Q1 News Bytes 2018

First Batch of Medical Cannabis Cultivators Approved in Pennsylvania

On Dec. 27, 2017, Pennsylvania Gov. Tom Wolf announced that eight medical cannabis grower/processors have been approved to begin cultivation of the state’s first batch of medical cannabis. He also announced that about 10,000 patients have been registered with the program. “We have four grower/processors in the final stages of their inspection process,” said Rachel Levine, Pennsylvania acting Health Secretary. “We have been working with them to make sure they are meeting all of the standards set out by the regulations and their facilities are safe and secure.” Medical cannabis is expected to become available in early 2018. Patients suffering from 17 illnesses are eligible to register with the program. The approved businesses are Cresco Yeltrah, Franklin Labs, GTI Pennsylvania, Ilera Healthcare, Pennsylvania Medical Solutions, PurePenn LLC, Standard Farms and Terrapin Investment Fund.

Nevada’s Recreational Cannabis Sales Hit Nearly $38M

Nevada adult-use cannabis sales topped $37.9 million in October 2017, according to the Nevada Department of Taxation. The sales have yielded nearly $20 million in tax revenue as well. The numbers indicate that Nevada easily outperformed other states for the first four months of cannabis sales. Due to processing times under the Nevada Department of Taxation, it took two months for the data to be revealed. According to many Nevada-based dispensary owners, the implementation of adult-use sales in California poses little threat to the Nevada market. With nearly 43 million tourists who visited Las Vegas in 2016, tourism obviously is an important factor in Nevada. These impressive cannabis sales were caused in part by the state’s tourist-driven economy.

Cannabis ETF Begins Trade on U.S. Exchange

Cannabis-focused Exchange-traded fund, ETF Managers Group LLC (ETFMG), announced on Dec. 26, 2017, that its Alternative Harvest ETF went live on New York Stock Exchange (NYSE) Arca. While it is still high risk, cannabis-related ETFs have been soaring in popularity. “As an ETF issuer we are excited about opportunities for innovation, the chance to give investors exposure to new markets and doing our part to impact the continued evolution of the ETF industry by meeting the appetite of investor interest,” stated Sam Masucci, founder & CEO of ETF Managers Group. Previously known as the Tierra XP Latin America Real Estate ETF, with the ticker symbol LARE, the new ticker symbol will be MJX and the fund’s underlying index has been changed to the Prime Alternative Harvest Index. Prime Alternative Harvest Index tracks companies that are likely to financially benefit from the growing normalization of cannabis.

Banks Continue to Warm Up to Cannabis Businesses

Since January 2017, the number of depository institutions in America that are willing to provide services for cannabis businesses has increased 18 percent. In January 2017, 340 banks were allowing cannabis businesses to access their banking services, and as of the end of September 2017, there were 400 banks willing to embrace cannabis businesses, according to the Financial Crimes Enforcement Network (FinCEN). Thanks to the Freedom of Information Act, FinCEN must periodically report on information that is frequently requested. A 2014 amendment to the Financial Services appropriations bill blocks the Treasury Department from using funds to punish financial institutions that provide services to state-legal cannabis businesses, but unfortunately, it wasn’t enough to encourage banks to accept those types of businesses.

Medical Marijuana Inc. Continues to Expand Overseas

Medical Marijuana Inc. announced on Dec. 8 2017, that its subsidiary Kannaway® has expanded business into the untapped European market. The company’s distribution network will be capable of distribution of organic hemp-based products to all citizens of the European Union. In addition, the products will be sourced out of Europe. “We are extremely excited to take this next step in our international expansion by becoming the first direct selling company to feature phytocannabinoid based products in Europe and to share our products, culture, and mission throughout Europe,” stated Blake Shroeder, COO Medical Marijuana Inc. “We have always planned to bring our revolutionary products to a worldwide audience, and Europe is the perfect next step for our company.” Kannaway® specializes in hemp-based botanical products. This is a significant opportunity for the brand to expand into Europe, as it is already operating in both North and South American countries.