Month: September 2020

Recreational Cannabis Not on North Dakota Ballot

Voters in North Dakota will not have the opportunity to support the legalization of recreational cannabis in the upcoming election. That’s because a constitutional measure that would have legalized recreational marijuana failed to receive enough signatures. As a result, it will likely be at least two (2) more years before North Dakotans are able to legally purchase cannabis from dispensaries for recreational use. What does this mean for cannabis companies looking to expand their retail cannabis operations into North Dakota?

Not Enough Support for the North Dakota Freedom of Cannabis Act

The North Dakota Freedom of Cannabis Act would have made it legal for cannabis operators to sell marijuana for recreational use to adults over the age of 21. The ballot measure had been in the works for more than a year as the North Dakota Cannabis Caucus, a grassroots group, worked hard to secure enough signatures to get the cannabis legalization measure on the ballot in November 2020. But now the initiative appears to be dead, with the deadline for obtaining the necessary signatures having passed.

A second recreational cannabis measure, supported by a group called Legalize ND, also failed to garner enough signatures to qualify for the upcoming election ballot in North Dakota.

COVID-19 Hinders Efforts to Collect Signatures for North Dakota Pot Legalization Measure

Under state law, the North Dakota Cannabis Caucus needed at least 27,000 people to submit valid signatures in order to allow North Dakota voters to have a say in the upcoming election on whether to legalize pot for recreational purposes. When all was said and done, however, only around 24,000 signatures were accounted for and submitted to the North Dakota Secretary of State’s office.

Jody Vetter, the chairperson of the group pushing to legalize recreational marijuana in North Dakota, had expressed optimism about getting enough signatures to qualify for the upcoming election ballot. Unfortunately for proponents of recreational cannabis legalization in North Dakota, the coronavirus pandemic made it extremely difficult to gather signatures due to shutdown orders and social distancing requirements. Prior to the COVID-19 pandemic, the North Dakota Cannabis Caucus had been able to stage public rallies in Bismarck and other major ND cities in support of recreational pot legalization. In the end, Vetter observed, the pandemic “really did put a damper” on the group’s signature collecting efforts.

What’s Next for Recreational Marijuana Legalization in North Dakota?

The next step for proponents of the North Dakota Freedom of Cannabis Act is to attempt to gather enough signatures for the next statewide election in November 2022. If the group is successful this time around, North Dakota residents would finally have the opportunity to vote on whether to legalize the use of cannabis for recreational purposes.

In addition to making it legal for North Dakota dispensaries to sell cannabis for recreational purposes, the ballot initiative would also allow North Dakota residents to grow marijuana plants at home, so long as the plants are not used for public consumption and there are not too many cannabis plants being grown in one place.

Cannabis Operators Can Contact Scythian Real Estate for Information on Sale-Leaseback Deals

Medical cannabis is already legal in North Dakota, with several dispensaries providing North Dakotans with access to marijuana after first having obtained a prescription from a physician. Two of these dispensaries were recently acquired by Scythian Real Estate, which subsequently leased the properties back to Grassroots Cannabis for operation under the Herbology name.

Scythian Real Estate is an established cannabis real estate business that partners with sophisticated cannabis operators who want access to capital. Two of Scythian’s current cannabis company partners are The Green Solution and Grassroots Cannabis. If you are a cannabis company thinking about expanding operations, email Scythian today.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

U.S. Congress Says Military Can Use CBD

Members of the United States military are now allowed to use CBD after the U.S. House of Representatives approved a measure to end the ban on hemp products for anyone serving in the Armed Forces. This means that U.S. troops can now use hemp products and hemp derivatives without fear of being arrested or discharged from the military. What could this news mean for the cannabis market, cannabis companies, and cannabis investors?

CBD-Based Hemp Products Can Now Be Used by Active Duty Troops

CBD stands for cannabidiol, which is one of the active ingredients in cannabis. Hemp has a high concentration of cannabidiol and a low concentration of THC, which differentiates hemp from cannabis. Many retail dispensaries sell CBD hemp flower and buds in a variety of different strains and flavors.

As a result of the recent legislation passed by Congress, active duty U.S. service members and U.S. military veterans will now be able to use hemp-based CBD products without fear of arrest or prosecution. As set forth by the new law, the U.S. Secretary of Defense cannot prohibit “the possession, use, or consumption” of hemp or any ingredient derived from hemp by anyone currently serving in the military or by military veterans. Previously, the Pentagon had continued to enforce a policy that restricted use of hemp by active duty soldiers despite hemp CBD being declared legal by the 2018 Farm Bill.

There are some restrictions in the new law, which was one of several amendments to the National Defense Authorization Act (NDAA). The legislation approved by Congress stipulates that the possession, use, and consumption of any hemp-derived products by members of the Armed Forces must meet federal standards and be “in compliance with applicable Federal, State, and local law.”

Bipartisan Support for Law Allowing CBD and Hemp Use by U.S. Troops

The house measure to allow U.S. troops to use CBD was overwhelmingly approved with bipartisan support from both Republicans and Democrats: the final vote was 336 to 71 in favor of the legislation.

The law was spearheaded by Hawaii Rep. Tulsi Gabbard, who recently ran for President as a member of the Democratic Party and who is a U.S. military veteran. Gabbard suspended her presidential campaign in March 2020, but she remains a sitting member of the U.S. House of Representatives. As a member of the House, Gabbard has long been an advocate for the hemp industry. For instance, Gabbard previously introduced the Hemp for Victory Act to call for research into the different applications of hemp and how hemp products might be used by Americans in their daily lives.

Contact Scythian for Information on Cannabis Real Estate Investing

Scythian Real Estate is a trusted third-party landlord and real estate partner to well-capitalized cannabis companies, with an executive team that boasts 50 years of collective real estate and investment experience. In addition to partnering with nationally recognized cannabis operators, Scythian also manages a cannabis real estate investment portfolio with a current value of around $40 million.

To learn about the Scythian Real Estate Fund, send us an email today.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

Colorado to Pardon Marijuana Convictions

It may soon be possible for individuals previously convicted of marijuana possession in Colorado to have the convictions expunged from their criminal records. The Colorado General Assembly recently added an amendment to House Bill 1424 that would allow Governor Jared Polis to mass-pardon all marijuana convictions for possession of two (2) ounces or less of cannabis. The amendment passed just before the Colorado state legislature ended its last session of 2020. The move could have positive implications for cannabis retail operators in the state.

Colorado Legislature Approves Cannabis License Social Equity Program

House Bill 1424, which had bipartisan support from both Democrats and Republicans, is a broad measure intended to create new opportunities for people of color in the burgeoning cannabis industry. Although cannabis has been legalized in Colorado for medical and recreational use, many industry observers have complained that there are still many social inequities for minorities when it comes to the state’s retail cannabis industry. The end result has been that there simply are not enough minority owners who are able to make inroads in the industry and obtain licenses to operate a dispensary. The recent legislation aims to fix that problem by creating incentives for certain individuals to own a regulated marijuana business in Colorado.

The new law applies to anyone who meets one of the following criteria:

Lived in a lower-income economic opportunity zone or high-crime area for at least 15 years between 1980 and 2020.
Was previously arrested, convicted, or subject to civil asset forfeiture related to marijuana when possession of pot was still illegal in Colorado.
Had an annual household income that would place their family in the low-income category.

Eligible residents who want to get involved in the legal cannabis industry would receive incentives from the Colorado Department of Revenue or the Colorado Office of Economic Development and International Trade. The exact nature of these incentives has not yet been determined by government officials.

Mass-Pardoning of Individuals with Past Marijuana Possession Convictions in Colorado

Anyone with a prior conviction for marijuana possession will be eligible for immediate, automatic pardon by the governor. This means that there will be no need for an individual to file an application or seek approval from a local district attorney or judge. Additionally, although Governor Polis will be able to consult with others before issuing pardons, he is not required to follow anyone else’s advice. Once individuals convicted of cannabis possession have been pardoned, they will then be eligible to get the record of the conviction expunged.

The implications of the mass-pardon provision could be significant, particularly for individuals who were previously convicted of marijuana possession in Colorado but who now live in another state. In these other states where marijuana may still be illegal, a conviction for pot possession can have a devastating effect on a person’s ability to seek employment, public housing, or government assistance.

History of HB 20-1424 and Expungement of Past Marijuana Convictions in Colorado

State legislators have been trying for some time to pass a law that would clear marijuana convictions from criminal records. Jonathan Singer, a Democratic Rep. from Longmont, proposed a similar bill earlier this year. That bill would have automatically cleared all past marijuana possession convictions, but legislative delays caused by the coronavirus pandemic meant that there was simply not enough time to garner enough votes in support of the bill. Shortly before the legislative session came to an end, Rep. Singer decided to try once again by tacking on an amendment to the cannabis social equity bill. Singer justified the inclusion of the amendment by connecting cannabis business licensing and “people who are still paying for their crimes that are now legal and constitutional.” Moreover, said Singer, those costs are being borne disproportionately by communities of color in Colorado.

Some state legislators objected to the expungement amendment on the grounds that it was more of a “criminal justice” concern and not sufficiently connected to the marijuana business licensing bill. Ultimately, however, HB 20-1424 passed with bipartisan support.

Next Steps for Applicants to Colorado’s Marijuana Social Equity License Program

Now that HB 20-1424 has been passed by the Colorado state legislature, it will head to Governor Polis’ desk. If Polis signs the bill, it will become the law in Colorado and grant him the authority to expunge prior convictions for misdemeanor pot possession. It is expected that Polis will choose to sign the bill. A spokesperson for Polis stated that the governor is “happy that a meaningful, bipartisan bill addressing marijuana equity passed the legislature.”

Applicants to the state’s new social equity license program will be able to start submitting their applications at the beginning of 2021. The Colorado Department of Revenue’s Marijuana Enforcement Division is expected to finalize the rules for eligibility soon so that there are no delays for applicants.

Contact Scythian Cannabis Real Estate Today

Scythian Real Estate is a trusted partner of cannabis operators who are looking to raise funds and expand their retail operations into new states. Scythian already works with The Green Solution and Grassroots (recently acquired by Curaleaf) in states like Colorado, North Dakota, and Pennsylvania.

If you are a cannabis operator, you can contact Scythian by sending an email today.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

The 2020 Election and the Cannabis Industry

A lot of cannabis operators are paying close attention to the upcoming 2020 presidential election because the outcome could have a major impact on the U.S. cannabis retail market. Depending on who is elected president, there could be a push to legalize marijuana at the federal level.

Trump or Biden: Who Is More Likely to Legalize Cannabis Across the United States?

It is expected that the Democratic Party will nominate former Vice President Joe Biden as its presidential candidate, while the Republican Party is likely to officially nominate incumbent Donald Trump for re-election to a second term as president. As one might expect, there are a number of significant policy differences between the two candidates. Just one example: Biden has expressed clear support for the Affordable Care Act that he and former president Barack Obama signed into law in 2010, while Trump has continually tried to repeal Obamacare during his first term. Other examples of strong policy differences between Biden and Trump include immigration, climate change, tax policy, and social justice issues. Surprisingly, the two candidates do seem to be aligned on at least one policy matter: marijuana legalization.

Roughly two-thirds of the American public is in favor of legalizing cannabis for recreational use, according to an October 2019 Gallup poll. This number is up nearly 50% from just 10 years ago. Despite the widespread support for pot legalization, however, there has been a reluctance from federal lawmakers to back any measure perceived as endorsing increased drug use of any kind. Interestingly, both Donald Trump and Joe Biden appear to be opposed to legalizing cannabis federally.

What Would President Biden Mean for Federal Marijuana Laws?

On Tuesday, November 3, 2020, voters across the country will cast their ballots in the presidential election, as well as state and local races. (Many voters are also expected to vote early through mail-in voting.) Some states have cannabis legalization measures on the ballot: New Jersey and South Dakota voters will weigh whether to legalize recreational marijuana, Mississippi voters will consider whether to make medical marijuana legal, and Oregon is set to vote on whether to decriminalize all drugs. Other states, such as Arizona, Idaho, and Montana, may have pot legalization measures on the ballot as well, depending the outcomes of pending court cases.

In the long term, the choice of president in the upcoming election could have the greatest effect on the cannabis industry. Although neither Trump nor Biden seems likely to push to legalize cannabis in the U.S. any time soon, it is possible that a President Biden might come around on the issue because it is what his supporters want. A recent poll found that 76% of Democrats strongly favor the legalization of cannabis for recreational use, as compared to just 51% of Republicans. At a minimum, the election of Joe Biden would probably signal that federal enforcement of laws against marijuana possession would not be increased. And if the recommendations of a recent Joe Biden-Bernie Sanders task force become law, medical marijuana would be legalized nationwide.

It is also possible that cannabis could be decriminalized at the federal level if Joe Biden wins the November election. This is something that Biden has voiced support for in the past and that the Biden-Sanders task force made a point to include in the 110-page document submitted to the Democratic National Committee’s Platform Committee. So, what would decriminalization actually mean? While marijuana distribution would still not be legal, minor possession offenses would no longer result in prison time for offenders. This could provide a big boost to the retail cannabis industry in states where marijuana has already been legalized for recreational and/or medical use.

Impact of 2020 Election on Cannabis Real Estate and Financing

A win for expected Democratic nominee Joe Biden in the November election could also profoundly affect the cannabis industry by leading to banking reform. Currently, cannabis companies have a difficult time accessing capital because banks are reluctant to provide financing to businesses that technically violate federal law. In order to get the funds needed to operate their retail dispensaries and cultivation sites, many cannabis operators enter into sale-leaseback agreements in which they sell their real estate to an investment fund and then lease back the property from the investment fund. The 2020 presidential election might change the way that cannabis operators do business in the future.

Cannabis Investing After the 2020 Election

The country could look much different in January 2021 than it does right now. If a new president is sworn in at that time, the cannabis industry could also look much different. What kind of effect will this have on cannabis operators? Could cannabis investors see a greater opportunity for strong financial returns after the upcoming presidential election?

Contact Scythian for Information About Cannabis Real Estate Investment Opportunities

Scythian Real Estate is a trusted real estate partner of cannabis operators that are interested in accessing capital through sale-leaseback deals. Scythian currently owns 19 cannabis properties spread across several states, including Colorado, Pennsylvania, and North Dakota – with an acquisition pipeline that is expected to continue growing the fund’s portfolio. To learn more, email Scythian Real Estate today.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

710 Day Shows Popularity of Cannabis Concentrates

The recent “710 Day” in the United States highlighted the rising popularity of cannabis concentrates in cities where cannabis has been legalized for recreational use. Each year on July 10, cannabis consumers flock to dispensaries in states where recreational marijuana is legal and purchase concentrated extracts and oils. This year was no exception, with reports indicating that business was booming at retail marijuana stores in Colorado, Illinois, Nevada, and throughout the United States.

What Is 710 Day?

The most famous and celebrated cannabis holiday is 420 Day, which falls on April 20^th each year. A close second, however, is 710 Day on July 10^th. This is the recognized holiday for cannabis oil products, called 710 Day because “710” looks like “OIL” when reversed and turned upside-down. Each year on July 10^th, cannabis enthusiasts celebrate by smoking cannabis concentrate and extract products such as shatter weed, crumble weed, and hash oil wax. These cannabis concentrates tend to be popular among consumers because they offer a more potent high than traditional marijuana products.

Cannabis Concentrates & Oils Rising in Popularity in Colorado

Among all cannabis product categories, cannabis concentrates are one of the most coveted by recreational pot users. This is particularly true in Colorado, where demand is so high that dispensaries can’t seem to keep cannabis concentrate products on the shelves for very long.

Cannabis concentrates are part of the fastest-growing product segment in the cannabis industry. According to the most recent annual report released by the Colorado Department of Revenue’s Marijuana Enforcement Division, more than 40,000 pounds of cannabis concentrate products were sold in both the medical use and recreational use markets in Colorado in 2019. This represented a 128% rise from 2016, when just over 17,600 pounds of concentrate products were sold in Colorado. To put these numbers in perspective, consider that cannabis flower products saw just a 4.4% increase in sales during the same time period.

Of course, it is worth noting that cannabis flower is still the most sought-after product among both recreational and medical marijuana users: more than 350,000 pounds of flower products are sold annually in Colorado, or around nine (9) times as much as cannabis concentrates.

High Demand for Cannabis Concentrates in Both U.S. and Canada

Although sales of cannabis concentrates are not quite so strong in a newer market like Massachusetts, where recreational marijuana was legalized at the end of 2016, sales have still risen sharply. Data shows that retail sales of cannabis concentrates in Massachusetts increased by roughly 17% from June 2019 to June 2020.

The demand for cannabis concentrates is also strong north of the border in Canada. Health Canada is the department that oversees the country’s national health policy, and data from Health Canada shows that retail sales of concentrated extracts of marijuana increased by 154% in a period of just six (6) months. By contrast, sales of marijuana flowers on the recreational cannabis market in Canada actually decreased during that same time period.

Cannabis Companies Focusing on Marijuana Concentrates Market

The increased demand for marijuana concentrates has certainly been noticed by cannabis companies, especially those companies that are looking to expand operations into Colorado, California, Michigan, and other states where recreational marijuana is legal. Curaleaf, the largest multi-state cannabis operator in the country, recently acquired Select, a dominant wholesaler that provides cannabis products to more than 900 retailers throughout the U.S. Part of the reasoning behind the acquisition was that Curaleaf wanted to build a national cannabis concentrate brand, as well as to gain direct access to an experienced marijuana concentrate manufacturer for future research & development.

After the deal was completed, Select president and co-founder Cameron Forni issued a statement noting that there has been “an evolution [among cannabis consumers] in appreciation for hardware and oil quality.” One of the brand’s most popular cannabis concentrate products is Select Elite Live, which combines THC oil and high-terpene extract (HTE). Products like these tend to generate even more interest on 710 Day, when cannabis concentrate sales typically see a huge bump as consumers look for alternatives to more traditional marijuana flowers at dispensaries. Additionally, observed Forni, the people who are most excited about cannabis concentrates tend to come from “a small subset of super-enthusiasts.”

Curaleaf’s acquisition of Select in February 2020 was the first major deal made by the cannabis retailer, but it certainly was not the last. In July 2020, Curaleaf completed another major transaction by finalizing its merger with Grassroots Cannabis.

Contact Scythian Cannabis Real Estate Investing Today

Scythian Real Estate is the real estate partner of several large cannabis companies that operate across the United States. The Scythian Real Estate Fund specializes in sale-leasebacks with sophisticated cannabis operators and includes nearly two dozen retail cannabis properties valued at approximately $40 million. To learn more, email Scythian today.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.