California edition / January 11, 2020
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1 HOW BIG MIGHT THE THC TAX GROW?

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As 2019 closed out, the State did the opposite of what the cannabis industry requested: California announced it would raise pot taxes.

Also in December, "How High," a report from the Legislative Analyst's Office, presented "as a least worse option" that we switch to a taxation formula based on THC levels.

This "How High" departure would leave behind the current weight-based system, which the report calls the weakest option.
SF Weekly

  • Harm reduction is an element of motivation behind the proposed restructuring. “The negative effects of cannabis use seem to be particularly high for high-potency products, high-frequency use, and youth use,” analyst Gabriel Petek writes.
  • Unsurprisingly, the industry isn't super up for shifting tax modes. Zachary Pitts California Cannabis Delivery Alliance president said he was “stunned” that California would “think [this] is an acceptable solution for anything.”

Quick Hits

  1. The company formerly known as Origin House, CannaRoyalty Corp., is part of Cresco Labs now that the merger has closed. New year, same consolidation.
    New Cannabis Ventures
  2. Trinity County legend Bailous Eugene Smith was an old-school rabble rouser, a Vietnam vet and pot pioneer who joined a bunch of gold prospectors deep in the Trinity Alps, lived off the land, and grew weed. This week he died at 72.
    Cannabis Now

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2 SEC PERMITS SANTA CRUZ FARM STOCK SALES

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The Canadian exchanges are no longer your only public stock options.

For $100 a share, you can buy stock in a Santa Cruz pot farm. Jay Clayton's Securities and Exchange Commission just let something new happen.
Sacramento Bee

  • A 2012 law that allows small companies to sell stock through online equity crowdfunding made the The Regulation A stock sale possible.
  • Golden Seed has $3.2M in assets. The lifestyle brand will put the funds raised by their stock offering toward facilities expansion, debt reduction, and marketing.
This week on the podcast
Gofire Or Go Home, with Joe Hodas

3 MEXICAN SENATOR: LEGALIZATION TOP CONCERN

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Months off of last fall's buzzer-beating delay that stopped Mexico's already-postponed, Supreme Court-mandated, legalization vote, Senator Jorge Ocejo Morena on Monday Tweeted that we'll see “a debate final en la regulación de la cannabis" in 2020.

We'll see about that, won't we.
Twitter/Marijuna Moment

  • Mexico's Supreme Court was initially supposed to vote on Halloween. Lobbying against the legislation's progressive approach was so intense that politicians allowed the Oct. 31 deadline to pass.
  • Congress reconvenes on February 1. A law must be passed by April 30... unless too many monied interests make a fuss, and there's like no chance of that happening, huh?
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4 JUST LIKE WEEDMAPS SAID IT WOULD GO

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WeedMaps CEO Chris Beals described on a December WeedWeek podcast episode what the casting out their noncompliant advertisers would go. Beals was pretty spot on, as most — but not all — noncompliant sellers are off of Weedmaps.
MJ Business Daily

  • Insiders say that because Weedmaps doesn't vet ads before going live, the platform will continue to have a small presence of illicit business.
  • The report credits Sacramento consultant Jackie McGowan with the assertion that Weedmaps "apparently" scrubbed the site of roughly 2,700 underground marijuana shops and delivery services in California.

Quick Hit

  1. These prize-winning weed growers are the talk of Grass Valley, Truckee, too. And to think that Nevada County didn't even allow the growing of cannabis until May. Hmmm... maybe these champs were illicit!
    The Union

5 TRESPASS GROWS ARE WORSE THAN YOU THOUGHT

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Regenerative farming is one of California's leading-edge weed concepts right now. Hot on that movement's heels comes the enforcement-side proposition that the illicit operations on public lands must be stopped to save the planet.

"Next to climate change and habitat loss, trespass grows are a leading threat to California’s wildlife,” said Jackee Riccio, regional field director of the CROP Project, of the illegal farming. “What is happening is equivalent to ivory poaching or whaling.” Yipes.
OZY

  • In one Trinity County reclamation operation last year, the Integral Ecology Research Center dismantled 12 illegal cannabis cultivation sites in the Shasta-Trinity National Forest, removing eight miles of irrigation lines that diverted water from local watershed along with 7,560 pounds of trash.
  • Once California — which easily leads the nation in trespass grows — gets as proactive about integrating traditional growers into the legal cannabis framework as South Africa, they are likely to disappear.
  • According to OZY, "Up to 70 percent of the black-market cannabis in California is cultivated on illegal sites." Ruling out squat growing, which isn't an actual thing, 30% of the groceries are cultivated with cooperation of legal types. Possibly self-righteous ones who complain about the "black market" on social media.

Quick Hit

  1. Ivanka Trump was invited to give the keynote speech at CES, but cannabis innovations could only muster quasi-private accolades, no up front acknowledgments. The struggle is real.
    INC.
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6 TRACK AND TRACE, PICK UP THE PACE

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PHOTO BY JAVARDH ON UNSPLASH

A minute past midnight on Monday is when everyone set to take part in California's track and trace system and wasn't yet on Metrc became eligible for fines and or license suspensions.

The training wheels are off, kids. What are you and Metrc up to?
Cannabis Now

  • A distributor told Cannabis Now that his company is keeping about $15K worth of product in Metrc “purgatory.” They are waiting for California to tell them what to do with it.
  • A couple of anonymous breeders said that dealing with the system was taking an unusual amount of time, in terms of cataloguing and weighing seeds.

7 NON-GAMING TRIBE PICKS RIVERSIDE COUNTY HEMP

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The federal government granted the Santa Rosa Band of Cahuilla Indians permission to open reservation land near Mountain Center in Riverside County for the development of hemp.
Patch

  • The Department of Agriculture granted the Santa Rosa Band of Cahuilla Indians this permission under the 2018 Agriculture Improvement Act's Domestic Hemp Production Program. Only three tribes have been allowed to use the program.


Quick Hit

8 CAN NEW LEADERSHIP BRING NEW HIGH TIMES RESULTS?

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PHOTO BY MELINDA GIMPEL ON UNSPLASH

With its portfolio of lawsuits and financial woes, High Times in 2019 called to mind the beloved character from Eddie Murphy’s movie Life, Bookeem Woodbine’s Can’t Get Right. Industry types keep standing up for the brand, and they’ve got their own reasons.

A new CEO, High Times shows that, at least, it can’t stop trying.
MJ Biz Daily

  • The woman in charge at the venerable brand is Stormy Simon, former President of Overstock.com, Inc.

Quick Hit

  1. On February 5-6, the International Cannabis Business Conference returns to California.
    The Leaf 

9 @ BREWBOUND, BEVERAGE EXPATS GIVE CANNABIS INTELLIGENCE

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At a Santa Monica gathering last month, three cannabis executives with beer-game pedigree went back to tell their old compadres what they've learned in the wide world of weed.

“We don’t have a canonized body of knowledge,” said Ted Whitney, vice president of operations at Nug. Just one way that cannabis differs from the world of drink.
Bev.net

  • On the faultline that is cannabis' marketplace threat to alcohol, Whitney pointed to the taxes and feels California passes on to consumers, saying, “If anything, cannabis has become less of a threat because we doubled our price overnight."

10 MED’S SEXUAL CAUSE AND EFFECT

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PHOTO BY DIMITRI BONG ON UNSPLASH

Researchers from the University of Connecticut and Georgia State University have concluded that MED laws have made younger Americans screw more.
Marijuana Moment

  • To determine how legalization has influenced frequency of sex, the research team looked at a significant data set that included “detailed questions about sexual activity and substance use” in the youth between 1997 and 2011. Their survey asked for explicit answers on past-month marijuana use and sex.
  • Respondents reported a 4.3% increase in the “likelihood of having sex once or more in the past month.”
  • According to the report contraceptive use is down and births are up, correspondingly.