Cannabis Insights | NY legalization plans, ACRGF financing, and MMJ sales launch in MO and VA

10/20/20 06:06AM EDT

NY has plans to legalize by April, says Cuomo advisor

In an interview with Canopy Growth’s David Culver, Axel Bernabe, Assistant Counsel for Health to NY Gov. Andrew Cuomo, said that cannabis legislation would be brought up again through the state budget in January – the goal being to enact recreational legalization by April. 

“We’re watching New Jersey closely. We’ve always been confident that we get to this before New Jersey, so if they pass the referendum, they still have to have an agreement between the governor the Senate over there,” Bernabe said, referring to legislative lag if NJ voters pass the ballot question this November. “We’re working on this. We’re going to reintroduce this in our budget in January. We think we can get it done by April 1.”

This is not the first time that Cuomo’s office has suggested adult-use legalization to be in the near-term – cannabis legalization has been included in Cuomo’s budget proposal for the past two years. However, it appears that this time around may be different from the pressure of New Jersey legalization and state coffers in dire need of new revenues due to COVID.

Bernabe also commented that the administration would likely pursue regulations for cannabinoid-infused drinks and food items, suggesting an example as setting a maximum of 25 mgs of CBD per serving. “We’re really doing it across the board on this,” Bernabe said. “We’re really looking at every product class and trying to strike a balance between consumer protection and letting people have what they’re obviously using extensively for health and wellness.”

Acreage Holdings pays off a short-term, 60%-interest loan for $18M (ACRGF, CGC, STZ)

Acreage Holdings has announced the retirement of its short-term strategic financing taken out in June 2020. Acreage paid approximately $18 million to retire the full principal balance and accrued interest, which was a $15 million, 60% interest loan. Payment of this short-term strategic financing, which was used to close the acquisition of vertically-integrated operations in NJ, realigns Acreage’s capital structure and significantly reduces the amount of debt outstanding. The debt proceeds were used to acquire the Compassionate Care Foundation’s medical marijuana license in NJ for $10 million-plus debt. The high-cost debt may have been worth it for Acreage as NJ polls are suggestive for a legalization win; the company is positioned to potentially convert its medical marijuana license into an even more lucrative recreational one. 

Medical marijuana program launches in both Missouri and Virginia (CURLF, CCHWF, JUSHF)

Both Virginia and Missouri launched medical marijuana programs over the weekend, becoming the 33rd and 34th states to having operating medical marijuana programs, respectively.

Missouri’s first sales come after voters approved a constitutional amendment nearly two years in November 2018. Approximately 65,000 patients have been approved, and the state has so far awarded licenses for 60 cultivators, 86 processors, 192 dispensaries, and 10 testing laboratories. Through its acquisition of Grassroots, Curaleaf has obtained six licenses in the state.

At the moment, medical marijuana purchases in Virginia are limited to cannabis oils, edibles, and vape cartridges – flower is not allowed.  However, the market’s limited license status and the likelihood of flower being soon introduced bodes well for the state’s market potential. Jushi Holdings and Columbia Care count themselves amongst the few companies licensed to serve the state.

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