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Law California

No more munchies; America's first cannabis cafe opens in California

LOS ANGELES (Reuters) - Hollywood’s three-martini lunch may be going up in smoke with the opening on Tuesday of the first restaurant in the United States where weed can be openly consumed.

Almost two years after California began allowing sales of recreational cannabis, Lowell Farms: A Cannabis Cafe opened its doors in trendy West Hollywood, offering farm-to-table cuisine alongside vaping, joints, bongs and prepackaged edibles.

“We are excited to be that flagship, that benchmark, to show people that a cannabis business isn’t something that is scary,” said general manager Kevin Brady.

“It’s something that hasn’t been legal for 120 years,” he added of the restaurant venture, which is funded by cannabis farmers Lowell Herb Co, whose backers include the likes of pop star Miley Cyrus, actor Chris Rock and comedian Sarah Silverman.

While the food served at Lowell Cafe will not be infused with cannabis, diners will be offered the services of a “flower host” who will advise how to pair different strains of marijuana with menu items and roll a joint at the table.


“Each day we will smell and taste the strains of the cannabis and offer pairings, much as you would do with wine pairings,” said chef Andrea Drummer.

Californians have been enjoying cannabis-infused food in private homes and at dinner parties since the state began allowing sales of recreational cannabis in January 2018. But Lowell Cafe is the first to open of eight cafes or restaurants that were awarded licenses by West Hollywood for public consumption, and the first in the United States.

The restaurant is aimed beyond Hollywood A-listers.

New Yorker Joy Alison Cohen, who was among the first customers on Tuesday, called the opening a “historic event.”

“I’ve had to fly to Amsterdam to experience this. No more. We have better pot now too, so it is awesome,” she said.


“We have families that are excited to come in and share it with their relatives and their grandparents. We have people that have reached out from Russia, Tokyo, Italy who want to plan their vacations to come here specifically for the cafe,” said Brady.

The restaurant has an indoor and outdoor dining space and a high-tech air filtration system that managers say will scrub out the smoke and ensure that no diners go home high for free.

“They won’t feel like they are walking into a Korean barbecue or a funny stoner comedy,” said Brady.
 
No more munchies; America's first cannabis cafe opens in California

LOS ANGELES (Reuters) - Hollywood’s three-martini lunch may be going up in smoke with the opening on Tuesday of the first restaurant in the United States where weed can be openly consumed.

Almost two years after California began allowing sales of recreational cannabis, Lowell Farms: A Cannabis Cafe opened its doors in trendy West Hollywood, offering farm-to-table cuisine alongside vaping, joints, bongs and prepackaged edibles.

“We are excited to be that flagship, that benchmark, to show people that a cannabis business isn’t something that is scary,” said general manager Kevin Brady.

“It’s something that hasn’t been legal for 120 years,” he added of the restaurant venture, which is funded by cannabis farmers Lowell Herb Co, whose backers include the likes of pop star Miley Cyrus, actor Chris Rock and comedian Sarah Silverman.

While the food served at Lowell Cafe will not be infused with cannabis, diners will be offered the services of a “flower host” who will advise how to pair different strains of marijuana with menu items and roll a joint at the table.


“Each day we will smell and taste the strains of the cannabis and offer pairings, much as you would do with wine pairings,” said chef Andrea Drummer.

Californians have been enjoying cannabis-infused food in private homes and at dinner parties since the state began allowing sales of recreational cannabis in January 2018. But Lowell Cafe is the first to open of eight cafes or restaurants that were awarded licenses by West Hollywood for public consumption, and the first in the United States.

The restaurant is aimed beyond Hollywood A-listers.

New Yorker Joy Alison Cohen, who was among the first customers on Tuesday, called the opening a “historic event.”

“I’ve had to fly to Amsterdam to experience this. No more. We have better pot now too, so it is awesome,” she said.


“We have families that are excited to come in and share it with their relatives and their grandparents. We have people that have reached out from Russia, Tokyo, Italy who want to plan their vacations to come here specifically for the cafe,” said Brady.

The restaurant has an indoor and outdoor dining space and a high-tech air filtration system that managers say will scrub out the smoke and ensure that no diners go home high for free.

“They won’t feel like they are walking into a Korean barbecue or a funny stoner comedy,” said Brady.
Thank for the information!
 
First Cannabis Farm Granted Permit to Grow in Sonoma County

Wine country may soon become cannabis country.
first-cannabis-farm-granted-permit-grow-sonoma-county-featured.jpg


On Monday, a growing operation received the first one-acre, conditional-use permit for cannabis cultivation in Sonoma County, the northern California hotbed for Chardonnay, Cabernet Sauvignon, and Pinot Noir.

The operation will be overseen by a grow team known as Petaluma Hills Farm, but the entire property—which will be located in a part of Sonoma County called the Petaluma Gap—will operate under the title Sonoma Hills Farm.

Sam Magruder, a partner in Petaluma Hills Farm, hailed the permit as a milestone.

“This permit, and pending cultivation permits, demonstrates a huge step forward for California cannabis cultivators, wine country, and artisanal cannabis grows throughout the country,” Magruder said. “We are ushering in a new era that will allow small farmers of fine cannabis to equally participate, and ideally thrive, in Sonoma County.”


The news comes only about a month after Sonoma County inspectors shut down what was described as the largest non-permitted commercial cannabis cultivation in the county’s history, an operation that had more than 63,000 plants. As of last month, the county had reportedly responded to nearly 200 complaints of non-permitted cannabis activities.

Wine Country Going Green
Sonoma Hills Farm has lofty aspirations for its own licensed operation, saying in a press release this week that it “strives to be a cultural and educational intersection of cannabis and traditional agriculture.”

The company said it has already received assistance from permaculturists and Michelin-starred chefs in “designing a one-acre chef garden and fruit orchard to fully integrate the natural ecosystems of the occupied land.”


The operation will be located on 40-acres of farmland, with the cannabis cultivation concentrated on one acre of land split between two locations on the property: a 28,560 square-foot outdoor cannabis garden farmed with dry farming techniques. Its first harvest is slated for late next year.

The company said the farm is “designed and will be built to exceed expectations for this type of operation, from farming methods and land preservation, to energy and water conservation.”

“As pioneers in legal cannabis, we aspire to be a beacon for the industry, as well as a model for the world for growing finely crafted cannabis in wine country,” Magruder said in the press release. “Much like growing grapes for the finest wines, we plan to take an artisanal approach to cultivation through the cannabis we have been permitted to grow in this incredible terroir.”
 
First Cannabis Farm Granted Permit to Grow in Sonoma County

Wine country may soon become cannabis country.View attachment 13507

On Monday, a growing operation received the first one-acre, conditional-use permit for cannabis cultivation in Sonoma County, the northern California hotbed for Chardonnay, Cabernet Sauvignon, and Pinot Noir.

The operation will be overseen by a grow team known as Petaluma Hills Farm, but the entire property—which will be located in a part of Sonoma County called the Petaluma Gap—will operate under the title Sonoma Hills Farm.

Sam Magruder, a partner in Petaluma Hills Farm, hailed the permit as a milestone.

“This permit, and pending cultivation permits, demonstrates a huge step forward for California cannabis cultivators, wine country, and artisanal cannabis grows throughout the country,” Magruder said. “We are ushering in a new era that will allow small farmers of fine cannabis to equally participate, and ideally thrive, in Sonoma County.”


The news comes only about a month after Sonoma County inspectors shut down what was described as the largest non-permitted commercial cannabis cultivation in the county’s history, an operation that had more than 63,000 plants. As of last month, the county had reportedly responded to nearly 200 complaints of non-permitted cannabis activities.

Wine Country Going Green
Sonoma Hills Farm has lofty aspirations for its own licensed operation, saying in a press release this week that it “strives to be a cultural and educational intersection of cannabis and traditional agriculture.”

The company said it has already received assistance from permaculturists and Michelin-starred chefs in “designing a one-acre chef garden and fruit orchard to fully integrate the natural ecosystems of the occupied land.”


The operation will be located on 40-acres of farmland, with the cannabis cultivation concentrated on one acre of land split between two locations on the property: a 28,560 square-foot outdoor cannabis garden farmed with dry farming techniques. Its first harvest is slated for late next year.

The company said the farm is “designed and will be built to exceed expectations for this type of operation, from farming methods and land preservation, to energy and water conservation.”

“As pioneers in legal cannabis, we aspire to be a beacon for the industry, as well as a model for the world for growing finely crafted cannabis in wine country,” Magruder said in the press release. “Much like growing grapes for the finest wines, we plan to take an artisanal approach to cultivation through the cannabis we have been permitted to grow in this incredible terroir.”
Yay! I'm so happy to hear this! I hope one day to be driving along and see the hills of Sonoma County dotted with cannabis as well as vinyards. Not that there is anything wrong with vinyards, but there are so many of them, and not enough cannabis farms. I'd love to see the neat rows of cannabis trees stretched out over the hillsides. We aren't there yet, but Sonoma Hills Farm sounds wonderful. It's a nice start. Maybe one day, instead of people giving wine as hostess gifts, people will bring over cannabis. Maybe not. The Buy-A-Great-Bottle-Of-Wine-For-Under-$10-And-Talk-About-Wine-Bargains-Over-Dinner-Game is pretty popular out here. I personally have stopped saying I grow homegrown, and now say I am an "artesinal small batch grower". Sounds Better, right? I can't wait to throw a cannabis infused dinner party, but @Madri-Guy is the trained chef in the house, and he isn't fond of edibles after the greenout from the cannabis flour incident. Personally, I don't see where this stops him from cooking, baking and serving, but I have some talking to do on this one. People wound still want wine with the meal, wouldn't they? Cannabis and chardonnay, marijuana and merlot, grass and gewurtztriminer, pot and pinot noir, bud and burgundy, sensimilla and semillon...
 
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Yay! I'm so happy to hear this! I hope one day to be driving along and see the hills of Sonoma County dotted with cannabis as well as vinyards. Not that there is anything wrong with vinyards, but there are so many of them, and not enough cannabis farms. I'd love to see the neat rows of cannabis trees stretched out over the hillsides. We aren't there yet, but Sonoma Hills Farm sounds wonderful. It's a nice start. Maybe one day, instead of people giving wine as hostess gifts, people will bring over cannabis. Maybe not. The Buy-A-Great-Bottle-Of-Wine-For-Under-$10-And-Talk-About-Wine-Bargains-Over-Dinner-Game is pretty popular out here. I personally have stopped saying I grow homegrown, and now say I am an "artesinal small batch grower". Sounds Better, right? I can't wait to throw a cannabis infused dinner party, but @Madri-Guy is the trained chef in the house, and he isn't fond of edibles after the greenout from the cannabis flour incident. Personally, I don't see where this stops him from cooking, baking and serving, but I have some talking to do on this one. People wound still want wine with the meal, wouldn't they? Cannabis and chardonnay, marijuana and merlot, grass and gewurtztriminer, pot and pinot noir, bud and burgundy, sensimilla and semillon...
My wife and I got a new BMW to drive up to SONOMA wine & CANNABIS!
Growing in NORTH CALIFORNIA was the fashion many decades ago?
The near desert of SOUTH CALIFORNIA has field’s of CANNABIS (commercial investors)
Like NORML predict’s $38.00 per once? 28 gram’s +/-!
Small grow’s will be rare!
We have great ingredients with a FRENCH flair.
Mexican food is really gourmet in my jarden!
Person COLA ‘S are why growing is still vogue!
Dispenser’s don’t understand the market?
Nuggets 4 ROSIN
Colas 2 vape
Monkey tail’s = COLAS r da top of da tree!
INDICA = NORTHERN
SATIVA = SOUTHERN
Outdoor kine!
Indoor cost more $!

GDP ROSIN is a decent solution for cannabis people 2 enjoy?
If U like INDICA?
DUTCH TREAT ROSIN is 4 later! (Hybrid)) 420 celebrate da Pale Blue Dot!
 
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Life has stabilized for California cannabis testing labs since 2018, but hurdles remain

California’s cannabis testing industry was stressed to the brink in 2018, with newly required testing thresholds going into effect first in July 2018 and then in January 2019.

The result at the time was long waits for test results, a temporary increase in product testing failures and various industry stakeholders arguing the state needed far more labs.

Much of that, however, has changed since final regulations were adopted in January.

Lab executives now generally report:
  • Their businesses have stabilized.
  • Wait times for testing results have become more predictable.
  • Product failures are down.
  • The 27 currently licensed labs are enough to handle the state’s testing workload.

“Things have definitely stabilized quite a bit. Right at July (2018), when testing was being enforced and mandated for the first time, there was a rush everywhere” for testing services, said Zach Eisenberg, vice president at San Francisco-based Anresco Laboratories.

Stabilization has occurred despite the fact only 27 licensed labs are serving the entire state market, while another 66 lab licenses have been canceled, surrendered, revoked or have expired, according to the Bureau of Cannabis Control’s licensing data.

However, plenty of issues still face California testing labs and the larger industry they serve.

“Everyone expected the market to be at a different point than it is right now. The trajectory that started in July last year … we’ve flatlined right now,” said Swetha Kaul, chief scientific officer at Santa Ana-based Cannalysis, referring to an apparently stagnated number of product batches that have been tested in recent months.

No labs at full capacity

Marijuana Business Daily spoke with several executives from testing labs around California, and none of them reported being anywhere close to capacity.

“By and large, everyone has scaled up in terms of their capacity,” said Daniel Witt, president of Sonoma Lab Works in Santa Rosa, adding that most labs have the capacity to do more testing.

Lab executives said that indicates two things:

  1. The legal market has not reached its full potential, since, if it had, it would produce far more samples for labs to test.
  2. The number of labs may not expand much in the near future since there isn’t a need at the moment.

Some lab consolidation, in fact, may be coming.

“You definitely need a healthy number of labs, but you don’t need a really big number,” Kaul said.

“California is still in the process of finding that healthy balance between what makes a good lab versus what’s easy for the regulators to oversee.”

Chasing clients on testing bills

Part of the problem is the illicit market is still so strong and undercutting legal retailers and growers.

Many of those companies haven’t been able to – or simply don’t want to – pay the fees labs charge for testing services, said Greg Magdoff, CEO of PharmLabs, which has testing facilities in San Diego, Monrovia and Coachella.

It’s usually either because clients are strapped for cash or because they’re unhappy with the actual lab results on their products, Magdoff said.

“One of the larger California companies, out of Northern California … they couldn’t pay their bill – a $5,000 bill,” Magdoff said.

“There’s a few companies that have no problem paying their bills upfront, but it seems like 70% of our clients need some net terms.

“It’s like not having $1 in your car to get over the toll bridge. … It leads me to believe that the entire industry is struggling.”

Other labs said they’ve had similar problems with clients skipping out on bills, but the consensus was that’s part of doing business in the current industry climate.

Misuse of lab names, results

Several labs reported that they’ve had to chase down instances with clients where a company has paid to have a small sample of a wholesale batch tested and then misrepresented to potential buyers that everything that was for sale was lab-tested.

“We have people that will give us 5 grams of oil to test one time and then they sell off that (certificate of analysis) for a year,” said Antonio Frazier, vice president of operations at CannaSafe in Los Angeles.

“We have to go after people sometimes. … If you want to certify bulk oil, there are certain ways to do it.”

One testing company – Santa Cruz-based SC Labs – has sent a flurry of cease-and-desist letter to companies.

“My brand shows up on so many products that I’ve never heard of and I’ve never tested for, that it’s a bit frustrating. So we have a steady stream of cease-and-desist letters that go out,” said Jeff Gray, SC Labs’ CEO and founder. He estimated that SC Labs has sent up to 25 such letters in the past year.

“We’ve just been really aggressive about challenging every instance that we can find,” Gray added.

Gray warned that other labs should remain concerned about the possibility of their professional credibility being usurped, especially given the recent vaping illness epidemic and the potential for labs to be roped into investigations if their names are falsely linked to vape products that may have contributed to the illnesses.
 
peronMary-1.jpg



Dennis Peron and Brownie Mary Act Signed: Compassion Returns


California’s Proposition 64 prohibited the legitimate gifting of Cannabis and products in Nov. 2016. State Governor Newsom just signed the Bill (SB34) that reverses that action:

Many in the know were shocked when they saw the support for California’s proposition 64 knowing it would shut down compassion programs and stop the gifting of cannabis – even by legal entities. This has created quite a bit of strife between many former compassion providers that are now limited in what they can do, which includes myself, and those that chose to gain licenses under the new recreational law passed by voters in November 2016. It’s not as if compassion providers felt that their friends abandoned them for the big paycheck of full legalization in the state – but facts are facts – those of us that stayed in compassion have battled patient to patient gifting limitations that have made even the most giving of people unable to participate in what created the industry – a subculture of love. And that’s what this article is about – how the industry was created and how compassion played a vital role.

The intense and and historic story of how grassroots activists changed the societal view of cannabis as medicine is largely unknown to the general public. Several key figures contributed to this movement that forever shifted the opinion of the populous about marijuana, a once demonized plant that was given no medical value by the U.S. Government in the Controlled Substances Act of 1970 and remains in that ‘Schedule 1’ category – even though our pharmacies have cannabis extracts as medicine now.

Without key people in the early movement and their bold and selfless actions to fight injustice, we would never be at the pivotal time of cannabis legislation and legalization that we are now. We wouldn’t be witnessing multiple other new industries develop based on the legitimization of the cannabis plant without these seldom spoken of heroes – as there simply would not be one. The fact is it took a village to make it happen in California back in the mid 90’s with Proposition 215, but our brand new compassion act is based on the names of the two that are now once again forever part of legislative history as the new law is called “the Dennis Peron and Brownie Mary Act”. And this is their story:

Mary Jane Rathbun
mary.jpg


Mary Jane Rathbun was a volunteer in Ward 86 at San Francisco General Hospital during the AIDS epidemic in 1981. Ward 86 exclusively treated HIV patients. Rathbun passed out THC infused brownies to the patients and it helped them have immense relief from their symptoms. Rathbun is the real Mary Jane. Dr. Donald Abrams, an assistant director of the AIDS program at the Hospital, saw the drastic changes in the patients. In 1997 Dr. Abrams received funding from the National Institute on Drug Abuse to conduct a series of clinical trials on the effect of cannabinoids in HIV infections. By the time Dr. Abrams’s study was approved by the National Institute on Drug Abuse, 410,000 Americans had tragically died of AIDs. People were dying slow, painful deaths. The medicine available to treat their symptoms resulted in awful side effects like appetite loss, diarrhea, fatigue, bleeding, bone loss, nausea, and vomiting. Rathbun was able to provide these people with temporary relief with no debilitating side-effects.

Dennis Peron
dennis.jpg


Dennis Peron’s life partner, Jonathan West, according to sources used cannabis instead of Marinol, a drug given to HIV and cancer patients to stimulate appetite, because the synthetic pharmaceutical version of THC (Marinol) caused him to get violently ill. Peron began to grow medical marijuana for himself and his partner. On a San Francisco night in January 1990, Peron’s home was raided. He was charged with possession of marijuana with intent to sell. As tales are told this wasn’t the first encounter for Peron with cannabis and authorities, he had previously been arrested for selling weed as a teenager – which could have caused serious issues as the laws for prior convictions weren’t too lenient back then. Six months after Peron’s arrest, West told the court that the cannabis was his own personal medicinal use and the charges were dropped.

Shortly after this West passed away along with many other of Peron’s loved ones as the AID’s epidemic ran rampant and the pharmaceutical options were vastly limited 30 years ago.

With the loss of so many close to him, Peron was distraught and desirous of providing compassionate use of cannabis to all that were in need. So in 1991, Peron organized efforts and gained the passage of the famed yet little known about San Francisco’s Proposition P, a resolution calling on the state government to permit medical cannabis, which received 79% of the vote. That same year, he co-founded the San Francisco Buyers Club, the first public dispensary of legal cannabis, per the local resolution, since Prohibition. His story is endless, but the two of these legends had previous encounters before the gathering of compassionate minds that wrote the one page ‘Compassionate Use Act’ of 1996. Back In 1993, Peron and Brownie Mary published a cookbook with recipes for cannabis edibles.

The Union of Peron and Brownie Mary (and the 215 Team)

All of this had a fire burning within Peron, he and Rathburn had history along with a dozen that were assembled to draft and gain the signatures to put the well known 1996 Proposition 215 on the ballot – but most had doubts a law allowing people t smoke and use cannabis would pass. – but it did. This allowed for the medicinal use of cannabis for the first time since prohibition and started what we all know as the industry of today. Many would debate other actions in other states helped – and that wouldn’t be out of the ballpark. But, without out a doubt the fire under Peron and company has changed the world. Many are unaware that then attorney general of California Dan Lungren ordered a raid of Peron’s Dispensary the night before the law passed which closed down the Buyers Club – but not for long as once 215 passed it reopened where Peron and company helped out crowds of his friends which eventually created a network of compassion.

per.jpg

Dennis Peron at his office at his large medical marijuana club on Market Street, in 1996.

Many are totally unaware that It’s due to the efforts of Rathbun, Peron, several other authors, hippies and many in the LGBTQ+ communities that cannabis is where it is today. Many would love to debate this but it’s fact that’s concrete and without a doubt soon to be in history books. There are currently many other cannabis activists fighting the same fight in other states and countries – they face the same challenges of heartache – loss of loved ones that many of us are already aware cannabis can help if not heal. Droves continue to keep fighting for decriminalization,just regulation, proper legalization, and cannabis education. The federal legalization, or hopefully decriminalization, of cannabis in all 50 states is inevitable as it must leave it’s schedule one status and is not suitable in it’s plant form for any other schedule. The end of prohibition is near but where will it take us – nobody knows. But what we do know is thanks to grassroots efforts we have legalization in states and other countries – we now have a compassion act once again in California and the beginning of giving.

It seems it’s these grassroots movements that eventually make little things into big things – nobody ever expected a cannabis industry as we see today. None of us in California ever expected a regulation overload with full legalization nor did good people in a legal industry expect it to hurt patients. That intent simply wasn’t there – for the most part. But it was the last words of the legend Dennis Peron that spoke out to many on social media and beyond. Having the pleasure of knowing him briefly, working with him on what I call his last act of compassion – the Peron Resolution – in 2017 are memories that are iron clad. Dennis asked everyone to listen and many did not as by the time 2016 had came along it had been 2 decades since cannabis cards were being issued after the work of the famed prop. 215 team to gain the medicinal laws passage. But we are thankful that a tireless effort was put forth by countless cannabis patients, cannabis lobbyists, and so many more to push for the signing of the bill and that’s after getting it to that point.

Welcome back compassion – California has missed you!
 
peronMary-1.jpg


Dennis Peron and Brownie Mary Act Signed: Compassion Returns

California’s Proposition 64 prohibited the legitimate gifting of Cannabis and products in Nov. 2016. State Governor Newsom just signed the Bill (SB34) that reverses that action:

Many in the know were shocked when they saw the support for California’s proposition 64 knowing it would shut down compassion programs and stop the gifting of cannabis – even by legal entities. This has created quite a bit of strife between many former compassion providers that are now limited in what they can do, which includes myself, and those that chose to gain licenses under the new recreational law passed by voters in November 2016. It’s not as if compassion providers felt that their friends abandoned them for the big paycheck of full legalization in the state – but facts are facts – those of us that stayed in compassion have battled patient to patient gifting limitations that have made even the most giving of people unable to participate in what created the industry – a subculture of love. And that’s what this article is about – how the industry was created and how compassion played a vital role.

The intense and and historic story of how grassroots activists changed the societal view of cannabis as medicine is largely unknown to the general public. Several key figures contributed to this movement that forever shifted the opinion of the populous about marijuana, a once demonized plant that was given no medical value by the U.S. Government in the Controlled Substances Act of 1970 and remains in that ‘Schedule 1’ category – even though our pharmacies have cannabis extracts as medicine now.

Without key people in the early movement and their bold and selfless actions to fight injustice, we would never be at the pivotal time of cannabis legislation and legalization that we are now. We wouldn’t be witnessing multiple other new industries develop based on the legitimization of the cannabis plant without these seldom spoken of heroes – as there simply would not be one. The fact is it took a village to make it happen in California back in the mid 90’s with Proposition 215, but our brand new compassion act is based on the names of the two that are now once again forever part of legislative history as the new law is called “the Dennis Peron and Brownie Mary Act”. And this is their story:

Mary Jane Rathbun
mary.jpg


Mary Jane Rathbun was a volunteer in Ward 86 at San Francisco General Hospital during the AIDS epidemic in 1981. Ward 86 exclusively treated HIV patients. Rathbun passed out THC infused brownies to the patients and it helped them have immense relief from their symptoms. Rathbun is the real Mary Jane. Dr. Donald Abrams, an assistant director of the AIDS program at the Hospital, saw the drastic changes in the patients. In 1997 Dr. Abrams received funding from the National Institute on Drug Abuse to conduct a series of clinical trials on the effect of cannabinoids in HIV infections. By the time Dr. Abrams’s study was approved by the National Institute on Drug Abuse, 410,000 Americans had tragically died of AIDs. People were dying slow, painful deaths. The medicine available to treat their symptoms resulted in awful side effects like appetite loss, diarrhea, fatigue, bleeding, bone loss, nausea, and vomiting. Rathbun was able to provide these people with temporary relief with no debilitating side-effects.

Dennis Peron
dennis.jpg


Dennis Peron’s life partner, Jonathan West, according to sources used cannabis instead of Marinol, a drug given to HIV and cancer patients to stimulate appetite, because the synthetic pharmaceutical version of THC (Marinol) caused him to get violently ill. Peron began to grow medical marijuana for himself and his partner. On a San Francisco night in January 1990, Peron’s home was raided. He was charged with possession of marijuana with intent to sell. As tales are told this wasn’t the first encounter for Peron with cannabis and authorities, he had previously been arrested for selling weed as a teenager – which could have caused serious issues as the laws for prior convictions weren’t too lenient back then. Six months after Peron’s arrest, West told the court that the cannabis was his own personal medicinal use and the charges were dropped.

Shortly after this West passed away along with many other of Peron’s loved ones as the AID’s epidemic ran rampant and the pharmaceutical options were vastly limited 30 years ago.

With the loss of so many close to him, Peron was distraught and desirous of providing compassionate use of cannabis to all that were in need. So in 1991, Peron organized efforts and gained the passage of the famed yet little known about San Francisco’s Proposition P, a resolution calling on the state government to permit medical cannabis, which received 79% of the vote. That same year, he co-founded the San Francisco Buyers Club, the first public dispensary of legal cannabis, per the local resolution, since Prohibition. His story is endless, but the two of these legends had previous encounters before the gathering of compassionate minds that wrote the one page ‘Compassionate Use Act’ of 1996. Back In 1993, Peron and Brownie Mary published a cookbook with recipes for cannabis edibles.

The Union of Peron and Brownie Mary (and the 215 Team)

All of this had a fire burning within Peron, he and Rathburn had history along with a dozen that were assembled to draft and gain the signatures to put the well known 1996 Proposition 215 on the ballot – but most had doubts a law allowing people t smoke and use cannabis would pass. – but it did. This allowed for the medicinal use of cannabis for the first time since prohibition and started what we all know as the industry of today. Many would debate other actions in other states helped – and that wouldn’t be out of the ballpark. But, without out a doubt the fire under Peron and company has changed the world. Many are unaware that then attorney general of California Dan Lungren ordered a raid of Peron’s Dispensary the night before the law passed which closed down the Buyers Club – but not for long as once 215 passed it reopened where Peron and company helped out crowds of his friends which eventually created a network of compassion.

per.jpg

Dennis Peron at his office at his large medical marijuana club on Market Street, in 1996.

Many are totally unaware that It’s due to the efforts of Rathbun, Peron, several other authors, hippies and many in the LGBTQ+ communities that cannabis is where it is today. Many would love to debate this but it’s fact that’s concrete and without a doubt soon to be in history books. There are currently many other cannabis activists fighting the same fight in other states and countries – they face the same challenges of heartache – loss of loved ones that many of us are already aware cannabis can help if not heal. Droves continue to keep fighting for decriminalization,just regulation, proper legalization, and cannabis education. The federal legalization, or hopefully decriminalization, of cannabis in all 50 states is inevitable as it must leave it’s schedule one status and is not suitable in it’s plant form for any other schedule. The end of prohibition is near but where will it take us – nobody knows. But what we do know is thanks to grassroots efforts we have legalization in states and other countries – we now have a compassion act once again in California and the beginning of giving.

It seems it’s these grassroots movements that eventually make little things into big things – nobody ever expected a cannabis industry as we see today. None of us in California ever expected a regulation overload with full legalization nor did good people in a legal industry expect it to hurt patients. That intent simply wasn’t there – for the most part. But it was the last words of the legend Dennis Peron that spoke out to many on social media and beyond. Having the pleasure of knowing him briefly, working with him on what I call his last act of compassion – the Peron Resolution – in 2017 are memories that are iron clad. Dennis asked everyone to listen and many did not as by the time 2016 had came along it had been 2 decades since cannabis cards were being issued after the work of the famed prop. 215 team to gain the medicinal laws passage. But we are thankful that a tireless effort was put forth by countless cannabis patients, cannabis lobbyists, and so many more to push for the signing of the bill and that’s after getting it to that point.

Welcome back compassion – California has missed you!
Glad to see compassionate care back. I remember hearing and reading about Brownie Mary back in the 80's, and I thought she was brave and heroic then as I do now.
 
"Newsom’s approval of the bill prohibiting the smoking or ingestion of cannabis in buses, taxis and limousines was supported by law enforcement groups including the California Narcotic Officers’ Assn., which argued that the smoke from passengers could affect bus and limo drivers who then would endanger people on California’s roads."

I guess my first thought is who gives a flying feck at a donut about the opinion of the California Narcotic Officers’ Assn about MJ. MJ is not a narcotic.

Second thought is, are they really trying to reinvigorate that red herring of "contact high" FFS Next, we will need to keep it off of ships on the high sea lest the helmsman gets a contact high and steers the ship over the edge of the flat earth. sigh

I also find his justification from keeping MMJ from hospital patients...incl terminal hospital patients...to be very unconvincing.



CALIFORNIA | After Newsom bans pot use in limos, and for hospital patients, cannabis advocates are angry


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Gov. Gavin Newsom led the campaign to legalize marijuana in California three years ago but has since angered some in the industry by refusing to allow pot in hospitals and outlawing its use on tour buses and in limousines.

Newsom took the action on tour buses and hospitals as he signed several other bills in the last few weeks that will ease pot restrictions, including measures waiving taxes on cannabis provided for free by charities to people with serious health problems and allowing parents to provide medical marijuana products such as oils, creams and pills to their sick children on K-12 school campuses.

This was Newsom’s first chance to act on cannabis laws since he led the 2016 campaign for Proposition 64, which legalized the growing and sale of marijuana for recreational use. By the Oct. 13 deadline for acting on bills for the year, Newsom used his pen to sign or veto more than a dozen pieces of marijuana-related legislation.

“The 2019 legislative session has been a mixed bag for the cannabis industry, but with priority bills signed by the governor in the final hours, the industry is optimistic about future partnership with the administration,” said Lindsay Robinson, executive director of the California Cannabis Industry Assn.

Newsom’s approval of the bill prohibiting the smoking or ingestion of cannabis in buses, taxis and limousines was supported by law enforcement groups including the California Narcotic Officers’ Assn., which argued that the smoke from passengers could affect bus and limo drivers who then would endanger people on California’s roads.

“The problem was the driver was put in a position where he or she could be impaired by people using cannabis, and that creates a serious safety issue,” said John Lovell, legislative counsel for the narcotic officers group.

However, the measure was blasted by members of the burgeoning marijuana tourism industry, including Bryan Spatz, chief executive of Loopr, which offers cannabis tours in California and Colorado.

“Shutting down the industry entirely, instead of working towards a reasonable compromise that had already been laid out, is a slap in the face to the small-business people who have invested their livelihoods in this industry,” Spatz said.

Legislators say the ban will give the California Highway Patrol and other traffic safety experts time to develop standards for separating the driver’s compartment, including its air circulation system, from the back of tour buses.

“We are already in L.A. operating, but because of this measure we are considering all options, including pulling up stakes and moving out of California until a reasonable compromise can be reached,” Spatz said.

Other cannabis supporters were disappointed Newsom vetoed a bill that would have allowed dying patients to use smokeless forms of medical marijuana in hospitals, skilled-nursing facilities and hospices.

Ken Sobel, an attorney for the Cannabis Nurses Network, sent a letter to the governor criticizing his rejection of the bill. “Your veto simply rewards big pharma and the medical industrial complex allowing them to use opioids as the sole source of pain relief for dying mothers and fathers, sisters and brothers,” Sobel wrote.

The governor said in his veto message that he was acting “begrudgingly” in keeping the measure from becoming law, citing the conflict with federal law, under which marijuana remains an illegal drug. He said it could jeopardize federal reimbursement to hospitals for healthcare costs.

“Patients who are hospitalized and facing the end of their days should be provided with relief, compassion and dignity,” Newsom wrote. “It is inconceivable that the federal government continues to regard cannabis as having no medicinal value.”

But, he added, “this bill would create significant conflicts between federal and state law that cannot be taken lightly.”

Jim Bartel, who campaigned for the law after his son died of pancreatic cancer, disputed the governor’s concerns, saying the bill was written to allow hospitals to opt out if a federal regulatory agency forbids cannabis use.

Sobel said it is unlikely the federal government would seek to withhold reimbursements and noted California has challenged federal policy in the past with so-called sanctuary cities and setting its own vehicle efficiency standards.

State Sen. Ben Hueso (D-San Diego), the bill’s author, noted that similar laws have been adopted in New York, Connecticut and Maine. “I don’t see why we can’t achieve the same in California,” Hueso said in response to the veto.

Newsom signed a bill setting steeper fines for licensed and unlicensed pot firms that violate state law, which was a significant act, according to Javier Montes, vice president of the United Cannabis Business Assn. The group has complained that illicit sellers were not facing stiff enough penalties.

Jeannette Zanipatin, the state director of the Drug Policy Alliance, said the most significant new law signed by Newsom will waive fees for cannabis firms formed by people from disadvantaged communities that have been disproportionately affected by the war on drugs.

“We really wanted to emphasize the need to ensure that communities that were overpoliced, folks with prior convictions, are able to take part in this industry,” Zanipatin said.

As for Newsom’s balking at other expansions of cannabis use, Zanipatin said, more work needs to be done on scientific research and public education to build support for some policies. “He’s sort of taking a somewhat cautious approach, but in a good way,” she said.

Lawmakers shelved a bill for the year that would have allowed the state to license banks to handle money from marijuana businesses after the governor’s office raised concerns about how it would work and the author decided to provide more time to work on answers, one official said.

Those surprised by Newsom’s level of caution on some pot bills include Kevin Sabet, president of Smart Approaches to Marijuana, which opposes legalization.

“For someone that we might have expected to earn an F on marijuana policy, this gives him a D,” Sabet said. “I think when it came to such extreme issues as marijuana in hospitals and tour buses, he knew there would be local pushback.”
 

California's Cannabis Compassion is re-legalized



Free cannabis came before legal cannabis. Gifting joints or edibles to sick people who, being sick, couldn’t afford to buy — and couldn’t find relief anyway else besides someone else’s compassion — was central to the ethos of the early marijuana legalization pioneers.

And free weed for some was a boss three-dimensional chess move: busting a career waitress in her 60s known for handing out weed brownies to dying AIDS patients was, for the prohibitionist establishment and for law enforcement, almost as bad a look as busting a pot dealer with a lover dying of the same disease.
This is how medical marijuana became a thing, and providing space for sick and disabled people to come and smoke weed — weed quite often given to them, poor people on fixed incomes — is how retail cannabis stores began. And so one “funny” thing about legal, recreational commercial cannabis was that it made free cannabis illegal, or at least cost-prohibitive.

Charging tax on medicine given away for free was one reason why Dennis Peron, the aforementioned healer-dealer, opposed 2016’s Adult Use of Marijuana Act 20 years after being central to the passage of the country’s first medical-marijuana law, 1996’s Compassionate Use Act. Once legalization kicked in, giving free cannabis to the indigent and ill — a practice known as “compassion” — without paying tax on the “sale” became an outlawed act (although compassion was already on its way out in an increasingly commercial medical-marijuana industry).

Almost three years after voters approved legalization, lawmakers have re-legalized compassion. Earlier this week, among other cannabis-friendly bills passed by the state Legislature, California Gov. Gavin Newsom signed into law the Dennis Peron and Brownie Mary Act (the latter is the aforementioned brownie-provider). Sponsored by state Sen. Scott Wiener (D-San Francisco), the bill allows cannabis providers to gift certain products away to certain people without paying California cultivation and excise taxes, which can exceed 25%.

The California cannabis industry has been clamoring for tax relief since before the first legal gram was sold. High tax burdens are seen by many as the chief driver behind high prices at legal dispensaries — where $20 grams and $75 or $80 eighths are not uncommon — and why California’s underground cannabis economy is still estimated at four times (or more) the size of its legal weed marketplace.

But the Dennis Peron and Brownie Mary Act is more a throwback to those bygone outlaw days. Various cannabis compassion programs, including the Sweetleaf Collective, which still doles out cannabis to AIDS and HIV sufferers in San Francisco, and Operation EVAC, which provides the same to military veterans with PTSD and other afflictions, are now re-legalized. And, the hope goes, there’s now encouragement for more, similar programs.

“For decades, compassion programs have played a critical role in helping low income people with serious medical conditions access their medicine,” Wiener said, according to High Times. “Access to medical cannabis has allowed so many people living with HIV, cancer, PTSD, and other health conditions to survive and thrive. Taxing programs that give away free medical cannabis, and thus have no revenue, makes no sense and has caused far too many of these programs to close. SB 34 will allow compassionate care programs to survive and serve those in need. Many people will be healthier as a result of today’s action by the Governor.”
 
IMO, Newsom's justification for this just does not play. He's worried about violation of Fed laws...well, the entire fucking rec/med program is a violation of Federal law. Got to do better than this, Newsom and hope your hospice pallative medical care options aren't subject to some politician's faulty decision.

I mean, CA has no problem in telling Federal law and authorities to shove it when it comes to immigration so what gives with the sudden deference?

California governor criticized over vetoing bill to allow medical marijuana in hospitals

Following the signing of several cannabis-related bills earlier this month, California Governor Gavin Newsom is now facing criticism over proposed legislation that he vetoed.
Among the bills that failed to receive Newsom’s signature was Ryan’s Law, which would have allowed terminally ill patients to access marijuana on hospital grounds.
Due to weed’s illegality on the federal level, the California governor opted to “begrudgingly” veto the bill.

“It is inconceivable that the federal government continues to regard cannabis as having no medicinal value. The federal government’s ludicrous stance puts patients and those who care for them in an unconscionable position,” he wrote in his veto message but cited the conflicting legal nature of marijuana as the reason he couldn’t sign the bill.

Advocates claim bill covered hospitals fearing loss of federal funding
Now some proponents of the bill argue Newsom should have signed the bill anyway, pointing to the fact that the legislation was designed to allow hospitals to suspend cannabis on-grounds in the event a federal agency “issues a rule or otherwise provides notification to the health care facility that expressly prohibits the use of medical marijuana in health care facilities.”

State Senator Ben Hueso who authored the bill drew attention to the fact that similar laws exist in New York and Maine. “I don’t see why we can’t achieve the same in California,” Hueso said.

One of the citizens campaigning for the law, Jim Bartell, told the Los Angeles Times that the governor’s veto was unfounded.
Bartell’s son Ryan, after whom the bill was named died from pancreatic cancer at the age of 41. His father claims cannabis helped Ryan deal with the pain and other symptoms of his illness during his final weeks.

Another disgruntled supporter of the bill is Ken Sobel – a medical marijuana advocate who works as an attorney for the Cannabis Nurses Network.
Sobel slammed the governor’s decision in a letter, stating Newsom’s veto gave an advantage to big pharmaceutical companies, which are increasingly being scrutinized for their role in the nation’s opioid epidemic.

“Your veto simply rewards big pharma and the medical-industrial complex allowing them to use opioids as the sole source of pain relief for dying mothers and fathers, sisters and brothers,” Sobel wrote.

Before Newsom’s veto, the California Hospital Association said it was opposed to the bill as they fear it could lead to the loss of federal funds despite its support for medical marijuana.
 
"Wesson cited an admission by DCR Director Cat Packer last week that two applicants were able to get into the application system before 10 a.m., the designated start time for filing applications. As a result, Wesson said, the entire process was “compromised.”​


What a crock of BS.



LA Council president requests redo of retail marijuana licensing, shocking world’s largest MJ market


More confusion was added to the mix in Los Angeles this week over the city’s latest marijuana business licensing round after City Council President Herb Wesson called for the process to be redone, thus throwing into doubt the fate of 100 highly coveted cannabis retail licenses in the largest MJ market in the world.


Some winning applicants, in response, threatened to sue the city if the initial results are scrapped.


But industry officials applauded the move, saying last month’s licensing round had been flawed.


In a letter to the L.A. Department of Cannabis Regulation (DCR), Wesson recommended that:


  • The roughly 800 retail marijuana license applications submitted last month be suspended.
  • License applicants be given a refund for their fees.
  • All invoices sent to winning applicants be canceled.
  • A third-party audit be performed to ensure the licensing system has been working properly.




“It is paramount that the application process have the utmost integrity, be transparent, and fair,” Wesson wrote. “There appears to be no scenario in which the Retail Round 1 process can meet those three principles currently.”



Wesson cited an admission by DCR Director Cat Packer last week that two applicants were able to get into the application system before 10 a.m., the designated start time for filing applications. As a result, Wesson said, the entire process was “compromised.”


In an emailed statement to Marijuana Business Daily, a DCR spokeswoman said the agency is “committed to the most fair and transparent process possible. We’ll be meeting with the Council President’s Office soon to discuss their recommendations.”


Packer said last week that the two applicants that gained early entrance were detected by her staff and the candidates’ places in line for applications were adjusted accordingly to a start time of 10 a.m.


What’s next?


As of Wednesday, it was unclear what would happen next – especially whether the DCR would heed Wesson’s advice and redo its own licensing, which it has the authority to do without a vote of the full Council, or move ahead as planned.


“Technically, all (Wesson has) done is put a halt to things and he’s asking for a third party to come in and prove that it was on the up and up. That’s all that’s been done right now,” said Adam Spiker, the executive director of the Southern California Coalition (SCC), a group of cannabis industry stakeholders.


Spiker said Wesson was between a rock and a hard place, in part because he:


  • Spearheaded the entire social equity program push within the City Council.
  • Represents many of the communities that are incensed over how the program has played out.

“He had to do it,” Spiker said of Wesson’s letter. “I just think there are too many folks out there, from the communities that have been impacted statistically by the war on drugs that do not believe the process was on the up and up. So he had to do something.”


Lawsuits threatened


But the news sent shockwaves through the California marijuana business community, and several winning applicants promised they would sue the city if their positions in the top 100 of the first-come, first-served process were thrown out.


“We got an invoice TODAY,” one applicant wrote on Facebook. “Fully intend to sue the city if we lose our building because of this.”


Another winning applicant, who requested anonymity, wrote in an email to MJBizDaily, “Now they want to delay it or overturn it. I would be bankrupt or would have to sell shares, which I do not want to do. … If this is delayed or overturned, I will be suing for sure.”


Leona Whitney Beatty, an African-American single mother who won slot No. 45 last month and was primed to move forward with her cannabis shop, said Wesson’s proposal is “adding insult to injury.”


“We did exactly what the city told us to do,” Beatty said. “And for them to now go back and try to undo this process, I couldn’t sleep last night, worried about what happens now.


“It’s literally playing games with people’s money and livelihoods.”


Beatty said she’s already received an invoice from the DCR for the latest licensing round and was hoping to open her new L.A. shop in the first quarter of 2020. But now she’s uncertain exactly what will happen.


Some stakeholders support a redo


The California Minority Alliance (CMA) and some of the other applicants, however, applauded Wesson’s move because they believe there were too many flaws with the September process.


“We are grateful and the people are grateful. It’s just about fairness,” said Donnie Anderson, co-founder of the CMA, which issued a letter of its own supporting Wesson’s proposal.


“He’s seen that the system is compromised … and if the system is compromised, you have to change it,” he said.


Anderson, who believes the licensing system was indeed compromised, said he wants the entire process redone, along with a third-party audit to iron out any kinks.


Spiker said he believes the licensing process will likely be addressed by the City Council in November and that one potential solution might be an increase in the number of available licenses. Only 100 retail permits are up for grabs in the first round of Phase 3 and another 150 in the second round, which has yet to open.


“There should be a real, hard conversation about expanding the number of licenses,” Spiker said, noting the estimated hundreds of illegal shops that still operate in L.A., largely due to simple market demand for cannabis that can’t be filled by the existing 187 legal retailers.
 
California | ‘Epidemic’ of layoffs in marijuana industry — CEO faults state for inaction

Flow Kana, which bills itself as “California’s No. 1 selling cannabis flower brand,” is cutting up to a fifth of its workforce and its chief executive is faulting the state for failing legal marijuana companies.

The company, which is based in California’s Emerald Triangle — Humboldt, Mendocino and Trinity Counties — is cutting “non-core” staff, CEO Mikey Steinmetz said. He did not disclose a specific number of layoffs.

Flow Kana employs between 201 and 500 people, according to its LinkedIn page.

“It was one of the toughest decisions that I’ve ever had to make,” he said.

Flow Kana isn’t the only cannabis company forced to make cuts. In recent weeks, companies like Eaze and Weedmaps have also laid off part of their workforce.

“It almost feels like an epidemic of companies of similar size going through similar processes,” Steinmetz said.

The layoffs reflect challenges in California’s fledgling recreational cannabis industry. Voters legalized recreational marijuana in 2016, with sales beginning in 2018.

The intent was to create a lucrative, lawful and licensed marijuana market, but in practice state lawmakers have spent the past two years working to address several industry-identified hurdles.

This year, Gov. Gavin Newsom signed laws aimed at helping the cannabis industry, including one that allows businesses to claim state tax deductions, and another that allows businesses to donate product to medicinal users.

But, other proposals failed, including one that would have allowed cannabis businesses to have access to limited banking services.

One hurdle that Steinmetz identified is the lack of sufficient retail space for marijuana products.

California’s patchwork of legal statuses for marijuana retail means that there is just one retailer in the state for every 34,256 adults 21 and older, according to a survey conducted by BDS Analytics and ArcView Market Research.

“We need more retail, and it’s not in a few months. We need more retail immediately,” Steinmetz said.

He said that while there’s a place for unlicensed cannabis enforcement, the state should create an easier path to allow illicit retail operators to come into the legal market.

“If they were paying taxes the state would be better off,” he said.

Steinmetz said it’s not enough for the state to just crack down on those black market vendors. Without a comprehensive approach, “you’re going to just be playing a game of whack-a-mole the rest of your life,” he said.

“Doing enforcement right now, in a broken system, to me it’s like pouring water into a glass that has holes in it,” Steinmetz said.

Steinmetz also called on the state to ease the tax burden faced by growers, either by implementing a temporary tax holiday on the state’s cultivation tax, or by changing it from the current fixed rate to a percentage-based system that takes the fluctuating price of cannabis into account.

He said that the state could look to the craft beer industry, creating a tiered tax structure based on the size and output of the business.

Flow Kana “will weather the storm,” Steinmetz said. He said he doesn’t want to be perceived as complaining, or challenging the state. Steinmetz said he knows lawmakers are trying to make things better for the industry.

“But I really want them to hear the alarm that is being rang,” he said.

Below is a statement Steinmetz submitted to The Sacramento Bee on state oversight of the marijuana industry.

California cannabis can absolutely be a catalyst for social, environmental, medical and economic change, but that promise is growing increasingly fragile.
Just as no farmer would try to grow in contaminated soil without first remediating it, it is incumbent upon all of us, including our elected and appointed leaders in Sacramento, to commit to remedying the soil in which California’s cannabis industry is presently attempting to grow.
According to BDS Analytics and ArcView Group, approximately $1 billion dollars are spent on cannabis in California each month. The problem is, only ¼ of that is directed toward the legal market, and that number has been relatively flat for the past 18 months. No one who worked on or voted for Prop. 64 would say that less than half of total sales is success. The combination of overtaxation, overly-complicated regulations, and lack or dispensaries due to local moratoriums have created significant imbalance in the biggest legal marijuana industry in the world.
According to the LA Times, close to 80% of our state’s jurisdictions have banned retail cannabis stores, effectively rolling out the red carpet to illicit retailers. California has the lowest ratio of legal retail licenses to cannabis consumers, with just one retailer for every 34,256 adults.
The alarm bell is ringing. The entire legal industry is contracting as evidenced by recent noteworthy lay-offs experienced by Eaze, Pax, CannaCraft, Grupo Flor, Weedmaps, and many other private companies that have been silently conducting hiring freezes and discharges. Today, Flow Kana joins these leading brands as we announce a strategic workforce reduction. We too have had to make the difficult but necessary choice to better align our operations with the realities and size of the market and, moreover, to protect the backbone of our mission and model, California’s independent heritage cannabis farmers.
Flow Kana sources cannabis from 200+ independent family farmers who have invested considerable time and resources in order to comply with California cannabis regulations. They have worked hard to earn their cultivation licenses, and they adhere to state regulations in every aspect of their businesses. All the while, their sustainable and regenerative growing practices have transformed California cannabis into a world renowned agricultural product. These farmers have dedicated their lives to pioneering our industry, sacrificing everything to make the expensive and arduous transition into the legal market after a multi-generational legacy of “traditional” cannabis farming. This leap of faith required that they become experts on regulatory compliance, reimagine their business models, and accept lower earnings. They’ve had to forfeit immediate financial stability in favor of long-term viability. In this moment of crisis, we ask that their partner, the State, act with the long-term future of this industry in mind as well.
Many of our state legislators have done commendable work standing the basic framework of this industry up in 2015, and others educating themselves on the unique needs of cannabis companies since. We applaud them as well as the farmers, producers, and retailers who have put in the time to teach our lawmakers about what we do. That was a great start. Now, as we approach 2020, we need to take our efforts a step further in the name of building a thriving California cannabis community that is sustainable in every sense of the word. That is afterall, the California way.
Every legal operator is looking to state leadership to join us in effecting solutions and making 2020 the year of perfect vision for California’s cannabis industry. In brief, here are our immediate recommendations:
  • We respectfully demand a wider (and easier) path for illicit retail operators to join us in compliance. Rather than spend time and resources punishing these businesses, help us bring them into the market so that we can all thrive together.
  • We ask that the Bureau of Cannabis Control be elevated to a Department-level agency reporting directly to the Governor. With direct interface with our business-minded Governor the cannabis industry should benefit from his acumen.
  • We ask elected officials to ease the heavy state tax burden which makes licensed retailers non-competitive with the illicit market. As a model, we ask the state to look to the craft beer industry and help us create a tax structure based on measured output and production so that smaller businesses labor under a lower rate.
California cannabis is here for good, and so are we. From farmers to dispensary owners — California’s cannabis industry is working to ensure that our golden state can demonstrate the extraordinary medicinal, social, and agricultural benefits that this plant can bring and in doing so contribute the jobs, tax revenue, and business fundamentals of a promising growth industry.
Let’s make the New Year one of fruition in the which the extraordinary promise of California’s legal cannabis industry begins to flower.
 
Top 6 growing pains in California’s cannabis marketplace

Every state that’s legalized cannabis for adults 21-and-up has faced that moment or even series of moments that threatened to really derail or seriously stymie market development. California is at that crossroads and has been almost from the outset of the first issuances of cannabis licenses back in January 2018. California will, of course, eventually and sufficiently deal with its myriad of cannabis issues, but right now there are a select few that are really affecting licensed businesses and the success of this important democratic experiment. In no particular order, my top six (current) threats/growing pains to the development and success of California’s cannabis marketplace are:
  1. State licensing woes and low licensing numbers. Every state at some point experiences what seems to be either too much licensing (see Oregon) or just too little to satisfy demand. Right now, California is probably in the latter category. And with too few licenses comes lack of access for consumers and the growth and continued operation of illegal operators. The state has done its best to mitigate the licensing log jam (see, for example, the new and improved provisional license concept), but even that hasn’t done much to spur huge licensing numbers. Right now, according to the AP, “California has 7,392 licensed cannabis businesses. The [Bureau of Cannabis Control] oversees 2,630 companies with either provisional or annual licenses, while the state Department of Public Health oversees an additional 932 manufacturers. The state Department of Food and Agriculture oversees 3,830 farmers.” Whether it’s based on local control issues (see below) or the fact that licensing, itself, is just too onerous for stakeholders, California just doesn’t have a swell of legal operators with licenses at this point. In fact, just last week, the state suspended 394 licensee applications, representing 5% of the licensed market, because those applicants weren’t progressing with the mandatory track and trace training requirements, which is a cornerstone of legalization (being able to monitor the inventory at all times).
  2. Local control. Most people don’t realize that the majority of California cities and counties still completely ban commercial cannabis activity. And the majority of cities and counties that do allow for it only limit that activity to medical cannabis production and sales. Of course, the local control pitch was a big part of getting Prop. 64 and the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MACURSA”) through into actual law, and cities and counties have inherent police powers anyway to ensure the protection of the health and well-being of their citizens. Still, in California, to secure a state license of any kind, you must have local approval to operate from your city or your county. And in local jurisdictions that have bans, this means that licensing is impossible; it also means that these communities are hotbeds for unaccountable illegal cannabis activity, which of course undermines legal operators at every turn.
  3. Illegal market actors. Every state continues to deal with the illegal cannabis market, and it will always exist in some capacity regardless. At the same time, when barriers to entry are too high or intense or taxes are way too high and/or there’s too much red tape, regulators may be helping to spur the illegal market they seek to eliminate. In California, the illegal market is alive and well in certain communities for a number of reasons. The usual culprits are municipal bans, lack of enforcement by the state or locals, the fly-by-night nature of these operators, egregious taxation that makes legal operation too expensive, and constant changes to or inconsistent regulator interpretations of state and local rules that can bankrupt operators. Moreover, the brazen attitudes and recklessness of illegal actors (especially in California) know no bounds–a perfect example is the vaping crisis, which is almost entirely attributable to illegal cannabis vapes and cartridges, for which the legal cannabis industry has suffered from reactionary state and local bans and new restrictions on lucrative vapor products at the state and local levels.
  4. Lack of transparency and consistency from regulators. Being a cannabis regulator is no easy task. To wrangle and control a new industry unlike any other is incredibly difficult and many challenging policy and legal decisions have to be made by these regulatory bodies without any assistance (or budget) from other branches of state and federal governments. At the same time though, and in my experience, the best cannabis regulators are those that are consistent, transparent, and responsive to stakeholders, and especially those that do not engage in “business as usual” politics, only dealing directly with paid lobbyists and trade groups. In California, my personal experience with the three governing bodies at the state level has been mixed. At the outset of licensing, it seemed it was easier to secure more comprehensive, direct responses to questions or concerns about various regulations (and there are A LOT of regulations). Now though, depending on the agency and depending on the analyst with whom you may be dealing, you would be lucky to even get a substantive response to important regulatory questions within a couple weeks of submission, if at all. Some of that delay or lack of response is understandable as regulators wear many hats and are on the constant go relative to enforcement and maintaining the regulatory structures surrounding licensing. And maybe some of the delay or non-responsiveness is due to the size of California and the massive undertaking that is licensing, but I can say that in almost a decade of practice in this area it is not yet simple or easy for stakeholders to consistently communicate with state regulators, which puts at risk business practices and a solid understanding of regulatory compliance in order to avoid regulatory violations.
  5. Taxes. In my opinion, no state has figured out the gold standard for cannabis taxation that isn’t so high as to hinder business but isn’t so low as to incentivize extreme consumer cannabis use. In California, there are multiple levels of cannabis taxation–a 15% excise tax on retail sales (on top of state and local sales tax), a varying cultivation tax depending on the type of product that enters the commercial market, and then applicable local cannabis-specific taxes and fees. In July, the SF Chronicle estimated that “Californians are paying up to 45% tax rates on cannabis purchases — nearly 40% higher than the standard 6% state sales tax.” When taxes are unflinchingly high like this, the illegal market is energized and consumers tend to turn that way to avoid paying too much for their cannabis even if that cannabis isn’t tested or quality assured. Since MAUCRSA’s inception there’s been little to no tax reform to provide any kind of relief to cannabis businesses, including on the local level (with very few exceptions from cities that want the tax revenue to justify the social cost).
  6. Lack of access to banking. If you’re motivated and capitalized enough to secure local approval and a state license, and you can bear the significant tax burdens, you still likely will have difficulty securing a bank account in California. Because California’s regulations aren’t the tightest in the cannabis union, on the whole (and especially regarding the vetting of owners and financial interest holders), financial institutions have not openly banked the industry pursuant to the 2014 FinCEN guidelines (which are still alive despite the rescinding of the 2013 Cole Memo). The lack of access to banking forces the classic public safety threat of all-cash, which is also a logistical nightmare for cannabis businesses that must taxes and run payroll. While other states with stricter regulatory regimes, like Washington State and Colorado, have options for cannabis banking, California still lags in this area, but I’m hoping that will change as cannabis regulations progress.
None of the foregoing are new or novel cannabis industry issues on a state-by-state basis. However, since California has had cannabis legal reform since 1996, you wouldn’t be out of bounds to think that such a state could quickly and effectively deal with these issues, but that’s not been the case (despite the fact that they are now several state legalization blueprints from which to borrow). Nonetheless, I remain confident that California will eventually come out on the other side with successful and long-lasting licensees in tow after it makes through these growing pains.
 
Code Blue! California’s medical cannabis ID card system has collapsed

Virtually none of the estimated hundreds of thousands of California patients entitled to purchase tax-free cannabis are getting those savings—because the state’s medical marijuana ID card system has collapsed, new data from the California Department of Public Health shows.


Patients say it's just too burdensome and costly to get one.

In a state of 40 million people, just 4,551 patients had the official medical marijuana ID card, according to CDPH totals for the fiscal year 2018-2019, which ended June 30.


Adult-use legalization—with its 600 stores and delivery services, plus the legal right to grow at home—has made the card partially obsolete for adults 21 and over. Those seeking the official ID card say that it’s costly and time-consuming to obtain and often not worth the hassle. One of the country’s oldest medical cannabis card programs might need to be retooled or scrapped.


california medical marijuana cards

Active state ID card totals are down 65% from their 2010 peak. (Leafly, California Department of Public Health)

“Is the program serving the people it should? No,” said Debby Goldsberry, operator of the Magnolia Wellness dispensary in Oakland, and an ID cardholder. “The cost is too high. People don’t buy that volume of cannabis, and there’s no value to them.”


“It’s messed up,” said Michele Aldrich, a longtime San Francisco medical cannabis activist and ID cardholder.

System antiquated, distrusted

California’s medical marijuana ID card system is America’s oldest, one of its least restrictive, and arguably one of its least functional.


The world’s first medical marijuana law, California’s Proposition 215, passed in 1996. But it didn’t actually legalize medical marijuana. It offered an awkward medical defense in court for those with a doctor’s note.


Patients say, ‘Why should I have to register with the county like some sex offender?’

By 2004, cops had grown tired of trying to verify more and more doctor’s recommendations during police stops. So the California Legislature passed Senate Bill 420, which created an ID card system and gave cops a state number to call to verify patients. Cardholders couldn’t be stopped solely for possessing a permissible amount of cannabis.


“It does offer a little more protection” than Prop. 215 offered on its own, said Ellen Komp, co-director of California NORML.


But the card system never really caught on. Patients didn’t have to get the card—it’s voluntary for those who want extra legitimacy. By contrast, later medical cannabis states mandated ID cards. “Because it was voluntary,” Komp said, “it was set up for failure.”


Also, there’s the privacy issue. Telling the state that you use a federally illegal Schedule 1 controlled substance turns off a lot of people, said Komp. “Patients say, ‘Why should I have to register with the county like some sex offender?’”

The Prop 64 tax break failure

California’s medical ID program peaked at 12,659 cards in circulation in the fiscal year ending 2010.


The state’s 2016 adult-use measure, Proposition 64, granted state medical ID cardholders an exemption from state and local sales taxes, which run 7.25% to 10.25%. Other medicines aren’t taxed, either.


Medical ID cardholders can also obtain their medicine in other states that have so-called “reciprocity” rights.


Holding a card can ease interactions with law enforcement. Medical marijuana patients can possess more than the state’s adult-use limit of one ounce in public, and six plants on your property.


“It’s a brighter white line,” said Komp.


California did $1.91 billion in cannabis sales in its first adult-use year, 2018, yet almost no one took the medical sales tax break. Why?


Because getting a medical marijuana ID card in California sucks. “It’s absurd,” said Aldrich.

Getting a card is a part-time job

Here’s what a patient will tell you: First you have to find a doctor who will write you a note, and there are fewer of them now under adult-use legalization. Make an appointment. Go to the doctor’s office and pay about $150 for the consultation, maybe more.


Then find out how to make an appointment with your county health department, and schedule that weeks in advance, schlep to some county health office, bring the right paperwork, and pay up to $100. The county has 30 days to verify the application, then 30 days for the state to make the card, then you might have to come back to the county health office to pick up the card.


Yay! Now you can save an average of 8.37% sales taxes on your cannabis purchases. So go out there and purchase at least $2,986 worth of cannabis products, at which point you’ve saved enough in sales taxes to have paid for the doctor’s visit and card ($250).


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“It costs an enormous amount of money to get a card,” said Goldsberry.


Oh, also: After one year, the card expires and you have to repeat the entire process.

No teleconferencing allowed

Each of California’s 58 counties administers the state ID card system on a local level. So in Goldsberry’s Alameda County, waits are three weeks just to get a card appointment. Alameda County issued 467 cards last fiscal year, maybe two per business day.


In San Francisco, the birthplace of cannabis compassion, waits are two weeks to get a county health appointment. You have to show up in person, even if it requires an ambulance to bring you, Aldrich said.


Aldrich learned that the hard way earlier this year when her husband, Michael, went to renew the card of a bed-ridden woman for whom he has been a caregiver for the past six years. The woman, in her 60s, has intractable and debilitating chronic pain from hip and knee injuries. San Francisco County Health wants her down at the health office to renew her ID card, said Aldrich. Unlike last year, a picture of the patient, or a consult via teleconference, won’t do.

An aimless government program

What is the total addressable market of people in California who qualify for medical cannabis?


It could be 915,845 patients, if California’s system worked as well as Arizona’s, or 1.2 million if it worked as well as Maine’s ID card system.


Instead, no one knows. The California Department of Public Health told Leafly it has no quotas for program success. Neither do the counties.


“There is no target goal for issuing a number of [cards],” a staff member at the Los Angeles County Department of Public Health told Leafly in an emailed statement. LA County has issued 138 medical marijuana ID cards so far this fiscal year, for a population of 10.1 million people.


'There is no target goal for issuing a number of cards.'
Los Angeles County Dept. of Public Health Communications Department

“It is likely that the numbers of MMICs issued have decreased as other options are now available for legal purchase,” the LAPDH staff member wrote.


LA County, which encompasses 4,751 square miles, has seven Public Health offices where patients can set up appointments. The county does not keep data on wait times for an appointment, but “the program is not aware of long waits for the applicants to get an appointment with our department.”

Patients turning to a toxic, illicit market

LA County, Tulare County, and Kings County each have recorded one death and dozens of illnesses caused by vaping illicit market THC vaporizer cartridges. Victims report shopping in the black market because they cannot afford the high cost of tested products.


Tulare County Public Health Division Manager Cecilia Herrera told Leafly the county’s medical ID card system is a success because it follows applicable state laws. Getting a card can take up to six weeks and $100 in fees, plus the doctor’s visit cost. Tulare has issued a total of four ID cards this fiscal year.


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“The decrease in numbers of MMJ ID Cardholders is likely due to recent changes in legalization. … The Tulare County decrease is consistent with the state trend,” Herrera said.


Kings County Assistant Director of Public Health Nancy Gerking also considers her county’s program a success. Getting a card there can take as little as about two weeks, and two visits to the county health office. The rural county has four active medical marijuana cards, for 151,000 people. “We are proud to say we believe our program at Kings County to be successful,” Gerking said. “That’s largely due to the fact our turnaround time is very short.”


Kings County is down from a 2015 peak of eight cards. Gerking couldn’t say why, though she had a theory: “Since the legalization of recreational marijuana the cards may have become less desirable.”

Should we shut it down?

Given how few people get ID cards and how much it probably costs taxpayers, should we just shut the program down and give the sales tax break to anyone with a doctor’s note? It’s tough to say.


“I wouldn’t have a problem with that,” said NORML’s Ellen Komp.


“It doesn’t have that much utility,” said LA. lawyer Alison Margolin. “And I support medical marijuana.”


The biggest loss would be to medical cannabis travelers. “I need my reciprocity,” said Oakland patient Debby Goldsberry.


Related
Which US states accept out-of-state medical marijuana authorizations?


Instead, Goldsberry recommended lowering county application fees to $20 or $30, plus a statewide educational campaign about the advantages of the ID card.


Many former medical patients shop in adult-use stores. That adds up to a likely overpayment in the tens of millions of tax dollars statewide. “I’m still seeing patients” at Magnolia Wellness, said Goldsberry. “They just don’t get their card anymore. They don’t understand the value.”


Ultimately, medical cannabis preceded adult-use legalization, and that paradigm is too valuable to lose, she said.


“Cannabis can be used as a targeted medicine to help a wide variety of conditions,” Goldsberry said, “and we’ve just started looking at the tip of the iceberg in terms of what the plant can do and how it can help people. This is not the time to take the market away from helping people have these transformative experiences. We need to bring the focus back to cannabis as a plant that helps people.”
 
These people are complete and utter blithering fucking idiots.

What is the BIG story out of CA about MJ over the last year or more? That's right, the illegal black market is still thriving and is much larger than the legal market. And that this is due, to a great extent, on high prices driven..... by high taxes...... driven by greed fucking politician and bureaucrats who never saw a dollar that they didn't want to seize.

I couldn't believe this headline when I saw it. I thought I must have misread it. sigh

California marijuana taxes will increase New Year’s Day

After having avoided an increase in state taxes on legal marijuana, California officials changed course Thursday and announced MJ excise and cultivation taxes will go up effective Jan. 1.

High state and local tax rates have been an industry problem that have made legal businesses less competitive with the illicit market: Unlicensed retailers can lure customers with lower prices, since rogue shops don’t pay any taxes.

In announcing the move, the California Department of Tax and Fee Administration (CDTFA) – which must recalculate the wholesale cannabis markup rate every six months – revealed that the markup rate for the marijuana excise tax will increase from 60% to 80% on New Year’s Day.

The markup rate is used to provide the basis for California’s 15% excise tax.

The increase will also raise the state cultivation tax to adjust for inflation, raising those taxes as well:
  • $9.65 from $9.25 for an ounce of flower, or an increase of 4.3%.
  • $2.87 from $2.75 for an ounce of leaves, or an increase of 4.3%.
  • $1.35 from $1.29 for an ounce of fresh marijuana plant material, or an increase of 4.6%.
The CDTFA’s markup rate is based on the wholesale average market price of cannabis, and the agency had previously declined to increase the state marijuana tax rate.

The agency statement said the markup rate change was based on “an analysis of statewide market data,” and a CDTFA spokesman wrote in an email to Marijuana Business Daily that the tax adjustments are a result of existing state law.

“When implementing (Proposition 64), the Legislature moved the incidence of the tax from the retailer to the distributor, requiring CDTFA to determine the average markup rate every six months,” CDTFA spokesman Casey Wells wrote.

“The purpose of the markup is to have the actual tax match the 15% gross receipts rate approved by voters. After analyzing thousands of transactions in the state’s Track and Trace system, CDTFA analysts have determined that the required markup rate for the period beginning January 1, 2020, is 80%.”

When asked if the excise markup rate will change again in another six months, Wells said that will depend on wholesale market data. But the cultivation tax, since it’s based on inflation, would only be adjusted once a year, he said.

To date, legislative efforts to lower state taxes have fallen short, meaning the legal supply chain has continued to struggle to attract customers.

Industry insiders immediately criticized the move.

The California Cannabis Industry Association (CCIA) said the increase left its members “stunned and outraged.”

“As California’s regulated market spirals towards collapse from taxes on cannabis consumers … we believe that the CDTFA’s decision to increase tax burdens on compliant cannabis operators is counter to developing a safe industry,” according to the association’s statement.

“Widening the price disparity gap between illicit and regulated products will further drive consumers to the illicit market at a time when illicit products are demonstrably putting people’s lives at risk.”

Other industry insiders agreed.

“At the very least, this is tone deaf, given what the legal industry is going through right now and the lack of control of the illicit market,” said Adam Spiker, the executive director of the Southern California Coalition, a Los Angeles-based cannabis trade group.

A report on cannabis taxes, expected in December from the Legislative Analyst’s Office, has been highly anticipated by industry insiders who hope it will give them political ammunition to support lowering statewide marijuana tax rates.
 
California Is Raising Its Taxes On Cannabis... Again

Los Angeles, CA – The California Department of Tax and Fee Administration (CDTFA) announced yesterday that it plans to raise taxes on the legal cannabis industry once again. This move is considered to be another blow to an industry that is currently facing an economic downturn in a depressed market.


The legal cannabis industry faces stiff competition from a thriving illicit market, due to the non-compliant market's significantly lower price points. The CDTFA's latest planned tax increase will further exacerbate price point discrepancies between the compliant and non-compliant markets. Potentially, cannabis consumers may be driven away from the heavily-taxed legal market if the latest tax increases are passed on to consumers rather than absorbed by operators.


While the CDTFA describes its mission "to make life better for Californians by fairly and efficiently collecting the revenue that supports our essential public services," it is hampering the legal cannabis industry's ability to operate cost-effectively. This latest tax increase is prompting some California cannabis executives to believe CDTFA is deliberately trying to crush the livelihood of legal operators.


"It makes you wonder if the state wants the legal cannabis industry to fail," said one exasperated executive on the condition of anonymity.


Cannabis Markup Rate


CDFTA is responsible for determining the tax mark up rate on cannabis every six months. According to their website, "an analysis of statewide market data was used to determine the average mark up rate between the wholesale cost and the retail selling price of cannabis and cannabis products. Based on this analysis, effective January 1, 2020, the newest markup rate will be at 80%."


Additionally, the 15% cannabis excise tax is based on the average market price of cannabis or cannabis products in a retail transaction. The markup rate is used when calculating the average market price to determine the cannabis excise tax due in an arm's length transaction where the average market price is the retailer's wholesale cost of cannabis or cannabis products plus, the markup rate determined by the CDTFA.


In a non-arm's-length transaction, the average market price is the cannabis retailer's gross receipts from the retail sale of cannabis or cannabis products.


Cultivation Tax Rates:


As of January 1, 2020, the tax on cannabis flower per dry weight per ounce will increase from $9.25 to $9.65. Marijuana leaves per dry weight per ounce will increase from $2.75 to $2.97, and fresh cannabis plants per ounce will increase from $1.29 to $1.35.


The rates apply to cannabis that a cultivator sells or transfers to a manufacturer or a distributor.


California is considered by many to be the Shangrila state of the legal industry, due to the sheer size and scope of ubiquitous dispensaries and the plethora of products that they carry. However, that may change for marijuana supply chain operators and consumers alike if they are increasingly priced out of the market.
 
"California has 7,214 state-licensed cannabis companies"

Wow, that seems like a REALLY high number to me....very different approach than here in MD.


Hundreds of California marijuana business licenses still suspended and likely going unused


Almost 4% of California’s state marijuana business permits remain suspended weeks after regulators put more than 400 in limbo for not participating in mandatory track-and-trace system training.


The number of suspended permits has fallen – but remains sizable. As of Tuesday, 277 out of the 407 permits involved had not received reinstatement to “active” status, according to state licensing data.


Those remaining 277 are “a combination of businesses not in operation or not in the (track-and-trace) system,” a spokesperson for the Bureau of Cannabis Control wrote in an email to Marijuana Business Daily.





Industry observers suggest California’s licensed marijuana supply chain likely won’t experience major fallout from the permit suspensions, because many of the cannabis companies involved weren’t currently operational or were canceled business ventures.



Or, if they are operational, marijuana businesses can get through the permit reinstatement process quickly, industry officials noted.


The ongoing suspensions include:


  • 164 distributors (16 of which are transport-only)
  • 28 retailers
  • 41 delivery services
  • 34 microbusinesses
  • 8 manufacturers
  • 2 cultivators

Suspensions for inactive businesses?


California has 7,214 state-licensed cannabis companies, so the suspensions represent just under 4% of the legal supply chain.


For about a quarter of the suspended permits, it was an easy fix that took only about half a day, said Josh Drayton, communications director for the California Cannabis Industry Association (CCIA).


But that’s also apparently a part of the supply chain that wasn’t even yet operational, according to analysis by several industry participants.


As far as the remainder of the suspensions, many appear to still be in the works or perhaps canceled ventures altogether.


The upshot, the CCIA’s Drayton said, is the legal supply chain won’t experience major long-term impacts from the suspensions.


But to him, the episode again illustrates how burdensome the regulatory system remains for marijuana companies.


“There’s still quite a few barriers for folks, and right now, with capital investment drying up, it’s going to be difficult for some of these folks to ever get operational, because those investment dollars are just no longer there, the way they were a year ago,” Drayton said.


As far as the 277 remaining suspensions, many of those have likely gone unused, Drayton said, another indicator of how difficult it’s been to navigate the California marijuana industry or to turn a profit.


“I don’t know if this is the full case, but my initial understanding is a lot of these licenses are businesses that have been inactive,” Drayton said.


That’s true for at least three of the operators that have suspended permits.


Tim Blake, founder of the Emerald Cup – one of the most high-profile marijuana events in California – holds one of the 28 retail permits that were suspended. It’s for a retail cannabis shop in the heart of Mendocino County that he said he currently can’t afford to reopen after closing it about a year ago for remodeling.


“It was an old building (and) had a lot of upgrades that needed to be done. We thought (regulators would) let us get by without doing a lot of them, but they demanded all that get done,” Blake said.


The mandatory upgrades – such as making the building disability-accessible – are likely going to cost upwards of $200,000, he said. But he’s had other business ventures to focus on in the past year.


“It came down to a matter of finances,” Blake said.


“It probably would have cost a prohibitive amount to be open over the last year, so I probably ended up saving money by not being open.”


Blake is still planning to reopen the shop, but likely not until spring, he said.


It’s a similar story with Grupo Flor, a Monterey County-based company with a wide business footprint that also holds a suspended distribution permit.


Grupo Flor had an investment deal that fell through over the summer – which was partially to blame for the company’s recent staff layoffs – and left the company without the necessary capital to launch a previously planned statewide distribution operation. That license is currently going unused.


“Since the location is not operational, it’s not much of a loss,” Grupo CEO Gavin Kogan wrote in an email to MJBizDaily.


“Rather than accept the suspension, we are voluntarily withdrawing the license from (the) state. We will resubmit to state once the location is operational.”


Possible system glitches


Another suspended permit belongs to Jerred Kiloh, president of Los Angeles-based trade group United Cannabis Business Association, for a retail shop in Napa.


That instance, however, appears to involve a clerical error by the Bureau of Cannabis Control (BCC), Kiloh said, since he’s fully credentialed for the state’s Metrc track-and-trace program for his other shop in L.A., the Higher Path.


Kiloh said the BCC made a mistake on the license, so he just needed to inform the agency the required track-and-trace training was already completed.


“It was just a convoluted amount of miscommunications on (the BCC’s) part,” he added.


Kiloh noted his Napa shop – like Blake’s – has yet to open, so getting the suspension lifted isn’t a priority yet, in part because getting that taken care of will likely take only a matter of hours.


“We’re not open for business yet, so it wasn’t like, ‘Oh my god, let’s hurry and get onto Metrc,'” Kiloh said.


“Because who cares right now? But we are trying to open in the next few weeks, so my name should be off the suspended list by now.”


Kiloh said he suspects it’s a similar explanation for many of the other suspended licensees: Either they’re not yet operational but soon will be, or they have canceled plans, as in the case of Grupo Flor.


“A lot of them have put that on the back burner until they’re ready, knowing that in a few days, they can take that suspension off,” Kiloh said.


He also noted that a lot of small businesses – including retailers, farmers and others – obtained distribution permits in 2018, thinking that niche would be an easy entrance into the legal market.


“Some farmers got distribution licenses so they could distribute their own product, and then they realized it’s not cost-effective,” Kiloh said.


“They didn’t have a whole sales force to go sell their product like a distributor would need to. So a lot of those forces are what have pushed a lot of these distribution permits to not be used.”
 
License revoked for California cannabis vape maker Kushy Punch after state seizes $21M worth of products

California cannabis regulators have revoked the business license of well-known vaporizer brand Kushy Punch after the company was raided last month and found to be operating from an unlicensed facility.

After receiving a complaint about illegal cannabis activity at a location in Canoga Park, California regulators searched the unlicensed facility and seized nearly $21 million of cannabis products held by Vertical Bliss, which does business as Kushy Punch and manufactures and distributes the brand’s products.

The seized merchandise included 7,200 illicit vape cartridges, according to the Bureau of Cannabis Control (BCC).

An attorney for Kushy Punch lamented the state’s decision and blamed the slow rollout of California’s adult-use cannabis market.

“The More Agency, as the sole owner to all rights to the recipes, formulas and intellectual property pertaining to Kushy Punch, is saddened by the license revocation … ” Eric Shevin, legal counsel for Kushy Punch, wrote in a statement to Marijuana Business Daily.

“We have witnessed what has been termed a cannabis extinction event, as many operators are unable to withstand the licensing delays, costs and onerous taxes that continue to be a barrier for historical brands like Kushy Punch to survive.”

According to BCC spokesman Alex Traverso, Kushy Punch was not selling vape pens from the unlicensed facility, but it was manufacturing and storing them there.

“All commercial cannabis activity in California must be conducted on a premises with a valid license issued by the appropriate state cannabis licensing authority,” California regulators said in a statement.

“Manufacturing, distributing or selling cannabis goods without a state license or at a location that is not licensed is a violation of state law.”

The license revocation comes as the marijuana industry continues to react to a health crisis in which dozens have died and more than a thousand have been sickened by vaping products.

The Centers for Disease Control and Prevention on Thursday confirmed 47 deaths and 2,290 illnesses associated with vaping.

Legal cannabis companies say black-market vaporizers are the culprit behind the vaping crisis.

The More Agency is looking for licensed marijuana partners that will continue to provide Kushy Punch’s branded products, according to Shevin.

At the time of the raid, Kushy Punch said it planned to destroy the vape cartridges.

Kushy Punch, which makes both recreational and medical marijuana products, has been operating in California’s MMJ market for more than 20 years.
 
Weel, CA sure do be getting a lot of press on this subject....none of it good, deservedly.

I often wonder if our political election process somehow secretly winnows candidates to those possessing intellectual challenges...severe intellectual challenges! haha

No Joke: California Will Increase Its Cannabis Tax on Jan. 1

When the year began, marijuana was supposed to remain the hottest investment opportunity on Wall Street. Canada had legalized recreational weed in Oct. 2018, derivative products were forecast to hit dispensary shelves by Oct. 2019, and a number of U.S. states had been pushing for medical or recreational legalization. The stage appeared to be set for success -- and then someone turned out the lights.
Since the end of the first quarter, virtually no pot stocks have moved higher. Not only are most marijuana stocks down, but most have lost half or more of their value. This train wreck can essentially be boiled down to a handful of factors.
To our north, Canada has been plagued by persistent supply issues and regulatory delays since day one of legalization. Health Canada has been slow to approve cultivation and sales license applications, thereby keeping legal product off the market. All the while, the country's most populous province, Ontario, has just two dozen open dispensaries for consumers to purchase from. Both factors have led to a scenario where black market marijuana has thrived.
A black silhouette of the United States, partially filled in by baggies of cannabis, rolled joints, and a scale.

In the United States, the culprit looks to be high tax rates in select states. High levels of taxation make it difficult for legal-channel weed to compete with illicit producers. The higher the tax rate, the wider the price gap, and thus the more likely it is that black market growers will carve out a sizable portion of a state's total marijuana sales.
Exorbitant cannabis taxes are probably the easiest problem to resolve. Unfortunately, California didn't get that memo.
California's ridiculously high marijuana tax is about to grow
On Thursday, Nov. 21, the California Department of Tax and Fee Administration (CDTFA) announced cannabis mark-up and cultivation tax rate changes that'll become effective as of Jan. 1, 2020. Here's the spoiler: Cannabis tax rates are going up!
First off, the mark-up rate will jump from 60% to 80%, based on an analysis of statewide data that the CDTFA does every six months. As noted in the update:
The 15 percent cannabis excise tax is based on the average market price of the cannabis or cannabis products sold in a retail sale. The mark-up rate is used when calculating the average market price to determine the cannabis excise tax due in an arm's length transaction. In an arm's length transaction, the average market price is the retailer's wholesale cost of the cannabis or cannabis products, plus the mark-up rate determined by the CDTFA.



Essentially, this mark-up rate is the basis for the Golden State's 15% excise tax. Keep in mind that this increase isn't arbitrary, but is instead mandated by legislation (Prop 64) that was passed by the state.
A green highway sign that reads, Welcome to California, with a white cannabis leaf in the upper-right corner.

Secondly, California's cultivation tax is being adjusted for inflation. The adjustment is as follows:
  • An increase to $9.65 from $9.25 per ounce of dried cannabis flower.
  • An increase to $2.87 from $2.75 per ounce for cannabis leaves.
  • An increase to $1.35 from $1.29 per ounce for fresh marijuana plant material.
These cultivation tax rates are examined once annually by the CDTFA and, in 2020, represent inflationary adjustments of between 4.3% and 4.6%.
California is rolling out the green carpet for the black market
Now, here's where things get maddening.
California has long expected to be the world's crown jewel of cannabis sales. Although estimates vary, most of Wall Street expects California to generate $10 billion to $11 billion in annual sales by 2030. Yet, in the state's first full year of recreational marijuana sales, California's total pot revenue declined. In 2017, when California only sold medical marijuana, sales hit roughly $3 billion. Then, in 2018, with both recreational and medical cannabis available, statewide sales plunged $500 million to $2.5 billion. A big reason for this drop is that California has been taxing the daylights out of its consumers.
A cannabis leaf lying atop a neat stack of one hundred dollar bills.

Here's a snippet of some of the expenses currently being absorbed by California consumers as legal cannabis moves from seed-to-sale:
  • State taxation.
  • Local taxation, which could have a few added percentage points, depending on the city.
  • The aforementioned 15% excise tax.
  • The cultivation tax that's entirely dependent on the stage of plant being taxed.
  • Quality control testing.
Again, while estimates vary, this suggests that the typical Californian cannabis user could be facing a tax rate of between 45% and 80%, once these new increases go into effect on Jan. 1, 2020. That's practically inviting black market producers to undercut legal-channel marijuana, and the 2018 sales figures show it.
And it gets worse.
In addition to turning consumers upside down and shaking out all loose dollar bills and change, close to 80% of the state's municipalities have banned retailers from selling adult-use weed. This allows black-market growers to fill the void in cities where consumers have no readily available purchasing options.
A large marijuana dispensary sign in front of a retail store.

California's marijuana miscues are particularly disparaging for pot stocks operating in the state. Cresco Labs (OTC: CRLBF), in particular, made noise in April when it announced what was, at the time, a more than $820 million acquisition of Origin House (OTC: ORHOF) in an all-stock deal. Cresco Labs, which is best known as a multistate dispensary operator, made the deal to buy Origin House in order to gain access to over 500 dispensaries in the Golden State. Origin House is one of a select number of distribution license holders in the state.
However, the Golden State's exorbitant tax rate on legal weed has clearly turned off buyers. When compounded with the fact that most municipalities have banned recreational retail sales, it's created a scenario where companies like Cresco Labs and Origin House aren't guaranteed the success that investors envisioned as recently as seven months ago.
If California doesn't wise up soon, it'll risk doing irreparable damage to its legal marijuana industry.
 

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