California edition / October 23, 2020
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1 L.A. DRIVERS’ LAWSUIT MAY BE A SOCIAL-EQUITY BELLWETHER

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A group of Los Angeles delivery services have hit the city's Department of Cannabis Regulation with an inevitable-seeming lawsuit that's bound to be watched up and down the state, if not around the nation.
WeedWeek/MJ Biz Daily

  • The city's decision this summer to limit delivery operators to qualified social-equity applicants through 2025 is the suit's impetus.
  • Adam Spiker, co-founder of the Southern California Coalition—a plaintiff in the litigation—says, "We walked into [a] game of chess, not with a blank playing field, with pieces strewn all over the place that we have to figure out on the fly." Whew.
  • Meanwhile, Harborside's latest social-equity move suggests momentum continues to move with the new justice concept.
    Benzinga

Quick Hits

  1. If your product is good year after year, you get a rep for having tasty, high-quality stuff and then the name of the region becomes synonymous with the product. That's wine guy terroir talk, so you know it must be true.
    MJ Biz Daily
  2. In greatest-basketball-team-on-Earth news, while the artist formerly known as Metta World Peace celebrated with 10 blunts, Magic Johnson entered the Chinese CBD market.
    The GrowthOp/Forbes
  3. En Español, Madison Margolin says psychedelics hold the promise of healing for communities of color.   
    El Planteo
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2 A TEEN TAKE ON OUR CONSUMPTION WORMHOLE

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Photo by Sammie Vasquez on Unsplash

Legally, Sandra Koretz isn't old enough to read this newsletter. Yet the student's chronicle of classmates' changing smoking habits is as mature a look at an as under-scrutinized population as you're going to find on the Internet.
Harvard-Westlake Chronicle

  • Citing data such as Weedmaps' reported 348% increase in the number of orders processed from March to July, Koretz details what appears to be a cultural shift on consumption as a coping strategy.
  • One 20-year-old told Koretz, "I know people that would smoke blunts on Zoom. The seniors didn’t care at the end of the year. I had a friend that showed up to class smoking a blunt, claiming it was a cigar, and the teacher did not care."

3 FLUSH WITH NEW FUNDS, NABIS AIMS TO DISTRIBUTE 25% OF CALI WEED

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Now that business-to-business distributor Nabis has received its latest round of Series A funding, it can get on with trying to distribute 25% of California's marijuana. Nabis claims it presently ships a quarter of a billion dollars of the state's registered weed each year.
Tech Crunch

  • The $5M cash injection will go toward building the online marketplace Nabis feels is necessary to hit the 25% number.
  • The Series A included Y Combinator, Doordash co-founder Stanley Tang, Gmail creator Paul Buchheit, Twitch co-founder Justin Kan, Babel Ventures, Liquid2 Ventures and Soma Capital. Since its 2017 founding, Nabis has raised $10M.

4 NOV. VOTE A REFERENDUM ON EXPANSION AT L.A.’S EDGES

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Photo by Henning Witzel on Unsplash

Tracking every California city with cannabis on the ballot is a tough ask. You can cut to the chase of prohibition's last stand by drilling down on ballot measures coming before six Los Angeles-area municipalities in November. 
Los Angeles Business Journal

  • Laguna Woods residents will cast their ballots on a nonbinding measure asking if they support future retail cannabis. Calabasas and Hawthorne are in a precursor stage, with measures that would approve taxes on future companies. La Habra’s measure would permit only delivery businesses. 
  • "(These ballot initiatives) aren’t growing the local market," says Aaron Justis, president of Studio City's Buds & Roses Collective Inc. "(They are) only replacing the unlicensed market with the legal market."

Quick Hit

  1. We Are for Better Alternatives President and Hawaii Hemp Conference founder Morris Beegle says people are getting tired of virtual events
    Green Market Report

5 SAN DIEGO TARGETS GRIZZLY PEAK AS TAX SCOFFLAWS

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Photo by Vikas Anand Dev on Unsplash

Between January 2018 and and June of last year, San Diego/Oakland-based Grizzly Peak Farms supplied dispensaries from its Oakland cultivation facilities without paying taxes, according documents filed on behalf of SD. Now the Southern California city is suing Grizzly Peak for nearly $10,000
San Diego Union-Tribune

  • Grizzly Peak appears to be the first local company not to pay. San Diego's tally includes penalties and interests. (The canna business tax rate here went up from 5% to 8% in July 2019.)
  • The city expects cannabis taxes to bring in some $30M annually in the coming five years.

Quick Hit

  1. She downloaded the app, then registered for its #StonerLove event. About 10 minutes before the it started, the notifications began—"Your date with Evan will be at 7:02 pm. Get ready!" And with that the lonely girl was on her way to a too short virtual date.
    Green Entrepreneur

6 NEVER MIND JAY WEED, HERE’S CALIVA’S EX-OFFENDER MENTORSHIP PROGRAM

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Photo by Monica Melton on Unsplash

Days before news broke of its Jay-Z co-brand Monogram, Caliva put out a press release announcing the creation of a career training and mentorship program that prioritizes inmates released from the California state prison system into pandemic and employment crises.
Los Angeles Times/Caliva Press Release

  • The reigning hip-hop entrepreneur's Monogram site has a music module and a module that says "Monogram marks a new chapter in cannabis defined by dignity, care and consistency. It is a collective effort to bring you the best, and a humble pursuit to discover what the best truly means." Welp, it's just pot being sold.
  • As part of the San Jose company's social impact initiative, Caliva is also partnering with nonprofits Chrysalis and Success Centers to hire newly trained ex-offenders in the Los Angeles and Bay areas.

Quick Hits

  1. Diversity in cannabis security "produces more effective security [and] helps score points in certain state cannabis business applications."
    Benzinga
  2. Does the lack of energy around Los Angeles delivery licensing indicate diminished interest in cannabis entrepreneurism?
    MJ Biz Daily

7 SLO SUIT ALLEGES $17M IN MISSPENT FUNDS

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Photo by Craig Whitehead on Unsplash

Helios "Bobby" Dayspring is said to own three shops and multiple grow sites in San Luis Obispo County. He also reportedly has access to 11 of the county’s 144 cannabis land-use permits. 

Also: A suit that landed in San Luis Obispo Superior Court on Wednesday alleges that Dayspring took $17M of an investor's money and spent it on projects in which the man had no financial stake. 
Santa Barbara Independent 

  • The litigant in this wide-ranging lawsuit is 81-year-old William Szymczak, a federal Housing and Urban Development director from the Nixon to the Reagan eras who owns 400 acres in SLO. 
  • The suit alleges Dayspring used Symczak's money to address IRS and FBI "entanglements" and took advantage of the investor's age.
  • Dayspring answered by saying Szymczak was made aware of the expenses.

Quick Hit

  1. People thought the days of getting a wholesale harvest price of $3,400 per pound were over, but October is proving past can be prelude.
    Leafly

8 IF IT’S HARVEST TIME, WHY DOES MY WEED COST SO MUCH?

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Photo by Malachi Brooks on Unsplash

On the heels of a novel home grow segment, investigative reporter David Downs joins Leafly's podcast to offer reasons why prices are the highest they've been in three years
Leafly/The Roll-up

  • The obvious factors are scarcity driven by consumers sucking down record amounts of weed and the bud that was burned by wildfire. Less quantifiable are the impacts of the state's licensing struggles and cannabis damaged by smoke.
  • Downs recommends consumers act on any good deals they come across, "because there's no reason to think it will get cheaper like it normally does during harvest season."

Quick Hit

  1. For a multi-state operator's perspective on doing business in 2020, consider the words of Cresco Labs co-founder Charlie Bachtell.
    Associated Press

9 GRANDMA’S STASH SUES CALIFORNIA CITY

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Courtesy of Getty Images

Abruptly, Tuesday's meeting of the California City council pivoted from General Plan discussion to three councilmember abstentions, because of a freshly leveled lawsuit from Grandma's Stash, a delivery company.
Antelope Valley Press

  • Grandma's Stash was one of three businesses denied a permit at the Kern County town's June 23 meeting. The suit was filed on September 10. Named in the suit are Mayor Pro Tem Donald Parris, Councilmember Will Smith and City Manager Anna Linn.
  • "Personally, I think the complaints being referenced are ridiculous, but objectively as the City Attorney I have to be cautious,” said Baron Bettenhausen.

Quick Hit

  1. What is a parametric insurance program? Growers at risk of weather incident should look into having such coverage created. 
    Cannabis Industry Journal

10 NEW LINE’S LATEST CANNABIS VEHICLE SOUNDS LIKE AN OLD POT VEHICLE

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AUSTIN, TX - MARCH 18: Rappers Redman and Method man perform during the Budlight Event 2017 SXSW Conference and Festivals on March 18, 2017 in Austin, Texas. (Photo by Matt Winkelmeyer/Getty Images for SXSW)

Last season, the handmade signs that signify neighborhood filming began to reemerge on phone poles around Los Angeles; the industry's hibernation was ending. Now, dealmaking is back with every bit of certainty presently available in Hollywood.

New Line Cinema, for example, announced this week it will be rocking with the COVID epoch's most bankable non-Zoom phenomenon: Sweet Mary Jane.
Variety 

  • Jake Peralta and the Pontiac Bandit, aka Craig Robinson and Andy Samberg, are producing and starring in the comedy Super High, whose premise concerns a strain that gives the duo super powers. It levels up conceptually on Redman and Method Man's 2001 college romp How High?
  • Bay Area writer Adam Mansbach has been tapped to write the script. Mansbach's resume includes the classic children's book Go the Fuck to Sleep and Barry, the 2016 Obama-in-college flick. 

Quick Hits

  1. Ordinarily, feature stories on publicists are gross. But very few publicists are Zoe Wilder, an LA woman with her hand in a shocking amount of significant weed events
    High Times
  2. Actor Jason Mantzoukas was 36 when he first got stoned. In this clip he shares a minimally entertaining anecdote about that. Cultural forecasters say we're roughly 18 months from repetitive newbie tales toppling over The Tacky Point and our no longer having to endure them in silence.
    YouTube