Months from Now, When You Buy Someone, Or You Are Acquired. Or, When You Merge...

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Last year merger news began to feel like an industry constant. And this was not merely a pool of minnows getting it on. Marlboro parent company, Altria, bought 45 percent of Canada's Cronos Group in December for $1.8 billion. Equity financing and mergers attorney Tatiana Logan of the West Coast legal firm Harris Bricken says 2019 could be defined by such transactions.

  • The state's limited number of licenses are a significant driver these moves. But the number of counties with marijuana bans can't be ignored either factor.
  • "[J]ust by virtue of holding a license, your cannabis business holds inherent value to strategic and financial buyers," Logan said.
  • Even licensed businesses need an exit strategy should the industry's current vagaries overwhelm them. The attorney advises that suvival-minded entrepreneurs can search for peers to combine with, via share swaps. Companies who have swapped stock have increased their licensing portfolio and their ability to attract new funding sources.
  • Logan insists on small operators having a way out. "Because of the clear race to the bottom for cannabis on pricing, we have no doubt that bigger companies will quickly start to eat up distressed cannabis operators for better or worse (which is already happening in certain states).

Quick Hits

  1. SF Weekly tells us that "the clock has finally struck midnight" and Big Tobacco is coming for our pot.
  1. Sonoma County producer SPARC joins Audible in sponsoring San Francisco's Sketchfest, which runs through the month. This is a major advertising milestone, as marijuana has been an unofficial sponsor of sketch comedy for as long as anyone can remember.
  1. An Oregon legislator has proposed a bill that would allow its businesses to export marijuana to states that have deals with Oregon's governor.

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Murder Mountain: Behind the Redwood Curtain

The Fusion-produced pot-doc series Murder Mountain, just landing on Netflix, is a mystery that lives in both Northern Cali's Emerald Triangle and the lurch between legal weed and the wildest black market.

Told amid Humbold County's endless waves of Redwood trees, Murder Mountain concerns the disappearance of Southern California carpet-bagger Garret Rodriguez. The film toggles between Rodriguez's mysterious circumstances and those arising from the Emerald Triangle's rich hippie history, with the region's hard-drug influx lurking beneath all stories' surface.

Murder Mountain is visually aborbing and smart, with top-level reinactments. But is the series reflective of the eminently shady Emerald Triangle growing experience?

  • Some local critics have called the weed outlaw culture, as depicted, over the top. Perhaps more are experiencing Murder Mountain as a cleansing confessional. "I think we have, as a community, become desensitized to the crazy shit that really goes down here," says Lost Coast Outpost columnist John Hardin. "We’ve learned to look the other way or dismiss it as normal business as usual. I’m actually glad for this new series because I always wondered about that case."
  • Local residents who found the film overdramatic said that isolated incidents--dealers resembling terrorists spin on motorcycles for the cameras -- were married to the locale's imposing visual affect, to heighten drama. "The most dangerous part about that mountain," one grower said, "has and always will be federal intervention."
  • Also, the eponymous mountain, Alderpoint, is framed here as emblematic of Humboldt's history. In actuality Alderpoint is the heart of the Emerald Triangle: Trinity, Mendicino, and Humboldt. Different story. Sorry, people. Details matter.

Racial Inequality No Longer Cannabis Industry's Secret Shame

Courtesy of Getty Images

Welp. Now everyone knows. Once NBC is addressing marijuana ownership's Portland-esque whiteness, the jig is up.

Specific numbers on who owns what have been slow to come in -- hmm, wonder why?-- but in 2017 84 % f business owners were white. only 4.3 % black. Latinos and Asians made up 5.2 and 2.3 percent respectively.

Quick Hits

  1. Next month's 420-driven EDM Festival at Mike Tyson's Desert Hot Springs Ranch is shaping up to be an international event.
  1. Illicit market booms after legalization debuts: Feature or bug? It's not just Californians asking this question.
  1. In "Capital Cannibus," Ngaio Bealum resolves to "support the locals and to stick up for the underdog" by smoking more small-batch cannabis.
  2. Smoking marijuana remains a banned activity at Coachella.
  3. Monday's WeedWeek podcast guest Amanda Chicago Lewis reached out to a dozen pot know-it-alls and concluded that enough difficulty is in the rear-view that Mary Jane is finally about to get her shine on.

Editor Note

Thank you to WeedWeek's Patreon Supporters!

Sam Cornwall
Co-Founder/Photographer, Cannabis In Color Boutique Photo Service for the Industry, providing Custom and Stock Photos. 
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Find us at cannabisincolor.com and Instagram

Pamela Hadfield
Co-Founder, HelloMD
HelloMD: The largest online community of health and wellness cannabis consumers
HelloMD on InstagramFacebook

Spencer Vodnoy
CEO, Critical Mind Inc. Adelanto, CA
Affiliations: CA State Bar; Board Member, Adelanto Growers Association Critical Mind, Inc. is a Medical Cannabis Cultivation and Manufacturing Facility located in Adelanto, CA. Providing the highest quality Cannabis products. Compliance without Compromise! criticalmindinc.com

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Cat Packer & the Questions

Courtesy of the City of Los Angeles

In Los Angeles, trying to be a good citizen weedhead and buy all of your REC legally is like trying to do budget-conscious shopping at the Staples Center concession stands. After a while, one starts to feel foolish, and the illicit market gains another customer.

None of this is the fault of balleyhooed Cannabis Regulation Director Cat Packer. She did not set local pot taxes. She's in no way responsible for L.A.'s high rental costs. Local control was not her concept. But Packer is the department head, and the bloom seems off the rose. The day of fawning profiles are in the rear view for Los Angeles' Cannabis Regulation director. As pot underperforms financially, street weed straps in for the long haul, and local bureaucracy is a fair target, the questions are growing tougher.

  • The rollout of L.A.'s Phase 2, which addresses non-retail businesses, is dependent upon a "continually evolving timeline," according to the director. The quickness with which the city's 600 backlogged applicants -- half of which Packer expects to get licensed -- pass inspections and are processed dictates nearly everything about how Phase 2 will play out.
  • Retail operations (169) and "10 or 11" testing facilities have been fully authorized in Los Angeles.
  • Phase 3 is open to social equity applicants. Unfairly or not, Packer is associated with cannabis equity, which a portion of the California industry regards as burdensome.

Quick Hits

  1. This week federal prosecutors will begin sharing with state officials marijuana cases that might be eligible for dismissal. The period for consideration ends on July 31.
  2. Next week the grandfathering period for illegal marijuana collectives ends, and with that an historic era in California cannabis.

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