The closing of this acquisition allows Green Growth Brands to operate up to 47 dispensaries across Nevada, Massachusetts and Florida.
COLUMBUS, OH, Aug. 1, 2019 /CNW/ - PRESS RELEASE - Green Growth Brands, Inc. has announced the completion of its previously announced acquisition of Spring Oaks Greenhouses, Inc., per the terms detailed on July 29, 2019.
The closing of this acquisition brings GGB's ability to operate up to 47 dispensaries across three key states: Nevada, Massachusetts and Florida.
A Senate committee held a hearing July 23 to hear testimony from cannabis and financial industry stakeholders on the importance of passing the SAFE Banking Act.
As tensions continue to mount between the cannabis and financial industries, policy reform legislation is gaining traction in Congress—namely, the Secure And Fair Enforcement (SAFE) Banking Act.
The Senate Committee on Banking, Housing, and Urban Affairs held a hearing July 23 titled “Challenges for Cannabis and Banking: Outside Perspectives,” where stakeholders from the cannabis and financial industries testified on the need to pass the SAFE Banking Act, or S. 1200, which would allow cannabis businesses to access banking and lending services.
Watch video of the hearing here.
Sponsored by Sen. Jeff Merkley (D-OR), the SAFE Banking Act would bar federal banking regulators from penalizing banks that work with state-compliant cannabis-related businesses, taking action on loans made to those businesses or limiting a depository institution’s access to the Deposit Insurance Fund. The legislation would also protect ancillary businesses from being charged with money laundering and other financial crimes, and would require the Financial Institution Examination Council to develop guidance to assist credit unions and banks in serving the cannabis industry.
The legislation currently has 31 cosponsors in the Senate, and a House companion bill, H.R. 1595, was introduced in February by Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA), Steve Stivers (R-OH) and Warren Davidson (R-OH). The House bill has 206 cosponsors and the House Financial Services Committee approved it in March with bipartisan support.
John Lord, CEO of LivWell Enlightened Health, a cannabis retailer with dispensary locations in Colorado and Oregon, and chairman of the board for the Cannabis Trade Federation (CTF), testified at the hearing, sharing his experience as a cannabis operator.
Read Lord’s full testimony here.
During the hearing, witnesses were asked to describe how banks handle cannabis-related accounts and cannabis-derived funds deposited by industry stakeholders such as attorneys, Lord told Cannabis Business Times. Testimony centered on how the SAFE Banking Act would create a “safe harbor” for financial institutions to help the cannabis industry access banking services, he said.
“As the CEO and owner of a vertically integrated cannabis business in Colorado, my testimony focused primarily on my own experience,” Lord said. “I discussed what it is like to manage a company that generates approximately $100 million in annual revenue, with all retail transactions being conducted in cash. I described the challenges and safety risks involved in running such a business under these conditions, including highlighting when I had no option but to transport $3 million in a gym bag to the Denver IRS office to pay my federal taxes.”
Lord outlined the need for social justice and social equity in the emerging cannabis industry, and how access to banking is necessary to help advance these efforts. “My testimony highlighted the barriers to entry in the industry that exist—and will continue to exist—for those disproportionately impacted by the war on drugs when banking is not available,” he said.
The hearing was historic, according to CTF CEO Neal Levine, in that it was the first time the Senate has debated an end to cannabis prohibition, although the conversation was very tightly focused on banking provisions.
“It was incredibly significant that the U.S. Congress is having hearings on key pieces of cannabis reform legislation as we work towards unwinding prohibition,” Levine told Cannabis Business Times.
And this type of reform is long overdue, he added. “We have reached the stage now [where] 33 states plus the District of Columbia and several U.S. territories have opted out of prohibition in some form. Eleven states, the District and two territories have opted out entirely. We have a situation where we’ve got over 200,000 people working in the cannabis industry every single day, and every single day they report to work, they can be arrested for a federal felony. As an industry, because of this dichotomy between this federal and state law, we get hit with 280E taxation, which means we’re taxed on our revenue, not our profits, and we have trouble even using the bank. … Plus, all the cascading impacts that has on our employees, where employees get denied mortgages and car loans … because of this dichotomy between federal and state law. It is time for Congress to act.”
Indeed, the cannabis industry has faced longstanding tension with financial institutions. Cannabis businesses largely cannot accept credit card payments, and an all-cash model presents an obvious danger to public safety.
“There’s a danger to our customers because people know that people are coming in there with a lot of cash, walking in to potentially buy their product,” Levine said. “There are stories like the one that John told, like he had no way to do an electronic transfer to pay his taxes, so he was forced to show up at the IRS office to pay taxes. They wouldn’t let him go in the back, and he had to stuff the bills into the teller window, three bills at a time. There are endless stories.”
In addition, all-cash businesses present challenges to the government, as well, when it comes to accurately collecting taxes.
“The entire system makes no sense and it’s all based on the federal government treating us like we’re an illegal drug cartel, when we’re operating legally under state and local law with a high degree of regulation, which is why I say Congress must act,” Levine said. “The situation has become completely untenable.”
Overall, Lord found the hearing productive. “I appreciated the persuasive testimony of the two Senate sponsors of the SAFE Banking Act, which included my Colorado senator, Cory Gardner, as they outlined the crucial need for this legislation and set the table for the second panel’s testimony to provide personal experiences to support their statements,” he said. “During the second panel, the committee heard not only from me, but also from bank and credit union representatives who underscored the need to change federal law so that financial institutions can more effectively serve cannabis businesses.”
The SAFE Banking Act is expected to receive a vote on the House Floor this fall, and Lord and Levine see the Senate committee hearing as a sign that the legislation may also gain traction in the that chamber during this legislative session.
“Leaving the hearing, my overall impression was that the committee members present understand the significant need to take action on the issue,” Lord said.
“Sometime in the fall, the SAFE Banking Act should pass out of the full House of Representatives, and this hearing was a key procedural step for the Senate to be able to markup the bill and move it,” Levine added. “There’s a lot of cannabis legislation out there that’s being introduced, but we’re very optimistic about the chances of SAFE Banking passing into law this Congress, and we’re also optimistic about the STATES Act itself possibly being able to pass through this Congress. In the STATES Act, we’ve got a bipartisan piece of legislation that would end the conflict between federal and state law that the president said he would sign. And the SAFE Banking Act and the STATES Act are two very complementary pieces of legislation."
The 1-for-60 reverse stock split will not be effective July 31 as previously expected.
ESCONDIDO, Calif., July 31, 2019 (GLOBE NEWSWIRE) -- via NetworkWire -- PRESS RELEASE -- Marijuana Company of America, a hemp and cannabis corporation, has provided an update to its previously disclosed reverse stock split. As stated in its press release dated July 3, 2019, and corresponding Form 8-K filed with the Commission, the company originally anticipated the effective date of the 1-for-60 reverse stock split to occur on July 31, 2019.
The reverse split will not be effective today as previously expected and disclosed. The company filed its notice of corporate action with the Financial Industry Regulatory Authority’s (FINRA), who is continuing its review of the action. The company will file its Form 14C today with the Commission disclosing the corporate action by consent of its majority stockholders.
Pending the Commission’s review of the Form 14C, FINRA's completion of its review of the proposed reverse split, and the mailing of the information statement to the company’s shareholders, the reverse split will occur at a future date. Updates regarding the approval and a new effective date of the proposed reverse stock split will also be posted on the company’s website and will be filed on Form 8-K with the Commission.
Regulators in Canada declined to comment on an ongoing investigation into ads Hexo Corp. ran on Snapchat, the app run by Snap Inc.
Snap Inc. and Twitter Inc. are gambling that they can profit off the growing marijuana industry by running ads for cannabis products from licensed Canadian producers, testing restrictive laws in Canada on marketing weed.
Regulators in Canada declined to comment on an ongoing investigation into ads Hexo Corp. ran on Snapchat, the app run by Snap Inc.
Both Snap and Twitter have published ads for some of the largest marijuana companies in Canada such as Aurora Cannabis Inc. and Hexo, who advertise brands, medical pot and other products on the social networks, according to screenshots of ads obtained by MarketWatch.
For example: Make sure the driver is educated about what he or she is transporting.
The first time it happened to Mountain Strong Hemp Company in Steamboat Springs, Colo., in late June, a pilot refused to take off with a shipment of legal hemp. The cargo included clones that she’d mistaken as marijuana—hemp plants that were destined for Shady Lane Farms in Tennessee, according to Mountain Strong Hemp Company’s founder and CEO, Nathan Brough.
When police were called to the scene and verified the shipment was indeed legal, the pilot still refused to carry the packages, Brough tells Cannabis Business Times. “FedEx [the courier] returned the package to us,” he adds, pointing out that the company is still waiting for a refund.
A day later, Mountain Strong Hemp Company turned to UPS to ship the hemp—and police were again called to inspect the packages. Thanks to detailed paperwork, officers “realized that it was hemp and was OK to ship,” recalls Brough. But even so, UPS was still hesitant to proceed with the shipment. After complaints from Shady Lane Farms, UPS agreed to send the hemp to its final destination—but “told us not to ship with them again,” Brough says.
Unfortunately, stories like this are all too common for companies attempting to ship hemp.
“There's a lack of education about what hemp is and how it's different from the intoxicating cannabis that contains significant amounts of THC,” explains Josh Hendrix, director of U.S. hemp production for CV Sciences. It’s that lack of education can often lead to problems in transit. “When you have a truck full of green hemp material fresh out of the field,” he says, “to the average person, it's automatically marijuana due to the look and smell—and that's very unfortunate, but it is just where we are right now with this crop, for the most part.”
Big Sky Scientific has encountered several problems while attempting to receive or ship its hemp products. In January, Idaho law enforcement stopped 6,700 lbs. of hemp on the way from an Oregon grower to Big Sky Scientific in Colorado. (The driver was arrested and charged with felony drug trafficking.) Since then, “we’ve been stopped a few more times,” says Big Sky Scientific CEO Ryan Shore.
“Police officers have a very difficult job, and I think it’s important we acknowledge that,” Shore says. “They are required to stop marijuana and allow hemp to pass. How can they make that determination? There is currently no field test that can accurately assess the difference.” And that, Shore explains, “is why it is so important to make their job easier.”
With that in mind, here are some lessons learned from hemp shipments gone wrong—so that you can avoid them, and the costly legal fines and potential jail time that go with them.
Make sure the driver is educated about what he or she is transporting.
“We make sure that our driver can communicate clearly to the officer and is educated about what they are shipping,” Shore says. To do that, “we always explain all our transportation documents to each driver on every shipment” before he or she hits the road, Shore says.
Consider shipping with USPS.
After its experience with FedEx and UPS, Mountain Strong Hemp Company now uses the U.S. Postal Service to ship its hemp, says Brough. “We finally learned that USPS is the only way to ship CBD and hemp products,” he says. “USPS goes by the law and not company policy.”
Hendrix agrees that USPS might be your best bet. “You are seeing much more support from the USPS, USDA, and other federal agencies clarifying the legality of interstate commerce as it pertains to hemp material from the farm, processed goods, and finished products,” he says.
Keep an accurate, detailed paper trail.
According to Hendrix, “the paper trail on hemp and hemp goods is the obvious answer” to shipment problems. “Always having the legal documents required by your state and the state you're going to is a must,” Hendrix says. And so is “good communication,” he adds.
Big Sky Scientific prepares all relevant shipping documents in a binder for safekeeping. Shore recommends you also “make sure someone will be available to answer the phone should the police officers want to talk to somebody at your business as well as the driver.”
Create clear labels and bills of lading.
Big Sky Scientific makes sure its hemp products are clearly labeled before they’re shipped, and “we make sure our bill of lading [BOL] is completely accurate,” Shore explains. (A BOL functions as a contract between a freight carrier and shipper, so it’s very important that it’s accurate. Accuracy can prevent misunderstandings between the shipper and customers.)
Cannabis Business Times’ interactive legislative map is another tool to help cultivators quickly navigate state cannabis laws and find news relevant to their markets. View More
Melissa Schiller