The Wink In Weed: Lessons Learned At Seattle Hempfest

By David Rheins

I’m just back from another epic Seattle Hempfest.  The Pacific Northwest is one of the most beautiful regions on the planet, and its volcanic mountains, vibrant cities and evergreen forests never cease to inspire wonder.  I cherish my PNW canna-family, and am humbled at how rich and meaningful have been our shared experiences, as we workers in weed have toiled to reform marijuana law, and establish a legal cannabis industry.

Jake The Professor and Don Skakie talk Washington Homegrow

Jake The Professor and Don Skakie talk Washington Homegrow

It is a treat to spend time with legends: Farmer Tom Lauerman, Jake The Professor, Grandma Cat Jeter, Kevin and Crystal Oliver, AC Braddock and Fritz Chess, David Tran, Vivian McPeak, Joy Beckerman, Nurse Heather Manus, Ah Warner and so many others.  This year we were honored to have USVI Senator Positive Nelson, who was traveling with a video crew from 420MEDIA,  visit with us.  I first met Terence, who is universally known as ‘Positive’, at a High Tea at Seattle’s Green Labs Farms a few years back, when as moderator I had the privilege of introducing the pro-pot and “positive living” politician to the cannabis community.  Look for great things from the Senator and USVI (pot tourism anyone?) soon.

The canna family gathers every year at Hempfest

The canna family gathers every year at Hempfest

Seattle Hempfest for me has always seemed like the ‘State Fair of Weed.’  Tens of thousands of people — of every age, shape and size — streaming through a labyrinth of vendor booths, food trucks and tents, smoking weed, hanging out and listening to advocates preach to the choir, and bands sing about “Mary Jane.”  This year was no different, a little smaller — a couple fewer stages due to lack of sponsorship support — and smokier, as a result of raging fires in Canada and Eastern Washington.

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Eden Labs’ Fritz Chess, Flower Girls Queen MJ, and MJBA Ambassador At Large Jake The Professor

At the Curved Papers/MJBA booth, and at a series of industry parties, I had the opportunity to reconnect to my industry friends and colleagues. What I heard was a consistent narrative: these are make or break times for Washington licensees.  Competition is fierce and getting fiercer.  Wholesale prices are brutally low for producers, and while sales remain strong at retail and gross revenues are high, profits are elusive and unfair taxes still eat up most of the profits.  For licensees the choice is straightforward: differentiate or die.

Much of our conversation revolved around the mainstreaming of cannabis — and the impact that the $4B USD investment that Constellation Brands just made with Canopy Growth would have on the mom & pops. The game has gone from grassroots to international overnight, and for the smaller players there is tremendous pressure to scale.  Undercapitalized businesses are putting their licenses up for sale, or looking for partnerships and mergers.

 

DOPE celebrated its 7th Anniversary with a “Golden Ticket” Party

Cannafest Destiny.  The West Coast is the fertile birthplace of the legal cannabis industry.  While NORML, established in 1970, can rightfully claim authorship of the political legalization and reform movement, the business — and more importantly the community — started in California, Oregon, Washington (and British Columbia).   The legitimate markets that we have created out West have blazed bright, sparks have now inspired entrepreneurs, activists, investors and politicians across the country — from Maine to Maryland, Michigan to Oklahoma. Our duty and opportunity is now to export the incredible experience and knowledge to these new emerging markets.

In a weird wrinkle of federal prohibition, Legal Cannabis has become international, before it has become a national industry!  Our neighbors to the north are rapidly ramping up their legal cannabis industry, and positioning themselves globally with distribution deals in emerging European, Caribbean and South American markets. Public Canadian companies are gobbling up American brands, and deals are now measured in the billions.

Jeremy MIller is organizing Viva Las Hempfest!

Jeremy Miller is organizing Viva Las Hempfest!

No where can we witness the mainstreaming of marijuana better than Las Vegas.  Neon billboards on strip.  24/7 retailers with drive thru.  Las Vegas, once upon a time among the harshest places in America to be caught with a seed or a stem (an infraction that could land you 20 years in the hoosegow) now actively planning the opening of consumption lounges and canna-friendly hotels.  No peace, love and tie dye hippie culture here.  Just the business of entertainment.  It is fitting then that the next stop for the Cannafest Destiny tour will be Las Vegas Hempfest on November 3&4th — Viva Las Hempfest! Hope to see you there!

Constellation Brands To Invest $4 Billion USD In Canopy Growth

Expands Strategic Partnership to Accelerate Canopy Growth’s Global Expansion Plans 

CANADA: Constellation Brands, a leading beverage alcohol company, and Canopy Growth, a leading diversified cannabis company have announced a significant expansion of their strategic partnership to position Canopy Growth as the global leader in cannabis production, branding, intellectual property and retailing.

Constellation Brands will increase its ownership interest in Canopy Growth by acquiring 104.5 million shares directly from Canopy Growth, thereby achieving approximately 38 percent ownership when assuming exercise of the existing Constellation warrants.  Constellation Brands is acquiring the new shares at a price of C$48.60 per share, which is a 37.9 percent premium to Canopy’s 5-day volume weighted average price of the common shares on the Toronto Stock Exchange (“VWAP”), and a 51.2 percent premium to the closing price on August 14, 2018.  Constellation will also receive additional warrants of Canopy that, if exercised, would provide for at least an additional $4.5 billion CAD to Canopy Growth.

Constellation Brands to Invest $4 Billion USD in Canopy Growth

Constellation Brands to Invest $4 Billion USD in Canopy Growth

As a result of the new shares Constellation is acquiring, Canopy Growth will immediately upon closing have proceeds of approximately $5 billion CAD ($4 billion USD) to bolster its leadership position in the global cannabis industry.  This investment, the largest to date in the cannabis space, will provide funds which Canopy Growth will deploy to strategically build and/or acquire key assets needed to establish global scale in the nearly 30 countries pursuing a federally permissible medical cannabis program, while also rapidly laying the global foundation needed for new recreational cannabis markets.  Canopy Growth’s Canadian platform does not require additional cannabis cultivation assets, and management views other jurisdictions, including the United States, as strategic priorities requiring significant capital.

“Through this investment, we are selecting Canopy Growth as our exclusive global cannabis partner,” said Rob Sands, Chief Executive Officer, Constellation Brands.  “Over the past year, we’ve come to better understand the cannabis market, the tremendous growth opportunity it presents, and Canopy’s market-leading capabilities in this space.  We look forward to supporting Canopy as they extend their recognized global leadership position in the medical and recreational cannabis space.”

Canopy Growth will benefit from Constellation’s deep understanding of consumer trends and shifting preferences, and proven ability to translate those insights into distinct brand positionings that build strong connections with consumers and foster brand loyalty.  Constellation’s disciplined approach and capabilities in areas such as mergers and acquisitions, finance, large-scale production, marketing and sales as a leading Fortune 500 company, combined with Canopy’s entrepreneurial approach and best-in-class knowledge and expertise within the emerging cannabis sector create a powerful combination that will ensure Canopy Growth is set up for sustainable, long-term success as the company and sector evolve.