This week in the world of weed, the ins and outs of women and minorities in the cannabiz, big investments continue to pour into US and Canada, the FDA cracks the whip on CBD makers, and much more. Let’s get right into it.
Biggest investor yet puts $200 million into Canopy Growth
Constellation Brands, the U.S. distributor of Corona beer, is buying a 9.9% stake in Canada’s largest MMJ concern, Canopy Growth, for just under US$200 million. “We’re obviously trying to get first-mover advantage, “Constellation CEO, Rob Sands told the Wall Street Journal, which broke the story. Sands says he plans to produce alcohol-free fruit-based drinks, sodas, and coffees for the Canadian (and possibly other global) market, with no plans to sell any MJ products into the US until national legalization. Constellation reportedly has the option to purchase up to 20% of Canopy, the most valuable public MJ company, valued at $1.3 Billion in a recent stock analysis. Other Constellation brands include Svedka vodka, Modelo beer and Kim Crawford wine.
Women cannabiz execs highest in CA, CO, emphasis on ancillary
In Florida, 1 in 17 full-state MMJ licensees will be designated to a minority grower. Maryland officials have gone back to the drawing board in setting up their MMJ rules to allow for more women and minority license access. And in California, the state which last year voted to allow expungement of past cannabis convictions, various cities are working on minority “set-asides” for portions of newly-licensed entities in 2018.
Grant Thornton Int’l teamed with MJ Business Daily to produce the first Women and Minorities in the MJ Industry, report. The study found that the percentage of women executives in cannabis had fallen from 36% in 2015, down to 26.9% in 2017—still above the rate for female executives nationwide of 23%. Because of the early low barrier for entry in Oregon, Colorado, and California, one-in-three MJ founders (or large owners) started in those states. The report guesses that as more professionals enter the cannabis industry from non-related fields, the number of male executives (and gender bias) will continue to expand. “California has a massive influence… it has the highest concentration of minority-owned business,” some estimates putting this figure at 40%. The study notes “take California out of the equation, and the ranks of minorities who founded or have stakes in MJ companies plummets.”
Ancillary businesses, those not touching the plant, require no licensing and less capital. The report places about 5.6% of Black, 3% of Asian, and 6% of Latino owners in the ancillary category. With greater ease to enter new states, 64.3% of ancillary-type owners have plans to expand this year. Across the board, about 40% of all women-owned concerns say they plan to expand to other states in 2017.
Minority executives in general (see chart below) are most active in “wholesale cultivation” (24.1%) and least dominant among industry investor group (12.2%). For women, just 10% of executive positions are held in finance/investment roles. ”That’s significantly lower than the average for… American business in general,” says the study.
This is worrisome, as access to capital is becoming a bigger ingredient to creating and running a successful MJ company. A new study in the same area is to be released by New Frontier Data later this month.
The FDA is warning CBD companies for cancer cure claims. Following up on a promise to look closer at MMJ and CBD offerings, the Food and Drug Administration has written letters to four CBD marketers to reprimand them for making unsubstantiated health claims for the product, specifically to fight cancers and tumors. Named in the letters were Colorado’s Stanley Brothers (Charlotte’s’ Web hemp oil) and Aspen’s That’s Natural!, led by Tisha Casida, advocate for “food and medicine freedom.” A third FDA cease letter went to Cameron Park, California-based Natural Alchemist, which was founded in 1978, and markets a wide range of natural remedies. A 4th company, GreenRoads Health of Florida, had no internet activity at press time, its website shown as “under maintenance.” Last year, the FDA sent similar letters to several CBD internet marketing concerns all told to avoid making any claims for preventing, treating or reversing serious health issues. Not clear from the FDA Oct. 30th notice is why the FDA selected these four companies from an estimated 300-400 selling CBD online as a nutraceutical or health supplement.
Los Angeles-based The MedMen has announced a massive $250 Million fund that the group says will be targeted to growth in New York City, Southern California, and Nevada. The MedMen Opportunity Fund II is a follow-on to 2016’s marijuana fund which raised more than $60 Million., which funded several projects including $26 Million spent to purchase control of a Manhattan dispensary and also another purchase of a Reno, NV grow. MedMen co-chair Chris Leavy joined the firm after success at Oppenheimer Fund, and as an executive at Black Rock, the world’s largest money manager.
Concerned about losing its momentum to support recreational MJ sales early next year, San Francisco Supervisor Malia Cohen introduced a new bill aimed at pushing forward with an expedited “equity program” which will be incorporated into new proposed rules. A San Francisco RMJ licensing mandate has been to provide a selection “priority” for low-income, ethnic minorities arrested/convicted for cannabis or non-violent crimes since 1971. Other considerations include applicants suffering from housing insecurity, persons earning no more than 80% of San Francisco median income and representative of Black, Latino or Asian populations in the city. The new language would place the rules for the “equity program” in the basic San Francisco cannabis rules, rather than having a separate rulemaking period. At this point, it appears that San Diego, Santa Cruz, and Berkeley will be the local California cities/counties ready to begin RMJ sales Jan. 1, 2018
Scientists at the University of California at Davis plan to conduct a comprehensive genetics study of industrial hemp. Joined by Front Range Biosciences, the genomic research will provide for an “advanced understanding of cannabis for medical and nutraceutical uses,” said the group. The study will focus on “complex pathways of secondary metabolism in plants, “emphasizing medicinal possibilities.
More love with cannabis: A study by investigators at the Stanford University School of Medicine indicates that, despite concerns among physicians and scientists that frequent marijuana use may impair sexual desire or performance, the opposite appears more likely to be the case. The findings, published online Oct. 27 in the Journal of Sexual Medicine, are based on an analysis of more than 50,000 Americans ages 25-45. “Frequent marijuana use doesn’t seem to impair sexual motivation or performance. If anything, it’s associated with increased coital frequency,” said the study’s senior author, Michael Eisenberg, MD, assistant professor of urology. The lead author is Andrew Sun, MD, a resident in urology.
Insys Pharma founder John Kapoor has been arrested and charged with racketeering and illegal opioid distribution. The Phoenix pharma concern has been accused of pushing its own version of high-potency drug, Fentanyl, engaging in coercion and bribing of physicians to overprescribe the expensive drug, then to also lie to the federal government drug reimbursement offices. Insys has Syndros, a synthetic marijuana drug in trials, and the company last year donated $500,000 to be spent against the Arizona vote for cannabis legalization.
This content is provided courtesy of West420 Newsweekly.