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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September 8 2022,
THE BIG IDEA
Happy fall and greetings from WeedWeek’s new HQ in Long Beach, California.
Let’s get to it:
- Exclusive: We tested top Calif. prerolls for potency inflation
Plus lots more.
I’ll be at the Benzinga conference in Chicago next week. Say hello.
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WHAT YOU MISSED IN WEEDWEEK CALIFORNIA PRO
A WeedWeek test of seven California preroll brands suggests potency inflation is close to ubiquitous in the product category.
- The seven brands we tested include some of the top selling brands in California: El Blunto (Albert Einstone’s), Field (Glass House), Jeeter (DreamFields), KingRoll (StateHouse), Lowell, Pacific Stone and Raw Garden.
Of the seven brands (and nine total products) included, all of them tested below the THC levels on their label. The implied potency inflation on various products ranged from 14% to more than 500%.
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UP TO SIX STATES COULD LEGALIZE IN NOVEMBER
The Hill looks at the six states that could legalize in November:
- South Dakota’s bill would legalize without creating a market. The idea is to avoid the lawsuits that killed the REC initiative the conservative state passed in 2020.
- Arkansas’ board of electors recently derailed a REC initiative, but activists are taking it to the state supreme court.
- Deep blue Maryland is voting on a REC constitutional amendment that would bypass Republican Gov. Larry Hogan, who is ambivalent on legalization.
- Missouri’s REC proposal, like Maryland’s, would expunge some past pot convictions. The Kansas City Star has more.
- MED state North Dakota is likely to vote on REC.
- Oklahoma’s Supreme Court could put off the REC vote.
- NORML’s Paul Armentano criticized Nebraska’s Supreme Court for killing a MED ballot initiative.
- Politico discusses why weed companies still can’t make money.
- E-cigarette brand JUUL was ordered to pay a nearly $500M fine to resolve an investigation into whether it marketed to youth. Some saw the smaller than expected fine as a good omen for the cannabiz.
- MJBiz looked at the rivalry between trade groups U.S. Cannabis Council and National Cannabis Industry Association.
- A poll found, for the first time, that more Americans smoke weed than cigarettes,
- Green Sentry CEO Brady Cobb discussed buying out MedMen in Florida.
- Abner Kurtin, CEO of MSO Ascend Wellness, was charged with battery in Miami.
The Deep Dive
- The U.S. SEC is suing Instagram celebrity Dan Bilzerian’s Ignite International brand to compel compliance over a subpoena involving potential accounting fraud. The company says it’s also being investigated by the U.S. Justice Department. Read the complaint. (Legal research supported by Unicourt.)
- NFL great Jim McMahon discussed his brand.
State and local:
- The LA Times has a big story on the illegal market’s vast scope and related environmental and labor problems.
- Grown In checks out a grey-area pot mecca on the New York/Canadian border.
- I reported on armed officials conducting unannounced water inspections in Humboldt County.
- Oregon released proposed rules for its new psychedelics program.
- San Francisco decriminalized psychedelics.
Health and science:
- Among all types of agriculture, a study found wildfires are particularly detrimental for weed.
Fun and interesting:
- @_chaseh_ used AI to manifest Dark Brandon legalizing it.
- Low dose beverage Cann raised several million from adult beverage fund InvestBev.
- Uncle Arnie‘s parent Fly Beverage is expanding to Oregon.
- Cookies Miami had a big first week. It’s owned and operated by TRP.
Respect My Region
- Cookies is also opening a branch of its Lemonnade retailer in Denver.
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May 6 2022,
THE BIG IDEA
Here’s my dispatch from Hall of Flowers.
Next week, don’t forget, we’ll be starting Thursday morning conversations in WeedWeek Discord, a few hours after the newsletter drops.
- Fun at Hall of Flowers
- Seven brands with interesting business models
Send tips, press releases, concerns, feedback and criticism to email@example.com
FUN AT HALL OF FLOWERS
Wrestling, is fake, but up close it looks and sounds real. Surrounded by a tight circle of cheering budtenders, it had a frisson of fun and daring that similar stunts rarely do.
Cannabis is more fun, and to my mind more appealing, when it doesn’t take itself too seriously. So in a market where the overwhelming mood is doom and gloom, it was refreshing that everyone at Hall of Flowers seemed eager to shake the pandemic and enjoy themselves.
Wellness seemed to be on the back burner. Instead brands like Moxie and Papa’s Herb brought fresh, contemporary takes on classic American motifs. Korean-inspired streetwear brand Sundae School delivered a natural extension with Mochi gummies. And Pure Beauty raised eyebrows with its menthol cigarette joint. (Menthol tobacco cigarettes could soon be banned nationwide.)
- Nor did I detect much pot snobbery. No one was bashing wedding cake clones.
The good mood might also reflect that the operators able to attend Hall of Flowers represent only a small percentage of the market.
Rashaan Everett, founder and CEO of delivery company Good Tree, said the event, with the company’s hot pink booth in the baking sun represented an outlay of $100,000 which he hoped to make back with 33 orders of $3,000. Plenty of companies aren’t in a position to take that kind of risk.
- The delivery service, which operates in SoCal, the Bay Area and Sacramento is the biggest equity business in California, with 200 employees, and perhaps the country.
Seven brands with innovative business models
Filings suggest more upheaval at TPCO
Michael Bowen, a financial industry veteran and must-follow on LinkedIn for news dug out of SEC filings, notes that California operator TPCO “had to pay off [departing] COO [Dennis O’Malley] to stay quiet.”
Also noted in the filing, (and by Bowen) three TPCO directors are departing: Former Yahoo CEO Carol Bartz, former Barracuda Networks CEO Jeffry Allen and Desiree Perez, CEO of Roc Nation.
- Perez was effectively Jay-Z’s representative on the board.
- TPCO did not respond to a request for comment.
WeedWeek recently explained why the company wrote down $654M last year.
Another question about Fresno licensing
The San Joaquin Valley Sun recently obtained a letter which shows former major league pitcher Matt Garza, the local owner of applicant Authentic 559, contacted Mayor Jerry Dyer (R) in violation of a clause prohibiting contact between applicants and relevant officials about their application.
- A social equity applicant was disqualified for breaking the same rule. A city spokesperson didn’t respond to requests for comment.
Without any dispensaries open, Fresno isn’t collecting pot taxes.
- During its quarterly earnings call, Weedmaps said it had acquired Enlighten, a provider of in-store advertising and menus.
- Capitol Weekly reports on the state industry’s growing impatience.
- LA Business Journal reports on SoCal dispensaries’ fight for survival.
- Las Vegas-based Flower One said there’d be a delay with its 2021 financial reporting.
- Nevada consumption lounges won’t allow alcohol, at least at first.
Fox 5 (Las Vegas)
- A paper from the libertarian Reason Foundation argues eliminating California’s cultivation tax would double tax revenue.
- Lindsay Maharry shares her favorite organic strains.
- The state senate governance and finance committee advanced SB 1336, a labor-supported bill which would offer cannabis businesses tax credits equal to “employment compensation, safety-related equipment and services, and employee workforce development and safety training.”
- Three quarters of California’s nearly 13,000 licenses are still provisional, a sign of backlog at DCC.
North Bay Business Journal
- A federal judge threw out claims that corrupt law enforcement officials conspired to extort Mendocino Co. growers.
- The Modesto Bee checked out “Weed Week,” five days of raids on illegal operations in Stanislaus Co.
- Trinity Co.’s fabled growers are frustrated with the county licensing process.
- Carnaval SF, over Memorial Day weekend, could be the first California street fair with legal sales and consumption.
- Los Gatos, near Silicon Valley, is considering a plan to allow dispensaries.
- Manhattan Beach (Los Angeles Co.) residents could face dueling ballot measures in November on whether to allow dispensaries.
The Daily Breeze
- MJBrand Insights checks out West Hollywood’s new Emerald City tourism initiative.
- The Santa Barbara County Planning Commission will have a May 11 hearing on whether to change the required permit for commercial cultivation from a Land Use Permit to a stricter Conditional Use Permit. Meanwhile, oversupply has dragged on pot taxes in the county.
Santa Maria Sun
- There will be a May 18 hearing in Concord (Contra Costa Co.) to discuss a dispensary hopeful.
Fun and interesting:
- LA’s pot-smoking moms are tired of being judged.
CHART OF THE WEEK
This week’s data, from point of sale software provider Cova, looks at 4/20 sales across its shops in two big SoCal counties. Recent same store growth looks especially strong in Riverside.