MJBizMagazine January 2022 by MJBiz Daily

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MAGAZINE VOLUME 9 • ISSUE 1 • $12.95

NEW: Cannabis Packaging and Design Insights Wana CEO Breaks Down $300 Million Deal Acquisitions, IPOs and Other Cannabis News

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January

Table of Contents

FEATURES

From the Editor COVER STORY

OPEN FOR BUSINESS

Cannabis companies prepare for launch of new markets potentially worth a combined $2.5 billion.

Five Questions with Nancy Whiteman

Hemp Notebook

Company News

Industry Developments

NEW DEPARTMENT

UNBOXED: CANNABIS PACKAGING & DESIGN INSIGHTS Packaging for Äkta cannabis products integrates environmental responsibility and distinctive design.

Industry Players

Unboxed

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JANUARY 2022

MAGA Z I N E VOLUME 9 • ISSUE 1 • $12.95

NEW: Cannabis Packaging and Design Insights

Seed to CEO

Wana CEO Breaks Down $300 Million Deal Acquisitions, IPOs and Other Cannabis News

On Our Cover OPEN FOR BUSINESS Cannabis companies prepare for launch of new markets potentially worth a combined $2.5 billion

Patrik Jonsson, Curaleaf’s regional president for the Northeast, plans the company’s expansion from its adult-use retail store in Oxford, Massachusetts. Photo by Steweson Photography

4 January 2022 | MJBizMagazine

Unboxed, a new packaging feature in MJBizMagazine, debuts on page 62.

DEPARTMENTS

MJBizMagazine January 2022 Volume 9 • Issue 1

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FROM THE EDITOR Kate Lavin

(Mostly) Unlimited Possibilities From the Northeast to the Southwest, the industry is ready to take off

ith six states poised to launch marijuana sales in the year ahead, 2022 is shaping up to be a big one for the cannabis industry. Organized by predicted market size, these states—New Jersey, Connecticut, New Mexico, Montana, Vermont and South Dakota—represent a hodgepodge of attitudes, licensing structures and business friendliness. Starting on page 32, reporter Omar Sacirbey takes an in-depth look at these upcoming marijuana markets to learn what they offer for entrepreneurs. In addition to learning about license types and social equity initiatives in each location, readers will hear from stakeholders about where the business opportunities are—and are not.

Licensing Tight Rope

Regulators in existing markets have struggled for years to find the right balance of cannabis business licenses. Limit the number of licenses too severely, and only well-capitalized multistate operators will clear the hurdles. Eliminate license caps entirely, and plant-touching companies often struggle with a glut of product. The states welcoming regulated marijuana in 2022 have taken a variety of steps to address equity in licensing, and it will be interesting to see how their solutions fare as these markets mature. The majority of the new markets aren’t limiting cannabis licenses at the state level, and

10 January 2022 | MJBizMagazine

some have taken the rare step of forbidding municipalities from banning marijuana businesses altogether.

“With six states poised to launch marijuana sales in the year ahead, 2022 is shaping up to be a big one for the cannabis industry.”

the regulated market is already booming. Meanwhile, Connecticut is the only market to institute statewide license caps across all sectors. But regulators there are working to diversify the industry by reserving 50% of all licenses for social equity applicants. Hopefully the lottery process runs smoothly, allowing social equity businesses to get up and running. Those familiar with the state’s regulated marijuana landscape say more cultivators will be needed quickly to supply what is likely to be a popular market.

The Year Ahead Montana took one of the more inventive stances on the issue, dictating that only counties where voters passed recreational marijuana can offer cannabis business permits. Whether license caps are implemented is also left to local discretion. Time will tell whether counties that voted against adult-use marijuana legalization will regret that decision when fees and salestax dollars start rolling into their neighbors’ bank accounts.

A Tale of Two Markets

New Mexico has no license caps, no bans on product types and no state residency requirement, making it one of the most wide-open states for cannabis entrepreneurs to do business. And with 6% of New Mexico residents registered in the medical marijuana program,

Also in this issue, regulatory and government reporter Jeff Smith identifies the states likely to address marijuana legalization in 2022 through voter referendums (see page 54) or state legislatures (page 58). Be sure to subscribe to the MJBizDaily newsletter to stay on top of these issues and more. From everyone here at MJBizMagazine, we wish you a safe and prosperous 2022!

Kate Lavin MJBizMagazine Editor

Reach Kate Lavin at kate.lavin@ mjbizdaily.com.

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FIVE QUESTIONS with Nancy Whiteman

Art of the $300 Million Deal Wana Brands CEO Nancy Whiteman shares the evolution of her all-cash deal with Canada’s Canopy Growth By Bart Schaneman

he industry was abuzz in October that Canadian cannabis producer Canopy Growth Corp. agreed to pay $297.5 million in cash for the option to purchase Boulder, Coloradobased marijuana edibles company Wana Brands. The actual acquisition is conditional on the United States legalizing marijuana at the federal level. The transaction raised some questions, however, including whether Wana had to wait to be paid the $297.5 million (it did not) and what exactly was meant by federal legalization. MJBizDaily spoke with Nancy Whiteman, co-founder and CEO of Wana, about her exit strategy, what she learned about structuring deals and why she chose to partner with Canopy.

There’s a business cliché that every entrepreneur needs to have an exit strategy. Was this a goal you always had? Some sort of an exit was always in the plan, and the particulars of what the exit looked like was more of an evolving situation. We were approached by many people who felt that going public was a good idea, that being part of a special purpose acquisition company (SPAC) was a good idea, that looking at private equity was a good idea. We systematically worked through the different options. This, for me, was a good fit to become part of something that was

12 January 2022 | MJBizMagazine

CEO Nancy Whiteman co-founded Wana Brands in Boulder, Colorado. Courtesy Photo

already established, that had deep resources and shared our values, and that could be a partner that would help us grow. (It was) the kind of deal that I was looking for.

exit, I think that companies need to really be balancing focus on topline revenue with a lot of focus on bottom-line revenue. We have years of audited financials. We were ready to go when we felt that the time was right.

Do you have any advice for other American brands considering structuring a deal in a similar way?

What made you want to pull the trigger on this deal?

One of the things that made this deal maybe a little unusual, from a valuation perspective, is that Wana is a highly profitable company. Canopy wasn’t making a big bet on top-line revenue that was not backed up by earnings. And that’s why we got the valuation that we got. That’s why we didn’t take a lot of stock. The bottom line counts. If what you are looking for is a profitable

If you’re an independent brand like Wana, you have to look at how the market is going to shift (with federal legalization). One of my working assumptions is that distribution is going to become a lot more important. Dispensaries will not be the only game in town. There will be other ways to purchase THC products in the future. So, you start thinking about what kind of partner can bring

FIVE QUESTIONS distribution opportunities to the table. And what kind of partner seems to be investing in the industry for the long run and has the resources to really hang in there. The investment (in Canopy Growth by alcohol giant) Constellation Brands brings that financial resource. And through Constellation, they bring a partner who is very skilled at building premium brands and has a lot of … distribution in their ecosystem. Then we looked at who is doing some interesting things, long term, to win in the United States. Obviously, Canopy has made other investments, not just Wana. They have a similar relationship with Acreage; they’ve made a significant investment in TerrAscend.

So, they have a number of interesting and strong brands, (such as) the Martha Stewart CBD brand, that were of interest. It really seems like a good fit for us.

Canopy said the proposed acquisition is conditioned on “federal permissibility of THC in the U.S.” Why structure the deal that way? Canopy is dual-listed. They’re listed on the Toronto Stock Exchange, and they’re also listed on the Nasdaq. The Nasdaq does not currently allow plant-touching companies in the United States. If (Canopy) directly owned Wana, they would be owning a plant-touching company. And so that’s what prevents it.

What’s next for you? Is it business as usual for a while? It is mostly business as usual. I’m remaining as the CEO. I remain the owner of the company because this was an option to acquire, not an acquisition. We’re executing on our two major strategies … which are to get to the best markets quickly and to focus on innovation and R&D and next-generation products. This interview has been edited for length and clarity.

Bart Schaneman covers cultivation and extraction for MJBizMagazine. You can reach him at bart. schaneman@mjbiz.com.

mjbizdaily.com | January 2022 13

HEMP NOTEBOOK Kristen Nichols

Time for Grain Think of hemp’s food potential as a pandemic promotion worth making

ood news: Hemp really can reduce the impacts of COVID-19. I’m not talking about cannabinoids, though. Instead, I am referring to the potential of hemp grain as a meat alternative. Hemp could join other healthy, plant-based proteins in a national effort to tackle obesity—if only politicians would get serious about funding efforts to improve the country’s overall health.

OBESITY AND COVID-19 It’s no secret that the United States has a weight problem, which has exacerbated the effects of the COVID-19 pandemic. The U.S. Centers for Disease Control and Prevention reports that obesity triples the chances that someone who contracts COVID-19 will need to be hospitalized. Once hospitalized, obese COVID-19 patients are more likely to need ventilators, more likely to need intensive care and, tragically, more likely to die. That’s a scary statistic in a country where more than 42% of adults are considered obese. The science is clear: Underlying health conditions such as obesity are key drivers keeping the United States in the unenviable position of leading the world in pandemic deaths.

PLANTS CAN HELP Government spending on food and health shows how screwy the United States is when it comes to addressing this problem. U.S. Department of Agriculture Secretary Tom Vilsack frequently

14 January 2022 | MJBizMagazine

makes the point that the U.S. now spends more each year on diabetes treatment than it does to run the entire USDA. That’s just crazy. And yet politicians seem unwilling to make the kinds of investments needed to change how America eats and to reduce our staggeringly high rates of obesity, diabetes and cardiovascular disease. The recent $1 trillion infrastructure law addresses the food supply chain only by improving broadband delivery in rural areas. For too long, the United States has incentivized monocropping and large-scale meat production. The result of this failed experiment is all around us, evident in an agriculture economy dominated by a few large players and a population so overweight that millions of Americans have developed health conditions that put them at risk for COVID-19 and other deadly diseases.

HEMP’S POTENTIAL The hemp plant could help solve the country’s obesity crisis. We just need to invest in it, instead of subsidizing meat production. The U.S. government spends more than $38 billion each year to subsidize the meat and dairy industries. Meanwhile, it allots less than 1% of that amount each year to subsidize fruit and vegetable production. An analyst at the University of California, Berkeley, estimated in 2015 that a pound of hamburger would cost $30 without any government subsidies. Grain producers aren’t helping. An estimated 33% of global farm

“The U.S. government spends more than $38 billion each year to subsidize the meat and dairy industries. Meanwhile, it allots less than 1% of that amount each year to subsidize fruit and vegetable production.” acreage goes to feed animals raised for meat, according to the United Nations.

SOWING THE SOLUTION Hemp could help change things. Hempseed products are high in healthy fats and provide all nine essential amino acids. These qualities make hemp the perfect building block for meat alternatives that could help ease the nation’s deadly obesity epidemic. Many readers of this magazine know all about hemp’s nutrition profile and don’t need me to talk it up. But the industry must do a better job talking to non-cannabis-using voters and politicians. Hemp’s food potential could be as powerful for human health as any tantalizing cannabinoid benefit. Think of it as the pandemic promotion that’s safe for cannabis operators to talk about.

Kristen Nichols covers hemp and CBD for MJBizMagazine. She can be reached at kristen.nichols@ hempindustrydaily.com.

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COMPANY NEWS U.S., Canada & International by MJBizDaily & Hemp Industry Daily Staff U.S. DEVELOPMENTS Springbig to Go Public on Nasdaq Via Marijuana SPAC Transaction

Marijuana marketing software company Springbig in Boca Raton, Florida, plans to go public through a merger with Tuatara Capital Acquisition, a special purpose acquisition company (SPAC) in New York City. The transaction will create a company worth roughly $500 million, including approximately $200 million worth of cash on hand after closing. The estimated value of the combined company is based on a price of $10 per share. The deal is subject to approval by Tuatara shareholders and other conditions.

Curaleaf to Buy Tryke for $286 Million

Cannabis multistate operator Curaleaf Holdings of Massachusetts signed a definitive agreement to acquire Arizona-based MSO Tryke Cos. in a cash-andstock transaction currently valued at $286 million. The acquisition of Tryke, which does business as Reef Dispensaries, will expand Curaleaf’s presence in Arizona, Nevada and Utah. The deal is expected to close in the second half of 2022, contingent on regulatory and other approvals. Under terms of the agreement, Massachusetts-based Curaleaf will pay $40 million in cash at closing and $75 million in cash in equal installments on the first, second and

16 January 2022 | MJBizMagazine

third anniversaries of the closing. Curaleaf also will pay 17 million shares of stock in equal installments on the first, second and third anniversaries. In addition, 1 million Curaleaf shares will be paid in 2023, based on the business exceeding certain profit targets for 2022.

SPAC Raises $200M to Target Companies

A California-based SPAC raised $200 million in an initial public offering to target companies involved in the medical cannabis or cannabinoid industry. Canna-Global Acquisition Corp. started trading on the Nasdaq after offering 20 million units at $10 per share. Each unit consists of one share of the company’s common stock and one warrant entitling the holder to purchase a share of stock for $11.50. Canna-Global, which also will target ancillary cannabis businesses, said it won’t invest in a business that is in violation of the U.S. Controlled Substances Act. In its prospectus, Canna-Global said it “hasn’t yet initiated any substantive discussions, directly or indirectly, with any business combination target.”

Ayr Wellness Raises $150 Million in Capital After Acquisitions

Cannabis multistate operator Ayr Wellness borrowed approximately $150 million in an additional offering of senior secured notes. The debt bears a 12.5% interest rate and matures in December 2024.

According to a news release, “Ayr intends to use the net proceeds from the issuance of the Notes to fund capital expenditures, including construction and improvement costs, as well as acquisitions and for general corporate purposes.”

Schwazze Borrows $95M, Acquires N.M. Operations

Colorado cannabis company Schwazze raised $95 million in capital and struck a deal worth $42 million for acquisitions in New Mexico. The Denver-based company’s acquisitions in New Mexico include “substantially all the operating assets” of Reynold Greenleaf & Associates, described as “a licensed medical cannabis provider with 10 dispensaries, four cultivation facilities—three operating and one in development—and one manufacturing location.” The deal includes the equity of Elemental Kitchen & Laboratory, described as a “manufacturing asset,” as well as the right to acquire the medical licenses of Medzen Services and R. Greenleaf Organics. The acquisitions are expected to close “within the next quarter,” subject to closing conditions and regulatory approvals. The capital raise includes $93 million worth of convertible notes that carry a 13% annual interest rate over a five-year term and are secured against company assets, according to a news release. Schwazze will pay $25 million in cash for the acquisitions in addition to a seller’s note worth $17 million.

COMPANY NEWS U.S., Canada & International CANADIAN DEVELOPMENTS Village Farms Buys Quebec License Holder for $37 Million

Village Farms International bought a majority stake in Quebecbased licensed cannabis producer and distributor Rose LifeScience, fulfilling the Florida-headquartered company’s pledge to gain a foothold in Canada’s second-biggest marijuana market by population. Village Farms, parent company of British Columbia cannabis producer Pure Sunfarms, bought 70% ownership of the privately held business for up to $37 million (CA$46.7 million), consisting of $15.8 million in cash and $21.2 million in shares.

Canopy and Hexo Shutter Facilities, Lay Off Staff

Quebec-based Hexo Corp. is shutting down three facilities and laying off staff as part of an integration plan. Hexo is decommissioning facilities in Kirkland Lake and Brantford, both in Ontario, on Jan. 31 and Stellarton, Nova Scotia, on Feb. 28. The company said some of the 155 affected workers could potentially be relocated to remaining facilities. Meanwhile, Canopy Growth Corp. is closing a 23-acre property in Niagara-on-the-Lake, Ontario, and terminating 30 employees. The Smiths Falls, Ontario-based

company acquired the property in June 2014.

Fire & Flower Consolidates Shares for Nasdaq Listing

Canadian cannabis retail chain Fire & Flower consolidated its shares as part of a plan to list on the Nasdaq exchange in the United States. The share consolidation is being implemented on a 10-to-1 basis, according to the company. Fire & Flower announced its Nasdaq ambitions in February 2021. Its shares will continue to be listed on the Toronto Stock Exchange.

COMPANY NEWS INTERNATIONAL DEVELOPMENTS Aurora Cannabis Buys Stake in Dutch Grower

Edmonton, Alberta-based Aurora Cannabis is investing “a significant equity stake” in upstart Netherlands-based Growery B.V., one of only 10 lottery winners selected to cultivate and distribute adult-use marijuana to retailers under a government-backed pilot program. Aurora said it intends to invest an “immaterial cash amount” upfront, with the remainder paid as Growery achieves certain milestones. Aurora did not say how much of Growery it is acquiring. The planned acquisition comes about a month after Aurora competitor Village Farms

International paid almost $4.6 million (4 million euros) for an option to purchase an 80% stake in Netherlands-based Leli Holland B.V., another lottery winner.

Tilray Strikes Deal To Supply Cannabis In Luxembourg

Leamington, Ontario-based license holder Tilray reached a deal with Luxembourg’s Ministry of Health to supply the small European country with medical cannabis. Tilray will be the third Canadian cannabis producer since 2019 to supply the burgeoning market. The company will provide a variety of pharmaceutical-grade

medical marijuana products such as extracts and dried flower. While financial terms of the agreement weren’t disclosed, the Ministry of Health in August requested $3.5 million (3 million euros) from the Ministry of Finance to buy 66 pounds (30 kilograms) of medical cannabis this year. Have a company announcement you want us to consider? Send a news release or general information to omar.sacirbey@mjbizdaily.com. (Note: We’re looking for news about expansions, financing, deals, partnerships and similar developments, not product announcements.)

mjbizdaily.com | January 2022 19

INDUSTRY DEVELOPMENTS National & International

MAP LEGEND

High level of medical development/implementation Medium level of medical development/implementation Low level of medical development/implementation Other—federally illegal but unique circumstances Recreational

Countries included have passed legislation at the federal level and must fulfill at least one of the following criteria: • Cultivation, manufacture or sale of medical and/ or recreational cannabis allowed. • Doctors can prescribe medical cannabis. • Import and/or export of medical cannabis allowed. High: Countries at the forefront of the global industry. Frameworks are established, and adoption is well underway. Medium: Implementation has begun but is still limited or restricted; lots of room for the market to develop. Low: Legislation has been passed, but implementation is very limited or nonexistent. Decriminalization is not included.

National & International News U.S. Rep. Introduces States Reform Act, a Marijuana Legalization Bill U.S. Rep. Nancy Mace from South Carolina introduced the 131-page States Reform Act, which would remove marijuana from the list of federally controlled substances and allow state governments to lead the way on cannabis reform. “Washington needs to provide a framework which allows states to make their own decisions on cannabis moving forward,” Mace

20 January 2022 | MJBizMagazine

said at a news conference. “This bill does that.” The bill was well-received by longtime legalization stalwarts as well as some conservative political groups. U.S. Cannabis Council CEO Steve Hawkins suggested the bill introduced by Mace, a Republican, could be the political bridge necessary to get marijuana reform “over the finish line” in Congress. Separately, a conference committee removed the SAFE Banking Act, which would prohibit federal regulators from punishing

banks for serving U.S. marijuana companies, from an omnibus defense spending bill in Congress.

U.S. Postal Service Enacts CBD Vape Product Restrictions The U.S. Postal Service made official a long-delayed rule that bans shipping commercial hemp and marijuana vape products in the mail. The ban was ordered by Congress in a law directed mostly at nicotine products. But the law covers cannabinoid vapes, too—even those made from legal hemp.

INDUSTRY DEVELOPMENTS

The final rule, published in November, makes exceptions for consumer testing, public health and noncommercial uses. Adults, for example, can make up to 10 noncommercial shipments in a 30-day period. High-THC vapes remain illegal to mail in any amount. But cannabinoid vape manufacturers across the THC spectrum have been watching to see how the Postal Service regulates vape commerce. U.S. consumers ordered roughly $44 million in CBD vape cartridges online in 2020, according to Nielsen

IQ, a market analytics company. Almost all the orders would have been delivered by mail. It’s unclear to what extent enforcement of the new mail ban will occur.

Germany’s Incoming Coalition Pledges to Legalize Recreational Cannabis Sales The three parties expected to form the next government in Germany vowed to regulate the distribution and sale of recreational cannabis, according to a coalition agreement released in November.

It’s unclear where cannabis reform ranks among priorities of the coalition, which was scheduled to take power from the current conservative government. Alfredo Pascual, vice president of investment analysis at Seed Innovations, told MJBizDaily that “the timeline until a recreational market will be established is largely unpredictable at the moment.” “With almost no details provided in the coalition agreement document, ‘legalization’ could end up meaning many different things,” he added.

mjbizdaily.com | January 2022 21

INDUSTRY DEVELOPMENTS State by State

WA MT

MN ID

DE MD VA

TN AR

SC MS

OH WV

RI PA

LA FL

■ Medical ■ Recreational HI

State News

Note: This map does not include states that have legalized only CBD-based oils.

Arkansas A proposed amendment was filed to legalize adult-use marijuana and create a new market for cannabis businesses. The Arkansas Adult Use and Expungement Marijuana Amendment would allow for at least one cannabis retailer per 15,000 residents and one cultivation facility per 300,000 residents. The proposed amendment, filed by Melissa Fults, a board member of marijuana advocacy group Arkansas NORML, would also legalize cannabis possession for adults and allow anyone with certain marijuana-related misdemeanor or felony convictions to ask the courts for relief from the conviction. California A spate of violent robberies targeting marijuana businesses in the San Francisco Bay Area have thrown into question the survival of several small businesses, with the combined losses of those operators estimated to be at least $5 million. The crimes ranged from break-ins that resulted in minor damage to wild gunfights between robbers and security guards. At least one person was shot.

22 January 2022 | MJBizMagazine

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INDUSTRY DEVELOPMENTS State by State Florida State officials will accept applications March 21-25 for one long-awaited, medical marijuana business license reserved for a Black farmer. The new license was required under a 2017 law passed by the Florida Legislature and connected to a 1981 discrimination case that found Black farmers were disadvantaged in the state by federal officials. Agriculture Commissioner Nikki Fried has called the $146,000 license fee for the Black farmer “discriminatory” because earlier MMJ licensing fees were less than half that amount. Fried has asked the state attorney general to investigate.

Idaho Federal agriculture officials gave the green light to a hemp production plan for Idaho, the last state to pass hemp legislation. Idaho’s law allows hemp cultivation and transportation but not the sale of any hemp products containing THC. The hemp plan also includes a ban on growing for anyone convicted of a felony drug violation in the past 10 years. A state agriculture department spokeswoman said she anticipates Idaho growers will begin filing applications to grow hemp right away.

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INDUSTRY DEVELOPMENTS Illinois Two companies applying for cannabis business licenses in Illinois filed a lawsuit against regulators, claiming the lottery system for awarding permits was unconstitutional, biased and does not meet the state’s goal to promote social equity in the industry. The plaintiffs, Champion Investments IL and Fox River Gardens, allege the state did not offer priority access for social equity applicants during marijuana retail store licensing and that the process subverted the purpose of the program designed to award the permits.

Louisiana The state health department is set to allow hemp-derived delta-8 THC in food. Regulators told businesses that applications are open to register for licenses to make foods containing cannabinoids. “This includes the addition of food products containing CBD and delta-8 (THC) products,” the agency clarified. Louisiana health officials cited a new law that creates a new category for “consumable hemp,” which is defined as “any product derived from industrial hemp that contains any cannabinoids and is intended for consumption or topical use.”

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INDUSTRY DEVELOPMENTS State by State Minnesota Regulators are adding medical marijuana edibles to the list of products available to MMJ patients, a move that could boost sales for both processors and dispensaries. The state health department said it would approve cannabis-infused edibles in the form of “gummies and chews,” effective Aug. 1, 2022. The department is undertaking the rulemaking process for labeling, safety messaging, packaging and testing. Starting in March, patients also will be eligible to purchase smokable cannabis flower.

New Jersey Regulators started taking grower, processor and testing lab license applications Dec. 15. Dispensary applications may be submitted beginning March 15, although existing medical marijuana operators are likely to be the first to start selling recreational cannabis. Roughly 70% of New Jersey municipalities have at least initially decided not to allow recreational marijuana sales.

INDUSTRY DEVELOPMENTS New York The recreational cannabis market in New York won’t launch until mid-2023, the state’s top marijuana regulator said. New York Cannabis Control Board Chair Tremaine Wright told local news outlets that it could be longer until adult-use businesses are operational. In the meantime, Wright pledged to crack down on a so-called “gifting” market, where entrepreneurs sell highly marked-up items such as T-shirts or lighters to customers, who, in turn, receive marijuana as a gift. Separately, the regulators unanimously voted to ban hemp cigarettes and extend a ban on delta-8 THC products. They also voted to formalize rules for manufacturing, testing and packaging of all cannabinoid hemp products. New York hemp businesses have six months to become compliant with the new rules.

Oklahoma New rules went into effect for medical marijuana businesses—including dispensaries—to package and sell pre-rolls up to 1 gram in weight. The new pre-roll regulations will benefit dispensaries but likely hurt licensed processors, which, until the change, were the only businesses allowed to package pre-rolls. The emergency rules also prohibit operating a marijuana testing lab while having a financial interest in a cultivation operation or dispensary.

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INDUSTRY DEVELOPMENTS State by State Pennsylvania State medical marijuana regulators ordered every licensed grower/processor to resubmit vaporized cannabis products containing additives for additional approval by Nov. 30. The directive included any product used in an inhalation process, such as shatter. In explaining the move, a department spokesperson said, “Patient safety is of utmost importance.” Pennsylvania cannabis attorney Judith Cassel told MJBizDaily, “This could mean millions of dollars of inhalation products, previously approved, could now be required to be destroyed.”

Rhode Island State officials awarded five new medical marijuana dispensary licenses through a lottery. The licenses were issued under a long-awaited MMJ program expansion plan that will eventually increase the number of dispensaries from three to nine. The winners included RMI Compassion Centers, Pinnacle Compassion Center, Green Wave, Solar Therapeutics Rhode Island and Plant Based Compassionate Care. A sixth dispensary license also will be awarded, but that was put on hold because of a recently dropped legal appeal.

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South Dakota The state’s highest court struck down on technical grounds a recreational marijuana initiative approved by voters in 2020, shattering the development of a projected $285 million market. In the November 2020 election, 54% of South Dakota’s voters approved adult-use legalization. But a state highway patrol superintendent filed suit against the measure on behalf of South Dakota’s anti-marijuana governor, Kristi Noem. The court ruled that the referendum violated a single-subject rule. The 2021 MJBizFactbook projected that South Dakota adult-use sales would have reached $100 million in the first full year of the program and $285 million by the fourth year.

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INDUSTRY DEVELOPMENTS State by State Texas Travis County Judge Jan Soifer issued an injunction barring state officials from enforcing a notice saying delta-8 THC products are considered controlled substances. The injunction comes after Hometown Hero CBD filed a lawsuit arguing that Texas health officials didn’t follow the correct procedures to initiate the change in the controlled substances list. Delta-8 THC consumers and sellers in Texas widely believed that delta-8 had been legal since it ramped up in popularity about two years ago. But official state documents show that the Texas health department listed the product on its controlled substance list in January 2021.

Vermont Cannabis regulators decided against more restrictive product warning labels and a THC potency cap advocated by a state doctors group. The Vermont Medical Society recently urged the state Cannabis Control Board and lawmakers to require warnings that THC might cause psychosis, impaired driving, addiction and harm to fetuses. The group also wanted to prohibit any products with more than 15% THC, a drastic cut from the 30% allowed under the recreational marijuana law. The Vermont Cannabis Control Board opted to stick with warnings recommended by its public health subcommittee and not overload labels with additional information.

INDUSTRY DEVELOPMENTS Washington state State regulators destroyed 13,000 pounds of cannabis valued at $3 million from three adjoining marijuana farms for allegedly growing more than allowed. The Washington State Liquor and Cannabis Board (LCB) notified Black Diamond Cannabis, Evergreen Nirvana and Green Volcano that they were growing more than their allotted canopy and 50% of their crops would be destroyed. The farms’ owners said they are being unfairly penalized because other growers have lodged complaints. An agent working for the LCB said the agency addressed the canopy-limits violations after complaints from cannabis trade associations. West Virginia The state’s first dispensary, owned by multistate operator Trulieve Cannabis, opened Nov. 12 in Morgantown, marking the launch of a medical marijuana market potentially worth $40 million. The company opened a second store in Weston on Nov. 15. The start of MMJ sales comes four years and seven months after West Virginia approved a law permitting the cultivation and sale of marijuana. State officials blamed the slow rollout on a struggle to provide banking services for the program.

Note: Entries sourced from MJBizDaily, Hemp Industry Daily and other international, national and local news outlets. These developments occurred before this magazine’s publication deadline, so some situations might have changed.

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As regional president for Northeast operations at Curaleaf, Patrik Jonsson is busy anticipating the launch of cannabis markets in several states. Photo by Steweson Photography

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BUSINESS 32 January 2022 | MJBizMagazine

By Omar Sacirbey

Cannabis companies prepare for launch of new markets potentially worth a combined $2.5 billion

ith at least five states poised to launch recreational marijuana markets and one introducing a medical program in 2022, thousands of opportunities exist for cannabis and ancillary entrepreneurs. Between them, the five states readying adult-use programs—Connecticut, Montana, New Jersey, New Mexico and Vermont—are home to 17 million residents and welcome tens of millions more tourists annually. MJBizDaily and other sources estimate that by 2025, the cannabis markets in those five states will collectively be worth $2.5 billion. “We see a big expansion of opportunities happening because of rec,” said Patrik Jonsson, regional president for Northeast operations at Massachusetts-based multistate operator Curaleaf.

FEW LICENSE CAPS

Plenty of licenses are expected to be available. There are no state-imposed caps on the number of licensees in most of the coming markets, though Connecticut and New Jersey’s cultivation sector are exceptions. In New Mexico, any complete and competent application will get a license, according to Ben Lewinger, executive director of the New Mexico Cannabis Chamber of Commerce. That said, in some states, local municipalities will have the right to limit licenses. The only state launching a medical marijuana program in 2022, South Dakota, has also left licensing caps up to municipalities. While some municipalities have been restrictive, no South Dakota town can outright ban all medical marijuana businesses.

REGULATIONS AND SECTORS

Observers see opportunities in every plant-touching category and for ancillary companies. “Anytime you’ve got a new market, you’re going to need certain industry expertise,” said Ned Horsted, executive director of the Cannabis Industry Association of South Dakota. While all five recreational states are hammering out their final regulations—even as this issue goes to print—one key trend is a greater effort by regulators to provide more opportunities for smallbusiness owners and social equity entrepreneurs to break into the market. These efforts include: • Lower application and licensing fees. • Creating microbusiness and small-business license classes. • Restricting vertical integration or limiting the number of licenses an operator can hold. • More robust social equity programs. Whether these regulatory innovations will make it easier for such businesses to succeed remains to be seen. Medical operators in these states have been given head starts and other advantages, which observers fear will allow large operators to dominate the markets—something regulators hoped to avoid. Observers acknowledge that only time will tell if regulations have done enough to allow small businesses to be competitive, but at least some marijuana activists are hopeful. “The regulations facilitate an environment where small businesses have a chance to compete,” said Edmund DeVeaux, president of the

New Jersey CannaBusiness Association in Trenton. If measures that New Jersey and other states have taken to facilitate small-business success bear fruit—and are adopted and expanded in other markets—2022 could be remembered as a pivotal year in cannabis. In the following pages, MJBizMagazine looks at six state markets launching this year and the key criteria that will help determine where there is opportunity for you and your business.

Established and new cannabis entrepreneurs are expected to find thousands of opportunities among the six states that are launching recreational and medical marijuana markets in 2022. Efforts have been made to help small businesses, but big players might still dominate. Important considerations and insights include: • Many of the new markets have lowered barriers to entry for small businesses by decreasing application and licensing fees, reducing or eliminating capital requirements and removing licensing caps. • Depending on the state, local municipalities have varying degrees of control over how many marijuana businesses they will allow, if any. • More states are making microbusiness, craft and smallbusiness licenses available, which likely will increase opportunities for entrepreneurs with limited capital. • Most of the new state markets have social equity programs. • Some states have eliminated or restricted vertical integration as a way to curb domination by large companies.

mjbizdaily.com | January 2022 33

NEW JERSEY By Omar Sacirbey

How does your Garden State grow? Ballot initiative or legislation: New Jersey voters approved recreational marijuana legalization on Nov. 3, 2020, by a margin of 67%-33%. The state’s Legislature passed an implementation bill for the new measure on Dec. 17, 2020. Regulatory agency: Cannabis Regulatory Commission (CRC) Business license types: There are six classes of licensed businesses: cultivator, with six tiers based on size; manufacturer, with two tiers based on size; wholesaler, distributor, retailer and delivery. In addition, microbusiness licenses are available for cultivators, manufacturers/ processors and retailers. Microbusinesses are defined as having no more than 10 employees and occupying no more than 2,500 square feet. The application process for cultivators, manufacturers/processors as well as laboratory licenses opened Dec. 15, while the application process for retailers will open March 15. Regulators have yet to set dates for when they will open the application process for delivery, distribution and wholesale licenses. License caps: Cultivation licenses are capped at 37 until Feb. 22, 2023. The cap doesn’t apply to cultivation microbusiness licenses. No other license types are capped.

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Out-of-state applicants: Allowed for the six main license types, but New Jersey residents must hold at least 5% of the company. Microbusiness license holders must be New Jersey residents—defined as having lived in the state for five consecutive years—and locate their business in the municipality in which they live or an adjacent municipality. Product types: All product types will be available except for infused sweet and savory edibles, such as gummies. Anticipated sales launch: Sales appear likely to start this spring, unless medical marijuana operators are given a head start. 2021 estimated medical sales: $180 million-$220 million 2021 state population and patient numbers: With 9.4 million residents and 120,000 cardholders, MMJ patients account for 1.27% of the state’s population. Predicted size of market: MJBizDaily projects New Jersey’s adult-use market will generate annual sales of $850 million-$950 million by 2024. Local control and opt-in/opt-out rules: Past prohibitions have been voided; municipalities had 180 days from the bill’s enactment to prohibit adult-use operations. Municipalities

cannot ban delivery services to consumers in their area, but they can decide how many licensed businesses to allow. Social equity provisions: Minorities, women and disabled veterans are given priority consideration for licensing. Priority is also given to applicants living in “impact zones,” or high-population municipalities negatively impacted by unemployment, poverty or marijuana-related arrests. To the extent possible, the CRC would grant at least 25% of all licenses to such applicants or those who employ at least 25% of their staff from such zones.

ith annual sales predicted to approach $1 billion by 2024, New Jersey’s recreational marijuana market is poised to become one of the hottest in the United States, potentially overtaking Massachusetts as the East Coast leader. New Jersey’s dominance likely will continue until neighboring New York’s program—not expected to launch until 2023—gets into full swing. “It’s really going to be the hot spot of the entire mid-Atlantic region,” said Edmund DeVeaux, president of the New Jersey CannaBusiness Association. Opportunities are expected to be plentiful for cannabis entrepreneurs,

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BUSINESS especially those looking to start small businesses. There is no statewide license cap except for a temporary limit on cultivation licenses that expires Feb. 22, 2023. That doesn’t mean an unlimited number of licenses will be available—local municipalities will be able to prohibit or limit the number of cannabis businesses in their areas—but it will still allow for a healthy number of licensees, analysts said. And while many municipalities already have opted out, some observers believe towns will opt back in as they better understand the regulations and financial benefits of licensing cannabis companies.

MILLIONS OF SHOPPERS

New Jersey is the fourth-smallest state by size but the 11th-biggest by population, giving entrepreneurs easy access to nearly 10 million residents living within a drive of only a few hours. State businesses also are likely to attract recreational cannabis consumers from New York—home to roughly 20 million people—and Pennsylvania, with 13 million. Nearby Maryland and Delaware also have about 7 million people between them. “Because of its location and vastly underserved market, both internally and externally, (New Jersey) will be a boon for cultivation and dispensaries,” said Steve Schain, a cannabis attorney who specializes in the New Jersey and Pennsylvania markets at Smart Counsel.

RETAIL AND DELIVERY OPPORTUNITIES

Of the license types available, retail offers the most opportunity and has been getting the most attention, analysts say. “It’s the most economical and the most practical,” DeVeaux said. “It requires less capital to start. It’s easier to find land. And the New Jersey commercial landscape lends itself to retail.” While industry observers welcome a cap-free recreational retail regime, they warn that the unfettered num-

36 January 2022 | MJBizMagazine

ber of retail licenses and lower cost of launching a store is already making for a highly competitive sector. And because a limited number of towns are allowing cannabis companies, real estate is being bought up “like hot cakes” in these areas, said Fruqan Mouzon, chair of the cannabis group at the law firm McElroy, Deutsch, Mulvaney & Carpenter. “It’s very hard to find a location and a town that allows it,” he said. Mouzon estimated that, based on studies, the state needs about 200 retail licenses to handle the expected number of consumers.

CULTIVATION OPPORTUNITIES

While launching a cultivation facility is vastly more expensive than starting a retail operation, some analysts see opportunity in that sector as well—especially once the cap on cultivation licenses expires in February 2023. “New Jersey … only has 12 functioning grows and is vastly underserving its plus-or-minus 150,000 patients. It needs a heck of a lot more cannabis— especially if it expects to also serve outof-state residents,” Schain said. DeVeaux said complaints from patients about the quality and quantity of medical cannabis are not uncommon, suggesting that the state will need many more cultivators to meet demand for a recreational marijuana market.

OPPORTUNITIES FOR SMALL BUSINESS

New Jersey has made solid efforts to promote small businesses—especially those owned by women and minorities. The state has created microbusiness licenses with fees of $1,000—far less than what is required for most other cannabis license types. The only catch: Microbusiness license seekers must locate their company in the municipality where the owner lives or a neighboring

municipality. If an aspiring microbusiness license owner lives in a town that forbids cannabis businesses and none of the neighboring towns allow them, either, the license seeker is out of luck. New Jersey also will offer conditional licenses to help less-capitalized individuals. Conditional licenses can be awarded to entrepreneurs who are on the pathway to full licensure but require more time because of the capital constraints needed to obtain a full license. “That favors new business owners, who will be mainly minorities and women,” DeVeaux said. The state also has prioritized social equity. “I think the state has gone above and beyond,” Mouzon said. “It’s a priority if you have diverse ownership, a priority if you’re owned by women, a priority if you’re owned by disabled vets, a priority if you’re owned by social equity applicants.” Mouzon is hopeful the regulations will increase the chances of minorities and women attracting the attention of investors. Another way New Jersey has sought to help small businesses is to eliminate vertically integrated licenses (not including the existing vertically integrated companies in the state’s medical marijuana program). The state’s reasoning is that vertical integration is costly and something that only large, well-capitalized operators can afford. If vertical licenses were allowed, it would make it harder for smaller, less well-capitalized entrepreneurs to compete, DeVeaux said. Companies would still be allowed to vertically integrate, but they would have to obtain the sector licenses individually—and they couldn’t obtain them concurrently; they would have to acquire one at a time, with one year between each license. “Vertical integration equals exclusivity,” DeVeaux said. “We are avoiding vertically integrated operators to allow more people in.”

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BUSINESS Half of cannabis business licenses will go to social equity applicants; regulators offer discounted fees By Omar Sacirbey

CONNECTICUT

Ballot initiative or legislation: The Connecticut General Assembly passed S.B. 1201 on June 17, 2021. Gov. Ned Lamont signed it into law June 22. Regulatory agency: Department of Consumer Protection (DCP)

Business license types: Cultivator, microcultivator, retailer and hybrid retailer, product manufacturer, food and beverage manufacturer, product packager and delivery. License caps: The law specifies that the DCP will determine how many licenses should be issued in each category and that 50% must be held by social equity applicants. If more than the DCP-designated number of applications are filed, the agency will hold two lotteries: the first for social equity applicants and the second for general, non-social equity applicants. Licenses will not be awarded to any lottery applicant who has two or more licenses of the same type through June 30, 2025. The Legislature has not set limits on the number of applications an applicant may submit. Out-of-state applicants: There are no restrictions, provided applicants are authorized to do business in the state of Connecticut. Product types: Infused chocolates and candies are prohibited.

38 January 2022 | MJBizMagazine

Anticipated sales launch: Estimates range from spring 2022 to late 2022. 2021 estimated medical sales: $165 million-$200 million 2021 state population and patient numbers: With 3.6 million residents and 54,000 medical marijuana cardholders, patients make up about 1.5% of the population.

Predicted size of market: MJBizDaily predicts Connecticut’s adult-use marijuana sales could total as much as $250 million in the first full year and $750 million by the fourth year. Local control and opt-in/opt-out rules: Any municipality wishing to prohibit cannabis businesses can opt out by holding a referendum. Municipalities that elect to permit marijuana businesses will retain local zoning control over locations. Only one retailer and one micro-cultivator will be allowed for each 25,000 residents in any municipality. This threshold is subject to reevaluation by the DCP on July 1, 2024. Social equity provisions: Social equity applicants will receive 50% of all licenses awarded for each license type, while general applicants will be awarded the remaining 50% of licenses Any person qualifying as a social equity applicant will receive a 50% discount on all fees for the first three renewal cycles.

onnecticut has the potential to be a lucrative market. With 3.6 million residents and borders that touch New York and Rhode Island—states that have yet to begin recreational cannabis sales—the market is considered “a very promising program” by observers. “Connecticut certainly has a very robust population and a really good medical program,” said Brian Ward, the chief financial officer at Verano Holdings, an Illinois-based multistate operator that in November bought CT Pharma, a major cultivator in the state, and two dispensaries. How promising that market will be depends on the extent the Department of Consumer Protection caps the number of cannabis business licenses—something not yet decided. Cap or no cap, Connecticut’s recreational program makes a solid effort to provide licensing opportunities for social equity and small-business applicants with a variety of tools, including: • A regulation stipulating that 50% of all licenses will be awarded to social equity applicants. Also, social equity applicants will be selected ahead of general applicants, giving them an early mover advantage. • Microbusiness licenses for small entrepreneurs.

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BUSINESS • Conditional licenses that make it possible for businesses to get licensed gradually, thereby reducing the amount of capital needed at the front end of the licensing process. • Relatively low application and licensing fees, reducing an early barrier to entry.

THE BIG COMPETITORS

That said, it won’t be easy competing against existing dispensary operators in Connecticut, including multistate operators Acreage Holdings, Curaleaf, Green Thumb Industries, Trulieve Cannabis and Verano. Although social equity applicants get priority, existing dispensaries can convert to hybrid retailer licenses, which allow them to sell medical and recreational products without going through the lottery process. Large operators that dominate the state’s cultivation sector now are expected to continue to do so for the first few years of the adult-use program. Only four medical marijuana cultivation licenses were issued, one to Curaleaf and three to private operators that are now owned by MSOs Verano, Green Thumb Industries and Greenrose Acquisition Corp., a special purpose acquisition company that acquired Theraplant in March 2021. Pablo Zuanic of New Yorkbased investment banking firm Cantor Fitzgerald wrote in an investor note: “We believe the four existing med cultivators will grab the lion’s share of the rec wholesale market initially, at least for the first couple of years.” Patrik Jonsson, Curaleaf’s regional president for the Northeast, agreed. “The current operators will have enough to supply the current medical market. Then the question becomes, how much additional supply will be needed for adult use,” Jonsson said. “I think we can supply the early market relatively well. As the market matures,

40 January 2022 | MJBizMagazine

it’s going to be important for new operators to come online.”

SMALL-BUSINESS TOOLS

While Connecticut’s established medical operators will initially have the market to themselves, social equity and small businesses are provided mechanisms to ease entry into the market. This includes relatively low application and licensing fees, microbusiness licenses and prioritization for social equity applicants. Another mechanism is a two-step licensing process that awards lotterywinning applicants with a provisional license that is good for 14 months, at which time an applicant must apply for a final license. Regulators hope the provisional licenses help businesses avoid getting locked into real estate, Michelle Bodian, a senior associate attorney with Vicente Sederberg’s Boston and New York offices, told MJBizDaily.

WHOLESALE OPPORTUNITY

New and existing operators will find both opportunity and necessity in the wholesale market because operators aren’t allowed to own more than two storefronts. “Our goal—and the goal of many of the operators—is to make sure that we can offer wholesale product to new operators looking to get into manufacturing and retail, because we are going to be limited to the number of retail outlets we can have,” Jonsson said. Ward from Verano agreed. “One of the opportunities we’ve seen is supplying partners with biomass—raw material that they can process themselves,” he said. “There are only four growers in the state currently. So even on the craft grow side, there’s always going to be tremendous opportunity.” Ward added that craft growers will find their product in demand by MSO-owned stores because they

will be aiming to diversify their retail offerings. “On the craft grow side, we’d love to have some of that product. So that’s definitely a big opportunity,” Ward said.

MANUFACTURING BRANDS

Another potential opportunity is in creating a manufactured brand using biomass bought from growers at wholesale. “In theory, the margins are pretty good, because you can buy biomass or finished oil relatively cheap. … If you’ve got an idea for a brand and execute, we’ve seen that be very successful,” Jonsson said. “And you can do that for a lot less money than what cultivation would run you.” One such example is Levia, a Massachusetts infused seltzer company that is the No. 1 infused beverage in the country, according to Leaflink. Levia recently was acquired by Ayr Strategies.

BEST REAL ESTATE

Retailers should also do well in a state that perennially boasts some of the highest median household incomes in the nation. Observers say many people are interested in the densely populated and often wealthy suburbs, towns along trainlines, the state capital of Hartford and the New Haven area, home to about 20 universities, including Yale. Businesses interested in Connecticut’s adult-use marijuana market should check with local governments to see if they will be allowing adult-use sales. Officials announced that residents of 35 Connecticut cities and towns will receive priority for recreational marijuana business licenses as part of the state’s social equity program. According to the Hartford Courant, more than 200 of the state’s 833 census tracts fall under the definition of disproportionately impacted by drug prohibition, based on drug conviction and unemployment rates.

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BUSINESS A potential ‘land of enchantment’ for entrepreneurs as state converts to a recreational marijuana market By Omar Sacirbey

NEW MEXICO

Ballot initiative or legislation: Gov. Michelle Lujan Grisham signed House Bill 2, which was passed April 13, 2021, during a special session by the state Legislature.

2021 state population and patient numbers: With 2.1 million residents and 126,231 cardholders as of Oct. 31, medical marijuana patients make up 6% of the population.

Regulatory agency: Cannabis Control Division Business license types: Micro-cultivation and commercial cultivation, manufacturer, retailer, vertically integrated establishment, integrated microbusiness license, testing laboratory, research laboratory, courier, consumption area. License caps: None.

Predicted size of market: MJBizDaily predicts New Mexico's adult-use market will generate $125 million in sales the first full year and $350 million by the fourth year. Local control and opt-in/opt-out rules: Local jurisdictions might not prohibit recreational cannabis businesses outright, but they can establish zoning regulations that limit where companies may locate.

Out-of-state applicants: Allowed. Product types: All products will be available. Anticipated sales launch: The law says sales must begin no later than April 1. The application process for micro- and commercial cultivation licenses opened in August, while other application processes began before the Jan. 1 deadline. 2021 estimated medical sales: $180 million-$220 million

42 January 2022 | MJBizMagazine

Social equity provisions: The legalization bill mandates that regulators ensure licensing diversity. It also enables Native American communities to participate in the market through regulator agreements. According to the Marijuana Policy Project: • Rules must include “procedures that promote and encourage full participation in the cannabis industry … by representatives of communities that have been disproportionately harmed by rates of arrest through the enforcement of cannabis prohibitions,

rural communities likely to be impacted by cannabis production and agricultural producers from economically disadvantaged communities.” • Rules must include procedures to encourage diversity among applicants, licensees and their employees. • The Cannabis Control Division will develop a certification for cannabis produced by microbusinesses or licensees that are owned by someone from a community that was disproportionately harmed by cannabis prohibition. • The agency will produce annual reports on diversity in the industry.

ew Mexico has no license caps. Municipalities can’t outright ban marijuana businesses. Cannabis business application and licensing fees are comparatively reasonable. What does this mean for cannabis companies? New Mexico might be the easiest new market to break into. But staying afloat and competing against established players and incoming multistate operators will require an entrepreneur’s A-game.

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The law legalizing adult-use cannabis essentially states that any recreational marijuana business license application that is done properly will be granted. “If you turn in an application that is complete and sound, you will be granted a license, whether it’s retail or any license,” said Ben Lewinger, executive director of the New Mexico Cannabis Chamber of Commerce in Albuquerque. “Anybody who submits an application that is complete and sound will get a license.” While the program has successfully fulfilled a desire to encourage applications for small businesses—more than 1,500 cultivation applications have been submitted since August, when the application period opened—it has done less to curb the entry of big businesses and MSOs. “There’s no residency requirement, and there are definitely lots of MSOs who are making inroads into the state,” Lewinger said. While many big operators and MSOs can be respectful competitors, there’s also a concern that other applicants might try to horde licenses and monopolize the program to the detriment of small and local operators. While that concern is valid, Lewinger said, regulators have put in safeguards meant to prevent big companies from monopolizing the market. Most notably, production limits will be in place for a few years, he added. The idea is that production caps, combined with the unlimited licenses, will create a market with many small producers and a few big producers each growing relatively small amounts of cannabis. Lewinger also noted that New Mexico’s Legislature will convene this month for a 30-day session. “Closing those loopholes” that allow big companies to monopolize the market

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“is a priority.” “Everything is focused on making it possible for these microlicenses to be successful.” “For new mom-and-pop stores coming into market, capital investment is the single-biggest obstacle. There’s just not a lot of capital in New Mexico. There is definitely a risk of out-of-state operators coming in and operating on economies of scale that make it impossible for local operators to be competitive on price,” Lewinger said. “The flip side of that coin is we are naturally and intrinsically supportive of homegrown businesses,” he said. “I would always bet on them against any big, multistate operator who thinks they’re going to come in and be able to relate to the New Mexico audience without doing their homework.”

BEST SECTORS

Cultivation is the only license type for which regulations have been written, while rules for the other license types were set to be released after this issue went to print. Lewinger believes cultivation and other sectors will have ample opportunity for small businesses. The micro-cultivation license allows license holders to grow up to 200 plants. License holders that want to scale up operations in the future can apply for a license in a larger tier at that time. “For lots of people, that 200-plant microbusiness (cultivation license) is just going to be a one-year jumpingoff point to full commercial licensure. Maybe in Year Three, you have 5,000 plants in the ground. But many will just want to stick to 200 plants per year,” Lewinger said. The move to adult-use demand and production will require more testing labs, Lewinger noted. “As we move from medical to adult use, there is going to be a big need for additional testing capacity,” he said.

CPG BRANDS AND RETAIL

At the same time, only a modest number of existing medical operators manufacture products and have storefronts. That leaves an open playing field for both infused product makers and retail entrepreneurs, Lewinger said. “If you have a novel product, the potential to do well is there. Anybody that has a very clear vision for a customer experience will eventually do very well with a retail license,” he said. When it comes to locating a storefront, executives will have to navigate a patchwork of zoning laws that makes some municipalities less inviting than others. That said, Lewinger believes many areas that are currently restrictive will loosen regulations once they see benefits, such as tax revenues. One area that was prohibitive initially but has since embraced the industry—and offers lots of opportunity—is Curry County in eastern New Mexico, on the Texas border, Lewinger said. “That border along Texas represents a huge opportunity for cannabis tourism. There’s a big rush to set up retail operations along the border,” he said. While Lewinger sees opportunities in the consumer packaged goods and retail sectors, supply issues early in New Mexico’s recreational program could be hard on some small businesses. But those that survive their first year or two are likely to reap the rewards. “For retailers and manufacturers, it may be difficult to get product initially. So, I think the biggest need we have right now is production,” Lewinger said. “As soon as our adultuse market equalizes and comes into balance, I think every single license type is going to present a unique opportunity for anybody who has a very clear vision of what they want their business to be.”

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MONTANA

By Omar Sacirbey

Adult-use market will be restricted to medical operators until July 2023 Ballot initiative or legislation: Voters passed Initiative 190, the Montana Marijuana Legalization and Tax Initiative, on Nov. 3, 2020, with a vote of 57% to 43%. State lawmakers then passed House Bill 701, which modified the referendum. Gov. Greg Gianforte signed the measure on May 19, 2021. Regulatory agency: Department of Revenue Business license types: Thirteen different cultivation or “canopy” licenses, manufacturing, retail, transportation and laboratory testing.

Product types: There are no restrictions on available products, but flower potency is capped at 35%. When might sales begin: Jan. 1. Only existing medical operators who have obtained recreational sales licenses will be allowed to sell to adult-use buyers. On July 1, 2023, the recreational market will open for new adult-use licensees. 2021 estimated medical sales: $125 million-$155 million

License Caps: There are no statewide caps, but municipalities can impose local caps on marijuana businesses.

State population and patient numbers: With 1.1 million residents and 55,000 cardholders, medical marijuana patients make up 5% of the population.

Out-of-state applicants: No. Montana residency is required to receive an adult-use business license as well as a medical business license. Residency can be established by living in the state for one year.

Predicted size of market: A University of Montana study projects an adult-use market will generate $217 million in the first full year of sales (likely 2023) and $234 million in year two.

46 January 2022 | MJBizMagazine

Local control and opt-in/opt-out rules: Where recreational marijuana business can locate depends on how the state’s counties voted on Initiative 190. Recreational marijuana businesses will be allowed to locate in counties that approved I-190 but not in counties that voted against the measure. Counties can change their policies through a local vote. Social equity provisions: Montana regulators are proposing strict rules for people working in the state’s marijuana industry. Those with a criminal conviction within the past three years would not be eligible for cannabis-related employment.

ontana’s recreational cannabis market has potential allure and opportunity, but just how much won’t be clear until regulators finalize market rules and individual towns

decide whether to permit marijuana businesses within their borders. While recreational sales are set to begin Jan. 1, only existing medical operators that have received a recreational license will be allowed to serve the adult-use market. The intention is to give Montana-owned marijuana operators a head start against competition. There are nearly 280 medical operators in the state and roughly 370 MMJ dispensaries. The industry will be limited to the existing medical marijuana operators until July 2023, when other recreational businesses will be allowed to participate in Montana’s adult-use market. Once other applicants are allowed into the market, the level of opportunity will depend on how many recreational businesses municipalities decide to allow.

For example, voters in the state’s biggest city, Billings, decided in November to prohibit new recreational marijuana stores, thereby leaving the market to existing MMJ dispensaries that also have licenses to sell recreational cannabis.

TOURISTS MIGHT DICTATE DEMAND

Montana’s 1.1 million residents have been accepting of the state’s medical marijuana program, with patient counts at about 55,000 or 5% of the population. While Montana’s population ranks 44th in the nation, it has a strong tourism market, drawing roughly 12.9 million visitors in 2019. How many suppliers, manufacturers and retailers it will take to satisfy that demand is unclear.

“The in-state market could be handled by the production capacity that we have in medical. But with tourists, we probably need to double the capacity to serve both the in-state and tourist market,” said Kate Cholewa, government affairs lobbyist for the Montana Cannabis Industry Association. The best places for retailers are in the larger population centers and near national parks, but land is costly, she cautioned. “Real estate right now in Montana, no matter where, is at a premium. Prices are up all over the place,” Cholewa observed. The areas that approved I-190 are home to about 90% of the state’s population, she estimated. “So, even though there are vast areas where there won’t be access to an adult-use market, most people live in a place where there is,” she said.

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mjbizdaily.com | January 2022 47

VERMONT

By Omar Sacirbey

Regulations seek to maintain state reputation for small businesses and artisanal products Ballot initiative or legislation: The Vermont Legislature approved S.54 on Sept. 15, 2020, and the bill became law, unsigned by Gov. Phil Scott, on Oct. 7, 2020. Regulatory agency: Cannabis Control Board (CCB) Business license types: Cultivation (six outdoor and six indoor tiers), product manufacturer (two tiers), wholesaler, retailer (one storefront tier, one nursery tier), testing laboratories, integrated (for existing medical operators). The board said in a report released Oct. 15, 2021, that it would consider several other license types in the future, including delivery, on-site consumption, manufacturing-cottage and temporary event. License Caps: No

48 January 2022 | MJBizMagazine

Out-of-state applicants: Yes, but it is recommended that out-of-state residents establish a limited liability company in Vermont.

Predicted size of market: The CCB estimates that recreational marijuana spending could reach $231 million annually by 2025.

Product types: Cannabis flower cannot have more than 30% THC, while oils can’t exceed 60% THC. Flavored vape cartridges are banned.

Local control and opt-in/opt-out rules: Local municipalities cannot ban cannabis business license holders except retailers. In the case of retail, towns must opt in with a vote approving retail outlets. So far, about 30 towns have opted into retail, while observers expect about 50 towns to opt in by the time sales begin.

Anticipated sales launch: October 2022 2021 estimated medical sales: $10 million-$14 million 2021 state population/MMJ patient numbers: With 680,000 residents and 4,674 medical marijuana cardholders, MMJ patients make up about 0.7% of the population, down from 0.8% in 2019.

Social equity provisions: In its report dated Oct. 15, 2021, the CCB proposed waiving application fees for social equity applicants in the first year, then offering fees reduced by 75%, 50% and 25% in each of the following three years, respectively.

ermont is a small state, but its far-reaching reputation evokes artisanal products and farm-to-table dining. Regulators of the state’s upcoming recreational cannabis market are encouraging that ethos and have created regulations that promote small-business opportunities while curbing Vermont’s appeal to multistate operators. Vermont’s cannabis economy won’t be the biggest—an Oct. 31 report by cannabis law firm Vicente Sederberg predicted it would reach $231 million in 2025—but the market will be open to small entrepreneurs from both inside and outside the state. “We’re not in the billion-dollar club, but we have some of the lowest barriers to entry in the industry,” said Tim Fair of Burlington-based consultancy Vermont Cannabis Solutions. “Vermont is going to be one of the most unique adult-use marketplaces in the country … because of the emphasis on small business.” Vermont has only 680,000 residents, but the state draws 14 million tourists annually—many of them from the Northeast. “Our regulators are incredibly procannabis and pro this industry. They are working as hard as they can to make sure this is accessible to anybody who wants in,” Fair said of the burgeoning recreational marijuana market in Vermont. “There’s an emphasis on the small craft, but not to the exclusion of anyone else.” Patrik Jonsson, Curaleaf’s regional president for the Northeast, agreed. “There seems to be a little bit more pushback from the state to support small businesses. I think it’s just the nature of Vermont,” Jonsson said, adding that only a few cities are large enough to be of interest to Curaleaf. “Vermont’s going to be very protective about small businesses, more so than some of the other states in the Northeast. I think they’re going to do everything they can to protect local

“Perhaps the most opportunity lies in the craft and smallcultivation segment.” farmers and hemp producers and folks like that and try to keep out the MSOs to some extent—or at least not let them create any type of monopoly.”

PUSH FOR SMALL BUSINESS

One way Vermont is trying to dissuade MSOs from entering is by limiting operators to one license per sector. That means an operator that wants to vertically integrate must separately win one grow, one manufacturing and one retail license. Operators can’t have more than one of any kind of license, which is a disincentive for big businesses used to trying to win market share by opening multiple stores in a state. “One retail license gets one retail location, and that is it. That has effectively really dissuaded a lot of MSOs and a lot of large operators from coming into the state,” Fair said. “It has really kept out a lot of the major players and instead allowed a lot of the smallbusiness people to really establish a foothold.” Fair added that applicants for craft and smaller-tier licenses aren’t required to provide proof of funds. Furthermore, municipalities can’t ban growers; they can only regulate them for zoning and nuisance violations. “What we have is an opportunity for small entrepreneurs to really get a chance at the adult-use cannabis industry without the major players hogging up the market,” Fair said. The team at Vermont Cannabis Solutions anticipates that about 100 small growers will be needed—in addition to existing MMJ operators—to supply adult-use retailers, which are expected to number around 35.

CRAFT OPPORTUNITIES

Perhaps the most opportunity lies in the craft and small-cultivation segment.

The CCB calculated that Vermont will need 400,000 to 500,000 square feet of flowering canopy to sufficiently supply the recreational market. Fair and his partner, Andrew Subin, believe much of that square footage will be awarded to small growers. “I think they would give out 400, 1,000-square-foot licenses if they want to. But that’s just the benchmark; there’s no limit on the number of licenses,” said Fair, noting that his firm represents about 120 cultivation license applicants.

EDIBLES OPPORTUNITIES

Fair and Subin also see opportunity in the product manufacturing category, particularly edibles. They said the edibles manufacturers currently seeking licensure in Vermont typically make 100 to 1,000 units per week. Many of the product manufacturers that get licensed will be small businesses that aspire to reflect Vermont’s small craft ethos. But there also will be a need for value-priced edibles brands that are mass-produced. “What we’re talking about is a production capability. We do not yet see the production capability to put out the volume of products that would be necessary to meet anticipated demand,” Fair said, referring to the millions of tourists who pour into the state for skiing, leaf-peeping, mountain biking and other activities. What Vermont needs, he said, is an edibles manufacturer that can crank out 10,000 to 15,000 units per week. “That’s a real opportunity right now because that simply doesn’t exist,” Fair said. “There are going to be some small-batch, very high-end, craft edibles. But there are people who drink Budweiser, too. … We also need basic edibles that are not high end, and that

mjbizdaily.com | January 2022 49

SOUTH DAKOTA By Omar Sacirbey

A patchwork of medical marijuana opportunities in a state where all towns must allow one cannabis business Ballot initiative or legislation: South Dakota voters approved Measure 26 by a vote of 70% to 30% on Election Day 2020. Regulatory agency: State Department of Health Business license types: Cultivation, product manufacturing, retail/dispensary, testing labs. License caps: There are no state license caps, but counties and other local municipalities can institute their own caps. Out-of-state applicants: Yes, but at least one principal officer must be a resident. Product types: There are no restrictions. Anticipated sales launch: Sales are expected to launch in late summer or fall 2022.

50 January 2022 | MJBizMagazine

2021 state population and patient numbers: South Dakota is home to 885,000 people. The first medical card was issued Nov. 18. Predicted size of market: MJBizDaily projects medical marijuana sales will total $1.5 million-$2 million in the first year and hit $10 million-$12 million by 2024. Local control and opt-in/opt-out rules: There are no statewide license limits. Municipalities are prohibited from barring all cannabis businesses outright and must have at least one cannabis company within their borders. Otherwise, local governments carry a high level of control, including writing their own municipal cannabis business licensing and zoning ordinances. Social Equity Provisions: None

aving survived various attempts to kill the recreational marijuana referendums that voters passed in 2020, South Dakota’s soon-to-launch medical market will be relatively small but still offer opportunities for cannabis entrepreneurs. “South Dakota has always been an agricultural state and a very business-friendly state,” said Ned Horsted, executive director of the Cannabis Industry Association of South Dakota, adding that each sector has attractive points. “I think there’s opportunity in all of them.” South Dakota has given a great deal of regulatory authority to local municipalities. As a result, how much opportunity cannabis entrepreneurs find will depend on where they choose to locate businesses.

OPEN FOR

BUSINESS A factor that could dampen patient numbers is that few physicians are interested in providing recommendations, according to news reports.

PATCHWORK POTENTIAL

Some municipalities have been very open and cannabis-friendly, allowing a relatively high number of licenses. Others have been restrictive, even capping the number of businesses to the legal minimum of one. While the state can’t charge more than $5,000 for a business license, municipalities can set their own fees. Some municipalities are charging less than $5,000 for a license, while at least one has proposed $125,000—a fee that would likely exclude some smaller players. “Each of the counties and municipalities can do what they want,” Horsted told MJBizMagazine. “There are no clusters of areas that are prohibitive or open. It’s really a patchwork. And I think that there’s some interesting market dynamics happening right now.” Horsted said it’s not widely known which municipalities are friendly to cannabis businesses. His group developed a “matrix and a spreadsheet” for members to gauge how many licenses each municipality allows. “Right now, I think the little guy has a chance. It really goes back to what these localities are doing with their zoning and licensing caps,” Horsted said.

LOCATION CHALLENGES

Among the “interesting market dynamics developing” is which municipalities are opening cannabis opportunities and which are limiting them. Just as multistate operators appear to prefer limited-license states, Horsted believes that other big companies will target limited-license municipalities, which are also likely to be more expensive. Smaller cannabis entrepreneurs, meanwhile, will find opportunity in municipalities offering more licenses.

52 January 2022 | MJBizMagazine

That dynamic and the number of opportunities are reflected in how South Dakota’s two biggest cities—Sioux Falls, population 190,000, and Rapid City, population 80,000—are approaching cannabis licenses. Sioux Falls voted in November to limit its cannabis licensing to five dispensaries plus testing labs, but nothing else. “So, no cultivation or product manufacturing within the city of Sioux Falls,” Horsted said. Rapid City regulators so far plan to make 15 dispensary licenses available, but that number could grow because the regulations link the number of dispensaries in the city to population growth. Meanwhile, the Sioux Falls suburbs of Brandon and Hartford will be less stringent, while the former gold-mining town of Lead (pronounced Leed) in the Black Hills is one of a small number of towns without any license cap. “You can do the math there. I think a multistate operator might be much more interested in a situation like Sioux Falls, where they’ve got a captive market and a high barrier to entry, at least in terms of licensing fees. And then other areas, they probably would want to stay away from because there are no caps,” Horsted said. While it will be relatively easy for out-of-state operators to break into the market, that won’t diminish the opportunities for local cannabis entrepreneurs. “There’s going to be a lot of opportunity for your typical South Dakota entrepreneur to get into the business,” Horsted said.

ROOM FOR BRANDS

The uncapped nature of South Dakota’s market will offer numerous licensing opportunities. But developing a strong brand in this new market has the potential for long-term rewards, Horsted said. “I think there is a latent brand opportunity here, but it’s going to take a little while for the market to establish itself,” Horsted said.

As an example that could indicate the potential for brand success, he pointed to Native Nations Cannabis, a vertically integrated brand launched by the Flandreau Santee Sioux Tribe last summer that so far has seen high demand. “It’s been great,” Native Nations Cannabis President Tony Reider told Sioux Falls TV station KELO in November. “Business has been right on spot with where we projected it would be.” Native American tribes in states with regulated marijuana markets have some autonomy in how they manage their cannabis industries. This includes South Dakota, where some tribal areas launched cannabis markets July 1, when the medical marijuana law went into effect. Horsted predicted there would also be “significant opportunities on the ancillary side” and said he is recruiting packagers, accountants, lawyers and other ancillary businesses to the association.

WAITING FOR A REC FUTURE

While South Dakota’s medical market looks promising, many entrepreneurs are already looking ahead to when recreational cannabis is legalized. Although the South Dakota Supreme Court in November upheld a decision to invalidate the 2020 recreational legalization ballot referendum, there are still two paths to recreational legalization: • Cannabis advocates are lobbying legislators to pass a recreational legalization bill. • Activists are collecting signatures to get another recreational legalization referendum on the ballot in 2022. “A lot of folks are just holding out for rec,” Horsted said.

Omar Sacirbey is a reporter for MJBizMagazine. You can reach him at omar. sacirbey@mjbizdaily.com.

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BACK TO THE BALLOT BOX Residents of several states are likely to vote on marijuana legalization initiatives in November

By Jeff Smith

s many as six recreational marijuana referendums could reach state ballot boxes during the 2022 election, industry officials say. And some of the citizen-led initiatives are in conservative states such as Arkansas and North Dakota. Thirty-eight states already have adopted medical marijuana programs, but citizen efforts are underway to legalize MMJ in three more: Idaho, Nebraska and Wyoming. Depending on how those efforts play out, new markets could generate hundreds of millions of dollars in annual sales. In 2020, marijuana referendums made a clean sweep on Election Day, with voters approving new recreational markets in Arizona, Montana, New Jersey and South Dakota as well as new medical programs in Mississippi and South Dakota. (State Supreme Courts later overturned South Dakota’s recreational market and Mississippi’s medical program.) MJBizDaily projected Arizona and New Jersey combined would generate nearly $2 billion a year in marijuana product sales by 2024. The 2020 ballot-box sweep reflected strong public support for legalization spreading across the country—even in so-called “red states.” Surveys show that twothirds of Americans support adult-use marijuana legalization, although the number is lower in many conservative states. U.S. Senate Majority Leader Chuck Schumer, who is proposing a comprehensive federal marijuana legalization bill, the Cannabis

54 January 2022 | MJBizMagazine

Administration and Opportunity Act, told media company Black Enterprise: “The country is realizing that all the myths about (the extreme dangers of) marijuana are just that—myths.”

POTENTIAL PITFALLS

Not all is well on the ballot-initiative front, however. Rather, opponents have opened a new playbook. Antimarijuana officials in Mississippi and South Dakota have been successful in overturning marijuana initiatives on technical grounds—even after voters had approved them. The most recent defeat came in South Dakota, where the state Supreme Court shot down a recreational marijuana initiative opposed by Gov. Kristi Noem. But cannabis advocates are at it again, collecting signatures for another attempt at adult-use legalization at the 2022 ballot box. The latest South

Dakota initiative doesn’t include commercial sales. “We decided to move forward with an initiative that was the least likely to be challenged in court,” Matt Schweich, Marijuana Policy Project’s deputy director, told MJBizMagazine. “Our proposed 2022 cannabis legalization initiative is very narrowly focused on personal freedom regarding cannabis.” Following is a snapshot of what’s happening on the legalization front in various states.

ARKANSAS

Proposal: Recreational Possible ballot initiatives: Arkansas Recreational Marijuana Amendment of 2022 (Arkansas True Grass) Under the proposed constitutional amendment, the Arkansas Agricultural Department and the

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BUSINESS Alcoholic Beverage Control Division would regulate a commercial market. The initiative calls for a three-year residency requirement. The Agricultural Department would issue two types of licenses: one for cultivation, transport and sale, and another for cultivation, processing, transport and sale. A second group, Responsible Growth Arkansas, said in November 2021 that it also plans to have a signature drive for an adult-use legalization measure. The text of the initiative wasn’t available by deadline. The deadline for collecting signatures for the November 2022 ballot is in July. It’s unclear whether either group will qualify a referendum.

Marijuana Legalization and Automatic Expungement Initiative (Fair Access)

Proposal: Medical Possible ballot initiative: Idaho Medical Marijuana Act of 2022 (Kind Idaho)

The ballot proposal would establish a Nebraska Medical Cannabis Commission under the state Liquor Control Commission to regulate a commercial market. Application criteria would be established by July 1, 2023, and regulators would begin issuing permits to applicants that met the requirements by Oct. 1, 2023. The deadline for submitting ballot signatures is July 8. Nebraska has a relatively high bar for ballot qualification: Signatures are required from 10% of registered voters, including at least 5% in 38 of the state’s 93 counties. If the referendum does reach the ballot, it has a good chance of passing.

IDAHO

If the measure is successful, the state Department of Health and Welfare would be required to issue rules within 120 days after the effective date of the act. Cities and counties would be allowed to place “reasonable zoning ordinances” for medical marijuana facilities. It’s unclear whether the referendum will be successful.

MARYLAND

Proposal: Recreational Possible ballot initiatives: Not yet announced House Speaker Adrienne Jones said in July that she intends to pass a bill that refers recreational marijuana legalization to voters. Industry experts believe voters would likely approve such a measure.

MISSOURI

Proposal: Recreational Possible ballot initiatives: Missouri

56 January 2022 | MJBizMagazine

The constitutional amendment proposed by Fair Access would allow an unlimited number of recreational marijuana business licenses to be issued. A 7.5% tax would be imposed on retail sales. New Approach Missouri, which ran the successful 2018 medical marijuana legalization campaign, also said it would try to put an adultuse legalization measure on the 2022 ballot. It’s unclear whether either effort would be successful.

NEBRASKA

Proposal: Medical Possible ballot initiatives: Nebraska Medical Cannabis Regulation Act

NORTH DAKOTA

Proposal: Recreational Possible ballot initiatives: To Tax and Regulate Cannabis Like Alcohol and Tobacco (Legalize ND) Legalize ND said in 2021 that it would collect signatures for an initiative to legalize adult-use marijuana and establish a retail market. The group’s website recently indicated the effort was on hold because of COVID-19.

OHIO

Proposal: Recreational Possible ballot initiative: Ohio Marijuana Legalization initiative (Coalition to Regulate Marijuana Like Alcohol) A Cannabis Control Division would be created to regulate the industry and issue licenses. The referendum calls for a social equity and jobs program.

OKLAHOMA

Proposal: Recreational Possible ballot initiative: Oklahoma Marijuana Regulation and Right to Use Act (Oklahomans for Responsible Cannabis Action) Medical marijuana dispensaries would be allowed to start selling adult-use products 60 days after passage of the referendum. The excise tax on retail sales initially would be 15%.

WYOMING

Proposal: Medical Possible ballot initiatives: Wyoming Cannabis Patient Act of 2022 The Wyoming Department of Revenue’s Liquor Division would regulate a commercial medical cannabis market. The Liquor Division would be required to establish rules by July 1 in the year after adoption. Cannabis advocates face a high bar to get a medical marijuana referendum on the ballot: The number of signatures must equal 15% of the ballots cast in the previous general election, including 15% in at least two-thirds of the counties. But if the referendum qualifies for the ballot, it has a good chance of passing. A University of Wyoming survey found that 85% of state residents support medical marijuana legalization. Additional reporting by Jenel SteltonHoltmeier.

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LAWMAKERS CONSIDER LEGALIZATION State governments feel pressure to conform with will of voters nationwide By Jeff Smith

arijuana legalization through state legislatures has become more prevalent in recent years, in part because some markets don’t have a voter-referendum process. In 2021 alone, lawmakers in Connecticut, New Mexico, New York and Virginia legalized recreational marijuana markets that eventually are expected to generate more than $5 billion combined in annual revenue. Alabama lawmakers, meanwhile, passed a medical marijuana law. This year potentially could be as active, with lawmakers in Delaware (recreational), Kansas (medical), Maryland (recreational), Mississippi (medical), North Carolina (medical), Rhode Island (recreational) and South Carolina (medical) all making moves that warrant a close watch. In Maryland, the Legislature might wind up referring legalization to voters at the 2022 ballot box. As for Mississippi, voters approved medical marijuana at the ballot box in November 2020, only to see the referendum voided by the state Supreme Court on a technicality. State lawmakers then hammered out a less business-friendly medical marijuana measure, but Gov. Tate Reeves declined to call a special session to consider the initiative formally. So, medical marijuana is likely to come before the Mississippi Legislature—again. The state summaries that follow include the most recent legalization bills that were considered.

58 January 2022 | MJBizMagazine

Legalization bills introduced in 2022 legislative sessions in most cases are expected to be similar to the ones introduced in 2021. In some states—such as North Carolina and South Carolina—bills were introduced for the 2021-22 session.

DELAWARE

Proposal: Recreational Bill(s): House Bill 150 (2021 bill) Key backers: State Rep. Ed Osienski Last year’s House bill called for up to 30 retail store licenses, including 15 for social equity applicants; 30 processor licenses, including 10 for social equity applicants; and 60 cultivator licenses, including 30 for social equity applicants. Existing medical cannabis operators also could apply to participate in the adult-use market. Adult-use legislation has a 50-50 chance of passing in 2022, with state leaders feeling more pressure to legalize as neighboring New Jersey moves closer to launching its recreational marijuana market.

would set aside 15% of licenses for minority applicants. A medical cannabis measure is considered likely to have a strong chance of passing in 2022.

MARYLAND

Proposal: Recreational Bill(s): Cannabis Legalization and Regulation, Inclusion, Restoration and Rehabilitation Act of 2021 (HB 32). Also, a legalization bill titled SB 708. Key backers: Numerous backers The two 2021 bills had similarities, but the House measure offered more opportunities for small and minority-owned businesses. State House Speaker Adrienne Jones said in July that she intends to pass a bill that refers legislation to voters, so it’s possible an adult-use legalization referendum will end up on the 2022 ballot in Maryland.

MISSISSIPPI

KANSAS

Proposal: Medical Bill(s): Not yet introduced. Key backers: State Sen. Kevin Blackwell and Rep. Lee Yancey

Smoking and vaping products would be prohibited. The measure

Republicans Blackwell and Yancey were lead negotiators on a measure that lawmakers wanted to consider during a special session in 2021, but as of press time, Gov. Reeves seemed unlikely to call the session. So, the legislation will likely be considered this year.

Proposal: Medical Bill(s): Kansas Medical Marijuana Regulation Act, SB 158 (passed by House in 2021 but not the Senate) Key backers: No individual sponsors identified

Details are sketchy, but the legislation will reportedly include a provision for municipalities to opt out of the medical marijuana program. A measure of some sort likely will pass this year, given that voters approved medical cannabis legalization at the polls in 2020.

NORTH CAROLINA

Proposal: Medical Bill(s): North Carolina Compassionate Care Act (2021-22 session, Senate Bill 711). Key backers: Sens. Bill Rabon, Michael Lee and Paul Lowe Regulators would issue 10 medical marijuana “supplier” licenses. Each license holder could open up to four dispensaries. Medical cannabis legislation has about a 50-50 chance of passing in 2022.

RHODE ISLAND

Proposal: Recreational Bill(s): Cannabis Authorization, Regulation and Taxation Act of 2021 (SB 568). Gov. Dan McKee proposed a separate plan. Key backers: Sens. Michael McCaffrey and Josh Miller The state Senate bill emphasizes craft cultivation licenses and policies that would promote social equity. The governor’s plan would have set aside five of 25 retail licenses for minority applicants. Rhode Island has a strong chance of passing recreational marijuana legislation in 2022 or 2023.

ate Care Act (2021-22 session, S. 150 and H. 3361) Key backers: Sen. Tom Davis and Rep. Bill Herbkersman Regulators would issue 15 cultivation and 30 processing licenses plus one dispensary permit for every 20 pharmacies in the state. MMJ legislation has about a 50-50 chance of passing in 2022. Additional reporting by Jenel SteltonHoltmeier.

Jeff Smith covers regulatory issues and government for

SOUTH CAROLINA

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mjbizdaily.com | January 2022 59

INDUSTRY PLAYERS New Hires & Promotions by Omar Sacirbey

Attorney Takes CEO Post at Colorado-based Dalwhinnie Dalwhinnie Enterprises, a vertically integrated cannabis company in Ridgway, Colorado, installed attorney Brandon Barksdale as CEO. Barksdale joins from the Los Angeles office of the law firm CohnReznick, where he spent nearly five years, including two as director of the risk and business advisory practice. While at CohnReznick, Barksdale advised Dalwhinnie as well as multistate operators and cannabis startups. The company’s goals include “establishing processes that will lead us to GMP (Good Manufacturing Practice) and GACP (Good Agricultural and Collection Practice) certification,” Barksdale said.

Growing MSO Appoints VP for Social Equity Ascend Wellness Holdings, a vertically integrated multistate cannabis operator, hired Danielle Drummond as vice president of social equity, a newly created position in which she will develop and lead community partnerships and restorative justice initiatives across the company’s existing fivestate footprint and spearhead its entrance into the New York market. Before joining Ascend, she served as deputy chief of community engagement at the Suffolk County District Attorney’s Office in Boston. Drummond will focus much of her initial efforts on developing and implementing social equity initiatives in New York, including helping social equity applicants, developing a diversity-focused hiring plan and holding expungement clinics.

Jushi Gets New CFO Jushi Holdings, a vertically integrated, multistate cannabis operator based in Florida, appointed retail veteran Edward Kremer as chief financial officer. Kremer most recently served as chief operating and restructuring officer of Le Tote and Lord & Taylor. Before that, Kremer held various executive leadership and finance roles with consumer products companies such as Oakley, Oliver

60 January 2022 | MJBizMagazine

Peoples and Beats Electronics (Beats by Dr. Dre). Kremer replaces Kimberly Bambach, who will stay with the company through the end of March to help with the transition. Molly Duplechian

Denver Regulator Leaves Post Ashley Kilroy is stepping down Jan. 7 as executive director of the Denver Department of Excise and Licenses, a role in which she helped shape the Colorado city’s legalized marijuana industry. Kilroy has worked for the city and county of Denver since 1997 and served as executive director of the Department of Excise and Licenses since 2016. Mayor Michael Hancock appointed Kilroy as the first director of the Office of Marijuana Policy in 2014. Hancock merged the Office of Marijuana Policy and the Department of Excise and Licenses in 2016, appointing Kilroy as executive director. Kilroy’s longtime deputy director of policy and administration, Molly Duplechian, will serve as

interim executive director for the department. Duplechian joined the Office of Marijuana Policy in 2014 and remained Kilroy’s top deputy when the two offices merged.

Top Oklahoma Regulator Joins VS Strategies Taylor Hartin left her post as director of compliance and enforcement for the Oklahoma Medical Marijuana Authority to become senior associate at VS Strategies, a cannabis policy and public affairs firm headquartered in Denver. Hartin will remain in Oklahoma to build VS Strategies’ local practice.

MPP Hires Communications Vet The Marijuana Policy Project in Washington DC hired political communications veteran Denise Tolliver as its communications director. Tolliver spent 11 years as chief of staff for the DC Council and four years as chief of staff for the Detroit City Council. Tolliver also has been a communications director for the U.S. House of Representatives and held other congressional posts. Hired or promoted someone for a senior-level position? Send a news release or general information to Omar Sacirbey at omar.sacirbey@ mjbizdaily.com.

UNBOXED Cannabis Packaging and Design Insights

Pure Appeal Packaging for Äkta cannabis products integrates environmental responsibility and distinctive design By Kate Bertrand Connolly

SUPPLIERS

he packaging for Äkta cannabis products combines sustainability and shelf appeal. All the brand’s packaging is recyclable, and the stylized illustrations and lively colors reflect the primary ingredients. “We opted to have an aesthetic that is a bit lighter, brighter and softer than most of the packaging on the market, which commonly appeals to a younger, edgier male demographic—especially in the concentrates market,” said Marc Rassel, creative director at Hava Cos., which makes Äkta products. “We want the brand and packaging to be approachable for all consumers, both new and experienced.” The Äkta product line includes live rosin cartridges, gummies and dabbable live rosin. The products are made from cannabis flower grown in living soil by Äkta’s sister company, Hava Gardens. Carbondale, Colorado-based Äkta then uses a solventless technique to make ice-water hash.

Gummies tin: Tin Canna, tin-canna.com Live rosin and vape cartridge packaging: The Paper Tube Co., papertube.co Design: Tiny Hammer, tinyhammerdesign.com

A Stylish Product Line The brand uses paper tubes for its vape cartridges, aluminum tins for its gummies and a glass jar inside a paper tube for live rosin concentrate. “We want to be able to extend this mindset of sustainability as much as we can, so a logical

62 January 2022 | MJBizMagazine

step is to use as many recyclable materials as possible in our product packaging,” Rassel said. The tins and jars provide the barrier protection required to preserve product quality and integrity, and the tins also keep the gummies from getting stale.

Paper tubes provide sufficient protection for the vape cartridges because the carts themselves are sealed. The Illinois-based Paper Tube Co. supplies Äkta with the tubes, and California-based Tin Canna supplies the child-resistant, senior-friendly tins. Echoing Äkta’s brand attributes of sustainability and quality, its package graphics are clean, vibrant and organic. Graphics on tins for each of the seven gummy flavors feature an illustration of the primary ingredient(s) in each flavor, such as berries and lemon on the Blueberry Lemonade indica gummy tin. Similarly, the cartridge packaging features three unique graphic designs. Hava Cos. worked with New York-based designer Erica Simon, owner of Tiny Hammer, to create all the package graphics. This fresh take on cannabis packaging, Rassel said, is “much more inviting to new and experienced consumers alike.” To suggest a product for this department, email magazine@ mjbizdaily.com.

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SEED TO CEO Sound Bites from the MJBiz Podcast

veryone wants to get in on the cannabis market. The podcast “Seed to CEO” gives marijuana entrepreneurs an edge. Each week, MJBiz interviews a cannabis executive to learn the stories behind their successes and failures. To hear from those who have been there and done that, visit mjbizdaily.com/podcast or listen to “Seed to CEO” wherever you get your podcasts.

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Tune In Today!

These “Seed to CEO” podcast guests answered:

What is something you wish someone had told you about the challenges of leadership?

JIM MAKOSO

SEUN ADEDEJI

LILACH MAZOR POWER

CEO, Flowe Technologies; director, Lucid Lab Group Seattle

CEO, Elev8 Cannabis Boston

CEO, Giving Tree Dispensary Phoenix

Don’t be scared to fail. Failure is not failure. Failure is a lesson. It builds character. If you do fail, own up to it. If you make a mistake, own up to it. I’m pretty sure the people you’ve made a mistake with or for have made plenty of mistakes. And if they don’t understand, you’re not in the right circle to really elevate or better yourself. I’ve made mistakes. And when people in my company make mistakes, I don’t sit there and burn the bridge. I sit there and think, “How do we be better as a company to train these people to be the best version of themselves?”

The first thing that I wish people told me is it could get lonely as a leader, because you’re no one’s friend. You’re always going to have employees. And no matter what—even if they’re higher level—they still look at you as the boss. So, make sure you have other support systems to talk to. The other thing I’m learning now, as I’m hiring my leadership team and getting to work with them, is the difference between managing people and leading people. You get people that just “get it,” and they can execute. Let them execute their way. And lead them to be happy and push the company forward. But don’t manage the way they do things and criticize if they don’t do it the way you would do it. Be happy about that. This is why you hired them.

The best leaders are the ones that are willing to serve the most. I’ve tried to really turn that into a model for how I lead in anything. I’ve learned over time that the more I serve the people I’m leading, the better results I have. There are practical ways to do that: reading about good leaders whose employees love them. And the consistent thing that you’ll find with the leaders who had the admiration and respect of those they lead is that they cared about them. They knew about their needs, both inside and out of work. They did the simple things like showed up for a birthday party or called them. These are all simple, human things that you expect people who care to do.

Comments have been edited for length and clarity. 66 January 2022 | MJBizMagazine

MJBizDaily Buyers Guide

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MJBizDaily Buyers Guide Cannabis Packaging Automation

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INTRODUCTION Labor in the U.S. has reached a critical shortage, with businesses from every industry reporting difficulty filling open jobs as existing workers quit at record high levels. Companies have attributed the labor shortage to a complicated mix of a push for remote work and employee flexibility, along with a demand for higher wages and benefits. Cannabis product manufacturers have turned to automation as one solution to meet their labor and output requirements, while streamlining efficiency and ensuring product packaging consistency and quality. Laura Drotleff MJBizDaily

Choosing the right automation equipment for packaging needs can be complicated and includes several considerations. Getting it right before choosing the machinery will translate to savings down the road if your business upgrades packaging, opts for sustainably produced packaging or scales its facility. MJBizDaily is pleased to present the Cannabis Packaging Automation Buyers Guide to provide product manufacturers with the considerations needed and questions to ask before investing in machinery. The guide includes a list of packaging automation and packaging companies, and cannabis product makers also receive smart content from industry experts covering: • Choosing a packaging automation system. • Planning for efficiency and scaling your business. • Applying automation innovations to sustainable packaging. • Trends in consumer packaged goods to look for in cannabis. We appreciate the efforts of contributor Georgie Smith for her work on this guide. We hope you find this content helpful in aiding your decisions in selecting packaging automation equipment that’s right for your business model, and we welcome any feedback at laura.drotleff@hempindustrydaily.com.

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MJBizDaily Buyers Guide Cannabis Packaging Automation

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CHOOSING A PACKAGING AUTOMATION SYSTEM FOR YOUR CANNABIS BUSINESS

Many smaller or mid-scale cannabis manufacturers are interested in adding automation at the initial stages of the packaging process—the labor-intensive process of weighing, batching and filling. They are looking for ways to automate putting flower into jars or pouches, gummies into jars or bags, tinctures into bottles, cream into tins or weighing, filling, compacting, twisting and packaging pre-rolls. Customized packing automation equipment may be needed, especially for dried flower products. However, cannabis products like edibles, tinctures or creams packaged similarly to many other consumer packaged goods (CPG), can take advantage of automation solutions already in the marketplace. The challenge is finding equipment at the smaller scale with the lower price-point or flexible financing that cannabis manufacturers need. Larger, more mature cannabis companies may have already automated the earlier stages of the packaging processing and are now looking at second-stage automation to save on labor costs. They might be using common packaging tools such as case packers, case sealers, coding machines and palletizers.

MJBizDaily Buyers Guide Cannabis Packaging Automation

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So how do cannabis manufacturers choose which equipment to invest in based on company needs? There is no one tried-and-true way to set up a cannabis packaging automation system. Products packaged, the types of packaging used and whether the budget allows for a turnkey solution or requires adding automation components over time will all play into a final decision.

A cannabis packaging equipment buyer’s checklist What to know and what to ask about packaging automation Ask yourself:

F How accurate is your machinery? F How can you customize your machinery to meet my company’s needs?

F What does packaging currently cost our company? F Would automation free up labor for other parts of the business?

F Can your equipment be added incrementally?

F Could automation improve employee morale?

F How long after ordering until delivery?

F Can we commit to training and paying employees to use automation equipment?

F Do you provide technical service and repair?

F What are the most labor-intensive parts of the company’s packaging process?

F Where are replacement parts shipped from and how long does it take to get them?

F How much money can the company budget for packaging automation?

F Do you install equipment on site?

F Do you provide remote analytics?

F Do you provide initial training on your equipment?

F What are the company’s long-term packaging needs?

F How quickly can you provide training?

F What kind of packaging materials and branding are important to the company’s mission?

F How easy is it to calibrate and change machinery between different packages?

F How will packaging elevate brand messaging?

F How do you clean and calibrate the equipment?

Ask packaging equipment manufacturers:

Don’t be afraid to:

F Has your company worked with cannabis product manufacturers?

F Get multiple quotes. F Go visit a manufacturer.

F What kind of packaging is recommended for use with your machines?

F Ask for references. F Ask for a factory performance guarantee.

F What are your machinery’s speed and efficiency rates?

6 Copyright 2022, MJBizDaily, a division of Anne Holland Ventures Inc. You may NOT copy this report, or make public the data and facts contained herein, in part or in whole. For more copies or editorial permissions, contact CustomerService@MJBizDaily.com or call 720.213.5992 ext. 1.

MJBizDaily Buyers Guide Cannabis Packaging Automation

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Cannabis products often require unique strategies compared to common efficiencies used in consumer packaged goods. Photo by Laura Drotleff

CANNABIS-SPECIFIC CUSTOMIZED SOLUTIONS

While the CPG automation industry has found ways to automate the packaging process of almost anything, from cornflakes to oysters, cannabis creates unique challenges for automation equipment manufacturers. When Green Vault Systems, an Everett, Washington-based cannabis packaging equipment manufacturer, started to design a packaging machine for cannabis flower, officials there assumed they could take “what works for coffee, jellybeans, potato chips, and pretzels and marry it to cannabis,” said Lise Bernard, director of sales and commercial business at Green Vault Systems. The company quickly discovered that strategy wouldn’t work for cannabis flower. Flower is delicate and sticky, and it can’t be washed. In addition, the trichomes sit on the outside of the bud and are lightweight and easily dislodged. Because of that, vibration, a common strategy for moving products like coffee beans through a weighing and batching process, can’t be used for dried flower products without risking losing the most valuable part of the product—the trichomes—during the packaging, Bernard said. Cannabis flower is indeed an “incredibly challenging product to run,” agreed Amelia Dishion, senior vice president of cannabis sales for Oxnard, California-based packaging automation manufacturer ActionPac Scales and Automation. This makes the typical solutions used for other products not effective. 8 Copyright 2022, MJBizDaily, a division of Anne Holland Ventures Inc. You may NOT copy this report, or make public the data and facts contained herein, in part or in whole. For more copies or editorial permissions, contact CustomerService@MJBizDaily.com or call 720.213.5992 ext. 1.

MJBizDaily Buyers Guide Cannabis Packaging Automation

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A radial, or combination, scale is a common type of high-speed and precision scale used in many CPG automation processes. It works by feeding product into multiple buckets and then dumping each bucket into a package as soon as the correct weight is achieved. Those scales work well for uniform products such as coffee beans and are commonly used in cannabis for items like gummies, Dishion said. But cannabis flower isn’t a consistent product, so a radial scale doesn’t work. The challenge of controlling dried flower products is why some automation systems still do that part by hand. But manufacturers won’t see the best labor-saving benefits in that scenario, Dishion said. “Automation is brought in to take over that repetitive work by people to really be able to scale and grow,” Dishion said. “You can’t do that when you’re tying two people to a machine. To grow, you’ll need more and more machines. That’s not automation.”. Further, because of the high dollar value of cannabis products, packaging overages can add up quickly. Product manufacturers must make sure to purchase automation equipment with high accuracy. Easy-to-clean machines are also crucial in cannabis packaging, especially as manufacturers switch between cannabis varieties. And don’t forget that cannabis manufacturers must meet child-resistant packaging requirements and even state-specific packaging rules, which adds more complexity to the automation needs.

MJBizDaily Buyers Guide Cannabis Packaging Automation

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OPTIMIZATION IS KEY

Remember, there is no such thing as a “one size fits all” in cannabis packaging automation, said Jim Chrzan, vice president of content and brand development at Packaging World Magazine, a division of the Association for Packaging and Processing Technologies (PMMI). “Something that’s loading flower into a pouch is not going to package gummies,” Chrzan said. Dishion added that a multi-task machine might work, but typically not at the speed and efficiency levels that automation should bring to a company. Specialization and optimization are essential in the cannabis industry. “We could go on Amazon right now and buy a one-milligram table scale for very cheap. That’s not the hard part, Dishion said. “The hard part is automating the taking from a bowl of 10 pounds of product and feeding it to the point where it’s a single bud. That’s hard to do.” Even if a manufacturer finds a piece of equipment that they can adjust to do different types of products, how long will the changeover take? And will it work efficiently, accurately and at high speeds for all the different kinds of products? “It sounds really great to have one packaging line; however, it will never be great,” Dishion said. “The changeover that would require, to get the system to go from flower to shake or flower to gummies, would be so long and difficult that any major potential savings that you would get in one system would be lost.”

There's no such thing as a one size fits all approach to cannabis packaging automation. Consult with automation companies before choosing packaging options. Photo by Laura Drotleff

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CONSULT WITH AUTOMATION COMPANIES FIRST

Don’t buy your packaging machine and your packaging materials “in a vacuum,” Chrzan said. He’s seen many cannabis companies buy a machine and then try to figure out what sort of packaging materials to use with it. That’s backwards. “You really want to think about how I want this to look at the end. Go with glass? Find a machine that’s made specifically to handle glass,” Chrzan said. On the other hand, don’t let your marketing department go “head over heels with a package that’s going to be hard to automate,” Bernard said. Cannabis companies are notorious for coming up with creative packaging ideas that can be expensive to execute. “Talk to your packaging (automation) company at the beginning of the process and what you can possibly do,” Bernard said. “Then go back to your marketing department and say, ‘Okay, here’s what we could do.’” Freshness, exposure to light, moisture, and other post-packaging effects on the product will dictate the packaging materials manufacturers choose. Make sure the machine purchased can run those materials, Chrzan said. And unlike CPG manufacturers, cannabis producers must be careful about placing large material orders, Chrzan said. For example, a branded label or package may become unusable because of a rule change.

MJBizDaily Buyers Guide Cannabis Packaging Automation

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“Somebody was wrapping a soda bottle in a shrink-wrap label. It was a football going through a goalpost. They had ordered from Asia, boxes and boxes of these labels,” Chrzan recalled. “I walked through the plant and the boxes were spilling open, so I asked about it. They said the cannabis board changed their minds. A football is too appealing to children, so we can’t use it anymore.” Some cannabis companies are moving to digital printing shorter runs of labels, giving them more flexibility to make changes if there’s a problem, Chrzan said.

WATCH FOR RED FLAGS

Even for manufacturers on a bootstrap budget, Chrzan advises cannabis companies to be wary of purchasing inexpensive automation equipment manufactured overseas. He’s heard horror stories of companies bringing in machinery they bought from an auction in China with parts hanging out. Or purchasing an overseas piece of machinery and within “four or five months they had run it into the ground.” U.S.-made automation packaging equipment is the best in the world, according to Chrzan, and those companies are close by when there is a problem, or a part is needed. Bernard agreed, saying manufacturers can’t afford to have a packaging line down for weeks while they wait on a part shipped from overseas. Make sure to get references from at least three other buyers, Bernard said. “You’re spending a lot of money,” she said. “It is amazing how many people will buy equipment without having spoken to people that are using it. Dishion recommends visiting the manufacturer to see how employees assemble products and ask about factory acceptance tests. That’s a performance test run once the equipment is built and before the final deposit to prove that the equipment runs as quoted. It gives the purchaser one last chance to make sure the equipment meets their expectations and request any changes. Another question is what sort of training the automation manufacturer provides and how long before the equipment company can provide that training? Some companies promise installation and training, but it takes them six months to get to it, Dishion said. “There is a misconception that’s prevalent in this industry that you don’t see in any other that what they’re buying from us is something akin to an iPhone,” Dishion said. “That it’s going to work with little thought on their part. But that’s not the case. It’s Just like a car and having to learn to drive it.”

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MJBizDaily Buyers Guide Cannabis Packaging Automation

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MORE PACKAGING AUTOMATION SOLUTIONS GIVE CANNABIS MANUFACTURERS BETTER OPTIONS

The packaging industry is catching up with the unique needs of cannabis producers, giving cannabis manufacturers more to consider when introducing automation into their packaging lines. Packaging automation offers many advantages to cannabis manufacturers: • More efficient production. • Lower labor costs. • Greater uniformity in the final products. • Less costly packaging overages. But as of 2020, most of the cannabis industry was still using costly manual labor for processing and packaging. That was in large part due to a lack of cannabis-specific packaging solutions, cost barriers and a lack of understanding of the automation process, according to the Association for Packaging and Processing Technologies (PMMI). Realizing savings from packaging automation systems will be critical for cannabis manufacturers looking to scale their business and remain competitive. The global legal cannabis market, including hemp and marijuana, was valued at $17.8 billion in 2021 and is projected to reach $91.5 billion by 2028, according to a June 2021 market analysis by Grandview Research. “Automation and packaging, it’s always said, is the least important, yet most important thing,” said Amelia Dishion, senior vice president of cannabis sales for ActionPac Scales and Automation, a California-based packaging automation company. “It’s really where you make your money. You can grow a million dollars worth of cannabis, but it’s not worth anything if you can’t get it to market.”

DEVELOPING SOLUTIONS FOR THE UNIQUE CANNABIS CHALLENGES

Companies like ActionPac, which began developing solutions for the cannabis industry 10 years ago when there were almost no packaging automation solutions specific to cannabis products, are part of a growing trend in cannabis-tailored packaging automation equipment. Jim Chrzan, vice president of content and brand development at Packaging World Magazine, said he sees many more solutions in packaging automation appropriate for cannabis manufacturers than he did even five years ago, when the first options were more appropriate for large-scale consumer packaged goods (CPG) companies. “(Initially) the machines were ginormous. It was packaging for Sargento cheese or Diamond walnuts at speeds of 350 (packages) a minute,” Chrzan said. “That’s not what cannabis needed at all.” Now smaller machines are targeting the cannabis market, according to Chrzan.

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MJBizDaily Buyers Guide Cannabis Packaging Automation

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Even for larger, multistate manufacturers, smaller, more scalable systems are important because of the unique regulatory constraints in the cannabis industry. Outside of the cannabis sector, CPG companies generally try to set up as few packaging facilities as possible, shipping their raw product to regional facilities to be processed and packaged. And, in the facilities they do set up, they install the same equipment and use the same packages for uniformity across their brand. But in cannabis, manufacturers are limited to the states they can legally operate in and those states’ specific rules. “If you’re growing in Massachusetts, you can’t send it anywhere due to federal regulations, so you’ve got to set up a processing and packaging facility in Massachusetts,” Chrzan said. Moreover, cannabis packaging regulations can vary from state to state. “Is that the same kind of package that you’re allowed to do in Illinois? Or, due to regulatory constraints, is Massachusetts different?”

Cannabis manufacturers require smaller-scale solutions than consumer packaged goods industries due to varied state regulations. Photo by Laura Drotleff

This makes automation more challenging for the cannabis sector and is driving the need for smallerscale solutions at a more affordable price. Cannabis needs more scalable solutions not just in the equipment itself, but in how manufacturers pay for the equipment. In response to industry requests, equipment manufacturers are now offering more financing and leasing options to help offset the “sticker shock” of capital equipment outlays, Chrzan said. Packaging contractors are also becoming more common, as companies that did invest in packaging machines offer their packaging services to other manufacturers. It all bodes well for cannabis manufacturers weighing the pros and cons of packaging automation.

AUTOMATION OFFERS LABOR SAVINGS ADVANTAGES

Labor is the first reason most cannabis companies start exploring packaging automation. Hand packaging is inefficient, inaccurate and unreliable, especially with increasing labor shortages. Cannabis manufacturers spend time and money hiring and managing employees, only to have them leave. Manufacturers also must deal with pervasive industry problems such as employee product theft.

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MJBizDaily Buyers Guide Cannabis Packaging Automation

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Workers preparing bottles of Hi-Fi Hops at CannaCraft in Santa Rosa, California. Photo by Bill Reitzel

These labor-related issues make it hard for a company to scale, and spur many manufacturers to seek out automation, Chrzan said. In the words of one cannabis manufacturer, according to Chrzan: “That machine shows up every day ready to go. We don’t have to call home and find out why they didn’t come or any of the problems you have with employees.” Heavy dependence on manual labor isn’t just a problem for management, Dishion said. It can also be demoralizing for employees. “The mind-numbing, soul-crushing eight hours of sitting there with a little scale,” Dishion said. “Not only is that heinous for the morale of your employees, it is going to be a limiting factor in our ability to grow.” While adding automation may end up eliminating jobs, the jobs that are left should be better, said Lise Bernard, sales director for Green Vault Systems, a Washington state cannabis-specific packaging equipment designer and manufacturer. “The good people will stay and now they’re going to learn a new skill. They’re going to learn how to operate these beautiful machines,” Bernard said. Thomas Geiger, special project director with United Food and Commercial Workers International Union Local 21, a Washington state union organization with a growing voice in cannabis labor, agrees that automation “is not necessarily an enemy of the worker.”

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But he says that with a caveat. If those higher-skilled jobs don’t equal higher pay and more job reliability within the workplace, then employees won’t realize the benefits of automation. “The question is who pays and who gains,” Geiger said. Keep in mind, Dishion said, that automation packaging machines can be complex. If a company is going to optimize its workforce, it needs to commit to hiring and training employees with the aptitude to run and manage the equipment, she noted. And make sure to keep them at that job rather than transferring them somewhere else a few weeks later. “You’re making an investment in equipment, but you’re also investing in your employees,” Dishion said. “Those employees are just as important. They’re an extension of this equipment.”

UNEXPECTED SAVINGS BY REDUCING OVERAGES

A less obvious but financially significant advantage to adopting automation is the savings cannabis manufacturers realize by increasing their package accuracy. Bernard said her company’s clients typically average 3.6 grams on a 3.5-gram (an eighth) package when hand-packed. However, the “Precision Batcher” flower machine weighs down to onehundredth of a gram, which means it can be much more accurate than hand packaging. As a result, the average overpack is only 3.54 to 3.56 grams, Bernard said, versus 3.6 grams for handpacked product. It may not seem like much, but “over time, when you do the math, it’s going to be just as important if not more important than your labor,” Bernard said. Dishion added it’s not just the value in wholesale dollars that precision automation can salvage—it’s more money at the retail level, too. “It’s not being put on the shelf. It’s being lost. Or, actually, it’s being given away,” Dishion said of the overpack. “Your customers aren’t going to complain, but they wouldn’t know the difference (if weights are accurate).”

ADD AUTOMATION INCREMENTALLY

The cost of turnkey, start-to-finish automation packaging lines can be overwhelming, but even small-scale producers can start seeing automation savings by buying automation components as they can afford them. Think of it like Legos, adding on components as you grow, Bernard said. “Start with just the weighing and the batching. That’s the heart of it,” Bernard recommends for manufacturers that are still debating what sort of final package to use. “When it’s just the batching and the weighing, (that machine) doesn’t care if you’re using jars, bags, drams or you put a takeout food container underneath it.” As manufacturers dial in what packaging they want to use, they can add more automation components. Chrzan advises manufacturers to look for a “small area where I can show an immediate win.” 16 Copyright 2022, MJBizDaily, a division of Anne Holland Ventures Inc. You may NOT copy this report, or make public the data and facts contained herein, in part or in whole. For more copies or editorial permissions, contact CustomerService@MJBizDaily.com or call 720.213.5992 ext. 1.

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“Start small. Get the machine that takes the scale, weighs it and puts it in the pouch. But then we can take the pouches off ourselves and put them in a box. Or we can fill the hopper by hand,” he said. “There’s things where you can break up and not go insane and automate everything. Think about where your pain points are.”

CONSIDER FUTURE EFFICIENCIES

As cannabis companies add automation, consider the future efficiencies achieved by integrating production, processing and packaging, Dishion said. For example, other sectors, like nuts, have integrated automation from the field to the packaging. Even if that level of integration is far off for cannabis manufacturers, a company can plan for it by considering simple things. For instance, a ceiling in a packaging facility might need to be higher than initially thought to accommodate taller equipment incorporated later.

Cannabis manufacturers can plan for future efficiencies by considering the potential for integrated automation and changes to their facilities. Photo by Laura Drotleff

“People need to start wrapping their minds around linking their facilities and their organization up,” Dishion said. “Make sure they at least functionally are in a nice flow and that they could be integrated easily together. Look at it long term so that they’re not making decisions now that will hobble them later.” Calculating return on investment of cannabis packaging equipment is more complicated than just figuring out how much time until the machine has paid for itself, Bernard said. An ROI litmus test for a Green Vault Systems machine is once a producer has packaged 1,500 pounds, the machine has paid for itself. That will look a lot more attractive for a producer that’s packaging 100 pounds a week versus 20 pounds, Bernard said. But it all depends on where a producer is hoping to realize savings. “I have people who don’t really care about the overpack. That’s just the way they package. They care about the labor. And I have other people; it’s just the other way,” Bernard said. “So it really depends on what they are looking for.” Ultimately, cannabis producers need to be flexible about where they add automation to realize efficiencies. “There’s always a solution and there’s always a way to bring some efficiency into a facility or an organization, but it might not be exactly as you want to see it,” Dishion said.

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AUTOMATION CONSIDERATIONS FOR SUSTAINABLE PACKAGING MATERIALS

Sustainable packaging is better for the environment and lauded by consumers, but it is notorious for making the cannabis packaging process more challenging and expensive. Consumer packaged goods (CPG) brands marketed as sustainable enjoyed a 39.5% price premium and grew 7.1 times faster over five years than products not marketed as sustainable, according to the New York University Stern Center for Sustainable Business. Benchmarks for cannabis sustainability typically include adopting Earth-friendly growing practices, reducing the use of energy by incorporating LED lights in greenhouses and choosing packaging that is biodegradable, recyclable or both. Using sustainable packaging materials is a story cannabis brands can use to elevate their products over their competitors, said Michael Markarian, CEO at Contempo Specialty Packaging, a Providence, Rhode Island-based company creating sustainable packaging products for the cannabis industry. Sustainable packaging makes sense for the cannabis market and consumer, Markarian contends. “Why can’t the cannabis industry show the whole world what sustainable packaging is really about?” Markarian said. “The product line is so diverse. You’ve got edibles, which is food. You’ve got vapes, which is like hardware. You’ve got topicals, which is like cosmetics. And you have this environmentally conscious group of people that actually care.” But will sustainable packaging materials lend themselves to automation equipment?

PLANNING TO AUTOMATE WITH SUSTAINABLE PACKAGING

As cannabis brands grow and add automation processes, they could end up with expensive equipment that doesn’t work with the sustainably produced packaging they would like to use. “If a company has already made a large infrastructure purchase in a certain direction, they sometimes feel that they can’t move on from it,” Markarian said. “The earlier you consider sustainable packaging, the better. Because you might make some infrastructure decisions right now that prohibit you from turning back (to using sustainable materials).” Rigid packaging using recycled plastic or recyclable glass containers for items like gummies or flower typically work interchangeably with conventional plastic jars. However, flexible packaging like pouches and bags made from bioplastics or other Earth-friendly materials may rip or tear too easily for some automation equipment. “In cases where you’re filling, it’s less of an issue because you’re dropping right into a container,” Markarian said. “But if you’re moving a bagging line (toward sustainable materials) and now it’s going to open a bioplastic (bag), that might be a little bit more brittle.”

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Make sure to do your research, said Patrick Wlaznak, founder of Soulshine Cannabis, a Washington state cannabis product manufacturer. When Soulshine moved into automation, the company shipped the bioplastic bag it wanted to use to a company that made a sleeving machine for packaging pre-rolls and asked the manufacturer to videotape running the machine using the bioplastic bag. “They were able to guarantee the film would work on the wrapper even though it was bioplastic,” Wlaznak said.

Soulshine Cannabis did its research to guarantee a new packaging machine would work with a bioplastic wrapper before buying. Photo courtesy of Soulshine Cannabis

ROOM FOR IMPROVEMENT IN SWAPPING PLASTIC FOR SUSTAINABLE PACKAGING

Though the typical cannabis consumer favors sustainably produced products, there are still surprisingly few sustainable options in cannabis packaging. “I was surprised at MJBizCon about how little talk there was about sustainability,” said Jim Chrzan, vice president of content and brand development at Packaging World Magazine. ”(Sustainability) has been rocking the packaging world because, during COVID, everybody stayed home and got these meal kits and thought, look at all this plastic.” Laws regulating legal cannabis make packaging with sustainable materials more cumbersome. Some states, like Washington, require extensive single-use packaging, which is at odds with the whole idea of sustainable packaging. “Single-use plastics are rife throughout cannabis, and I don’t think it can continue,” Chrzan said. In addition, price points are a problem. Some sustainable packaging options are significantly more expensive than their plastic counterparts. Even a common material like glass costs more than plastics, plus it has potential to break in the packaging process or during transport. Price point has been a discouraging factor in adopting sustainable packaging, Wlaznak said. Adopting sustainable packaging didn’t “move the needle” as much as they thought it would, at least initially. “It didn’t pay off at first,” Wlaznak said. “But every year that’s gone by, we’ve gotten more and more appreciation from people for doing it. At the end of the day, it was the right thing to do.” Price points for sustainable packaging materials are becoming more competitive since COVID, Wlaznak said, making the higher prices an easier choice today than when they first made the commitment.

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TAKE SMALL STEPS TOWARD SUSTAINABILITY

Even making small changes can help a cannabis manufacturer move toward sustainable packaging. “Don’t get paralyzed because you can’t find a 100% solution to anything,” Chrzan said. “Reduce the plastic cap by 20%. Use more post-consumer recycled content. Do something that you can tell people you’re doing and tell that story.” It’s about progress, not perfection, Markarian points out. There are more options in sustainable materials available now than even a few years ago. And as consumers continue to use their dollars to support sustainability, the marketplace will provide even more options, Markarian predicts. Cannabis manufacturers need to consider the increased costs of sustainable packaging versus the market share it can bring them, Markarian said. As the cannabis industry matures, sustainable packaging won’t be just an ethical choice for a company but vital for business. “The days of just taking weed, throwing it in a container and selling it and being successful are gone,” he said. “Competition is increasing. People are progressively becoming more strategic about how to position their brands.” Wlaznak noted more cannabis companies are moving toward sustainable packaging. When his company first adopted sustainable materials, Soulshine was one of only two cannabis manufacturers in Washington state to make the commitment to sustainable packaging. Soulshine uses 100% recyclable cardboard sourced from sustainable forests and printed with vegetable-based dyes, a fully compostable clear plastic window, and a reusable zip-close bag for its retail shelf flower packaging. But now, especially in states like Washington, Oregon and Colorado with older cannabis programs, sustainable packaging is becoming more commonplace, Wlaznak said. “It’s a long-term move for brands; you’re not going to see short-term benefits,” Wlaznak said. “But if you message it year over year, you’ll get a following because of it, and that’s pretty valuable.”

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4 CPG PACKAGING TRENDS TO WATCH FOR IN CANNABIS

Emerging technologies and shifts in consumer buying habits since the coronavirus pandemic are shaking up the consumer packaged goods (CPG) sector. Packaging innovations like artificial intelligence (AI), remote analytics, digitization and even augmented reality are creating a new level of company efficiencies and consumer experience. But will these innovations cross over into cannabis? Not all packaging innovations make sense for cannabis companies, which “typically (are) not looking for the same speeds and automation control” in packaging that other CPG sectors are, said Jim Chrzan, vice president of content brand development at Packaging World Magazine. That said, some trends are worth watching.

CONTRACT PACKAGING

The cannabis sector is seeing an emerging contract packaging, or co-packing, service. It follows in the footsteps of the CPG sector. Contract packaging in the CPG sector saw significant growth during the coronavirus pandemic, reflecting a change in consumer buying habits and labor shortages. Contract packaging is an option for a company looking to reduce packaging labor but not ready to invest in the necessary equipment, Chrzan said. In other cases, as companies mature they may find it makes more sense to contract out those services while they concentrate on the aspects of their business they do best. Patrick Wlaznak, the founder of Washington state-based Soulshine Cannabis, started three years ago offering co-packing services for other cannabis companies. But he ended up suspending that service and now does just the opposite -- contracting out some of his processing and packaging needs to co-packers. “It’s a maturity issue. These legacy companies like myself get tired of doing everything,” Wlaznak said. “You try to find somebody else who has a better machine or a better system; they can make more joints, or they can process and package your materials faster and cheaper than you can.”

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Many packaging equipment manufacturers provide data collection as part of their machinery functions to help meet state cannabis regulations. Photo by Laura Drotleff

DIGITIZATION AND AI

Digitization has come to the CPG packaging sector, bringing the power of analytics and AI to create packaging automation efficiencies and improve product traceability. Cannabis has yet to see a similar level of packaging automation analytics though it offers obvious benefits, said Amelia Dishion, senior vice president of cannabis sales for California-based ActionPac Scales and Automation. “I feel like real streamlined automation of data is what people need to be looking at,” Dishion said. Many packaging equipment manufacturers provide data collection as part of their machine functions, and cannabis manufacturers are collecting and reporting data to meet state cannabis regulations. But the cannabis sector doesn’t yet have industry software solutions that let them automatically collect, organize and analyze their packaging and production performance, Dishion said. “Our scale is retaining all kinds of information. Every single cycle weight, how many passes, how many rejects, how many products have been put through the machine, who was running the machine. It’s all this production data,” Dishion said.

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SUSTAINABILITY

Sustainability is a big buzzword in CPG packaging. CPG brands are responding to the consumer outcry over everything from landfill waste to the impact of plastic packaging on aquatic ecosystems, and bringing a renewed emphasis on recycled and biodegradable packaging options, according to a 2020 McKinsey report. Though sustainable packaging has been slow to gain a foothold in cannabis, manufacturers are starting to feel the same pressure to adopt packaging that’s better for the environment. Expect that trend to continue, predicts Luke Millspaugh, project manager for sustainability at Contempo Specialty Packaging, a Rhode Island company producing sustainable packaging options for the cannabis industry. “It’s a major part of my generation,” Millspaugh said, pointing to the recent COP26 climate summit in Glasgow, Scotland, and news surrounding climate change and environmental damage caused by consumerism. “Now that we’re getting out into the workforce and getting our own money, we’re demanding companies make these changes,” Millspaugh said. ”That’s going to progress more as we come into these next years.”

FASTER, MORE EFFICIENT PACKAGING TECHNOLOGIES

Speed and efficiency is the goal of CPG packaging automation. Although cannabis manufacturers don’t require the same level of performance that other sectors do, efficiency is still crucial to automation practices. Expect to see more efficient technology as automation companies continue to customize for cannabis needs. In some cases, it may be simply a matter of figuring out how to adapt commonly used automation equipment to the unique needs of cannabis, Dishion said. Vertical bagging is one example—a fast, user-friendly and efficient packaging process using thin, flexible packaging for products such as potato chips. The bag is formed around the product as the product falls through a tube, which is why you get air in potato chip bags, Dishion said. But vertical bagging has yet to come to cannabis in a big way. Cannabis packaging regulations require a thicker film of material than that used in CPG vertical bagging machines, she said. But if rules were changed or the machines could be adapted for cannabis regulations so vertical baggers could be used for packaging cannabis items like single-use grams or pre-rolls, “that would be revolutionary,” Dishion said. “A radial scale integrated with a vertical bagger isn’t just the fastest configuration. It’s also the easiest to use.”

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COMPANY NAME

WEBSITE

100% Hemp Packaging by Contempo

www.contempopackaging.com

333 Apparel & Promotions

333apparelandpromotions.com

3WIN CORP

www.3wincorp.com

420WholesalePack.com by McCallum Packaging

420WholesalePack.com

Aaron Equipment Company

www.aaronequipment.com

AbeTech

www.abetech.com/solutions/ intelligent-edge

ABSCENT, LLC

abscent.com

Accelerant Manufacturing

www.accelerantmanufacturing.com/

Accu-Seal

accu-seal.com/

ActionPac

www.actionpacscales.com

Advanced Labeling Systems

www.advancedlabelingsystems.com

Afinia Label

www.afinialabel.com

All American Label

www.allamericanlabel.net

Alpha Packaging

www.alphap.com

American International Container

www.aicontainer.com

Amerivacs

www.AmeriVacS.com

Amish Farms Soap

www.moistureguardpro@gmail.com

A-ROO Company

www.a-roo.com

Arrow System

www.arrsys.com/

AssurPack LLC

www.assurpack.com

AT Information Products

www.atip-usa.com

ATG Pharma Inc.

www.atgpharma.com

ATID

Atidusa.com

Atlantic Packaging Corporation

www.safercannabispackaging.com

AuthentiBrand Inc. / HoloShield

authentibrand.com

Bio Hazard Inc

biohazardinc.com

Black Mamba

www.BlackMambaGloves.com

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COMPANY NAME

WEBSITE

Boveda

www.bovedainc.com

BROCONE ORGANIC PVT LTD

www.brocone.com/

Brother Mobile Solutions

www.brothermobilesolutions.com

California Label Products

www.californialabelproducts.com

Calyx Containers

calyxcontainers.com

Can of Bliss

www.canofbliss.com

Canapa / Paxiom

www.canapasolutions.com

Canna Brand Solutions

cannabrand-solutions.com

Cannabis Promotions

Cannabispromotions.com

Cannaline Custom Packaging Solutions

www.cannaline.com

Cannapaco

cannapaco.com/

CannVerify

cannverify.com

Charles Beseler Company

beseler.com/

Chubby Gorilla, Inc.

www.chubbygorilla.com/

Clark Food Service Equipment

www.cfse.biz

ClearBags

www.clearbags.com

ClearSolv

clearsolv.com

Clipper Lighters

FLAMAGAS.COM

CNC Packaging INC

Www.Cncpackaginginc.com

Coastal Vape Co

www.coastalvapeco.com

Compliant Packaging LLC

compliantpackaging.com/ mjbizcon-2021/

Constantia Flexibles

www.cflex.com

Contempo Specialty Packaging

www.contempopackaging.com

Corners Packaging

www.curtispackaging.com

CRATIV Packaging

crativpackaging.com/

Creative Cannabis Promotions

www.cannabisswag.com

Credence Engineering Inc.

www.credencefillingsystems.com

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COMPANY NAME

WEBSITE

CurTec

curtec.com

Custom Cones USA

www.CustomConesUSA.com

Custom Pak Solutions

custompaksolutions.com

CUSTOMPACKCO

www.custompackco.com

Dark City Molds

darkcitymolds.com

Delta9 Systems & Color Label Solutions

www.delta9systems.com

Denali Innovations, LLC.

www.denali-innovations.com

Detroit Dispensing Solutions

DetroitDispensingSolutions.com

DisplayDispensary.com

DIZPOT / DOSS Carts

www.DIZPOT.com

DMLIFT INC

www.DMLiftinc.com

Dura-Pack

www.dura-pack.com

DYMAPAK

www.dymapak.com

eBottles420

www.eBottles420.com

Elemental Container Inc. a Tournaire S.A. Company

www.aluminumbottles.com

Erika Record Baking Equipment

www.erikarecord.com

Fiftyshot Unite Vapeware

www.fiftyshot.com

FILAMATIC

www.filamatic.com

Futurola USA LLC

www.futurolausa.com

Gamer Packaging, Inc.

www.gamerpackaging.com

Genius Pipe

geniuspipe.com/

Global Cannabis Applications Corp

cannappscorp.com/

Gold Leaf Packaging

www.goldleafpackaging.com

Green Vault Systems

www.greenvaultsystems.com

Green420pack

www.green420pack.com

Greenlane

gnln.com

Greenzilla

www.greenzilla.tech

Groen Automation

www.groenautomation.com

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COMPANY NAME

WEBSITE

Grove Bags

www.grovebags.com

Grow Merchandise

growmerchandise.com

Happy Head Marketing

www.happyheadmarketing.com

HBI International

www.hbiinternational.com

Heat and Control, Inc.

www.heatandcontrol.com/cannabisindustry-solutions

Hefestus USA Inc.

www.hefestus-cannabis.com/

Heinz Glas

heinz-glas.com/en/

Hemper

www.harasupply.com

HERO Packaging, a div. of TARAL Plastics

www.HeroPackaging.com

High Fidelity Paper Co

www.innovativesourcing.com

High Tek USA, Inc.

www.hightekusa.com

HISIERRA Compliant Packaging

www.hisierra.com

Hitachi Industrial Equipment & Solutions America, LLC

www.hitachi-iesa.com/industrialmarking-and-coding

Hoffmann Neopac AG

www.hoffmann.ch

Hoosier Custom Plastics, LLC

www.hcplastic.com

Hourglass International, Inc.

hourglass-intl.com

Ideal Print Solutions

idealprintsolutions.com/

iFillSystems

www.ifillsystems.com

IMPAK CORPORATION

www.sorbentsystems.com/ scentshield.html

Innovative Packaging Company

innovativepackagingco.com

Integra By Desiccare

www.integra-products.com/

InTu Mobility

www.intupackaging.com/cannabispackaging/

IPL Packaging

www.iplpackaging.com/

Ispire

getispire.com

IVEK Corporation

www.ivek.com

Kalvara

www.kalvara.com

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COMPANY NAME

WEBSITE

King Kone

kingkoneusa.com

Labels Lab

www.labelslab.com

Labeltronix

www.labeltronix.com

Latini-Hohberger Dhimantec Inc.

www.LatiniUsa.com

LeafLocker

www.leaflocker.com

LeafyPack

leafypack.com

Lightning Labels

www.lightninglabels.com

Linhardt GmbH & Co.KG

www.linhardt.com/en/

Loda Enterprises, Inc

www.loda.com/

LuvBuds, LLC

www.shopluvbuds.com

LuxLeaf Packaging

LuxLeafPackaging.com

Mactec Packaging

www.mactecpackaging.com

Marijuana Packaging by A&A Global Imports

www.MarijuanaPackaging.com

Martini Incentives

www.martiniincentives.com

Mold-Rite Plastics

www.mrpcap.com/markets/cannabis

Monkey Pak Me

monkeypakme.com

Montroy Sign and Graphic Products

Montroy.com

MULTIPOND America Inc

www.multipond.com/en/

Nanografix

www.nanografix.com

Navac INC

industrial.navacglobal.com/

NeuraLabel Printing Solutions

neuralabel.com

New World Packaging

www.newworldpackaging.com

Novopack™ Machinery

www.novopackus.com

Pack Leader USA

www.packleaderusa.com

Pack3000

www.pack3000.com/home/

Paper Tube Co.

www.papertube.co

PAQcase

www.paqcase.com/

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MJBizDaily Buyers Guide Cannabis Packaging Automation

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COMPANY NAME

WEBSITE

Phoenix

www.phxpkg.com

Plan Automation LLC

planlp.com

Planet Canit, LLC

www.planetcanit.com

PreRoll-Er

preroll-er.com/

Production Automation : Cantel Life Sciences

www.gotopac.com

Pure Hemp® & Smoking® Rolling Papers and Pre-Roll Cones

www.PureHemp.com

QUADREL LABELING SYSTEMS

www.quadrel.com

Republic Brands

www.ocbusa.com

Reusable Transport Packaging

reusabletranspack.com/

Roll The Life Premium Rolling Tips

www.rollthelife.com

RollPros

www.rollpros.com

Royal Supply

www.RoyalSupplywholesale.com

RXDco

www.rxdco.com

S10 Labs

s10labs.com

Sana Packaging

www.sanapackaging.com/

Savenseal.com ltd

www.humidi.co

Seidel GmbH & Co. KG

www.seidel.de/en/420/

Seven Point Packaging

www.sevenpointpackaging.com/

Shine Papers

shinerollingpapers.com/

Sierra Bags LLC

www.sierrabags.com

Smosi

www.smosibox.com

SonEx Labs

sonexlabs.us

START International

www.startinternational.com

STAT Shots LLC

acadianaplastics.com/products/statvials/

Stephen Gould Corporation

www.safelylock.com

Stölzle Glass USA

www.stoelzle.com/pharma/

Stuffed & Stacked

stuffednstacked.com

29 Copyright 2022, MJBizDaily, a division of Anne Holland Ventures Inc. You may NOT copy this report, or make public the data and facts contained herein, in part or in whole. For more copies or editorial permissions, contact CustomerService@MJBizDaily.com or call 720.213.5992 ext. 1.

MJBizDaily Buyers Guide Cannabis Packaging Automation

mjbizdaily.com

COMPANY NAME

WEBSITE

Sunset Packaging by Fluted Partition

sunsetpackaging.net

Take-a-Label, Inc

www.take-a-label.com

Taylor

www.thepouchhouse.com

TEKLYNX

teklynx.com

Texas Barcode Systems

www.texasbarcode.com

THC Label Solutions

thclabelsolutions.com/

The Blinc Group

www.theblincgroup.com

The Cones Factory

theconesfactory.com

The Flavor Co.

cdxxflavors.com

The Packaging Company

www.thepkgco.com

Thomas Packaging

www.thomaspackaging.com

Thompson Duke Industrial, LLC

thompsondukeindustrial.com

Tilt Holdings

www.jupiteresearch.com

Tomric Systems, Inc.

www.tomric.com/

Treeform Packaging Solutions LLC

www.treeformpackaging.com/

True Liberty Bags

www.truelibertybags.com

Union Standard Equipment

unionmachinery.com

United Label

www.unitedlabel.com

Vape-Jet

www.vape-jet.com

Vaper Tip

www.vapertip.com/

VC999 Packaging Systems

vc999.com

Vector Molds

www.vectormolds.com

Ventiv Design

www.ventiv.design

Virtual Packaging

virtualpackaging.com

Vist Labs LLC

vistlabs.com/

Weber Packaging Solutions, Inc.

www.weberpackaging.com

WIPOTEC-OCS

www.wipotec-ocs.com/us/

30 Copyright 2022, MJBizDaily, a division of Anne Holland Ventures Inc. You may NOT copy this report, or make public the data and facts contained herein, in part or in whole. For more copies or editorial permissions, contact CustomerService@MJBizDaily.com or call 720.213.5992 ext. 1.

MJBizDaily Buyers Guide Cannabis Packaging Automation

mjbizdaily.com

COMPANY NAME

WEBSITE

WizardPins

wizardpins.com/

Wolfgang Enterprise, Inc.

fhpkg.com

WRH Industries, Ltd.

www.wrh.net

XACT

xactlife.com

Xylem Technologies

xylemtech.com

Yamato Corp

YamatoAmericas.com

31 Copyright 2022, MJBizDaily, a division of Anne Holland Ventures Inc. You may NOT copy this report, or make public the data and facts contained herein, in part or in whole. For more copies or editorial permissions, contact CustomerService@MJBizDaily.com or call 720.213.5992 ext. 1.

WHY DIZPOT? W

alk into any dispensary and you will see a dizzying variety of cannabis packaging, from pre-roll pop-tops, to eye-catching edibles boxes. Distinctive product packaging can influence consumers just as much as the product itself. That’s why so many dispensaries and vendors partner with DIZPOT. We keep our eyes on the ever-changing market so that we can create thoughtful and dynamic packaging for you! From using our leverage to source the best quality products for the lowest possible price, to elevating your brand with unique designs and custom artwork, we take your project from concept to completion, ensuring your products are noticed and purchased!