Spotlight Series: Drew Richards, Director, New England Cannabis Industry Leader at Marcum LLP

The CannaBusiness Advisory Spotlight Series features expert perspectives from Burns & Levinson clients and contacts who are blazing new trails in the cannabis market.

Today, we spotlight Marcum LLP and Drew Richards, Director, New England Cannabis Leader. Marcum LLP is an accounting and advisory services firm that offers accounting, financial and consulting services to cannabis industry operators. Based in New Haven, Drew Richards has 12 years of experience conducting, reviewing, and analyzing financial information. Marcum LLP was a Gold sponsor at Burns & Levinson’s Sixth Annual State of the Cannabis Industry Conference, held on October 17th at the Westin Boston Waltham. Our nationally recognized conference convened national experts and industry leaders to share unique strategic legal and financial perspectives on forecasted trends, regulations, M&A, investments, and more.

From your corner of the cannabis industry, what’s the single greatest challenge right now?

Although there are a lot of accounting-related challenges (280E, inventory valuation), including the various and different state regulations, I would say the biggest challenge right now centers around education and future operations. Business owners may not have accounting backgrounds, so they run their businesses without much consideration for generally accepted accounting principles (GAAP) or international financial … Keep reading

On October 17th Burns and Levinson hosted its Sixth Annual Cannabis Industry Conference. Our very own Scott Moskol sat down with the following experts to discuss the current state of the national cannabis market and diagnose the events of the last couple of years that led the market to where it currently resides.

David Bunzel / Managing Director – Investment baking, M&A, Public & Private Markets / Young America Capital

Kyle Patrick Judge / Vice President – Management Liability, Cannabis & Transaction Risk / HUB International

Tiffany Liff / Managing Director / Entourage Effect Capital

Richard Ormond / Senior Advisor / PGP Capital Advisors

Jacques Santucci / President / Opus Consulting

There is no denying that the national cannabis market is undergoing a thorough “shake-up,” resulting in depressed prices, a reduction in annual gross profit, and an increase in defaults under debt instruments leading to the institution of receivership and other foreclosure proceedings. But how did we get here, and what should cannabis operators keep in mind when strategizing ways to safeguard the health of their company?

Straight from the mouths of our experts to your computer screen, here’s a non-exhaustive list of the realities that make running a … Keep reading

 

On October 17th Burns and Levinson hosted its Sixth Annual Cannabis Industry Conference, where our very own Frank Segall sat down with Steven Hoffman to reflect on Steven’s time as the Chairman of the Cannabis Control Commission, his impact, and what his hopes are for the future of the industry.

Steven recalled his first few months as the Chairman as somewhat of a whirlwind. From being appointed on a Friday night and thrust into a press conference on Monday morning, he has been going nonstop ever since. Steven initially had the help of 5 commissioners, no office, no staff, no money, and very aggressive legal mandates to decipher. His plate was overflowing from day one. For the next 6 months, the commissioners held between 30-50 public meetings in order to discuss and draft regulations that would be broadly followed throughout Massachusetts.

Steven’s proudest moment as commissioner was the implementation of the Cannabis Social Equity Trust Fund. This fund was put into place to encourage the participation of regulated marijuana for entrepreneurs who have been harmed by marijuana prohibition and enforcement. This fund is set to provide additional opportunities to those who may not be able to do … Keep reading

Spotlight Series: Kyle Patrick Judge, Vice President, Manage Liability, Cannabis & Transaction Risk at HUB International

The CannaBusiness Advisory Spotlight Series features expert perspectives from Burns & Levinson clients and contacts who are blazing new trails in the cannabis market.

Today we spotlight Kyle Patrick Judge, Vice President, Management Liability, Cannabis & Transaction Risk at HUB International. HUB is a global insurance broker and financial services firm headquartered in Chicago with over 530 offices throughout North America. Their work focuses on risk management, insurance, employee benefits, retirement, and wealth management products and services. HUB’s dedicated cannabis practice assists cannabis-related businesses with securing business insurance, risk services, and claims management, and building employee benefits programs.

At Burns and Levinson’s Sixth Annual State of the Cannabis Industry Conference, Kyle will speak with nationwide industry experts on the panel “Weathering the Storm: Restructurings, Workouts, and Distressed M&A.” The panel will discuss best practices for navigating financial and operational distress from multiple perspectives – investors, secured debt holders, and companies during dropping stock prices and reduced multiples.

From your corner of the cannabis industry, what’s the single greatest challenge right now?

The biggest challenge in the management liability space is a lack of carriers playing in the cannabis space. This is the crux of a lot of … Keep reading

President Biden Acknowledges a “Failed Approach” to Marijuana Policy, Outlines Significant Plans to Pardon Thousands, and Evaluate How Marijuana Is Scheduled Under Federal Law.

 

On Thursday, October 6, 2022, President Joe Biden issued a press release and video statement announcing his actions to end what he called a “failed approach” to the United States’ federal marijuana policies and calling for significant marijuana reform at the federal level.

First, President Biden announced his administration will be pardoning any U.S. citizens and lawful permanent residents charged or convicted under federal law (and Washington D.C. law) of simple marijuana possession on or before October 6, 2022. Their full political, civil and other rights will be restored. The President called on all governors to follow suit and pardon state offenders of simple marijuana possession.

President Biden also directed the Secretary of Health and Human Services and the Attorney General to initiate the administrative process to “review how marijuana is scheduled under federal law.”

At a minimum, the President’s announcement shows a real – and long-awaited – change in the Federal Government’s approach to cannabis, which has been criminalized as a Schedule I substance since the Controlled Substances Act was signed into law … Keep reading

The long-anticipated New York cannabis market is finally coming into shape. The New York State Office of Cannabis Management (“OCM”) has issued more than 250 Adult Use Conditional Cultivator Licenses and 25 Adult Use Conditional Processor Licenses and began processing retail license applications on August 25. There’s no doubt that New York is the cannabis industry’s next land of milk and honey. As potential investors prepare to inject capital into this promising new market, it’s important they—and their target businesses—be aware of potential regulatory pitfalls particularly as they apply to “True Parties of Interest.” Below, this blog discusses what it means to be a True Party of Interest in New York and how such designation may affect investment in New York’s Adult Use Cultivation and Processing market.

What is a True Party of Interest??

To promote more balanced competition, many states with legalized recreational cannabis have implemented restrictions and limitations on the number of licenses an individual or entity can have a direct or indirect “interest” in. In New York, individuals with such interests are identified by the OCM as “True Parties of Interest.”

The definition of “interest” and the restrictiveness of these provisions vary from state to state. … Keep reading

 

Are supply contracts a thing of the past in the cannabis market? As many cannabis markets continue to develop state to state — whether it be veteran markets adjusting to changes in consolidation or emerging markets expending efforts to establish a foundation — many operators are considering moving away from having a master supply agreement govern the legal terms and conditions of the business relationship between B2B product suppliers and product buyers for one-page purchase orders and invoices as a replacement. This blog identifies the top 5 legal considerations you need know when relying on this latter approach.

Under the traditional approach used in many industries, product fulfillment arrangements to be supplied by a distributor, on the one hand, and received by either a middle-entity operator, like a product manufacturer, or retailer for resale, on the other hand, are papered up as a form of master supply agreement (aka, purchase agreement, distributor agreement or wholesale agreement). These agreements govern the terms of the purchase, payment, delivery, and other legal jargon of the purchase-supply relationship generally and would be later supplemented by the parties through the use of purchase orders or invoices from time to time when the purchaser … Keep reading

The cannabis market in America has expanded and continues to grow with each election cycle. State lawmakers and their respective voters continue to propose and pursue the passage of ballot referendums, constitutional amendments, and new legislation that seek to legalize the recreational use of cannabis and establish a framework for the adult-use commercial market and the regulatory oversight thereof. The November 8th midterm elections are no exception, as five states seek to legalize recreational cannabis.

The following states seek to join the nineteen (19) states that have previously legalized recreational cannabis.

Arkansas

  • Action: Ballot Referendum. Lawmakers in Arkansas passed a constitutional amendment to permit the addition of this initiative to the ballot. The state Supreme Court upheld the constitutional amendment and ordered the initiative to legalize recreational cannabis to be added to the ballot for November 2022.
  • Opposition
    • Faces a legal challenge claiming the title of the ballot initiative is misleading. Many state officials are arguing that this legal challenge should be resolved before adding it to the ballot, which remove it from this year’s ballot.
    • The legal challenges have delayed the secretary of state’s ability to certify the signatures received supporting the ballot referendum. The initiative
Keep reading
Early Bird Tickets Available Now: 6th Annual State of the Cannabis Industry Conference

Join us on Monday, October 17, for Burns & Levinson’s nationally recognized State of the Cannabis Industry Conference! Each year our team convenes national experts and industry leaders to share unique strategic legal and financial perspectives on forecasted trends, regulations, M&A, investments, and more. Make connections, develop partnerships, and gain insight from industry leaders.

We’re back for our sixth and best event yet with a full day of in-person programming at the Westin Waltham Boston — although there is a live stream option for those who’d like to access the panels remotely.

Early bird tickets are on sale for a limited time for a discounted price of $149. Click here to purchase.

This year’s panels include:

  • A discussion on restructuring, workouts, and distressed mergers and acquisitions,
  • A spotlight on women executives in the cannabis industry,
  • A deep dive into capital markets, financing, debt, and the state of M&A,
  • A fireside chat with Steven Hoffman, the former chairman of the Massachusetts Cannabis Control Commission,
  • A CEO roundtable.

Be sure to subscribe for more updates on confirmed speakers and panels.

Keep reading

“If you build it, they will come.” These were the words spoken from above to Kevin Costner’s character, Ray Kinsella, in Field of Dreams, as he walked through an Iowa cornfield and envisioned Shoeless Joe Jackson standing in what would become a beautiful ballfield. And this vision did come true. Like Ray, countless entrepreneurs have walked through farmlands, warehouses and retail shops alike – dreaming of building state-of-the-art cannabis facilities.

The cannabis industry is home to some of the hardest working, gritty, thoughtful, and passionate entrepreneurs in the world, and there are plenty of success stories out there. However, the industry at large is quickly experiencing a difficult truth: it’s not as simple as if you build it, they will come. The saying for the industry, at this point, should probably be something more along the lines of if you build it, and build it in a great location, and are well capitalized, and execute effectively, with a great team that provides customers with a consistent product, then they will come.

Yes, there is momentum from 2021’s state legislative victories that resulted in Connecticut, New Mexico, New Jersey, New York, and Virginia all legalizing adult use. But … Keep reading