WeedWeek edition / January 27, 2020
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1 MEDMEN STOCK IS “CHEAP:” CEO

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@shopmedmen Instagram
Adam Bierman, CEO of California-based MSO MedMen, made the case for the retailer's value amid confirmed reports that the company has offered to pay some suppliers in MedMen stock.
MarketWatch

In an interview with Green Market Report and in an Ask Me Anything on Reddit, Bierman argued the company's stock is "cheap... versus where it will be as we execute." He said MedMen's assets include its $1 billion in license value-- more than 10 times its current market capitalization-- national footprint and desirable store locations in New York, California and Las Vegas.

Ganjapreneur writes up key points from the Ask Me Anything and says Bierman answered some, but not all, of the tougher questions. (You can see comments that were deleted and removed here.)

  • In an email obtained by MarketWatch, MedMen offered a supplier three options: 1) The full amount owed in non-voting stock, 2) A payment plan for the full amount or 3) A cash payment for half the amount owed.
  • On Sunday MedMen stock was worth 44 cents per share, down from $6.49 in October 2018 and 64 cents on January 17. The company's current market cap is $92.6M according to Yahoo Finance.
  • In a separate story, Green Market Report notes the company had $671M in total liabilities in September, and $43.9M in revenue for the quarter ending that month. Report called it "a fairly lopsided situation."
  • In an interview with Green Market Report, CEO Bierman said "our cash position is very healthy, our balance sheet is strong."
  • This comes after MedMen renegotiated terms with Gotham Green Partners and at least one other backer last year. Bierman said the restructuring will probably be done in a month. (Gotham Green Partners has close ties to Canadian cannabis company Cronos Group.)
  • The restructuring has involved substantial layoffs and forced the company to exit Arizona.
  • Bierman said MedMen is working with restructuring firm FTI Consulting to get its finances in order.

Key moments from the Reddit AMA:

  • Bierman said he bought 1M shares of MedMen stock in December and January and has never personally sold a share of MedMen stock. "I am all in on this company." Bierman has been criticized for paying himself lavishly, but is now receiving a salary of $50,000.
  • "No amount of money could secure the [store] locations we have today. "
  • "I regret not implementing this cost cutting sooner," Bierman wrote.

Financial site Grizzle has a more bearish view and discusses what to do if MedMen owes you money.

 

Quick Hits

  1. MedMen competitors CuraLeaf and Cresco Labs have recently closed on $300M and $200M in debt financing, respectively.
    MJBiz
  1. U.S. marijuana companies are not eligible for bankruptcy protection. In December, National Law Review discusses this thorny issue.
  2. "Bargain hunters" have pushed up the value of some Canadian pot stocks.
    Reuters

PRE-ORDER "THE CANNABIS DICTIONARY!

2 TRUMP ADMIN’S CANNA-CURIOSITY

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MARK WILSON / GETTY IMAGES
Guess which one is more baked

President Trump's daughter Ivanka and her husband, senior Trump advisor Jared Kushner, attended a small October 2018 dinner with unnamed leaders in the cannabis industry, according to Lev Parnas, a former associate of Trump's lawyer Rudy Giuliani, who has been indicted on campaign finance charges and is now cooperating with law enforcement.
The Daily Beast

  • The industry figures “wanted Jared to be more involved, maybe help push the agenda with the president because they felt that that was something he needed to be more lenient on,” Parnas said. 
  • A dinner attendee said Trump and Kushner recognized that "the tension between federal and state marijuana laws needs work."

Parnas also spoke with Trump directly about marijuana in an April 2018 conversation Parnas secretly recorded.
Tom Angell -- Forbes

  • Trump said the drug makes people "lose IQ points" and that they "have more accidents" in Colorado.
  • Trump seemed to express surprise that cannabis companies can't access banks, adding, “I don’t know if that’s a good thing or a bad thing.”
  • Regarding legalization, Parnas said "It's so far out you're not going to stop it" and suggested federal reform could help with the midterm elections. Trump did not respond directly.
  • In the recording, Donald Trump Jr. can be heard saying "alcohol does much more damage" than cannabis and that "You don't see people beating their wives on marijuana...It's just different."
  • Parnas' lawyer Joseph Bondy is also involved in a case challenging cannabis' federal illegality.
    Marijuana Moment

Do you know anything about connections between the administration and the cannabis industry? I want to hear about them and will protect your identity: alexhalperin@protonmail.com.

For a wider ranging conversation of the extraordinary recording, see the New York Times.

Quick Hit

  1. MJBiz looks at the prospects for federal reform in 2020. The short version: Banking has the best shot. Marijuana Moment has more on the banking situation.

3 DATA BREACH EXPOSED INFO ON 30,000 CANNABIS BUYERS

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PHOTO BY MARKUS SPISKE ON UNSPLASH

A team of online privacy researchers discovered a data breach which exposed the personal information of more than 30,000 cannabis customers. The breach affected THSuite, a cannabis software company which was apparently storing the information in an unsecured "bucket."
VPNMentor

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4 40+ STATES

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More than 40 U.S. states could legalize some form of cannabis by the end of 2020, further straining the contradictions of federal illegality, Mona Zhang writes in Politico.

The piece also has updates on possible REC legalization in New Mexico, New Jersey, New York, Connecticut, Arizona, Oklahoma, Missouri, Montana and South Dakota. MED is on the table in some of the country's most conservative states: Kansas, Idaho and Mississippi.

  • REC won't be legalized in Ohio or Florida this year. Marijuana Policy Project's Matthew Schweich said campaigns cost less money in smaller states and each comes with two U.S. Senators.
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5 CANN SCOOPS UP $5M

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Trendy drink brand Cann raised $5M to compete in California's increasingly crowded infused beverages space.
TechCrunch

  • The company says it has sold 150,000 cans of its "social tonics" since they debuted in May.
  • Investors include Imaginary, an early stage VC fund started by the founder of the Net-a-Porter group, and cannabis company JM10.

6 YOUNG CANNABIS USERS BECOME WORSE DRIVERS: STUDY

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PHOTO BY CONOR SAMUEL ON UNSPLASH

A study found people who started using cannabis before age 16 exhibited poorer driving performance even when they are sober.
Boston Globe

  • The study "found heavy cannabis users using a driving simulator hit more pedestrians, missed more stop signs and red lights, drove faster, and left their lane more often than non-users, even after abstaining from the drug for at least 12 hours."
  • However, those who took up cannabis after age 16 didn't exhibit the same behaviors.
  • It was the first study to find poor driving performance by cannabis users when they are not actively high.

7 LARGEST U.S. TRIBAL NATION COULD GO GREEN

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JEROME POLLOS/ GETTY IMAGES
A member of the Cherokee Nation fits his headdress before a traditional dance competition

The Cherokee Nation, the largest Native American tribe in the U.S., is studying whether to enter the cannabis industry.
AP

  • The tribe is based in Oklahoma, which has a freewheeling MED industry.
  • The Paiute are the only U.S. tribe I'm aware of which has entered the industry. It runs the NuWu Cannabis Marketplace in Las Vegas, one of the world's largest dispensaries.

Quick Hit

  1. After several delays, Mexico could legalize REC in April.
    Marijuana Moment

8 IBOGA: THE NEXT MED HALLUCINOGEN?

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THE IBOGA PLANT

A German company called Atai Life Sciences is about to test ibogaine, a hallucinogenic compound modeled on the extract of an African plant, as a treatment for opioid addiction.
Bloomberg

  • The company has backing from Silicon Valley tycoon Peter Thiel.
  • “In some circles, psychedelics are still associated with escape from the real world and irresponsible extravagance,” Thiel said in an email. “With FDA-controlled studies, we will come to see that their most powerful use brings people to mental health and sober sanity in a medical setting.”
  • Studies have found ibogaine reduces symptoms of opioid withdrawal more effectively than methodone.
  • "Patients have described their experience as a sobering trip that visualizes the negative consequences of drug abuse," an executive with Atai partner DemeRx said. The procedure requires 24 hours of clinical monitoring since ibogaine has been linked to heart side effects.

Quick Hit

  1. An Oregon company called Silo Wellness has designed a "magic-mushroom nasal spray" intended for medical uses.

9 BRING THEM HOME

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PHOTO BY YE JINGHAN ON UNSPLASH

Esquire has a piece on The Last Prisoner Project, an NGO started by Harborside founder Steve DeAngelo to bring non-violent cannabis offenders home from prison.

  • LPP estimates there are 40,000 people locked up for non-violent cannabis offenses.
  • The program also aims to train returned offenders for jobs in cannabis.

Quick Hit

  1. In Massachusetts, aspiring equity entrepreneurs say the system isn't working.
    Boston Globe

10 BEHOLD: THE NUCLEAR BONG

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The founder of a Bay Area company called Silicon Cali posted a video of bong it is developing called The Reactor, which enables the soon to be vaporized concentrate to float in mid-air.

It supposedly uses levitation technology invented for nuclear power plants and "takes dabs to a level man isn't ready for," according to a Reddit commenter. Weedmaps featured the bong in a post on consumer trends.

Quick Hit

  1. Christian-themed cartoon series "Veggie Tales" created a cannabis character, Cannabis Carl, jokes satire site Babylon Bee.
  2. Following negotiations with the player's union, the NFL appears likely to adopt a more lenient cannabis policy.
    Washington Post