Grow Life 420

Florida Gov. Ron DeSantis (R) has launched a new political action committee to campaign against marijuana legalization and abortion rights initiatives that will appear on the state’s November ballot. At the same time, a newly released campaign finance report shows over $5 million in contributions supporting the cannabis measure have come in over the past two months.

As DeSantis continues his crusade against the marijuana legalization proposal, late last month he started what’s being called the Florida Freedom Fund, aimed at preventing adults from gaining the right to use cannabis. It’s being run by the governor’s chief of staff, James Uthmeier.

A spokesperson for DeSantis told Politico that the PAC “will be championing issues and candidates committed to preserving Floridians’ freedom.” How that stated mission squares with an attempt to restrict adults from accessing marijuana without risking a criminal record and potential jail time is unclear.

According to a Fox News poll released last week, two in three Florida voters support the cannabis initiative—with the issue proving more popular than the governor himself. The survey showed majority support for legalization across the political spectrum, too.

Despite his opposition to the marijuana legalization, DeSantis recently vetoed a bill to ban the sale of intoxicating hemp-derived cannabinoids in his state. The action came amid reporting that the governor planned to block the hemp prohibition legislation in hopes that the industry would return the favor by financially assisting in his effort to defeat the marijuana initiative.

The governor, who predicted voters will reject the marijuana initiative in November, has argued that the state shouldn’t go beyond the existing medical cannabis program and that broader reform would negatively impact the quality of life for Floridians. The Florida Republican Party also formally came out against Amendment 3 last month.

So far, DeSantis’s PAC hasn’t reported raising any money. The Smart & Safe Florida campaign behind the marijuana initiative, however, reported more than $5.2 million in new contributions from April 1 to May 31, with the bulk of that funding coming from the multi-state cannabis company Trulieve. That’s in addition to the $15 million the campaign raised in the first quarter of the year, a haul that included contributions from other cannabis companies such as Verano Holdings, Curaleaf, Ayr Wellness, Green Thumb Industries and Cresco Labs.

The new first quarter report shows that other marijuana firms are coming to the table in support, including Insa, which donated $144,000, Sunburn parent company Green Sentry Holdings, which chipped in $50,000, and Urban-Gro, which gave $25,000.

The report also shows dozens of small-dollar donations, too.

We are so excited for this announcement! Smart & Safe Florida welcomes @urban_gro and @sunburncannabis in advocating for Amendment 3. Join the movement, vote #YesOn3 pic.twitter.com/5VFHvZQmPw

— Smart & Safe Florida (@SmartandSafeFl) June 11, 2024

Trulieve previously contributed about $40 million as advocates worked to collect more than one million signatures to qualify for ballot placement. The company’s CEO, Kim Rivers, said recently that, contrary to the governor’s claims, legalization could actually “improve quality of life” for residents.

She also said that she remains confident DeSantis will respect the will of the people and implement the legalization initiative if voters approve it at the ballot.

Smart & Safe Florida separately announced in March that it was working to form a coalition of veterans to build voter support for the reform, and the campaign has since formally launched that initiative.

The campaign additionally released an ad last week arguing that cannabis currently available on the state’s illicit market is dangerously unregulated.

Economic analysts from the Florida legislature and DeSantis’s office, estimate that the marijuana legalization initiative would generate between $195.6 million and $431.3 million in new sales tax revenue annually if voters enact it. Those figures could increase considerably if lawmakers opted to impose an additional excise tax on cannabis transactions that’s similar to the ones in place in other legalized states.

Here’s what the Smart & Safe Florida marijuana legalization initiative would accomplish:

• Adults 21 and older could purchase and possess up to three ounces of cannabis for personal use. The cap for marijuana concentrates would be five grams.
• Medical cannabis dispensaries could “acquire, cultivate, process, manufacture, sell, and distribute marijuana products and marijuana accessories to adults for personal use.”
• The legislature would be authorized—but not required—to approve additional entities that are not currently licensed cannabis dispensaries.
• The initiative specifies that nothing in the proposal prevents the legislature from “enacting laws that are consistent with this amendment.”
• The amendment further clarifies that nothing about the proposal “changes federal law,” which seems to be an effort to avoid past legal challenges about misleading ballot language.
• There are no provisions for home cultivation, expungement of prior records or social equity.
• The measure would take effect six months following approval by voters.

Here’s the full text of the ballot title and summary:

Despite his opposition to the initiative, DeSantis, a former GOP presidential candidate who dropped out of the race in January, previously accurately predicted that the state’s highest court would ultimately allow the measure on November’s ballot.

Unlike the governor, U.S. Rep. Brian Mast (R-FL) said in April that he does believe Florida voters will approve the legalization initiative.

California Senators Approve Bill To Legalize Marijuana Cafes Where People Could Smoke, Eat Food And Watch Events Such As Concerts

The post DeSantis Launches ‘Florida Freedom Fund’ To Oppose Marijuana Legalization Ballot Initiative, As Campaign Reports Millions In New Donations appeared first on Marijuana Moment.

Nearly two months after sending out press releases that crowed about the company’s advancements, Numinus Wellness Inc. (OTC: NUMIF) walked back those claims and blamed its public relations firm for the mistake.

Numinus released a statement after the markets closed on Friday, June 7, saying, “The releases were inadvertently disseminated by a public relations firm contracted by the company and represent information that was previously disseminated by the company. The company apologizes for any confusion.”

First error

The first error noted by Numinus related to a partnership between Numinus and Cybin (NYSE American: CYBN) (Cboe CA: CYBN) announced in a press release dated April 17 titled “Numinus and Cybin Embark on a Groundbreaking Journey: Pioneering Phase 3 Trials for Major Depressive Disorder.”

Cybin did indeed engage Cedar Clinical Research to provide clinical research services, and its Murray, Utah, location will be one of 15 U.S. research sites for Cybin’s Phase 3 multinational clinical trial of CYB003. However, the release claimed that Numinus’ Chief Science Officer Dr. Paul Thielking would be the principal investigator. In reality, Thielking is the site principal investigator for the CCR site, not the trial’s principal investigator.

Numinus made the claim again in a May 30 press release, which said, “The Phase 3 trial, set to begin enrollment in mid-2024, will delve deeper into CYB003’s safety and efficacy. Under the leadership of Dr. Paul Thielking, Numinus’s Chief Science Officer and the trial’s Principal Investigator, the study aims to further explore CYB003’s potential to address a critical unmet need in mental health care.”

Numinus clarified that it has no direct or indirect ownership interest in CYB003 and that any CYB003 research is the property of its sponsor, Cybin.

Second Error

Numinus also got ahead of itself by telling investors that it planned to launch a Numinus Network community pilot, which will be made available to its current therapists and other practitioners, alumni of its training program, and former therapists and other practitioners, including those who join the Canadian Centre for Psychedelic Healing when it launches. That press release, dated April 15, was titled “Numinus Wellness Provides Corporate Update.”

Numinus now says that it and CCPH have only agreed in principle to collaborate on the development of training content for the Numinus learning platform. However, Numinus insists that definitive terms of this collaboration will be determined in a subsequent agreement.

The new press release went on to explain that the planned community pilot program and Numinus Network do not provide access to medical infrastructure for the therapeutic administration of ketamine and other psychedelic drugs within Canada’s regulatory framework, which may be through a program such as CCPH’s co-op program.

It also added that there can be no assurance that a subscription-based model of the Numinus Network will be rolled out in Canada or the U.S.

MDMA pivot

In April, Numinus told investors it was going to ease away from the Canadian market and instead focus on the U.S. market and in particular on the drug MDMA. Numinus had high hopes that the FDA would give a positive nod to Lykos MDMA drug; instead, the FDA Advisory panel voted against the drug.

“While the decision of the (Psychopharmacologic Drugs Advisory Committee) was not the preferred outcome for many in the mental health care community, considering the dire need for an effective treatment for the millions impacted by PTSD, we understand the PDAC was acting in the best interests of patient safety and quality care,” Payton Nyquvest, Numinus founder and CEO, said about the decision.

“Based on the positive results from Lykos’ Phase 3 trial, which focused on adult patients, we are optimistic that once the PDAC’s specific concerns are addressed, MDMA-assisted therapy will be made available,” he added.

The post Numinus walks back claims made in press releases appeared first on Green Market Report.

The Ninth Circuit Court of Appeals is set to hear arguments in August in a closely watched case about whether terminally ill patients have the right to use the psychedelic drug psilocybin under federal and state “right-to-try” laws, Law360 reported.

The case, Advanced Integrative Medical Science Institute v. U.S. Drug Enforcement Administration, was brought by Dr. Sunil Aggarwal, a Seattle physician who’s seeking to provide psilocybin to his dying cancer patients to treat depression and anxiety.

Aggarwal and his clinic argue that laws aimed at allowing terminal patients to try experimental medications should permit the use of psilocybin in this context. The DEA and Justice Department counter that right-to-try statutes don’t override the federal prohibition on the substance.

Oral arguments in the case are scheduled for the morning of Aug. 19 in San Francisco, the Ninth Circuit announced Sunday.

The current appeal is part of a broader effort by Aggarwal to expand access to psilocybin for end-of-life care. The DEA has repeatedly rejected his proposals, arguing that providing the substance would be inconsistent with public health and safety and that Aggarwal must register as a researcher to obtain it.

Aggarwal sued the DEA in 2022, alleging its decisions were arbitrary and contradicted legal precedent allowing limited therapeutic use of other restricted drugs. The agency has insisted that Aggarwal hasn’t provided sufficient evidence and that it can’t fully assess his waiver request without more specifics.

In a separate case, the Ninth Circuit ordered the DEA to clarify its rationale for keeping psilocybin in Schedule I after rejecting a petition by Aggarwal to reclassify it.

Though currently illegal, psilocybin has received “breakthrough therapy” designation from the FDA twice and is now undergoing late-stage clinical trials. Any ruling by the Ninth Circuit in Aggarwal’s case could mean reverberations for its legal status and availability to patients.

The post Appeals court to hear case on psilocybin use by terminally ill appeared first on Green Market Report.

$811 million – Value of cannabis capital raises year-to-date

Cannabis capital remains challenging to get, and it’s reflected in the amount of raise activity the industry has seen in the first part of 2024. As of the end of May, cannabis companies had raised $811 million, down 22% from the same period in 2023. But it’s not bleak for every sector. According to Viridian Capital Advisors, the cultivation and retail sector – the largest sector tracked by Viridian – saw its raises up 48% in the same timeframe.

Source: Viridian Capital Advisors

The post Number of the Week: $811 million appeared first on Green Market Report.

After two years of having to get permission to talk about the inner workings of the New York Office of Cannabis Management, Aaron Ghitelman quit his government post to enter the private world of cannabis public relations.

Now the former spokesman for the agency is he’s speaking up about the inner workings of the OCM after a scathing report from the New York Office of General Services was released last month.

Ghitelman told Green Market Report recently that there were basically no decisions made at the OCM in which Hochul didn’t have a say-so and chalked much of the agency’s ongoing transition to “political games” being played by Hochul to save face in light of the turbulent market rollout.

The following interview has been edited for length and clarity.

Broad strokes, give me your thoughts on what stakeholders may see change in the wake of the Office of General Services report last month and the departure of Chris Alexander. 

After the really tough year of 2023, New York’s cannabis market has been growing, stores have been opening, product is moving, and it’s growing in a real way, partially thanks to (New York City Mayor) Eric Adams who, the minute he got more authority to shut stores down, actually committed resources to shutting stores down in a real serious way.

The big questions for me are around those who have already put in applications for licenses, and how quickly can the governor’s office can actually implement this – and are they interested in implementing their suggestions in a real way? Because I think a big part of this report wasn’t actually about the function of the state or about the function of the licensing team at the OCM.

The report was more about a political concern of Gov. Hochul wanting to remove Chris Alexander from his position, and kind of creating what she must have felt like was the necessary landscape to allow her to remove him. I think they were looking for corruption, which they didn’t actually find. All they found is the same inefficiency that plagues every other agency that licenses anything in New York State.

At the core, they want to restructure the touch points and make things more transparent to applicants. But a big part of it is bringing on more staff. I am not aware of the changes having already been implemented. I’m not aware of the new hiring happening in earnest.

What I have heard a lot of is exhaustion and frustration from the people who still work within the OCM, where a lot of folks felt that the governor kind of blindsided them.

Not to mention, I think the announcement that the kind of massive change in review, where the November queue of people with locations – which was a lottery and not everybody was guaranteed a license – now everybody in that queue on the retail side has been guaranteed a review, but a parallel guarantee has not occurred for the December applicants. After everybody got their applications in, the rules changed.

I think the governor may have made a few fatal missteps that actually will slow down the process of getting these licenses out instead of speeding them up.

Any thoughts on the transition currently underway from Alexander’s leadership? 

I’m surprised that the governor didn’t have a choice ready when she kind of made the moves to remove Chris (in May). She could have at some point in May nominated her hopeful successor, introduced them, popularized them as a choice and have them approved.

Even if Chris stayed on until September as he initially had planned on doing, the governor still, based on the New York legislative calendar, would’ve had to get somebody confirmed by the end of session in early June.

There’s a lot I’ve seen since she’s become governor that really makes me think Gov. Hochul’s a novice political operator who kind of is more interested in wishful thinking than doing the actual things necessary to make policies or appointments a success.

To me, it gets back to the central point about the report; I don’t actually think the report was about improving systems. There are a lot of ways you can improve systems without this railroaded public-facing report where OCM didn’t have a chance to discuss it or refute things before it went live.

To me, it was very clear this was a political decision where she no longer wanted Chris Alexander in this role.

What do you think we’ll see more of from the OCM and the CCB moving forward?

At the end of the day what the governor is looking for is an agency that doesn’t really shake things up and doesn’t really make noise. If you look at how she’s governed the rest of the state beyond cannabis, it’s very kind of small picture things. Gov. Hochul hasn’t really pushed for big things. She’s a don’t-rock-the-boat type person.

I don’t know if that means kind of greater space for the registered organizations or for MSOs that currently are not in New York state or they’ll be able to enter New York state. But I think the governor kind of leans towards what big business wants from her, what big real estate wants from her. And one of the big issues with how OCM operated was it was very much an antitrust-focused office.

The MRTA created a two-tiered anti-monopolistic market to (does) not allow six or seven operators to form a cartel to decide what pricing costs. That is different than how the governor has approached a lot of other problems. I think her office and her team have a discomfort with antitrust. But if the governor wants to give more room for vertically integrated operators, that would likely be something she would have to run by the legislature, which make it tough.

There are a lot of things that have kind of been started and things that aren’t just the same as we see in other states. What we’re seeing from a lot of corporate America are retreating from the promises of diversity and equity and inclusion people made in 2020 now that it doesn’t feel as pressing or as politically beneficial.

The goal of the New York market was for 50% of licenses to go to individuals from social and economic equity groups, and based on the projections I’ve seen from applications, New York state is well ahead of that 50%. So theoretically the governor could cut back on a lot of the grander equity programs, scale that back, focus more on just getting licenses out, supporting those who already have capital already have lobbyists in their corner and coast on that and still surpassed the 50% social and economic equity goals of the MRTA.

Do you see anything changing in the near term?

I think if the governor’s office was serious about staffing up and did indeed begin a real push to get folks on those teams and have real support for licensing, we may start to see increases an actual speed up and ramp up in, say, two or three months from now. In the near term, we’re probably going to see the same rate of licenses up for approval that we’ve seen in the last couple Cannabis Control Board meetings.

The report criticized OCM for having a startup culture. My read from that is the governor’s office wants people to almost work slower, but I don’t know how you can ask somebody to sacrifice nights and weekends when you just kind of trash their work and remove their boss.

So I think there’s a chance it speeds up. I think there’s a chance it slows down a lot. I think it could really go either way. And I think at the end of the day, if you were frustrated in March, there has been literally nothing changed.

It sounds like you would agree with folks who have said that Alexander was scapegoated by the governor’s office. Would you agree with that?

Entirely. If you read the report, you would not know that we could not make any decision within the OCM without approval from the governor’s office. I was not able to get you a quote without it getting run by both the governor’s comms office and the governor’s legal team.

We were not doing a single thing without their approval, but if you just showed up and read the assessment, you might think all of this was news to the governor, which most certainly was not the case. And Chris was very much scapegoated.

A lot of the assessment is accurate in terms of lack of staff, efficiency of government bodies, and government licensing bodies. But you could have written that exact same report about (the state liquor authority), about building permits, about so many other things that take way longer than they ever ought to take, and way longer than they take in the private sector.

In my view, they went into this assessment looking for corruption, with the assumption that OCM moves with the same level of corruption as the governor’s office.

The post Former New York OCM spokesman critiques agency’s turbulent transition appeared first on Green Market Report.

An NFL player is suing the league and his former team the Denver Broncos for alleged employment discrimination after he was fined more than half a million dollars for testing positive for THC that he says was caused by his prescribed use of a synthetic cannabinoid.

Randy Gregory filed a lawsuit in a Colorado district court last week, asserting that the league and the Broncos violated the Colorado Anti-Discrimination Act (CADA) by penalizing him for using the Food and Drug Administration- (FDA) approved cannabis medication dronabinol to treat anxiety, post-traumatic stress disorder (PTSD) and pain.

While the NFL and its players union agreed to end the practice of suspending players over marijuana or other drugs as part of a collective bargaining agreement in 2020, it’s continued to fine players over positive THC tests. For the first through third positive test, the fine is half a week’s salary; a fourth and each subsequent positive test is punishable by a fine equal to three week’s salary.

“Thus, if Mr. Gregory takes his medication as prescribed, he is fined seventy-five percent (75 percent) of his salary and earns twenty-five percent (25 percent),” the court filing, previously reported by NBC News, says. Since the time that the NFL rejected his request for an accommodation to use the synthetic THC medication in May 2023, he paid out $532,500 in penalties.

“Mr. Gregory is entitled to the full protection of Colorado anti-discrimination laws. The NFL and Broncos ignored Colorado State law and have refused to engage, in good faith, in the interactive process with Mr. Gregory,” the lawsuit says. “It is a violation of CADA for the NFL and the Broncos to financially penalize Mr. Gregory for consuming prescribed Dronabinol to treat his disabilities, while simultaneously benefiting from his continued employment. The NFL and the Broncos are not above the law.”

Attorneys for Gregory also pointed out that the cannabis-based drug is “an alternative to opioids and benzodiazepines, which are fraught with significant side effects and addiction issues.”

The NFL itself has committed significant funding to research into whether CBD can serve as an effective opioid alternative, and it’s also explored the therapeutic potential of the non-intoxicating cannabinoid for pain management and neuroprotection from concussions.

A commissioner of the NFL and the league’s players union previewed the funding plan in June 2022, emphasizing the strong interest among players and other stakeholders. The joint NFL-NFLPA committee also held two informational forums on CBD in 2020.

But despite the fact that dronabinol is legal at both the state and federal level as an FDA-approved medication, the league has not carved out an exemption to its THC rule, prompting him to file a charge of discrimination first with the Colorado Civil Rights Division before moving forward with the lawsuit.

“Mr. Gregory is entitled to damages including, but not limited to, repayment of the monetary fines that Mr. Gregory was required to pay including interest to the fullest extent permitted by law in an amount to be determined at trial,” the suit says. “Mr. Gregory is entitled to damages and relief to the fullest extent permitted by law in an amount to be determined at trial.”

Meanwhile, other sports leagues have similarly adopted revised marijuana policies as the state-level cannabis legalization movement continues to spread.

For example, a collegiate athletics proposal from earlier this year would remove marijuana from the list of substances included in drug screenings for National Collegiate Athletic Association (NCAA) championship competitions, with officials set to vote on the matter this month.

The plan would build on a 2022 change that increased the allowable THC threshold for college athletes, aligning NCAA’s rules with those of the World Anti-Doping Agency (WADA).

The Ultimate Fighting Championship (UFC) announced in December that it is formally removing marijuana from its newly modified banned substances list for athletes, also building on an earlier reform.

However, ahead of a UFC event in February, a California athletics commission said they could still face penalties under state rules for testing positive for THC over a certain limit, as the state body’s policy is based around WADA guidance.

Nevada sports regulators voted last year to send a proposed regulatory amendment to the governor that would protect athletes from being penalized over using or possessing marijuana in compliance with state law.

While advocates have welcomed these changes, there’s been criticism of WADA over its ongoing cannabis ban. Members of a panel within the agency said in an opinion piece last August that marijuana use by athletes violates the “spirit of sport,” making them unfit role models whose potential impairment could put others at risk.

Advocates strongly urged WADA to enact a reform after U.S. runner Sha’Carri Richardson was suspended from participating in Olympics events due to a positive THC test in 2021.

Following that suspension, the U.S. Anti-Doping Agency (USADA) said that the international rules on marijuana “must change,” the White House and President Joe Biden himself signaled that it was time for new policies and congressional lawmakers amplified that message.

Read the NFL player’s anti-discrimination lawsuit over cannabis-related penalties below: 

GOP Congressman Predicts Florida Voters Will Approve Marijuana Legalization, But Doubts Congress Will Advance Cannabis Banking By November

Image element courtesy of Marco Verch.

The post NFL Sued By Player Who Was Fined Over $500,000 For Positive THC Tests Caused By Prescribed Cannabis Medication appeared first on Marijuana Moment.

The Drug Enforcement Administration (DEA) has formally canceled a scheduled Monday administrative hearing on its proposed ban of two psychedelic compounds as the constitutionality of the scheduling process is being challenged in federal court.

In a notice published in the Federal Register on Friday, DEA said that the hearing is being indefinitely postponed in light of an administrative law judge staying the proceeding in response to the court action.

“As the matter before DEA is currently stayed, no hearing will commence on June 10, 2024,” the notice says.

The purpose of the hearing was to allow the agency to receive expert input on its controversial plans to classify 2,5-dimethoxy-4-iodoamphetamine (DOI) and 2,5-dimethoxy-4-chloroamphetamine (DOC) as Schedule I drugs under the Controlled Substances Act (CSA).

The cancellation comes about a month after Panacea Plant Sciences (PPS) filed a complaint and request for injunctive relief against DEA in the U.S. District Court for the Western District of Washington.

PPS is contesting the administrative hearing process that’s preceding final rulemaking, arguing that DEA’s reliance on administrative law judges to settle such arbitration is unconstitutional based on U.S. Supreme Court precedent.

“Panacea Plant Sciences is glad that the DEA has provided the public notice that the hearing is canceled. We expect to win in federal court and force the rule to be withdrawn,” CEO David Heldreth told Marijuana Moment on Friday. “We wish the DEA would do the scientific community and country a favor and withdraw the rule itself.”

The hearing has been stayed until the federal court renders a decision in the legal challenge to the administrative process. In the interim, Panacea and the Justice Department are required to submit joint status reports every 60 days until the case is resolved.

This is the latest development in a years-long dispute over DEA’s efforts to schedule the psychedelics, which it first attempted to do in 2022, only to withdraw the proposal amid pushback from the scientific community. The agency separately withdrew from a proposal to ban five different tryptamine psychedelics in 2022.

Last December, DEA announced that it would be trying to enact the DOC and DOI ban again. The agency’s notice about the scheduling proposal still lacks evidence that directly connects the compounds to serious adverse health events or demonstrated a high abuse potential.

“To date, there are no reports of distressing responses or death associated with DOI in medical literature,” it says. “The physiological dependence liability of DOI and DOC in animals and humans is not reported in scientific and medical literature.”

DEA said that anecdotal reports posted by people online signaled that the substances have hallucinogenic effects, making it “reasonable to assume that DOI and DOC have substantial capability to be a hazard to the health of the user and to the safety of the community.”

It did point to one report of a death of a person who had used DOC in combination with two other unspecified drugs—as well as two reports of hospitalizations that it said were attributable to the use of DOC with other drugs—but scientists say that hardly constitutes reason enough to place them in the most strictly controlled schedule.

In the background of this development, the Justice Department is now taking public comment on its proposal to move marijuana from Schedule I to Schedule III under the CSA. It’s expected that an administrative hearing will be similarly scheduled once that’s complete. It’s unclear whether the ongoing litigation over that administrative process in the context of the psychedelics scheduling issue will come into play for the marijuana action.

Florida Marijuana Legalization Ballot Measure Has More Support Than DeSantis, Who Is Campaigning Against It, Poll Shows

Photo courtesy of Wikimedia.

The post DEA Formally Cancels Hearing On Proposed Psychedelics Ban Amid Constitutional Challenge To Review Process appeared first on Marijuana Moment.

A Florida retirement fund is suing Scotts Miracle-Gro (NYSE: SMG) and some of its executives over poor decisions that caused the value of the shares to fall damaging the group’s pension plan. The Hialeah Employees’ Retirement System is a benefit pension plan based in Hialeah, Florida filed a complaint last week in the Southern District of Ohio outlining the allegations of mismanagement at Scott’s. Scotts maintains its headquarters in Marysville, Ohio, which is situated in this District.

The pension fund claims it bought shares in the company during a period in which the value was inflated as investors were unaware of the true situation with the company’s finances. The market period was defined as between November 3, 2021, and August 1, 2023. They claim that once Scott’s told investors the truth about the financial situation, the shares sold off causing the fund to see its investment fall as well.

Accusations against Scotts

The main allegations against Scotts in the complaint revolve around inventory levels, debt levels, and maintaining a specific covenant of the debt regarding a debt-to-EBITDA ratio.

Stuffing the channels

The first complaint is that Scotts missed out on millions of dollars in sales in 2020 and 2021 due to a lack of inventory as it faced surging demand. The investors accused Scotts of buying too much inventory after having too little and then hiding the problem. They claim that instead of Scotts coming clean with investors over having more inventory than it could sell, it engaged in “stuffing the channels.” The complaint alleges that Scotts sales personnel pressured retailers to purchase more inventory than they wanted or needed. The court document read, “This scheme enabled Scotts to book as revenue the sales to its distributors and maintain earnings to debt ratios that just barely exceeded those required by its debt covenants.”

The investors also pointed to earnings calls in which the Scotts CEO Jim Hagedorn told investors about record shipments, which they say was a false claim.

Debt levels

The investors are also upset that at the beginning of the class period, Scotts held $2.3 billion of debt but by the end, Scotts’ debt had ballooned to $3.1 billion. The problem with the debt levels growing was that Scott’s has to maintain a debt-to-EBITDA ratio under 6.25 in order to remain in good standing on its debt. If the debt goes higher than the earnings by too much it breaches the debt covenants.

They alleged that by claiming the company had higher earnings, it wouldn’t trigger the debt covenants even as the debt was rising. However, quarterly sales were falling forcing the company to move the goalposts on the debt covenants to 7.0 times the debt-to-EBITDA ratio. That way the company could tell investors that it wasn’t in default of its debt covenants.

Had Scotts admitted it was in default, the investors claim the company’s lenders could have declared all outstanding indebtedness immediately due and payable.

Stock selloff

The main issue that caused the lawsuit was that Scott’s common stock plunged in value once the company told investors that it was having difficulties. When Scott’s reported its 2022 full-year earnings, the company cut its projections to roughly half of its prior guidance. The company also announced plans to take on additional debt to cover restructuring charges as it attempted to cut costs. Still, executives were optimistic, which the investor’s claim wasn’t warranted.

Then by the third fiscal quarter of 2023, the company slashed fiscal year EBITDA guidance by a staggering 25% and announced it had to take a $20 million write-down. The market responded with a selloff.

The complaint notes that Scotts had a closing price of $102.18 per share on June 7, 2022, which then fell to a closing price of $93.13 per share on June 8, 2022. As the executives began expressing the problems to the market, shares fell from $71.44 on August 1, 2023, to a closing price of $57.86 per share on August 2, 2023.

News of the investor lawsuit may have triggered more selling. The stock closed on June 7 at $68 and in early trading on Monday, shares fell to $65.

The post Scotts Miracle-Gro sued over channel stuffing appeared first on Green Market Report.

Voters in Slovenia approved a pair of cannabis-related ballot measures over the weekend, one on whether medical marijuana patients should be able to cultivate the plant for personal use and the other on whether all adults should be able to legally grow and possess marijuana.

The sale and use of medical cannabis is already legal in the country, but cultivation remains prohibited.

The two marijuana questions appeared on the ballot in Sunday’s election alongside other referendum questions on medically assisted dying and a proposed change to the country’s general elections process.

The first question—”Should the Republic of Slovenia allow the cultivation and processing of cannabis for medical purposes on its territory?”—passed 67 percent to 33 percent.

The second—”Should the Republic of Slovenia allow the cultivation and possession of cannabis for limited personal use on its territory?”—was approved by a margin of 52 percent to 48 percent.

The outcomes are advisory and not binding on lawmakers. Nevertheless, they could influence future legislation and contribute to the growing push for reform in the country.

Slovenia’s National Assembly voted to put the questions on the ballot in April. The country’s National Institute of Public Health had taken a position against the cannabis proposals.

The votes are among the latest examples of a push for marijuana reform making its way through Europe. About two months ago, another country in the region, Germany, began implementing a cannabis legalization law.

In Slovenia’s neighboring Italy, meanwhile, voters were deprived of the opportunity to decide on marijuana and psychedelics policy reform in 2022 following a ruling from the country’s top court. But support has been building for a narrower, cannabis-only measure that would allow the home cultivation of four plants, the eventual creation of social clubs and the elimination of penalties for consumers.

Malta became the first European country to enact marijuana legalization, with the president signing a reform bill in 2021.

A novel international survey released in 2022 found majority support for legalization in several key European countries. Slovenia was not included in that poll, however.

The United Nations’s (UN) drug control body recently reiterated that it considers legalizing marijuana for non-medical or scientific purposes a violation of international treaties, though it also said it appreciates that Germany’s government scaled back its cannabis plan ahead of the recent vote.

German Lawmakers Approve Changes To Marijuana Legalization Law Addressing Social Clubs And Impaired Driving

The post Voters In Slovenia Approve Marijuana Ballot Measures appeared first on Marijuana Moment.

President Joe Biden’s health secretary is suggesting that federal drug enforcement officials are not necessarily on board with the administration’s plan to reschedule marijuana.

Asked about the status of the proposed move of cannabis to Schedule III of the Controlled Substances Act at a recent event in Sacramento, U.S. Health and Human Services (HHS) Secretary Xavier Becerra said his agency “took action” based on available science and evidence, saying that the ball is now in the Department of Justice’s court.

He dodged a follow-up question, however, about rumored pushback against the reform by Drug Enforcement Administration (DEA) officials.

“We did our job,” Becerra said of the recommendation in an interview with KQED’s Scott Schafer at the CalMatters Ideas Festival on Thursday, adding that DEA “now has the final call to make that happen.”

“Is there resistance in DEA?” Schafer inquired.

“Talk to DEA,” answered Becerra, repeating: “We did our job.”

“I’m gonna take that as a yes,” Schafer replied.

“Our scientists reviewed the evidence,” Becerra responded. “FDA bases its action on the science and the evidence before us. We took action.”

During the interview, Schafer also asked Becerra whether he has “any concerns, as the father of three daughters—three children—you know, about the use of marijuana?”

“I have concerns when they get out and drive a car, or they go out at night and they’re over 21. I have lots of concerns,” Becerra said. “Thank God they’ve got great heads on their shoulders. And on something like cannabis, I think they would continue to have great heads on their shoulders.”

“Look, if my daughters could go out and buy a pint of whiskey or a menthol cigarette—we know what we’re up against,” he continued. “And let’s be real: You can’t incarcerate your way to a solution here. You can regulate it. And if you regulate it the right way, which we’re supposed to do for alcohol and cigarettes and all the rest, then we can manage it. But we have to make a decision.”

“More than half of the states have made a decision that they’d rather regulate this than criminalize it,” Becerra added of medical marijuana. “The U.S. FDA, the scientists, have spoken and said we should deschedule from Schedule I to Schedule III on cannabis.”

I sat down with @Scottshafer at @CalMatters Ideas Festival to share HHS priorities and successes on lowering drug costs, expanding access to care, and increasing health equity.

We're reaffirming our commitment to ensuring everyone has access to quality, affordable care. pic.twitter.com/X4zeXbmAL7

— Secretary Xavier Becerra (@SecBecerra) June 7, 2024

Becerra’s handling of the question about “resistance” at DEA comes amid ongoing speculation over the internal politics within the administration on marijuana rescheduling.

Indications that DEA might not be on board came alongside the rescheduling move itself, with the proposed rule in the Federal Register noting several times that the agency believes “additional information” needs to be collected via public comment or a possible administrative hearing could influence the final scheduling decision.

“DEA has not yet made a determination as to its views of the appropriate schedule for marijuana,” the document said.

Adding to questions about a possible disconnect between DOJ and DEA over the proposal is the fact that the attorney general, rather than the DEA administrator, signed the draft rule.

Even before the formal announcement, it had been reported that certain DEA officials had been “at odds” with the Biden administration over the rescheduling push.

A DEA official was also absent last week from a scheduled appearance to discuss marijuana policy and regulatory oversight issues for cannabinoid research.

The moderator of that panel said the DEA representative cancelled at the last moment. DEA did, however, issue a message to attendees that the agency’s “goal is to support researchers as they navigate this registration process” to study Schedule I drugs like cannabis, “and outreach is a key component of their model to provide that support,” according to the moderator.

The proposed rule to federally reschedule marijuana was officially posted last month, kicking off a public comment period that’s expected to elicit a major response from supporters and opponents of cannabis reform.

Marijuana reform advocates and stakeholders have made clear that they intend to leverage the opportunity, with some planning to support the reclassification and others intending to call for descheduling cannabis altogether. Prohibitionists are expected to oppose the incremental policy change and seek to keep marijuana in Schedule I, and there’s also a looming threat of litigation.

While DOJ will take all public comments submitted by July 22 into consideration as it weighs the reform, it said in the notice that one of the topics its especially interested in hearing about is the “unique economic impacts” of the rescheduling proposal given that state-level legalization has created a “multibillion dollar industry” that stands to benefit from possible federal tax relief under the reform.

On Capitol Hill, Senate Majority Leader Chuck Schumer (D-NY) and colleagues have reintroduced legislation to federally legalize cannabis and impose certain regulations. The bill’s prospects are dubious in the current divided Congress, however.

Meanwhile, the top Democrat in the U.S. House said that the Biden administration’s move to reschedule marijuana is a “step in the right direction,” but it should be followed up with congressional action such as passing the legalization bill Schumer filed.

In a recent interview with Fox News, former DEA Administrator Asa Hutchinson said it “absolutely looks like” the agency will follow through with moving marijuana from Schedule I to Schedule III under the CSA.

Biden has separately issued two rounds of mass pardons for people who’ve committed federal marijuana possession offenses. Again, a Schedule III reclassification would not legalize cannabis or free people still incarcerated over cannabis.

During his run for the presidency, Biden pledged to move cannabis to Schedule II—a stricter category compared to what’s been proposed by his administration.

Voters In Slovenia Approve Marijuana Ballot Measures

The post Top Biden Health Official Hints At DEA Resistance To Marijuana Rescheduling Move appeared first on Marijuana Moment.

Going public is a common goal for many company founders, and RAW‘s founder Josh Kesselman is no exception. He told Green Market Report at the CWCB Expo in New York, where RAW was a sponsor, that he’d “love to” find a way – but the path would have to fit his vision.

Attired in a sparkling blazer, diamond-encrusted watch, and $900 Balenciaga sneakers, the paper impresario waxed poetic about selling shares to his customer base to create a “community.”

IPO talk

Going public “is something we would love to do,” Kesselman told GMR. “It just has to be done in our way.

“It isn’t something we’re just going to go to market and do the usual path. It’s got to be done in some way that really truly creates the kind of thing that I’m envisioning, which is more of a legacy,” he added.

During a session at the CWCB Expo, Kesselman told Tim Seymour of CNBC, “My dream would be to bring the company public in a way that only our fans – like our consumers, our smokers – can invest with us. That way it’s more of … a RAW community.”

In this dream, shares would be available via a QR code inside packs of RAW paper. “For every one you scan, you’re allowed to buy a share,” Kesselman said. “That way I can keep certain sharks out.”

For now, the vision will remain a dream, however, as there is no way to control who buys stock in a public company.

“I don’t know how we’re going to pull it off, but I really want to pull it off in a way that, 10 years from now, we brought our base in with us,” he said. “There’s got to be a way, man. There’s got to be some way.”

Seymour also asked if a deal with a large consumer packaged goods company, such as Procter & Gamble, would be considered, but Kesselman said he isn’t interested in going corporate. Even a company that has vast experience with paper products isn’t the path he wants to go down.

“I want to bring my people in. Imagine if you ran a publicly traded company where all of your shareholders were your fans who consumed your product. Imagine what that would be like,” he said.

Pre-rolls

While rolling papers cater to the audience that wants to roll their own, pre-rolls are a fast-growing category that attracts those who don’t know how to roll a joint or aren’t any good at it.  Kesselman acknowledged this trend and said he is pursuing pre-roll brands to use RAW papers and put the company’s logo on the product packaging.

“My goal would be to license RAW to people who are making really good pre-rolls in a way that they have to make it in a certain way using the certain paper, certain machines, grinders, devices, so that it’s a perfect, or what I consider to be a perfect, joint for the end user,” he said. “I prefer to license it to smaller outfits than larger ones because that way it’s more like what we already do.”

Kesselman clearly loves his product and his company. He said he began a rolling paper collection in youth, and while he is currently rebuilding it after losing the collection, he is passionate about papers.

The post Could a RAW IPO roll up to the markets? appeared first on Green Market Report.