How Big Is Legal Cannabis In Colorado?

by Leave a Comment

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

Aphria Announces Record Adult-Use Cannabis Gross Revenue in First Quarter Fiscal Year 2021

by Leave a Comment

Sixth Consecutive Quarter of Positive Adjusted EBITDA

CANADA: Aphria Inc. announced record adult-use cannabis gross revenue in first quarter fiscal year 2021 and sixth consecutive quarter of positive adjusted EBITDA.

Net Cannabis Revenue Increased 103% from Prior Year Quarter.  Adjusted EBITDA from cannabis business of $10.4 million increased 11% from prior quarter. Cash cost per gram remained below $1.00 and decreased for the fourth consecutive quarter to $0.87

Key Operating Highlights – First Quarter Fiscal 2021

  • Record gross revenue for adult-use cannabis of $69.6 million in the first quarter, an increase of 23% from prior quarter and the sixth consecutive quarter of growth.
  • Net cannabis revenue of $62.5 million in the first quarter, an increase of 103% from prior year quarter.
  • Net revenue of $145.7 million in the first quarter, an increase of 16% from prior year quarter and decrease of 4% from prior quarter, solely due to lower distribution revenue driven by the COVID-19 global health crisis.
  • Cash cost to produce dried cannabis per gram of $0.87 in the first quarter, a decrease of 1% from the prior quarter, and decreased for the fourth consecutive quarter.
  • Adjusted EBITDA from cannabis business of $10.4 million in the first quarter, an increase of 11% from the prior quarter.
  • Adjusted EBITDA of $10.0 million in the first quarter, an increase of 17% from the prior quarter.
  • Ended first quarter with a strong balance sheet and liquidity, including $400.0 million of cash and cash equivalents to fund planned Canadian and International growth.
  • Aphria transferred its stock exchange listing from the New York Stock Exchange to The Nasdaq Global Select Market (“Nasdaq”) on June 8, 2020. This transition did not impact the Company’s primary listing on the Toronto Stock Exchange (TSX: APHA).
  • Filed Prospectus supplement for $100 million (USD) At-the-Market program (“ATM Program”) on July 29, 2020 which the Company plans to use for acquisition opportunities.
  • Good Supply and P’tite Pof launched large-format SKUs, and launched new brand B!NGO, a large format, economy brand utilizing lower potency cannabis.

 Subsequent Events

  • Aphria entered into a Strategic Supply Agreement with Canndoc Ltd. (“Canndoc”), a subsidiary of InterCure Ltd., (TASE: INCR/INCR.TA), one of Israel’s largest and most established medical cannabis producers on August 4, 2020.
  • Liquidated the convertible note receivable from HydRx Farms Ltd.
  • Company completed its first certified European Union Good Manufacturing Practices (“EU GMP”) shipment of dried flower from its Aphria One EU GMP facility to CC Pharma, a leading distributor of pharmaceutical products to more than 13,000 pharmacies in Germany.

Key Financial Highlights
(In thousands of Canadian dollars)
Revenue Overview
Source: Aphria Inc. August 31, 2020 MD&A1 [1]
Net revenue for the three months ended August 31, 2020 was $145.7 million, an increase of 16% from $126.1 million in the same period last year. First quarter fiscal year 2021 net revenue was 4% lower when compared to the prior quarter net revenue of $152.2 million, as significant increases in net cannabis revenue were offset by lower distribution revenue at CC Pharma in Germany.  The decline in distribution revenue is largely a function of the impacts of the COVID-19 global health crisis, including a reduction in the number of elective medical procedures and in-person visits to physicians and pharmacies

The average retail selling price of medical cannabis, before excise tax, increased to $7.38 per gram in the quarter, compared to $6.63 in the prior quarter. The average selling price of adult-use cannabis, before excise tax, decreased to $4.15 per gram in the quarter, compared to $5.23 per gram in the prior quarter, primarily as a result of the initial pipeline fill of new large format offerings, including the introduction of B!NGO, an economy brand utilizing lower potency cannabis.

Adjusted cannabis gross profit for the first quarter was $31.5 million, with an adjusted cannabis gross margin of 49.7%, compared to $28.1 million and 52.9% in the prior quarter. The increase in adjusted cannabis gross profit and decrease in adjusted cannabis gross margin was primarily due to the release of large format products and the pipeline fill for B!NGO, our economy brand utilizing lower potency cannabis, which provided an increase in sales but at lower margins than the Company’s other branded products.

Adjusted distribution gross profit for the first quarter was $11.8 million, with an adjusted distribution gross margin of 14.4%, compared to $11.9 million and 12.1% in the prior quarter. The decrease in adjusted distribution gross profit was a result of the previously discussed decline in distribution revenue at CC Pharma in Europe.  The increase in the gross margin was a function of sales mix and improved cost management at CC Pharma in the quarter.

Selling, general, and administrative costs in the quarter increased to $54.4 million from $116.6 million in the prior quarter, and increased from $41.4 million in the prior year. The increase from the prior year was primarily due to increased operating costs associated with increased global operations and increased selling costs associated with our higher sales.

Net loss for the first quarter of fiscal year 2021 was $5.1 million, or a loss of $0.02 per share, compared to net loss of $98.8 million, or a loss of $0.39 per share in the prior quarter, and net income of $16.4 million, or $0.07 per share for the same period last year.

Adjusted EBITDA increased by $1.4 million to $10.0 million for the first quarter compared to $8.6 million in the prior quarter. Adjusted EBITDA from the cannabis business for the first quarter was $10.4 million compared to $9.4 million in the prior quarter. The adjusted EBITDA loss from businesses under development for the first quarter was $2.8 million compared to a loss of $2.7 million in the prior quarter. Adjusted EBITDA from distribution business for the first quarter was $2.4 million, compared to $1.9 million in the prior quarter.

Since establishing its US$100 million  ATM Program on July 29, 2020, the Company has not drawn on the program.

The Company ended the first quarter with a strong balance sheet, including $400.0 million of cash and cash equivalents.
READ ON APHRIAINC.COM

California Cannabis Licensing Authorities File Civil Action Against Vertical Bliss (Kushy Punch) For Unlicensed Activity

by Leave a Comment

CALIFORNIA:  The Bureau of Cannabis Control and California Department of Public Health (CDPH) announced today the filing of a complaint seeking civil penalties from Vertical Bliss, Inc. also known as Kushy Punch and related people for unlicensed commercial cannabis activity. The complaint was filed on September 23, 2020 by the California Office of the Attorney General in Los Angeles County Superior Court.

The complaint alleges that Vertical Bliss conducted unlicensed operations on an undisclosed premise in Canoga Park, California, and inverted illegally manufactured product back into the regulated market. On October 2, 2019, in response to tips about illegal manufacturing and distribution of cannabis goods, the Division of Investigation executed search warrants at the unlicensed Canoga Park location. The search revealed significant quantities of cannabis concentrates, edibles, vape cartridges and raw materials. Seized records document the production of more than 3.3 million Kushy Punch brand gummies during an 18-month period, with an estimated value of $64 million.

Vertical Bliss simultaneously held cannabis manufacturing and distribution licenses for a premises located in Chatsworth, California. These licenses were revoked, following the discovery of the unlicensed operations.

The Medicinal and Adult-Use Regulation and Safety Act (MAUCRSA) establishes strict requirements for the cannabis market and products, including requiring a state license and local approval for every premises where commercial cannabis activity is conducted. Manufacturing, distributing or selling cannabis goods without a state license or at a location that is not licensed is a violation of state law. A person engaging in commercial cannabis activity without a license is subject to civil penalties of up to three times the amount of the license fee for each day of operation.

To file a complaint regarding illegal cannabis activity, click here – Enforcement Online Services.

ILLINOIS: IDFPR Announces Approval Of Permanent Rules For Conditional Adult-Use Cannabis Dispensary Licenses Tie-breaking Process

by Leave a Comment

Illinois Joint Committee on Administrative Rules Approves Tiebreaker Rules; Dispensary Licenses to be Issued in Coming Weeks

ILLINOIS: The Illinois Department of Financial and Professional Regulation (IDFPR) announced today that permanent rules have been adopted for adult use cannabis dispensary licensees to be selected when there are two or more applicants in the same Bureau of Labor Statistics Regions with tied high scores. The rules, which were filed in June, may be found here.

The approval of these rules allows IDFPR to move forward in awarding the 75 conditional adult use cannabis dispensary licenses that were authorized by the 2019 Cannabis Regulation and Tax Act. Consistent with the new rules, IDFPR will provide a public notice announcing the applicants with tied high scores who, if they meet the requirements in the rules, may participate in the selection process for a conditional license.

“We are pleased that these rules have been adopted, and we remain unwavering in our commitment to ensuring these licenses are issued in a fair and objective way that implements Illinois’ equity-centric law,” said Toi Hutchinson, Senior Advisor for Cannabis Control to Gov. Pritzker. “Additional licenses will be made available in the coming years and these rules will help ensure a strong foundation is established for the licensing process in the future.”

Once IDFPR awards a conditional license, the licensee will have 180 days to find a location within its BLS Region to operate. A license to operate cannot be issued if the location is within 1,500 feet of an existing licensed dispensing organization. More about the awarding of the conditional adult use dispensing organization licenses may be found under 410 ILCS 705/15-25 and 15-30 of the Cannabis Regulation and Tax Act.

In addition, application scoring for craft grower, infuser and transporter licenses is being finalized, and the Illinois Department of Agriculture will announce award dates in the near future.

Surna Announces Largest Contract In Its History

by Leave a Comment

Announces $2.8 million Sales Contract in July

COLORADO: Surna announced today that it recently signed a sales contract valued at $2.8 million.

The project in Illinois is for a multi-state operator with whom Surna has worked on previous facilities in other states. The facility is approximately 88,000 square feet, of which approximately 66,000 square feet is dedicated to cultivation, drying and processing areas. Surna is under contract to provide a full suite of climate control products and technologies for the cultivation and processing spaces (the mechanical engineering design was done by Surna through a previous contract), supply of major mechanical equipment, SentryIQ™ environmental controls, and system start-up. While Surna can and does provide MEP design and equipment for a wide range of climate control approaches, in this case the priorities of reducing electrical infrastructure requirements and reducing roof loading, along with the desire for precise control of the facility’s environment, resulted in the selection of a 4-pipe hydronic system. The design has integrated dehumidification, in which Surna is providing its proprietary line of multi-function fan coils, destratification fans, dehumidifiers and heat recovery chillers.

Tony McDonald, CEO commented: “The team at Surna has worked diligently to secure the largest single contract in the Company’s history. Now our operations and controls departments will be hard at work ensuring the delivery of a precisely controlled environment and on-time delivery of equipment to meet our customer’s requirements.”

OREGON: OLCC Commission Takes Step to Continue Curbside Delivery

by Leave a Comment

Begins Process to Ban Additives in Inhalable Cannabis Products

Commissioners Also Approve Marijuana Licensee Stipulated Settlements

 

OREGON:  At its regular monthly meeting on June 18, 2020, the Oregon Liquor Control Commission moved to extend the ability of licensed marijuana retailers to continue curbside delivery, and took the first step towards adopting rules that would ban non-cannabis additives from inhalable cannabis products.  Commissioners also approved six marijuana violation stipulated settlement agreements.

In the wake of the COVID-19 pandemic the OLCC, in order to promote social distancing required under the Governor’s Executive Orders, approved a temporary rule allowing licensed marijuana retailers to make “curbside delivery” within the immediate vicinity of their licensed (premises) retail store. That temporary rule expires in September 2020 and cannot be extended with another temporary rule.

Because the duration of the pandemic remains unknown, measures aimed at accommodating social distancing requirements and minimizing person-to-person contact remain critical to protecting public health. The proposed rule provides licensed marijuana retailers flexibility in how they can deliver to consumers at their licensed premises.

In the fall of 2019, a number of Oregonians suffered from the outbreak of vaping-associated lung injury (VALI) linked in part to inhalable cannabis products.  As of March, 2020, Oregon had 23 reported cases of VALI, including two fatalities.  VALI has been tentatively linked to additives combined with cannabis oil.

Commission staff are attempting to address consumer product safety concerns by prohibiting all processed non-cannabis additives from being added to inhalable cannabis products. Non-cannabis vaping additives are used in cannabis vaping products for a variety of purposes, including dilution, flavor, and effects.  However, non-cannabis additives are not necessary to make a vape product work with vaping technology.

Although the additives may be generally recognized as safe (GRAS) for ingestion, the same cannot be said for their inhalation. There is no regulatory body that evaluates the safety of these ingredients when inhaled, and additive makers do not disclose all of their ingredients due to trade secret concerns.

The Commission also ratified the following violation fines and suspensions based on stipulated settlements (detailed information on specific cases can be found here on the OLCC website):

  • MAHALO in Hillsboro will pay a fine of $3,795 OR serve a 23-day recreational marijuana retailer license suspension for one violation.

Licensee is: Mahalo, Inc.; Frankie Powell, President/Secretary/Director/Stockholder.

  • PLANE JANE DISPENSARY in Portland will serve a 30-day recreational marijuana retailer license suspension OR pay a fine of $3,795 AND serve a seven-day suspension for one violation.

Licensees are: Plane Janes’ LLC; Patricia Wiegele, Member.

  • MYLES MYERS will pay a fine of $750 OR serve a 30-day marijuana worker permit suspension for one violation.

Marijuana Worker Permit #393L5E.

  • GREEN BOX in Portland will pay a fine of $2,640 OR serve a 16-day recreational marijuana retailer license suspension for two violations.

Licensees are: Green Box, LLC; Adrian Wayman, Member; Robert Wayman, Member.

  • PARADISE FOUND in Portland will pay a fine of $10,230 OR serve a 62-day recreational marijuana retailer license suspension for two violations.

Licensees are:  JIMO Holdings, LLC; Joseph Cohen, Member; Idan Magal, Member; Arman Daytian, Member/Manager.

  • WINDS OF CHANGE* will surrender its recreational marijuana producer license suspension for eight violations.

Licensees are:  Winds of Change, LLC; James McQuade, Member.

Virtual Listen and Learn Forum: Rules Regarding Tier 1 Producer Licensing, Session #2

by Leave a Comment

WASHINGTON: The Washington State Liquor and Cannabis Board (WSLCB) is hosting two Listen and Learn forums about the current rules regarding marijuana producer licenses, specifically the consideration of revisions and new rule sections that would incrementally expand the plant canopy square footage allowed for licensed Tier 1 producers. This is the second of two planned sessions. Session #1 will cover WAC 314-55-075 Sections 1 through 5. Session #2 will focus on Sections 6 through 11.The full text of WAC 314-55-075 is provided here.

Please join us virtually on Tuesday, June 30, 2020, from 1:00 p.m. until 3:00 p.m. via WebEx in alignment with guidance and recommendations issued by the Governor’s office.

As you may recall, the Board began to consider revisions to existing producer license rules by initiating a formal rule inquiry on December 18, 2019. The Pre-proposal Statement of Inquiry filed by the Liquor and Cannabis Board may be found here.

The Board has received requests from medical marijuana patients and segments of the industry to increase the availability of Department of Health (DOH) compliant product in licensed retail stores. The Board has also learned that smaller producers are concerned about business sustainability based on canopy space restrictions. Recognizing this, the Board would like to explore the ways that it can support Tier 1 producer business viability. Revisions considered may also include clarifying and technical updates to existing rule within the scope of this topic.

An agenda is attached to help you prepare. Please come prepared to offer feedback and suggestions regarding this rule section.

If you wish to join us virtually, we’d like to offer the following reminders:

  • Virtual participation will be structured to allow one speaker at a time though the hand-raising feature on WebEx.
  • If you experience difficulty with audio or visual elements of virtual participation, please be patient.

Please remember that we are still in the developmental phase of rulemaking, and there are not yet any proposed or final rules amendments. To help you prepare for this listen/learn/contribute forum, please review the guidance document prepared for this and future forums.

Questions? Contact Casey Schaufler at casey.schaufler@lcb.wa.gov

To join the WebEx meeting online:

https://watech.webex.com/watech/onstage/g.php?MTID=e704a0de07d3b41806e1f7f59ba96195e

To join the WebEx meeting via audio conference only:

Toll Free: 1-855-929-3239
Access Code: 133 418 7301

Washington: WLSCB Virtual Listen And Learn Forum: Draft Conceptual Rules Regarding Marijuana Licensee True Party Of Interest Rules

by Leave a Comment

WASHINGTON: The Washington State Liquor and Cannabis Board (WSLCB) has rescheduled a Listen and Learn forum on draft conceptual rules regarding marijuana true party of interest regulations described in WAC 314-55-035 to accommodate concerns around the COVID-19 outbreak.

Please join us virtually on Wednesday, May 20, 2020, from 1:00 p.m. until 3:30 p.m. via WebEx in alignment with guidance and recommendations issued by the Governor’s office.

As you may recall, the Board began to consider revisions to existing marijuana true party of interest rules by initiating a formal rule inquiry under WSR 18-22-54 in October, 2018. Those efforts were extended by the passage of Engrossed Substitute House Bill (ESHB) 1794, concerning agreements between licensed marijuana businesses and other people and businesses, including royalty and licensing agreements relating to the use of intellectual property during the 2019 regular session of the Washington State legislature

During the summer, and into the fall and winter of 2019, WSLCB held multiple meetings with industry association representatives, licensees, and others to draft the conceptual rules we’ll be discussing during this Listen and Learn session. These conceptual draft rules reflect an engaged and inclusive developmental process that embodies not only WSLCB’s commitment to regulatory stability and consistency, but to listening to and learning from the input of licensees. They also represent a significant agency policy shift in the removal of the spousal vetting requirement.

An agenda is attached to help you prepare. Please come prepared to offer feedback and suggestions regarding this new rule section and the draft conceptual rules.

If you wish to join us virtually, we’d like to offer the following reminders:

  • Virtual participation will be structured to allow one speaker at a time though a hand-raising feature on WebEx.
  • If you experience difficulty with audio or visual elements of virtual participation, please be patient.

Please remember that we are still in the developmental phase of rulemaking, and these are not proposed or final rules. To help you prepare for this listen/learn/contribute forum, please review the guidance document prepared for this and future forums.

Questions? Contact Kathy Hoffman at katherine.hoffman@lcb.wa.gov

To join the WebEx Event:

Event address for attendees: https://watech.webex.com/watech/onstage/g.php?MTID=e13ac4927e2202ebbb097b00732f4e5b0

To attend by phone: (TOLL) +1-415-655-0001 or (TOLL FREE)+1-855-929-3239

Access code: 285 815 516

Canopy Growth Announces Changes To Global Operations To Drive Strategic Focus

by Leave a Comment

 

The Company continues to expect to incur approximately $700-800MM pre-tax charge in Q4 Fiscal 2020.

CANADA: Canopy Growth Corporation (“Canopy Growth” or the “Company”) (TSX:WEED, NYSE:CGC) today announced a series of global operational changes designed to further optimize production, better align supply and demand, and improve efficiencies in its global operations. As part of its ongoing strategic review of the business, the Company announced today the following changes to its operations:

  • Africa: Canopy Growth has exited its operations in South Africa and Lesotho, transferring ownership of all of its African operations.
  • Canada: The Company will shut down its indoor facility in Yorkton, Saskatchewan, to further align production in Canada with market conditions.
  • Latin America: Canopy Growth will cease operations at its cultivation facility in Colombia, moving to an asset-light model that leverages local suppliers for raw materials and Procaps for formulation and encapsulation activities as outlined in the previously announced agreement between the two companies. These activities will support the position of Colombia as the Company’s LATAM production hub and the ongoing development of its cannabis industry.
  • United States: Canopy Growth will cease its farming operations in Springfield, New York, due to current market demand for hemp.

“When I arrived at Canopy Growth in January, I committed to conducting a strategic review in order to optimize our cost structure and reduce our cash burn,” said David Klein, CEO, Canopy Growth. “I believe the changes outlined today are an important step in our continuing efforts to focus the Company’s priorities, and will result in a healthier, stronger organization that will continue to be an innovator and leader in this industry. I want to sincerely thank the members of the teams affected by these decisions for their contributions in helping build Canopy Growth.”

The Company continues to expect, based upon information currently available to management, to record estimated pre-tax charges of approximately $700-800MM in the quarter ending March 31, 2020. This relates to this announcement and previous announcements, as well as any additional changes made during the organizational and strategic review. The organizational changes announced today include a headcount reduction of approximately 85 full-time positions.

All figures reported above with respect to the quarter ending March 31, 2020 are preliminary and are unaudited and subject to change and adjustment as the Company prepares its consolidated financial statements for the year ending March 31, 2020. Accordingly, investors are cautioned not to place undue reliance on the foregoing information. The Company does not intend to provide preliminary results in the future. The preliminary results provided in this news release constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation, are based on several assumptions and are subject to a number of risks and uncertainties. Actual results may differ materially. See “Notice Regarding Forward Looking Statements”.

OLCC Will Temporarily Accept Expired State Of Oregon Issued ID

by Leave a Comment

OREGON: The Oregon Liquor Control Commission will allow alcohol and marijuana licensees to accept expired Oregon driver licenses or identification cards that expired, on or after March 8, 2020, as an acceptable form of identification.

This decision aligns with the Oregon Department of Motor Vehicles and law enforcement position, as DMV offices are closed because of the COVID-19 public health crisis preventing individuals from renewing their driver’s license or ID cards.

This temporary exception only applies to driver licenses and identification cards issued by the State of Oregon. This exception will remain in place while the Governor’s Executive Order 20-03remains in effect.

This addresses a concern, brought to the attention of the OLCC, faced by former Oregon Medical Marijuana Program cardholders, who have transitioned to the recreational marijuana system, but have driver’s licenses or identification cards that have expired.

On March 20, 2020, The Oregon DMV asked law enforcement to exercise discretion in enforcing violations due to expired credentials and the Oregon State Police, Oregon State Sheriff’s Association and the Oregon Association of Chiefs of Police have agreed to support this “grace period.”

Additional information can be found in the OLCC recreational marijuana program FAQ.

Information about COVID-19 related changes to OLCC rules, program and compliance/enforcement can be found on the OLCC COVID-19 Business Continuity page on the OLCC website.