California edition / August 21, 2020
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1 AS FIRES RAGE, CULTIVATORS STRUGGLE TO TALLY DAMAGE

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Extreme temperatures and high winds, sometimes abetted by lightning strikes, continue to burn hundreds of thousands of acres, chewing through California's brush land, canyon country and dense forest.

As intense as wildfire has been in the region surrounding San Francisco, burnings from Sierra Nevada to Southern California have been been profoundly destructive and, too, are resulting in untold cannabis product losses.
MJ Biz Daily

  • A Yolo County cultivator said 2,000 of his 12,000 plants suffered smoke damage. In Santa Cruz County, the venerable WAMM Phytotherapies has probably lost a farm, according to founder Valerie Corral, who evacuated on Tuesday night.
  • “There are a ton of farms that are located in the fire’s path. No one’s out of the woods yet. This is just starting,” said farmer Keala Peterson. On Wednesday Peterson's Sweet Creek Farm lost 80% of its crop, which was uninsured.

Quick Hits

  1. What is potentially most damaging about politically motivated federal investigations? Their impact on stock market, their impact on merger transactions, or how they might drive operators back into the traditional market?
    Cannabis Industry Journal
  2. The former French Laundry culinary gardener who aims to become the nation's first organically certified craft cannabis grower would be bringing the Petaluma Gap along in the process.
    North Bay Business Journal
  3. In this webinar replay, it's boldly posited that the first Green Rush is over. Is that a good thing
    Harris Bricken
  4. Finally the city of Weed is in on the revenue possibilities, if not the joke, and moving toward a development deal.
    Mt. Shasta News
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2 TAX REVENUES TAKE HUGE SECOND-QUARTER LEAP

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On Wednesday, the state Department of Tax and Fee Regulation reported that second quarter pot tax revenues jumped 32.6% from last year.  The record quarterly income of $208M comes from the strength—not in spite—of pandemic conditions. 
Wolf Street

  • First-quarter revenues were revised up in a major way, from $134.9M to $205.9M. Over 2020's first two quarters, tax revenues increased 44% ($414M) from 2019, and by 150% from the same period in 2018.
  • Considering cultivation, sales and excise taxes, state 2020 revenues will come close to $5B.

Quick Hit

  1. Does the approach presently taken by cannabis investors in 2020 remind you more of getting hot tips on liquor stores or advancing medical cannabis?
    Forbes

3 WATCH SACRAMENTO ACE ITS RECESSION TEST

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Holding steady in the biggest economic slide since 1929 would be a test for any emerging industry. In the capital, our friend Mary Jane is acing her exam.
Comstock's

  • Sacramento's legal cannabis economy appears to be thriving under quarantine, despite the cancellation of April's Cannabis Cup and implementation of local dispensaries' COVID-19 cleanliness protocols.
  • Counted by BDS Analytics as part of the Bay Area, Sacramento saw per-person purchases jump from about $90 in November 2019 to $120 in April.
  • Across the state, consumption leapt from 23% in first-quarter 2017 to 37% in the third-quarter of last year. 

Quick Hit

  1. The Long Beach Collective Association will offer free marijuana to low-income patients and veterans through its Compassionate Care Program. Thank the Dennis Peron and Brownie Mary Act for that.
    Dope

4 TILRAY’S UP, APPLE’S DOWN AT CALPERS

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Getty Images

Concerns over post-election changes in the U.S. relationship with China have brought CalPERS to sell some of its Apple shares. Meanwhile, the nation's biggest state pension fund increased its stake in microchips, pharma and the Canadian company Tilray.
Chief Investment Officer

  • Apple's had a big year, but analysts are worried the tech company may see regulatory restrictions growing out of its China challenges. 
  • The Tilray stock purchase was a bargain, down 59% to $7.10 a share.
  • CalPERS declined a Chief Investment Officer request for comment.

Quick Hit

  1. The latest out of San Diego State University's Fowler College of Business: after-hours weed consumption does not cause drop in worker productivity.
    Ganjapreneur

5 ROYAL EMERALD BRINGING CLINICALS TO DESERT HOT SPRINGS

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The first company in America contracted by the government to work on THC- and CBD-derived MED is opening a Desert Hot Springs research facility. The next trick for Royal Emerald Pharmaceuticals will be earning Food and Drug Administration approval.
NBC Palm Springs

  • By 2021, a 200-bed Royal Emerald recovery facility for opiate addiction is expected to open. Desert Hot Springs officials say the facility will bring 400 jobs to the area once fully developed. 
  • "Nobody has done clinicals, nobody knows [cannabis'] attributes. Nobody will know what it will or won’t do, that’s what we are going to prove or disprove,” said Royal Emerald's CEO Mark Crozier.

6 US AG’S JOIN TREASURERS IN PETITIONING CONGRESS

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Last month 15 state treasurers signed a letter urging Congressional leadership to include cannabis banking protections in the next COVID-19 relief package. Now, in August, some of the states' top law-enforcement officials have urged passage of the Marijuana Opportunity, Reinvestment and Expungement Act (MORE).
Marijuana Moment

  • More than 50 law-enforcement officials and four attorneys general signed the  letter.
  • "As front-line public-safety experts, we believe that responsible regulation and control of marijuana will be more beneficial to society than prohibiting and criminalizing it," the law-enforcement officials wrote.
  • A floor vote on MORE was urged for next month.

7 FAILED-BUSINESS WAVE FAILS TO MATERIALIZE

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Conventional wisdom at the end of 2019 was that a wave of shuttered businesses was coming. With 2021 in spitting distance, it's pretty clear this year will be remembered as performing if not miracles, then opposite of expectations.

So, why did the failures fail to materialize?
MJ Biz Daily

  • Factors primary to the industry's unexpected performance included it being deemed essential, sales resulting from federal stimulus payments for unemployed workers, investors leaning into bets to survive 2020, and "likely interplay" between traditional and licensed operators.
  • According to California records, as of Aug. 7, active business license totals were up in every category over 2019, excepting manufacturer licenses, which dropped from 976 in August 2019 to 937 active permits. Active licenses total 9,174. 

Quick Hit

  1. Last week we gave you a manufacturing and development dialogue featuring House of Platinum's George Sadler. This week we have a talk with Matthew Elmes, director of new product development at CannaCraft.
    Cannabis Industry Journal

8 HOW TO GET A LICENSE IN HOSTILE TERRITORY

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By a 5-0 vote on Tuesday, the City Council of Sonoma awarded its sole dispensary license. The vote capped a two-year process for the once stridently prohibition-minded municipality. In winning the license, San Francisco's SPARC beat out nine other applicants, including Justice Grown, which lost an advocate en route to ending prohibition in Sonoma.
Sonoma Valley Sun

  • SPARC has promised to create 15-20 jobs in 2021, as well as donate 5% percent of its profit to local non-profits and donate $4,000 each month to support low-income medical patients through free cannabis.
  • “We want to express our sincere gratitude to the many pioneers, including Ken Brown and his wife, the late Jewel Mathieson, for their passionate commitment to ensuring that Sonoma residents have safe access to medicinal cannabis,” said Erich Pearson, SPARC co-founder and chief executive officer.

Quick Hits

  1. Maybe you think you're up on the ABCs of California Cannabis regulation. This explainer reminds that you may not know what you don't know. Ya know?
    Beard Bros. Pharms
  2. Being a Black entrepreneur whose dispensary was ransacked during the George Floyd protests is complicated enough. Then Keith Stephenson began doing battle with insurance adjusters
    MJ Biz Daily

9 MELROSE COOKIES TURNS INTO GRIEVANCE LIGHTNING ROD

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"Prominent hip hopper" Berner owns the West Hollywood Cookies store, and his largely black and brown clientele is drawing complaints. The owner admits that managing crowds remains a work in progress.
WeHoville/LA Weekly

  • "These people are Urinating all over our Homes Apts Tree’s Cars Everywhere,” wrote Susan Kraut in a post on a West Hollywood section of Nextdoor.com. Complaints about noise, smoking and illegal parking have been lodged with LAPD, LA County Sheriff’s dept. and councilmembers from both Los Angeles and West Hollywood.
  • In acknowledging that the changes Cookies is implementing are necessary, Berner said, “There’s nothing wrong with the black and brown community shopping somewhere and we don’t want to feel like we have to hide our customers."

Quick Hit

  1. Kevin Durant, Snoop Dogg and now Howard Shultz are investors in the e-commerce platform Dutchie.                                                                                     Cheddar

10 MADISON MARGOLIN IS CALI WEED ROYALTY

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A poster featuring and scripted by American philosopher Dr Timothy Leary, advising people to, 'Turn On, Tune In and Drop Out'. (Photo by A Jones/Getty Images)

Why are we so certain writer-activist Madison Margolin is the closest thing to legal weed royalty California has to offer? That she'd undoubtedly find that sentence appalling is a start. The matter is cinched by her having the likes of Timothy Leary brought home by her father, the immortal Bruce Margolin
High Times

  • Now co-editor of the psychedelics-focused DoubleBlind magazine, Margolin attended Leary's memorial along with Ram Dass and so many heavies. Years later she would connect spiritual teachings with the drug culture. 
  • "I'm thinking that psychedelics are about five to ten years behind cannabis," says Margolin.
  • Her sister Allison is, like Bruce Margolin, a longtime cannabis defense attorney.

Quick Hit

  1. Zide Door is an entheogenic church, meaning it treats psilocybin as a sacrament. According to Zide Door's preacher, on August 13, 20 Oakland police officers raided the church. Meanwhile, WeedWeek's Ngaio Bealum points out that cannabis in worship is a time-honored tradition.
    DoubleBlind/WeedWeek