July 7 2022,

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THE BIG IDEA

Hi all,

High summer is finally here!

As the hot season kicks off we’ve got two stories about brands and a quick look at what the new tax law means for the market.

  • Cali’s top 25 flower brands, and what they say about the market
  • How B Real plans to beat the celebrity brand curse
  • Newsom signs bill ending cultivation tax

As ever, send suggestions, comments, tips, complaints and queries to alex@weedweek.com.

Alex

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NEWSOM SIGNS TRAILER BILL, ENDS CULTIVATION TAX

California’s hated cultivation tax is no more after Gov. Gavin Newsom signed the cannabis trailer bill. While the law doesn’t go as far as some had hoped, it was generally welcomed by an industry desperate for tax relief.

  • Dale Sky Jones, executive chancellor at Oaksterdam University, described the unmourned cultivation tax as especially burdensome to small farmers.
  • By compounding throughout the supply chain, “taxing on the tax” it pushed consumers back to “their dude.” 

“There’s an overall feeling that this is a win,” Vicente Sederberg attorney Andrea Golan said. She added that businesses are keeping a close eye on two provisions in the law: 

  • Whether the state will raise the excise tax
  • The new law also requires companies with 10 non-management employees to commit to a labor peace agreement. The number was previously 20. Penalties up to and including license revocation suggest it will be strictly enforced, Golan said.

The law also:

  • Moves the collection point for state excise taxes from distributors to retailers, eliminating what many saw as a hassle and burden. 
  • Puts new resources into enforcement against the illegal market.

CAN BE REAL BREAK THE CELEBRITY BRAND HEX?

 

B Real (Courtesy Dr. Greenthumb’s)

The newsletter One Weed Please recently asked Headset to pull data on celebrity brand sales and the results came back very clear: No one is smoking it. Only one celeb brand, Seth Rogen’s Houseplant, made the top 100. Cypress Hill’s B Real thinks his Dr. Greenthumb’s dispensary and premium Insane brand can be an exception.

SoCal-native B Real’s arrival in the cannabiz had an air of inevitability. He’s been rapping about the plant since the early 1990s and is one of the movement’s most exalted cultural icons. But unimpeachable street cred hasn’t been enough for Willie Nelson, Bob Marley and plenty of other brands that haven’t lit the world on fire.

I spoke to Dr. Greenthumb’s exec Travis Howard about breaking the celebrity brand curse.

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QUICK HITS

Regulation:

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Health and Science:

CHART OF THE WEEK

As a counterpoint to the Headset story above, the new Chart of the Week shows off how app Jointly uses customer reviews to rank California’s favorite flower brands. Unlike Headset, which taps into dispensary PoS systems, Jointly collects its data from consumers focused on whether a product helped them get whatever they hoped to get out of it.

“Our list isn’t as good at approximating best sellers but best performers,” in terms of consumers’ goals, CEO David Kooi said. “You’d think if it’s performing better for the people who buy it, they’d buy it more.”  Currently pre-revenue, Jointly’s betting some of the data it collects will be valuable to retailers. 

To be included, a brand needed at least 30 ratings from 25 different users:

NOTABLES

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