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Planet 13 Grapples With Headwinds in Q3 as Expansion Looms

November 10, 2023

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Planet 13 Holdings Inc. (CSE:PLTH) (OTCQX:PLNH) reported a slight decrease in revenue for the third quarter ending Sept. 30, as the company prepares to branch out into new markets.

The Las Vegas-based retailer known for its sprawling SuperStore saw its revenue drop by 3.3% to $24.8 million, down from $25.6 million in the same period last year. The modest decline comes amid a competitive Nevada market that has been seeing wider contraction since last year.

Despite the drop in revenue, Planet 13 reported a gross profit margin rise, buoyed by reduced product discounting. Gross profit for the quarter was $11.1 million or 44.7% of revenue, compared to $10.6 million or 41.2% in the previous year.

The company’s co-CEOs, Larry Scheffler and Bob Groesbeck, remain optimistic about the future, citing nearly one in ten cannabis purchases in Nevada can be traced back to their operations. They also highlighted the impending expansion into Illinois and Florida as potential growth catalysts.

“This quarter, we took major steps towards executing the strategic goals we laid out at the start of the year and becoming a major player in Florida,” Groesbeck said in a statement. “We are also getting very close to opening our Illinois dispensary and completing the next phase of exciting new additions to the SuperStore. I’m very excited for 2024 when all our hard work starts to pay dividends.”

Operating expenses surged to $55.1 million from $15 million, a stark increase attributed to a one-time, non-cash impairment charge of $39.6 million, leading to a net loss of $46 million, significantly higher than the $6.3 million loss from the same quarter in the previous year.

Adjusted EBITDA was $200,000, shrinking from $500,000 year over year.

The balance sheet also showed a reduction in cash from $52.4 million to $36.8 million and a decrease in total assets from $233.6 million to $178.4 million. Total liabilities showed a minor decrease.

Planet 13’s strategic moves during the quarter included a definitive agreement to acquire Florida-based VidaCann, a domicile change to Nevada, and the change in its OTC trading symbol.

The post Planet 13 Grapples With Headwinds in Q3 as Expansion Looms appeared first on Green Market Report.

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MariMed Posts $4.2M Loss in Q3 Despite Maryland Rec Launch

November 10, 2023

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Massachusetts-based MariMed Inc. (CSE: MRMD) (OTCQX: MRMD) posted a $4.2 million loss for the third quarter of the year, its worst quarter of 2023 thus far, despite the launch of Maryland recreational cannabis sales in July.

MariMed had $38.8 million in revenue for the quarter, which ended Sept. 30, and $109.7 million year-to-date, but the red ink brought its losses for 2023 to $5.8 million thus far. Last year, the company was solidly in the black after Q3, up $8.8 million in profit.

Revenue was up both sequentially and year-over-year, from $36.5 million and $33.9 million, respectively. Sales also increased for the first nine months of 2023, by almost 12% from $98.2 million, which gave CEO Jon Levine cover to “report another solid quarter of strong revenue growth” in a press release.

“We continue to outperform the greater industry,” Levine said. “Our wholesale business continued to set quarterly sales records, which will continue for the remainder of this year and next. Our balance sheet remains one of the strongest in the industry, and we were particularly pleased with the exponential growth of our Maryland operations with the commencement of adult-use sales on July 1.”

Retail sales in Maryland alone shot up by 88% after recreational sales commenced, MariMed reported, and the wholesale marijuana business also grew by 161%.

Another quarterly highlight for MariMed its publicity stunt in the Boston Harbor with a reenactment of the colonial-era Boston Tea Party, themed as a protest of 280E, the federal tax provision that prevents cannabis companies from claiming standard business deductions.

Following the close of the quarter, MariMed also announced a new dispensary opening in Casey, Illinois. The shop is the company’s fifth in the state and its 12th nationally. MariMed is also still building out both a cannabis processing facility and a grow in Illinois; the processing facility is expected to become operational before the end of the year, but the cultivation won’t be finished until next year.

MariMed updated its financial guidance for shareholders, with new expectations to finish the year with $148 million to $150 million in total revenue, a gross margin of about 45%, and capital expenditures of $22 million to $25 million.

The post MariMed Posts $4.2M Loss in Q3 Despite Maryland Rec Launch appeared first on Green Market Report.

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Former FDA Official Says He’d Be ‘Shocked’ If DEA Doesn’t Reschedule Marijuana By 2024 Election

November 10, 2023

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Speaking at a cannabis industry event on Thursday, a former Food and Drug Administration (FDA) official said he’d be “shocked” if the Drug Enforcement Administration doesn’t reschedule marijuana by next year’s presidential election.

“I would be really shocked if it took the DEA longer than the second quarter of next year to come up with its final rule,” said Howard Sklamberg, former FDA deputy commissioner for global regulatory operations and compliance. “Even when I was at FDA, we knew that important regulations that you wanted to get done in an election year, you want to get done by the summer before.”

Sklamberg also said he expects DEA will ultimately accept the FDA’s recommendation to put cannabis in Schedule III of the Controlled Substances Act (CSA) instead of reaching a contradictory scheduling decision.

“I personally would be surprised if DEA did not agree ultimately with FDA and [the Department of Health and Human Services]’s decision,” Sklamberg, who served as chair of FDA’s Marijuana Working Group from 2014 to 2017, said. “It certainly would be strange, in an issue that is such an important priority for the administration, for one part of the administration to reverse what another one has said.”

Sklamberg, now a lawyer at the firm Arnold and Porter, was one of a handful of panelists who spoke during a Thursday webinar hosted by the American Trade Association for Cannabis and Hemp’s (ATACH) Capital Markets Council. Others included Andrew Kline, a former policy advisor to then-Vice President Joe Biden (D) who’s now at the law firm Perkins Coie, and Adam Goers, a senior vice president at the multi-state marijuana operator The Cannabist Company (formerly Columbia Care).

The group’s mood toward August’s rescheduling recommendation was decidedly upbeat. “I’m really looking forward to this conversation,” Kline said at the start of the event, “and getting people to the place where they understand that this is a really good thing.”

Sklamberg called the possible move “a giant step in the right direction and one that, probably, you know, four years ago, most people would not have foreseen.”

In perhaps the most meaningful change for existing marijuana businesses and would-be operators, the panel said, rescheduling cannabis to Schedule III would free companies from an Internal Revenue Service (IRS) tax code rule known as 280E, which currently prohibits cannabis companies and other federally illegal businesses from taking standard business deductions.

“Schedule III fixes 280E. I think we should put that on a bumper sticker somewhere,” Klein said. “Schedule II does not.”

That change alone could have a sweeping impact on business, he noted. “Instead of paying an effective 80 percent tax rate, companies are going to be paying an ordinary 21 percent tax rate,” he said. “You don’t need to be a mathematician to see that this is going to create profitability overnight.”

And while some have worried that rescheduling could threaten state-legal marijuana systems, Goers at The Cannabist Company said he’s confident business would continue more or less as usual.

“One of the things I would say, for people who have fear of what the unknown ahead would be in Schedule III, is that companies will break Schedule III law in state-regulated markets just like they do Schedule I today, except much more enthusiastically without 280E over our heads,” he said. “That’s going to be impactful for companies big and small, social equity and otherwise, and particularly for companies that are not vertically integrated.”

Goers’s confidence is at odds with worries by some in the legal industry that a move to Schedule III could actually lead to a host of obstacles as FDA and DEA rebalance their enforcement priorities.

In an op-ed for Marijuana Moment, for example, Khurshid Khoja, founder of the business law firm Greenbridge Corporate Counsel and chair emeritus for the National Cannabis Industry Association, warned that large cannabis companies were getting ahead of themselves by celebrating rescheduling as a win.

“In their rush to declare victory before fully assessing and addressing all downstream legal effects of rescheduling,” Khoja wrote, “large multi-state cannabis operators could risk permanently enshrining an ill-suited federal regulatory framework.”

But at Thursday’s webinar, former FDA official Sklamberg downplayed those worries.

“I do not think that people should be worried at all about any kind of increased FDA enforcement role with respect to state cannabis programs based on the change in schedule to Schedule III,” he said. “And I can’t be more emphatic about that.”

In response to a question from Marijuana Moment, Sklamberg also weighed in on recent comments that a senior State Department lawyer made to a United Nations (UN) body asserting that international drug treaties should grant member states considerable leeway on domestic policy—remarks that some observers read as the Biden administration posturing against any argument that global agreements would prevent a move to Schedule III for cannabis.

“You can interpret what the State Department official said as saying, ‘Well, we’re looking to interpret the treaty as really only affecting scheduling decisions insofar as they would affect the international posture of the U.S., as opposed to the internal workings of our state markets,'” he said. “That would be the most logical reading of it, and that of course would be helpful.”

While he said it was possible the official was speaking off the cuff, Sklamberg acknowledged the comments highlighted a possible path DEA could take if they choose to address the country’s drug treaty obligations.

“I think if a DEA official wanted to get to Schedule III and it couldn’t,” he said, “it could use the logic that that State Department official used.”

In 2016, DEA rejected a separate rescheduling petition on the grounds that “in view of United States obligations under international drug control treaties, marijuana cannot be placed in a schedule less restrictive than schedule II.”

Prior to the HHS recommendation in August, Sklamberg participated in an event that month at which he predicted that a move to Schedule III would be the most likely outcome of the marijuana review directed by Biden.

Since HHS issued its rescheduling recommendation to DEA in August, many in the industry have clamored to explain the implications of the possible move. Others have warned that businesses are basing their enthusiasm on very little public evidence.

Months after news of the rescheduling memo leaked, the government released the correspondence—as the result of a Freedom of Information Act (FOIA) request—in highly redacted form. The redactions obscure virtually the entire substance of the message, such as the scheduling recommendation itself and a scientific review portion that was attached to the letter.

The document, sent to DEA Administrator Anne Milgram, says that the HHS recommendation was based on “the eight factors determinative of control of a substance under 21 U.S.C. 81 1 (c).”

While the Congressional Research Service (CRS) recently concluded that it was “likely” that DEA would follow the HHS recommendation based on past precedent, DEA reserves the right to disregard the health agency’s advice because it has final jurisdiction over the CSA.

Meanwhile, six former DEA heads and five former White House drug czars sent a letter to the attorney general and current DEA administrator last month voicing opposition to the top federal health agency’s recommendation to reschedule marijuana. They also made a questionable claim about the relationship between drug schedules and criminal penalties in a way that could exaggerate the potential impact of the incremental reform.

Signatories include DEA and Office of National Drug Control Policy heads under multiple administrations led by presidents of both major parties.

Advocates and lawmakers who support cannabis reform separately marked the one-year anniversary of Biden’s mass marijuana pardon and scheduling directive this month by calling on him to do more—including by expanding the scope of relief that his pardon had and by expressly supporting federal legalization.

Two GOP senators, including the lead Republican sponsor of a marijuana banking bill that cleared a key committee last month, recently filed new legislation to prevent federal agencies from rescheduling cannabis without tacit approval from Congress.

A coalition of 14 Republican congressional lawmakers is also urging DEA to “reject” the top federal health agency’s recommendation to reschedule marijuana and instead keep it in the most restrictive category under the CSA.

White House Says ‘Nothing Has Changed’ With Biden’s Marijuana Stance As Ohio Becomes Latest State To Legalize

The post Former FDA Official Says He’d Be ‘Shocked’ If DEA Doesn’t Reschedule Marijuana By 2024 Election appeared first on Marijuana Moment.

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Federal Health Agency Announces $2 Million In Funding To Develop Psychedelic Treatments For Substance Use Disorders

November 10, 2023

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The National Institutes of Health (NIH) is soliciting proposals to develop psychedelics into treatments for substance use disorder (SUD), with plans to issue $2 million in grant money toward the research projects during fiscal year 2025.

The funding opportunity will support research into a range of substances that might be used treat addiction, including “classic psychedelics” such as psilocybin and LSD, empathogens such as MDMA, dissociatives such as ketamine and other hallucinogens, including ibogaine and its analogues. The NIH listing refers to all the substances broadly as “psychedelics.”

“There is an urgent need to develop novel treatments for SUD in light of the escalating rates of substance use, addiction, and overdose. Psychedelics may offer a new potential therapeutic use in SUD,” it says. “The ultimate goal is to advance the development of safe and effective treatments for SUDs with psychedelics in the FDA [Food and Drug Administration] approval pathway.”

NIH announced the new funding opportunity on Wednesday. Applications will be accepted online from January 28 through February 28 of next year. The National Institute on Drug Abuse (NIDA), a division of NIH, will administer the grant program.

Psychedelics Treatment Research in Substance Use Disorder (UG3/UH3 Clinical Trials Optional) https://t.co/4sJMTRzx0g

— NIH Funding (@NIHFunding) November 1, 2023

“Despite the widespread claims of the therapeutic effects of psychedelics for substance use disorders (SUDs), their safety and efficacy have not been sufficiently and empirically established,” NIH says in the listing, “and there are no psychedelics that are approved by the FDA for the treatment of SUDs.”

The agency acknowledges in the posting that psychedelics are more complicated to evaluate than many more traditional pharmaceuticals, writing that, “With psychedelic therapies, the complex interplay between pharmacotherapy and psychotherapy makes it difficult to establish the degree to which the psychedelic drug requires a specific dose for the therapeutic effect, as well as how frequently and for how long it should be administered.”

“Therefore,” the posting continues, “it is essential to establish the optimal type of psychotherapy to use with a psychedelic drug treatment, the number of the sessions required, as well as their content, duration, and frequency.”

The goal is to further develop psychedelics that can treat SUDs for opioids, methamphetamine, cocaine, nicotine, cannabis “or any other illicit substance use, except alcohol.” The posting does not clarify why alcohol is excluded.

Clinical trials for the funding round are optional. Applicants may submit proposals that involve clinical trials, but it’s not a requirement. However, applications “must provide the entry and exit points of the proposed research plan in the FDA regulatory approval pathway.”

Examples that NIH provides of potential research milestones include, as listed in the posting:

Lead Candidate Identified: Single compound identified with adequate affinity, selectivity, pharmacokinetics, and toxicological properties to initiate advanced toxicology/safety/Drug-Drug Interaction studies.
File Investigational New Drug (IND) application without clinical hold imposed by the FDA.
No significant objections that may require additional studies by the FDA following Investigational New Drug filing.
FDA agreement (where appropriate) that study endpoints are acceptable to support further development.
Completion of Phase I single and/or multiple ascending dose clinical studies without significant medical safety or pharmacokinetic issues identified.
Completion of initial clinical efficacy testing in a pilot phase 1b or phase 2A study in patients without significant safety issues identified and with study endpoints ascertained.
Completion of the pilot clinical trial assessing a certain endpoint of interest as a primary objective, where the objectives were fulfilled and Go/No-Go criteria were answered.
Meeting with the FDA for advice on specific clinical drug development plan configuration is requested.
Completion of the Proof-of-Concept trial with study objectives attained.
Completion of clinical study in intermediate-size patient groups with safety and efficacy demonstrated.
Phase 3 Clinical study(s) successfully completed.

Applicants can request up to $2 million per year for direct costs, but the posting says that the intent is to split up the $2 million among three to five awards.

Several types of organizations are eligible, including institutions of higher education, nonprofits, for-profit businesses, individual state or local governments, U.S. agencies as well as school districts, housing authorities, tribal organizations, faith-based groups and international entities.

The announcement comes less than six months after NIH posted three other funding opportunities focused on how psychedelics could be used to treat drug addiction. All three notices focused on the same overall objective, but one would focus on the mechanisms of psychedelics, and the others would need to involve clinical trials with human subjects. Those funds, set to be released in fiscal year 2024, totaled $1.5 million.

At a Senate committee hearing earlier year, NIDA Director Nora Volkow told members that there’s emerging evidence that psychedelics carry “significant potential” as therapeutic treatments for certain mental health conditions, and it’s a topic of “great interest” for researchers.

Last year, Sens. Brian Schatz (D-HI) and Cory Booker (D-NJ) pushed top federal officials to provide an update on research into the therapeutic potential of psychedelics, arguing that ongoing federal prohibition has stymied studies.

NIDA responded to the inquiry by saying that federal prohibition makes it more difficult to study the benefits of psychedelics, requiring researchers to jump through additional regulatory hoops. Volkow previously said that she personally hesitates to study Schedule I drugs because of those complications.

Volkow told Marijuana Moment in 2021 that researchers need to prioritize psychedelics research, as more people are likely to use them as they’re exposed to studies showing the therapeutic potential of the substances.

Meanwhile, support appears to be growing at the federal level to expand psychedelic-assisted therapy to military veterans with PTSD and other mental health conditions, although Department of Veterans Affairs (VA) officials have insisted on the need to proceed cautiously to avoid putting veterans at risk of further harm.

VA officials recently launched a new podcast about the future of veteran health care, with its first episode focused on the healing potential of psychedelics.

Congress was scheduled to hold its first-ever subcommittee hearing dedicated to veterans and mental health care last month, but the event was postponed as Republicans in the House scrambled to select a speaker.

A number of the subcommittee’s members—Republicans especially—have previoulsy expressed interest in psychedelics reform. Rep. Jack Bergman (R-MI), for example, is the co-founding member of the Congressional Psychedelics Advancing Therapies (PATH) Caucus, a bipartisan group relaunched this past March.

Another member, Rep. Morgan Luttrell (R-TX), has publicly shared how treatment with ibogaine and 5-MeO-DMT “changed my life” and was “one of the greatest things that ever happened to me.” Earlier this year, he and several other GOP lawmakers spoke in favor of a bill to create a $75 million federal grant program to support research into the therapeutic potential of psychedelics for certain health conditions among active duty military service members.

And the House subcommittee’s chair, Rep. Mariannette Miller-Meeks (R-IA), led a roundtable this summer to discuss emerging therapies for PTSD and substance abuse.

Earlier this year, House lawmakers passed a spending bill with a number of veteran-focused marijuana and psychedelics amendments. One would allow VA doctors to issue medical cannabis recommendations to former servicemembers, and the other would encourage research into the therapeutic potential of psychedelics.

In August, three bipartisan co-chairs of the Congressional Cannabis Caucus wrote to VA Secretary Denis McDonough expressing “deep concern” over a recent VA marijuana directive that continues to prohibit its doctors from making medical cannabis recommendations to veterans living in states where it’s legal.

Rep. Earl Blumenauer (D-OR), one of the authors of that letter, recently sent a separate letter to McDonough and Department of Defense Secretary Lloyd Austin slamming their departments for perpetuating a “misguided denial of services” by recommending against the use of medical marijuana by veterans with post-traumatic stress disorder (PTSD).

VA and DOD “have a long history of claiming the best interest of our veterans and service-members only to deny the reality of medical marijuana as a key treatment option for those impacted by PTSD,” he wrote, referencing recently updated joint clinical practice guidelines that the departments released in July.

At the state level, however, blue states have taken the lead on psychedelics reform. Oregon in 2020 legalized psilocybin therapy in addition to decriminalizing possession of all drugs. The state approved the first legal psilocybin service center this past May.

And in Colorado, Gov. Jared Polis (D) signed a psychedelics regulation bill into law in May, setting rules for a psychedelics legalization law that voters passed last year.

California advocates are trying to qualify two three separate psychedelics reform measures for the 2024 ballot. One, which would legalize the possession, sale and regulated therapeutic use of psilocybin, has already begun gathering signatures. Another proposal would create a $5 billion state agency tasked with funding and promoting psychedelics research that it hopes will accelerate federal legalization of substances like psilocybin and ibogaine. And a third campaign has filed a prospective initiative to legalize psychedelics broadly for therapeutic and spiritual use with a doctor’s recommendation.