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

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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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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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April 28 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,

Will you be at Hall of Flowers? Do you want to shower me with swag and/or invite me to your party? Drop me a line at alex@weedweek.com 

Next week’s newsletter will be delayed a day to include my HoF dispatch.

Lots to dig into today:

  • Can the LA market recover?
  • “We’re in a very tight spot:” Eaze exec

Our weekly sessions in the Discord will begin in two weeks, I promise.

Alex

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“We’re in a very tight spot,” Eaze exec tells team

Delivery app Eaze’s survival was in question before it acquired Colorado-based retailer Green Dragon, executives told staff in a Zoom meeting this month, a recording of which was shared with WeedWeek.
WeedWeek

The sometimes contentious meeting between the company’s leadership and engineering team offers a rare look inside a major cannabis company navigating consolidation, slowing growth in some states and the many challenges inherent in the federally illegal industry.

As with any merger, the combined company has had to align the companies’ cultures and operations. Green Dragon, which started about a decade ago, had been a profitable family business. Eaze, by contrast, looked more like a tech start-up and was “burning an obscene amount of money,” CFO Trey Handley, formerly of Green Dragon, said.

Employees at Eaze, which handles about one third of legal deliveries in California, took pride in the company’s social equity component and being, what one current employee called…

Read the WeedWeek exclusive

DOGWALKERS

Timber! Treez lands $51M

Under the radar tech outfit Treez raised $51M at a valuation of $260M to expand to new states. The company, which focuses on Metrc markets, offers point of sale software and a suite of other offerings including inventory management, analytics and a plug into a payments system.

Chief Revenue Officer Josh Glantz said the company’s “open ecosystem” software which connects to more than 100 integrations is a competitive advantage compared to some platforms which have a “walled garden” approach. 

MedMen names new boss

SoCal-based MSO MedMen named seasoned retail executive Edward Record as its new CEO. Chairman and outgoing interim CEO Michael Serruya said Record has the “discipline and restructuring expertise” the company needs. MedMen is currently embroiled in litigation against MSO Ascend Wellness Holdings over a New York REC license. 

Desert grow partners with Tommy Hilfiger

California wholesale prices have plunged, but that hasn’t dissuaded new competitors from entering the fray. This month Green Horizons announced plans for a greenhouse and business complex of up to 1M square feet in Coachella. Tommy Hilfiger’s investment vehicle is the founding investor.

Green Horizons co-founder and CEO Carlos “Los” Arias said the company’s forthcoming flagship brand would be at the nexus of cannabis, fashion and sports. Look for it in late summer.

QUICK HITS

Legislation:

Regulation:

Local:

Fun and interesting:

GOING DUTCHIE EDITION

CHART OF THE WEEK

Our new chart of the week features exclusive data from cannatech unicorn Dutchie, on category sales in California this year:

Plus: Data shop Headset shared this tidbit:

  • California saw higher than average sales growth on 4/20 this year compared to other U.S. markets. The median California dispensary experienced 161% sales growth and a 62% increase in average discounts on 4/20 in comparison to the previous four Wednesdays.

NOTABLES

Milestones:

Products:

Job moves:

  • Brothers Steve and Andrew DeAngelo joined the advisory board of Harvest Direct, a biotech company “pioneering lossless cannabis processing.”

Upcoming:

BACK IN BUSINESS EDITION

WEEDWEEK HIGH SOCIETY

Comedian Mike Glazer and Hazy partner Kolin Morgenstern strike a pose at the LA launch party for P&B Kitchen, the new edibles line from Papa & Barkley

Mike Glazer
Photo courtesy of: Papa & Barkley

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