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business Monday 19 october 2020
Cresco Labs CEO talks legal marijuana industry challenges

By ALEX VEIGA Pennsylvania, Ohio, New
AP Business Writer York -- but they're seeing
LOS ANGELES (AP) — De- growth in well-established
mand for marijuana prod- markets like Colorado,
ucts in U.S. states where Washington, Oregon and
they are legal in some form California. To see growth in
has been resilient this year, those markets is even more
despite the pandemic. telling.
In California and other Q: What's the biggest chal-
states that account for lenge facing the industry?
most of the retail sales of A: The main thing holding
marijuana for recreational the industry back is ac-
use, sales are up 8.5% from cess to capital that would
a year ago, according to allow the infrastructure to
data from industry tracker be built, that then creates
Headset. the growth, the jobs, the
Charlie Bachtell, CEO and revenue. The fundamental
co-founder of Chicago- restraint that still hangs over
based Cresco Labs, cred- this industry is it's difficult to
its strong sales this year to capitalize it, but once that
growing marijuana de- hurdle is cleared, even if
mand and retailers having nothing else is done, you'll
been deemed essential see explosive growth.
businesses during the pan- Q: The SAFE Banking Act,
demic. which would free up banks
Cresco Labs began grow- to do business with licensed
ing and selling marijuana in This photo provided by Cresco Labs LLC shows Charlie Bachtell, CEO of Cresco Labs. marijuana companies, has
Illinois in 2015, and as of this Associated Press stalled in the GOP-con-
year has expanded to a to- trolled Senate. How confi-
tal of nine states and Can- excise sales taxes -- more to describe it is to compare ing in place and looking for dent are you this and other
ada. Its sales more than appealing to state govern- second-quarter results to ways to manage the stress measures favored by the
tripled in the first half of this ments. Six states will vote first-quarter results. We're of it all? cannabis industry will be-
year to nearly $161 million. on marijuana-related bal- in nine markets across the A: You can find the corre- come law in the near fu-
Its stock trades on the Ca- lot initiatives in next month's country, nine different lation there, for sure. They ture?
nadian stock exchange elections. states, and we saw at least have more time on their A: The conversations
and on over the counter Bachtell recently spoke to 30% sequential growth, hands, working from home, are changing from 'Why
markets in the U.S. The Associated Press about quarter-over-quarter, in all being at home, and find- would we do this?' to 'Why
Only 11 states including how Cresco has prospered of our nine states except for ing something else to help wouldn't we do this?' Even
Oregon and Colorado al- during the pandemic and one, Massachusetts. And them take their mind off at the federal level, as it
low the retail sales of mari- the challenges facing the Massachusetts was one of the stress. All of the above relates to how banking oc-
juana for recreational use, U.S. cannabis industry. The the very limited states that are factors in what we saw curs, you'll find support for
but advocates are push- interview has been edited did not deem the adult-use with greater acceptance, this on both sides of the
ing to expand access else- for length and clarity. program essential. a greater consumer base aisle. And it's less about 'if'
where. The pandemic has Q: How have your sales Q: Would you say the pan- with greater spending, so and more about 'how' to
ravaged states' finances, fared during the pandemic demic's been a boon for far, during this era. We tend do it. Cannabis, from my
making legalizing marijua- and recession? legal marijuana, given so to be in the highly regulat- perspective, is in a very
na -- and collecting high A: The easiest way for me many people are shelter- ed newer markets -- Illinois, good position.q
China passes new law restricting sensitive exports

BEIJING (AP) — China has Export controls under the posing a national security
passed a new law restrict- law will apply to civilian, threat, including the data
ing sensitive exports to military and nuclear prod- they may possess from op-
protect national security, ucts, as well as goods, erating in the country.
allowing Beijing to recip- technologies and services Companies and individu-
rocate against the U.S. as related to national security. als who endanger national
tensions mount between A list of controlled items will security by breaching the
the sides over trade and be published "in a timely new export control law,
technology. manner" in conjunction including those outside of
The law, which will apply with relevant departments, China, could face criminal
to all companies in China, according to the law. charges. Violations of the
was passed Saturday by The new law allows Beijing law, such as exporting items
the National People's Con- to retaliate against the U.S., without a permit, could re-
gress Standing Committee which in recent months sult in fines of 5 million yuan
and will take effect on Dec. has attempted to block ($746,500), or up to 20 times
1. Under the law, China can Chinese technology firms the business value of the il- Trucks transport shipping containers at a dockyard in Qingdao
take "reciprocal measures" such as telecommunica- legal transaction. in east China's Shandong province on Sept. 25, 2020.
toward countries or regions tions gear supplier Huawei, The new law adds to the Associated Press
that abuse export controls Bytedance's TikTok app growing uncertainty of firm Oracle Corp. In August, tion, text analysis and con-
and threaten its national and Tencent's messaging Bytedance's deal to sell China added technologies tent recommendation to its
security and interests. app WeChat on grounds of its video app TikTok to U.S. including voice recogni- list of regulated exports.q