Virginia marijuana legalization bills headed for floor votes
Marijuana legalization bills in the Virginia Legislature passed their final committee hurdles Wednesday and will head to both chambers' floor. The Senate Finance and Appropriations Committee and the House Appropriations Committee both advanced their respective legalization bills Wednesday. The bills could come up for the first reading in both the House and Senate as soon as Wednesday. Each chamber faces a Saturday deadline to send legislation to the other chamber, and the Legislature is slated to adjourn on Feb. 11. However, Democratic Gov. Ralph Northam (a strong supporter of legalization) is expected to call a special session to extend the legislative session for an additional 16 days. Both chambers have introduced substantive amendments that will need to be reconciled in conference.
New Cannabis REIT
On Wednesday, FC Gamma, a newly-formed commercial mortgage REIT focused on the cannabis industry, announced terms for its IPO. The company plans to raise $100 million by offering 5.6 million shares at a price range of $17 to $19. At the midpoint of the proposed range, AFC Gamma would command a fully diluted market value of $214 million. The company plans to issue regular quarterly distributions of all or substantially all of its REIT taxable income. Formed by Advanced Flower Capital, AFC Gamma originates, structures, underwrites, and manages senior secured loans and other types of loans for established companies operating in the cannabis industry in states that have legalized medicinal and/or adult-use cannabis. Its loans are primarily secured by real property and certain personal property, including licenses, equipment, and other assets. AFC Gamma was founded in 2020 and booked $2 million in revenue for the 12 months ended September 30, 2020. It is expected to price during the week of February 8, 2021.
Proposing medical marijuana in Kansas
Kansas Governor Laura Kelly announced a new plan to legalize medical marijuana and use the revenue to fund Medicaid expansion. At the same time, Kansas House and Senate committees have filed their own medical cannabis bills in recent days. Kansas’ neighbors Oklahoma and Missouri have legalized medical cannabis. Kansas is one of only three states in the country without any public cannabis program. 36 states have some form of legalized recreational or medical use, while another 11 allow CBD oils or other products with low levels of THC. The details of Governor Kelly’s bill has not been revealed. Last year the Governor tried to pass a Medicaid expansion bill. This time cannabis taxes would fund the expansion. The Governor’s office has suggested a medical program could raise more than $50M in revenue for the state. This is the first time the Governor has formally proposed cannabis legalization. Kansas does not have a process in which citizens can put referendums on the ballot.
