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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. This week we cover The Parent Company and Gold Flora joining forces, Green Check Verified’s $6 million Series A, Canopy Growth’s $150 million registered direct offering, and more. Let’s get to it.

Roll Call

Business

A major merger in California cannabis. According to a press release issued on Wednesday, two vertically-integrated California cannabis businesses — The Parent Company (TPCO Holding Corp.) and Gold Flora — plan to merge. Together they will command a massive presence with 20 retail stores, 12 house brands, 3 distribution centers, 1 manufacturing facility, and 6 cultivation facilities. The joint entity will be known as New Parent, but operate under the name Gold Flora Corporation after the deal is complete. Just last month, TPCO restructured the terms their agreement with Jay-Z’s Roc Nation and SC Branding.

Tech

Green Check gets more green. Cannabis financial technology leader Green Check Verified announced yesterday it raised a $6 million Series A round led by Mendon Venture Partners. The funding will help the FinTech, which provides compliant solutions and services to the cannabis industry, continue to build out their comprehensive ecosystem for banks, credit unions, and cannabis-related businesses (CRBs). In September of last year, they acquired PayQwick to bolster their payments and lending capabilities. More recently, they launched a marketplace connecting CRBs to vetted financial services providers including banking, lending, insurance, payroll, human resources, and cash logistics.

Business

Canopy finds (some) cover. Canadian cannabis producer Canopy Growth Corp. has obtained a $150 million convertible debt issuance from an institutional investor. The agreement brings in much needed capital for the company. Only a few weeks ago, they laid off 800 workers following larger than expected losses in its fiscal third quarter.

State of the Industry

Arizona: Sales for cannabis in 2022 were nearly identical to 2021, again topping $1.4 billion. The big shift came in the recreational market overtaking the medical market to make up the lion’s share of the total.

California: Cannabis sales fell 8% in 2022 compared to 2021, dropping year-over-year for the first time since the legal market began back in 2018. This news comes only a few weeks after it was revealed the state was considering legalizing cannabis cafes to aid its struggling cannabis industry.

Iowa: Democratic lawmakers have introduced legislation to legalize cannabis for adult-use. A recent poll found that more than half of adults in the state are in favor.

New Hampshire: The state House gave initial approval on a bill to legalize cannabis for recreational use.

New Jersey: A revision to the Attorney General's Law Enforcement Drug Testing Policy indicates police officers won’t be subjected to drug testing for cannabis in most instances.

North Carolina: A measure to legalize cannabis for medical purposes advanced in the state Senate.

Oklahoma: Voters will decide on recreational cannabis legalization when they head to the ballot box for a special election in March. The initiative known as State Question 820, failed to make it on the ballot in November.

Texas: A proposed bill would allow cities and counties to make their own decisions on recreational cannabis legalization. What could possibly go wrong? But Governor Greg Abbott is unlikely to sign it even if it passes a vote, despite reports showing a majority of Texans support legalization.

Washington: The state Senate passed a bill prohibiting employers from discriminating against candidates during the hiring process for cannabis use. The bill covers the pre-screening process, but doesn’t carry over into an employee’s on-the-job duties if they are hired.

What We’re Reading

• The Murders of Two Oregon Cannabis Entrepreneurs in Houston Highlight the Industry’s Unnecessary Dangers (Willamette Week)

• California Wants Interstate Weed. That Could Backfire. (Bloomberg)

• Ten Reasons To Be Bullish On SAFE Banking (Marijuana Moment)

• Cocaine Bear, Meet Cannabis Raccoon and McFlurry Skunk (New York Times)

• New Cannabis Trade Group Aims to Be the 'Got Milk' of Weed (Adweek)

• This Grandma Wants Cannabis Legalized In Oklahoma And She's Here To Tell You Why (Benzinga)

Stay tuned for more cannabis industry news next week!

💚,

The Pre Roll Team

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