As it shuts down normal life in much of the U.S., the coronavirus pandemic is likely to have dire consequences for some cannabis companies, Alan Brochstein writes at New Cannabis Ventures:

• Brochstein: "Deeply-discounted equity offerings from [MSO] Harvest and [Canadian MED company] Tilray are likely a harbinger of more stock sales ahead as companies with inadequate capital struggle for survival...We think the most important thing now is to understand that many companies aren’t likely to survive without substantial dilution to existing shareholders."
• More Brochstein: "Unfortunately, COVID-19, the second black swan event in six months [after the vaping crisis], could prove to be more fatal to cannabis companies than the vaping crisis. Quite simply, capital has become more scarce overall."
• NCV's Global Cannabis Stock Index fell 25% in January and February, and is now down almost 50% on the year.
• Attorney David Feder posted on what it could mean for business contracts.

Chicago store MOCA Modern Cannabis suspended REC sales to focus on serving MED patients, who may have compromised immune systems.
Chicago Tribune

• "Dispensaries are upping their cleaning routines, offering gloves for employees and encouraging patients to use online ordering," the story says.
• MJBiz looks at businesses taking similar steps nationwide, and how the disease has "exposed fragility" in the vape hardware supply chain from China.
• Also in MJBiz, U.S. companies are looking to source their packaging closer to home.

The disease is also devastating cannabis events businesses, both consumer and business focused. Leafly compiled a list of cancelled and postponed events. Short version: Nothing is happening through 4/20.

• 420-friendly mainstream events like SXSW and Coachella are also off.
• Colorado's cannabis tourism sector is struggling.
  Westword
• The virus endangers The Stranger (Seattle) and The Portland Mercury, two cannabis friendly alt-weeklies.

However, for predictable reasons, the crisis seems to be increasing demand for cannabis.

• The Hollywood Reporter: "People are in scarcity mode. The streets are emptier, but specific businesses like grocery stores and dispensaries are seeing more people than usual — and people are stocking up and purchasing in bulk," says Steve Lilak, the head of sales for California cannabis company NUG. "I've seen regular customers buying three or four of what they normally buy just one of in L.A. dispensaries." He adds that one Hollywood shop he spoke with saw 1,000 customers on Wednesday when they usually see that amount on a Saturday.
• In addition to food, hoarders are stockpiling liquor, weed and guns. Rumor has it that 120 proof liquor kills germs.
  L.A. Times

Former Vice President Joe Biden appears to have a prohibitive lead in the Democratic Primary. His likely place on top of the ticket has divided cannabis notables, since he's one of the few candidates to oppose legalization.
Canna Law Blog

• Notably, Steve DeAngelo tweeted that he has "seen the repeated sell out of the cannabis freedom movement by the Dems. They say nice things during the election, then act like Republicans when they win."
• Veteran cannabis journalist David Bienenstock responded that he'd be voting against Trump because he fears "Real Capital F Fascism."
• Bienenstock previously wrote a Leafly story headlined "Joe Biden's drug war record is so much worse than you think."

This week Biden said he would legalize, and then corrected himself.
Marijuana Moment

For this week's exclusive Power Players interview I spoke with Kris Krane, president and founder of MSO 4Front.

Krane has been involved in cannabis advocacy since he was a student at American University in Washington D.C. He spent the aughts at NORML and then led Students for Sensible Drug Policy, before Steve DeAngelo recruited him to help recreate dispensaries like Harborside across California. It was too early for that business to work, but it led to the formation of consultancy 4Front, which has evolved into a vertically integrated company with operations in eight states.

Here are a few highlights:

On the Massachusetts REC market:

"It’s outrageous that there’s one REC store in Boston three and a half years after we got that ballot initiative. Boston has changed its process for getting hosting agreements three times. Meanwhile all these applicants have been pending, that are now on their third different application process."

On "real world" cannabis equity:

A brand licensing agreement can be real way in. There’s a reason why most people don’t open Bob’s hotel, they’ll license the Hilton brand. Because people are familiar with the Hilton brand, they have operating protocols, they can come in and manage it for them, and the owners still get a nice payment, and they have a nice job, and they manage staff day to day but they’re in the Hilton system. And that may be enticing to an equity licensee.

On keeping shelves stocked in less mature markets:

So Michigan, Illinois, Massachusetts’s, pricing is all around $4,000 a pound. And you’re lucky if you can get it. We have a retail store open in Ann Arbor Michigan, we rarely have any flower on the shelf. It’s just not there. It will be, there’s been a bunch of cultivation licenses awarded in the last six months but none of it is up and running.

Read the whole thing.

Who should we speak to for future Power Players interviews? Reply to this email with suggestions.

Recent developments in several potential state ballot initiatives show cannabis reform is in play in virtually every state:

• In Arizona, the Arizona Cannabis Chamber of Commerce dropped its push for a small business friendly REC initiative and endorsed a rival REC initiative, Smart and Safe Arizona. The latter has support from MSOs operating in the state.
  Phoenix New Times
• NJ.com checks in on New Jersey's REC initiative.
• A group called Missourians for a New Approach is making progress on signature collecting for a REC initiative.
  KSHB
• Mississippi is likely to see two MED initiatives on the November ballot.
  Tom Angell
• Advocacy group Arkansas True Grass wants a REC vote in November.
  KARK
• Idaho South Dakota and Nebraska could see MED votes as well.
  Ballotpedia
• And Oregon, could vote on decriminalizing all drugs.
  OPB

Meanwhile, the coronavirus could derail New York's push to legalize REC through the legislature.
Leafly

The Associated Press finds a couple of legalization refugees who fled Humboldt County for Oklahoma. It's because Oklahoma is one of the easiest places to run a cannabis business.

• "A combination of factors — including a remarkably open-ended law and a red state’s aversion to government regulation — have created such ideal conditions for the cannabis industry that entrepreneurs are pouring in from states where legal weed has been established for years," Sean Murphy writes.
• Six percent of the state's 4M residents have a MED card, and opening a dispensary is as easy as opening a taco stand. A dispensary license costs $2,500, can be filled out online and is approved within two weeks.
• Oklahoma has 2,300 dispensaries, the second most per capita after Oregon.
• University of Oklahoma football coach Lincoln Riley essentially called for college sports to update their marijuana policy.
  The Athletic

California, which has about 600 dispensaries, saw pot taxes exceed $1B in 2019. WW California has more.
OC Register

After cutting 40% of its workforce late last year, MSO MedMen cut an additional net 113 jobs in February, Business Insider found in a securities filing.

• The stock is trading at 13 cents per share.

Equity Guru looks at stocks, including one pot stock, that could make investors rich, once the recovery arrives. But don't hold your breath.

WW Canada has everything you need to know about corporate crises north of the border.

The House Veterans' Affairs Committee advanced two bills which would increase veterans' access to MED.
The Hill

• One bill, sponsored by Rep. Lou Correa (D-Calif), would require the VA to research MED on PTSD and related conditions.
• The second bill, sponsored by Rep. Earl Blumenauer (D-Ore.) would permit VA providers to offer MED cards.
• VA doctors currently can't discuss therapeutic MED use with patients.

LSD and psilocybin, but not ketamine, produces "persistent antidepressant-like effects" in rats, a study found.
American Chemical Society

• The study found ketamine, which has also attracted interest as a behavioral drug, produced only a transient anti-depressant like effect.
• The study also suggests "a subjective existential experience may not be necessary for therapeutic effects" of psychedelics.

A study of home prices in Colorado and Washington state found legalization may lead to increased housing prices.
Marijuana Moment

• The study found neighborhoods saw a 7% bump in housing prices after a dispensary opens.
• “Concerns about the potential effect on crime rates and the difficulty in policing impaired driving have been cited as reasons to slow-walk the path to full recreational legalization,” the study’s authors write. “This research contributes to the discussion, providing evidence that recreational marijuana legalization (RML) has large positive spillover effects on the local housing market.”

Last week we asked, "What common industry practices are most self-defeating?" Here are two interesting responses:

The most self-defeating behavior I have personally witnessed is big cannabis companies spending to keep local regulations as restrictive as possible to artificially limit their competition and boost their profits. It comes at the expense of patients and customers who need safe access. If a company needs to rely on an artificially created oligopoly to stay in business, they need to seriously evaluate the deficiencies in their business model and find ways to appeal to customers by offering quality products at fair prices.

Mitchell Colbert, Oakland CA

CEO and Founder, Full Spectrum Strategy

For me, its the general failure of the industry to realize that the business economics of cannabis are no different than any other industry. Big or small, a focused strategy and strong operational/financial control environments are requisites for success. Ultimately, not even strong consumer demand and resolution of the obvious regulatory/compliance issues will mask the inefficiencies of a poorly run business operation.

Dave Hickok, Los Angeles CA

Principal, Hiccox Consulting

Submitted via Leafwire

This week, we'll ask the big, obvious question: How is your business adapting to Covid-19?

To tell us, Reply to this email, or write to us hello@weedweek.net. Please include your name, location and affiliation. We'll honor requests for anonymity. Responses may be edited for length and clarity.