400+ New York municipalities say ‘no’ to cannabis
New York is the next big legal market on the cannabis horizon – but more than 400 cities and towns in New York have opted out of adult-use cannabis before the December 31 deadline, reports WWNYTV.
Where cities say no, illicit market says yes!
As happens in every market, some cities and towns just don’t seem themselves ready for cannabis (even though voters overwhelming support legalization.) Ironically, when cities say no, these so-called legal cannabis deserts are being blamed for a thriving illicit market and overcrowded storefronts in other areas, according to a Canadian Press report.
A strain on the legal system too
In British Columbia’s Lower Mainland, for example, a high percentage of cannabis delivery orders come through neighbouring Surrey and Richmond, where cannabis stores aren’t yet permitted. It’s a strain on not-yet-profitable cannabis retailers. “We’re effectively losing money on those deliveries … and hope that at some point, those municipalities will opt in and we’ll be able to access them,” said Harrison Stoker, chief growth officer at Dutch Love.
As has happened in other emerging legal markets – cities and towns saying no is often temporary – as they begin to long for those tax dollars from cannabis and begin to open up to legal cannabis retail. Expect the same in New York… eventually.
Enjoy Cannabis Daily each morning at 7 a.m.
Supply chain shortages hit US cannabis
From vape cartridge materials to cultivation resources, rolling blackouts and shipping issues in China are starting to impact the cannabis industry, reports Bloomberg.
What it means
Like with other parts of the global economy, prices will likely increase — and it could get worse, with Lunar New Year holidays coming up for Chinese workers. “I believe this issue will go on at least until the end of May,” said the Blinc Group’s CEO Arnaud Dumas de Rauly.
The cannabis sector is not immune to global supply chain glitches – so hold on tight, the next few months could get even rockier.
2021’s biggest surprises
New Cannabis Ventures summed up the past year’s cannabis industry highs, lows — and the five wild cards that no one saw coming:
- New Jersey voted to legalize adult-use cannabis in November 2020, but there still isn’t even a date set for when the new program will be implemented
- Everyone predicted plenty of M&A in 2021, but no one expected regulators to sign off on Trulieve’s acquisition of Harvest
- Prices in California bottomed out, hurting cannabis operator stocks and ancillary companies, which are pegged to the market
- Republican Congresswoman Nancy Mace’s States Reform Act was another surprise, showing that cannabis legalization is indeed a bipartisan issue (even if the White House is sort of ‘meh’ on the issue)
- Low MSO valuations, despite positive revenue growth and excess cash
The cannabis industry is unpredictable. If you’re in the business of predicting what’s next, you’re probably going to be wrong.
Malta first to legalize cannabis in Europe
Beating Luxembourg to it, Malta is Europe’s first country to legalize possession and cultivation of cannabis for personal use, according to the Guardian.
Those 18+ can possess up to seven grams. They can also grow up to four plants at home and store up to 50 grams of homegrown cannabis.
Maltese parliament voted in favour yesterday. The president will sign it into law before the weekend.
Tiny but mighty
Drug reform in Europe’s smallest country is expected to create a wave of similar reform across Europe in 2022, in countries such as Germany, Switzerland, Luxembourg and the Netherlands. Italy is planning a referendum too.
SynBiotic snaps up four cannabis companies
Germany’s SynBiotic has agreed to acquire four businesses founded by European cannabis industry ‘pioneer’ Daniel Kruse in a move that some are saying is the “most significant acquisition outside of the North American market to date,” reports BusinessCann.
The deal is worth €11.2 million for 50.1% of four companies. Hanf Farm, Hempro International and Hemp Factory are “well-established, direct-to-consumer brands,” raising revenue forecasts from €5.4 million to €15 million. And, MH Medical Hemp supplies CBD oil and isolate to food, cosmetic and pharma companies.
Germany’s new government is expected to lead drug reform in Europe, and SynBiotic is poised to benefit, Krause said. “Many countries will change their laws to be able to export to the German recreational market, which means that they will also legalise first.”