Cannabis Prices In Nevada Are Up 200% And These Companies Are Set To Capitalize | Markets

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Demand for recreational marijuana in Nevada has been much higher than expected and the state is still facing a supply shortage.

While this shortage has been a headache for dispensary owners and cultivators, these companies have seen a 200% increase in the price of marijuana in just one month.

Nevada’s Recreational Market Faces a New Issue

Initially, the Nevada recreational marijuana industry was being hampered by a lack of distributors for the retail outlets. Now, the industry is facing a problem that is not as easy to solve…cultivation constraints.

Nevada has approved 88 cultivation facilities; however, retailers are limited by what these cultivators can produce.

Nevada-based dispensaries are focused on inventory management as it is key for success. These dispensaries want to make sure they are always holding the products that in the highest demand, but they don’t want to pay 200% more than what they were paying last month.

Nevada’s Marijuana Industry Scores a Victory

Last week, Nevada marijuana companies recorded a victory after Carson City District Judge James Todd Russell denied a preliminary injunction from liquor distributors.

The companies wanted to stop the Nevada Tax Department from allowing licensed marijuana businesses transport marijuana from the cultivation facility to the dispensary.

Judge Russell also revoked a temporary restraining order that stops Nevada’s Tax Department from moving forward with application from licensed marijuana companies looking to distribute the retail product.

Two Opportunities to Watch

We recently visited several companies in the Vancouver area and during this trip, we had the pleasure of sitting down and meeting with Brayden Sutton, CEO of Friday Night Inc.

Unlike many of its competitors, Friday Night did not suffer from distribution constraints since they inked a deal with one of the two distributors, Blackbird Logistics, to do the physical deliveries themselves.

Friday Night is levered to the Nevada hemp and cannabis market through the acquisition of Alternative Medicine Association, which owns and operates a licensed medical marijuana cultivation and production facility in Las Vegas.

Alternative Medicine Association owns and operates out of 12,000 sq. ft. cannabis cultivation facility where it produces its own line of cannabis-based extracts and manufactures other third-party brands of similar products.

Marapharm Ventures (MDM.CN) (MRPHF) is another Canadian firm focused on the burgeoning legal marijuana market in Nevada and California.

In July, Marapharm announced that it had two more recreational marijuana licenses approved, a cultivation license as well as a production license for edibles and oils. A total of three licenses have been approved for recreational purposes and Marapharm has been issued business licenses by the City of North Las Vegas.

After Las Vegas approved and issued business licenses to Marapharm, it now has more than 300,000 square feet of recreational marijuana licenses. The company is well capitalized and well positioned to capitalize on this opportunity.

In late June, Marapharm reported to have received more than $12.1 million from nine warrant series offered to its shareholders. During May, Marapharm’s Directors exercised 600,000 of their stock options for $300,000, which was also received by Marapharm.

A Long-Term Growth Story

We are favorable on Friday Night and Marapharm and believe these companies are well positioned to capitalize on a massive growth cycle. The firms are led by management teams with proven track records, they are well capitalized and able to execute on growth initiatives, and are attractively valued.

Although the Nevada recreational marijuana market is working through some fundamental issues, we expect these issues to be transitory and believe that investors can find considerable growth potential in these investments.

This article was written by Mark Maulden for on .

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California Is Still Arresting Too Many People of Color for Cannabis

California residents voted overwhelmingly to legalize cannabis for all adults last November. Yet law enforcement’s approach towards the drug has yet to fully evolve along with public attitudes. That’s according to crime statistics from 2016 released by the California Department of Justice last week.

Marijuana felony arrests fell by nearly half from 2011 to 2016. But racial disparities remain.

That crime data confirms a disturbing trend seen in other cities and states: While arrests for cannabis are on the decline, the disparity between arrest rates for white people and people of color still persists. Non-white people are much more likely to be arrested for marijuana in California, despite having the same rate of consumption.


Overall, marijuana arrests in California have plummeted since 2011—from 21,860 that year, to 13,810 last year. Felony marijuana arrests fell 44%, from 14,092 in 2011 to 7,949 last year.

Felony marijuana arrests dropped 44% from 2011 to 2016.

But those drops did not happen because of legalization—at least not directly.

In 2010, with a marijuana legalization measure on the ballot, Gov. Arnold Schwarzenegger signed into law a bill that made possession of an ounce or less of cannabis a civil infraction, punishable only by a fine.

In 2014, following a voter-approved ballot proposition, most drug-related felonies became misdemeanors. Felony marijuana arrests promptly dropped by a third, as many of those offenses moved into the misdemeanor category. As cannabis arrests fell, overall misdemeanor drug offenses (including but not limited to marijuana) shot up from 92,469 in 2014 to 163,073 in 2015.

Possession of an ounce or less of cannabis became legal for adults 21 and over in California on Nov. 8, 2016, the day more than 57 percent of voters approved Proposition 64. Sale of marijuana remains illegal (except for medical sales) until the state opens up its regulated system in 2018.

Voters in three other states—Maine, Massachusetts, and Nevada—approved marijuana legalization on Election Night, joining Colorado, Washington, and Oregon.

In California, retail sales of recreational marijuana won’t begin until sometime after Jan. 1, 2018, by which time the state is supposed to issue business licenses to cultivate, transport, and sell the plant. Until then, the only legal method to purchase cannabis in California is with a medical marijuana recommendation.

But even as legalization loomed large in the state last year, marijuana still represented a significant portion of court caseloads in California.

Overall, drug arrests have increased significantly since 2011, although a larger percentage of those arrests are misdemeanors, not felonies. More than 220,000 people were arrested for drug crimes in California in 2016. Of those, 182,002 arrests were misdemeanors. In 2011, there were 192,248 drug arrests all told, with 76,916 misdemeanor arrests.

California trend: More misdemeanor arrests, fewer felonies.

While possession of an ounce or less of cannabis is now legal in California, it’s still illegal to cultivate the drug for sale or sell it without a permit, as multiple large law enforcement raids this summer of what police say are illegal grows have demonstrated.

And legalization’s seeming inevitability has yet to solve the drug war’s glaring racial bias.

Before and after legalization, nonwhite people were still arrested for marijuana-related crime at a rate greater than that for whites despite similar rates of use, with the disproportionate policing falling most heavily on black people.

More than 70 percent of people arrested for marijuana in 2016 were nonwhite, according to the California DOJ’s annual Crime in California report.

Black people comprised 20 percent of the state’s felony marijuana arrests, despite making up 6.5 percent of the population.

2016 felonies: Black people make up 6.5% of California’s population, but 20% of felony marijuana arrests.

Of the 7,949 people arrested for marijuana-related felonies, 3,066 were Latino, 1,215 were classified as “other” (a catch-all category including Asians), and 1,592 were black.

Overall, of the 13,810 people arrested for marijuana in 2016, 4,051 were whites, 2,201 were black, 5,994 were Latino, and 1564 were classified as “other.”

California is 76.9% white, 17.8% Latino, 13.3% black, and 5.7% Asian, according to the US Census Bureau estimates.

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In Las Vegas, Waimanalo native is cashing in on cannabis industr – Hawaii News Now

LAS VEGAS, NEVADA (HawaiiNewsNow) -

In Las Vegas, where recreational marijuana sales began in July, a Waimanalo native is cashing in. 

Ranson Shepherd is the co-owner of Pegasus, a marijuana cultivation company in Nevada. 

And at just 32-years-old, he says his company is making millions of dollars a month. 

“We exploded right into the market immediately. Once recreational marijuana took off, it’s been out of control here in Las Vegas,” Shepherd said. 

Shepherd says his 22,000 square foot facility can grow about two tons of marijuana every year. His product line, Virtue, can be found in most Vegas dispensaries. And in this market, he says there is more than enough business to go around. 

“There’s over 40-plus million people a year that come to this town. And even if we get 1-percent of the 40-plus million people a year, that’s still 400,000 patients and users,” he said. 

Shepherd got involved in the industry through family who saw how talented and driven he was. 

He says that determination started at a young age. 

After being in the custody of Child Protective Services, he was raised by his grandparents, became an honor roll student at Kailua High, and all-state athlete.

He attended the University of Nevada, Las Vegas on scholarship where he walked onto the football team, but dropped out during his last semester to get a full time job to care for his younger brother. 

“I took full custody of him at a very young age and raised him. I put him through high school, put him through college,” he said. 

The now father of two says being successful in this new industry takes patience and persistence. 

Pegasus received its cultivation license in November 2014, but didn’t put plants in the ground until September 2016. 

Prior to recreational pot, the company began selling medical marijuana in March. 

“There’s so much growing pains and growing challenges to the entire process because what we’re doing in this industry. The regulators and some of the state people are still trying to figure out what they’re doing and how they’re going to regulate this industry,” he said.  

Shepherd has been following the Hawaii market closely because he says he would love to do business here at home eventually. 

Copyright 2017 Hawaii News Now. All rights reserved. 

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Nevada marijuana license expansion on hold again until Aug. 29

CARSON CITY, Nev. (AP) – Nevada’s marijuana regulators have agreed to delay the expansion of distribution licensing to meet growing demand at pot retail stores until the state tax commission can hear another appeal from a group of state liquor wholesalers next week.

A Carson City judge lifted an injunction last week that had prohibited the Nevada Taxation Department from licensing anyone other than alcohol businesses to transport recreational marijuana from cultivators to dispensaries.

Judge James Russell said he had no authority to override the department’s decision earlier this month that there weren’t enough alcohol distributors to keep up with demand.

He said the Independent Alcohol Distributors of Nevada must first exhaust all administrative remedies and file a formal appeal with the Tax Commission.

The commission agreed Friday not to license any non-alcohol entities for distribution until the panel hears the appeal Aug. 29.

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Cannabis companies eager to take growing biz to the bank

Sacramento, Calif. — Any private U.S. bank that is insured by the federal government is forbidden by law from knowingly handling money from cannabis businesses. That leaves people in the rapidly growing industry with few options when it comes to dealing with business basics like payroll, taxes, and finances.

That is a particular problem in California, the country’s biggest market for marijuana. Every year, the state produces 14 million to 16 million tons of pot and consumes 1.5 million to 2 million tons. Along with Massachusetts and Nevada, California voters in November made marijuana legal for recreational use. Recreational marijuana will be be regulated alongside medical marijuana beginning on January 1, 2018.

A recent study by the UC-Davis Agricultural Issues Center estimated that sales of recreational marijuana in California could top $5 billion annually. But because cannabis is illegal under federal law, marijuana businesses must continue to operate as cash-only enterprises and may not tap credit and debt products the way ordinary companies do. That’s a risky proposition that also limits growth.

Customers “have to pay us in cash,” a Sacramento area cannabis cultivator, who asked to be identified only as “Morales,” told CBS News.

These commercial banking restrictions are a regular topic of conversation at California’s Board of Equalization, which collects state-specific taxes and fees in the state. As the January legalization deadline approaches, many are wondering how cannabis businesses will handle what many expect will be a flood of money.

Fiona Ma, a member of that board, said that one idea gaining traction is a state-run bank that is free of federal control.

“I think people get a little fed up, and they want an alternative that is going to be easy, transparent and affordable,” she said in an interview with CBS News. “This would be a long-term solution, and there needs to be a commitment from the state.”

Private banks have shareholders and are run by a board of directors. By contrast, a state bank authorized to do business with cannabis companies would be owned by the public and run by local government officials. Any profits could also potentially be returned to taxpayers.

© 2017 CBS Interactive Inc.. All Rights Reserved.

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Nevada Tax Commission to hear appeal of pot ruling Aug. 29

The Nevada Tax Commission has agreed to bar the department from issuing marijuana distribution licenses to anyone except liquor distributors until they hear the appeal of Thursday’s ruling opening licensing to retailers, cultivators and others in the pot business.

Kevin Benson, who represents distributors including Carson City’s Kurt Brown of Capital Beverages, is battling to enforce the language of the voter approved statute legalizing recreational marijuana. That language says distribution of recreational pot can only be done through licensed liquor distributors for the first 18 months.

But the initiative also says taxation can issue those licenses to others, including retailers themselves, if the department determines there aren’t enough liquor distributors to handle the demands of the more than 60 retailers and dispensaries in Nevada.

Taxation officials made that ruling last week, forcing liquor distributors to go to court for an injunction.

But Carson District Judge Todd Russell ruled Thursday, Aug. 17, the issue should go first to the tax commission before reaching his courtroom. And he lifted the stay on taxation officials granting licenses saying it appeared to him there was, “substantial evidence supplied at the hearing there is a need for additional distributors over and above the liquor distributors.”

Benson said the commission has set a hearing on the issue for Aug. 29.

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“It says in the notice they’re going to give us a stay until the Tax Commission decides it,” he said.

But Benson said the commission gave notice he must file a brief in the case by Wednesday, Aug. 23, which he said gives his side no real time to prepare. He said the commission also served notice they won’t allow new evidence, “unless there is good cause.”

He said he can show good cause: “The problem is we never had a chance to present it at the hearing.”

Benson said they will prepare their arguments for the Aug. 29 hearing.

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