Cannabis sector not able to unionize
The National Labor Relations Board ruled that marijuana cultivators, trimmers, sorters, and packagers can not form unions because they qualify as agricultural laborers. The decision last week contradicts previous decisions that marijuana growers are employees and not agricultural workers. The distinction matters because agricultural laborers under federal law do not have the right to organize unions, but employees do have the right. The ruling could have long term margin benefits for the sector.
A look at Washington State
Part of our LONG thesis from FFNTF is the company's dominant position in Washington State. The legal cannabis industry has grown at a “staggering rate” in Washington. According to a new report from Washington State University, it now contributes roughly $2 billion a year to the Pacific Northwest state’s economy. The report, titled “2020 Contributions of the Washington Cannabis Sector,” found that in 2020 the industry was responsible for $1.85 billion of gross state product and supported about 18,700 jobs. The report also concluded that even more growth is likely on the horizon, which is great for FFNTF. The expected 2021 contributions to Washington’s resulting from the Cannabis sector is $2.13 billion, up from the $1.8 billion in 2020. “There is still substantial growth to come as the industry matures,” Caitlein Ryan, a spokesperson for the WSU Impact Center and the Washington State Cannabis Alliance. Retail marijuana sales alone have grown 605% between 2015 and 2020; the report further suggested the economy would benefit even more if Washington state lawmakers legalized home cultivation for recreational use. That practice is prohibited, though limited home grows are allowed for medical marijuana patients. A bill to make such a change is working its way through the state legislature. The report found that allowing recreational marijuana home grows would not detract from existing businesses. Instead, it would more likely have a complementary effect by expanding the industry in general and allow for more experimentation and innovation.
We recently met with a dispensary operator in Washington State, confirming that business is good and FFNTF products are some of the best selling products in his store!
Lantern not part of the Drizly acquisition
Yesterday, Uber Technologies announced that it reached an agreement to acquire Drizly, the largest alcohol delivery platform, for $1.1B. In May, Drizly launched Lantern, a cannabis delivery platform. Lantern is not part of the acquisition. Lantern currently operates in Massachusetts and Michigan. Uber’s CEO said during an interview yesterday that the company is not interested in marijuana delivery.
