California edition / July 10, 2020
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1 WEED’S RISING ON A DESERT FRONTIER

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Few municipalities have gone all-in harder on cannatourism than Desert Hot Springs. Now its No. 2 revenue stream, Mary Jane brought the San Bernardino County city $3.2M in the fiscal year ending in 2019, before weed was classified essential.

So, what remedy do you think Desert Hot Springs would seek when 90% of our counties and cities are looking at layoffs and Desert Hot Springs itself faces a $350,000 deficit? 

Let’s just say, room service and Bowling Night won’t ever be the same.
Desert Sun

  • Not only are city officials moving toward allowing sales and consumption in hotels, but entertainment facilities such as bowling alleys could be in the mix as well.
  • Desert Hot Springs may also revisit its tax rate for growers. Officials are meeting with local weed experts in planning its cannatourism agenda.

Quick Hit

  1. I wrote a thing. It started very much being about product placement within Rick and Morty. Now the thing’s a gift guide featuring the products I used while watching the show’s unsettling fourth season, as God intended.
    WeedWeek
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2 STATE LIENS ON UNDERGROUND SHOPS

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Last month the Department of Tax and Fee Administration used local law enforcement to begin serving liens on underground dispensaries in Los Angeles and San Bernardino counties.
MJ Biz Daily 

  • In addition to seizing $1M in product and $100,000 in cash from the dozen stores, the state executed the tax warrants as part of its plan to increase pressure on the illicit market.
  • “Tax evasion unfairly shifts the burden onto all other taxpayers and makes it tough for those businesses that are playing by the rules to survive,” CDTFA Director Nicolas Maduros said this week.

Quick Hits

  1. A group of San Luis Obispo hemp growers lost their bid to turn back a new law that significantly reduced the size of every farm operating in the county last year.
    Hemp Industry Daily

  2. As writer Zack Ruskin explains, once you know the extent of cannabis illegality’s role in racism it’s tough to look away.
    Rolling Stoned

3 END OF THE DISPENSARY AS WE KNOW IT?

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With pandemic conditions worsening, the question has ceased to be 'When do we return to normal?'

Now we’re wondering what the new normal will look like. WeedWeek’s Dan Mitchell explains that the cannabis industry’s new reality will so emphasize  deliveries, online purchases and curbside pickup that the adjustments may shape up as a wholesale retooling.

  • The need for storefronts and bud tenders have taken big hits, but “in-store consultations” are likely to complement internet sales.
  • Storefronts are likely to retain popularity with high-end users.

Quick Hit

  1. In the category of Novel Ways to Be Busted for Pot, we have the two tech consultants who’ve been busted for trying to trick banks into processing $100M in cannabis transactions.
    Ars Technica

4 THE TRUTH ABOUT PAY-TO-PLAY

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Slotting fees are pay-to-play in the most public-facing sense. In short, brands pay from $500 to $15,000 per month for choice spots on retailers’ shelves. For as long as we have dispensaries, would-be players will pay.
MJ Biz

  • Slotting fees’ ascent seems to have risen with the 2017-2019 popularity of vaping, whose products contributed to a shelf-space crunch. 
  • Critics of slotting argue it hurts smaller brands that lack the funds to pay for visibility. But slotting has been in mainstream retail since the 1980s, and pot super-wants to be mainstream.

Quick Hits

  1. When brand-name artists say they’ve grown skeptical of weed, assume  it’s not the plant they’re talking about. It’s you, legal cannabis industry. It’s you.
    OZY
  2. What happens when a “fashion branding guru” from the east coast builds up a grow in Santa Barbara County? Why, she and her husband get sued by prohibitionists, of course!
    Green Entrepreneur 

6 DIRTY FINDS IN SC PRE-ROLL TESTS

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Dirty pre-roll paper batches seem to have appeared in parts of the state, causing products to fail testing for reasons unrelated to marijuana.
LA Weekly 

  • Last week, Santa Cruz-based SC Labs verified positive results for chlorpyrifos, a pesticide. The compound appeared at three to four times the level approved by the Bureau of Cannabis Control.
  • SC Labs co-founder Josh Wurzer said the failed pre-rolls show “definitely that that quality control for some of these paper manufacturers is lacking and you can’t just take it for granted that you don’t really have to pay attention to … your supplier.”

Quick Hits

  1. Department of Cannabis Regulation Executive Director Cat Packer explained the reasoning behind LA’s recent bold call on social equity, which caused the Social Equity Owners & Workers Association to drop its lawsuit.
    MJ Biz Daily/Los Angeles Times
  2. California didn’t match Oregon’s 87% overall year-to-year sales increase, yet we were among the leaders in a very hot May among western states.
    New Cannabis Ventures 

7 “PLANT” BILL WOULD PROTECT PUBLIC LANDS

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Legislation introduced by a bipartisan group of US representatives would turn up the heat on those who use public land for their grows

“Left unchecked, these operations illegally divert water and dump toxic waste into our streams, rivers and lakes,” said District 2 Rep. Jared Huffman. The proposed law is called the Protecting Lands Against Narcotics Trafficking Act.

PLANT, you see?
Lost Coast Outpost

  • According to Huffman, in 2018, Operation Forest hauled in from public land busts: 82 firearms, 638,370 plants and over 103,603 pounds of trash, pesticides and chemicals. The damage thoughtless growers have done to Golden State nature has been less calculable.
  • PLANT would help local, state and federal law enforcement eradicate unlicensed grows on public lands as well as set up a fund to bring back land damaged by illicit growing.

8 TWO YEARS IN, EQUITY RECIPIENT STILL STUCK

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  1. If you felt bad learning the plight of Oakland social-equity licensee Linda Grant two years ago, when social equity was novel, know that catching up with her in 2020 isn’t more pleasant.

The self-described “poster child for social equity” remains “in a fish tank full of shit.”
Cal Matters

  • A 35-year veteran of traditional market dealing, Grant relates two negative experiences with incubator programs. “When wealthy people found out about the equity program, it was like a wave of vultures came into Oakland,” she says.

9 ANDREW DEANGELO: WEED WARRIOR

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To regular readers of this newsletter entrepreneur and activist Andrew DeAngelo needs no introduction.

But regular readers of industry newsletters are all but the definition of legal weed bubble inhabitants. DeAngelo totally needed an intro when he began his four-column stint with Playboy. So that’s just what he gave himself.
Playboy

  • Candid as ever, DeAnglo writes that he “smuggled” marijuana  in his pre-compliance days. No prettying up his commercial past, just humanizing brass tacks.
  • It’s possible DeAngelo’s sports-injury origin story is familiar to you. But even he wasn’t hip to the challenge ahead. “I had no way of knowing or understanding the kind of sacrifice needed to do something as monumental as getting the U.S. to legalize weed,” he says.

10 L.A. WELCOMES DAVE-LESS “HALF BAKED”

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The California Film Commission has offered a tax credit to the producers of Half Baked 2.Half Baked 2. The long-rumored production must begin shooting within 180 days. 

All COVID aside, what’s interesting here is the project is moving forward without the talents of one David Chappelle.
Paste

  • In December, writer-comedian Justin Hires announced he would be writing the sequel. The story will focus on the son of the first movie’s Thurgood character.
  • As difficult as it may be to imagine a Chappelle-free Half Baked, it’s not as though critics would be let down by a substandard follow-up; with a Metacritic rating of 16, the comedy was never a darling.