420 with CNW — Congressional Researchers Say High Federal Taxes on Marijuana May Hamper Industry’s Economic Potential

The Congressional Research Service recently published a report that cautions legislators to consider the possible consequences of levying high taxes on cannabis products in the event that marijuana gets legalized federally. This comes as Congress considers several reform initiatives and the DEA concludes its review of marijuana scheduling and makes a decision on whether or not to reclassify cannabis as a Schedule 3 drug under the Controlled Substances Act, as recommended by the U.S. Health and Human Services Department.

In a previous report, the nonpartisan research body argued that the DEA was likely to reschedule cannabis based on previous precedents. In its most recent report, the body states that the potential economic impacts of recreational cannabis could be major considerations in any actions taken by Congress on the drug, warning that reliable federal scientific data on this particular topic is scanty given the substance’s ongoing prohibition.

The report advised that Congress gather additional data through agencies such as the Bureau of Economic Analysis as well as Bureau of Labor Statistics. The report also discussed the possible descheduling or rescheduling of cannabis, arguing that imposing federal taxes on the drug much like the taxes levied on tobacco could affect the drug’s economic development capacity.

The Congressional Research Service explained that a balanced approach was needed when it came to marijuana taxes, noting that legislators would need to consider the benefits of increased revenue vs. the drawbacks of a possible consumer resistance against high taxes that may permit the black market to proliferate. It then cited some studies whose findings posit that high tax rates levied on cannabis — and the consequent high prices for recreational cannabis products could heighten the odds of potential consumers turning to the untaxed illicit market.

The body also presented a counterargument, claiming that high cannabis taxes could even deter some individuals from trying the substance altogether, particularly those who were new to adult-use cannabis and weren’t likely to buy from the illicit market. In addition to this, it pointed out modest bits of legislation that could relieve some of the peculiar financial challenges cannabis businesses in legal states faced due to prohibition. This includes the Secure & Fair Enforcement Regulation (SAFER) Banking Act, which was cleared in September by the Senate’s Banking Committee.

This measure would create a safe haven from federal law for transactions with state-sanctioned recreational cannabis businesses and any entity handling the proceeds from such transactions, as well as restrict the ability of federal regulators to terminate a deposit account for a recreational cannabis business. Currently, however, the bill is yet to advance to the House.

With the right federal regulatory framework in place, enterprises such as Innovative Industrial Properties Inc. (NYSE: IIPR) that serve marijuana businesses could grow and thrive.

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CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.

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420 with CNW — Nevada Approves Six Additional Cannabis Consumption Lounges

Nevada authorities are still granting more licenses for consumption lounges, with the state’s marijuana compliance board (CCB) recently giving the green light to six additional conditional licenses for various marijuana businesses, including TGIG LLC; NevadaPure LLC; Higher* Archy LLC; Desert Evolution LLC; Green Thumb Industries (GTI); and Curaleaf Holdings.

Curaleaf Holdings, a global cannabis giant, obtained one license for Tryke Companies, its subsidiary that runs Reef Dispensaries. GTI, another significant player in the multistate marijuana sector, also secured a license for Integral Associates, its subsidiary, with intentions to open a club on the Strip.

The CCB stated in June last year that it intended to establish new rules for regulating consumption lounges, aiming to promote greater inclusivity within Nevada’s marijuana sector. Back then, the agency stated that it planned to grant up to 65 permits, most of which would be linked to already-operating dispensaries and the remaining portion to independent lounges.

The board announced 20 potential candidates for the licenses granted in October 2022. In June 2023, the CCB first issued three conditional licenses to the Venue@Sol Cannabis, Planet 13 Holdings and Cheyenne Medical Sammy Davis dba, which operates as Thrive Cannabis Marketplace. LA Lounge received a license as the first lounge independent from a dispensary in July, and in August, three additional licenses were issued to KV Group, Global Harmony and Deep Roots Harvest.

There are currently 15 conditional licenses that have been approved. After being authorized, licensees have a year to fulfill all regulatory criteria and make the necessary modifications to start operating. Mitch Britten, CEO of Thrive Cannabis Marketplace, expressed excitement in September about commencing work on their new opening on the Strip, terming it a significant milestone for their business.

Planet 13 Holdings also unveiled its plans for a consumption lounge named DAZED! at the beginning of this month. The lounge, adorned with unique features such as VIP booths for marijuana-infused cocktails and “bong chandeliers,” will offer 3,000 square feet of space for food sales, entertainment and consumption. Larry Scheffler, the company’s co-CEO, expressed enthusiasm, envisioning their lounge as a destination that outshines typical Vegas experiences. They aim to open the venue by mid-April next year, capturing the attention of marijuana novices, enthusiasts, tourists and locals alike.

Many licensees of consumption lounges had originally planned to open for business by summer, but they encountered several setbacks. It is anticipated that the lounges will draw a large number of tourists, supporting the Nevada cannabis business, given that Las Vegas alone had more than 38 million visitors in 2022. Additionally, the state’s cannabis sector is expanding thanks to the entry of well-known individuals such as artist Future into the market with his cannabis line, Evol by Future.

Conversely, the establishment of lounges is not advancing as quickly in other states. In California, Governor Gavin Newsom vetoed AB 374, a bill that would have legalized marijuana cafes similar to those in Amsterdam.

The aim of the bill, which Assemblymember Matt Haney introduced early this year, was to allow lounges to sell prepackaged, noninfused food and beverages. Newsom cited concerns about the existing California laws that mandate a smoke-free workplace for workers, stressing the importance of worker health and safety. Haney expressed his intentions to collaborate with the governor’s office and labor leaders to address these concerns and reintroduce the bill in the future.

As more states begin licensing consumption lounges for cannabis, the market for ancillary product and service providers such as Industrial Innovative Properties Inc. (NYSE: IIPR) could widen in those jurisdictions.

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420 with CNW — Cannabis Legalization Causes Major Drug Test Manufacturer to Replace Tests with Fentanyl

Psychemedics, a leading drug-testing technology manufacturer, has unveiled an innovative screening panel that diverges from detecting cannabis, instead focusing on fentanyl and other controlled drugs, as a response to the shifting landscape due to the legalization of cannabis in numerous states.

Psychemedics’ updated Advanced 5-Panel Drug Screen marks a transformative step in how companies safeguard their places of work by shifting focus from cannabis to the major threat posed by fentanyl. The revamped screening panel has garnered approval from the Food & Drug Administration (FDA) and is celebrated for its enhanced accuracy in identifying amphetamines, PCP, opioids and cocaine.

Psychemedics, established in 1987 after which it pioneered hair testing, expressed the necessity for this change in a recent press release and highlighted the failure of the original five-panel drug tests to adapt to the contemporary drug market, specifically in detecting the escalating presence of fentanyl.

Psychedemics CEO and president Brian Hullinger stressed the substantial transformation in workplace challenges brought about by the changing dynamics involving cannabis and fentanyl. He explained how the company responded to this shift by developing its Advanced 5-Panel, aiming to close the existing gap.

With a growing number of states legalizing marijuana, protections have been established for employees who use cannabis during their off-duty hours. In California, for instance, employers are now prohibited from inquiring about an applicant’s prior cannabis use.

Similarly, Michigan recently ceased pre-employment cannabis drug testing for job applicants for government jobs and offered those penalized for past THC tests the chance to have their sanctions retroactively removed. Nevada and Washington also protect job applicants from discrimination based on positive marijuana tests. New York extended job protections for those adults legally using marijuana during their off-hours while away from their workplaces.

At the federal level, there have been attempts to end marijuana drug testing for those applying for federal jobs. The House Rules Committee has repeatedly blocked these efforts, but the Senate approved defense legislation back in July preventing intelligence agencies from withholding security clearances based solely on past cannabis consumption. The House Oversight & Accountability Committee has also approved a bipartisan bill to prevent federal employment or security clearance denials due to past marijuana consumption.

Concurrently, concerns regarding the fentanyl drug supply have grown. While there have been debates over claims of fentanyl-laced cannabis, experts acknowledge the presence of this potent opioid in drugs such as cocaine and heroin.

The spreading wave of legalization isn’t only leading to shifts in the work of makers of testing kits for drugs. It is also creating many opportunities for companies such as Innovative Industrial Properties Inc. (NYSE: IIPR) that don’t deal in the substance but serve cannabis companies in an ancillary role.

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420 with CNW — Demand for Marijuana Seeds Booms as Legalization Spreads

Demand for cannabis seeds in America is surging. A wave of cannabis reform has left medical marijuana legal in 38 states, and recreational cannabis is now legal in 23 states. Now that thousands of commercial cultivators across the country can legally grow and produce cannabis, demand for seeds in the United States is skyrocketing.

State-level recreational cannabis policies that allow home cultivation have also contributed to the increase in marijuana seed demand. Since cannabis seeds barely contain any THC and have no potential for abuse, the law essentially treats them like any other seed.

In Minnesota, residents were lining up at cannabis stores to buy seeds the same day the state legalized recreational cannabis. Jordan, Minnesota-based shop Strains of the Earth saw a “huge influx” of Minnesotans looking for and buying seeds on Aug. 1, 2023, the day Minnesota legalized adult-use cannabis.

Owner Jim Cramond says he had uncountable social media requests asking if marijuana seeds were available, and the company served a steady stream of customers throughout the day. Cramond predicted that he would need to restock every three months, but demand for cannabis seeds has been so high he has to order new stock every week to keep up.

Hammond began teaching courses on how to grow seeds into healthy, bud-producing cannabis plants in September and soon had hundreds of customers attending his tutorials without any social media promotion.

Millions of Americans now live in a state with legal recreational cannabis, and interest in home cultivation is on the rise. For Americans who pride themselves on self-reliance and want to consume contaminant-free cannabis, home cultivation allows them to grow their own cannabis from seed to bud without any outside aid. Home cultivation is also a much more affordable alternative to buying cannabis flower as legal recreational cannabis tends to be quite expensive.

Additionally, it is the only way states such as Minnesota where legal sales haven’t officially launched can legally possess cannabis. Minnesotans who don’t want to wait until 2025 when regulators are done setting up a retail market can only access recreational legal cannabis through seeds and home cultivation.

Virginia residents are also stuck in a gray area where the state has legalized the possession and use of recreational cannabis but still hasn’t set up a commercial market. Smoke shops and horticulture companies in Virginia are now selling seeds and donating them in some cases to satiate residents’ demand for adult-use cannabis.

This surging demand for marijuana seeds and products bodes well for ancillary entities such as Innovative Industrial Properties Inc. (NYSE: IIPR) since they are also likely to see growing demand for their products as the cannabis industry grows its reach across the country.

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420 with CNW — Ohio Voters to Decide on Recreational Cannabis Legalization

Ohioans are currently voting to decide the fate of a proposed initiative aimed at legalizing recreational marijuana. Early voting commenced on Oct. 11, 2023, with the statewide election scheduled for Nov. 7.

The initiative, which bears the designation Issue 2 on the ballots, has been championed by the Coalition to Regulate Marijuana Like Alcohol. The campaigners spent more than a year pushing for the initiative to be included on the ballot since the Republican-controlled legislature would not expand on the present medicinal marijuana policy.

Should the initiative gain approval, Ohio would become the 24th state to legalize recreational cannabis. This would supersede the existing medical cannabis program, which has steadily expanded since its inception in 2016.

The proposal encompasses provisions permitting adults 21 years of age and older to purchase and possess up to 2.5 ounces of marijuana and 15g of concentrate. Additionally, they would be allowed to cultivate a maximum of six plants, with a cap of 12 for households with multiple adult occupants.

The commercial production and distribution of marijuana products would be subject to regulation by a newly established state agency: the Division of Marijuana Control. The commission will be responsible for licensing, enforcing regulations, conducting investigations, and levying penalties on testing laboratories, operators, and other players in the recreational cannabis sector.

Recreational cannabis sales would be subject to a 10% tax, with the generated revenue allocated toward a cannabis social-equity and employment fund, the oversight of the program, support for communities hosting marijuana facilities and addiction services.

A poll conducted in July by the USA Today Network revealed that a majority of Ohio voters, approximately 58.6%, are in favor of legalization. This sentiment is more pronounced among younger respondents, with 76% of those aged 18 to 34 showing support, in contrast to 43% of individuals aged 65 and above. Additionally, another survey by Fallon Research discovered that 59% of voters were in favor of the ballot initiative, while 32% stated they would vote against it.

The law would take effect 30 days after the voting results are officially certified. However, the longevity of legalization is not assured since this is a citizen-initiated statute and not a constitutional amendment. State legislators can still repeal or amend the program following the election.

Currently, several groups, including law-enforcement agencies and the Ohio Children’s Hospital Associations, are against the initiative. Republican legislators are also against it and may become more assertive in contravening the public’s will, particularly with a favorable presidential election year in 2024.

If the measure to legalize recreational cannabis succeeds and is implemented, Ohio could see the mushrooming of not just marijuana companies but also other verticals connected to the industry in the same way that entities such as Innovative Industrial Properties Inc. (NYSE: IIPR) have carved out a niche serving marijuana companies in other state markets.

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420 with CNW — Cannabis Dispensaries Happy That SAFER Banking Act Has Progressed to Senate Floor

Cannabis businesses across the United States have applauded a recent vote by a committee of the U.S. Senate to advance cannabis banking legislation and move it to the senate floor. The committee approved a revised version of a bipartisan marijuana banking bill for the first time last week, raising hopes that America’s state-legal cannabis industry could finally gain access to financial and banking services.

Members of the Senate Banking Committee voted in favor of the Secure and Fair Enforcement Regulation (SAFER) Banking Act in a 14 to 9 vote just a week after bill sponsors Senators Steve Daines and Jeff Merkley officially filed the revised bill. If the measure becomes law, it will provide protections to banks and financial institutions that serve businesses in the cannabis sector from federal reprisal.

America’s state-legal cannabis industry currently cannot access banking services such as bank accounts and cashless payments due to federal prohibition, forcing them to mostly operate on a cash basis. On top of making tax compliance quite difficult, running cash-only operations attracts thieves and increases the likelihood of violent cannabis dispensary robberies, something that is already happening with frightening regularity around the country.

Senate Banking Committee Chair Sherrod Brown has said that the bipartisan cannabis banking bill was necessary as it would help keep cannabis businesses, service providers, and communities safe.

Although the proposal will have to advance past the Senate and House of Representatives before heading to President Joseph Biden’s desk for his signature, cannabis dispensaries are pleased with the progress it has made so far. Herban Underground’s Clif Gordon said he wants to run his cannabis business like any other business in the country but limited access to banking makes this difficult. His establishment is functions like any other business, but federal prohibition prevents his from taking credit cards or any other cashless payment systems, limiting his business to cash-only transactions.

Former Colorado Representative Ed Perlmutter has been championing cannabis banking for close to a decade to help business owners like Gordon. He explains that the SAFER Banking Act would finally allow banks to serve the state-legal cannabis sector as it serves other legitimate industries. That would include granting the industry access to deposit accounts, credit cards, payroll accounts, and other banking and financial services that are immediately accessible to other businesses.

Mason Tvert from Colorado Leads says operating on a cash-only basis and essentially keeping a pile of cash on hand presents a safety issue for cannabis businesses and their employees. He says the SAFER BANKING Act is a “critical public safety legislation” that will allow access to critical banking services while providing social equity and small businesses with the financial products they need to grow.

If this act gains Congressional approval and is signed into law, it could result in more marijuana companies accessing financial services, thereby having positive downstream effects such as causing a spike in the number of clients ancillary firms such as Innovative Industrial Properties Inc. (NYSE: IIPR) serve.

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420 with CNW — Payment Processing Firm Enters Canada’s Cannabis Market

Payment processing platform Square has announced its entry into the Canadian marijuana market through a collaboration with Jane Technologies, an online service that enables customers to order cannabis for store pickup or delivery. In line with the partnership, Square is poised to launch an early-access program tailored for licensed cannabis dispensaries in Ontario. The program will allow dispensaries to begin testing Square for retail point of sale (POS) solution within their brick-and-mortar stores, paving the way for a broader launch later on.

In addition to payment processing, Square’s new cannabis client services also feature real-time inventory tracking across various retail locations and compliance notifications in the event that an order exceeds Canada’s legal marijuana product purchase thresholds.

Square has been collaborating with CBD companies since 2019, despite persistent barriers to banking marijuana businesses. Square began an invite-only trial program in May of that year to provide services to CBD vendors, and the business expanded the program in October of the same year.

The entry of an established, well-known payment platform and point-of-sale provider might put pressure on rivals currently operating in the cannabis industry. Many of these competitors are comparatively smaller in scale compared to their more traditional financial counterparts, focusing primarily on serving cannabis and other heavily regulated enterprises.

In the United States, the conundrum surrounding federal marijuana illegality renders many cannabis companies incapable of accepting card payments for cannabis transactions. Financial institutions find themselves confronted with potential liabilities and legal repercussions for facilitating services to cannabis entities, thereby prompting most of them to steer clear of the industry altogether.

Consequently, certain companies have resorted to unconventional measures, such as deploying “cashless ATMs” to obfuscate cannabis sales as routine cash withdrawals. In a recent development, a Maryland tax official revealed that they refrain from categorizing cannabis transactions as such on tax returns to safeguard banks from potential legal consequences.

This admission elicited criticism from a group opposing cannabis legalization, accusing the state of shielding banks engaging in activities that breach federal law. However, both the state and its banking partner, Wells Fargo, asserted that the transactions adhered to applicable legal frameworks and regulations.

This week, a vote is scheduled in Congress regarding legislation aimed at facilitating banking relationships with cannabis enterprises. Several groups, including 35 marijuana trade associations, drug-policy reform organizations and a leading national labor union, issued a joint appeal to Congress, urging the body to pass the banking bill before the year ends to address the “humanitarian toll” inflicted by frequent robberies targeting cash-heavy cannabis enterprises.

As more enterprises such as Square join the likes of Innovative Industrial Properties Inc. (NYSE: IIPR) in addressing the unique needs of the marijuana industry, the hurdles that cannabis companies have to go through in their day-to-day operations will gradually decrease.

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420 with CNW — Government Analysis Foresees Cannabis Scheduling Change by DEA

A recent government analysis predicts that the Drug Enforcement Administration (DEA) will most likely reschedule marijuana following the recommendation of federal health authorities. The DEA affirmed to Congress in 2020 that it is required by law to give the Department of Health and Human Services (HSS) precedence on matters of science and health in a report released on Sept. 13 by the Congressional Research Service (CRS), a think tank for public policy run by the federal government.

Based on the analysis, it is unlikely that the federal drug policy will be advanced in a way that may be revolutionary.

This has far-reaching consequences not only for the U.S. cannabis industry but also for individuals who use marijuana and seek federal employment or assistance, including military service and access to public housing. Researchers point out that the DEA’s past responses in congressional hearings indicate its tendency to align with the FDA’s recommendations on scientific and medical matters. The CRS report further notes that there is no record of the DEA rejecting an FDA proposal for rescheduling.

HHS’s recommendation to shift cannabis from Schedule 1 to Schedule 3 under the Controlled Substances Act is a crucial part of the ongoing federal review of marijuana’s legal status initiated by President Joe Biden last October. The DEA’s current responsibility is to evaluate how this reclassification impacts legal and policy-related questions, including U.S. obligations under international drug-control treaties. Additionally, the agency must formulate an appropriate modification to federal law.

The review is anticipated to conclude by year-end, with potential changes to federal law occurring as early as next spring.

Although marijuana remains illegal at the federal level, 38 states have legalized it for medical purposes, while 23 states have legalized it for recreational use. Rescheduling the substance would have significant consequences for both the marijuana industry and cannabis users. For starters, the stringent tax code provision, Section 280E, which currently prevents cannabis businesses from claiming regular tax deductions on federal tax returns, would no longer be applicable.

Furthermore, medical cannabis users may experience fewer barriers to accessing public housing, obtaining immigrant visas, federal employment and firearm ownership.

Under the Controlled Substances Act (CSA), Schedule 1 contains substances with a high potential for abuse and minimal or no recognized medical utility. In stark contrast, Schedule 3 substances are accessible legally through a doctor’s prescription, following a rigorous FDA approval process. Such substances are also deemed to have a relatively lower potential for psychological and physical dependence.

As the federal restrictions on marijuana gradually ease, many companies are likely to mushroom in the industry, and ancillary companies such as Innovative Industrial Properties Inc. (NYSE: IIPR) that serve marijuana companies could see their operations grow faster.

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420 with CNW — Data Shows Border Sales Boosting Retailers’ Earnings in US

Marijuana sales crossing state lines have proven to be a lucrative source of revenue for retailers in the United States, and recent data suggests that a similar trend is emerging along international borders, particularly with Mexico. Insights gathered from various sources, including LeafLink, quarterly reports, state agencies and interviews with marijuana companies, support this observation.

LeafLink’s analysis of numerous ZIP codes found that when new recreational marijuana markets open, retailers near state borders tend to increase their inventory orders significantly compared to those located further inland. Over the past three years, wholesale cannabis product purchases by border stores surged by 140% after the introduction of recreational sales. In contrast, retailers situated in more interior regions increased their purchases by only 80%.

Several factors contribute to these trends, with neighboring state marijuana regulations playing a significant role. For example, Illinois retailers near Wisconsin continue to attract Wisconsinites even after four years of recreational sales in Illinois because marijuana possession remains illegal in Wisconsin.

Additionally, varying retail sales taxes play a part. Operators in the St. Louis area are witnessing an influx of shoppers from southern Illinois, where marijuana taxes are triple the rate of Missouri’s.

Missouri’s recent launch of adult-use sales has created a ripple effect in the Midwest, as it borders eight states, with Illinois being the sole state offering recreational marijuana sales. Missouri’s low 6% retail tax on recreational marijuana purchases attracts Illinois consumers, resulting in significant foot traffic across the Mississippi River.

The impact extends to the wholesale market, with wholesale purchases per store in the Kansas City, Missouri, market increasing by 406% after the launch of recreational sales, according to LeafLink data. Similarly, in the St. Louis market, wholesale purchases per store increased by nearly 57%.

In Maryland, which recently entered the recreational cannabis market, retailers along the state’s borders are experiencing increased demand, with some doubling their orders to meet customer needs. Wholesale product orders increased by 115% in Elkton, near the Delaware border, while in the Germantown/Rockville area, monthly wholesale purchases rose by about 42% since recreational sales began.

Across the U.S.-Mexico border, commercial ties run deep, with residents often crossing freely between Sunland Park, El Paso and Juarez for various purposes, including shopping for regulated marijuana. Other border communities, including Hobbs and Clovis, are also witnessing strong sales, indicating that Texans and some Mexicans are crossing the border to purchase marijuana from New Mexico retailers.

It is highly likely that as cannabis retailers along borders see increased sales, other ancillary businesses such as Innovative Industrial Properties Inc. (NYSE: IIPR) may also be benefiting from this boom as demand for their products and services rises.

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420 with CNW — Planet 13 to Expand into Florida with Planned Acquisition of VidaCann

Planet 13 Holdings has announced a $48.9 million acquisition of VidaCann, a vertically integrated cannabis operator in Florida with 26 medical marijuana dispensaries. A recent news release revealed that both companies’ boards unanimously approved the total acquisition of VidaCann’s debt, cash and stock by Las Vegas-based cannabis firm Planet 13 Holdings.

The membership interest purchase agreement will see Planet 13 Holdings acquire an operational greenhouse cultivation facility, an analytical and processing laboratory, and three product lines, including licensed brands Stanley Brothers, Tikun Olam and the VidaCann house brand. The state-of-the-art facility is fully operational and capable of supporting more than two times the volume of cannabis that flows through VidaCann’s and Planet 13’s dispensary networks combined.

According to Planet 13’s co-CEO Larry Scheffler, VidaCann is among the 10 largest marijuana operators in retail size in the entire state of Florida. Furthermore, Scheffler noted that the Florida-based cannabis company has developed a reputation for producing high-quality products and providing great customer service. Acquiring the company will allow Planet 13 to “significantly accelerate” its entry into the Florida market, Scheffler said, and also allow it to capture a greater share of the market.

Planet 13 currently has 13 retail operations in the state of California along with 4 leased retail operations in Florida; the company is also set to launch a retail store in Illinois.

Scheffler said that Planet 13 was partly drawn to the acquisition deal by the prospect of teaming up with VidaCann’s “amazing management team” as it has built VidaCann into the ninth largest marijuana company in the state with little outside capital and limited debt. Scheffler added that VidaCann’s management’s ability to run a lean and efficient operation would be a strategic and cultural fit to Planet 13’s philosophy of launching retail operations in other states.

The Las Vegas cannabis operator has outlined a set of goals to achieve after the acquisition deal is complete that will build VidaCann into an even stronger company next year, Scheffler concluded.

According to the purchase agreement, which received unanimous approval from both VidaCann managers and the Planet 13 Board of Directors, the acquisition deal should close in Q1 2024. Upon the deal’s closing, VidaCann will be granted the right to nominate a fifth member to Planet 13’s board of directors. As per the proposed agreement, former VidaCann shareholders will have a 26% pro forma ownership on a fully diluted basis in Planet 13 Holdings.

As these major players in the cannabis industry expand their footprint in different markets across the country, they inevitably create opportunities for other ecosystem actors such as Innovative Industrial Properties Inc. (NYSE: IIPR).

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