The Parent Company, said it would terminate an announced $50M investment for 6.2% of California-based grower Glass House Group.
- In a statement to WeedWeek, Glass House CEO Kyle Kazan wrote, “While the investment portion of an agreement with TPCO was negotiated in May, we then faced the task of working out a 10-year offtake and retail agreement in less than a month, in order to meet our closing date. That proved a bit too ambitious, and since we did not need it, we went without it. This does not change Glass House’s plans.”
- A statement from The Parent Co. didn’t give a reason for ending the deal.
- Analyst Alan Brochstein says the bullish thesis for pot stocks is playing out.
New Cannabis Ventures
In Forbes, Will Yakowicz calls the fight over Delta-8 THC, an intoxicating cannabinoid which can be derived from hemp, “a battle for the future of the cannabis industry.“
The products containing Delta 8 are widely available in smoke shops and gas stations in states where REC and MED aren’t legally available or are hard to find. About a dozen states, some of which have legalized, have banned Delta 8.
- “I see it as a fight for the future of cannabis,” said the founder of a Texas-based company. “For anyone trying to limit this, taking on that prohibitionist stance—whether they’re motivated by business interests, political or religious—is really just fighting against cannabis.”
- Joe Bayern, CEO of mega-MSO Curaleaf takes an opposing view: “I think it should be framed as one of the most high-profile health risks available in the marketplace today,” says Bayern. “The fact that these products are showing up completely unregulated and untested in mainstream channels, available to anybody, including children, is an incredibly dangerous proposition that needs to be addressed.”
- Some states are trying to split the difference by legalizing it as long as it passes through the regulated market.
Read the whole thing.
Prominent lawyer Robert Hoban called Delta-8, “a tale of American ingenuity.“
- SCOOP: Hoban’s firm, Hoban Law Group, is being acquired by Clark Hill. Hoban (the attorney) told WeedWeek he would lead the merged firm’s global cannabis group.
Weed lit up the Internet this holiday weekend after we learned 21-year old Sha’Carri Richardson would be barred from running the 100-meter dash at the Tokyo Olympics after she tested positive for THC.
Richardson, one of the fastest female sprinters in history, said she smoked to cope with the death of her mother. As part of her one month suspension, she had to complete a counseling program.
The legalization movement has scored some major victories in conservative states, but Politico reports GOP Senators in MED and REC markets remain skeptical of legalization. Even with full Democratic support, which is not a given, legalization appears unlikely to have the 60 votes necessary to clear the Senate.
- The industry hoped former Sen. Cory Gardner’s (R-Colo.) evolution on the issue would be a model for other Republicans. However, Republicans from other legal states have mostly disappointed. This might be because Gardner was facing (and lost) a close election in a state where cannabis is a priority for voters.
- Bank reform could have a better chance. Sen. Steve Daines (R-Mont.) opposes legalization, no matter what his constituents want, but is a lead sponsor of the SAFE Banking Act, which would enable the industry to access the financial system.
In more news from the right:
A new report from cannatech shop Akerna anticipates Friday, July 2 will be the second biggest sales day of 2021, after 4/20.
- It anticipates sales up 60% from a normal Friday and weekend sales total $206M.
A new report from consultancy Brightfield Group is similarly bullish.
- More women are consuming than ever before and in some states make up the majority of users.
- New users are entering the market at significant rates, “A clear factor in this phenomenon is stress and anxiety.”
In a development little noted in the cannabis world, earlier this month Apple opened its app store to pot delivery services.
- In the past, the tech giant has wavered on its 420-friendliness.
- Delivery apps will be able to operate as long as they are geo-restricted to a legal jurisdiction.
- Google’s Android does not currently allow cannabis delivery apps.
In an interview with WeedWeek, Chris Vaughn, CEO of California delivery service Emjay and before than founder and CEO of booze delivery app Saucey, described delivery as “probably the biggest opportunity in cannabis.”
- While no cannabis company is big enough to sway Apple, he suggested the company is picking up on prevailing trends such as legalization in New York and Amazon’s decision not to test employees.
- Emjay had been preparing its Apple iOS app before the announcement and has now submitted it to the company for feedback. “We had a feeling this was coming,” he said.
- Delivery apps have the potential to offer a smoother, more intuitive shopping experience than the mobile web.
- “I think Google will follow quickly,” Vaughn said.
A story in MJBiz discusses the shake-up at California retailer Harborside after it went public and had to shed its activist roots. The situation has become common as cannabis companies with limited fundraising options started trading in Canada.
According to the story, the company took on a much more buttoned-up corporate culture and a number of staffers decided to part ways with the firm.
- “It just comes down to the fact that … all these companies, under normal circumstances, had no business going public,” said Jon DeCourcey, an analyst at New York-based Viridian Capital.
- “The DeAngelos [founder Steve and his brother Andrew, formerly Harborside’s COO] had raised money. They had shareholders, so they didn’t own 100% of the company. So they had a responsibility to their shareholders to bring in profit. So going public only exacerbated it from that end,” current board president Matt Hawkins, managing partner at Entourage Effect Capital said. “That’s just business. If people don’t understand that, then I don’t know what to say.”
- Steve and Andrew, who have cut their ties with Harborside, declined to comment for the story.
- Other companies cited as experiencing similar “turmoil” after going public include MedMen, Ayr Wellness and Medicine Man Technologies (now Schwazze.)
Oakland-based Harborside was one of the city’s first dispensaries. Founded by Steve DeAngelo, it’s famous for taking on the federal government in a forfeiture lawsuit it won and a less successful fight against industry-hated tax rule 280E.
East Bay Express, MJBiz
Read the whole thing.
- Bloomberg looks for lessons in California’s $100M weed biz bailout.