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Cannabis Round-Up: Ukraine Legalizes Medical Cannabis, Blüm to Acquire California Stores

Cannabis company Blüm Holdings (OTCQB:BLMH) signed a letter of intent to purchase three California retail locations from Operators Only this week in a bid to expand its business into Sacramento.

Meanwhile, Ukraine passed legislation to legalize medical cannabis use, and Québec’s only cannabis retailer reported its results for the third quarter of 2023, showing sales growth. Also, after years of trying to establish an adult-use cannabis market, Virginia’s Senate and the House of Delegates approved two separate cannabis sales bills.

Stay up to date on the latest news, trends and policy developments in the cannabis industry with our round-up below.

Ukraine signs medical cannabis bill into law

Ukraine has joined a growing number of European countries in embracing cannabis reform.

President Volodymyr Zelensky signed a medical cannabis bill into law this past Tuesday (February 13), making Ukraine the latest nation to legalize the use of cannabis for medical purposes.

The news was posted on the Ukrainian Association of Medical Cannabis’ Facebook page. The matter was voted on in December 2023 after activists proposed the bill to treat the roughly 6 million Ukrainians suffering from cancer, as well as those facing post-traumatic stress disorder brought on by the country’s almost two year war against Russia.

At the time, the bill was backed by 248 Ukrainian lawmakers, but opposed by former Prime Minister Yuliia Tymoshenko, who stopped it from reaching Zelensky’s desk by voting “absent” during the parliamentary vote, effectively preventing the bill from attaining the required number of votes for passage. Tymoshenko argued that legalizing cannabis would represent a threat to the future of Ukraine. However, after several rounds of negotiations and amendments to address the concerns of the opposition, the medical cannabis bill received enough votes in parliament for Zelensky to sign it into law. It will officially come into effect six months after it is published in Ukraine’s official gazette.

The law will only apply to medical use, as recreational cannabis remains illegal in the country. In addition, Ukraine’s minister of health has been tasked with producing a list of diseases and conditions that can qualify for medical cannabis treatment, and Ukrainians involved in the cultivation and sale of cannabis will have to obtain a license to do so. All production lines will be placed under 24 hour surveillance accessible by police at any time.

Québec cannabis retailer posts latest quarterly results

The Société Québécoise du Cannabis (SQDC), Québec’s government-owned cannabis retailer, posted its Q3 2023 results on Wednesday (February 14), reporting net income of C$33 million (US$24.5 million). The amount represents an increase of 7.6 percent compared to the same period the year before. According to Québec law, the amount is paid in full to the provincial government for cannabis-related research and prevention efforts.

The SQDC reported overall sales of C$201.6 million (approximately 37,215 kilograms) in the third quarter of last year compared to C$187.3 million in Q3 2022. In its report, the firm highlights improvements made to edibles and extracts, as well as the opening of six new stores. The SQDC has now reached its target of 98 retail locations across Québec, meeting one of the goals outlined in its Strategic Plan 2021-2023.

Blüm to acquire three California cannabis stores

California’s Blüm Holdings is set to acquire three additional cannabis stores from Operators Only, expanding its reach to the Sacramento market. Blüm entered into a binding letter of intent to purchase the locations on Tuesday for total consideration of US$9.7 million. The funds will come as a combination of a US$1.9 million secured promissory note, payable over 34 to 42 months, and more than 1.8 million shares of Blüm common stock issued to Operators Only. Blüm is expected to generate approximately US$14 million in additional revenue from the deal.

On Wednesday, Blüm issued a press release detailing the highlights of the deal, including sales and growth expectations and storefront expansions. The document emphasizes the benefits of the new locations, which will increase Blüm’s presence in the Sacramento area and potentially drive increased sales and revenue for the company.

Blüm also unveiled a new brand, Turkey Bag Heroes, which will serve as the flagship high-end brand for its retail strategy. According to Blüm, “Unlike traditional brands, Turkey Bag Heroes offers exclusive drops in 14-gram and 28-gram quantities, catering to connoisseurs seeking unrivaled sensory journey from aroma to flavor to potency.”

US Virgin Islands approve rules and regulations for adult-use cannabis

Despite passing a law to legalize recreational cannabis over a year ago, the US Virgin Islands, which consist of Saint Croix, Saint John and Saint Thomas, along with around 50 smaller islands scattered around the Caribbean, have experienced delays in implementing the program. However, recent developments suggest progress is finally being made.

An advisory board approved a list of proposed rules and regulations this Tuesday. Subsequently, the board announced that a 30 day public comment period will start “soon,” although no date has yet been set. In addition to approving the proposed rules and regulations, the board is finalizing a list of individuals with cannabis possession convictions who may qualify for expungement, as well as developing a registration system for medical or sacramental cannabis users.

The proposed rules and regulations for recreational cannabis would allow adults over the age of 21 to possess up to 2 ounces of cannabis, a half ounce of cannabis concentrate and 1 ounce of other cannabis products, such as edibles. The law applies to sacramental and other uses as well. By comparison, medical cannabis patients are allowed to possess as many as 4 ounces of cannabis, 1 ounce of concentrate and 2 ounces of other cannabis products. Medical purchases are also exempt from a minimum 18 percent sales tax that applies to recreational users.

Senate and House approve separate cannabis sales bills in Virginia

In a surprising development for cannabis advocates in Virginia, the state’s Senate and the House of Delegates have now both passed their own versions of bills to regulate and tax the sale of recreational cannabis.

This marks a significant step forward in the state’s efforts to create a legal, regulated recreational cannabis market, which has been a long time coming since Virginia approved the legal possession of cannabis by adults over two years ago.

Both bills propose a scheduled implementation date of January 1, 2025. However, the two bills differ in key respects, such as the submitted tax rate. HB698 proposes a tax rate of 9 percent on all sales with no additional state or local retail sales tax. On the other hand, SB448 proposes a tax of 16 percent on top of any state and local sales tax.

The differences between the bills make the next step of reconciling the two crucial. Each bill will now go to the other chamber of the state legislature, where lawmakers will have the opportunity to review the paperwork and propose amendments. The two chambers will need to form a conference committee to resolve the differences between the two versions of the bill and work to create a final version to be voted on by both chambers. Once a bill has passed in the Senate and in the House, it will cross the governor’s desk for signature.

Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.

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