The story of El Chapo’s escape from prison in a laundry cart and his triumphant return to Sinaloa

A book cover shows a colorful painting of El Chapo beneath the title, in bold white letters
The cover of El Chapo: The Untold Story of the World’s Most Infamous Drug Lord

In early 2001, Joaquín Archivaldo Guzmán Loera, the Mexican drug trafficker better known as El Chapo, decided he didn’t want to be in prison any longer.

El Chapo had been at Puente Grande, the maximum-security prison outside of the city of Guadalajara since 1995, locked up for his role in a bloody shootout in 1993 at the Guadalajara airport. And he’d been doing alright at Puente Grande, had enjoyed many of the same creature comforts during his years in Puente Grande as he had on the outside-good food, women, volleyball-and unlike his life on the outside, he even got to sleep in the same place every night. Much of this was thanks to his patronage of Dámaso López Nuñez, who’d taken over as deputy director of security in 1999 and had proved even more pliant than his predecessor in seeing to it that all of El Chapo’s needs were met. When Dámaso arrived, El Chapo immediately began to shower money and gifts on him: ten thousand dollars in cash here, a house there. When one of Dámaso’s children was injured in an accident, it was El Chapo who paid the child’s medical bills.

“When I needed anything, I would ask and he would give it to me,” Dámaso said years later.

Unfortunately for El Chapo, Dámaso had left Puente Grande in the fall of 2000, under a cloud of suspicion amid drastically belated efforts by the government to investigate corruption there. And on January 18, 2001 everything changed for El Chapo when the Supreme Court of Mexico ruled that the United States could extradite Mexican prisoners such as El Chapo, as long as the death penalty was taken off the table. His worst fear, an American prison cell, was suddenly much closer to reality.

A woman in a cramped shop holds up a shirt that reads "Who do you trust" with a picture of El Chapo.
A vendor in Sinaloa state, El Chapo’s birthplace in Mexico, shortly before he was sentenced in 2019.

So the next day he left, smuggled out the door tucked into a laundry cart, rolled to freedom by a guard known as El Chito. And nobody saw fit to stop him.

In the book Narcoland, journalist Anabel Hernandez argues that the laundry cart story was a tall tale cooked up in the wake of the escape to hide the real story: that El Chapo had simply walked out the door. Others have joined Hernandez in speculating that the laundry cart story was a fanciful tale ginned up to cover up a more mundane escape made possible by systemic corruption. (Years later, when El Chapo was finally put on trial at a U.S. federal court in Brooklyn, the laundry cart theory was retold repeatedly by multiple former accomplices.)

Regardless of whether El Chapo was rolled out, or walked out in a stolen guard uniform, it was his ability to buy the right people that allowed him to escape.

El Chapo was back. Within days, he was holding a series of meetings with his partners, including the man who in the ensuing years would become his most steadfast ally, Ismael “El Mayo” Zambada García. At one of the first meetings at a lieutenant’s ranch, El Mayo made it clear that he was backing El Chapo to the hilt.

“I’m with you one hundred percent,” El Mayo said. “I’m going to help you with anything you need. And any kilo of coke that I receive from Co- lombia, I’m going to give you half. So for now, just take care of yourself, stay in hiding.”

Two police are seen standing in the back of a vehicle and facing a prison complex, seen in the distance.
Mexican federal police patrol the surroundings of the Puente Grande State prison.

But the question was where. El Chapo was travelling with a hard-to-conceal entourage of armed men, and his face was plastered across televisions and newspapers all over Mexico. Where could he lay low without attracting attention?

El Mayo had an idea.

“Let’s go to Sinaloa,” El Mayo said. “Let’s go back to your native lands.”

“El Cielo”

Perched atop a peak that looms over La Tuna, a ring of cypress trees sits like a crown, blowing faintly in the breeze. From below, across the valley, the trees are all you can see of “El Cielo,” or the Heavens, the home El Chapo built for himself.

It’s a sanctuary he never got to truly enjoy, but which he visited from time to time, sneaking back into his hometown to throw a party or visit his mother.

A man is seen wearing a grey winter coat and looking tentatively to the side.
El Chapo is pictured on July 10, 1993 at La Palma prison in Mexico after being apprehended.

It sits unoccupied now. With El Chapo serving a life sentence at a supermax federal prison in Colorado, it’s unlikely he’ll ever set foot here again. (But don’t tell his mother that-the family once threw out a television reporter who had the temerity to ask Doña Consuelo directly how she felt about her son spending the rest of his life in prison.)

If he were to get out of prison, however, he might want to head to this mountaintop retreat. Indeed when he escaped from Puente Grande prison in January 2001, it was to El Cielo that El Chapo returned, to plot his new empire-and to see his mom.

Things were looking good for him then. He was free, back in the mountains in which he had grown up and gotten his start, where much of the population loved and supported him, and where the remoteness and the rugged terrain provided a natural defense that allowed him to move about with relative ease.

He was moving coke again, and marijuana and heroin as well-there was always more money to be made in cocaine, but the local economy of his sanctuary still relied heavily on the production of those two trusty cash crops, the hills dotted with red poppy flowers and redolent stalks of cannabis.

By purchasing these drugs from local farmers, he could make a handsome profit, prop up local business, and buy an enduring base of support. Who’s going to turn on the guy who pays wholesale for their crops?

Among the farmers El Chapo bought from in those days was a man named José,* an affable father of three, born, raised, and still living in a small town just off the highway. (Names marked with an asterisk are pseudonyms.)

An elderly woman is seen seated in a car and looking out the window.
Maria Consuelo Loera, El Chapo’s mother, leaves the US embassy in Mexico City in 2019 after applying for a visa to visit her son.

Like El Chapo, José and his neighbors learned how to grow weed and opium from their fathers, using tried-and-true methods to grow the crops on little plots of land in the hills above their village. In the early 2000s, José was working an area of land roughly equal to the size of about five football fields. The area was under the protection-or the control-of El Chapo, to whom José and other growers paid a 30% tax in exchange for protection from the soldiers who might otherwise raid the area, burning crops and sending months of work up in smoke.

For several years after the escape from Puente Grande, José did not meet the man to whom he paid taxes. But that finally changed in 2005, when, short on funds, he decided he wanted to make a proposition. A friend agreed to make the introduction, and they drove together up the highway, onto the dirt road, and on to La Tuna. When El Chapo received them, José made his proposal: What if El Chapo covered the expense of planting, and then they split the eventual profit fifty-fifty?

El Chapo readily agreed; that’s just the kind of guy he was, José recalled.

“He was a very simple man, and very natural,” José said. “You just felt like talking to him, never found him to be aggressive.”

The relationship between trafficker-strongmen and the people who grow opium and weed is rarely an even one, and can sometimes be downright feudal: Growers rarely have much choice in whom they sell to, so the people buying are able to set the asking price. The exchange is one of constant negotiation, and often features a certain degree of coercion-whether through the direct threat or deliverance of violence, or through the local boss withdrawing his protection and opening the farmer up to the full fury of a state that is, technically, dedicated to wiping out the farmer’s livelihood.

A small white and red church is seen in a lush and hilly stretch of land.
A cemetery known for the many prominent narco-traffickers who are buried there sits on a hilltop in Santiago De Los Caballeros, in Mexico’s in Sinaloa state.

Until very recently, small-time, self-employed farmers like José formed the backbone of the opium and marijuana industries. (This status quo has been upended in recent years as widespread legalization of marijuana in the United States and the introduction of synthetic opioids like fentanyl into the heroin supply have caused prices of both crops to plummet.)

As in any good capitalist system, farmers did most of the work, and were exposed to the most risk at the hand of the state. It pays well, better than most legal work; but by the time a stamp of heroin or a dime bag of weed has been sold on the streets of New York or Philadelphia, only about 1% of the total profits find their way back to the farmer.

The real profits, the billions of dollars that flow from the street sales to the money launderers to the front companies and bank accounts of traffickers, don’t trickle all the way down to little villages nestled in the mountains of Sinaloa or Guerrerro, or to the streets of the border towns through which the drugs pass on their way north. But it’s on the heads of these small-timers that most of the violence of the drug war falls.

Origin stories of the drug trade in Sinaloa often highlight the region’s legacy of upheaval, banditry, and rebellion. But early drug-trafficking clans of Sinaloa were hardly treated as outlaws.

The Mexican sociologist Luís Astorga writes that early Mexican drug traffickers emerged from within the state power structure, rather than as actors outside of it. They came along at a time when that power structure itself was just taking shape, and managed to negotiate for themselves a cozy little cubby within it, one that worked for the state, for the wealthy elite, and for the drug traffickers and cultivators. To a more limited extent, it also worked well for the poor peasants living in areas like Sinaloa.

There is a proud tradition of independence and autonomy in the Sierra, and the drug trade allowed the people of the Golden Triangle to continue to fend mostly for themselves without posing a true threat. The drug traffickers who came before El Chapo acted as local power brokers, playing a key role as unofficial intermediaries between the government and the people of the Sierra. The government allowed them to get rich trafficking drugs as long as the traffickers kept a relative peace in rural areas and made sure the local peasants showed up to vote for the ruling Institutional Revolutionary Party, or PRI.

A man faces the camera wearing a black button-down short.
The author Noah Hurowitz

José and others in the highlands of Sinaloa talk of those years right after El Chapo’s escape as something of a Golden Age, when you knew who ran things and you could look the boss in the eye, make a deal with him, and then have a pleasant chat. As this went on, El Chapo would often pay José, who played in a band in his spare time, to perform at his parties. It felt good to hang out with a guy like El Chapo, José said, to be in the presence of someone regarded in these parts as a great man.

“He is a legend, truly, a legend,” José said. “It was a privilege to speak with him, to have a friendship with him like I did.”

Even if José was giving the sanitized-for-gringo-reporters version, many people in the mountains of Badiraguato knew only this side of El Chapo, the magnanimous local chieftain. This area of Sinaloa was, for many years, spared the violence that the drug trade-and the war on drugs-wreaked on other areas of Mexico. And when violence did arrive, it usually came in the form of the heavy hand of the state, rather than the cruelty of narco hit men.

But even as El Chapo was spreading his goodwill around his hometown and surrounding villages, he and his allies were inflicting violence elsewhere. For when El Chapo arrived back in La Tuna in 2001 and began to rebuild his empire, he was a man hell-bent on revenge.

* * *

Excerpted from El Chapo: The Untold Story of the World’s Most Infamous Drug Lord, published by Atria, a division of Simon & Schuster, Inc. Copyright © 2021 by Noah Hurowitz.

Noah Hurowitz is a journalist based in New York City. He covered the trial of El Chapo for Rolling Stone.

Read the original article on Business Insider

Amazon lobbying on legalization

marijuana, california
Welcome to Insider Cannabis.

Welcome to Insider Cannabis, our weekly newsletter where we’re bringing you an inside look at the deals, trends, and personalities driving the multibillion-dollar global cannabis boom.

Sign up here to get it in your inbox every week.

Happy Friday everyone:

What’s going on this week? Turning Points Brands, a NYSE-listed company, turned a few heads in the industry this week by announcing an $8 million investment into Old Pal, a California cannabis brand.

Companies that want to maintain their listings on marquee exchanges like the NYSE usually won’t touch US cannabis with a 10,000-foot pole. But Turning Points Brands got around that with some clever moves, as Marc Hauser, who co-leads Reed Smith‘s cannabis practice, noted in his Cannabis Musings newsletter (which you should read).

First, the investment is a convertible note – a form of debt that converts to equity at a later date – and that Old Pal, while nominally a “plant-touching” company, actually operates on a licensing model. So, as Hauser said, TPB is merely lending to a licensing business – not directly investing in a company that traffics in a Schedule I controlled substance.

It’ll be interesting to see if other companies follow this model.

What else is happening?

Cannabis was first domesticated in neolithic China, making it one of the oldest domesticated crops known to humanity. New York airports won’t seize cannabis found at TSA checkpoints anymore. New Jersey is dismissing 88,000 marijuana possession cases.

Sen. Cory Booker clarified his stance on the SAFE Banking Act, a bill that would let cannabis companies access the banking system in an interview with Yahoo. He called the bill – which has bipartisan support, unlike the broader, social justice-focused legalization bill he, Sen. Schumer, and Sen. Wyden proposed last week – a good “sweetener” to sway moderates to a more progressive vision of full-scale legalization.

He previously said he would try and stop SAFE Banking from advancing ahead of his broader legalization bill at all costs, as you may remember from last week’s newsletter.

– Jeremy Berke (@jfberke) & Yeji Jesse Lee (@jesse_yeji)

If you like what you read, share this newsletter with your colleagues, friends, boss, spouse, strangers on the internet, or whomever else would like a weekly dose of cannabis news.

Here’s what we wrote about this week:

Check out the pitch decks that hot cannabis startups used to raise millions from top investors

Cannabis startups have raised millions in the last few years, targeting everything from tech, to distribution, to branded products. We’ve published over a dozen pitch decks from startups like Cann, Dutchie, and Eaze, and gone deep with the founders about their best tips for raising money in an emerging sector like cannabis.

‘A generational wealth opportunity’: 4 top Wall Street analysts share the cannabis stocks to buy now

Four top Wall Street analysts named their top cannabis stock picks. Here’s a look at which companies analysts from Cowen, Jefferies, and others say you should place your bets.

Huge consumer companies from Nestle to Altria are vying for a slice of the exploding CBD market

CBD is already a $2 billion industry in the US, but the cannabis compound’s legal status is murky. Still, that hasn’t stopped large consumer companies from striking up deals and partnerships to jump into the industry.

See the pitch deck that Compass Pathways used to raise $80 million and fuel its rise into one of the world’s biggest psychedelics companies

Compass Pathways is the second-largest psychedelics company in the world by market cap. But in 2019, the company was just getting started. Insider got a hold of a leaked pitch deck the company used to raise $80 million from investors like Otsuka and Founders Fund.

Amazon, investment banks, and even big tobacco are spending millions of dollars to try to get favorable marijuana laws

A record 167 special interests lobbied on cannabis in the second quarter of 2021, an Insider analysis of new lobbying disclosures found. Amazon, Altria, and Morgan Stanley were among the companies lobbying on cannabis banking or legalization.

The CEO of the biggest psychedelics company lays out the 3 challenges he has to address before treatments hit the market

Florian Brand is now the CEO of the biggest psychedelics company in the world. In an interview after Atai’s IPO, Brand laid out the three challenges he has to address before treatments hit the market

Top VCs in psychedelics say Big Pharma is knocking at the door – and it could fuel a wave of deals

Insider talked to 11 top VCs in the psychedelics space and asked for their predictions. Three of them said that pharmaceutical companies are eyeing the space and looking for a way in. This article is the first of three that will detail VCs’ predictions for the psychedelics industry.

marijuana cannabis
Employees tend to medical cannabis plants at Pharmocann, an Israeli medical cannabis company in northern Israel.

Executive moves

  • California-based cannabis company Harborside announced on Monday that chairman Matt Hawkins would be stepping in as interim CEO. Hawkins runs the cannabis investment firm Entourage Effect Partners. Former CEO of Sublime Ahmer Iqbal has been appointed to COO.
  • Psychedelics company Compass Pathways said on Wednesday that it had appointed Danielle Schlosser to senior vice president of clinical innovation.
  • Cannabis edibles startup Hervé has appointed a pair of marketing execs in California, including Cheyne Nadeau who joins from Canndescent, and Emily Ryan, from Plus Products. Read our story on Hervé’s Series A here.

Deals, launches, and IPOs

  • Multistate operator Ayr Wellness announced on Tuesday that it would acquire Illinois-based Herbal Remedies Dispensaries in a $30 million cash and stock deal.
  • Cannabis-focused hydroponics company GrowGeneration said on Tuesday that it had acquired Oregon-based Aqua Serene. The investment bank Stifel estimated the deal amounts to $7 million in a note.
  • Turning Points Brands, an NYSE-listed company that owns Zig-Zag rolling papers and other smokeless tobacco brands, is investing $8 million into cannabis brand Old Pal through a convertible note.
  • Silver Spike Investment Corp. said on Tuesday that it had plans to make an initial public offering on the Nasdaq until the symbol “SSIC.”
  • Psychedelics company Field Trip Health announced on Friday that it had obtained conditional approval to list on the Nasdaq under the symbol “FTRP.”

Research and data

  • A new study from the Cannabis Research Center at UC Berkeley found that cannabis grows in California often tap unregulated groundwater sources which may have negative effects on streamflow and wildlife.
  • A new study published in the Journal of the International Neuropsychological Society did not find a link between adolescent cannabis use and reduced motivation, but the authors said that greater cannabis use was associated with a devaluing of school.
  • A new study published in the journal Science Advances found that cannabis was first domesticated in Neolithic China.

Policy moves

  • New York State Senator Jeremy Cooney proposed a new bill that would let cannabis growers harvest and sell cannabis ahead of the final rules and appointments for the state’s Office of Cannabis Management. The bill would let growers start next year.

Chart of the week

Thirty-five to 44-year-olds in the US make up the largest portion of medical cannabis patients in the country, according to New Frontier Data. Twenty-five to 34-year-olds trail closely behind, making up 21% of all medical patients in the US.

cannabis weekly newsletter chart about the medical cannabis patients by age
medical cannabis patients by age

What we’re reading

What truck drivers really think about new federal regulations to crack down on drug use (Insider)

‘It’s going to be a bloodbath’: Why some Toronto pot store owners are giving up (BNN Bloomberg)

Your shopping mall’s latest tenant? A pot dispensary (NBC News)

Thieves are stealing California’s scarce water. Where’s it going? Illegal marijuana farms (CalMatters)

A man failed workplace drug test days after N.J. legalized weed and was fired. Now he’s suing. (NJ Advance Media)

Read the original article on Business Insider

Biden said ‘the rules are the rules’ when asked about Sha’Carri Richardson’s suspension for marijuana use

Joe Biden
US President Joe Biden speaks on the economy at Cuyahoga Community College Manufacturing Technology Center, on May 27, 2021, in Cleveland, Ohio.

  • President Joe Biden said “the rules are the rules” when asked if Sha’Carri Richardson’s suspension was fair.
  • But the president went on to question if the rules should remain that way.
  • Richardson, 21, tested positive for THC, the psychoactive component in cannabis, at the US Olympic Team Trials.
  • See more stories on Insider’s business page.

President Joe Biden said “the rules are the rules” on Saturday when a reporter asked whether he thought Sha’Carri Richardson’s one-month suspension for marijuana use was fair.

But the president went on to question if the rules should remain that way.

“The rules are the rules,” Biden told reporters. “And everybody knows the rules going in, but whether it should remain that way is a different issue.”

“I was really proud of the way she responded,” he added.

Read more: Banning Sha’Carri Richardson from the Olympics for weed is outdated. So is the idea that weed slows you down.

Richardson, 21, tested positive for THC, the psychoactive component in cannabis, at the US Olympic Team Trials, where she finished first in the 100-meter race. The suspension in light of the positive test put her qualification for the Tokyo Olympics in jeopardy.

Richardson said she took marijuana after she learned from a reporter that her biological mother died.

“To hear that information come from a complete stranger, it was definitely triggering. It was definitely nerve-shocking.” she said on NBC’s Today show. “No offense to him at all, he was just doing his job, but it put me in a state of mind of emotional panic.”

“I’m not making an excuse or looking for empathy in my case,” she said. “However, being in that position in my life, finding out something like that … Dealing with the relationship I have with my mother, that definitely was a very heavy topic on me.”

Biden’s comments came after Rep. Alexandria Ocasio-Cortez blasted the decision on Friday.

“The criminalization and banning of cannabis is an instrument of racist and colonial policy,” Ocasio-Cortez wrote in a post on Twitter. “The IOC should reconsider its suspension of Ms. Richardson and any athletes penalized for cannabis use.”

Read the original article on Business Insider

What GTI and Trulieve told Wall Street

An employee holds a display of dried marijuana at the Fire and Flower store as the first legal cannabis stores open in the province of Ontario, in Ottawa, Ontario, Canada, April 1, 2019.

Welcome to Insider Cannabis, our weekly newsletter where we’re bringing you an inside look at the deals, trends, and personalities driving the multibillion-dollar global cannabis boom.

Sign up here to get it in your inbox every week.

If you follow cannabis news closely, this week was a good reminder of the strange world we live in where marijuana use is completely legal and normalized in some states and a criminal act in others.

Late-night host Conan O’Brien lit up a joint with cannabis evangelist and comedian Seth Rogen on live TV, for O’Brien’s second-to-last ever TBS show. O’Brien said he’s not a regular marijuana user, but joked that he needed to do something with all his newfound free time.

Elsewhere in the late-night world, Jimmy Kimmel helped “Freddie the Stoner,” an Indiana man who was interviewed by the show while waiting in line at a dispensary opening in Michigan, land his dream job writing product reviews for Emjay, a Los Angeles-based cannabis delivery startup.

Lots of Americans of all political stripes watch Kimmel and O’Brien. You might think that late-night hosts being so brazen about using marijuana on live television is a clear sign that the era of marijuana prohibition is over. You’d be wrong.

LA Lakers guard Alex Caruso was arrested in Texas for having a grinder with a small amount of marijuana on him at the airport. He was released, but not before his mugshot was shared with the world. He’ll be fine, and I’m sure he has the money and resources to cover bail and fight whatever charges crop up, but he’s an example of what’s still happening to thousands of people across the country.

And on a semi-related note, two former consultants to Eaze were sentenced to prison for disguising credit card payments on the marijuana delivery service’s platform. At the hearing, US District Judge Jed Rakoff criticized the sentencing guidelines which called for life in prison for one, and 24 years for the other, Reuters reports.

The consultants broke the law. But life in prison for what amounts to fraud is quite a harsh sentence – the defendant ultimately got two-and-a-half years.

What else?

The Ontario Securities Commission gave out “quasi-criminal” charges to CannTrust‘s former CEO, Peter Aceto, as well as another executive and a board member for growing unlicensed cannabis.

And I got a fun scoop on what the CEOs of US cannabis companies Trulieve and Green Thumb Industries told an audience of some of the world’s most powerful investors at last week’s Robin Hood Investors Conference. You can read that here.

Cantor Fitzgerald analyst Pablo Zuanic said in a note this week the US cannabis sector has been suffering from a ‘Schumer overhang’ while the industry waits for the Senate Majority Leader’s legalization bill.

Let’s get to it.

– Jeremy Berke (@jfberke) & Yeji (@jesse_yeji)

If you like what you read, share this newsletter with your colleagues, friends, boss, spouse, strangers on the internet, or whomever else would like a weekly dose of cannabis news.

Here’s what we wrote about this week:

Psychedelics giant Atai is targeting a $2.3 billion valuation in its IPO. We pored over its 446-page filing to find 7 key takeaways.

The largest private psychedelics company in the world made its long-anticipated public debut last Friday. We dug through Atai’s public filings to narrow down the main takeaways investors should know about the company.

4 top cannabis-tech startups share how they’re gearing up to win a slice of New York’s $7 billion marijuana market

Tech companies that work in cannabis are preparing for New York’s adult-use marijuana market. Insider spoke to four cannabis-tech companies – Fyllo, Dutchie, LeafLink, and SpringBig – and all said they’re hiring aggressively to meet the demand of the New York market.

Capitol Hill staffers say they use marijuana freely even though it’s still illegal for federal workers

Using marijuana is a fireable offense in President Joe Biden’s White House, but many power players who work a couple of miles away on Capitol Hill can and do get away with it.

Most congressional staffers never get asked about their cannabis use, so they can light up or take edibles without too much concern about losing their jobs.

Meme stock shareholders are causing issues by not voting on things like exec pay and M&A deals. Here’s how startups are trying to improve the process.

Companies with large retail-investor bases face difficulties reaching a quorum in shareholder votes. “It’s hard to get those shareholders to show up and vote,” Tilray CEO Irwin Simon told Insider.

The CEOs of two of the biggest US cannabis companies break down the future of the industry to an exclusive audience of Wall Street’s most powerful investors

Green Thumb Industries and Trulieve CEOs spoke at the exclusive Robin Hood Investors Conference last week. The talk was closed to the press, but Insider learned the executives discussed the generational opportunity of investing in cannabis and made predictions about the industry.

Israel cannabis
An employee holds a leaf of a medical cannabis plant at Pharmocann, an Israeli medical cannabis company in northern Israel June 24, 2020.

Executive moves

  • Amy Larson is joining TILT as the VP of operations and communications next week. She was previously a VP at Simplifya.
  • Psychedelics company Awakn announced on Thursday that David Nutt, director of the neuropsychopharmacology unit at Imperial College London, has joined as chief research officer.
  • In more psychedelic people moves, Novamind has appointed Dr. Paul Thielking as chief science officer.

Deals, launches, and IPOs

  • Hydroponics company Hydrofarm Holdings will acquire Aurora Innovations, an Oregon hydroponics company, for $161 million in cash and $26 million in Hydrofarm stock.
  • Precision Extraction Solutions and Cascade Sciences are merging to form Sinclair Scientific. The merger will create what the company says is the largest cannabis and hemp extraction company, with combined annual revenue of over $100 million.
  • PharmaCann announced on Friday that it had completed a senior secured note offering. The net proceeds are worth around $79.9 million.
  • Awakn Life Sciences went public on the NEO Exchange on Wednesday under the symbol “AWKN” through a reverse takeover.

Policy moves

Marijuana Cannabis
In this March 25, 2018 file photo, a convention visitor examines a marijuana sample at the New England Cannabis Convention in Boston.

Research and data

  • Adolescent marijuana and alcohol use remained steady during the pandemic, despite decreases in both substance’s availability, according to a study from the National Institute on Drug Abuse’s Dr. Nora Volkow. The study also showed that past-month nicotine vaping among high schoolers decreased during the pandemic. The authors say the study shows that reducing teen use of substances cannot be achieved solely by limiting supply.
  • A new study published in the journal Sleep found that Zelira Therapeutics cannabinoid drug, Zenivol, is effective for treating insomnia and showed few adverse effects.
  • Alabama could add $600 million to its GDP in its first three years of medical cannabis sales, according to a report from cannabis software firm Akerna. Alabama legalized medical cannabis in May.
  • Cannabis information site Leafly published a report ranking states with legal cannabis on their social equity programs. California and Colorado topped the list, while Montana and South Dakota came in last. The report states that only 1 in 50 cannabis companies is black-owned, compared to the US average of 1 in 20 for other industries.
  • A new report from the Coalition for Cannabis Policy, Education, and Regulation (CPEAR) looked at the challenges of establishing a framework for small, minority-owned businesses in the cannabis industry.
  • Cannabis use may be associated with suicidal ideation in young adults, according to a National Institutes of Health analysis of survey data from 280,000 young adults between the ages of 18-35.

What we’re reading

Amazon ditched cannabis testing, and more employers will likely follow (CNN Business)

CannTrust’s former CEO and two directors charged with fraud over unlicensed pot growing scandal (Financial Post)

Opinion: Cannabis is the great social experiment that wasn’t (CTV News)

Maine’s mom and pop weed scene sweats corporate ‘gentrification’ (Politico)

The Future Of Psychedelic Medicine Might Skip The Trip (Forbes)

How Conn. Learned From Its Neighbors On Pot Legalization (Law 360)

Political ‘infighting’ could mean more delay for New York’s legal marijuana business (New York Upstate)

I ate a 4-course meal at a weed pizza parlor and got stoned to the bone (Insider)

Eric Adams on weed, Beyonce, and the housing-sleuth haters (Vanity Fair)

Cannabis firms Tilt, Ayr pay nearly $300,000 each in MA settlements (MJ Biz Daily)

Read the original article on Business Insider

Canadian cannabis giant Cronos is making moves to enter the US. Its $110 million deal with PharmaCann would give Cronos access to New York’s $7 billion market.

marijuana cannabis
Employees tend to medical cannabis plants at Pharmocann, an Israeli medical cannabis company in northern Israel.

  • New York is shaping up to be the next hot spot for cannabis M&A.
  • Canadian cannabis giant Cronos recently struck a deal with private US company PharmaCann.
  • PharmaCann is one of the few cannabis companies operating in New York.
  • See more stories on Insider’s business page.

As New York’s recreational cannabis industry shapes up, companies are making deals to take full advantage of the emerging market.

On Monday, Cronos Group, a Canadian cannabis company backed by Altria, said it agreed to make a “strategic investment” in US cannabis company PharmaCann, which has operations in New York. Cronos paid $110.4 million for an option to acquire a 10.5% ownership stake in PharmaCann, once cannabis is federally legal in the US.

PharmaCann is privately owned and operates in six states: New York, Illinois, Ohio, Maryland, Pennsylvania, and Massachusetts.

Canadian companies have been vocal about their intentions to enter the US market as soon as they’re able to do so. Cannabis, though legal for medical use in 36 states and adult use in 16 states, is still considered a Schedule I drug by the US federal government.

Canopy Growth, the largest cannabis company in Canada, has deals with two US cannabis companies – Acreage Holdings and TerrAscend – that would let it target US cannabis consumers once the market opens up to it. Alcoholic-beverages giant Constellation Brands owns a large stake in Canopy.

Once New York’s cannabis market ramps up, annual sales could reach $5 billion to $7 billion, according to estimates from analysts at Stifel and Cantor Fitzgerald, respectively.

The Cronos-PharmaCann deal comes a few months after US cannabis company Ascend Wellness said it would take a majority stake in MedMen’s New York operations for $73 million.

Several other cannabis companies are also likely targets in the lucrative New York market.

Click here to read more about the deals you can expect in New York as the state legalizes cannabis. This article is available exclusively to Insider subscribers.

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Amazon says it will no longer include marijuana in its drug screenings for some workers

Amazon stops marijuana screenings
Matty Merritt.

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In an attempt to overthrow the DQ that doesn’t limit how many brownie blizzards you can eat as your town’s best employer, Amazon announced it would no longer include marijuana in its drug screenings for some workers. So unless your position is regulated by the Department of Transportation, Amazon said it will treat marijuana like alcohol (should make for an interesting office holiday party).

  • Other employers like Hospitality Ventures, a management group that runs Marriott and Hilton hotels, have also dropped marijuana testing to attract already hard-to-find staff.

Everyone’s doing it. Last year, of the seven million drug tests conducted for employers by Quest Diagnostics, around 2.7% came back positive for marijuana. The number has been rising slowly, from 2% in 2016, as more states legalize recreational use.

Speaking of legalization, Dave Clark, Amazon’s consumer boss, said the company supports legislation to decriminalize cannabis and encouraged other companies to get with it.

Big picture: Amazon hopes its cool weed aunt energy, recent wage increases, and the introduction of a (poorly received) cry box will neutralize the slew of criticism it’s gotten around unsafe working conditions.

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Amazon says it’s ‘actively supporting’ federal marijuana legalization

Weed Capitol Hill
Activists from the DC Marijuana Justice (DCJM) wave flags during a rally to demand Congress to pass cannabis reform legislation on the East Lawn of the US Capitol in Washington, DC on October 8, 2019.

  • Legislation to federally decriminalize marijuana was reintroduced in Congress last week.
  • On Tuesday, Amazon said it back the effort.
  • The company will also stop drug testing for marijuana.
  • See more stories on Insider’s business page.

Amazon said their public policy team will be actively supporting The Marijuana Opportunity Reinvestment and Expungement Act of 2021, an effort to federally legalize marijuana.

“We hope that other employers will join us and that policymakers will act swiftly to pass this law,” Amazon’s consumer CEO, Dave Clark, said in a statement.

The company will also no longer include marijuana in drug tests for positions not regulated by the Department of Transportation.

“In the past, like many employers, we’ve disqualified people from working at Amazon if they tested positive for marijuana use,” Clark said. “However, given where state laws are moving across the U.S., we’ve changed course.”

The MORE Act passed in the House of Representatives in December 2020 and would end criminal penalties for anyone who sells cannabis in states where its legal and decriminalize the use of cannabis throughout the US. It would also formally allow states to chart their own course in establishing commercial marijuana sales.

The bill was reintroduced in Congress last week.

“Since I introduced the MORE Act last Congress, numerous states across the nation, including my home state of New York, have moved to legalize marijuana,” House Judiciary Committee Chairman Jerry Nadler said in a statement. “Our federal laws must keep up with this pace.”

Amazon also said it was updating its “time off task,” a system that measures worker’s productivity. The system tracks how man packages employees complete in an hour and sends alerts whenever employees take a break from scanning packages for too long.

Clark said the company will now measure time off over a longer period of time.

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Legal cannabis sales shot up to $17.5 billion during the pandemic as dispensaries helped Americans stock up on marijuana

In this March 22, 2019, file photo, Heather Randazzo, a grow employee at Compassionate Care Foundation’s medical marijuana dispensary, trims leaves off marijuana plants in the company’s grow house in Egg Harbor Township, N.J.

  • The pandemic initially disrupted the legal cannabis industry, but 2020 saw record sales of $17.5 billion.
  • Dispensaries navigated changing regulations and markets to find new ways to reach customers.
  • A cannabis producer in Las Vegas told The New York Times sales in Nevada could top $1 billion in 2021.
  • See more stories on Insider’s business page.

Shortly after Nevada officials announced that licensed cannabis stores and medical dispensaries could reopen after lockdown, Nicolas MacLean said cars were lined up for five blocks waiting for curbside pickup.

Like many industries in Las Vegas, the cannabis industry used to rely on tourists for sales, but that changed when the pandemic hit, MacLean, who serves as the CEO of Las Vegas-based cannabis producer Aether Gardens, told The New York Times.

“Locals are very discerning – they want something they aren’t going to find on the black market,” MacLean said. “Especially when you are stuck at home.”

The year of 2020 saw extraordinarily strong sales of legal cannabis in the US, up 46% from 2019 to a record $17.5 billion, according to cannabinoid market research firm BDSA.

“I expect this will be the first year Nevada does over a billion in cannabis sales,” MacLean said. “And it happened on the back of what I think no one expected.”

In western Massachusetts, where recreational cannabis use is legal, Meg Sanders, CEO of Canna Provisions, said government restrictions and later social-distancing requirements forced her to radically change her sales strategy.

At first, only medical dispensaries were allowed to remain open, while recreational-use retailers were forced to close.

“To have liquor stores deemed essential and not adult-use cannabis – especially when the law passed in Massachusetts was about regulating cannabis like alcohol – was surprising and unfortunate,” Sanders told The Times.

As Canna Provisions was allowed to re-open, the shop’s particular boutique-style in-person shopping experience had to change in favor of over-the-phone preorders.

“Our county is an internet desert,” she explained.

Now when customers call, they speak with a salesperson who can answer their questions and walk them through the available topicals, edibles, and smokables – a method, she said, is “working” for business.

“In our Lee store, preorders have become almost 100 percent of our business, so we bought more handsets and hired more people to answer the phones, and our revenue is up,” she said.

In Florida, Oswaldo Graziani Lemoine, the creative director at Fluent Cannabis Care, said his company’s 19 locations were able to remain open for the roughly half million state residents with medical cannabis cards. (Recreational use is illegal in the state of Florida.)

“For us, it became less about the in-store experience and more about offering our customers deals and the ease of pickup,” he told The Times.

In addition to offering special discounts, Graziani said future locations will be designed with pre-orders and drive through sales in mind – no counter, no lobby, just green.

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JPMorgan CEO Jamie Dimon warns investors not to buy crypto – and calls for clearer rules around trading it

jamie dimon
Jamie Dimon.

  • Jamie Dimon cautioned investors against owning cryptocurrencies.
  • The JPMorgan boss sees little value in them relative to gold and fiat currencies.
  • Dimon urged lawmakers to regulate crypto more closely.
  • See more stories on Insider’s business page.

Jamie Dimon blasted cryptocurrencies as inferior to traditional assets, warned people against buying them, and urged regulators to scrutinize them more closely at a congressional hearing this week.

“Something that’s not supported by anything, I do not believe has much value,” the JPMorgan CEO said. Blockchain and stablecoins aren’t in that camp, and his opinion doesn’t dictate whether his company embraces crypto, he added.

“My own personal advice to people is stay away from it,” Dimon said. “That does not mean the clients don’t want it – this goes back to how you have to run a business. I don’t smoke marijuana, but if you make it nationally legal, I’m not gonna stop our people from banking it.”

JPMorgan is exploring ways to allow clients to buy and sell crypto and have it appear on their statements, the bank’s chief said. However, he reiterated his view that crypto pales in comparison to conventional assets, and carries a lot more risk.

“It’s nothing like a fiat currency, it’s nothing like gold,” Dimon said. “Buyer beware.”

The executive also bemoaned the lack of rules in the crypto space, which he described as a “serious emerging issue” in his latest shareholder letter.

“The regulators who are a day late and a dollar short should be paying a lot more attention,” he said, highlighting crypto, payment for order flow, and high-frequency trading as areas of concern.

Bitcoin surged in price from under $10,000 a year ago to north of $60,000 in April, and continues to trade at north of $30,000. Dimon said he wasn’t a fan of the coin earlier this month, and has dismissed it as fraudulent and dangerous in the past.

“It’s worse than tulip bulbs,” he said in 2017. “It won’t end well. Someone is going to get killed.”

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JOIN US APRIL 29: How to invest in the spread of US marijuana legalization

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Sign up for this exclusive webinar on April 29.

Cannabis legalization is sweeping the US.

In the November elections, five states voted to pass cannabis reform, bringing the tally of states with recreational marijuana to 15. Thirty-six states now have medical cannabis programs – meaning that a majority of Americans now have some form of access to marijuana, whether medically or recreationally.

A Democratic Senate, House, and White House is also the best possible outcome for the cannabis industry. Though cannabis reform is expected to continue mostly on the state level, a slew of cannabis-related bills in Congress have prompted cannabis companies and investors alike to eye the changing landscape as an opportunity.

On top of that, more states like New York, Connecticut, and Pennsylvania are looking to legalize marijuana.

If you’re looking to invest, or just understand what all these changes mean for the economy and beyond, tune in to Insider’s exclusive webinar on April 29th at 1 PM EST.

We’ll be chatting with investors Emily Paxhia and Mitch Baruchowitz, both long-time players in the cannabis industry.

Paxhia is the co-founder and managing partner of Poseidon Asset Management, and Baruchowitz, managing partner at Merida Capital Holdings. Both firms landed top spots in Insider’s list of top investors in the cannabis space in 2020.

The two will talk about which companies are poised to win as legalization spreads across the US, which companies to invest in, and which ones to avoid.

You can sign up here if you’re an Insider subscriber.

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