As part of his sweeping state budget, New York Gov. Andrew Cuomo today proposed a plan to legalize, tax and regulate adult-use cannabis and to expunge past cannabis-related conviction records of residents. Because this is contained within a state appropriations package, this plan could move quickly in the state legislature.
Cuomo’s pitch would cap the number of cultivation, distribution and retail licenses allowed in the state, and would prohibit companies from vertically integrating.
That’s a departure from the state’s vertically integrated medical marijuana market, which currently has 10 businesses up and running. It’s not clear whether those businesses would have a head-start on any adult-use licenses. Last fall, State Sen. Diane Savino, who worked on a task force that assisted this legalization proposal, toldCannabis Business Times that an underpinning of any adult-use cannabis market in New York would be focused on small business development.
The licensing regime and regulation will take place in the proposed Office of Cannabis Management, a new state entity that would over the industry: reviewing applications, issuing licenses, tracking sales data.
Counties and municipalities would be able to ban cannabis sales if desired.
The proposal includes a 20-percent state tax and a 2-percent county tax on cannabis wholesalers. Further, the plan includes a $1-per-gram flower tax and a $0.25 tax on trim for cultivators. Cuomo said he sees this plan generating some $300 million in tax revenue for the state. That money would flow toward a state traffic safety committee, small business development and substance abuse services in New York.
A sales tax at the retail stage of the market was not mentioned.
Following the example of other states, cannabis would be legal for adults 21 and older. No sort of home grow policy was brought up during the Jan. 15 announcement.
Cuomo arrived at this point of laying out a legalization plan under great pressure that built through 2018. His Democratic primary opponent, Cynthia Nixon, drew him into a public debate over the merits of a legal adult-use cannabis market; two years ago, Cuomo had opposed the idea of legalizing cannabis, calling the plant a “gateway drug.”
Plus, neighboring states have either legalized cannabis or have taken strides to get some form legalization passed in their respective state legislatures. “I think you have to look at New Jersey and you have to look at Massachusetts,” he said. “They are natural competitors in the marketplace.”
MPX Securityholders Approve Business Combination with iAnthus
MPX International will focus on developing and operating assets across the global cannabis industry.
NEW YORK and
TORONTO, Jan. 15, 2019 (GLOBE NEWSWIRE) -- iAnthus Capital Holdings Inc. and MPX Bioceutical Corporation are pleased to announce that at the special meeting of MPX
securityholders
held today,MPX Securityholders voted overwhelmingly in favor of a special resolution to approve the previously announced plan of arrangement under the Business Corporations Act
(British Columbia) between iAnthus and MPX whereby iAnthus will acquire all of
the issued and outstanding common shares of MPX pursuant to the terms
of an Arrangement Agreement between iAnthus and MPX dated October 18, 2018.
Obtaining approval from the MPX Securityholders is one of the primary
conditions to completing the Arrangement.
The
Arrangement Resolution required approval by (i) at least two-thirds of the
votes cast by holders of MPX Shares present in person or by proxy at the Meeting,
(ii) at least two-thirds of the votes cast by MPX Securityholders present in
person or represented by proxy at the Meeting, voting together as a single
class, and (iii) a majority of the votes cast excluding the votes of MPX Shares
held or controlled by “interested parties” as defined under Multilateral
Instrument 61-101 – Protection
of Minority Security Holders in Special Transactions. At the
Meeting, the Arrangement Resolution was approved by (i) 99.44% of the votes
cast by all of the MPX Shareholders eligible to vote at the Meeting, (ii)
99.55% of the votes cast by all of the MPX Securityholders eligible to vote at
the Meeting, voting together as a single class, and (iii) 99.38% of the votes
cast by all of the MPX Shareholders eligible to vote at the Meeting excluding
votes of MPX Shares held or controlled by interested parties. Approximately 40%
of the total issued and outstanding MPX Shares were voted in person or proxy at
the Meeting.
In addition,
MPX Shareholders approved (i) the continuance of MPX from the Province of
Ontario to the Province of British Columbia prior to the closing of the
Arrangement; and (ii) the stock option plan of the newly formed MPX
International Corporationthat will hold
all of the non-U.S. businesses of MPX. MPX International has applied to list
its securities on the Canadian Securities Exchange.
It is expected
that MPX will apply for a final order of the Supreme Court of British Columbia
in respect of the Arrangement on January 18, 2019. Completion of the
Arrangement remains subject to customary closing conditions, which are set out
in the Arrangement Agreement, a copy of which can be found on the SEDAR
profiles of iAnthus and MPX at www.sedar.com.
Assuming that the conditions to closing of the Arrangement are satisfied or
waived, it is expected that the Arrangement will be completed on or before
January 30, 2019. Further information about the Arrangement is set forth in the
materials prepared by MPX in respect of the Meeting, which were mailed to MPX
Securityholders and filed under MPX’s profile on SEDAR at www.sedar.com.
Upon closing,
MPX International (MPX’s spun-out company) will hold the non-U.S. assets of
MPX, and will be focused on developing and operating assets across the global
cannabis industry with an emphasis on cultivating, manufacturing and marketing
products which include cannabinoids as their primary active ingredient. Initial
key assets will include Canveda Inc. (a Canadian Licensed Producer), the Salus
BioPharma Corporation agreement with Panaxia Pharmaceutical Industries Ltd. and
50% of a medical cannabis license application in Australia.
10 Questions with Travis MacKenzie of TJ's Dispensaries
CD spoke with MacKenzie about what it takes to stand out in Oregon’s crowded marketplace.
After his wife, Cham, suffered a traumatic brain injury in 2005, Travis MacKenzie began growing medical cannabis on a small farm in Eugene, Ore., to help assuage her painful migraines. He came to love the plant, and Cham felt healed by its properties. Before long, the couple partnered with fellow grower and friend James Orpeza and went into business under the vertically integrated TJ’s brands. TJ’s Organic Provisions dispensary opened in Eugene in 2015, followed by TJ’s on Willamette in 2017. Up next: A new TJ’s dispensary in Portland, due to open in early 2019.
Cannabis Dispensary spoke with MacKenzie about what it takes to stand out in Oregon’s crowded marketplace and how he and his team share their story with consumers seeking something different.
Eric Sandy: What were you and your team looking for in planning an expansion into Portland?
Travis MacKenzie: Understanding that Oregon is not an extremely populated state and the Portland metro area is where most of the people are—we really wanted to be in that market. That market was a place that would help us build our brand and give our Portland fans an opportunity to experience a TJ’s store. People can get TJ’s products at a number of different dispensaries, but we decided to have a different experience in [each of] our stores for folks to come in and see what we’re all about.
Sandy: How did TJ’s initially find a way to stand out among the competition?
MacKenzie: When House Bill 3460 passed [in 2013], allowing legal medical dispensaries in a regulated system and an outlet for medical growers to be able to legally sell their cannabis to consumers in the state, we started our brand-building. We started out as medical growers. When we were growing medically, not a lot of people were recognizing the farms. It was retail-driven, so the consumer was coached initially to look at dispensaries to see who had the best cannabis or the best products for whatever ailed them. We felt like it was important to let people know who was growing the medicine they were consuming.
We started to be one of the first farms to approach dispensaries and say, “We would like our name on this jar. We would like to tell you our story, and you can relay that story to your customers, and then your customers can make a more informed choice, and a choice that maybe they identify with our story or with our farming practices.” When Measure 91 passed [in 2014], and we had a legal recreational market, we were able to have more brand recognition than the new start-up farms.
Sandy: How do you engage consumers directly and share that story?
MacKenzie: When a customer goes into a dispensary, I would say more than half of the sales are budtender-driven. If the budtender recommends something, most of the time the consumer is going to buy that. The way that we like to connect with budtenders is: First, we make sure that when a store starts carrying our product, we get samples to those budtenders so that they can see the quality of the product—how it makes them feel, and all of those other measurables when it comes to just being a cannabis connoisseur.
We let [budtenders] know of our nonprofit organization that we support, the Forrest Initiative, which is something we started back in the medical days before recreational cannabis was legal. We started making and providing, for free, CBD oils and THCA oils to children with pharmaceutically resistant, intractable epilepsy. That program expanded to basically any minor dependents that needed cannabis therapy for whatever ailment or reason. We have over 140 families in our program right now.
We’re always reaching and trying to normalize our business as much as possible. For example, in Eugene recently, the Chamber of Commerce had a business-to-business event. Members of the chamber came out, set up booths and everybody networked and interfaced. We were the only cannabis company there. We’re not really a business-to-business situation; the only purpose was to normalize [cannabis], to get people to understand it.
Sandy: Do you see that normalization as a responsibility of a dispensary owner?
MacKenzie: I do. Public perception is the beginning of everything. We absolutely want to be out in front of everybody and to say that cannabis is a healthy choice for people to either recreate or medicate. Truthfully, from our perspective, recreational cannabis is medical cannabis. Generally, if somebody feels 100-percent OK, they’re not looking for anything to alter that mood or feeling. It’s when people are a little anxious or tired or not tired enough. There are all these things that people—even if it’s just to unwind—use cannabis as a therapy. [Dispensaries] shouldn’t feel any embarrassment or any reservation about participating in community events.
Sandy: How did you develop the look and feel of your first Eugene store, and what were some of your goals?
MacKenzie: When we first started building that store, we didn’t have a lot of money to invest, and the building was pretty run down. We had to put some investment into the bones of the place to get it to be habitable. Then we basically completely gutted the entire interior. The design, as far as how the rooms are spaced and how the flow is, was regulated by [the Oregon Health Authority] at the time.
As far as the décor and the reclaimed lumber, we wanted a natural, comfortable place. We went with a more subdued look, as far as our color palette goes, to make it inviting for everyone. We tried to reuse and recycle as much material as possible and make the building as green as possible. We did enlist the help of a professional designer to help us achieve that look. The outside of the building was our design with the corrugated metal on the sides and the planters in the front to make it look homey. The design specs on the inside all came from [the design firm] Potency.
Product offerings at TJ’s Organic Provisions in Eugene, Ore. “When we decided to put our name at the beginning of each strain, it was to let people know that what they’re buying is the TJ’s cut of that strain,” says Travis MacKenzie, co-owner, TJ’s Dispensaries.
Sandy: How do you track purchase trends, and have you found any unexpected trends over the years?
MacKenzie: We had a good idea of where the market was going to go, and we had two examples in Washington and Colorado. Oregon had slightly different rules, so we could anticipate it not following the exact trajectory as those two states, but it was going to be similar. Under House Bill 3460, [Oregon’s] flower was overwhelmingly the top seller. What we could see in Colorado and Washington was that it didn’t take long for concentrates, extracts, edibles, those other kinds of products and cannabinoid products [to have] a rapid increase in market share over the course of the first two years. We felt like that was probably going to happen here. We can see from sales data that flower sales are not necessarily declining, but not increasing as much or at the rate that sales for edibles and extracts have been.
Sandy: What goes into strain selection and the idea of appending each name with—for example, “TJ’s Durban Poison” as opposed to “Durban Poison”?
MacKenzie: Cannabis is not like corn and other agricultural crops where you have this uniformity across that particular cultivar.
What we have in the cannabis space is, although we have the same names across these strains, we have a lot of different phenotypes within that family. When we decided to put our name at the beginning of each strain, it was to let people know that what they’re buying is the TJ’s cut of that strain. I’ve seen a lot of different Durban Poison plants, and I haven’t ever seen a Durban Poison plant exactly like ours.
There’s commonality among all these different cultivars. There’s a similar smell. There’s a similar effect, but they’re not quite the same, and that can be due to genetic differences in the seed or in the cuttings, but it can also be epigenetic shift. If I grow different than you, and you and I get a cutting from the same plant, after a couple of years, they’re not necessarily going to be exactly the same anymore.
Sandy: Have customers responded to that, and have you found brand affinity to be a major underpinning of the company?
MacKenzie: Yeah, with particular strains. For example, our Durban Poison is a wildly popular cut. As we’ve scaled up from a medical operation to a recreational operation, we’ve managed to keep some consistency from batch to batch with our flowers. Certainly, people respond to many of our strains just because it is the TJ’s cut. But more so than having the name on the jar, it’s the overall impression of the company that drives people to our products.
Sandy: Could you describe the process of collaborating earlier this year with Claim 52 Brewing Company, and what you and the team learned from working with a brewer?
MacKenzie: We looked at a couple of things when we were deciding what we were going to collaborate on. That included [deciding on] a marketable name. We didn’t want to make a beer out of Green Crack, for example.
We wanted to find a name that was going to be appealing as a collaboration and find an interesting aroma profile, a terpenoid profile that we could match with hops. Cannabis and hops are cousins. There are a lot of different smells and flavors that you can get out of hops, just like with cannabis. We assembled smell and flavor profiles from the hops based on smelling the cannabis, and that’s how that collaboration started. (Editor’s note: The partnership led to a hazy IPA based on TJ’s Durban Poison, called Durban Poison IPA, and a Berliner Weisse based on TJ’s Mountain Berry Kush, called Mountain Berry Kush Sour. Both were available in spring 2018 at Claim 52 Brewing Company.)
“All the citizens of Oregon would benefit from Oregon being able to sell all its cannabis inventory at a good price,” says Travis MacKenzie, co-owner, TJ’s Dispensaries
Sandy: What’s next for TJ’s in Oregon?
MacKenzie: A continuing goal of ours is to find the best way to connect with our customers to ensure that we’re going to continue to have customers in a time when there are dispensaries literally selling $28 ounces. So, our goals are—aside from fiduciary responsibility and making sure that we’re doing things in a way that allows us to continue to operate—keeping an eye out for emerging markets in other states and seeing if our brand and our model translate well to other areas where we maybe didn’t have the advantage of being a well-placed, well-known medical farm to begin with.
Ultimately, what we would hope for is that federal deregulation and an opening of state lines. That’s always on our minds.
The one drawback to Oregon is its population, and that’s what a lot of us here in Oregon love—the fact that there’s not a lot of people—but we have literally thousands of acres of prime cannabis-growing country. There are not enough people to smoke it all, and so that interstate commerce piece would be huge for Oregon as a state—not just for the operators that work in the cannabis space in the state. All the citizens of Oregon would benefit from Oregon being able to sell all its cannabis inventory at a good price. And that increases jobs and increases tax revenues. It increases building development, all kinds of stuff. It would be a huge win for the state if we could export.
Editor’s note: This interview has been edited for style, length and clarity.
Wikimedia
AP: Attorney General Nominee William Barr Says He Will 'Not Go After' Marijuana Companies
Barr made the comments during his Senate confirmation hearing.
U.S. Attorney General nominee Bill Barr says he would "not go after" marijuana companies in states where cannabis is legal.
Barr said at his confirmation hearing on Tuesday that companies had relied on Obama-era guidance that kept federal authorities from cracking down on the pot trade in states where the drug is legal.
Former Attorney General Jeff Sessions rescinded that guidance, known as the Cole Memo, last year.
ALBANY — New York could raise about $300 million in annual revenue from recreational marijuana, according to Gov. Andrew M. Cuomo, who will propose a regulatory framework in his budget Jan. 15.
The governor made the forecast Monday during an interview on WAMC, when he made the case that it's no longer a question of whether or not the state should legalize adult use of marijuana.
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