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MediPharm sues Hexo claiming breach for $9.8M in unpaid bills
MediPharm is suing Hexo after Hexo failed to honor a supply agreement between the two parties. The alleged breach demonstrates the challenge faced by many operators when it comes to implementing supply chain management at this early stage in the industry’s life cycle.
Is the Safe Banking Act on the Ropes?
The SAFE Banking Act became the first standalone marijuana bill to be passed by a House floor vote in September 2019. Since then, the SAFE Banking Act has languished in the Republican-controlled Senate. For now, it appears that legal cannabis operators will have to continue to survive without full access to banking based on the current environment in DC.
California Recreational Marijuana in Crisis after Two Years
California’s legacy, illegal operators can sell cannabis at a lower price point than licensed, legal operators due to the high taxes and local control provisions dictated by Proposition 64. Governor Gavin Newsom has proposed a handful of changes to alleviate these challenges, but, for now, licensed operators will have to endure the current environment.
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Shades of "Gray": February 15, 2020
Welcome to our first edition of “The Bengal Bite.” As a valued member of the Bengal investing community, we would like to share with you our perspective on some of the topics we’ve found to be most important in the ever-changing cannabis industry. Going into 2020, cannabis in some form is legal in 2⁄3 of America. The regulatory landscape is complex and varies from state to state, but one constant exists everywhere - the illicit market. Analysts estimate that the illicit market accounts for 75% of cannabis sales in California ($9bn in illegal sales out of $12bn total). The illicit market is massive, and it is potentially the biggest threat to legal cannabis operators everywhere. A fully legal market does not yet exist anywhere in the US. At best, licensed operators are operating in cannabis markets colored in varying shades of “gray.”