Curaleaf lays off another round of employees

Hi everyone,

If you don’t know me already, I’m Jeremy and I’ve covered the cannabis industry for a quite a while now.

I’ve got a long track record of breaking stories about the people, companies, and policies that matter.

I want this newsletter to be your guide to the brave new frontier of cannabis, whether you’re already in the industry or are looking for your opportunity.

I want to inform you on the news you can use, cut through the bullshit, and hopefully give you something fascinating to read.

All that’s to say I’ve seen a thing or two, and I’ve heard even more — and like any good reporter, I’m terrible at keeping secrets.

You’ll be the first to know when I have something good to share.

Last, I’m going to start borrowing a trick from a publication I admire: Semafor. Today’s scoop count is 3.

-Jeremy

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💡What’s the big deal?

Curaleaf laid off a number of employees on Monday.

The departures include Director of National Procurement and Partnerships Chris Ramos, among others, according to posts on LinkedIn.

While the layoffs appear to be only among corporate-level roles, the company declined to comment on the specific number of job cuts.

Back up: Curaleaf, like other cannabis multi-state operators, has had a tough 2023.

The company’s stock is down over 37% since October of last year, and it previously shuttered a New Jersey facility and laid off around 89 employees in July.

That came after a round of layoffs in March that affected both frontline and corporate roles.

Curaleaf in July filed to list on the Toronto Stock Exchange, a move the company says would give it access to a much wider base of investors and that listing evidently can’t come soon enough.

Zoom out: Cannabis is a tough industry to make money in.

Curaleaf and its competitors suffer from a complex regulatory environment, high tax burdens, and falling wholesale cannabis prices.

If you’re looking for job security, cannabis probably isn’t the industry for you, unfortunately.

Publicly traded cannabis companies are waiting for relief from Congress, though they could be waiting a lot longer than everyone expects given the Speaker turmoil.

The bulls, in other words, are waiting for some good news.

What the company is saying: “We can confirm that some positions have been eliminated as a part of a continued effort to identify synergies and further business optimization and integration. While it’s never an easy decision to lose team members, this process is a normal course of business as we continue to balance our needs and resources to drive the business forward,” Curaleaf Senior Director of Public Relations Jordon Rahmil said in a statement.

See the comments on my LinkedIn post for some useful context on the statement.

🥊 Quick hits

German lawmakers discussed a fascinating framework for legalization, which would start with decriminalization and phase commercialization in slowly, reports Sifted.

Payment issues persist in the cannabis space as more pin-debit systems in dispensaries have been taken offline.

The Kansas City Federal Reserve said in a new report that states with legal cannabis experience broad tax and income benefits, but social costs as well — and these social costs mostly hit heavy users.

Cresco Labs is pulling out of Arizona.

Cannabis tracking firm Metrc is fighting a subpoena in the ongoing Catalyst/Glass House Group case, WeedWeek reports.

🗣️ Quote of the week

“I've been frustrated with this from the beginning,” Governor Kathy Hochul said earlier this month about the proliferation of illicit cannabis shops in New York City.

New York regulators opened up applications for at least 1,000 new cannabis licenses, including micro-businesses, in October.

📜 Policy moves

What happened: A group of former Drug Enforcement Administration and Office of National Drug Control Policy officials released a letter criticizing the Department of Health and Human Services recommendation to reschedule cannabis to a Schedule III drug.

The letter writers say that cannabis should remain a Schedule I drug because no double-blind, peer-reviewed studies show the safety and efficacy of cannabis.

What else does the letter say?

• Shifting cannabis’s status to the less-restrictive Schedule III would benefit cannabis companies by getting rid of the 280E tax.

• That would allow them to deduct business expenses, “drastically increase their profit margins,” and to advertise more freely.1 

• The letter also discusses marijuana’s “high potential” for addiction — citing that 3 in 10 cannabis consumers become addicted, per Center for Disease Control data.

• Some cannabis-derived medicines already do exist on less restrictive schedules, and the letter writers are not opposed to Food and Drug Administration-approved medications.

• The letter says that legalization has brought a proliferation of high-potency cannabis, which has more addictive potential than low-potency cannabis.2

• Last, the letter says that the costs of doing research on cannabis-compounds and bringing new drugs to market, often upwards of $1 billion, are what prohibits cannabis-based drug development, not cannabis’ status as a Schedule I drug.

Yes, there’s some pushback: The letter writers use what many experts and those on social media have called a specious argument.

Studies around cannabis safety and efficacy don’t exist because for most of modern US history, they’ve been illegal to conduct thanks to cannabis’s Schedule I status.3

It’s a catch-22, so the letter writers say the status quo should remain.

Back up: If you remember, the HHS called for rescheduling cannabis in August.

Schedule I drugs are considered those with a high potential for abuse and no accepted medical use. Schedule III drugs include widely prescribed drugs like Xanax, cough syrup with codeine, and ketamine.

The ball is now in the DEA’s court to make the switch, but most experts I’ve spoken with expect that to happen before the next presidential election, if not before the end of the year.

Still, it’s far from a done deal.

📚 What I’m reading

“Our work studying the experiences of other states suggests that the impacts of legalization — whether good or bad — are never quite as dramatic or as certain as some may claim or predict.” (Dayton Daily News)

“Yet a small but vocal, ad-hoc coalition of lawmakers — almost all Republicans — is keeping the anti-weed fight alive in Washington. And they’re not exactly losing.” (Politico)

“Fragments of old stories reveal that exclusive priests of the ancient Iranian religion, Zoroastrianism, drank an inebriating potion called haoma to see into the life after death.” (DoubleBlind)

California marijuana operators sue rivals selling hemp-derived THC products (MJBizDaily)