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Weedmaps agrees on $1.5 billion deal to go public

Weedmaps agrees on $1.5 billion deal to go public

by | Dec 12, 2020 | 420 News, Blog, Business

Weedmaps goes public with $1.4 Billion dollar deal

IRVINE, Calif.–(BUSINESS WIRE)–WM Holding Company, LLC (“WMH” or the “Company”) and Silver Spike Acquisition Corp. (Nasdaq: SSPK) (“Silver Spike”), a publicly-traded special purpose acquisition company, announced today a definitive agreement for a business combination that would result in WMH becoming a public company. The combined company will be led by Chris Beals, Chief Executive Officer of WMH, and is expected to remain listed on the Nasdaq Stock Market.

Company Overview

Founded in 2008, WMH operates Weedmaps, the leading online listings marketplace for cannabis consumers and businesses, and WM Business, the most comprehensive SaaS subscription offering sold to cannabis retailers and brands. The Company solely provides software and other technology solutions and is non-plant touching. WMH has grown revenue at a CAGR of 40% over the last five years and is on track to deliver $160 million in revenue and $35 million in EBITDA for 2020.

The cannabis market in the U.S. is expected to double over the next five years as the majority of U.S. adults support having legal access to cannabis. Despite these expectations of growth, cannabis users in the U.S. are still a small sub-segment of the population today, and retail density is still low across the majority of states with regulated legal cannabis markets. The regulations related to these markets are often complex and disparate across states as well as cities and counties within regulated states. Cannabis itself is a highly complex and non-shelf stable consumer product. These dynamics present a challenging and sometimes uncertain environment for consumers seeking legal cannabis products and for businesses selling to cannabis users while operating in a compliant fashion.

WMH addresses these challenges with its Weedmaps marketplace and WM Business SaaS subscription offering. Over the past 12 years, Weedmaps has grown to become the premier destination for cannabis consumers, with over 10 million monthly active users and over 18,000 business listings across every U.S. state, the District of Columbia and Puerto Rico with a legal cannabis market. Clients of the Company maintain listings in 9 international countries outside of the U.S. Through the Weedmaps website and mobile apps, WMH provides consumers with information regarding cannabis retailers and brands, as well as the availability of cannabis products, facilitating product discovery and online order-ahead for pickup or delivery by participating retailers.

The Company’s cloud-based WM Business SaaS subscription offering provides cannabis retailers with an end-to-end operating system to access valuable users, grow sales and scale their businesses at a compelling return-on-spend. This “business-in-a-box” functionality ranges from integrations supporting product menus that have online order-ahead, delivery order fulfillment software, data & analytics, a point-of-sale solution and a wholesale marketplace. WMH has been investing in and optimizing its WM Business software solution to also facilitate compliance for businesses amidst the complex, disparate and constantly evolving regulations governing the cannabis industry. Underlying this compliance functionality is a proprietary and sophisticated rules engine that is a core underpinning of the WM Business SaaS platform.

Chris Beals, WMH’s Chief Executive Officer, will continue to lead the Company along with the existing management team. Silver Spike’s CEO and Chairman, Scott Gordon, will join the merged company’s Board of Directors upon completion of the transaction.

Management Comments

“We are thrilled to partner with Silver Spike to transition WMH to our next phase of growth as a public company,” said Chris Beals, CEO of WMH. “We passionately believe in the power of cannabis and the importance of enabling safe, legal access to cannabis for consumers worldwide. With this merger, we will be able to continue scaling the Weedmaps marketplace in the U.S. and internationally in service of our users while expanding the functionality of our WM Business SaaS offerings in service of our clients.

Our partnership with Silver Spike will provide us a stronger platform to advance our mission to advocate for legalization, social equity and licensing in many jurisdictions while providing cannabis businesses with the tools needed to succeed in a highly complex world of regulations. I am grateful for the continued support from my teammates and investors and most thankful for the thousands – and what I expect over time to be hundreds of thousands – of business clients on our platform. We are energized by the opportunities to continue helping our business clients thrive as regulated cannabis markets expand and grow.”

 

Read the full press release on LA Cannabis News

How Oklahoma Became the Nation’s Hottest Weed Market

How Oklahoma Became the Nation’s Hottest Weed Market

by | Dec 8, 2020 | 420, 420 Culture & Travel, 420 News, Blog, Cannabis Law, Cannabis Law and Compliance, Culture, Politico

How oklahoma became the largest cannabis market in the country

Oklahoma entered the world of legal cannabis late, but its hands-off approach launched a boom and a new nickname: ‘Toke-lahoma.’

WELLSTON, Oklahoma—One day in the early fall of 2018, while scrutinizing the finances of his thriving Colorado garden supply business, Chip Baker noticed a curious development: transportation costs had spiked fivefold. The surge, he quickly determined, was due to huge shipments of cultivation supplies—potting soil, grow lights, dehumidifiers, fertilizer, water filters—to Oklahoma.

Baker, who has been growing weed since he was 13 in Georgia, has cultivated crops in some of the world’s most notorious marijuana hotspots, from the forests of Northern California’s Emerald Triangle to the lake region of Switzerland to the mountains of Colorado. Oklahoma was not exactly on his radar. So one weekend in October, Baker and his wife Jessica decided to take a drive to see where all their products were ending up.

Voters in the staunchly conservative state had just four months earlier authorized a medical marijuana program and sales were just beginning. The Bakers immediately saw the potential for the fledgling market. With no limits on marijuana business licenses, scant restrictions on who can obtain a medical card, and cheap land, energy and building materials, they believed Oklahoma could become a free-market weed utopia and they wanted in.
Within two weeks, they found a house to rent in Broken Bow and by February had secured a lease on an empty Oklahoma City strip mall. Eventually they purchased a 110-acre plot of land down a red dirt road about 40 miles northeast of Oklahoma City that had previously been a breeding ground for fighting cocks and started growing high-grade strains of cannabis with names like Purple Punch, Cookies and Cream and Miracle Alien.“This is exactly like Humboldt County was in the late 90s,” Baker says, as a trio of workers chop down marijuana plants that survived a recent ice storm. “The effect this is going to have on the cannabis nation is going to be incredible.”Oklahoma is now the biggest medical marijuana market in the country on a per capita basis. More than 360,000 Oklahomans—nearly 10 percent of the state’s population—have acquired medical marijuana cards over the last two years. By comparison, New Mexico has the country’s second most popular program, with about 5 percent of state residents obtaining medical cards. Last month, sales since 2018 surpassed $1 billion.
To meet that demand, Oklahoma has more than 9,000 licensed marijuana businesses, including nearly 2,000 dispensaries and almost 6,000 grow operations. In comparison, Colorado—the country’s oldest recreational marijuana market, with a population almost 50 percent larger than Oklahoma—has barely half as many licensed dispensaries and less than 20 percent as many grow operations. In Ardmore, a town of 25,000 in the oil patch near the Texas border, there are 36 licensed dispensaries—roughly one for every 700 residents. In neighboring Wilson (pop. 1,695), state officials have issued 32 cultivation licenses, meaning about one out of 50 residents can legally grow weed.

Read the rest of Chip Baker’s feature in POLITICO here!

Retail sales drive application surge among Missouri medical cannabis patients

Retail sales drive application surge among Missouri medical cannabis patients

by | Dec 5, 2020 | 420 News, Blog, Cannabis Law

Missouri medical cannabis

Patient, caregiver applications increase more than 60 percent as dispensaries open statewide.

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The continuing rollout of retail medical cannabis sales across Missouri appears to be fueling a new surge in prospective patient and caregiver interest, state records show.

On Monday, the state Department of Health and Senior Services reported approving nearly 70,000 patients and caregivers — with another 17,000-plus application (including those deactivated or that expired without renewal) pending review.

The six weeks since the state’s first sale of medical cannabis by St. Louis County dispensary N’Bliss on Oct. 17 have seen a weekly average of more than 1,600 new patient and caregiver applications to the state.

By comparison, the state had received roughly 1,000 such new applications each week since the program’s June 2019 start. Excluding the shortened holiday week of Thanksgiving, the short-term increase tops 70 percent.

“As the Missouri medical cannabis industry literally takes shape before our eyes, it’s no surprise that more patients and caregivers are signing up,” said Andrew Mullins, executive director of MoCannTrade (Missouri Medical Cannabis Trade Association). “Patient participation has already exceeded levels seen in other states at similar junctures, and we fully expect interest to only grow as more businesses come online.”

As of Wednesday, Nov. 25, the state had approved 30 medical cannabis businesses for operation, including 16 retail dispensaries and 10 cultivation sites. Another 35 businesses are awaiting final state inspections.

The end-of-2020 green rush also means the rollout of thousands of new jobs for Missourians. Through Monday, DHSS reports receiving more than 900 agent ID application requests as part of the screening process for medical cannabis workers, with 857 approved to date.

Read the full story on Greenway

US House passes historic bill to legalize cannabis at federal level

US House passes historic bill to legalize cannabis at federal level

by | Dec 4, 2020 | 420 Culture & Travel, 420 News, Blog, Business, Cannabis Law, Culture, Hemp Law

US house passes historic cannabis legalization bill MORE Act

In a groundbreaking vote, the U.S. House of Representatives on Friday passed a comprehensive bill that removes marijuana from the Controlled Substances Act, ending the federal government’s decades-old prohibition on the plant.

Lawmakers in effect voted to legalize marijuana by approving the social justice-focused Marijuana Opportunity, Reinvestment and Expungement (MORE) Act by a margin of 228-164 after an hour of debate. A handful of Republicans voted for the measure.

The vote – while largely symbolic because the bill still must pass the Senate – comes only two days after the United Nations took the historic step of reclassifying cannabis as a less dangerous drug.

Opponents of the MORE Act criticized Democrats for prioritizing marijuana during the coronavirus crisis and voiced concerns about health risks for youth.

The MORE Act

The legislation could potentially open up an already fast-growing, multibillion-dollar industry to billions of dollars of additional business opportunities and interstate commerce over time.

However, the vote Friday will prove to be emblematic unless Democrats gain control of the U.S. Senate by winning two run-off races in Georgia on Jan. 5.

Even then, the more conservative Senate might be resistant to such a major change in federal marijuana policy.

“I have been waiting for this historic moment for a long time. It is happening (Friday) because it has been demanded by the voters, by facts and by the momentum behind this issue,” U.S. Rep. Earl Blumenauer, co-chair of the Congressional Cannabis Caucus and a Democrat from Oregon, said in a statement distributed late Thursday.

The House Judiciary Committee advanced the bill a year ago in what then was seen as a landmark development.

What’s misunderstood about the MORE Act

The measure wouldn’t create a federal licensing or federal regulatory framework. States would, however, continue to regulate marijuana as they see fit, without federal interference.

“The MORE Act decriminalizes and deschedules cannabis,” said Randal Meyer, the executive director of the Global Alliance for Cannabis Commerce.

“It would allow state-legal businesses to operate in a federally legal environment, with business-tax deductibility and access to legal processes, and permit states to set their own cannabis policy, be it total prohibition or not.”

Steve Fox, strategic adviser to the Cannabis Trade Federation, said: “The MORE Act is a wonderful piece of legislation that would end cannabis prohibition at the federal level and take some critical and much needed steps toward restorative justice. It would provide major benefits to cannabis businesses, which would become legal at the federal level.”

Businesses, he said, would have greater access to financial services and be freed from Section 280E of the federal tax code, which currently prevents marijuana companies from taking deductions for ordinary business expenses.

“The MORE Act does not, however, establish a regulatory framework for cannabis at the federal level. So, from an industry perspective, the MORE Act is just one step in a longer process,” Fox said.

Vincent Sliwoski, a cannabis attorney at Harris Bricken in Portland, Oregon, echoed Fox, noting that licensed marijuana commerce will remain in place unless changed by states or local jurisdictions.

“What the MORE Act actually does is remove marijuana from control under the federal Controlled Substances Act while adding a 5% federal excise tax and tacking on key provisions like expungement for past marijuana convictions under federal laws. As with alcohol, there will be no federal business licensing element.”

He also emphasized that there would be “a lot of benefits here for state-licensed cannabis businesses, including everything from banking options to tax relief under (Internal Revenue Service) code 280E to federal trademark availability.”

Experts also note that they expect a number of federal agencies, such as the Food and Drug Administration, the Federal Trade Commission, the Department of Treasury and the Department of Agriculture, to weigh in on various issues, including health claims, cultivation standards and banking issues.

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Read the full story on MJ Biz Daily

United Nations votes to reschedule cannabis in historic vote

United Nations votes to reschedule cannabis in historic vote

by | Dec 4, 2020 | 420 News, Blog, Cannabis Law, Cannabis Law and Compliance, Hemp Law

UN cannabis vote to list as medicine

The United Nations Commission on Narcotic Drugs (CND) on Wednesday accepted a World Health Organization (WHO) recommendation to remove cannabis and cannabis resin from Schedule IV of the 1961 Single Convention on Narcotic Drugs.

The historic vote in Vienna could have far-reaching implications for the global medical cannabis industry, ranging from regulatory oversight to scientific research into the plant and its use as a medicine.

The eagerly awaited approval of Recommendation 5.1 had a slim majority in favor with 27 votes for, one abstention and 25 votes against.

The CND – the main drug policymaking body within the United Nations – turned down all five remaining recommendations.

The passage of Recommendation 5.1 carries broad symbolic significance for medical cannabis, as it could help boost medical cannabis legalization efforts around the globe now that the CND tacitly acknowledges the medical utility of the drug.

“The medical cannabis wave has accelerated in recent years already, but this will give it another boost,” Martin Jelsma, drugs and democracy program director at the Netherlands-based Transnational Institute, told Marijuana Business Daily.

“And for those countries that basically mirror the U.N. scheduling in their domestic legislation, it may lead to national descheduling and remove obstacles to use cannabis for medical and research purposes.”

The vote could encourage countries to reevaluate how cannabis is classified on their own lists of narcotic drugs, potentially paving the way for more research into medical marijuana and its use as a treatment for a variety of ailments and conditions.

“While the move doesn’t totally free the plant from treaty control, it’s a giant step toward the normalization of cannabis in medicine above all but also in our societies generally,” independent researcher Kenzi Riboulet-Zemouli of CND Monitor told MJBizDaily.

“Decades of efforts have been necessary to remove cannabis from Schedule IV, with implications that will slowly but surely be seen over the next decades.”

Drugs in Schedule IV of the 1961 treaty – where, until Wednesday, cannabis sat alongside heroin – are a subset of those already in Schedule I.

Schedule I – which includes fentanyl – already requires the highest levels of international control.

The schedules of the international drug-control conventions categorize drugs considering their medical utility versus the possible harm they could cause.

Only the 53 current member states of the CND had an opportunity to vote, but the decision applies to all signatories of the international drug control conventions.

What should not be expected is a loosening of international controls governing medical cannabis.

 

Read the rest of the story from Marijuana Business Daily