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September 30 2023,
THE BIG IDEA
Great to see so many of you in Chicago this week.
It was a schlep getting back, so today’s newsletter is a bit short. But watch this space; Some big stories are in the works. We’ve also got the return of High Society (below). Send your pics to email@example.com
Also, after Hirsh Jain’s presentation on California retail geography went so well, I’m beginning to think about future panels, presentations, debates and other virtual events. Got any ideas for who to include? Let me know.
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CANNABIZ BUZZING AGAIN IN CHICAGO
There was a hum in the air at this week’s Benzinga Cannabis Capital Conference in Chicago (a WeedWeek advertiser), that I hadn’t heard in a while. The money spigots aren’t on full blast exactly, but smart people say the capital climate is slowly improving. Investors seemed to be feeling better, at least about their prefered niches and sub-niches.
With rescheduling and SAFER banking now on the table, meaningful federal reform has never felt so close. But, many cautioned that it’s important to temper the optimism. The cannabiz and federal Washington still don’t understand each other very well. Whether or not the revised banking bill passes, it’s “become a proxy fight for other interests,” longtime legalization activist Justin Strekal told Politico.
The folks I asked seemed much more deeply invested in rescheduling to Schedule III. Since it would end industry-hated tax rule 280E would be a game changer for virtually every plant touching company. While some have argued that it’s near certain to go through, others are more concerned. The Schedule III recommendation from the Dept. of Health and Human Services now goes to the DEA, which (as far as I’m aware) has never ceded any ground on federal prohibition.
It’s not your father’s DEA. Director Anne Milgram, a political appointee, was previously an attorney general of New Jersey known for police reform efforts. While we don’t know exactly how the Biden campaign plans to leverage the popularity of rescheduling, it’s going to happen somehow. And Milgram will be under intense pressure to reschedule. However, the Washington Post editorial page suggested Schedule II would be a more prudent option, leaving 280E in place. “Given the risks that remain with marijuana consumption, it seems preferable to be cautious on expanded marketing,” it said. 280E is an unfair tax, but in the eyes of official Washington, ending it would be just another sop to special interests.
While the cannabis world vastly preferred de-scheduling, Schedule III would still be a major advance (both tangible and symbolic) for the industry and how the plant is viewed in society. By contrast, Schedule II would be a devastating setback for everyone who pays pot taxes, and the people who get paid by them. And since neither rescheduling is likely to have much immediate effect on consumers, it might be politically safer for Biden as well. Plan accordingly.
- Green Market Report say the allegations in Trulieve‘s recent lawsuit against former employees highlights a known practice of paying to play for shelf space in Arizona.
- Greenspoon Marder tax attorney Nick Richards suggests industry-hated tax rule 280E could have a little known upside — “the 280E asset” — for business exits.
- Also in GMR, Ben Kovler, CEO of Green Thumb Industries, had to hand over C$52.5M in company shares as part of his divorce settlement. It’s a substantial cut to his voting power at the large MSO.
- Retired alcohol exec turned Canadian cannabiz critic Rob McPherson shared some pungent words after Terry Booth, former boss of operator Aurora, sold millions of shares in the company.
- Hemp lawyer Rod Kight argues, “In the current climate, to be pro-cannabis is to be pro-hemp, and vice versa.” And he suggested the Cannabis Regulators Association (CANNRA) is the “new face of cannabis prohibition.”
State and local:
- A former Michigan regulator, who was previously the states Republican speaker of the house, got 55 months for accepting licensing related bribes.
- Colorado-based Ripple has called for Colorado to end the requirement that Metrc tags contain RFID chips. The proposal would save state businesses millions of dollars a year.
- Las Vegas business WeedGenics faces a federal investigation.
Las Vegas Review-Journal
- New details have emerged in the suspension of Massachusetts’ top regulator, who has called her punishment illegal in a new lawsuit.
- The United Food and Commercial Workers notched the first union win in Utah’s cannabiz, organizing dispensary Dragonfly Wellness in Salt Lake City.
- Missouri’s recall saga will be with us for a while.
- A discrepancy between testing and sales data has raised eyebrows in Montana.
- With only 23 legal shops, New York farmers are struggling, but retail license applications go live this week.
- Chinese immigrant laborers sued after being lured to an illegal facility on Navajo land in northern New Mexico and being forced to trim for 14 hours a day.
- Texas THC-A entrepreneur Jesse Niesen’s posted that his San Antonio store Reggie & Dro was robbed. WeedWeek discussed the store in a recent story.
- Cartoonist Brian “Box” Brown is doing a Kickstarter to turn his Legalization Nation comic strip into a book. His latest strip takes on the mess in New York.
- You can now pre-order “Let’s Get Baked: The official High Times Cookbook.“
Health and science:
- Back from maternity leave, Jackie Bryant thinks about the intersection of cannabis and anxiety.
Fun and interesting:
- @paul.oils recalls seminal 1971 Vancouver pot protest: The Grasstown Smoke In and Jamboree.
- MJBiz has a rundown of key weed bills now awaiting Gov. Gavin Newsom’s signature (or veto).
- SF Gate discusses the industry’s pushback to AB 1207, the bill which would ban pictures of people from weed labels and marketing, including social media. “This is an attack on our identities,” Oakland equity activist and entrepreneur Amber Senter said.
- Distru exec Azam Khan posted about the DCC’s Request for Information for track and trace software. It’s not “a signal from the DCC that they are themselves dissatisfied with Metrc. They are simply putting out the contract since the 5 year mark is about to be up.” Applications were due in July.
- A judge ruled the bankruptcy of Lowell Farms’ former parent The Hacienda Co. can move forward.
Green Market Report
- Jesus Burrola stepped down as CEO of Posibl, which developed Latino-centric brand Humo. WeedWeek has covered the brand’s lawsuit against its former marketing consultant. Hector Salazar, who has been involved with the company, is the new CEO.
- Vertically integrated StateHouse named Zed Schlott, VP of retail.
- Unrivaled Brands named Arturo Sanchez associate general counsel, compliance and David Stogner director of people.
- Lender FundCanna and ERP platform Distru announced a partnership.
- Mary Jones Soda landed in Washington state, where Jones Soda is based.
- Green Horizons, a big new industry campus in the Coachella Valley, announced a $24M financing and said it will soon open its first 100,000 sq. ft.
- The first Cookies shop opened in West Virginia.
- Sessions, the first consumption lounge in National City (San Diego Co.) plans to open in the spring.
- SF sales are sluggish amid market saturation and a drop in tourism.
- Mendocino supes rejected a request for a weed-free zone outside Willits.
- Law enforcement in Placer Co. found an illegal farm that posed an “extreme fire risk.“
- Weed is a leading crop in Shasta County.
- Who’s the supposed “evil genius” behind a pot tax proposal in Sausalito (Marin Co.)?
- SLO Co. could get more pot shops, with longer opening hours.
CannabizTeam hosted a fun Chicago happy hour at venue Chez this week. Here’s boss Liesl Bernard with, from left to right, Terrascend CEO Jason Wild, CFO Keith Stauffer, COO Ziad Ghanem and CannabizTeam’s Rachelle Henning. Shout out to brand Kaviar for distributing samples in Volcano-filled vape balloons, which I hadn’t seen before.
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Correction: This previously referred to CannabizTeam as a sponsor. It hosted the event.