THE CANNABIS TRENDS WE’RE LEAVING IN 2023

As 2022 comes to a close, we again look back at one of the most brutal years ever on both sides of the cannabis marketplace in California. 

And I assure you, that is no exaggeration. On the recreational side, more and more farms went under or simply chose not to plant a crop this year. And those are the moms and pops feeling it — not those with cash reserves to burn while they wait for more shelf space to open up across the state and beyond its borders in the not-too-distant future. 

But those without a permit had plenty to gripe on as well. At one point during the harvest, you could get machine-trimmed pounds for $50 a pop. This stuff would have been worth $1,200 to $1,500 a decade ago. It’s not the heat by any means, but it’s still shocking. The underground market is also prepping the transition of enforcement next year from the CAMP program to rebranded EPIC program. The big difference? Private parcels will face much more scrutiny in 2023 compared to CAMP’s targeting of public lands much of the time. A lot of people really needed a good one this year because of this. Despite the perfect conditions, they faced a flooded bottom-dollar market come harvest. 

Things We’re Leaving Behind in 2022

Nepotism-Based Shelf Space 

As the cannabis industry continues to do circles around the eye of the storm with people falling off the ship left and right, now is not the time to play favorites for shitty reasons. The main determining factor that should go through your head before you stock an item is whether it’s the best you can do for whatever tax bracket you are trying to serve with the said item. That’s regardless of whether you’re talking discount eighths or the mountaintop, purchase from the same ethos. Screw the free doughnuts; never buy cannabis products because someone brought free doughnuts — you’re going to have a bad time. 

Getting Shot Over Big Piles of Money

As we exit 2022, the cannabis banking situation still hasn’t been figured out. It looked like it had a chance a couple of weeks back, but it fell short without the support or at least ambivalence of Senate Minority Leader Mitch McConnell. The industry currently finds itself in two camps at the moment. The first is those that wanted bank accounts yesterday for their own personal safety and that of their staff. The second is those who want it as a bargaining chip to protect social equity in the national legalization debate to come. Both are great takes. Hopefully, it happens soon for the sake of nobody getting murdered over weed money. But given what happened in the Senate, we’re probably not all going to make it alive, so be careful. 

Overproduction

There are few things that can devastate the market price of a commodity quite like overproduction. It’s a huge factor on both sides of the marketplace. On the recreational side, it has created a race to the bottom. The “top shelf” just under the true exotics is getting cheaper and cheaper, as people edged each other out 50 cents at a time to get us to this current bummer. On the illicit side, a ton of that oversupply on the recreational side finds its way to the streets. And it doesn’t have a home as it did in the past. That part is thanks to how many places have become less sketchy to grow. Why fly a box in from California when you can drive home from Maine or Oklahoma? Overproduction is the biggest factor in those $50 pounds we mentioned earlier, too. 

CA QUARTERLY POT TAXES DIP $95 MILLION FROM 2021

California’s quarterly cannabis tax revenue dipped $95 million from Q4 2021 compared to Q4 2022. 

On Wednesday, The California Department of Tax and Fee Administration (CDTFA) reported cannabis revenue today for the fourth quarter of 2022 totaling $221.6 million; these numbers are always adjusted when the next quarter comes out. So we’ll have the final number in a few months, but regardless, the $108 million in excise tax collected and $113.6 million in sales tax revenue from cannabis businesses will be a monster dip from 2021.

When the final numbers for the last quarter of 2021 were released in 2022, the number climbed from $308 million to $316.59 million. That figure includes $160.64 million in excise tax, $39.99 million in cultivation tax, and $115.96 million in sales tax. 

The $95 million in lost taxes represents a 30% dip in cannabis revenue for Q4 2022 compared to the same quarter a year prior. This revenue loss also is up from the $82 million loss in comparison of Q3 2021 to Q3 2022. 

The quarter-to-quarter dip wasn’t as bad, but still pretty brutal. The numbers for Q3 2022 were revised to $251.3 million. This represents a $30 million dip in Q4. The revenue dip from Q4 2021 compared to Q3 2021 was $25 million. The dip in revenue this year was roughly 20% larger than in 2022. 

Some would be quick to point to a halt in the cultivation tax for the loss, but lawmakers only expected to lose $150 million on that over three years. Sure they lowballed it, but there have to be other places the tax dip is coming from too.

We asked Kyle Greenhalgh of Heritage Mendocino if he felt like the dip in taxes was from brands going under.

“I think in general, people got broke in California and weren’t spending as much in the stores as they used to,” Greenhalgh told L.A. Weekly, “I know we still see the same amount of door swings, but a quarter of the spending of what it used to be. People were buying their needs, not their wants. So I think a bunch of dispensaries went to a value-driven model, but I see spending and higher quality bouncing back.”

Greenhalgh watched the shop’s average spend go from $100 to $20 really fast. He thinks people had to choose from buying gas at the gas station, or cannabis, and gas to get to work won that battle. 

“This in turn made it very hard for most big corporations and brands to make a profit, and the exit started to happen. I’m seeing a lot of success and movement now for more of the smaller and craft brands though,” Greenhalgh noted. 

Michael Katz of the Mendocino Cannabis Alliance broke down the $95 Million dip in revenue a bit further. 

“Overall, the dip in licensed cannabis tax revenues appears to be driven mostly by a small reduction of sales tax compared to the big hits to excise tax and the removal of the cultivation tax last year,” Katz told L.A. Weekly. 

He notes the tax dip spread across the supply chain and unfortunately did not provide the level of direct relief for which cultivators had hoped for. 

“Big picture I’d say that reduced sales are still primarily due to the high taxes levied on licensed products,” Katz argued. “As inflation has forced people to spend more and more on even the most basic of necessities, it becomes harder and harder for them to justify spending two or three times as much for licensed cannabis products. At the same time, there’s a significant amount of unregulated and untaxed cannabis retail throughout the state, offering product that looks ‘legal’ but costs a fraction of the price.”

Katz closed by noting, as long as the taxes remain high, most consumers who have less money in their pockets will be incentivized by their bottom lines to shop outside of the licensed market.

With annual surpluses coming to an end in 2022, the state will look to figure out how to replace that $95 Million.

PUFFCO AND ARIZONA DROP CUPSY COLLAB FOR 4/20

In one of the season’s most unexpected 4/20 collaborations, Puffco and AriZona Beverages are dropping an ice-tea homage edition of the Cupsy. 

We have to admit the kings of digital dabs are dropping a collaboration with the 99-cent beverages of my childhood that were not on my bingo card for the holiday season, but we’re ready to party. 

“Puffco has long admired AriZona’s unwavering quest to bring affordable, great-tasting beverages to the masses, and we see a lot of synergy in the way we develop our products to celebrate the beautiful flavors of the cannabis plant,” said Roger Volodarsky, CEO and founder of Puffco. “This creative effort is all about marrying our innovative design with AriZona’s iconic cherry blossom print to offer another pathway for people to enjoy a cannabis experience that emphasizes taste.”

The Cupsy is a highly effective stealth smoking apparatus The original looks like a standard coffee cup, so you can just leave it in your cup holder and take bong loads at work all day without anyone looking in and seeing anything sketchy. Not that bongs are sketchy, but there are some square bears in our midst!

Puffco describes the Cupsy as a revolutionary design that pairs an unassuming everyday object with a high-performance cannabis bubbler system. A fair take. While I’m more of a glass tube guy, the Cupsy certainly was a ripper when I took it for a test drive after the original dropped roughly a year ago. 

The AriZona Edition of the Cupsy is a lot more vibrant than its stock predecessor. That being said, at first glance, it’s still going to be pretty tricky. It’s got those vibrant pastel colors that make you think of Easter, if you’re not too busy thinking of ice tea. Generally, it’s a refreshing color palette compared to most of the space. The clear glass cup with the iconic AriZona logo on it also is a nice switch from the stainless steel wrapped in plastic in the original. The glass will still be a breeze to clean. 

“Everything we do is built on taste. From our label design, to creating great quality products. At AriZona, our customers are our single biggest inspiration,” explains Spencer Vultaggio, chief marketing officer at AriZona Beverages. “Our mission is to bring customers a memorable experience: from ingredients, to unique merch. Puffco is another Brooklyn-born company that is deeply passionate about pushing the boundaries of design, flavor and accessibility, and that’s why we are excited to bring this collaboration to fruition.”

Adding to the fun? This is a true collector’s edition item. Puffco will only be producing 420 of these collaborations in honor of the holiday. It’ll likely be a must-grab item for the real cannabis accessory enthusiasts given how out of left field the collab feels like when you first read about it. 

There also is an argument to be made about just how functional the Cupsy design is. There are not a lot of options that short that offer the same quality of percolation. While we’d love to see the bowl grow a little in the next rendition, the Cupsy is firmly planted on our stealth smokers list. 

Puffco did this drop to coincide with the 4/20 holiday season, but they also drop new gear year-round. We recently featured the new Wizard attachment for the Proxy on our 4/20 list. It’s one of the best examples of what’s possible at the production scale with the modular system of the Proxy. 

I wouldn’t be surprised if these end up selling out in just a day. Puffco SMS users will get a half-hour head start over the nonbelievers at 9 a.m., on 4/20.

THE ROAD TO LA STARTS: THE EMERALD CUP HARVEST BALL

The rain could not stop the heat at the second annual Emerald Cup Harvest Ball in Santa Rosa. 

The event serves as the kickoff to cup season with the winners getting crowned in roughly six months in L.A. at the awards show. This weekend had traditionally served as the whole show for years, before the new format. The quests of farmers looking for next year’s hottest genetics, the chance to survey the harvest, and the awards show were all crammed into one action-packed weekend over 17 years that continued to get larger and larger. 

With the awards show still months out, the weekend now focuses on the cannabis of the moment and seeds. The seed and genetics part can’t be overstated. In more recent years we’re even seeing tissue cuttings available for farmers terrified of the dreaded Hop Latent Viroid, commonly known as HLVd. Cuttings with HLVd have been the downfall of mega nurseries people were convinced were here to stay. But regardless of the high-tech stuff, the regular seeds and cuttings called clones are a huge part of the show.

We were reminded of this when we walked in the gate on Day One. Emerald Cup Competition Director Victoria Shea grabbed me out of line just before gates opened so I’d make it to the judges’ meet-and-greet on time. The public hadn’t even been allowed in yet and there were already lines at the Compound Genetics and Purple City Genetics Booths as their peers participating in the Harvest Ball queued up to get the latest and greatest genetics from both. That wave of people on the hunt would increase tenfold once the gates opened up. 

And those who weren’t looking for cuts were looking for great cannabis or trying to convince people they had it; plenty did. 

Our Favorites

Higher Heights from Comptche, California, had a lovely spread. The two standouts for us were the Carambola and the Purple Candy Cane. The Purple Candy Cane was a bit more complex on the nose. 

Pacific Cultivation was another absolute banger spread for 2022. Everything came out awesome, but it would be criminal to not highlight the Hippie Crasher. The pairing of Kush Mints and Wedding Crasher was among the finest offerings at the whole harvest ball. The Caked Up Cherries was our second favorite from the Pacific Cultivation lineup.

Pacific Cultivation

Humboldt Seed Company had their new Jelly Donutz collaboration with Casa Flor on display. You could certainly smell the sugary goodness some people like to start their mornings with. 

Moon Valley Cannabis’s Wine Country-grown pot also was pretty awesome. The standout for us was the Grapes and Cream, but the Zlurpy was very competitive, too. We could see people leaning in that direction for sure. 

Moon Valley Cannabis

Bigfoot Cannabis Co’s rendition of Gelato 41 was stunning. It was one of our favorite versions we have ever seen that wasn’t indoor. The only one nicer won the Cannabis Cup in 2018. 

Fidel’s spread was as top-class as to be expected. It included the KMZ that won the Transbay Challenge I hosted in Los Angeles this past August. The blend of Kush Mints and zkittelz is a flavor profile in its own league. 

Fidels

One of the loudest jars of the day had to be the Garlotti from Good Good. Once you cracked it open, you were hit with an explosion of garlic terps so strong your eyes and sinuses might water up a bit. But don’t worry, that’s definitely a good thing. 

Garlotti

Sun Roots Farm’s Velvet Papaya won the contest for the thing I think we’ll have the best shot of smoking in a hash format. The terp-loaded strain was said to produce a decent amount of the resin you need to make hash, which essentially is collected plant resin.

Art courtesy of The Freak Brothers

THE FREAK BROTHERS TEAM UP WITH WEEDMAPS FOR SEASON 2

Former LA Weekly cover boys, The Freak Brothers, are teaming up with Weedmaps for in-episode integrations for cannabis enthusiasts, starting with the launch of Season 2 today. 

The Freak Brothers have been getting laughs out of cannabis enthusiasts the world over for 55 years. Thanks to WTG Enterprises, the producer of The Freak Brothers and Fox’s streaming platform Tubi, more people than ever have access to the trio’s cannabis-fueled adventures alongside their talking cat. 

The production value of the first season was way beyond most cartoons. In addition to great animation, the voice cast featured Woody Harrelson, John Goodman, Pete Davidson, Tiffany Haddish, Adam Devine, Blake Anderson, Andrea Savage, La La Anthony and ScHoolboy Q. All of those big names are returning and they’ll be adding Joe Sikora to the mix for a special guest appearance.

Weedmaps, one of the most recognizable names in cannabis, is obviously hyped to be in this effort to help further cannabis into the mainstream. The announcement noted the actual partnership itself will consist of in-episode integrations in the new season, as well as exclusive “Smoke & Screen” events throughout the U.S., bringing together industry influencers and tastemakers at the intersection of cannabis and entertainment.

“We know comedy has the power to influence culture, and we are excited to partner with The Freak Brothers to amplify our message that weed is something to be celebrated,” said Randa McMinn, chief marketing officer at Weedmaps. “Since our company’s founding, Weedmaps has been committed to elevating stoner culture everywhere, challenging outdated stereotypes and bringing the plant to the forefront of mainstream conversations. Now, 15 years later, to see the Freak Brothers’ characters themselves embrace Weedmaps as their ‘go to’ for weed in the series is indicative of society’s broader acceptance of the plant and the industry at large.” 

The team that brought Gilbert Shelton’s creation to the small screen has no qualms about the brothers using Weedmaps to get their hands on their next score. 

“Embracing the essence of stoner culture before it was mainstream, Freak Brothers and Weedmaps are united in blazing the trail toward a more inclusive and enlightened cannabis landscape” said Greg Goldner, chief  brand & strategy officer of The Freak Brothers. “We’re excited about this partnership as it’s a convergence of the psychedelic past and the digital present, where entertainment meets connection through a shared love for cannabis, while helping shape a future where cannabis culture thrives unapologetically.” 

The antics for Season 2 look to be right on par with The Freak Brothers’ previous adventures in adapting to the modern era following a 50-year nap in San Francisco. The creators noted when announcing the deal that this season will include The Freak Brothers hitting their high school reunion, a match of wits with Mark Zuckerberg, settling old scores with Mitch McConnell, and battling Seth Rogen in a Pot Brownie Bake-Off contest.

WTG develops media across multiple platforms from its Beverly Hills office. WTG was founded by studio executives and Hollywood producers Courtney Solomon and Mark Canton and led alongside veteran entertainment executive Greg Goldner.

Back before the rights were secured, Solomon spent months trying to find Gilbert Shelton. After six months of searching for Shelton, Solomon was able to track down Shelton to the outskirts of Paris thanks to his lawyer of 47 years. “Super nice guy named Manfred, and he set up the meeting and I flew out to Paris and spent a couple of days with Gilbert,” Solomon told L.A. Weekly in 2020.

The Freak Brothers Season 2 is free to watch on Tubi. And be sure to keep an eye out for special offers from WeedMaps during the episode. 

VITAL GARDEN SUPPLY PROVES ORGANIC CANNABIS IS SCALABLE

Photos by Jimi Devine

VITAL GARDEN SUPPLY PROVES ORGANIC CANNABIS IS SCALABLE

JIMI DEVINEMAY 11, 2023

The team at Vital Garden Supply continues to prove cultivating organic cannabis is very much possible at scale. 

As mega gardens have become more prominent and significant in the wake of Prop 64’s passing seven years ago, people wanted more shortcuts to go with the scale of their operation. Many didn’t care much what was in it if it passed testing and made their lives easier. Much of the time because they weren’t smoking it themselves. 

Brian Malin from Vital Garden Supply is the exact opposite of that ethos. Since 2006, Vital Garden Supply has provided California gardeners of all kinds with the means to grow things organically. But, of course, the company holds a special place in the hearts of cannabis farmers, to the extent that when the state said it was time to create a mechanism to certify organic cannabis farming in California, they called Malin in to help write the rules for the OCal program.

Pacific Reserve in Salinas.

This week we got to visit Pacific Reserve’s farm in Salinas. The garden was founded by Andy Demico, Billy Tomlinson, Brook Eagle, Bryce Heart and Malin. Most of the group of founders met in Grass Valley or Santa Cruz by using Malin’s products. 

Malin is deeply connected to the farm. Not only does it serve as the largest visible example of what’s possible organically with his products, but his son spent the last few years climbing the ranks through compliance and processing to become cultivation director. 

Malin went on to note there are other big farms using his products, but as of right now, the Pacific Reserve facility is going the hardest with them. Lots of people use Vital’s cocoa and other baseline nutrients to build out their own programs that may not end up totally organic. 

“But Pacific Reserve is 100% on the program, we have other full sun ones that are maybe a couple of acres that are probably similar,” Malin told L.A. Weekly at the farm. 

The group inspects a La Bomba x Oreoz pheno hunt.

We asked Malin when a company like Vital went from serving smaller-scale operations to the mega-farms of the modern era, too.

“Well, it was a slow and steady climb from 2006, that was the first year,” Malin said. “Here we are 17 years later, I’d say the last 10 we’ve been handling some pretty good scale stuff. I think the first really big customers were when these guys first had the place across the street and Crockett’s place. That was like 2,000 yards of soil. It was sweet.”

Malin was never thinking in terms of 10,000-square-foot greenhouses when he started. It was more like he felt he needed to start it to help supplement his own grows and more on a local scale. 

“So I definitely didn’t think of it turning into what it did. It’s pretty crazy,” Malin said. “People are using it now, using around not necessarily the whole world, but definitely all over the U.S. and the Caribbean on the islands. And it’s all clean and organic. So it helps me sleep well at night, knowing I’m like teaching good practices and cutting down on the use of other products that aren’t as good for the planet.”

La Bomba x Oreoz

We asked Malin how he balances growing the company and putting in the work in the garden that’s helped get it this far. He pointed to a combination of intuition and urgency, then laughed, noting it was basically whichever seemed the more important of the two on a given day. 

Recently Pacific Reserve’s parent company Kolaboration Ventures Corporation (KVC) bought Massive Creations and brought on breeder Shiloh Massive as its new head breeder. 

“Shiloh will use the large cultivation and nursery footprint of KVC as the backbone to breed, select these unique cultivars and bring them to market in a wide variety of consumer products,” the company noted when announcing the deal earlier this week. 

Massive joined us in Salinas for the day and explained that his original dealings with Malin saw him first visit the farm in 2016. Originally he gave them some cuts to mom out so he would have plants to back his work as Massive Creations continues to expand. 

“So it was like kind of a no-brainer to let these guys have some proprietary genetics to run,” Massive told L.A. Weekly. “And then I could tap out and get some like clones from them to entertain other parties.” 

A recently harvested room.

It went well. The relationship continued to grow, the farm wanted to run more of his great, and eventually, it got to the point where they acquired Massive Creations and brought Shiloh in-house. 

“It was a long way, but a short time,” Massive said. “It just kind of happened almost overnight toward the end.”

Massive went on to note how fitting the whole thing was given his long history with Vital.  

“I worked in the Vital warehouse. I drove the forklift. I loaded trucks. All the seeds I’ve ever made have been made with Vital since it was ever a product, so it was just a natural fit,” Massive said. “Brian and I have been friends for a long time.”

Since coming on board, Massive has watched the rooms begin to be transitioned to a fully organic program, room by room. Each of those rooms is the size of a small aircraft hangar, so it’s a delicate process, so as to not screw up any production runs. 

That being said, the team swears by the recent results. 

“Everyone is amazed because the last salt run didn’t look too good,” Massive said. “And now the first organic runs are looking amazing. So it just kind of proves what we thought all along that organic cannabis was, I don’t want to say superior, but it’s just a great option for any kind of farming.”

Salinas is a much different environment than where Massive did most of his breeding work in the Emerald Triangle. Right now they are working through his library to figure out what works best. 

“Not every strain is hitting a home run. So now that we got a plan and we’re going to do more pheno hunting, we can do on-site pheno hunting and have a clone garden that kind of feeds this seasonally and we know which strains do better and which season,” Massive explained. “So we’re just in the infancy of it all. And we’re just tapping into the potential, but it’s really exciting to be along for the ride and to actually get a place to start playing with everything I’ve done.”

And it should be worth noting there is plenty of heat growing twice. Some of Pacific Reserve’s neighbors have won The Emerald Cup before. We’ll have the results from this year’s cup next week.