Massachusetts police say they are seeing a thriving underground marijuana market, which is booming four months after the launch of legal pot sales — as dealers take advantage of the heightened demand and short supply — and compete with cheaper weed, while using the legalization laws as cover.

Police chiefs say their concern that legalizing pot would actually fuel the illicit market — leading to an explosion of illegal marijuana sales in Massachusetts — is coming true.

Both the cops and cannabis advocates say the combination of high prices and low supply in the few retail stores — often located far from their customers — is driving the newly energized weed consumer base to seek out the cheaper black market.

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TORONTO, April 04, 2019 (GLOBE NEWSWIRE) -- CB2 Insights, a provider of predictive analytics tools, data-driven software and comprehensive services across the cannabis value chain, today made its second acquisition announcement in 2019 as it has acquired the assets of Colorado-based medical cannabis clinic group Rae of Sunshine Health Services LLC, operating as "Relaxed Clarity", effective immediately. This follows the 2017 acquisition of Massachusetts-based Canna Care Docs, the largest multi-state cannabis clinic group in the US and the March 20, 2019 announcement of the agreement to acquire Arizona and Colorado-based MedEval LLC.

CB2 continues to acquire clinics as part of its strategy to standardize the capture of clinically-validated patient efficacy data. This new acquisition will help expedite that process and will not only improve CB2's financial metrics but advance the industry at-large.

Relaxed Clarity operates four clinics in Colorado including Denver, Colorado Springs, Pueblo and Broomfield.  The group was established in 2009 and provides comprehensive medical cannabis evaluations and educational support to approximately 15,000 patients each year.  In 2018, Relaxed Clarity recorded approximately US$1.1 million in revenue.

Terms of the acquisition

Under the terms of the acquisition, CB2 has acquired 100% of the assets of each of ROSH and its subsidiaries for a combination of cash and stock.  Total consideration consisted of a cash payment of US$200,000 and issuance of 500,000 common shares of the Company.  Share consideration was negotiated by the parties based on the Company's most recent financing price, led by Merida Capital.  Additionally, milestone incentive payments are in place relating to patient growth over the next 12 months and total up to US$100,000 in cash and up to a value of US$300,000 in common shares of the Company.

Subsequent share issuances will be based on the 30-day volume weighted average price of the Company's shares prior to the date of issuance and all shares will be subject to a minimum hold period of four months plus 1 day from the date of each issuance. 

BOCA RATON, April 02, 2019 (GLOBE NEWSWIRE) -- Stem Holdings Inc. is pleased to announce it has executed a definitive agreement dated March 29, 2019 to acquire Western Coast Ventures Inc. WCV has a working capital surplus of approximately $2,000,000 and has negotiated a joint venture with ILCA Holdings, Inc. ILCA has been issued a limited Conditional Use Permit for a Marijuana Production Facility by the City of San Diego, California, which will only be granting a total of 40 MPFs. The consideration for the acquisition is expected to be 2,000,000 shares of Stem’s common stock, having a value of approximately $3,500,000 based on Stem’s closing trading price on March 29, 2019. After giving effect to the closing of the acquisition of WCV and the previously announced acquisition of South African Ventures, Inc., the former shareholders of WCV will own approximately 7.3% of the issued and outstanding shares of Stem. The acquisition of WCV is expected to be completed on or around April 12, 2019.

The JV will consist of its own management team and with the personnel, expertise, and other resources necessary to construct the MPF. It is agreed that WCV will have a 51% interest in the JV, for an aggregate purchase price of $1,500,000. ILCA will hold the remaining 49% interest in the JV. ILCA previously invested $500,000 in the build-out and initial MPF permitting process. Stem anticipates the JV will finance the cost of construction of the MPF, estimated at $3.5 million, with its cash on hand and other non-dilutive sources of financing. The construction of the facility has begun and is estimated to be completed during the fourth quarter of 2019.

Upon issuance of the final MPF permit and the completed construction, the JV will: (1) operate an advanced cannabis facility to grow and cultivate cannabis; (2) manufacture cannabis-derived products; and (3) distribute cannabis and cannabis-derived products state-wide throughout California.

“With a population of 39 million and the fifth largest GDP in the world, California’s cannabis market is an unparalleled state market which makes it a critical location for Stem’s expansion,” states Adam Berk, CEO of Stem. “The agricultural, production and distribution expertise that both Stem and ILCA bring to this project are expected to result in a successful California cannabis operation based in the City of San Diego.”

The MPF encompasses 10,700 square feet and will feature state-of-the-art technology for cultivation, production and distribution. A complex, sophisticated, portable racking system will create a 10,000 square foot canopy that has the potential to produce over 6,000 pounds of product per year with the help of high efficiency LED lights. The production sector of the MPF will deliver a large variety of cannabis-derived offerings such as flowers, pre-rolls, infused edibles, and topicals. Stem expects production from the MPF to begin during the fourth quarter of 2019.