Hi all,

Sorry about the delay. As I mentioned in the free newsletter, we’re about to have some big announcements and in the meantime, I’m trying to figure out when’s the best schedule for sending the newsletters. Got any thoughts? Send them along.  In the meantime, thanks for your patience.

In the newsletter:

• SCOOP: Judge order Nabis to turn over docs in Herbl suit
• Industry warned on new delivery regs 

I hope you find it valuable,

Alex

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This weekend regulations took effect which require delivery services to create a Metrc delivery ledger before a vehicle leaves a licensed premise. Tech shop Meadow explains the details on this page and in this webinar from last week. 

This year, companies cheered the expansion of the so-called “ice cream truck” model which allows drivers to head out carrying more unpurchased inventory, up to $5,000 per vehicle. This gives drivers more ability to fulfill orders without the hassle and cost of returning to their depot. 

However, some industry groups and local governments are warning of a lesser known new provision, which they warn could further undermine the state’s struggling industry.  The key issue is that the rules only require the delivery county to be entered in Metrc.

The industry and groups representing local governments have clashed over local control. However, they agree that in this case more precise data is needed.

In a December letter they argued why (A December letter from LA County made similar points.):

• It’s unfair for local operators to have to compete with out of town delivery services that aren’t held to a city’s rules and taxes. In the city of LA for example, delivery services may be able to undersell local operators because they pay less in local taxes to a different jurisdiction.
• It blocks cities from auditing cannabis activity and collecting taxes on it. Without city and zip code data for deliveries, cities have no way to tax orders delivered from another jurisdiction.
• The letter suggests that making cities unable to assess taxes and delivery activity would force them to consider banning outside delivery, reducing access to legal product. 

The letter cites a DCC response that it limits the data to counties to protect buyers’ privacy. It responds that collecting city and zip code data for deliveries would not point to any consumer.  

For now, only county data is required.

SCOOP: Happy Cabbage Analytics acquires ZolTrain

Canna tech shop Happy Cabbage Analytics told WeedWeek it has acquired ZolTrain for undisclosed terms. SF-based Happy Cabbage marshalls dispensaries’ data to drive revenue. ZolTrain delivers content-rich mobile marketing to budtenders and consumers. ZolTrain co-founder and CEO Danny Gold will serve as COO of the combined entity under Happy Cabbage CEO Andrew Watson.

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State election regulator reviews Chula Vista licensing 

The California Fair Political Practices Commission (FPPC) confirmed it is reviewing a complaint filed against Chula Vista (San Diego Co.) councilmember Andrea Cardenas, related to the city’s licensing process.

Laura Wilkinson Sinton, an unsuccessful dispensary applicant with Caligrown, who sued the city in 2020, filed the complaint. It alleges that Cardenas has not disclosed the companies represented by her political consulting firm Grassroots Resources or recused herself from closed door discussions about competing license applicants. March and Ash, which Grassroots represents, received one of eight available Chula Vista dispensary licenses, even though it didn’t apply for one.
San Diego Union-Tribune

Last year a California appeals court told the city to reprocess Caligrown’s three unsuccessful license  applications. Doing so would likely require raising the number of permitted dispensaries above eight in the city of nearly 300,000. The city has yet to comply and Cardenas said she has not taken a position on the issue. The city declined to comment.

• FPPC has not yet determined whether to open an investigation.

State:

• AB 471, which would expand access at private events, passed the Assembly’s Business and Professions Committee.
• AFP looks at California’s thriving illegal market.
• California product continues to flood New York shops.
  Crain’s New York Business

Business:

• The Parent Company, which recently announced a merger with GoldFlora, said it had $94M on hand at the end of 2022.
• Glass House reported results for Q4 and 2022. The big grower anticipates its cost of production falling below $110/lb in the second half of 2023. 
• A report in MJBiz found several California companies, including Herbl, signed labor peace agreements with “company unions” that don’t have a record of organizing workers. Herbl didn’t respond to a request for comment.  
• Unrivaled Brands posted an operating profit after a year of restructuring. 
  Green Market Report
• Grassdoor workers in Brisbane joined the Teamsters union. 
• After winning an arbitration settlement, MedMen founder Adam Bierman has his eyes on the cannabiz again.
  MarketWatch

Local:

• Concerned Carpinterians, a group that seeks to limit big greenhouse grows, requested that Santa Barbara County, be among the six yet to be determined counties audited by the state for licensing and permit review practices.
  Santa Barbara Independent 
• Kristin Nevedal resigned as director of Mendocino County’s cannabis department. The county has been dogged by licensing delays.
  Mendo Voice
• Arvin (Kern Co.) city council is set to vote on allowing storefronts.
• San Bruno (San Mateo Co.) city council voted to allow one storefront, not downtown.
  San Mateo Daily Journal

Crime:

• The head of San Jose’s police union has been charged with importing fentanyl.
  ABC
• Dispensary owner Helios Dayspring, who bribed an SLO County official, got out of federal prison, after serving seven months of a 22 month sentence. 
  SacBee

Fun and interesting:

• Kiva Confections and Fatburger teamed up on an infused ketchup.
  Respect My Region

Company milestones:

• LA-based Ritual Cannabis Hospitality has released what it says is the first point-of-sale system for consumption lounges, putting weed and food on the same check.
• Jetty Extracts is legally available in New York City.
• Cookies’ sativa-centric sister brand Lemonnade, is opening its first Michigan shop in partnership with MSO TerrAscend.
  DBusiness
• Culture Cannabis Club opened a store in Wildomar (Riverside Co.).
• Old Pal announced an exclusive distribution partnership with Nabis. In 2020 it announced an exclusive distribution partnership with Kiva.
• Shango is expanding its California product line.

Job moves:

• Embattled San Dieg0-based REIT Innovative Industrial Properties hired David Smith as CFO and Treasurer. He joins from privately held weed REIT Aventine. IIP also promoted Catherine Hastings to COO and Ben Regin to Chief Investment Officer. 

Upcoming:

• The city of LA’s regulator will hold its next Q&A lunch April 12.  It’s also preparing a multi-hour webinar on Licensing 101.
• A 4/20 panel will discuss how the media covers cannabis. 

Research:

• Cal Poly Humboldt and Sonoma State are partnering on a study of the NorCal industry.