Canadian Cannabis Company Captor Capital Buys San Jose Dispensary for $6 Million

Leading Santa Cruz Dispensary Acquired by Captor Capital

Adding Chai Cannabis continues to increase presence in California retail cannabis market September 18, 2018

TORONTO, Sept. 18, 2018 (GLOBE NEWSWIRE) — Captor Capital Corp. (“Captor” or the “Company”) (CSE: CPTR; FRANKFURT: NMV;USOTC:NWURF) announced today it has completed its previously announced acquisition of a dispensary in Santa Cruz, California, Chai Cannabis Inc. (“Chai”). Chai also possesses a license permitting cannabis delivery within the greater Santa Cruz area. Adding this dispensary, one of the most popular in the area (unaudited revenues of USD$8.4 in 2017), is expected to materially increase total revenues from Captor’s retail cannabis investments.

Chai was acquired for a total consideration of USD$6,015,000, of which USD$4,390,950 was payable in cash closing, USD$721,800 of which was in the form of a promissory note and USD$902,250 was paid in shares of Captor. The portion of the consideration paid in Captor shares was converted into approximately C$1,187,722 and 7,662,722 Captor Shares were issued at a deemed issue price of $0.155.

Dispensary renovations are set to begin shortly that will triple Chai’s sales floor space. The newly renovated space will allow Chai to carry a much wider range of flowers, edibles, extracts, and other cannabis products. Chai will remain open during the renovations and it is not expected to impact the dispensary’s operations. Manager of Chai, Josh Lechner, has been successfully operating the dispensary since it opened in 2014 and will continue on in this role.

The Chai brand adds a unique retail experience to the consumer which complements Captor’s premium branded MedMen (MMEN.CN), stores in West Hollywood and Santa Ana. The acquisition of Chai continues Captor’s business plan to aggressively invest in California’s retail; cannabis industry. Captor’s investment in this profitable dispensary represents a fantastic growth opportunity. We believe the Santa Cruz area with more than 4 million tourists visiting each year will become a growing retail cannabis market.”

About Captor Capital

Captor Capital Corp. is a Canadian firm focused on the cannabis sector listed on the Canadian Securities Exchange, the OTC, and the Frankfurt Stock Exchange. A vertically integrated cannabis company, Captor provides recreational and medical marijuana based products to consumers via its leading brands and dispensary locations. Listed on the Canadian Securities Exchange, the OTCUSA, and the Frankfurt Stock Exchange, Captor owns and operates advanced growing facilities which produce consistent high-quality contaminant free marijuana for its customers, as well as other high demand cannabis-based goods for consumption. 
The company follows a strategy of acquiring cash flowing established companies and organizations with growth potential that require capital to scale. Captor currently has a number of revenue generating cannabis investments including two wholly owned branded MedMen dispensaries – the world famous West Hollywood location and the showpiece Orange County dispensary in Santa Ana. Captor Capital is currently looking at additional revenue generating investments in the cannabis space and will be updating the market in due course.


Original Press Release

About Michael King

Michael King is an experienced professional with a background in finance, private equity, real estate and consulting. He is currently a principal in one of the leading Cannabis consulting firms in the country based out of Palm Springs — Kings Garden Inc.

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Community outreach helping cannabis companies - Michael King Cannabis Palm Springs

Community outreach helping cannabis companies gain edge on rivals, attract customers

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Cannabis companies nationwide are finding they can reap generous rewards from giving to their local communities.

Being a good corporate citizen can make it easier for marijuana businesses to work with regulators and local officials, stand out from competitors and attract new customers and high-quality employees, according to industry executives and experts on corporate giving.

There are a variety of ways cannabis companies can give back to their communities, ranging from providing volunteer time for events and projects to collecting food donations.

And with U.S. cannabis retail sales estimated to reach between $8 billion and $10 billion in 2018, many MJ businesses have room in their budgets to cut checks to cause-driven organizations.

“Giving back has always been a part of my life, but part of my mission is also breaking stereotypes about people who use cannabis as not being contributing members to society,” said Annette Atkinson, owner of HWY420, a Washington state marijuana retailer that has been recognized for its charitable giving.

“If I can increase the population that believes marijuana is an OK alternative to alcohol and opioids through showing that people who use marijuana are not horrible people, then on the business side, I think that will help me.”

In some states, giving back isn’t just good business; it’s required to even open for business.

In 2016, Denver started requiring applicants for retail marijuana licenses – and those seeking to renew their permits – to submit “community engagement” plans.

The idea was to “create positive impacts in the neighborhoods where the licensed premises are located.”

Some options for companies include:

  • Neighborhood Beautification.
  • Increasing access to healthy food.
  • Homelessness assistance.
  • Improving connectivity and transportation.

Municipalities such as Oakland, California, and Thornton, Colorado, also have adopted requirements aimed at ensuring the marijuana industry creates social benefits.

Similarly, Pennsylvania, Ohio and other states rolling out new marijuana markets are introducing merit-based application programs as well, making community outreach and engagement increasingly important in the industry, said Courtney Mathis, president, and co-founder of KindColorado.

Denver-based KindColorado helps cannabis companies in the state strategize how to connect with neighborhood groups and nonprofits.

Among other activities, KindColorado has organized opportunities for marijuana company employees to pull weeds alongside refugee farmers, serve food for women struggling with poverty and fund senior-focused food banks.

“Cannabis companies are really becoming a part of their communities, and they feel really lucky about that,” said Kelly Perez, co-founder, and CEO of KindColorado.

“It isn’t about hitting licensing requirements. It’s about getting to serve a community where you don’t have to be in the shadows anymore: Coming out, standing tall and using your privilege and opportunity to be an asset.”

About Michael King

Michael King is an experienced professional with a background in finance, private equity, real estate and consulting. He is currently a principal in one of the leading Cannabis consulting firms in the country based out of Palm Springs — Kings Garden Inc.

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Wholesale Marijuana Prices Continue to Drop - Michael King

Growing Pains: Wholesale Marijuana Prices Continue to Drop

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The genius of supply and demand as economic theory is its raw, basic simplicity. There are plenty of other determinants with hands in the market, but if demand stays constant and there is a new, unprecedented rush of supply, it’s pretty clear why prices will subsequently plummet. This is exactly what’s happening as wholesale marijuana prices continue to drop.

It’s Simple Economics

In many states where cannabis is legal, wholesale marijuana prices continue to drop, and there are simple economic explanations why. As more and more cannabis producers enter the market, with bigger and bigger cultivation facilities, this drop is entirely predictable.

As Marijuana Business Daily reported on Monday, the average asking price for a pound of cannabis on Colorado’s wholesale marijuana market is currently at an all-time low of $1,298, down from a three-year high of $2,007 in January 2015. And all the factors driving down the price—more competition, more efficient production and even more competition—are still at play, meaning prices should plummet even further.

When that happens, producers may be compelled to grow even more cannabis, flooding the market with even more supply, which will drive the price even lower. You get the idea.

While it’s true that newcomers are entering the commercial marijuana market all over the country—in no small part because they believe that black market-era profit margins are theirs for the taking, and are presenting such rosy revenue projections to their investors—in Colorado’s case, it’s a situation of existing producers ramping up their output.

According to Shon Williams, a consultant with Mjardin, a Denver-based group of cultivation advisers, big companies are able to add capacity without much in the way of increased cost. As a result, they can remain profitable even while accepting those lower prices.

In Colorado, what newcomers there are tend to produce cannabis using the sun, a relatively new allowance in the state. Outdoor producers may not be able to fetch nearly as much per pound, but they’re able to produce that pound much more cheaply. That translates into a slightly smaller hill to climb toward profitability, whether or not the final product stays as flower or (more likely than not) is extracted into oil for edibles, concentrates or vape cartridges.

This does make newcomers think twice before entering the industry—and it makes staying in business more difficult for smaller operations without the ability to scale. In other words, it’s hard out here for a small grower—which is what we’ve been hearing for years now in the marijuana world.

Even mainstream media has been hip to this trend. “From Washington to Colorado, wholesale marijuana prices have tumbled as dozens of states legalized the drug for recreational and medicinal uses, seeding a boom in marijuana production,” the Wall Street Journal reported in August.

Granted, these findings did rely on data from Washington, where an early market inefficiency—there just weren’t any growers—artificially spiked the price of a gram to $20-territory, but the general gist of the article is accurate.

How Long Will Wholesale Marijuana Prices Continue to Drop?

At some point, the production market will become saturated. Nobody will be able to increase their output, and it will be hostile to newcomers. That is, unless someone presents an innovation of some kind that gives them a clear market advantage.

What would that be? More efficient lights? Hard to get more efficient than LEDs or the sun. A better strain that breaks the market? Maybe. And when will that be? Similarly, when will prices settle into a predictable groove, in the way other agricultural consumer products have?

Williams, the Denver-based consultant, isn’t sure when all this could happen, only that it will happen. Then again, marijuana hasn’t yet had some kind of market-breaking crisis, something like a widespread outbreak of the fungus phylloxera, which decimated and nearly destroyed the wine industry.

The good news here is that the price drop has been passed onto consumers. According to BDS Analytics, a cannabis consumer data-crunching firm that has access to POS data from Colorado dispensaries, the average price of a gram is now hovering around $7 in Colorado—a far cry from the $40 to $50 bags from black market days.

The other outstanding question—for producers, sellers and consumers alike—is whether government regulation will create new demand for off-label, black market cannabis. That’s the concern in California, where a tiny minority of the growers currently in business have signed up for licenses and the required inspections.

As Tawnie Logan, the chairwoman of the California Growers Association, told the New York Times, dispensary pot in California is around $50 an eighth (for now), whereas black market weed fetches $20.

Will that change the way pot is grown and sold, and will it affect prices? So far in California, the tool used to stamp out off-label growers has been law enforcement, not the free market.

Because that worked so well in the past.

About Michael King

Michael King is an experienced professional with a background in finance, private equity, real estate and consulting. He is currently a principal in one of the leading Cannabis consulting firms in the country — Duard Ventures.

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California Report on Cannabis and Banking - Michael King

California State Treasurer Presents Report on Cannabis and Banking

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As many of you know, cannabis businesses are faced with many roadblocks and hurdles, banking being one of them, but as California nears recreational cannabis in less than two months, it appears that we are a bit closer to potentially having a solution to our cash and banking crisis.

Today, John Chiang, the California State Treasurer and the Cannabis Banking Working Group held a press conference to announce the release of their report on “Banking Access Strategies For Cannabis-Related Business.” The past year John Chiang and 18 representatives from the Cannabis Banking Working Group have gone up and down California meeting with over 50 expert panelists to discuss the issues and reviewing possible solutions for the industries banking issue.

Before I go into the recommendations the Cannabis Banking Working Group presented, let’s review the past year.

Why is this an issue?

Although medical cannabis has been permitted in California for more than two decades, the production, distribution, sale, and possession of cannabis still remains illegal under federal law and is listed as a Schedule 1 controlled substance.

This impacts legal California cannabis businesses from opening a business account, writing checks, accepting credit cards, transferring money and forces these businesses to deal with large amounts of cash.

Outside of not having access to a bank account, this also has created a considerable safety concern against the safety of business owners and employees as they have to run there businesses strictly on a cash-based service and this matter doesn’t just affect cannabis businesses but state and local government agencies as well.

Did you know: A few years ago in Southern California, a dispensary owner was kidnapped, tortured and manned after being driven into the desert in search of non-existent money.

On top of safety, by not providing businesses with a banking solution many have stayed and will continue to stay underground, and it hinders them the opportunity to become a transparent, regulated, tax-paying business.

Cannabis Banking Working Group

John Chiang, as California’s State Treasurer saw these concerns and knew something had to be done, this is when the Cannabis Banking Working Group was created. These 18 representatives came from the cannabis industry, financial institutions, and government tax collection, law enforcement, and regulatory agencies came together and held over six public meetings around the state in the hopes that they would all be able to find a possible solution or recommendation to help deal with this cannabis banking problem.

On February 10th, 2017, the Cannabis Banking Working Group met in Los Angeles, California. Jerred Kiloh of the United Cannabis Business Alliance, expressed his frustration, “Security issues, keeping high amounts of cash on hand, access to capital to grow their business. Legal representatives and contractors are all losing their bank accounts for working with cannabis companies.” Mr. Kiloh stated, “I had to open a total of eight new bank accounts, and with these changes, my employees and staff lost healthcare.”

Kenneth Berke of Payqwick presented a possible solution at that meeting. Mr. Berke built out a sophisticated e-wallet that can go from processors to retailers and from consumers to retailers. They developed a fully compliant program and are working closely with Washington Liquor and Marijuana Board.

In July 2017, the Cannabis Banking Working had its fourth meeting in San Diego, where they heard John Hudak, Deputy Director of the Center for Effective Public Management, who made an important statement,” the banking solution should be achieved for the 40 million California’s who for them this is a public health and public safety issue.” Hudak reminded the room that this isn’t just about business. It is important to make sure this industry can be tracked, traced, kept honest and regulated efficiently so that the individual knows exactly what product they are getting, where it came from, and that the tax money ends up in the treasurer where it belongs.

Ali Fakhri of EventHi, an online event management platform specific to the cannabis industry, presented a possible solution at his panel. Mr. Fakhri and Sundie Seefried, CEO of Safe Harbor Private Bank publicly announced that EventHi and Safe Harbor Private Bank, a compliance-based cannabis banking program, which is a division of Partner Colorado Credit Union were officially working together, making EventHi one of the first California businesses to work with Safe Harbor.

California Nears Recreational Cannabis

So that leads us to today, John Chiang presented a series of steps that they believe could point us in the right direction. However, although these measures are recommended the reality is there is no definitive solution to this cannabis banking issue until the federal government reschedules cannabis or Congress approves safe harbor legislation protecting financial institutions that serve cannabis businesses from federal penalties.

The Four Recommendations

Cash handling the collection of taxes and fees
To have state and local agencies contract armored couriers to pick up tax and fee payments in cash and deliver the funds to financial institutions.

Expanding cannabis industry access to banking services under current law
To have the state and local agencies create an online portal that aggregates data on cannabis business. The portal should be designed with financial institution compliance needs in mind and provide material to help institutions fulfill their know-your-customer responsibilities.

A state-backed financial institution
This would entail California creating a state-backed financial institution in California that can serve cannabis businesses directly. A public institution that would either (1) finance public infrastructure and expand banking for underserved groups, including the cannabis industry; or (2) take deposits, make loans, and provide other services primarily to cannabis producers, distributors, retailers, and related businesses.

Full access to banking services: the federal solution
This proposal is where an association is developed for cannabis-legal states, local governments, cannabis and financial service industries and law enforcement to advocate for changing federal laws.

In Conclusion

As we get closer and closer to 2018, although we don’t have an exact solution, it appears we are closer now more than ever, but the work doesn’t stop here. We all have to continue our roles as not just cannabis entrepreneurs but as advocates for this plant and this industry.

And you can do so easily by joining a cannabis industry association, reaching out and speaking to government and city officials or by continuing to educate others on cannabis and the cannabis industry.

About Michael King

Michael King is an experienced professional with a background in finance, private equity, real estate and consulting. He is currently a principal in one of the leading Cannabis consulting firms in the country — Duard Ventures.

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How To Get Your Legal Weed Permits in California - Michael King

How To Get Your Legal Weed Permits in California

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It’s officially time to start looking into legal weed permits in California! The state is about to fully legalize recreational cannabis. If you want to break into the industry, it’s time to prepare.

The Steps For Licensing

The new year is a time for new beginnings.

In California, January 1, 2018, will mark the day when the Golden State starts the task of issuing legal weed permits in California. For those in the state who hope join the Green Rush and get in on the action, this date is everything.

If you’re planning on starting your own weed business, here’s a simplified, yet comprehensive, guide on how to start.

First Thing’s First

There are two important things to know before we start. If you’re an eager beaver and planning to apply for legal weed permits in California during the first couple of months of legality, you will only be able to get a temporary license.

This is because the state still has not finalized everything regarding regulation on their end.

And before you can obtain a statewide permit, you will need to apply for and be granted a local permit. Since both local and state permits are necessary to start and maintain cannabis businesses, you will also need to wait until your city finalizes local regulations.

The Application

You will be able to submit your application one of two ways. You can send your application through the mail if you don’t trust the Internet. Or you can apply online if you don’t trust the humans working in the mail system.

Either way, you’ll need the following four things:

1. Permission from the Government

This should be obvious, but unless you can show proof that you’re authorized to open a cannabis business, you won’t be able to move forward with your application for legal weed permits in California.

2. Business Information

You don’t need to present a detailed business plan.

For this component, you pretty much just need the basics of your business. Useful and required information includes the name of the business, relevant contact information and a brief summary of what your business will be.

And speaking of what kind of business you’re planning on having…

3. Your Desired Type and Class of License

You’ll need to officially decide upon what avenue you’re traveling on in terms of business.

In other words, pick a side: medical cannabis or recreational cannabis.

From there, you will need to specify what kind of business you will be running. Some options for this include retailer, testing lab and distributer, among others.

4. A Basic Floor Plan

This doesn’t have to be too detailed. The people reviewing your application just want to know the layout of the rooms and divisions of your business.

When you submit an application for a permanent license, though, you’ll need to provide more details, like what kind of security measures you will have.

Final Hit: How To Get Your Legal Weed Permits in California

None of this sounds too daunting, right?

Compared to the college application process, this seems like a walk in the park. Hey, no one’s asking you to write an essay explaining why you’re special and different from the millions of other students vying for a spot!

Again, keep in mind that this is a simplified and streamlined guide to legal weed permits in California. For more detailed information, visit the official website of the state’s Bureau of Cannabis Control. Good luck, everybody!

About Michael King

Michael King is an experienced professional with a background in finance, private equity, real estate and consulting. He is currently a principal in one of the leading Cannabis consulting firms in the country — Duard Ventures.

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Legal and Medical Cannabis Investment on the Rise - Michael King

Legal and Medical Cannabis Market Investments on the Rise

Article originally published by Markets Insider

According to a report by New Frontier Data, medical cannabis sales are forecast to grow to $5.3 billion in 2017, or accounting for 67% of total cannabis sales. By 2025, medical sales in currently legal states are forecast to grow to $13.2 billion and will account for 55% of all sales. Comparatively, adult-use sales in 2017 are forecast to reach $2.6 billion, or rising to $10.9 billion by 2025. This puts emphasis on the state of California, which offers the perfect example of why it is so important to understand trends in consumer behavior. The state’s legal industry is forecast to grow from $2.8 billion in 2017, to $5.6 billion in 2020. AmeriCann Inc. (OTC: ACAN), Corbus Pharmaceuticals Holdings, Inc. (NASDAQ: CRBP), Cara Therapeutics Inc. (NASDAQ: CARA), Zynerba Pharmaceuticals Inc. (NASDAQ: ZYNE), AXIM Biotechnologies, Inc. (OTC: AXIM).

New Frontier also commented on the growth in cannabis investing over the past two years, including how the investment community has responded to the 2016 general elections. Cannabis stocks have seen significant growth in recent years, with the Viridian Cannabis Stock Index growing 236.1% in 2016 alone.

“Cannabis stocks significantly outperformed major indexes in 2016, fueled by speculative investment based on anticipated expansion of new legal markets.

In the run up to the election, stocks increased by 207.8% and continued to rise, even with an uncertain future under the new administration. While recent comments by the Trump administration did have an initial dampening effect on the market, we have seen continued growth relative to Q4 2016 whereby cannabis stocks are still outperforming other sectors,” said Giadha Aguirre De Carcer, CEO of New Frontier Data.

AmeriCann Inc. (OTCQX: ACAN) an Agricultural-Technology company that is developing the next generation of sustainable, state-of-the-art medical cannabis cultivation properties, announced earlier today that it has secured an equity investment commitment of $10,000,000 from Mountain States Capital, LLC (“MSC”).

The majority of the investment from MSC will be utilized to develop the first phase of AmeriCann’s flagship project, the Massachusetts Medical Cannabis Center (“MMCC”.) This state-of-the-art cannabis cultivation and processing development project is 47 miles from Boston in the midst of the rapidly growing Massachusetts medical cannabis market.

Mountain States Capital released a statement that, “AmeriCann is well positioned to benefit from the recent implementation of the landmark adult-use cannabis program in Massachusetts. The Commonwealth, and the country, needs the sophisticated, technologically advanced facilities that AmeriCann is delivering.”

The MMCC project is approved for 1 million square feet, which will be developed in phases and is expected to be one of the most technologically advanced cultivation facilities in the nation.

Massachusetts is one of the most dynamic developing cannabis markets in the United States,” stated AmeriCann CEO Tim Keogh. “Our MMCC project will become a center of excellence for quality, consistency and efficiency and play an important role in helping to provide the cannabis infrastructure the Commonwealth requires.”

The project’s first phase will consist of a 30,000 square foot greenhouse, laboratory and research center. AmeriCann has agreements with Coastal Compassion, Inc., one of a limited number of licensed operators in the Massachusetts cannabis market. Coastal Compassion, Inc. will lease 100% of the first phase of MMCC upon completion. In addition to funding the initial 30,000 square foot facility, the balance of the equity is expected to be utilized to prepare for projects in other regulated markets.

About Michael King

Michael King is an experienced professional with a background in finance, private equity, real estate and consulting. He is currently a principal in one of the leading Cannabis consulting firms in the country — Duard Ventures.

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Cannabis Entrepreneurs Offer Advice On Where To Jump In - Michael King

Cannabis Entrepreneurs Offer Advice On Where To Jump In

Article Originally Published by Forbes

“It’s a boom town,” says entrepreneur Richard Huang, describing the legal cannabis industry, “but it’s not a gold rush, where just any fool can strike it big.” As co-founder of the vaporizer company Cloudious9, Huang has picked out his niche, putting time and effort behind the vaping trend.  He is one of the plethora of professional financiers, scientists, retailers, inventors and entrepreneurs jumping into legal cannabis, which last year surpassed sales of $6B .

The success stories are alluring. Two retired ladies created food-safe cannabis containers and sold millions right away. A couple of guys at the glass show ordered some cool pipes to sell online and ended up creating Dankstop, the largest online head shop.

Cannabis entrepreneurs continue to find a variety of new opportunities in the evolving industry, and one of the fastest-growing is marijuana-infused edibles.

Bethany Gomez, Director of Research for the cannabis-focused market research firm, Brightfield Group, estimates that edibles sales will reach nearly $1.6 billion in 2017 and as markets mature, they will increase as a percentage of the total market, “reaching more than 25% of total sales in several states.” Offerings in the sector have moved far beyond the stereotypical “pot brownie” to infused beverages, candies, tinctures, and cooking ingredients.

Customer consumption patterns have not yet stabilized according to Gomez and “the brand landscape remains highly fragmented,” in edibles she said, leaving significant room for newcomers to succeed. “Infused products offer some of the greatest opportunities for entrepreneurship in the cannabis market,” she said, despite the growing number of products in this space.

An important public health benefit of legal cannabis is that it is tested for potency, pesticides and other chemical aspects. Accurate product testing offers an enormous opportunity for small businesses because dispensaries and patients want safe consistent products says Will Waldrop, CEO of Signal Bay, Inc., a medical cannabis consulting service. “As demand for cannabis grows, so will product manufacturers’ need for accredited lab testing services,” he said.

For those who prefer a marijuana-adjacent business (which avoids the rules and regulations that come with “touching the plant,”) Lauren Seigel, Marketing Manager of BloomBoss, a designer of high-efficiency LED grow room lighting and accessories advises cannabis entrepreneurs to target home cannabis growers. Building a home grow “requires an initial investment of anywhere from $800-2500 in equipment,” she said, and each new legislative session and state legalization brings in new customers. “The opportunity adds up fast,” she said.

About Michael King

Michael King is an experienced professional with a background in finance, private equity, real estate and consulting. He is currently a principal in one of the leading Cannabis consulting firms in the country — Duard Ventures.

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