California edition / April 04, 2020
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1 BUY MY MEDICINE, DENY ME SUPPORT, SHUT ME DOWN

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We have entered an era of truths laid bare: Your small licensed business is ineligible for a dollar of the $349B in federal small-business stimulus loans. Cannabis business remains second-class commerce, afforded none of the privileges alcohol or even cigarettes enjoy. And never mind medicine; the feds will take legal weed’s help in stemming the bleeding of a wounded economy, while regarding you with the same gaze reserved for the sex worker

There's also a threat to the industry with potential to inflict greater damage than the lack of federal support: A retinue of voices are saying folks shouldn't congregate around weed shops or be smoking while a respiratory illness is pandemic. They want pot shops closed.
SF Chronicle/Los Angeles Times

  • “We find it extremely disturbing that, even in a time of national crisis, the cannabis industry is still not recognized for the value we bring to our communities by federal authorities,” said Kevin Reed, the president of the Green Cross in San Francisco’s Excelsior neighborhood.

Quick Hits

  1. While Mary Jane may be essential around these parts, the product is a far cry from legal. Never mind that you can't find the stuff in 80% of the state, the Hmong growers of Siskiyou County have an even more "complicated story about fear of change.”
    California Magazine 
  2. MedMen could be giving up as much as 78% of its ownership in its gambit to right its fortunes, making Gotham Green Partners look like winners.
    Seeking Alpha
  3.  Racial parity is one of the great projects of legal weed. It has yet to be achieved. In the meantime, you can always find a white weed mogul buying a giant-ass mansion. This time it's Double Barrel LLC CEO Carissa Davino, whose main home is in Chicago.
    Variety
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2 POST-SURGE, A RETURN TO UNCERTAINTY

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3D blue globe sinking underwater with bubbles

Surely, no one thought a 159% sales increase over March 16, 2019 sustainable. If there is such thing as settling in during 2020 weed, a sales level 18% higher than last year ought to feel reassuring. However, the problems of 2019 won't be outrun. 
MJ Biz Daily

  • "The Coronavirus is basically exacerbating an existing problem," California-based report John Schroyer says in this video, "which is basically a capital crunch. A credit crunch." The retreat in institutional investors that began last year is chief among underlying negatives.
  • Our present shortage of capital may result in lasting systemic damage to the industry.

Quick Hit

  1. We know that cigarette smokers are at higher risk of contracting Covid-19, but does smoking pot put consumers at higher risk? “Probably,” says Dr. Stanton Glantz, professor of medicine and director of the UCSF Center for Tobacco Control Research and Education. The jury is out on vaping as well
    SF Weekly/KQED
WeedWeek's Guide to the California Cannabis Industry
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To celebrate the release of WeedWeek’s Guide to the California Cannabis Industry we’re offering it to WeedWeek subscribers for just $20 with the code WWREPORT. That’s about 80% off the cover price.

“The combination of valuable macro data and anecdotal accounts from longtime industry leaders make this an essential read for anyone looking to navigate the waters ahead.”

Colin Earl, CEO Sisu Consulting

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3 AMID LUNG HEALTH CONCERNS, EDIBLES JUMP BIG

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Spring flowers representing human lungs, conceptual studio shot.

Edibles have soared beyond the market correction experienced by most legal weed in the days after the state holed up. According to Eaze, since March 9 sales of bud and vapes have dropped 8% while purchases of edible products have doubled
Green State

  • “We hypothesize people are looking for options that place less strain on their respiratory systems and that are more discreet,” says Travis Rexroad, Weedmaps’ director of communications.
  • No studies have directly linked cannabis smoking to coronavirus. However, the disease can cause respiratory illness, and smoking and vaping can aggravate it.

4 A RISING VICE FLOATS ALL BOATS

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The 300% month-to-month sales increase experienced by Oakland low-dose drink company Cann is just one indicator of how powerfully cannabis can perform in the coronavirus economy.

With the drinking of alcohol down across the planet, many believe now is a moment when macro usage trends shift in favor of cannabis
Venture Beat

  • Other so-called vices and vice-adjacent businesses are thriving. Lucy, a nicotine- alternative company saw a 50% increase in sales. Intimate essentials purveyor Maude sold out of its Vibe personal massager in mid-February, and enjoyed a 15% spike in lubricant sales.
  • “Millions of Americans consume cannabis and alcohol at home. Having an extended period where nearly everyone is stuck at home could absolutely change social norms around how we look at those sorts of decisions,” says Catharine Dockery, founding partner of Vice Ventures.

5 THE WILD RIDE THAT IS CALI’S 4.20 PIVOT

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Smiling girl spinning and holding hands of her dad, playing in an autumn forest.

Rumors of 4.20.20's death at the hand of corona  have been wildly exaggerated. Company owners who have already paid for events that will not happen will have to be convinced.

This year's celebrants will share screens instead of sharing joints. How we're celebrating virtually will tax business leaders' pockets and imaginations.
MJ Biz Daily

  • Virtual parties and concerts figure to be the splashiest forms of online celebration, accessories and swag the most accessible. Also expect to see product deals offering large discounts for immediate purchases and specials for later. 
  • As 420 nears and the landscape takes shape, social media influencers will be in play as never before. “We are shifting to a daily value-oriented proposition for our customers via digital advertising," says Anna Shreeve, managing partner of The Bakeréé, a Seattle dispensary.

Quick Hit

  1. Workers at Studio City dispensary WHTC and L.A.’s Cornerstone Wellness were among the first to begin wearing two masks—an N95 mask and a cloth one on top—to avoid touching their faces. Other safety innovations have followed, not just up and down the state, but across the nation.
    Thrillist

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6 ALL HAIL, A CBD HERO!

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Photo by Spencer Platt/Getty Images

Years ago, CannaCraft founder Dennis Hunter did real time for selling weed. In 2019, he made $46M selling CBD. CannaCraft also made millions selling products containing THC.
INC.

  • Due to federal restrictions, Hunter reportedly hands out 200 cash-stuffed envelopes on payday.
  • "It's funny," Hunter told INC. "I go to trade shows now, and some of the same people who wouldn't talk to us before have booths set up and are looking to work with our industry." Funny? Probably. Ironic? No question.

Quick Hit

  1. San Diego dispensary company March and Ash gave its an employees a $2 an hour raise for going above and beyond during this time of crisis.
    Wikileaf
This week on the podcast
A Sound Bath & Beverage in Venice

In February Donny traveled to Venice, California for a sound bath guided by the musical duo called Dynasty Electrik. This week, Alex Halperin unpacks what his co-host learned about this trendy form of sonic healing and what happens when it’s enhanced with the cannabis drink called bhang.

7 FEDS MAKE NFL’S TURLEY END CBD CLAIM

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Photo by Cindy Ord/Getty Images for SiriusXM

The Food and Drug Administration and Federal Trade Commission on Tuesday asked flamboyant former NFL star Kyle Turley — Moreno Valley's first dispensary owner — to fully dial back his claims that CBD can cure the coronavirus

“CBD can help keep your immune system at the top of its game," read part of Turley's since-deleted statement. "We want everyone to take CBD and take advantage of its potential to help prepare your body to fight a coronavirus infection.”
Press-Enterprise

  • Your website offers cannabidiol (CBD) products for sale in the United States and that these products are intended to mitigate, prevent, treat, diagnose, or cure COVID-19 in people,” the jointly-produced government letter reads in part. “We request that you take immediate action to cease the sale of such unapproved and unauthorized products for the mitigation, prevention, treatment, diagnosis, or cure of COVID-19.”
  • Turley removed the language from the Shango Moreno Valley website, but says he "stands by his statement," however that works.

8 L.A. AUDIT RESULT COULD LET LICENSING FLOW

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Last September, the already-overdue third phase of cannabis licensing was set to begin in Los Angeles, a city deeply underserved in legal retail. But, on the day L.A.'s first-come, first-served application program began, two applicants gained early entrance to the city system.  

In October, a city councilmember demanded the licensing process be investigated. One month later, Cannabis Regulation Director Cat Packer said no licenses would be granted until an audit of last fall's early entrance incident was completed.

This week the commissioned audit indicated that no bias was shown in the episode. 
Cannabis Business Times

  • A staff error resulting from changing the retail applicants' passwords provided the early access. Auditors called the Los Angeles response "reasonable and appropriate."

9 SATELLITE MODERNIZED HUMBOLDT ENFORCEMENT

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In April of 2018, Humboldt County hired the San Francisco satellite imaging and analytics start-up Planet. That marked the end of illegal grows in the remote county being tracked down by a small posse of county law-enforcers.
Governing

  • By 2018's end the county had issued nearly 700 citations. The previous year there had been less than 100. This huge jump resulted from the precise nature of Planet's satellite images and Humboldt leaving behind complaint-driven enforcement.. 
  • County officials receive images from Planet. "We take the imagery, and we digitize it," says Bob Russell, deputy director of the county's Planning and Building Department. "Then we combine it with other data sets from our permitting software and other databases that we have, and we create overlays."
  • Founded by three former NASA scientists, Planet specializes in cost-effective, ultra-compact satellites—small enough to piggyback on rockets. They can be easily de-orbited and replaced.