Month: March 2021

New Jersey Legalizes Recreational Marijuana

After several months of delays, it appears that the legalization of cannabis in New Jersey is back on track. New Jersey residents, and others in the state, should soon be able to go to their local dispensaries to purchase marijuana for recreational use. That’s because NJ Gov. Phil Murphy recently affixed his signature to a law that will address logistical issues with the implementation of necessary measures to create the state’s adult-use cannabis market. What effect will marijuana legalization have on the New Jersey economy, and on the cannabis industry generally? Keep reading this blog to learn more.

NJ Governor Signs Law to Create Adult-Use Cannabis Market

On February 22, 2021, New Jersey Governor Phil Murphy signed a law that will essentially legalize recreational market and create a new cannabis market in the Garden State. The legislation makes it legal to purchase and use cannabis for recreational purposes and decriminalizes possession of small amounts of marijuana.

Although a ballot measure to legalize adult-use cannabis was approved by NJ voters on November 3, 2020, there was a holdup on implementation because of concerns raised by Governor Murphy: the governor refused to sign a bill to begin implementing cannabis legalization measures until state lawmakers approved a related bill to ensure that criminal penalties would remain on the books for underage marijuana use. That “clean-up bill” was subsequently passed by the New Jersey Assembly and the New Jersey Senate by overwhelming margins.

With many of the issues that were holding up adult-use cannabis legalization now on track to be resolved, state lawmakers believe that the legal sale of recreational marijuana in New Jersey could happen before the end of 2021. The state recently appointed five (5) members to a Cannabis Regulatory Commission (CRC), an oversight agency which is in charge of regulating the medical marijuana program and developing rules and regulatory measures for the new recreational marijuana market. While many cannabis operators wishing to do business in New Jersey will need to apply for recreational cannabis licenses, some cannabis operators already have medical cannabis licenses and could seek quick approval for adult-use cannabis sales.

Economic Impact of Recreational Cannabis Legalization in NJ

Cannabis industry experts believe that the New Jersey adult-use cannabis market will generate more than $1 billion annually by 2024. This would make NJ the largest cannabis market on the East Coast and one of the leading cannabis markets in the entire country.

Of course, with New Jersey finally having legalized recreational marijuana, the question now becomes: when will New York legalize adult-use cannabis? Only time will tell on that one, but there is definitely momentum pushing New York towards full legalization of cannabis – especially as the U.S. Congress considers decriminalizing cannabis federally and more and more Americans indicate their support for full legalization of cannabis. Additionally, many industry observers believe that other states like Pennsylvania, Maryland, and Virginia could soon follow New Jersey’s lead and legalize cannabis. Shortly after the NJ marijuana legalization ballot measure was approved by voters in the 2020 election, Steve Hawkins, the executive director of the Marijuana Policy Project, said, “The passage of this ballot measure positions New Jersey to take the lead in the Northeast and will push neighboring states, like New York and Pennsylvania, to take action on marijuana legalization.”

Within New Jersey, the economic impact of legal recreational cannabis could be significant. Scott Rudder, president of the New Jersey CannaBusiness Association, called the new law “historic” and predicted “phenomenal” business opportunities not just for cannabis investors and companies but also for NJ residents. Additionally, there could be a sizable benefit to related businesses like law firms and accounting firms that will be needed to assist cannabis operators.

Contact Scythian Real Estate for Assistance with Cannabis Operations in New Jersey and Across the U.S.

Scythian Cannabis Real Estate is a privately held cannabis real estate fund that provides financing and other operational assistance to some of the largest and most sophisticated cannabis operators in the country. To learn more, 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.

Curaleaf Ends 2020 with Record Quarter

Major cannabis company Curaleaf recently reported record earnings to close out 2020. According to financial and operating results for the fourth quarter of 2020, Curaleaf generated all-time high revenues for both an entire year and a single quarter. What could the recent success of Curaleaf mean for the company going forward? And what could it mean for the cannabis industry and major cannabis operators more generally? Keep reading this blog to learn more.

Curaleaf Revenues Hit Record Highs in 2020

Curaleaf Holdings, Inc. is a leading provider of consumer cannabis products in the United States. Curaleaf operates more than 100 dispensaries in 23 states, and the company also has numerous cultivation and processing sites, as well as nearly 4,000 employees and team members. Additionally, Curaleaf is a vertically integrated cannabis provider with its own in-house brands, including the popular Curaleaf and Select brands.

In 2020, Curaleaf revenues hit record highs. Moreover, the final three months of 2020 continued an upward trend that suggests 2021 could be even more profitable for the cannabis company. According to fiscal and operating results that were recently made public, Curaleaf’s Q4 2020 saw the company’s total revenues exceed $230 million. This represented a sizable 23% increase over Curaleaf’s Q3 earnings of $182 million, and a massive 205% increase over the company’s Q4 2019 earnings. These financial figures for the final three (3) months of 2020 built on the already-strong results of the preceding nine (9) months. For the entire fiscal year 2020, Curaleaf had total revenues of more than $626 million. This represented a 184% increase over company revenues for 2019.

Curaleaf Cannabis Sales Fueled by Retail Operations

A significant portion of Curaleaf revenues and profits can be attributed to the company’s cannabis sales. For 2020, Curaleaf recorded a gross profit of approximately $275 million on sales of cannabis products at dispensaries in states where marijuana can be legally sold for either recreational use or medical use. In fact, Curaleaf launched a total of 84 new cannabis products last year, with 32 of those products debuting during the last three (3) months. Curaleaf’s new product lines were the culmination of heavy investment in research and development, and many of the finalized products were sold at dispensaries acquired by Curaleaf. During 2020, Curaleaf completed acquisitions of eight (8) smaller cannabis businesses and product lines, including Grassroots Cannabis, Alternative Therapies Group (ATG), Arrow Companies, Cura Partners (Select), Curaleaf NJ, Prime Organic Therapy (MEOT), Remedy Compassion Center, and Virginia’s Kitchen (Blue Kudu). The acquisition of Grassroots Cannabis, in particular, allowed Curaleaf to expand its presence into six (6) new states, including Illinois and Pennsylvania.

As evidenced by the acquisition of ATG in Q4, the expansion of Curaleaf’s retail and wholesale operations across the United States showed no sign of abating as 2020 came to a close. In fact, Curaleaf saw its total number of retail operations expand from 51 to 96 over the course of the last year, and its retail footprint also expanded from 14 states to 23 states. The company’s retail growth was matched by its expansion in cannabis cultivation and processing: Curaleaf added nine (9) cultivation sites and 15 processing sites last year. While much of the company’s growth was a result of corporate acquisitions and mergers with other cannabis companies, Curaleaf also had organic growth that allowed for entry into new and emerging cannabis markets.

Looking Ahead to 2021: Continued Growth as Curaleaf Expands into New Cannabis Markets

So far in 2021, Curaleaf has already completed a number of significant acquisitions and deals. For instance, Curaleaf recently opened new retail stores in Florida, Maine, and Pennsylvania. Although Curaleaf already had a robust presence in all three states, the additional dispensaries should bode well for the company as it looks to continue expanding operations. Additionally, the recent store openings give Curaleaf a total of 101 retail locations that sell either adult-use or medical cannabis.

Like other cannabis companies, Curaleaf is expected to thrive as more and more states legalize cannabis for adult use. Joe Bayern, Curaleaf’s Chief Executive Officer (CEO), anticipated further growth for the company in 2021 as Arizona and New Jersey finish implementing their own rules for new adult-use cannabis markets. Both states officially legalized cannabis for recreational use in November 2020 when voters overwhelmingly supported ballot measures. According to Bayern, the legalization of marijuana in New Jersey may “accelerate the potential of future adult-use in key states such as New York, Pennsylvania, and Connecticut.” Since Curaleaf already has a strong presence in those states, the success of legalization efforts at the state level could be very good for Curaleaf’s financial bottom line in the years ahead.

Curaleaf Expected to Enter European Cannabis Market

Perhaps the biggest development for Curaleaf so far this year is its possible entry into the burgeoning European cannabis market. Curaleaf is nearing the finish line of discussions to acquire EMMAC Life Sciences Limited, the largest vertically integrated independent cannabis company in Europe. If the deal is finalized, Curaleaf would become the global leader for retail cannabis sales, and gain access to medical cannabis markets in Germany, Italy, Portugal, Spain, and the United Kingdom. Boris Jordan, Curaleaf’s Executive Chairman, called the Curaleaf-EMMAC deal a “milestone transaction” that will give Curaleaf access to a market with nearly 750 million people.

A Curaleaf press release noted that the acquisition would cost roughly $286 million and could close during Q2 2021. Once complete, the deal would provide Curaleaf with strong international cannabis revenues for the foreseeable future.

Contact Scythian Cannabis Real Estate

Scythian Real Estate is a privately held cannabis real estate fund that has relationships with several of the top cannabis operators in the country. One of the companies that Scythian works with is Grassroots Cannabis, which was recently acquired by Curaleaf. If you are a cannabis operator looking to add capital, Scythian Real Estate may be able to help you. For more information, 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.

Columbia Care Posts Record Q4 for Cannabis Sales

Cannabis company Columbia Care recently announced its financial results for the fourth quarter of 2020, and the results exceeded expectations. Preliminary data showed that the company set a record high for performance in both a single quarter and in a full year. What does Columbia Care’s continued success mean for the cannabis industry more generally? Keep reading this blog to learn more.

Columbia Care Remains Industry Leader for Medical and Adult-Use Marijuana

Columbia Care Inc. is one of the nation’s biggest cultivators, manufacturers, and providers of legal cannabis, with operations in 18 states. Columbia Care, which is based in New York, was one of the first companies to provide medical cannabis in the United States. Today, Columbia Care has expanded its business to also include adult-use cannabis, but it remains an industry leader in medical cannabis operations across the U.S., including 81 dispensaries and 27 cultivation and manufacturing facilities.

In Q4 for the year ending December 31, 2020, Columbia Care established an all-time company record for cannabis sales revenues. Financial data shows that Columbia Care generated around $87 million in combined revenues in the fourth quarter, which is up more than 50% over the previous quarter and more than 230% over the fourth quarter of 2019. These figures place Columbia Care among the most successful cannabis operators in the entire country, as well as making it “the fastest growing top-tier multi-state operator.”

Nicholas Vita, the CEO of Columbia Care, said in a company press release that the record sales figures were “driven by continued revenue growth and margin expansion.” Vita specifically highlighted the company’s effective navigation of challenges brought on by the COVID-19 pandemic, which caused significant problems for many businesses in other industries. For the entire fiscal year of 2020, Columbia Care generated approximately $290 million in pro forma revenue.

Columbia Care Completes Acquisition of The Green Solution in Colorado

At the close of 2020, Columbia Care completed major acquisitions of both The Green Solution (TGS) and Project Cannabis. Columbia Care also announced its upcoming acquisition of Green Leaf Medical. The integration of TGS dispensaries into the Columbia Care portfolio is expected to make Columbia Care a leader in Colorado, the world’s largest legal cannabis market. The Green Solution has a longstanding relationship with Scythian Real Estate, a Denver-based cannabis real estate fund with more than a dozen cannabis properties that operate as TGS dispensaries. The TGS dispensaries are located across Colorado, including Denver, Fort Collins, and Black Hawk.

In the third quarter of 2021, Columbia Care’s acquisition of Green Leaf Medical is expected to be finalized. Columbia Care has already agreed to purchase Green Leaf Medical LLC for $240 million in combined cash and stock. The deal should give Columbia Care an even stronger operational footprint on the East Coast, with both cultivation facilities and retail stores in Maryland, Ohio, and Pennsylvania.

These acquisitions continue a trend of Columbia Care integrating other cannabis companies into its nationwide business model and expanding its reach into new cannabis markets. Importantly, the promising cannabis sales figures for Columbia Care do not take into account the company’s upcoming entry into the New Jersey cannabis market. New Jersey recently legalized cannabis for recreational use, with the state expected to become the largest cannabis market in the eastern U.S. and to generate $1 billion annually in the coming years. It is also possible that Columbia Care could expand into other cannabis markets if certain states, like New York and Virginia, decide to legalize cannabis for recreational use.

Contact Scythian Real Estate for Information on Cannabis Financing

Scythian Real Estate is a privately held cannabis real estate fund that provides major U.S. cannabis operators with financing and other operational assistance. For more information, send us an email.

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.

Illinois Expunging 500k Cannabis Convictions

Illinois recently took an important step by expunging 500k cannabis convictions from the criminal records of state residents. The move to formally remove these cannabis-related criminal histories was made by Illinois Governor J.B. Pritzker just as 2020 came to an end. Cannabis operators who already have a strong presence in Illinois’ thriving legal cannabis market likely took notice. Continue reading this blog to learn more.

Illinois Governor Moves to Expunge Cannabis Arrest and Conviction Records

In 2019, Illinois officially legalized marijuana for recreational use. It was not until 2020, however, that the Illinois marijuana legalization law finally went into effect. At the end of 2020, Illinois Governor J.B. Pritzker went one step further and took action to eliminate the cannabis-related arrest and conviction records of nearly half a million people who had been charged under the previous cannabis laws.

Pritzker’s move to formally expunge cannabis arrest and conviction records was actually required by the Illinois Cannabis Regulation and Tax Act, the law that legalized recreational cannabis in Illinois. As set forth by the statute, the state government had until January 1, 2021 to start the process of expunging non-felony cannabis arrest records from 2013 through 2019. The law specifically required state officials to expunge 492,192 state-level records of cannabis arrests and convictions. However, the deadline for finalizing the expungements is January 2025, which means that clearing these arrest records could ultimately take years. So far, just nine of the 201 counties in Illinois have cleared non-felony cannabis arrest records.

Pardons for Low-Level Cannabis Convictions in Illinois

In addition to expunging cannabis arrest records in Illinois, Pritzker also issued formal pardons for 9,219 individuals with low-level cannabis convictions under the state’s previous laws. This was similar to a move made earlier in 2020 by Colorado Governor Jared Polis to pardon low-level marijuana convictions. Although marijuana possession is no longer a crime in Illinois, people who were previously convicted of marijuana possession in the state were not grandfathered into the new law. This meant that their past convictions under the state’s old cannabis laws remained on their records. A person with a cannabis conviction on their background report could find it difficult to apply for a job, secure housing, or apply for federal loans.

When announcing the decision to expunge cannabis arrest records and pardon cannabis convictions, J.B. Pritzker highlighted the significant damage that has been done to minorities as a result of the state’s war on drugs. Pritzker observed that it has been communities of color “who have disproportionately shouldered this burden.” The Illinois governor acknowledged that the government made mistakes in the past when it came to criminalizing marijuana use and then punishing African Americans. Importantly, the governor also pointed toward a future in which Illinois residents won’t be punished for possessing and using cannabis.

Illinois Cannabis Legalization Law Requires Investment in Low-Income Communities

The Illinois Cannabis Regulation and Tax Act allows local municipalities to generate tax revenues from legal cannabis sales. An important provision of the marijuana legalization law also requires the state to reinvest 25% of those revenues into a fund designated for “R3 communities.” These are communities with a statistical prevalence of gun violence, child poverty, and incarceration. The tax revenues that come from legal sales of cannabis in Illinois will be used to provide financial support for various programs in these communities, including programs aimed at youth development, anti-violence, economic development, and re-entry into the community for people released from prison.

Contact Scythian Cannabis Real Estate Today

Scythian Real Estate is a privately held cannabis real estate fund that provides financing and operational assistance to some of the country’s largest and most sophisticated cannabis operators. If you are a cannabis operator in Illinois or anywhere else in the U.S., Scythian Real Estate may be able to help you. For more information, send us an email.

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.