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Online cannabis marketplace Leafly to go public

Online cannabis marketplace Leafly to go public

cannabis company Leafly is going public

In a historic year for Washington companies going public, Seattle-based Leafly, an online cannabis marketplace, will push the 2021 total even higher.

The company announced Monday it will go public through a special merger with New York-based Merida Merger Corp (Nasdaq: MCMJ). The transaction is expected to value Leafly at $385 million and add approximately $161 million of additional proceeds to the company.

The combined company will adopt Leafly’s name, and is expected to trade on Nasdaq with the ticker symbol “LFLY.” The company said it will list its shares once the merger is complete, likely sometime this fall.

According to PitchBook, 15 companies in Washington have gone public in 2021 so far, five more than last year’s total, and the most the state has seen in the last five years.

“Online retail shopping is in our DNA,” said Yoko Miyashita, CEO of Leafly, in an interview. “What you see is … this realization from consumers that say ‘Oh, (cannabis) is like any other retail product I can order online.”

Leafly earned $36 million in revenue last year, up from $30 million in 2019, according to its investor presentation. This year, revenue is expected to increase to $43 million, and grow roughly 50% annually through 2024.

Still, the company does not expect to be profitable until 2024, predicting it will lose at least $15 million in net income from 2021 to 2023.

The company makes money mostly through subscription fees it charges cannabis retailers who list their menus on Leafly’s platform. Customers place orders with retailers through the online site, but still have to go to the cannabis shop in person to pick up their product. Leafly does not take a commission from each transaction but does make money off ad sales from retailers.

The company said it has 4,600 paying retail subscribers, with approximately 55% of North American retail cannabis licensees on its platform and 125 million annual visitors.

Miyashita said cannabis retailers are “constrained” in their ability to advertise on major social media networks because of federal prohibition laws. Leafly’s platform, giving retailers and consumers an opportunity to reach each other, is “huge,” she said. “We have one of the largest audiences in cannabis.”

More states impose cannabis potency laws

More states impose cannabis potency laws

states are imposing cannabis potency restrictions and taxes

In addition to THC limits, some states are likely to adopt potency-related taxes.

Many states have already established or are planning to establish new laws for the legal cannabis industry based on the level of tetrahydrocannabinol (THC) in products.

In 2020, Illinois imposed a potency-related tax for all marijuana sales, followed by New York this past March. According to ABC News, Vermont plans to limit the amount of THC in products when the state opens up its legal cannabis market in 2022, with the percentage of THC in any amount of recreational pot set at 30% for flower-form marijuana and 60% for concentrates.

Virginia’s new legalization law aims to give the state’s future Cannabis Control Authority the power to establish THC limits in recreational products and put a cap on THC in medical marijuana. Currently, in states where it’s legal, marijuana is taxed on the established sale price or weight. But with the new laws in Illinois and New York, more states are likely to follow their lead and adopt potency-related taxes on recreational sales.

‘Recriminalization’ at play?

While these changes in state laws are aimed at discouraging the production and sale of highly concentrated cannabis products, the idea of calculating taxes based on potency is getting some pushback. According to the National Organization for the Reform of Marijuana Laws (NORML), this is a type of “recriminalization” of sorts. “[The] consumer demand for [high-potency] [cannabis] products is not going to go away, and recriminalizing them will only push this consumer base to seek out similar products in the unregulated illicit market,” said Paul Armentano, deputy director of NORML.

According to the United Nations Office on Drugs and Crime’s World Drug Report 2021, cannabis potency has quadrupled over the past two decades, while the percentage of adolescents who perceived the drug as harmful fell by as much as 40%.

Clearly, many states are taking this increase in cannabis potency as a serious issue. In fact, some states have already begun limiting the amount of THC milligrams contained in a single serving and packaged cannabis products, while others have prohibited the use of high-potency cannabis altogether. Whether these practices help effectively reduce the production, sale or harmful use of products containing high THC levels remains to be seen.

Denver gives first cannabis transporter license to felon who trafficked plant

Denver gives first cannabis transporter license to felon who trafficked plant

first cannabis transport license issued in Colorado

Two days after Denver issued its first-ever cannabis delivery license to a dispensary, the first transporter license was granted to a company whose co-founder suffered legal consequences for trafficking the substance decades ago.

Ari and Karina Cohen, co-founders of the cannabis transportation company Doobba, were awarded the license Thursday.

Applicants who qualify for Denver’s social equity designation are the only ones who can apply for cannabis transporter permits until July 1, 2024. After that, licensed cannabis stores can conduct their own delivery services.

Established cannabis stores must obtain a delivery license and they must contract with a transportation license holder until the July sunset date.

Ari qualified as a social equity transporter because he was convicted of a cannabis-related felony about 30 years ago, Karina confirmed.

“Our business model is to partner with very specific dispensaries,” she said. “Our biggest thing in this whole journey is to end cannabis prohibition.”

Colorado law specifies social equity applicants must meet one of three criteria as well as have at least a 51 percent ownership of the company.

The applicant must have lived in the state for at least 15 years between 1980 and 2010 in a census tract designated as an opportunity zone or disproportionate impacted area; or they, a parent, guardian, sibling, spouse or child were arrested, convicted or subject to civil asset forfeiture related to a cannabis investigation; or the applicant’s yearly income the year prior did not exceed 50 percent of the state’s median income.

She said Doobba has been talking to at least three cannabis companies about partnering with them for delivery services, and the company will start with two drivers.

Cohen said she’s not sure when her company will finalize a contract with a dispensary, but that she hopes to do so within the next couple of weeks.

She also said Doobba intends to help other social equity applicants navigate the licensing process because “it can be confusing.”

“Ari and I both have a lot of business acumen, and we want to pay it forward and help others stand up and be successful,” Cohen said.

Strawberry Fields received the first delivery permit for a licensed cannabis business on Tuesday, and representatives said they have been in talks with Doobba.

THC-O Acetate: Will it replace Delta 8 THC?

THC-O Acetate: Will it replace Delta 8 THC?

What is THC-O Acetate and is it like Delta 8 THC?

As more states begin banning and regulating Delta 8 THC, manufacturers are looking for alternatives to skirt the rules. Bring in THC-O Acetate.

Before we dive into the latest designer cannabinoid that aims to replace Delta 8 THC as it becomes banned in several states and regulated in some others, let’s briefly run through what Delta 8 THC is itself.

All cannabinoids, from CBD to THC and beyond begin as CBGA. Because of the shared molecular structure of cannabinoids, manipulating them is simpler than it may seem. While Delta-8 is relatively new, producers have been using these methods to manipulate cannabinoids for a long time to find exotic new cannabinoids.

While Delta-8 THC exists in a wide range of cannabis strains, it is in minuscule, trace amounts. To extract and purify Delta-8 from raw plant material with less than one percent of the targeted cannabinoid is unprofitable. This is why producers have begun converting other, more prevalent cannabinoids like CBD and Delta-9 THC into Delta-8.

Through a synthetic isomerization process, CBD is combined with a solvent to create Delta-8 THC. This is why the most popular products are vape cartridges and gummies. Cannabis cannot produce enough Delta-8 on its own.

Why Delta 8 THC is being banned

If you read the above section and started thinking, “That sounds pretty similar to those designer cannabinoids like spice that hurt a lot of people”, you would be on the right track. That is why over a dozen states have already banned Delta 8 THC.

Due to grey areas in the 2018 Farm Bill which legalized hemp and all of its derivatives (besides Delta 9 THC), producers of Delta 8 believe they technically aren’t breaking any laws. However unlike CBD which was immediately popular and thus regulated by the FDA for safety, Delta 8 has had no such treatment.

In 2020, the DEA released a set of rules for hemp production in the country. This ruling states that any naturally occurring tetrahydrocannabinols in the hemp plant that has a Delta 9 THC percentage below .3% is not a controlled substance under the Controlled Substance Act. In other words, it would seem like Delta 8 in the clear.

However the DEA also includes that for synthetically derived tetrahydrocannabinols (like Delta 8 which is created synthetically), the concentration of D9 -THC is not a determining factor in whether the material is a controlled substance. All synthetically derived tetrahydrocannabinols remain schedule I controlled substances. In other words, maybe Delta 8 is not so in the clear.

For the states that have already banned Delta 8 THC, it seems the easiest solution to a product that the FDA and DEA have made no mention of regulating. For producers however, THC-O Acetate is the solution.

What is THC-O Acetate?

While Delta 8 THC occurs in low concentrations in cannabis that must be extracted and isolated, THC-O Acetate — commonly called ATHC or THC-O — is not naturally occurring in the cannabis plant and can only be made synthetically.

THC-O is a man-made cannabinoid produced by using specific chemicals to acetylate THC. Acting as a metabolic prodrug for THC itself, THC-O works in the same manner as heroin does as a metabolic prodrug for morphine. That alone is enough to rub many cannabis users the wrong way, especially whole plant advocates.

THC-O Acetate can also be made from Delta 8 THC, so in states where it has been banned and producers may have a bulk supply of Delta 8, it can be converted relatively easily. And what truly makes THC-O so popular is the effects users feel.

Traditional THC Molecule:

Delta 9 THC vs THC-O AcetateTHC-O Acetate Molecule:

What is THC-O Acetate and is it safe?

A better high than Delta 9?

According to user reports and the little science behind it, THC-O Acetate has been shown to be two to three times stronger than Delta 9 THC. You read that right. THC-O can be 300% more potent than traditional Delta 9 THC.

Users have claimed that THC-O Acetate is a much more introspective and psychedelic experience compared to Delta 9 or Delta 8 THC, which is likely due to the extreme potency. Similarly to Delta 8 THC, THC-O can only be made through isolation, which means most products will be either a vape cartridge or edibles.

While for most, normal Delta 8 or Delta 9 THC does the trick just fine and taking such a concentrated product would be excessive, there is a real appeal for medical applications of THC-O Acetate. For some, traditional Delta 9 doesn’t provide enough relief from pain, anxiety or other issues.

Due to its potency, many believe that THC-O could be a great beneficial medicine for those who want to use cannabis but need a more concentrated dose that isn’t easily attainable through traditional consumption. With that said, THC-O Acetate is treated similarly to Delta 8 currently.

That means in states where Delta 8 has already been banned, you may be unable to have THC-O products delivered, or find them at smoke shops. However since there is so little information on THC-O, few states actually know about it, which means distributors may be able to get away with it for a while.

Is THC-O Acetate the new designer drug?

Of course for now it is too soon to say if THC-O is likely to end up in a similar grave to Spice or K2. These were synthetically created cannabinoid products that ended up hurting a lot of people, leading them to be banned across the country. However the way these products skirted the law was by minutely adjusting their chemical makeups every time one was banned.

Because the government would ban specific makeups of these products, small adjustments made them different products technically. It is always possible, being a fully synthetic creation, that THC-O befalls a similar fate. In grey markets, profits typically rise above safety. As competition grows, just like Delta 8 became more widespread, the same will likely happen to THC-O Acetate.

Producers will try to create stronger and cheaper versions of the drug, the latter effort being that which leads to danger. We all saw what happened when illicit market vape cartridge producers tried to cut costs by including Propylene Glycol and Vitamin E Acetate in their products. This resulted in hundreds of hospitalizations and even deaths.

With any grey or black market cannabis products, it is always on the user to ensure they are getting a safe and reliable product. If demand for THC-O Acetate grows enough, you can bet there will be a market for it.

However as a non-natural cannabinoid, THC-O isn’t measured with most testing methods used for cannabis currently. While some have claimed to created a reliable process for measuring THC-O, nothing has become the standard. Due to this it might be a while before there are truly reliable providers of THC-O products, but that hasn’t stopped consumers before, and likely won’t this time around either.

Denver grants first cannabis delivery license

Denver grants first cannabis delivery license

colorado cannabis delivery
Ever had one of those lazy days where you don’t want to get off the couch, even to buy cannabis? Soon, you won’t have to.
Strawberry Fields, a marijuana cultivation company with five Colorado dispensaries, including one at 3453 S. Yosemite St., was awarded Denver’s first cannabis delivery license Tuesday.

“I think it’s going to open up a lot of different avenues and outlets, more availability for our (medical cannabis) patients and consumers,” said Ethan Shean, chief retail operations officer for Strawberry Fields.

The service will not be immediately available, however.

Retail cannabis outlets must contract with companies that have obtained a cannabis transportation license, and none of those have been issued, although city officials told BusinessDen those applications could be approved within the next couple weeks.

Shean said the ability to deliver products will help Strawberry Fields connect with homebound medical cannabis patients and to people who have limited transportation.

“That is part of the inclusion that we want,” Shean said. “The customers and the patients who may not have access to come to one of our locations could be patients who rely on public transportation. We want to be accessible and convenient.”

Strawberry Fields opened in 2010 as a medical dispensary before adding recreational sales when it became legal in Colorado. The company is in communication with a few people who have applied for cannabis transportation licenses, Shean said.

State law governs how much cannabis can purchased per day, which is up to one ounce of “flower” per person or eight grams of concentrate with more than 800 milligrams of THC.

The city of Denver will only allow people who qualify as a “social equity applicant” to apply for medical and retail cannabis transportation licenses until July 1, 2024. Transporters can contract with multiple cannabis stores for their services. Deliveries must take place between 8 a.m. and midnight.

Existing retail and medical cannabis stores must contract with transportation licensees until July 1, 2024. After that, licensed dispensaries will be able to conduct deliveries themselves.

Study Reveals Humans Domesticated Cannabis 12,000 Years Ago

Study Reveals Humans Domesticated Cannabis 12,000 Years Ago

study shows domesticated cannabis could be over 12,000 years old

Cannabis was first domesticated around 12,000 years ago in China, researchers found, after analyzing the genomes of plants from across the world.

The study, published in the journal Science Advances on Friday, said the genomic history of cannabis  had been under-studied compared to other crop species, largely due to .

The researchers compiled 110 whole genomes covering the full spectrum of wild-growing feral plants, landraces, historical cultivars, and modern hybrids of plants used for  and drug purposes.

The study said it identified “the time and origin of domestication, post-domestication divergence patterns and present-day genetic diversity”.

“We show that cannabis sativa was first domesticated in early Neolithic times in East Asia and that all current hemp and drug cultivars diverged from an ancestral gene pool currently represented by feral plants and landraces in China,” it said.

Cannabis has been used for millennia for textiles and for its medicinal and recreational properties. The evolution of the cannabis genome suggests the plant was cultivated for multipurpose use over several millennia.

The current highly-specialized hemp and drug varieties are thought to come from selective cultures initiated about 4,000 years ago, optimized for the production of fibers or cannabinoids. The selection led to unbranched, tall hemp plants with more fiber in the main stem, and well-branched, short marijuana  with more flowers, maximizing resin production.

‘New insights’

The study was led by Luca Fumagalli of the University of Lausanne and involved scientists from Britain, China, India, Pakistan, Qatar and Switzerland.

“Our genomic dating suggests that early domesticated ancestors of hemp and drug types diverged from Basal cannabis“, around 12,000 years ago, “indicating that the species had already been domesticated by early Neolithic times”, it said.

“Contrary to a widely-accepted view, which associates cannabis with a Central Asian center of crop domestication, our results are consistent with a single domestication origin of  in East Asia, in line with early archaeological evidence.”