WeedWeek edition / May 11, 2020
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WeedWeek editor Alex Halperin discussed the California market with David Belsky, CEO of recruiting firm FlowerHire.

1 “WAS QUARANTINE MADE FOR CANNABIS?”

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In a dispatch from Los Angeles, The New Yorker asks, "Was quarantine made for cannabis?"

 

🌴WW California has lots more from the Golden State.

This week on the podcast
The Book on Jack Herer

Dan Herer’s father crashed the hemp movement into existence with his self-published 1985 book The Emperor Wears No Clothes. A new ebook edition is out, and the pioneer’s son explains why hemp’s sacred text is more relevant than ever.

  • A post-divorce convert to cannabis, Jack Herer clashed with the established legalization movement
  • In 1980, the senior Herer was cited for “violation of the sedition” act for protesting pot prohibition and served 15 days in federal prison. It was there that he wrote the book, which was published on news print.
  • When a fan developed the “Jack Herer” strain, the man himself was present.
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2 CANNABIS IS HIRING

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As unemployment reaches levels unseen since the Great Depression, cannabis businesses are hiring thousands of workers nationwide.
CNN, Politico

  • Politico writes, "Fewer shoppers are hitting stores, but they’re making bigger buys, and there’s been a surge in delivery sales. They are thriving even though they can’t touch federal rescue money to pay their bills or employees."
  • In most cases, the hiring plans were in place pre-pandemic but they haven't been derailed.
  • Front Range Biosciences CEO Jonathan Vaught argues Congress needs to support the industry.
    Green Entrepreneur

Meanwhile, cannabis social network MassRoots, a group of whose investors recently paid $1.5M to resolve federal stock fraud charges, said it received a $50,000 loan from the paycheck protection program, which is off limits to ancillary cannabis businesses. MassRoots didn't return a request for comment.
Barron's, Press release

A note from the editor

Since 2015, WeedWeek has been the best way to keep up with the Green Rush. WeedWeek’s audience includes many of the most influential figures in cannabis because we are editorially independentAdvertisers have no influence on our editorial content.

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Tips, comments and complaints to Alex alex@weedweek.net.

To advertise contact Lisa Marie Dudenhoeffer lisamarie@weedweek.net

3 “THE HYPOCRISY HAS BEEN EXPOSED”

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In this week's business column, industry leaders say the industry can no longer be both essential and illegal. While the immediate outlook is very challenging, they hope the pandemic will catalyze change:
WeedWeek

"Taxes are high. Margins are low. Regulations are onerous. [In California] The illicit market is beating the legal one. Poor management and overspending have put many companies in jeopardy. This was all true before the pandemic struck, creating yet more uncertainty and fear.

"The state government’s declaration of cannabis as an “essential” business surely saved a lot of companies from going under. And an initial surge of sales provided some relief. But the situation is still bad."

Read the whole thing.

4 POWER PLAYERS: ELIZABETH MORRIS ON CANNABIZ LENDING

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Who couldn't use some extra cash these days?

For the Power Players interview, I spoke to Elizabeth Morris, COO of Dynamic Alternative Finance which has facilitated about $100M in loans to cannabis businesses. It sounds like the company is very busy.

A few highlights:

On the perils of cannabis companies borrowing money:

One thing that we do see, unfortunately, is someone will call us and say they thought they had a deal. It was a really good fit. They had a great term sheet and wonderful rates and the lender charged them $25,000 on the front end to do underwriting and then decided not to do that deal.

On the state of lending:

In equipment finance and real estate, people are still lending, but it's taking a little bit longer. The underwriting is a little bit more strenuous because the investors have seen wild fluctuations in the market and in their own liquidity.

On being "recession proof":

I don't think cannabis is as recession proof as some people initially thought it was going to be. The basis for me saying that is it’s become clear that in certain states, like Colorado and Nevada, that the industry has a high dependency on tourism.  It's not well known that 25% of cannabis revenue in Colorado is from out of state visitors.

 

Read the whole thing.

And check out some of our recent Power Players interviews:

Got any thoughts on who the next Power Player should be? Email us at hello@weedweek.net

5 BIDEN WANTS TO DECRIMINALIZE

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Joe Biden, the presumptive Democratic nominee for president, said he would " decriminalize the use of cannabis and automatically expunge all prior cannabis use convictions."
Marijuana Moment

  • It's part of his Plan for Black America.
  • Biden was one of the few candidates in the Democratic primary who didn't call for REC legalization.

Are you registered to vote?

6 CORPORATE ROUND-UP

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This week in the corporate world:

7 IN THE STATES…

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Here's what's happening in the states:

The movement to expunge past marijuana convictions is also moving forward, despite the pandemic. 🌴WW California has more.
Filter

8 RESEARCH SUGGESTS CBD MIGHT BENEFIT SOME COVID-19 PATIENTS

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While numerous business have been called out by the FDA for promoting CBD as a way to prevent or cure COVID-19, research suggests it may benefit certain patients under medical supervision.
WeedWeek

  • A pre-clinical study found CBD, and potentially other cannabinoids, added to anti-viral therapies may reduce the lung inflammation associated with some severe cases.
    Science Direct

Quick Hits

  1. An alumnus gave MIT and Harvard Medical School $9M to study how MED affects the brain and behavior.
    The Harvard Gazette
  2. Leafly rounds up products containing CBG, CBN and other rare cannabinoids.

9 HIGH TIMES HIRES THIRD CEO IN A YEAR

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High Times' parent company hired its third CEO in a year as it pivots from media and events to retail.
New York Post

  • Peter Horvath, who's taking the helm, was previously CEO at Green Growth Brands, and before that was a C-suite executive at Victoria's Secret. In April Green Growth said it was in default on a $5M note and is selling off its dispensaries.
  • High Times attempts to raise money through a crowdfunded IPO have fallen short of its expectations. Horvath will receive a bonus if he can raise $20M.
  • High Times' previous CEO, Stormy Simon, joined the company in January and said in February she would run for Congress in Utah as a pro-pot Democrat.
  • Bottom Line: Is anyone excited to shop at a High Times-branded dispensary?

Quick Hit

  1. With the capital markets frozen, companies like California's Goldenseed are following High Times' example and looking to mom-and-pop investors.
    MJBiz

PRE-ORDER "THE CANNABIS DICTIONARY!

10 YOU DON’T REMEMBER STICKY FINGERS

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S.F. Weekly talked to author Alia Volz about her new memoir, "Home Baked: My Mom, Marijuana and the Stoning of San Francisco."

  • Volz's mother Meridy Volz ran Sticky Fingers, a brownie operation, from the late 1970's until the late 1990's. It prefigured the MED activism which accompanied the AIDS crisis.

Do you miss this?

“In those days,” Volz says, “the community aspect was extremely strong. A transaction could stretch for hours because there was this very community-oriented, social aspect to it all. You were friends with your dealer. You hung out. There was a scene and a subculture around it.”

Elsewhere: