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Citing the old classics reminiscent of  Reefer Madness, nearly 30 former U.S. Attorneys sent a letter to Attorney General Merrick Garland asking that cannabis not be reclassified as a Schedule 3 drug. While arguing that for fifty years Republican and Democratic administrations had followed the science and kept cannabis as a Schedule 1 drug, the group ignored current medical knowledge.

The group stated its main three reasons for keeping cannabis as a Schedule 1 drug as follows:

• High potential for abuse
• No currently accepted medical treatment
• Marijuana lacks accepted safety for use under medical supervision

Addictive Qualities

The letter stated that since Washington state legalized cannabis the DEA determined that 21% were addicted to the product. The group also said that a report in JAMA found that the most comprehensive study on the addictive potential of different drugs determined that marijuana is more addictive than several other Schedule I drugs, including LSD, GHB, ecstasy, and khat. It’s worth noting that the study surveyed less than 1500 people. However, there are 7.9 million people in the state and 30% surveyed by the Washington Department of Health stated they had consumed cannabis within 30 days. That means the state has 2.3 million regular cannabis consumers demonstrating that this test did not acknowledge that amount of consumers in the state reporting no cannabis use disorder.

This argument also centered on the increasing level of THC in cannabis products today and that is not disputed.

Medical Qualities

Here the letter cited a NIDA factsheet on medical marijuana that wrote, “So far, researchers haven’t conducted enough large-scale clinical trials that show that the benefits of the marijuana plant (as opposed to its cannabinoid ingredients) outweigh its risks in patients it’s meant to treat.” Yet, it failed to recognize that Jazz Pharmaceuticals (NASDAQ: JAZZ) currently owns the drug Epidiolex which uses cannabis as its main compound for treating pediatric epilepsy conditions known as Lennox Gastaut and Dravet Syndrome. This drug went through the standard FDA studies and was found to have substantial medical uses and continues to study additional conditions to treat more patients.

Criminal Qualities

The letter also makes a blanket statement that the only people benefiting from legal cannabis are drug cartels. The attorneys neglected to address the positive aspects of the tax revenue in states where it is legal. It didn’t note that jobs created and ways cannabis has impacted the real estate landscape in depressed neighborhoods.

It did address the illicit market problem in California which is true. However, drug cartels have moved on to pushing fentanyl not cannabis. A fractured market of smaller domestic operators produces most illicit cannabis. Larger criminal organizations can make more money with easier-to-move products than cannabis.

Ultimately, the letter rolled out old cannabis myths that have mostly been busted since cannabis was1777000-1777208-us-attorney-letter-re-marijuana-rescheduling_december2023-1
decriminalized or legalized in many states.

 

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Move over booze, your customers would rather have cannabis instead.

A new report from TD Cowen analyst Vivien Azer said legal cannabis is driving consumers away from alcohol. The long time cannabis equity analyst wrote: “Alcohol sales in legal cannabis states have underperformed by 100-150 bps over the past five years. With $29 billion in sales in 2023E, we expect U.S. cannabis sales to grow at a 7% CAGR over the next 5 years, as the category is set to gain 18 million past-month users (while alcohol could lose 2 million users).”

Since Colorado legalized retail sales for adult-use cannabis, the market has grown to 11% of alcohol sales, which is up from only 4% five years ago. Azer’s team believes that over the next 5 years, that growth trend will continue for the cannabis category, while alcohol will decline as consumers embrace cannabis and cut back on their alcohol consumption.

It seems beer is taking the biggest hit as the percentage of past-month cannabis users who prefer beer has fallen 6 points over the past three years, according to TD Cowen’s proprietary survey.

Sticking With It

Alcohol may have hoped that cannabis consumers would eventually return to them after the novelty of legal cannabis wore off, but that doesn’t seem to be the case. TD Cowen wrote that among 18-25 year-olds this past month, cannabis category retention has grown roughly 1,000 bps, to 68%, while past month alcohol category retention has fallen about 400 bps to 74% in 2022.

Azer said her survey showed that two-thirds of cannabis consumers said they cut back on drinking.

“According to BEA data, states with access to legal cannabis are underperforming by over 100 bps, while select Nielsen states show a roughly 140 bps delta. Meanwhile, the 5-year alcohol volume CAGR for adult-use cannabis states has underperformed non-cannabis states by 150 bps in IWSR (data),” the report said.

Growth

TD Cowen noted that, historically, the alcohol category in the U.S. has grown at a 5% CAGR. However, younger consumers are opting to go sober for longer. Azer projects that could present a 100 bps headwind to industry volumes over time.

As the stigma around cannabis weakens, she expects cannabis sales to grow 11% in 2023 and alcohol to grow 3% in 2023.

Looking ahead, more adult use states are coming online, such as Connecticut, Maryland, Missouri, and New York, as well as pending transitions in Minnesota and Ohio. TD Cowen now estimates total U.S. legal cannabis retail sales of $29 billion in 2023 and $37 billion in 2027.

As cannabis consumers drink less, they report consuming cannabis on a more frequent basis. The analysis cited data from the National Survey on Drug Use and Health highlighting that more than 47% of past-month consumers use cannabis on a daily or near-daily basis (20-30 days/month).

“Not surprisingly, our proprietary data also shows that past month cannabis users who drink alcohol are more likely to participate in intentional abstinence than drinkers who have never used cannabis,” Azer wrote.

Stock Conclusions

When it comes to stocks, Azer thinks that alcohol can manage the effect of cannabis sales in the near term. Beer will eventually be affected, but companies with exposure to more popular categories, such as tequila and bourbon, stand to do better.

Azer also noted that soda consumption is declining and energy drinks are facing more scrutiny, which could provide additional opportunities for growth in other areas.

She remains positive on cannabis but noted that more work and change needs to occur before the industry will reach its full potential.

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A Seattle doctor is not giving up when it comes to the rescheduling of psilocybin. While the focus on rescheduling cannabis is talked about constantly, psilocybin also faces the same dilemma of being a schedule one drug. Law360 reported that Seattle physician Dr. Sunil Aggarwal filed a petition on December 11th nearly two months after a circuit panel remanded his request to change psilocybin’s status back to the DEA and ordered the agency to clarify why it believes the drug should remain a Schedule I substance.

Dr. Aggarwal is requesting a rehearing stating “The Order did not address Petitioners’ argument that 21 U.S.C. § 811(b) requires a referral to the Food and Drug Administration (“FDA”) for scientific and medical evaluation and scheduling recommendation, and instead ordered a remand to the Drug Enforcement Agency (“DEA”).  This omission has both legal and practical ramifications for the Petitioners, and Petitioners request that the panel correct this legal error.”

Backstory

Aggarwal and his clinic, the Advanced Integrative Medical Science Institute (AIMS) filed the original petition with the DEA in February 2022. They argued that there was several pieces of evidence from clinical trials showing psilocybin’s efficacy in treating depression for patients in end-of-life care and urging the agency to move psilocybin to the less restrictive Schedule II category.

However, the agency rejected the petition with a two-paragraph denial letter in September 2022, asserting that since the FDA had not yet approved a psilocybin-based treatment, there was no basis for moving the drug into Schedule II.

Aggarwal pushed back saying that the DEA had not considered the evidence placed in front of it and had neglected its responsibility to consult the U.S. Department of Health and Human Services for a scientific and medical analysis of psilocybin’s potential uses and benefits. The petition went on to say that the failure to explicitly order the DEA to refer the rescheduling request to the FDA was out of step with precedential case law and public policy.

Furthermore, the petition noted that the FDA’s findings on scientific and medical matters bind the DEA, and if the Department of Health and Human Services (“HHS”) recommends that the DEA not subject a substance to control, the DEA “shall not control the drug or substance.” Only after the FDA’s binding, expert views on scientific and medical considerations are rendered may the DEA assess whether “substantial evidence” exists to warrant initiating a formal rulemaking process.

Finally, the petition summed it up stating:

If agencies could simply procure naked remands (as the Court ordered here) in response to substantive petitions, such a precedent would embolden agencies to avoid making decisions on the merits. In other words, such a precedent would incentivize agencies to say less, not more, in initial decisions, multiplying judicial workload and delaying decisions on the merits. For this additional reason, the Court should have ordered a referral to the FDA, rather than a remand to DEA.

 

1776000-1776421-aims 12.11.23 rehearing petition

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California-based CV Sciences Inc. (OTCQB: CVSI) has acquired Polish plant-based vegan food company Cultured Foods. CV Sciences said in a statement that the acquisition was structured as an equity purchase, where it will operate Cultured Foods as its wholly owned subsidiary.

CEO Joseph Dowling hinted at the acquisition in the company’s most recent earnings call. He stated that his goal for CV Sciences was to become a global health and wellness company that isn’t limited to CBD products. That includes exploring opportunities with non-CBD nutraceuticals and other plant-based food products.

Deal Details

CV Sciences said that the total consideration for the purchase was up to $535,000, with a cash payment of $175,000 and 7,074,270 shares of CV Sciences’ common stock, having a value of $250,000. In addition, there is a potential payment of up to $110,000 in the form of an earn-out if the business of Cultured Foods meets certain performance thresholds during the first year after the closing.

“Our immediate plan is to leverage our B2B distribution network and bring convenient and sustainable plant-based foods into the U.S. natural product channel while working with Cultured Foods to grow their business in the European market,” Dowling said.

The global vegan food market is experiencing a boom right now, with analysts estimating that it will quintuple by by 2030, Dowling noted.

“In addition, we plan to leverage the Cultured Foods infrastructure to introduce select products from our flagship brand PlusCBD across all of Europe as laws allow, providing for significant expansion and opportunity to grow our company mindshare,” he added.

According to the statement, Cultured Foods produces a variety of curated plant-based products that are sold in 15 different European countries.

The acquisition creates an opportunity for the importation of these specialty foods to the U.S. and establishes a European base of operations for the sale and distribution of CV Sciences’ PlusCBD products, opening doors to numerous new retail and distributor partners.

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The Administrator of the Drug Enforcement Administration (DEA) has issued a temporary order to schedule six synthetic cannabinoids in schedule I under the Controlled Substances Act. The DEA said the action was based on a finding by the Administrator that the placement of these six substances in schedule I was necessary to avoid imminent hazard to public safety. The temporary order begins today and is effective until December 12, 2025.

The products are sold in gas stations, convenience stores, and smoke shops. They are sold as herbal incense and promoted as a legal alternative to cannabis.

The cannabinoids are:

•Methyl 3,3-dimethyl-2-(1-(pent-4- en-1-yl)-1H-indazole-3- carboxamido)butanoate (Other name: MDMB–4en–PINACA)

•Methyl 2-[[1-(4-fluorobutyl)indole- 3-carbonyl]amino]-3,3-dimethyl- butanoate (Other names: 4F–MDMB– BUTICA; 4F–MDMB–BICA)

•N-(1-amino-3,3-dimethyl-1- oxobutan-2-yl)-1-(pent-4-en-1-yl)-1H- indazole-3-carboxamide (Other name: ADB–4en–PINACA)

• 5-Pentyl-2-(2-phenylpropan-2- yl)pyrido[4,3-b]indol-1-one (Other name: CUMYL–PEGACLONE; SGT– 151)

• Ethyl 2-[[1-(5-fluoropentyl)indole-3- carbonyl]amino]-3,3-dimethyl-butanoate (Other names: 5F–EDMB–PICA; 5F– EDMB–2201

•Methyl 2-(1-(4-fluorobenzyl)-1H- indole-3-carboxamido)-3-methyl butanoate (Other name: MMB–FUBICA).

Synthetic Cannabinoids

The notice described synthetic cannabinoids as substances that are synthesized in laboratories that mimic delta-9- tetrahydrocannabinol (THC), the main psychoactive ingredient in cannabis. The DEA said that from 2009, abuse of SCs has escalated in the United States noting recent hospital reports, and said the products are negatively impacting communities. They also state that there are no medical uses for these products.

The DEA said that emergency room situations involving these compounds have included seizures, sudden collapse, involuntary muscle spasms, jerking movements, catatonia, and increased violence.

Multiple deaths have been reported involving MDMB- 4en-PINACA, 4F-MDMB-BUTICA, and CUMYL-PEGACLONE. In addition, all six SCs have been seized by law enforcement in the United States. Based on the pharmacological similarities between MDMB-4en-PINACA, 4F-MDMB-BUTICA, ADB-4en-PINACA, CUMYL- PEGACLONE, 5F-EDMB-PICA, and MMB-FUBICA and other schedule I SCs, these six SCs are likely to produce signs of addiction and withdrawal.

These products typically come from China in bulk powder form and are smuggled via common carrier into the United States and find their way to clandestine designer drug product manufacturing operations located in residential neighborhoods, garages, warehouses, and other similar destinations throughout the country. The producers then spray or mix the SCs with plant material for consumers to smoke with a pipe or rolled into a joint.

Next Steps

The new order states that if sellers don’t have a license to sell these Schedule 1 drugs, they need to surrender these products. If this order is extended or made permanent, the DEA said it will publish a document in the Federal Register.

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Exopharm Limited is buying Tryp Therapeutics Inc. (CSE: TRYP) in an all-stock deal valued at C$12.8 million dated December 8, 2023. According to the company statement, the purchase price of C$0.08 represents a 78% premium to the closing price of $0.045 and a 112% premium to the 20-day volume-weighted price of $0.0378 per Tryp share on December 8, 2023.

Tryp CEO Jason Carroll said, “Joining forces with Exopharm heralds a new era for Tryp, where we expect our combined strength and shared vision to elevate us to the prominent platform of the ASX. With enhanced access to capital and the evolving landscape of the Therapeutic Goods Administration (TGA) regulations in Australia for select psychedelics, we see even more paths forward to innovate and grow. I am thrilled to emphasize that our ongoing clinical commitments and our TRP-8803 R&D program remain unchanged and will be pursued with the same vigor and dedication. It is not expected that Exopharm’s current R&D program will be pursued following completion of the transaction. With this merger, we’re even better positioned to serve our stakeholders.”

Deal Details

Tryp said that its shareholders are expected to receive 4.52 Exopharm Shares for each Tryp share held. The majority of the directors of the combined entity are to be appointed by Tryp. The combined entity is expected to relist on the Australian Securities Exchange in the first quarter 2024. However, the company did note that the listing will require the company to raise AUD $6 million under a public offering.

Tryp’s Situation

Carroll is a relatively new CEO having just been named to the post in August 2023. The company hasn’t posted financial earnings since July when the company delivered results for the quarter ending in May 2023. At that time, Tryp reported that it had no operating revenues during the quarter and relied on external financing to generate capital for its continued operations. As a result of its activities, the company continues to incur losses. For the nine months ended May 31, 2023, the company reported a net loss and comprehensive loss of
$3,496,657 (May 31, 2022 – $5,325,216) and a basic and diluted loss per share of $0.04 (May 31, 2022 – 0.07).

Tryp announced in November that it had closed a private placement of unsecured convertible notes for aggregate gross proceeds of AUD$3,215,000.

Exopharm (EX1) is described as a leader in advancing and manufacturing technologies for exosome-based medicines using exosomes or extracellular vesicles (EVs) as a chassis for improved and non-viral drug delivery.  Currently, Exopharm is executing a strategy to maximize the significant value of the company’s IP position in the exosome field.

Tryp’s lead program is TRP-8803, which is a proprietary formulation of IV-infused psilocin that alleviates numerous shortcomings of oral psilocybin including significantly reducing the time to onset of the psychedelic state, controlling the depth and duration of the psychedelic experience, and reducing the overall duration of the intervention to a commercially feasible timeframe. The company reported that it has completed a Phase 2a clinical trial for the treatment of Binge Eating Disorder at the University of Florida, which demonstrated an average reduction in binge eating episodes of greater than 80%.

 

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Gilgamesh Pharmaceuticals announced the successful completion of its Phase 1 single ascending dose (SAD) trial of GM-2505. In the Phase 1 study, Gilgamesh reported that the GM-2505 patients reached a peak intensity consistent with a full psychedelic experience, while the duration of those effects was limited to 60-90 minutes.

According to the company, GM-2505 is a novel, patented small molecule, short-acting 5-HT2A receptor agonist/5-HT releaser that is expected to have a rapid and durable antidepressant effect. It is expected to produce dramatic changes in human consciousness, perception, emotion, and cognition.

Given the limited number of trained therapists, Gilgamesh believes it will be able to treat more patients than those that only have multi-hour psychedelic treatment options.

“We were thrilled to obtain clinical confirmation of the short half-life and strong psychedelic effects of GM-2505 that were suggested by preclinical data and look forward to advancing this promising therapeutic candidate into patients,” said Andrew Kruegel, PhD, CSO and co-founder of Gilgamesh.

The company believes that GM-2505’s short duration of action will harness the impressive clinical efficacy of other 5-HT2A receptor agonists while better aligning with existing health care infrastructure and clinical workflow, which will broaden patient access in contrast to longer-acting agents such as psilocybin.

“In the Gilgamesh Phase 1 study, a full range of GM-2505 doses have been tested with the highest doses of 15 and 20 milligrams manifesting a full psychedelic effect with minimal effects below 10 milligrams. This provides a basis to move confidently into initial Phase 2a testing in patients with GM-2505,”  Dr. Matthias Liechti said.

Following the successful completion of the Phase 1 SAD trial, Gilgamesh said it will initiate a Phase 2a study in major depressive disorder (MDD) patients during the first quarter of 2024. The Phase 2a study will aim to refine the dosing regimen, confirm safety, and demonstrate an early efficacy signal of GM-2505.

The company said that additional details will be presented at the American College of Neuropsychopharmacology meeting in December.

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Hawthorne, the hydroponic subsidiary of fertilizer company The Scotts Miracle-Gro Co. (NYSE: SMG), is looking to strike out on its own – a move that Scotts CEO Jim Hagedorn hinted at on the company’s earnings call in November.

“We’ve made progress on a range of potential solutions that should benefit shareholders and create opportunities for that business to grow,” Hagedorn said about Hawthorne at the time. “We’re in active discussions to create a leading vertically integrated cannabis company. I can’t share more at this time, but we will provide an update as soon as we can.”

Just a few years ago, Hawthorne was riding high as the cannabis industry’s mantra was bigger is better. Multistate operators were competing with each other over who could build the biggest grow facilities – and that meant lots and lots of lights.

However, the cannabis bubble burst and the business wilted. Hawthorne President Chris Hagedorn made difficult decisions to adjust to the new reality and eliminated almost a thousand jobs. He restructured debt and cut expenses.

Now the company is positioning itself to become profitable again.

Options

Green Market Report spoke with Jim and Chris Hagedorn at the MJBiz Conference last week, where the two opened up about the options being considered. Essentially, there appear to be two roads out of Scotts:

• Spinning out into a separate public company
• Joining forces with Riv Capital (TSX: RIV) (OTC: CNPOF), which has an investment connection with Hawthorne

“We’ve said as much publicly, but I think the interesting part of the conversation is why?” Jim Hagedorn said. “(Scotts will) keep the debt. You move it without any debt at all. So completely clean. Hundreds of millions of inventory and upward capital.”

New PubCo

Scotts could spin Hawthorne out into its own public company where it would compete with the likes of Ubi-grow, Agrify, and Grow Generation. However, these companies receive little analyst coverage, and there is concern that Hawthorne’s assets wouldn’t be recognized.

Hawthorne has engaged in considerable research, and Chris Hagedorn doesn’t want that to get lost by being lumped in with other hydroponic companies.

Riv Capital Option

Riv Capital and Hawthorne are already associated with each other. In 2021, RIV Capital Inc. signed a deal with The Hawthorne Collective, a  cannabis-focused subsidiary of Scotts for the purchase of a $150 million unsecured convertible note from RIV Capital.

However, Riv Capital is best known for paying top dollar to buy New York medical operator Etain. The Hagedorns acknowledged the criticism that the deal received but maintain that the New York market still holds great promise.

Jim Hagedorn pointed out that Riv Capital is currently sitting on almost $90 million in cash, but it only has a market cap of roughly $10 million.

In Talks

“So the audience of people who we’re talking to, we haven’t had anybody yet say no. The question is how do we do this so that we create a company that you would look at and say, holy f*ck,” Jim Hagedorn said. “I sat with those guys and they were giving me big time hints that there is going to be a consolidation here that’s sort of across the board that creates the best pot company in the United States.

“There are different permutations on how to get there. And these are conversations that are live right now,” he added.

Chris Hagedorn noted that in those conversations, they’ve been told, “We see the R&D you guys do. They look at it as there’s the tax-yielding, which is exciting because everyone’s looking for tax mitigation. Hawthorne has the highest possible quality produced at the lowest possible cost.”

The pair believe that cannabis will be rescheduled next year, which will release a lot of capital into the market. And with that there’s a lot of opportunity ahead for Hawthorne.

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Braxia Scientific Corp. (CSE: BRAX) (OTC Pink: BRAXF) reported its earnings for the fiscal second quarter of 2024 ended Sept. 30, with revenue up 30.5% to $594,000 from the same period a year ago.

Net loss for Braxia Scientific was $275,000 for the quarter versus last year’s net loss of $2.16 million.

As of Sept. 30, company’s cash and cash equivalents were $701,000 with a working capital deficit of $961,000.

Challenging Environment

Despite the improvements in revenue, Braxia has essentially come to the end of its runway and is looking for strategic alternatives. The company said that the process will begin immediately and that it will evaluate a broad range of options, including:

• Potential sale of the company.
• Merger or other business combination.
• Sale of all or a portion of the company’s assets.
• Strategic investment or other significant transaction.

Braxia also told investors that it has received strategic inquiries from multiple parties over the past few months.

“Looking ahead, the board has formally initiated a process to explore strategic alternatives and alternative sources of capital or partnerships that may be available to the company following continued challenges in the economic environment and in accessing capital through public markets,” CEO Dr. Roger McIntyre said. “While I remain confident in the continued growth of our clinics, if we are unable to raise additional funding in the short term, we will look at alternate courses of actions including, but not limited to, further cost reductions, restructuring, and the potential scaling back of clinic locations.”

The company has not set a timetable for implementing a plan and won’t update investors again unless it signs a deal. Braxia also warned investors that even if it attempts to make a deal, there are no assurances that one will be struck.

Resignations

In addition to the dire financial situation, Braxia has seen a number of key team members jumpship.

Olga Cwiek, a member of the board of directors, resigned this week, as did CFO Stephen Brooks.

Peter Rizakos, chief legal officer, was appointed to the board and will also take on the role of chief financial officer.

Even though the company is struggling financially, the clinics have been slowly growing.

“Our clinics experienced higher treatment volumes in the first half of fiscal 2024 resulting in strong revenue growth,” McIntyre said. “This demonstrates the demand for critical mental health treatments and therapies that our team of specialized psychiatrists, doctors and nurses provide across our clinical footprint.”

He added: “Our team has continued to focus on reducing expenses and improving efficiencies while also looking to add novel therapies and other support services to our clinical platform to further improve revenues.”

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It isn’t the program that many had hoped for, however many are cheering the latest development in Germany’s adult-use cannabis legalization.

After what was described as intense negotiations, the European nation’s legislative body hammered out a bill that expanded medical cannabis sales, decriminalized certain amounts of cannabis, and improved home cultivation restrictions.

Acting chairwoman of the health committee in the Bundestag, Kirsten Kappert-Gonther, said on the social media platform X that the bill would:

• Reduce consumption bans to “sight distance” of schools and child care centers, with a minimum 100 meters.
• Permit home cultivation of 50 grams of dried cannabis.
• Amend the Driving Licence Ordinance with an appropriate limit by spring 2024.

The bill also proposes no mandated distances between cannabis clubs and no criminal penalties (only misdemeanors) for small quantities of 25-30 grams in public and 50-60 grams in private.

According to ZDFHeute, which added more detail, the bill provides for the removal of cannabis from the list of prohibited substances in the Narcotics Act and a maximum of three plants should be allowed to be grown in a private residence. In cannabis clubs, members would be allowed to grow the drug together and give it to each other.

Prost!

This latest step forward likely has several Canadian cannabis firms cheering, as many have targeted the market for expansion as Canadian sales slowed.

According to Statista, the German medical cannabis market is anticipated to reach $333 million this year. Moreover, the market is expected to display a steady compound annual growth rate of 13.97%, resulting in sales of $640 million by 2028.

The companies that stand to gain the most from this legislative easing are:

• Tilray Brands
• Curaleaf Holdings
• Cronos Group
• Organigram Holdings
• Aurora Cannabis

Tilray (Nasdaq: TLRY) (TSX: TLRY): Tilray has two locations in Germany and works closely with doctors and pharmacists there. Tilray offers a broad portfolio of full-spectrum cannabis extracts and cannabis flowers in Germany.

Curaleaf (CSE: CURA) (OTCQX: CURLF): In 2022, Curaleaf Holdings Inc. announced that its European holding company, Curaleaf International Holdings Limited, signed a definitive agreement to acquire a 55% stake in Four 20 Pharma GmbH, a fully EU-GMP and GDP licensed German producer and distributor of medical cannabis with its own product line. The partnership creates a strategic pathway for Curaleaf to acquire complete control of Four 20 Pharma within two years of the commencement of adult-use sales in Germany.

Cronos Group (NASDAQ: CRON) (TSX: CRON): In September, the company sent its first order of cannabis to its German distribution partner, Cansativa, which is bringing the Peace Naturals brand back to the German market. The company said that re-establishing Cronos and the Peace Naturals brand in the German market would position it to capitalize on this growing opportunity with additional upside potential from future legislative changes, including in the rescheduling of cannabis to no longer label it as a narcotic.

Organigram (NASDAQ: OGI) (TSX: OGI): In May 2023, Organigram entered into a supply agreement for dried flower with the medical division of German cannabis company Sanity Group, a health and life sciences company based in Berlin,.

Aurora Cannabis (NASDAQ: ACB) (TSX: ACB): In April 2023, Aurora Cannabis announced the expansion of its portfolio in Germany with the launch of two new cannabis flower products for patients. In 2022, the company claimed to be the market leader in Germany. In 2019, Aurora was awarded a tender/contract by the German Federal Institute for Drugs and Medical Devices for the annual production of 1,000 kilograms of high-quality medical cannabis flower over a period of four years.

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South Dakota is teeing up to be the next state to legalize adult-use cannabis. Attorney General Marty Jackley submitted the proposed measure to Secretary of State Monae Johnson on November 17. The draft summary of the measure was made public as required by state law so that the public will have 10 days to review and comment.

That gives South Dakotans until November 27 to write in with their thoughts on the measure. After that, the Attorney General gets another 10 days to write the final summary of the legislation, which would get submitted back to the State Secretary.

In order to get this legislation on the ballot in 2024, 17,509 residents will have to sign a petition in favor of the measure. As of 2021, the state had just over 800,000 residents.

In 2020, South Dakota voters passed Initiated Measure 26 which legalized medical cannabis. As of November 20, 2023, there were 254 approved practitioners and 12,791 approved patient cards. There are currently 90 medical dispensaries in the state.

Try Try Again

This isn’t the first time the state has tried to initiate adult use legislation. In 2020, South Dakota voters rejected an adult-use cannabis legalization ballot measure. According to Marijuana Moment, an earlier version was approved but that was ultimately invalidated by the state Supreme Court. The Governor has demonstrated that she isn’t a big fan of adult-use cannabis and polls in the state also show that supporters of the initiative have their work cut out for them.

Indeed,  there is a separate piece of legislation that would repeal the state’s medical cannabis law and yet another that would keep federally banned substances from ever being legalized in the state. The state attorney general finalized the ballot explanation for the medical marijuana repeal measure in August according to Marijuana Moment. South Dakotans for Better Marijuana Laws claim that the repeal legislation did not follow proper procedures and should be thrown out.

Medical Operators Get First Dibs

If the legislation were passed, current medical operators would be able to get dual-use licenses that would enable them to sell cannabis to people over the age of 21 for non-medical purposes. Municipalities won’t be able to stop adult use dispensaries from opening, but they would be able to limit the number of licenses.

Individuals would be able to grow up to six plants and households can grow up to 12 plants. In addition to that, it would still be illegal to drive while under the influence of cannabis or to possess and consumers would need to be over the age of 21.

Turning Point

There is significance in the South Dakota vote for the entire country. Since Ohio became the 24th state to legalize adult-use cannabis, if South Dakota were next that would mean half the country has voted to legalize adult-use cannabis. Comparing that to the end of alcohol prohibition, by 1933 there were 36 states that had approved alcohol consumption pushing the government to end prohibition with the 21st amendment.

 

 

1768000-1768309-nov 14 2023 mjj to johnson draft ag statement duel use marijunana licenses

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Lucy Scientific Discovery Inc. (NASDAQ: LSDI) released its quarterly financial earnings for the period ended Sept. 30. In just three months, the company has burned through $1.4 million in cash.

The company had a cash balance at the end of June, the end of its last fiscal year, of $1.6 million; at the end of September, it was just $237,614. The company also reported a working capital deficiency of $636,603 at the end of the quarter.

Lucy reported no revenue in the quarter, which the company in its filing attributed to “no product sales during the three months ended September 30, 2023, as the company was changing its payment processor. Sales commenced again in October 2023.”

Lucy Scientific reported $7,048 in sales for the past fiscal year, but that figure is also listed in the accounts receivable column, so the company hasn’t actually been paid for those sales. The operating loss for the quarter was $1.6 million and the net loss for the quarter was $1.9 million.

The company incurred net losses in recent periods and has accumulated a deficit of $46,413,848 as of Sept. 30.

Lucy Scientific summed up dire state of affairs in its latest regulatory filing: “We may be unable to raise additional funds or enter into such other arrangements when needed or on terms that are acceptable to us, or at all. To the extent that we raise additional capital by issuing our equity securities, our existing stockholders may experience substantial dilution, and the terms of these securities may include liquidation or other preferences that could harm the rights of a common shareholder. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us.”

Still, the company said it believes it will have sufficient working capital to meet its liquidity needs through 12 months from the quarterly report.

The company mentioned its recent acquisition plans for High Times and Bluesky Biologics in the filing, but neither of the deals has actually closed.

The post Lucy Scientific Burns Cash with No Revenue Collected in Q1 appeared first on Green Market Report.

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Debra Borchardt, KahliBuds, 420GrowLife