WeedWeek edition / July 12, 2020
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1 THE MOST OBNOXIOUS WEED CEO?

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@danbilzerian

A lawsuit filed this week by former Ignite executive vice-president Curtis Heffernan, alleges he was fired in June because he tried to flag a proposal to misclassify a government Paycheck Protection Program (PPP) loan as "miscellaneous income."
Law360

  • Heffernan's lawyer couldn't confirm whether the company misreported the PPP loan. Ignite received between $1M and $2M from the program, according to government data.

Among money-hemorrhaging pot bosses, Ignite CEO and Instagram celebrity Dan Bilzerian (31.9M followers) stands out for his performative obnoxiousness.

  • The plaintiff's lawyer said Bilzerian "traveled the world with a harem of models that would make Hugh Hefner jealous, expecting that the company would cover it all."
  • Heffernan alleges he'd been pressured to approve $350,000 in expenditures on Bilzerian's Los Angeles home including a paintball field, a rock climbing wall, a game room and a $15,000 ping pong table. According to the complaint, Bilzerian said pool parties at the house justified the expense.
  • Ignite covers the $200,000 rent on Bilzerian's home, the lawsuit says.
    Forbes
  • In 2019, Ignite reported a net loss of C$67M (US$50M) on C$9.6M in sales.
  • Bilzerian told TMZ that Heffernan was fired for "incompetence and negligence," and said the company plans to counter sue.
  • View Heffernan's lawsuit here.

In a scathing piece at Forbes, Chris Roberts writes, "What is uncommon is how bloated and profligate Bilzerian’s company managed to become in less than one year."

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2 SELECT POT COS. COLLECTED COVID RELIEF

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The U.S. Small Business Administration (SBA) blocked companies that derive revenue from "marijuana-related activities" from claiming federal COVID relief funds. But Ignite isn't the only cannabis-sector company to have received them.

  • Loan recipients included high-profile California brand Caliva, which received between $2M and $5M. Caliva declined to comment.
    Law360
  • Law360 also found Akerna (the tech company formerly known as MJFreeway) received a loan, as did its competitor Metrc, which said it returned the money. Akerna didn't respond to a request for comment.
  • Arcview received between $150,000 and $350,000. The investor network didn't respond to a request for comment.
  • Government data says payments company Hypur received a loan, but the company denied it.
  • Anne Holland Ventures, publisher of MJBiz, received a loan, as did beleaguered social network MassRoots. Asked for comment, both said they don't touch the plant.
  • According to Vicente Sederberg founding partner Josh Kappel, it's "unclear" where to draw the line on eligibility for marijuana-involved companies. Hemp companies appear largely to be eligible.

3 BIDEN ISN’T THERE ON LEGALIZATION

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SEAN RAYFORD / GETTY IMAGES

The Atlantic discusses why presumptive Democratic presidential nominee Joe Biden "won't inhale" on legalization, despite it being a "surefire way to boost turnout."

  • Current and former aides say, "All that’s stopping Biden is public health. He’s read the studies, or at least, summaries of the studies (campaign aides pointed me to this one). He wants to see more. He’s looking for something definitive to assure him that legalizing won’t lead to serious mental or physical problems, in teens or adults."
  • Biden favors decriminalizing cannabis use, expunging records for low-level offenses and allowing states to determine their own REC laws. He also wants to remove marijuana from schedule I, which would likely accelerate MED research.
  • The Trump administration doesn't support any of these measures.
  • Politico says the Democrats' left flank "got rolled" by Team Biden on legalization and other law enforcement priorities. 

Washington-state brand Saints is participating in a promotion that enables voter registration from a QR code on a pack of pre-rolls.

Are you registered to vote?

Quick Hit

  1. With REC legalization gaining momentum in Pennsylvania, Lt. Gov. John Fetterman (D) has become a champion of the cause.
    CBS-Pittsburgh

4 POWER PLAYERS: MPP’S STEVEN HAWKINS ON THE FUTURE OF EQUITY

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Marijuana Policy Project is having a landmark year.

That wasn't necessarily the expectation. When Steven Hawkins joined as executive director in Summer 2018, MPP was under a cloud following past allegations of sexual harassment against founder and executive director Rob Kampia. The group also confronted questions about its role in the post-prohibition era.

In this presidential election year, MPP had a "dream map" of ballot initiatives and other legalization efforts on the table. The pandemic truncated much of that and delayed legislative REC pushes in New York and elsewhere. (Nonetheless, it appears MPP-backed efforts in Montana(REC), South Dakota (REC) and Nebraska(MED) reached the ballot.)

MPP is generally considered an industry ally. But Hawkins, who has held senior roles at Amnesty International and the NAACP, emphasizes legalization as a civil rights issue. He's now guiding the organization at a moment when the American public may be receptive to the idea as never before. When we caught up last week, he discussed how MPP views cannabis equity, the true cost of criminalization and the coming "radical transformation" of police work.

On Wednesday, MPP hosts virtual conference: "Reimagining Justice: Race, Cannabis and Policing."

Read the interview.

Related:

5 POT SHOPS NOW RESEMBLE FULFILLMENT CENTERS

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WeedWeek business columnist, Dan Mitchell discusses how the pandemic has forced dispensaries to act more like logistics operations than retailers:

"In a conference call with investors last month, [Las Vegas dispensary complex] Planet 13 executives reported that, at $100,000 a day, sales were only half of what they had been before the lockdown. It marked a huge improvement over the $10,000 the store was generating daily in March, but with the pandemic now worsening again, things won’t get back to “normal” for a long time yet. 

And even then, “normal” will look very different from before. Among other things, there will be much more emphasis on Internet purchases, deliveries, and curbside pickup than anyone had envisioned before the crisis."

Read the whole thing.

In other retail news:

6 PORTLAND’S TOP REGULATOR HAS BIG PLANS

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WeedWeek profiled Portland's new top regulator Dasheeda Dawson:

"One of Dawson’s ideas is a pilot program to teach health professionals, lawmakers, those in child services and other fields about cannabis. The curriculum would include the endocannabinoid system, the difference between hemp and marijuana and the history of cannabis, before and after it was 'demonized and made illegal.”

More from Hilary Corrigan:

7 SEC HALTS HIGH TIMES OFFERING

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The U.S. Securities and Exchange Commission halted High Times Holdings' "mini-IPO" offering because the company didn't meet an extended deadline to file its annual report.
Cannabis Law Report

  • The company reportedly continues to pitch main street investors on its crowd-funded offering.
  • High Times said its filing has been delayed and pushed back at reports that the deal was "halted." Executive chair Adam Levin called media reports, "misleading and inflammatory."
    MJBiz

In another corporate story:

Federal prosecutors and the FBI are examining whether Wirecard, a scandal-ridden German payments company, played a role in an alleged scheme 🔒to launder transactions for delivery app Eaze. (Eaze hasn't been charged and is cooperating with authorities.)
WSJ

  • Ars Technica takes a look at the complex case and concludes, "Even if the federal government has a solid legal case, it's worth asking whether the prosecution is a good use of federal resources."

8 CBD PRODUCTS OFTEN MISLABELED: FDA

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An FDA report found many CBD products contain significantly more or less of the compound than labelled. It didn't name names.

Quick Hit

  1. A company called Hempire Direct promotes Delta 8 THC vape cartridges as a legal alternative to Delta 9 THC.

9 “LITCO VS. EVERYBODY”

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Respect My Region interviews Rez, proprietor of downtown Los Angeles dispensary Litco. Before he joined the cannabis space, Rez was a "known hustler" in L.A.'s music, art and graffiti scenes.

  • “The advantage I have on these suit and tie fuckers is they need someone to tell them what’s cool; I know what’s cool.” Rez went on to say that the suits are “focused on selling the weed and not connecting with the people.” “I support the subcultures; the skaters, the musicians, the poets, the writers, and the artists that love cannabis,” he said.

10 WEEDWEEK’S TOUGH SUMMER GIFT GUIDE

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satorichocolates.com/

WeedWeek California editor Donnell Alexander put together our gift guide for a tough summer.

  • We think you'll enjoy it.

Quick Hits

  1. GQ calls rapper Killer Mike "one of the loudest and most original political voices in the country."
  2. Johnny Depp acknowledged giving cannabis to his then 13-year old daughter.
    Daily Star
  3. Palm Springs is betting big on pot hotels. 🌴WW California has more.
    Desert Sun