Curaleaf and Harvest have a presence in Arizona. In fact, the latter is headquartered here, and both are among the major players in the legal cannabis markets. Each made a big business move in 2020.
Curaleaf announced Feb 1 that it completed its acquisition of Cura Partners, Inc., which makes the Select vaping brand. It’s a big purchase that was announced back in 2019 and finally finished. This gives the brand 53 dispensaries across the U.S., the largest operational footprint of any company.
Of course, the purchase isn’t without controversy. First, it should be noted that Cura Partners spent the past several years embroiled in controversy, most of it revolving directly around the Select vapes. Oregon media reports the Oregon Liquor Control Council (OLCC, the regulatory body for cannabis in the state) hit Select with a record fine for a cannabis company.
The fine was related the vaping epidemic that hit in 2019. By the time vitamin E acetate was identified as the culprit, some states (including Oregon, obviously) put a ban on any additives in vaping. This included any non-cannabis-derived terpenes, which Select is accused of using.
The botanical terpenes in Select vape pens may match the cannabis terpenes (i.e. limomene and pinene), but they aren’t derived from the cannabis plant. This meant Select was mislabeling its vape products, according to the OLCC. This is a problem that Curaleaf will tell you doesn’t bleed into Arizona because cannabis can’t be transported across state lines.
But vape carts can be. So can non-cannabis-derived terpenes. So it stands to reason that ALL Select vape products use botanical terpenes that don’t come from the cannabis plant. Essentially, that pinene you’re vaping is a liquid pine tree.
Check out why I don’t trust pre-filled cannabis vape pens.
There have been plenty of lawsuits in Arizona’s cannabis market – remember when Dream Steam sued OpenVape in 2017?
The basis of the defamation lawsuit was that Dream Steam used refined coconut oil to thin vape carts, while OpenVape used polyethylene glycol (PG). Each made unprovable health claims about the safety of one dilute versus the other. The case was settled out of court.
And that brings us to the next story, because Dream Steam is owned by Harvest, who has been busy already in 2020.
Harvest Health has been involved in two major stories so far this year. First, it terminated its merger with Falcon International and now Falcon is suing Harvest for $50 million. This match made in heaven turned to hell when the companies struggled over financial paperwork and due dilligence.
This is to be expected in a mostly unregulated market. We can’t even tell if Med Men has money to pay its bills yet, and the company can’t even file for bankruptcy protection. We’re finally starting to see the major cracks in the gray area legalization. So long as cannabis remains federally illegal, these businesses represent the Wild West.
As the vertically integrated Harvest recovers from the failed merger, Co-Executive Chairman Jason Vedadi, CEO Steve White, and Operational Leader Joe Sai, have voluntarily surrendered a total of 2.4 million equity options to Harvest for redistribution to eligible employees throughout the company. The three senior leaders will not receive any consideration from Harvest.
Overall, it’s a $10 million non-cash charge that should even out the executives’ tax brackets while keeping blue-collar dispensary workers satiated.
Either way, both Harvest and Curaleaf remain massive companies with presences far beyond Arizona’s borders. This is no mom-and-pop industry.