L.A. VACATING 66,000 POT CONVICTIONS

Los Angeles County DA Jackie Lacey said she would dismiss 66,000 pot convictions.
L.A. Times

  • Lacey said she would vacate 62,000 felony convictions dating back to 1961 and 4,000 misdemeanor convictions.
  • Of those granted relief, 32% are black, 45% are Latino and 20% are white.
  • A partnership with tech non-profit Code for America helped determine the people who should receive relief.

Kansas City, Mo. Mayor Quinton Lucas (D) said he would pardon those convicted of municipal marijuana possession.
FOX-Local

DON’T INJECT THC

A study published in Nature found that taking THC intravenously can cause schizophrenia like symptoms.

Merry Jane discusses the brief and unhappy history of injecting THC:

  • “Basically, folks would boil weed buds into a “broth,” pull that filtered broth up into a syringe, then inject it. Rather than getting lit, they got sick AF instead, which included bouts of vomiting, intense muscle pains, and serious heart problems.”
  • Snorting weed isn’t a good idea either: “You’ll end up blowing pot-snot all day and never catching a buzz.”

Quick Hit

  1. A Canadian man who stabbed his mother to death in 2017 after injesting a small amount of cannabis was sentenced to 45 months in prison.
    CBC

INVESTORS FLOWHUB

Business Insider calls “retail management” company Flowhub, the “buzziest start-up in cannabis.

  • FlowHub’s platform is designed to provide all the software a dispensary needs including inventory tracking, sales processing and compliance.
  • With almost 1,000 dispensary customers, the company processes $1 Billion in annual sales. Its software package starts at $499/month.
  • The company closed a $23M Series A in October from investors including Poseidone.ventures and Evolv Ventures.

Quick Hit

  1. When evaluating pot stocks, New Cannabis Ventures cautions not all revenue is the same.
  2. Medical psychedelics companies are starting to go public.
    Bloomberg

STATES UPDATE

Here’s the latest state news:

How can WeedWeek help you succeed? Take this anonymous two-question survey.

TRUMP BUDGET WOULD END MED PROTECTIONS

President Trump’s proposed $4.8 Trillion budget would eliminate existing protections for state-legal MED activity from enforcement by the U.S. Justice Department. Presidents Trump and Obama both previously asked, unsuccessfully, for the protection to be removed.
Marijuana Moment

  • Rep. Matt Gaetz (R-Fl.), a Trump ally, said Congress has the votes to extend the existing protections, which have been in place since 2014.
    Marijuana Moment

Elsewhere in the proposed budget:

  • It asks for money to help the Food and Drug Administration regulate “cannabis and cannabis derivatives.”
  • It also extends a longstanding provision blocking the District of Columbia from using local tax dollars to legalize sales.

Are you registered to vote?

Quick Hit

  1. Thirteen GOP lawmakers thanked Senate Banking Committee Chair Mike Crapo (R-Idaho) for delaying a committee vote on the cannabis banking bill which passed the Democratic-led House.
    Marijuana Moment

IN CANADA, DOLDRUMS PRESIDE

The corporate news out of Canada continues to be bleak. Major player Aurora announced a quarterly loss of C$1.3 Billion (US $980M). Barron’s

WW Canada has lots more.

CALIFORNIA LABOR TENSIONS ESCALATE

Thus far the cannabis industry has had relatively amicable relations with organized labor, especially in California.
Vox

Two recent developments suggest that may be changing:

  • CCIA executive director Lindsay Robinson said the paper was not supposed to be anti-union. “We retract any statements that may have been misleading,” she said in a statement. “This document does not reflect priorities in our legislative platform, nor our guiding policies.”
  • While it’s not yet clear if the fallout will be substantial, Adam Spiker, executive director of industry group Southern California Coalition, called it an “unforced error” by CCIA. “Labor has been a partner with local and state government much longer than regulated cannabis,” he added

Separately, The Daily Beast reports on a group called ProTech Local 33 which calls itself a union but “looks like a front group for bosses.”

Reporter Chris Roberts writes:

  • “Privately, labor officials have suggested … ProTech, is a business-friendly front meant to help companies meet state labor requirements without ever intending to allow workers to organize. Indeed, ProTech appeared to dance very close to the definition of “a company union”—ersatz worker organizations set up by management to crush organizing efforts before they can begin—which have been banned under federal labor law since the 1930s.”
  • “This union has never ever been found guilty of anything,” the group’s head said.

Quick Hit

  1. Business Insider is tallying layoffs — now about 2,000 total — across the industry.

IS CALIFORNIA BACK?

Despite struggles at well known companies like Eaze and MedMenLeafly reporter David Downs argues the world’s largest legal REC market is poised for a recovery this year.

“On a bureaucratic and social timescale, California is still at hour one of day one of legalization,” Downs writes.

Reasons for optimism:

  • More than 3.2M Californians 25 and older used cannabis in the past month.
  • California’s 13,000 liquor stores outnumber licensed dispensaries 21 to 1.
  • While 67% of state local jurisdictions don’t allow dispensaries, “cities and counties are now beginning to compete to attract cannabis dollars.”
  • Delivery services are expanding their reach.
  • BDS Analytics sales data from several states, including California, show vape sales began to recover late last year.
  • Leafly‘s annual cannabis jobs report found California leads the nation in pot jobs. WW California has more.
  • Jeff Schultz, an executive with investment firm Navy Capitalcontinues to see opportunity amid the volatility.
    MJBiz

“I think California is fucking fantastic,” Graham Farrar, CEO of Glass House Farms and a WeedWeek Council member, told Leafly. The company just opened a massive 355,000 square foot greenhouse in Santa Barbara County. The company believes its 500,000+ square feet of greenhouse canopy may make it the largest such operator in the country. Forbes

Still, not all is rosy. Among other issues, MJBiz says taxes are still a major headache for California businesses.

  • In addition to the industry hated federal tax rule 280E, state tax collectors have weighed on company finances because they’re quick to levy heavy penalties for late payment.

CONCERNS UP OVER WEED WHALES’ HEALTH

Well documented in this space is that every cannabis company — legal and not — experiences peaks and valleys unlike those of other competitors in an emerging American market. Upheaval is the norm.

However, when a bombshell like last week’s revelation that Silicon Valley darling Eaze is cash-strapped gets followed by MedMen’s disclosure that it’s trying to pay its bills in stock, both the underground and above-board parts of the weed ecosystem take note.
TechCrunch, Marketwatch

  • MedMen CEO Adam Bierman also confirmed with Green Market Report’s Deborah Borchardt that his company has been late paying bills because “at the end of last year we entered into a restructuring in the business.”
  • Bierman described the company’s layoffs as a painful part of “exiting the hyper-growth stage of the business, and getting into sustainability.”
  • Backed by about $166 million in funding and on the heels of a $15 million bridge investment, Eaze is after a $35 million Series D funding round. The company’s road ahead is complicated by no longer being able to take credit cards. The app can only process payments with a debit card or an automated clearing house network.

Quick Hits

  1. Next month the federal Food and Drug Administration will begin registering veterans for the first government-approved trial studies of weed and its impact on PTSD. Vets like Oakland’s Roberto Pickering would benefit.
    Vice
  2. Falcon International has requested a $50M break-up fee from MSO Harvest asking for a cash payment as part of a move to dismiss the complaint that Arizona company filed earlier this month. In its legal action, Harvest accused Falcon International of operating illegally.
    MJ Biz Daily

SHORT SELLERS MADE $1B ON POT STOCK CRASH

Pot stock short sellers collected profits of $993.3M in 2019, according to a new analysis by S3 Partners. (Short sellers bet on stocks to fall.)
Last year was abysmal for pot stocks. Two big cannabis ETFs fell 43% and 36% respectively, as the mainstream S&P 500 index gained 32%.
MarketWatch

  • It’s now very expensive to short pot stocks.

Separately, investors filed a class action suit against Trulieve, Florida’s largest MED company. The suit alleges Trulieve overstated corporate profits and misled defendants about cultivation practices.
Miami Herald

  • Trulieve said Grizzly’s report contains “several false, slanderous and misleading statements about the company,” and that Grizzly’s sole interest is profiting from a drop in Trulieve shares. The company says it is preparing legal recourse against Grizzly.

Following California-based MSO MedMen’s dismal stock performance, the Equity Guru mocked the company’s plan to partner with yoga classes.