
This acquisition allows Trulieve to continue its expansion in growing markets across the nation. “Harvest provides us with an immediate and significant presence in new and established markets and accelerates our entry into the adult use space in Arizona. Trulieve and Harvest are leaders in our markets, recognized for our innovation, brands, and operational expertise with true depth and scale in our businesses. We look forward to providing best-in-class service to patients and customers on a broader national scale as we create an iconic U.S. cannabis brand.”
“We are thrilled to be joining Trulieve, a company that has achieved unrivaled success and scale in its home state of Florida,” said Steve White, Chief Executive Officer of Harvest. “As one of the oldest multi-state operators, we believe our track record of identifying and developing attractive market opportunities combined with our recent successful launch of adult use sales in Arizona will add tremendous value to the combined organization as it continues to expand and grow in the coming years.”
In total, Trulieve now has a total inventory of 149 dispensaries and three regional hubs, and the company operates across 11 states. This also significantly puts Florida on the map as a leading market for cannabis, despite the state’s slow start in the recreational space. Arizona and Pennsylvania are other notable leading markets.
“This combination brings together two companies with depth and scale in key markets, providing a platform for growth for years to come,” said Harvest CEO Steve White. “Trulieve’s customer-centric values match well with Harvest’s dedication to improving lives through the goodness of cannabis.”
Now, due to this acquisition, Trulieve will have access to Harvest Brands. Under the Harvest umbrella are Alchemy and Roll One, both popular in the local market.
When the sale went down, those with Harvest shares received 0.117 in subordinate voting shares of the company. Trulieve gave out 50,874,175 new shares in exchange for all of Harvest’s shares. Harvest is based in Canada, and thus the sale was compliant with British Columbia’s Business Corporations Act.
The post Trulieve Becomes Largest U.S. Cannabis Company appeared first on High Times.
NBA Hall of Famer and entrepreneur Chris Webber on Tuesday broke ground on Players Only Holdings, a $50 million cannabis production and training facility in Detroit’s Corktown neighborhood. Once completed, the new facility sitting on nine acres near the Detroit River is expected to create hundreds of jobs over the next three years.
Co-founded by Webber with fellow entrepreneur Lavetta Willis, Players Only is a Black-owned business focused on cannabis cultivation, real estate development, brand partnerships and creative content development and management. The 180,000 square foot Players Only facility, dubbed the Webber Wellness Compound, will include a 60,000-square-foot cannabis cultivation operation, an 8,000-square-foot cannabis dispensary and a private consumption lounge.
At Tuesday’s groundbreaking ceremony, Webber announced the creation of a distribution partnership for Players Only branded products with Gage Growth Corp., a leading, Michigan-licensed cannabis operator headed by CEO Fabian Monaco.
“This will be the shining jewel of Michigan. Everything great in Michigan starts in Detroit, and I am excited to collaborate with Gage to bring our premium line of Players Only products to this community,” former Detroit Piston star Webber said in a statement from Players Only. “Gage is the HOF of cannabis operations. With Fabian Monaco as a teammate, this relationship is a winner on every level.”
Webber also took the opportunity to reveal the Detroit expansion of cannabis training program Cookies U, founded by rapper and cannabis mogul Berner in partnership with The WebberWildWillis Foundation, a nonprofit organization focused on uplifting and enriching Black and Brown communities negatively impacted by the War on Drugs. In a statement, Berner characterized the state of Michigan as “one of the most important markets in the cannabis industry.”
“Detroit is the first city we opened a flagship store in, outside of California. I have to salute Chris Webber, Jason Wild and Lavetta Willis for supporting our vision to build out Cookies U in Humboldt California and extending the program to Detroit, which happens to be Chris’s hometown,” said Berner, co-founder and CEO of Cookies. “Michigan has always been an advanced and educated market, and we couldn’t be more excited to offer underrepresented people an opportunity to learn the industry from seed to sale.”
Cookies U is a hands-on, fee-free training program that will recruit students from underserved communities and prepare them for jobs in the cannabis industry, including access to a GED program with a financial literacy component. In addition to the educational curriculum, a job-placement program will help graduates find employment in Michigan’s booming legal cannabis market.
“This Detroit training and operations facility is only the first step in bringing tangible opportunities to the people of this city—one that means so much to me—while eliminating barriers to an industry with unlimited economic potential,” Webber said.
“We will create, foster and provide a cannabis ecosystem that celebrates diversity, creates jobs and benefits this community—focusing intensely on those who are being left behind. As social equity programs struggle in many states, we are here to support legacy operators who created the foundation for this industry so that they are included in future iterations of it while we wait on the politics to catch up.”
Construction on the first phase of the Webber Wellness Compound is expected to begin this fall, with work slated to wrap up by March 2022. A $125 million second phase, which as of yet has no announced timeline, will expand the cultivation area by 80,000 square feet.
“This is my biggest priority in life,” Webber said. “I’ve seen who (Willis) and I have helped across the country and the lives that have been disrupted by cannabis. Hopefully, we can do a little bit of repairing. Hopefully, we can help the city.”
The post NBA Icon Chris Webber Unveils Detroit Cannabis Facility appeared first on High Times.
In a move that is further expected to shore up new calls for comprehensive cannabis reform at a European level, Czech President Miloš Zeman signed a law in the last week of September that allows industrial hemp grown in the country to have a THC level of 1.0 percent.
This exceeds the current limit set by the European Parliament last fall as a regional guide (up from 0.2 percent to 0.3 percent), but that change will not take effect at the EU level until 2023.
Regardless, such a change comes at a very interesting time for the entire cannabis, if not hemp, discussion across Europe. Other provisions in the new Czech law are also going to shake up the discussion when it comes to access to cannabinoid drugs. Licensed, private groups will be allowed to manufacture medical cannabis products.
This in turn will potentially affect not only the Czech Republic, but every country across the EU now in search of lower priced cannabis products (starting but not limited to flos and extract). Indeed, with this move, the CR may well position itself as the main competitor to North Macedonia in terms of pricing—and certainly whatever is on the way in Portugal. It will also create an alternative and much lower cost labour market than Denmark.
For countries starting with Poland, this may also be a boon to the entire discussion of access where patients just cannot access medicine they can afford.
It may also move the conversation in countries like Italy, which are also undergoing a new discussion about decriminalizing cannabis and other medical plants like psilocybin—and have already allowed home growing.
Medical cannabis cultivation has been legal in the country since 2013, but only a few, larger-scale growers have so far been licensed. Czechs are also allowed to grow up to five plants at home—it is technically decriminalized even though it can be punished with a fine—but many are hoping that the Pirate Party, currently polling third in the run up to the country’s national election in October, will be able to not only win but, as promised, embrace a sea of change in the country’s cannabis policy.
Whether the Pirates win is one thing. Regardless of more changes in the country’s cannabis policy after the election, the Czech Republic is again taking a first stand on a major issue in the industry that is bound to stimulate if not encourage more reform elsewhere.
Given the renewed call for “recreational trials” that are beginning to sprout up around Europe (and will be given even more of a push by the recent German elections last weekend), it is also not out of the question to see a similar trial in the CR in the next couple of years.
Currently, the medical cannabis produced in the country is for domestic consumption. This is a unique situation in Europe, since most of the cultivation underway post 2017 has been largely for export (and to Germany). As a result, within the country, medical cannabis does not have to meet a GMP certification, making it much less expensive to cultivate than in other parts of the EU.
The dispensation of medical cannabis has grown exponentially over the last several years. Last year, patients were given close to 70 kgs—a dramatic increase over 2019 where the official dispensation figures showed just 17 kgs were distributed.
The Czech GMP discussion is also one of the most intriguing in the EU. As it stands, unless the cannabis it cultivates domestically is GMP rated, farmers will not be able to export it to other European medical markets. However, there is likely to be a massive uptick in domestic production and medical consumption.
As a result of this, the CR may become one of the countries in the EU, like Portugal, where the entire “GMP vs GACP” discussion, and even for medical cannabis, is re-examined. This in turn, particularly set against a rising tide of calls for, at minimum, recreational trials in multiple countries, may confuse the issue even further rather than clarifying it.
So far, this certification has been the highest barrier companies have had to cross and face—starting with raising the financing to cultivate or extract at this level in the first place.
With an exclusively medical market in the region, nobody challenged the same—at least directly—although all the larger Canadian companies in the room have repeatedly stubbed their toes on this issue.
Now, with recreational trials also looming, the certification question that has seemed to be so uniform may also be challenged—albeit on a country-by-country basis.
Reform and of the most interesting, varied and potentially market moving kind, has absolutely landed in the EU, if not Europe, this summer—and the new developments in the Czech Republic will undoubtedly ripple far beyond the country’s borders as the discussion begins to broaden if not finally flower and bloom.
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October skies are ready to deliver cool breezes and even cooler star signs and weed strains. Check out what's on your horoscope horizon.
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I work with many manufacturers and distributors of hemp-derived products and am often surprised by the fact that few understand their general obligations beyond labeling requirements.
Every state that authorizes and formally regulates the manufacture, distribution, and sale of these products – Colorado is a good example – imposes stringent manufacturing requirements that squarely align with those imposed on food products, dietary supplements, and cosmetics free of a hemp-derived ingredients under the Federal Food, Drug, and Cosmetic Act (FDCA).
Some of these requirements include complying with Current Good Manufacturing Practice (CGMP) to ensure the quality and safety of food products, dietary supplements, and cosmetics, as well as deliver properly labeled products to consumers. CGMPs provide for mechanisms that assure monitoring and control of manufacturing processes and facilities. This includes, for example, registering the manufacturing facility for inspection purposes, establishing standard operating procedures (SOPs), detecting and investigating product quality deviations, using reliable testing protocols, and ensuring proper packaging and labeling.
Both federal law and state laws prohibit the introduction or delivery into interstate commerce and intrastate commerce of any food, dietary supplement, or cosmetic that is adulterated or misbranded. The FDCA defines “interstate commerce” to mean commerce between any State, the District of Columbia, or Territory and applies to all steps in a product’s manufacture, packaging, and distribution. Because “interstate commerce” is broadly defined, nearly everyone involved in the supply chain (manufacturers, packers, distributors, and retailers) is responsible for ensuring that they are not dealing with products that are unsafe for human consumption, or products that contain inaccurate, false, or misleading information on the label or packaging– EVEN IF someone else caused the adulteration or misbranding. In other words, if a company introduces a product into interstate commerce or receive it in interstate commerce, they are responsible for any issue with the product. It is also worth pointing out that even if a company limits the sale of their products within one state (i.e., “intrastate commerce”), chances are, some of their ingredients or packaging originate from another state or country, and thus fall under the definition of “interstate commerce.”
As such, these interstate and intrastate obligations force everyone in the supply chain to play their part and help mitigate the risk of product defect. For instance, distributors of dietary supplements must establish and follow written procedures for holding and distributing operations that will protect the finished product against contamination and deterioration. This includes holding products under appropriate conditions of temperature, humidity, and light so that the product’s purity, strength, and composition are not compromised between the time it leaves the manufacturer’s facility and lands on the retailers’ shelves.
These mutual obligations further mean that companies should enter into thoroughly drafted agreements that clearly stipulate each party’s obligations and liabilities. These agreements should contain, at a minimum, robust representations and warranties regarding the parties’ compliance with all relevant regulations and obligations to disclose specific information, such as SOPs and product recalls, to the other side, as well as sound indemnification provisions.
The lack of federal regulations regarding the manufacture, sale, and marketing of hemp-derived products should not deceive stakeholders into thinking that state and other general requirements imposed on food products, dietary supplements, and cosmetics do not apply to hemp-derived products. If anything, lawfully venturing into this market is twice as burdensome on these manufacturers, packers, distributors, and retailers because they must meet twice as many requirements: those generally imposed on the category of products they are producing and selling AND hemp-specific requirements.
The post Hemp-Derived Products: The Law Does Not Stop at Labeling Requirements appeared first on Harris Bricken.
