Most state legislatures are done for the year. So, in July Cannabis news, we’ll change our focus a bit from developments in the states to the business and research side of the industry.
1. Curaleaf Busts A Move
Curaleaf announced that it was buying Chicago-based Grassroots Cannabis in a deal valued at about $875mm (US). And this is after Curaleaf announced in May 2019 that it was buying Oregon-based Cura Partners for $949mm (US). Looks like Curaleaf is a company on the move.
Grassroots brings a solid Midwest presence to Curaleaf. With the completion of both purchases, Curaleaf will have 131 dispensary licenses, 68 operational locations, 20 cultivation sites and 26 processing facilities.
See the Forbes article here
2. The Canopy Growth Back Story
As Curaleaf puts the “pedal to the metal” acquisition-wise, Canopy Growth appears to be applying the brakes. Could it be that with the firing of Bruce Linton, Canopy Growth’s ambitious drive to “achieve unassailable market-share dominance” is spent? See the Toronto Star opinion piece here
3. Banks Silently Bailing on the Cannabis Industry
In what might seem to be an unrelated piece of cannabis news, 30 of the largest banks are silently bailing on the US farm sector.
After years of falling farm income and US trade wars with, well, everyone, the agricultural loan portfolios of the top banks have fallen 17.5% from their peak in 2015.
“The retreat from agricultural lending by the nation’s biggest banks, which has not been previously reported, comes as shrinking cash flow is pushing some farmers to retire early and others to declare bankruptcy.”
Hello US farmers! We have an alternative profitable crop for you!
4. Research Studies on Medical Marijuana and opioid abuse
We should pay more attention to health studies even if there are significant methodological defects with many of them. The biggest splash occurred in June and was from Stanford University researchers who re-visited a 2014 study on medical marijuana and opioid abuse.
What the 2014 study found
The study reported that medical marijuana resulted in a lower opioid death rate in states which legalized medical marijuana. That study was oft-quoted as an argument to promote medical marijuana law reform. The 2019 study claimed to update the 2014 study by adding those additional states that had legalized medical marijuana since 2014.
The 2019 study could not replicate the 2014 study results, and researchers concluded that:
“We don’t think cannabis is killing people, but we don’t think it’s saving people.”
Stanford University Study
We are not quite sure how the 2019 study corrected for the wide variance in state-to-state medical marijuana laws, and for uneven access between states that have approved medical marijuana. But the issue is noteworthy.
See the Stanford article here
On the other hand, in a Cannabis survey…
The National Institute of Health advises, in a self-reporting survey from 2 Colorado dispensaries, on recreational use by consumers previously taking opioid analgesics for pain relief. The survey reports 88% stated that they reduced or entirely stopped using those opioids.
See the survey here
JAMA Pediatrics reports that in states which legalized recreational use, cannabis use among youth may actually be falling.
Investment banking firm Cowen & Co. report
The firm has a strong presence in the cannabis market and reports that in states where adult use of cannabis is legal, the incidence of binge-drinking has fallen 9% below the national average and 11% below non-cannabis states.
See the article on Mediapost
For sure, there may be procedural defects with each of these studies, pro and con, but these studies raise important questions. More research is required.
Short Takes in July Cannabis News
- A Florida state court may have thrown a monkey wrench into state licensing frameworks by recently holding that Florida’s vertical integration model for medical marijuana violated that state’s constitution;
- The US attorney for the Southern District of California indicted a cannabis manufacturer for dumping hazardous waste in violation of federal law, BUT did not take the extra step of indicting the same defendant for cannabis business activity in violation of the federal Controlled Substances Act;
- The US Senate Committee on Banking, Housing and Urban Affairs scheduled a hearing on the SAFE bill, that is, on banking practices in the cannabis industry. Does this signal a potential softening by the Republican majority of its anti-THC stance?
- Celebrity Takes: JAY-Z announced a multiyear partnership with the California-based cannabis company Caliva, as that company’s chief brand strategist. What took him so long to jump in?
Cannabis Industry Networking
We’ve promoted these outlets before and will likely do so again. We receive no benefit. We simply think these outlets are each a solid means to connect and learn in the industry. Let us know if you have others.
a. Maze is a newsletter listing all sorts of upcoming cannabis-related events across the country, including conferences, networking events, education seminars, social events, etc. You should subscribe!!!
See the calendar here
b. Cannagather is our personal go-to networking/educational venue, with monthly events in multiple states and cities, including, New York City, Washington, DC, Denver, Los Angeles, etc. Hope to see you at the next NYC event on August 20th.
Love to hear back if you have any comments, revisions, or more color to add.
For those who want to see our past updates, we refer you to our blog here.
A note of thanks
We thank our wonderful website designer, Carmen Yazejian and the folks at Network9, in making these updates really pop!
Please feel free to forward to anyone who may find this content of interest. And if you know anyone who wants to directly receive these updates, then let me know or have that interesting party give us a holler!
Till next time,
Best, Doug
