- NUGS
to benefit from approximately 40 commercial cannabis licenses throughout
California
- Company
signed letter of intent to partner with a Santa Barbara County grow
operation with cultivation sites that are expected to be a critical
component of each brand’s supply chain
Drive 400 miles from San Francisco to Los Angeles anytime
soon, and you may be passing through Cannabis Strategic Ventures Inc. (OTC:
NUGS) land. The Golden State incubator and brand builder is set to benefit from
a large batch of licenses awarded in cannabis-friendly communities along the
stretch. Recently, NUGS announced that it had signed a letter of intent to
partner with a Santa Barbara County grow operation that holds approximately 40
commercial cannabis licenses from the County of Santa Barbara, the California
Bureau of Cannabis Control, the Manufactured Cannabis Safety Branch and the
CalCannabis Cultivation (
http://ibn.fm/b28rQ).
This impending deal signals NUGS’ commitment to its strategy of promoting
brands to be category leaders in the recreational and medical cannabis sectors.
The NUGS management team believes that the cultivation sites will eventually be
a critical component of each brand’s supply chain.
In California, the regulatory regime for cannabis, operative
since January 16, 2019, is set out in the Medicinal and Adult-Use Cannabis
Regulation and Safety Act (“MAUCRSA”). Traversing its tortuous tracks
successfully may be possible for only for the most organized enterprises, like
NUGS. The first stop is the Bureau of Cannabis Control (“BCC”), the lead agency
in regulating commercial cannabis licenses for medical and adult-use cannabis
in California.
The BCC handles the licenses for four categories of cannabis
businesses, including distributors, microbusinesses, retailers and testing
laboratories, as well as short-term enterprises, such as cannabis shows and
events. A microbusiness license allows the cultivation of cannabis on an area
smaller than 10,000 square feet, as well as the distribution of cannabis and
the manufacture of products that use either non-volatile solvents or no
solvents at all. In addition to these four licenses, there are 16 others at the
state level, including 14 cultivation licenses (indoor, outdoor, nursery, etc.)
and two manufacturing categories.
For manufacturers, a license from the Manufactured Cannabis
Safety Branch (MCSB) is also required, while growers must get a license from CalCannabis
Cultivation, a division of the California Department of Food and Agriculture
(“CDFA”). At the county level, licensing applications will generally only be
considered if state licenses are in place. In Santa Barbara County, where NUGS
operates, there are eight types of permits: cultivation, distribution,
microbusiness, nursery, retail, testing and volatile and non-volatile
manufacturing.
Nevertheless, the travails of navigating the regulatory
obstacle course are worth it. Close to 20 million people reside around the
megalopolises of Los Angeles and San Francisco, and, together, the two metro
areas have a GDP that is roughly the size of Mexico’s (around $1 trillion).
NUGS has a finger in other pies, too. Late last year, the
company signed a deal with Biolog Inc., a company backed by Redfund Capital
Corp. (CSE: LOAN) (Frankfurt: O3X4) (OTC: PNNRF), to develop water-soluble
cannabis technologies for use in cannabis and phytocannabinoid-infused foods,
beverages and consumer products (
http://ibn.fm/2OYD3). Cannabinoids are hydrophobic and,
thus, not easily soluble in water. Current cannabis formulations tend to be
emulsions. Developing water-soluble versions of cannabinoids could considerably
improve their range of application to beverages, foods, cosmetics and other
consumer products, as well as significantly improving bioavailability.
NUGS recently acquired FITAMINS, a CBD performance brand,
and it has retained Art ‘One Glove’ Jimmerson as an ambassador for the
brand (
http://ibn.fm/M0zp6).
Jimmerson is a former professional boxer and mixed martial arts fighter,
Ultimate Fighting Championship pioneer and coach. Under the acquisition
agreement, FITAMINS will be distributing its vitamin- and hemp-derived CBD
formulations through a network of 600+ wholesalers that serve the
Asian-American market. FITAMINS will produce a proprietary CBD product to be
added to NUGS’ brand portfolio, initially targeting distribution networks in
the United States and eventually expanding into Asian markets that have
legalized CBD products. FITAMINS leverages a proprietary health and wellness
formula containing 25 mg of hemp-derived, THC-free cannabidiol (“CBD”) and
other joint-supporting vitamins that work to improve health and relieve joint
and muscle pain, encouraging movement and flexibility.
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