Reversing a three decade tradition among elected Democrat California Insurance Commissioners – and reneging on his own campaign pledge – Insurance Commissioner Ricardo Lara has accepted contributions from an insurance company executive and spouses of executives tied to a company with business before the Commissioner.
The author of the voter-approved law that made the insurance commissioner an elected post and the group he founded, Consumer Watchdog, called on Insurance Commissioner Ricardo Lara to return the campaign contributions and commit to rejecting insurance industry money in the future.
Read the San Diego Union-Tribune news story: https://www.sandiegouniontribune.com/news/watchdog/story/2019-07-05/states-top-insurance-regulator-accepted-tens-of-thousands-of-dollars-from-industry-executives-records-show
“Proposition 103 made the office of insurance commissioner an elected position in order to make the commissioner accountable to the voters who pay insurance premiums, not to the insurance companies the commissioner regulates. Honoring the voters’ trust, all but one of the previous elected insurance commissioners have refused to accept campaign contributions from the insurance industry,” wrote insurance reform Proposition 103 author and Consumer Watchdog founder Harvey Rosenfield, and Consumer Watchdog executive director Carmen Balber, in a letter to Lara today. “Taking that money is a violation of the pledge you made to voters to not accept campaign contributions from the insurance industry.”
Download the letter: https://consumerwatchdog.org/sites/default/files/2019-07/LtrLara7-8-19.pdf
The only elected California insurance commissioner to accept insurance industry contributions was Republican Commissioner Chuck Quackenbush, who resigned in 2000 over an industry pay-to-play investigation. Quackenbush was embroiled in a year-long scandal and faced prosecution for soliciting contributions from insurance companies who were under scrutiny by the Department of Insurance after the Northridge earthquake.
An insurance executive and two spouses of insurance executives, all with ties to workers’ compensation insurer Applied Underwriters, made $46,500 in contributions to Commissioner Lara’s 2022 reelection fund in April. One month later the Berkshire Hathaway-owned Applied Underwriters submitted a request to Commissioner Lara seeking his approval of a pending acquisition. A third person married to an insurance executive gave Lara an additional $7,800.
Applied Underwriters has a history of questionable practices across the country. Its California subsidiary, California Insurance Company, settled an action brought by the Department of Insurance in 2017 after its sales of its workers compensation insurance policies were halted for bait and switch marketing. It is currently fighting legal actions brought by five other businesses it insured alleging the same unlawful practices. Past misconduct is typically part of a Department of Insurance review of a proposed acquisition.
The insurance industry contributions totaling $54,300 include:
- $15,500 from Stephen Acunto, managing director of the Constitution Group, which wholly owns Constitution Insurance Company and whose directorate interlocks with Applied Underwriters and California Insurance Company. Acunto is also a spokesperson for Applied Underwriters.
- $15,500 from Carole Acunto, identified in campaign reports as the president of a production company and the wife of Stephen Acunto.
- $15,500 from Theresa DeBarbrie, identified in campaign reports as an administrator at a nursery school. She is the wife of Carl DeBarbrie, an insurance broker for Applied Underwriters and former executive with Constitution Insurance Company and California Insurance Company.
- $7,800 from Darlene Graber, identified as a homemaker in campaign reports and the wife of Larry R. Graber, Senior Vice President and Director of Independence Holding Company which has multiple health insurance subsidiaries.
View the reports at the California Secretary of State campaign finance website: http://cal-access.sos.ca.gov/Campaign/Committees/Detail.aspx?id=1415175&view=late1
Commissioner Lara also appears to have kept $6,000 in campaign contributions he accepted last spring from The Doctors Company, a medical malpractice insurance company, despite his promise during the campaign to return the funds and not accept industry money.
Lara denied taking insurance industry contributions in a debate that aired on KQED one month before the election, stating: “I haven’t taken for this race any insurance money and it’s unfair to say that I’ve taken insurance money. In my past campaigns I have, in this campaign I have not.”
Rosenfield and Balber wrote: “As Insurance Commissioner, you oversee insurance policies worth hundreds of billions in annual premiums paid by Californians. Such decisions should not be made under a cloud of improper industry influence. To preserve the integrity of your office, and to demonstrate your personal independence from the insurance industry, you must immediately return the contributions in question and commit to rejecting insurance industry money in future. To do otherwise would be a betrayal of the people of California.”
“The recent contributions to your 2022 reelection campaign fund appear intended to covertly grease the wheels for a legal matter currently pending before the Department of Insurance.”
“The company’s request for your approval also contains troubling statements that seem to be intended to solicit your personal favor. As the Insurance Commissioner of California, you chair the National Association of Insurance Commissioners’ Cannabis Insurance Working Group, and you have made wildfire and cannabis insurance priorities during your first months in office. Applied Underwriters’ application promises that the workers compensation insurer “will expand its business operations to include Wildfire Home Insurance to California homeowners, Home Insurance to California homeowners in inner-city areas, and workers’ compensation to employers involved in the cannabis industry.”
“No insurance commissioner should take money from the industry he or she regulates. Applied Underwriters appears to think its executives and their families can buy your support. Disabuse it of that notion by returning the money immediately and pledging to reject any future insurance industry contributions. It is the only way to prove your independence from the industry you regulate and keep faith with the voters whose interests you have sworn to protect,” the letter concluded.
SOURCE Consumer Watchdog
Medicine Man Technologies to Present at Benzinga Cannabis Capital Conference
On the first anniversary of Canadian cannabis legalization, “Legalization 2.0” or “Cannabis 2.0” will allow popular cannabis derivatives like edibles, infused beverages, and vapes to legally be bought and sold nationwide. Demand for these products is incredibly high, and most analysts believe that cannabis derivatives will allow companies to deliver on ambitious revenue projections for the still-growing pot industry. Because this market is so important, companies that are prepared to capitalize on cannabis-derived consumables—like BevCanna Enterprises Inc. (CSE:BEV) (OTCPK:BVNNF), MediPharm Labs Corp. (TSX:LABS) (OTCQX:MEDIF), Cronos Group (TSX:CRON) (NASDAQ:CRON), Valens GroWorks (TSXV:VGW) (OTCQX:VGWCF), and IAnthus Capital Holdings, Inc. (CSE:IAN) (OTCQX:ITHUF)—are likely to ride the new wave of legalization and become the major industry players of tomorrow.
According to a comprehensive report from Deloitte called Nurturing New Growth: Canada Gets Ready for Cannabis 2.0, the Canadian market for edibles and alternative cannabis products will be worth $2.7 billion annually. $1.6 billion of that will be from edibles alone, and $529 million will be from beverages.
BevCanna is Best Positioned to Deliver Cannabis Beverages
BevCanna Enterprises Inc. (CSE:BEV) (OTCPK:BVNNF) understands better than perhaps any other company what kind of opportunity “legalization 2.0” provides for the cannabis industry. With its goal to become the global leader in cannabis-infused drinks, BevCanna has done an exceptionally good job of preparing itself for the new consumables market.
The last few months have seen a bevvy of activity for BevCanna. The company recently completed independent lab testing on its proprietary powder ingredient, Deeper Green, which allows for a full range of cannabinoid inputs, including THC, CBD, full-spectrum extracts and hemp-based CBD. The company also has an exclusive supply agreement with Nextleaf Solutions to employ its water-soluble cannabinoids for development and manufacturing, as well as a research license allowing BevCanna to look into the stability and homogeneity of water-soluble cannabinoid infusions in water-based beverages.
All this means that BevCanna has the technology and the permits in place to deliver cannabis drinks that are both high-quality and reliable. Accomplishing just one of these tasks is a monumental achievement, but having both in place in time for “legalization 2.0” puts the company in an industry-leading position.
BevCanna Enterprises Inc. (BEV-BVNNF)‘s two announced products lines, Anarchist Mountain Beverages and Grüv Beverages provide the company with brands that are broadly appealing for consumers interested in cannabis drinks. Anarchist Mountain is a line of THC-dominant sparkling spring water beverages with botanical flavor profiles inspired by the Pacific Northwest. Grüv is a wide range of easy-drinking cannabis-infused iced tea drinks with a balanced CBD and THC profile. Additionally, BevCanna is in “the final development stage for a third product line that will be the catalyst for the launch of the company’s water-soluble powder beverage line in California,” according to its corporate update.
At the beginning of October, the company entered into a definitive agreement with Higharchy Ventures to manufacture and launch a portfolio of cannabis-infused beverage brands for the Canadian market. The brands will be distributed throughout Canada via Higharchy’s retail cannabis network, and as part of the rollout, BevCanna plans to establish a retail education and training program. This program will focus on educating store staff on the infused beverage category and responsible consumption.
Also, in its recent corporate update, BevCanna Enterprises Inc. (CSE:BEV) (OTC:BVNNF) laid out its objects for the next six months, which mostly center on forming relationships with LPs looking to enter the infused products market in Canada, as well as forming strategic relationships with companies and brands that offer complimentary products.
Already, 11% of Canadians consume cannabis products like edibles and infused beverages, and according to the Deloitte report, another 13% are expected to start buying them when they become legal. With nearly one in four citizens in Canada currently or likely to consume cannabis edibles and alternative products, Deloitte says that “legalizing these products should clearly create valuable new growth opportunities for Canada’s cannabis sector.”
Other Companies That Can Deliver Products to a Hungry Market
BevCanna Enterprises Inc. (BEV-BVNNF) won’t be the only company to benefit from “Legalization 2.0.” Many of its contemporaries are working hard to establish themselves in the newly legal markets.
In preparing for the new legislation governing cannabis derivatives, MediPharm Labs Corp. (TSX:LABS) (OTCQX:MEDIF) VP of investor relations & communications Laura Lepore says that her company is building “the largest vape pen platform in all of Canada.” A big part of that is the company’s white label agreement with Ace Valley, which in signed in June, to launch a premium line of approximately 2 million Ace Valley-branded cannabis extract-based vape pens to Canadian consumers.
MediPharms has also signed a manufacturing agreement with Cronos Group (TSX:CRON) (NASDAQ:CRON), which will see the company produce high-quality cannabis concentrate filled vapes for Cronos Group’s COVE brand. Vape pens have been called the key to Cronos Group’s success, and its Cronos Device Labs in Israel—which is focused on developing vape products for cannabis applications—could just be the driving force to make Cronos a leader in the vape pen category.
Not to be outdone, Valens GroWorks (TSXV:VGW) (OTCQX:VGWCF) is making sure it remains the go-to cannabis extraction company as legalization 2.0 impacts the industry. Valens already lists major market players such as Canopy Growth, HEXO, and The Green Organic Dutchman among its clientele, and to make sure that it can meet the demand for cannabis extracts once edibles can be produced and sold, it has increased its annual extraction capacity to 425,000 kgs of dried cannabis and hemp biomass.
Like MediPharm and BevCanna Enterprises Inc. (BEV-BVNNF), Valens also entered a white-label contract that will see it produce a minimum of 2.5 million THC and CBD infused beverages over five years for Iconic Brewing.
While those companies prepare to capture the burgeoning cannabis consumables market in Canada, IAnthus Capital Holdings, Inc. (CSE:IAN) (OTCQX:ITHUF) hopes to take a similar approach in the US market wherever it can. According to its Q2 financial earnings report, the company can sell extracts such as vape cartridges, edibles, waxes, and tinctures in the state of Arizona. IAnthus also increased its production by 30 percent in Q2 over the previous quarter and is planning to use this added capacity to fuel rollouts in New York, New Jersey, and Massachusetts.
The Growing Market for Cannabis Consumables and Extracts
A survey conducted by Ernst & Young found that once cannabis products like gummies and face creams become available, they will attract as many as 3 million new Canadian consumers to the market.
Outside of Canada, the market for cannabis consumables is growing exponentially. According to Zion Research, the global market for cannabis beverages is going to grow in value from 1.6 billion to $4.5 billion in 2025, at a CAGR of approximately 15%. Meanwhile, Arcview projects that the edibles market could be worth over $4.1 billion in just Canada and the United States by 2022.
BevCanna Enterprises Inc. (BEV-BVNNF) has made sure it can capitalize on the markets created by “Legalization 2.0.” It will do this through its multiple agreements to test, manufacture, and supply pot beverages, both for its own brands and for clients.
It will be joined in the new markets by MediPharm Labs Corp. and its partner Cronos Group, as well as Valens GroWorks
Sunniva Announces Amendment Of Performance Warrants
Sunniva Inc. (“Sunniva” or the “Company”) (CSE:SNN) (OTCQB:SNNVF), a North American provider of cannabis products and services, announces that it is amending the terms of the 718,249 performance warrants (the “Performance Warrants”) issued in conjunction with the acquisition of LTYR Logistics, LLC (“LTYR”) on December 31, 2018. The Performance Warrants are convertible into 718,249 common shares of the Company (“Performance Shares”) upon the satisfaction of certain operational milestones (the “Milestones”).
The Performance Warrants will be amended by replacing the original Milestone of opening a distribution business at the Company’s facility in Long Beach, California with the opening of a distribution business at the Company’s facility in Coachella, California. Upon amendment of the Performance Warrants, the Milestones will be satisfied and the Company will convert the Performance Warrants into Performance Shares.
The amendment of the 239,491 Performance Warrants held by Mr. Kevin Wilkerson, President of the Company and the former CEO of LTYR, is considered to be a “related party transaction” within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company is relying on the exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101, as neither the fair market value of the subject matter of, nor the fair market value of the consideration from, the amendment of the Performance Warrants held by Mr. Wilkerson, exceeds 25% of the Company’s market capitalization.
For more information please visit: www.sunniva.com.
To be added to the Sunniva email distribution list please register at www.sunniva.com/email-alerts.
The Canadian Securities Exchange does not accept responsibility for the adequacy or accuracy of this release.
SOURCE Sunniva Inc.
Employers still face cannabis-related challenges, a year after legalization
Employers are still facing challenges related to cannabis in the workplace a year into legalization, finds a new survey by the Canadian Federation of Independent Business (CFIB). In fact, nearly six in 10 business owners rank their provincial government’s efforts to educate them as poor or very poor.
“Cannabis legalization posed some major new challenges for employers, especially in industries where the safety of employees or customers is a concern. We warned governments in the lead-up to legalization that their education efforts were severely lacking. A year in, and as new products become available, it doesn’t look like it’s gotten much better,” said CFIB president Dan Kelly. “We’re finding that provincial governments still have not done a great job of informing employers of their responsibilities, relevant rules and regulations, as well as the resources available to them.”
Only 8 per cent of surveyed businesses had experienced a cannabis-related incident in the workplace since October 17, 2018, but that number rises to 22 per cent for businesses with 100 to 499 employees, according to the preliminary data. Businesses in hospitality were most likely to report having had an incident (16 per cent).
The survey also found that:
- Only a quarter of businesses list their provincial government as a primary source of information related to cannabis in the workplace.
- 32 per cent listed CFIB as a primary source of information, while 48 per cent did not have a primary source of information.
- 59 per cent of those who had a primary source of information felt better equipped to deal with cannabis in the workplace.
- 34 per cent of businesses do not have a drug and alcohol policy in place.
“Many small businesses don’t have an HR department or legal experts on staff so they need help and resources, but too often, their needs are treated as an afterthought when governments rush to introduce major new legislation,” added Kelly. “I advise any business owners that are looking for information to visit cfib.ca/cannabis for tools and resources, including a free workplace drug and alcohol policy template.”
SOURCE Canadian Federation of Independent Business
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