The profit and revenue from the cannabis industry continues to grow with the latest figures from states such as Oklahoma ($7.2 million in sales in February). But Canadian cannabis company Ascent Industries is facing financial trouble.
Oklahoma voters legalized medicinal use cannabis in June 2018, and the state’s business-friendly medical program now serves an estimated 55,000 patients. The state reports that 1,100 dispensaries and 1,800 growers are registered or licensed.
Part of the boom can be attributed to residents of Arkansas and other states with state-issued medical cannabis licenses who can legally apply for a temporary license in Oklahoma. The temporary license lasts for 30 days and can be renewed as long as the license is valid from the issuing state.
Arkansas voters approved medical marijuana in 2016. The constitutional amendment that authorized medical cannabis is more restrictive, and progress has been slow in implementing the industry in the state.
The Colorado Department of Revenue released its monthly report for cannabis sales and tax data on Feb. 12. Revenue from taxes, licenses, and fees for cannabis topped $266.5 million in 2018 and cannabis sales topped $6 billion to date since adult-use marijuana sales.
Across the northern border, one Canadian cannabis company, Ascent Industries, needed to be granted creditor protection due to the suspension of its licensing. While the proceedings do not impact the operations of Ascent’s other subsidiaries in Oregon and Denmark reporting record profits, Ascent Industries is in danger of losing its Master Marijuana License in Clark County, where its Las Vegas division is located.
Ascent Industries appeared before the hearing officer of The Clark County’s Department of Business License to show cause why its license should not be permanently suspended, revoked or non-renewed. If the department rules against Ascent Industries, the company has a right to appeal the decision and may also file a petition for a judicial review conducted by the District Court in Las Vegas.
Health Canada notified British Columbia-based Ascent in 2018 that the agency was suspending the licenses of its subsidiary, Agrima Botanicals. There were reports of infractions related to noncompliance with the Access to Cannabis for Medical Purposes Regulations and the Narcotic Control Regulations. Ascent Industries has failed to demonstrate to federal authorities that a suspension is unfounded.
Ascent Industries has now been granted creditor protection by the Supreme Court of British Columbia to address liquidity issues. The creditor protection extends to Agrima Botanicals, Bloom Holdings, Bloom Meadows, Pinecone Products, Agrima Scientific and West Fork Holdings NV.
A spokesperson from Ascent said the company will continue day-to-day operations and reported it received a commitment of interim financing from Gulf Bridge for up to 2 million Canadian dollars ($1.5 million). Gulf Bridge is a Dubai-based secured creditor of Ascent.
Political and regulatory developments continue to bring legalization to states including New York, Utah, New Mexico, Louisiana, Missouri, Ohio, Michigan, and New Jersey. As of January 1, 33 states plus the District of Columbia (D.C.) have legalized cannabis for medicinal use, with 10 states and D.C. permitting adult recreational-use.
Worldwide consumer spending on legal cannabis was reported to reach estimated $12.2 billion in 2018, according to the 2019 Update to The State of Legal Marijuana Markets, 6th Edition (SOLMM6) report released today from Arcview Market Research and BDS Analytics.
It is being reported that US sales of medical cannabis are expected to reach $5.9 billion and adult-use cannabis is expected to reach $7.0 billion in 2019. The total number of registered US medical cannabis patients is projected to reach 2.4 million in 2019, up 26 percent from 1.9 million patients in 2018.