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BUSINESS
   

Track & Trace? More
Like, Off-Track & Debased

Photo by Cédric Dhaenens on Unsplash

Though Prop. 64 promised that plants would be tracked from the time seeds are planted until their resulting products are purchased by consumers, none of that is even close to happening.

About 627 licensed retail shops sell cannabis in the state. Through April, only nine were participating in the "seed-to-sale" system that has a $60M deal to track -- as well as trace -- all of our legal weed. Of the more than 1,000 manufacturers in the sector, just 93 are participating. Only 254 of 4,000 growers are taking part.
Associated Press

  • The high-tech system created by Florida-based Franwell Inc. has worked since legal sales started, Jan. 2 of last year. However, temporary license holders weren't trained on the system because taking the time to do so was thought a potential disruption to the newly regulated market. Instead many companies write their reports by hand.
  • "Things can be intentionally altered, " said BioTrackTHC CEO Patrick Vo. Though most companies in the state do document their business on paper, Vo says the approach can be a gateway to criminal behavior. Most California companies are required to document their business on paper, sales invoices and shipping manifests. But experts say that can be a doorway for criminal traffic. The "honor system" allows for "so many areas where things can go wrong."
  • The state has thus far received 50,000 manifests. BCC spokesman Alex Traverso said the agency was unaware of any enforcement cases triggered by fraudulent or altered paper records.

Jury Finds Verdict in
OC Retail Pioneers Lawsuits

Photo by Zdeněk Macháček on Unsplash

Dueling civil suits between co-owners of Orange County's first legal REC shop ended Thursday with a jury verdict of breach of contract against one.
Orange County Register

  • Dispensary owner David DeWyke was found to have pushed out former co-owner David Worden from South Coast Safe Access, which is said to have made $13M in revenue last year and is estimated to be worth $10.2M. The jury said DeWyke must pay Worden $601,078 and one third of South Coast Safe Access.
  • Worden said he was pushed out in 2017 because his then-partner DeWyke accused him of skimming funds, running an illicit weed business on the side, and sexually harassing employees. Worden denies the claims.
  • In 2015, shortly after the shop started selling MED, Worden was shot multiple times. The shooter has not been apprehended and motive is not known. DeWyke denies knowing anything about the shooting.
  • The men are set to appear in Fullerton's Orange County Superior Court again next month to determine the fate of the shop.

Quick Hits

  1. “Belonging to a union gives employees a seat at the table." Never heard of a union organizer in this industry? Well, ladies and gentlemen, meet United Food & Commercial Workers Union vet James Araby.
    Sonoma West
  1. Are you a Los Angeles weed entrepreneur and confused about what's happening in the city's third phase of licensing? You probably want to attend Thursday's Department of Cannabis Regulations workshop.
    LA Department of Cannabis Regulation
  2. It's entirely possible that the best way to grow in the legal market is to be the entrepreneur who does not grow.
    Marijuana Observer
  3. The state's Department of Food and Agriculture has openned applications to cultivate Industrial hemp.
    CDFA
  4. Former MedMen CFO James Parker has added new allegations to his lawsuit against the retailer. The company called them "meritless."
    Marijuana Business Daily

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POLITICS
   
Courtesy of Getty Images

Thirty-eight U.S. attorneys general this week urged Congress to pass the Secure and Fair Enforcement Banking Act (SAFE), legislation that would allow cannabis companies to access federally-insured banks. AGs from Republican outposts like Utah and North Dakota joined California Attorney General Xavier Beccera and the other AGs in articulating the harm presented to industry operators by classifying cannabis with banned narcotics.
Sacramento Bee

  • "Not incorporating an $8.3B industry into our banking system is hurting our public safety and economy,” said Becerra in a statement. SAFE would aid growers and retailers who are prevented from banking. Even paying taxes becomes drama when you're forced to deal in cash.
  • Gridlock in D.C. makes SAFE's passage unlikely to come about soon. California operators best bet may be state Senate Bill 51, which would authorize banks and credit unions to allow cannabis companies to pay fees, rent, and taxes through special accounts. Having been approved by the Senate Committee on Government and Finance, the bill will be taken up by the Appropriations Committee on Monday.

Gov. Newsom's Bud
Budget: Small & Feisty

Photo by Josefin on Unsplash

Due to underperformance in the legal cannabis industry, the budget put forth by Gov. Gavin Newsom (D) on Thursday scaled back cannabis revenue projections through 2020 by $223M.

John Kagia of New Frontier Data, called the move"a pragmatic confession."
San Bernardino Sun

  • Newsom's budget, which makes visonary moves such as ending taxes on diapers and tampons, commits $80 million in cannabis revenue to expand access to child care.
  • The most-recent budget documents predict cannabis excise tax will climb $288M this fiscal year and $359M next year. A 2016 forecast predicted net state and local tax revenue from legal cannabis will eventually exceed $1B.

Quick Hits

  1. Halfway through the legislative session, it seems prudent to check in on who the Senate and Assembly cannabis winners and losers have been.
    Marijuana Business Daily
  1. David Downs sat down with the state's top regulator and straight away asked podcast guest Laurie Ajax to talk about California's local delivery conflict. "Cities and counties can enforce their own regulations, but they'd be doing that on their own," Ajax said.
    The Hash
  2. Students at San Jose State saw what cities such as San Francisco have done to expedite expungements of those with pot records, then looked downtown and saw they were viewed as CLARIFYlollygagging on behalf of Santa Clara County District Attorney Jeff Rosen. To draw attention to the cause Students Against Mass Incarceration took up signs and demands, then rallied.
    San Jose Inside

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CULTURE
   

Behind the Scenes
at Hall of Flowers

Courtesy of Getty Images

If you're like most Californians, you only know legal weed from the far side of the dispensary counter. (Judging from illicit market sales figures, most people in Cali are unfamiliar with even the general insides of dispensaries.)

A fresh piece of writing on Santa Rosa's second Hall of Flowers event takes you to the other side of the counter to the brand-centric deals that don't resemble the old and iconic ones.
Cannabis Now

  • Overwhelmingly, the brands represented were three or so years old. "Instead of the story behind how and where the cannabis is grown and by whom," the author writes, "most stories now are about the birthing of the brand!"
  • Attendees stood in line to get samples of products containing THC. Through a deal arranged with the Bureau of Cannabis Control (BCC), booth visitors could be given a “sample card” with a number on it to take to the site's “Show Grow Dispensary." At the dispensary, cards were redeemed for actual edibles, pre-rolls, flowers, vape cartridges, etc. at a cost of $2 per sample.
  • The agreed-upon "best place to do biz,” HoF was also "a celebration of survivors." Said Red Light Management's Jim Lewi,“It’s been a tough year for us all, lots of suffering."

As If We Never Toked
in the Shadows

Photo by Echo Grid on Unsplash

Or in alleys. Weed tourism in the vein of winery tastings is the next big Green Rush cash cow, and that's awesome. Probably.

Yet, as we move to the part where Mary Jane's inarguably wonderful attributes are celebrated en masse, let's not get so effervescent in extolling usage upticks that we forget: One New York-minute ago, this clean industry was associated with people of color, whom law enforcement targeted.
SF Chronicle

  • Mendocino's so-called "fourth pillar of tourism," along with wine, waves and wilderness, weed in Mendocino is drawing visitors to Flow Kana's new Solar Living Institute. One tourist found rows of pot plants in the sun where she had expected guard dogs and chain link fences. The Vallejo yoga instructor's worries that pot farms were dangerous, clandestine operations vanished. “It was like you had walked up to someone’s winery in Napa,” she said.
  • The vast majority of Cali grows are unlicensed. You're more likely to find guard dogs than a cask of Screaming Eagle Cabernet.
  • With so many visitors using the illicit market to buy their marijuana, CLARIFY it's almost impossible to know what the "cannatourist" market is generation. One indicator would be Colorado, which drew an estimated 6.5M million visitors. These visitors consumed 19 metric tons of weed in 2017, according to a report prepared for that state’s Department of Revenue. However, in a survey from the previous year, only 5% of Colorado visitors called it a motivation for their trip.

QUICK HITS

  1. After last year's false start, Southern California will finally get its first officially sanctioned Cannabis Cup. Ice Cube will headline the concert portion of the event.
    San Bernardino Sun
  1. Who cares whether our Mother's Day is capitalist fabrication based on an idea not even vaguely related to commerce. my friend. Give yer mum some bud.
    High Times

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