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California’s Exorbitant Cannabis Taxes, Cannamoms Speak Out
Plus, Feds say they can seize legal cannabis
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🌱 Hey, Benzinga Cannabis community! Maureen Meehan here, bringing you the freshest updates from the cannabis world. In today’s newsletter, we're diving into some major federal news, including a new ruling on marijuana seizures, Ohio’s record-breaking cannabis sales and the growing challenges for Texas hemp businesses as a THC ban looms.
Plus, we’ve got financial updates from iAnthus and Flora Growth, super high marijuana taxes in California, a look at cannabis M&A trends and some culture-shifting stories about cannabis moms as well as sustainability in the industry.
Let’s get into it!
In today's issue:
🏛️ Politics & Policy
Feds Say Marijuana Can Be 'Summarily' Seized From State-Legal Businesses—But Not If It’s Rescheduled
Big federal news! The U.S. Department of Homeland Security and Customs and Border Protection (CBP) argued in a new court filing that they can “summarily” seize marijuana from state-legal businesses. However, this could change if cannabis is moved to Schedule III. The filing follows a lawsuit from several New Mexico cannabis businesses whose products were seized by CBP and DHS. It all boils down to how federal agencies handle marijuana, especially with the rescheduling discussions currently up in the air. The outcome of this case could have significant implications for businesses operating in the legal space.
Looks like the Garden State might be taking a new step in cannabis policy! In the race for New Jersey’s next governor, several hopefuls have voiced strong support for allowing people to grow their own cannabis at home. New Jersey legalized marijuana but hasn't yet given citizens the right to cultivate their own plants. If these candidates have their way, that could change soon! Home-grow advocates argue it’s time to take the next step in expanding cannabis rights for both medical and recreational users.
📈 Market Moves & Financials
Ohio's cannabis industry has hit a major milestone, with sales now totaling $2.5 billion. Recreational purchases have been the driving force behind this growth, contributing over $390 million in the last seven months alone. While this news is a win for the state, there’s still a lot of debate going on about how to handle marijuana tax revenue. Some lawmakers, including GOP Gov. Mike DeWine, want to shift funds from social equity programs to focus more on police training and mental health services. This shift has sparked some heated discussions.
iAnthus Capital Holdings (CSE: IAN) (OTCQB: ITHUF) has posted a major improvement in its financial results for 2024. While the company still posted a net loss of $7.6 million for the year, that’s a huge improvement compared to last year’s $76.6 million loss. The New York-based cannabis company saw a 5.2% increase in annual revenue, with $167.6 million in total revenue for 2024. This includes a strong fourth-quarter showing, with $42.7 million in revenue. It's a step in the right direction for iAnthus as it looks to recover and grow in the competitive cannabis market.
Flora Growth Corp. (NASDAQ: FLGC) has reported a decline in revenue across all of its business segments for 2024, posting $59.5 million in total revenue, down from $76.1 million the year before. Despite the dip in revenue, the Florida-based cannabis company has made some strides in reducing operating costs, cutting them down from $68.1 million to $28.1 million. However, Flora still reported a net loss from continuing operations of $15.9 million, which is an improvement over the previous year's loss of $46.7 million.
🌿 Industry Growth & Challenges
The price of legal cannabis in California is about to get higher—literally. Starting July 1, 2025, the state's excise tax on cannabis is set to increase from 15% to 19%, a move that could push the total tax burden on consumers to nearly 48% when combined with local taxes. But how does this stack up against other taxed goods and is the cannabis industry being unfairly targeted?
Benzinga’s Javier Hasse looks at the question of cannabis taxation, which has been hotly debated since California legalized adult-use sales in 2018. Supporters argue that cannabis should be taxed heavily, like tobacco and alcohol, to generate state revenue and discourage excessive consumption. Critics contend that the industry is already overburdened, making legal businesses uncompetitive against the illicit market.
Texas' hemp market is booming, generating an impressive $5.5 billion in annual sales. However, the state's Senate just passed a bill that would ban THC products, a move that could bring the industry’s growth to a halt. The bill is now headed to the House, and dispensary owners across the state are concerned about the potential damage. One business owner commented, "Unfortunately, this bill will absolutely kill our business." With Texas' hemp industry supporting nearly 50,000 jobs, the impact of this legislation could be huge.
Cannabis mergers and acquisitions (M&A) are on a downward trend in 2024, dropping 33% compared to the previous year. This year, M&A activity reached $1.169 billion, a significant decrease from 2023's $1.749 billion. So, what's behind the decline? Viridian Capital Advisors' Frank Colombo suggests several factors at play, including market uncertainty and regulatory challenges. This could be a sign of growing pains in the cannabis sector, with companies facing increased competition and tighter financial constraints.
💬 Cannabis Culture And Environment
A group of moms in Missouri is breaking the stigma around cannabis use. These "Cannamoms" say that smoking weed helps them be better parents. "Cannamom game night is just basically a night out with your besties, away from the kids," said Kimberlee Kesterson, co-founder of Cannamoms. "You're meeting new friends. You're going to be gifted some joints, you're going to play some games, and you're just going to live your best kid-free life for a couple of hours." These women are working to change how cannabis use is viewed, especially for moms.
A new study has found that shifting marijuana cultivation from indoor to outdoor grows could reduce the industry’s greenhouse gas emissions by as much as 76%. The cannabis industry currently accounts for 1% of total national emissions, but with outdoor cultivation, energy consumption could drop significantly, benefiting both the environment and the bottom line. This could be a crucial step in making the cannabis industry more sustainable and eco-friendly.
That’s a wrap for today! Keep checking back with us here at Cannabis Daily for the latest updates, and feel free to drop any thoughts or comments below. Stay high on knowledge and have an amazing day! 🌱
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