Business
Ripped from the headlines: MJBizDaily’s most-read marijuana business stories of 2022
From huge marijuana-plant seizures in Canada to adult use in New Jersey and a fluctuation in wholesale prices in California, the cannabis market has certainly seen its share of peaks and valleys this year.
Here’s a look back at MJBizDaily’s 10 most-read marijuana business stories of 2022:
1. Health Canada seized more than 35M grams of marijuana, 7,800 plants after inspections
Canada’s cannabis regulator seized more than 35 million grams (77,162 pounds) of marijuana products and thousands of plants from federal license holders for regulatory shortfalls in the 2019-20 fiscal year.
Most of the products were destroyed, with the remaining held by Health Canada to be returned to licensees who had regained compliance.
The report shed new light on a tumultuous period in the early years of Canada’s burgeoning adult-use cannabis industry.
2. New Jersey prepares to launch $2 billion recreational cannabis market
All eyes were on New Jersey in 2022, as the recreational marijuana market was poised to become one of the largest on the East Coast with annual sales projected to top $2 billion within a few years.
The state’s adult-use cannabis businesses recorded nearly $79.7 million in total sales between April 21 and June 30 of the state’s second fiscal quarter.
That included nearly $1.9 million in recreational sales on April 21, the day New Jersey recreational sales launched with a dozen stores.
3. California wholesale cannabis prices rebound from slump
Readers were hungry for good news out of California, and signs of a rebounding wholesale market drew their attention.
In February, the price of bulk flower was starting to rebound amid an uptick in sales, according to several operators in the state who told MJBizDaily they closed the books in January on a high note.
Signs indicate those prices didn’t hold, but publishing a story about a positive development in California’s struggling market was nice while it lasted.
4. Aurora Cannabis sets more closures, selling Sun greenhouse at fraction of cost
In a bid to slash costs and become profitable, Aurora Cannabis closed its flagship Aurora Sky facility in Edmonton, Alberta, and also shuttered an outdoor farm in British Columbia as well as the company’s prized Anandia testing and genetics division.
The closure of the flagship Sky facility was a serious setback to Aurora after the company significantly overshot the production capacity needed to meet Canadian and international cannabis demand.
That’s been a common refrain across the industry as production outpaces sales in more mature markets.
5. A few states could still legalize marijuana through legislatures this year
Industry watchers were optimistic that several states would legalize marijuana through state legislatures, including Delaware (recreational), Kansas (medical) and North and South Carolina (medical).
Those didn’t happen, but key legislative victories were won in Maryland, Mississippi and Rhode Island, laying the groundwork for hundreds of millions of dollars in combined sales for recreational and medical cannabis companies in those states.
6. Adult-use marijuana companies struggle to stay afloat amid overproduction, falling prices
The common theme of this year: Industry headwinds caused by macroeconomic conditions as well as factors unique to the marijuana market.
As mainstream businesses coped with surging inflation and the threat of a recession, many adult-use marijuana companies – growers, retailers and ancillary businesses alike – struggled with their own host of problems.
Falling prices and a product glut in more established state marijuana markets forced companies out of business, triggering layoffs and setting off an industrywide scramble to stay afloat.
7. Assault charge could tarnish image of Ascend, entire cannabis industry, consultants warn
A well-known and outspoken CEO and chair of a multistate marijuana operator getting charged with assault sent a ripple through the industry.
Some in the cannabis business ecosystem have been trying to ensure the market doesn’t succumb to the same pitfalls as other male-dominated and discriminatory industries with efforts that include promoting women-owned or -led businesses as well as social equity efforts.
The battery charge against Abner Kurtin was later dropped after the alleged victim and a witness did not cooperate with the police and prosecutor.
But the story still raised the hackles of industry critics and led to Kurtin giving up his CEO role and becoming executive chair of the Ascend board.
8. The cannabinoid CBN might be cannabis industry’s surprise hit
As cannabis entrepreneurs looked for new angles on the market outside of THC and CBD, minor cannabinoids also drew plenty of interest.
For example, over the past year, cannabis companies leveraged CBN’s reputation as a sleep aid with growing success.
Sales of products containing CBN totaled more than $65 million over four quarters for adult-use retailers in California, Colorado, Nevada and Oregon.
Safe to say it was the sleeper cannabinoid of the summer, pun intended.
9. US Senate holds historic first hearing on marijuana legalization bill
Anything about federal lawmakers discussing marijuana legalization is sure to raise some eyebrows.
And the U.S. Senate holding a committee hearing on marijuana legalization for the first time did just that.
Of course, the body took no action in that July hearing, which was more of a symbolic placement of marijuana issues in the political spotlight than it was an actual debate on the bill.
But the move still held significance to the industry and our readers.
10. New Mexico set to launch $400 million adult-use marijuana market likely to attract Texans
As the starting gun readied for New Mexico to begin adult-use marijuana sales on April 1, the focus was on providing opportunities to small local businesses in the first state to establish an adult-use industry adjacent to Texas.
Sales were expected to hit $400 million within five years, with New Mexico marijuana businesses likely benefiting from neighboring Texans driving across the border to buy adult-use products.
Throughout the year, more recreational cannabis cultivation production came online in the state, and new retailers established the connections they needed to secure supply.
Sales in New Mexico hovered around the $40 million mark in several months of the year.
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/
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