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U.S. House Passes Cannabis Research Bill, New Jersey Lawmakers Reach Deal on Adult-Use Legislation: Week in Review

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This week, the U.S. House of Representatives passed HR 3797: The Medical Marijuana Research Act, which facilitates clinical cannabis research by establishing a process so that authorized scientists may access flowers and other products manufactured in accordance with state-approved marijuana programs. Elsewhere, in New Jersey, lawmakers agreed on legislation to implement the state’s adult-use cannabis program, with a vote expected later this month.

Here, we’ve rounded up the 10 headlines you need to know before this week is over.

  • Federal: Members of the U.S. House of Representatives voted Dec. 9 in favor of HR 3797: The Medical Marijuana Research Act, which facilitates clinical cannabis research by establishing a process so that authorized scientists may access flowers and other products manufactured in accordance with state-approved marijuana programs. It also ends the decades-long monopoly on the cultivation of cannabis for FDA-approved research by requiring federal agencies to license multiple manufacturers in addition to the University of Mississippi. Read more
  • New Jersey: New Jersey lawmakers have reached a deal on legislation to implement an adult-use cannabis program in the state. The Senate Judiciary Committee is expected to take up the bill on Dec. 14, the news outlet reported, and the legislation will go before the full Senate for a vote on Dec. 17. Read more
  • Nebraska: Sen. Anna Wishart is working on language to legalize adult-use cannabis that will be added to a medical cannabis legalization initiative that is planned for the state’s 2022 ballot. “In light of the successful ballot measures in South Dakota and yesterday’s vote in the House of Representatives, our team is drafting a ballot initiative to legalize cannabis for adult use,” Wishart wrote in a Dec. 5 Facebook post. Read more
  • California: The Humboldt Community Business Development Center (HCBDC) has partnered with the California Center for Rural Policy at Humboldt State University and Sonoma State University for a comprehensive look into the impact of cannabis farming, manufacturing, distribution and retail sales on the overall economy of a research area which includes the legendary Emerald Triangle (Humboldt, Trinity and Mendocino counties). The HCBDC will develop the study through a grant from the California Bureau of Cannabis Control. Read more
  • The Cannabis Advisory Committee recommended regulatory changes this week that would help licensed cannabis businesses compete with the illicit market and face new challenges related to the ongoing COVID-19 pandemic. The committee held public hearings throughout 2020 and made 17 total recommendations for improving the state’s cannabis industry. Read more
  • Minnesota: A University of Minnesota research team has developed a genetic test that can predict whether cannabis will produce mostly CBD or THC, having broad implications for both cannabis and hemp. The team’s findings were recently published in the American Journal of Botany. Read more
  • Florida: Sen. Randolph Bracy has announced that he will introduce a bill during the 2021 legislative session to make it easier for people to clear misdemeanor convictions involving the possession and distribution of less than 20 grams of cannabis. The legislation would not automatically expunge records, but it would allow thousands of people to clear their criminal records and waive all court fees to do so. Read more
  • New Mexico: A state advisory board recommended this week that the state health secretary consider allowing licensed medical cannabis cultivators to grow more plants to alleviate concerns about the high cost of medical cannabis and the lack of variety. The board voted on the recommendation in response to a petition seeking to either eliminate the limit or significantly increase the number of plants each cultivator can grow. Read more
  • Illinois: Multistate cannabis operator Cresco Labs has announced the relaunch and availability of its cannabis-infused chocolates line from its Mindy’s Chef Led Artisanal Edibles brand in dispensaries across Illinois. Previously introduced to the state’s medical market in 2016, the line is now available for the first time to recreational customers. Read more
  • Canada: Licensed producer Canopy Growth Corp. will shutter roughly 17% of its indoor cultivation space and all of its outdoor cultivation sites in Canada, which will result in layoffs for about 220 employees. The closures are part of a four-pronged approach that CEO David Klein and other company executives outlined last month to improve margins and turn a profit by the end of the fiscal year 2022. Read more

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MORE Act Passes the House – Is Legalization Around the Corner?

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On Friday, December 4, 2020, the US House of Representatives passed the Marijuana Opportunity Reinvestment and Expungement Act of 2019 (the MORE Act), which would effectively legalize cannabis by removing it from the Controlled Substances Act. The bill (H.R. 3884) has several key components:

This MORE Act is a substantial step in cannabis legislation. Reactions to the proposed legislation have been mixed. While the bill does include some measures aimed at social equity, critics of the bill claim it does not go far enough. Similarly, while the bill includes a federal permitting provision, this would be the beginning of a nascent federal regulatory scheme.

What does this mean for your business? 

While this bill passed in the US House of Representatives, it would still need to pass in the U.S. Senate this term, which by most accounts does not seem likely. However, the passage of this bill signifies the progress that has been made and provides insight on what further legislation may look like.

Canopy Growth to Close Additional Canadian Cultivation Sites

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Washington, DC – PRESS RELEASE: Members of the US House of Representatives voted Dec. 9 in favor of HR 3797: The Medical Marijuana Research Act, which facilitates clinical cannabis research by establishing a process so that authorized scientists may access flowers and other products manufactured in accordance with state-approved marijuana programs. It also ends the decades-long monopoly on the cultivation of cannabis for FDA-approved research by requiring federal agencies to license multiple manufacturers in addition to the University of Mississippi. For over five decades, the University has been the only federally licensed source of research-grade marijuana in the United States.

The Act is sponsored by Oregon Democrat Earl Blumenauer, along with several Republican co-sponsors. House members passed the Act on a voice vote.

“The cannabis laws in this country are broken, especially those that deal with research. It’s illegal everywhere in America to drive under the influence of alcohol, cannabis, or any other substance. But we do not have a good test for impairment because we can’t study it … This is insane and we need to change it,” Congressman Earl Blumenauer said today on the House floor. “At a time when there are four million registered medical cannabis patients, and many more likely self-medicate, when there are 91 percent of Americans supporting medical cannabis, it’s time to change the system. Our bill will do precisely that.”

In April, NORML provided testimony for the Federal Register advocating for many of the changes made in this Act.

NORML’s Deputy Director Paul Armentano said, “These common-sense regulatory changes are necessary and long overdue. The DEA has proven time and time again that it is not an honest broker when it comes to overseeing the cultivation of research-grade cannabis. Despite promising over four years ago to expand the pool of federal licensees permitted to provide cannabis for clinical research, the agency has steadfastly refused to do so—leaving scientists with woefully inadequate supplies of cannabis and cannabis products available for human studies.”

He added, “Further, these federally-licensed products do not represent the type or quality of cannabis products currently available in legal, statewide markets. The reality that most high-schoolers have easier access to cannabis than do our nation’s top scientists is the height of absurdity and an indictment of the current system.”

Under the existing regulatory system, there is only one federally licensed entity—the University of Mississippi—that is permitted to cultivate and to provide marijuana for use in FDA-approved clinical studies. Scientists have consistently criticized the poor quality of the University’s plants, which they say fail to accurately reflect the varieties of marijuana commercially available in the United States.

According to the federal government’s marijuana menu, scientists may currently select from no more than six varieties of pre-rolled cannabis cigarettes–none of which possess THC concentrations above 7% or CBD concentrations above 1%. Other types of cannabis-infused products, like tinctures and concentrates, are not available for clinical study.

Nonetheless, the current system does not permit scientists to access state-licensed marijuana products as part of an FDA-approved protocol.

In 2016, the U.S. Drug Enforcement Agency pledged to expand the pool of federally licensed entities permitted to grow cannabis. But, to date, the agency has failed to act on more than 30 applications before them. The Marijuana Research Act would permit an unlimited number of federally licensed entities to participate in this space.

Today’s floor vote comes on heels of the lower chamber on Friday voting in favor of the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act, HR 3884, which removes marijuana from the federal Controlled Substances Act—thereby eliminating the existing conflict between state and federal marijuana laws and providing states with the authority to establish their own cannabis laws free from undue federal interference.

New Mexico Advisory Board Recommends Increasing Medical Cannabis Plant Count

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Washington, DC – PRESS RELEASE: Members of the US House of Representatives voted Dec. 9 in favor of HR 3797: The Medical Marijuana Research Act, which facilitates clinical cannabis research by establishing a process so that authorized scientists may access flowers and other products manufactured in accordance with state-approved marijuana programs. It also ends the decades-long monopoly on the cultivation of cannabis for FDA-approved research by requiring federal agencies to license multiple manufacturers in addition to the University of Mississippi. For over five decades, the University has been the only federally licensed source of research-grade marijuana in the United States.

The Act is sponsored by Oregon Democrat Earl Blumenauer, along with several Republican co-sponsors. House members passed the Act on a voice vote.

“The cannabis laws in this country are broken, especially those that deal with research. It’s illegal everywhere in America to drive under the influence of alcohol, cannabis, or any other substance. But we do not have a good test for impairment because we can’t study it … This is insane and we need to change it,” Congressman Earl Blumenauer said today on the House floor. “At a time when there are four million registered medical cannabis patients, and many more likely self-medicate, when there are 91 percent of Americans supporting medical cannabis, it’s time to change the system. Our bill will do precisely that.”

In April, NORML provided testimony for the Federal Register advocating for many of the changes made in this Act.

NORML’s Deputy Director Paul Armentano said, “These common-sense regulatory changes are necessary and long overdue. The DEA has proven time and time again that it is not an honest broker when it comes to overseeing the cultivation of research-grade cannabis. Despite promising over four years ago to expand the pool of federal licensees permitted to provide cannabis for clinical research, the agency has steadfastly refused to do so—leaving scientists with woefully inadequate supplies of cannabis and cannabis products available for human studies.”

He added, “Further, these federally-licensed products do not represent the type or quality of cannabis products currently available in legal, statewide markets. The reality that most high-schoolers have easier access to cannabis than do our nation’s top scientists is the height of absurdity and an indictment of the current system.”

Under the existing regulatory system, there is only one federally licensed entity—the University of Mississippi—that is permitted to cultivate and to provide marijuana for use in FDA-approved clinical studies. Scientists have consistently criticized the poor quality of the University’s plants, which they say fail to accurately reflect the varieties of marijuana commercially available in the United States.

According to the federal government’s marijuana menu, scientists may currently select from no more than six varieties of pre-rolled cannabis cigarettes–none of which possess THC concentrations above 7% or CBD concentrations above 1%. Other types of cannabis-infused products, like tinctures and concentrates, are not available for clinical study.

Nonetheless, the current system does not permit scientists to access state-licensed marijuana products as part of an FDA-approved protocol.

In 2016, the U.S. Drug Enforcement Agency pledged to expand the pool of federally licensed entities permitted to grow cannabis. But, to date, the agency has failed to act on more than 30 applications before them. The Marijuana Research Act would permit an unlimited number of federally licensed entities to participate in this space.

Today’s floor vote comes on heels of the lower chamber on Friday voting in favor of the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act, HR 3884, which removes marijuana from the federal Controlled Substances Act—thereby eliminating the existing conflict between state and federal marijuana laws and providing states with the authority to establish their own cannabis laws free from undue federal interference.

iUNU Raises $7M in Series A Financing to Accelerate Global Adoption of its LUNA Platform by Commercial Greenhouses

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IRVINE, Calif.–(BUSINESS WIRE)–PRESS RELEASE–WM Holding Company, LLC and Silver Spike Acquisition Corp., a publicly-traded special purpose acquisition company, have announced 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, an online listings marketplace for cannabis consumers and businesses, and WM Business, an 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 nine 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.

Beals 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.

“We are thrilled to partner with Silver Spike to transition WMH to our next phase of growth as a public company,” said Beals. “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.”

Gordon commented, “We believe WMH is the most compelling investment opportunity in cannabis today. We established Silver Spike Acquisition Corp. to identify and partner with a best-in-class company and proven management team that are well positioned to benefit from the macro drivers surrounding cannabis. We wanted to not only assist them with the transition to the public markets but also create a unique opportunity worthy of institutional investors. WMH is the perfect expression of our vision for Silver Spike Acquisition Corp.

Their business is transforming the eCommerce experience for cannabis by combining the largest audience of frequent cannabis users with the broadest set of brands and retailers and supporting those businesses with the complete tech stack for cannabis. They have created a 12-year advantage and solved very thorny issues, such as normalizing product data to drive user conversion or embedding compliance functionality throughout their software, while building the only comprehensive “business-in-a-box” software solution for cannabis retailers. We are beyond excited to work with Chris and the incredibly-talented WMH team to support their vision of helping licensed cannabis businesses thrive while driving growth and returns for our shareholders.”

Transaction Overview

The estimated post transaction equity value of the combined company is approximately $1.5 billion, assuming the $10.00 per share PIPE price and no redemptions by Silver Spike shareholders. The transaction will provide up to $575 million of gross proceeds (assuming no redemptions), including $325 million through a fully-committed common stock PIPE at $10.00 per share. The PIPE includes commitments from existing investors including Silver Spike Capital, and new institutional investors including funds managed by AFV Partners, the Federated Hermes Kaufmann Funds and Senvest Management LLC.

The transaction, which has been unanimously approved by the Boards of Directors of WMH and Silver Spike, is subject to approval by Silver Spike’s shareholders and other customary closing conditions. Additional information about the proposed transaction, including a copy of the merger agreement and investor presentation, will be provided in a Current Report on Form 8-K to be filed by Silver Spike with the Securities and Exchange Commission and will be available at www.sec.gov. Additional information can be found on the WMH Investor Relations page at www.weedmaps.com/investors.

Advisors

Rothschild & Co. is serving as exclusive financial and capital markets adviser and Cooley LLP is serving as legal advisor to WM Holding, LLC. Stifel, Nicolaus & Company, Incorporated and Piper Sandler & Co. are serving as joint placement agents and financial advisors and Davis Polk & Wardwell LLP is serving as legal advisor to Silver Spike Acquisition Corp. Gibson, Dunn & Crutcher LLP is serving as legal advisor to the founders of WM Holding.

Liberty Health Sciences Appoints Vice President of Operations

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TORONTO, Dec. 9, 2020 /CNW/ – PRESS RELEASE – Liberty Health Sciences has announced it has hired Darrin Potter as Vice President of Operations. Potter will report directly to the interim CEO, George Gremse.

In his new role, Potter will be responsible for driving the organization’s growth by leveraging Liberty’s cultivation, processing, extraction, packaging and distribution operations. He will also manage the expansion of the LHS360 production facility in Gainesville.

Potter has a proven background in the cannabis industry as an award-winning cannabis production executive with over 12 years’ experience in the medical and recreational cannabis markets. During his career, Potter has served in an operations consultative capacity, focusing on new methods to improve product quality and yield, as well as having managed a company’s full facilities operations.

"Liberty’s production decreased this past summer creating some shortages of product in the dispensaries over the past few months," said George Gremse, interim CEO of Liberty Health Sciences. "New genetics and SOPs were introduced, and the results are starting to show. Darrin is a strong, experienced leader. His comprehensive industry background adds a high level of expertise that will serve the company and our patients well. His focus will be on continuing to improve the quality and quantity of Liberty’s product offerings. We are confident that Darrin will be an outstanding addition to our team and has what it takes to lead the company to another level of success. We are thrilled to have him on board."

Prior to joining Liberty, Potter served as Vice President of Production at iAnthus Capital Holdings Inc. At iAnthus he worked directly with cultivation department managers across US assets to create and maintain company standards, develop best practice protocols to reduce production costs, and leverage industry relationships for best pricing on cultivation and processing materials. Potter also worked as Chief Horticulture Officer for GrowHealthy Holdings, where he coordinated a design team for its 200,000-square-foot indoor/greenhouse/shade house production facility.

"I look forward to refining the business processes already in place at Liberty, continue to develop quality products and provide the best user experience in Florida," said Potter. "My goal is to bring online more award-winning genetics, exciting new product offerings and increase production as we continue to strengthen our existing customer relationships and expand our reach."

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Clever Leaves Successfully Delivers First Shipment of EU GMP certified Cannabis-Derived Pharmaceuticals from Colombia to Germany

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IRVINE, Calif.–(BUSINESS WIRE)–PRESS RELEASE–WM Holding Company, LLC and Silver Spike Acquisition Corp., a publicly-traded special purpose acquisition company, have announced 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, an online listings marketplace for cannabis consumers and businesses, and WM Business, an 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 nine 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.

Beals 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.

“We are thrilled to partner with Silver Spike to transition WMH to our next phase of growth as a public company,” said Beals. “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.”

Gordon commented, “We believe WMH is the most compelling investment opportunity in cannabis today. We established Silver Spike Acquisition Corp. to identify and partner with a best-in-class company and proven management team that are well positioned to benefit from the macro drivers surrounding cannabis. We wanted to not only assist them with the transition to the public markets but also create a unique opportunity worthy of institutional investors. WMH is the perfect expression of our vision for Silver Spike Acquisition Corp.

Their business is transforming the eCommerce experience for cannabis by combining the largest audience of frequent cannabis users with the broadest set of brands and retailers and supporting those businesses with the complete tech stack for cannabis. They have created a 12-year advantage and solved very thorny issues, such as normalizing product data to drive user conversion or embedding compliance functionality throughout their software, while building the only comprehensive “business-in-a-box” software solution for cannabis retailers. We are beyond excited to work with Chris and the incredibly-talented WMH team to support their vision of helping licensed cannabis businesses thrive while driving growth and returns for our shareholders.”

Transaction Overview

The estimated post transaction equity value of the combined company is approximately $1.5 billion, assuming the $10.00 per share PIPE price and no redemptions by Silver Spike shareholders. The transaction will provide up to $575 million of gross proceeds (assuming no redemptions), including $325 million through a fully-committed common stock PIPE at $10.00 per share. The PIPE includes commitments from existing investors including Silver Spike Capital, and new institutional investors including funds managed by AFV Partners, the Federated Hermes Kaufmann Funds and Senvest Management LLC.

The transaction, which has been unanimously approved by the Boards of Directors of WMH and Silver Spike, is subject to approval by Silver Spike’s shareholders and other customary closing conditions. Additional information about the proposed transaction, including a copy of the merger agreement and investor presentation, will be provided in a Current Report on Form 8-K to be filed by Silver Spike with the Securities and Exchange Commission and will be available at www.sec.gov. Additional information can be found on the WMH Investor Relations page at www.weedmaps.com/investors.

Advisors

Rothschild & Co. is serving as exclusive financial and capital markets adviser and Cooley LLP is serving as legal advisor to WM Holding, LLC. Stifel, Nicolaus & Company, Incorporated and Piper Sandler & Co. are serving as joint placement agents and financial advisors and Davis Polk & Wardwell LLP is serving as legal advisor to Silver Spike Acquisition Corp. Gibson, Dunn & Crutcher LLP is serving as legal advisor to the founders of WM Holding.

Cresco Labs Debuts Deliciously Dosed Chocolates from its Mindy’s Chef Led Artisanal Edibles Brand for the Illinois Recreational Cannabis Market

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IRVINE, Calif.–(BUSINESS WIRE)–PRESS RELEASE–WM Holding Company, LLC and Silver Spike Acquisition Corp., a publicly-traded special purpose acquisition company, have announced 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, an online listings marketplace for cannabis consumers and businesses, and WM Business, an 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 nine 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.

Beals 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.

“We are thrilled to partner with Silver Spike to transition WMH to our next phase of growth as a public company,” said Beals. “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.”

Gordon commented, “We believe WMH is the most compelling investment opportunity in cannabis today. We established Silver Spike Acquisition Corp. to identify and partner with a best-in-class company and proven management team that are well positioned to benefit from the macro drivers surrounding cannabis. We wanted to not only assist them with the transition to the public markets but also create a unique opportunity worthy of institutional investors. WMH is the perfect expression of our vision for Silver Spike Acquisition Corp.

Their business is transforming the eCommerce experience for cannabis by combining the largest audience of frequent cannabis users with the broadest set of brands and retailers and supporting those businesses with the complete tech stack for cannabis. They have created a 12-year advantage and solved very thorny issues, such as normalizing product data to drive user conversion or embedding compliance functionality throughout their software, while building the only comprehensive “business-in-a-box” software solution for cannabis retailers. We are beyond excited to work with Chris and the incredibly-talented WMH team to support their vision of helping licensed cannabis businesses thrive while driving growth and returns for our shareholders.”

Transaction Overview

The estimated post transaction equity value of the combined company is approximately $1.5 billion, assuming the $10.00 per share PIPE price and no redemptions by Silver Spike shareholders. The transaction will provide up to $575 million of gross proceeds (assuming no redemptions), including $325 million through a fully-committed common stock PIPE at $10.00 per share. The PIPE includes commitments from existing investors including Silver Spike Capital, and new institutional investors including funds managed by AFV Partners, the Federated Hermes Kaufmann Funds and Senvest Management LLC.

The transaction, which has been unanimously approved by the Boards of Directors of WMH and Silver Spike, is subject to approval by Silver Spike’s shareholders and other customary closing conditions. Additional information about the proposed transaction, including a copy of the merger agreement and investor presentation, will be provided in a Current Report on Form 8-K to be filed by Silver Spike with the Securities and Exchange Commission and will be available at www.sec.gov. Additional information can be found on the WMH Investor Relations page at www.weedmaps.com/investors.

Advisors

Rothschild & Co. is serving as exclusive financial and capital markets adviser and Cooley LLP is serving as legal advisor to WM Holding, LLC. Stifel, Nicolaus & Company, Incorporated and Piper Sandler & Co. are serving as joint placement agents and financial advisors and Davis Polk & Wardwell LLP is serving as legal advisor to Silver Spike Acquisition Corp. Gibson, Dunn & Crutcher LLP is serving as legal advisor to the founders of WM Holding.

WM Holding Company, LLC to List on Nasdaq Through Merger with Silver Spike Acquisition Corp.

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IRVINE, Calif.–(BUSINESS WIRE)–PRESS RELEASE–WM Holding Company, LLC and Silver Spike Acquisition Corp., a publicly-traded special purpose acquisition company, have announced 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, an online listings marketplace for cannabis consumers and businesses, and WM Business, an 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 nine 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.

Beals 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.

“We are thrilled to partner with Silver Spike to transition WMH to our next phase of growth as a public company,” said Beals. “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.”

Gordon commented, “We believe WMH is the most compelling investment opportunity in cannabis today. We established Silver Spike Acquisition Corp. to identify and partner with a best-in-class company and proven management team that are well positioned to benefit from the macro drivers surrounding cannabis. We wanted to not only assist them with the transition to the public markets but also create a unique opportunity worthy of institutional investors. WMH is the perfect expression of our vision for Silver Spike Acquisition Corp.

Their business is transforming the eCommerce experience for cannabis by combining the largest audience of frequent cannabis users with the broadest set of brands and retailers and supporting those businesses with the complete tech stack for cannabis. They have created a 12-year advantage and solved very thorny issues, such as normalizing product data to drive user conversion or embedding compliance functionality throughout their software, while building the only comprehensive “business-in-a-box” software solution for cannabis retailers. We are beyond excited to work with Chris and the incredibly-talented WMH team to support their vision of helping licensed cannabis businesses thrive while driving growth and returns for our shareholders.”

Transaction Overview

The estimated post transaction equity value of the combined company is approximately $1.5 billion, assuming the $10.00 per share PIPE price and no redemptions by Silver Spike shareholders. The transaction will provide up to $575 million of gross proceeds (assuming no redemptions), including $325 million through a fully-committed common stock PIPE at $10.00 per share. The PIPE includes commitments from existing investors including Silver Spike Capital, and new institutional investors including funds managed by AFV Partners, the Federated Hermes Kaufmann Funds and Senvest Management LLC.

The transaction, which has been unanimously approved by the Boards of Directors of WMH and Silver Spike, is subject to approval by Silver Spike’s shareholders and other customary closing conditions. Additional information about the proposed transaction, including a copy of the merger agreement and investor presentation, will be provided in a Current Report on Form 8-K to be filed by Silver Spike with the Securities and Exchange Commission and will be available at www.sec.gov. Additional information can be found on the WMH Investor Relations page at www.weedmaps.com/investors.

Advisors

Rothschild & Co. is serving as exclusive financial and capital markets adviser and Cooley LLP is serving as legal advisor to WM Holding, LLC. Stifel, Nicolaus & Company, Incorporated and Piper Sandler & Co. are serving as joint placement agents and financial advisors and Davis Polk & Wardwell LLP is serving as legal advisor to Silver Spike Acquisition Corp. Gibson, Dunn & Crutcher LLP is serving as legal advisor to the founders of WM Holding.

California Panel Recommends Regulators Relax Rules for Struggling Cannabis Businesses

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Washington, DC – PRESS RELEASE: Members of the US House of Representatives voted Dec. 9 in favor of HR 3797: The Medical Marijuana Research Act, which facilitates clinical cannabis research by establishing a process so that authorized scientists may access flowers and other products manufactured in accordance with state-approved marijuana programs. It also ends the decades-long monopoly on the cultivation of cannabis for FDA-approved research by requiring federal agencies to license multiple manufacturers in addition to the University of Mississippi. For over five decades, the University has been the only federally licensed source of research-grade marijuana in the United States.

The Act is sponsored by Oregon Democrat Earl Blumenauer, along with several Republican co-sponsors. House members passed the Act on a voice vote.

“The cannabis laws in this country are broken, especially those that deal with research. It’s illegal everywhere in America to drive under the influence of alcohol, cannabis, or any other substance. But we do not have a good test for impairment because we can’t study it … This is insane and we need to change it,” Congressman Earl Blumenauer said today on the House floor. “At a time when there are four million registered medical cannabis patients, and many more likely self-medicate, when there are 91 percent of Americans supporting medical cannabis, it’s time to change the system. Our bill will do precisely that.”

In April, NORML provided testimony for the Federal Register advocating for many of the changes made in this Act.

NORML’s Deputy Director Paul Armentano said, “These common-sense regulatory changes are necessary and long overdue. The DEA has proven time and time again that it is not an honest broker when it comes to overseeing the cultivation of research-grade cannabis. Despite promising over four years ago to expand the pool of federal licensees permitted to provide cannabis for clinical research, the agency has steadfastly refused to do so—leaving scientists with woefully inadequate supplies of cannabis and cannabis products available for human studies.”

He added, “Further, these federally-licensed products do not represent the type or quality of cannabis products currently available in legal, statewide markets. The reality that most high-schoolers have easier access to cannabis than do our nation’s top scientists is the height of absurdity and an indictment of the current system.”

Under the existing regulatory system, there is only one federally licensed entity—the University of Mississippi—that is permitted to cultivate and to provide marijuana for use in FDA-approved clinical studies. Scientists have consistently criticized the poor quality of the University’s plants, which they say fail to accurately reflect the varieties of marijuana commercially available in the United States.

According to the federal government’s marijuana menu, scientists may currently select from no more than six varieties of pre-rolled cannabis cigarettes–none of which possess THC concentrations above 7% or CBD concentrations above 1%. Other types of cannabis-infused products, like tinctures and concentrates, are not available for clinical study.

Nonetheless, the current system does not permit scientists to access state-licensed marijuana products as part of an FDA-approved protocol.

In 2016, the U.S. Drug Enforcement Agency pledged to expand the pool of federally licensed entities permitted to grow cannabis. But, to date, the agency has failed to act on more than 30 applications before them. The Marijuana Research Act would permit an unlimited number of federally licensed entities to participate in this space.

Today’s floor vote comes on heels of the lower chamber on Friday voting in favor of the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act, HR 3884, which removes marijuana from the federal Controlled Substances Act—thereby eliminating the existing conflict between state and federal marijuana laws and providing states with the authority to establish their own cannabis laws free from undue federal interference.