WeedWeek edition / November 15, 2020
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1 DO CELEBRITY POT BRANDS SELL?

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Guitar icon Carlos Santana is the latest high-profile celeb to have his own cannabis brand, but does having a famous musician or athlete's endorsement help move product? In WeedWeek, Willis Jacobson found it's a mixed bag:

“Having a celebrity brand may help get you to first base quicker than other start-ups, but in the long run, I would advise building a great brand with a high-quality product,” said Randall Huft, CEO of Innovation Agency. He recommends that brands consider using celebrity endorsements rather than building an entire brand around one celebrity.

  • Among other reasons, if a celeb's image is tarnished or loses cache, it can tank the brand."

Willis wrote several more must-read business features this week:

Quick Hits

  1. Colorado dispensary Standing Akimbo has made a long shot appeal to the U.S. Supreme Court in its case against hated tax rule 280E.
    WeedWeek
  2. A federal judge ruled that a CBD retail chain can move forward with a lawsuit accusing credit card giant Visa of "terrorizing" its business.
    WeedWeek
A note from the editor

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2 THE ELECTION’S OVER, NOW WHAT?

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After five out of five states voted to legalize MED and/or REC, the big question now is whether it will be enough to break the stand-off over pot reform in Washington D.C.:

  • The Democrat-controlled House of Representatives is set to vote on the MORE Act this year. If enacted, it would decriminalize cannabis nationwide and enable states to legalize at their own pace. Worried it would hurt them at the polls, House Democrats cancelled a pre-election vote on the bill, a decision that doesn't necessarily look smart in hindsight.
    WeedWeek
  • While the bill faces an uphill battle in the Senate, Sen. Pat Toomey (R), who will chair the banking committee if Republicans maintain control of the upper chamber, described himself as "sympathetic" to banking reform.
    @natsfert
  • Business Insider anticipates a wave of industry M&A (paywall).
  • Despite reassurances, decriminalization and federal cannabis record expungements were left out of President-Elect Joe Biden's racial equity transition plan.
    Marijuana Moment
  • Nineteen state cannabis regulators formed a non-partisan group to share policy information.
    WeedWeek 
  • Bloomberg asks if weed can help Biden unite a divided nation?

Edibles sales appear to have climbed in the stressful weeks leading up to the election. Now Canndescent CEO Adrian Sedlin anticipates strong holiday sales "for all the wrong reasons," i.e. everyone's stressed and bored.
New York Times/ LinkedIn

3 VERANO/ALTMED TIE-UP CREATES A MAJOR PLAYER

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MSO Verano Holdings said it would acquire Alternative Medical Enterprises (AltMed) to create an operator with 44 shops across 14 states.
MJBiz

  • The terms were not disclosed.
  • Executives say the combined company will be one of the three largest U.S. players by revenue, though the privately held companies don't disclose their sales figures. This suggests annual sales of more than $200M.
  • Verano operates the ZenLeaf dispensary brand. AltMed operates the MüV dispensary brand. The latter has about 10% market share in Florida.

In other business news:

4 NEW JERSEY WANTS ITS REC, BUT EXPECT DELAYS

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New Jersey Democrats have to settle some disagreements over taxation before the state can open its newly legal REC market. While about two-thirds of voters approved the ballot initiative, the state legislature still needs to pass a law governing the state's industry.
Politico/Marijuana Moment

  • The dust-up involves who can tax consumers, how much, and whether those policies are in line with the state constitution and the recently passed ballot initiative.
  • There are also questions about how the state will spend pot taxes, especially whether they will be earmarked to benefit communities disproportionately harmed by the war on drugs.
  • The Philadelphia Inquirer interviewed Dianna Houenou, who'll chair the state's regulatory commission. She was previously involved in an ACLU cannabis-reform effort.
  • The mayor of Atlantic City is calling -- almost certainly in vain -- for the city to have the a three to five year monopoly on state REC sales.
    New Jersey News 12
  • Next door, where REC isn't legal, Pennsylvania Lt. Gov. John Fetterman (D) told Rolling Stone, “We are leaving $5 billion over the next 20 years, of free money."

5 ANOTHER LAWSUIT TANGLES L.A. LICENSING

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Another lawsuit appears likely to further delay licensing in the world's largest metropolitan market. This one was filed against the city of Los Angeles by four social equity applicants and their businesses. It accuses the city of violating its own regulations and claims that the licensing process last year was "severely compromised."
WeedWeek

  • It's at least the fourth lawsuit this year involving the city's licensing process.
  • A lawyer for the plaintiffs said social equity applicants "have faced nothing but soul-crushing bureaucracy, unexplained delays, and depressing rumors of misconduct, from the City of Los Angeles.” 
  • Meanwhile, Blacks and Latinos still account for more than 75% of cannabis arrests in L.A. WW California has more.
    L.A. Taco

More from California:

6 MEXICO’S READY TO LEGALIZE REC, FOR REAL THIS TIME

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COURTESY OF GETTY IMAGES

After years of stop and start, Mexico appears ready to legalize REC by mid-December. But significant questions remain about what the law will look like.
Washington Post

  • Some advocates believe the bill is too friendly to wealthy corporations, while ignoring small businesses, family-owned farms and the realities of the country's ongoing struggles with drug cartels and poverty.
  • “The truth is we’re just a few weeks away from the vote and we don’t know what’s going to happen,” said Julio Salazar, a senior lawyer and legalization advocate with the nonprofit group Mexico United Against Crime. “I'm not sure if the initiative being pushed by Congress actually makes things better. It makes a cannabis market for the rich and continues to use criminal law to perpetuate a drug war that has damaged the poorest people with the least opportunities.”
  • There's a cannabis "protest garden" in the shadow of the country's Senate.

On the other side of the world, Israel also sees some traction with REC legalization though the legislative process is likely to last well into next year.
Jerusalem Post

7 FOR PSYCHEDELICS, THE FUTURE IS NOW

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Vanity Fair unpacks "psilocybin's big week" which included both a groundbreaking study and votes for reform in Oregon and Washington D.C.

  • Oregon voted to allow psilocybin therapy and Washington D.C. decriminalized the hallucinogen.
  • A new study from Johns Hopkins found that two therapeutic doses of the drug may benefit patients with depression.
  • “This is a new model in terms of psychiatry,” Roland Griffiths, Ph.D., the study’s lead researcher and a professor in the departments of psychiatry and neuroscience said. “Frankly, it looks more like an orthopedic surgical manipulation...You go in, you replace a hip and establish functioning, and you expect the person to be enduringly better, if it works.”
  • Approximately 10% of the U.S. population has a diagnosis for major depression annually.

Canna Law Blog offers 10 lessons from the cannabis industry for the future regulated psychedelics industry.

8 LONGEST SERVING U.S. POT PRISONER TO BE RELEASED

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@lastprisonerproject

Richard DeLisi, 71, who has been described as America's longest-serving non-violent cannabis offender is set to be released next month from a Florida prison.
New York Post

  • In 1989, DeLisi received a 90-year sentence for smuggling cannabis from Colombia to South Florida. Along with his brother, who was released in 2013, DeLisi reportedly smuggled $50M worth of cannabis.
    USA Today
  • The non-profit Last Prisoner Project has advocated for his release.
  • "I am so excited to hug my children and grandchildren," DeLisi said. "I have missed so many important moments with them and I can’t wait to get out there and create precious memories with everyone. I am so thrilled that this dark chapter of my life is finally over”

9 ON VETERAN’S DAY, CALLS FOR MED ACCESS

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Jane Technologies CEO Socrates Rosenfeld

In a Veteran's Day essay, Jane Technologies CEO Socrates Rosenfeld highlighted MED's value for soldiers returning from war:
WeedWeek

Medical cannabis personally helped me reconnect with my natural emotional responses after I left the military. I was fortunate to have family and friends who understood the benefits of cannabis and were able to introduce me to the plant...Unfortunately, for millions of veterans who rely solely on their VA healthcare benefits, federal law ties the hands of VA doctors from prescribing medical cannabis as a treatment option.

10 IN N.J., IT’S “WEEDMAN VS. GREEDMAN”

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@njweedman

Ed Forchion, the cannabis activist and storefront dealer better known as N.J. Weedman, is calling for the state to license illicit dealers like himself:
NJ.com

  • The state's amendment only legalizes “a controlled form of marijuana called ‘cannabis.”
    NJ.com
  • Semantics aside, Forchion wants the dealers like himself, from the traditional market, to be welcomed into the state's new REC regime.
  • “They’re trying to eliminate the black market?” Forchion said. “Well, the black market ain’t going nowhere.'
  • "The only way to eliminate the black market, he said, is to let the current dealers sell pot legally. Forchion said he and his fellow dealers would be glad to collect the tax, which would add only about $3 to the price of the typical eighth-ounce bags he sells for $40."

Quick Hit

  1. Merry Jane put together an interesting two minute video on Hollywood's tortured relationship with weed, from 1934 to the present.