A cannabis-infused lotion from Yummi Karma's High Gorgeous line.
Yummi Karma LLC became the first cannabis manufacturer to get a state license in Orange County, Calif., last week. Now, the women-led company plans to keep doing what it does best—create cannabis products for women, by women—while taking its advocacy efforts all the way to the federal level.
Launched in 2014, Yummi Karma produces a full line of tinctures, as well as an award-winning beauty line called High Gorgeous. The company has been active in its local community, showing residents in Costa Mesa that cannabis businesses can be good neighbors. It has also been working to prove that the legal cannabis community is taking steps to produce safe and consistent products, and the owners hope to discuss cannabis policy reform with lawmakers on every level—and eventually with President Trump.
Here, the women behind Yummi Karma—Communications Director Alysia Sofios, CEO Krystal Kitahara and COO Chelsea Kitahara—detail the company’s journey in California’s market, its advocacy efforts and more.
Cannabis Business Times: Can you provide some background on the company and briefly describe its journey to becoming the first state-licensed cannabis manufacturer in Orange County?
Communications Director Alysia Sofios
Alysia Sofios: Yummi Karma LLC launched in 2014, operating under SB 420, Section 11362.7, as a women-run cannabis company targeting female consumers. Since then, it has become an industry leading manufacturer in California. In 2017, YK launched the first mainstream cannabis beauty line, High Gorgeous, which continues to win awards and garner national media attention.
As of Oct. 4, 2018, the all-female team became the first state-licensed manufacturer in Orange County. The company has always been, and remains, self-funded.
CBT: What kinds of products will the company produce?
Alysia: Yummi Karma makes a full line of tinctures, including California’s best-selling sleep tincture, Drift Away. The beauty line, High Gorgeous, produces the award-winning infused body butter, Pina-Co-Canna, as well as several other THC, THCA and CBD topicals. Seasonal products include bubble bath and body polish.
CBT: How has the company differentiated itself in California’s market?
CEO Krystal Kitahara
Krystal Kitahara: We started by making products for women like us. From the beginning, we have been a leader in compliant packaging and operated like a legal business. This helped our company streamline into compliance without skipping a beat this year.
CBT: How is the company approaching branding and marketing in California’s competitive marketplace?
Alysia: We have always targeted women with our branding and marketing efforts. At first, everyone thought we were crazy, and that there weren’t enough female customers to keep us in business. That couldn’t have been further from the truth. Currently, women are the fastest growing cannabis consumer [demographic] and make most of the health and wellness decisions for their families. Women have embraced our products and our success is the result.
CBT: Has anything been particularly challenging for the company as it has become licensed and operational? Do you have any advice for other companies when it comes to overcoming these challenges?
Krystal: We approached licensing like we have approached everything else—one step at a time. It is definitely a marathon and not a sprint. Or, actually, more like an uphill triathlon. It feels great to be on the other side of it, so we can concentrate on what we do best—make great cannabis products that help people. At the end of the day, that is what this is all about.
CBT: How is Yummi Karma active in its community? Has the community been accepting of the business?
Krystal: We moved from Central California to Orange County so that we could be a part of this community. The city of Costa Mesa has been great to work with, and we both learned a lot together. It’s the first time these cities are doing this too, so it’s a learning curve. We are pleasantly surprised every day at how many people embrace our business.
Alysia: It’s the little things, too. For example, joining the Chamber of Commerce, or even hanging a sign on the entrance with our logo, was a huge deal. It’s so nice to be able to say, “Yes, we are here, we make cannabis products, and we’re good neighbors.” That’s important to us. Being able to have an honest dialogue with the community is refreshing.
CBT: Can you describe Yummi Karma’s political advocacy efforts on the federal level? How is the company approaching cannabis policy reform?
Alysia: We believe that if the government could see the efforts the legal cannabis community is taking to produce safe and consistent products, it would help them with regulations.
Communication is key, and up until now, we haven’t been allowed to do much of it. Since we all operated in gray areas for so long, we didn’t do as much advocating as we would have liked. It’s time to change that. We want to discuss reforming and improving drug policy with lawmakers on every level, and eventually we’d like to end up in the White House having a real discussion with the president.
COO Chelsea Kitahara
CBT: What are some of the company’s shorter- and longer-term goals?
Chelsea Kitahara: For the rest of the year and into 2019, we are focused on building more brand awareness and looking into opening aflagship store and expanding nationally. Our store would be the first boutique-style cannabis retailer targeting women in Southern California. We look forward to seeing our brand in every state in the future. It’s an exciting time!
Photos courtesy of Yummi Karma LLC
MedMen Doubles Market Reach With Acquisition of PharmaCann
The $682-million all-stock deal will give MedMen a presence in 12 U.S. states.
LOS ANGELES–(BUSINESS WIRE)–PRESS RELEASE–MedMen Enterprises Inc. (“MedMen” or the “Company”) and Chicago-based PharmaCann LLC (“PharmaCann”) announced today that both companies have signed a binding letter of intent for MedMen to acquire PharmaCann in an all-stock transaction valued at $682 million.
The resulting pro-forma company (including pending acquisitions by MedMen) will have a portfolio of cannabis licenses in 12 states that will permit the combined company to operate 79 cannabis facilities. The combined company will operate in 12 states, which comprise a total estimated addressable market, as of 2030, of approximately $40 billion according to Cowen Group. Through the transaction, MedMen will add licenses in Illinois, New York, Pennsylvania, Maryland, Massachusetts, Ohio, Virginia and Michigan.
Founded in 2014, PharmaCann is one of the largest medical cannabis providers in the U.S. It currently operates 10 retail stores and three cultivation and production facilities across multiple states, including New York, Maryland and Massachusetts, and in Illinois, where it is the largest holder of medical cannabis licenses. The company also owns licenses for retail stores in Pennsylvania, Maryland, Massachusetts, Ohio, Virginia and Michigan, and cultivation and production licenses in all of its markets, excluding Maryland. PharmaCann is known for its high-quality cultivation and production and has one of the best track records in the industry for cannabis license applications.
“PharmaCann has built highly-efficient cultivation centers and dispensaries to promote a better quality of life for medical marijuana patients,” said Teddy Scott, Ph. D., PharmaCann chief executive officer. “This acquisition validates the dedication and level of sophistication we have used to provide consistent patient outcomes. I am proudest of the top-notch team we have assembled here and their dedication to our mission of serving medical marijuana patients. Our organization is a natural fit for MedMen, and we are excited to join a leading enterprise with a best-in-class management team.”
MedMen currently operates 14 retail stores in California, Nevada and New York. The Company recently acquired a license to open and operate 30 retail stores in Florida and has signed binding agreements to acquire an operating retail store in Illinois, cultivation and retail operations in Arizona, and an additional non-operating retail license in California. The Company has cultivation and production facilities in Nevada and New York, and is building facilities in Desert Hot Springs, California and outside Orlando, Florida. PharmaCann is licensed for 18 retail stores in eight states and eight cultivation and production facilities in seven states. Combined, the two companies will be licensed for 66 retail stores and 13 cultivation and production facilities (including pending acquisitions by MedMen).
Transaction Details
Based on the closing price of the Company’s Class B Subordinate Voting Shares as of October 9th, the total transaction is valued at $682 million and will be satisfied by the issuance of Class B Subordinated Voting Shares of the Company. Under the terms of the Agreement, PharmaCann holders will own approximately 25 percent of the fully-diluted shares of the Company upon closing and will be subject to lock up agreements for a period of 6-12 months. The specific transaction structure is subject to ongoing tax, financial, and regulatory advice.
The transaction is subject to regulatory approvals by various local and state authorities in each of the markets where PharmaCann’s assets and licenses are held, all debt of PharmaCann being repaid and other customary closing conditions.
The letter of intent is fully binding and subject to contractual obligation.
Board Recommendation
The Board of Directors of both MedMen and PharmaCann have unanimously approved the transaction.
Eight Capital provided a fairness opinion to the Board of Directors of MedMen, stating that in its opinion, and based upon and subject to the assumptions, limitations, and qualifications set forth therein, the transaction consideration is fair, from a financial point of view, to MedMen shareholders.
Marquis Partners acted as financial adviser to PharmaCann on the transaction.
Cresco Labs Plans to Go Public and List on the Canadian Securities Exchange
Access to capital will position the multi-state cannabis company for acceleration of its strategic growth plan.
CHICAGO – October 10, 2018 – PRESS RELEASE – Cresco Labs, LLC has announced plans to execute a reverse takeover of Randsburg International Gold Corp., by which it will become a public company. Closing of the proposed transaction is expected during the fourth quarter of 2018. Terms of the proposed transaction may be found in a press release issued by Randsburg and available here. Cresco is also seeking approval to list its common shares on the Canadian Securities Exchange (CSE) in accordance with the Exchange’s customary listing conditions.
"The Canadian market has been very supportive of U.S.-based cannabis companies, and we look forward to having expanded access to capital that will help us accelerate our strategic growth plan," said Cresco Labs Chief Executive Officer Charles Bachtell. “Three years ago, we formed Cresco Labs to apply our founders’ institutional knowledge and regulatory expertise to the rapidly evolving cannabis industry. We believe Cresco has a compelling investment story for institutional and individual investors looking to participate in the dynamic growth of this sector.”
Cresco Labs is one of the largest cannabis companies in the United States with operations in Illinois, Ohio, Pennsylvania, Nevada, California and Arizona. Cresco is compliance-focused, vertically integrated from seed to sale, and dedicated to operational excellence, product development and consumer education.
Operations and Footprint
Cresco has emerged as a dominant leader as measured by market share, merit-based license application wins, speed-to-market, access to capital and engagement with consumers in the states where it operates.
As a cultivator, processor and distributor, Cresco is currently operating in six states. This operational market footprint has over 120 million residents and 866 million tourists annually, making it one of the leading population footprints in the U.S.
Brands
Cresco understands the importance of providing appropriate and approachable cannabis to each consumer segment across the country. Developing this understanding of the cannabis consumer has developed Cresco’s suite of branded products. In fact, Cresco is a leader in safe and efficacious, consistently-dosed products and compliant packaging. Cresco plans to expand its presence in both adult-use and medically-focused legal markets across the country.
Cresco: Namesake for our company, Cresco elevated everyday cannabis. THC-focused products available in flower, vape pens, and multiple forms of extracts.
Mindy’s Edibles: In collaboration with James Beard Award Winning Chef Mindy Segal, Cresco Labs created the industry’s first true culinary-backed edible option.
RESERVE: Designed for more discerning palates, Reserve is a manifestation of the best efforts of Cresco’s strains.
remedi: Products designed for the medically-minded patient, with forms reminiscent of traditional pharmaceuticals.
Education
Many Americans don’t know that some form of the use of cannabis has been legalized in 31 of the United States and Washington D.C. Education plays a big role in Cresco Labs' business operations, aiming to provide consumers and physicians with information on cannabis in a straightforward and intuitive way. Cresco provides education that fosters awareness, supports consumer comfort and stimulates brand awareness. Cresco is also active in public affairs, supporting and influencing cannabis legislation, including helping state governments in their struggles with opioid addiction.
Sira Naturals' Cannabis Business Accelerator Accepts Its Inaugural Round of Applicants
First participants made up exclusively of women, economic empowerment, and minority-owned small businesses.
MILFORD, MA -- PRESS RELEASE -- Sira Naturals, Inc., a Massachusetts-based registered marijuana dispensary (RMD) group, has accepted the inaugural class of applicants into the Sira Accelerator program, its small-business accelerator designed to help entrepreneurs navigate and succeed within the emerging regulated cannabis industry.
From an initial response of more than 400 applicants, three groups were chosen based on the quality of the teams and viability of the products. The three companies include: Healing Tree Edibles, a women-owned producer of craft cannabis infused edibles and pet snacks based on Cape Cod ; Hothouse Holyoke, an aspiring craft cannabis cultivator and product manufacturer based in the disproportionately impacted community of Holyoke; and 612 Studios, an Economic Empowerment applicant based in Boston that produces a women’s and couples’ cannabis infused product line.
“We looked at hundreds of inspiring and enthusiastic entrepreneurs during our application process, and these three successful applicants have demonstrated a vision and dedication to their work that is second to none.” said Michael Dundas, president and chief executive officer of Sira Naturals. “Sira Naturals is grateful to have the opportunity to share what we have learned throughout our journey as an organization, and to accelerate these small businesses to enormous success. Many of the other groups that applied showed tremendous potential and we hope to work with many of them in the future.”
“We are very excited about this opportunity and I can’t wait to start working.” said Leah Samura, one member of the husband and wife team that makes up 612 Studios. “As an Economic Empowerment applicant, the barriers to entry in the cannabis industry are extremely high. This program is so unique and valuable in how it can help our company make the transition to the regulated marketplace.”
“When we moved to Massachusetts we deliberately chose Holyoke as our new community,” said Audrey Park, co-founder of Hothouse Holyoke which has applied to the Cannabis Control Commission for Cultivation and Product Manufacturing licenses. “We believe that the cannabis industry has the economic potential to give back to disproportionately impacted communities and we want to be a part of this movement.”
“This is truly a historic moment in the cannabis industry,” said Michelle Bennett, founder of Healing Tree Edibles. “For a small business like mine, the Accelerator offers the potential to reach a much wider market than I could achieve on my own,” she said. Healing Tree currently manufactures cannabidiol-infused pet treats.
The goal of the program is to provide cannabis entrepreneurs an immediate path-forward in product development, slicing through barriers to entry, and accelerating them to profitability. The Sira Accelerator provides access to world-class lab technology, workspace, and executive mentorship. Additionally, each small-business receives an allotment of Sira Naturals-produced cannabinoid substrate, or cannabis oil, that is invaluable to product development, and often the most prohibitive hurdle for these small businesses to overcome.
Stem Holdings Inc. Strengthens Craft Cannabis Portfolio Through the Acquisition of the Assets of Yerba Buena
Stem will acquire from Yerba Buena all the assets comprising Yerba Buena's business and assume the related liabilities.
BOCA RATON, Oct. 10, 2018 - PRESS RELEASE - Stem Holdings Inc. has announced the execution of definitive agreements for the acquisition of Yerba Buena, signed Oct. 8, 2018, an award-winning Oregon cannabis brand, pending Oregon Liquor Control Commission’s (OLCC) approval.
Under the terms of the agreement, Stem will acquire from Yerba Buena all the assets comprising Yerba Buena's business and assume the related liabilities. The consideration to be paid by Stem includes: (i) US$350,000 in cash payable on closing; (ii) a US$400,000 non-negotiable promissory note (iii) US$3.86 million in common share of Stem to be issued in two tranches, with US$1.58 million to be issued on closing at the then prevailing market price and US$2.28 million to be issued in June 2019 at the then prevailing market price. Closing of the transaction is expected to occur in January 2019 and is subject to regulatory approvals.
The 29-acre Yerba Buena property, located in Hillsboro, Ore., features state-of-the-art LED lighting and 9,000 square feet of indoor cultivation canopy. At full production, the cultivation facility can produce 4,000 pounds of clean cannabis annually. Yerba Buena has also developed an advanced, in-house genetics program that has generated a cannabis seed stock collection of a few hundred strains.
“Oregon is home to one of the most competitive cannabis markets in the country. Yerba Buena’s success in the Pacific Northwest demonstrates their ability to strongly execute large-scale cultivation operations while maintaining a consistent, high-quality product,” said Stem’s CEO Adam Berk.
Upon OLCC approval, the acquisition of Yerba Buena directly supports Stem’s plans for nationwide expansion. While Stem’s operational affiliates have developed partnerships with a number of widely recognized cannabis brands and licensees across the country, the acquisition of Yerba Buena solidifies Stem’s commitment to providing shareholder value through strategic mergers and acquisitions within the cannabis space.
“This transaction with Stem is an opportunity for Yerba Buena’s cannabis to reach more consumers in Oregon while promoting our platform of sustainable and progressive labor practices on a broader scale,” said Preston Greene, general manager of Yerba Buena.
“Stem shares our mission, as we look forward to setting the industry standard for best business practices and sustainable cannabis products achieving the ultimate goal of creating a multi-national footprint,” said Laura Day, director of operations.
Yerba Buena is widely recognized as a cannabis industry leader in stewardship and cultivation. Led by its management team of respected industry experts and composed of a first-in-class staff, Yerba Buena is one of the only cannabis farms in the country to hold both Clean Green and Certified Kind responsible agriculture credentials. Yerba Buena delivers naturally-grown products that have garnered numerous industry awards including, the Best Indoor Grow by the Dope Industry Awards, Best Cannabis Farm in Portland two years running, Best Sativa at the Oregon Dope Cup, and Best CBD strain at the Cultivation Classic.
Yerba Buena has also been honored for their exemplary workplace practices. Its cultivation facility was the first cannabis company to ever receive the 100 Best Green Companies award by Oregon Business Magazine, winning in both 2017 and 2018, placing 9th and then 6th respectively across all industries. Yerba Buena is committed to building a diverse workforce as women make up half of the business’s employee base, as well as people of diversity comprise a third of the staff.
“As we continue to expand into other states and markets, partnering with experienced leaders holding similar values as Stem is key to our success,” said Berk. “Together, we will continue to build one of the country’s most prosperous and sustainable cannabis cultivation brands.”
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