🌿 Congressional Cannabis Hearings 🌿canabodial
Welcome back to our weekly newsletter, which outlines recent cannabis news you need to know about related to entrepreneurship, finance, legal, medicine, science, and technology.
Federal developments dominate headlines this week following approval of the MORE Act. We also discuss alternatives for cannabis businesses looking to raise capital, run down recent business news, and outline new medical studies.
The week was another exciting one for CannaGather events. Orange County had their first event of the new year with speakers including Hyper Chief Revenue Officer Tyler Beuerlein, Kannabis Works Co-Founder/Health & Wellness Director Shelly McKay, and ChironConnect CEO Denise Chesne. Baltimore set its focus on the science of cannabis this month. They were joined by Josh Crossney, President, CEO, and Founder of CSC Events.
New CannaGather markets are set to kick off! Coming up on January 30 is our official launch of CannaGather Detroit, featuring MI Legalize Co-founder, Treasurer, and Campaign Manager Nick Zettell. February 18 marks our CannaGather Boston launch, with speakers to be announced.
Quick Note: An email was accidentally sent out Sunday afternoon welcoming a new member to our CannaGather community. If you received this email, kindly disregard. Thanks!
Be sure to join us at a CannaGather in your city, where we continue to network and explore the latest progress in our communities as the reach of cannabis increases.
Know someone who is just as cannacurious as you are? Be sure to share this newsletter to keep them in the loop!
// CannaGather Calendar
(TODAY) January 21 // New York, NY // Cannabis Market Playbook 2020: A Brand Insider’s View
(NEW MARKET) January 30 // Detroit, MI // CannaGather Detroit Kickoff
February 4 // Los Angeles, CA // CGLA February 2020
February 13 // Baltimore, MD // Being Black in Cannabis
February 18 // New York, NY // February CannaGather
(NEW MARKET) February 18 // Boston, MA // CannaGather Boston Kickoff
February 19 // Orange County, CA// CGOC February 2020
February 19-20 // Boston, MA // Northeast Cannabis Business Conference, Hosted by NCIA (Use Discount Code CG20)
Sale-Leasebacks: An Alternative for Cannabis Companies
In recent months, funding opportunities for cannabis companies have become less available to those that are unable meet their revenue and profitability targets. So where do cannabis businesses turn to raise capital when falling stock prices and executive turn-over make them unappealing to investors? A recent real estate trend has seen large cannabis companies turning to sale-leaseback deals to keep their companies afloat.
A popular choice for more commercial real estate, including office buildings, retail, etc., a sale-leaseback transaction for a cannabis company involves selling their own cultivation, processing and storage facilities, and then immediately leasing them back. This can quickly put capital back in play to help grow a cannabis business, without watering down the value of its stock.
The end of 2019 saw several such deals, including:
- Cresco Labs’ $50 million sale-leaseback deal with GreenAcreage Real Estate
- Columbia Care’s $35 million sale-leaseback deal with New Lake Capital Partners
- Green Thumb Industries’ $39.6 million sale-leaseback deal with Innovative Properties
- Acreage Holdings’ $72 million sale-leaseback deal with GreenAcreage
What This Means and Why You Care: The combination of limited funding and limited paths to profitability leaves cannabis businesses seeking alternative strategies to keep their companies afloat. We will likely see more sale-leaseback deals in 2020.
Recent Business News
- Stock prices of OrganiGram are way up after their Q1 earnings report was released. They also announced a three-year supply agreement with Medical Cannabis by Shoppers, a subsidiary of Canadian retail pharmacy chain Shoppers Drug Mart.
- Two hemp and CBD startups just laid off workers. Mile High Labs, a Colorado-based CBD manufacturer, laid off 20 staffers, and GenCanna, a private Kentucky-based hemp and CBD producer, laid of 65 workers in December.
- David Klein, former CFO of Constellation Brands, officially started as Canopy Growth’s new CEO this week after his role was announced in December.
- Tilray adds a new COO (Jon Levin, a former executive at Revlon), and CFO (Michael Kruteck, formerly at Molson Coors).
What This Means and Why You Care: The cannabis market continues to change at a rapid pace. While some companies provide evidence of progress, others are struggling to stay successful, leading layoffs and executive shakeups.
New Federal Developments
On January 15, the Energy and Commerce Committee held the first ever legislative hearing to discuss current and future federal cannabis policies. According to a joint statement issued by the Energy and Commerce Chairman and Health Subcommittee Chairwoman, its focus was on “the implications of changing marijuana’s schedule listing, the potential of cannabis research, and federal efforts to review and approve cannabidiol products.” Though the hearing focused largely on cannabis research, a total of six cannabis reform proposals were hot topics for discussion, two of which would legalize cannabis federally.
This development follows the recent approval of the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, a bill that when passed will seek to reverse harmful effects of federal prohibition and criminalization. Many view the MORE Act as a starting point from which to mend the wide-spread damage inflicted by the drug war, predominantly for communities of color. Rep. Joe Kennedy III (D-MA), who recently became a cosponsor of the MORE Act, used his platform at the hearing to specifically acknowledge the importance of a discussion focused on the people who have been harmed most by cannabis prohibition, and subsequently announced that the committee will hold a second hearing on the topic.
What This Means and Why You Care: Comprehensive marijuana reform being a central topic of discussion on a federal level at congressional hearings suggests that slow and steady momentum is seriously building in 2020, and could pave the way for the House Judiciary Committee to become the first chamber of Congress in history to pass a bill that ends prohibition.
// Medicine, Science, & Technology
New Scientific Studies
A recent study found that “marijuana use is common among orthopedic patients [and that] patients believe marijuana is beneficial for managing pain and other medical conditions, although most would be willing to stop using marijuana if told it would negatively impact their surgery.”
A review in the European Journal of Epilepsy concluded that “newly available evidence supports earlier findings that cannabidiol probably reduces the frequency of seizures among children with drug-resistant epilepsy.”
New evidence shows that “cannabidiol is a potent in vitro inhibitor of the two-step hydrolysis of heroin.”
What This Means and Why You Care: Cannabis has the potential to help people suffering from a wide variety of issues, from minor orthopedic issues to serious epilepsy. It is important that there are opportunities for researchers to conduct clinical trials so that we are able to better understand its potential.
Exciting Events in Orange County and Baltimore
January has been another busy month for exciting CannaGather events. Orange County had their first event of the new year with speakers including Hyper Chief Revenue Officer Tyler Beuerlein, Kannabis Works Co-Founder/Health & Wellness Director Shelly McKay, and ChironConnect CEO Denise Chesne.
Baltimore set its focus on the science of cannabis this month. They were joined by Josh Crossney, President, CEO, and Founder of CSC Events, which hosts and operates the world’s largest scientific and medical cannabis event, the semi-annual Cannabis Science Conference, including a Canna Boot Camp (a full-day, hands-on workshop that covers many aspects of cannabis science and industry).
Do you want to get involved and join the CannaGather team? We would love to have you on board as we grow! You can email CannaGather founder Josh Weinstein at email@example.com for more info.
Written by Justin Bernstein
Contribution by Michela Proto