A cannabis company is asking the Illinois Supreme Court to let the state name the winners of craft grower licenses that have been held up by pending litigation, according to the Chicago Tribune.
1837 Craft Grow LLC filed a motion Jan. 5 to modify a court order that bars state officials from naming the licensees until litigation is settled, the news outlet reported.
The case holding up the licensing process centers on 13 companies that sued the state to challenge the licensing process after their applications for craft grow and transporter licenses were disqualified, according to the Chicago Tribune.
A state law required Illinois officials to issue the 60 new craft grow licenses by Dec. 21, 2021, the news outlet reported, but Cook County Judge Neil Cohen and Sangamon County Judge Gail Noll have ordered that the licenses cannot be awarded until the lawsuit is settled.
A hearing in the case is scheduled for March 10, according to the Chicago Tribune, which also noted that it could take months or years for the litigation to be resolved.
1837 Craft Grow argues in its motion that it and other applicants have faced mounting costs as they pay for property and other business expenses while waiting to hear if they will ultimately be awarded a license to operate.
The Illinois attorney general’s office asked Noll to allow the state to name the 60 winners of the craft grow licenses without issuing the licenses in an effort to allow the licensees to move forward with their business plans, but Noll denied the request, the Chicago Tribune reported.
Carver Family Farm Plans to Bring Quality, Variety to New Mexico’s Adult-Use Market: The Starting Line
Matt Muñoz, a partner in the Albuquerque-based business, says “craft cannabis is going to be the next big thing” for the city, which already has a large microbrewery and craft distillery culture.
Three partners have come together to launch Carver Family Farm, an aspiring adult-use cannabis microbusiness based in Albuquerque, N.M., that plans to bring quality and variety to the state’s forthcoming adult-use cannabis market.
“One of the things I’m excited about is Albuquerque has a huge microbrewery and craft distillery culture here, and I think that craft cannabis is going to be the next big thing for Albuquerque,” Matt Muñoz, the company’s chief innovation and finance officer (CIFO), tells Cannabis Business Times.
Muñoz and the company’s other two partners, Chief Cultivation Officer Andrew Brown and Chief Operations Relations Officer Erika Hartwick Brown, a husband-and-wife team, are seeking to secure multiple adult-use licenses to become a vertically integrated cannabis microbusiness.
The trio applied in August for a producer license, which it received in mid-December. The New Mexico Cannabis Control Division (CCD) opened the application process for retail and manufacturing licenses last month, and Carver Family Farms will apply for those, as well.
Photos by Andrew Brown
Carver Family Farm runs an organic, no-till living soil indoor cultivation operation.
“We’re focusing on an organic, no-till, living soil indoor operation,” Muñoz says. “Erika and Andrew have been patients since New Mexico had a medical cannabis program. They’ve been personal producers at their home, so they’ve been growing from there and perfecting this crop ever since.”
Muñoz says cannabis has also been a big part of his life after he was arrested at age 18 on possession charges.
“It took me five years to graduate from high school because of it,” he says. “I lost my scholarships. It’s something that’s been a part of my life since I was young. It’s something that I believe in.”
While Erika and Andrew applied for one of New Mexico’s 34 medical cannabis business licenses nearly a decade ago, they did not ultimately secure a license when the state awarded them through a lottery in 2014.
New Mexico Gov. Michelle Lujan Grisham signed the state’s adult-use cannabis bill into law in April, and the statute sets “a pretty aggressive timeline” for adult-use sales to launch in April 2022, Muñoz says. Regulators have told the Carver Family Farm team members that they should have their final licenses in the next month or two, just in time for the first legal sales.
Building a Business
Carver Family Farm has a facility in Albuquerque where the team plans to co-locate the company’s cultivation, manufacturing and retail operations. Muñoz and the Browns are Albuquerque residents and spent the first few months of their business lives in the city looking for real estate for Carver Family Farm.
“I drove around neighborhoods I didn’t know existed in Albuquerque just looking for warehouses, calling the owners on the tax rolls to see if they wanted to rent it,” Muñoz says. “We were pretty aggressive getting our building.”
While New Mexico’s adult-use cannabis law prohibits the state’s municipalities from outright banning cannabis businesses within their jurisdictions, it does allow them to enact restrictions, such as how far away cannabis operations can be from a school, day care or church.
For example, Muñoz says that Albuquerque banned cannabis stores in its historic district, but several adult-use dispensaries are already planning to set up shop a few blocks outside of that area. Albuquerque also requires cannabis cultivators to have an odor control plan in place, he adds, which prompted Carver Family Farm to purchase carbon filters late in the business planning process in order to comply with the ordinance.
“I know one of the small towns put that you can’t be 300 feet from a residentially zoned area, which basically meant there were two shopping centers in the entire county where you could put a dispensary,” Muñoz says. “They’re still finding creative ways to restrict it, but they can’t just outright ban it.”
Opportunities and Challenges
Muñoz applauds New Mexico for creating microbusiness licenses, which he says “lowered the bar for a lot of smaller producers to enter this market.”
Albuquerque has a culture that supports shopping small and shopping local, Muñoz adds, which will help microbusinesses like Carver Family Farm find a niche market.
“That’s what I’m excited about, is seeing this high-end, craft cannabis that you don’t really see in some of these bigger markets,” he says.
Muñoz points to ever-changing regulations as some of the company’s biggest growing pains.
“They’re not finalized, so it’s like we’re building a business while they’re building the regulations, and that’s our biggest headache,” he says.
Securing additional employees is also a chief concern, Muñoz adds, as the national labor shortage continues.
“Finding enough workforce to actually bring in the harvests and trim and all of the other labor-intensive parts of this process that we need is a concern for me in the short-term,” he says.
Securing water rights is another challenge for many of New Mexico’s cannabis producers.
“It’s their biggest roadblock besides financing,” Muñoz says.
It’s a complicated issue, he adds, which could ultimately keep larger, multistate operators from dominating the state’s market.
“New Mexico put in statute that you have to have water rights in order to grow, and so it’s not going to be [like] in other parts of the country where you can just build a warehouse and drill a well and suddenly start growing,” Muñoz says.
Water rights are attached to property in the state, he says, and cannabis producers must find farms that have the proper amount of water rights to support their crops.
“We’re fortunate in Albuquerque because we have commercial water [and] we have a commercial lease,” Muñoz says. “For commercial property, if you have a commercial lease, you can use it. But outside of that, finding commercial water in New Mexico is going to be the hardest thing.”
Securing water rights can be a challenge for cannabis growers in New Mexico, but Carver Family Farm has commercial water with its lease.
The ongoing COVID-19 pandemic also poses its own unique set of challenges for new businesses, in New Mexico and beyond. The Carver Family Farm team plans to follow all state and Occupational Safety and Health Administration (OSHA) guidelines to keep its employees and customers safe, Muñoz says, and the company will require its employees to be vaccinated and boosted.
“New Mexico changed the definition of fully vaccinated—it’s considered with a booster,” he says. “We’re going to have a mask mandate—everybody is going to have to wear a mask. We’re looking at what happens after Omicron. What’s the next issue? We’re looking at doing the online, web-based market, which became very popular during the pandemic.”
To promote social distancing, the team is considering moving some of its trimmers out of the facility’s designated trim room and into other areas of the building in order to keep employees 6 feet apart while trimming.
Finding a Niche
Product quality and variety will ultimately set Carver Family Farm apart in New Mexico’s nascent adult-use cannabis market, according to Muñoz.
While the company’s organic, no-till cultivation is more labor-intensive, he says it produces higher quality flower, which medical cannabis patients have said is lacking in the state.
“That’s really where we’re going to be distinguishing ourselves, is putting out the highest quality flower that we can,” Muñoz says.
The company has also amassed a wide variety of cultivars over the last 10 years, he adds, with a collection of 169 different genetics.
“We have some strains that are sought after all over, that you just can’t find anywhere close to us,” Muñoz says. “We think that’s also a way for us to distinguish ourselves.”
Flower will be Carver Family Farm’s main focus, as it continues to be the most popular product category among New Mexico’s patients, according to Muñoz. Many of the state’s medical cannabis retailers consistently sell out of their flower offerings, he says.
The company is also paying close attention to the rise of solventless extraction and plans to produce live rosin for New Mexico’s adult-use market.
Carver Family Farm’s main goal, however, is to have product on the shelf when adult-use sales launch April 1, Muñoz says. “Short-term, we just want to have product to sell and have our market ready."
Katherine | Adobe Stock
New Hampshire House Approves Adult-Use Cannabis Legalization Bill
Similar legislation cleared the House in 2020 but ultimately stalled in the Senate.
The New Hampshire House approved an adult-use cannabis legalization bill Jan. 6, according to an AP News report, after similar legislation cleared the House in 2020 but ultimately stalled in the Senate.
The bill, which now returns to the Senate for consideration, would allow adults to possess up to three-fourths of an ounce of cannabis and cultivate up to six plants at home, AP News reported.
Cannabis could be traded or given away under the legislation, but not sold, according to the news outlet.
A broader bill in 2019 would have created a regulated and taxed retail market for adult-use sales, but that legislation also died in the Senate, AP News reported.
While New Hampshire Gov. Chris Sununu opposes adult-use legalization, the latest bill approved by the House passed with five votes more than needed for a veto-proof majority, according to the news outlet.
Curaleaf Announces the Acquisition of Bloom Dispensaries
Bloom further strengthens Curaleaf's presence in the highly attractive Arizona market, expanding the company's cultivation, processing and retail assets in the state.
WAKEFIELD, Mass., Dec. 28, 2021 /PRNewswire/ -- PRESS RELEASE -- Curaleaf Holdings, Inc., an international provider of consumer products in cannabis, has announced that it has entered into a definitive agreement to acquire Bloom Dispensaries, a vertically integrated, single state cannabis operator in Arizona in an all cash transaction valued at approximately US$211 million. The transaction is expected to close in January 2022, subject to customary approvals and conditions.
The proposed transaction with Bloom includes four retail dispensaries located in the cities of Phoenix, Tucson, Peoria, and the only dispensary currently in Sedona, with a combined population of over 2.3 million and drawing millions of tourists every year. In addition, Bloom strengthens Curaleaf's production capabilities in Arizona with the addition of two adjacent cultivation and processing facilities located in north Phoenix totaling approximately 63,500 square feet of space. Finally, Bloom has an attractive financial profile, generating expected 2021 revenue of approximately $66 million and EBITDA margins of more than 40%. Following the close of Bloom and the previously announced acquisitions of Tryke Companies and Natural Remedy Patient Center, Curaleaf's retail footprint will increase to 16 dispensaries in Arizona and 128 nationwide.
Boris Jordan, Executive Chairman of Curaleaf, stated, "We are pleased to continue Curaleaf's expansion in the state of Arizona with the acquisition of Bloom. In addition to bolstering our strong position in this key growth market with an attractive portfolio of retail and cultivation assets, Bloom will be immediately accretive to our adjusted EBITDA margins upon close. On behalf of the Board of Directors and management team, I look forward to welcoming Bloom to the Curaleaf family."
Joseph Bayern, CEO of Curaleaf, stated, "We are excited to announce the acquisition of Bloom, which shares Curaleaf's mission of delivering the highest-quality products and superior service to patients and customers while striving to make a positive impact in the communities we serve. Bloom has built a strong and profitable business, and we believe the combination of our two companies will enhance our competitive position and ability to continue gaining share in the highly attractive Arizona market."
Under the terms of the agreement, Curaleaf will pay US$51 million in cash at closing, with the remaining approximately US$160 million paid in three promissory notes of $50 million, $50 million, and $60 million due, respectively, on the first, second and third anniversary of closing of the transaction. The notes will be recourse only to shares and assets of Bloom and will not be guaranteed by any Curaleaf entity.
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Workers Are Quitting En Masse in the ‘Great Resignation,’ but Cannabis Industry Hiring Remains as Strong as Ever
The growth potential in cannabis has tended to insulate the industry from broader labor trends.
On the homepage of the New York Timesearlier this week: “More Workers Quit Than Ever as U.S. Job Openings Remain Near Record.”
The news story cites U.S. Department of Labor survey results published Jan. 4 that set the ongoing economic tension in stark relief. Even as inflation rises, workers are leaving behind jobs at astonishing numbers and for myriad reasons—chief among them stagnant wages.
The cannabis industry, which clocked around $26 billion in sales in 2021, may not be entirely immune from the trend, but it’s certainly a bit protected by virtue of its rapid expansion across the U.S. and its sky-high ceiling for growth in the otherwise uncertain years to come. Early last year, Leafly released a formal jobs report that found at least 321,000 full-time equivalent jobs in the industry—and that number was expected to grow steadily.
David Belsky, CEO of recruitment firm FlowerHire, says that cannabis finds itself in an interesting position as an industry with no real (legal) history of employment. It’s a regulated space that’s emerged from advocacy efforts and political headwinds in the past 10 or so years, and its growth now demands new workers from a variety of backgrounds—including horticulture, certainly, but also financial management, retail, interior design, corporate communications, insurance and so on.
A lot of service-based industries, like hospitality, have faced a sudden demand crunch amid the pandemic. Elsewhere, consumer-packaged goods and the light industrial space are facing a supply crunch.
“I think there are a lot of contributing factors to the great resignation,” Belsky says. “I think it's a real thing. I just don't think it's as relevant for cannabis.”
According to FlowerHire’s research, 80% of the demand for work in the cannabis space is materializing outside of California, painting a picture that newer markets on the East Coast or in the Midwest, for instance, are driving that sense of growth. This is a national industry, however fragmented it may be.
The breadth of cannabis makes it an interesting foil for the resignation narrative we’re seeing elsewhere.
“There’s actual growth of opportunity in the cannabis industry,” Belsky says. “Light industrial jobs have been going away forever, retail has been consolidating. These companies in those sort of old-world industries, if you will, are not hiring again. People, after experiencing the last couple years, have really begun to ask, ‘What am I doing? What am I doing with my time? What should I be doing?’ In cannabis specifically, it's unique as a job creator for that 90% because the industry itself is going to hire hundreds of thousands of people in the next decade that have never worked professionally in cannabis. And you can actually go get a job in cannabis and work your way up through your own effort and work ethic and, and desire to be successful.”
Toward the end of 2021, Lume, a Michigan-based, vertically integrated cannabis company, announced that it had hired its 1,000th employee.
"When I first joined Lume Cannabis Co. in 2019, we had just 75 employees. Fast-forward a little over two years and we now employ 1,000 people and counting in great paying jobs with high-quality benefits," Lume president and Chief Operating Officer Doug Hellyar said in a public statement. "Our explosive growth over the last two years makes Lume one of the fastest-growing, privately owned companies in Michigan. Every member of our team is integral to showing cannabis in a new light and I want to thank every single one of them for their hard work and determination."
The news came alongside the opening of Lume’s 26th dispensary in Michigan. By 2024, Hellyar said, the goal is to have 100 Lume dispensaries open in the state.
Growth like that tracks with the general sense of momentum that the industry is seeing in greener regions: the Midwest, the Mid-Atlantic, New England, even the South. Belsky points to those relatively newer state markets as powerhouses of opportunity.
“The biggest job creation engines in cannabis are east of Mississippi,” he says. “And what's interesting is that, even three or four years ago, when I started in California, there was still a stigma about working in the industry. Even to hire in California! But there's not the same level of stigma anymore, even in these emerging markets—even when there haven’t yet necessarily been cannabis jobs present. A lot of that comes back to the idea that cannabis might actually be a more stable industry than other industries, which is the world flipped upside on its head."
So, what’s next?
In the absence of a working crystal ball, Belsky points to state markets that currently up and running—but in need of greatly expanded supply. States like Illinois, New Jersey, Pennsylvania, Massachusetts, he says: Cannabis markets like that are where entrepreneurs or prospective employees might look for future licensing expansion. Illinois’ expansion is under way (even if it’s stumbling), and New Jersey is preparing now for a hotly anticipated adult-use market, for example. But opportunities in the burgeoning U.S. cannabis industry are legion.
“I actually am very bullish on Florida, to be honest with you,” Belsky says. “I think Florida could be our biggest state [in 2022], if not second-biggest. This is partly because a lot of MSOs are moving their headquarters down there, but also because a lot of those other licenses that have been dormant … are going to be opening for business in 2022. Obviously, every one of those licenses, based on the regulatory structure, comes with hundreds if not thousands of jobs. I think Florida is going to be a major driver, based on what I'm seeing.”
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