Following the Money: Analyzing Capital Flow into the Legal Cannabis Industry

At our recent cannabis conference, financial services experts gathered to discuss the evolution of cannabis-related investments. A panel consisting of Kyle Detwiler (Northern Swan Holdings), Jeff Finkle (ARC Angel Fund), Scott Greiper (Viridian Capital Advisors, LLC), and Harrison Phillips (Viridian Capital Advisors, LLC) talked about specific investor trends, and how these trends will shift as the industry begins to mature. Below are a few highlights from that discussion. What are the current investor types? When will traditional VC and PE funds do more than “dip… more

The Shifting Landscape of Local Communities

When Massachusetts initially approved the legalization of recreational cannabis in November 2016, some communities exhibited a strong resistance to the end of prohibition by implementing local bans or limitations on future cannabis retail. The way the law is currently structured, if a town’s population voted against legalization in 2016, its officials may impose bans or moratoriums on local retail shops. On the other hand, if a town’s population voted for legalization in 2016, it may still impose bans or moratorium on retail shops, but must… more

Breaking Down California's Proposition 64 Rules

Last year, Californians passed Proposition 64, which legalized recreational marijuana use across the state. On Thursday, November 16th, state regulators released their 276-page set of cannabis rules to go along with the legalization that is set to be effective January 1, 2018. In general, California will treat cannabis like alcohol, allowing people 21 and older to legally possess up to an ounce and grow six marijuana plants at home. Scaled fees are spelled out, with costs for annual licenses ranging from $800 for businesses transporting… more

Reflections on MJBizCon 2017

Recently, I traveled to Las Vegas with colleague and fellow Cannabis Advisory Group co-chair, Frank Segall, to attend the Marijuana Business Conference & Expo, also known as “MJBizCon,” which bills itself as “the largest cannabis conference in the world.” Launched in 2012 by the editors of Marijuana Business Daily, MJBizCon hosts bi-annual events in the fall and spring, bringing together thousand professional cannabis operators and investors every year. This was my fourth MJBizCon (one spring, three fall), and it was, by far, the largest. The… more

Throughout history, marijuana has brought many benefits to vastly different populations. Realizing that those benefits outweigh any potential risks, Massachusetts, as a forward-thinking state, has allowed this product (and it is a “product”) to enter the marketplace on a legal basis, though regulatory details continue to be worked out. Below are some salient facts and dates to remember as cannabis comes fully online in the Commonwealth. When did the law take effect? The law took effect on December 15, 2016. What aspects of the law… more

Many cannabis industry experts believe that the cannabinoid-based pharmaceutical sub-industry has the most potential to be the largest growth target for the cannabis industry as a whole, and if regulatory barriers to the cannabis industry are eased or lifted, the industry experts are probably right. The positive results of cannabis-based drugs on various diseases, illnesses, and symptoms, are overwhelming, and companies such as Digipath, Inc. and GW Pharmaceuticals, plc, are at the forefront trying to bring these this cannabis-based drug treatment to the mainstream. The… more

At our cannabis conference on October 17th, representatives from across the industry gathered to discuss how the landscape of legalized marijuana has changed in recent years, particularly in New England. A panel, consisting of James Alex (Premier Healthcare Group), Jason Sidman (Sanctuary Medicinals), Patricia Rosi (Wellness Connection of Maine), and G. William Eldridge (GW Consulting), talked about specific industry trends they have seen and where they expect the industry to go moving forward. Below are a few highlights from that discussion: Why should people be… more

Last week, our inaugural cannabis conference took place at the Hilton Boston-Dedham hotel, and we are pleased to report that, by virtually every measure, the day was a tremendous success. This being the first conference ever put on by our group, we knew from the beginning that we were venturing into uncharted waters. But with the help of co-host Viridian Capital Advisors and our exhibitors, sponsors, and panelists, the entire affair ran smoothly and proved memorable, insightful, and enjoyable for all involved. In total, 152 investors,… more

On July 28, 2017, Governor Baker signed into law H. 3818, “An Act to Ensure Safe Access to Marijuana,” which was passed by state legislators to update state laws governing the cultivation, sale, and use of marijuana, following voter approval in 2016. The Act was characterized as an emergency law and declared “necessary for the immediate preservation of the public convenience,” and the majority of its provisions pertain to the establishment of a five-member Cannabis Control Commission, the purpose and duties of which are relative… more

As banks are learning to navigate the murky legal waters inherent to cannabis-related businesses, they are increasingly becoming open to housing cannabis-related business accounts, even with the substantial burden placed on them by the federal government to comply with their respective state laws. In August 2013, then-Attorney General James M. Cole issued a memorandum to all U.S. attorneys, which was published by the Department of Justice, setting expectations for the federal government, state governments, and law enforcement on how to address state-implemented, legal-adult-use cannabis programs…. more

One commonality for businesses across all industries, including those in the medical and adult-use recreational marijuana space (“cannabis companies”), is the importance of access to capital. Everyone knows that running a company requires a significant amount of money. However, cannabis companies specifically face distinct hurdles to raising capital, especially when it comes to deciding whether to go public. The process of a private company offering and selling stock to the public typically begins with an initial public offering, which can trigger large payouts for management… more

Now that Massachusetts has legalized the use of marijuana for medicinal and limited recreational purposes, how should employers in the Commonwealth deal with worker use of marijuana? Here are three things any employer should be aware of about marijuana use in the workplace. 1. Employers can prohibit employees from reporting to work or performing work under the influence of marijuana, even if they cannot control the use of recreational marijuana outside of work. However, detecting the current use of marijuana can pose a challenge, since… more

In a few weeks’ time—October 17th, to be exact—we are hosting our first conference on the topic of cannabis, called “The Cannabis Industry: Growth Opportunities for Professionals, Operators and Investors.” After months of planning and behind-the-scenes prep work, we’re thrilled that we’re now only a few short weeks away from what we know will be a fantastic day. And as we detailed in our last post (ticket and other information here), we’ve put together a program that we think attendees will find informational, interesting, and enlightening…. more

Burns & Levinson, in partnership Viridian Capital Advisors, is incredibly excited to announce the first in what it hopes will be an annual event, “The Cannabis Conference: Growth Opportunities for Professionals, Operators and Investors.” Slated to take place at the Hilton Boston Dedham hotel on Tuesday, October 17th, from 8:00 a.m. to 6:00 p.m., the conference will bring together professional investors, entrepreneurs, thought leaders, and other participants in the cannabis space for an exploration of the industry’s potential opportunities and challenges. The event is by invitation only,… more

Introduced in 2003, the Rohrabacher-Farr amendment prohibits the Justice Department from spending funds to interfere with the implementation of state medical marijuana laws. Its original text stipulated that: “None of the funds made available in this Act to the Department of Justice may be used, with respect to the states of Alabama, Alaska, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, Oregon, Rhode Island, South… more

Already generating billions of revenue dollars annually, the cannabis industry is moving ever closer to the mainstream, and newly created companies are increasingly seeking out investor assistance to turn their ideas into realities. In this post, we present some issues to consider and measures to take when deciding whether to invest in a cannabis-related company that is seeking funding. 1. Make sure the company has truly obtained all required licensure Each state has its own system for awarding licenses to grow or sell cannabis. It’s… more

In 2012, Anthony Pisarski and Sonny Moore, marijuana cultivators operating legally under California law, were raided by federal agents, who seized 327 cannabis plants, firearms, and over $400 thousand in cash. Pisarski and Moore were each charged with conspiracy to manufacture and possession with the intent to distribute. Five years later, and only days ago, their case was reviewed by the Honorable Richard Seeborg, a California U.S. District Court judge. Judge Seeborg’s decision blocked federal prosecutors from pursuing claims against Pisarski and Moore, ruling that… more

Here’s some food for thought: 29 states currently have laws broadly legalizing cannabis, in some form. Eight of those states – Alaska, California, Colorado, Oregon, Massachusetts, Maine, Nevada, and Washington, as well as the District of Columbia – have legalized the plant’s sale, for both medicinal and recreational use. These numbers continue to grow. In fact, many studies indicate that cannabis is the fastest-rising industry in North America. For companies to capitalize on the many opportunities this industry presents, however, they need startup and growth… more

In my previous post, I outlined some of the challenges property owners face with regard to leasing real estate to registered marijuana dispensaries (RMDs) and cannabis cultivation centers (MJ Tenants). For all parties involved, the path to success in the cannabis space begins with an understanding of the differences between applicable state and federal laws. With respect to leasing to businesses that actually touch the flower, there are significant zoning and locational restrictions imposed on RMDs and MJ Tenants that must be taken into consideration…. more

Recently, I’ve been asked to negotiate several commercial leases for cannabis cultivation centers (MJ Tenants) and registered marijuana dispensaries (RMDs) around Massachusetts. Competition is fierce, and parties are scrambling to scoop up real estate in qualifying zoned areas. As a result, the market value of these properties is increasing rapidly. While high costs pose an entry challenge for new businesses, many commercial landlords are benefitting from the sudden increases in value. But despite their expanding profit margins, there remains a host of issues for commercial… more