Well, tell me something new: The challenges continue in New York cannabis.
The Cannabis Control Board, the state’s chief regulatory agency, abruptly canceled a planned meeting set for Wednesday morning that was intended to finalize a batch of license applications.
That means more delays for prospective dispensary owners, more costs, less business, and less legal access to cannabis for New Yorkers. People are rightfully upset — that’s clear via social media posts on the platform formerly known as Twitter, Reddit, and what our Editor-in-Chief is hearing from sources.
Here’s to getting things going, ASAP. For everyone’s sake.
A 6-minute read from JB and JR
DOJ WANTS TO DISMISS
The DOJ doesn’t want a lawsuit to get in the way of rescheduling
What happened: The Department of Justice asked a federal court to dismiss a lawsuit brought on by a group of large cannabis companies that seeks to prevent the federal government from interfering with state-legal cannabis businesses by enforcing the Controlled Substances Act on state-legal businesses.
The lawsuit, Cultivated readers know, was filed by powerhouse law firm Boies Schiller Flexner LLP. The firm’s leader, David Boies, represented Al Gore in the 2000 election, among other high-profile cases.
Why now: The DOJ, or lawyers working on behalf of Attorney General Merrick Garland, said that the courts shouldn’t get in the way of the ongoing rescheduling process.
In short, they say that since cannabis companies have been able to drive billions of dollars of sales without prosecution in Massachusetts, where the case was filed, that means they aren’t being treated unfairly by the federal government.
What the motion to dismiss says: “Courts have consistently, and correctly, held that no fundamental right exists to distribute, possess, or use marijuana,” it begins.
And on rescheduling: “It is not for the courts to disrupt or get ahead of that administrative process.”
The plaintiff’s response: “Plaintiffs look forward to demonstrating their standing before the Federal District Court in Springfield, Massachusetts,” their response begins.
“Plaintiffs have been injured by the federal government’s ban on cultivating, manufacturing, and distributing intrastate marijuana. Plaintiffs brought this suit to stop the enforcement of that unconstitutional ban and protect themselves and others similarly situated from further injury.”
Global X ETFs is closing its Nasdaq-listed cannabis ETF, POTX, as the fund has struggled to generate returns.
Canadian cannabis company Organigram raised C$41.5 million through a share sale. The shares were valued at C$3.22.
Tilray completed its previously-announced acquisition of cannabis beverage company Truss. The company says it now controls 40% of Canada’s cannabis beverage market.
🇩🇪 GERMANY GREEN?
Deutschland will legalize by April
Driving the news: A top German official says that cannabis will be legalized in the country by April.
What they’re saying: “I am continuing to assume that the Cannabis Act will be passed by the Bundestag in the week between February 19 and 23 and will go into force from April 1,” Health Minister Karl Lauterbach told German newspaper Die Welt.
The devil’s in the details: So far, Germany’s legalization plan looks very different from the commercial models in the US and Canada.
The country would take a phased approach to legalization, which would start with decriminalization and allow home cultivation and possession by April 1, and then launch “cultivation” clubs or cannabis social clubs by July.
So far, there are no details about launching a full-scale commercial cannabis market.
MSOS TO FOCUS ON WHOLESALE IN ‘24
The M&A wave might be over
What’s happening: Big, publicly traded cannabis firms known as multistate operators or MSOS or looking to grow through wholesale in ‘24, industry publication Marijuana Business Daily reports.
With many retail markets tapped out, few investors deploying capital, and most assets already scooped up, wholesale is one of the few channels that these companies have left to grow.
Price compression of cannabis in more mature markets remains a problem, too. In other words, it’s going to be a year of organic growth.
What they’re saying: “The vast majority of the growth is expected to come from wholesale as opposed to retail – particularly in those markets that aren’t undergoing some type of medical to adult-use transition,” Jamie Mendola, the chief business development officer at Ayr Wellness said. “We ended the year with growth, but it was certainly masked by a lot of that price compression.”
And Curaleaf CEO Matt Darin told MJBiz the company is just starting to “scratch the surface” of the wholesale market opportunity.
📼 What we’re reading (and watching)