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

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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

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Job Moves:

Upcoming:

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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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June 9 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,

Coming in late today. Thanks for your patience.

Here’s something super cool that happened this week: Brian “Box” Brown’s Legalization Nation comic strip featured our recent story about the draft of a deal between Shryne Group and a social equity partner in Oakland.   

In the newsletter:

  • Two tech startups changing how weed gets sold
  • A reprieve in Sacramento

Enjoy,

Alex

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Correction: Last week I incorrectly said Big Pete’s Treats is one of the portfolio of brands at sales and marketing firm PetalFast, which works with distributor Nabis. Big Pete’s no longer works with Petalfast and is distributed by Herbl.

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SILVER LINING IN SACRAMENTO

Amber senter
Supernova Women executive director Amber Senter speaks at the capitol on Thursday. (Courtesy: Supernova Women)

In May, Gov. Newsom’s budget blueprint zeroed-out the hated cultivation tax but proposed raising the excise tax from 15% to 19%, a move the industry strongly opposes.  

The state legislature’s proposal, which dropped last week, is “far more preferable” to the cannabiz, lobbyist Amy Jenkins, president of Precision Advocacy said.

  • The document includes concepts to be detailed in the state spending bill, which has to pass by midnight on Wednesday, or budget trailer bills where there is an “informal expectation” that they will pass next week, Jenkins said.

The key thing is the it would keep the excise tax at 15% for three and a half years with the potential for it to stay there indefinitely.

Additionally, the legislative document calls for:

  • Relief for social equity businesses. Jenkins said she’s hearing about a provision being drafted that would create a $20M set- aside for social equity businesses based on a tax rebate or credit. She speculates that it might only apply to retailers, who would take over the role of collecting the excise tax, now handled by distributors. 
  • Additional worker protections
  • Stepping up enforcement against illegal operators. 

Also happening in the capitol:

Equity group Supernova Women held a rally Thursday on the capitol steps to condemn Gov. Newsom’s proposal.
East Bay Express   

  • “My great-grandfather was a sharecropper who bought his own freedom,” said Morris Kelly, CEO of SF Roots dispensary. “That’s the dream BIPOC California operators bought into with Prop 64, but the 26% increase in the excise tax will kill this dream.”

Plus:

DOGWALKERS

Silver Spike Capital co-led $170M loan to Shryne

Touted as one of the biggest debt instruments ever made available to a cannabis company, Silver Spike Investment Corp. co-led a loan worth up to $170M to Shryne Group, the vertically integrated parent of vape brand Stiiizy. The interest rate and the other lenders were not disclosed. Silver Spike previously created the SPAC with merged with Weedmaps to go public.

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County of LA, Public Health

LA city council votes to join county “emblem” program

Licensed dispensaries in LA have a new way to show they’re above board: a sign to display in their windows. Approved businesses would also have to provide a handout with health info and inspection results. The city council passed motion instructs the city attorney to write an ordinance, with the program likely to launch this year.

QUICK HITS

Business:

Local:

Health and science:

Fun and interesting:

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CHART OF THE WEEK

California’s weed deserts may be slowly shrinking, but they’re still out there. The new Chart of the Week draws on WeedWeek Maps data to highlight the state’s biggest cities without an open dispensary.

California’s biggest cities without a dispensary

 

NOTABLES

Company milestones:

Job moves:

Local:

Upcoming:

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