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🌿 Mastercard bans debit cards, Cresco sues GTI, and Eaze accused of fraud

Welcome to another edition of The Pre Roll, the cannabis newsletter that keeps you up-to-date on the industry happenings you need to know. Here’s what we’re rolling up this week: Mastercard says no more to debit cards, Cresco sues Green Thumb Industries, Eaze is accused of fraud, and more. Let’s get to it.

Author

Alex Lipnik
July 28, 2023

together with

Happy Friday Pre Rollers! Welcome to another edition of The Pre Roll, the cannabis newsletter that keeps you up-to-date on the industry happenings you need to know.

Here’s what we’re rolling up this week:

  • Mastercard says no more to debit cards

  • Cresco sues Green Thumb Industries

  • Eaze is accused of fraud

…and more. Let’s get to it.

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🚨 Roll Call

Business

Source: Andrew Harrer / Bloomberg

Mastercard no more. In a blow to an industry already lacking payment options, Mastercard, one of the world’s largest payment processing companies, issued a statement this week telling banks to stop allowing cannabis transactions on its debit card rails.

“As we were made aware of this matter, we quickly investigated it. In accordance with our policies, we instructed the financial institutions that offer payment services to cannabis merchants and connects them to Mastercard to terminate the activity.”

Mastercard statement

Due to federal illegality, cannabis businesses are unable to accept credit cards as most traditional businesses do. The majority operate heavily in cash, with debit cards and ACH making up the remaining share.

Many in the industry are hopeful that the passage of the SAFE Banking Act will open the door to greater access to financial services.

Business

Cresco vs. GTI. Multi-state operator Cresco Labs alleges fellow Chicago-based MSO and rival cannabis company Green Thumb Industries poached a key employee according to lawsuit filed last week. The suit in Cook County claims the employee is in violation of a one year non-compete clause that “barred him from working for a substantially similar company” such as GTI.

Green Thumb shot back with the following: “Instead of investing to retain current employees or support former employees through their transition following a recent sizable layoff, Cresco is spending money on lawyers to monitor and sue its former employees for finding new jobs. This move is not only distasteful to their former employees looking to continue their careers in the cannabis industry, but also a total waste of Cresco’s capital and resources.”

Cresco is seeking compensation for damages in addition to an injunction to enforce the terms outlined in the former employee’s non-compete clause.

Business

Source: Eaze

Take it Eaze-y. Less than two years after acquiring retailer Green Dragon to become the largest cannabis delivery company in America, Eaze finds itself back in the spotlight, albeit for less favorable reasons this time. A new lawsuit accuses Eaze of running an illegal operation and defrauding investors. The lawsuit was filed by the founders of Green Dragon.

Back in 2021, former Eaze CEO James Patterson pled guilty to one count of bank fraud.

🇺🇸 State of the Industry

Alabama: Chairman of the Alabama Medical Cannabis Commission Dr. Steven Stokes doesn’t plan to resign despite facing a lawsuit over his appointment.

Maryland: Health officials in Montgomery County issued a warning to restaurants not to sell cannabis-infused food or drinks.

đź“Š Business

Curaleaf announces major layoffs in NJ

The multi-state operator, and leading grower and seller of cannabis in the Garden State, is laying off nearly 50 employees at a production facility in New Jersey.

Tilray stock surges

The global cannabis-lifestyle and consumer packaged goods company saw shares of its stock spike as losses narrowed and revenue rose in its Q4 financial results.

Trulieve appoints interim CFO

The vertically integrated, multi-state cannabis company named VP of Finance Ryan Blust as its interim Chief Financial Officer after Tim Mullany left the role for personal reasons only 10 days after taking over the job.

🌏 Around the World

Albania: Parliament voted to legalize medical cannabis, although it has yet to be determined how it will be regulated.

đź’¨ Quick Hitters

  • Phoenix Suns forward Kevin Durant joked that NBA Commissioner Adam Silver smelled the cannabis on him when they met to discuss taking it off the league’s banned substance list.

  • Cannabis CEO total compensation was down in 2022 compared to 2021.

📚 What We’re Reading

  • Cannabis legalization at the federal level won’t happen soon, analyst predicts, even as more states open up to adult-use market (MarketWatch)

  • Seth Rogen’s Houseplant combines the actor’s passion for cannabis, design, and art (Wallpaper*)

  • The King Of Unlicensed Weed Dispensaries Declares War On New York (Forbes)

  • Can Europe’s cannabis market avoid the US’ mistakes? Investors chime in (TechCrunch)

đź“Ľ Video of the Week

🔎 Job Board

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Stay tuned for more cannabis industry news next week!

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The Pre Roll Team

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