California Cannabis Tax Increases to 80% and Germany Buys 650 Kilos
By: Infinity Broadcast Network
Democratic Senator Adam Ebbin prefiles a bill to decriminalize marijuana possession, lowering the penalty for holding up to an ounce from a 500 dollar fine and 30 days jail time to a maximum 50 dollar civil penalty. Cannabis reform has been a priority for Governor Ralph Northam, however, with Democrats reclaiming the majority in both legislative chambers last month, the current effort is expected to be more successful than previous ones.
In Massachusetts, vertically-integrated cannabis provider Sira Naturals announces that its employees are set to join the local chapter of the United Food and Commercial Workers Union. Sira, which is the first marijuana company in the state to unionize its workforce, hopes to set a new standard for the emerging regulated industry.
Lawmakers introduce new legislation for medical marijuana businesses. Aspects of the two introduced bills include limits on associations between medical cannabis treatment centers and retail facilities, prohibition against retailers producing products, and preferential treatment for minority and citrus farmers. These proposals would completely dismantle the state's current vertical integration requirement on MMJ companies, if the Florida Supreme Court doesn't do so first.
In finance, Cresco Labs enters into sale-leaseback agreements with Innovative Industrial Properties for 38 million dollars. They will enter into long term triple net lease agreements for two facilities in Ohio and Michigan, and plan to use the capital to expand operations in markets like Illinois, Pennsylvania, California and Nevada.
The government-run Ontario Cannabis Store, or OCS, opens up recreational marijuana wholesaling to private-sector participation. The hybrid model will involve licensed producers in cannabis storage and distribution, alongside the OCS, in order to maximize cost efficiencies, improve service levels, and expand product offerings. The move toward more private ownership in Ontario's cannabis industry follows the lead of Saskatchewan and New Brunswick.
Germany is set to buy at least 650 kilograms of medical cannabis flower for an average wholesale price of 2.3 Euros per gram, from domestic cultivator Demecan, and German subsidiaries of Aphria and Aurora. Even as the largest market in Europe, the low margins could make profitability a pipe dream for domestic producers, unless they manage to win distribution rights in the future. The first shipment to federal distributors is expected at the end of 2020.
Written by: Jacqui Verdura