California edition / May 30, 2020
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1 ‘THE WEWORK OF WEED’

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Our week began with a deep dive into what weed-aware California has known for years: MedMen is the towering inferno of hot pot messes.
Politico

  • Having lost 95% of its stock market value, the Culver City-based company has become a cautionary tale. According to a suit, "the WeWork of weed" provided a salary for Bierman’s personal marriage counselor and, among other remarkable expenditures, a panic room for the CEO's home, Cadillac Escalades and a Tesla SUV. 
  • Independent of wild spending and profligate partying, MedMen was as much undone by "dealing with regulators who are just kind of making it up.”

Quick Hits

  1. On Tuesday, Santa Barbara supervisors are expected to do what critics say the county should have done a long time ago: Make all permits conditional.
    Santa Barbara Independent
  2. Not many would have remembered the failed canna business Genius Fund. But last month a former employee filed a lawsuit claiming Genius Funds' owner blew through $165M. That owner was billionaire Dmitry Bosov, who died weeks after the suit was filed in what the Russian government called suspected suicide.
    Radio Free Europe
  3. The suspected killers of Santa Cruz grower Tushar Atre have been arrested. Two of the men arrested were employees at Atre's cultivation facility. 
    Silicon Valley Business Journal
  4. A potential Supreme Court case is asking a big labor question: Under federal labor law, can cannabis workers sue their employers?
    WeedWeek
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2 JONESIN’ FOR REVENUE, CALI TOWNS CHANGE TUNES

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Last year's trickle of city and county pot-ban reversals is turning into a stream. No, we don't have significant new scientific findings. There's just budget shortfalls, from Lake County to Chula Vista.   

"It's clear now that California municipalities are changing their posture toward cannabis in the COVID-19 era," says Hirsh Jain, Caliva's director of government relations. Could what quarantine's wrought be what drives California's struggling industry into maturity?
MJ Biz Daily

  • Local governments aren't merely passing more cannabis ordinances, according to Jain. Existing laws are being made more friendly to the business. 
  • Within the article's slide show, we learn that Anaheim, Chico, Concord and the previously embattled El Monte will have licenses available.

3 CBD, BEFORE IT WAS COOL

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Return with us to olden times: Before every third washed-up jock started a brand. Before Kyle Turley even conceived of his eyebrow-raising claims. When Walgreen's couldn't imagine peddling the stuff.

The year is 2011. Samantha Miller, a biochemist who had been growing marijuana since age 14,  hosted a gathering of activists, farmers, doctors and writers at her split-level Northern California home. Miller had quit a six-figure job to start her own cannabis testing lab. But on this early winter she helped form the hemp craze's origin story.
New York Times

  • Fred Gardner, a 78-year-old writer and anti-war activist, inspired the gathering, having begun with the 2009 cannabis testing breakthrough, Project CBD. Miller called together her explorers a few months after Gardner's website went up.
  • By the following summer, chronically ill people began to know of cannabidiol, the plant's healing chemical. An epileptic child used CBD on the Discovery Channel’s Weed Wars, a show featuring co-founder of Steep Hill lab, Steve DeAngelo.

4 CALEXICO IS LATEST CORRUPTION FLASHPOINT

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Composite Image of an "EXIT ONLY" US Highway / Interstate / Motorway for the town / city of CALEXICO

On May 21, Calexico councilmembers David Romero and Bruno Suarez-Soto were arraigned and charged, via video. The politicians were charged with accepting $35,ooo in bribes to facility a local cannabis license.
NBC San Diego

  • In the US Attorneys' Southern District of California announcement, the men are said to have received the money from an undercover FBI agent they thought represented investors. According to the US Attorneys, the councilmembers had taken bribes in the past. "This isn't our first rodeo," is what law enforcement says they said.
  • Romero was set to be named mayor in July. He and Suarez were released on $10,000 bonds.

5 NEW TAX REVENUE NUMBERS ARE IN. WHAT ARE THEY WORTH?

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California's Department of Tax and Fee Administration announced Wednesday that revenue from the year's first quarter was $134.9M. The numbers should be taken with your doctor's maximum daily allowance of salt; about half of taxpayers usually reporting have not yet filed. 
Ganjapreneur

  • Here's a breakdown of the incomplete figures: $68.3M in excise taxes and $50.2M from sales taxes. Cultivation taxes brought in $16.4 M.
  • The revenue numbers are $42.4M less than the previous quarter. For the last three months of 2019, the department reported $177.3M in weed tax revenues: $85.9M from excise taxes, $67.3M from sales taxes, and $24.1M in cultivation taxes.
  • Since legal marijuana debuted in January 2018, 1.17B in tax revenue has been collected. That includes $569.8M in cannabis excise taxes, $456.9M in sales taxes$140.2M in cultivation taxes.

6 THE SHOCKING REALITY OF CRIMINALIZED VETS

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It's been said that if the legal cannabis industry is having a good week, the traditional market is having an awesome one. The disabled Marine Corps veteran visiting an acquaintance's house to cop his ounce instead of the nearby state-approved dispensary unhappily keeps things awesome in the old market.

The vet does this to keep his benefits and work opportunities intact, even though pot is only federally illegal. And of course to save money.
Politico

  • A sufferer of post-traumatic stress disorder, anxiety and hypervigilance, Alex began growing his own bud more than a dozen years ago, despite knowing that an arrest would destabilize his VA status.
  • Veterans who openly use cannabis, even in legal states, “commonly run into challenges” when trying to get work, according to Military Times.
  • Alex, of Sacramento, calls his dealer's place the “duty-free” market. He gets an ounce of concentrate for roughly half of what he'd pay at a state-certified REC shop.

Quick Hit

  1. Up in Garberville, a low-impact fender-bender leads to CHP nabbing 770 pounds of unsanctioned cannabis. Meanwhile, down in San Diego go-getter cops took the initiative of tearing up a dispensary. If you're really paying attention, California weed enforcement plays like absurdist comedy.
    Redheaded Blackbelt/Merry Jane

7 PROP 64 FUNDS SUPPORT ILLS VISIBLE & UNSEEN

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Los Angeles' Center for Living and Learning continues getting homeless people off the street, at a time when how they fare, more than ever, relates to how the rest of us fare. The nonprofit would be vulnerable without the funding that REC and MED provide.
Leafly

  • The Center for Living and Learning received part of a $1.25 million grant to get the unhoused through addiction treatment—if necessary—and into job interview-appropriate clothes.
  • Since January of 2018, your consumption of government-sanctioned cannabis has generated $532.8M in Prop 64 funds earmarked for state social work and public safety.

8 LITTLE JOINTS & MILD STRAINS? WELCOME TO RECESSION POT

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When COVID-19 landed, Cresco Labs moved up the California launch of its bulk bud brand High Supply from summertime to early April. It happened because America's battered economy has made price point and potency matter more than ever
CNN

  • Cresco's "no-frills" line, High Supply, includes half-gram pre-rolled joints and comes in cardboard-colored boxes. It's not exceptional. Where the industry previously courted weed tourists, the recession/depression focus will move to pot essentialists who want more holler for their dollar.
  • A side benefit of "value options" would be stanching the flow of broke customers to underground weed, and its enticing price points.

9 CANNACRAFT’S NEW BRAND IS SO METAPHORICAL

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Farmer and the Felon is CannaCraft's self-referential flower product's name. More than a clever moniker, Farmer and the Felon has distinguished itself in philanthropy, giving thousands to forward-looking causes such as the Last Prisoner Project
Green Entrepreneur

  • A bit like the first Will Smith album, Dennis Hunter is the felon and Ned Fussell plays the farmer for the new flower. Hunter earned the felon role in 1998, when feds raided his Humboldt County grow. Fussell is part of OSC2, One Step Closer to an Organic Sustainable Community.
  • Of the branding, Fussell says, "It's a play on words. The paradigm we are living in is, when making the decision to be a farmer and grow cannabis, you're consciously or subconsciously accepting the fate that the title felon could easily follow."
  • Hunter and Fussell have donated $30,000 to the Last Prisoner Project. 

Quick Hit

  1. Possessor of the nation’s biggest bar association and the world’s largest cannabis market, the state can finally guide attorneys who advise weed companies on how to both represent their clients and protect their licenses. Expect far-reaching impacts.
    Bloomberg Law

10 SF CLOTHIER DEPLOYS CLASSIC LEAN-INTO-WEED APPROACH

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Lower Haight District streetware brand Upper Playground is the latest from textiles to align itself with Mary Jane. Its artists-driven Stoked line is the foray's delivery system.  
SF Weekly

  • Best known for shirts and beanies, Upper Playground is hiring artists to use child-proof bags as their canvases. The first run of 1,500 features the work of Sam Flores and will be featured on apparel items as well.
  • Other artists set to be featured are Jeremy Fish and Estevan Oriol.