June 9 2022,

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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

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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

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