Sugarmade Signs Binding LOI to Enter Rare Cannabinoid Market – Cannabis Business Times
alfredvondoussa34 January 24, 20220 Views Save
The planned market entrance is through a license agreement for patented THC-V-rich chemovars.
NEW YORK, Jan. 24, 2022 – PRESS RELEASE – Sugarmade Inc., an emerging leader in the licensed cannabis sector, announced the signing of a binding letter of intent (the “LOI”) with GenCann Inc., the exclusive licensor for a set of cannabis chemovars particularly rich in the cannabinoid Tetrahydrocannabivarin (THC-V) (the “GenCann chemovars”).
Under the terms outlined in the LOI, Sugarmade and its licensed cannabis cultivator partners will be granted a five-year license to cultivate what the company believes to be some of the highest THC-V-containing strains in existence. Sugarmade and GenCann plan to begin clone production immediately upon the signing of the final agreement with a cultivation program beginning this spring in Lake County, Calif.
“While THC-V is sometimes referred to as a ‘rare cannabinoid,’ we believe the term no longer applies relative to our planned cultivation effort using GenCann’s chemovars,” Sugarmade CEO Jimmy Chan said. “The test results from certified California laboratories of these chemovars are certainly impressive, with THC-V yields in flower of up to 8 percent. We think the GenCann chemovars are a game-changer in the cannabinoid space. Sugarmade plans to make a substantial commitment to bring products based on THC-V to the California market and perhaps to other states in the future.
The GenCann chemovars are covered by multiple issued U.S. patents, including patent numbers PP33212 for the plant called “V1,” patent number PP33211 for the plant called “V2” and patent number PP33210 for the plant called “V3.” All three of these chemovars contain abundant THC-V, with the V1 variety being especially distinguished by producing more THC-V than THC by percent weight. The V3 strain, also known as Skelator, will be the predominant strain utilized for spring cultivation due to its early finishing characteristics and its higher THC-V content, although the V1 and V2 varieties are also planned for Sugarmade’s cultivation effort.
Sugarmade plans to utilize the THC-V-rich biomass in a series of products it plans to introduce to the licensed California marketplace. The first of these will be THC-V-rich smokeable flower and THC-V-rich gummy candies. In the future, Sugarmade plans to also produce distillate and isolate products based on its cultivated biomass.
“The THC-V smoking and edibles consumption experience is very different compared to traditional cannabis,” Chan said. “Where legacy cannabis strains often produce a sedating effect, consumption of THC-V-rich products produces a pleasant and uplifting effect. It’s a remarkable experience, and we believe consumers will gravitate to it.”
In addition to seeking to supply the mainstream cannabis marketplace with THC-V products, Sugarmade also plans to seek pharmaceutical and nutraceutical partners for supply agreements as many of these companies are already stating their intentions to conduct trials or to produce products containing rare cannabinoids.
The cultivated THC-V cannabinoids from the GenCann chemovars differ significantly from the current generation of THC-V products presently available in the marketplace, most of which are converted via a chemical process from hemp-based isolates. This generation of products is also very expensive, often priced in the $50-per-gram range, and is typically not tested by certified laboratories.
Additionally, the cannabinoids produced by the GenCann chemovars differ from planned offerings by other companies that utilize genetically modified organisms, such as bacteria or yeast, to create cannabinoids outside of the cannabis plant varieties. All of the cannabinoids to be generated via the GenCann chemovars and Sugarmade’s cultivation will be produced from real cannabis plants that have been specifically bred for this purpose and grown in an outdoor setting.
Sugarmade and GenCann believe outdoor cultivation of THC-V-rich strains will yield higher desirable cannabinoid content due to optimal ultraviolet light levels inherent in natural sunlight.
The Colorado-based company’s limited-edition product releases include its unique Pheno Hunts, First Cut Strains and exclusive partnerships with retailers.
Veritas Fine Cannabis is always looking for new ways to engage with the end consumer, and this past year, the Colorado-based company has found success in a variety of limited-edition product drops.
The Veritas team likes to curate experiences, according to the company’s marketing director, Jordan Plunkett.
“That’s the thought process behind our new product lines and our new product drops,” Plunkett says. “We want to do something that goes above and beyond just giving someone a new product to try out. We want to tie that into an experience somehow, and we’ve done this in the past with previous product lines, such as our Pheno Hunts.”
While “pheno hunting,” or determining a cannabis cultivar’s best traits, is usually reserved for a company’s internal product development team, Veritas has given its customers the chance to try and vote for their favorite phenotype. The one with the most votes then becomes a permanent cultivar in Veritas’ genetic library.
“That [idea] derived from our gardeners coming to us and basically saying, ‘We have all these phenos and these incredible strains, and we don’t even … know where to choose from,’” Plunkett says. “We then came up with an idea to actually … get consumers engaged somehow.”
Veritas offers its customers a Pheno Hunt box that includes 1 gram each of three different phenotypes of the same cultivar, along with accessories like a grinder, a lighter and rolling papers. Consumers can then sample each phenotype and offer their honest opinions and feedback on which ones should have a place in Veritas’ genetic library, Plunkett says.
“It’s been a really successful and engaging way to really connect with our customers,” he says. “They seem to love it because it actually gives them a say so in what we do as a company. At the end of the day, they’re the ones actually enjoying our products, so we want to hear from them directly.”
Now, customers are anxiously waiting for the next Pheno Hunt to drop.
“We’ve really seen a huge number of growth, and we actually have people asking us when the next one is,” Plunkett says. “People are very familiar with it, they know about it, so I would definitely say our Pheno Hunts are probably our most successful limited-edition product line that we offer.”
Veritas also has a First Cut product line, which is offered more frequently than Pheno Hunts and gives customers a look at a cultivar that the company is growing for the first time.
As with the Pheno Hunt products, the First Cut line gives Veritas’ customers the ability to provide feedback on the cultivars and decide whether they should have a permanent spot in the company’s genetics library.
“People have absolutely loved the First Cut concept so far,” Plunkett says. “We’ve been doing it for a few years now, and … people like having … the opportunity to be a part of something when it comes to working with these big cannabis brands.”
Veritas also tries to find unique ways to connect with its retail partners by offering them exclusive, limited-edition product drops.
For example, the company recently partnered with Golden Meds to offer exclusive day and night boxes. The day box contains two of Veritas’ sativa-dominant cultivars from its Invigorate line, while the night box contains two indica-dominant cultivars from the company’s Alleviate line.
“With that, we’ve given the users an experience, and with the store, we’ve given them this exclusive product that’s only available to them,” Plunkett says.
Veritas has also partnered with Wolfpac Dispensaries to offer Cocoa Puffs as an exclusive cultivar available in 7-gram jars.
“That is not typically a product line that we carry, so that was a cool, limited-edition, exclusive drop that if you wanted to get Cocoa Puffs, you had to go to Wolfpac,” Plunkett says.
Sometimes, Veritas will tie an exclusive product drop to a prize or giveaway to drive new product lines. For the 2021 All-Star Game in Denver, for example, the company sold a commemorative can with three 1-gram pre-rolls and a baseball rally towel inside—and one lucky can also held two tickets to the game.
“You’re already going to enjoy the product itself—you’re already planning on purchasing our product anyway—but we’re giving the consumer that extra little nudge, that extra thing to incentivize them,” Plunkett says.
Veritas evaluates the success of a limited-edition drop based on whether the products sell out. The company sets the drops at a certain quantity, and its goal is to sell out of that inventory as soon as possible.
For example, Veritas releases about 900 boxes for its Pheno Hunt promotion and typically sells out within a couple weeks.
“We consider that to be an absolute success and a win there,” Plunkett says.
The company also considers social media engagement when determining the success of a particular drop. Veritas never asks customers to post about the brand or its products, but if the company sees a lot of natural, organic conversation on social media about a particular drop, the team counts it as a successful promotion.
“We really determine our success based on what people just really, truly thought of the promo,” Plunkett says. “Obviously, we take a look at our sales data and our numbers and review all that stuff to make sure that we did it right and [where] we have room for improvement. … But our ultimate goal is to really just create an experience for the customer and have a positive little thing for them to try out.”
Looking ahead, Veritas plans to collaborate with Native Roots to roll out a live resin vape cartridge. Beginning Jan. 28, Native Roots will be the exclusive retailer of the cartridge, which will feature custom packaging.
“We’ve given them our product, our flower, to be pressed and extracted into pens,” Plunkett says. “We’re planning on only starting with about 3,000 of these in the market, so we’re hoping that these take off and we’re very excited to see how they do and how people enjoy them.”
The overall goal of Veritas’ limited-edition product drops, Plunkett says, is to create an organic conversation with the company’s customers and allow them to weigh in on what they like—and what they don’t.
“The biggest thing we just try to do here is really just give the end consumer the ability to feel like they’re a part of something,” he says. “We love pushing the boundaries of what’s out there and what’s possible, and we like to try to do things that pave the way for others to even follow.”
The licenses went to retailers in Wagner, Watertown and Keystone.
South Dakota has issued its first three medical cannabis dispensary licenses to retailers in Wagner, Watertown and Keystone, according to a South Dakota Public Broadcasting report.
The licenses went to Custom Touch in Wagner, Dakota Dispensaries in Watertown and Puffy’s in Keystone, according to the state’s website.
South Dakota must still license medical cannabis cultivators, manufacturers and testing facilities, and the Department of Health is continuing to process applications, South Dakota Public Broadcasting reported.
The state’s voters approved medical and adult-use cannabis legalization measures in the November 2020 election, although the South Dakota Supreme Court has since overturned the adult-use initiative, ruling that it violated the state’s single-subject rule.
South Dakota lawmakers are currently considering several proposed bills on medical and adult-use cannabis during the 2022 legislative session, which kicked off Jan. 11.
Combining Dama's fintech and payment solutions and GrowFlow's software platform will create a sophisticated, comprehensive solution for cannabis companies, integrating product, operations, compliance, and financial data in a more usable and flexible solution.
SOUTH SAN FRANCISCO, California, January 21, 2022 – PRESS RELEASE – Dama Financial (Dama), a provider of access to banking and payment solutions for the cannabis industry, has entered into an agreement to acquire GrowFlow Corp. (GrowFlow), whose business management and compliance tools have processed more than $3.3 billion for cannabis retailers, cultivators, processors, and distributors.
Dama Financial has entered an agreement to acquire GrowFlow, creating a comprehensive solution for cannabis companies.
Combining Dama’s fintech and payment solutions and GrowFlow’s software platform will create a sophisticated, comprehensive solution for cannabis companies, integrating product, operations, compliance, and financial data in a more usable and flexible solution. The highly scalable platform will fulfill the business needs and regulatory obligations of any licensed cannabis business—dispensary or wholesale—everywhere cannabis is legal in the United States.
“With this acquisition, we are creating the leading platform for cannabis operators, essentially a one-stop-shop for the business tools they need to thrive,” said Anh Hatzopoulos, Dama’s co-founder and chief executive officer. “We created Dama to solve real problems for the industry through innovation, and integrating GrowFlow’s software into our fintech is a huge step forward in that mission. To be successful in the long term, cannabis operators need legal, compliant, forward-looking solutions like Dama’s that don’t skirt restrictions through workarounds, and this sets us up to keep innovating to champion our customers and propel a booming market.”
Cannabis is currently legal in 37 U.S. states and four U.S. territories. The U.S. market is expected to reach $43 billion by 2025, according to New Frontier Data. Dama is one of the only solutions available in every state where cannabis is legal.
“I could not be more excited about this merging of minds and technologies,” said Travis Steffen, GrowFlow chief executive officer. “Our leadership teams have nearly identical views of the industry and how it is evolving. Bringing our solutions together will allow us to serve customers in many unique ways and compete on much more than price.”
The transaction is expected to close this quarter, subject to regulatory approvals and other customary closing conditions.
The nonprofit organization recently received a donation from The Source, which will help advance its efforts to create diversity and commonsense regulations as the state launches cannabis consumption lounges.
Who will be the next set of leaders in Nevada’s cannabis industry as the state works to launch its much-anticipated cannabis consumption lounges?
For the Nevada Chamber of Cannabis, a 501(c)(6) nonprofit organization with the goal of advancing inclusivity in cannabis commerce, and its industry partners, it is imperative that the state works to create a more diverse marketplace.
Since its inception in early 2020, the Chamber of Cannabis has grown to over 400 registered members and 65 cannabis businesses, as well as roughly 10 ancillary businesses. The organization hosts monthly meetings, much like a regular chamber of commerce, to gather industry leaders to share ideas.
“Our chamber board has been able to use their network to bring people together,” says Tina Ulman, the co-founder and president of the Chamber of Cannabis “We’ve helped place talent, we’ve helped make business introductions, and … those are things that just weren’t happening as strong as they should’ve been previously.”
Earlier this month, The Source, a vertically integrated cannabis operator with dispensary locations in Henderson, Las Vegas and Reno, joined the Chamber of Cannabis at its “Game Changer” level with a donation of $10,000 or more.
“With The Source’s generous financial support, we’re able to retain professional services, such as an executive admin and content creators to help elevate the association communication,” Ulman says. “Without that, we wouldn’t be able to be as effective or sustainable. … We’re grateful to have companies like The Source help support our initiatives.”
“As a company, I think we’ve always been and continue to be about elevating the communities that we work in through community education, engagement and partnerships,” adds Simon Nankervis, CEO of The Source. “When we first started talking to Tina about the Chamber of Cannabis and what the Chamber stood for, we thought that joining at the Game Changer level made a lot of sense for us because there was alignment for us to support a nonprofit that was focused around cannabis reform, community building, and really focused at the dispensary level.”
As a female-owned organization, Nankervis says The Source has always been an advocate for diversity and inclusion in the industry.
“We’ve been given the opportunity to take a product that’s historically been seen as taboo and work with that product in the greater market,” he says. “It’s important that we destigmatize cannabis more broadly, making sure that communities and people that aren’t actively engaged in cannabis see the great benefits that the product has. In order for people to feel good about the product, they have to feel good about the people in the industry.”
The Nevada cannabis industry has continued to grow since it launched its first legal adult-use cannabis sales in the summer of 2017, and, with that growth, Nankervis says the industry has an obligation to develop both state and national best practices. That includes expanding opportunities for minority-owned businesses, he says, especially as Nevada rolls out its cannabis consumption lounges, which the state legalized last year.
The Chamber of Cannabis has also set its sights on creating diversity and commonsense regulations as Nevada works to launch its consumption lounges.
Ulman has worked with Nevada Assemblyman Steve Yeager for the last several years, and when he signaled his support for consumption lounges, Ulman and her colleagues at the Chamber of Cannabis put forth a proposal and submitted it to Yeager for introduction in the Nevada House.
“Through building relationships, we were fortunate to raise enough money to retain a lobbyist and move as a coalition of like-minded businesses and leaders who wanted to see this bill pass,” Ulman says. “We chose the social consumption lounge bill because it was truly the next thing that should’ve been passed. When Nevada went adult-use, … the legislators didn’t give people anywhere to consume where they weren’t being criminalized, and that’s a big problem, especially when we have millions of tourists coming here every single year.”
The bill ultimately passed last spring, and the Chamber of Cannabis continues to give the industry a voice to help shape the rollout of Nevada’s cannabis consumption lounges.
“I was very lucky to be chosen to sit on a subcommittee for diversity, social equity and inclusion with another activist, two political leaders and a female dispensary owner in Nevada,” Ulman says. “I’m very happy that our Cannabis Compliance Board created four subcommittees to get suggested regulations from people that know that area better than them. Our CCB has also made diversity, social equity and inclusion their top priority because, unfortunately, the Nevada Department of Taxation failed to do so on the first two major rounds of licensing.”
The CCB’s regulations for consumption lounges should be finalized this spring, Ulman says. After that, businesses will be able to apply for consumption lounge licenses.
“This business model does allow infused food and non-alcoholic drinks, which is very, very important because, in Las Vegas, we have a great deal of entrepreneurs, restauranteurs, chefs—people that have big ideas for these lounges,” she says. “It’s not just a smokey lounge, something that I’ve seen people envision sometimes, but much bigger than that and much broader, [and it] will help a lot of other people get into this industry that maybe weren’t involved before.”
Ulman says that some dispensaries already have blueprints in mind for building out consumption lounges in their existing facilities, and these businesses will likely open their lounges first, ahead of independent lounges that will be in the start-up stages.
“It’s just exciting to see how tourism will change,” Ulman says. “The younger tourist isn’t spending the money on gambling. They aren’t spending the money on clubs like they used to. They want the experiences, and a lot of people are also refraining from drinking alcohol and moving into plant-based medicine and using cannabis. … Things are just going to shift, and we want to be at the forefront of that with companies like The Source.”
Nankervis says The Source plans to apply for a consumption lounge license when the time comes.
“At this time, I don’t know what that looks like because the legislation has a long way to go,” he says. “It’s not been made very clear how the lounges will and won’t function in the state. There are a lot of opportunities for us to follow best practices from other industries. I think we can look to the gaming industry about how they’ve dealt with smoking inside casinos [that are] adjacent to eating establishments. I think there are a lot of opportunities for us to look at the way mainstream or non-cannabis businesses dealt with similar issues that the industry’s facing.”
Nankervis says he and his team will work through the Chamber of Cannabis to ensure the Nevada’s consumption lounges move forward with commonsense legislation.
“We’re really happy to be a part of the Chamber of Cannabis,” he says. “We’re happy to support their energy and efforts toward ensuring that we have a better industry. … We’re truly a fledgling industry today. As we go forward, it’s important that we start to think about, OK, what does this industry look like three, five, 10 years from now, and how do we develop the next set of leaders as we go into the next stage of the evolution?”
It is an election year for Nevada’s local jurisdictions, and the Chamber of Cannabis plans to meet with many of the candidates to discuss their positions on cannabis policy reform. The organization will ultimately create scorecards for each of the candidates, Ulman says.
The Chamber of Cannabis also aims to increase its collaboration between the organization and local colleges and universities so ensure that graduates can secure internships and jobs in the cannabis industry.
“For me, The Source and other companies truly are helping us do what we’ve always envisioned, and without them, we wouldn’t be able to continue with the movement,” Ulman says. “It’s great to see a win-win relationship, and we’re excited to continue to set the bar for other cannabis companies and set the bar for other states, so that Nevada will be the gold standard in so many aspects.”
Cannabis Business Times’ interactive legislative map is another tool to help cultivators quickly navigate state cannabis laws and find news relevant to their markets