Cannabis Briefs for April 9, 2019April 9, 2019
•More than 20 cities in California have sued the state’s Bureau of Cannabis Control and its head, Lori Ajax, over its decision to allow marijuana deliveries anywhere in the state, regardless of local bans on cannabis retailers. The lawsuit alleges that the provision violates Prop. 64—the ballot measure that legalized recreational cannabis in the state—and its promise to “safeguard local control, allowing local governments to regulate marijuana-related activities.” This regulatory framework resulted in more than 80% of California’s municipalities banning non-medical cannabis retail. Many cities fear that cannabis delivery vehicles will be a magnet for crime, while delivery proponents note that restricting access to legal products will fuel black market sales.
•Sales were brisk as Ontario opened its first 10 recreational cannabis shops last week. According to retail tracking company Cova, seven of the stores averaged sales of just under C$51,000 ($38,089) on 867 transactions on their first day, 10 times more than the approximately $5,000 ($3,734) on 111 transactions typical for the rest of the country. The average transaction totaled C$61.82 ($46.17), higher than the national average of C$46.54 ($34.76). Observers noted that the numbers will likely fall closer in line with national trends over the next few weeks. An additional 15 shops are expected to open as final approvals are granted by the province.
•Los Angeles-based Vertical Companies has closed its Series A funding round with $58 million, $23 million more than targeted. The company’s president, former drinks industry executive Smoke Wallin, said the capital will allow Vertical to scale commercial operations and reach almost 2 million square feet of cultivation space this year. Along with its manufacturing and distributing operations, Vertical Companies houses Vertical Wellness, a CBD-centric division, and V Brands Management, which has a large cannabis intellectual property portfolio. Significant investment came from private equity fund Merida Capital Partners, among others. In addition to California, Vertical operates in Arizona and Kentucky.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning. You will also receive the Cannabis edition as part of your subscription.