Massachusetts places cap on cannabis delivery licenses (CURLF, TCNNF, GTBIF, AYRSF)
The Massachusetts Cannabis Control Commission (CCC) has agreed to home delivery policy, which would create two delivery license types. A wholesale delivery license would allow the licensee to source the cannabis and cannabis derivative products they sell from CCC-licensed wholesalers. A limited delivery license would allow an operator to charge a fee for deliveries made from CCC-licensed retailers and dispensaries. The CCC decided on regulations that permit one business to own up to two delivery licenses, either two wholesale delivery licenses, or two limited delivery licenses, or one of each. The state regulators also rejected a plan to delay delivery until 2023.
Currently, delivery licenses are only available to participants in CCC’s social equity/economic empowerment program. The coronavirus pandemic has accelerated the adoption of home delivery/e-commerce within cannabis (e.g., cannabis delivery in Ontario), and it seems likely that cannabis delivery operators in Massachusetts will be as competitive as brick-and-mortar retail storefronts as they come online.
Trulieve has been building out a cultivation and manufacturing facility in Holyoke, MA, and anticipates launching its wholesale operations in the state by the end of 2020 or in 2021. Their Massachusetts wholesale operations have been framed as a pilot program for its greater wholesale expansion plans.
If Texas were to legalize, the state could generate billions in marijuana tax revenue.
In a report from law firm Vicente Sederberg, Texas could generate $1.1 billion in tax revenues biannually through recreational legalization and following a taxation model like Colorado’s. Based on the assumption that more than 1.5 million Texans consume cannabis monthly, the report estimates adult-use cannabis sales to hit $2.7 billion annually.
The report makes a strong case for recreational legalization in the wake of the pandemic’s economic devastation: “We also expect it would bolster the hospitality industry, which would benefit communities that rely on tourism; especially those that have recently been severely impacted by the novel coronavirus, such as San Antonio, Houston, and Corpus Christ.”
In 2015, the state began allowing limited medical cannabis oil access with less than 0.5% THC. Gov. Greg Abbot (R) signed a bill last summer to legalize industrial hemp in the state, which the USDA approved earlier this year. However, the Republican-controlled state legislature appears unlikely to make a meaningful change towards recreational legalization – although sentiment does appear to be softening towards the plant, if ever so slightly.
Cannabis ancillary company GrowGeneration makes its second acquisition in two weeks (GRWG)
GrowGeneration, the nation's largest chain of specialty hydroponic and organic garden centers, has acquired Big Green Tomato ("BGT"), a two-store chain in Battle Creek and Taylor, Michigan. BGT is one of Michigan's premier hydroponic equipment stores, founded in 2011. BGT has two well-established locations with strong commercial operations and annual revenues approaching $16 million. As part of the transaction, GrowGen purchased the 10,000 square-foot retail property in Battle Creek. With the BGT acquisition, the Michigan market is expected to generate annual revenues well over $40M for GrowGen. It also brings the total number of GrowGen hydroponic garden centers in Michigan to six.
Last week, the company announced its acquisition of Hydroponics Depot, Phoenix's largest indoor and outdoor garden center. The acquisition comes as voters will consider Prop 207 this November, which would legalize limited possession, cultivation, and marijuana use for adults ages 21 years or older in the state. Hydroponics Depot had year-to-date sales above $5 million and year-over-year growth at 50 percent at the time of the acquisition.
Arizona has one of the largest medical marijuana programs in the country, with close to 300,000 active cardholders as of September. Last year, registered medical marijuana patients spent over $705 million on cannabis products. A Suffolk University/USA TODAY Network live-interview poll of 500 likely Arizona voters taken between September 26th – 30th showed that support for Prop 207 came in at 45.6% versus 34.2% opposed, with about 19% of voters undecided on the matter. It appears that GrowGeneration is making a bet that Arizonans will indeed legalize recreational come this November.