🌿 Snoop Dogg launches Death Row Cannabis

Good Morning all. This is The Greenfields, the newsletter that tells you everything you need to know about the cannabis industry.

What’ve we got for you today?

• Snoop Dogg launches death row cannabis

• Cronos ditches face-to-face clinics

• The race for EU heats up

• Medicinal cannabis oil trial shows promise for treating insomnia

• Queensland Labor (apparently) chickens out of drug law reform

Snoop Dogg launches Death Row Records cannabis

Snoop Dogg is so closely associated with cannabis that you’d think he invented getting high. He’s now launching a cannabis line under the Death Row Records brand.

This isn’t Snoops first attempt at branded cannabis. He launched Leafy Snoop in 2015, but that hasn’t been around for a few years now. Death Row Records cannabis is being positioned as a high-end product. The cannabis is cultivated by AK, who is something of a celebrity cultivator in the US, and is ‘infused’ with diamonds of cannabis (actually crystallised cannabis).

The commercial success of celebrity cannabis brands are a bit of a mixed bag. Plenty are just a cash grab, but others such as Seth Rogans Houseplant and Jay-Z’s Caliva seem to be pretty legitimate businesses.

Australia hasn’t legalized recreational cannabis (yet 🤞), so we don’t expect to see Karl Stefanovic or Cate Blanchett Cannabis anytime soon. We also don’t think there are many Australian celebs with a large enough following that overlaps with the cannabis market, so expect to see an invasion of US Celeb branded cannabis when Australia finally allows recreational use.

Cronos goes all in on telehealth

Cronos has announced the closure of their face-to-face medicinal cannabis clinics and are moving all their consultation to telehealth. With 95% of consultations happening online anyway it doesn’t sound like it’s going to impact a lot of their business, and they’ll save money on rent and utilities.

According to Honah Lee there are almost twice as many clinics doing telehealth as there are face-to-face clinics (there’s a fair bit overlap between the two groups as well). Given the savings on offer by running telehealth and the ability to reach a larger market, we wouldn’t be surprised to see more clinics moving to telehealth-only.

The race for the EU heats up

Little Green Pharma (ASX:LGP) says it’s focusing on the European market, particularly the UK, France, Germany, and Italy. LGP have been doing deals with German distributors for a while now and expect to sell a tonne of flowers to Germany in 2023.

The rules for cannabis production in Australia are based on the rules in Europe. This means Aussie growers get to export to Europe without the same pain as some other countries. Germany’s recreational cannabis market is going live in 2024 and will be one of the first in Europe.

Last week we told you about ECS Botanics (ASX:ECS) $9.9m deal to supply German company Ilios Sante with cannabis over three years. LGP and ECS are joining other Australian companies eyeing off Europe:

1. Cann Group (ASX:CAN) owns a stake in a German importer and distributor Iuvo Therapeutics.

2. Australian Natural Therapeutics Group (ATNG) is getting paid $92 million over ten years to supply Germans with cannabis.

3. Creso Pharma (ASX:CPH) has a distribution deal with health products distributor MHG, and a deal with Innuana to grow cannabis according to Creso specifications.

Because the US can’t export and Canadian growers need to jump through more hoops than Australian growers, it looks like a lot of Australian growers will be trying to do deals in the EU for some time.

Sleepy stoners save insomniacs

The sleepy stoner stereotype is as common as the hungry stoner stereotype. A recent study tested if Entoura-10:15 medicinal cannabis oil could help people with insomnia. The people in the study took medicinal cannabis oil for two weeks and 60% of the people who took the oil did not have insomnia at the end of the trial.

Up to 30% of the population experience difficulty sleeping, falling asleep, or insomnia, but only 514 prescriptions were given out in 2022 under the Special Access Scheme B (SAS-B is one of four pathways for accessing medicinal cannabis). There’s definitely a lot more opportunity for medicinal cannabis to help people with their sleep problems.

QLD Labor (apparently) chickens out of drug law reform

On Thursday morning brisbanetimes.com.au reported that QLD Labor had “stubbed out” calls from the party for recreational cannabis to be legalised. Disappointing news.

We reported this on Thursday morning, but we noticed that there’s no official statement. Eventually there was a statement from the Acting Attorney-General that turned up in subsequent reports:

"The Palaszczuk government has committed to exploring how we can improve the criminal justice system to provide a broader range of available responses to low-harm offending and ensure that the system concentrates the resources of courts and prisons on the most serious matters,"

It’s mostly weasel words that don’t say much at all, but what it’s definitely not is an enthusiastic yes to reforming drug laws. So it doesn’t look like much will be changing in Queensland anytime soon.

Stock Round-Up

A couple of medicinal cannabis companies released their quarterly investor updates recently:

• ECS Botanics (ASX:ECS) - Revenues up to $4.56m a 94% increase on previous quarter. ECS shares were up about 4%.

• Little Green Pharma (ASX:LGP) - Customer cash receipts were up 35% to $6m. LGP shares were up about 5%.

That’s all we’ve got for today. We’d love to hear from you, so follow us on Twitter and Facebook, and let us know what you think about The Greenfields.

DISCLAIMER: This newsletter is not financial advice. It is strictly educational and is not investment advice or a solicitation to buy or sell anything or to make any financial decisions. Please do your own research and do not buy anything shady.