The cannabis world saw two major mergers this spring as packaging giants Greenlane and KushCo joined forces and tech platform Dutchie acquired Greenbits and LeafLogic as part of a $200 million capital that left the company with a valuation of $1.7 billion.
The Greenlane-KushCo merger is an all-stock deal that creates combined company valued at more than $400 million with a customer base including many of the leading multi-state operators and licensed producers, the majority of the top smoke shops in the United States and millions of consumers. The transaction is expected to generate approximately $15 million to $20 million of annual run-rate cost synergies.
The combined company will have a diversified and highly complementary customer product offeringthat includes consumption devices, vaporizers and accessories; supplies and child-resistant packaging; papers and wraps; and complementary solvents and natural products. In addition, the combined company will offer curated proprietary owned brands, including Pollen Gear, VIBES rolling papers, Marley Natural Accessories; K.Haring Glass Collection, Aerospaced grinders, Eyce specialty silicone smoking products, and Higher Standards.
KushCo CEO Nick Kovacevich will serve as the new company’s CEO while Greenlane’s Bill Mote will serve as Chief Financial Officer.
Dutchie’s latest round of funding was led by Tiger Global, with participation from new investors Dragoneer and DFJ Growth, and from existing investors including Casa Verde Capital, Thrive Capital, Gron Ventures, and former Starbucks Chairman and CEO Howard Schultz. The acquisitions of Greenbits and LeafLogix, two enterprise resource planning (ERP) and point-of-sale (POS) software solutions serving the cannabis industry, are designed to “provide more value to dispensaries and consumers,” according to a press release.
According to a blog post on the Dutchie website, LeafLogix and Greenbits have always bee “great partners” with Dutchie and “over time it became clear that officially bringing our teams and technology together would create unparalleled opportunities to build solutions for our retailers.”
In a nod to the changing and maturing nature of the cannabis industry itself, for the first time, this year’s Emerald Cup included a testing component that sorted the entries into one of six categories based on terpene profiles.
According to a press release, the hope was that the new data-driven approach would “provide a greater understanding and appreciation for the diversity and range of cannabis chemistry and chemotypes” and allow judges to rate similar terpene profiles against each other to find a “best in class” winner.
The testing was done by SC Labs, which has partnered with the Emerald Cup for 11 years and creates detailed profiles of each varietal, with a focus on terpenes.
“Cannabis consumers have often solely looked to THC content as the primary indicator of quality. Terpene content is the other half of the equation,” Alec Dixon, SC Labs co-founder and director of client relations, said in a press release. “Historic Emerald Cup data has shown year after year that the judges’ picks and winners have never had anything to do with THC content when compared to the averages, but winners consistently test much higher in terpene content than the rest of the field. The real quantitative quality marker in cannabis is terpene concentration.”
This year’s Emerald Cup was streamed live on Social Club TV on April 11 featuring performances by Ziggy Marley, Michael Franti and Krayzie Bone of Bone Thugs-N-Harmony along with special appearances by Chelsea Handler, B Real and Willie Nelson Lifetime Achievement Award recipient Winona LaDuke.
— Brian Beckley
Oklahoma License Caps
An attempt to limit the number of licenses available in Oklahoma’s red-hot medical marijuana industry appears to have failed, thanks in part to the efforts of the Oklahoma Dispensary Association, which lobbied to have the caps removed from the most recent version of the Legislature’s cannabis bill.
“Our efforts have paid off,” said ODA executive director Paul Murano.
Oklahoma’s medical cannabis market is one of the largest and fastest-growing in the country, in part because of the government’s almost laissez-faire approach to regulations on the number of licenses available and the relatively low barriers of entry to the industry. The result has been a boom, particularly in retail, where tiny, rural Oklahoma has nearly double the number of licensed dispensaries than any other state, even with a slight decline in 2020.
According to Murano, Oklahoma’s market has been as successful as it has because it allows for small and local businesses to compete and the lack of caps also helps keep large corporations from taking over. He said the now-removed language, known as the “Oklahoma Cap on Medical Marijuana Businesses Act of 2021,” could have stifled the market, reduced access for patients and created a “non-diverse, non-competitive” industry, which he said has happened in other states, like neighboring Missouri.
Murano said he is hopeful the new Senate bill, which replaced one sent by the House of Representatives, would be approved by the House and signed by the governor. Murano said he is pleased with the current bill and hopes Oklahoma’s market continues to be an industry leader and example for other states.
“We hope Oklahoma has showed the best way for cannabis regulation is to look at the examples of other states, disregard the bad examples and follow the good ones,” he said.
— Brian Beckley