Issue 40: Jushi Gets Squeezed by Lawsuit
Plus: Some things you should know about that CBD vape study, and a climate scientist rings the alarm bells over the industry's impact
Welcome to Issue #40 of Burn After Reading! You can check out last week’s issue here. If you haven’t subscribed already, head here.
Welcome new (and old) readers! Let’s get into it.
Multi-State Operator Jushi Get Squeezed by Lawsuit from Small Massachusetts Company
Here’s some Jushi gossip: The publicly-traded multi-state company (who recently bought out the Nature’s Remedy brand in Massachusetts) is being sued by MA-based MJ’s Market for allegedly attempting to stop MJ’s from opening a dispensary near one of Jushi’s stores.
If you don’t have time to read the 33 page lawsuit (first reported on by Law360's Sam Reisman), here is the gist:
The chief complaint of the suit is that Jushi attempted to use a variety of mechanisms to block MJ Market from opening a location near their Nature’s Remedy store in Tyngsborough, all in an attempt to gain a monopoly over the town’s cannabis market.
The recent Merger and Acquisition Deal between Jushi and Nature’s Remedy allegedly contained a clause that would award the owners of Nature’s Remedy $15 million (!?!) if they successfully blocked MJ Market from opening its doors.
The owners of MJ’s Market are asking for at least $60M in damages, among other requests.
While these accusations are alarming, this lawsuit also gives good insight into how the sausage is made in terms of attempting to open a cannabis business in Massachusetts. The reality of the town’s cannabis zoning meant that MJ’s Market was more-or-less forced to open their business on the one of the fews parcel where the town would actually give them approval, giving Jushi the desire (and potential leverage) to attempt to block this project.
Tyngsborough is hardly the only town in Massachusetts with extremely limited cannabis zoning, and this reality creates a situation where the few available parcels that do fall within the cannabis zone are often used as pawns for all types of shady behavior.
Similarly, the complex local process in Massachusetts (which involves a laundry list of approvals from various municipal bodies and the negotiation of the oft-dreaded community host agreement) is also rife with chances for bad actors to attempt to sink a business’s chances of opening. The fact that Tyngsborough’s government seemingly had no interest in playing along with the defendant’s alleged scheme is probably the only thing that stopped it from succeeding.
These types of behind-the-scenes shenanigans at the local level from potential competitors are hardly a rare occurrence in the industry, but finding enough evidence to pursue a lawsuit can be difficult. Lawsuits also cost a lot of time and a lot of money, and people who are struggling in the uphill battle to get a cannabis business up and running rarely have either of those things.
It’s a big risk for an operator like MJ’s Market to take on a large, publicly-traded company, but if the accusations are true, you can understand why they did it.
My attempts to get comments from both Jushi and MJ’s Market were unsuccessful, but I’ll keep an eye on how this story develops.
Cannabinoid Provider says Big CBD Vape Study is fundamentally flawed
As someone who regularly recommends that cannabis newbies first try a vape cartridge that has some levels of CBD in it to stave off anxiety, I was a bit alarmed by some of the headlines that a recent study spawned. This study, entitled “Vaping Induced Cannabidiol (CBD) Oxidation Product CBD Quinone Forms Protein Adducts with KEAP1 and Activates KEAP1-Nrf2 Genes” (catchy!) claims that vaping CBD is pretty harmful to your lungs.
However, it turns out this story may be another potent reminder to not automatically start believing something just because the abstract of a singular scientific study told you to. I don’t know enough about medical science or vape tech to rebut the findings of this study, but I do trust resident cannabinoid expert John Nathan on the subject, and he took some issues with this study’s methods on LinkedIn.
The CEO of Bay State Extracts* — the state’s leading minor cannabinoid provider — noted several issues with this study, including how little thought it seemingly put into procuring the vape cartridges and oils/juices they tested:
They used two products to draw this bold conclusion and neither product is suitable for doing so. For one, you cannot assert that a chemical reaction is attributed to a molecule without control testing that isolated molecule. Secondly, both products selected are not indicative of the most commonly used CBD vape products.
They used a CBD distillate cartridge (no mention of when the product was made) which could contain any amount of impurities, additional cannabinoids or general unknowns. When was the distillate made? How long has it been sitting?
It’s safe to say that it would be nice to have more scientific information on the impact of cannabis vapes, but if there’s anything we’ve learned so far, it’s that the composition of the concentrate and the device its placed in are key aspects to consider while attempting to understanding potential risks.
* = Because my brain is currently mush, I accidentally referred to Bay State Extracts as Bay State Botanicals in the original version of this piece.
Climate Scientist Acknowledges Some Ugly Truths About Indoor Cannabis Grows
Putting concerns about the CBD study aside, I’m not here to immediately dismiss any and all concerns about the impact of legal weed. This piece in Slate by Evan Mills — a retired scientist who played a role in the work of the Nobel Prize-winning Intergovernmental Panel on Climate Change — outlines a number of alarming environmental and health impacts of indoor cannabis cultivation.
This article touches upon several concerns that have been in the back of my mind for some time now, but Mills’ blunt assessment of the use of supplemental C02 in cannabis facilities was one of the first things that stood out to me in this piece.
Cannabis cultivation companies often pump extra CO2 into cultivation areas in order to kickstart plant growth, potentially prioritizing plant health over employee health in the process. Even if the CO2 isn’t at high enough levels to cause long term damage, you do have to wonder if the brain function of employees is impacted while spending hours upon end in these types of environments — something that could easily lead to accidents or other blunders.
Studies have shown that just spending a relatively small amount of time in a crowded, poorly ventilated space can have a surprising impact on people’s ability to stay alert and focused. If the CO2 levels are high enough at your kids’ dance recital to make you drowsy (a convenient excuse to be falling asleep, I know), imagine what the impacts can be when the stuff is literally being pumped into the room, often leading to CO2 levels exceeding three or four times the normal rate.
Mills also touches upon some of the potential impact of other things that can be found in the air of cultivation facilities:
Inside grow facilities, disproportionately nonwhite workers receive pay that mostly hovers around minimum wage while being exposed to a nasty stew of agricultural chemicals, gases, mold, noise, high temperatures and humidity, and harsh lighting brighter than the sun. In one study, nearly three-quarters of workers reported respiratory symptoms (including “probable” work-related asthma), eye and nasal irritation, and allergic reactions. Of particular concern is that workers breathe risky volatile organic compounds, VOCs, which are released from the plants and from dangerous extraction processes—and can reach concentrations hundreds to thousands of times higher than levels outside.
We’ve already seen plenty of evidence in the industry that companies aren’t taking into consideration the potential health risks that workers face when cannabis cultivation and production is attempted at scales and using methods that are largely unprecedented, often resulting in workers who are completely uninformed about the serious nature of these potential dangers.
While this piece points out a lot of real issues, I don’t think fixing them is quite as simple as the article’s sub-header suggests.
A common problem from cannabis content created by people based in California is that they often tend to forget that other states with legal cannabis actually exist. The most obvious thing (in my mind) that is complicating the push to move cannabis growing outdoors is that all outdoor environments are not created equal.
I’m a believer that high quality outdoor cannabis can be grown pretty much anywhere in the continental U.S, but results will always vary by season, and growing outdoor weed at scale and for profit is an entirely different matter than growing a few pretty outdoor plants. Even if states design their local programs to successfully encourage outdoor grows (and they rarely do), it seems obvious that every state can’t support the needs of their own markets solely through outdoor cultivation. This will remain an issue until interstate commerce is an option.
Similarly, the potential “best of both worlds” impact of greenhouse technology also goes unexplored in this piece. Still, it brings to light a litany of important concerns that haven’t received nearly enough attention in the cannabis space. Hopefully we can turn these words into meaningful action sooner rather than later.
Headlines
New England
WHAT CAN A TOWN DO IF A CANNABIS BIZ LOSES ITS STATE LICENSE? (Talking Joint Memo): “The move came after the Massachusetts Cannabis Control Commission “determined that” the company, “through the acts of its majority owner, poses an immediate or serious threat to the public health, safety, or welfare,” and documented many of the dispensary’s dirty details in a timeline. Having to grapple with the state suspension on its own terms, Athol Selectboard members juggled different options at their meeting on Tuesday.”
COURT RULES AGAINST TOWN'S AWARD OF MARIJUANA LICENSE (Ann Fisher | MaineBiz): “A Superior Court judge has blocked a move by Old Orchard Beach officials to preemptively issue an adult-use marijuana license before voters weigh in at the polls during a June referendum. York County Superior Court Justice Richard Mulhern on March 30 granted a preliminary injunction forcing the town to comply with the results of a local referendum scheduled for June 13 that would give residents a voice in determining a size limit for cannabis businesses.”
Rest of U.S. / National
EX-HEAD OF MICHIGAN MARIJUANA BOARD ADMITS HE TOOK BRIBES (Rick Johnson | Associated Press): “Charges against Johnson and three other men were announced by U.S. Attorney Mark Totten at a press conference near the Capitol in Lansing. Johnson, 70, was chairman of the marijuana board for two years until spring 2019. The Republican years earlier also was a powerful lawmaker, serving as House speaker from 2001 through 2004.”
'PERFECT STORM': ILLEGAL CALIFORNIA POT KEEPS SHOWING UP IN NEW YORK (Lester Black | SFGate): “Industry experts told SFGATE that New York is getting weed from two different types of California sources: some pot grown on legal California pot farms is being sent to New York, while other weed grown at illegal farms is being labeled with forged packaging to make it appear to be a regulated California product.”
VIRGINIA GOVERNOR AMENDS CONTROVERSIAL HEMP BILL (MJBizDaily): “Instead, Gov. Glenn Youngkin’s amendments will allow hemp-derived products to contain a CBD-to-THC ratio of 25-to-1, The Virginian-Pilot reported. The governor also removed another provision in the bill that would require producers to add a bittering agent to hemp topicals. The Virginia Cannabis Association had advocated for more amendments to the bill, which they said would hurt the local economy and kill jobs. But hemp operators told The Virginian-Pilot that the new 25-to-1 ratio limit is not enough and will still take a toll on their businesses.”
International
🇩🇪 GERMANY MIGHT PIVOT TO ‘CANNABIS LEGALIZATION LIGHT’ AMID EU PUSHBACK (Matt Lamers | MJBizDaily): “According to German news reports, federal officials are considering a “cannabis legalization light” model amid concerns that nationwide legalization could violate European law. As a result, Germany might roll out a trial model like those adopted by other jurisdictions such as the Swiss city of Zurich, under which recreational cannabis sales would be confined to certain parts of the country for three to five years.”
🇯🇲 THE MARLEYS PUSH HARDER WITH MAJOR LAUNCH IN JAMAICA'S GROWING MARIJUANA INDUSTRY (Ebuzztt.com): “The Marley Family have launched the new Marley Natural Herb House. The launch coincided with the launch of the Marley one global mushroom brand.”
Welcome Distraction
(For the uninitiated, this is where I offer a non-cannabis related piece of content to distract you from the world at-large)
The easy accessibility of Google’s new AI experiment (“Bard”) has finally convinced me to bite the bullet and give this exciting/terrifying AI technology a try.
I immediately started to put it to good use: One of the first things I did was ask it to write a hot take about Worcester, MA in the voice of President Nixon while he’s on LSD. The results did not disappoint:
You can mess around with Bard here. I have no plans on using other AI-generated content in this space, but I’ll let you know if that ever changes.
Cat of the Week
(For the uninitiated, this is where I offer you my cat of the week. I thought about axing this segment as the newsletter has gotten more popular, but readers regularly reach out to me to tell me how much they like it, so it’s not going anywhere)
This week it’s Celestia, who’s available at BayPath Humane. According to her bio she “can be a little spicy” but also enjoys attention and playing.
Special Bulletin
I’m always down to offer support to the good folks at Different Leaf magazine, but their upcoming podcast season is looking particularly worthy of a shoutout, as it includes friends of the newsletter Shaleen Title and Ricardo Baca (and of course, host Brit Smith).
That’s a wrap on this issue. Thanks for reading! If you have any suggestions or feedback, let me know by replying to this email or dropping me a line on social media. Be sure to subscribe if you haven’t already, and if you can afford to support my work, please consider a paid subscription.