WeedWeek edition / July 05, 2020
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1 EAZE TANGLED IN $100M BANK FRAUD CASE

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The Wall Street Journal has a 🔒scoop about a $100M federal fraud case with potentially "profound consequences" for the cannabis industry.

The case involves Ruben Weigand, a German businessman, who was arrested at LAX in March. In an indictment, federal prosecutors charged him with conspiracy to commit bank fraud, "stemming from an alleged scheme to trick banks into processing more than $100M in marijuana sales."

  • Though the company has not been charged, and is not named in the indictment, the story puts delivery app Eaze at the heart of the case.
  • Until last year, Eaze allowed customers to pay with credit cards. WSJ: "Prosecutors allege that Eaze executives and other unnamed co-conspirators worked with Mr. Weigand and another businessman...to devise a 'transaction laundering scheme' that hid the true nature of the transactions from banks."
  • Prosecutors allege Weigand's main role, per the paper, was "to manage the alleged network of phony bank accounts used by the phony merchants to process payments on behalf of Eaze. He was responsible, they said, for finding European banks to process Eaze's transactions."
  • Court filings say at least one Eaze CEO was involved in the alleged scheme. The Eaze executives allegedly involved, apparently no longer work for the company.
  • Eaze is reportedly cooperating with authorities "in hopes of leniency," according to the WSJ. The company says it is now using a new payment system.
  • Prosecutors seem to believe an unspecified multinational "criminal network" is involved.
  • The case "echoes" a 🔒settled California lawsuit in which a competitor accused Eaze of "holding an unfair advantage by using a payment system that skirted federal banking rules." 
    WSJ PRO
  • Weigand, who's in a California jail, has pleaded not-guilty. His attorney says the facts don't support the fraud charge.
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2 U.S. SALES COULD JUMP 40% IN 2020, HIT $37B BY 2024

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U.S. legal cannabis sales are poised to climb 40% this year to roughly $17B, according to projections from MJBiz. From there, it predicts sales will double again by 2024.

  • A looming question for 2020: How will the industry fare after July when federal, COVID-related, unemployment relief ends?
  • It projects sales in both Florida and Oklahoma -- in the latter, 8% of the population are MED patients -- to exceed $1B next year.

A report found the industry is "oddly well positioned" for the current economic moment.
WeedWeek

3 POWER PLAYERS: BOB HOBAN ON CANNABIS AND THE FORTUNE 500

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Starting in 2008, Bob Hoban began building Hoban Law Group into one of the country's top cannabis law firms. It now boasts a roster of prominent clients and offices in 23 states and abroad

This week's Power Players interview, focuses on one of Hoban's new projects, Gateway Proven Strategies, a consulting firm which helps mainstream companies and foreign governments navigate the cannabis world. In a fascinating conversation, we discussed how consumer packaged goods companies view cannabis, the industry's four regulatory lanes and whether Big Pharma is really trying to stop legalization.

A few highlights:

How big companies get excited about cannabis:

There's this notion of FOMO, right? The fear of missing out applies to large corporations as well. They're intrigued by the opportunity and how to position these products. Product developers within these companies have maybe studied it. But for decision makers, THC, CBD, all this stuff is really something they don't understand. 

Which big companies care about legalization:

[Alcohol and tobacco companies] see cannabinoids, THC in particular, as ways to sell products that are different than food and medicine, or just regular consumer products. Those folks have exerted a lot of influence to date. The other folks still see this as a small niche marketplace. 

How Big Pharma views cannabis legalization:

I think their influence is slowing down the rescheduling process because it suits them well, now. And when they're ready to have marijuana rescheduled, they'll be ready with the formulations, the products for different conditions to roll out. 

Read the whole thing.

Separately, Hoban wrote about the pitfalls of federal legalization.
Forbes

4 COLORADO GOV. SIGNS EQUITY LAW

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Six and a half years after the REC market opened, Colorado Gov. Jared Polis (D) signed the state's first cannabis equity law.
Colorado Politics

  • The law creates a class of social equity license. 
  • It also allows the governor to pardon low level cannabis offenses.
  • The ceremony took place at Simply Pure Dispensary, owned by Wanda James, one of the state's most prominent Black cannabis entrepreneurs.

Elsewhere in equity:

5 WHO’S AFRAID OF BIG POT?

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WeedWeek business columnist Dan Mitchell takes a look at U.S. Attorney General William Barr's antitrust investigations into the cannabis industry, and whether Big Pot is a threat:

John Elias, a prosecutor in the [Justice Department's] antitrust division, said Barr, motivated purely by his “personal dislike for the industry,” directed the division to investigate so many cannabis companies that the industry eventually represented nearly 30% of the cases it was pursuing. This despite the fact that the companies held “low market shares in a fragmented industry” and “do not meet established criteria for antitrust investigations.” 

Of 10 examples, the only one Elias mentioned was the proposed MedMen/PharmaCann merger, which fell apart last fall due to "regulatory delays" and other issues.

Read the whole thing.

Three dozen Congresspeople called for an inquiry into Barr's cannabis anti-trust work and possible impeachment. They said it was an "abuse of power."
Marijuana Moment

Separately, MedMen could be ejected from Pasadena, Calif.'s licensing process, on account of turnover at the company. City officials wouldn't say how it would change the selection.
Pasadena Now

Quick Hit

  1. Federal border patrol agents have seized legal cannabis shipments in southern California. 🌴WW California has more.
    Voice of San Diego

6 2020 STATE BALLOT PICTURE COMING TOGETHER

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Despite the pandemic, cannabis initiatives appear likely to qualify for the ballot in Arizona (REC),  Montana (REC) and Nebraska (MED).
WeedWeek

Recent protests also seem to have accelerated decriminalization efforts in Nashville, Tenn., Ohio and Virginia.
WeedWeek

Quick Hit

  1. Members of a criminal justice task force advising Joe Biden support marijuana legalization. The presumptive Democratic nominee, thus far, does not.
    Marijuana Moment

7 FATAL OPIOID OVERDOSES RISE AMID PANDEMIC

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The Trump administration says anxiety, isolation and depression have led to a surge in opioid overdoses this year:

  • Politico: "A White House drug policy office analysis shows an 11.4 percent year-over-year increase in fatalities for the first four months of 2020, confirming experts’ early fears that precautions like quarantines and lockdowns combined with economic uncertainty would exacerbate the addiction crisis."

Quick Hit

  1. The U.S. House of Representatives voted to allow research on cannabis purchased at dispensaries.
    Marijuana Moment

8 POT-SMOKING BURGLAR STOLE SUPER BOWL RINGS

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Bloomberg has a great read about Sean "Murph" Murphy, a cat-burglar and prodigious weed smoker who stole some of the New York Giants' Super Bowl rings after they defeated the New England Patriots in 2008:

Murphy got out after a few months and spent much of the ’80s and ’90s hanging with his buddies, cruising Lynn (Mass.) in his Camaro blasting Mötley Crüe, and burglarizing stores. He wanted to be the best the town had ever seen. He abstained from alcohol, mostly, and he didn’t use any of the painkillers he stole. But he loved lighting up a joint, sitting back in a chair, and thinking through his next caper.

Read it all.

9 AMERICANS TO SPEND MORE ON POT THAN COOKOUTS

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Mmmm, burgers

Software company Akerna, formerly MJ Freeway, anticipated Friday, July 3 would be the biggest day of the year for pot sales.
ABC

Quick Hit

  1. MSO Terrapin Care Station said it would transition to packaging that's made in America.

10 MEET THE INFLUEN-SAHS

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@SilencedHippie has 333,000 followers

The Boston Globe profiles four of New England's best known cannabis influencers: Jenny Fuore @jennywakeandbake, Sasha @silencedhippie, Amelia Walker @nugthugg and Roo @roogetslifted:

“I kind of felt like I was a loner stoner at the time, so turning on the camera was a way for me to still share my smoke sessions and just meet more people,” Sasha said. “I’ve been in tears over people telling me that my content makes them feel okay with smoking in the morning so they don’t feel nauseous or to ease their anxiety.”

Read the whole thing.

Quick Hits

  1. The movie Half Baked 2 appears to be a go.
    Metaflix
  2. On Instagram, Weed and Grub celebrated a decadent s'mores brownie recipe from Satori Chocolates.
  3. HBO is partnering with brand Kanha on infused gummies to promote its new animated series Close Enough.
    ComicBook.com