Cover Progress’s board sacks CEO Bruce Linton, New Jersey boosts variety of medical marijuana enterprise licenses, the U.S. Supreme Courtroom declines to listen to a 280E marijuana tax case – plus different vital information from across the business.
Linton out as Cover faces stress from Constellation
Bruce Linton, CEO and chairman of Canada’s Cover Progress, the most important cannabis firm on this planet, was ousted after rising stress from shareholder Constellation Manufacturers to enhance its monetary efficiency.
Whereas technically the co-CEO, Linton was the face of Cover, and he took the autumn after Constellation CEO Invoice Newlands voiced displeasure in a latest earnings name about Cover’s efficiency and its incapability to stem mounting losses. Constellation owns a 38% stake in Cover.
MJBizDaily takeaway: The shock transfer could give pause to cannabis firms in search of comparable tie-ups with massive business.
Most massive North American cannabis firms proceed to be a minimum of a yr or two out from constant profitability, and Linton’s firing could put a brake on potential offers with client packaged teams (CPG) giants.
Massive week for New Jersey MMJ business
The New Jersey Division of Well being introduced it’ll problem 24 further medical marijuana licenses, together with 5 cultivation, 15 dispensary and 4 vertically built-in permits.
The state beforehand issued a complete of 12 vertically built-in permits in two licensing rounds, however solely six are at present in operation.
A day after the well being division unveiled its plans, Gov. Phil Murphy signed an MMJ enlargement invoice that can part out the state’s 6.625% gross sales tax, improve the variety of licenses and develop the sorts of well being suppliers who can advocate MMJ to sufferers.
MJBizDaily takeaway: The brand new licensing spherical presents important enterprise alternatives to enter the fast-growing New Jersey medical marijuana market.
However cannabis attorneys say potential candidates are very upset that the state minimize the variety of out there licenses sharply from the 108 initially introduced.
As well as, famous New Jersey cannabis legal professional Rob DiPisa, no particular person processing licenses can be found. So, an applicant “would possibly want to mix with different individuals” to attempt to win one of many 4 vertically built-in licenses that shall be provided.
280E marijuana tax case disappointment
Hashish companies proceed to argue for tax fairness within the courts, with little to point out for it.
The U.S. Supreme Courtroom declined to listen to a petition difficult the onerous 280E federal tax code provisions.
Alpenglow Botanicals, a Colorado medical cannabis dispensary, argued that 280E doesn’t empower the Inside Income Service to determine whether or not a enterprise has violated federal legal drug legal guidelines.
The federal government and decrease courts dominated that Alpenglow’s house owners don’t qualify for abnormal enterprise tax deductions as a result of they function an enterprise that runs afoul of the nation’s drug legal guidelines.
MJBizDaily takeaway: Tax fairness for cannabis companies is more likely to come solely from federal legislative reform, not from U.S. courts.
Maine to start out gross sales; West Virginia delayed
Two long-delayed marijuana markets are dealing with reverse outcomes relating to when gross sales seemingly will kick off.
In Maine, would-be marijuana retailers have waited since 2016 to start leisure cannabis gross sales, and West Virginia legalized gross sales of medical marijuana by means of the Legislature in April 2017.
MJBizDaily takeaway: For Mainers, the end line for the primary day of gross sales is in sight.
Grownup-use MJ commerce is anticipated to start in March 2020, after Gov. Janet Mills signed a invoice containing rules not too long ago permitted by the state’s lawmakers.
In West Virginia, medical marijuana enterprise house owners should stay affected person: It might be so long as three years earlier than gross sales start.
The West Virginia well being division’s high spokesman advised Marijuana Enterprise Each day the “main trigger” behind the projected two- to three-year delay is concern over the flexibility of MMJ firms to safe banking providers.
California approves invoice to increase provisional permits, curtail illicit cannabis companies
The California Legislature permitted – and Gov. Gavin Newsom signed into regulation – a brand new marijuana regulatory package deal that included each an extension for provisional enterprise licenses and a brand new instrument for regulators to crack down on unlicensed growers and retailers.
MJBizDaily takeaway: The measure, Meeting Invoice 97, was a political victory for some within the cannabis business because it provides extra leeway to operators ready on their annual enterprise permits to maintain operating their firms below provisional permits – for as much as two years.
But it surely was additionally months within the works, and there have been many firms operating on momentary licenses that expired after which confronted a tough selection: Droop operations or hold going whereas risking penalization by state regulators.
The invoice additionally was a substitute for an earlier measure, Senate Invoice 67, which tried to repair the licensing disaster earlier this yr, as a result of hundreds of momentary licenses started expiring, leaving these firms with no authorized technique of doing enterprise.
As well as, AB-97 licensed a brand new $30,000-a-day civil fantastic that regulators can use towards illicit operators, in hopes of nonetheless curbing underground MJ companies.