California edition / July 24, 2020
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1 WHAT DOES DOJ WANT WITH THOSE COMPANIES’ DATA?

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Since January the Department of Justice has been requesting licensing records of several California cannabis companies as part of a criminal investigation. On Monday a petition was entered into the Southern District of California on Monday asserting the Drug Enforcement Administration subpoenaed licensing documents from the state’s Bureau of Cannabis Control (BCC). The bureau has declined to comply on grounds that the request was vague and possibly in violation of privacy laws.
WeedWeek/Marijuana Moment

  • The DOJ “seeks the documents for only six entities, which include three corporations and each corporation’s presumed owner.

Quick Hits

  1. What was it like to harvest a June crop in the middle of a pandemic? For one California cultivator, it's meant preparing “to live with COVID for potentially a much longer time than any of us had hoped.” That harvesting looked like just like this.
    Bloomberg
  2. A report by Youth Forward and Getting It Right from the Start, “California Cannabis Tax Revenues: A Windfall for Law Enforcement or An Opportunity for Healing?” says 23 of 28 cities analyzed saw double-digit increases in their police budgets since legalization. Eight of 28 police budgets grew by at least 25%. Financially distressed communities? Not so much.
    California Health Report
  3. Look, nobody wants to do it, but we've got to start talking about slotting fees, and not just their chain-supermarket history. We've got to get into this whole eye-level matter, and how product gets pushed toward the top or bottom of the rack.
    WeedWeek
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2 ILLICIT WEED WITHOUT THE ROMANCE

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All seeds considered, California cultivation more resembles a low-budget grow in Anza—an unincorporated Inland Empire township whose inhabitants on average earn $41,200 yearly—than a dispensary in The Castro or Francis Coppola's Napa operation. And most cannabis cultivators have common ground with Ronnie Bell, “a peaceful farmer" with back pain, who only wants to grow a business legacy. Chronic busts by law enforcement are Bell's biggest pain of all.
Los Angeles Times

  • Riverside County's bud Mecca, Anza is loaded with Ronnie Bells. Our pandemic-caused recession has boosted the relevance of their operations, yet on May 13 Bell was arrested by sheriff's deputies, along with nine others. Beyond the cost of defending himself, the 42-year-old has absorbed the cost of damaged lights and confiscated cannabis.
  • No permits have been granted to cannabis cultivators in Riverside County.
  • “So much revenue comes in from this plant, and we just want to positively contribute to the revenue stream in Anza. This town is asleep, and it’s begging for life,” Bell said.

Quick Hits

  1. In the first quarter, cannabis taxes brought in $134.9M, up 15.7% from winter 2019. Contrast that with a 30% drop in all California sales-tax revenue for May, versus May last year. Part of the essential gig is propping up budgets, thanklessly.
    Bloomberg
  2. In case you missed it, here’s everything that happened so far in 2020.
    Cannabis Industry Journal

3 SOCIAL EQUITY: ANOTHER WEEK, STILL NO SOLUTION!

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Influential as California's social-equity concept has been in states like Massachusetts, Michigan and Illinois, it's thus far been best at raising the hopes and dashing the dreams of young entrepreneurs. That's what happens when government programs are underfunded and expectations get way out in front of bureaucratic realities.
 
On Tuesday, the Bureau of Cannabis Control shared the details of its funding at the county and municipal levels. Actual benchmarks of how social equity might play out locally can now begin. 
MJ Biz Daily/Cannabis Business Times

  • Two years in, predatory investing remains a corrupting force. Propped-up “owners” from equity-qualified areas and backgrounds are used to defraud the government. Partnerships in general have been fraught. “The catch-22 is how will you get money from someone and still control your company?” says Marie Montmarquet, co-founder of MD Farms.
  • From the $6M the BCC sent to Los Angeles to the $60,000 that Stockton received, the 500-page document details the rationales behind each county's and city's award of funds. 

Quick Hit

  1. Southern California is being lapped by Northern Cali in its social-equity progress, as evidenced by the embarrassing stickiness of that 4thMVMT lawsuit to Long Beach's almost perfectly ineffective approach.
    MJ Biz Daily/Long Beach Business Journal

4 BILL WOULD TAKE ‘STICK’ TO LANDLORDS & ADVERTISERS

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When our legislature returns to session next month, look out for the vote on AB-2122, which targets landlords who rent to traditional-market growers as well as abettors providing advertising or other business support to unlicensed operations. The bill, introduced by Assemblywoman Blanca Rubio (D-Baldwin Park), has brought mixed reactions among the California cannabis communities. 

“In general we would rather see ‘carrots’ to assist people in securing commercial licenses by lowering the barriers to entry, rather than ‘sticks,’ be they criminal or civil,” says Ellen Komp, deputy director of California NORML.
WeedWeek/LA Magazine

  • Penalties of up to $30,000 can be leveled against non-sanctioned operators if this proposal, backed by the United Cannabis Business Association, is passed. In a letter to assembly members, the UCBA wrote that traditional market sales “must be shut down to ensure that legal operators can see an increase of patients and consumers.”
  • Critics such as NORML insist the fines in Rubio's bill are excessive and that it casts too wide a net. 

 

Quick Hits

  1. The Blumenauer-McClintock-Norton amendment expands on the protections granted MED during the Obama administration. If passed it would prohibit the Department of Justice from interfering with weed trade in legal states. Congress is set to to debate the amendment in August.
    The Hill
  2. We're looking at the five-month mark of quarantine and wondering: Why isn't more COVID-19-period dispensary design offering safety solutions beyond slapped up sheets?
    Green Market Report

5 HAS BORDER PATROL BECOME ANOTHER HARASSMENT TOOL?

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YUMA, AZ - MARCH 17: Handcuffs secure the back door of a US Customs and Border Protection border patrol vehicle (Photo by David McNew/Getty Images)

At the start of this month we let you know U.S. Customs and Border Protection overstep has become an operator issue in Southern California. More stories of Border Patrol abuse are coming to light as even hemp is being unjustly interdicted and merchants are losing thousands.
Leafly

  • In April, a driver from a company called Infinite CAL lost their legal hemp samples while traveling on Interstate 8, which runs east-west near the California-Mexico border. Border Patrol seized the hemp despite the driver's legit paperwork and his cargo being labeled and locked. It was the company's fourth seizure since March.
  • The presence of the Border Patrol in the supply chain can feel harassing for industry workers with dodgy citizenship paperwork. Marijuana use by a non citizen can bring deportation, visa revocation, denial of entry, as well as rejection of any application for citizenship.

Quick hit

  1. Last week the state and the Fresno Police Department broke up a smoke sesh, or busted what some in more refined corners call a farmer's market. The state is poised to crack down on such unlicensed meet-ups of cultivators, sellers and customers.
    MJ Biz Daily

6 UCI STUDY BODES WELL FOR SICKLE CELL PATIENTS

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A team working out of UC Irvine's Center for the Study of Cannabis has completed a study indicating marijuana can be an effective treatment for pain accompanying sickle cell anemia. The findings by UCI's Kalpna Gupta and UC San Francisco's Donald Abrams appear in JAMA Network Open
Science Daily 

  • Gupta and Abrams' trial is the first of its kind to employ gold-standard methods—double-blind, placebo-controlled, randomized—to assess cannabis's potential for alleviating pain associated with sickle cell disease.
  • The results go past confirmation that vaporized weed diminishes chronic pain among sufferers. "They also suggest that sickle cell patients may be able to mitigate their pain with cannabis -- and that cannabis might help society address the public health crisis related to opioids," says Kalpna Gupta, a professor of medicine on the faculty of UCI's Center for the Study of Cannabis. "Of course, we still need larger studies with more participants to give us a better picture of how cannabis could benefit people with chronic pain."

Quick Hit

  1. In a pandemic, your bud tender can no longer be your first line of marketing. That is just one of the unassailable facts of marketing and advertising in our strange New Normal.
    Cannabis Industry Journal 

7 GROWERS ALARMED OVER PROPOSED L.E.D. LIGHTING MANDATE

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Legal-weed cultivators are upset over a report by the California Energy Codes & Standards program. Now before the Energy Commission, the document is part of a proposal that would force indoor cultivators to use only LED lights by 2023, a restriction that would cost growers millions.
MJ Biz Daily

  • During a webinar hosted by the United Cannabis Business Association, Amber Morris, director of government affairs for NorCal Cannabis, said, "It’s very important to consider the upfront costs and … how growers will pay for that."
  • The Seattle-based consulting firm Seinergy estimates it would cost $255M for all of California’s indoor growers to make the LED conversion.

8 THE TRIBE THAT TURNED ITS CASINO INTO A DISPENSARY

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Reporter Jackie Bryant hung out in rural northeast San Diego County, checking in on the Iipay Nation of Santa Ysabel—a Kumeyaay tribe of around 300 people. Bryant bought some pre-rolls and learned some things.
Cannabitch

  • Years off a casino run that lasted until 2014, Santa Ysabel now allows cannabis growers to lease reservation land. The tribe's 37,000-square-foot casino was converted to a dispensary called Mountain Source. 
  • Neither white locals nor state officials are excited about where this failed-casino narrative has gone. “If they’re growing and processing and selling their own cannabis, that’s their right,” says Bureau of Cannabis Control spokesman Alex Traverso. “However, if they’re selling cannabis or other goods that came from the California market, that’s not allowed without a state license.”

10 THE NEXT TWO FARMS ON ‘GROWING EXPOSED’

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Episodes one and two of Growing Exposed's third season took viewers inside operations from Santa Monica and the Lost Coast to Medford, Oregon. With times so challenging for both cultivation and documentary video making, one cannot help but wonder what's next in the series' realistic take on pot farming. 
YouTube

Quick Hit

  1. Try though we might, Californians can't forget when the state called in the Army to wage war against the Emerald Empire's marijuana industry, and called that CAMP.
    SF Chronicle