WeedWeek edition / May 06, 2019
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This week on the podcast
Terpenes and Wax with DJ Verbz

1 COUNTERFEIT CANNABIS

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Counterfeit vape cartridges are yet another problem bedeviling the California industry. Many of L.A.'s 500+ unlicensed dispensaries are selling imitationscounterfeit versions of brands like Heavy HittersStiiizy and Brass KnucklesNBC reports.

In some cases, the imitations were so well rendered, the companies themselves struggled to tell the difference. However, the story found all of the fakes to contain "large amounts of dangerous pesticides, banned by the state for use on marijuana." One fake contained an illegal amount of lead.

  • It seems likely that these fakes have made it into other states as well.
  • L.A. and Gov. Gavin Newsom are cracking down on illegal shops but it remains challenging, especially since many cities and counties don't allow legal REC retailers.

The N.Y. Times says the California's illegal market is boomingThe East Bay Express says "the state basically keeps calling the cops on itself."

Quick Hit

  1. Zack Ruskin explains the industry's plastic problem.
    merry jane
  2. When Washington state retailers self-test for pesticides, it can give producers and processors a bad name.
    mjbiz

2 ANOTHER WEEK, ANOTHER BIG DEAL

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selectoil.com

Multi-state operator Curaleaf acquired Cura's Select Oil brand in a $948M all stock deal to create the world's largest cannabis company by revenue. The combined entity's $205M in 2018 sales is almost twice the size of its closest competitor, Florida dispensary chain Trulieve.
reuters

  • Oregon-based Cura is also sold in California, Nevada and Arizona. With 500 employees, it is the largest Oregon start-up in a generation.
  • The Oregonian has a feature on Select's sordid history. The company began with a "real estate scandal" before it was rescued by prominent entrepreneur Nitin Khanna who became Cura's CEO in 2015.
  • In 2014, a woman who had been Khanna's bride's hairdresser at their 2012 wedding accused Khanna of raping her hours before the wedding. "Khanna denied the accusations and reached a civil settlement with the woman, terms of which were never disclosed... [Prosecutors] said DNA tests proved he had sexual contact with the hairdresser but prosecutors concluded they couldn’t demonstrate it was not consensual."
  • In May 2018, Khanna stepped down as CEO after details of the sexual assault accusations surfaced on social media. Cura later sued California-based competitor Bloom Farms for surfacing the information. In response, Bloom presented itself as a champion of free speech.
  • Cameron Forni, who replaced Khanna as CEO, wrote last year that he was unaware of the accusation against Khanna until they resurfaced on social media.
  • Cura wouldn't say whether Khanna remains a major shareholder or still has a place on its board.
  • Through a spokesperson, Cura said the company was not connected to the real estate scam, blaming it on an investment manager who's now in prison. It declined to answer additional questions.
  • 🌴For more on the deal, see WeedWeek California.

Quick Hits

  1. When it went public in Canada late last year the diversified conglomerate Tilt Holdings, which includes Baker TechnologiesSea Hunter Therapeutics, Blackbird and other companies valued itself at $500M. It then revised that figure down to $7M. Its first quarterly earnings report listed a $554.5M loss on sales of $5.7M.
    marketwatch
  2. New Cannabis Ventures looks at the top 31 revenue-generating cannabis stocks.
  3. High Times appears likely to close its share offering well below initial expectations.
    mjbiz
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3 COLORADO POISED TO LOOSEN REGS

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Et puis, le deluge

Colorado weed is on the brink of "a new era."

Gov. Jared Polis (D), appears poised to empower marijuana companies to attract new investors and better cater to customers. This new pro-cannabis stance could help Colorado remain an industry hub as larger markets open.
colorado sun, westword

Colorado requires all marijuana investors to be identified to regulators. In this recent WeedWeek exclusive, my reporting documents an apparent investor in the company Ebbu who was not identified to regulators. (Ebbu's former CEO Jon Cooper denies the individual was an investor. Last year, Canopy Growth acquired Ebbu's assets.)

State authorities, including Gov. Polis' office have repeatedly declined to comment on Ebbu or the possibility that other companies made similar transactions to the one I've documented. This week in a Twitter thread, I explain why it matters.

Quick hits

  1. CityLab asks if Denver will legalize magic mushrooms. They're on the table in Oakland as well.
    marijuana moment
  2. Canopy Growth acquired the German cannabinoid company C3 for $253M.
    mjbiz
  3. Oregon's Senate voted to freeze pot production at current levels for two years.
    ap
  4. Las Vegas approved cannabis lounges.
    las vegas review-journal
  5. Winning a Massachusetts license, "often seems to be determined by whom you know -- or if you can afford to pay a lobbyist or consultant who knows people."
    boston globe

4 L.A., RECHARGED

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This week WeedWeek hosted our second Recharge L.A. event featuring talks by some very smart, plugged-in cannabis insiders.

Thanks again to our terrific sponsors SoapBox SampleHawke Media and Meadow!

  • Keynote speaker nancy whiteman, CEO and Founder, Wana Brands ("#1 US infused products brand by revenue" according to a November 2018 report by BDS): “Back in the day … it was predominantly a young male market. Now the fastest segments are female and skewing older.”
  • nicole elliott, Senior advisor on cannabis in California Gov. Gavin Newsom's Office of Business and Economic Development: “I’m interested in approaching enforcement in a way that doesn’t repeat all the mistakes made during the "War on Drugs."
  • (Our full interview with Elliott will be on an upcoming episode of the WeedWeek podcast.)
  • bryce berryessa, Founder, La Vida Verde; Board member. California Cannabis Manufacturers Association:"If you are thinking about getting into this industry now, make sure it is something you love. The road is a lot more tenuous and difficult than it used to be."

We were also lucky to hear from:
-elizabeth ashford, Senior director, Eaze
-rashaan everettGoodTreeLA
-david hua, CEO, Meadow
-gavin kogan, CEO, Grupo Flor

See more on Twitter and Instagram.

Watch this space for info on future WeedWeek events.

5 CHINA’S HEMP DYNASTY

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No, that's bamboo

The N.Y. Times looks at China's booming hemp industry. Based largely in the southern Yunnan Province, one of the country's poorest, the business benefits from interest in CBD.

China is the world's largest hemp producer, and largest exporter of hemp textiles and paper. In 2017, the South China Morning Post published a fascinating story about how China became a hemp superpower.

While backpackers used to visit Yunnan and find cannabis growing wildly, THC-legalization has "virtually no chance" of advancing in China.

Quick Hits

  1. The pioneering hemp soap company Dr. Bronner's is going into the REC business.
    cannabis now
  2. The FDA is under pressure to figure out how to regulate CBD.
    the hill
  3. Financial firm Piper Jaffray anticipates companies like Pepsi and Coca-Cola will release CBD products, though neither has made a public announcement.
    barron's
  4. Elsewhere Barron's threw water on MED company Vireo's patent for cannabis-infused tobacco.
  5. Mondelez could add CBD to cookie brands like Oreo and Chips Ahoy.
    nbc
  6. A federal judge will allow a closely watched patent-case to proceed towards trial. Plantiff United Cannabis alleges Pure Hemp Collective infringed on a cannabinoid formula, which Pure Hemp says is "ubiquitous" in the marketplace. The case has attracted attention because it could determine whether cannabinoid formulas can be protected.
    mjbiz
  7. Lawncare company Scotts Miracle-Gro posted strong results for its hydroponics business, Hawthorne.
    bloomberg
  8. Barclays estimated the US market would be worth $28B if legalized today, climbing to $41B by 2028.
    cnbc
  9. MED activist turned Canopy executive Hilary Black says she's not a sellout.🍁For more see WW Canada
    bnn bloomberg

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6 “NO SHOT” FOR NEW YORK REC LEGALIZATION

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Not yet

New York state senator and legalization supporter Diane Savino (D) told Cannabis Wire the state's REC legalization push has stalled. Between local objections in some areas, NIMBYism and big questions about equity, Scavino said REC legalization basically has "no shot" before 2021.

Gov. Andrew Cuomo called legalization a "large undertaking."

While REC legalization has sputtered out in New Jersey as well, multi-state operators are still arriving in the state. New licenses will be needed to support its growing MED program.
nj.com, mjbiz

But REC legalization could happen in Connecticut.
hartford courant

Quick hits

  1. A new bill would legalize REC sales in D.C.
    washington post
  2. Florida could be the first state to cap THC levels in smokeable MED.
    flapol
 

7 TEXAS GOP TAKES HARDLINE ON WEED

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The Austin Chronicle explains why legalization isn't moving in Texas despite bipartisan support.

  • While many Republicans support legalization, Texas' powerful Lt. Gov. Dan Patrick (R) is "strongly opposed to weakening any laws against marijuana [and] remains wary of the various medicinal-use proposals that could become a vehicle for expanding access to this drug."
  • With the legislative season winding down, a bill to reduce criminal penalties for pot crimes appears to have fallen short.
    austin statesman

Quick hits

  1. The VA came out against three bills which would improve MED access for veterans.
    marijuana moment
  2. decorated Army veteran lost his pension after he started working for Acreage Holdings.
    barron's
  3. Activists say presidential candidate and longtime drug warrior Joe Biden(D), has been more lenient with his children.
    washington examiner

8 HARVARD, MIT RECEIVE $9M FOR MED RESEARCH

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joe daniel price/ Getty Images

An alumni of Harvard and MIT who's now a cannabis investor donated $9M to the schools to study marijuana's medical value. The donor Charles R. "Bob" Broderick invests in cannabis through family office Uji Capital. He will not have any say over the research he's funding.
boston globe

  • MIT researchers plan to study the effects of cannabis on people with schizophrenia, about half of whom use cannabis heavily. Other MIT researchers will study autism, and Huntington's disease.
  • Half of the grant goes to Harvard where 30 scientists and doctors will study "the effects of marijuana ingredients on brain cell function and the connections between brain cells, testing purified ingredients on mice and rats."

Quick Hits

  1. Facebook showed how its AI technology can distinguish between pictures of cannabis and broccoli.
    marijuana moment
  2. A study found using cannabis and tobacco together can contribute to low function among young adults.
    eurekalert!
 

9 BALTIMORE PROSECUTOR FIGHTS TO TOSS POT CONVICTIONS

Baltimore prosecutor Marilyn Mosby has thus far been thwarted in her efforts to throw out nearly 5,000 marijuana possession convictions. Despite two judges ruling against her, the Baltimore Sun editorial board encourages her to explore additional options. The editors also encourage the legislature to act.

Quick Hit

  1. Billionaire former Insys Therapeutics CEO John Kapoor became the first CEO convicted at trial of racketeering related to the opioid crisis.
    bloomberg
 

10 LEGALIZATION’S LGBTQ HISTORY

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Merry Jane has a long story on the queer history of California's MED Movement.

The story features the famous activists Brownie Mary and Dennis Peron as well as lesser known figures like Chris Conrad, Mikki Norris, Andrea "Nurse Mary Jane" Tischler, and Paul Scott.