WeedWeek talked to Michael Auerbach of Subversive Capital,  which has emerged as a major investor.

• The company’s real estate investment trust (REIT) aims to close on $183M in transactions by the end of this month.
• Separately, a special purpose acquisition company, or SPAC, arranged by the company, raised about $575M in its IPO, the largest SPAC IPO in Canadian history.
• “I actually predict that I’ll be only one of two or maybe three of the 10 SPACs [currently] out there for cannabis that will do cannabis,” Auerbach said. “I think most of my competitors will end up doing non-cannabis targets.”

“The time to buy is now,” he says.

Quick Hits

1. Meadow is launching a CRM service which aims to be the “Salesforce of cannabis.”
   TechCrunch
2. CBD company SC Botanicals is suing an estranged partner, which it accuses of stealing its trade secrets for THC remediation.
   WeedWeek
3. Canna-tech workers are in demand, and probably will be for years to come.
   WeedWeek

A new lawsuit is targeting L.A.’s new licensing rules which would limit delivery licenses to equity applicants until January 1, 2025.
WeedWeek

• The case pits the city’s so-called legacy operators who have been in business since before legal REC went on sale against equity applicants.
• One equity applicant called the suit “tone-deaf” and a “slap in the face.”
• Adam Spiker, co-founder of the Southern California Coalition, a trade group that’s one of the plaintiffs, suggested both sides should unite against the illegal market.
• Though often called the world’s largest cannabis market, MJBiz suggests regulations, delays and litigation are repelling L.A. operators.

Quick Hits

1. With New Jersey poised to legalize on Election Day, New York REC legalization also looks to be on the fast track.
   WeedWeek
2. In a first, San Diego sued Grizzly Peak Farms claiming the grower didn’t pay the city’s pot tax. The company’s owner said it was an oversight. WW California has more.
   San Diego Union-Tribune
3. Massachusetts regulators approved the issuing of delivery licenses over the objections of brick and mortar retailers.
   Boston Globe

Weed hasn’t been a hot issue in the presidential election, but voting in November will have tremendous implications for the industry’s next few years. At WeedWeek, Willis Jacobson digs into five stories to watch on Election night. They include several state ballot initiatives and the battle for the U.S. Senate.

More election developments:

• CNBC suggests a Biden win would be good news for the cannabiz. The network’s Jim Cramer agrees.
• Canna Law Blog says don’t hold your breath for federal legalization.
• New Cannabis Ventures says Canadian operators benefit from U.S. election enthusiasm.
• Anticipating a Democratic victory, pot stocks are enjoying a “chilled-out” upswing.
  WSJ (Paywall)
  
• The Mormon Church “strongly opposes” Arizona’s REC initiative.
  AZCentral

WeedWeek reporter Willis Jacobson looks into the legal battle waged by the owner of California grower Skunkworkx Pharms after he reported a robbery only to see police show up and allegedly destroy $700,000 in plants and equipment.

WeedWeek:

“Federal judges, through their interpretation of the Civil Rights Act, have broadly applied so-called qualified immunity to law enforcement officers as a way to prevent excess lawsuits brought against officers for carrying out their jobs. Several states have adopted similar provisions that protect local officers…

“Rondon’s attorney Arthur Angel said he felt the laws are too often misused to “shield complete lawlessness” on the behalf of law enforcement officers.”

Read it all.

MJBiz takes a look at one of the industry’s abiding obsessions, packaging. In particular, it reports on how KushCo is developing childproof containers that are also accessible to seniors:

“100 adults 50-70 years old are tested individually. They’re given five minutes to open and, if it’s reclosable, properly close the child-resistant package. If they can’t open the child-resistant package in five minutes, they are screened to determine their ability to open and close two non-child-resistant packages in one minute. For packaging to pass the test, 90% of the adults tested must be able to open and properly close the package during both the five-minute and one-minute tests.”

Read the whole thing.

Quick Hit

1. Distributor Nabis wants to touch 25% of the legal pot in California. WW California has more.
   TechCrunch

Writing in The Chronicle, the newspaper at tony L.A. private school Harvard-Westlake, Sandra Koretz writes about how her peers are using cannabis in this unusual year:

“Before quarantine, I was smoking once or twice a week, and then once quarantine started, I would wake up and show up to class every single day high,” Robert said. “I know people that would smoke blunts on Zoom. The seniors didn’t care at the end of the year. I had a friend that showed up to class smoking a blunt, claiming it was a cigar, and the teacher did not care.”

There’s more.

George Goldsmith, CEO of MED psilocybin company Compass Pathways “insists that he’s not in the psychedelics business.”
Business Insider (Paywall)

• Firstly, the compound they’re using is synthetic, not made from mushrooms.
• He anticipates psychedelic therapies to be on the market by 2025 and predicts a “cambrian explosion of innovation” in the space.
• The company, which has backers including Silicon Valley magnate Peter Thiel, recently went public and is now valued at around $1.2B.

In recent months, Schwazze, formerly Medicine Man Technologies, which aims to be a major vertically integrated player in Colorado’s business-friendly REC market, has seen several announced deals fall through.
WeedWeek

• The company turned heads in December 2019 when it tapped Justin Dye, a former Chief Administrative Officer of supermarket chain Albertsons, to lead its expansion. The thinking was he’d bring the rigor of a major business to an industry that sometimes lacks it.
• But the company has seen a string of deals announced before Dye’s tenure collapse.
• The truncated deals include bids for retailer Strawberry Fields for $31M, concentrates maker Dabble Extracts ($3.75M), grower Los Suenos Farms ($11.9), Medically Correct, parent company of edibles brand Incredibles, ($17.25M) and retailer Colorado Harvest Company ($12.5M).
• To close it’s biggest acquisition so far, for 13 Star Buds shops and a grow, Schwazze needs to show proof of funds by Friday. 
• Star Buds’ owner didn’t respond to requests for comment.

What’s going on?

Quick Hit

1. Multi-state operator Cresco Labs‘ CEO Charlie Bachtell discussed how the company has thrived through the pandemic.
   AP
2. The IRS is creating a cannabis audit team to step up pot tax enforcement.
   Bloomberg Tax (Paywall)
   

Rapper and mogul Jay-Z’s cannabis brand Monogram is launching in partnership with San Jose-based Caliva.
Los Angeles Times

• “In the 15 months since joining forces with Carter, Caliva has launched a career training and mentorship program focusing on diversity and fair hiring practices in the cannabis industry.

Quick Hit

1. These days, Seth Rogan smokes weed all day every day.
   CNN/@Chloe_Melas

Following the dissolution of Genius Fund, a SoCal company that blew through $164M, the company’s former CEO is accusing individuals associated with the company of moving or selling more than $3M in assets in violation of a court order. Genius Fund representatives did not respond to a request for comment.
WeedWeek

• Francis Racioppi Jr., who is suing the company, called the action a “brazen and shocking” move that represents a “direct affront” to the court’s authority.
• Racioppi’s lawyer called his motion for contempt “an extraordinary legal remedy” justified by the “blatant violation of a federal court order.”
• Genius Fund was backed by Russian oligarch Dmitry Bosov who was found dead of an apparent self-inflicted gun wound in May.

Separately, SoCal-based retailer MedMen ????saw its stock fall to 12 cents after reporting a 40% drop in sales from the previous quarter.
Business Insider