NEW YORK, Nov. 21, 2023 – PRESS RELEASE – The Cannabist Co. Holdings Inc., one of the largest and most experienced cultivators, manufacturers and retailers of cannabis products in the U.S., announced its partnership with AiroBrands, a company focused on proprietary inhalation products.

The partnership will initially bring Airo’s cannabis vaporization brand to The Cannabist Co.’s three Columbia Care dispensaries in Delaware beginning this week. Airo will be available through the company’s wholesale channels in the coming weeks. The brand will continue to roll out across the Cannabist Co. dispensary network in markets such as Virginia, West Virginia, and Pennsylvania over the next few months, pending regulatory approval.

“Airo is one of the most recognized and innovative vaporization brands, and we are thrilled to bring their high-performance vaporizers and unique oils into our dispensaries. Their products, which offer a consistent and intuitive experience, align perfectly with our mission to provide unmatched, superior quality for anyone who walks into our dispensaries,” said Jesse Channon, The Cannabist Co.’s chief commercial officer. “We are excited to bring these amazing products to additional markets as we continue to meet the expanding needs of our patients and customers as the cannabis industry grows and evolves.”

“We’re excited to be able to provide Delaware with our quality products and couldn’t have found a better partner than The Cannabist Co. The quality experience provided by their dispensaries are a great match with Airo,” Airo Brands CEO Richard Yost said.

Airo Brands will debut its premium vapor systems AiroPro, AiroSport and AiroX Disposable, as well as its unique AiroPod cartridge oil formulations including its Strain Series, Artisan Series and Live Flower Series. Strain Series 0.5-gram cartridge offerings will include Cherry AK Sativa, Blue Dream Hybrid and Northern Lights Indica. The Artisan Series 0.5-gram cartridge offerings will be Black Mamba Sativa, Mystical Melody Hybrid and Midnight Moon Indica. The Live Flower Series 0.5-gram cartridge features Jack Fruit Sativa, Gelonade Hybrid and Lemon Jet Fuel Gelato Indica.

For more information, visit cannabistcompany.com and Airobrands.com.

Similar aged markets, New York launched its commercial adult-use retail program via one social equity licensee on Dec. 29, 2022, while Missouri launched adult-use sales via existing medical cannabis operators on Feb 3, 2023.

New York

Now with 27 licensed adult-use retailers—including 22 stores and five delivery-only operators—New York eclipsed $104 million in adult-use sales through the first 10 months of the year, according to the state’s Office of Cannabis Management (OCM).

In addition, New York regulators have approved 54 cannabis grower showcases (CGS) allowing licensed growers and processors to work with retailers to set up temporary shops and showcase their products at events like farmers markets where consumers can make cannabis purchases. These events have provided $3.4 million in sales, OCM Director of Policy John Kagia said while presenting his sales report during the Cannabis Control Board’s regular meeting Nov 17.

Cannabis flower made up 52% of sales at these CGS events, while edibles (20%), prerolls (11%), vapes (11%) and concentrates (5%) were the other leading product categories.

Source: New York Office of Cannabis Management

Despite few stores/events for New Yorkers 21 and older to purchase regulated cannabis products, Kagia said surpassing $100 million in sales is a “critical milestone” for the state market.

“I think it continues to reflect incredible retail velocity,” he said. “And with the extraordinary effort that our retailers have put forward in getting their stores up, securing diverse products and getting customers in, we continue to see strong growth amongst the operators that we currently have open.”

Although unlicensed cannabis stores have far outpaced the regulated adult-use market in New York—including outnumbering licensed dispensaries by an 800-to-1 ratio in New York City, according to an August estimate from the New York City Council—product and brand diversity will continue to drive consumers to regulated stores, Kagia said.

As of November, New York’s licensed retailers on average are carrying more than 50 brands, and 72% of these dispensaries have more than 200 SKUs in their stores, according to OCM.

“We think this is one of the critical differentiators between the legal market and the unregulated market—the number of SKUs that an individual store can carry,” Kagia said. “We’re certainly not seeing a great deal of unlicensed shops that have this level of diversity of product. And we think this is one of the things that is having customers come back into the legal store is the breadth of choice that allows them to choose products that reflect their unique use cases.”

In addition, Kagia said New York’s regulated market is just experiencing the beginning of a “rich brand diversification” that’s only going to accelerate with more cultivation, processor and distribution licenses being issued in the future. Currently, there are 200-plus brands in the market, he said.

RELATED: 5 Tips for Creating a Winning License Application in New York

Missouri

Meanwhile, Missouri cannabis sales have largely been rocking and rolling since the adult-use retail market commenced in early February.

The state’s licensed retailers reported $833.4 million in adult-use sales and $269 million in medical cannabis sales through October, passing the $1.1 billion mark so far in 2023, according to the Missouri Department of Health and Senior Services (DHSS).

Notably, Missouri sales have experienced a three-month skid since a $123.2 million peak in July, decreasing 8% to $113.1 million in October, mostly due to a shrinking medical market. All cannabis sales since medical retail operations commenced in late 2020 total a cumulative $1.7 billion, according to DHSS.

Source: Missouri Department of Health and Senior Services

With these sales figures, Missouri is now projected to be the sixth-largest cannabis market among adult-use states in the nation in 2023, behind California, Michigan, Illinois, Massachusetts and Colorado, according to Cannabis Business Times research and analytics.

Notably, Missouri’s market now includes 203 licensed and operational adult-use dispensaries as of Nov. 16, according to the DHSS.

This equates to roughly 3.3 dispensaries per 100,000 people, representing almost 30 times greater access to the regulated market than New York’s roughly 0.1 dispensary per 100,000 people.

Taking population into account, Missouri is averaging $14.96 in monthly adult-use cannabis sales on a per-capita basis, while New York is averaging $0.53 in adult-use sales per capita per month in 2023—the lowest in the nation among adult-use states, according to CBT research and analytics.

Putting this into perspective, Missouri’s adult-use cannabis sales in 2023 are more than eight times that of New York’s despite having one-third the population.

In the wake of the U.S. Department of Health and Human Services (HHS) recommending that cannabis be reclassified as a Schedule III drug under the Controlled Substances Act (CSA), U.S. Sen. Kirsten Gillibrand, D-N.Y., is calling on the Drug Enforcement Administration (DEA) to do just that.

Gillibrand announced Nov. 17 that she sent a letter to DEA Administrator Anne Milgram, urging her to consider rescheduling cannabis from Schedule I to Schedule III.

“While I continue to believe that marijuana should be descheduled entirely, I am urging the DEA to, at a minimum, consider rescheduling it from Schedule I to a Schedule III substance,” Gillibrand said in a public statement. “Marijuana is simply not comparable to other Schedule I substances like heroin, LSD and MDMA. Moreover, marijuana enforcement has for decades disproportionately targeted communities of color. This means that people of color are more likely to have criminal records for marijuana possession and to face needless barriers to employment, housing and educational opportunities as a result. It is past time to end overly restrictive federal marijuana policy and I urge the DEA to do so immediately.”

In her letter, Gillibrand urged Milgram to take the HHS’ rescheduling recommendation into full consideration. She wrote that the CSA’s Schedule I classification is the most restrictive and includes substances with “no recognized medical utility and a high potential for abuse.”

“Marijuana is currently categorized as a Schedule I substance, which has severely hindered our ability to gather the necessary data to make well-informed decisions regarding its legal status,” Gillibrand wrote. “Marijuana is considered to have a lower potential for harm compared to Schedule I substances like heroin. The acute health risks and potential addiction associated with marijuana use are lower than the risks associated with substances like cocaine or heroin, with it being virtually impossible to fatally overdose on marijuana alone. And unlike cocaine, marijuana is already legal for medical use in 38 states and the District of Columbia and in 24 states for decriminalized adult use.”

By reclassifying cannabis as a Schedule III substance, she wrote, it would classify it as having “accepted medical use” and pushes it closer to being a legally available prescription drug. A Schedule III classification would also encourage investment into medical cannabis research, Gillibrand said in the letter.

“Medical marijuana has been proven to effectively address chronic pain, nerve pain and post-traumatic stress disorder—among other uses,” she wrote. “Rescheduling marijuana to Schedule III will foster scientific research that can help further safe and effective marijuana use and marijuana-derived therapeutic benefits.”

Gillibrand noted in the letter that she commends President Joe Biden’s administration for its “commitment to addressing the systemic and racial injustices of federal marijuana policy,” referencing Biden’s October 2022 announcement that he would pardon thousands of federal cannabis offenses and review how cannabis is scheduled under the CSA.

“Harsh penalties have deliberately stigmatized marijuana and disproportionately targeted minority communities for decades,” Gillibrand wrote. “Selective policing and racial profiling have led to higher arrest rates among people of color, particularly among Black and Brown communities, even when marijuana usage across different racial groups remains comparable. These disparities extend into our judicial system where harsher sentences disproportionately affect people of color. Criminal records for marijuana possession impose needless barriers to employment, housing, and educational opportunities, contributing to cycles of multigenerational poverty.”

Gillibrand concluded her letter by saying that the DEA should act “with great urgency” to align the agency with HHS’ recommendation to reschedule cannabis to increase medical cannabis research and rectify the “deep racial disparities” that have disproportionately harmed Black and Brown communities.

Gillibrand is not the only member of Congress calling on the DEA to rethink its cannabis policy; a group of 31 bipartisan House lawmakers sent a separate letter last month to Milgram, emphasizing the ongoing review of how cannabis is scheduled as “a necessary step in the work to end the federal government’s failed and discriminatory prohibition of cannabis.”

That letter, signed by Reps. Earl Blumenauer, D-Ore., Dave Joyce, R-Ohio, Barbara Lee, D-Calif., and Brian Mast, R-Fla., among others, calls on the DEA and other relevant agencies to “recognize the merits of descheduling and work with congressional leaders to ensure this happens.”

In addition, two coalitions for comprehensive cannabis reform, the Marijuana Justice Coalition and the Cannabis Freedom Alliance, released a Nov. 2 letter calling for Biden to support removing cannabis from the Controlled Substances Act entirely.

Maine officials recently conducted audit testing of 120 samples from the state’s medical cannabis program and found that 50 of them—or 42%—were contaminated with mold, pesticides, heavy metals and more.

While testing is voluntary in Maine’s Medical Use of Cannabis Program (MMCP), the report resulting from the audit conducted by the Office of Cannabis Policy (OCP) revealed that nearly half of the samples tested would have resulted in failed tests under mandatory testing standards in Maine’s adult-use market.

Some of the 120 samples failed testing for more than one contaminant, while some failed for multiple contaminants.

Thirty individual samples failed for yeast and mold, according to the report, while 21 failed for pesticides. Three individual samples failed for heavy metals, and one failed for filth and foreign materials.

There were 12 samples that failed in multiple categories and/or for multiple analytes within a given category, according to the report. There were four samples that failed for multiple pesticides, resulting in a total of 26 pesticide failures. Another sample failed for multiple heavy metals, resulting in four total heavy metal failures.

Of the pesticides detected, myclobutanil was the most prevalent with eight of the samples exceeding 200 parts per billion (ppb), the pass/fail threshold for Maine’s adult-use cannabis program. One of the samples’ myclobutanil concentration was as high as 58,600 ppb, according to the report, which is 293 times the pass/fail threshold in Maine’s adult-use market.

Regulators said in the report that “public conversations in Maine about mandatory testing have been deeply contentious, have included disinformation about cannabis product testing and its accuracy, and have lacked reliable, rigorous and sound data on contamination in Maine’s medical cannabis supply chain.”

RELATED: Maine Strikes New Medical Cannabis Regulations Following Industry Backlash

The 49-page report “aims to bring data to the conversation, as well as fill information gaps around the impacts of cannabis contaminants and the requirements for certified cannabis testing facilities (CTFs) to operate and become licensed in Maine,” regulators said.

The report also identifies several “policy challenges” in the MMCP, including the lack of an inventory tracking system to address contaminated products in the market, as well as the OCP’s “insufficient authority” to seize and destroy contaminated cannabis. Regulators also flagged confidentiality protections for participants in the MMCP that bar the OCP from disclosing which businesses have contaminated products on the market as problematic.

Regulators said in the report that the MMCP “falls critically short of national standards around mandatory contaminant testing, which puts the state’s most vulnerable medical patients at risk of complicating their medical conditions and experiencing symptoms of contamination that can be mistaken for symptoms associated with their condition.”

Within the report, the OCP describes how the state’s medical cannabis policy impacts the state’s more than 106,000 registered patients and highlights the need for policy reform to help protect patients.

NEW YORK, Nov. 20, 2023 – PRESS RELEASE – Ascend Wellness Holdings Inc., a multistate, vertically integrated cannabis operator focused on bettering lives through cannabis, announced the opening of an Ascend dispensary outlet, located at 39 W North Ave., Northlake, Ill. This milestone represents the company’s commitment to serving the growing cannabis community in Illinois and providing high-quality, affordable products to its valued customers. The dispensary marks Ascend’s 10th in the state and 32nd across its seven-state footprint. 

The Northlake Ascend dispensary outlet promises to provide the same exceptional experience, diverse product selection, and outstanding customer service that the company is known for. The spacious and modern store environment is designed to create a welcoming atmosphere for both experienced and novice cannabis users. The dispensary will be open seven days a week from 9 a.m.-9 p.m.

This is Ascend’s second outlet in the state and will offer everyday low-priced products and “flower at a fraction” with products ranging from premium flower strains to edibles, topicals and accessories.

“We are incredibly excited to open our tenth dispensary in Illinois. This milestone is a testament to the hard work and dedication of our team, as well as the continued support of our loyal customers,” Ascend Chief of Stores Rick Wilkins said. “Our goal has always been to provide safe and convenient access to the benefits of cannabis, and we look forward to serving the people of Illinois from this new location.”

Grand Opening Events

Ascend will be celebrating the opening of this dispensary with a special event in the coming weeks. Attendees can expect exclusive discounts, educational sessions, and giveaways to mark the occasion. For more on the grand opening events, check out Ascend Illinois’ Instagram social page, @ascend.il.

Ascend Rewards Program

Ascend customers can also join the free Ascenders Club, where shopping becomes even more rewarding. Highlights include earning one point for every $1 spent at Ascend with bonus points for referring friends. Customers can sign up in store or online at www.letsascend.com.

NORWOOD, Mass., Nov. 20, 2023 – PRESS RELEASE – MariMed Inc., a leading multistate cannabis operator focused on improving lives every day, announced that it closed a $58.7 million secured credit facility with a U.S. chartered bank on Nov. 17, 2023.

“I am delighted to announce the closing of this debt refinancing, which will generate significant cash savings,” MariMed CEO Jon Levine said. “Securing a lower rate, when interest rates continue to rise, is the result of the financial discipline we have displayed over the past decade. Importantly, we are pleased there is no warrant or other equity component resulting in dilution to our shareholders.”

Levine said, “By paying off the Chicago Atlantic loan, we were also able to unencumber our operating assets in Illinois, Ohio and Delaware, as well as our branded products, providing additional levers for future term loans at attractive rates if we choose. Additionally, the credit facility bolsters our ability to continue executing our strategic plan, particularly as it relates to growing the company through mergers and acquisitions. There are many attractive opportunities for accretive deals to be made in our industry, and we intend to explore any that will increase shareholder value.”

Highlights of the refinancing deal include:

• A 10-year, $58.7 million Construction to Permanent Commercial Real Estate Mortgage (CREM) loan.
• Interest at a lower fixed rate. After the first five years, the rate will be reset for the remaining five years.
• Interest only payments for the first 12 months. After the first 12 months, payments will be based on a 20-year amortization schedule.
• The loan is secured solely by the company’s Maryland and Massachusetts operating assets and real estate holdings.
• The company’s other operating assets and key brands such as Betty’s Eddies and Nature’s Heritage are now unencumbered with the payoff of the Chicago Atlantic term loan.
• The terms of the transaction do not include warrants or other equity or dilutive instruments.
• The loan proceeds were used to:
• Pay off the existing term loans with Chicago Atlantic and Bank of New England and a sellers note from the Ermont acquisition, which in the aggregate totaled approximately $46.8 million.
• The remaining funds will be held in escrow by the lender to complete the expansion of the company’s Hagerstown, Md., cultivation facility. Any unused proceeds will be released to the company after completion of the cultivation facility expansion.

“The principal and interest savings of $4.7 million in the first year, and $3.5 million a year for the four years thereafter, will significantly improve cash flow from operations going forward, and provide funds that can be used for acquisitions if we choose,” Levine said. “Including this facility, our lower blended interest rate¹ and new debt facility represent a debt/EBITDA ratio of 2.5X, which is among the lowest in the cannabis industry and speak to our ability to generate significant positive cash flow from operations.”

^1. The blended interest rate is calculated as the weighted average rate of all interest-bearing loans, mortgages, and seller notes.

The California Department of Cannabis Control (DCC) put an embargo on three product batches in the state’s regulated market that it suspects were potentially adulterated.

The department sent a letter Nov. 9 warning cannabis program licensees that the continued sale of these products would violate the Medicinal and Adult-Use Regulation and Safety Act (MAURSA), state law governing the industry, as first reported by SFGATE and confirmed by Cannabis Business Times with DCC Media Relations Manager David Hafner.

The products batches include:

• Any and all “SHARK BITE – PACIFIC CHEMISTRY” Pre-Rolls from METRC Batch No. 1A406030000465D000001314;
• Any and all “WEST COAST CURE – BISCOTTI” Disposable Vape Pens from METRC Batch No. 1A4060300009222000010348;
• Any and all “CRU CANNABIS – MAI TAI” Disposable Vape Pens from METRC Batch No. 1A40603000020EC000009978.

“These items may not be removed or disposed of by sale or otherwise until permission for removal or disposal is given by the department or a court,” DCC officials wrote in the letter obtained by CBT. “The department is diligently conducting its investigation and will provide you with further information as it becomes available.”

According to two specific subsections under the California Business and Professions Code (BPC) listed by the DCC in the letter, department officials suspect the embargoed product batches could:

1. Bear or contain a poisonous or deleterious substance that may render them injurious to users under the conditions of use suggested in the labeling or under conditions that are customary or usual; or
2. Bear or contain a substance that is restricted or limited, and the level of substance in the product(s) exceeds the limits specified pursuant to state regulation.

In addition to testing chemical profiles for cannabinoids to ensure product compounds are labeled properly, California state law requires cannabis and cannabis products to be tested by a licensed laboratory prior to sale to ensure contaminants like molds, residual solvents and pesticides are within acceptable limits, according to DCC.

In addition, cannabis is tested for foreign material, including, but not limited to, hair, insects, or similar or related adulterant.

The DCC was required under the California BCP to establish standardized testing methods at the onset of 2023 for the industry.

“The ultimate goal is protecting public health and safety by providing consumers accurate and consistent information on the cannabis they purchase,” DCC Director Nicole Elliott said prior to implementing the standardized test methods.

With products from the three embargoed batches having already been on dispensary shelves in California, the DCC could determine if a recall is necessary as part of its investigation, Hafner told SFGATE.

Lawmakers sent a letter to federal officials Nov. 14 requesting that they update “out-of-date” guidance on providing banking tools to cannabis business owners convicted of past cannabis-related crimes.

The letter, sent by a group of 20 Democratic members of the House and Senate to the U.S. Department of the Treasury and the Financial Crimes Enforcement Network (FinCEN), references FinCEN’s 2014 guidance that the lawmakers said “unnecessarily” red flags businesses whose owners have been convicted of cannabis crimes that are no longer criminalized at the state level.

The guidance, titled “BSA Expectations Regarding Marijuana-Related Businesses,” directs financial institutions to consider various “red flags” before providing services to cannabis-related businesses in order to help identify if a business is engaged in an activity that violates state law or implicates one of the Department of Justice’s (DOJ) cannabis-related enforcement policies, which are outlined in the DOJ’s 2013 Cole Memo. (However, in 2018, then-Attorney General Jeff Sessions issued his own memorandum that rescinded the Cole Memo, leaving the DOJ’s prosecutorial motives and powers over state-legal cannabis businesses in a gray area ever since.)

One of FinCEN’s red flags states: “Review of publicly available sources and databases about the business, its owner(s), manager(s), or other related parties, reveal negative information, such as a criminal record, involvement in the illegal purchase or sale of drugs, violence, or other potential connections to illicit activity.”

The lawmakers, led by U.S. Sens. Elizabeth Warren, D-Mass., Jeff Merkley, D-Ore., and Raphael Warnock, D-Ga., and U.S. Rep. Earl Blumenauer, D-Ore., argued in the letter that this red flag would include all past cannabis-related criminal records and involvement in the illegal purchase and sale of cannabis, regardless of whether such action is now legal under state law.

“As a result, if a business owner, manager, or other related party has a conviction for simple marijuana possession, banks could view that conviction as a reason not to provide financial services—including banking services and loans to the business—even in states where marijuana possession is no longer illegal,” the lawmakers wrote in the letter, which was addressed to Secretary of the Treasury Janet Yellen and FinCEN Director Andrea Gacki. “As noted by Cat Packer, Vice Chair of the Cannabis Regulators of Color Coalition, there is real ‘concern that past marijuana criminal records, especially those that have been expunged or are for activity that has been pardoned or is no longer prohibited under state law, will … serve as an automatic indication that a business may be engaged in illegal activity.’”

The lawmakers said that under this guidance, a cannabis business owner with a past cannabis-related conviction may be able to receive a cannabis license “on paper,” but may be unable to access a bank loan to grow the business, for example, because he or she is considered a high-risk customer.

By being forced to operate as a cash-only business, these businesses expose their workers to safety risks, the lawmakers argued.

“This disproportionately harms Black- and Brown-owned businesses, whose owners are more likely to have a marijuana-related conviction, though they are not more likely to have violated marijuana use laws,” they wrote in the letter.

Ultimately, the lawmakers argued that FinCEN’s specified red flags “bake a penalty for nonviolent marijuana activity into lending decisions” as states continue to legalize medical and adult-use cannabis within their jurisdictions. They wrote in the letter that state and local cannabis regulators across the country have cited FinCEN’s red flag policy as a “significant issue” that affects their efforts to license and regulate cannabis businesses.

As such, the lawmakers urged FinCEN to revise its policy and ensure that its guidance does not bar states from providing business opportunities to entrepreneurs with prior cannabis-related convictions.

“The updated guidance should clarify that if a marijuana-related act has been expunged, pardoned, is no longer illegal under state law, or is not disqualifying for obtaining a state marijuana license or permit (i.e., ‘state-sanctioned marijuana activity’), then financial institutions should not consider that offense a ‘red flag’ when conducting customer due diligence of marijuana businesses,” the lawmakers wrote. “This would be an important step to promote fairness in the provision of financial services to marijuana businesses that participate in state-sanctioned marijuana activity.”

FinCEN doesn’t need to wait for new legislation to update its 2014 guidance, the lawmakers said, as the guidance says that the list of red flags “may be updated in future guidance.” The lawmakers also noted that FinCEN doesn’t need to wait for the DOJ’s decision on whether to reschedule cannabis based on the Department of Health and Human Services’ recommendation; they claimed that rescheduling under the Controlled Substances Act “would have zero impact on prior marijuana convictions at either the federal or state level.”

“FinCEN can and should update its guidance now to ensure that the guidance does not impede state efforts to allow owners who were previously involved in the illegal purchase or sale of marijuana to participate in state-sanctioned marijuana activity,” the lawmakers wrote. “For example, the guidance could explicitly state that ‘any conviction for marijuana activity that has been expunged, pardoned, is no longer illegal under the law of the state where the business is located, or is no longer disqualifying for obtaining a state marijuana license or permit should not be considered an indication of criminal activity.’”

FinCEN should also take action to update its red flag directing financial institutions to consider whether “the business, its owner(s), manager(s), or other related parties are, or have been, subject to an enforcement action by the state or local authorities responsible for administering or enforcing marijuana-related laws or regulations,” the lawmakers wrote. The updated guidance, they argued, should clarify that these prior enforcement actions should not result in a red flag if they targeted cannabis-related activities that are now permitted under state law.

“These clarifications would help ensure that all marijuana business owners have fair access to banking services,” the lawmakers wrote. “Until FinCEN does so, these business owners will continue to face unnecessary barriers to accessing financial services, simply for acts now legal within their states.”

The lawmakers are calling on Yellen and Gacki to answer the following questions by a Dec. 4 deadline:

1. What steps, if any, is FinCEN taking to update its 2014 guidance in light of marijuana decriminalization, expungements, and/or pardons at the state level?
2. What steps, if any, is FinCEN taking to update its 2014 guidance in light of state laws allowing or prioritizing marijuana business licenses or permits for those with past marijuana-related convictions?
3. Is FinCEN planning to update the 2014 guidance to make clear that convictions for state-sanctioned marijuana activity should not be considered a “red flag?”
   1. If so, what is FinCEN’s timeline for updating the guidance?
   2. What stakeholders, if any, is FinCEN speaking with about updates to its guidance?
4. Has FinCEN studied the impact of the 2014 guidance on lending patterns, including trends in the size of marijuana businesses that receive bank loans and the race/ethnicity of business owners? If yes, what has FinCEN learned from studying the impact of the 2014 guidance?
5. Has FinCEN gathered data on the number of business owners who are adversely impacted by the red flag that directs financial institutions to consider owners’ criminal records and “connections to illicit activity?” If yes, how many businesses:
   1. Have been adversely impacted by a red flag, and what was the nature of the adverse impact for each case?
   2. Were subject to the red flag but were not adversely impacted?
6. What are FinCEN’s past efforts and future plans to monitor and promote fair access in the provision of financial services to state-sanctioned marijuana businesses and hemp businesses, especially for minority-owned, women-owned, veteran-owned, tribal community–owned, and small businesses, as well as business owners with past marijuana criminal records? For example:
   1. Has FinCEN established best practices for financial institutions to follow, including best practices to promote fairness when providing financial services, including when processing payments to state-sanctioned marijuana businesses and related service providers?
   2. If not, is FinCEN considering establishing such best practices?
      1. If so, what is FinCEN’s timeline for issuing such best practices?
   3. What specific steps has FinCEN taken to ensure compliance with President Biden’s January 2021 Executive Order on Advancing Racial Equity and Support for Underserved Communities Through the Federal Government?

Meanwhile, Senate Majority Leader Chuck Schumer has vowed to bring the Secure and Fair Enforcement Regulation (SAFER) Banking Act to the Senate floor for consideration following its approval in the Senate Banking Committee in September.

The legislation, a revised version of the Secure and Fair Enforcement (SAFE) Banking Act, which has passed the U.S. House seven times since 2019, aims to bring traditional opportunities and transparency to state-licensed cannabis businesses by offering safe harbor to financial institutions that provide services to the industry.

Pennsylvania is one step closer to allowing all 25 of its medical cannabis grower/processor licensees to also obtain retail licenses after the House passed Senate-approved legislation that would remove a restriction in the state’s 2016 medical cannabis law that allows only five grower/processor licensees to be fully vertically integrated.

Senate Bill 773 passed the Senate in September in a 44-3 vote. The House then approved a slightly revised version of the legislation Nov. 15 in a 114-89 vote.

RELATED: Pennsylvania Senate Approves Legislation to Allow All Medical Cannabis Growers to Sell Directly to Patients

The bill, introduced in June by Sen. Chris Gebhard, R-Lebanon County, aims to break up what lawmakers claim is a retail market controlled by only a handful of companies.

Senate Majority Leader Jay Costa, D-Allegheny County, has said, for example, that the medical cannabis retail market in Pennsylvania is a “monopoly-type situation with out-of-state, multistate organizations coming in to the detriment of these independent grower/processors,” according to a Penn Live report.

Since lawmakers amended the bill in the House, it must now get final approval in the Senate before it goes to Gov. Josh Shapiro’s desk.

MIAMI, Nov. 16, 2023 – PRESS RELEASE – AYR Wellness Inc., a leading vertically integrated U.S. multistate cannabis operator, reported financial results for the third quarter ended Sept. 30, 2023. Unless otherwise noted, all results are presented in U.S. dollars.

The following financial measures are reported as results from continuing operations due to the sale of the company’s business in Arizona in March 2023, which are reported as discontinued operations. All historical comparisons have been restated accordingly.

David Goubert, president and CEO of AYR, said, “We continued to execute on our optimization initiatives during the quarter, as reflected by another strong period of year-over-year adjusted EBITDA growth and cash flow generation. We also continued to lay the foundation for AYR’s long-term revenue growth and profitability, bolstered by our recent work to reach agreements with our creditors, which, when fully consummated, will result in the extension of maturities of nearly $400 million of debt in the aggregate by two years. Upon closing of the transactions, AYR will have no meaningful debt maturities until 2026 and an additional $40 million of cash proceeds, providing a clear runway to execute our optimization initiatives and generate consistent, long-term growth.

“As only 15 of the 88 dispensaries across our footprint are fully ramped adult-use stores, AYR is well-positioned to take advantage of legislative catalysts in states like Ohio, which voted just last week to legalize adult-use cannabis, as well as Florida and Pennsylvania in the near future. The conversion of these stores would reflect a six-times increase in our adult-use retail footprint.

“During the quarter, retail transactions were up 18% year-over-year on a same-store basis, largely driven by our initiatives to increase customer acquisition and loyalty. This increase was offset by continued pricing pressure in select markets, as well as temporary cultivation challenges in Florida over the summer, leading to lower inventory levels at the end of the quarter, which will further impact sales in the fourth quarter. We anticipate Florida inventory levels normalizing by mid-December.

“As we close out the year and look to 2024, we will continue to execute our optimization plan and lay the foundation for future revenue growth. I’m proud of the work the team has done to dramatically improve the financial health of AYR, and we will remain focused on our liquidity and working capital as we further optimize inventory levels and align production with demand across our markets. We expect the execution of our objectives to position us for revenue growth, adjusted EBITDA margin expansion and free cash flow generation in 2024.”

Third Quarter Financial Summary (excludes results from Arizona for all periods) ($ in millions, excl. margin items)

¹_{Adjusted EBITDA, Adjusted Gross Profit and Adjusted EBITDA Margin are non-GAAP measures, and accordingly are not standardized measures and may not be comparable to similar measures used by other companies. See Definition and Reconciliation of Non-GAAP Measures below. For a reconciliation of Operating Loss to Adjusted EBITDA as well as Gross Profit to Adjusted Gross Profit, see the reconciliation tables appended to this release.}

Third Quarter Highlights

• Announced agreement to acquire third Ohio dispensary license.
• Reported Q3 retail transactions up 21% year-over-year on same-store basis.
• Added Michael Warren to the company’s board of directors.
• Announced three-year exclusive licensing and retail agreement to bring Kiva Confections to AYR’s 62+ Florida dispensaries.
• Changed expense allocation methodology resulting in an expense reclassification from SG&A to COGS that resulted in a 300bps reduction in adjusted gross margin in Q3.

Recent Highlights

• Announced appointment of George DeNardo as new chief operating officer.
• Opened 10 Florida stores thus far in 2023, bringing its Florida store total to 62 open locations to date. The company plans to exit 2023 with a total of 64 Florida stores, compared to 52 to start the year.
• Opened two retail locations in Ohio in Woodmere and Goshen. AYR has the future rights to ownership of both dispensaries, subject to regulatory approval.
• Last week, Ohio voters passed a ballot initiative to allow adult-use sales. AYR’s 58,000-square-foot Ohio cultivation facility is operational and equipped to produce over 40 thousand pounds of biomass to meet future adult-use demand in the state.

Financing and Capital Structure

• The company deployed $7 million of capital expenditures in the third quarter and ended the quarter with a cash balance of $72.8 million.
• The company has approximately 76.7 million fully diluted shares outstanding based on a treasury method calculation.ⁱ
• Subsequent to the quarter end, the company announced that it had entered into agreements to extend the maturity date of its 12.5% senior notes and LivFree Wellness Promissory notes by two years and receive $40 million of new money debt financing. Additional terms and details of the transaction can be found in the company’s press release announcing the transactions, dated Nov. 1, 2023.
• Upon completion of recently announced transactions in 2023, AYR will have retired or extended the maturity of nearly $400 million in debt in the aggregate by two years.

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^[i] _{Excludes AYR granted but unvested service-based LTIP shares totaling 5.0 million.}

Outlook
The company remains committed to further improving its financial health and positioning itself for sustainable, profitable growth across its footprint. Due to the modest sequential revenue decline in the third quarter, coupled with the temporary cultivation setback in Florida that will impact fourth quarter revenue by approximately $4 million to $6 million, the company no longer anticipates growth for the second half of 2023 over first half levels. The company now expects revenue to be essentially flat in the fourth quarter compared to the third quarter, and to maintain an adjusted EBITDA margin of 25% in the fourth quarter.

AYR’s expectations for future results are based on the assumptions and risks detailed in its management’s discussion and analysis (MD&A) for the period ended Sept. 30, 2023, as filed on SEDAR+ and with the U.S. Securities and Exchange Commission.

Line-item results from AYR’s third quarter 2023 financial results can be found here.