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In the newsletter:

• Tough week for Curaleaf
• SCOOP: Potency inflation defendant Kingroll responds

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KingRoll_COA (1)

SCOOP: Kingroll responds to potency suit

In September, WeedWeek published a story which found samples from seven out of seven prominent California pre-roll brands contained less THC than stated on their label. Since then, at least six brands, four of which were included in the WeedWeek story, have been sued for mislabeling their products.

Many consumers prefer high THC products, which incentivizes brands to “lab shop” for a partner willing to inflate their results. The problem of lab shopping is widely acknowledged in California and other states.

Last week Kingroll, a brand owned by Statehouse Holdings, filed a demurrer, the equivalent of a motion to dismiss, in Monterey County court. It’s the first substantial response I’m aware of from any of the defendants in these case.

Here’s what they said.

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MSO Curaleaf said it was pulling out of California, Colorado and Oregon and shuttering one of its two Massachusetts growing and processing facilities. The company also said it is laying off about 4% of its roughly 6,000 employees.

The MSO says its exit from these three states, not major cash generators for the publicly traded company, will enable it to save money and focus on more promising markets like Europe   

Separately, Massachusetts regulators told Grant Smith Ellis that the MSO is under investigation for:

1. A now exited investment from Russian oligarch Roman Abramovich who has been sanctioned by Canada and Europe, but not the U.S. 
2. An allegedly unlicensed research lab in its Newton, Mass. facility
3. Use of radiation to remediate product at the same facility. (The issue, as described by Ellis on Twitter, is one of worker safety, not product safety.)

Curaleaf said its facility is compliant and that it is not aware of any investigation. [[Update 1/30/23]: Curaleaf provided a statement: The Radiation based treatment of cannabis products at our Webster facility is commonly used in the industry as a safe and effective way to enhance the quality of our flower products. The machine is fully licensed by the Massachusetts Department of health and is not “hidden” from anyone. Our team members are trained on the manufacturer’s standard policies and procedures to safely operate the machine.]  

In a forum, chairman Boris Jordan said “There’s a lot of hate out there for some reason for our company, bordering on, frankly, racism.”
@grantsmithellis

Federal:

• American Express lobbied on banking reform. Senate Banking Chair Sherrod Brown (D-Ohio) said he wanted to move “quickly” on it.
  Cannabis Wire, @natsfert
• The FDA punted CBD regulation to Congress.
  CNN

Business:

• A federal judge dismissed a patent infringement case filed by e-rig maker SHO Products against its rival Puff Corp., maker of the Puffco Peak. SHO’s lawsuit came after Puff sued SHO for patent infringement over a separate patent. That case is ongoing.
  Bloomberg Law, WeedWeek
• Insiders expect dealflow to be heavy this year, but mainly focused on small and distressed assets, MJBiz reports.
• New industry group Cannabis Media Council, in partnership with Hearst Media, wants to make “I’m high right now,” the “Got milk?” of weed. With support from many prominent brands, it’s targetting Gen X and older consumers.
  AdWeek
• Broccoli Report rounds up some of the most and least successful weed marketing moments.
• Retailer software company Flowhub shares some industry data.
• Dutchie sued tech rival Akerna over acces to the Pennsylvania market. Akerna then exited the weed industry to join a crypto venture. POSaBIT acquired Akerna’s cannabis assets, MJ Platform, Leaf Data Systems and Ample Organics for $4M cash.
  Green Market Report, MJBiz
• Leafly has a two-part series on the death of Trulieve factory worker Lorna McMurrey, and the health hazards of  cannabis manufacturing. 
• A Maryland court upheld a decision to recall chocolates produced by Green Thumb Industries.
  Cannabis Equipment News
• Will AI replace your weed lawyer? (It won’t replace your weed reporter either.)
  Canna Law Blog

State and local:

• Prices appear to be stabilitzing. The state’s total canopy has shrunk about 15% from a year ago.
  MJBiz
• Nevada regulators suspended the license of Helping Hands Wellness Center over diversion concerns.
  AP

International:

• First Wednesdays has an update on European retail.
• High Times checks out the scene in Thailand.
• Hong Kong is banning CBD.
  TIME

Fun and interesting:

• “Hash or dog poop?”
  @ngaio420

Company milestones:

• MSO MariMed secured up to $35M in loans to fund its expansion.
  MJBiz
• MSO Ayr Wellness backed out of buying Chicago-based Dispensary 33 for $55M. 
• MSO Ascend Wellness said it would buy four operating Maryland dispensaries for $19M.

Job Moves:

• Marijuana Policy Project named four new board members: Barrington Rutherford, Tom Roth, Kim Napoli and Betty Aldworth.