Week in Review: Louisiana medical marijuana kickoff, Dixie-Arizona Iced Tea team, NM reciprocity & more

Sales begin in the long-delayed Louisiana medical marijuana market, MJ-infused product brand Dixie signs a licensing deal with Arizona Iced Tea’s parent, a New Mexico judge’s ruling could open MMJ sales to out-of-state patients – and more of the week’s top cannabis business news.

MMJ sales begin down on the bayou

After years of waiting, medical cannabis sales finally started in Louisiana this week, but the heavily regulated market is expected to be small in size.

Marijuana Business Daily projects sales of only $1 million-$1.5 million this year.

If the needle does move up, that’ll likely come as a result of high prices.

One dispensary reported that prices would range from just less than $100 for a 30-cubic-centimeter bottle of a CBD-rich extract to nearly $200 for a THC-rich solution.

The only products available thus far were three combinations of liquid tinctures.

MJBizDaily takeaway: Initial business opportunities were limited to nine dispensaries and two grower/processors that are in partnership with Louisiana universities.

Market growth is going to remain constricted because of bans on smokable flower and vaporizers and what at least initially is a relatively low doctor participation rate.

Dixie Brands’ new partner

Longtime infused products maker Dixie Brands, which is based in Denver, announced a new partnership with the New York-based parent company of Arizona Iced Tea, possibly signaling the willingness of yet more mainstream companies to enter the cannabis industry.

MJBizDaily takeaway: While the news indicates to the cannabis sector that there’s potential for more such partnerships, many similar deals probably won’t get inked until there’s some type of federal legalization in place, said New York-based?GreenWave Advisors’ Matt Karnes.

He pointed to the fact that Arizona Beverage Co. has struggled financially and may simply be desperate for more revenue streams and, therefore, is willing to take a risk for which other companies may not find themselves ready.

“They’re trying to resurrect or salvage an existing business, and the growth prospects of cannabis would appeal to any company that might be distraught financially,” Karnes noted.

The deal also has the potential to displace existing marijuana brands in the six U.S. states where Dixie has a presence, Karnes said, because at some point the infused product space will become fully saturated and newer brands won’t be able to pull customers away from those that have already cemented market share.

New Mexico reciprocity ruling

After a change in New Mexico’s medical cannabis law, a judge ruled?the state can give out medical marijuana cards to any qualified patient, not just those who live in-state.

However, New Mexico regulators oppose the judge’s decision, saying the law wasn’t intended to allow reciprocity, and they plan to respond to the ruling.

MJBizDaily takeaway:?According to several estimates of tourism, New Mexico gets a steady number of visitors – more than 30 million each year – and bordering Arizona and Oklahoma both have deep pools of MMJ patients to draw from.

If the judge’s ruling stands and New Mexico’s medical marijuana dispensaries can sell cannabis to out-of-state patients, the state’s MMJ companies could see a solid boost in revenue.

TerrAscend to snap up Ilera

TerrAscend, an Ontario, Canada-based, vertically integrated cannabis company, agreed to acquire Ilera Healthcare in Pennsylvania for up to $225 million.

Here’s a basic breakdown:

  • For now, TerrAscend is set to pay $25 million in cash and $25 million in stock.
  • The eventual investment will depend on Ilera meeting various performance and revenue targets, which could result in TerrAscend paying an additional $175 million in cash.
  • Ilera operates a cultivation and processing facility in Waterfall, Pennsylvania, and distributes its products to 50 of the state’s 52 operating dispensaries.
  • Ilera also operates its own dispensary in Plymouth Meeting, Pennsylvania, with plans to open two more by the end of the year. The transaction is expected to close in the fourth quarter of 2019.

MJBizDaily takeaway: It’s not California, where Canadian companies are investing heavily, but the move is part of a trend of Canadian companies seeking growth opportunities outside an increasingly mature market back home.

It’s also a play that’s banking on the federal government eventually making the product fully legal across the United States.

Cronos Group enters US hemp market

Canadian marijuana company Cronos Group made good on its plan to enter the CBD market before the end of 2019 when it announced it will buy assets of the Redwood Holding Group for $300 million.

Los Angeles-based Redwood produces, markets and distributes hemp-derived CBD consumer goods throughout the U.S. under the luxury consumer brand Lord Jones.

Since the announcement of the purchase, the Cronos Group said it expects CBD sales in the U.S. will be the “largest contributor” to the company’s growth over the next two years.

MJBizDaily takeaway:?Canadian marijuana companies continue to use the capital they’ve raised to flex into the U.S. market and buy up American CBD companies.

The purchase is clearly part of a longer-term strategy to capitalize on the consumer-driven international market for CBD, which has attracted a diverse range of customers to bring cannabis into the mainstream.

6 comments on “Week in Review: Louisiana medical marijuana kickoff, Dixie-Arizona Iced Tea team, NM reciprocity & more
  1. Patrica M. Monaghan on

    A New Mexico Judge has ordered that because of a change in the definition of patient in the statute from “NM resident” to “person,” any person, not just residents, may become a NM medical cannabis patient card holder. The changes in the law also permit reciprocity with patients licensed in other states, but the rules for that aren’t due until 2020. The court’s recent (8/5/19) decision forces the DOH to issue NM medical cannabis patient cards to nonresidents who get a certification from a NM health card provider.
    See Alternative Writ of Mandamus in Meyers, et.al v. Kenny Vigil – DOH, D-101-CV-2019-01967 filed 8/5/19.

    Reply
  2. Michael Kessler on

    The problem with medical marijuana in Louisiana is affordability. The required recommendation from a doctor can run up to $900.00 a year. Two different pharmacies have already told the televisions news stations that a high mix a THC/CBD oil cost $250.00 for a months prescription, that totals to $3900.00 for the year. How in the world can a person who is on disability afford the cost ? Insurance, Medicaid, and Medicare do not cover the cost in Louisiana. We need flower to be available and patients need to be able to grow their own medicine. The cost is outrageous and many can not afford the medicine much less the expense of the doctor’s required recommendation. This program is only for the greedy politicians that took over nine years to finally get the product to market due to their constant fighting over who controls the regulations, taxes, and profits from medical marijuana. Do you even think they considered the poor single parent raising a child that is epileptic ? Once again they more than prove, proper medical care is only for the rich that can afford it.

    Reply
    • Mario Baca on

      The cost is higher than that Louisiana medical marijuana patients are getting screwed. It looks like Louisiana wants there residents to stay on opioids because we can’t afford the states program. The state should be ashame of themselves take advantage of the great people of Louisiana.

      Reply
    • Mario Baca on

      The doctors once again get the upper hand on controlling peoples nightmare of pain. Okay here i go…. LSU and SU growing for a company in Nevada. The state is using are colleges. Charging students for degrees CB Science what are you paying to operate in are state ? Louisiana citizens cover all the cost not just taxes to build are colleges but any expense this program has. Louisiana screws there own people to get off the opioids. SAD SAD SAD Don’t call your doctor unless your ready to pay them everytime you need a refill or if you need to have your medication tweaked you have to pay the doctor 1st. Even if you just had a appointment a week ago.

      Reply
  3. Michael Kessler on

    Who can afford Louisiana Medical Marijuana ? Only the rich and financially well off people. It can cost up to $900.00 per year for the required recommendation from the doctor to get access to medical marijuana. Two pharmacies were interviewed by television newscasters this week and they said top shelf high THC/CBD content oil will cost $250.00 per prescription for a total of $3000.00 per year bringing the total cost to $3900.00 for a yearly supply of medical marijuana. The medicine is not covered by insurance, Medicaid, or Medicare in Louisiana, so good luck paying for needed medication if you are disabled or parents trying to raise an epileptic child, a person suffering with cancer, aids, hiv, pain, and the rest of the remaining qualifications. Qualified patients should be allowed to grow their own medicine and at the very least vape flower due to the outrageous financial cost. The high cost is lining the politicians pockets and the rich get richer while the poor get poorer. Same old song and dance that has been going on in Louisiana for far too long.

    Reply

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