Author: nate marcarelli

2020 in Review: U.S. House Votes to Decriminalize Marijuana

In 2020, the U.S. House of Representatives approved historic legislation that would decriminalize cannabis at the federal level. This was the first time in five decades that either chamber of the United States Congress has held an official floor vote on the legal status of cannabis. What will this mean for the future of the cannabis industry? Continue reading this blog to find out.

Also, check out the other entries in Scythian’s “2020 in Review” blog series: Part 1 on states legalizing cannabis in 2020 and Part 2 on cannabis industry success during COVID-19.

Congress Votes in Favor of MORE Act to Allow States to Legalize Cannabis

On December 4, 2020, the United States House of Representatives voted in favor of the MORE Act (also known as the Marijuana Opportunity Reinvestment and Expungement Act). If the MORE Act were to become law, it would allow individual states to determine their own policies regarding the legal status of cannabis – without any interference by the federal government. This would be an important development in cannabis law because federal law currently prohibits the sale and/or possession of cannabis, a legal status that runs counter to the adult-use cannabis laws and medical marijuana laws in several states.

In addition to legalizing cannabis at the federal level, the MORE Act would also establish a federal sales tax for cannabis. As set forth by the federal statute, the revenues generated by the marijuana sales tax would be used to fund a number of restorative justice programs intended to undo some of the harm caused by previous policies and laws that criminalized marijuana possession and that, in many cases, disproportionately harmed members of low-income and minority communities.

Democrat-Controlled Senate Could Lead to Cannabis Decriminalization in United States

The vote on the Marijuana Opportunity Reinvestment and Expungement Act in the U.S. House of Representatives went largely along party lines, with all but five of the votes cast in favor of the cannabis decriminalization legislation coming from Democrats. The final vote tally was 228 in favor of the proposed law and 164 against the proposed law.

The positive outcome for the bill was a predictable result of the Democrats holding a majority in the U.S. House. The bill’s ultimate outcome would be determined by the U.S. Senate, which until recently was controlled by Republicans. After the legislation initially passed in the House, however, the composition of the Senate changed: a special runoff election in Georgia on January 5, 2021 saw the Democrats flip two seats in the Senate. Now the MORE Act could have a legitimate chance of being approved by the Senate and becoming the law of the land.

U.S. Congress Approves Law to Study Medical Applications of Marijuana

The United States Congress passed another important cannabis bill in 2020: both the House and the Senate approved legislation that would grant researchers greater access to cannabis and allow them to study the potential medical uses and applications of marijuana. The medical marijuana research bill is viewed by supporters as a critical step in the creation of better and more targeted federal drug policy.

Additionally, it is worth noting that the medical marijuana research law received overwhelming bipartisan support from both Republicans and Democrats. This suggests that there could be room for greater support for federal cannabis legalization efforts in the future. During a House floor debate on the legislation, Rep. Greg Walden from Oregon said that more data on “the actual health impacts of [cannabis] products” in states where those products are currently legal will help to fill an “information vacuum” surrounding the pros and cons of legalizing marijuana.

Contact Scythian Cannabis Real Estate Today

Scythian Real Estate is a privately held cannabis real estate fund that provides financing and other assistance to sophisticated cannabis operators throughout the U.S. If you are a cannabis operator interested in raising capital, Scythian Real Estate may be able to help you. Send us an email for additional information.

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.

2020 in Review: Cannabis Industry Thrives During COVID

The cannabis industry thrived in 2020, even as plenty of other industries struggled due to the coronavirus pandemic. One major reason for the success of cannabis businesses last year was the relaxation of state and local laws that otherwise would have limited the ability of dispensaries to stay open and operate during COVID-19.

To learn more about other important changes to the cannabis legal landscape in 2020, read the other entries in Scythian’s “2020 in Review” blog series: Part 1 on states voting to legalize cannabis and Part 3 on Congress voting to decriminalize cannabis.

Cannabis Industry Sees a COVID Bump: Dispensaries Have Record Sales in 2020

While many other industries have suffered financially as a result of the COVID-19 pandemic, the cannabis industry has actually seen a massive uptick in business. Some have referred to this as “the cannabis COVID bump.” So, what explains the cannabis industry’s COVID bump?

Countless retail stores, restaurants, and other brick-and-mortar businesses throughout the United States were forced to temporarily close their doors when state-ordered lockdowns went into effect at the beginning of the coronavirus outbreak. For many of these businesses, the temporary shutdowns ended up being permanent: the loss of revenues for weeks and even months meant that the stores were unable to reopen their doors even after the lockdowns were lifted.

By contrast, the cannabis industry saw a surge in revenues as dispensaries managed to remain open during the COVID-19 pandemic. That is because retail dispensaries were deemed “essential businesses.” The “essential” designation given to these legal marijuana providers meant that they could continue operating and selling adult-use cannabis to consumers. For states where medical marijuana is legal, one strategy employed to keep the businesses open during COVID was to classify dispensaries as pharmacies.

Since the start of the pandemic, cannabis businesses have seen a huge boost in sales. States like Colorado, Oregon, and Illinois have reported record-breaking month after record-breaking month for state-licensed dispensaries. In Colorado, state cannabis sales surpassed the entire total for 2019 by October 2020. One likely reason for the surge in cannabis sales during COVID is the fact that, for the most part, dispensaries have been able to remain fully operational and open to the public.

Cannabis Industry Adapts with Marijuana Deliveries

The cannabis industry also adapted during the coronavirus pandemic: door-to-door cannabis deliveries became common in states that allow them. Certain states, such as Illinois, Michigan, and New York, relaxed their previously strict rules that limited delivery options for cannabis businesses and customers. The thinking behind these regulatory changes was that by allowing cannabis deliveries, the state could ensure that customers would not have to venture outside and potentially risk spreading the coronavirus.

The same logic was used to justify a related change to state rules in Illinois, Michigan, and New York that govern the amount of marijuana that a customer can purchase at one time: by decreasing the total number of times that customers and dispensary employees need to interact with one another, the risk of spreading coronavirus was also decreased.

Cannabis Industry Gains Legitimacy with “Essential Business” Classification

Beyond the direct advantage of dispensaries being allowed to remain open and operational during COVID, the classification of dispensaries as “essential” also had an indirect advantage of further legitimizing the cannabis industry. For many in the industry, this classification could be seen by the public as symbolic and might help to embolden those who are seeking to legalize cannabis in more states and, potentially, at the federal level.

Contact Scythian Real Estate for Information on Cannabis Financing

Scythian Real Estate is a privately held cannabis real estate fund that provides financing and operational assistance to some of the country’s most sophisticated cannabis operators. For more information, email us 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.

2020 in Review: States Vote to Legalize Cannabis

There were some major cannabis legal developments in 2020, many of which reflected a more welcoming environment for the cannabis industry in the United States as more and more states legalize marijuana. One of the most significant developments came on election night as voters in Arizona, Mississippi, Montana, New Jersey, and South Dakota chose to legalize cannabis for either recreational use or medical use.

To learn more about states voting to legalize cannabis in 2020, continue reading this blog. And don’t forget to check out other entries in Scythian’s “2020 in Review” blog series: Part 2 on the cannabis industry thriving during the COVID-19 pandemic and Part 3 on Congress decriminalizing marijuana.

Arizona, Mississippi, Montana, New Jersey, and South Dakota Vote to Legalize Cannabis

Perhaps the biggest development in the cannabis world last year was the overwhelming success of cannabis legalization measures on November 3. On election night 2020, voters in five (5) states were able to voice their support for the legalization of cannabis in Arizona, Mississippi, Montana, New Jersey, and South Dakota. The result: a clean sweep for cannabis legalization.

Voters in all five states were in favor of cannabis reform, choosing to legalize cannabis for either recreational use or medical use. In all five states, the margin of victory was clear and decisive: the South Dakota medical cannabis measure passed with nearly 70% of the vote, and the Mississippi medical marijuana measure passed with 62% of the vote. Moreover, exit polls on election night showed that there was a bipartisan consensus that included both Republicans and Democrats voting in favor of cannabis legalization.

South Dakota voters made history by becoming the first state to go from a total ban on adult-use cannabis to complete legalization: both recreational use and medical use will soon be allowed in South Dakota. The state’s medical cannabis law will go into effect first, to be followed later by implementation of the recreational cannabis law. Meanwhile, Arizona, Montana, and New Jersey are set to legalize cannabis for recreational use, and Mississippi will be legalizing cannabis for medical use.

Cannabis Legalization to Boost State Tax Revenues

The legalization of cannabis in Arizona, Mississippi, Montana, New Jersey, and South Dakota is expected to provide local municipalities with significant tax revenues. That’s because the cannabis reform laws will have provisions that allow for the regulation and taxation of legal cannabis sales by state-licensed dispensaries. At a time when many states are struggling due to the COVID-19 pandemic, additional tax revenues generated by adult-use cannabis sales should provide a much-needed boost to state and local economies.

What Is the Future of Cannabis Legalization in the United States?

A total of 36 states have now legalized medical cannabis use, with 15 of those states also legalizing cannabis for recreational use. The strong support for marijuana legalization in different regions of the country – East, West, South, and Midwest – on Election Night 2020 suggests that more states could be legalizing cannabis in the years ahead. There are already efforts underway to get cannabis legalization on the 2022 ballot in several mid-Atlantic states, including Connecticut, New York, and Pennsylvania.

The continued push for marijuana legalization across the U.S. should provide a significant boost to the cannabis industry. There has been a surge in cannabis acquisitions and investments by major players in the U.S. cannabis industry as more states look primed to legalize cannabis either through legislation or ballot measures.

Contact Scythian Cannabis Real Estate

Scythian Real Estate, which is based out of Colorado, is a privately held cannabis real estate fund that works with many of the largest cannabis operators in the country. Cannabis operators that are looking to expand their reach into new markets should contact Scythian Real Estate for additional information.

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.

Marijuana Flower Prices on Rise in Colorado

The prices of premium marijuana flower in Colorado continue to climb higher and higher during the COVID-19 pandemic. What could steadily rising prices for high-quality marijuana flower mean for the cannabis industry in Colorado in 2021 and beyond? Keep reading this blog to find out.

Wholesale Prices of Marijuana Flower in Colorado Set Records

Wholesale prices for marijuana flower in Colorado are currently at their highest point in nearly five (5) years. The Colorado Department of Revenue, which maintains records on legal cannabis sales in the state, recently reported that the Colorado wholesale market price for one pound of marijuana flower has reached $1,721. According to government agency records, the last time the price eclipsed $1,700 was in July 2016. Moreover, this represents a major reversal of fortune for the marijuana flower market: just two years ago, wholesale flower prices barely hit $700 per pound.

The price of marijuana flower on the wholesale market steadily increased since the beginning of 2020 – and then saw a massive spike in the last quarter of 2020. According to data provided by state-licensed cannabis operators, wholesale flower prices in Colorado went up by more than 30% between October 2020 and January 2021.

The higher prices for marijuana flower are likely an important factor in the continued explosion of cannabis sales in Colorado. Colorado cannabis operators seemed to set a new record for dispensary sales every month in 2020. For the entire year, total sales of recreational marijuana and medical marijuana in Colorado totaled more than $2 billion.

Strong Demand for Expensive Cannabis Flower Brands Amid COVID-19 Pandemic

Marijuana retail businesses have also noticed that there is a particularly strong demand by consumers for some of the more expensive cannabis flower sold by top-tier cannabis brands. Marijuana flower sold by premium brands are in high demand right now because the demand for cannabis generally has increased during the coronavirus pandemic.

At the beginning of the COVID-19 pandemic, cannabis consumers tended to stockpile cheaper cannabis flower products because they were worried about possible lockdowns and the closing of dispensaries. (Dispensaries in Colorado and elsewhere were actually able to remain open during the pandemic because states classified the dispensaries as “essential businesses.”) What ended up happening, however, is that cannabis consumers gravitated toward the more expensive, artisanal cannabis that remained on shelves after budget flower products were gone. This led to consumers appreciating the more potent marijuana products, including premium flower brands.

Consumers Paying More for Popular Marijuana Flower Brands

While greater demand and higher prices for marijuana flower is certainly good news for marijuana cultivators, some cannabis manufacturers and retailers have been forced to adjust their sales prices to account for increased costs. Ultimately, those additional costs are passed on to cannabis consumers who don’t seem to mind as the cannabis industry targets a new, more refined demographic. These days, individuals who head to their local dispensary to purchase cannabis flower tend to seek out high-quality, small-batch flower produced by premium brands like Cookies, Kaviar, and Snaxland.

Greater consumer demand for more expensive cannabis flower has prompted cannabis businesses to set higher prices. While the average wholesale price for cannabis flower in Colorado is around $1,700 per pound, some brands price their high-grade flower product at more than $4,000 per pound. The expectation among many in the cannabis industry is that demand for premium marijuana flower will not subside even after the COVID-19 pandemic is over.

New Business Strategies for Colorado Cannabis Operators During Coronavirus

Some cannabis businesses operating in Colorado are employing new strategies to try to take advantage of the increased demand for premium marijuana flower. For example, dispensaries are collaborating with branded flower companies on new product launches to put a spotlight on higher-end marijuana flower products. Additionally, premium flower brands are taking advantage of high numbers of followers on social media platforms like Twitter, Facebook, and Instagram to create buzz around new products. Beyond that, the limited supply of certain small-batch flower makes them even more desirable to consumers who don’t want to miss out.

One premium flower cultivator in Colorado that has seen a surge in sales during the pandemic is Kaya Cannabis, a cannabis company that utilizes in-house experts to cultivate unique strains of marijuana flower and other products in small batches. The Colorado-based craft growing cannabis company currently operates dispensaries located on South Fox Street in Denver, West Colfax in Denver, and West Jewell Avenue in Lakewood. All three marijuana retail stores provide customers with a wide variety of cannabis products, including premium flower brands like Kaviar and the Kaya Cannabis in-house brand. The Kaya Cannabis Santa Fe Dispensary on South Fox Street is also used as a cannabis cultivation facility.

Colorado’s Local Marijuana Market Thriving as Cannabis Industry Gains Legitimacy

Colorado’s tourism industry is struggling during the coronavirus pandemic as most people choose not to travel across state lines and risk their health. This means that the booming cannabis economy in Colorado is driven almost entirely by local residents in towns like Denver, Aurora, and Fort Collins. What residents have realized during COVID-19 is that their disposable income may be better spent on cannabis than on trips to restaurants, concerts, or movie theaters – especially if the plan for the foreseeable future is to remain indoors and at home.

The Colorado cannabis market has also thrived as marijuana becomes more accepted and is seen as a “legitimate” industry. In the recent 2020 election, voters in five states approved ballot measures to legalize marijuana for either recreational use or medical use. With several more states appearing primed to legalize adult-use cannabis in the next few years, it seems likely that cannabis will gain even more legitimacy.

Contact Scythian Cannabis Real Estate

Scythian Real Estate is a privately held cannabis real estate fund that partners with sophisticated cannabis operators in Colorado and throughout the U.S. Scythian recently partnered with Kaya Cannabis on a sale-leaseback deal for the cannabis operator’s 1075 South Fox Street dispensary in Denver, CO. If you are a cannabis operator looking to unlock real estate equity and propel company growth, 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.

Cannabis Company Columbia Care Has Record Quarter

The cannabis business continues to be very good for Columbia Care. The company behind many of the cannabis industry’s leading dispensaries recently reported its financial and operating results for the third quarter – and the numbers are staggering. Columbia Care posted all-time highs for a single quarter in terms of revenues and profits generated from the cultivation, manufacturing, and sale of medical cannabis and adult-use cannabis. What does this mean for Columbia Care and the rest of the cannabis industry going forward? Continue reading this blog to learn more.

Columbia Care’s Cannabis Revenues Are on the Rise

Columbia Care began as a leading provider of medical cannabis in the United States, and the company is now one of the country’s largest cannabis cultivators, manufacturers, and retail providers of both medical cannabis and recreational cannabis. Columbia Care currently operates 100 different facilities, including 76 dispensaries in numerous cannabis markets.

“Our growth strategy and operational discipline resulted in Columbia Care generating another quarter of record results.”
-Nicholas Vita, Columbia Care CEO

Columbia Care generated combined revenues of nearly $180 million during Q3 2020. This resulted in a gross profit of nearly $70 million and an adjusted EBITDA of $2.4 million. These third quarter results for Columbia Care included just one month of revenues from The Green Solution (TGS), which was officially acquired on September 1. During the month that followed, TGS generated more than $9 million in revenues and more than $4 million in gross profit.

Columbia Care Acquires The Green Solution in Colorado

In addition to the strong financial results, another reason for optimism regarding Columbia’s Care continued growth is the recent acquisition of The Green Solution (TGS). Nicholas Vita, the CEO of Columbia Care, noted that the acquisition of TGS will help to solidify the parent company’s leadership position in the Colorado cannabis market. Vita added that the TGS acquisition strengthens Columbia Care’s national portfolio of cannabis brands and will provide experience and expertise as the company looks to expand into new state markets where adult-use and/or medical cannabis is either already legal or on the cusp of becoming legal.

Columbia Care Dispensaries Are Located in Top Cannabis Markets

Columbia Care has dispensaries all over the United States. Some of the key cannabis markets where Columbia Care operates dispensaries include:

Colorado: Columbia Care revenues and gross profit in Colorado were both up 19% in Q3 when compared to Q2. These positive trends were due in large part to the acquisition of The Green Solution, the largest vertically integrated cannabis operator in the state. Columbia Care also operates a low-cost cannabis cultivation facility in Trinidad, CO.
Illinois: Columbia Care operates a Canopy in Aurora cultivation facility and saw record revenues for cannabis flower production and cannabis flower wholesale revenues in Illinois during Q3. Columbia Care also opened an adult-use dispensary in Villa Park in September.
New York: Columbia Care revenues in NY went up almost 25% from Q2 to Q3. This increase in cannabis revenues was fueled by the introduction of more efficient marijuana cultivation and manufacturing formats.
Pennsylvania: Columbia Care’s Q3 revenues in Pennsylvania were up roughly 20% when compared to Q2 revenues. The surge in demand is expected to continue, prompting Columbia Care to continue pursuing expansion throughout the state.

What Does the Future Hold for Columbia Care and the U.S. Cannabis Market?

The future looks bright for Columbia Care and the United States cannabis industry in general. Columbia Care’s Q3 2020 financials showed significant growth, with a 78% increase in company profits when compared to the second quarter of 2020 and a 300% increase in profits over the third quarter of 2019. These trends are expected to continue in Q4 and into 2021.

Columbia Care expects to increase its position in California over the next year as a result of the company’s recent acquisition of Project Cannabis. Columbia Care is also expected to expand its already-strong portfolio of cannabis products with Seed & Strain, the company’s first cannabis lifestyle brand developed entirely in-house.

Contact Scythian Today for Information on Cannabis Real Estate in Colorado and Across the U.S.

Columbia Care’s acquisition of The Green Solution (TGS) was also good news for Scythian Real Estate. Scythian is a privately held fund that owns more than a dozen cannabis properties leased by TGS and operated as dispensaries. These dispensaries are located throughout Colorado, including Denver, Aurora, Fort Collins, and Black Hawk. The Green Solution is just one of the major U.S. cannabis operators that Scythian has partnered with.

To learn more about the Scythian Real Estate Fund, 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.

Curaleaf Has Record Cannabis Earnings in Q3 2020

Third quarter revenues for major cannabis operator Curaleaf totaled $182.4 million, representing a new all-time record for earnings by the company in a single quarter. Additionally, the future for Curaleaf looks even brighter after the cannabis company completed its acquisition of competitor Grassroots Cannabis.

Curaleaf Revenues on the Rise in 2020

Curaleaf has seen its revenues and profits trending upward in 2020. Curaleaf’s Q3 revenues, which officially ended on September 30, increased by approximately 55% over the cannabis company’s Q2 revenues, and increased by a remarkable figure of 195% year over year when compared to Q2 in 2019. Those numbers come directly from Curaleaf’s financial and operating results, which were recently released by the company.

Curaleaf’s pro forma revenue in the third quarter of 2020 was $215.3 million. This was a record high for the cannabis operator. “Pro forma revenue” refers to the company’s managed revenue plus revenue from businesses that Curaleaf acquired. Curaleaf’s pro forma revenue for the third quarter includes revenue from the company’s recent acquisitions of Arrow Alternative Care and Grassroots Cannabis, which were both completed during Q2.

Curaleaf’s managed revenue in the third quarter was $193.2 million. “Managed revenue” is defined as total company revenue, as well as revenues from businesses that Curaleaf manages. The company saw a strong increase in managed revenue of 59% over the second quarter in 2020 and 164% over the third quarter in 2019. Mike Carlotti, Curaleaf’s Chief Financial Officer, said that the company anticipates “a continued rise in managed revenue” in the fourth quarter and in 2021 as Curaleaf completes its acquisition of Alternative Therapies Group in Massachusetts.

Curaleaf’s adjusted EBITDA in the third quarter was also a record high for the company: $42.3 million. Adjusted EBITDA includes earnings before interest, taxes, depreciation, and amortization. According to Curaleaf financial data, adjusted EBITDA in Q3 2020 was up 51% over Q2 2020, and a whopping 305% year-over-year increase when compared to Q3 2019.

Cannabis Sales and Profits Increase as Curaleaf Expands into New Markets

Gross profits for Curaleaf from retail cannabis sales in Q3 2020 were almost $90 million. This was a 110% increase over Q2 2020, and a massive 280% increase over gross profits from cannabis sales in Q3 2019. The surge in retail revenue was driven largely by the company’s continued growth and expansion, which included multiple new dispensary openings in Florida. Curaleaf also launched the Select brand in Illinois, Ohio, and Pennsylvania.

The strong sales revenues for Curaleaf came as the cannabis business scaled and operated dispensaries across 17 states. Moreover, Curaleaf continues to scale with an eye toward future growth, as the company recently expanded its marijuana retail sales presence to 23 states thanks to the acquisition of Grassroots Cannabis.

In addition to acquiring several major cannabis brands and companies, Curaleaf also continued to improve the operating capacity and efficiency of its own existing cannabis cultivation and processing facilities.

Curaleaf Thrives Despite Coronavirus Impact on Cannabis Market

The surge in profits for Curaleaf came even as the company was affected by the coronavirus pandemic, much like other businesses that depend on retail sales. Curaleaf sustained an estimated adverse impact of $25.6 million due to temporary store closures caused by the COVID-19 pandemic, as well as restrictions placed on retail businesses in states like Massachusetts and Nevada where Curaleaf has a significant presence.

Some of the third quarter highlights for Curaleaf included:

Launched the Select brand in three (3) new states. Select is a popular cannabis concentrate brand with a dominant footprint in numerous state and regional markets.
Completed merger with Grassroots Cannabis. This acquisition has the immediate effect of making Curaleaf the largest cannabis company in the world in terms of both revenue and operating presence. The merger with Grassroots also allowed Curaleaf to expand their presence into six (6) new states, including flourishing cannabis markets in Illinois and Pennsylvania.
Completed acquisition of Maine Organic Therapy assets. Curaleaf was already managing these assets, but now the merger of the two companies has been finalized and Maine Organic Therapy has been officially integrated into Curaleaf. Curaleaf has converted and consolidated nearly all of the company’s managed entities, and Curaleaf expects to consolidate the rest of its managed entities in the fourth quarter of 2020.

Curaleaf Sale-Leaseback Deals Provide Additional Cash Flow

According to a press release issued by Curaleaf, the company generated significant cash flow from operations in the third quarter of 2020. Curaleaf reportedly has access to around $85 million in cash.

Curaleaf has continued to complete sale-leaseback deals. These types of transactions allow cannabis operators like Curaleaf to immediately improve their cash flow. For example, Curaleaf was able to raise around $41 million in net proceeds from sale-leaseback transactions in the third quarter of 2020.

The Future Looks Bright for Curaleaf

Curaleaf is the largest vertically integrated multi-state cannabis operator in the United States, with cannabis cultivation sites, cannabis processing facilities, recreational marijuana dispensaries, and medical marijuana dispensaries fully operational in 23 states. Curaleaf is a cannabis industry leader with a strong reputation for providing high-quality products and offering manufacturing and cultivation expertise. Additionally, Curaleaf’s top-selling cannabis products include both the main Curaleaf brand and the Select brand.

Curaleaf CEO Joseph Lusardi is extremely optimistic about the company’s future prospects. According to Lusardi, “Curaleaf remains incredibly well-positioned following the transformative legalization of adult-use cannabis in Arizona and New Jersey, and consequently the potential of future adult-use in New York, Pennsylvania, and Connecticut.” Lusardi pointed to several different types of transactions that Curaleaf expects to complete in the months ahead, including organic initiatives and integration of the Select brand into Curaleaf products.

Contact Scythian Cannabis Real Estate

Scythian Real Estate is a full-service real estate partner of large cannabis operators who need access to capital. Scythian has partnered with Curaleaf, through Grassroots Cannabis, to provide access to capital via the Scythian real estate investment fund.

For more information about how you can partner with Scythian, send 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.

U.S. House Votes to Decriminalize Cannabis

Congress Votes to Decriminalize Cannabis

The United States Congress recently moved one step closer to decriminalizing cannabis at the federal level when the House of Representatives approved a bill that would remove marijuana from the Controlled Substances Act (CSA). How likely is it that the legislation will ultimately become a law? And what does it mean for the U.S. cannabis industry? Read on to learn more.

Congress Votes on Law to Decriminalize Cannabis at Federal Level

H.R. 3884, the resolution introduced and voted on in the House, is historic. The bill marks the first time that either chamber of Congress has officially cast votes on a proposed law to decriminalize marijuana federally. The bold legislation, named the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, is intended to “address the devastating injustices caused by the War on Drugs.” Democratic Rep. and House Judiciary Chair Jerry Nadler introduced the MORE Act because the criminalization of marijuana has disproportionately impacted minorities and communities of color through selective enforcement of marijuana laws by police.

After the momentous vote in the House, Maryland Democratic Rep. Steny Hoyer issued a powerful statement observing that millions of Americans have had their lives destroyed by convictions for possessing just a small amount of marijuana. Hoyer further noted that “the racial disparities in conviction rates for those offenses are as shocking as they are unjust.”

Proponents of the legislation say that the measure would directly benefit the federal government by providing much-needed revenues to finance things like cannabis industry job training, legal aid for indigent criminal defendants, and substance abuse treatment for people with addiction problems. These things would be made possible by a 5% sales tax on all legal sales of cannabis and cannabis-related products.

Proposed Law Would Eliminate Criminal Penalties for Marijuana Possession

If the MORE Act becomes law, it would remove marijuana from the substances banned by the Controlled Substances Act (CSA). The MORE Act would also eliminate criminal penalties for the manufacture, distribution, or possession of marijuana. This means that the law would effectively legalize cannabis in the United States.

The MORE Act also includes a provision that would allow for the expungement of prior convictions for marijuana possession. This means that an individual with a previous conviction for unlawfully possessing marijuana in violation of federal law would potentially be eligible to have that conviction removed from their permanent record. Beyond that, anyone currently in prison for a federal cannabis offense could have the ability to petition for a sentencing review hearing.

Republican Support for MORE Act to Decriminalize Cannabis

The MORE Act had strong support from Democrats, with 222 Democratic members of the House voting in support of the legislation and just six (6) Democrats opposing it. Perhaps surprisingly, five (5) Republicans also voted in favor of decriminalizing cannabis. In fact, one prominent Republican, Florida Rep. Matt Gaetz, was the bill’s co-sponsor. Before voting, Gaetz gave an impassioned speech on the House floor and implored his fellow members in the House to change their positions on marijuana legalization because those stances “are overwhelmingly losing with the American people.”

In addition to Gaetz, the other Republicans who voted to end the federal law prohibiting marijuana manufacturing, distribution, and use included Don Young from Alaska, Tom McClintock from California, Brian Mast from Florida, and Denver Riggleman from Virginia.

Cannabis Decriminalization Not Likely to Pass in U.S. Senate

Despite some Republican support for the MORE Act, the bill passed by the Democratic-controlled House might not go very far in the Senate. Republicans still control the U.S. Senate, and the vast majority of the Republican Party has not shown any inclination to legalize marijuana at the federal level – or to do much of anything that would pave the way for marijuana legalization across the United States.

Mitch McConnell, the Senate Majority Leader and one of the most powerful members of the Republican Party, was highly critical of the House for spending time on the cannabis decriminalization legislation instead of focusing on a COVID-19 stimulus bill that he called more “serious and important” than a marijuana law. Current Democratic vice president elect Kamala Harris previously introduced a similar bill in the Senate, but Republicans in the Senate Finance Committee prevented the measure from reaching the Senate floor for a formal vote.

Some have criticized the recent bill passed in the House of Representatives because it has little chance of gaining enough support in the Senate to become a law. Kevin Sabet, the president of conservative anti-marijuana group Smart Approaches to Marijuana, said that “there is zero interest in moving this bill in the Senate and zero interest in supporting it in either the current administration or the incoming one.” Whether that last observation is actually true remains to be seen.

While president-elect Joe Biden has not yet come out in favor of legalizing cannabis at the federal level, earlier this year he did express support for the decriminalization of marijuana. A spokesperson for the Biden presidential transition team recently said that Biden would reschedule marijuana as a Schedule II drug as opposed to a Schedule I drug. Additionally, Biden “would allow states to continue to make their own choices regarding legalization.”

What Does the Future Hold for Cannabis Legalization in the United States?

While cannabis legalization at the federal level may not be on the horizon, individual states continue to push their own marijuana legalization efforts. A total of 15 states have already legalized cannabis for recreational use, and 36 states have legalized cannabis for medical use. Both of those numbers grew in the November 2020 election, when voters in five (5) states approved laws to legalize cannabis within their respective state borders. Just last month, voters in Arizona, Mississippi, Montana, New Jersey, and South Dakota voted to allow legal marijuana sales at state-licensed dispensaries.

The number of regulated cannabis markets figures to increase in the years ahead, as more and more states take up the issue of whether to legalize adult-use cannabis. There is a growing belief among many in the cannabis industry that states like Connecticut, New Mexico, New York, and Pennsylvania could get recreational cannabis legalization measures on the ballot in 2022.

Contact Scythian Real Estate for Information on Cannabis Operations Financing

Scythian Real Estate is a privately held cannabis real estate fund that partners with some of the largest and most sophisticated cannabis operators in the country. To learn more about the Scythian Real Estate Fund, 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.

All-Time High for Cannabis Sales in Oregon

Oregon cannabis dispensaries set a new single-month record in May with approximately $103 million in sales of marijuana. This was the first time ever that the state has topped $100 million in monthly cannabis sales. What could the boom in retail marijuana sales mean for cannabis operators in Oregon? And could it provide savvy investors with new opportunities to get involved in the Oregon cannabis market? Read on to learn more.

Oregon Cannabis Sales Top $100 Million in Single Month

According to data from the Oregon Liquor Control Commission, retail marijuana stores in Oregon reported total sales of more than $103 million in May 2020. (May is the most recent month for which sales records have been made available to the public.) While this was the third straight month that Oregon set a new record for cannabis sales, it was the first time that retail cannabis sales have exceeded $100 million in a single month.

When compared to retail marijuana sales in 2019, the success of Oregon dispensaries so far in 2020 is staggering. The total of $103 million generated by Oregon dispensary sales of recreational cannabis and medical cannabis in May 2020 represents an increase of roughly 60% over total cannabis sales in May 2019. Moreover, these gains are not mere anomalies: year-over-year sales of marijuana in Oregon increased by 37% in March and 44% in April. Through the first five (5) months of 2020, Oregon retail pot shops have sold more than $415 million worth of product – a 40% increase when compared to the first five (5) months of the previous year.

Oregon Dispensaries Adjust to Changing Conditions Caused by Coronavirus Pandemic

Oregon dispensaries have seen a surge in retail cannabis sales even as most other retail businesses in the state struggled to adjust to coronavirus-related restrictions. In fact, the cannabis industry has thrived during the COVID-19 pandemic, in part because states like Oregon declared that cannabis dispensaries are “essential businesses” that should be exempt from shutdown orders.

Oregon dispensaries were allowed to remain open during the coronavirus pandemic with certain restrictions in place, such as social distancing and limits on the number of people allowed inside stores at once. Oregon retail marijuana shops were also able to take advantage of state laws that allow for delivery of marijuana: online orders and home delivery accounted for nearly $1.4 million in total sales in May 2020.

What Are the Effects of Legal Cannabis Sales on Oregon State Revenues?

Oregon lawmakers have expressed concerns about the state budget, especially in light of the hit that the state has taken in terms of decreased sales tax revenues during the coronavirus pandemic. This is because most businesses struggled when shutdown orders were put in place, and many of these businesses have continued to struggle even after the shutdown orders were lifted. The downturn in overall retail sales has had a devastating effect on Oregon state revenues.

One industry that has not suffered during the COVID-19 pandemic is the legal cannabis industry. This has provided a boost to the Oregon budget by filling the state with much-needed sales tax revenues. Oregon imposes a 17% tax on legal sales of marijuana. Additionally, this tax number is the same for both recreational marijuana and medical marijuana.

Economists enlisted by the state government to study and analyze the effects of the legalization of marijuana on the economy have been taking a close look at what has happened during the COVID-19 pandemic. These economists believe that several factors are influencing the bump in tax revenues generated by retail cannabis sales:

The underlying demand for marijuana (and alcohol) is up as more people are stuck at home and looking for some form of relief.
More cannabis product categories and varieties are available to consumers.
Greater demand for marijuana products such as concentrates and edibles has led to higher prices. Thus far, the higher prices have not discouraged consumers from continuing to purchase cannabis from dispensaries.

Contact Scythian to Learn About Cannabis Real Estate

Oregon is not the only state with strong cannabis sales so far in 2020. Many other states where cannabis use is legal, including Arkansas, Colorado, and Illinois, have also seen a surge in retail cannabis sales.

Scythian Real Estate is the full-service real estate partner of sophisticated cannabis companies throughout the U.S. and already has a strong footprint in several states where cannabis is legal. For more information about cannabis real estate, email Scythian now.

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.

Virginia Decriminalizes Cannabis Possession

Virginia lawmakers have decriminalized cannabis in the state, meaning that individuals who are caught by law enforcement with a small amount of marijuana in their possession will no longer face criminal penalties. Instead, possession of a minor amount of pot is now considered a civil offense punishable by a $25 fine. What could this new law mean for efforts to legalize recreational cannabis use in Virginia? Could cannabis companies soon be doing big business in Virginia? Read on to learn more.

Virginia State Legislators Reclassify Marijuana Possession as Civil Offense

HB 972 and SB 2, the two bills passed by the Virginia state legislature, specifically reclassify what used to be a criminal offense – the simple possession of one (1) ounce or less of marijuana – as a civil offense. Prior to passage of the new law, a person convicted of simple possession of marijuana in Virginia could be sentenced to 30 days in jail and fined $500. Now, instead of facing jail time and other severe penalties for simple possession of marijuana, anyone caught by police with a small amount of weed will be subject to a fine of just $25. This amount represents the lowest fine imposed by any state in the entire country for a marijuana possession offense, suggesting just how far Virginia lawmakers have moved when it comes to legalizing adult-use cannabis. But they still have a bit further to go in terms of legal cannabis sales: state legislators are soon going to consider whether to legalize cannabis for recreational use.

After the Virginia General Assembly passed the bills in March, Virginia Governor Ralph Northam sent the legislation back to legislators with a series of proposed amendments. Legislators incorporated most of the suggested changes, and Northam then signed the bills into law. The cannabis decriminalization law went into effect on July 1, 2020. Virginia is now the 27^th state in the nation to decriminalize marijuana possession.

When Will Cannabis Be Legalized in Virginia?

The thinking among many cannabis industry observers in Virginia is that decriminalization doesn’t go far enough. In addition to decriminalizing cannabis possession, the Virginia law also creates a committee to study the possible effects of legalizing cannabis for recreational use in the state. That committee will reveal its findings and issue a recommendation on cannabis legalization by November 30, 2020.

The formation of the work group to study legalization comes on the heels of an announcement by the Virginia Legislative Black Caucus to introduce legislation to legalize recreational cannabis in Virginia. The state legislators were set to introduce the proposed law during the August special session of the Virginia General Assembly. While state lawmakers considered many different criminal justice reform bills during the session, it was the marijuana legalization proposal that figured to draw the most attention because of the rising popularity of cannabis legalization both in Virginia and nationwide.

Legalization of cannabis has been an especially popular policy idea in southern states: a Civiqs online opinion poll found that a majority of adults in every Southern state are in favor of marijuana legalization. Cannabis has already long been decriminalized in Mississippi and North Carolina, while Georgia state lawmakers are set to consider cannabis decriminalization as part of the recently introduced Georgia Justice Act. Additionally, Arkansas, Florida, and Louisiana have gone even further by legalizing cannabis for medical purposes. (Virginia currently has a limited medical cannabis law on the books.)

No Criminal Record for Marijuana Possession in Virginia

Steve Hawkins, the executive director of the Marijuana Policy Project (MPP), stated that the Virginia decriminalization law “will save thousands of Virginians from the trauma of arrest and the stigma of a criminal conviction.” The MPP, which is the largest organization in the country dedicated to reforming existing marijuana policies and laws, has advocated for decriminalizing cannabis possession across the U.S. because individuals who get arrested and convicted for marijuana crimes often face difficulties getting hired for jobs, securing housing, and being approved for loans. When marijuana possession is classified as a criminal offense, a conviction can result in the offender being sentenced to jail time and being stuck with a permanent criminal record.

Cannabis Operators Should Contact Scythian Real Estate

Scythian Real Estate is a trusted partner of major cannabis businesses that operate in some of the largest cannabis markets in the United States. Scythian operates a portfolio of cannabis real estate assets with a current value of approximately $40 million.

To learn more about the Scythian Real Estate Fund, 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.

Illinois Cannabis Market Is Booming

Illinois only recently started selling cannabis legally at dispensaries, but the state is already breaking records. Cannabis operators are raking in money as more and more people purchase marijuana for both recreational use and medical use. The booming cannabis market in Illinois bodes well for legalization efforts in other states as lawmakers can see the positive effects that cannabis legalization has on the Illinois economy.

Illinois Dispensaries Sell Millions of Cannabis Products

The cannabis industry is doing extremely well in Illinois, where cannabis was legalized for recreational use in June 2019. The law went into effect on January 1, 2020, which is when adult-use dispensaries opened across the state. Since that time, Illinois retail cannabis sales have steadily increased each month. In June, the most recent month for which sales data is available, Illinois cannabis shops sold $47.6 million worth of marijuana products. This number set a new monthly record, topping the previous high of $44 million just one month earlier.

There are nearly 60 dispensaries currently licensed to operate in Illinois. These state-licensed dispensaries sell recreational marijuana and medical marijuana. Since marijuana was first legalized at the beginning of 2020, Illinois dispensaries have sold more than $250 million in cannabis and cannabis-related products. According to the Illinois Department of Financial and Professional Regulation (IDOR), Illinois retail marijuana stores have made nearly one million individual sales of marijuana and marijuana products, with each purchase averaging around $48.

Increase in Illinois State Tax Revenues from Legal Marijuana Sales

The coronavirus pandemic has been disastrous for Illinois tax revenues due to early shutdown orders for most retail businesses, as well as the reluctance of many state residents to venture outside and enter retail stores even after the shutdown orders were lifted. But the same is not true of tax revenues from the legal sale of cannabis in Illinois. In fact, the cannabis industry is one of the few industries that has managed to thrive during the COVID-19 pandemic. While overall sales tax revenues in Illinois are currently down by more than $181 million when compared to the 2019 fiscal year, marijuana sales tax revenues continue to rise each month.

Although sales tax numbers for the month of June have not yet been released by the Illinois Department of Revenue, sales of cannabis have generated tens of millions of dollars in revenues for the state already in 2020. Government data shows that Illinois collected $52.7 million in sales tax from the legal sale of cannabis during the first five (5) months of 2020. Remarkably, this is almost double the amount that state lawmakers projected before cannabis use became legal in Illinois. Moreover, these figures are expected to rise even higher in the future as the cannabis industry becomes more accepted in the mainstream and better understood as a fundamental part of the U.S. economy.

How Cannabis Sales Tax Works in Illinois

Cannabis sales tax laws in Illinois work differently than similar sales tax laws on other types of retail products and goods. Illinois imposes different tax rates on cannabis based on the potency of the cannabis: 10% at the lowest end of marijuana potency and 25% at the highest end of potency.

The revenues generated from taxes on cannabis sales in Illinois are used to fund different government programs and agencies:

General fund: 35%
Community development revitalization program: 25%
Substance abuse and mental health programs: 20%
Legislative bill backlog: 10%
Law enforcement agencies: 8%
Public education and analysis of marijuana legalization: 2%

Any additional revenues generated from sales tax on legal cannabis in Illinois are used for the state’s general revenue fund.

Illinois Cities and Towns Benefit from Legal Cannabis Sales

Although dispensaries first started operating in Illinois on January 1 of this year, local municipalities such as towns, cities, and counties did not begin adding their own taxes until July. When this happened, the purchase price of cannabis products increased slightly: early estimates put the increased prices at somewhere between 3% and 3.75%. While customers now have to pay a little more for recreational and medical cannabis purchased at retail cannabis stores, Illinois municipalities will benefit greatly from the additional tax revenues generated by cannabis sales.

One aspect of legal marijuana sales that doesn’t always get the attention it warrants is the extent to which recreational cannabis helps to infuse local economies with much-needed cash through sales to out-of-state consumers. Sales data shows that roughly 25% of all adult-use recreational marijuana sales at Illinois dispensaries comes from buyers who travel across state lines.

Contact Scythian Cannabis Real Estate

Many investors are looking into cannabis real estate investing, which has provided strong returns as retail cannabis sales surge across the U.S. Scythian Real Estate is a cannabis real estate fund that specializes in retail properties. Scythian has partnered with some of the largest cannabis operators in the country, including Curaleaf and The Green Solution. For more information, 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.