Cannabis Briefs for June 20, 2023
June 20, 2023•California cannabis retailer Velvet opened a new location in Napa. The company is known for its upscale stores in the East Bay and Los Angeles. The stores offer white-glove customer service from their budtenders, who offer guidance with their array of flower, edibles, CBD, topicals, vapes, and beverages. “We are thrilled to bring our award-winning cannabis retail experience to the community of Napa,” said Matt Morea, co-founder and COO. “We have built a unique and elevated customer experience, through our consistent stock of the best brands available, our connections to local growers, and our commitment to developing our staff, who are as passionate about our vision as we are.”
•Nevada governor Joe Lombardo has signed a bill to loosen up several cannabis restrictions and significantly lower industry fees. Senate Bill 277 will create a dual license for medical and recreational retailers to allow them to serve any type of customer, increase the limit on flower purchases from 1 ounce to 2.5 ounces, and increase the limit on concentrate purchases from an eighth of an ounce to a quarter. The bill also makes major reductions on fees, including lowering the initial fee for a recreational cultivation license from $30,000 to $3,000 and the renewal fee from $10,000 to $1,000.
•Illinois governor J.B. Pritzker signed a budget bill that will allow cannabis businesses to claim standard business deductions on their state taxes. A major and ongoing challenge for businesses across the industry is IRS code 280E, which prevents cannabis businesses from claiming tax deductions on their federal taxes. This Illinois bill decouples its state tax policy from federal policy, allowing cannabis businesses to claim these deductions on their state taxes, through a provision to be added to the tax code that specifies they can claim “an amount equal to the deductions that were disallowed under Section 280E of the Internal Revenue Code for the taxable year.”
•California-based cannabis drink brand Uncle Arnie’s received a strategic investment from Harry Rubin and Lorenzo Lamadrid, two founding partners of Samuel Adams, along with other investors Michael and Nick Carpenter. The size of the investment was not disclosed. Launched in 2020, Uncle Arnie’s is a top-selling cannabis drink brand in California, with seven of the top 10 best-selling cannabis beverage SKUs, according to Headset. It expanded to Oregon late last year and to Nevada earlier this month. The brand is present in more than 600 California dispensaries and plans are in place to expand to Michigan in the coming months.
•Canadian cannabis retailer High Tide released results for the quarter ended April 30, in which revenue rose to C$118.1 million ($89m), up 46% from the same period last year. Same-store sales increased 30% year-over-year and 1% sequentially, helping the company achieve a 13th straight quarter of positive adjusted EBITDA, up 20% sequentially, driven by significant cost reductions in general and administrative expenses. High Tide now accounts for 9.5% of the Canadian cannabis retail market, excluding Quebec.
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