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Arkansas Medical Cannabis Sales Surpass $100 Million

The state’s patients have purchased a total of 17,447 pounds of medical cannabis to date.

July 20, 2020

Dispensary News Medical Cannabis News State by State: Arkansas

The Arkansas Department of Finance and Administration has reported that medical cannabis sales have surpassed $100 million since the program’s launch in May 2019, according to The Sentinel-Record.

The state’s 68,069 registered patients have spent $109.65 million and have purchased 17,447 pounds of medical cannabis to date, the news outlet reported.

Twenty-six of the state’s 33 licensed medical cannabis dispensaries are now operational, according to The Sentinel-Record, and four new retailers opened this month, including Patient Services Co. in Monticello, Delta Cannabis in West Memphis, Enlightened Cannabis for People in Arkadelphia and Enlightened Cannabis for People in Herber Springs.

East Fork Cultivars Partners With Steward

The Oregon hemp and cannabis farm launched a fundraising campaign on the new crowd-funding site designed exclusively for farmers.

July 20, 2020

Brian MacIver

Business and finance Hemp News State by State: Oregon

East Fork Cultivars, a small, family-owned and operated craft hemp and cannabis farm in Takilma, Ore., has been raising capital through a network of small lenders mostly consisting of 30 or so close friends and family members.

But in the age of COVID-19, when personal finances are particularly tight, the company is looking to new sources of debt via Steward, a crowdsourcing fundraising website made specifically for small, sustainable farms.

Contrary to the Kickstarter model of crowdfunding where “investors” are purchasing advanced orders of products without getting their money back or an equity stake, Steward acts as a mechanism for individuals to invest as little as $100 into “human-scale farms,” according to Steward’s website. Steward investors can either receive an equity stake in the farm or receive interest payments on the loan they provide—it all depends on the type of debt the given farm is looking to raise.

East Fork Cultivars currently is conducting its first raise on Steward, a “modest” amount of $50,000, according to Mason Walker, CEO of East Fork Cultivars. “Mostly it's the proof of concept, just to see if people would have interest in it,” he told Hemp Grower in an interview.

The Oregon company mainly raises funds through unsecured debt—loans that are not backed by equity but yield interest rates. “That has allowed us to keep tight ownership control,” Walker said. Through its network of close investors, East Fork Cultivars offers an average of 8% APR on investments. With Steward, the hemp farm is offering a 10% annual return and plans to use the capital to expand the company’s breeding program, fund organic certifications for its entire hemp supply chain, and help the team expand into the retail vertical with its certified-organic hemp products.

There are different requirements and conditions for different types of equity, including SEC filings and increased diligence for equity investments. For farms looking to raise funds, “figuring out what type of capital you want is the best place to start,” Walker shared. “Do you want to pay a higher interest rate for unsecured debt that has fewer restrictions or balance sheet implications, or do you want to get cheaper debt that's secured against your assets?”

For East Fork Cultivars’ executive team, maintaining ownership is the highest priority, leading them to have to make monthly debt service payments to the tune of roughly $30,000 (“a bit on the high end for what we’re comfortable with,” Walker noted.) Regardless of the type of capital a company is looking to raise, “Steward has built their platform so you can raise any type of money. They make a custom agreement for each deal.”

Walker not only expects Steward to help the small farm find new investors, but also help the company manage its current investor pool. Managing payments and balance sheets “started to get a little tedious,” Walker detailed. “Steward’s tool gives us a couple things that allow us to manage our existing friends and family lenders: We can set up auto repayments and we can give them tax documents in a more automated way.”

Also unlike Kickstarter, farms don’t need to meet their target raise to access the funds. Likewise, if a campaign’s raise greatly exceeds its goals, then funds can be returned to investors without saddling the farm with loan payments it cannot meet.

“Steward is trying to be the one-stop shop for small, values-driven farms that are striking out finding funding with traditional sources of capital, but that have something special going on,” Walker said.

“I think that raising capital is going to be just a bigger and bigger and bigger and bigger issue in cannabis, especially as existing adult-use markets mature a bit, and as new restricted states come online and as the hemp industry matures, as well,” he said. “If I were talking to a young cannabis farmer right now, I would encourage them to up their finance understanding or partner with a CFO-type person, or make sure that they have a really good CPA strategist or attorney strategist because understanding finance is just going to get so important in this space. The faster that small operators can understand their financial strategy, the better.”

Arizona Cannabis Campaign Organizer Confident Group’s Adult-Use Legalization Measure Will Appear on 2020 Ballot

Stacy Pearson of Smart and Safe Arizona says the campaign will find out by mid-August if enough of the roughly 420,000 signatures submitted are valid to qualify the initiative for the ballot.

July 20, 2020

Melissa Schiller

Legalization Watch Legislation and regulation News State by State: Arizona Dispensary News

After submitting more than 420,000 signatures July 1 to qualify an adult-use cannabis legalization measure for Arizona’s 2020 ballot, Smart and Safe Arizona’s campaign organizer, Stacy Pearson, is confident that the initiative will appear before voters this November.

The group needed to collect 237,645 valid signatures by July 2 to place its statutory measure on this year’s ballot, and despite setbacks stemming from the ongoing COVID-19 pandemic, Smart and Safe not only met, but dramatically exceeded, its goal.

“Everything’s tracking, so we’re confident that we’ll be on the ballot and we’ll win in November,” Pearson told Cannabis Business Times and Cannabis Dispensary.

Smart and Safe was the first of four initiatives in Arizona to submit signatures to the state, she added, so its initiative will be the first one processed. The state has until July 29 to perform a cursory examination of the signatures and submit a random sampling of 5% of the total to the county, which then verifies the sample line by line. The county then sends a validity number back to the state, and Pearson said Smart and Safe should know by mid-August whether its initiative is officially certified for the November ballot.

If ultimately approved by voters, the measure would allow adults 21 and older to purchase and possess up to one ounce of cannabis, as well as grow up to six plants at home for personal use. The Arizona Department of Health, which already regulates and oversees the state’s medical cannabis program, would be charged with supervising the adult-use industry, as well, and the initiative mandates that the market launch by June 1, 2021.

The Department of Health would issue vertically integrated licenses to businesses to cultivate, process, and sell adult-use cannabis, as well as license adult-use testing facilities. Arizona’s existing medical cannabis businesses would be considered “early applicants,” as would applicants seeking to locate their business in a county with fewer than two existing medical cannabis operators.

Existing medical cannabis retailers awarded adult-use licenses would have to co-locate medical and adult-use sales in one storefront under the initiative.

The measure also would place a 5.6% sales tax and a 16% excise tax on adult-use cannabis to fund state agencies for the expenses related to implementing and managing the program, and any remaining tax revenue would be divided among community college districts, police and fire departments, the Highway User Fund, and a newly created Justice Investment Fund, which would support grants and programs related to public health, expungement, nonprofit services and social equity efforts.

These efforts would include provisions to expunge the criminal records of those previously convicted of low-level cannabis charges, as well as the designation of 26 business licenses for qualified social equity applicants.

Although Smart and Safe postponed polling due to the coronavirus crisis, Pearson said the campaign will launch polling efforts in the coming weeks to gauge support for legalization.

“We’ll be back in the field within the next couple of weeks with an update poll, but there have been some other polls done that are not affiliated with the campaign that show a pretty hefty lead,” she said.

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Hawaii Legislature Approves Bill Allowing Cannabis Edibles, Illinois Collects More Than $52 Million in Adult-Use Tax Revenue to Date: Week in Review

This week, lawmakers in Hawaii sent a bill to Gov. David Ige that would allow the state’s eight medical cannabis licensees to sell edibles.

July 18, 2020

Melissa Schiller

Dispensary News Grower/Agriculture Legislation and regulation Medical Cannabis News Politics State by State: Nebraska State by State: Nevada State by State: Missouri State by State: Hawaii State by State: Illinois State by State: Florida State by State: New Mexico State by State: New Jersey State by State: Arkansas State by State: Rhode Island

This week, the Hawaii Legislature passed legislation that would allow the sale of cannabis edibles, sending the bill to Gov. David Ige for his signature. Elsewhere, in Illinois, the state collected more than $52 million in cannabis tax revenue during the first six months of legal adult-use sales.

Here, we’ve rounded up the 10 headlines you need to know before this week is over.

Nebraska: Nebraskans For Medical Marijuana has submitted well over the roughly 121,000 signatures required to put the group’s constitutional amendment legalizing medical cannabis in front of Nebraska voters this fall. The campaign hopes to find out by mid-August if enough of the signatures they submitted are valid to qualify for a ballot initiative this November. Read more
Nevada: Green Therapeutics LLC and Meridian Companies LLC have filed a lawsuit against Australis Capital Inc. in Nevada’s Eighth Judicial District Court in Clark County— against which Australis announced it plans to “vigorously defend” itself. The plaintiffs’ complaint, which has been heavily redacted, states that “… Australis stole … from Plaintiffs under false pretenses, has breached the contracts, and has acted in a manner inconsistent with the implied covenant of good faith and fair dealing.” Read more
Missouri: The state’s medical cannabis program director says sales could launch as soon as this fall. Two cultivation facilities, one in Earth City near St. Louis and another in Perryville, were given the green light to plant their first crops last month, which means product could be ready within the next few months. Read more
Hawaii: Lawmakers have passed a bill that would allow the state’s eight medical cannabis licensees to sell edibles. The legislation now goes to Gov. David Ige for his signature. Read more
Illinois: The state collected roughly $52.8 million in cannabis tax revenue during the first six months of legal adult-use sales, including approximately $34.7 million in cannabis excise taxes and $18 million in sales taxes. The figures shatter Gov. J.B. Pritzker’s budget estimates, which predicted the state would collect $28 million in cannabis tax revenue by June 30. Read more
Florida: The Florida Supreme Court ordered a second round of arguments this week in a case over whether the state properly implemented a 2016 constitutional amendment that broadly legalized medical cannabis. The lawsuit, filed by Tampa-based Florigrown, challenges the constitutionality of a 2017 law that implemented the constitutional amendment, particularly provisions related to the business licensing process. Read more
New Mexico: Ultra Health, one of New Mexico’s largest medical cannabis producers, has sued the state’s Department of Health over its new medical cannabis regulations. The company is asking the district judge to request that the department repeal and rewrite several of the rules which it deems “arbitrary and capricious.” Read more
New Jersey: The New Jersey Treasury Division of Taxation recently announced that, effective July 1, sales tax on medical marijuana is reduced to 4% from the previous 6.625% sales tax rate (the rate imposed under the state’s “Sales and Use Tax Act”). The tax reduction is the first of three scheduled tax reductions designed to eliminate the sales tax on medical cannabis sales in the Garden State. Read more
Arkansas: The state’s five existing medical cannabis cultivators have filed a lawsuit to challenge the Arkansas Medical Marijuana Commission’s decision to issue three additional cultivation licenses. The lawsuit requests an injunction against the issuance of the new licenses, or that they be voided if they have already been awarded. Read more
Rhode Island: The Department of Business Regulation will start accepting applications July 17 for six new medical cannabis dispensary licenses. The application period will be open through Dec. 15, and new licensees will be chosen through a lottery, although a date has not been set for awarding the licenses. Read more

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Federal Appeals Court Says Indiana Ban on Smokable Hemp Is OK: Week in Review

In mid-July, the hemp industry is moving steadily toward harvest.

July 18, 2020

Eric Sandy

In mid-July, the hemp industry is moving steadily toward harvest. Temperatures are soaring, and farmers are keeping a watchful eye on their crops, soil, water and nutrients. We recently shared our feature on how to prevent your hemp harvest from going hot, and contributor Paul Barbagallo’s tips are going to be helpful between now and that final moment when your plants come out of the ground.

But beyond the season itself, this past week saw several important stories.

Here at Hemp Grower, we featured the Mojave Desert cultivation work at SoCal Hemp Co., a new venture between California licensed cannabis producer Glass House Farms and water supplier Cadiz Inc. The company hopes to harvest its first major hemp crop in August or September, teeing up a better understanding of how develop unique cannabinoid products in the years to come. Read more

Senior Editor Brian MacIver wrote about the Association of Official Seed Certifying Agencies (AOSCA) and what you need to know when sourcing seed. “Nearly every kind of agricultural crop that's grown has seed certification standards,” Chet Boruff, CEO of AOSCA, told Hemp Grower in an interview. “And those standards are always meant to make sure that seed is produced in a manner to maintain varietal purity.” Read more

In another feature that will come in handy, Editorial Director Noelle Skodzinski shined a light on Penn State’s College of Agricultural Sciences Extension and the staff’s draft budgets for hemp production. The Penn State team drew up budgets for the three main types of cultivation: grain, fiber and cannabinoid extraction. Read more

And here’s what we’re following elsewhere:

Georgia law enforcement is having its moment of conflict: the state’s hemp bill has made it difficult for the state to go after marijuana prosecution. Legislators pointed out the need to jumpstart the Georgia hemp industry; for now, police officers are left with little recourse when dealing with potential marijuana cases. The Atlanta Journal-Constitution has the story.

A federal appeals court in Indiana has pushed back on an earlier court ruling that halted a ban on smokable hemp in the state. As in Georgia and other states, Indiana argued that allowing smokable hemp flower in the market would make it more difficult to distinguish between hemp and THC-rich cannabis. This week, the federal appeals court sided with Indiana and insisted that state legislatures do indeed have the ability to write laws that restrict the scope of the 2018 Farm Bill. Read more in the Indy Star.

And in Illinois, Red White and Bloom Brands Inc., operating under the name High Times, is hoping that its newfound hemp operations will give the company a shot at the THC-rich cannabis market. Red White and Bloom Brands employs 300 people at its 80-acre greenhouse. The company harvest 60 tons of hemp last fall, netting 12-16% CBD content, according to the Chicago Tribune. “[The cannabis industry is] definitely a huge opportunity,” Rogers said. “This isn’t going away. This is the end of prohibition. These jobs are going to stay, solid, well-paying jobs.”

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