Pre-Christmas Cannabis Sales Expected To Hit $400 Million, New Years Sales To Top $81 Million

COLORADO:  Business intelligence from Akerna, an enterprise software, leading compliance technology provider, and developer of the cannabis industry’s first seed-to-sale enterprise resource planning software technology, estimates cannabis sales to spike this holiday season.

“To determine how the Christmas and New Year’s holidays would affect cannabis sales nationally, we took a look at last year to see how sales have been influenced by these holidays,” explains James Ahrendt. “For example, the Friday before Christmas was the second largest single sales day of 2019, while the 7-day period leading up to Christmas was 15% higher grossing than the weekly average of 2019.”

Farmer Tom Lauerman in festive garb

Akerna anticipates that in the week leading up to the start of the Christmas holiday (12/18-12/24), weekly average cannabis sales will increase 15%, generating $400 million.

The Friday preceding Christmas (12/18) will most likely be the largest sales day of the month, experiencing a 74% surge in sales. New Year’s Eve is expected to experience a 68% increase in sales, generating $81 million. The average order total is predicted to be $7 higher than the 2020 average, with adult-consumers spending $79 and medical patients spending $121.

Additional Holiday Season Predictions

Sales by product type:

  • Flower – 45%
  • Cartridge/Pens – 31%
  • Concentrates – 13%
  • Infused Edibles – 9%
  • Other – 2%

Sales by gender

  • Male – 64%
  • Female – 36%

Sales by age

  • Under 30 – 28%
  • 30-40 –30%
  • 40-50 – 19%
  • 50-60 –13%
  • Over 60 – 10%

Cresco Labs’ Good News Brand Expands Into Michigan

The Company Increases its Portfolio to Five Brands of Products Now Available in the State for Medical Patients and Recreational Consumers

ILLINOIS: Cresco Labs, one of the largest vertically integrated, multi-state cannabis operators in the United States, announced today the expansion of its Good News brand to Michigan, a state with accelerating adult-use cannabis sales and a growing medical program totaling nearly $600 million in cannabis sales to date, according to data from Headset1. Good News launches with gummy edibles available at dispensaries throughout the state. Good News gummies (100 mg. total; ten, 10 mg. gummies per pack) are sold in approachable packaging and crafted with consumers’ desired mood in mind — Me Time (Indica), Brunch (Hybrid), Friyay (Sativa) and Vegas (Sativa).

Cresco Labs’ Good News brand launches in Michigan with 10 mg. gummy edibles now available to purchase at dispensaries. (Photo: Business Wire)Cresco Labs’ Good News brand launches in Michigan with 10 mg. gummy edibles now available to purchase at dispensaries. (Photo: Business Wire)

“Since receiving our Medical Processing License in March 2020 and launching recreational sales in June, we have remained committed to our strategy of prioritizing wholesale distribution and I’m proud of our Michigan team for creating an outstanding operation that supports our brands and products,” said Charlie Bachtell, CEO & Co-founder of Cresco Labs. “Michigan is a sophisticated market, and we believe our growth speaks to the quality and variety of the brands and products that we are offering to our dispensary partners, patients and customers. We are investing resources in the most strategic markets, and we continue to be excited about the growth potential of Michigan’s cannabis program.”

Nick Fallon, General Manager of Michigan, added, “We’re thrilled to bring Good News to Michigan—it will be our fifth brand available to medical patients and recreational consumers. Our Mindy’s Chef Led Artisanal Edibles and High Supply brands are performing well, with consumers appreciating a low dose edible option from Mindy’s and more affordable, quality vapes from High Supply. In addition, our customers are enjoying our Cresco Liquid Live Resin vape cartridges, which are unique and differentiated from other live resin products in market today because they represent the purest form of the plant and deliver premium quality and flavor. We are proud to offer more choice with the debut of a higher dose edible option from our Good News brand.”

In December of 2019, Michigan became the tenth U.S. state to legalize cannabis for adult-use consumption. In the first eight months of this year, Michigan’s adult use and medical markets brought in over $281 million and more than $313 million, respectively, for a total of $595 million in cannabis sales, according to data from Headset1. Michigan has one of the country’s fastest-growing adult-use markets, with state sales generating over $104 million in October2. In addition to its new adult-use market, Michigan’s growing medical market is ranked second in the country behind California.

Good News is the Company’s mainstream, social-occasion based brand with a product line developed to deliver a quality, safe and consistent cannabis experience through easy to use and benefit-forward forms focused on occasion and mood benefits. Good News is currently available in California, Illinois and now Michigan.

Cresco Labs’ other House of Brands and products available in the state for medical patients and customers include Cresco live resin concentrates and liquid live resin vape cartridges, Mindy’s Chef Led Artisanal Edibles gummies, High Supply disposable vape pens, and Remedi capsules and tinctures.

Cresco Labs has a licensed cultivation and processing facility in Marshall, Michigan, which has a total of 53,000 square feet of cultivation space and is currently under renovation.

For more information on Good News, please visit wearegoodnews.co.

Aphria And Tilray Combine To Create Largest Global Cannabis Company With Pro Forma Revenue Of C$874 Million (US$685 Million)

Complementary, Scalable Medical and Adult-Use Cannabis Businesses Strengthen Leadership Position in Canada; Expands U.S. and International Reach through World-Class Cultivation, Manufacturing, Diversified Product Portfolio and Distribution Footprint

CANADA: Aphria Inc., a leading global cannabis company inspiring and empowering the worldwide community to live their very best life, and Tilray, Inc. , a global pioneer in cannabis research, cultivation, production and distribution, today announced that they have entered into a definitive agreement to combine their businesses and create the world’s largest global cannabis company based on pro forma revenue1. The deal is pursuant to a plan of arrangement under the Business Corporations Act (Ontario), and the implied pro forma equity value of the Combined Company is approximately C$5.0 billion (US$3.9 billion), based on the share price of Aphria and Tilray at the close of market on December 15, 2020. Following the completion of the Arrangement, the Combined Company will have principal offices in the United States (New York and Seattle), Canada (Toronto, Leamington and Vancouver Island), Portugal and Germany, and it will operate under the Tilray corporate name with shares trading on NASDAQ under ticker symbol “TLRY”.

The Combined Company, supported by low-cost, state-of-the-art cultivation, processing, and manufacturing facilities, will have a complete portfolio of branded Cannabis 2.0 products in Canada. Internationally, the Combined Company will be well-positioned to pursue growth opportunities with Aphria’s medical cannabis and distribution footprint in Germany, and Tilray’s European Union Good Manufacturing Practices low-cost cannabis production facility in Portugal, which has export capabilities and tariff-free access to the European Union to meet increasing global demand for medical cannabis. In the United States, the Combined Company will have a strong consumer packaged goods presence and infrastructure with two strategic pillars, including SweetWater Brewing Company, a cannabis lifestyle branded craft brewer, and Manitoba Harvest, a leading hemp food manufacturer and a pioneer in branded CBD and wellness products. The Combined Company is expected to have a strong, flexible balance sheet, cash balance and access to capital giving it the ability to accelerate growth and deliver attractive returns for stockholders.

Under the terms of the Arrangement, the shareholders of Aphria will receive 0.8381 shares of Tilray for each Aphria common share, while holders of Tilray shares will continue to hold their Tilray shares with no adjustment to their holdings. Upon the completion of the Arrangement, Aphria Shareholders will own approximately 62 percent of the outstanding Tilray Shares on a fully diluted basis, resulting in a reverse acquisition of Tilray, representing a premium of 23 percent based on the share price at market close on December 15, 2020 to Tilray shareholders. On a pro forma basis for the last twelve months reported by each company, the Combined Company would have had revenue of C$874 million (US$685 million).

Proven Leadership Team

The Combined Company will be led by a best-in-class management team and board of directors, with strong track records in consumer-packaged goods and cannabis experience internationally. Upon completion of the Arrangement, Aphria’s current Chairman and Chief Executive Officer, Irwin D. Simon, will lead the Combined Company as Chairman and Chief Executive Officer. The board of directors will consist of nine members, seven of which, including Mr. Simon, are current Aphria directors and two of which will be from Tilray, including Brendan Kennedy, and one of which is to be designated. Aphria and Tilray are confident that the leadership team and proposed board of directors of the Combined Company provides a strong foundation for the Combined Company to accelerate growth. Additional senior leadership positions at the Combined Company will be named at a later date.

“This is an exciting day for both companies including our 2,500 employees, for the cannabis industry, and for patients and consumers around the world. We are bringing together two world-class companies that share a culture of innovation, brand development and cultivation to enhance our Canadian, U.S., and international scale as we pursue opportunities for accelerated growth with the strength and flexibility of our balance sheet and access to capital,” said Mr. Simon. “Our highly complementary businesses create a combined company with a leading branded product portfolio, including the most comprehensive Cannabis 2.0 product offerings for patients and consumers, along with significant synergies across our operations in Canada, Europe and the United States. Our business combination with Tilray aligns with our strategic focus and emphasis on our highest return priorities as we strive to generate value for all stakeholders.”

“I am honored to work with Brendan Kennedy, a pioneer in the cannabis industry, and the Tilray team as they join forces with our talented employees at Aphria,” continued Mr. Simon. “I look forward to leading the talented teams of both Aphria and Tilray as we seek to create a leading global cannabis and consumer packaged goods company with a portfolio of medical, wellness and adult-use brands consumers love.”

Mr. Kennedy, Tilray’s Chief Executive Officer, commented, “We are thrilled to bring together two cannabis industry leaders. At this nascent stage of development and expansion of the global cannabis market, we believe companies with leading geographic scale, product range and brand expertise are most likely to benefit long-term. By leveraging our combined strengths and capabilities, we expect to be able to meet the needs of consumers more effectively all over the world and advance patient care. With a strong financial profile, low-cost production, leading brands, distribution network and unique partnerships, we believe the Combined Company will be well-positioned to deliver sustainable, attractive returns for stockholders. I look forward to working with Irwin and the Combined Company’s management team to make our consumer products more accessible around the world.”

Strategic and Financial Benefits

The Combined Company will be the largest global cannabis company based on pro forma revenue for the last twelve months reported by each company with scale and breadth across major geographies and a complete portfolio of market leading brands in the major Cannabis 2.0 product categories. Aphria and Tilray each believe the business combination pursuant to the Arrangement will provide the following financial and strategic benefits, among others:

Financial Strength and Flexibility: The Combined Company will enjoy an attractive financial profile with pro forma revenue of C$874 million (US$685 million) for the last twelve months reported by each company, the highest in the global cannabis industry. In Canada, the combination of Aphria and Tilray will create the leading adult-use cannabis company with gross revenue of C$296 million (US$232 million) in the adult-use market for the twelve months reported by each company. Aphria has generated positive adjusted EBITDA over the last six quarters2, which in combination with the synergies to be realized, provides a robust platform for future profitability and cash flow generation for the Combined Company. This, collectively with the strength of the Combined Company’s balance sheet and access to capital, is expected to help accelerate global growth and value for the Combined Company’s stakeholders.

Creates the Leading Canadian Adult-Use Cannabis Licensed Producer: Together, Aphria and Tilray will be the leading adult-use cannabis Canadian Licensed Producer based on revenue for the last twelve months by combining their respective brands, distribution networks and world-class facilities. In Canada’s C$3.1 billion adult-use, retail market3, the Combined Company will have one of the lowest cost production operations with its state-of-the-art facilities. In addition, the Combined Company will have a portfolio of carefully curated brands across all consumer segments that are sold through its distribution partners. On a pro forma basis, for the period August to October 2020, the Combined Company would have held a 17.3% retail market share4, the largest share held by any single Licensed Producer in Canada and 700 basis points higher than the next closest competitor.

Increases Product Breadth and Commitment to Innovation: Leveraging both Aphria and Tilray’s commitment and culture of innovation and brand building, the Combined Company will serve clients with a complete portfolio of Cannabis 2.0 products and sales and service infrastructure supported by leading distribution partners. Aphria and Tilray’s complementary brands will be available across economy, value, core, premium and premium plus product offerings. In addition, the Combined Company will have a complete breadth of products in every major cannabis category, including flower, pre-roll, oils, capsules, vapes, edibles and beverages.

Establishes an Unrivaled European Platform: The Combined Company will be well-positioned to pursue growth opportunities with its end-to-end EU-GMP supply chain and distribution, which includes Aphria’s German medical cannabis distribution footprint and Tilray’s 2.7 million square foot European EU-GMP low-cost cannabis cultivation and production facility in Portugal. In Germany, Aphria’s wholly-owned subsidiary, CC Pharma GmbH, will provide the Combined Company with distribution capabilities for the Aphria and Tilray medical cannabis brands to more than 13,000 pharmacies. In Portugal, Tilray’s EU-GMP cultivation and production facility will provide the Combined Company with the capacity to cultivate and produce medical cannabis products in order to meet international demand and has export capabilities, which provides tariff-free access to the EU.

Enhances Consumer Packaged Goods Presence and Infrastructure in the U.S.: In the United States, the Combined Company will have a strong consumer packaged goods presence and infrastructure with two strategic pillars, including SweetWater, a cannabis lifestyle branded craft brewer, and Manitoba Harvest, a pioneer in branded hemp, CBD and wellness products with access to 17,000 stores in North America. The Combined Company is expected to leverage SweetWater’s craft beer manufacturing and distribution network to build brand awareness for the Combined Company’s leading brands via craft beers, hard seltzers, and other beverages as it seeks to take advantage of opportunities for both the adult-use and health and wellbeing beverage trends. The Combined Company also expects to pursue the opportunity to expand with new or existing CBD or other cannabinoid brands leveraging Manitoba Harvest’s strong hemp and wellness product platform. When U.S. regulations allow, the Combined Company expects to be well-positioned to compete in the U.S. cannabis market given its existing strong brands and distribution system in addition to its track record of growth in consumer-packaged goods and cannabis.

Positions Combined Company to Continue to Grow in the Beverage Segment: The Combined Company believes it will be well-positioned to pursue an accelerated rate of growth in the Canadian and the U.S. beverage industries by leveraging SweetWater’s innovation, knowledge, and expertise to introduce adult-use cannabis brands via craft beers and other beverages. This includes leveraging Aphria and Tilray’s proven distribution networks in Canada to sell SweetWater’s 420 cannabis lifestyle brand in Canada.

Substantial Synergies: The combination of Aphria and Tilray is expected to deliver approximately C$100 million of annual pre-tax cost synergies within 24 months of the completion of the transaction. The Combined Company expects to achieve cost synergies in the key areas of cultivation and production, cannabis and product purchasing, sales and marketing and corporate expenses. This is expected to include the opportunity for Aphria’s Leamington, Ontario operations to provide additional volume for Tilray’s brands and to replace the need for Tilray to use wholesale cannabis purchases from other licensed producers. Tilray’s London, Ontario facility will also provide Aphria with excess capacity to increase production of additional form factors including their branded edibles and beverages. The Combined Company is considering utilizing Tilray’s existing Nanaimo, British Columbia facility for Aphria’s premium Broken Coast brand to increasingly meet consumer demand for its products. The Combined Company plans to capitalize on opportunities for growth through a broadened product offering and additional form factors, with the aim of increasing adult-use cannabis brand availability across certain Canadian provinces to an expanded customer base with the Combined Company’s scalable infrastructure. Internationally, the Combined Company will have the opportunity to reach additional pharmacies and patients via distribution relationships. The combination is expected to unlock significant shareholder value.

Agreement Details

Under the terms of the Agreement, the Arrangement will be carried out by way of a court approved plan of arrangement under the Business Corporations Act (Ontario) and will require the approval of at least two-thirds of the votes cast by the Aphria Shareholders at a special meeting. Approval of a majority of the votes cast by Tilray stockholders will be required to, among other things contemplated by the Agreement, authorize the issuance of Tilray shares to Aphria shareholders pursuant to the Arrangement. Following completion of the Arrangement, Aphria will become a wholly-owned subsidiary of Tilray, with Aphria shareholders owning approximately 62 percent of Tilray.

Completion of the Arrangement is subject to regulatory and court approvals and other customary closing conditions. Regulatory approvals expected to be required include Competition Bureau (Canada), U.S. HSR and Germany FDI. The Agreement includes certain reciprocal customary provisions, including covenants in respect of the non-solicitation of alternative transactions, a right to match superior proposals and C$65 million (US$50 million) reciprocal termination fee payable under certain circumstances. The Arrangement is expected to close in the second quarter of calendar year 2021 following the receipt of such regulatory approvals, as well as court approval of the Arrangement.

Each of Aphria’s and Tilray’s respective directors and officers and certain principal Tilray Stockholders have entered into voting support agreements agreeing to vote their Aphria Shares or Tilray Shares, as applicable, in favor of the resolutions put before them pursuant to the Agreement.

For further information on the terms and conditions of the Arrangement, please refer to the Agreement in its entirety, which will be available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. Full details of the Arrangement will be included in a management information circular of Aphria and in a proxy statement of Tilray to be delivered to Aphria Shareholders and the Tilray Stockholders, respectively, in the coming weeks.

Board of Directors’ Approval

Each of Aphria’s and Tilray’s respective board of directors has unanimously approved the Agreement and the Arrangement. Jefferies LLC provided a fairness opinion to the Board of Directors of Aphria on December 15, 2020, stating that, as of the date of such opinion and based upon the scope of review and subject to the assumptions, limitations and qualifications stated in such opinion, the Exchange Ratio is fair, from a financial point of view, to the Aphria Shareholders. Cowen provided a fairness opinion dated December 15, 2020 to the board of directors of Tilray stating that, as of the date of such opinion and based upon and subject to the assumptions, limitations and qualifications stated in such opinion, the Exchange Ratio is fair, from a financial point of view, to Tilray.

Advisors

Jefferies LLC is serving as financial advisor and DLA Piper LLP (US), DLA Piper (Canada) LLP and Fasken Martineau Dumoulin LLP are acting as legal counsel to Aphria. Cowen is serving as financial advisor and Cooley LLP and Blake, Cassels and Graydon LLP are acting as legal counsel to Tilray.

Conference Call & Webcast Presentation

Aphria and Tilray executives will host a conference call and webcast with a supplemental presentation to discuss the strategic business combination today, December 16, 2020 at 8:30 a.m. Eastern Time.

To listen to the live call, dial (647) 427-7450 from Canada and the U.S. or (888) 231-8191 from international locations and use the passcode 4334816. A telephone replay will be available approximately two hours after the call concludes through January 13, 2021. To access the recording dial (855) 859-2056 and use the passcode 4334816.

There will also be a simultaneous, live webcast and supplemental presentation available on the Investors section of Aphria’s and Tilray’s website at aphriainc.com and Tilray.com. The webcast will be archived for 30 days.

We Have A Good Thing Growing

Cannabis Market Is Expected To Grow At USD 39.4 Billion By 2023, At A Compound Annual Growth Rate (CAGR) Of 30.7%

JAPAN: The cannabis market is driven by various factors such as the growing medicinal application of cannabis and the increasing legalization of cannabis. Growing medicinal application of cannabis is expected to drive the overall growth of the cannabis market.

The cannabis market size is expected to grow from USD 10.3 billion in 2018 to USD 39.4 billion by 2023, at a Compound Annual Growth Rate (CAGR) of 30.7% during the forecast period. The cannabis market is driven by various factors such as the growing medicinal application of cannabis and the increasing legalization of cannabis. However, a complex regulatory structure for the use of cannabis can hinder the growth of the market.

Request to Fill The Form To get Sample Copy of This Report: https://www.sdki.jp/sample-request-61683

“The Final Report will cover the impact analysis of COVID-19 on this industry (Global And Regional Market).”

“The concentrates segment is expected to grow at the highest CAGR during the forecast period.”
The concentrates segment is the fastest-growing segment in the cannabis market, by product type. This is due to their ease in usage and their versatility in the method of delivery, such as dabbing, ingestible oils, and tinctures. Also, along with ingestion, concentrates can offer cleaner, smoother, and less-odiferous hits than flowers. Concentrates are being increasingly opted for over flowers, as these as more potent in nature. The potency of concentrates could also be modified as per requirement and usage, to evoke a higher consumer likeability.

“The THC-dominant segment, by compound, is projected to hold the largest market share during the forecast period.”
The THC-dominant segment is projected to hold the largest share and grow at the highest CAGR during the forecast period. The dominance of this segment is majorly attributed to the fact that THC is the psychoactive substance in cannabis products and is responsible for head high feeling. Even though high THC content is better known for its mind-altering euphoria, it has important medical benefits and is considered effective in relieving nausea, appetite loss, and insomnia.

“North America is projected to be the dominant market during the forecast period.”
The market in this region is primarily driven by the growth in the US and Canadian markets. The market in this region is driven by the increasing legalization of cannabis for both medical and recreational purposes all over North America and the increasing awareness among consumers regarding the health benefits of cannabis. The market is further fueled by the presence of major cannabis giants such as Canopy Growth Corporation, Aurora Cannabis Inc., and Medical Marijuana Inc., who are continuously investing and collaborating for the development of new products to fulfill the consumer demand.

“The Final Report will cover the impact analysis of COVID-19 on this industry (Global And Regional Market).”

How Big Is Legal Cannabis In Colorado?

MED Resources and Statistics

As of December 1, 2020

Medical Marijuana Business License Numbers:

  • 663 Cultivations
  • 6 Delivery (Permits)
  • 7 Operators
  • 216 Product Manufacturers
  • 1 Development and Research Cultivation
  • 431 Stores
  • 11 Testing Facilities
  • 6 Transporters

 Retail Marijuana Businesses License Numbers:

  • 712 Cultivations
  • 3 Hospitality
  • 9 Operators
  • 288 Product Manufacturers
  • 604 Stores
  • 12 Testing Facilities
  • 12 Transporters

Individual Licensees:

  • 185 Owner Entities
  • 1,726 Business Owners (Natural Person)
  • 39,653 Employee Licensees

MED Licensee Demographic Data

OLCC Identifies Potential Consumer Harm In Some Cannabis Vape Products

Voluntary recall started because non-cannabis additives had undisclosed ingredients

Investigation continues to determine impact across Oregon’s legal cannabis industry

OREGON:  As part of an on-going consumer product safety investigation, the Oregon Liquor Control Commission has identified that marijuana products sold in Oregon’s recreational marijuana market during the last two years contained additives, squalene and squalane, that have been linked to safety concerns similar to Vitamin E Acetate when vaped and inhaled. The OLCC is working to trace products and when necessary remove them from sale. OLCC will be considering immediate action at its December 2020 Commission meeting to prohibit future use of squalene and squalane, institute a mandatory recall of affected products, and create a more stringent and transparent review process of cannabis vaping products going forward.

Recreational retail shops won’t be open until October.

The products under investigation by OLCC contained Viscosity, a non-cannabis diluent manufactured and sold by a third-party (non-OLCC marijuana licensee). Some of the product remains on the market, and the OLCC is working to trace and remove it.

Bulk Naturals LLC., dba True Terpenes, sold Viscosity that solely contained squalene, squalane, and an unidentified olive extract to OLCC recreational marijuana licensees between at least January 2018 and November 2019. Squalene is a “botanically-derived terpene” that can be derived from olives; squalane is the hydrogenated version of squalene. Following OLCC’s confirmation of the presence of squalane in Viscosity via independent laboratory analysis by ChemHistory and SC Labs, True Terpenes has complied with all of OLCC’s requests for information. Viscosity has since been reformulated, and according to True Terpenes, none of their products have contained squalene or squalane since November 2019.

As a result of its investigation the OLCC has identified recreational marijuana licensees that potentially used Viscosity in their products.  Because of their purchase of Viscosity, OLCC has requested additional information from several licensees about products they have manufactured.

One licensee – Oregrown, a vertically integrated cannabis company based in Bend – swiftly provided the requested documentation. Oregrown was the first licensee to confirm its use of the Viscosity formula under investigation, and since then has been working with the OLCC to voluntarily recall the limited amount of its remaining product containing Viscosity. OLCC has provided Oregrown with the information regarding affected items still on the market and their current location.

Oregrown utilized Viscosity in making Oregrown PAX Era D9 Elite style vaping products manufactured on or prior to August 31, 2019. Although Oregrown has reformulated its PAX product to no longer include Viscosity, the previously manufactured items containing the prior Viscosity formula remain in the market. The most recent sales from Oregrown PAX Era D9 Elite products containing this prior Viscosity formula were in October 2020.

In all, between April 2018 and October 2020, 268 OLCC licensed recreational marijuana retailers sold this item.

Consumers can verify the date of manufacture and whether an item they have purchased is subject to this recall. Any Oregrown PAX Era D9 Elite item with the label identification of “2520” and made before August 31, 2019 should be destroyed by the consumer or returned to the retailer where the item was purchased.

The OLCC has found that Oregrown was NOT aware of the contents of Viscosity and didn’t know that it contained potentially harmful ingredients. At the time that Oregrown used Viscosity, the manufacturer, True Terpenes, did not publicly disclose any of Viscosity’s ingredients due to claims of trade secret protections. Oregrown has provided all information that OLCC has requested, and its products complied with OLCC’s labeling rules at the time. OLCC expects that other licensees will act just as swiftly in order to ensure consumer safety by assisting the Commission in identifying and removing these potentially harmful products from the market.

The OLCC has been concerned about the presence of undisclosed ingredients in cannabis vaping products, and during the last year has been examining the use of non-cannabis additives. As part of this review OLCC has gathered evidence that certain additives pose potential danger to consumers.

At the same time the OLCC has suspected that these unhealthy additives had already been introduced into Oregon’s recreational marijuana system without the knowledge of licensees. The OLCC has been investigating the presence of unknown additives in cannabis vape products, which led to OLCC’s independent discovery of squalene and squalane tainted products.

OLCC recently commissioned a study that determined that when exposed to heat, squalene and squalane produce harmful chemicals. It has also been documented that inhaling squalene has been associated with exogenous lipoid pneumonia. Initial evidence about these additives also suggests a potential for consumer harm similar to that already proven about Vitamin E Acetate.

In light of these recent findings, OLCC staff will be proposing two actions at OLCC’s December 17, 2020, Commission meeting. One will be an action that would declare squalene and squalane adulterants; if approved by the Commission, any items in Oregon’s regulated market to which squalene or squalane have been added would be subject to a mandatory public health and safety recall. The second proposed action will be rules regarding cannabis vaping products that have been under development since July 2020; these rules would establish greater transparency and accountability regarding non-cannabis ingredients, like Viscosity, that are used in cannabis vaping products sold in the OLCC system.

OLCC is continuing its investigation into licensees that purchased Viscosity during the relevant time frame in order to confirm whether it was used in any other vaping products that were sold to consumers. If it is determined that other licensees used the prior formulation of Viscosity without proper disclosure on the item’s label, or have withheld information from the OLCC regarding the use of Viscosity, OLCC will pursue compliance action against those licensees as necessary. Additional health and safety recalls may be issued as more information is discovered.

WM Holding Company, the Leading Technology Platform to the Cannabis Industry, to List on Nasdaq Through Merger With Silver Spike Acquisition Corp.

  • WM Holding Company, LLC (“WMH” or “WM Holding”) operates Weedmaps, the leading online listings marketplace for cannabis consumers, and WM Business, a comprehensive software-as-a-service (“SaaS”) subscription offering for cannabis retailers and brands
  • The merger advances WM Holding’s mission to power a transparent and inclusive global cannabis economy and capitalize on its position as the largest technology provider in the sector
  • The estimated post transaction equity value of the combined Company is approximately $1.5 billion and provides up to $575 million of gross proceeds through the approximately $250 million of cash held-in-trust by Silver Spike Acquisition Corp. and a fully-committed common stock PIPE of $325 million
  • As a result of outsized demand, the PIPE offering was significantly oversubscribed and upsized, including investment from funds managed by AFV Partners, the Federated Hermes Kaufmann Funds and Senvest Management LLC along with a $35 million commitment from Silver Spike Capital
  • WM Holding’s executive officers will retain 100% of their equity in the combined company, which will have approximately $100 million of cash on hand after closing

CALIFORNIA: WM Holding Company, LLC and Silver Spike Acquisition Corp., a publicly-traded special purpose acquisition company, announced today a definitive agreement for a business combination that would result in WMH becoming a public company. The combined company will be led by Chris Beals, Chief Executive Officer of WMH, and is expected to remain listed on the Nasdaq Stock Market.

Company Overview

Founded in 2008, WMH operates Weedmaps, the leading online listings marketplace for cannabis consumers and businesses, and WM Business, the most comprehensive SaaS subscription offering sold to cannabis retailers and brands. The Company solely provides software and other technology solutions and is non-plant touching. WMH has grown revenue at a CAGR of 40% over the last five years and is on track to deliver $160 million in revenue and $35 million in EBITDA for 2020.

The cannabis market in the U.S. is expected to double over the next five years as the majority of U.S. adults support having legal access to cannabis. Despite these expectations of growth, cannabis users in the U.S. are still a small sub-segment of the population today, and retail density is still low across the majority of states with regulated legal cannabis markets. The regulations related to these markets are often complex and disparate across states as well as cities and counties within regulated states. Cannabis itself is a highly complex and non-shelf stable consumer product. These dynamics present a challenging and sometimes uncertain environment for consumers seeking legal cannabis products and for businesses selling to cannabis users while operating in a compliant fashion.

WMH addresses these challenges with its Weedmaps marketplace and WM Business SaaS subscription offering. Over the past 12 years, Weedmaps has grown to become the premier destination for cannabis consumers, with over 10 million monthly active users and over 18,000 business listings across every U.S. state, the District of Columbia and Puerto Rico with a legal cannabis market. Clients of the Company maintain listings in 9 international countries outside of the U.S. Through the Weedmaps website and mobile apps, WMH provides consumers with information regarding cannabis retailers and brands, as well as the availability of cannabis products, facilitating product discovery and online order-ahead for pickup or delivery by participating retailers.

The Company’s cloud-based WM Business SaaS subscription offering provides cannabis retailers with an end-to-end operating system to access valuable users, grow sales and scale their businesses at a compelling return-on-spend. This “business-in-a-box” functionality ranges from integrations supporting product menus that have online order-ahead, delivery order fulfillment software, data & analytics, a point-of-sale solution and a wholesale marketplace. WMH has been investing in and optimizing its WM Business software solution to also facilitate compliance for businesses amidst the complex, disparate and constantly evolving regulations governing the cannabis industry. Underlying this compliance functionality is a proprietary and sophisticated rules engine that is a core underpinning of the WM Business SaaS platform.

Chris Beals, WMH’s Chief Executive Officer, will continue to lead the Company along with the existing management team. Silver Spike’s CEO and Chairman, Scott Gordon, will join the merged company’s Board of Directors upon completion of the transaction.

Canopy Growth Announces Changes To Canadian Operations

CANADA:  Canopy Growth Corporation announced a series of Canadian operational changes designed to streamline its operations and further improve margins.

Canopy Growth will cease operations at the following sites: St. John’s, Newfoundland and Labrador; Fredericton, New Brunswick; Edmonton, Alberta; Bowmanville, Ontario; as well as its outdoor cannabis grow operations in Saskatchewan. Approximately 220 employees have been impacted as a result of these closures.

“As part of the end-to-end review of our operations that we outlined during our second-quarter earnings call, we have made the decision to close a number of our production facilities. These actions will be an important step towards achieving our targeted $150-$200MM of cost savings and accelerating our path to profitability. We are confident that our remaining sites will be able to produce the quantity and quality of cannabis required to meet current and future demand,” said David Klein, CEO, Canopy Growth. “This was a difficult decision but I believe it is the right one. I want to thank all of the employees impacted by this decision for their efforts in helping build Canopy Growth.”

These decisions are the partial outcome of an ongoing end-to-end review designed to improve the Company’s margins. The end-to-end review was announced during the Company’s Q2 earnings call and looks at people, process, technology, and infrastructure. The Company expects to record estimated total pre-tax charges of approximately $350-400MM in the third and fourth quarters of Fiscal 2021.

The production sites impacted represent approximately 17% of the Company’s enclosed Canadian footprint and 100% of its Canadian outdoor production footprint.

All figures reported above with respect to the third and fourth quarters of Fiscal 2021 are preliminary and are unaudited and subject to change and adjustment as the Company prepares its quarterly and annual financial statements.

 

Survey Finds Changing Cannabis Consumer & Consumption Habits

MASSACHUSETTS:  A new survey conducted by The Harris Poll on behalf of Curaleaf Holdings, Inc., a leading U.S. provider of consumer products in cannabis, finds that 42% of adults aged 21+ who have ever consumed cannabis have started or increased their consumption since the beginning of the pandemic.

According to the survey by the independent pollster, conducted online in October 2020 among nearly 2,000 U.S. adults aged 21+, the main reasons many Americans have chosen to start or increase their cannabis consumption since the pandemic began include:

  • to reduce stress and anxiety (54%; women (64%) and men (47%))
  • to relax (50%; women (50%) and men (49%))
  • to help them sleep (48%; women (52%) and men (45%))

This shift in consumption habits extends to parents of children under 18 (“parents”). In fact, more than half (52%) of parents who have ever consumed cannabis say they have started or increased their cannabis consumption since the beginning of the pandemic, compared to 33% of those who are not parents of children under 18. These moms and dads of children under 18 are also more likely to consume cannabis primarily for medical use (58% vs. 44%).

The survey also found that more than half (57%) of parents with children under 18 who have ever consumed cannabis have reduced or replaced their alcohol consumption with cannabis since the start of the pandemic.

Overall, amongst all adult cannabis consumers aged 21+, 45% say they have reduced or replaced their alcohol consumption with cannabis, and one-third (33%) of those who consume cannabis for adult use say they prefer cannabis to alcohol.

“Educating consumers around cannabis consumption is so important,” said Stacia Woodcock, PharmD and Dispensary Manager for Curaleaf in New York. “Curaleaf’s pharmacists and committed dispensary associates make it a priority to educate our patients and consumers and help them find the right products to make cannabis a part of their lives.”

The survey results come as the cannabis industry continues to become destigmatized and evolve into an increasingly mainstream role within society. Governors across the country designated the industry an “essential service” throughout the pandemic, acknowledging the important role cannabis plays serving the health and wellness needs of consumers. In November, voters in five states approved ballot measures expanding access to cannabis. Medicinal cannabis will be available in 36 states and adult-use in 15 states and Washington D.C.

“Since the start of the pandemic, we have seen an increase in new consumers at our dispensaries with more people exploring cannabis,” said Joe Bayern, President of Curaleaf. “The liberalization of the plant — and the increasing diversity among consumers who enjoy it — will continue as the general public become more interested in incorporating cannabis into their health and wellness routines.”

The survey also found similarities in cannabis consumption regardless of educational level or marital status, and across different regions of the country.

The Emerald Triangle, Sonoma & Del Norte Participate In First-Ever Research Study Of Northern California’s Cannabis Economy

HUMBOLDT COMMUNITY BUSINESS DEVELOPMENT CENTER TO ESTABLISH ECONOMIC IMPACT STUDY

THROUGH GRANT FROM THE CALIFORNIA BUREAU OF CANNABIS CONTROL

ECONOMIST ROBERT EYLER OF SONOMA STATE UNIVERSITY TO LEAD RESEARCH IN PARTNERSHIP

WITH THE CALIFORNIA CENTER FOR RURAL POLICY AT HUMBOLDT STATE UNIVERSITY

 

CALIFORNIA:  Northern California’s cannabis industry will become the focus of a pioneering study examining the economic impact of industry upon the region.  The Humboldt Community Business Development Center (HCBDC), has partnered with the California Center for Rural Policy at Humboldt State University, and Sonoma State University for a comprehensive look into the impact of cannabis farming, manufacturing, distribution, and retail sales on the overall economy of a research area which includes the legendary Emerald Triangle (Humboldt, Trinity, and Mendocino counties).  The HCBDC will develop the study through a grant from the California Bureau of Cannabis Control.

“It is widely understood that cannabis is a significant economic driver in rural northern California, yet four years into the regulation, legalization, and taxation of California’s cannabis industry we still do not have real, data-driven research and analysis on what is the true economic impact of the cannabis industry,” says Natalynne DeLapp, HCBDC Executive Director.  “This grant will provide resources to answer long-standing questions, will help establish a baseline by which to measure the economic health of the cannabis industry, and by which public policies can be evaluated for efficacy for years to come.”

A chief cash crop in the area for decades, there has never been a thorough analysis of the role of cannabis to the local economy of rural Northern California. The study which also encompasses Del Norte and Sonoma counties will begin to harvest data in early 2021 on such issues as the impact of cannabis on the private and the public sectors, cannabis prices on the licensed and unlicensed markets, job creation, and taxes and government and administrative costs.  Some of the questions this  study will seek to address include:

  • How much cannabis is produced by the North Coast cannabis community?

  • How much is the region contributing to California’s GDP?

  • How long have businesses been in the community and how much do they contribute to state and local taxes?

  • How many people are employed; how much is paid in wages?

  • How much are cannabis businesses paying in licenses, permits, and fees?

“This proposal helps policymakers, advocates, private business, and local residents understand the economics and business aspects of the cannabis business as a combination of agriculture and manufacturing with supply-chain partners to deliver goods to retail and customers,” says economics professor Robert Eyler, Dean, Sonoma State University’s School of Extended and International Education, who will be leading the study.  “This framing gets us away from the conversation of illegality and about how these businesses (similar to the wine or craft brew industries) harvest a crop that becomes a manufactured product.”

“For decades, rural northern California counties have incorporated the cannabis economy as an unplanned economic development strategy. This research will help these jurisdictions formulate long-term strategies to incorporate a significant, previously illegible, sector of their economies into a more sustainable, resilient future for their communities,” says Dominic Corva, Co-Director, Humboldt Interdisciplinary Institute for Marijuana Research (HIIMR), Humboldt State University.