Business
Auctioning Off Cannabis Licenses? – How Does It Work, When is the Auction, and How Much are Licenses?
Can you bid on a cannabis license at an auction?
Cannabis License Auction, FL. Feb. 23-24 – The Cannabis10x License Auction-Style Event Features License Holders, Buyers and Investors Jockeying for Positions in Coveted States Such as FL, NY and More.
[mention Cannabis.net when you sign up for a free access to the Cannabis10x Network membership]
Cannabis10x is hosting a live and virtual Cannabis License Auction-Style Event February 23-24 in beautiful Sand Key, FL. In attendance will be a varied group, ranging from multi-state operators seeking first-in, strategic locations in limited license states (Florida, New York) to investors and single-state operators seeking Joint Ventures for the purposes of crossing state lines. From the most established states to those that recently opened that are limiting licensing, these attendees are a very effective group. License valuations range from $45 million to $2,500.
The following is an interview with co-founders of Cannabis10x, Jason Tropf and Holly Ford.
Cannabis.net:
Folks I am doing this personally today because I think you’re gonna’ love what you’re about to hear! I am talking today to the team who founded Cannabis Franchising! They then made a splash with their Cannabis Shark Tanks with great stars like Cheech Marin, Bruce Linton, and yours truly! (Laughter) and now they’re at it again doing something no one has ever done before… A Cannabis License Auction! Holly Ford and Jason Tropf welcome!
Jason Tropf (Cannabis10X)
Hi Curt. Nice to see you again… Happy to be here!
Cannabis.net:
So, what the heck is a Cannabis License Auction!
Holly Ford (Cannabis10X)
It is definitely going to be intriguing! Sellers and bidders come together in person (or virtually) to buy and sell. Sellers set a minimum bid and bidders deposit 10% until the state approves the transfer…. There will be a LOT of networking and quite a few strategic partnerships formed.
Cannabis.net:
How does this work… can anyone buy a cannabis license in the auction?
Jason Tropf (Cannabis10x):
Yes, they need to be 21…. But I’d like to emphasize to buyers: ‘Do your due diligence to make sure you meet the regulation requirements for the state in which you intend to buy’. All sales are contingent on state approval. Some states require state residency, some favor social equity only in the early phases, while others welcome everyone. (Bidders can sign up here: Register to Bid.)
Cannabis.net:
Who can sell a cannabis license in the auction?
Holly Ford (Cannabis10x):
Any owner of a cannabis license can sell their license in the auction. They just need to register as a seller. (The direct owner of the license must register as the seller on the website which can be done here: Register to Sell.)
Some sellers have requested we work with them outside of the auction. Cannabis10X can take those sellers on as clients. Clients can list as many licenses as they want and get the status as a Featured Seller as well.
Cannabis.net:
That’s great! What does a Featured Seller get? Anything special?
Holly Ford (Cannabis10X)
Featured Sellers can list an unlimited number of licenses. Most importantly, they have 5 minutes to directly pitch their license on the auction podium (or have the hosts pitch their license to the audience for them.) They also get increased exposure including on the main auction website, a featured listing on all auction itineraries, a listing on the front page of all of the bidder packages, they are listed in all press releases and marketing material… The increased exposure typically generates more investor introductions.
Cannabis.net:
OK, best guesses here… how much do you think buyers will pay for a license?
Holly Ford (Cannabis10X)
Historically licenses have sold for as low as $2,500 dollars and up to $70 million! Prices will vary by location and license type and valuations have a large degree of variance. Regardless, sellers have autonomy here. They set their own minimum bids, but all transactions are subject to seller approval so they may approve bids as low as they feel necessary to close the sale. A refundable 10% deposit is held in escrow on the day the bid is accepted. All of the Terms are listed on the registration page.
Cannabis.net:
Sounds perfect! Tell me more about the valuations.
Jason Tropf (Cannabis10X)
Some state regulations are much different than others which has a great deal to do with valuations. If competition is throttled by regulations, revenue is much greater per operator, making license values much greater. For example, certain states offer retail licenses that allow for a single retail location per license and that license type might be valued between $2,500 – $50k. In other states, a single license includes and allows for vertical integration: cultivation, manufacturing, and an unlimited number of retail locations under a single license. These types of licenses are valued in the range of multiple $10’s of millions.
Cannabis.net:
A lot of different licenses out there! What kind of license can people buy?
Jason Tropf (Cannabis10X)
License holders from across the entire supply chain are selling licenses. This includes cultivation, processing/manufacturing, retail and delivery/distribution. In some instances, the entire vertically integrated operation is included under one license. In states such as Florida, for example, unlimited retail outlets are allowed under a single license. Again, make sure you are educated in the states licensing requirements prior to bidding.
Cannabis.net:
Do you offer any help for due diligence prior to the auction?
Jason Tropf (Cannabis10X)
Participants can contact Cannabis10X or our auction’s prime sponsor; cannabis attorney and political candidate, Michael Minardi.
Cannabis.net:
What states can people buy licenses?
Holly Ford (Cannabis10x):
Participants can buy licenses in any legal state in the US that allows licensed cannabis businesses to operate, subject to state approval of the transfer of license. This includes some of the more coveted states like Florida and New York as well as established markets like Colorado and Oregon. Specific licenses are frequently being updated and can be found on the event site. We expect more than 100 licenses. (Cannabis10x.com License Auction event page )
Cannabis.net:
What happens if the cannabis license does not sell at the auction?
Jason Tropf (Cannabis10X)
Sellers have the option to become clients of Cannabis10X where we will continue to work with the license owner through our Mergers & Acquisitions division to locate a buyer or strategic partner.
Cannabis.net:
OK, now for the fun stuff… who is coming besides yours truly?
Holly Ford (Cannabis10X)
License owners, investors, acquisition teams, franchisors, multi-state operators, joint venture partners and single operators both domestically and internationally. We will be featuring international licenses as well which will attract a more global crowd.
Cannabis.net:
What kind of investors and acquisition teams are you referring to?
Jason Tropf:
Already in the 10X Network are a wide variety of investors and acquisition teams. This includes the Cannabis10x family of franchise brands (Cannabis10x Family of Franchise Brands). Investors range from wealthy individual accredited investors to family offices and franchise portfolio builders. Fund managers that manage funds between $10 million – $100 million and franchise portfolio owners that own anywhere from 200 – 2,000 franchise units. Also included are main street investors that expect to spend between $250k – $2 million as well as smaller investors who expect to spend $2,500 – $50,000.
Cannabis.net:
So, is this an all-business and networking event? Any fun planned for live attendees?
Holly Ford:
Yes! That’s why we added the live venue in Sand Key, Florida! Thursday evening will be drinks and swag bags, meet and greet, networking and a great speaker. Friday morning networking again followed by the auction. Many will be staying the entire weekend to continue forging strategic partnerships.
Cannabis.net:
How can a business get involved or gain exposure to your audience?
Jason Tropf:
Sponsor! Our legacy sponsor is taken, but we still have room for strong businesses on the bill. Sponsors even have an option that will allow them to speak to the entire live and virtual audience! Besides the obvious banners and promotional materials, sponsors will gain recognition on the Cannabis10x.com website for up to 12 months after the event and get free tickets to the main event. And much more! (Sponsors can learn more here: Sponsor Program)
Brief Description:
Cannabis10x.com:
Cannabis10x License Auction
Marriott Hotel, Sand Key, FL
Date: Feb 23-24, 2023
12:00pm EST
Virtual & Live Attendance
Video: https://youtu.be/gLFJrIxMGp0
More Information: https://members.cannabis10x.com/auction-event1668458277085
• ALL States
• Expecting 100+ Licenses
• Live & Virtual
•Joint Ventures
• Outright Sales
• Limited License States
• FL, NY, MI, CT, MO & More…
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
New Mexico cannabis operator fined, loses license for alleged BioTrack fraud
Marijuana companies suing US attorney general in federal prohibition challenge
Alabama to make another attempt Dec. 1 to award medical cannabis licenses
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