The Week In Cannabis: MedMen And Sundial Lose Their CEOs, Santa Cruz Gets Trippy And Much More

A week filled of cannabis news ended with the departure of MedMen Enterprises Inc. MMEN MMNFF’s CEO Adam Bierman, who left the company after a massive restructuring and considerable reduction in its workforce. Bierman also agreed to return his Class A super voting shares to the company.

COO and CTO Ryan Lissack has been named interim CEO.

“Adam Bierman has been relieved of his CEO duties at MedMen. On Friday, the company announced that the co-founder would also relinquish his super-voting shares that he and partner Andrew Modlin awarded themselves with when the company went public in order to maintain control,” Debra Borchardt, CEO of Green Market Report, told Benzinga.

“Ultimately, though, the creditors won out and took over the company. A lesson many in the cannabis industry are learning.”

Check out two recent exclusive Benzinga interviews with Bierman on the future of the company here.

Also this week, Sundial Growers Inc SNDL’s CEO Torsten Kuenzlen left his spot.

EcoGen Laboratories, a company focused on the manufacturing and supply of hemp-derived specialty ingredients and formulations, as well as private-label finished products in the United States, closed a $40-million private placement with institutional investors.

“We are thrilled to announce the closing of our $40-million private placement,” Alexis Korybut, co-founder of EcoGen, told Benzinga ahead of the announcement.

Santa Cruz, California, became the third city in the U.S. to decriminalize psychedelic mushrooms, joining Denver, Colorado and Oakland, California.

Australia’s new cannabis possession and cultivation laws came into effect, allowing home growing and possession of up to 50 grams of cannabis flower. The retail sale of cannabis remains banned.

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Also this week, we saw smaller legalization and regulation moves in the Cherokee Nation, New Mexico, New Hampshire, Vermont, Virginia and Mexico, as well as the USDA’s approval of hemp regulatory plans for Texas, Nebraska and Delaware. Check out Marijuana Moment’s politics coverage for more on these topics.

The Southern University Agricultural Research and Extension Center in Baton Rouge, Lousiana launched a hemp-derived CBD product line, ALAFIA, in partnership with Ilera Holistic Healthcare. This makes Southern University the first historically black college university, or HBCU, to launch a hemp product line.

ETFs were once again in the red. Over the last five trading days:

• The Horizons Marijuana Life Sciences Index ETF HMLSF HMMJ was down 4.04%.
• The ETFMG Alternative Harvest ETF MJ lost 5.11%.
• The AdvisorShares Pure Cannabis ETF YOLO tumbled 3.25%.
• The Cannabis ETF THCX slipped 6.04%.
• The Amplify Seymour Cannabis ETF CNBS lost 5.87%.
• The SPDR S&P 500 ETF Trust SPY closed the period down 2.14%.

More News From The Week

MediPharm Labs Corp. LABS MEDIF filed a lawsuit against Hexo Corp. HEXO in the Ontario Superior Court of Justice. The former argued the latter failed to pay outstanding amounts of around $9.8 million pursuant to a cannabis oil sale agreement.

Oakland, California cannabis company NUG announced the opening of four greenhouses totaling 6,000 square feet dedicated to the business operations of its social equity partners. The four equity partners can now move into the automated greenhouses rent-free to launch their own respective cultivation operations at NUG’s Oakland headquarters.

The businesses, which specialize in cultivation, are Dakota West Coast; Medicinal Organic; Nine Mile Tribe; and OMCG. While the greenhouses were being constructed — each is equipped with augmented lighting, motorized curtains and an irrigation system — two of the equity partners were employed by NUG and received on-the-job training. NUG also provided the businesses with cannabis products to begin packaging under their own respective labels, as well as connections with NUG sales reps to pitch their products to California dispensaries.

The Florida Hemp Council, a nonprofit organization founded in 2019 to provide structure, networking and services to the hemp industry in Florida, welcomed five new board members: Brian Dickerson of Star Manufacturing Hemp; Christian Graubard of Nutrition Formulators Inc.; Sarah Groves of Southeastern Grocers, Inc.; Hussein Rakine of Just CBD; and Durée Ross of Durée & Company, Inc.

“We are pleased to see both the expansion and diversity of our board,” said Jeff Greene, the council's co-founder and director of business development.

“We are honored to have such a committed and talented representation of the industry. The combined contributions of these new board members will set us up for a very successful 2020 and beyond.” 

The green rush is maturing, but despite the popularity of the product, a lot of cannabis companies have struggled to make money in the face of illicit market competition, complex regulations and the challenges of marketing a stigmatized product.

Marino PR, in New York, launched a Silicon Valley-style accelerator called Cannabis Media Lab where it’s handpicking a half-dozen startups to walk them through the process of media relations and branding on a pro bono basis. The firm partnered with cannabis meetup group High NY and The Equity Organization, a nonprofit that helps people who have been impacted by the war on drugs, to launch the Cannabis Media Lab.

“We’re inviting cannabis startups who want to take it to the next level in the brave new world of cannabis PR,” said John Marino, president of Marino PR. ”They can learn a lot from us, and we’re also hoping to learn from them, as we’re all making history together in this exciting new industry.”

Marino is still seeking applicants for its cannabis accelerator, which appears to be the first of its kind.

The vaporization technology company Airgraft launched its new “Trust Your Vapor” campaign in an effort to restore trust in cannabis vapor and educate consumers about verified fresh flower oils. In response to the “vape crisis” that is capturing the nation’s attention, the brand wants to provide security, accountability and a clean vaporization experience for all consumers by setting a new standard in cartridge security.

“Trust is not simply a marketing challenge, it requires a substantial effort to verify and secure the product. SecurePod is the most advanced expression of that process and our commitment to transparency and safety,” said Mladen Barbaric, Airgraft's founder and CEO.  

Wana Brands, a producer of infused cannabis products in the U.S., formed a partnership with Curio Wellness to bring Wana’s products to patients to Maryland. Curio Wellness is a vertically integrated company with high standards for cultivation and processing, something that was instrumental in Wana Brand’s decision to strike the partnership. Maryland marks the seventh state in Wana Brands’ national expansion efforts.   

“We were extremely impressed by Curio Wellness from the start and it was clear to see that they know how to execute at the level we require,” said Wana Brands CEO Nancy Whiteman, CEO. “Bringing Wana’s products to Maryland is an important step in our East Coast expansion as we further secure a national footprint.”

Silverware Inc., a Phoenix-based business management solutions provider, has built a cannabis ERP, Silver Leaf CBC, on Microsoft Dynamics 365 Business Central and it’s now live on Microsoft’s marketplace, AppSource.

The cannabis-specific software solution offers product tracking, quality control, delivery compliance and best-in-class financial practices. Silver Leaf CBC has the audit capabilities investors require and can streamline business processes while helping to automate state compliance requirements that are necessary for maintaining licensing.

Franny’s Farmacy is celebrating the grand opening of its latest dispensary located at 964 2nd St NE in Hickory, North Carolina Feb. 6-9.

“We're thrilled to keep growing in our home state and support the community of Hickory, NC with CBD tinctures, edibles, topicals, lotions, pet treats, and more,” said Franny Tacy, owner of Franny’s Farmacy. 

Cresco Labs CL CRLBF finalized an agreement to sell its Ohio-based Yellow Springs property to Innovative Industrial Properties IIPR at a price of $10.5 million, a figure that includes financing for extra tenant enhancements. The property covers around 50,000 square feet of industrial space.

BofA Securities analyst Christopher Carey reiterated a Buy rating on Canopy Growth Corp CGC, with a price objective of CA$36 ($27.59).

"Canopy sales must be much higher to breakeven on profit," Carey wrote in a note.

According to BofA calculations, Canopy should generate around CA$260 million in quarterly net sales to break-even on EBIT versus CA$109 million in the second quarter of fiscal 2020.

BMO Capital's Tamy Chen and Peter Sklar upgraded their rating on Canopy Growth from Market Perform to Outperform and boosted their price target from $25 to $40.

"We believe there is potential upside to Street expectations for FQ3/20 driven by the company's pivot into a rec product mix that should now be better aligned with demand," the analysts said in a Tuesday note.

Driven Deliveries DRVD announced a letter of intent to acquire cannabis distribution company, Humboldt Heritage Inc, and its subsidiaries Humboldt Sun Growers Guild LLC and Grateful Eight LLC.

Nabis Holdings Inc NAB NABIF, a Canadian investment company, recently announced it has entered into a binding memorandum of understanding with Panaxia Pharmaceutical Industries Ltd.

Vireo Health International, Inc. VREO VREOF announced the expansion of its collaboration with Leaf Trade in order to enable a wholesale order and fulfillment management platform in four states.

BPCM, a strategic consulting and communications agency with offices in New York, Los Angeles and London, launched a cannabis division.

Viridian Capital Advisors announced this week that Peter Rosenberg has joined its investment banking team as its head of mergers and acquisitions.

TerrAscend Corp. TER TRSSF subsidiary TerrAscend Utah, LLC obtained approval for a medical cannabis processor license from the Utah Department of Agriculture and Food. TerrAscend Utah's processing facility will be based in St George, Utah.

Sproutly Canada, Inc. SPR SRUTF reported third-quarter financial results and operational highlights Wednesday. Sproutly's wholly owned licensed cannabis producer Toronto Herbal Remedies has obtained a Health Canada sales license for cannabis flower, according to the company. The license enables the subsidiary to sell dried cannabis flower products across Canada.

Cookies, a cannabis brand run by rapper Berner, on Friday expanded access to its artisan flower with the opening of its first shop outside California. A couple hundred medical users flocked to the Detroit shop at 8 Mile and Mound — some waiting more than 12 hours in sub-freezing temperatures to get the first pick of supply.

Broad-spectrum hemp producer Socati launched its private label lineup, a full "concept-to-market" platform with customizable cannabinoid products. The platform enables new and established brands looking to develop innovative lines of hemp-infused products to customize safe, high-quality finished packaged products they can market.

Socati provides its team of agronomists, geneticists, food scientists and marketing experts to ensure new branded products can be deployed to market quickly and efficiently.

"Outside of the top 20 brands in the market, entities looking to develop new hemp-infused products need a partner who can customize, create and manufacture a range of high quality goods efficiently to meet market demand.” said Socati’s Mark Elfenbein.

"Socati has innovated over the past year by being the first to offer the ability to precisely customize ratios of minor cannabinoids such as CBG and CBN in water soluble and broad spectrum oils, a factor that has made it the preferred supplier to many of the largest brands in the market."

Sun+Earth Certified, a nonprofit organic certification program for sun-grown cannabis and hemp, expanded from California into Colorado, Oregon, Washington, and Wisconsin. Launched on Earth Day in 2019, Sun+Earth has now certified 30 cannabis businesses, which sell their products at hundreds of retail outlets across the country. No chemical fertilizers or toxic pesticides are used to grow cannabis certified by Sun+Earth, whose standards go beyond USDA Organic by focusing on regenerative cultivation, farmer and farm-worker protections and community engagement.

"As more and more U.S. states adopt cannabis laws, and as public opinion in favor of lifting the federal prohibition on the plant increases, Sun+Earth is poised to become the leading standard in the industry, demonstrating how cannabis can be cultivated ethically, ecologically, and with minimal carbon footprint," said Sun+Earth Executive Director Andrew Black.

Canonic, a subsidiary of Evogene Ltd. EVGN EVGN announced a collaboration with Hadasit, a Hadassah Medical Center Technology transfer company, for pre-clinical research to back the development of its anti-inflammatory medical cannabis products.

And Canada's Aleafia Health Inc ALEAF closed a licensing agreement with Kinstate to bring its cannabis-infused sublingual strips brand Kin Slips to the Canadian cannabis market. Kin Slips sublingual strips provide health and wellness-conscious consumers with a consistent, smoke-free cannabis experience. Aleafia Health expects to provide the new format to consumers in Canada during the second quarter of 2020.

“Our goal with Kin Slips is to provide consumers everywhere with discreet and reliable experiences. Aleafia Health’s commitment to cannabis health and wellness makes them the ideal organization to partner with in order to take Kin Slips to the international stage,” Josh Kirby, Kinstate CEO, told Benzinga.

Top Stories Of The Week

Check out the top stories on Benzinga Cannabis this week:

• What's Going On With Cannabis Tech Darling Seedo?
• Why Tommy Chong, At Age 80, Is The Reigning Cannabis Legend
• The NCIA's NorthEast Cannabis Business Conference Lands In Boston Feb. 19-20
• Willie Nelson Is The Hero That The Cannabis Industry Needs
• Benzinga Cannabis Managing Director Javier Hasse To Speak At CanEx Investment Summit In NY, Feb 18
• Will Microsoft's New Climate Innovation Fund Include Hemp?
• A Leading Cannabis PR Firm Shares Its Top Picks For Journalists To Follow On Twitter
• California Bill Requires Cities To Open Medical Cannabis Stores
• Cannabis Capital Raises Getting Big In 2020, Despite A Challenging Private Placement Market
• All About Wiz Khalifa's Many, Many Cannabis Ventures
• $25 Billion Cannabis Market Complicated By Lack Of Federal Legality
• Choked By The Supply Chain: USDA Reqs, Lack Of Testing Labs Render Most Hemp Farmers Helpless

Check out these and many other cannabis stories on Benzinga.com/cannabis

Events Calendar

Feb.11-12: the Cannabis Packaging Summit is set to debut at the Anaheim Convention Center in Anaheim, California, adjacent to packaging technology event WestPack.

As the global packaging market for cannabis products is expected to be worth $25 billion by 2025, the Cannabis Packaging Summit will be the first event to exclusively focus on cannabis packaging. Tabletop exhibits and networking sessions with engineers, brand managers, and other key decision-makers will also explore the packaging challenges and opportunities facing cannabis manufacturers and how the suppliers of packaging solutions can begin to approach this booming consumer market with greater insight and understanding.

Feb. 24-25: The premier gathering of cannabis entrepreneurs and investors in North America, the Benzinga Cannabis Capital Conference, is heading to Miami in 2020 for its sixth installment.

The conference, which takes place Feb. 24-25 at the Fontainebleau Miami Beach, creates an ideal setting for attendees to learn from the individuals and experts driving the cannabis space forward amid regulation, legalization and industry changes. 

March 13-22: SXSW disembarks in Austin, Texas once again, with its second year featuring a CannaBusiness track. Check out details here.

May 1-3: The CBD Show returns to the UK with three full days of content, more than 50 speakers, specialized workshops, and 100-plus exhibitors from around the globe. Hosted at London Olympia, days one and two of the event are dedicated to the business side of things. Day three is open for the public sector to explore the latest offerings on the CBD market. Register for your tickets here.

Lead image by Ilona Szentivanyi. Copyright: Benzinga.