California edition / June 20, 2020
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1 TO MODIFY WHITE POWER IN CANNABIS

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Jeff Gray is CEO of SC Labs and one of the few black cannabis executives. The Santa Cruz exec last week offered a thoughtful, emotional take on why diverse hiring practices especially matter in an industry devoid—almost devoid—of people of color in positions of power.

Early indications are that meaningful diversity measures are in play as never before.
Instagram

Quick Hits

  1. The effects of looting early in the country's social unrest was severe enough to impact the supply chain.
    MJ Biz Daily
  2. Humboldt County is 84% white and has begun putting together its social-equity program. Here's what that looks like. 
    Times-Standard
  3. If you don't think Mary Jane and cultural resistance are intertwined, then go back school and learn your weed history.  
    Daily Trojan
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2 MEDMEN CO-FOUNDERS PUT OUT OF THEIR MISERY

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Having been allowed to fail for an almost comical amount of time, MedMen co-founders Adam Bierman and Andrew Modlin were asked to step down from the company's board of directors.

As slo-mo dumpster fires go, none is more watchable than an over-indulged slo-mo dumpster fire of a cannabis kind. But what does this most iconic public fail say about the industry that Bierman and Modlin felt orbited them?
Green Market Report/Forbes

  • “MedMen is both the logical outcome and the confluence of two major themes in the cannabis industry,” says cannabis attorney Matt Kumin. He says those themes are crime and capitalism. Ouch.
  • The argument here is the legalization movement promoted an “uneasy marriage” of  underground smuggler attitudes and naive venture capitalism. The premise is that cannabiz sought returns reminiscent of both smuggling and Silicon Valley salad days.

Quick Hits

  1. Barring compromise, November's West Hollywood election will feature an initiative battle over dispensary regulation. Pitting original owners against newbies, one initiative would significantly rewrite local rules.
    WeHoville
  2. A Pomona man who helped a Temple City Sheriff's Department deputy fake a raid and rob a grower of 1,200 pounds of bud and $600,000 was given probation this week.
    My News LA 

3 YELP BARS WEED COMPANIES FROM BIZ FEATURES

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In a move that furthers Silicon Valley weed-suppression norms, Yelp has blocked cannabis companies from using Business Highlights and Portfolio features.

“This is yet another blow for us—amidst a devastating pandemic, no less,” says Lauren Watson, Director of Marketing for Berkeley Patients Group. BPG is the nation's longest-running dispensary.
Marijuana Moment

  • The decision follows an NBC investigation of Yelp's role in boosting illegal pot shops.  
  • The Business Highlights paid feature lets account operators pay to feature up to six elements on their page that illustrate, according to Yelp, what “makes their business unique."
  • Portfolio—also paid—enables companies “to showcase their quality of work, expertise, and specializations along with additional details such as cost and project timelines” via photos.
  •  Yelp emails to cannabis companies said the decision is “effective immediately.”
     

Quick Hits

  1. Whether the cause is pandemic or America's social upheaval, any cannabis company worth its weight in marketing is prepared to tweak its messaging. 
    MG Retailer/Green Entrepreneur
  2. Here's a guide to all of the legal delivery services in the entire state.
    Leafly

4 INVESTORS HIGH ON CANNABIS, AGAIN

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A reminder of how skittish cannabis investors can be, from Poseidon Asset Management's Emily Paxhia:

“When Maureen Dowd ate a chocolate bar and freaked out in a hotel room [in 2014], capital ran from the space,” Paxhia said during a CannabisLAB-produced investors conversation earlier this month. In that context of chronic shakiness we deliver good news: Apocalyptic flare-ups aside, the future of weed looks promising
WeedWeek

  • Banking and other federal regulation of cannabis could result as local governments around the United States are “hemorrhaging cash.”
  • Despite the optimism earned through pot's still-new essential status, pandemic and further economic downturn restrain Paxhia's optimism while she “would now add social unrest and maybe even a constitutional crisis as potential risk factors.”

5 SET TO ADJUST, EXCISE TAX WILL REMAIN UNCHANGED

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State law requires that every six months the formula upon which its 15% excise tax is based must recalculated. In a little-noted May announcement, the Department of Tax and Fee Administration said in July that won't be happening.
MJ Biz Daily

  • The agency announced in November its calculations would result in a tax increase. On  New Year’s Day the recalculation went into effect and did indeed cause the tax to go up.
  • The department's bulletin said California's cannabis markup rate will remain at its current level throughout 2020.

Quick Hit

  1. Did you know there's a national directory of black-owned cannabis companies? You can learn about that directory's founder and 15 black hemp owners here.
    Green Entrepreneur

6 MARY JANE’S RETURN ENGAGEMENT AT THE VEGAS STRIP

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When March began, Las Vegas dispensaries were posting their highest profits since the arrival of legalization. This week dispensaries on the Strip awakened from the state's delivery-only status, and this is what that looks like.
Leafly

  • Of all of the city's weed shutdown losses, none was more devastating than the closing of Planet 13, which made for 10% of Nevada sales.  Store officials estimated that 80% of its 2,200 daily customers lived outside Nevada.
  • Nevada dispensaries have been open since May 30 for in-store shopping, at 50% capacity.

7 DISREGARD YOUR GROWTH. INSURANCE STAYS HARD

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This year cannabis revenues are up and so are the number of companies who call themselves profitable. So why does the insurance industry see a “hard” market for cultivators and other licensed businesses?
Insurance Journal

  • For growers, “[t]he market’s hardened in so many areas, property especially, where companies don’t want to write it,” one policy seller said. The property matter centers on general lack of capacity, which has made pricing a prime buying consideration.
  • Despite growth, insurers shy away from cannabis because the industry's characteristic is new, unpredictable and unfamiliar.

Quick Hit

  1. The Library of Congress is compiling racist news articles used to criminalize “marihuana” in the early 20th century. 
    Merry Jane

8 BLOOM FARMS RESPONDS TO LAWSUIT

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Bloom Farms' parent company defended itself in court after an investor sued over its business practices. In a filing, the defendant called the investor’s demands baseless and unreasonable.
WeedWeek

  • The lawsuit, filed against American General Resources LLC last week in Delaware contained allegations about the company’s corporate governance and financial management.

9 PANDEMIC DISABLES LA’S FIGHT AGAINST ILLICIT POT

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The pandemic has hit the City of Los Angeles with a $50M revenue shortfall. Throughout the month, its Budget and Finance Committee has meetings scheduled. Ripe for cutting, per Mayor Eric Garcetti's proposed budget, are police hours dedicated to cannabis enforcement.

What this development spells for L.A.'s effort to counter the traditional cannabis market is curtailed enforcement of unlicensed shops.
MJ Biz Daily

  • Legal weed's best L.A. hope is that the proposed padlock ordinance will be in place within the next month or so.
  • The LAPD estimates that 75 unlicensed retailers operate within city limits. In February 82 were operating, according to the police.

Quick Hit

  1. California wants to fund an 87-member marijuana police force. A public-health advocacy group has countered with two studies indicating that weed revenue would be better spent on community-led health initiatives and such, rather than funding more law enforcement
    Sacramento Bee
  2. At Oakland's most recent Cannabis Regulatory Commission meeting, a couple of owners suggested they and their employees be permitted to carry guns, sparking a deeply relevant conversation. 
    East Bay Express

10 BECAUSE OF THC, HK DENIES BRUCE LEE

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Considering that Bruce Lee spent some of his youth's most crucial years in Oakland and Seattle, word of his pot consumption should have surprised no one. Yet, the martial artist's birthplace of Hong Kong refuses to honor him because of THC in his system at the time of his death. 
Merry Jane

  •  In 1973, Lee died at 32 of an allergic reaction to a pain killer. Fan murals of the actor and martial artist dot the streetscape of Hong Kong, but no streets, buildings or parks bear his name.

Quick Hits

  1. Looking to level up on your cannabis reading collection? Alice O'Leary-Randall and Ed Rosenthal are among the authors who must be included in your "highbrary."
    Cannabis Now
  2. Some describe Neil Young's  long-lost Homegrown as Harvest, Pt. 2, but it's allegedly something else.
    Aquarium Drunkard