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Illinois' Record Year at $2Bill.                                           View this email in your browser
Vol. 9, No. 2 --  January 7, 2022--  Edited by Dr. Lloyd Covens
2022's Leaders Ready for Launch--  West420 calculated the relative market share of the top20 global cannabis leaders as the new year begins.  Major mergers and acquisitions from this group will change the future MJ landscape forever, and that doesn't consider further interest from consumer products goods(CPG), liquor and beverage giants, pharma or the tobacco sector.   Pressure on the (orange) Canadian group will accelerate, on the (red) next largest MSOS (multi-state operators) who join--or outgrow-- market leaders like Verano, Cresco or Columbia Care.  Non-retail sectors in green further fill-out the major movers in cultivation, CBD (Charlottes's Web)  and the soon-to-boom cannabis synthetics, as pioneered by GW Pharma.  And privately-held firms--like PharmaCann/LivWell-- will also be targets, but global growth means new European corporations will be on this "word-map" soon.  For more, see the well-researched group of "22 for 2022" leaders who will shape the year, also representing 9 of our list of 20.  See the mgRetailer choice for MJ movers at  https://lnkd.in/gNfP_XTP

Montana REC Frontier Opens With 350+ Dispensaries 

            The Big Sky Country's outdoor majesty is an annual draw for more than 10 million visitors--and judging by the plethora of current MMJ adding RMJ offerings, business planning must rely on tourism much more than the native Montana population.  And after the Jan. 1st successful launch of adult-use in 10-degree weather, many of the existing 380 storefronts will operate without new competition until mid-2023.   Industry analysts have predicted first year RMJ sales of $180Mil up to a possible $217Mil is combined RMJ/MMJ sales.  Results from the
state's opening weekend of Jan. 1-2 saw nearly $1.6Mil. in RMJ($1.99Mil in total sales with MMJ), with an estimated $323,000 flowing to state tax coffers.


       "These folks have put their heart and souls in it," meaning the high cost to add RMJ access,  notes Ariana Newton, a Montana native who has joined the state MJ lobby/advocacy community to fight for smart regulations from Montana oversight in the Dept. of Revenue.  "Others have decided to get out of retail, and become wholesale operations," said Newton, hinting at the tough times ahead as RMJ consumers decide who will likely gain profitable market-share with too many retailers in operation.  Newton notes that former MMJ-only operators were able to pay overhead because patients were "tethered" to a single dispensary, and it was difficult to move.  But with the state's 56,000 cardholders (about 8 percent of the adult population) it may become harder to attract enough RMJ traffic to pay for the much higher costs (ie., 20%-plus taxes) of adult-use while waiting to see if the major Summer/Fall tourist trade will be major cannabis buyers. 

In its quest to protect local, existing MMJ licensees from out-of-state and MSO entrants, state regulations keeping out any new licenses until July, 2023 will also have the effect of restricting much-needed new investment to stay in the RMJ game.  Aside from a "Cookies" franchise of stores (which is being run by locals) all other retailers are owned by Montana residents, and the rules for in-state consolidation also make it difficult to see co-owned regional store chains from developing.  MJ advocates also hope that potential MJ clients will shop from still-illegal surrounding states like Idaho, Wyoming, North Dakota and even the potential consumer traffic heading to Kalispell  from the southern regions of adjacent Canadian provinces in Alberta and Saskatchewan.

 

With the completion of implementation rules from Montana's department of revenue (and with guidance from the legislature's HB-701) Montana has added new wrinkles to the regulatory scheme.  Among the rules:

  • Cannabis flower will be capped at a maximum of 35% THC;  Each home may grow four plants;

  • CBD and derivatives will be allowed to be sold in dispensaries, however smokable hemp and Delta-8 are not allowed for sale;
  • Expungement of minor cannabis offenses is possible, but will be driven by former offenders filing expensive requests, with initial motions to expunge barely topping 150;
  • No provision for social consumption clubs are in bill 701, although dispensary-adjacent "tasting rooms" may be allowed;
  • Rules for Montana's 12 native tribes to sell cannabis from reservation venues remains unclear; (only one dispensary is active as of launch day).
  • Advertising use of the term "cannabis" will be curtailed so that consumers won't be confused into not knowing that the term also describes "marijuana".

          "As the legislature meets again in 2022, it is likely that certain updates and changes will occur with the initial RMJ rules" says Newton, who hopes sustainability/energy challenges will be addressed for the 90% indoor cultivation state producers.   And Newton expects new attempts to add various local  and state taxes to the new adult-use sales, she also notes that the "purple-state politics" make it easier to fight for lower overall taxes, given Montana's libertarian streak.  Further clarification in Helena may address additional rules for the entry of deep-pocketed national multi-state operators.

    Opt-in counties (see map below) will automatically include those who voted 51% plus for the 2020 RMJ ballot issue while opt-out counties will be those who voted against I-190.  With an overall 57%-to-43% affirmative statewide vote, Newton estimates that 90 percent of state residents will be living in so-called "green" (opt-in) counties. Local governments will be allowed to switch their opt-in or opt-out status by a  local vote.


New Year's Day kicks off sales all over Missoula, with eager customers lining up at Spark 1 Montana (left). Former college pals reunite for WeedDay, Dancing Goat budtender Mariah Ray  (left) and West420 correspondent Ariana Newton.  Bottom:  Green counties host over 440 Montana locations. (PHOTOS BY ARIANA NEWTON).  Enjoy an insider view from WeedTube's correspondent Ariana Newton with West420 editor Lloyd Covens in a new "Talking Legal" podcast.

Congress, FDA, DEA and FTC all pitched in to resist helping the U.S. hemp industry cope with a myriad of problems, including designation of CBD as a safe dietary supplement, eligible for inclusion in food and beverage(California will allow that in 2022).  The 19-min. video summary above is provided by the U.S. Hemp Roundtable which is prioritizing passage of HB-841.      .
MJ dispensary guard, Dominique Trumaine Ware, 33, above, was the victim of  yet another savage killing by gunman coming for the cash at a South Los Angeles store in mid- December.  LA cops arrested three suspected shooters, however until Senate leaders Chuck Schumer and Mitch McConnell allow a vote on the SAFE Banking act, these senseless killings will continue in the targeted, all-cash cannabis industry.    Please help out the Dominique's  family with funeral expenses by visiting his "GoFundMe" memorial at https://www.gofundme.com/f/dominques-funeral-expenses  and re-double your support for SAFE banking action in 2022.
CANNABIS News Briefs.......
        Even while an additional 184 new licenses wait to open (while they sue each other over scoring issues) Ilinois's first 110 MJ stores are expecting to surpass $2Bil in combined sales for 2021, nearly double of the prior year.  The record sales place also has delivered more than $385Mil. in state taxes-- surpassing state alchol tax collections by $120Mil.     As Illinois Gov. J.B . Pritzker is happy to boast almost one-third of all sales coming from surrounding states with no recreational access-strong customers from Indiana, Wisconsin, Missouri and even Iowa.    Illinois generated $1.03 billion in total cannabis sales during 2020, including $669 million in RMJ sales, and more than $366 million for its MMJ program.  Illinois continues to be host to several of the country's  largest MJ multi-state operators--Green Thumb Industries, Cresco Labs, PharmaCann, and Verano Holdings-- while Chicago's iconic Wrigley family are set to also become a dominant cannabis player as well.

With a new state law passed, 2022 will be the year when Las Vegas brings "big nightclub-type venues" to adult cannabis social consumption clubs.  In 2017, Nevada instituted a two-year moratorium on MJ clubs, but with last year's new legislative rules, it appears that Vegas giant Planet13 will be first--(of perhaps 19 total venues) to open for non-gaming consumption.  Over the past 3 years, Native American owned NUWU Cannabis has hosted a smaller cannabis tasting cafe at its downtown Vegas location. But Planet13 hopes Spring, 2022 will kick off its two-story, 8500 square foot indoor disco/party club, with a 5000 sq/ft. outdoor balcony with a massive 4-foot deep wading pool.  Clark county commissioner Tick Segerbloom -- credited as the "father of Nevada cannabis"--says he will organize industry stakeholder meetings early in 2022 to finalize local rules.  Sigerbloom said "I don't want to get too far behind either because this is going to be a huge industry."

           After months of Denver social equity outreach, the first social equity MJ cultivation center--Kilo Enterprises-- has been approved with hopes to start growing in March.   As a prior MJ offender, Ivan-Omar Rodriquez-Serrato successfuly applied for the first social equity cultivator license in 2021, and joined with partner Karen Riley to form Kilo to grow in west Denver.   Denver licensing is disappointed to report slow pickup for new social equity delivery/transport services who have found slack demand (12 retailers) with few contracts for delivery from more of  Denver's 400-plus dispensaries.


Link-of-The-Week:    Cancer and cannabinoids.  It is one of the most contentious subjects within the entire medical cannabis sector.  Project CBD contributor Nate Seltenrich collects some key analysis on the near-term prospects for new research on cancer and and cannabinoids. "Federal prohibition of cannabis, promising research into the anti-carcinogenic effect of cannabinoids – backed by anecdotal accounts of cancer remission induced by cannabis oil extracts – have not yet been translated into clinical trials." writes Seltenrich, adding "Much work still needs to be done to establish that cannabis and cannabinoids can fight cancer in humans, including as an adjunct to other therapies like chemo and radiation, and to integrate their use into treatment protocols." Story at: https://bit.ly/3qTkIUI

       Even as unlimited millions are being thrown around on big MSO takeovers-- in 2021 Curaleaf spent nearly over a half-billion dollars acquiring Tryke, Bloom(Arizona/Nevada), Los Suenos Colorado outdoor growers, Europe's EMMAC and Natural Remedy Patient Center-- a smaller $120Mil deal has seen the sale of Denver-based MJBiz/Anne Holland Ventures to event giant, Emerald-X.  The all-cash deal will reportedly leave the entire editorial/trade show contingent in place, and MJBiz execs could also earn additional incentive dollars.  Pre-COVID, MJBiz offered a summertime show called NEXT, hosted in New Orleans.  In 2018, MJBiz held a Luxembourg conference, and also another event in Colombia, but the company says it will only continue with this year's planned  Emerald Science conference in San Diego (Feb 27-March 1), and its world-leading Las Vegas 30,000-plus gathering again at the convention center,  next Nov. 15-18th.
The massive annual growth of MJBiz Con (see timeline below)has helped drive the multi-year expansion of the cannabis industry itself.  Co-founder Cassandra Farrington recalls when her team went to skeptical Las Vegas venues totally against bringing a cannabis show to Sin City.
   This week, Farrington told West 420 in a 2014 meeting with the RIO Hotel, " we emphasized that MJBizCon is a B2B event connecting the suppliers with the cultivators, retailers and processors," she said, adding :" We were then-- and now have remained-- non-plant touching. Our assurances that there would not be active product displayed or sampled at the event gave them the comfort they needed to move forward.”  From the opening of the RIO show in 2015 the industry has seen six years of un-precedented show growth has mirrored global MJ growth.
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