The New Mexico Cannabis Control Division (CCD) recently announced that more than 1,500 prospective business owners have thrown their hats in the ring for an adult-use business license. The vast majority reportedly seek a microbusiness license, a cultivation tier that caps the number of plants at 200. 

It’s an early sign of a business boom in New Mexico, which has no plans to limit the number of licenses that will be issued in this market. Similar to Oklahoma’s sprawling medical cannabis market, New Mexico regulators are taking a free-market approach to the licensing process.

“I don’t know that we could have anticipated what the demand was going to be other than knowing there really seems to be a great excitement across the state,” John Blair, deputy superintendent for the New Mexico Regulation and Licensing Department, told KRQE in a fairly expansive feature on the state of the industry in New Mexico right now. “If a million New Mexicans want to get a license, we would license a million people.”

Approval or rejection is meant to occur within 90 days of a submitted application.

Sales are expected to begin by April 1, giving the market a tight timeline right off the bat. And yet: Licensing is not yet on the table for retailers, transporters or product manufacturers; those rules need to be finalized by Jan. 1, according to the state law.

Aside from the short on-ramp ahead of adult-use sales, entrepreneurs are attuned to the high level of competition that is expected in this market. Applicant A.J. Sullins told the news station that his home state will likely follow the trends seen in other markets, where larger players spend freely to acquire small businesses and expand their footprint. “There’s going to be quite a few people who have received licensure and their costs are outweighing their revenue because they didn’t plan for a low-cost production. And they’re going to start to get consolidated or washed out within a three-year period,” he said.

According to the regulations drafted for the adult-use market, the New Mexico Regulation and Licensing Department and the CCD will assess the industry every September, ensuring that supply and demand are in alignment and the adult-use and medical markets are not overshadowing each other.

VANCOUVER, British Columbia, November 15, 2021 - PRESS RELEASE - Village Farms International, Inc. (Village Farms) announced it has acquired 70% ownership of privately-held, Québec-based ROSE LifeScience (ROSE), a vertically integrated branded cannabis producer, supplier and commercialization expert in the Province of Québec. The transaction is valued at up to $46.7 million. ROSE becomes the Québec operational unit of Village Farms' Canadian cannabis business segment, with ROSE's headquarters and the existing team remaining in Québec.

ROSE is a third-party cannabis products commercialization expert in the Province of Québec, acting as the exclusive, direct-to-retail sales, marketing and distribution entity for Entourage Health, Sundial, Tilray and The Flowr Corporation and 10 Québec micro and craft growers throughout Québec. ROSE also distributes to Québec retail its brand of high-quality cannabis products. Tam Tams is grown and processed at ROSE's Québec-based, Health Canada-licensed 55,000-square-foot controlled environment agriculture (CEA), purpose-built facility in Huntingdon, which was commissioned in 2020. ROSE also enables a platform for commercialization in the market for several Québec-based micro-producers under its DLYS brand.

Highlights of the Acquisition

• Adds a substantial presence in the Province of Québec as a cannabis supplier, producer and commercialization expert, which represents approximately 15% of total Canadian retail cannabis sales at the current annualized run rate of more than $627 million, the vast majority of which is dried flower and pre-rolled products;
• Adds experienced, Québec-based industry professionals who will join the Village Farms/Pure Sunfarms team, bolstering extensive existing relationships in the Québec cannabis market and leveraging specialized, deep experience in both consumer-packaged goods and regulated industries; and,
• Adds a Québec-based 55,000-square-foot, health Canada-licensed CEA cultivation and processing facility

"The acquisition of ROSE, by far the most successful Québec-based cannabis operator in our view, is a prudent and strategic means by which to enter and rapidly ramp sales in one of Canada's largest provincial cannabis markets," said Michael DeGiglio, Village Farms CEO. "ROSE adds an exceptional group of Québec-based experts to our Canadian cannabis operations. The team has a proven track record of success, and shares our belief in the importance of cultivation excellence, as well as the advantage of innovation and continuous improvement. We look forward to building on ROSE's strong foundation in the Québec market, with a long-term commitment to the company's Québec heritage."

"ROSE immediately expands our reach to more than 90% of all Canadian retail cannabis sales and represents a major step forward in Pure Sunfarms' strategy to become the leading national supplier of cannabis in Canada, with at least a 20% market share in the dried flower category," said Mandesh Dosanjh, Pure Sunfarms president and CEO. "ROSE is very well respected in the Québec cannabis industry, with a reputation for leadership and brand strategy success that we have come to know well and respect. We look forward to pursuing the new opportunities, both near-term and long-term, created by the addition of ROSE as our Québec-based cannabis operational unit."

"We have long admired the success of Village Farms and Pure Sunfarms in the Canadian cannabis industry. We are proud to join forces with them to accelerate our successes and seize this opportunity to further evolve the industry in our home province of Québec," said Davide Zaffino, ROSE co-founder, president and CEO. "We cherish our Québec roots and deeply believe in our province's culture and values. As always, we remain committed to ensuring that Québec benefits from the responsible production, sale and consumption of cannabis. As part of the outstanding family of cannabis businesses within Village Farms, we are even better positioned to continue playing this leading role in the Québec landscape."

In Texas, the back-and-forth legal debate over delta-8 THC has become quite the source of confusion, especially with the recent news that the Drug Enforcement Administration (DEA) has clarified that the compound is not a Schedule-I substance. What’s a hemp product manufacturer to do in Texas?

This week, Veterans Day threw the issue into stark relief.

“There are a lot of veterans in Texas, and veterans are consistently the people that respond to us saying, ‘Hey, these products are amazing. They've changed my life. They allow me to go outside without anxiety and other stuff, they help with our PTSD,’” Hometown Hero CEO Lukas Gilkey told the Austin American-Statesman. “Almost every single one of the testimonials we receive references somebody's cancer, their chemotherapy, their sleeping issues, their eating issues or their PTSD.” 

This has been a consistent point of contention all year, with hemp businesses in many U.S. states finding little choice in the matter. Demand for delta-8 THC products is so great, it would be difficult not to get into the market.  

And yet. In an industry as tightly regulated as hemp—to say nothing of state-licensed cannabis landscape—no one wants to run afoul of the law, even if it’s changing from day to day.

We’ve rounded up some of the key cannabis headlines from the week right here.

• A Texas judge has barred the state from listing delta-8 THC as a Schedule I drug, meaning that the cannabis compound is legal in Texas again under the temporary injunction. The saga continues… Read more 
• Seth Rogen and Sarah Silverman launched the Cannabis in Common initiative in coordination with reform organization U.S. Cannabis Council (USCC) and HeadCount’s Cannabis Voter Project. Read more 
• South Dakota is now taking applications for medical cannabis cards as physicians begin certifying patients for the program. Read more 
• Viola Brands launched in Canada through a partnership with Avicanna Inc., a Canadian biopharmaceutical company headquartered in Toronto. Read more 
• Cannabis and hemp attorney Rod Kight of Kight Law, who has been closely following and commenting on delta-8, highlighted that the DEA has clarified in 2021 that hemp-derived delta-8 is not a federally controlled substance. Read more 

And elsewhere on the web, here are the stories we’ve been reading this week:

• CNBC: “The stars may be aligning for cannabis stocks as they tear higher on hopes around a reported Republican-led legalization effort.” What does that mean long-term? Read more 
• Politico: Oklahoma’s free-market approach to medical cannabis has been a boon for the state—and a galvanizing factor in rising crime. Read more 
• CTInsider: “Verano Holdings Corp., which has active operations in 12 states, closed its agreement with Willow Brook Wellness on Oct. 25. It signed agreements Wednesday to, if finalized, acquire Caring Nature and Connecticut Pharmaceutical Solutions Inc.” Read more 
• WANE: Southern Michigan dispensary owners explain that more than half their customer base is from Indiana. Read more 
• Bloomberg: “Germany’s likely next ruling coalition is closing in on a deal to legalize cannabis for recreational use, the strongest signal yet that long-awaited growth of Europe’s marijuana market is gaining traction.” Read more