News and nuggets for cannabis industry practitioners in the Midwest and beyond.
Canopy Growth co-founder Bruce Linton preps Michigan’s Gage Cannabis for public investors
Detroit’s vertically-integrated Gage Cannabis, backed by Canopy Growth founder Bruce Linton, raised at least $20 million in recent weeks from New York-based hemp and healthcare hedge fund JW Asset Management.
Gage currently operates three cultivation facilities, five provisioning centers, and one pot processor in Michigan, with plans to double operations and become publicly-traded in the first half of 2021.
Linton, a ganga god of fundraising over the past decade as cannabis gained government approval, raised more than $6 billion through 16 capital rounds while leading Canada’s Canopy Growth from 2013 to 2019.
After less than a year of running Minnesota-based and publicly-traded cannabis company Vireo Health, Linton in May set up a $150 million special purpose acquisition company to invest in THC and decidedly non-CBD-driven cannabis businesses.
In an October interview with Motley Fool, Linton goes deep on Elon Musk, pot stocks, and why CBD only interests him in “super high doses”.
Gage is not the only Michigan-based cannabis company to announce significant fundraising in recent weeks. Last month, Ann Arbor-based multi-state operator C3 Industries said its private fundraising now exceeds $45 million. C3 is a player in highly competitive Oregon and has added operations in Massachusetts and Missouri in addition to its vertically-integrated business in Michigan.
High Times in Shelbyville, Illinois
Northing is for certain and things can always go wrong, but high times keep getting higher for owners of cannabis assets in limited licensed states like Illinois.
This week, Toronto-based Red White & Bloom Brands Inc. paid according to my math, about $40 million) to acquire through a special purpose acquisition company called Cannabis Capital Partners, the rights to cultivate 220,000 square feet of medical and recreational cannabis in Illinois.
A social services nonprofit hoping to cultivate cannabis with an eye toward mental health remedies, selling entity Shelby County Community Services one year ago received approval to cultivate cannabis in Illinois.
Red, White and Bloom also owns an Illinois Department of Agriculture-approved 3.6 million square foot hemp cultivation facility in Granville, Illinois as well as a licencing deal to sell High Times-branded bud throughout the state.
If the feds normalize cannabis commercialization, specifically how the components of the plant are regulated, Red, White and Bloom investors will be living the good life.
It is also worth noting that tens of millions in cannabis cash will impact a non-profit’s stated mission “to provide and promote mental health and rehabilitation programs for the residents of Shelby County.”
Pennsylvania cannabis company Organic Remedies makes moves in Missouri
In a lawsuit filed against The Missouri Department of Health and Senior Services as well as its director Randall Williams, Pennsylvania-based cannabis investor and entrepreneur Mark Toigo claims that Missouri’s residential requirements for cannabis business ownership make it harder to raise necessary capital to fund the development of operations.
Toigo, who owns multiple Organic Remedies medical dispensaries in Pennsylvania, is a minority owner of Organic Remedies MO, which owns a vertically-integrated hat-trick of three medical marijauana retail licenses, one manufacturing facility license and one cultivation facility license in Show-Me state.
“The real effect of the residency requirement has been and will continue to be to stifle Missouri’s medical marijuana program by severely restricting the flow of investment into the state,” says the suit. “This will mean that Missouri’s medical marijuana businesses will not be able to access the capital necessary to build a vibrant, viable, and successful industry.”
Current Missouri rules restrict licenses for 196 dispensaries, 60 cultivators, 86 infused manufacturers, 22 transporters, and 11 testing facilities to operate in the state. Most of these businesses are not yet open, and won’t be within the originally mandated first year of licensure.
Claiming Covid as a barrier to setup, license owners have told Grown In that the one-year timeline was challenging for Missouri operators and the first-wave of dispensaries are still just setting up shop. Most new cannabis markets have bumpy startups, and most take longer to open than originally anticipated.
In the meantime, licensed companies looking for case by case extensions need to show a “good faith effort” that they are working on it, lead regulator Lyndall Fraker tells Grown In.
