Cresco Labs snaps up Origin House in a landmark deal, Ontario’s marijuana retailers open for business, two U.S. Senate heavyweights ask federal regulators to open financial services to the hemp industry – plus other important news from around the cannabis space.
Cresco Labs, a Chicago-based multistate operator, agreed to acquire Origin House, a Canadian distributor of branded cannabis products with a dominant presence in California, in a deal valued at $823 million. It is the largest acquisition in the U.S. of a publicly traded cannabis company.
MJBizDaily takeaway: Cresco’s acquisition gives the company huge exposure in the vital California market. It also marks a different strategic approach versus other multistate operators (MSOs) that have acquired MSOs to increase their geographical footprint. Cresco, by contrast, has focused on brands and distribution.
In an out-of-court settlement, the Florida health department allowed medical marijuana retailer Trulieve to expand to 49 locations, 14 more than allowed by the current cap system established by a 2017 law that other MMJ retailers must abide by. Trulieve now has 27 dispensaries.
MJBizDaily takeaway: The settlement is good news for Trulieve but bad news for other Florida MMJ companies. By leaving the cap in place while letting Trulieve open 14 more stores than its rivals gives the Florida MMJ giant a significant edge. The question is how long will it last, as competitors that also had stores open before the cap – including Modern Health Concepts, Surterra and Knox Medical – may well ask to be exempted from the cap like Trulieve. “Without a doubt, I think they will,” said Jeffrey Sharkey, president of the Florida Medical Marijuana Business Association.
Drugstore giant Walgreens is joining rival CVS in selling hemp-derived CBD products. Walgreens plans to bring products to shelves in 1,500 stores across nine states.
MJBizDaily takeaway: The Walgreens and CVS announcements are the strongest signals yet that mainstream retailers aren’t waiting on the U.S. Food and Drug Administration to come up with rules for selling nonprescription CBD. Years of light enforcement from the FDA on CBD, combined with a proliferation of online CBD retailers, have emboldened retailers with large brick-and-mortar footprints to try to capture the CBD trend.
Owners of unlicensed medical cannabis retail stores in Michigan are breathing a sigh of relief after regulators allowed them to stay open for business past a March 31 deadline.
MJBizDaily takeaway: Allowing these dispensaries – totaling some 50 – to remain open will save thousands of dollars in lost sales, help to prevent product shortages and keep patients from seeking out medical cannabis elsewhere, including on the illicit market.
Sens. Mitch McConnell, a Kentucky Republican, and Ron Wyden, an Oregon Democrat, urged four U.S. regulatory agencies to open financial services to the hemp industry now that the plant is legal under the 2018 Farm Bill.
MJBizDaily takeaway: Banking problems persist for hemp businesses, despite the Farm Bill’s passage. The letters from McConnell and Wyden, who co-wrote the Hemp Farming Act, boosts the hemp industry’s chances of accessing capital and lending services before the 2019 planting season.
A Colorado House committee approved a bill that would allow home delivery of medical cannabis next year and recreational marijuana in 2021.
MJBizDaily takeaway: Home delivery – if passed by the Democratic-controlled Legislature and signed into law by Gov. Jared Polis – could result in additional sales for existing marijuana businesses as well as new opportunities for MJ transporters.
