The High Times 100 celebrates the 100 most influential people in the cannabis world. From entrepreneurs and activists to entertainers and cultivators, the women and men on this illustrious list are shaping the current cannabis industry. Learn more about the most influential people in marijuana in our second annual HT 100.
A true people person and merit-based application strategist, Verano Holdings’ co-founder and chief growth officer’s strengths lie in building solid teams, creating strong alignments via funding and real-estate assets, and working with local governments to help organize strong applicants. Sam Dorf has raised over $140 million and has secured 19 licenses across eight states. To top it off, his charity supports woman’s shelters, domestic-abuse prevention, job creation and helping veterans in need.
See the complete list on High Times Website.
Daniel I. DorfmanPioneer Press
Verano Holdings is preparing to merge with Harvest Health and Recreation later this summer. Dorf recently talked with Pioneer Press about his work in the cannabis industry as lawmakers in Springfield continue to weigh whether to legalize recreational marijuana use in Illinois.
Q: How did you become a part of the cannabis industry?
A: I was at John Marshall Law School and while I was there, one of my buddies was one of the first individuals who started a cannabis company in Colorado. I saw the medical benefits in the growing industry of the cannabis business, and I helped him raise funding and structure his company while I was in law school and watched the company expand in Colorado. I saw there was a big opportunity there to grow businesses and improve people’s lives.
Q: What kind of resistance do you still get from law enforcement or the public regarding cannabis?
A: As we go throughout the country now, as we are arguably the largest operator throughout the U.S., we get very little resistance. Any resistance that we do see is quickly overcome by education. It is a lack of education of what is a dispensary and what products are being sold and what is the security like. Once you start to educate the community that you are going into, they quickly see the benefits of not only the medical benefits of cannabis, but also the economic benefits of cannabis and the job creation. A lot of manufacturing has left the U.S. and we bring a lot of skilled jobs and skilled laborers to communities that are under-served. Once you explain what the company is, people adapt to it extremely quickly.
Q: What will your new role be in the new company?
A: It is a really a merger of the two companies and it is really going to be business as usual for us at Verano Holdings. We will help grow the public company and everything we desire.
Q: How do you see the business evolving over the next few years?
A: I think it is poised for explosive growth and I think where we stand today is where Canada stood 24 months ago as a march up to national legalization. I think this is going to be one of the largest industries in the U.S. It is full steam ahead.
Q: What do you enjoy about your work?
A: I enjoy growing a business and at the same time, helping people. If you stand at our dispensaries, you see that people are taking themselves off of opioid pills because of cannabis. There has never been an overdose death due to cannabis, and we are seeing a rapid decline in the states that allow for medical and recreational cannabis in opioid abuse and overdoses. That is the most satisfying thing for me as not only can I have a successful career, but I can help save lives at the same time.
Shout Out is a weekly feature in which we introduce our readers to their fellow community members and local visitors throughout suburban Chicago.
Daniel I. Dorfman is a freelance reporter for Pioneer Press.
POINT ROBERTS, Wash. and DELTA, British Columbia, March 26, 2019 (GLOBE NEWSWIRE) -- Investorideas.com, a leading investor news resource covering hemp and cannabis stocks continues with our two part series on how the growing cannabis market is boosting ancillary markets, with part two focusing specifically on acquisitions in the cannabis sector.
According to a recent Forbes article, “most of the businesses growing, processing and selling cannabis across the United States are small independently-held entities. That may change in 2019 which looks like a big year for industry mergers, acquisitions and expansion. Large companies, like those in the food, tobacco and pharmaceutical industries have mostly stayed on the sidelines, held back by regulatory concerns, but are now expected to enter the market. The cannabis industry still has a mom and pop feel but that could change rapidly.”
Canopy Growth Corp. ( NYSE: CGC ) ( TSX: WEED ) is a strong example of one such larger company making acquisitions, having recently acquired AgriNextUSA, a hemp enterprise led by CEO, Geoff Whaling, that has been at the forefront of hemp advocacy and building a vibrant hemp sector in the US. The acquisition is expected to accelerate Canopy Growth’s entry into key American jurisdictions as regulations surrounding the full use of hemp as a crop implementation.
SinglePoint ( OTC: SING ), a company with a focus on acquiring companies that will benefit from the injection of growth capital and technology integration in mobile payments, ancillary cannabis services and blockchain solutions, has been very busy making recent acquisitions in Cannabis and most recently solar, all which could benefit their cannabis division was featured in Part One of this series.
The company offers mobile Web checkout gateway services which allow mobile users to purchase goods and services directly from Web-enabled mobile phones through credit or debit cards. It also sells hemp products through SingleSeed.com, supplies hydroponic supplies and nutrients to commercial and individual farmers through retail and online stores. SinglePoint, Inc. was founded in 2007 and is based in Phoenix, Arizona.
Harvest Health and Recreation ( OTC: HRVSF ) ( CSE: HARV ) recently announced that it would buy competitor Verano Holdings for $850 million in an all-stock deal, marking the largest US cannabis deal to date. The combined company will be one of the country’s largest multi-state operators, presiding over as many as 200 facilities in 16 states.
Steve White, the co-founder and CEO of Harvest, commented on the state of the market in a recent CNBC article. “Presently, we’re in a phase that people are referring to it as a land grab,” White told CNBC’s ’Fast Money.’ “We plan on ... developing the largest retail footprint, the largest retail platform, in the United States, and with this acquisition, I think we’ve done that.”
Green Thumb Industries Inc. ( CSE: GTII ) ( OTC: GTBIF ) also recently announced the closing of the acquisition of For Success Holding Company, the Los Angeles-based creator of the lifestyle suite of Beboe branded cannabis products.
Beboe is the leader in luxury cannabis whose mission is to ‘destigmatize’ legal cannabis through heightened experience and education. Beboe is best known the thoughtful design aesthetic of its iconic rose gold vaporizing pens and edible pastilles, and each product is curated with a unique blend of socially dosed THC and CBD. Beboe is currently available in more than 125 retail locations in California and Colorado and via home delivery across California. In 2018, Beboe launched a direct-to-consumer hemp-derived CBD line of products and introduced several collaborations, including a CBD-infused drink with wellness brand Dirty Lemon.
In early 2019, Barneys New York announced an exclusive partnership with Beboe for a first-of-its-kind luxury cannabis lifestyle and wellness concept shop, “The High End.” The shop will debut at Barneys’ Beverly Hills flagship location in March, with plans to expand to additional locations in the near future. The collaboration includes exclusive, special edition packaging and a silver Beboe vaporizer pen in celebration of the project. With the acquisition by GTI, Beboe products will become available beyond California and Colorado with distribution in select markets.
This “land grab” momentum is expected to continue through 2019 as the cannabis sector expands and consolidates within its own sector and with its ancillary markets. This may mean that the companies making early acquisitions will have a much better chance of success in the market.
Part one The SunnySide of Cannabis; Cannabis Growth Boosts Solar Market; (TSX: $VFF.V) (OTC: $SING) (CSE: $HUGE.C) (CSE: $BGRD.C) https://www.investorideas.com/news/2019/renewable-energy/03211Cannabis-Solar.asp
For investors following cannabis stocks, Investor Ideas has created a stock directory of publicly traded CSE, TSX, TSXV, OTC, NASDAQ, NYSE, ASX Marijuana/Hemp Stocks
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Harvest Health & Recreation is set to acquire Verano Holdings for the jaw-dropping price tag of $850 million, the largest single acquisition in cannabis history and the next step in Harvest’s vision of becoming the most valuable cannabis company in the world.
In March, the two companies entered into a binding agreement that, once finalized, will make Harvest a dominant force in the industry, with licenses to operate 200 cannabis cultivation, manufacturing and retail facilities in 16 states and territories across North America.
Harvest CEO Steve White calmly described the Verano acquisition as “just part of the evolution of the industry,” but experts and analysts said the blockbuster, all-stock deal is emblematic of the increasing competition to acquire licenses and expand retail footprints before federal policy changes open the floodgates for institutional investors.
“There is absolutely a race to beat the end of prohibition,” said Tom Zuber, managing partner of the law firm Zuber Lawler, which serves the global cannabis community.
Zuber said Harvest is taking advantage of the federal prohibition of marijuana, which has prevented major corporations from entering the U.S. cannabis industry.
Included in the acquisition is Verano’s potential cultivation canopy of 900,000 square feet. Photo courtesy Verano.
“When prohibition ends, a lot of deep pockets are going to enter the market — pharmaceutical companies, alcohol companies and so forth,” he added. “In that context, it will be much harder for smaller companies, and cannabis companies today are smaller companies. It’s going to be harder for them to compete.”
White said that scenario is exactly what Harvest is ready for.
“When large financial partners are prepared to come into the U.S. cannabis arena, we want to be their first choice,” White told Marijuana Venture.
After a flurry of acquisition deals, Harvest Health & Recreation has become one of the largest cannabis companies in the world, with licenses to operate in 16 states. Photo courtesy Harvest Health.
Dena Jalbert, the founder and CEO of Align Business Advisory Services, said mergers and acquisitions are the fastest vehicle for multi-state operators to expand. Most cannabis companies require a huge up-front investment to get licenses and build out facilities before an operation can generate revenue — a process that can take a significant amount of time and burn through a substantial amount of capital.
“An acquisition like this allows an organization to bypass all of that and immediately get access to all of the market,” Jalbert said of the Harvest-Verano deal.
Harvest and Verano set a deadline of April 9, 2019 to sign a definitive agreement and finalize the acquisition.
Harvest is “looking forward to integrating Verano’s people and assets as quickly as we can,” White said.
The companies agreed to a mutual termination fee of $20 million should either entity fail to enter the agreement.
“This (termination fee) is probably just doing due diligence on each other seeing if there are any undisclosed liabilities,” said attorney William Gay, a partner at Wilson Elser who has extensive experience in mergers and acquisitions. “In this case, Harvest is the publicly traded company and Verano is private, so Harvest would be looking very closely at Verano because they haven’t been a recording company.”
Gay said the “stock-for-stock deal” is typical for publicly traded cannabis companies since federal laws in the U.S. prohibit both businesses from domestic banking transactions.
The $850 million price tag was based on Harvest’s share price of CAN $8.79. The acquisition is believed to be the largest to date in the U.S. cannabis industry, surpassing MedMen Enterprises’ acquisition of PharmaCann in an all-stock deal valued at $682 million.
Since going public in November 2018, Harvest (CSE: HARV; OTCQX: HRVSF) has made several high-profile acquisitions and expanded rapidly.
“Our pace is unlike any you’ve seen in this industry,” White said.
Within the past five months, Harvest acquired San Felasco Nurseries, a vertically integrated company in Florida, CBx Enterprises, a Colorado-based extraction and manufacturing company, and Falcon International, a California cannabis producer, processor and distributor.
The Verano acquisition will make Harvest the largest multi-state operator in the industry, based on the number of licenses held, according to the company. Harvest was already one of the biggest cannabis companies in the U.S., with more than 600 employees and licenses for 140 cannabis facilities. The company has grown steadily since opening its first dispensary in Arizona in 2011.
Verano Holdings was one of the largest privately owned cannabis companies in the U.S.
“This is a natural match between like-minded entrepreneurs who have built our companies from the initial facilities into two of the largest MSOs (multi-state operators) in the U.S., with an unwavering focus on operational excellence, superior quality products and service and delivering value to customers and shareholders,” Verano co-founder and CEO George Archos said in a press release announcing the deal. “Our growth and unique positioning in key markets allowed us to evaluate some of the largest players in the space, but we only had one unanimous choice for a major transaction and that was Harvest.”
Post-acquisition, Harvest plans to hire an additional 300 employees, which would bring the combined companies up to about 1,200. Harvest expects to have a total of 13 cultivation facilities, 13 manufacturing facilities and 70 dispensaries operational by the end of 2019. White said the company will continue acquiring other businesses as it moves forward with construction. Harvest has accrued enough capital to fund current and further expansions through 2020.
Since Harvest and Verano both have branded cannabis products in similar categories, it’s unclear what will happen to Verano’s brand identities, but White said he’s found the two companies’ assets to be complementary. For example, Verano has had more success with edibles and branding its flower, while Harvest has a wider range of vape pen lines.
“We anticipate being overly inclusive and really utilizing the distribution channels to push more brands in more places. … We think there is a place for almost everything under the umbrella,” White said.
Changes in Harvest’s executive leadership have not been announced, but White said the company plans to utilize acquired infrastructure as an East Coast hub for Harvest and continue operation of Verano’s nine Zen Leaf locations.
“Harvest is very smart in how it’s going about acquiring licenses,” Zuber said, pointing out that both Harvest and Verano appear to be very profitable. “That’s a sign of discipline.”
“I think one of the big opportunities here is that (Harvest is) picking up a proven team that has operational experience, grow experience and, on top of that, retail experience,” Jalbert said. “The thought leadership that you are acquiring — you can’t find people with this kind of institutional knowledge.”
Harvest CEO Steve White says Verano’s Illinois office will act as an East Coast hub for the multi-state operation. Photos courtesy Harvest.
Jalbert also said she believes a driving factor of the acquisition for Harvest was gaining access to Verano’s research and development and retail analytics, which could prove to be an invaluable resource in forecasting product trends and desired deliverables to consumers.
Gay said the organic R&D assets, such as genetics or any cannabis material, is much more limited in potential, because federally illegality forbids cannabis from being transferred across state lines.
“If Verano has technology in breeding or whatever it is that is of interest to Harvest, they are going to have to figure out how to do that without transferring any clones or seeds,” he said.
Although the cannabis industry remains a mine field of risks and uncertainty, experts agree the pace of consolidation is likely to accelerate.
“The mergers and the acquisitions that are happening right now are a sign that the cannabis industry is growing up,” Zuber said. “In some sense that will be good for consumers because there will be a sophistication of corporate leadership entering the market. It may ultimately reduce options for consumers, but overall I think that it’s a sign of good health in the sense that the cannabis industry is moving in the right direction. It’s maturing toward legalization and I find that to be a very good thing.”
The American cannabis chain Harvest Health & Recreation announced an acquisition today that could make it the industry’s largest retail license holder—with the right to open 123 retail dispensaries across 16 states and territories. Its Canada-listed stock jumped 18% on the morning’s news, to 10.15 Canadian dollars (US $7.57) on the Canadian Securities Exchange.
As cannabis restrictions fall in one state after another, a half dozen companies are racing to become the Starbucks of legal weed. Like Harvest, they must list their stocks in Canada, or with the OTC Markets Group , because the NYSE and Nasdaq won’t accept them as long as cannabis remains federally illegal.
The Phoenix-based Harvest (OTC ticker: HRVSF) will buy the privately held operator Verano, which is headquartered in Chicago, for stock that the companies valued at $850 million. Verano brings with it licenses for 37 retail locations and seven cultivation facilities. The acquisition announcement said that Verano is cash-flow positive.
“It’s a real big deal,” Harvest chief executive Steve White told Barron’s, “particularly if you’re concerned about profitability.”
The merger will add retail outlets in states where Harvest or Verano already have cultivation facilities, thereby enhancing the group’s margins.“We were profitable in Arizona. Then we became profitable in Nevada. Then we became profitable in Maryland and Pennsylvania,” said White. “So far, there hasn’t been a state where we haven’t been able to turn profitable quickly.
Verano also has a proprietary technology for extracting cannabis ingredients at pharmaceutical grade levels, said the companies.
“The combination with Verano fits perfectly with our vision of creating the world’s most valuable cannabis company,” said Jason Vedadi, Harvest’s executive chairman, in the release. Verano executives said they’d considered some of the largest players in the industry, before choosing Harvest as their acquirer.
The companies plan to discuss the deal in a conference call this afternoon.
March 11, 2019 09:28 AM Eastern Daylight Time
PHOENIX & CHICAGO--(BUSINESS WIRE)--Harvest Health & Recreation, Inc. (CSE: HARV, OTCQX: HRVSF) (“Harvest”), a vertically integrated cannabis company with one of the largest footprints in the U.S., is pleased to announce that it has entered into a binding agreement to acquire Verano Holdings, LLC (“Verano”), an arm’s length third party, one of the largest privately held multi-state, vertically integrated licensed operator of cannabis facilities, in an all-stock transaction for an estimated purchase price of approximately USD $850,000,000 based on a share price of CND $8.79. The combined company will be one of the largest multi-state operators (“MSO”) in the U.S., as measured by licenses held and facilities permitted. Upon completion of the transaction and regulatory approval, Harvest will hold licenses that will allow it to operate up to 200 facilities in 16 states and territories across the country, including 123 retail dispensaries.
“Our growth and unique positioning in key markets allowed us to evaluate some of the largest players in the space, but we only had one unanimous choice for a major transaction and that was Harvest.”
Harvest’s planned acquisition of Verano will include:
Following completion of the transaction, the combined company is expected to be operating 30 dispensaries, eight cultivation facilities and seven manufacturing facilities, with expected further aggressive operational expansion. By the end of 2019, Harvest expects to have over 70 dispensaries, 13 cultivation facilities and 13 manufacturing facilities in operation. The company expects continued growth in 2020.
“The combination with Verano fits perfectly with our vision of creating the world’s most valuable cannabis company,” said Jason Vedadi, Executive Chairman of Harvest. “We are confident that this is an opportunity to continue to leverage each of our company’s strengths and drive continued shareholder value, while at the same time achieving the scale we know will give us a leadership position in one of the largest cannabis markets in the world.”
“This is a natural match between like-minded entrepreneurs who have built our companies from the initial facilities into two of the largest MSOs in the U.S., with an unwavering focus on operational excellence, superior quality products and service, and delivering value to customers and shareholders,” said George Archos, Verano Co-founder and CEO. “Our growth and unique positioning in key markets allowed us to evaluate some of the largest players in the space, but we only had one unanimous choice for a major transaction and that was Harvest.”
“Verano has been creating a brighter way for cannabis production, products and health and wellness by assembling a stellar team of experts drawn from the cannabis industry and the top echelons of Fortune 500 corporations,” noted Sam Dorf, Verano Co-founder and Chief Growth Officer. “We are excited to join forces with Harvest to leverage each of our strengths to share the benefits of cannabis in innovative new ways with an ever increasing customer base. Verano and Harvest independently have always focused on business fundamentals to drive year over year growth in both revenue and EBITDA. Together, we expect to accelerate that momentum and raise the bar even higher for the industry.”
The newly combined company plans to continue hubs of operation in both Arizona and Illinois and merge key leadership talent to create a team of the most professional operators in cannabis. Both companies have recently attracted management expertise across consumer-packaged-goods, beverage, spirits, logistics, branding, horticulture, and extraction technologies from some of the largest most influential companies in the world, all supporting the companies’ explosive growth. Similarly, the combined company expects to grow new and existing brands throughout its expanded territory.
“From day one, we have operated as a fundamentally sound business focused on consistent revenue and profit growth. We are excited to bring Verano’s premium brands and operations into Harvest,” said Steve White, CEO of Harvest. “We have the unique opportunity to create truly national brands by deploying these products within the future combined footprint of states and dispensaries. Most importantly, we share the same mission as one new company to improve people’s lives through the goodness of cannabis.”
Pursuant to the binding agreement entered into between Harvest and Verano on March 10, 2019, the parties agreed to enter into a definitive agreement within the next 30 days (the “Definitive Agreement).
Upon closing, Verano shareholders will receive, in the aggregate, a combination of Harvest subordinate voting shares and Harvest multiple voting shares as mutually agreed between the parties, acting reasonably, for a total estimated purchase price of USD $850,000,000 based on a CSE share price of CND $8.79. It is anticipated that the acquisition will close in the first half of 2019.
Closing is subject to the negotiation and execution of a Definitive Agreement, applicable shareholder or unitholder approval, approval of the Canadian Securities Exchange, as well as any other approvals for that are customary for a transaction of this nature. There can be no assurances that the transaction will be completed as proposed or at all. Harvest and Verano have agreed to a mutual termination fee in the amount of US $20 million in the event either party fails to enter into the Definitive Agreement within 30 days from the date of this agreement (other than as a result of an uncured breach by the other party). The transaction was negotiated entirely at arms-length. Verano has approximately US$3.2 million in long term debt which will remain in place following completion of the transaction. Further, completion of the transaction will not result in a change of control of Harvest.
Eight Capital is acting as Harvest’s financial advisor in connection with the transaction and INFOR Financial Inc. is acting as financial advisor to the special committee of Harvest’s board of directors. In addition, Eight Capital and INFOR Financial Inc. have each provided an opinion to the board of directors of Harvest that, as of the date of the opinion and subject to the assumptions, limitations and qualifications on which the opinions were based, the consideration being paid by Harvest in connection with the Transaction is fair, from a financial point of view to Harvest.
New Jersey cannabis supporters received good news this week: adult-use legalization passed another hurdle.
Sen. Nicholas Scutari, author of Senate Bill 2703, said on Feb. 15 that legislative leaders and Gov. Phil Murphy agreed to impose a $42 per ounce tax rate on recreational marijuana. Senate President Steve Sweeney had wanted a 12% levy while Murphy supported a 25% rate.
“We’re closer than we’ve ever been before,” Scutari stated. “However, if I thought we were all done, I’d be the first person calling a press conference.
This was a major topic of discussion at Accelerate Cannabis four days later on February 19 at the New Jersey Performing Arts Center (NJPAC) in Newark. About 150 business people, officials, activists, lawyers and service providers gathered to share ideas about legalized pot in the Garden State. Speakers on a series of panels discussed a wide range of topics from dealing with municipalities to developing new products.
The tax issue had become a stumbling block after the bill passed in two committees and went to the full House and Senate for debate in November.
The state is also working on expanding its existing medical program. After a competitive process wrapped up last year, the Department of Health awarded six new licenses, doubling the number in the state to 12.
New Jersey currently has 41,000 pot patients, more than double the 17,000 when Murphy took office in 2108. The health department has also reduced the fees to participate in the medical program from $200 to $100 and now offers discounts to seniors.
“I want to see those fees continue to come down,” noted assistant health commissioner Jeff Brown, who’s responsible for oversight of the cannabis program. “We’d like the industry to bear the brunt of running the program instead of the patients… We need to get rid of the sales tax on medical cannabis and the rule that patients have to go back to their doctor every 90 days. It should be once a year to check in.” The tax is 7%.
Troy Kaplan, director of new markets for new state licensee, the Chicago-based Verano Holdings, believes New Jersey is an attractive market for businesses, especially for bigger integrated cannabis companies. “Most of these larger companies want to plant their flag in every state,” he commented. “In New Jersey, with the new governor and enhancements in the program, it just made sense to be here.”
The message that cannabis is an effective medicine for many aliments such as arthritis, Lupus and anemia has been lost in all the noise, Dasheeda Dawson, founder and CEO of MJM Strategy, contended. “The face of cannabis has changed and no one on Main Street knows that yet,” she noted. “People need to be re-educated because in some ways we’ve been hoodwinked by Big Tobacco, Big Paper and Big Medicine.”
Dianna Houenou, policy counsel for the ACLU of New Jersey, has been working with lawmakers to push for criminal-justice reform in the legislation, including expunging records for people convicted of marijuana infractions. “We want to see meaningful access to jobs and business opportunities,” she stated. “Advocacy groups have been shouting at the top of their lungs explaining the injustice. You cannot do this work without affirmatively addressing the War on Drugs was created with racist intent.”
Discrimination also extends to women seeking venture capital funding for cannabis businesses, Green Market Report’s Debra Borchardt CEO and co-founder related. “If you’re a female and thinking of raising money, you should know that men just want to invest with other men,” she observed. “The amount of money that women-owned companies raise is far, far lower. I’ve seen men with less experience raising money with just an idea. Then you’ll see a woman-led company with profits and doing everything right and they’ll be like, ‘Well, I don’t know.’ I’m just being honest. If you’re a female-led company, you have to work twice as hard and twice as many hours to get half the money the guys are going to get.”
Panel host Ellie Siegel, CEO of Longview Strategic, which produced the event, recommended that future retail store owners begin early and build a team of service providers, such as security specialists and financial planners. “Now is the time to be situating yourself,” she expounded. “You can’t go in there without a plan. You need to put things in place by deriving what information you can from data points and start to put one foot in front of the other.”
Summing up the general feeling of excitement in the building, Tara Sargente, executive director of the New Jersey Cannabis Industry Association, said it’s about time that adult-use legislation passes in her state. “I don’t believe the sky will fall,” she told Freedom Leaf. “The sky hasn’t fallen in other states. In fact, it’s been a significant fiscal boom.”
Hemp’s been legalized and CBD products are trending. States are pulling in hundreds of millions in tax revenues from legal cannabis sales. At the same time, Federal restrictions still keep business operators in legal limbo and bans on medical cannabis research means US companies are lagging companies in countries like Israel where those studies are legal.
Here, senior cannabis executives weigh in on what keeps them up at night and what they hope for in the coming year
Billions of Dollars and Still Few Banks to Put it In
Access to banking and financial services is the backbone of every company that operates in the United States, said Derek Peterson, chief executive of Terra Tech, a vertically integrated cannabis agriculture company based in California. However, most cannabis businesses still do not have access to basic bank accounts or other financial services like lines of credit, due to federal laws. “Ultimately this affects the entire supply chain and keeps a tremendous amount of the business in the gray market,” he said, “If we're ever to move this industry out of the Dark Ages banking is a top priority.”
Being an entrepreneur in the cannabis business in 2019 is like raising an adolescent child, said Marji Chimes, chief marketing offer for Coda Signature, a manufacturer of cannabis-infused edibles, topicals and concentrates located in Colorado. “Down deep, you profoundly believe in your offspring but on the surface, it is challenging to manage on a daily basis,” said Chimes. And with regulations changing every day, it feels a bit like managing an adolescent’s mood swings. “One minute you know what to expect,” she said, “and the next minute it is something totally different.”
The constantly changing regulatory environment is still a big problem agrees Peter Vogel, chief executive of LeafWire, a Linkedin-like platform with 6,000 members for the cannabis industry, headquartered in Denver. Because cannabis is still federally illegal, entrepreneurs never know if their bank accounts will be shut down or their payment processing accounts will be turned off with no notice, he said. On the marketing side it's more of the same. YouTube pages can get deleted, marketing campaigns turned off, and shipments between states can be held-up or confiscated said Vogel. “Until the federal laws change,” he said, ”entrepreneurs in cannabis face multiple extra hurdles that other businesses take for granted”
CBD Facts vs. Hype
The most challenging aspects of being an entrepreneur in the cannabis/CBD space in 2019 will be balancing CBD science vs. CBD hype, according to Eric Lerner, director of business development, at Jay Pharma an Ontario-based biopharmaceutical company focused on cancer care & Co-Founder of Tikun Olam global, an Israeli company brining 10 years of medical research and products to the US. The science shows promise but cautiously optimistic companies need to follow the evidence and not give the public any false hope or make any unsubstantiated claims. ”Conducting well-controlled, peer-reviewed, double-blinded studies on human patients is the gold standard for companies looking to differentiate themselves in the space,” said Lerner.
2019 also brings new possibilities as medical and recreational markets open and expand across the country. Peter Barsoom, chief executive and founder of 1906, a Denver-based edibles company predicts seniors with leisure time and disposable income will replace stoners as tastemakers. That’s just one of the opportunities Barsoom sees for 2019. He also predicts cannabis will become a top 5 political campaign agenda item and will be one of the single biggest drivers of turnout across all parties. “I don’t know another issue where 60%+ agree,” he said.
Barsoom makes fast-acting edibles and is betting that the growth of edibles and smokeless cannabis products will continue to outpace flower and smokables in 2019 and 2020. Within the category, Barsoom predicts consumers will choose low-dose products designed to address a specific need such as sleep, relaxation, increased energy, etc.
The 2019 cannabis industry is in a consolidation and expansion frenzy, according to George Archos, chief executive of Verano Holdings, a vertically integrated operator of licensed cannabis facilities, so growing in a smart way, efficiently and effectively, is critical. The market is complex though. For operators who want to do business in more than one state, “there are a plethora of licensing applications to be filed, in addition to meeting strict build-out deadlines once you are awarded or acquire a license,” Archos said. It’s a logistical challenge to attract, train and retain experienced talent he said, while securing financing, establishing best practices and building physical facilities, all at the same time.
But with states announcing record-breaking 2018 cannabis sales, it’s an opportunity as well.
Partnership Receives Investment from Greenfield Global CEO
CHICAGO, IL and COACHELLA, CA – February 27, 2019 –Verano Holdings, (Verano™), a national, vertically integrated private operator of licensed cannabis cultivation, manufacturing and retail facilities dedicated to improving lives, today announced it has created an exclusive and controlling partnership with D9 Manufacturing, including a strategic multi-million dollar private investment by Howard Field, President and CEO of Greenfield Global.
D9 is a licensed developer of integrated high capacity, commercial grade cannabis extraction systems for legal cannabis processors. Greenfield Global is a leading producer of high-purity alcohols, solvents and biochemicals. Greenfield’s extensive portfolio includes premium products, regulatory expertise and industry-leading services.
The D9 transaction is a cash and stock deal valued at more than $20 million. Verano expects to use D9’s extraction systems across the country to increase extraction capacity, with the ability to produce over 3000 kilograms monthly per facility. The system also includes formulating special and unique botanical infused super oils for medicinal purposes that are third-party tested, and certified pesticide-free.
“This partnership exemplifies our shared vision of creating a brighter way for cannabis extraction and production of the highest quality products,” stated Ron Goodson, Verano’s President and COO. “The D9 technology will be a transformative addition to Verano by facilitating entry to the California market, producing multiple new revenue streams, expanding brand categories for both CBD and THC products and creating jobs. In an industry where there is a shortage of current FDA and Goods Manufacturing Practices (cGMP) extractors, we plan to license D9 systems to a network of cannabis producer partners to provide white-label production for branded cannabis-infused products. Extraction capacity is critically important, especiallyin infused products,which is the fastest growing segment of the cannabis market. This partnership of combined talents, resources and technology allows for dramatic scaling.”
D9 was the first to develop an integrated, turnkey self-contained, ethanol full-loop cannabis extraction system in California, designed for easy deployment and setup for legal cannabis facilities. Taking a pharmaceutical/food manufacturing approach for operating excellence, D9 instills best Standard Operating Procedures (SOPs) across all levels of current FDA and cGMP in manufacturing operations and safety. D9’s new proprietary system is designed to process 400 pounds of cannabis flower or trim per hour, including full pesticide removal at the molecular level. The system and its technology are designed to meet or exceed today’s pharmaceutical standards. D9’s manufacturing operations will be housed in a newly constructed facility in Coachella Valley, California.
“Verano has a reputation for producing superior, ultra-pure cannabis products at its indoor grow facilities,” stated Ferrel Raskin, D9 CEO. “We’re excited to join forces with this dynamic team and expand D9’s technology enabling Verano to expand into outdoor grow environments where pesticides are pervasive in the soil and air, yet still maintain the highest levels of quality and purity in extracts from all usable plant parts at extremely high production levels. Verano opens the door for us to expand immediately into numerous additional markets, while our systems offer the ability to anticipate and preemptively adapt to regulatory changes with no down time. As federal oversight continues to enter the cannabis industry, manufacturing processes will come under more intense scrutiny, increasing the necessity and value of D9’s processes, services and the brain trust of this partnership.”
Unique to D9, the newly designed, high-sensitivity system can be programmed to isolate individual phytocannabinoids, enabling the automated preparation of custom cannabinoid ratios for specific products. This can allow the branding of oils with unique name and numbering conventions to illustrate purity and trusted performance. These and other custom formulations open the doors to numerous business industry verticals, including: alcohol & spirits; pharmaceutical medicine, new and expanding biotech research of the endocannabinoid system, cosmetics and foods.
“Greenfield Global is a company built on innovation. This opportunity opens the door to developing new products and entering new industries, helping us meet the diverse and demanding requirements of our customers today and tomorrow,” stated Howard Field, President and CEO of Greenfield Global. “We work with partners to develop custom solutions while meeting the highest regulatory standards. The cannabis and hemp market opportunities show immense potential. This partnership puts us on the ground floor with companies like Verano and D9 to ensure we learn, contribute and are well positioned for the future.”
Verano intends to deploy D9’s cannabis extraction systems to increase extraction capacity and throughput across the four production facilities it operates in Illinois, Nevada, Florida, Maryland in addition to facilities currently under development in Massachusetts, New Jersey, Ohio, Oklahoma, Pennsylvania and other areas.
Chicago-based, multistate marijuana operator Verano Holdings announced it is moving into another state through the acquisition of a Massachusetts marijuana business.
Verano said in a news release it has acquired 100% of Four Daughters Compassionate Care of Sharon, subject to review by Massachusetts regulators. Verano would not disclose the exact purchase price but said the transaction is valued north of $30 million.
The acquisition includes:
Verano has stakes in 10 operating facilities in Florida, Illinois, Maryland and Nevada, plus more than 45 licenses under development in Florida, Maryland, Michigan, Ohio and Puerto Rico.