Cannabis legalization is on the rise in the Southeast, and approvals for medical and recreational weed are gaining momentum.
The Alabama licensing process is ongoing and Weed legalization in Florida building. South Carolina is also pursuing a program to legalize medical marijuana.
Last week, Republican Senator Tom Davis introduced South Carolina’s Compassionate Care Act. (opens in new tab), making adjustments to avoid issues that previously derailed reforms. A previous version of the bill passed the South Carolina Senate but failed to pass the House due to issues related to tax language. Recommendations will make cannabis available through licensed pharmacies.
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Weed legalization is already supported by most voters in the United States.And in November, a poll released by Winthrop University (opens in new tab) It found that 78% of South Carolina adults, including a majority of Republicans, want medical cannabis reform. He also had 54% of voters in favor of legalizing recreational weed.
“South Carolina’s Compassionate Care Act has been under scrutiny for eight years and incorporates numerous provisions to address concerns,” said Karen O’Keeffe, state policy director. told Moment. (opens in new tab)“Senator Davis’ 2023 bill reflects years of input, removing the tax and revenue distribution clause that derailed last year’s bill in the House.”
We support cannabis at the federal level and are particularly keen on legalization efforts in the home of Rep. am.
Second Regal Dispensary Opens in New York
Unfortunately, not all states have a level playing field in the United States, and New York’s adult recreation market has stalled. A second legal door, Smacked, opened this week as a pop-up pending an official location to be finalized. Located at 144 Bleecker Street in Greenwich Village, Roland Connor’s Smacked is the first licensed pharmacy to be approved through the New York Social Equity Cannabis Investment Fund. Gov. Kathy Hochul said it was the first legal cannabis place in the state to be opened by someone previously considered a criminal by the cannabis ban.
“As the first individual to open a legal cannabis store in New York City, I am very excited to be a part of history. I couldn’t even imagine,” Conner said. in a statement. “But this isn’t just about me and my family. It’s about everyone who’s been affected by the harsh drug laws of the past.”
We love seeing the energy directed toward social equity in new markets and doors, and wish all of New York’s social equity licensees the best of luck. It’s disappointing to see so many negative comments about the total mismanagement of the now estimated 1,400 illegal pot shops that have sprung up across the city. We are proponents of a thriving legal market and it is hard to overlook the struggles of businesses at the state and city level. It includes the door to social equity that is emerging.
If you plan to buy cannabis in New York City, do your cannabis partners a favor and buy through a legal door. There are only two stores currently open, and both are easy to find as they are both located in high-traffic areas of lower Manhattan. While we cannot currently guarantee price, quality, or product selection, we cannot expect the legal industry to win if we do not support those who drive it forward.
Legal cannabis cuts demand for codeine
Research can be a powerful tool for bringing about positive change in industry and society. For years there has been anecdotal evidence of cannabis’ medicinal benefits, but most of the time the ignorant hear the parrot’s words “no research”. As research on the social benefits of cannabis legalization grows, that stigma is slowly fading.
According to new research (opens in new tab), demand for prescription codeine declined in states that implemented recreational cannabis laws through 2019. In states that implemented legalization, codeine distribution decreased by 37%. Codeine is known for its high potential for abuse and for causing thousands of overdose deaths in the United States each year.
“Reducing opioid misuse can save lives,” said study author Shyam Lama, a PhD candidate at Cornell University. This indicates a significant reduction in the distribution of codeine in the United States, a potential and overlooked benefit of legalizing recreational cannabis use.”
Cannabis lobbying funding is meager compared to big pharmaceutical companies. Unlike alcohol and tobacco, we have yet to see the pharmaceutical camp wanting to partner with cannabis. Instead, the cannabis industry confines its progress to Washington, D.C. because drug company funding keeps us out. Much work awaits for continued progress at the federal level.
Curleaf shuts down some operations
Survival and progress by wise and optimal means are key themes of Poseidon. (opens in new tab) As more pain surfaces, the cannabis industry continues its efforts to correct its difficult trajectory in 2022, as seen in a recent announcement from . bespoke financial (opens in new tab) When innovative industrial property (IIPR (opens in new tab)). We’ve been warning about the cannabis debt problem for months, as a lot of money is being spent under debt pitches as a “safer” way to invest in cannabis. It’s nonsense and the results are sadly coming to fruition.
Former Intel (INTC) (opens in new tab)) CEO Andy Grove once said, “Bad companies are destroyed by crisis, good companies survive, and great companies are improved by crisis.”
This week, the industry’s largest operator, Curaleaf (CURLF (opens in new tab)). The company has cut its workforce by another 10% and is closing operations in his three states of California, Oregon and Colorado. These states did not contribute significantly to Curaleaf’s revenue and were operating at a loss. The company claims these actions could generate $125 million in positive free cash flow for him in 2023. This is a big change for CURLF’s balance sheet.
The initial reaction to this announcement was negative. marijuana strainsI do not agree with overly emotional reactions. These are necessary and difficult steps to improve your company. We knew the companies that took the first leap would go bankrupt, but in the process of generating positive free cash flow, we wouldn’t be surprised if other companies took similar steps to right-size their operations. .
The cannabis M&A market could struggle this year
The evolution of mergers and acquisitions (M&A) is a long-term theme in the legal cannabis industry. M&A is also cyclical across industries, and cannabis is no exception. There was an eventful year, followed by a quiet year, with the industry much quieter in his 2022. M&A predicts he will resurface in 2023, but signs of that are more likely to emerge in the second half of this year. Most companies focus on strengthening their balance sheets, reducing cash burn, or making cash flow positive, so there’s little urgency to jump. These behaviors are good for payability and survival, but at the cost of growth.
Many companies may be under-growing their industry and sacrificing market share for stability. This could continue for some time until M&A is considered again. We are less bullish on the recently capitalized distressed rollup strategy.
Frank Colombo, Director of Analytics, Viridian Capital Advisors (opens in new tab)said in the company’s January 13 newsletter: [multi-state operators] recently said it expects most M&A activity to be the purchase of distressed assets. ”
Having been in the cannabis industry for many years, we don’t see an advantage in distressed assets compared to working with quality companies that grow and are attractively priced. M&A also tends, especially in the early stages of a boom, toward high-priced, quality companies over low-priced, struggling companies.