Still want to ride the cannabis boom? Six bets to play the green gold rush

The growing menu of cannabis stocks may be enticing for investors seeking to profit from the green gold rush, but betting on winners is not easy.

Cannabis companies have been in the spotlight during the run-up to the legalization of recreational pot in Canada. With the passage of Bill C-45 in the Senate, the sale of marijuana now has the green light, although it will be fall before consumers can buy cannabis products.

Risks for investors still abound in this young industry. There is uncertainty as to whether producers can meet delivery targets, or whether there could be a cannabis glut. It is unclear whether restrictions on cannabis advertising will make it difficult for the legal product to compete against the black market.

And it hasn’t been determined how much dilution shareholders face because of bought-deal financings, whereby the underwriting syndicate buys the entire stock offering and resells the shares to their clients.

Given the potential landmines among pot plays, we asked three cannabis-focused fund managers for some of their top picks.

Greg Taylor, portfolio manager at Purpose Investments Inc., Toronto

Fund: Purpose Marijuana Opportunities Fund with ETF series (MJJ-NEO)

The pick: Hydropothecary Corp. (THCX-X)

52-week range: $1.10 to $5.42 a share

The Gatineau, Que.-based medical cannabis producer is “one of the leaders in the space, but seems to be getting overlooked,” says Mr. Taylor. “Its stock trades at a discount to its peers, and about half of the valuation of Canopy Growth Corp.”

In April, Hydropothecary signed a five-year deal with Société des alcools du Québec to supply more than 200,000 kilograms of cannabis products for recreational use, thus becoming Quebec’s preferred supplier. The firm, which has a strong management team, is expanding its greenhouse capacity, investing in extraction technologies, and plans to grow globally, he says. “They are working on research and development projects for extraction into oils and infusion into beverages.”

Hydropothecary, whose cost of production is less than $1 per gram, also benefits from cheaper power in Quebec. The firm is an unlikely takeover candidate but could partner with a major beverage or drug-industry player, he adds.

The pickCannTrust Holdings Inc. (TRST-TSX)

52-week range: $5.86 to $10.58 a share

The Vaughan, Ont.-based cannabis producer is well-positioned as a play on medical marijuana that could “explode in demand,” Mr. Taylor suggests. It sells higher-margin cannabis oils and has introduced innovations, such as vegan-based capsules.

CannTrust has credibility in its niche because it was founded and is controlled by former pharmacists, and has partnered with Apotex Inc., Canada’s largest generic drug maker, which exports to more than 115 countries, he adds. But CannTrust, which has indoor-grow and greenhouse facilities, also plans to expand into recreational cannabis and is developing pet products, too, he says. “They are thinking out of the box.”

The firm, which has reported three consecutive quarters of profit, recently raised $100-million from a bought-deal to meet its growth needs. CannTrust, whose stock trades at a big discount to peers such as Canopy Growth Corp., could be a takeover target for a pharmaceutical giant, he says.

Charles Taerk, president of Faircourt Asset Management Inc., Toronto

Fund: Ninepoint UIT Alternative Health Fund

The pickAphria Inc. (APH-TSX)

52-week range: $5.14 to $24.75 a share

Shares of the Leamington, Ont.-based medical cannabis producer, which are off sharply from their January peak, are compelling on a relative-value basis, says Mr. Taerk.

Aphria’s recent acquisition of Nuuvera Corp. was controversial because of cross-ownership, but it is helping global expansion, he says. Aphria, a low-cost producer, now has access to more than 13,000 pharmacies in Germany. The firm, whose current production capacity is second only to Canopy Growth Corp., has also posted 10 consecutive quarters of positive earnings before interest, taxes, depreciation and amortization (EBITDA), he notes. It has a strong management team led by Vic Neufeld, formerly CEO of Jamieson Laboratories Ltd., he adds.

Aphria is building a $55-million extraction facility for cannabis concentrates to be used in everything from edibles to infused beverages, and has also partnered with Southern Glazer’s Wine & Spirits for product distribution, he adds.

The pickOrganigram Holdings Inc. (OGI-X)

52-week range: $2.04 to $5.93 a share

Organigram is one of the top five Canadian licensed medical marijuana producers in terms of current production capacity, but its stock trades at a significant discount to its bigger peers, says Mr. Taerk.

Based in Moncton, N.B., it doesn’t have the profile of Ontario players but benefits from lower power rates and cheaper land costs, he adds. Organigram lost its organic certification in 2016 after some batches tested for pesticides, but new management led by chief executive officer Greg Engel “has turned the ship around,” he says. The company will be getting its certification back, but only a small part of its business will be organic, Mr. Taerk notes.

Organigram’s cost-per-gram averaged $1.22 during the latest quarter, which is low for an indoor grower, he says. Organigram, which is doing a “nice job of creating a brand strategy” for recreational cannabis, is also a potential takeover target or could merge with other regional players, he adds.

Bruce Campbell, president of StoneCastle Investment Management Inc., Kelowna, B.C.

Funds: Cannabis Growth Opportunity Corp. (CGOC-CN) and StoneCastle Cannabis Growth Fund

The pick: Valens GroWorks Corp. (VGW-CN)

52-week range: 75 cents to $3.50 a share.

Toronto-base Valens, which aims to be a vertically integrated cannabis products provider, is attractive as a multi-licensed company with various revenue streams, says Mr. Campbell. “But their big business is going to end up being in extraction.”

The company, whose production facilities are in Kelowna, B.C., holds a dealer’s licence to produce and sell its higher-margin cannabis oils, and has an agreement with Canopy Growth Corp. to distribute its products through its CraftGrow program. Valens has applied for a cultivation licence, but also signed a deal recently with Speakeasy Cannabis Club Ltd., which will also supply it with cannabis. Valens, which has a licence to offer cannabis-testing services, has teamed up with U.S. scientific instruments maker Thermo Fisher Scientific Inc. to do so.

Valens could be a takeover target for players wanting extraction expertise or could even merge with smaller firms to build a regional powerhouse, he says.

The pick: Friday Night Inc. (TGIF-CN)

52-week range: 17 cents to $1.40 a share

This Chilliwack, B.C.-based company, which is involved in growing and distributing medical and recreational marijuana in the United States, operates three distinct business lines, says Mr. Campbell. Its business is focused on Nevada, a medical-marijuana state that legalized recreational cannabis in 2016. Friday Night is a potential takeover target for a player that wants a foothold in that state, or it could be an acquirer, too, he says.

Alternative Medicine Association, its licensed producer, is building a new cultivation facility in Las Vegas to expand capacity, and recently bought an adjacent building for cannabis extraction. Its Infused MFG unit produces cannabidiol (CBD)-infused products ranging from pet products to lip balms and cream.

And its Spire Secure Logistics unit, which gets a recurring revenue stream from selling security services to the cannabis industry, will see demand grow as the industry matures, he predicts.

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U.S. Tax Court Rejects Cannabis Businesses, but Bankers Want in on Legal Weed

As financial institutions pressure lawmakers to allow state-legal canna-businesses access to banking services, a new judicial ruling complicates the industry’s cash issues even further.

The fight for cannabis legalization in America is gaining new ground every day. At the local, state, and even national level, the U.S. is soaked in green rush growth and medical marijuana advancements. But in the financial sphere, strict adherence to federal regulations and a long-standing stigma have continually prevented any significant progress on the problems of marijuana-related banking and taxation.

Complicating those issues even further, a ruling from a U.S. tax court judge released this week will make it more difficult for legal weed businesses to square up with Uncle Samcome tax season.

According to Marijuana Business Daily, Judge Richard Morrison ruled against now-closed Colorado medical marijuana dispensary Altermeds after the pot shop owners had attempted to file standard business tax deductions on the non-cannabis products that they sold, namely rolling papers, pipes, and other smoking accessories.

Tax officials have long denied deductions from cannabis businesses under Code 280E, which restricts any illegal business from writing off standard expenses in tax filings. Altermeds’ owners argued that pipes were not included under the definition of illicit items covered in 280E, but Judge Morrison disagreed, writing in his decision that he considered paraphernalia as part of the marijuana business.

For state-legal weed businesses around the country, the deduction denial is yet another strain on an already tenuous relationship with finances and banking. Despite repeated efforts from cannabis advocates and lawmakers, federal law restricts banking institutionsfrom working with marijuana businesses, leaving growers and dispensary owners around the country counting their payroll, taxes, and profits in cash.

Just last week, the House Appropriations Committee rejected an amendment to the 2019 budget that would have allowed banks to work with weed companies without worrying about losing federal insurance. But while U.S. judges and legislators have been slow to act on securing financial stability for state-legal ganjapreneurs, banking professionals have begun to see the light.

According to MJBizDaily, a number of influential finance industry lobbying groups, including the Independent Community Bankers of America and the American Bankers Association, have lent official support to cannabis finance reform. With millions upon millions of dollars in assets currently locked out of federally-insured institutions, bankers are beginning to see the huge potential profits behind legal pot.

Back in Colorado, however, the former owners of Altermeds will now have to cough up nearly $470,000 in back taxes and penalties.

As the proliferation of marijuana reform laws continues to spark the creation of new cannabis businesses across the country, reconciling the costly differences between state law and federal financial regulations will be instrumental in bringing the once-controversial plant fully into the American mainstream.

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Cannabis Sales In Canada Are Expected To Pass $7 Billion In 2019

How much will legalization be worth? Now we know who will be buying weed, and how much they’ll be paying for it.

After legalization this summer, Canada will be one of the biggest weed consumers in the world. How much will the Canadian market be worth was the million (or billion) dollar question—until now. Financial giant Deloitte just released an official report on cannabis in the country’s market. In it, they shared that cannabis sales in Canada are expected to pass $7 billion in 2019.

Canadians Will Spend Over $7 Billion on Weed

In the report titled A Society in Transition, An Industry Ready to Bloom, Deloitte surveyed Canadians in early 2018 to predict future marijuana consumption. The report estimates that cannabis sales in Canada are expected to Pass $7 billion in 2019 alone. This includes medical, legal recreational, and illegal sales.

It also predicts that legal recreational sales will make up $4.34 billion, the majority of overall sales. According to surveys, Canadians will buy legal marijuana as long as it’s no more than 10 percent more than what’s currently available illegally.

Deloitte calculates the Canadian weed market value is worth between $1.34–2.75 billion. In 2019, they expect it to increase to $1.81–4.34 billion.

The Average Consumer Is Changing

The report describes the current weed smoker as “risk taker,” which skews younger (18-34 years old). They expect that legalization will attract 35-54 year-olds, who will consume, on average, less than once a month.

This doesn’t mean that they’re new to the herb. 3/4 have smoked, eaten or vaped in the past, and almost half have in the past few years.

After legalization, those who rarely smoke weed and those who consume it often are expected to increase their intake. Not only that, but the rare smokers will spend 65 percent more on marijuana than they do now.

The culture around marijuana is changing. Middle-aged consumers, especially those with college or graduate school educations, will become typical. These will be people with stable jobs, families and more of an inclination to follow the law.

Canadian Spending On Legal Weed Will Depend On Access

There are some major hurdles to overcome post-legalization. The lower the priceof legal recreational marijuana and the better the supply and access, the more Canadians will spend.

Most cannabis consumers will buy from dispensaries. This means that location, accessible information and a good (and visible) supply are key. Of Canadians surveyed, one third would buy marijuana online. Delivery services have the advantage of privacy, but the threat of shared data.

Most Canadians Will Be Buying Their Weed Legally

Overall, most people see the benefits of legalization–and are willing to pay for it. The average Canadian is open to paying 10 percent more, though it varies per province. They see legalization as a way to guarantee quality and offer better and more varied products.

And if there are enough dispensaries, and if weed is cheap and plentiful enough, this could mean over $7 billion in weed sales in 2019.

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Michigan Legislators Could Vote to Legalize Weed This Week

Republican lawmakers want to end prohibition on their own, ahead of November’s ballot initiative vote, in hopes of tightening the state’s proposed green rush regulations.

Republicans in the Michigan legislature want to vote on recreational cannabis legalization before the week is up. But while Great Lake State conservatives could finally open the floodgates for marijuana policy reform in the Midwest, the socially progressive crossover is still flush with ulterior motives.

According to Michigan Live, the legislative legalization push would enact the state’s prohibition-ending marijuana ballot measure before a public vote, allowing Michigan’s lead Republican lawmakers to more easily amend the law and add new, presumably stricter, regulations to the state’s impending green rush.

“I’m proposing that we adopt it and amend it and put it right under the [medical] marijuana law and regulate it,” Senate Majority Leader Arlan Meekhof, R-West Olive, who is leading the legalization charge, told MLive.

Late last year, Michigan cannabis activists collected over 360,000 signatures in support of a legalization ballot measure appearing in the upcoming midterm elections, which was then quickly approved by state officials. Compound that initiative with polling data that shows over 60% of Michigan voters support legalization, and experts around the country have widely predicted the Great Lake State as a near-lock for legalization.

If passed, the ballot measure would legalize the possession, use, and sale of marijuana for adults 21 years and older. Residents and tourists alike would be able to carry up to 2.5 ounces of weed and purchase pot from state-licensed stores. Like Colorado, Michigan’s legalization program would direct cannabis tax revenue to local schools and road repairs, with a proposed 10% excise fee added to every marijuana product.

Reading the writing on the wall, Michigan legislators and anti-cannabis advocates have all but given up the fight for prohibition, and have now shifted their focus towards regulatory control and the ability to amend the particulars of legalization.

Put to a successful popular vote, Michigan lawmakers could amend the voter-approved ballot initiative with support from three-quarters of the state legislature. If the legalization effort is passed by legislative vote, though, Sen. Meekhof and his Republican peers will only need a basic majority to make changes to the state’s marijuana laws. With a current conservative majority in Lansing, those changes could be made as quickly as the bill is approved.

For the cannabis advocates who worked tirelessly to construct and validate Michigan’s legalization measure, the legislative power grab is troubling. Like post-legalization problems in MassachusettsMaine, and elsewhere, supporters are worried that legislators could add unnecessary red tape and delay the implementation of Michigan’s retail market.

“We’re happy for the legislature to adopt our initiative as written. But we have a strong position that it doesn’t need to be changed right away,” said Josh Hovey, spokesman for the Coalition to Regulate Marijuana Like Alcohol. “We used Michigan’s 2016 [medical marijuana] framework to draft our initiative, and we followed it very, very closely,”

In addition to possibly adding higher taxes or stricter zoning rules for pot shops, political experts have argued that a legislative end to marijuana prohibition could change the outcome of Michigan’s other November elections, with young people potentially discouraged from participating in the democratic process without the option to vote for legal weed.

If Senator Meekhof and Great Lake State Republicans are going to pass cannabis legalization on their own, though, they will need to act fast. Michigan’s Senate and House of Representatives must both approve the initiative before the end of Tuesday, or the measure will automatically be sent to November’s ballot for a public vote.

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If you are anything like most entrepreneurs looking to get in on the green rush, you’ve probably been doing your research for quite some time now on the ins and outs of the cannabis industry. While there are hundreds, if not thousands, of people speaking on what it takes to enter the industry and grow a successful business, it is not every day that one gets advice from a cannabis attorney on how to start a cannabis business (legally)!

For that reason, we spoke with Neil Juneja, founder and managing partner at Gleam Law Firm, a cannabis-focused firm, who works diligently to help people understand the best legal options for cannabis businesses while assisting them as they navigate the evolving industry.

(Credit: Neil Juneja)

With all of the news about difficulties and victories that entrepreneurs of color are experiencing, Juneja shares his expert advice on cannabis and the law.

What are the steps to establishing a cannabis company?

If the company is directly touching the plant, each state’s laws and regulations are different. Some states have an open application period and will provide a large number of licenses. Other states have limited the total number of licenses to single digits and require an extensive application requiring proof of large amounts of capital and competency.

How can entrepreneurs learn the cannabis laws as they seek to enter the growing industry?

The first step is to reach the state’s regulations on the matter. Subsequently, join local cannabis industry groups and speak with attorneys focusing on the local cannabis markets. There is also a Minority Cannabis Business Association.

What kind of lawyer should entrepreneurs seek when trying to establish a cannabis company?

If the state’s license number falls below the requisite number to support cannabis-focused attorneys, a business and admin attorney is best. A cannabis-focused intellectual property attorney should also be consulted. As intellectual property is federal, the intellectual property attorney can come from any state.

What are some of the opportunities and risks of entering the industry?

While most states have some form of cannabis legalization, the DEA still considers cannabis illegal. While the risk is very low, it does exist.

From a business perspective, the larger states are hyper-competitive and many of the businesses are capitalized. This can result in very thin margins.

According to a report by the New York Times, people of color are being arrested at 10 times the rate as white people. Are there ways that cannabis business owners can legally protect themselves and their customers?

As the DEA is not currently pursuing the regulated cannabis industry, the important communication bridge is with local and state authorities. As regulation increases, all sides are beginning to see the tax revenue and as a result, have been treating cannabis use in parity with alcohol use.

How can cannabis business owners make sure that their product doesn’t end up in the wrong hands?

Proper security is advised. After the sale to the consumer, unauthorized use can be mitigated utilizing child-proof packaging.

Where can people who are interested in working in the cannabis industry find jobs and what kind of background do they need to have in order to qualify?

Each state varies. For instance, all employees and contractors of cannabis companies in Hawaii must submit to an extensive background check whereas many other states have no requirement. For experience, most skills are applicable to any business and cannabis is no different. The only unique position would be the master cultivator and those trimming the flowers. The industry has need for management, HR, compliance, sales, chemists, labor, etc.

A criminal record may preclude cannabis business ownership. To counteract this, Oakland, California is providing preference and assistance to minority cannabis business owners. Florida, Ohio, and Pennsylvania also have equity programs currently.

To learn more about how you can enter and navigate the cannabis industry, Join us and Neil Juneja at the Entrepreneurs Summit for a timely conversation with Dasheeda “The Weed Head” Dawson, and Hope Wiseman led by Eboni K. Williams.

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Marijuana reform is here, but minorities still get shafted

First prosecuted, now excluded from legalized trade and treatment

In the initial years of the Green Rush—the push in New York and the nation for medical marijuana and decriminalization—some cruel ironies were politely ignored by the burgeoning industry.

Most glaring was that the same racially motivated drug laws that imprisoned generations of blacks and Latinos for nonviolent offenses now barred them from participating in the $30 billion cannabis trade.

This disparity persists and might even be worsening, given the industry’s surging growth. But it’s no longer ignored, and for-profit companies who haven’t hesitated to throw around social-justice buzzwords when threatened by regulators can no longer plead ignorance.

Yet another unequal facet of the Green Rush has gone unnoticed: Communities of color have been excluded not only from economic opportunities, but also from receiving medical care.

While African-Americans and minority groups across the economic spectrum are more likely to suffer from several health issues treatable by medical marijuana, they’re not gaining access to it—even in states that have enthusiastically embraced the concept. If the already-conclusive and growing consensus is that medical marijuana offers non-addictive pain relief, helps chemotherapy patients tolerate treatment, and calms veterans and trauma victims experiencing PTSD, then where is the push to make it available to communities of color?

The Green Rush hasn’t just left black and Latino entrepreneurs behind, but black and Latino patients as well. Big tobacco, liquor distributors and most recently opioid manufacturers have never hesitated to profit off minority groups. But medical cannabis interests, whose advertising emphasizes themes like compassion and healing, most certainly have.

One reason for this phenomenon is that as New York and other states have conservatively capped the number of dispensary licenses and locations, operators have cited these facilities in wealthy, white locations.

Take the recently opened dispensary on Manhattan’s elite Fifth Avenue. It garnered national and worldwide attention. And why shouldn’t it? It’s a powerful signal of how far the country has evolved. But if treatment and not merely profit is our objective, the opening of a dispensary just uptown on 125th Street in Harlem would mark a more consequential shift.

Addressing health disparities is, of course, more complex than brick-and-mortar locations; it requires addressing socioeconomic barriers denying historically disenfranchised groups the equal care they deserve. It’s an undertaking that requires education and community engagement: buy-in from local leaders, door-to-door canvassing, outreach to ethnic media. It demands culturally-sensitive promotional materials that reference medical conditions black and Latino families have struggled with, ensuring customer-service representatives are educated on black and brown health issues, and a network of prescribing physicians to treat and advise these underserved patients.

Correcting this emerging imbalance is no easy feat, but it’s a chance for this young industry to demonstrate its commitment to healing the much older wounds the drugs laws inflicted.

If we genuinely believe that medical marijuana is a means of improving health and wellness, then it should be available for all.

As the right to provide—and profit from—medical marijuana remains fiercely contested in New York and states across the nation, I hope that the next wave of applicants and the public-sector regulators administering these lucrative competitions remember these concerns.

The Rev. Al Sharpton is president of the civil rights organization National Action Network.

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Everything You Need to Know About CBD and Its Benefits

With the green rush in full effect, more and more people are becoming interested in cannabis and its many medicinal benefits. While going full flower might still seem intimidating for some, CBD may be a friendlier gateway for those who are just looking to get their feet wet. For starters, it’s not mind-altering like its psychoactive sibling THC. Though it’s commonly known as the nonpsychoactive cannabinoid, it is important to note that that holds true as long as you stay within recommended doses. Smoke or consume enough, and it’s very much possible to experience adverse effects like paranoia and anxiety — the opposite of what you’re likely trying to achieve with CBD. Let’s dive into the basics of this cannabinoid and how it can help you.

What Is CBD?

CBD, short for cannabidiol, is an all-natural and legal (except in the state of Indiana) compound found in the cannabis plant. It will not get you high (in recommended doses) and it will not show up on a drug test. Much, if not all, of marijuana’s medicinal benefits are thanks to CBD.

What Forms Does It Come In?

CBD oil is one of the more popular methods of consumption, but it’s also available as a vape pen, topical, or edible. These forms can all be found free of THC. However, when it comes to straight-up weed, every strain of marijuana contains different ratios of THC to CBD, and even the most CBD-dominant weed will still contain small traces of THC.

What Are Its Benefits?

The list goes on. Other areas of study include CBD’s role in the treatment of Alzheimer’s disease, multiple sclerosis, Parkinson’s disease, and cancer. More research is needed in order to support these other claims, which is why the legalization of cannabis is critical to unlocking CBD’s medicinal potential.

What we do know, however, is that CBD seems to counteract the adverse effects of THC. In fact, it wasn’t until this active compound was introduced and administered with THC that we began to enjoy the pleasant high we know today. Once strains began to include CBD, it balanced out the effects of THC and made the high more enjoyable. The two complement one another, which is why a 1:1 (THC to CBD) ratio or a CBD-dominant strain is recommended for beginners who’d prefer to smoke flower over other consumption methods.

Long-term use of high amounts of THC may promote plaque development around the heart, according to Dr. Kaplan. However, keep in mind that these tests used synthetic versions of THC, which are often much stronger than that found in cannabis. CBD may act as a protective agent against THC.

“The antioxidant and anti-inflammatory properties of CBD likely leads to pro-heart health effects,” Dr. Kaplan told POPSUGAR.

Additionally, CBD may also mitigate the risk of THC tolerance.

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Canopy Growth Applies To Be First Cannabis Cultivator On The NYSE

Canopy Growth could be the first Canadian cannabis cultivator to list on the NYSE.

So far there have been no cannabis cultivation companies listed on the New York Stock Exchange. The closest thing to it is Scotts Miracle-Gro which has been acquiring various businesses that sell products to marijuana growers. One of Canada’s largest pot producers is looking to make history by entering the NYSE. Canopy Growth applied to be the first cannabis cultivator on the NYSE and they expect shares to be trading under the symbol CGC by the end of May. The company is already listed on the Toronto Stock Exchange under the ticker symbol WEED.

Canadian Cannabis Enters U.S. Stock Markets

Another Canadian cannabis company called Cronos Group Inc. has already listed in the U.S. on the Nasdaq this February. Originally, Canopy’s Chief Executive Officer Bruce Linton was a step away from filing to list on the Nasdaq Stock Market when he decided to shift focus to a deal with Constellation Brands Inc., a large producer and marketer of alcohol. He told Bloomberg why he ended up applying to the NYSE instead.

“Ultimately one of them is on Wall Street and has a bit more history and cache, and the neighbors on it are pretty substantive companies,” Linton said in a phone interview.

Despite not having any operations south of the Canadian border, Linton hopes listing on the NYSE will make the company more appealing to U.S. institutional investors.

“One of the primary drivers of this listing is, as we are expanding globally, having U.S. institutional investors helps,” he said. “I think the investment community has to drop the pot jokes and talk about the investment grade opportunity.”

The company will still need to file a Form 40-F Registration Statement with the Securities and Exchange Commission for approval the NYSE and its regulators before they can be listed.

Canopy Growth/Facebook

Canopy isn’t the only Canadian cannabis company looking to expand globally. One of their largest competitors, Aurora Cannabis currently has the biggest cannabis deal ever in the works. They’ve been acquiring assets to improve and expand their global distribution network. While Aurora is the largest deal maker, Canopy remains on top when it comes to revenue and market value with stocks more than tripling in the last year.

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FBI Raids California Mayor’s Home For Involvement in Legal Marijuana Industry

In a still-murky scenario of rare federal enforcement against municipal corruption, FBI agents last week raided the home of the mayor of Adelanto in Southern California’s San Bernardino county. In the same operation, a local cannabis dispensary was also searched. Economically troubled Adelanto has aggressively sought investment in its local cannabis industry, but paranoia in the wake of the federal raids could have a chilling effect.

The town of Adelanto, on the western edge of the Mojave Desert, has struggled to make budgetary ends meet since the closure of George Air Force Base in 1992, and was looking to cannabis legalization in the Golden State as the solution to its financial difficulties. But federal raids on the mayor’s home and a dispensary may give investors the jitters.

FBI agents on May 8 raided both Adelanto’s City Hall and the home of Mayor Rich Kerr, in what the San Bernardino Sun called “a widening corruption probe into the High Desert town’s dealings with marijuana businesses.” Agents also served search warrants at the Jet Room, an Adelanto cannabis dispensary, and the San Bernardino offices of the Professional Lawyers Group, where the office of the Jet Room’s attorney, Philip E. Rios, is located.

Kerr, who was handcuffed and briefly detained by agents during the raid on his home, told a City Council meeting the following day: “For the record, before we move forward this evening, the events yesterday were indeed daunting. It was literally a very disturbing and frightening experience for my family and myself.”

The warrants were sealed by a federal court, and FBI spokeswoman Laura Eimiller told The Sun she could not comment on the case other than to say they did involve “an investigation into criminal activity.” No arrest warrants were issued. The investigation is also said to involve the Internal Revenue Service and the San Bernardino County District Attorney and sheriff’s department.

In a written statement, a city spokesperson said that Adelanto was unaware of the nature of the case but is “prepared to cooperate with any investigation being conducted.”

The first developments in the case broke in November, with the arrest by federal agents of then-Councilman Jermaine Wright. Later indicted in Riverside federal court, Wright is accused of taking a $10,000 cash bribe from an undercover FBI agent in exchange for his help rezoning an area of the city for a cannabis transportation business. (Of course, the business did not actually exist.)

Wright is also accused of paying another undercover FBI agent $1,500 to burn down his barbeque restaurant, Fat Boyz Grill, in an insurance scam. Wright pleaded not guilty and awaits trial on the charges, which is scheduled for August.

Since 2015, under Kerr’s leadership, Adelanto has worked hard to attract the cannabis industry. His efforts have drawn national attention to the once-sleepy town and led to what the Los Angeles Times called a “cannabis land rush” as investors and entrepreneurs sought to exploit Adelanto’s open-door disposition. The LA Times headlined that Adelanto aspired to become the “Silicon Valley of medical marijuana.”

The town seems to be well on its way. A 30-acre industrial park in Adelanto has been divided into 21 units slated to be sold to cannabis cultivators at $7.5 million each. Across the city’s 360-acre cultivation zone, former warehouses and factories have been sold to cannabis concerns and are being retrofitted. Adelanto has so far approved only large-scale medical marijuana cultivation, as California is not set to issue permits for large-scale “recreational” cultivation until 2023 — though some growers have circumvented this delay by amassing an unlimited amount of permits for small grows.

As legal processes unfold in the coming months, we shall get a clearer idea of whether Adelanto officials overshot their own ambitions by skirting the law, or if federal prosecutors have singled the town out as a means of putting a chill on California’s burgeoning legal cannabis economy.

TELL US, do you think there’s corruption in the California legal cannabis industry?

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The Best Drug Documentaries On Netflix Right Now

Everything you need to know about drugs, in one place.

Drugs, drugs, drugs. Across the world, drugs support entire economies, such as Big Pharma in America or the cocaine industry in several South American countries. Some drugs have less negative effects than others. For instance, everyone knows that it’s impossible to overdose on marijuana. Researchers found that a marijuana user would have to smoke 20,000 to 40,000 times the amount of THC rolled in a blunt to overdose on the drug. Not even Snoop could smoke that much in a day. On the other hand, prescription drugs like OxyContin and Percocet kill thousands of people every year. What makes the drug industry run? Why are certain drugs legal while others are banned? What is the history of crack cocaine, marijuana, or heroin? All of those answers can be found in these Netflix documentaries.While documentaries like Freeway: Crack in the system, Cocaine, and Drug Lords focus on the dealers and their effect on the communities around them, other docs like Take Your Pills and Heroin(e) showcase the effects of legal drugs around the nation. If all that sounds a little too heavy for you, docs like Super High Me and DMT: The Spirit Molecule are much more lighthearted watches. Whether you’re interested in learning more about your favorite drug, interested in the history of drugs you’ve never tried, or if you’ve never taken anything other than a Tylenol in your life, these documentaries are sure to grab your interest. Here are the ten best drug related documentaries on Netflix right now.P.S. We hope you enjoyed your 4/20.

1. Drug Lords

Pablo Escobar, Frank Lucas, and the Pettingill Clan are all featured in this docu-series that shows the inner workings of the biggest drug lords in history. This series goes in-depth and interviews the people closest to the drug lords, and there’s even an interview with Frank Lucas himself.

2. Dope

This docu-series gives viewers a look at the war on drugs from the perspectives of users, police, and drug dealers. The different perspectives give this series an intriguing standpoint, and it feels like more of a movie than a documentary.

3. Heroin(e)

Huntington, West Virginia is facing one of the worst opioid epidemics in U.S. history. The overdose rate in the town is about 10 times the average of the rest of the country. This documentary was nominated for an Academy Award, and it’s easy to see why. First responders are real heroes.

4. Freeway: Crack In The System

Have you ever wondered about the story of FreewayRick Ross? There’s a reason why the head of Maybach Music Group decided to use the legendary kingpin’s name as his moniker. This documentary focuses on dirty cops, a broken legal system, and the proliferation of crack cocaine.

5. Cocaine

Split into three parts, Cocaine takes an in-depth look at the cocaine trade in South America. Peru, Brazil, and of course, Colombia are put under the microscope. From the farmers to the drug lords, this documentary series shows how one of the most popular drugs on the planet is affecting the economies of these countries.

6. Take Your Pills

When people speak about drugs, they usually don’t think about Adderall or Ritalin. Big Pharma would probably prefer nobody watches this documentary, which focuses on people who use prescription drugs to help focus or become better in some way. Take Your Pills shows that perception pills are just as dangerous, if not more dangerous, than illegal drugs that you would never give a child.

7. The Legend Of 420

Most documentaries about drugs are very somber, but The Legend of 420 is comedic and enlightening. With Marijuana slowly becoming more acceptable across the nation (legally), it only makes sense to follow the source of the “green rush.” The history of marijuana, how it became illegal, and how far we’ve come since then, are fully explored in this documentary.

8. DMT: The Spirit Molecule

DMT (dimethyltryptamine) is the most intense psychedelic drug on the planet. It is produced naturally by the human brain and is found in most plant life. Dr. Rick Strassman’s research of the drug is put on full display in the documentary, which stars everyone’s favorite drug advocate, Joe Rogan.

9. Prescription Thugs

This is another documentary that Big Pharma may want you to stay away from. The statistics of overdoses, the effects of addiction, and the billions of dollars pharmaceutical companies make off the pain of other people are all fully explored in Prescription Thugs. If you thought cocaine dealers were bad, you have no idea.

10. Super High Me

This popular documentary put a spin on Super Size Me, which found one man showing the effects of eating only McDonald’s for 30 days straight. As you can imagine, smoking weed for 30 days straight had little to no negative effects on this documentary’s main character. In fact, he has several hilarious positive effects, such as a higher sperm count. Who knew.

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