Second Wave: Multi-state operator Columbia Care is being sued over a Florida medical license in a suit alleging the company conspired to fraudulently strip another groups’ rights. The complaint from Florida MCBD claims Columbia Care broke up an agreed-upon joint venture between MCBD and Sun Bulb in order to have Sun Bulb transfer its Florida license. The suit also alleges “a pattern of racketeering and tortious activity” in other states, such as Arizona and Massachusetts, and seeks $50 million in damages and a voiding of the transfer of the license to Columbia Care.
Why It Matters: I mean, this kind of stuff is pretty old hat in the cannabis world, but Columbia Care’s involvement is somewhat interesting. Launched in Washington, D.C. in 2012 and taken public via a Canaccord Genuity blank check company (SPAC ATTACK) in 2018, Columbia Care has led with a somewhat conservative approach relative to some peers, positioning itself as a medical-first, East Coast focused player with lower-key approach on PR and visibility. The company has emphasized its ability to win licenses (instead of the often expensive, primarily M&A tactics of others) - which makes this suit’s allegations across other states maybe a little concerning. Everyone wants to position themselves as part of the next wave of cannabis winners. But if this suit is accurate, the surf still feels pretty choppy.
Playing Favorites: MJ Biz Daily ran a fairly interesting interview series with different MSOs on their most and least favorite states. Executives from 4Front, Acreage, GTI, Harvest, MedMen, and Columbia Care varied in their answers, but Pennsylvania (4 respondents), Illinois (3) and New York (3) led the pack in favorite existing, while the New York Tri-State (NY, PA, NJ) highlighted as most anticipated. Overall, the group was fairly varied in their opinions, aligning generally with their footprints.
Why It Matters: Eh, this probably could’ve been a quick hit, but I thought it highlighted a few things worth noting. First, these opinions aren’t really that useful - of course, the executives are going to validate their previous decisions (See: Pennsylvania as a near unanimous favorite, except for 4Front, who ranked it as least favorite and coincidentally just pulled out of PA). That said, the overlaps highlight how Illinois and the East Coast markets are viewed positively, primarily because limited license regimes ensure limited competition and a better shot at near-term profits (which are deeply valued by this market and investors).
Balance Of Trade: Canada exported a record amount of dried cannabis in 2019, over 8,000 pounds of dried cannabis for medical use and more than 160% more than 2018. The staggering export puts Canada second to the Netherlands, with most of the crop (90%+) serving the German market. However, the success may be short lived, as local medical cannabis production in Germany is slated to start this year. Meanwhile, oil exports continue to gain ground on dried cannabis, as demand stems from more countries and faces less hurdles.
Why It Matters: Everything’s a double edged sword, right? In that case, exports might be a triple edge. We’ve seen recently how exports can be a huge boon (or drag) on Canadian companies as issues with Aurora’s exports led to a big financial miss. For now, exports help Canadian LPs who’ve overinvested in production plug the difference in domestic supply and demand. But, as local capacities scale internationally and low cost geographies like Colombia and Uruguay smooth out their export issues, this outlet seems less durable in the long haul. Moreover, LPs have retrenched from international geographies, leaving them less able to capitalize in the longer-term.
Some Personal News: If you're connected to me (Colin) on LinkedIn, you probably noticed - I recently accepted a role at ATAI Life Sciences, a global biotech that's building the future of mental health drugs. ATAI has actually been mentioned in Cannablurbs before - as one of the leaders in developing psychedelic compounds into actionable treatments for depression, addiction and anxiety. I'll be helping across the platform, with my focus in the near-term on strategy, finance, and fundraising.
Why It Matters: A few have asked on what this means for Cannablurbs (especially after the break last week). Long story short - the ship will keep sailing, and nothing's changing. Well - mostly nothing: My co-founder (and fiancee) Cara will be helping out more (check out the Instagram for her aesthetic genius), we'll likely be shifting the release to Mondays to ease some timing on my end, and will lessen psychedelic coverage unless directly relevant to cannabis (or if completely batshit - see Quick Hits below). If you ever want to learn more about why I'm at ATAI, hear what's up with psychedelic medicine, talk about cannabis, or just shoot the shit, I'm always keen to connect.
Creating a CULTA: Jared Miller is the Wholesale Director at CULTA, a vertically integrated cultivation, processing and dispensary company operating in Maryland. We sat down with Jared to discuss how CULTA is thriving in Maryland, successful collaborating with brands like Cookies, and more.