Cannabis Musings - May 23, 2024
Mishmash.
Friends, for today’s Cannabis Musings, we’re going to revisit some recent topics.
First, coming shortly on the heels of MedMen’s demise, which we discussed back in April, adding to the line of the downfall of early industry darlings, there’s now word that cannabis delivery giant Eaze is facing a foreclosure on all of its assets by its lender and investor. Eaze has had a varied history, including acquiring Florida-based Green Dragon in 2021, having its CEO plead guilty to bank fraud, and raising hundreds of millions of dollars (most recently publicly disclosed at a $700mm pre-money valuation in 2021). It was also synonymous with cannabis delivery, its ubiquitous billboards throughout the Bay Area announcing a future of technology-driven cannabis access. Eaze told SFGate that it’s “still in a ‘healthy financial position’,” and it’s not readily apparent what happened to trigger the foreclosure demand. Nonetheless, like so many other industry titans that have fallen, it’s both shocking and not at all surprising to see this happen.
Second, the Canna Provisions lawsuit filed last Fall by Boies Schiller LLP on behalf of a number of cannabis operators (which we discussed at the time) had its first major day in court. This is moderately interesting if you’re a law student who just finished their first constitutional law class, or a deep policy nerd. Otherwise, I would suggest you not spend too much time on following the case. It’s currently at the district (trial) court level, and no matter the outcome, the district court’s decision will almost certainly get appealed. The federal appellate court is where all the action happens anyway (unless, of course, the Supreme Court takes up the case after appeal, but, generally, the odds of that are very low), so, until then, vos iz der chil’lek? (“what difference does it make?”).
Next, we recently talked about the brewing civil war between hemp and non-hemp cannabis over “intoxicating hemp” products (cf. Politico). Readers were implored to watch what happens in Congress over the 2024 Farm Bill’s treatment of the hemp “loophole”, something we’ve discussed for a while now. Well, the fight is underway. Representative Mary Miller (R-IL) introduced an amendment that would effectively close up the loophole allowing intoxicating hemp products. Varfen an oyg (“pay attention”) – there’s a lot at stake on both ends of this.
Speaking of hemp, I stumbled upon a LinkedIn post from earlier this week noting that E & J Gallo Winery, the largest wine company in the country (by a fairly wide margin), has received patents relating to cannabinoid extraction from cannabis. Fascinating! Long-time readers of these Cannabis Musings know that the intersection between wine and cannabis is near and dear to my heart. We talked most recently about this topic back in 2023. Being an avid wine snob, oenophiles have the same passion and meshugas for wine as cannabis snobs do for the plant. It’s all about the craft, the care, the mystery.
So, what is a giant wine company doing with cannabis-related patents? I’ve been forecasting (warning about) this since my early days in the cannabis industry – there’s a natural affinity between the alcohol industry and the cannabis industry, as much as the latter may resist. I’m guessing (I have no inside information here) that E & J Gallo realized that they need to position themselves in the infused beverage category, particularly given the rapid uptake of intoxicating hemp drinks and its general acceptance in retail channels (seemingly regardless of the pesky issue of the FDA’s Food, Drug, and Cosmetic Act). Even if Gallo does nothing with these patents anytime soon, it’s apparently moving into position for a future in which wine may be on the decline (or maybe not) and daily cannabis use is outpacing daily alcohol consumption.
Again, varfen an oyg.
Oh, I’ve been nominated for the 2024 Nevada Cannabis Awards under “Educational Speaker.” I’d appreciate your support! Vote here. It requires a login to keep track of voting, but you may vote once a day, so vote early and often!
Be seeing you!
© 2024 Marc Hauser and Hauser Advisory. None of the foregoing is legal, investment, or any other sort of advice, and it may not be relied upon in any manner, shape, or form. The foregoing represents my own views and not those of Jardín.