The infrastructure tied to awarding 26 highly sought-after social equity licenses in Arizona is still intact, at least for now.
Maricopa County Superior Court Judge Randall Warner dismissed a lawsuit challenging the state’s rules for issuing the adult-use cannabis retail licenses, ruling Tuesday that the rules published by the Arizona Department of Health Services (ADHS) satisfy provisions set forth by Proposition 207, the state’s 2020 voter-approved ballot measure for adult use.
Leaving leeway in the groundwork, Prop. 207 established that those licenses be awarded to applicants impacted by prohibition.
Warner said the law provided ADHS flexibility on how to write and implement rules, The Associated Press reported. As drafted, those rules “are reasonably designed to meet its objectives,” the judge concluded.
The licenses in question are tied to applicants who have recently lived in 87 qualifying ZIP codes, ADHS officials announced in October.
While ADHS officials did not release details about their residency requirement selection process—there are more than 500 ZIP codes in the state—the chosen areas appear heavily focused on or near Native American reservations, The Arizona Republicreported.
A limited license state, Arizona’s adult-use cannabis program allows for a total of 169 retail licenses. To be eligible for the 26 social equity licenses, applicants must meet three of four qualifying criteria, one of which is the residency requirement, set forth by the ADHS.
Overall, more than 1,500 applications were filed ahead of the mid-December 2021 deadline for the 26 social equity licenses.
The dismissed lawsuit, filed in part by the Greater Phoenix Urban League, said the rules are deficient, lacking provisions such as a prohibition against license transfers and a requirement that licensees’ expenditures and profits remain in their communities, the AP reported.
Currently, there is a bill in the Arizona Legislature that would prevent a social equity license holder from selling the license within 10 years, and if they do sell it, the license would have to go to another qualifying individual, not a corporation, Fox 10 Phoenix reported.
A random selection process to award the 26 social equity licenses is scheduled for spring 2022, according to ADHS, but there’s a possibility for delay if further litigation makes headway in the judicial system.
Atomazul | Adobe Stock
South Dakota House Rejects Bill to Allow Local Governments to Opt Out of Medical Cannabis
Legislation that would have authorized cities and counties to pass exemption ordinances was narrowly shot down Jan. 31.
The South Dakota House rejected a bill Jan. 31 that would have allowed local governments to opt out of hosting medical cannabis businesses, according to a KELO report.
House Bill 1095, which would have authorized cities and counties to pass exemption ordinances, was narrowly shot down in a 31-33 vote, the news outlet reported.
The legislation needed at least 36 votes to advance to the South Dakota Senate.
South Dakota voters approved Initiated Measure 26 in the 2020 election to legalize medical cannabis. The measure received 70% support and passed in 63 of the state’s 66 counties, KELO reported.
“We talk about the will of the people, but not every county voted for medical marijuana,” said Rep. Rhonda Milstead (R-Hartford), who sponsored H.B. 1095.
Zack Frank | Adobe Stock
California Bill Would Classify Unlicensed Cannabis Cultivation as a Felony
Under legislation filed by Rep. Thurston Smith, growing more than six plants without a permit would be a felony offense instead of a misdemeanor.
A new bill in the California Legislature would classify unlicensed cannabis cultivation as a felony, rolling back part of the state’s 2016 voter-approved initiative that legalized adult-use and made growing any number of plants without a license a misdemeanor, according to a Forbes report.
Under A.B. 1725, filed by Rep. Thurston Smith (R-Apple Valley), growing more than six plants without a permit would be reclassified as a felony offense, punishable by up to three years in jail.
To go to Gov. Gavin Newsom’s desk, the legislation requires a two-thirds majority in the Legislature, since it amends a voter-approved initiative.
Thurston’s bill aims to “combat illegal marijuana grows that have been proliferating throughout the rural High Desert communities,” according to a press release from his office.
“These illicit growers have been operating with impunity, knowing that the law allows them to grow with barely a hindrance,” Thurston said in a public statement. “For far too long, Sacramento has been soft on crime, and the illicit market has exploded with massive unlicensed grows popping up all around the state."
One of Verano's Zen Leaf dispensaries in Illinois.
Photo courtesy of Verano
Verano to Acquire Goodness Growth for $413 Million
The multistate operator will enter the New York, Minnesota and New Mexico markets, and expand in Arizona and Maryland, through the proposed deal.
Upon consummation of the acquisition, Verano’s footprint will span 18 states, with active operations in 15, including 17 cultivation facilities totaling 1.3 million square feet of cultivation capacity and 111 active dispensaries
Verano will obtain one of only 10 vertically integrated licenses in New York, which includes one cultivation license, four active dispensaries and four additional dispensaries planned in high-traffic locations
Verano will acquire one of only two vertically integrated licenses in Minnesota, which includes one cultivation license and eight active dispensaries
In New York, the company will gain delivery service across the New York City area via a dispensary on Queens Boulevard centrally located next to the Long Island Expressway, Citi Field and LaGuardia Airport; along with three high-traffic dispensaries—in a busy shopping district in White Plains; in Albany adjacent to the University of Albany campus and Colonie Center Mall; and in Johnson City across from the Oakdale Mall
In Minnesota, Verano will obtain eight dispensaries, including one in the heart of downtown Minneapolis and four more across the Minneapolis-St. Paul metro area; in locations covering the cities of Duluth and Rochester; and in Moorehead, which is situated in the Fargo, N.D., metro area
Between 2022 and 2026, these net new markets are expected to generate combined revenue of more than $13.8 billion, according to BDSA data
CHICAGO, Feb. 1, 2022 – PRESS RELEASE –Verano Holdings Corp. and Goodness Growth Holdings Inc. have entered into a definitive arrangement agreement (the “arrangement agreement”) pursuant to which Verano will acquire all of the issued and outstanding shares of Goodness in an all-share transaction valued at approximately $413 million on a fully diluted basis.
Photo courtesy of Verano
Verano's Sonny G cultivar
Under the terms of the arrangement agreement, it is expected that each holder of Goodness subordinate voting shares will receive 0.22652 of a Verano Class A subordinate voting share for each Goodness subordinate voting share held and each holder of Goodness multiple voting shares and Goodness super voting shares will receive 22.652 Verano shares for each Goodness multiple voting share and Goodness super voting share held, respectively.
Goodness’ active operations include 18 dispensaries; five cultivation and processing facilities; a research and development facility; and the Vireo, 1937, LiteBud, Kings & Queens, Hi-Color, and Amplifi product brands. The acquisition of Goodness is expected to expand Verano’s operational footprint with the addition of the New York, Minnesota and New Mexico markets, strategically increasing the company’s presence in the Northeast, Midwest and Southwest, while adding a suite of established cannabis brands to the company’s portfolio.
Management Commentary
“We have always viewed New York as a strategic market to solidify our existing East Coast presence, particularly ahead of the state’s adult-use rollout, as we further expand the Verano platform and exceed a milestone of operating more than 100 dispensaries across the country,” Verano founder and CEO George Archos said. “Adding the New York, Minnesota and New Mexico markets to our portfolio, with full vertical integration, provides Verano with a solid foundation for future growth. We’re excited to welcome new colleagues to the Verano family and look forward to serving patients and consumers in communities across these great states.”
“After an extensive evaluation process, George and the Verano team are unquestionably the ideal partners to take our business to the next level,” said Goodness Chairman and CEO Kyle Kingsley, M.D. “Evidenced by their strong leadership team, sound operating principles, core values and sustained growth, Verano continues to reach new heights as one of the top multistate cannabis operators. We are confident in Verano’s ability to foster future growth opportunities for our employees and deliver an exceptional experience for our patients and consumers.”
Transaction Highlights
The transaction includes 18 active dispensaries; five cultivation and processing facilities; a research and development facility; and the Vireo, 1937, LiteBud, Kings & Queens, Hi-Color, and Amplifi product brands.
New York
Goodness currently holds one of 10 vertically-integrated licenses to grow and dispense medical cannabis products in the state of New York. It operates four medical dispensaries under the Vireo Health brand in Albany, Johnson City, Queens and White Plains. Goodness is also entitled to open an additional four dispensaries in advance of the commencement of the state’s recently approved adult-use program, which allows for three of its eight dispensaries to sell recreational-use products.
Goodness also operates a home-delivery service across New York City and all its boroughs, as well as in Westchester, Rockland, Nassau and Suffolk counties. Its home-delivery business currently accounts for more than half of its total medical cannabis sales in the state.
Goodness currently grows and manufactures its products in a 64,204-square-foot greenhouse cultivation and processing facility in Johnstown, and is in the process of expanding this facility with the construction of 324,000 square feet of indoor warehouse, 170,000 square feet of which has been approved for indoor cultivation and processing.
Minnesota
Goodness currently holds one of two vertically integrated licenses to grow and dispense medical cannabis products in the state of Minnesota. It operates eight dispensaries in the state under the Green Goods name in Blaine, Bloomington, Burnsville, Duluth / Hermantown, Minneapolis, Moorhead, Rochester and Woodbury.
Products are manufactured at Goodness’s 87,232-square-foot greenhouse cultivation facility in Otsego, where Goodness has the potential to expand onto an adjacent 20-acre parcel in the future. The state of Minnesota has recently approved the sale of smokable flower within its medical program, with flower sales expected to begin by the end of March 2022, followed by the introduction of certain edible products this coming summer.
New Mexico
Goodness operates a 18,650-square-foot cultivation facility in Gallup, as well as four medical dispensaries under the Green Goods name in Albuquerque, Gallup, Las Cruces and Santa Fe. Goodness has also identified several locations for projected store expansion in the near-term future. The state of New Mexico’s cannabis program is expected to commence adult-use sales in April 2022, at which point all of the Green Goods dispensaries in New Mexico will be eligible to sell recreational-use products.
Maryland
Goodness currently operates two medical dispensaries in Maryland under the Green Goods name in Baltimore and Frederick. It also currently operates a 143,500-square-foot greenhouse in the town of Massey. Goodness also operates a separate 22,500-square-foot manufacturing and processing facility in the town of Hurlock.
Arizona
Goodness operates an active 18-acre outdoor cultivation facility in Amado.
More Details
Additional information about the terms of the transaction, approvals and recommendation, and advisers, can be viewed here.
Schwazze Adds Key Hires to Senior Leadership Team
The company ramps up for growth, expanding its manufacturing, information technology and cultivation expertise.
DENVER, Feb. 1, 2022 /CNW/ - PRESS RELEASE - Schwazze, has announced the addition of key roles to support the company's significant expansion within manufacturing, cultivation, and information technology.
As Vice President of Manufacturing and Supply Chain, David Kaufman joined the leadership team from Carlex Glass where he was responsible for global operations. Kaufman is a seasoned executive with experience identifying and yielding multimillion-dollar improvements in operations and supply chain through LEAN manufacturing, procurement, and distribution strategies. He had full P&L responsibility for the European business segment where he led a significant turnaround in operating performance and financial improvement. Kaufman holds a distinguished certificate in general management from the Darden School of Business at the University of Virginia, MBA from the University of St. Francis, and BS in Chemistry from Purdue University.
Steven Liedtke joins Schwazze as Vice President, Information Services. Liedtke is an experienced Information Technology Executive with more than 25 years of leadership experience across industry sectors such as: CPG, Food & Beverage, Retail, and High Technology industries, including The Hain Celestial Group, The Whitewave Foods Company and Maines Group. Technology is a key pillar in Schwazze's growth strategy to help drive digital transformation, operational efficiencies, and synergies. With his M&A systems integration experience, Liedtke brings the expertise Schwazze needs in this period of significant organic and new acquisition growth.
The third key addition to the leadership team is in cannabis cultivation. Robert Piziali joins Schwazze as Vice President, Cultivation, overseeing its grow operations. Piziali was formerly the President of FarmPerfect, a cannabis farm management company based in Mendocino County, Calif. He has 20 years of experience in operations management and, prior to cannabis, comes from the wine industry where he was involved in all aspects – from the vineyard to the cellar, to tasting rooms and retail operations. He was also the co-founder and president of FLO Wine, which he launched nationally in chains including Wal-Mart, Costco, Target, Jewel-Osco, and Albertsons. Piziali has an MBA from University of North Carolina, Chapel Hill and a BA in Psychology from Rollins College.
"We are excited about the key additions to our operational leadership team. Kaufman, Piziali and Liedtke bring a wealth of knowledge and experience in their respective areas which are both critical to Schwazze's growth strategy in manufacturing, grow operations, distribution and digital commerce," said Nirup Krishnamurthy, chief operating officer. "We continue to be proud of what we've built in Colorado since 2019 and look forward to our continued expansion."
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Tony Lange
Melissa Schiller
