This week we’re excited about what’s to come for the cannabis industry in 2023.
Last week we covered the fact that life is less than perfect in cannabis while highlighting some of the things we believed caused a lot of our headaches in 2022. This week, the opposite. We’re highlighting the things we think are going to help everyone turn it around.
Finally Fixing LA’s Equity Program
Here in Los Angeles, one of the biggest calls to action from the cannabis industry for the new mayor’s office continues to be the repair of the L.A. Social Equity Program. It was awesome to see 100 Social Equity Individual Applicants were randomly selected to apply for retail cannabis licenses last month, but the couple hundred people who invested their lives into putting their ducks in a row for the program are going to demand more. And while the new mayor’s office is separate from the scandals of the fall, they may have to pay the bill if a class action lawsuit ends up developing from the then-racist city council having original control over the program that drained so many coffers.
Standardized Testing?
It originally looked like we would have standardized lab testing this year. It seems a little hazy at the moment, but we wanted to put it on here to push the idea. Currently, cannabis labs have no fixed standard operating procedures. A lot of the time they’re just following the instructions for whatever hardware they bought. Then adjust the standard operating procedure to their liking. That’s where you see the variations in testing numbers from lab to lab. The idea of people shopping around their cannabis at labs to get the best numbers possible is a real thing. This is more so an issue with potency and terpene testing as opposed to heavy metals and pesticides.
Wider Access in America
It’s critical that California cultivators get access to more shelf space soon. While the state continues to drag a bit, the idea of stocking shelves all over the world with cannabis grown in California is appealing to people. The first shelves will probably be domestic, and step one is having as many states with legal access to cannabis as possible for when that day comes. And it’s not that far out. Some regulators figure it will be a few more years. Whenever it is, it’ll certainly make people’s lives a lot easier. We don’t think it will happen this year, but we’ll be talking about the mechanics of it by December a lot.
The Pace of Change is Fast
I know it’s going to take some time for the other stuff I mentioned, but it’s easy to see how fast things are moving for cannabis all over the world. It’s like a snowball with a rocket sled behind it pushing it even faster as it grows and grows rolling down the mountain. Now is everyone hoping to get sucked up by the snowball a saint? Doubtful. But the bigger the snowball gets, the more opportunities there will be for nice people to take part. Plenty of people entering the cannabis space now aren’t haters, they were just scared to go to jail back in the day.
The Weed, Sex, and Chocolate Guide is back to help you with your quest to enhance the Valentine’s Day festivities.
Weed is one of the greatest Valentine’s Day gifts of all, regardless of your plumbing. You can buy it for the person you started dating last week or last decade and you never have to worry about it being too over the top. Not the lube, but the other stuff.
We’ve always used this list to highlight the chocolate of the moment. We’re also trying to include plenty of new faces this year, but you’ll certainly recognize a couple of OGs that just have it down. Nevertheless, we’re sure this lineup of cocoa in all its glory produced all over California will fill the air with, at the very least, a love of weed chocolate.
The Weed
Alien Labs – Super Silver Haze x Xeno
The pheno of SSH x Xeno that we tried was probably the haziest American thing we’ve ever had the chance to sample. It tastes more like something from Europe than Sacramento. I think the thing that shocked us the most was just how overpowering the Haze terps were over the complexity of Xeno. A lot of people would argue hazes are some of the best sex weeds with the exception of this dominatrix I knew from San Francisco who said Blue Moonshine. But I think she just wanted a heavy indica to make it easier to tie people up.
Symbiotic Genetics Rosin
Courtesy of Kalya Extracts
Symbiotic Genetics is one of the most stored seed companies of the decade. In addition to its genetics taking top honors at Chalice, its work has dotted podiums all over the world for years. I even saw some Mimosa grown in Africa that would be competitive. As luck would have it, the amazing flavors are now available in hash made by some of the world’s best extractors. Keep an eye out for their work with Royal Key Organics and Kalya.
The Chocolate
Fig Farms – High Flyin Chocolates
Courtesy of Fig Farms
The first-ever Emerald Cup indoor flower champions are diving into the world of edibles with a new chocolate offering. Made from the same quality material that’s taken home a podium spot in every contest it has ever entered, you’ll certainly be able to feel the difference. But the actual flavor of the Cookies and Cream rosin-infused chocolates is spot on, too, with no weedy flavor to it at all.
Oui’d Confections
Courtesy of Ouid
Is another rosin chocolate starting to make waves, Ouid is owned and operated by Michelin and James Beard Award-winning chefs Matthew Kim and Matt Rowbotham. The pair strived to bring their high-end cooking experience to the world of cannabis edibles. They argue that they are putting out restaurant-quality confections and it would be hard to say otherwise. Ouid Confections is available all over Los Angeles.
Cosmic Cookie Dough
Courtesy of Cosmic
We covered the tale of Cosmic Cookie Dough last year, and they remain one of the easiest ways to please vegan edible lovers. If you want to show your vegan lover you care, bake some up for the holiday or just bring two spoons and raw dog it. There are no eggs, so you don’t have to worry about food poisoning.
Punch Edibles
Courtesy of Punch Edibles
Punch always has a Valentine’s day offering, but this year, the new half cookie bar is definitely our pick. Punch is a company that was made famous during the medical era for its potency but had to fall back on quality alone once the value buying aspect of cannabis edibles was lost to the 100mg THC cap that came with Prop 64. This year the company celebrates a decade of getting Southern California lit with its exceptional edibles.
Native Humboldt
Courtesy of Native Humboldt
Want to get your V-day chocolate from a women-owned farm in the heart of The Emerald Triangle? Look no further than Native Humboldt. The bars are filled with the quality and love of the game it takes to be a survivor up north these days. With so many farms devastated over the past few years up north, it’s important to support the farmers up there when you get the chance, but we’re not telling you to buy it out of sympathy. It’s great chocolate.
Jelly Wizard Magic Morsels
Courtesy of Jelly Wizard
We have been a wizard gang since the moment they entered the recreational market. We were literally standing at the booth smoking a blunt with them when they made their first legal sale at Kushstock a couple of years ago. While the gummies helped put them on the map along with some killer hash and flower, do not sleep on Jelly Wizard’s chocolate offering. You can truly taste the hype in The Magic Morsels.
The Sex
Flora + Bast Aphrodisia Intimate Arousal Oil
Courtesy of Fiona + Bast
The dual purpose oil is designed for both topical and edible adventures in the bedroom. Now is the $77 price tag steep for 1,700mg CBD and 1,000mg CBG? Maybe that’s just the cost of great cannabinoid-laced sex these days. Flora + Blast note when applied topically it makes you slippery and stimulates the libido. If you eat it, the CBD makes your Valentine’s Day hookup less regrettable. The oil also comes in a Sex System they call “the kit” (not my quotations) because why not, right? That set features a QR code to download the book “Becoming Cliterate” by author and sex educator, Laurie Mintz, Lelo’s sonic massager Sona II Cruse and the Aphrodisia Oil for $149.
Lavinia Oh.Hi Lubricant
Courtesy of Lavinia
In one of this year’s list’s most heartwarming tales, here is Lavinia’s backstory that I couldn’t possibly word better:
“The brand was founded in 2021 by Katie Enright, a former celibate studying to be a nun. In a quest to help herself and others obtain easy, powerful, multiple orgasms, Enright began by studying cannabis and sex, and created her first product for herself, then for friends, then friends of friends. After an earth-shattering orgasm, Lavinia’s first product, oh.hi, was born.”
The company claims the THC and CBD-infused lube increases blood flow for heightened sensation when applied vaginally or for Valentine’s Day butt stuff. Oh.hi is latex friendly, glycerin-free, glycol-free, paraben-free, hypoallergenic, unscented, unflavored, and 100% vegan. It’ll take about 15 minutes to work, not the slippery part, the weed part. Oh.hi is available at dispensaries all over California.
Missouri’s first weekend of legal cannabis sales is in the books.
The nearly 200 dispensaries dotting the state netted $12.6 million in sales in the first three days of adult-use sales. There is an argument to be made that number may have been higher had the permit release timing been a little clearer; even operators didn’t realize they would be allowed to commence sales Friday.
John Mueller is the CEO of Missouri’s largest operator Greenlight, a multi-state operator that has 15 retail permits in Missouri. Mueller, a Missouri native, told L.A. Weekly that Greenlight had its fair share of action over the weekend, with sales doubling overnight once adult-use kicked in.
Mueller notes the tail end of last week was a bit of a gray zone.
“Then what happened is, on Thursday, the state said they would start issuing out the licenses and you didn’t have to wait. We thought they would have all licenses at open at whatever time on the sixth,” Mueller explained.
They would get the permit at 8:30 a.m. Friday morning and be open in an hour and a half. But unlike the big lines we’re used to seeing outside dispensaries on opening day, at first it was a quest by consumers to confirm the news on shops opening earlier than expected. Mueller says the phone continues to ring off the hook in that regard.
Even with the traditional first sale not the spectacle it’s been in other states, dispensaries did great. Mueller noted some places saw up to four times the amount of usual foot traffic depending on where.
Mueller said there is plenty to be happy about besides the numbers. He feels dispensary operators got a lot to work with in the regulations.
“Thrilled with the performance, but there is a whole lot of stuff. You know we got drive-through here authorized, express pick-up windows in the lobbies and then also making sure that that patient wasn’t relegated to a bad status.”
Greenlight has separated the adult-use and medical lines at the dispensaries to make sure none of the state’s 200,000 medical cannabis patients feel left behind in the transition over to adult-use sales.
Mueller doesn’t feel like things have been overly restrictive on operators, apart from the normal childproofing packaging and things like that.
“We carry about 300 products per store, so we’re a pretty wide selection and we’ve got a pretty robust cultivation and manufacturing side of this equation,” Mueller said.
He noted the dispensaries currently operating are able to acquire flower from 28 different cultivators in the state. He thinks there are about 50 different manufacturers in the state that are all cranking out products too.
While that number may sound small to Californians, it’s still a decent number of producers on day one. We asked Mueller if it was enough for a real level of competition similar to the fight for shelf space we’re seeing on the west coast.
He was quick to argue, sure. Currently, Greenlight’s discount eighths are running $25, with the top shelf clocking in at $45.
There weren’t a lot of surprises for Greenlight during the transition. The company was able to lean on its past experiences transitioning from a medical market to adult-use in Nevada. Greenlight also has operations across the southeast and midwest in Arkansas, West Virginia, Illinois and South Dakota.
A new survey from Wired Research suggests most American adults will be including cannabis in their Valentine’s Day plans.
According to the survey, 61% of American adults plan on using cannabis or gifting it to someone this Valentine’s Day. The survey was commissioned by Verano Holdings to see how consumers would treat cannabis around the holiday as it continues to get further normalized nationally.
Another fascinating takeaway is the number of Americans that will skip booze this holiday season and opt for cannabis. Wired Research put the number at about 19 million. If just half those people bought a top-shelf eighth for the holiday, you’re talking about $60 million dollars in revenue before you even add the taxes.
While it was close, men were a little bit more likely to include cannabis in their Valentine’s Day plans (66%) than women (57%). This gap is actually closer than the gap between men and women admitting to use in wider society. In 2016, Columbia University Professor Deborah Hasin noted the rates at which men and women used cannabis had held steady for a long time at 13% of men and 7% of women through the mid 2000s. But in 2007, experts started to see a shift that would see the rate at which men were using rise another 4% while women’s use rates would rise 3%.
Younger folks were a lot more down with adding cannabis to their holiday plans than seniors were, with 70% of Gen Z and Millennials surveyed saying cannabis very well could end up a part of their holiday plans. But even then, the seniors weren’t that far behind. While the survey was just under 1,000 people, the idea that more than half of the two oldest categories said they’d be including it in their plans was pretty wild. That is probably the number it would be fascinating to see scaled up into a bigger survey the most.
Another big factor that will separate use rates this holiday? Kids. Parents were found to be more likely to partake in cannabis on the holiday than their childless peers. The survey found 69% of people with kids planned on making cannabis part of the fun, while only 57% of those without offspring said they’d be partaking.
As opposed to just another part of the evening’s fun, many argued they were using it as a tool to inspire romance.
“The data from the survey show that Americans use cannabis to relax or improve their mood, which can help people be present and more connected, which is crucial to a better love life,” said Dr. Shannon Chavez, a Beverly Hills psychologist and sex therapist. “Valentine’s Day is a great opportunity for couples to try something new together and try a more dynamic and less formulaic approach to intimacy, which cannabis can help inspire.”
Americans are starting to come around on the idea. One in four surveyed believed cannabis would help get them in the mood. While separately, one in four surveyed said they expected to perform better sexually with the help of cannabis.
Luke Scarmazzo was California’s most prominent medical cannabis operator serving federal time and he did so for nearly 15 years until his release on Feb. 3.
For those many years, Scarmazzo served as the face of the worst-case scenario for state’s medical cannabis operators. He was walking proof that even if you were operating in full compliance with state law, the feds could come to rip you away from your family at any moment.
There is a fair argument to be made that of the cannabis offenders released in recent years to much-deserved excitement, Scarmazzo was the most connected to the modern industry. Modesto, the home of the nonprofit California Healthcare Collective (CHC) for its year in operation, is now riding its own cannabis wave that hit the shore a bit later than coastal California. We even covered cannabis sales at the Modesto Reservoir during Dirtybird Campout.
After giving him some room to catch up with family and friends, we caught up with Scarmazzo last weekend.
The conversation would start with the fact he’d been the main face of California medical cannabis prisoners since the release of Eddy Lepp in 2016. But the two were on very different boats. Scarmazzo operated a nonprofit collective while Eddy grew some legendary “smell it from the highway” big crops. Eddy pushed the limits and many of his peers up north weren’t as surprised when he caught a case even though he was compliant with state law. Scarmazzo on the other hand represented a lot more people doing exactly what he was doing that didn’t want to end up in similar circumstances. As such, he’s had a lot of different people and organizations advocating for his release throughout his whole incarceration. With Eddy it was more of a cult hero support, but I can’t imagine most of those supporting Lepp thought they’d ever go as big as he did.
So with all that, when did Scarmazzo know this time it was real? The day he was released.
“I woke up, kind of just did the normal prison routine,” Scarmazzo told L.A. Weekly. “I gotta make coffee, getting ready to work out. And I just kind of go jump on the email to check the day’s emails.”
When he logged in there were significantly more emails in there than usual.
“So I knew something was up,” Scarmazzo said. “So I was like, OK, so I open it up. And the first email I see is from my attorney, and the subject line says, ‘you’re a free man.’ So I just stared at the computer for a few minutes.”
Things got a bit more obvious in 2017 that Scarmazzo was getting targeted for more time over his music career where he’d taken some shots at the feds in his lyrics. In January of that year, Scarmazzo’s co-defendant, Ricardo Montes, had his sentence commuted by President Obama on his way out the door. Scarmazzo, who also applied, wasn’t as lucky. And given the nature of how clemency works he never found out why, but to onlookers, it seemed pretty obvious.
The pair had worked on their clemency petitions in an informal clemency clinic in the prison library where Scarmazzo and Mission Green founder Weldon Angelos would help guys file their petitions and legal documents for free. Scarmazzo had wrapped his head around legal forms and paperwork over the first five years of his sentence on the hunt to find a way out. He was essentially offering up the skill set he’d built in that time to other prisoners free of charge.
“So we did this kind of clemency clinic, and then we, when it came to our turn to file, Weldon and I worked on both mine and Ricardo’s clemency petition,” Scarmazzo said. “They’re basically identical petitions. I mean, we were sitting together, and we were charged the same. We were both co-founders of CHC. So it was like, our conduct and all the circumstances of our case were pretty much the same.”
Scarmazzo noted the petitions were identical to the point all he had to do was swap out his name and personal information.
Scarmazzo would see Montes’ name among those granted clemency, but not his own. That was seemingly the point it felt the most personal.
“I knew something like this has to be something personal, I mean, this has to be an issue that’s directed directly at me, rather than us because the president obviously granted his and then called his sentence outdated and unjust. And I’m like, well, hello, my sentence is the same. So if you think this is outdated, adjust my findings, too.”
Scarmazzo reiterated he was happy to see Montes walk. The pair had been friends for many years before their ordeal. But he remembers one of the low points of the moment is having to explain the situation to his daughter.
“I was really happy to see him get out though,” Scarmazzo said. “He’s my brother. I’ve known Ricardo since we were kids. So, but you know, it was bittersweet. Like it was hard to kind of, I guess the hardest part was calling my family and my daughter and just telling them, hey it didn’t come through for us, but it came through for Ricardo. I want everybody to be happy for him.”
He knew regardless of his own circumstances, the moment had to be treated like it was a big win, because it was.
Most of the federal actions that followed what happened to Scarmazzo felt targeted. The last major federal action on a cannabis retailer operating in compliance with state law was 11 years ago during the Oaksterdam raids. Its founder, Richard Lee, bankrolled Proposition 19 in 2010 with legalization, only losing by a few points. The feds got their revenge on him a couple of years later.
One of the things Scarmazzo is most thankful for is the 29-page opinion the judge wrote when granting a five-year supervised release for the rest of his sentence. The long document articulates the changing of the times and other people will be able to use it as case law in their own quests for freedom.
The team at the nation’s oldest cannabis law reform group, The National Organization for The Reform of Marijuana Laws, was happy for what Scarmazzo’s freedom meant in the continued wave of cannabis prisoners getting out in recent years.
“I think it definitely sets a fantastic precedent that we’re starting to see federal judges reexamine the sentences that have been handed out by other judges, or sometimes even by themselves,” NORML Political Director Morgan Fox told L.A. Weekly. “When they start to look at changes of both state and federal policy and as well as the length of sentences that had been handed down for violations of federal infractions over the years since national attitudes have been changing.”
Fox noted there’s a lot of people out there that don’t have the connections and resources that might get lost in the shuffle here.
“And at the same time, there’s also just the opinion of one judge in one particular case,” Fox said. “It’s really going to take a change in federal law in order to start providing relief on a massive scale for not only people at the federal level, but people at the state level.”
California NORML called Scarmazzo the last known federal medical marijuana prisoner, following his release.
Numerous cannabis-related bills were filed in Sacramento this week.
There is still a lot of work to do to fix California’s cannabis industry as many hold on by a thread. That work is reflected in the annual wave of cannabis bills we see this time of year. 2023 will be no exception, as lawmakers look to cover everything from the expansion of the regulatory task force to where to put the tags on your plants.
Here are many of the bills we saw filed this week. There are a few more we’ll dive deeper into next week.
The main purpose of this bill is to expand the state’s cannabis task force. Currently, there is not a seat at the table for either the Civil Rights Department within the Business, Consumer Services, and Housing Agency or the Department of Industrial Relations within the Labor and Workforce Development Agency. These are essentially worker protection agencies that enforce civil rights laws when it comes to employment and housing access or push for a better quality of life and working conditions for the state’s labor force. The task force already includes The Department of Cannabis Control, CDTFA, the Department of Fish and Wildlife, the water board, CHP, The Labor and Workforce Development Agency, and the Department of Justice. It would also include representatives from municipalities that opt into the task force.
This bill would change the technical wording on how the mandated unique identifier can be attached to plants. The current language requires the tags to be attached at the base of the plant. This would make it easier for any going big. Some of the largest outdoor plants have literal tree trunks you have to saw; it’s better for the plant to attach it to one of those stems shooting off the side. So again, they’re just changing a few words around, but it makes sense.
This bill is dedicated to anyone who has ever had to call someone five times over an invoice. It’s meant to empower the legislator to set maximum terms by which someone can sell cannabis on credit, create penalties and a course of action for the failure to pay invoices on time, and empower the DCC with the powers needed to ensure timely payments throughout the supply chain.
This bill would crack down on people attempting to falsely represent cannabis products as licensed. Specifically, it emphasizes, the use of the cannabis universal symbol to push unlicensed products could cost you up to $30,000. While using the symbol was noted given how prolific it’s been on unlicensed cannabis packaging, any claim or representation of a product as licensed cannabis that’s not could land you in hot water. The good news? If you have a permit, you’ll only be charged $5,000 for pretending something was legit, meaning there is an argument to go legal just for the sake of discounted fines.
This bill on the surface seems pretty straightforward in blocking appointees from the governor from taking part in the industry but, in fact, could possibly hinder the efforts to save California cannabis. Prop 64 prevents the DCC director and members of the Cannabis Control Appeals Panel from engaging in certain cannabis activities. The effort to add appointees to the list could prevent actual experts that have been successful in California’s industry from coming in and helping to fix things. Would you want someone that knows how to run a thousand lights trying to help save the day or a random political appointee in compliance with AB-1111?
This bill would have the DCC reevaluate packaging regulations based on evolving science. The DCC would have to determine by July of 2025 if the current standards are still up to the task. As of January 2030, they’d have to reevaluate any changes to determine if any new concerns based on science need to also be added to packaging. The bill would also require the DCC to form an advisory committee dedicated to this subject of evolving label accuracy in the years to come.
Filed earlier this week, AB 741 would prohibit the California FAIR Plan Association from refusing to issue, canceling, or refusing to renew coverage over an applicant or policyholder possessing or previously possessed a legal amount of cannabis. Regardless of whether it was flowers, hash, or living cannabis plants, or because the applicant or policyholder had ever had a commercial cannabis licensee.
Keep an eye out for more coverage of cannabis bills coming out of Sacramento this year.
We just wrapped up judging the preliminary round of the biggest Zalympix competition yet.
The 2023 installment of Greenwolf’s massive contest is bigger than ever in terms of entries this year, not just hype. Greenwolf opened up the competition to over 100 farmers for the next installment.
That’s a huge jump from the 16 we’d seen in the previous boxes to 109. Obviously, there was going to be a need to switch the format up a pinch given the scale of how big the contest is this year. Greenwolf’s solution? A preliminary round.
The Greenwolf team assembled a reputable squad to go whittle down the pack. It included past winners, famous growers, and other journalists. Everyone they selected was based on their faith in their palette and opinion on cannabis.
Getting the kit in two boxes.
I received my box on Feb. 8 and had through the 21st to finish the samples. I went into the last day with four left. That worked out to trying just over nine samples a day. I smoked every single entry in a backwood because they are kind of like a cheat code when you’re grading marijuana. If you can taste it through the woods, you know it’s the goods.
One thing about this contest was the fact it was refreshing to not have to pick a winner. We had to pick 27 things we thought had a shot in the final round. That’s a ton. If I knew something had to be in the box I just gave it all fives. Even if it wasn’t my favorite terps, I just couldn’t deny it a shot at the big show.
I ended up with 18 out of the 109 in that must-go-in-the-box category. These were fantastic representations of lots of different kinds of weed. There were certainly a ton of dessert terps across the field of entries, but dotted between the Gelatos and Lemon Cherries were both new and old flavors.
There were a ton of OGs. To be expected from a Los Angeles-based contest? Sure. But they were of varying qualities; some leaned on the pure fuel smell while others smelled more like Skywalker or Tahoe cut with a bit more pinene in them.
Most of the things I scored the highest were rockstar-level gas, which is weed that literally smells like there was some kind of accident at a gas station that needs to be reported. I wasn’t worried about color either when I was scoring. Don’t get me wrong, I wanted the stuff I was picking to be aesthetically pleasing, but a wild nose went a hundred times further in my opinion building than a couple of hints of purple.
A lot of people entered new gear they thought might be their golden ticket. I’ve regularly checked out the Compound lineup over the last few years as they were testing out new gear. I smelled a lot of notes from last year’s seed drops like Gastropop and Pave.
Jon Cappetta from High Times was among the others selected to make their way through the entries in search of the 27 he thought worthy.
“Sorting through almost 120 samples in two weeks is a feat for even the most seasoned veterans, but The Zalympix preliminaries were a great preview of the gear we can expect to see making headlines this year. It seems like ‘23 is going to be another year of candy gas, but I’m holding out hope for more unique flavor profiles,” Cappetta told L.A. Weekly.
We’re going to go deep into Zalympix for 4/20 this year. Keep an eye out.
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.
“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.
Whether it’s getting all the way down the 5, to the farm or hoping the greenhouses don’t collapse, legal cannabis currently is experiencing plenty of headaches from the biggest snowstorm of its short existence in California.
The biggest widespread headache will be inaccessible roads. Mixed-light farmers facing issues with power over the next couple of days could face the biggest challenges. Most farmers still afloat should be able to survive any stress. It’s still early in the year. Even if people do face some structural damage, they’ll have time to clean it up before things get popping. But if you’re a mixed-light operation running year-round, any hit you’re taking to power or structural integrity is going to lead to pure down take. At worst, it could cost you a crop.
As people work to get their ducks in a row, it’s going to be a lot trickier to navigate some key stretches of California for the industry. Commerce itself most likely will be impacted by the close of Tejon Pass. With the snow level expected to be well below 1,000 feet, it’s going to be ripping up. Some experts are predicting two feet of snow right in the heart of one of the cannabis industry’s, and the rest of California’s, most vital travel routes. Even if the roads reopen, the ripping winds at the tail end of the storm are no fun for the sprinter vans the industry whips up and down the state in.
Sure you could take the coast, but it’s going to be mobbed and add hours to the trip.
The roads that many of the state’s cannabis farmers call home also will be an issue. While the frozen dirt might be easier to drive on in many cases than unplowed asphalt in a few inches, once it starts to pile up, it can get nasty quickly. One farmer in Southern Humboldt County said he was expecting about three feet when the storm was over.
Josh Vert from Royal Key Organics said indoor farmers like him in Humboldt don’t necessarily worry as much as the outdoor farmers about any one storm in particular, but the season brings its own challenges as a whole.
“Winter runs and cold weather, it’s the opposite for us as it is in LA,” Vert told L.A. Weekly. “Winter can be more challenging in the Arcata indoor scene than summer. Dew points and surface condensation create excessive moisture. Facilities need to compensate via extra insulation and dehumidification. Our trimming and storage require less air conditioning and everything stays cool. It’s really the cold humidity we have to fight all winter long. The storms have been a good mental break from the norm. Nothing other than that.”
Closer to home, all the snow and rain have led to a flood watch in Los Angeles through Saturday afternoon. The areas impacted are Los Angeles County Beaches, Los Angeles County Inland Coast including Downtown, Los Angeles County Mountains, San Fernando Valley, San Gabriel Valley, Malibu Coast, Santa Clarita Valley and The Santa Monica Mountains.
The National Weather Service noted rainfall rates up to an inch per hour are possible, especially in the foothills and lower mountain locations.
In a cannabis industry where much of the time the people of note entering from other walks of life to start their brands have been men, Erykah Badu is about to be one of the most celebrated females ever to enter the space she’s been in since 2020.
From an outsider’s perspective on the chessboard, it seemed the moves she was making in the build-up to the March 8 launch of her That Badu line at Cookies made a lot of sense. She went with better genetics than some of her peers entering the space and was working with a solid retail partner. We’ve always found that one of the most giant red flags recently is when a celebrity brand launch coincides with the launch of whatever mechanism that’s getting you the weed. Badu went the opposite direction in working with an established retailer.
That Badu is a cross between Lemonchello and Jet Fuel Gelato. It will be available in eighths and pre-rolls for its International Women’s Day launch on March 8. Expect more offerings from the line in time for Mother’s Day.
Badu’s first cannabis line, Apple Trees, launched in February 2020. Unfortunately, the world closed a few weeks later so the launch got lost in the news that was focused on some of the biggest sales weeks in the history of California cannabis as people feared dispensaries would close.
But the cannabis world is a lot chiller at this moment with the exception of what small farmers are going through and crime waves. And getting the launch in a month and a half before 4/20 to avoid the noise was a good play, too.
Our chat with Badu started with the fact she is a busy lady, a multi-platinum recording artist with plenty of things on her plate. What made her want to enter the cannabis space in addition to the wellness work she’d already been involved with for a long time?
“I’ve always been an advocate and interested in cannabinoids,” Badu told L.A. Weekly. “My first band is called The Cannabinoids. We are all on the electronic drum machines, nine of us, and we just improv.”
The conversation quickly moved to her work as a doula she started over 20 years ago and how much that actually intertwined with her new cannabis endeavor over the years. Doulas can assist new families in the build-up, during and after the birthing process, or help families with the transitions that come with death and provide emotional support.
“I became a doula in 2001 and as a birth and death doula; many of my mothers and patients use cannabis in many different ways,” Badu explained.
And more personally than those she supports through her doula work, cannabis has long been a part of Badu’s early morning ritual as she works to find alignment for the day or whatever message she needs to hear in that moment.
“It brings clarity, and the aroma is also part of the ritual. The smoking is also a part of the ritual, the breathing, inhaling and blowing and exhaling,” Badu said. “All these things have been very instrumental in my creativity as an artist, as a very busy entrepreneur, and as a mother who has to work in a very masculine world. It helps me not forget who I am and that I am also important.”
Badu is currently a resident of Texas. She is sitting in hopes of the chains moving on legalization in the near future. If people used football metaphors more to try and legalize it, they probably would; nevertheless, Badu is working on a CBD permit. As proven by many in the past, she thinks getting her infrastructure in place with CBD stuff and making the move to recreational when Texas goes legal is the move. Certainly, a fair take.
Texas isn’t the first place that comes to mind when people think of cannabis reform, but it was a long slow process in many places. Texas is now in the midst of that process — it’s just one of those places that started a bit later. Given this, we asked Badu how private she feels like she has to ever had to be about her own use.
“Exactly. That’s why we can have conversations about it, but we have to be very careful with those types of things,” Badu replied. “So now that it’s being introduced, as a prospective license, we can have more conversations and I will be at the forefront of the legalization. I will use my voice for this. And I’m specifically interested in cannabinoids and women.”
Badu noted, while everything in the product line kind of caters to or comes from a feminine perspective, it’s definitely high-end product meant for whoever wants to smoke heat. But you’ll see plenty of feminine notes, like the packaging mimicking the oriental ceramides Badu has become fond of over the years.
“I was thinking, what kind of vessel will this be in? What kind of packaging, what colors, with flowers?” Badu said. “I first thought of porcelain and the Oriental and Persian vases and tea sets, and those types of things.”
Badu noted she’s also excited about the mushroom tea she’s working on. We asked what it’s like to be diving into the psychedelic space and if it ever felt like psychedelics had been demonized in communities of color.
“Maybe demonized is a heavy word, I would say for sure misunderstood,” Badu said.
Badu argues when something is misunderstood, it’s often abused and mishandled. Her new mushroom teas will be called That Badu technologies. The first is meant to be a coffee substitute for during the day and the second is the psychedelic one, which she noted can be used in ritual work of any kind.
Keep an eye out for That Badu to expand across California in 2023.
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