Week In Review: Vangst Acquire CannabizTeam; Washington D.C. Enhances Medical Cannabis Regs; Petalfast Acquires Flow Distribution; Canadian Cannabis Sales Dip; DEA Plan Hearing on Psychedelics

LOS ANGELES–Welcome to the far too-exciting world of cannabis and psychedelics, where it’s a tale of two markets with some states doing amazingly well. And some, not so well. Let’s get to it!

Cannabis Industry Highlights

#1.Washington D.C. Enhances Medical Cannabis Regulations and Extends Tax Holiday:  In a significant legislative move, the Council of the District of Columbia has unanimously passed the “Medical Cannabis Patient Card Extension 4/20 Medical Cannabis Sales Tax Holiday Week Emergency Amendment Act of 2024.” This act amends Title 7 of the DC Official Code to implement three critical changes aimed at improving the medical cannabis framework within the district.

#2Florida Supreme Court to Decide Fate of Cannabis Legalization: The Florida Supreme Court is set to make a pivotal decision regarding the appearance of an adult-use cannabis legalization amendment on the November ballot, according to ClickOrlando. This determination follows a challenge by Attorney General Ashley Moody last year concerning the amendment’s ballot language, pushing the court to scrutinize its clarity and legality.

#3. Surge in Canceled Cannabis Licenses and Rising Unpaid Excise Tax in Canada: In January 2024, Canada witnessed a notable 11.5% drop in retail sales of legal adult-use cannabis compared to December 2023, as reported by Statistics Canada. Despite a revision that increased the total recreational cannabis sales for the year 2023 to CA$5.08 billion, this downturn has sparked concerns about potential challenges facing the industry.

#4. Petalfast Acquires Flow Distribution to Enhance National Cannabis Sales and Distribution Network: Petalfast, a national sales and distribution platform in the cannabis industry, has finalized the acquisition of Flow Distribution’s sales and distribution subsidiary, marking a significant expansion of its operations and brand portfolio in the United States. Flow Distribution, headquartered in Phoenix, Arizona, is known for its cultivation, manufacturing, and distribution of cannabis products, servicing some of Arizona’s most recognized cannabis brands including STIIIZY, WANA, and 22 Red.

#5 Alabama Seeks to Reset Medical Cannabis Licensing with New Bill: In an effort to resolve ongoing delays and legal complications in its medical cannabis program, the Alabama Senate Agriculture, Conservation, and Forestry Committee has endorsed Senate Bill 306, which proposes a comprehensive reset of the cannabis licensing process. This bill, introduced by Sen. Tim Melson, aims to discard all prior license approvals and initiate a new, more stringent application process. Sen. Melson, who originally sponsored the successful Medical Cannabis Act in 2021, emphasized the necessity of this reset to address the inefficiencies and fulfill the program’s intent to provide medical cannabis to patients in need.

#6. Vangst, the cannabis industry’s leading hiring platform, has officially acquired CannabizTemp, the temporary staffing division of CannabizTeam. The acquisition was 50% cash, 50% stock, and is the first acquisition in the cannabis HR space.

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Psychedelic Sector Update

#1.DEA to Conduct Hearing on Psychedelic Substances Proposal: The Drug Enforcement Administration (DEA) has announced plans to hold a hearing regarding the proposed classification of two psychedelic substances, 2,5-dimethoxy-4-iodoamphetamine (DOI) and 2,5-dimethoxy-4-chloroamphetamine (DOC), as Schedule I drugs under the Controlled Substances Act. This move comes in response to significant opposition from the scientific and research community, who argue that such a classification could hinder potential therapeutic advancements.

Sector-Wide Developments

– Canopy Growth’s Retail Optimization: The closure of five Canopy Growth retail locations is a strategic decision aimed at enhancing operational efficiency. This move reflects the company’s efforts to streamline operations and focus on profitable growth areas, amidst the challenges of a competitive market.

– Aurora Cannabis Enters the U.S.: Aurora’s strategic acquisition to enter the U.S. market represents a significant milestone. By taking a majority stake in a leading U.S.-based CBD company, Aurora is not only diversifying its portfolio but also positioning itself to capture growth in the world’s largest cannabis market.

– Washington’s Tax Relief for Medical Cannabis: The elimination of the 37% tax on medical cannabis in Washington State marks a progressive step towards supporting medical patients and designated providers. This legislative change is expected to make medical cannabis more accessible and affordable, potentially setting a precedent for other states to follow.

– Pure Jamaican’s Global Ambitions: The initiative by Pure Jamaican and Seven Ten Limited to export pharmaceutical-grade cannabinoid products underscores Jamaica’s emerging role in the global cannabis market. Targeting major markets like the USA and Brazil, this move highlights the country’s potential as a key exporter of cannabis and hemp products.

– Cybin’s Funding Drive for Psychedelic Development: Cybin’s aim to raise $150 million through private placement underscores the growing investor interest in the psychedelic sector. These funds are earmarked for advancing the development of psychedelic drugs, indicating strong confidence in the therapeutic and commercial potential of psychedelics.

– Indiana’s Psilocybin Research Initiative: The state’s pending legislation to advance psilocybin research for mental health treatment highlights a growing recognition of the potential benefits of psychedelic substances. This initiative, particularly focused on veterans and first responders, could pave the way for broader acceptance and utilization of psilocybin in mental health care.

These developments across the cannabis and psychedelic sectors reflect a period of strategic repositioning, financial maneuvering, and innovative breakthroughs. As companies and states navigate regulatory, market, and scientific landscapes, the potential for growth and transformation in these industries continues to expand, promising exciting advancements in the near future.

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