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Cannabis Briefs for February 23, 2021

February 23, 2021

•Hexo has agreed to acquire fellow Canadian cannabis producer Zenabis for $235 million. The deal will see Hexo gain access to licensed capacity to produce approximately 111,200 kg of additional high-quality cannabis annually, and give it a foothold in the European medical market. The combined organization will be a top-three licensed producer in terms of combined Canadian recreational cannabis sales. Hexo has Canadian adult-use brands including Hexo Cannabis, Up Cannabis, and Original Stash, and is present in the medical space with its Hexo medical cannabis label. The company says the Zenabis deal positions it for accelerated domestic and international growth.

•New York governor Andrew Cuomo has made three amendments to his legalization proposal in hopes of squaring differences with state lawmakers on the issue. Under the amended proposal, the Department of State would allocate $100 million in social equity funding, through grants administered by Empire State Development Corporation, in collaboration with the departments of Labor and Health and other agencies. A second amendment would allow cannabis delivery, with local governments able to opt out, and a third reduces the initial plan’s penalty for selling to underage consumers from a felony to a class A misdemeanor.

•NHL legend Mark Messier has joined NXT Water as an equity partner and brand captain for the company’s Akeso CBD water. Messier, a six-time Stanley Cup winner, will work closely with the Akeso executive team on branding, advertising and marketing campaigns, social and digital content, and opening up new sales and distribution channels as well as other initiatives. Akeso’s CBD water includes a specific formulation of three key cannabinoids—CBD, CBDA and CBG—from organic hemp plants, and maintains potency and shelf life stability for over a year in bottle.

•Cresco has completed its acquisition of Verdant Creations dispensaries in Cincinnati, Chillicothe, Newark and Marion, Ohio, and has now reached the five-license limit for dispensaries in the state. Ohio has a registered medical patient count that more than doubled in 2020 from roughly 78,000 patients to 160,000, in addition to 52 operational dispensaries statewide and 2020 annual cannabis sales of nearly $220 million. Cresco CEO Charlie Bachtell said the move “significantly deepens our position in Ohio, a market that looks structurally similar to Illinois and Pennsylvania in the early years of those medical markets.”

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