Ultimate Resource On Weed, Wine And Psychotropic Drugs
The bottle: Kim Crawford Sauvignon Blanc 2019, $17.99 Ultimate Resource On Weed, Wine And Psychotropic Drugs
The back story: It’s no secret that Americans are drinking and smoking more during the coronavirus pandemic. Wine and weed sales, for example, soared by 66%, according to market researcher Nielsen, based on year-over-year figures for a period in March.
It stands to reason that this particular bottle from New Zealand’s Marlborough region represents a small chunk of those sales. The Kim Crawford Sauvignon Blanc is consistently the most-popular Sauvignon Blanc available in the U.S., based on sales data. For that matter, the retail site Wine.com said it was its best-selling bottle overall last year.
What’s behind the appeal? Part of it is the growing popularity of New Zealand wines — in particular, Sauvignon Blanc from Marlborough. These are easy-to-drink, full-flavored white wines, known for “intense, mouth-watering acidity,” according to one oenophile.
And the Kim Crawford label — Kim is a man, by the way — has been at it for nearly 25 years. In some ways, Crawford helped create the New Zealand Sauvignon Blanc boom, which was also driven by the relative affordability of his bottles, even as they earned accolades from top wine publications. In short, the Crawford Sauvignon Blanc has “a devoted, even fanatical, following,” says Kim Crawford Wines Vice President of Marketing Julie Rossman.
Kim Crawford Wines was eventually sold and is now part of Constellation Brands, a major conglomerate of beer, wine and spirits brands. Crawford himself now has a new label, called Loveblock.
What we think about it: Sometimes the American public gets it right. The Crawford Sauvignon Blanc is about as tantalizing and delicious as an under-$20 bottle of wine gets, with bright, tart flavors. The label says you should pick up notes of everything from passion fruit to freshly cut grass.
How to enjoy it: Keep this nicely chilled and pair it with seafood (say, oysters) or vegetables (say, asparagus). Or just enjoy it as a before-dinner wake-the-palate sip.
Hope was born and raised in Prince George’s County, Maryland, graduating from the illustrious Spelman College where she received her Bachelor’s in Economics.
Of her many undergraduate accomplishments, Hope cites her time as co-founder of her alma mater’s Habitat for Humanity chapter as some of the most educational and inspiring opportunities she encountered on her road to entrepreneurship.
How To Make Wine Purchases Count As An Industry Pivots
As wineries, retailers and restaurants fight to stay in business and support their employees, oenophiles are looking to spend their money meaningfully.
SO MANY THINGS I’ve long taken for granted—ordering a glass of Chablis in a restaurant, visiting a winery’s tasting room or just standing in line in a liquor store—seem like distant memories. Now, restaurants all over the country are selling wines to pick up curbside. Wineries are holding tastings via Facebook or Zoom. And wine retailers are donating profits to support unemployed restaurant staff.
Oregon winemaker David Patte had the bad luck to launch his brand-new label, Sun Break Wines, in early March. “When you think of all the risks—I didn’t think of this,” said Mr. Patte, who was at a UPS Store in Corvallis, Ore., mailing bottles of wine when we talked. Most of his sales have been to family and friends; hopes of finding distribution have been dashed as distributors around the country have laid off sales staff.
I found Mr. Patte’s winery through the Berserker Quarantine Relief forum on Wine Berserkers (wineberserkers.com), the online wine community launched in 2009. The forum, created in mid-March, lets small producers post offerings of their wines, often with deep discounts and/or free shipping.
Now you can chat and taste with winemakers via Facebook.
Berserker Quarantine Relief has been a vital means of support for small wineries. Erin Di Costanzo, who produces small amounts of single-vineyard Cabernet in Napa and Sonoma with her husband, Massimo, under the Di Costanzo label, said in an email that sales generated by the forum have given her winery a much needed “jolt.” Di Costanzo’s offering on Berserker Quarantine Relief sold out in three weeks.
Another winemaker who has benefited from selling via that online forum, Jeff Nelson of Liquid Farm winery in Santa Barbara, estimated revenue lost from tasting-room and wholesale sales at around $150,000 each month. Like so many others, he had to lay off his entire tasting-room staff.
Quite a few wineries hope to increase sales by offering oenophiles the chance to chat and taste with winemakers via Facebook or Zoom. Some tastings are free and some are tied to a purchase. I tried both kinds, with mixed success. The Zoom format was less satisfying, especially when the audio or video failed or the session seemed poorly thought out, and looking at multiple strangers in their bedrooms or kitchens was, frankly, weird.
I did get to witness some inadvertently comedic moments from non-video-savvy winemakers—particularly those filming outdoors. My favorite winery-produced video didn’t feature wine at all but a flock of sheep grazing in Napa vineyards. If you’re having trouble falling asleep, you can literally count the Shafer Vineyards sheep: Simply click the image of woolly creatures on the homepage (shafervineyards.com) to link to 6 hours of pastoral footage.
As restaurants around the country pivot to takeout only, sommeliers are posting videos of their own—many of which seem to be more about cheering one another up than selling wine.
But they’re doing the latter too. At Vetri Cucina in Philadelphia, the entire cellar of Italian wines went up for sale to an “overwhelming” response, according to wine director Bobby Domenick, after he put the word out via sociae media. The fact that Pennsylvania’s state-controlled wine and liquor stores were all closed probably helped fuel the frenzy, as did the high quality of the Vetri collection itself.
In Portland, Ore., wine director and restaurateur Andy Fortgang received a similarly enthusiastic response when he emailed and posted news that he was selling wines off the lists of his restaurants Le Pigeon and Canard (lepigeon.com, canardpdx.com) at prices close to retail (40-50% off list price). Such was the demand for the restaurants’ deep cellar of great Burgundies and other collectibles, he decided to scale back to weekly “curated” wine packages that customers can pick up curbside.
In hard-hit New York City, after the state liquor authority allowed restaurants to sell wine directly to customers under a special proviso, Caleb Ganzer, managing partner of the wine bar Compagnie des Vins Surnaturels, turned wine delivery man. He’s been taking orders via the bar’s website (compagnienyc.com), packing up bottles and delivering them via Zipcar.
Although he’s been quite busy, the bustle hasn’t necessarily translated into big bucks. Mr. Ganzer estimated his wines sales are down 80% from what they were when the restaurant was open. He has been changing up featured wines often, with creative offerings like a selection of two “farmer” (small-producer) wines coupled with produce from the Union Square Greenmarket—“the ultimate CSA box,” as he describes it.
Mr. Ganzer offered to drive bottles to my house if I wanted to buy a few, but his delivery capacity is limited. I did buy a couple bottles of an attractively mineral 2018 Etienne Boileau Petit Chablis ($26) with my takeout dinner from Faubourg Montclair, in Montclair, N.J. (faubourgmontclair.com).
The restaurant’s beverage director, Philippe Marchal, said he’s pricing wines just $1 above retail. And while sales were initially slow, people are now frequently adding wine—sometimes entire cases—to dinner orders. Mr. Marchal speculated that his customers don’t want to visit wine stores.
Still, retail wine sales are up, according to Nielsen, by 32% the week ending April 4 over the same week the year before. Recognizing that restaurateurs aren’t faring nearly so well, some retailers are offering special packages whose profits go to assisting unemployed restaurant workers.
For example, Parcelle wine shop in Manhattan is selling a six-pack titled Shameless Plug ($150 at parcellewine.com), with wines made by prominent sommeliers such as Le Bernardin’sAldo Sohm.
One hundred percent of the profits from sales of this six-pack will directly benefit restaurant workers in New York by way of a partnership between Relief Opportunities for All Restaurants (ROAR), the Robin Hood Foundation and the Restaurant Employee Relief Fund. In just the first few weeks, Parcelle owner Grant Reynolds reported, he has sold more than 160 Shameless Plug charity packs.
On a much larger scale, New York-based wine importer Patrick Mata of Olé & Obrigado chose 19 Spanish and Portuguese wines from his portfolio, earmarking 50% of the profits from this “Restaurant Relief” selection for the Restaurant Workers’ Community Foundation, which directly assists unemployed restaurant workers around the country; in certain states profits will aid local relief initiatives too. A month after Mr. Mata began his campaign, 83 retailers in 15 states are offering these wines.
I bought a case of Restaurant Relief wines ($120) online from Grapes The Wine Company in White Plains, N.Y. (grapesthewineco.com), and was pleasantly surprised by the caliber of the $10 bottles. My case included four bottles each of three wines, two Spanish and one Portuguese.
The red was the soft, easy drinking 2017 Flaco Tempranillo from Spain; the white, the lively and bright 2018 Nortico Alvarinho from Portugal; and the rosé, the juicy, zesty 2018 Zestos Rosado Madrid.
I biked some bottles to the houses of nearby friends, including a few I knew needed a good glass (or two): a newly unemployed husband and wife, a journalist covering healthcare workers on the front lines, and a chef who had to close his restaurant. Everyone reported loving the wines, but we agreed that what we really want is to share a bottle when we resume normal life.
Essential Marijuana Sellers Are a Good Business for Their Landlords
During the coronavirus pandemic, doctors have prescribed marijuana for pain, nausea and muscle spasms, making it an essential business alongside pharmacies and grocery stores in much of the country.
The business of marijuana growing and processing is essential, according to many state governments. That has been a boon for owners of cannabis real estate during the coronavirus pandemic.
Cannabis producers cultivate the plant in warehouses and process it into pills, vape kits and dried flowers that can be rolled into marijuana joints. Medical marijuana is legal in 33 states and in the District of Columbia, while recreational pot is legal in 11 states and in the District of Columbia.
Property investors typically purchase the warehouses and dispensaries from the operators, then lease the space back.
Doctors have prescribed marijuana for pain, nausea and muscle spasms, making it an essential business alongside pharmacies and grocery stores in much of the country. More than 20 states have designated the cannabis industry to be essential, allowing medical marijuana dispensaries, and in some cases recreational facilities, to stay open during shelter-in-place orders.
“The industry has quickly gone from a designation of ‘illegal’ to ‘essential’,” said Katie Barthmaier, chief executive officer of GreenAcreage, a real-estate landlord with five facilities.
Sales of inhalable marijuana products remained strong in the first quarter, said producers such as Green Thumb Industries and Curaleaf Holdings Inc., despite heightened concern about respiratory diseases related to Covid-19.
“Have we seen flower sales decline because of Covid? No, we have not seen a material decline,” said Tom Catherwood, managing director at BTIG REITs Research, referring to the smokable part of the cannabis plant.
Innovative Industrial Properties Inc., the only publicly listed landlord in the U.S. focused on cannabis facilities, has purchased five sites totaling around $176 million since March, when the pandemic’s spread led to nationwide lockdowns. It owns 49 medical cannabis cultivation facilities and seven dispensaries in 15 states.
Shares of the San Diego-based real-estate investment trust are up 54% since mid-March, outperforming the broader FTSE Nareit All Reits Index’s 19% gain over the same period.
Innovative Industrial Properties was also one of the top performing real-estate companies last year, at one point tripling its share price from the start of 2019.
GreenAcreage said it stopped acquisitions of warehouses when the pandemic started in March. The company worried that dispensaries could be forced to close.
The New York-based company said some operators started to offer curbside pickup and delivery as demand for cannabis remained steady even after early stockpiling.
There has been strong demand in Illinois, Pennsylvania and Florida. Total sales of medical marijuana in the Sunshine State through May 22 were up around 56% from roughly the same period in 2019, according to data from Florida Office of Medical Marijuana Use.
Still, there have been weaker cannabis sales in Massachusetts and Nevada due to tighter social-distancing orders and collapsed tourism in Las Vegas. Recreational-use cannabis was designated nonessential in Massachusetts, a reminder to investors that state regulatory issues remain a risk.
What’s more, the substance is illegal under federal law. Some investors in cannabis real-estate companies prefer not to publicize their holdings while potential investors are worried about compromising their relationships with their lenders and other stakeholders.
“For these institutions, they may stay sidelined until there is significant legislative reform at the federal level, which we believe is still likely to be several years out,” said Paul Smithers, chief executive officer of Innovative Industrial Properties.
Subversive Real Estate Acquisition REIT LP, based in Beverly Hills, Calif., raised $225 million in an initial public offering on Toronto’s Neo Exchange in February.
The company’s name came from its values of subverting the status quo and “is aligned with our mandate in a cutting-edge sector,” said Richard Acosta, chief executive officer of Subversive.
Of The 2,108 Wines I Tasted This Year, These 10 Were The Best
The vintage to drink now, or to add to your collection.
I taste far more than my fair share of the world’s great wines, so it’s never easy to pick my annual 10 best experiences.
Usually, though, they happen in winery cellars, tasting rooms, vineyards, and restaurants in some of the most beautiful places on the planet.
Not this year.
After the first 2 1/2 months, with visits to Paris, Reims, New York, and elsewhere, I began pouring from bottles in my home office. Winemakers joined me via Zoom, Microsoft Teams, FaceTime, and more, and sometimes took notes at my own dinner table.
Nonetheless, more than 2,000 wines—2,108 to be exact, but who’s counting?—crossed my lips. Old vintages of fine Bordeaux vied with barrel samples of the superb 2019. New Champagne cuvées and vintages 2008 and 2012 are stellar. In the mix were surprises from new grapes and regions, as well as California reds and whites from wineries celebrating their 40th and 50th anniversaries.
Many of them wowed me, but those that I prize most this year made me see wine in a new light and conjured memories of happier times.
My top 10 range from one of the world’s greatest Champagnes to a $23 white from a very rare, exotic grape—and beyond, to a fabulous Brunello from one of Italy’s legendary winemakers.
$200 And Under
2019 Diamantakos Preknadi
My wine discovery of the year is this fascinating white made from an almost extinct local grape in Naoussa, a wine region in northern Greece best known for reds. The wine’s floral honeyed aromas, yellow fruit flavors, and round texture resemble viognier, but with a drier, chalkier, brighter side. Grape rescuer George Diamantakos poured it at the WineParis trade show in February, alongside 11 producers who champion unusual varieties that may hold the secret to great wines in a warmer future. $23
2017 Tablas Creek Vineyard Esprit de Tablas Blanc
This showstopping California blend of five white Rhône varieties from Paso Robles is a vivid reminder that you don’t have to compromise on quality to support wineries consciously working to make the world a better place. The stunning Esprit de Tablas white has salty minerality; zesty acidity; rich, complex flavors; and serious aging potential—a grand wine for a reasonable price. Tablas Creek became the world’s first Regenerative Organic Certified winery this year, embracing a new comprehensive program that includes social responsibility for its workers. $45
2003 Château Suduiraut
A great wine experience often goes beyond what’s in the glass. I savored this opulent sweet sauternes in hedonistic surroundings: the Château de Versailles, the setting for a gala dinner celebrating the 70th anniversary of Bordeaux’s Commanderie de Bontemps, an association of top châteaus. We walked under sparkly chandeliers in the Hall of Mirrors in the splendid, art-packed, 390-foot long Galerie des Batailles. The dessert wine, suffused with caramelized citrus, honey, and ginger notes, was the perfect final sip, alongside a Delacroix painting of a swashbuckling battle scene. $60
2010 Château Haut-Bailly
The chance to compare 20 vintages of one of my favorite Bordeaux grands crus was a must-attend event. The tasting at a Manhattan loft was an homage to American owner Robert Wilmers, who purchased the Graves region estate in 1998 and oversaw constant improvements until his death in 2017. I was torn between the concentrated, plush, and polished 2016, and the violet- and cigar-scented 2010, with its fresh tobacco and spice power, but I gave the edge to 2010—it’s what to drink now. $149
2016 Sandrone le Vigne
As a Barolo devotee, I’m always looking for the “wow” years, like 2016, that remind wine lovers why they should collect these age-worthy Italian reds. Sandrone le Vigne, with its vivid core of cedar, cherry, and spice flavors, surpassed the dozens of other terrific options from 2016 that I sipped at an in-depth Barolo event in February. It’s a profound vino serioso that lingers on your palate. Luckily, the prices aren’t yet at Burgundy’s level, but collectors are beginning to dive in. $200
2016 Larkmead Solari
I was all-in when Larkmead winemaker Dan Petroski promised lunch at New York’s Union Square Café with insider data, deep discussion, and 11 vintages of Solari, a cabernet sauvignon produced from a single parcel of vines at the historic Napa winery. For me, the big reveal was how the style of the wines had shifted from super ripe and fleshy to savory and structured. My favorite was the powerful 2016 vintage in which the elements of the new direction come together seamlessly. $224
2012 Biondi-Santi Brunello di Montalcino Riserva
Only 39 vintages of Biondi-Santi Brunello Riserva have been released since the first one in 1888, so I eagerly joined a virtual tasting with Chief Executive Officer Giampiero Bertolini to try the most recent, from 2012. The wine shows all the new leather, crushed herb, velvety licorice, and red cherry-berry richness that has made this riserva so famous. The 2012 vintage has an added emotional element: It is the last one overseen by legendary winemaker Franco Biondi Santi, whose family created Brunello, and is dedicated to his memory. From $450
2006 Krug Clos du Mesnil
The new vintage of this crystalline all-chardonnay Champagne is the ultimate in sophisticated elegance: my finest—and rarest—fizz of 2020. It comes from a small, walled plot of vines in the village of Le Mesnil-sur-Oger. Although 2006 was a warm year, this layered bubbly hums with energy and combines fresh baked brioche aromas; a crisp, flinty, preserved lemon character; and a sumptuous creamy texture. I sipped it (no spitting) with Krug-provided music pairings by 3D music pioneer Ozark Henry. $1,195
Taylor Fladgate Very Old Tawny Port, Kingsman Edition
A sample of this unique blend of rare tawny port arrived in a tiny glass tube inside a fancy wooden box that could have held a collectible fountain pen. Still, there was enough liquid to revel in its seductive flavor starburst of candied citrus, sugared nuts, dried figs, and butterscotch, all tied together with a luxurious texture. And there’s the frisson of a movie tie-in—it was created to celebrate spy action-comedy The King’s Man, which will debut in February. The U.S. gets only 100 crystal decanters of it. $3,800
2017 Domaine de la Romanée-Conti Romanée-Conti
A week before the coronavirus lockdown in March, I was 60 stories above lower Manhattan at the Manhatta restaurant for the annual Domaine de la Romanée-Conti pre-release tasting—what ended up as my last wine event in the city for 2020. All the domaine’s seven reds and one white, are, as expected, superb. What to highlight? Although I loved the exceptionally concentrated and rich white Montrachet ($9,600), this complex, rose-petal-scented, ultra-rare Romanée-Conti is the ultimate red Burgundy. $15,500
New Tax In Town? Federal Proposal To De-schedule And Tax Marijuana
Today, Senate Majority Leader Chuck Schumer (D), Senate Finance Committee Chairman Ron Wyden (D), and Sen. Cory Booker (D) released their discussion draft—the Cannabis Administration and Opportunity Act—for federal descheduling of marijuana. While federal descheduling impacts all states, it does not deschedule marijuana in states which choose to keep their own ban.
Nevertheless, descheduling would have a profound effect on the marijuana businesses operating in states which have already legalized use—either medically and/or recreationally—by normalizing income tax treatment, opening access to capital, and permitting interstate commerce in cannabis.
The bill includes an excise tax with a rate of 10 percent in the first year, growing to 25 percent in the fifth year.
The House of Representatives already has a bill, the MORE Act, which would also deschedule and tax marijuana.
In the short term, existing businesses would benefit from descheduling by no longer being subject to Section 280E, enacted in 1982 to deny the deduction of business expenses to those selling drugs on Schedules I and II of the Controlled Substances Act. While intended to stop illicit sellers from deducting expenses like guns and yachts used in smuggling operations, the IRS applies it to state-authorized marijuana retailers, which hurts taxpayers trying to comply with the law and creates a competitive advantage for the illicit operators that Section 280E was enacted to penalize.
This particular section of the tax code limits the deductions businesses can take when calculating their income tax liability. Traditional businesses can deduct ordinary expenses such as rent, marketing, utility costs, and payroll, but marijuana businesses are limited to deducting cost of goods sold (COGS). Cultivators and wholesalers have had an easier time than retailers as more expenses are directly associated with COGS.
The unfavorable treatment of state-legal businesses has resulted in retailers selling marijuana experiencing effective rates well above 70 percent.
Were a bill passed to deschedule marijuana at the federal level without a subsequent federal tax, compliant marijuana businesses would receive an effective tax cut. Repeal of 280E was estimated in 2017 to lower federal receipts as much as $5 billion over 10 years according to the Joint Committee on Taxation (JCT).
In 2021, with significantly more businesses than in 2017, that number is likely to be higher. It should be included in any assessment of 280E that a repeal (and normal access to banking) is likely to increase taxpayer compliance by existing companies. A report from the Treasury Inspector General for Tax Administration found significant compliance issues and underreporting of income under the current system.
Tax cuts as a result of federal reform were always unlikely, and thus, the new bill includes an excise tax. The proposed tax rate will grow from 10 percent of removal price (cost at producer level or removal from bonded premises) in the first two years to 25 percent of removal price in the fifth year. The tax also applies to illegally imported or otherwise unlawfully removed products.
In the sixth year, products will be taxed differently based on whether THC content can be measured with sufficient certainty. Tetrahydrocannabinol (THC) is the main psychoactive compound and is generally used to define potency of the marijuana product, even though there are other compounds in the plant which may influence the effects on the user.
THC-measurable products will be taxed based on grams of THC. For products where measurements are not possible, products will be taxed per ounce.
The rate will be 25 percent of the sales price in the previous federal fiscal year—for non-measurable products, it will be the sales price of cannabis flowers, and for measurable products, the sales price of THC. This could mean that the THC-measurable category will continue to expand as testing capabilities develop. Products considered drugs are exempt from taxation.
It is less than ideal to change the tax system after five years. Businesses will have built systems to comply with the first system and will then be forced to change when the system changes. There could be substantial pressure from the business community to extend the purely price-based tax design ahead of year six, even though potency-based taxes represent a superior design.
While the proposed federal rates start at the lower end, they quickly become substantial. Since all states with recreational sales already tax either cultivation, wholesale, or retail sales, the federal government should err on the side of lower tax rates. Overtaxing marijuana could result in a competitive advantage to illicit sales, which are still prevalent in most states—even in states that offer a licensed market.
Perhaps in acknowledgment of this, the bill offers a credit for qualified domestic manufacturers (a system also applied in alcohol taxation). This credit amounts to 50 percent of an applicable amount each year. This amount grows from $2 million in the first year to $5 million in the fifth year. The term “qualified domestic manufacturer” is not defined in the bill.
It is unfortunate that the bill relies on price as a tax base, as prices share no association with the negative externalities (harm) associated with consumption. Even though the tax eventually incorporates an element of potency and quantity, the rate will still be determined on sales prices. Such a design can lead to more volatile revenue generation, as prices fluctuate.
With the bill’s design, highly potent products would be more expensive and yield more revenue, reflecting higher societal cost associated with more potent products. In terms of internalizing externalities, this is a positive. By including the weight component, the levy would also respect the different harm profiles of smoking a little versus a lot of marijuana.
Neither weight nor potency are perfect, but both are substantially better proxies than price for internalizing the externalities. However, a simpler way to achieve this without the need to reflect last year’s prices is shown here.
Using THC as a tax base assumes that THC content is the best proxy for potency and therefore the best measure of externalities related to marijuana consumption. This, however, is an area that should be studied further. There are hundreds of cannabinoids in marijuana and the understanding of the “formula for potency” is nowhere near complete. Even with a THC focus, there may be a need to levy one rate on edibles and another of concentrates to account for different and more potent absorption mechanisms. For instance, this year New York and Connecticut passed tax systems where edibles are taxed four times higher than concentrate.
Furthermore, one of the great challenges with tax design for marijuana is the sheer number and variation of product types available on the market, from pre-rolled joints to sparkling water, and the yet unknown products to come. Any tax system should either be nimble enough or be updated frequently enough to capture new products as they enter the market.
Finally, significant work remains to be done. The bill leaves certain questions to two federal agencies, the Food and Drug Administration (FDA) and the Alcohol and Tobacco Tax and Trade Bureau (TTB). The processes developed by FDA will be especially important for the future of medical marijuana. Furthermore, interstate commerce could radically change the operating environment for existing businesses.
The discussion draft is expected to undergo several changes before introduction of the final bill text.
Cannabis Execs Cheer ‘Green Landslide’ of Votes For Legal Pot
Despite all the uncertainty surrounding the U.S. election, there’s a clear victor already: domestic cannabis companies.
Leaders across the industry cheered after marijuana measures passed in all five states that had them on the ballot Tuesday — even in deeply red parts of the country. The results showed how marijuana is becoming less of a partisan issue, and buoyed the biggest U.S.-based players in the market.
“Cannabis won, and won big,” said Boris Jordan, chairman of Curaleaf Holdings Inc., one of the largest cannabis companies.
“It’s a green landslide.”
The latest results make recreational marijuana legal in 15 states and approved for medical purposes nearly nationwide, pushing the once-taboo topic of legalization firmly into the U.S. mainstream. Voter support in New Jersey passed by a wide margin, while Mississippi voted for the more liberal of two options to legalize medical use. South Dakota was also the first state to vote in recreational and medical use at the same time.
“We think that is a big signal to Washington and other states,” Jordan said in a phone interview. “Cannabis has won much bigger than anyone thought.”
Green Thumb Industries Inc. jumped 5.3% Wednesday in New York, while Harvest Health & Recreation Inc. and Cresco Labs Inc. each rose less than 1%. Curaleaf shares slipped 1.5% after giving up earlier gains.
Like many of his contemporaries, Cresco Chief Executive Officer Charlie Bachtell was thrilled by the election news pinging his phone all night, waking him after he tried a glass of wine to get to sleep late. Soon after gave up and had a cup of coffee.
“We may not know the results of the presidential election, but it’s safe to say cannabis was victorious,” Bachtell said in a phone interview.
Trulieve Cannabis Corp. CEO Kim Rivers said she indulged in one of the company’s products — a CBN sleep aid, with no THC — to help her get through the election uncertainty. After eight hours of shut-eye, she woke up to the industry’s big victory.
“The election is solidifying what we already know: Cannabis isn’t a partisan issue, it’s a human issue,” she said. Rivers added that the industry could also benefit from a possible stimulus bill, if one can be passed after the election.
Despite growing support for cannabis in the U.S., prospects for federal legalization took a hit, at least in the short term, with the likely possibility that Republicans retain control of the Senate.
That weighed on Canadian cannabis companies, which are missing out on the U.S. market strength. Dan Ahrens, chief operating officer at AdvisorShares, where he manages two cannabis ETFs, said some investors had also thought they might have had an easier time breaking into it under an all-blue scenario.
Instead, a Republican senate would validate the model of the U.S. companies, which have already managed to “grow tremendously in the last four years during the Trump presidency.”
Shares of Canopy Growth Corp., the industry’s biggest Canadian company, slumped 7.1%, while Tilray Inc., once one of Canada’s hottest stocks, fell 9.4%.
The likelihood of a Republican Senate means that the MORE Act — legislation which would de-schedule cannabis — is now off the table, and legal change will more likely happen under the STATES Act, which defers legalization issues to states.
After the latest results led to legalization in New Jersey, Arizona, Montana and South Dakota, as well as medical legalization in Mississippi, the total addressable market for cannabis producers has grown by more than $3 billion, Cowen analyst Vivien Azer said in a note.
With recreational legalization passing in New Jersey, that could put pressure on neighboring markets such as New York, Pennsylvania and Connecticut to make a similar move soon.
The rapid acceptance isn’t exactly a surprise to many in the industry, but executives were still glad to see it actually play out.
“You wake up and you see a third of America is living in states where cannabis is legal for adults,” said Ben Kovler, CEO of Green Thumb Industries.
MindMed Surges, Putting It At Forefront of Psychedelic Euphoria
Canadian-listed shares of MindMed have surged over 50% since the beginning of the month and have more than tripled since the end of October. Its market capitalization of over C$1 billion puts the company ahead of at least eight companies in Canada’s benchmark S&P/TSX Composite Index, according to data compiled by Bloomberg.
Thailand Legalizing Opioid-Like Herb Spurs Rush of Online Sales
Entrepreneur Sittichai Komam didn’t waste time once Thailand in late August decriminalized kratom, a coffee-like plant native to Southeast Asia that can give users a mild high. Within hours, Sittichai was on Facebook selling freshly picked kratom leaves, sourced from his neighborhood in southern Thailand, to local consumers.
Popular in the U.S., where advocates say it’s an opioid alternative but critics say it’s a dangerous drug, kratom is the latest herb the Thai government has legalized for production. Though producers can only sell domestically for now, Thailand has plans to allow exports, potentially enabling local dealers to become suppliers to the U.S., the world’s most lucrative market.
“A lot of the older villagers kept kratom trees to harvest and eat its leaves,” Sittichai, 31, said. “After it became legal, I started collecting and buying the leaves to help them earn extra income.”
Already, the domestic response has been overwhelming: One week after Sittichai launched, he stopped advertising because Thai orders were coming in faster than villagers could harvest the crop.
Still, Thai consumers have many options on social media platforms like Facebook or e-commerce outlets like Sea Ltd.-backed Shopee, where hundreds of new posts offer stacks of fresh leaves for roughly 100 baht ($3.09) per 100 grams.
Thailand removed kratom from the narcotics list on Aug. 24 and on Sept. 8 lawmakers passed a draft law to allow kratom imports and exports. The moves followed easing of rules against cannabis and hemp.
Thailand lags Indonesia as a producer of the coffee-like shrub, which has leaves that advocates say can kill pain, boost energy and treat depression and high blood pressure. Thailand had banned its cultivation, consumption or sale, and people convicted of possessing any part of the plant faced hefty fines and lengthy prison sentences.
Thailand’s local kratom market could be worth 600 million baht by next year, based on assumptions that the sector will be smaller than the hemp industry, according to Chaiwat Sowcharoensuk, an analyst at Krungsri Research.
Once Thailand announces rules to regulate trade and large-scale companies join the green rush, though, the export market could be significantly larger, he said.
“Decriminalization will not only benefit farmers but will create a whole new supply chain from upstream to downstream and will likely attract operators looking to turn it into beverages, health supplements and cosmetics,” Chaiwat said.
The biggest potential export market is the U.S., where online dealers now sell Indonesian-sourced kratom powder and other products to consumers looking for alternatives to opioids. The U.S. market is estimated to be valued at more than $1 billion annually, with 11 million to 15 million users, according to the American Kratom Association, which based its valuation on imports from Indonesia.
“We expect that the legalization of kratom in Thailand will lead to more acceptance of this botanical, and, in turn, reasonable regulations for growing and processing in the countries where kratom is cultivated,” said Jenn Lauder, director of marketing and advocacy at Kraken Kratom, an Oregon-based vendor that sells products from strains local to Indonesia and Thailand.
“This means that companies in the U.S. could have greater control over their supply chains, including seed-to-sale tracking and quality assurance standards that start at the source, and more consistent raw plant materials,” she added.
The timing of liberalization is awkward. The World Health Organization’s Expert Committee on Drug Dependence, which evaluates the potential harm of psychoactive substances, next month will begin what it calls a pre-review of kratom, the first step in a process that could lead to tighter controls.
In the U.S., the Food and Drug Administration has warned consumers about kratom. “There is substantial concern regarding the safety of kratom, the risk it may pose to public health and its potential for abuse,” Judy McMeekin, the FDA’s Associate Commissioner for Regulatory Affairs, said in a May statement.
Advocates say criticism is unfair. “Kratom may be much more beneficial than harmful to society and if properly regulated can help with certain addictions, help those struggling with acute and chronic pain, and offer those who are trapped in the opioid addiction cycle a safe path away from that,” said Mac Haddow, senior fellow on public policy at the American Kratom Association.
In Thailand, decriminalization is getting good reviews from people like Phatcharaphon Thupaphong, a 47-year-old caddie who chews kratom to get an energy boost while working under the tropical sun.
“Before it became legal, I’d have to hide the leaves under my car seat and they’d shrivel from the heat by the time I got home,” she said. “Now I don’t have to worry.”
Psychedelic Companies Hope At-Home DNA Tests Bring Better Highs
An emerging industry aims to help people pick the best drug for their ailments—and the right dose.
Spit into a tube and pop it in the mail, and the lab results may lead to a better high—or at least a safer one. That’s the premise of a home saliva testing kit sold for $199 by Endocanna Health Inc., which looks for 57 genetic traits that could influence a customer’s response to marijuana, so they can select the best strain and correct dose.
The company also plans to look at similar factors for a range of psychotropic drugs.
“Your DNA is your blueprint,” says Len May, chief executive officer of the Burbank, Calif.-based startup. “It gives you a GPS that can guide you to an experience that is more optimal and helps you avoid sharp corners.”
Endocanna is among a handful of early-stage companies following in the footsteps of precision medicine by trying to help people understand how they’ll react to cannabis or psychedelic drugs, such as psilocybin, MDMA, DMT, and ketamine.
Companies researching alternative therapies for depression, addiction, chronic pain, and other afflictions want part of the $27 billion global market for traditional psychiatric drugs.
They’re trying to solve the piece of the puzzle that holds many people back from microdosing magic mushrooms or undergoing marijuana therapy: fear of a bad trip—or even lasting psychosis.
Pharmacogenomics, the branch of pharmacology concerned with how genetic factors influence reactions to drugs, has already seen some success in oncology.
Although there’s no scientific consensus about whether a person’s response to any kind of psychiatric drug can be predicted with genetics, companies including Endocanna are already wading into research and even direct-to-consumer kits. If they can succeed in preventing extreme reactions to psychedelic drugs, it could smooth a path for the industry more broadly.
The risks are more significant than just bad trips. Marijuana is often recommended to ease anxiety, but it can also provoke it in some people. The National Institute on Drug Abuse says smoking high-potency marijuana could increase the chances of developing psychosis.
On the flip side, a 2015 analysis of U.S. patient data found that 19,299 Americans who took classic psychedelics such as LSD, psilocybin, and mescaline weren’t at increased risk for developing problems such as schizophrenia, psychosis, depression, or anxiety, or of committing suicide.
Bad trips are still problematic: A Johns Hopkins University study of 1,993 people who reported bad trips found that 11% said they had put themselves or others in harm’s way during the experience, and 8% had sought treatment for what they believed were enduring psychological symptoms related to the event.
“That to me is disquieting, particularly in light of the cultural enthusiasm for legalization and decriminalization,” says Roland Griffiths, director of the Center for Psychedelic & Consciousness Research at the university. “People trying them are not only seeking treatment but may be putting themselves or others at risk—even life-threatening risk.”
The risks aren’t deterring investors. The Canadian Securities Exchange said $277 million has been raised for psychedelics companies since 2020, and $11.25 billion has been raised for cannabis and hemp companies since 2016.
Vancouver-based Entheon Biomedical Corp., which sells a mail-order saliva test for people considering psychedelics, priced at $89, is among them. The early-stage company went public last year through a reverse takeover.
Entheon’s psychedelic test looks at five factors: a liver enzyme for ketamine metabolism, serotonin receptor variations to gauge “psychedelics sensitivity,” and three other factors to weigh “mental health risk” by analyzing genes believed to influence responses to THC and CBD—including a test for the AKT1 gene, which the National Institute on Drug Abuse has identified as potentially linked to a higher risk of psychosis in people who use marijuana.
The company grew out of CEO Timothy Ko’s desire to help his opiate-addicted brother, who tried traditional treatments for a variety of mental ailments before dying two years ago.
“Some of the difficulty that we faced as a family was that there was a lot of uncertainty as to what he was actual suffering from and what medications might be given to him,” Ko says.
Entheon’s dashboard for customers taking its tests contains links to dozens of scientific studies published in peer-reviewed journals that offer some clues to potential links, but no definitive answers. The company is also conducting research on electroencephalogram brain waves in patients undergoing psychedelic-assisted therapy to further research links between genetic variance and drug response.
Griffiths says it’s too early to know if a psychedelic treatment plan can be personalized to account for someone’s genes. “Right now within precision psychiatry, there aren’t even good genomic predictors of responses to most interventions,” he says. “I’m not aware that there are any within psychedelics, either.”
With regards to marijuana, factors other than genetics help determine someone’s response. “It’s also about what a person has eaten that day, what time of day they take the drug at, and how well hydrated they are,” says Dr. Jan Roberts, a New York-based psychotherapist who specializes in cannabis and mental health. Some foods, like mango, have a reputation for enhancing the effects of cannabis, she says.
Entheon says there is a place for direct-to-consumer tests, though the scientific understanding of how genetics relates to drug sensitivity and mental health is evolving.
Other companies are also pushing ahead despite the uncertainties. Berlin-based Atai Life Sciences NV has more than a dozen entities pursuing various drugs in the psychedelics space. Among them is PsyProtix, a joint venture that’s researching depression, genetics, and metabolomics—or the study of small molecules within cells.
New York-based startup Mind Medicine Inc., known as MindMed, is betting on precision medicine that isn’t limited to genetics. It aims to use information culled from step counters, pulse rate sensors, sleep patterns, and side effects from past medications to help psychiatric patients determine which drugs to take and at what dosage.
The results could help as MindMed develops a pipeline of potential products, including treatments based on LSD, MDMA, DMT, and an ibogaine derivative: 18-MC. MindMed CEO Rob Barrow says he doesn’t believe in the hype around home-DNA tests. “Genomic testing can be confusing even for people who know what they’re doing, like physicians,” he says.
There’s a debate about whether it’s even desirable to avoid bad trips altogether. Christian Angermayer, the chairman of Atai, says that while long-term psychosis isn’t desirable, a negative experience for the duration of a psychedelic dose is actually rewarding for some people, who turn to psychedelics to cope with negative experiences like personal trauma and depression. “A bad trip is not a bad outcome,” Angermayer says. “It helps you go through your demons.”
Is It Ever OK To Get Stoned With A Client? And Other Questions As Pot Comes To Work
As more young professionals use legal weed with work friends, companies grapple with setting boundaries on a new kind of bonding.
The legalization of marijuana around the U.S. is bringing weed into the workplace in new ways.
Many of the 55 employees at Vangst, a recruiting firm for cannabis companies based in Denver, consume marijuana during a biweekly, virtual all-hands meeting that usually happens around happy-hour time, says Karson Humiston, its 28-year-old founder.
“Some people are drinking an alcoholic beverage, and others are smoking a joint,” she says of their online team hangouts.
Marijuana is a common, if sometimes covert, element of American life. Nearly half of U.S. adults said in 2021 that they have tried it, up from about 34% in 1999, according to a long-running Gallup poll.
With the widening legalization of pot in the U.S.—19 states and Washington, D.C., have legalized it for recreational use and more than a dozen others have cleared it for medical purposes—workplaces and co-workers are adjusting to greater openness about the drug, grappling with issues from referencing cannabis in job interviews to deciding whether it is ever acceptable to get stoned with a client.
“When it was totally illegal, you didn’t have to worry about it in corporate settings too much, but now there are a lot of gray areas,” says Matt Kittay, a corporate attorney at Fox Rothschild in New York who counts cannabis companies among his clients.
For instance, some companies producing cannabis products say they have had to rule on employees’ use of them during the workday. Others, including Amazon.com Inc., have stopped drug-testing job applicants and are pushing for nationwide decriminalization.
Jamie Partida, 30, interviewed for a job last year as an account executive at Canon Solutions America, a subsidiary of copier and camera company Canon Inc., in New York City. On her résumé, she included her unpaid marketing experience at CannaGather, a cannabis industry networking and education community.
“One of the first questions they asked me at my final interview was about that, and they seemed a little shocked at first,” she says, adding that she explained why easing attitudes about cannabis was important to her.
The interviewer ended up liking that she was passionate about something outside of work, she says, and she got the offer. She also had to submit to a drug test before starting work, which she passed.
Drug testing prospective hires for cannabis is becoming less prevalent as more states legalize the drug. In New York, recreational marijuana was legalized on March 31, 2021, so while employers can still test prospective hires for cannabis use, they can’t make hiring decisions solely based on a positive cannabis result, according to state legislation.
Some employers say they can’t afford to rule out potential hires in a tight labor market. When Amazon said in June that it would stop screening most job candidates for marijuana, it predicted the pool of qualified applicants would rise by 400%.
Greater workplace acceptance of marijuana can also mean having to listen to co-workers share details of their pot habits.
Nicholas Athey, an assistant professor at the University of La Verne in Southern California, says he has talked about his marijuana use with students and colleagues since he joined the university in 2017.
Mr. Athey, who teaches criminology, says his openness has changed some students’ perceptions about drug users. He adds that it has bonded him with some students, such as military veterans who use pot for pain management.
Ed Roberts, president of his Southwick, Mass., staffing firm, has been a proponent of medicinal cannabis for nearly a decade and grows the plant at home. He has been enthusiastic about his hobby in the office for years.
He says his full-time team of four, plus several contractors, is used to his evangelism on behalf of the plant. Mr. Roberts, 65, recently suggested cannabis-infused oils for one colleague’s sleep troubles and another’s seasonal allergies.
“I’m at a point where my employees or people I meet through work bring their problems to me now,” he says, adding that employees haven’t rebuffed his advice so far.
At some companies, marijuana plays a part in team-building and socializing. Unsurprisingly, the companies most eager to talk about it are connected to the cannabis industry.
Rosie Mattio, head of a New York public-relations firm that works with cannabis-industry clients, devised weed-assisted virtual bonding sessions for her team during the pandemic.
As a group, they logged on to experience guided meditations online and DJ sessions, each taking an edible or smoking from home. In June, they participated in an in-person joint-rolling class in the Berkshires, led by an employee.
At the same time, cannabis companies are tightening their rules around workplace weed as they seek mainstream acceptance in business. At MJBizCon, one of the industry’s largest conventions, held in Las Vegas, where recreational marijuana has been legal since 2017, organizers have strict rules against on-site consumption due to local venue regulations.
Nabis, a cannabis wholesale platform based in San Francisco, doesn’t drug test its workers, but has a no-tolerance policy for being under the influence on the job, in part because some employees handle heavy equipment, says Chief Executive Vince Ning.
At companies such as Vangst, partaking of recreational marijuana during work hours is a nonstarter, though medical marijuana would be permissible, says Ms. Humiston. When the workday wraps, however, co-workers and managers sometimes use marijuana to socialize. Workers at Cann, a THC- and CBD-infused beverage company in New York, usually drink their product only on Friday afternoons, to decompress before the weekend, says Jake Bullock, 33, a Cann co-founder.
Bringing cannabis into professional life can be a more loaded proposition for people of color, some of whom remain leery of openly discussing—or using—marijuana at work due to negative stereotypes, says Andrew Farrior, 33, managing partner at a New York venture company that invests in several Black-owned cannabis startups.
Dae Lim, 28, who runs cannabis-inspired clothing label Sundae School, says he makes daily judgment calls about when it’s appropriate to get high, adding that he is typically sober most of the workday. Five of his 11 full-time employees use cannabis regularly, he says.
“If it’s a meeting with a real-estate investor for a dispensary permit, I wouldn’t smoke,” he says. “But if I’m meeting an artist for a collaboration, I think it could be appropriate to smoke together. There is a shared bond that gets created that way.”
‘People Who Bore The Brunt Of Incarceration,’ Deserve To Succeed In New York’s Legal Cannabis Sector, Says Entrepreneur
Getting minorities real access to the cannabis sector is vital, business leaders said at a New York gathering.
Concern about opportunities in legal cannabis for African Americans, indigenous people and people of color loomed large in an industry gathering focused on the emerging adult-use business in New York state this week.
About 300 advocates, financiers and prospective cannabis business founders gathered at the Business of Cannabis: New York event on Wednesday in New York City’s Rainbow Room to listen to discussions and network, as the Empire State joins others around the country in rolling out an adult-use cannabis program.
Bronx native and retired NFL player Ruben Lindo supported plans under the New York law to award cannabis business licenses to neighborhoods impacted by cannabis prohibition, but said people who have already been in the industry deserve more than a carved-out allocation of permits.
‘It’s about giving the rightful ownership of an industry to people who bore the brunt of incarceration. We operated in the space at risk of life and liberty.’
— Ruben Lindo, CEO, Phoenix Nutraceutical Inc.
“It’s about giving the rightful ownership of an industry to people who bore the brunt of incarceration,” said Lindo, who is also CEO of Phoenix Nutraceutical Inc. and founder of Blak Mar Farms. “We operated in the space at risk of life and liberty.”
Lindo and others called on the state’s new Office of Cannabis Management to move forward quickly with an application process for social equity licenses.
With more than 19 million people, New York ranks as the fourth largest state by population in the U.S after California, Texas and Florida. It’s also home to the world’s biggest financial center, Wall Street.
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Estimates on the potential size of the legal cannabis market in the state range from $3 billion to $6 billion, after the state legislature and former Gov. Andrew Cuomo legalized cannabis for people 21 and over in March.
Speakers said New York should avoid some of the pitfalls of legal cannabis in other states. In California, the illicit cannabis market has continued as a competitor to legal sales, partly because of high state taxes that make regulated pot less competitive. In Massachusetts, social justice licenses have been awarded but few applications have been approved thus far.
Mitch Baruchowitz of Merida Capital, which is taking cannabis company Leafly Holdings public through a SPAC deal, said New York could become the Eastern pole of the cannabis business, along with California in the West.
“There’s going to be a lot of entrepreneurs here,” he said. “The chance to talk to people and hear their own origin stories doesn’t feel like work.”
Cannabis may be the first product to be normalized before it was legalized because millions of people used it despite prohibition, he said.
“The challenge is, what are you going to do to new people who violate the law? What happens to people who don’t join the legal industry?” Baruchowitz said.
Amber Littlejohn, executive director of the Minority Cannabis Business Association, said New York should take steps to ensure that cannabis entrepreneurs with social justice licenses have enough capital to succeed.
She called on investors and employers in the space to work with minority entrepreneurs, who have to this point been mostly left out of the state’s existing medical cannabis business.
“There are plenty of minorities that have resources and are experienced,” Littlejohn said. “When dealing with folks that are less funded, look for the meaningful opportunity, and include the people whose backs we’ve built this industry on.”
John Hudak of the Brookings Institute said municipalities that opt out of the cannabis businesses are similar to town folk in the movie Footloose who tried to ban dancing by forbidding it.
“These municipalities are afraid of people of color coming into communities and doing these scary things that the ‘War on Drugs’ propaganda has told us,” he said.
Kirstin Jordan of real estate firm Park Jordan LLC said residential property values around dispensaries have not suffered, which is “quite the opposite of what opt-out proponents have been predicting.”
State Sen. Liz Krueger, who authored New York’s Marijuana Regulation and Taxation Act (MRTA), said she was motivated to take on the issue more than seven years ago when she learned that about 50,000 young people per year were getting busted for low level marijuana offenses.
“They were not busting white kids in my district [but] everybody’s kids use marijuana at about the same rate and it’s insane — I wanted to fix the law,” Krueger said.
Roger Thomas, the African American CEO of Bronx-based cannabis startup Mello Tymes, said he found the event helpful to his plan to applying for a social justice cannabis business license.
“All we want is a chance,” said Thomas. “I think New York is going to give us a shot.”
New York Gov. Kathy Hochul has recently named members of the Office of Cannabis Management, which will move ahead with the licensing and regulatory activity to set up legal cannabis sales in New York by some time in 2023.
The Business of Cannabis: New York was presented in partnership by the Business of Cannabis and Prohibition Partners.
Justin Bieber Breaks Into Cannabis With Palms Partnership
Justin Bieber is entering the marijuana market with prerolled joints that’s he calling “Peaches,” the name of a song from his most recent album.
The Canadian singer is working with a Los Angeles-based company, Palms, on the products. Palms specializes in prerolled cannabis products, with its seven-joint packs selling for $32 at locations in Nevada and California, according to its website.
“I’m a fan of Palms and what they are doing by making cannabis approachable and helping to destigmatize it –- especially for the many people who find it helpful for their mental health,” Bieber said in an emailed statement. A spokeswoman declined to share financial terms of the collaboration.
Scientists are studying the effects of cannabis on mental health. A 2020 paper from researchers at Columbia University and the New York State Psychiatric Institute said a popular belief that marijuana can help with depression is leading more patients to try it, but that some studies have concluded it can worsen outcomes.
“Among the most common health claims made in online advertising for recreational cannabis dispensaries is depression treatment,” the researchers said. “These messages may be increasing in frequency, while media messaging about marijuana has become more positive over time and includes less information about risks.”
Bieber, 27, has been open about how the pressures of child stardom and drug use contributed to his own mental health challenges. In a YouTube documentary series last year, he said he tried marijuana when he was 12 or 13 and eventually grew to feel dependent on it, though he said not everyone has the same experience.
Celebrities are increasingly wading into the cannabis industry. Jay-Z is chief visionary officer of the Parent Co., which sells branded cannabis products, while Martha Stewart has a line of CBD gummies in partnership with Canopy Growth Corp. Gwyneth Paltrow and Rosario Dawson are both involved with THC-drinks maker Cann.
Palms has raised capital from individuals and professional investors, according to Tyler Breton, chief operating officer of the company, whose official name is Tres Palmas Inc. “As a young and rapidly growing company, it’s exciting to find talented people who will enter into true partnerships where both of us are rewarded as the product succeeds,” he said in an emailed statement.
Bieber’s target demographic, Gen Z and millennials, make up almost 40% of the cannabis market, according to the 2020 HQ Cannabis Brand Affinity Report.
A portion of sales from his cannabis products will support groups including Veterans Walk and Talk, a group of veterans which advocates for cannabis as medicine, and the Last Prisoners Project, a nonprofit that aims to free people convicted of marijuana possession. It will also support diversity in the marijuana industry.
“They both closely align with Palms mission of making cannabis approachable and mainstream,” Tres Palmas Chief Executive Officer Noah Annes said in an emailed statement.
As for the name of the product, it ties in with the chorus of Bieber’s song: “I got my peaches out in Georgia. I get my weed in California.”
Dreams Of Pot Tourism In Canada Dashed By Tough Rules
Farms in some provinces are allowed to sell directly to the public—with onerous restrictions.
The Ontario government’s idea appears straightforward: Encourage investors to buy rich farmland and grow sun-drenched cannabis plants full of the compounds that get you high, treat ailments, and pack an aromatic punch. Then let them open their gates, offering tourists an experience akin to boutique wineries.
Entrepreneurs jumping on the opportunity are finding it’s not so simple.
Legislation that took effect in 2019 allowing direct sales from farms is restrictive and unwieldy, and such projects are further complicated by the myriad rules governing the cannabis industry in Canada at the municipal, provincial, and federal levels.
J.P. Mariwell Inc., a pot grower attempting to build a tourism business, imagines guests strolling through its fields of towering pot plants—with a guide extolling the health benefits of the various strains.
The company would like to offer some of its weed harvest for sale on site, as well as bath bombs and beverages from other local producers in the bucolic region on the Lake Erie shore. Mariwell’s master grower envisions a cafe, with a menu showcasing his most spectacular specimens.
Much of that is likely to remain a dream. Regulations require Mariwell’s shop windows to be blacked out so minors can’t see in. Tours of the fields aren’t allowed under rules designed to avoid contamination.
And forget a tasting room along the lines of nearby wineries: On-site consumption of cannabis isn’t permitted; staff can’t even sample the pot they grow. “I just wish that customers could touch it or smell it,” says Theresa Robert, the company’s chair and a primary investor.
Like many fledgling marijuana operations in Canada, where the cannabis industry is burgeoning, Mariwell is looking to sell its meticulously bred strains for medicinal and recreational uses. A tourism operation would be a welcome ancillary revenue stream. Mariwell is optimistic about turning its first profit this year—with about 5,000 plants growing well—on gross sales of about C$10 million ($7.8 million).
The company has raised C$5 million, which it spent on land, equipment, seeds, fencing, and security—upfront investment required before Mariwell could gain approval to sell in stores, and there’s still no guarantee the provincially-run distributor will choose to stock its products.
Selling from a farm shop would then require a further round of licensing. “You have to put an excessive amount of money into the business in the hopes it will be approved,” Robert says.
Sensi Brands Inc. opened its farm store in a railway boxcar in St. Thomas, Ont., last week. The company fitted the car’s tiny windows with one-way glass to comply with the rules prohibiting exposure of the interior. “We’ve created a really cool experience because our brand is Station House,’’ says Tony Giorgi, Sensi’s chief executive officer.
Station House is one of just three pot-farm outlets—what the province calls “farmgate” shops—that have opened since the legislation passed.
The tepid interest in the business stems from the onerous rules, as investors are unwilling to jump through so many hoops, says Trina Fraser, a partner with Brazeau Seller Law. “I’ve had a number of clients say, ‘Just forget about farmgate, we’re not going to do it,’” she says.
Farmgate shops are subject to the same rules as all provincial cannabis retail stores, says Daffyd Roderick, a spokesman with Ontario Cannabis Store, the government-owned distributor in the province. OCS will continue to monitor the success of the farmgate model “and assess whether future modifications may be necessary.’’
While Ontario was the first province to allow on-site stores, New Brunswick, on the Atlantic Coast, recently launched a similar program, and British Columbia, on the Pacific Coast, is developing a plan. George Smitherman, CEO of the Cannabis Council of Canada, an industry lobby group, says pot tourism will expand as growers find creative ways to entice visitors.
He predicts consumers will find workarounds for consumption restrictions, such as buyers taking their purchases to nearby parks. “There’s so many creative, gutsy, courageous people,” he says. “These are hard-core entrepreneurs.”
Mariwell master grower Brendon Ditmar is about as hardcore as they come. A longtime recreational user (his first teenage cannabis was a strain that tasted like Grape Crush), Ditmar has the vocabulary of a botanist and the soul of a vintner.
His weed sports such names as Fresian Dew and Triple Cheese. Pineapple Upside Down Cake is going to be a star, he says, pointing to a row of two-foot-high plants.
“I’m working on some peanut butter flavors right now,” Ditmar says. “A wine connoisseur will feel the exact same way I do. You see those unique characteristics and you want to bring them up. You want to have that unique profile.’’
For now, weed connoisseurs wanting to check out Ditmar’s work will have to make do with a virtual tour on Mariwell’s website, which boasts of pot with an aroma of tropical fruit and hints of chocolate, and where the farm and its rows of plants are on full display.
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