Revenue up 18% Y/Y to $116.7 Million, Excluding Discontinued Operations
Company Delivers Record Adjusted EBITDA(1) of $29.4 Million, up 78% Y/Y, 12% Sequentially, with Adjusted EBITDA Margin of 25%
GAAP Loss from Operations Improved 81% Y/Y, 79% Sequentially to $(4.5) Million, Excluding Discontinued Operations
Aug. 17, 2023 AYR Wellness Inc. a leading vertically integrated U.S. multi-state cannabis operator (“MSO”), is reporting financial results for the second quarter ended June 30, 2023. Unless otherwise noted, all results are presented in U.S. dollars.
The following financial measures are reported as results from continuing operations due to the sale of the Company’s business in Arizona in March 2023, which are reported as discontinued operations. All historical comparisons have been restated accordingly.
David Goubert, President & CEO of AYR, said, “The second quarter represented a meaningful step in AYR’s journey towards generating meaningful cash flow, as we simultaneously got leaner and more efficient while continuing to lay the foundation for revenue growth. We generated record Adjusted EBITDA, up 78% year-over-year with an Adjusted EBITDA margin of 25% and improved our GAAP loss from operations by 81% year-over-year to a loss of $4.5 million. Our efforts around cost savings and optimization accelerated margin expansion ahead of our expectations, and we believe these efforts will enable us to maintain Adjusted EBITDA margin in the mid-twenties for the second half as we unlock working capital through aggressive inventory management throughout the remainder of the year.
“We have also made meaningful progress on improving our liquidity profile in the second quarter. Along with the amendments to various earnout considerations completed in May, we also reached contingent agreements to extend the maturity of $69 million in promissory notes by two years and recently refinanced and upsized our Gainesville cultivation facility mortgage. As a result of the collective amendments to the vendor notes, contingent promissory notes and earn-out payments, and refinancing and upsizing of our Gainesville facility mortgage, we have extended the payment terms of more than $120 million of obligations, inclusive of the $69 million of contingent agreements. These important milestones reflect our commitment to strengthening AYR’s balance sheet, as we are intently focused on improving our working capital and liquidity.
“We are positioning AYR for sustainable long-term growth and profitability across all our markets, while prioritizing the financial health of the Company. As we look to the rest of the year, we plan to accelerate our cash generation via our 2023 optimization plan, making strides in inventory optimization, continuing to align our production with demand, and developing further synergies within our supply chain, retail, wholesale and purchasing functions. Additionally, we believe our ongoing initiatives to grow our Florida footprint, improve operations in New Jersey, and build out retail footprints in Ohio, Illinois, and Connecticut will enable us to accelerate growth in the quarters ahead.”
Second Quarter Financial Summary (excludes results from AZ for all periods) ($ in millions, excl. margin items)
(1) Adjusted EBITDA, Adjusted Gross Profit and Adjusted EBITDA Margin are non-GAAP measures, and accordingly are not standardized measures and may not be comparable to similar measures used by other companies. See Definition and Reconciliation of Non-GAAP Measures below. For a reconciliation of Operating Loss to Adjusted EBITDA as well as Gross Profit to Adjusted Gross Profit, see the reconciliation tables appended to this release.
Second Quarter and Recent Highlights
-- Retail Updates
-- Opened the Company's 86th retail location, subsequent to quarter
end.
-- Q2 retail sales increased 1% sequentially from Q1, with total
transactions up 6%.
-- The Company has opened 10 Florida stores thus far in 2023,
bringing its Florida store total to 62 open locations to date. The
Company plans to exit 2023 with a total of Florida 64 stores,
compared to 52 to start the year.
-- Completed re-brand of full fleet of Florida stores to AYR Cannabis
Dispensary.
-- Announced agreement to acquire third Ohio dispensary license.
-- Announced an exclusive licensing and retail agreement in Florida
with Kiva Confections, a global leader in cannabis edibles. As
previously announced, the agreement will bring Kiva's collection
of award-winning cannabis edibles to the Florida market for the
first time via AYR's retail locations across the state.
-- Corporate Updates
-- Closed the acquisition of Tahoe Hydroponics, an award-winning
cultivator and one of Nevada's top producers of high-quality
cannabis flower.
-- As previously announced, reached an agreement to amend the terms
of contingent consideration under the membership interest purchase
agreements of GSD NJ, LLC and Sira Naturals Inc.
-- As previously announced, reached contingent agreements to defer
approximately $69 million of promissory note payments.
-- Subsequent to quarter end, closed a $40 million refinancing and
upsizing of its existing mortgage for its Gainesville cultivation
facility, contributing a net $14 million of cash proceeds. The new
loan carries an interest rate of 5-year FHLB Rate + 4%.
Financing and Capital Structure
-- The Company deployed $6.7 million of capital expenditures in Q2 and ended
the quarter with a cash balance of $60.0 million.
-- The Company has approximately 77.2 million fully diluted shares
outstanding based on a treasury method calculation.i
-- Subsequent to the quarter end, the Company closed on a $40 million
refinancing and upsizing of its existing mortgage for its Gainesville
cultivation facility. Following the July 7, 2023, paydown of its existing
$25.3 million mortgage, the Company had a pro forma cash balance of $74
million.
-- In 2023, the Company filed an application with the U.S. Internal Revenue
Service ("IRS") for the employee retention credit ("ERC"), as originally
enacted through the U.S. Coronavirus Aid, Relief, and Economic Security
Act. The Company anticipates receiving $12.3 million relating to its ERC
application.
Outlook
The Company remains committed to its financial health and is positioning itself to achieve sustainable long-term growth and profitability across all markets of operation. AYR expects to generate revenue and Adjusted EBITDA growth in the second half of 2023 and into 2024 and to generate positive GAAP cash flow from operations for the calendar year 2023.
AYR’s expectations for future results are based on the assumptions and risks detailed in its Management’s Discussion and Analysis (“MD&A”) for the period ended June 30, 2023, as filed on SEDAR+ and with the U.S. Securities and Exchange Commission (“SEC”).
Tuesday, August 8, 2023, marks the sixth annual observance of National CBD Day
SmartCBDelivery.com Celebrates National CBD Day
Wait, is National CBD Day really a thing? If it’s a thing, how did it become a thing?
For decades now cannabis enthusiasts have marched, rallied, and gotten elevated on April 20, better known as 4/20, an event that started as an after-school weed-smoking break in the 1970s for a group of California high school students, and which evolved into an annual international celebration of all thing’s cannabis. For the past seven years or so, meanwhile, some people have latched on to July 10, or 7/10, as Cannabis Oil Day, a day to give thanks for cannabis oils and extracts. The holiday’s date originated when somebody noticed that the number 710 looks like the word “OIL” when viewed upside down.
Not exactly spontaneous…
“National CBD Day” is August 8, but it has nothing to do with 8/8. Which, if you turn it on its side, is infinity divided by infinity. It turns out that National CBD Day is not the result of impromptu merrymaking. In 2017 a North Carolina-based cannabidiol (CBD) manufacturer known as cbdMD applied to have “National CBD Day” added to the calendar. How do you do that? You state your case to National Day Calendar, a North Dakota-based firm that promotes old and new national holidays via old and new media sources.
“We have a process where companies or individuals can suggest a new national day,” Marlo Anderson, the founder and CEO said.
Committee Approval Required
Anderson said his group gets about 20,000 applications a year for new holidays. “We have a four-person committee that goes through those (applications),” he added, “and if they get unanimous approval then it moves forward.”
The committee discussed cbdMD’s application, and voted it in. A 2018 press release heralding the new holiday said the popularity of CBD (cannabidiol) “has quickly swept the nation, prompting experts to finally acknowledge the significance of the all-natural supplement.”
Happy Marketing Day
These new holidays are often created with brand awareness in mind. According to National Day Calendar’s company website, the benefits of having a new national day, week or month “include news stories, increase in product sales, market visibility, social media engagement, fundraising opportunities for non-profits, brand authority and much more can be generated annually.”
About 20,000 media outlets follow National Day Calendar, and Anderson said he expects National CBD Day to catch on. Come Thursday, August 8, he said, “I’m sure there will be many morning talk shows that will talk about (CBD).”
Make a Thing, Get People to Celebrate It
So is National CBD Day just a way to introduce new customers to CBD products, via a new, consumer-driven holiday?
“What holiday isn’t?” said Anderson, who noted that nearly every holiday has been “made up.”
“If you get enough people who want to celebrate it,” he added, “it becomes something.”
Anderson’s mindset has been validated by many of the CBD Companies which are offering product discounts on August 8.
While none of these prefabricated holidays have yet become official, banks-are-closed national holidays, Anderson said his company expects about 100 million people to be aware of this year’s National CBD Day.
And he observed that some of the celebrations his company has helped create are bigger than some national holidays.
“Try to find a donut-on-Donut Day, for example,” he said.
Inspirational Technologies
We, at Inspirational Technologies are at the forefront of Inspirational and Frontrunners on the frontier of current technology.
We are often faced with our own personal conflicts which directly influence our interactions with our peers and family.
When Inspirational Technologies is an endorsement of the “Cannabis” approach to the medical condition, we say, let’s let the look at the data and the people who say that they benefit for cannabis alternatives.
1st Hemp USA News is a resource of Inspirational Technologies (2021-2023)Inspirational Technologies (2023) AllRightsReservedYour ONE STOP BLOG FOR INFORMATION, EDUCATION, & INSPIRATION OF ESSENTIAL INNOVATION & RENOVATION of You-THANK YOU FOR YOUR INTEREST*This site receives virtually no compensation for sales of some or all mentioned products. We however place humanitarian value over monetary interests. Our monetary income goes back into research, development, discovery and healing.Inspirational Technologies – is Committed to Your Health Wellness Beauty and EnrichmentReporting on Today’s Internal Botanical and Skin Product Benefits
4 Hemp Club was Inspired by Steven Smith’s vision to “Have an older generation 4H Club, where an older community of adults could carry on what the younger 4H Club envisioned.
Our 4H Platform Uses HEMP as an Agricultural Focal Point, deserving of research, development and with the
4 Hemp key points being Health Hope and Happiness, thru Hemp“.
Cannabis CBD and Me Inspirational Technologies Inspirational Technologies (2014) @Inspire123tech Background Noise Studios Logos bySteven M Smith
Interested in growing marijuana in Florida? Unfortunately, home cultivation is prohibited under Florida’s medical marijuana program. If you have been thinking about growing marijuana in Florida, here are 10 things you should know.
1. Growing Marijuana in Florida at Home Is a Crime
Florida’s medical cannabis laws do not specifically cover the cultivation of cannabis. However, Florida law states that possession of 20 grams or less of cannabis is a misdemeanor punishable by up to one year in jail and up to a $1,000 fine. Therefore, growing marijuana in Florida is illegal.
Possession of more than 20 grams of cannabis is a felony. Penalties include up to five years in jail and up to a $5,000 fine.
2. Marijuana Growers Must Be Vertically Integrated
In Florida, medical marijuana companies must be vertically integrated. That means that a company is responsible for the cultivation of marijuana, manufacturing, transportation, and sale of cannabis products to medical patients. Vertical integration has been challenged by cannabis companies but affirmed by the State Supreme Court.
3. Marijuana Cultivation Jobs Are Growing
Florida is third in terms of total full-time cannabis jobs with 31,444 based on 2020’s numbers. In 2020, the state added 14,891 full-time cannabis jobs. Cannabis cultivation jobs are some of the most in-demand positions in the nation.
4. Florida Black Marijuana Farmers are Waiting for a License
After 4 years of waiting for rules to be developed regarding a new medical marijuana license, black farmers are on the verge of being able to apply. The ruling does not indicate when the license applications will begin being accepted.
A 2017 law required the state to grant a special license to “one applicant that is a recognized class member” of the “Pigford Class,” a designated a protected class of black farmers that won a settlement for a speciall license due to the history of racial discrimination by the U.S. Department of Agriculture.
5. 19 More Grow Licenses Must Be Issued
At the moment, Florida has 22 licensed operators in the state. However, the medical program has a schedule requiring new licenses to become available as the patient count rises. With more than 600,000 medical cannabis patients enrolled since the start of the program, the state must issue 19 additional licenses on top of the Black farmer license.
FREE E-BOOK
Learn How To Grow Cannabis!
6. Florida Farmers Can Grow Hemp
The Florida Department of Agriculture and Consumer Services (FDACS) provides farmers with a Hemp Cultivation Portal that allows them to submit applications for permits to grow hemp in Florida.
7. Home Cultivation Proposals Have Failed Several Times
Florida’s road to recreational cannabis legalization has been a failure. A recent citizen’s initiative to legalize recreational cannabis and allow adults to grow weed at home was struck down by the Supreme Court due to misleading language in the ballot initiative.
A new initiative by Regulate Florida is aiming to gain approval and enough signatures after it was rejected by the Supreme Court earlier in the year. It is unclear whether Florida will pass legal cannabis soon.
8. Florida Has an Optimal Grow Climate
Florida’s sunny climate makes it a perfect environment for growing cannabis. However, the state also experiences extreme levels of heat and humidity, which can negatively affect marijuana plants.
Florida’s fertile and healthy soil is ideal for sativa plants. Its optimal cannabis climate has made the Sunshine State the third largest indoor cannabis producer in the nation.
9. Only One Man Can Grow Cannabis at Home
Only one person in the State of Florida is legally allowed to grow marijuana at home. In April 2018, A Florida Court ruled that Joe Redner can grow cannabis at home for medicinal purposes. However, only he is allowed to grow marijuana in Florida.
“
There are over 300,000 jobs in the cannabis industry. CTU trained me for one of them!
The judge’s ruling said that Redner is “entitled to possess, grow, and use marijuana for juicing, solely for the purpose of emulsifying the biomass he needs for the juicing protocol recommended by his physician.”
10. Florida A&M University’s Hemp Cultivation Research
Florida A&M University (FAMU) has partnered with three hemp producers to research the best hemp varieties to grow in Florida’s climate. Researchers hope to identify strains that will “thrive safely, efficiently, and cost effectively” in Florida. In addition, the research intends to determine the best soil preferences and best practices for growing hemp in Florida.
Enroll in Cannabis Training University
Knowing Florida’s state regulations can help you use cannabis safely and legally. If you want to get a complete cannabis education, enroll in Cannabis Training University’s online marijuana school. Our complete curriculum covers all state laws, laws in Canada, and cannabis laws in several countries around the world.
We, at Inspirational Technologies are at the forefront of Inspirational and Frontrunners on the frontier of current technology.
We are often faced with our own personal conflicts which directly influence our interactions with our peers and family.
When Inspirational Technologies is an endorsement of the “Cannabis” approach to the medical condition, we say, let’s let the look at the data and the people who say that they benefit for cannabis alternatives.
1st Hemp USA News is a resource of Inspirational Technologies (2021-2023)Inspirational Technologies (2023) AllRightsReservedYour ONE STOP BLOG FOR INFORMATION, EDUCATION, & INSPIRATION OF ESSENTIAL INNOVATION & RENOVATION of You-THANK YOU FOR YOUR INTEREST*This site receives virtually no compensation for sales of some or all mentioned products. We however place humanitarian value over monetary interests. Our monetary income goes back into research, development, discovery and healing.Inspirational Technologies – is Committed to Your Health Wellness Beauty and EnrichmentReporting on Today’s Internal Botanical and Skin Product Benefits
4 Hemp Club was Inspired by Steven Smith’s vision to “Have an older generation 4H Club, where an older community of adults could carry on what the younger 4H Club envisioned.
Our 4H Platform Uses HEMP as an Agricultural Focal Point, deserving of research, development and with the
4 Hemp key points being Health Hope and Happiness, thru Hemp“.
Cannabis CBD and Me Inspirational Technologies Inspirational Technologies (2014) @Inspire123tech Background Noise Studios Logos bySteven M Smith
AYR Cannabis Dispensary Strengthens Florida Retail Footprint with Three New Locations
MIAMI, July 17, 2023 (GLOBE NEWSWIRE) — AYR Cannabis Dispensary, a cannabis retail chain owned by AYR Wellness, Inc. (CSE: AYR.A, OTCQX: AYRWF) (“AYR” or the “Company”), a leading vertically integrated U.S. multi-state cannabis operator (“MSO”), today celebrated the opening of three retail locations in Orange County, Florida. The opening of AYR Cannabis Dispensary locations Orlando (UCF), Winter Haven and Orlando (N. Orange Blossom Trail) expand the Company’s retail presence to 62 locations throughout Florida and brings AYR’s total footprint to 86 stores nationwide.
“We are proud to see our Florida retail footprint exceed 60 locations as we further broaden our reach across the state,” said Sevi Borrelli, AYR’s General Manager, Florida. “Our patients in Florida are our top priority as we launch new initiatives and drive growth for our Company. With nearly one million registered patients across our home state, I am thrilled to see us continuing to evolve our retail presence while building long-lasting relationships with our communities.” Patients are invited to celebrate the opening of the Orlando (N. Orange Blossom Trail) retail location on Thursday, July 27. The grand opening celebration will begin with a ribbon-cutting ceremony at 8:45 a.m. ET, followed by games, prizes, music and refreshments. Each dispensary will offer AYR’s suite of national brands and products. Additionally, consumers and medical patients at each dispensary can access special discounts, rewards and prizes by enrolling in the AYR Cannabis Dispensary Loyalty Program.
AYR continues to expand its presence in Florida, opening 10 new dispensaries statewide through the first seven months of 2023. The Company previously celebrated the opening of dispensaries in Tarpon Springs, Winter Haven, Palatka, Lake Mary, Land O’ Lakes, Orlando and Palmetto Bay earlier this year. To learn more about the company’s nearby dispensaries, product offerings or future openings, please visit http://www.AYRwellness.com.
We, at Inspirational Technologies are at the forefront of Inspirational and Frontrunners on the frontier of current technology.
We are often faced with our own personal conflicts which directly influence our interactions with our peers and family.
When Inspirational Technologies is an endorsement of the “Cannabis” approach to the medical condition, we say, let’s let the look at the data and the people who say that they benefit for cannabis alternatives.
1st Hemp USA News is a resource of Inspirational Technologies (2021-2023) Inspirational Technologies (2023) AllRightsReserved Your ONE STOP BLOG FOR INFORMATION, EDUCATION, & INSPIRATION OF ESSENTIAL INNOVATION & RENOVATION of You- THANK YOU FOR YOUR INTEREST *This site receives virtually no compensation for sales of some or all mentioned products. We however place humanitarian value over monetary interests. Our monetary income goes back into research, development, discovery and healing. Inspirational Technologies – is Committed to Your Health Wellness Beauty and EnrichmentReporting on Today’s Internal Botanical and Skin Product Benefits
4 Hemp Club was Inspired by Steven Smith’s vision to “Have an older generation 4H Club, where an older community of adults could carry on what the younger 4H Club envisioned. Our 4H Platform Uses HEMP as an Agricultural Focal Point, deserving of research, development and with the 4 Hemp key points being Health Hope and Happiness, thru Hemp“. Cannabis CBD and Me Inspirational Technologies Inspirational Technologies (2014) @Inspire123tech Background Noise Studios Logos bySteven M Smith
Florida Gov. Ron DeSantis (R), a 2024 Republican presidential candidate, has signed a bill banning sales of any consumable hemp products—including cannabis “chewing gum”—to people under 21, an expansion of an existing prohibition on young people being able to purchase smokable hemp.
The legislation, SB 1676 from Sen. Colleen Burton (R), was signed into law last week and took effect on Saturday. It also creates penalties for businesses that market hemp in a way that’s appealing to children and bans products that look like candy or are manufactured “in the shape of humans, cartoons, or animals.”
The bill prohibits the sale of hemp extract “including, but not limited to, snuff, chewing gum, and other smokeless products” to people under 21. A person who violates the revised statute would be subject to a second degree misdemeanor for a first offense and a first degree misdemeanor for a second or subsequent offense within one year of the initial violation.
“Hemp extract products found to be mislabeled or attractive to children are subject to an immediate stop-sale order,” the measure also says.
Additionally, the newly implemented law imposes rules on hemp product packaging. It requires, for example, that the containers mitigate “exposure to high temperatures” and do not appeal to children.
Further, the bill amends statute to make it so hemp products can only be sold if they are “processed in a facility that holds a current and valid permit issued by a human health or food safety regulatory entity with authority over the facility, and that facility meets the human health or food safety sanitization requirements of the regulatory enti
The legislation as introduced would have capped the THC limit for hemp products, but that was amended out in a House committee in April following significant pressure from hemp industry representatives.
DeSantis signed the bill without specifically commenting on it.
The governor separately signed a measure last week that prohibits sober living facilities from allowing residents to possess or use medical marijuana, even if the patient is certified by a doctor to legally use cannabis therapeutically in accordance with state law.
DeSantis’s marijuana policy comments and actions have come under the spotlight since he entered the race—and especially since he said recently that he would not decriminalize cannabis if he’s elected to the White House.
He argued, among other things, that marijuana use hurts the workforce, inhibits productivity and could even lead to death if contaminated. The position has earned him criticism, including by Democratic presidential candidate Robert F. Kennedy Jr.
DeSantis also talked about Florida’s medical marijuana program that was enacted by voters, saying military veterans are “actually allowed access” to cannabis under that model. But he said the issue is “controversial because obviously there’s some people that abuse it and are using it recreationally.”
“Misunderstood”
The Hemp Story
Several Republican 2024 presidential hopefuls have also addressed drug policy issues in recent weeks.
For example, former President Donald Trump seemed confused during a recent interview when he was confronted with the fact that his proposed plan to impose the death penalty on drug traffickers would have condemned a woman he pardoned and promoted as an example of a key criminal justice reform achievement during his administration.
At a CNN town hall event last month, former New Jersey Gov. Chris Christie (R) said that he would “end” the war on drugs if elected, emphasizing the need for a treatment-based approach to people experiencing addiction—while at the same time maintaining that he’d seek to increase enforcement against those who sell drugs.
We, at Inspirational Technologies are at the forefront of Inspirational and Frontrunners on the frontier of current technology.
We are often faced with our own personal conflicts which directly influence our interactions with our peers and family.
When Inspirational Technologies is an endorsement of the “Cannabis” approach to the medical condition, we say, let’s let the look at the data and the people who say that they benefit for cannabis alternatives. Inspirational Technologies (2023) InspirationalTech.org for your Health Wellness Beauty and Inspirational Goals
For More Information on Cannabis and CBD and YOU. Click On the Following Link
1st Hemp USA News is a resource of Inspirational Technologies (2021-2023) Inspirational Technologies (2023) AllRightsReserved Your ONE STOP BLOG FOR INFORMATION, EDUCATION, & INSPIRATION OF ESSENTIAL INNOVATION & RENOVATION of You- THANK YOU FOR YOUR INTEREST *This site receives virtually no compensation for sales of some or all mentioned products. We however place humanitarian value over monetary interests. Our monetary income goes back into research, development, discovery and healing. Inspirational Technologies – is Committed to Your Health Wellness Beauty and EnrichmentReporting on Today’s Internal Botanical and Skin Product Benefits
4 Hemp Club was Inspired by Steven Smith’s vision to “Have an older generation 4H Club, where an older community of adults could carry on what the younger 4H Club envisioned. Our 4H Platform Uses HEMP as an Agricultural Focal Point, deserving of research, development and with the 4 Hemp key points being Health Hope and Happiness, thru Hemp“. Cannabis CBD and Me Inspirational Technologies Inspirational Technologies (2014) @Inspire123tech Background Noise Studios Logos bySteven M Smith
Since the beginning of 2023, five new recreational markets have launched, including New York, Missouri and Maryland, where sales began on Saturday. Those states alone added 37 million people to the legal weed column.
But that’s left plenty of holdouts — overwhelmingly in more conservative territory, particularly in the deep South. And there are increasing signs of a legalization backlash in deep red America: Voters in four states — Arkansas, Oklahoma, North Dakota and South Dakota — have rejected adult-use referendums in the last nine months. Every county in Oklahoma voted against a March referendum that would have legalized possession and sales for adults.
“The lower hanging fruit are increasingly picked,” said Karen O’Keefe, director of state policies at legalization advocacy group Marijuana Policy Project. “It’s going to require moving into states that are in many respects more challenging.”
Here’s a look at this year’s legalization action and what potentially lies ahead:
Legislation passed
MARYLAND
Adults lined up to buy legal weed on July 1, less than two months after lawmakers sent Democratic Gov. Wes Moore legislation establishing a recreational market. The state sold nearly $10.5 million worth of weed during its first weekend of sales. Making such a tight deadline to launch sales was a feat in itself, in part spurred by policymakers’ concerns that an illicit market could become more entrenched if the rollout took longer. That meant allowing existing medical marijuana operators to be the first to serve the adult-use market, which could make it more difficult for social equity applicants — entrepreneurs from marginalized groups who are prioritized for licensing — to break in when the state issues additional licenses in January.
Lawmakers are sure to return to the issue in next year’s legislative session. Democratic state Sen. Jill Carter — a key legalization advocate — praised a provision that would direct 35 percent of cannabis tax revenues to a fund for community reinvestment for areas that were disproportionately impacted by marijuana enforcement. But she’s concerned that the bill does not get rid of criminal penalties for distribution, nor does it provide a pathway for unlicensed weed sellers to get into the regulated industry.
“They need us to be intentional about bringing them into the fold,” Carter said.
MINNESOTA
Minnesota has forged its own unique legalization path. The state enacted a medical program in 2014, but didn’t allow smokable flower products to be sold until 2022. Then last July, the state legalized low-potency, hemp-derived beverages and edibles. The launch of that market sparked a boomlet of new cannabis businesses, but also raised public health concerns due to the lack of licensing and testing requirements.
Democrats won full control of the legislature in November, opening a pathway to full legalization. In May, a bill legalizing possession and sales for adults cleared both chambers — by just one vote in the Senate.
“We successfully avoided some of the pitfalls that in other states have led to the continuation of the illicit marketplace,” said Democratic state Rep. Zack Stephenson, the chief sponsor of the House bill, citing lower taxes and tough penalties for illicit sales as two important elements. “We created a lot of incentives to participate in the fully regulated marketplace.”
The recreational market isn’t expected to launch until 2025, although Democratic Gov. Tim Walz has suggested that Native American tribes could start adult-use sales much earlier.
DELAWARE
For the past five years, Democratic state Rep. Ed Osienski has been trying to legalize adult-use cannabis in the First State. This year, the indefatigable legalization advocate managed to shepherd a pair of cannabis bills to Democratic Gov. John Carney‘s desk in March: one to legalize marijuana possession for adults and another to set up a regulated market.
While Carney remains opposed to legalization — he vetoed one of Osienski’s bills last year — the governor allowed the bills to become law without his signature.
“My views on this issue have not changed,” Carney said in a statement. “I believe we’ve spent far too much time focused on this issue. … It’s time to move on.”
The licensing process for the adult-use market will begin in the summer of 2024.
Lawmakers overwhelmingly passed legislation in March establishing a medical program after years of failed efforts. The stumbling block had long been the Senate, but both GOP-led chambers backed the bill this year by two-to-one margins. The bill was strongly supported by Democratic Gov. Andy Beshear, who previously issued an executive order legalizing marijuana possession for medical purposes.
However, Kentucky’s program will include some significant restrictions: home cultivation and smokable products won’t be permitted, and there will be potency caps on all products. The program isn’t expected to launch until 2025.
“The legislation is not going to allow the industry to flourish as it should,” said C.J. Carter, director of the Kentucky chapter of Minorities for Medical Marijuana.
Legislation still alive
NEW HAMPSHIRE
A familiar story played out this legislative session in New Hampshire: the House passed an adult-use legalization bill, only for the proposal to die in the Senate in May.
Sununu’s newfound support for a marijuana monopoly model spurred lawmakers in the House to briefly consider attaching such a proposal to separate legislation. Though that effort ultimately did not go anywhere, lawmakers ended up sending a bill to Sununu’s desk last week that would create a commission to study state-controlled cannabis sales. The commission is tasked with producing a report that proposes legislation by Dec. 1.
NORTH CAROLINA
A bill to legalize medical marijuana is stuck in the North Carolina House. The bill passed the state Senate by a vote of 36-10 earlier this year — as it did last year — and now is running into procedural hurdles in the House.
House Speaker Tim Moore (R) told local news that he won’t bring the bill to the floor until a majority of Republican lawmakers say they’ll vote yes, something he says he does with every bill. Senate Rules Committee Chairman Bill Rabon (R) — the lead sponsor of the legislation — in retaliation added an amendment to an unrelated bill not allowing it to become law unless the medical marijuana legislation is also enacted.
If the bill can make it through the House, it will likely be signed by Democratic Gov. Roy Cooper, who supports medical marijuana legalization.
Market launches
CONNECTICUT
Connecticut launched recreational weed sales in January after legalization was approved in 2021. Existing medical marijuana dispensaries were the first to be able to serve customers over age 21, while social equity businesses were able to follow soon after through partnerships and joint ventures with established businesses.
Before the adult-use market could launch, Connecticut’s law required that there be a total of at least 250,000 square feet of approved grow space to ensure medical marijuana patients would have enough supply. Adult-use cannabis sales have been growing every month, while medical marijuana sales started falling in March. The state saw nearly $23 million in cannabis sales in May.
MISSOURI
Missouri’s new adult-use marijuana market is off to a robust start, with sales skyrocketing after the launch in February. The state surpassed $1 billion in marijuana sale this May.
The state also saw a 350 percent increase in cannabis industry jobs over the past year, surpassing all other state markets in job growth, according to a recent report from cannabis recruitment firm Vangst.
However, Missouri has not yet awarded microbusiness licenses, which were included in the legalization framework as a way to help small entrepreneurs and people harmed by disproportionate drug enforcement. The framework faced criticism from grassroots advocates during the legalization campaign because it bars microbusiness licensees from doing business with other licensees.
MISSISSIPPI
The Magnolia State’s much-anticipated medical market launched in late January. The relatively wide-open licensing rules have enticed lots of weed entrepreneurs to set up shop. More than 300 businesses have received licenses, including roughly 180 dispensaries.
But those businesses will be competing for a pretty small group of customers, owing to relatively stringent enrollment rules.
Lawmakers made changes to the program this year in hopes of making it easier to enroll. Among the adjustments: The Mississippi Department of Health will only have 10 days to approve a patient’s application, down from 30 days previously; and health care providers will be permitted to assist their patients in filling out the necessary paperwork to get a medical card.
Alabama is still working on implementing its medical program after lawmakers passed a bill to legalize medical cannabis last year. The state has the distinction of offering the most difficult application process of any state, according to industry officials with experience applying for licenses in restrictive medical programs.
As has become expected in any merit-based, limited license cannabis program, regulators have run up against legal challenges from applicants who lost out on the potentially lucrative licenses. It’s unclear whether the program will be able to launch sales by the end of the year as expected, after a judge enjoined state regulators from issuing final licenses amid litigation.
An effort to put a recreational use referendum on the ballot next year is being almost entirely bankrolled by Trulieve, the state’s largest cannabis operator. If successful, it could have significant political ramifications for next year’s presidential election as well, potentially reshaping turnout in a massive state that’s always crucial in national votes.
The legalization campaign has already collected in excess of 1 million signatures, surpassing the threshold needed to make the ballot. But Republican Attorney General Ashley Moody has asked the state Supreme Court to reject the legalization petition, arguing that it misleads voters in several ways, including by failing to point out that the drug remains illegal at the federal level.
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The Buckeye State has two potential avenues to legalize adult-use marijuana: Voters could have a chance to weigh in on a ballot initiative in November, or the state legislature could pass a bill. But legalization bills have gone nowhere in previous sessions, and a ballot initiative was rejected by voters in 2015.
For one, the group leading the push — the Coalition to Regulate Marijuana Like Alcohol — has learned from the failed 2015 initiative, which proposed a marijuana monopoly of 10 cultivation licenses for the campaign’s wealthy backers. This year’s initiative does not create a monopoly and would impose a relatively low 10 percent tax rate on adult-use sales. The campaign expects to turn in more than enough signatures to make the November ballot on July 5.
Meanwhile, a bipartisan pair of lawmakers introduced a bill to legalize recreational marijuana, which could serve as another avenue for legalization if the ballot initiative does not succeed.
Other states:
Advocates are aiming to get adult-use marijuana on the ballot in South Dakota in 2024, after a question failed at the polls in 2022. They’re also working to get medical marijuana questions before voters in Nebraska, Idaho and Wyoming — the latter two states could also see decriminalization initiatives at the ballot box in 2024.
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