The WeedWeek California Pro newsletter

Every Thursday morning the newsletter delivers exclusive reporting and analysis about what’s happening in the California market and why it matters for your business.
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March 30 2022,

TOGETHER WITH

Promotion from MATTIO Communications

We are excited to introduce MATTIO+FIORE Media, a best-in-class 360° full-service agency specializing in cannabis companies.

To learn more, click here!

SOMETHING NEW...

THE BIG IDEA

Hi all,

We’re excited to introduce the first issue of WeedWeek California Pro, the only publication for people who make money in the world’s largest cannabis market. 

In this new newsletter, I’ll deliver exclusive reporting and analysis every week. Subscribers will also have access to our new, interactive tax and licensing maps, powerful tools to help you better understand the Golden State’s $5B+ cannabiz. 

Check it all out with a two-week trial for just $1

And don’t worry, we’ll still publish the free WeedWeek newsletter on Fridays.

Thanks for reading. I hope you find it valuable.

Alex

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Send tips, press releases, concerns, feedback and criticism to hello@weedweek.com

SHAKE UPS

LA SET TO OVERHAUL LICENSE PROCESS

LA’s Department of Cannabis Regulation held a webinar yesterday on forthcoming changes to the city’s cannabis ordinance.

Built on top of entrenched grey and illegal markets, the city known as the world’s largest market has struggled with a host of challenges since the California REC market opened in 2018.

  • Cat Packer, the department’s first executive director stepped down in early March. Her former deputy Michelle Garakian has the reins on an interim basis.

Largely in response to frustrated applicants, the city began an ordinance review process in September. Among other goals, the new draft ordinance aims to clarify and accelerate licensing, with an emphasis on ensuring a smoother process for social equity applicants.

Among its proposals:

  • A lottery, probably next year, would determine winners of the “phase 3, round 2” process for social equity applicants seeking retail licenses.
  • They no longer have to be holding the property to apply for a license, but the definition of who qualifies as a social equity applicant is narrower.
  • City cultivation licenses would be reserved for social equity applicants through January 1, 2025.
  • Emily Hackman, a license specialist with law firm Vicente Sederberg, said one big takeaway is DCR would have to meet codified deadlines for responding to applicants 

The new ordinance could be approved by city council as soon as April, but they will also have opportunities to modify and delay it. 

See the city’s presentation here.

BILL PROPOSES BIG YELLOW WARNING LABELS

State Sen. Dr. Richard Pan (D – Sac.) is holding a virtual press conference today to support SB 1097, the Cannabis Right to Know Act. It would require cannabis products to carry big yellow warning labels.

If the bill passes:

  • One-third of packages would have to be covered with warnings about DUI, use during pregnancy and cannabis’ potential to contribute to mental health problems, especially when THC is consumed frequently or in high doses. 
  • One of the messages would say: “WARNING: Buy Legal! Illegally sold cannabis is more likely to contain unsafe additives or harmful contaminants such as mold or pesticides.”

The California Cannabis Industry Association opposes the bill.

In a March 25 letter to Sen. Richard Roth, (D-Inland Empire), chair of the Committee on Business, Professions and Economic Development, CCIA executive director Lindsay Robinson argued the bill would:

  • Create additional regulatory burdens for an industry that has its share
  • Be redundant since products already have “significant and effective warning labels”
  • Lead to increased landfill waste and carbon emissions
  • Do nothing to reduce demand for illegal product

The bill’s supporters include the American Academy of Pediatrics, the American College of Emergency Physicians and the American College of Obstetricians and Gynecologists.

  • California ER visits with cannabis as the primary cause have increased from 9,793 in 2016 to 14,999 in 2019.

Dr. Lynn Silver, a pediatrician and senior advisor to with Getting It Right From the Start, a program by of the non-profit Public Health Institute, which promotes public health and equity on cannabis policy called the labels a “very low cost intervention.” 

  • “I think it’s in the interests of the cannabis industry for consumers to have safer positive experiences and to avoid adverse experiences,” Silver said. 
  • She expressed optimism that the bill would pass. “We hope to have the support of the cannabis industry as well.”

EQUITY

SAN DIEGO CO. BEGINS LISTENING TOUR

San Diego County, the second most populous in the state, also has one of the lowest concentrations of dispensaries (See chart below). Now it’s seeking to develop an equity program and crack down on the illegal market. 

This week a company contracted by the county, Womxn’s Work Consulting kicked off a listening tour to discuss what equity could look like.

  • Aside from familiar equity issues, participants made intriguing, but unlikely suggestions like community cannabis gardens, farmers markets and government purchase quotas.  
  • Womxn’s Work is also conducting a community survey on what equity should look like and who should benefit. The responses will inform how the county shapes the program.
  • The listening tour continues Saturday at 10 a.m. You can tune in on Zoom

QUICK HITS

Politics:

Regulation:

Business:

Fun and interesting:

WEED DESERTS HO!

CHART OF THE WEEK

Our first chart of the week digs into WeedWeek‘s maps and state data to find the California counties with the fewest retail licenses per person, (storefront and non-storefront).

The graph takes us from Los Angeles County, where 328 active licenses amounts to just one per 30,000-ish people to Placer County which has one active license for its population of just over 400,000 people. It’s Golden State Patient Care, in Colfax, in case you’re hard up. 

  • To be included, a county had to have at least 1 pot shop and 100,000 people.

NOTABLES

Company Milestones:

Job Moves:

Upcoming:

Send your milestones to hello@weedweek.com

VAPE IT UP EDITION

WEEDWEEK HIGH SOCIETY

Collin Palmer, head of formulations at PAX with Chris Sayegh “The Herbal Chef,” and PAX COO Steven Jung smile for the camera at a tasting event for PAX’s new Live Rosin with Natural Diamonds vape pods.  Sayegh hosted the event at Nostalgia Bar & Lounge, his restaurant in Santa Monica. 

Pax
Photo by Kaitlin Parry @shootpeople_ , Courtesy of PAX

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July 7 2022,

TOGETHER WITH

Promotion from MATTIO Communications

We are excited to introduce MATTIO+FIORE Media, a best-in-class 360° full-service agency specializing in cannabis companies.

To learn more, click here!

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:

Business:

Local:

Criminal justice:

Nevada:

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

Company milestones:

Job moves:

Upcoming:

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