California edition / March 28, 2020
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1 NO BUSINESS AS USUAL IN COVID-19 ECONOMY

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corona virus in los angeles

These weeks of spikes and plunges have exhausted all roller coaster analogies. Collective reaction seems to have coalesced around the notion that legal weed is a recession-proof industry at least from a demand perspective.  
MJ Biz Daily

  • Early opinion is that course of the nascent economy is indeed shaping up to be as dependable as alcohol.
  • “Consumers budget for cannabis. And they will budget and spend consistently, even when they pare back payments on other things, like that latte or going to the movies,” says Oregon economist Beau Whitney.
  • To get by early in the Coronavirus time — as well as help California humanity — some companies such as CannaCraft have privoted to making hand sanitizer weed.
  • The supply chain is in tact for now, but companies are getting nervous. Columnist Dan Mitchell has the story in a WeedWeek exclusive.

Quick Hits

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2 CALI, IN SICKNESS AND IN WEALTH

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March has been a month for watching our own personal marriage story play out under tumultuous circumstances, from the Emerald Triangle to America's southern border. Anyone feel like a good cry of some essential tears?
North Bay Business Journal/San Diego Union-Tribune

  • Sebastopol dispensary Solful reports a 25% drop in business since switching from counter to curbside service. CEO Eli Melrod, who had not transitioned the company to delivery, observed that the curbside model turns Solful's customer-relationship-approach into something more transactional.
  • Everything's changed, while California's patchwork rules remained a constant. On Wednesday night, Berkeley’s economic development manager sent out an email saying that the city health officer ruled only deliveries will be legal in that municipality.
  • Meanwhile, in San Diego, one employee at an open dispensary told the Union Tribune. “We are all wearing gloves around here. We're handling the cash. You have TVs everywhere telling you to stay six feet away from everybody.” Time will say whether that's good enough.
  • In bustling Sacramento, Glass House Farms CEO Graham Farrar cut back service to 10 customers in a store, then to one customer, and...  as of now Glass House Farms is in the delivery business.

Quick Hit

  1. Tuesday's Infused Products Virtual Conference is the rare March cannabis event that hasn't been cancelled. Visionaries from Cresco Labs and Tandem Food will be in the virtual house.
    Cannabis Industry Journal

3 ARE WE THROUGH THE LOOKING GLASS?

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History may recognize winter's end of 2020 as the close of legal weed's rough opening, though anyone who has tried to make money in this state is not going to tempt fate by easing up on the gas.

What's undeniable is that Oakland's Harborside is one of many California retailers who've been hiring back employees they only recently laid off, in addition to taking in record money. Feel free to knock wood.
Politico/CNBC

  • Denver saw sales spike 120%, while California has seen flower, edibles, and beverages fly off shelves. Harborside's Steve DeAngelo says his Southern California drive-through location "is a very popular place to buy cannabis in the Coachella Valley right now.” 
  • One state not carrying the California torch is Nevada. As much as 80% of business in the cannabis hub of Clark County comes from Las Vegas tourists.
  • Troubled Med Men Enterprises' stock price has doubled, to about 30 cents, since the nation began shutting down.

4 JUDGE RULES NO CBD LIBEL

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In a libel decision more than five years in the making, the fourth district court ruled March 20 against plaintiffs Medical Marijuana, Inc., and HempMeds PX, saying they failed to show the defendant, the non-profit Project CBD, engaged in demonstrably false reporting.
Hemp Industry Daily

  • In October of 2014, Aaron Miguel Cantu published a presentation for Project CBD that included test results that said the plaintiffs’ product was contaminated with heavy metals. Medical Marijuana, Inc., and HempMeds filed suit. 
This week on the podcast
Karim Webb Brings Sauce to Social Equity

5 IS IT TIME TO MAKE A DEAL?

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The impulse could not be more counterintuitive for those of us holed up and in survival mode, but now's a fascinating time in the deal making realm. Could you do better if the virus gets worse? Gross question, but one worth asking. 

From the temptation to make new deals to the importance of keeping tab on existing contracts, the drama behind Covid-19's March to Remember reminds us that dealmaking waits for no man or virus. 
Canna Law Blog

  • "What may make sense today may not make sense in two weeks, writes Griffen Thorne. He adds that his firm Harris-Bricken "expect[s] to see a lot of short-term contracts with contingent renewal provisions so that parties aren’t stuck if the current situation gets worse."
  • Existing contracts ought to be reviewed, in case they feature force majeure clauses and you've lost track of that.

PRE-ORDER "THE CANNABIS DICTIONARY!

6 HEMP WINS, THC LOSES IN SBA RELIEF

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The federal government predictably snubbed owners of small cannabis businesses when time came to hand out coronavirus relief funds. Yet, makers of hemp products are bestowed with the good graces of the Small Business Administration. 
Boston Globe/Marijuana Moment

  • On Monday the SBA's Northwest Regional office tweeted that only "businesses that produce or sell hemp and hemp-derived products" would be eligible for the billions in expected funding. 
  • Earlier this month, a coalition of cannabis businesses petitioned federal lawmakers for small-business support.  

7 SANTA BARBARA ACCESSES TRACK & TRACE

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On Tuesday the California Department of Food and Agriculture entered an agreement with Santa Barbara to provide the county access to the department's Track-and-Trace program, as a means of catching cannabis tax scofflaws. The county joins Monterey and Yolo counties in the pilot program. 
Santa Barbara Independent

  • County fiscal and policy analyst Steven Yee told the Supervisors that the program will provide the county with access to the inventory records associated with 250 licenses located in this county.
  • Businesses in Santa Barbara have brought in $4.8M thus far in the fiscal year.
  • The county continues to have scofflaws who have avoided their taxes.

8 NEVADA AGENCY CONJURES EDGY DELIVERY AD

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A gray-market Las Vegas advertising agency called Artisans on Fire put together an ad to drive customers toward delivery services. The agency had reportedly lost 25% of its revenue in the 24 hours after the city's dispensaries were shut down. 
Ad Age

  • Artisans on Fire had "been posting 200% growth and with plans to hire five employees" before creating the advertisement for Thrive Cannabis Marketplace. The commercial features close-up cuts between pairs of anxious eyes while featuring a voiceover track of worries related to coronavirus. Then, a doorbell rings and a glove-wearing person drops off a bag of a cannabis brand sold by Thrive. 
  • Some of the worried eyes belong to Artisan on Fire employees en route to being laid off.
  • Thrive's ad will run on Thrive’s website and social channels, along with some digital networks.

9 DON’T JUST SMOKE IT, READ ABOUT WEED

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What constitutes a stoner book is a matter of endless debate, particularly while stoned and literate. For some, stoner lit can only be what's aesthetically elevating, like Milan Kundera's An Unbearable Lightness of Being. Others have bias toward texts that educate on the plant or its history. 

While we're indoors we're going to want choices. A new literary list offers us quite a weedy array of choices.
Leafly

  • While huddled with our books, we can be glad that  One Hundred Years of Solitude by Gabriel García Márquez is stoner lit in the same time line that Ricardo Cortés' It's Just a Plant. Meanwhile, Bong Appétit: Mastering the Art of Cooking with Weed: A Cookbook belongs in the canon with Catherynne M. Valente's Space Opera, and the planet is a better place for it.
  • Leafly Senior Editor Bruce Barcott's Weed The People will be part of a Facebook discussion at 1:30 p.m. PST on April 9.

 

10 A TACOMA SHOW HITS IN HOLLYWOOD

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Tacoma FD stars Steve Lemme and Kevin Heffernan tell the story of their show's origins as a road story about two comic actors traveling the country, doing stand-up and writing. Lemme and Heffernan sold a bunch of TV projects before their firefighter premise stuck. But then they thought of a hook: The rainiest city in the country as a setting for fighting fires

A live show in Tacoma helped this Hollywood production take off.
High Times

  • "At our live shows, you look into the audience and see half stoners, half cops. And they’re all coming together and they’re laughing at the same jokes. It’s kind of a cool feeling. It’s like a red-state blue-state thing, bringing opposite elements together. Weed and the stoner elements of our stuff open up that opportunity for us."