Hi all,

Here’s my dispatch from Hall of Flowers.

Next week, don’t forget, we’ll be starting Thursday morning conversations in WeedWeek Discord, a few hours after the newsletter drops.  

Today:

• Fun at Hall of Flowers
• Seven brands with interesting business models

Enjoy,

Alex

*

Our advertising policy.

*

Send tips, press releases, concerns, feedback and criticism to hello@weedweek.com

The Star Wars themed party for distributor Herbl, was already bumping when two big guys had a beef and stripped down to their leotards. It was a promotion, of course, for the edibles brand Luchador.

Wrestling, is fake, but up close it looks and sounds real. Surrounded by a tight circle of cheering budtenders, it had a frisson of fun and daring that similar stunts rarely do.

Cannabis is more fun, and to my mind more appealing, when it doesn’t take itself too seriously. So in a market where the overwhelming mood is doom and gloom, it was refreshing that everyone at Hall of Flowers seemed eager to shake the pandemic and enjoy themselves.

Wellness seemed to be on the back burner. Instead brands like Moxie and Papa’s Herb brought fresh, contemporary takes on classic American motifs. Korean-inspired streetwear brand Sundae School delivered a natural extension with Mochi gummies. And Pure Beauty raised eyebrows with its menthol cigarette joint. (Menthol tobacco cigarettes could soon be banned nationwide.)  

• Nor did I detect much pot snobbery. No one was bashing wedding cake clones.

The good mood might also reflect that the operators able to attend Hall of Flowers represent only a small percentage of the market.

Rashaan Everett, founder and CEO of delivery company Good Tree, said the event, with the company’s hot pink booth in the baking sun represented an outlay of $100,000 which he hoped to make back with 33 orders of $3,000. Plenty of companies aren’t in a position to take that kind of risk.

• The delivery service, which operates in SoCal, the Bay Area and Sacramento is the biggest equity business in California, with 200 employees, and perhaps the country. 

Filings suggest more upheaval at TPCO

Michael Bowen, a financial industry veteran and must-follow on LinkedIn for news dug out of SEC filings, notes that California operator TPCO “had to pay off [departing] COO [Dennis O’Malley] to stay quiet.”

Also noted in the filing, (and by Bowen) three TPCO directors are departing: Former Yahoo CEO Carol Bartz, former Barracuda Networks CEO Jeffry Allen and Desiree Perez, CEO of Roc Nation.

• Perez was effectively Jay-Z’s representative on the board.
• TPCO did not respond to a request for comment.

WeedWeek recently explained why the company wrote down $654M last year.

Another question about Fresno licensing

Fresno, the largest city in California without a pot shop, began its licensing process in 2020. The city has awarded 21 licenses but none have opened thanks to appeals, lawsuits and other delays.

The San Joaquin Valley Sun recently obtained a letter which shows former major league pitcher Matt Garza, the local owner of applicant Authentic 559, contacted Mayor Jerry Dyer (R) in violation of a clause prohibiting contact between applicants and relevant officials about their application.

• A social equity applicant was disqualified for breaking the same rule. A city spokesperson didn’t respond to requests for comment. 

Without any dispensaries open, Fresno isn’t collecting pot taxes.

Business:

• During its quarterly earnings call, Weedmaps said it had acquired Enlighten, a provider of in-store advertising and menus.
• Capitol Weekly reports on the state industry’s growing impatience.
• LA Business Journal reports on SoCal dispensaries’ fight for survival.
• Las Vegas-based Flower One said there’d be a delay with its 2021 financial reporting.
• Nevada consumption lounges won’t allow alcohol, at least at first.
  Fox 5 (Las Vegas)  
• A paper from the libertarian Reason Foundation argues eliminating California’s cultivation tax would double tax revenue.
  Sacramento Bee
• Lindsay Maharry shares her favorite organic strains.
  Uproxx

Legislation:

• The state senate governance and finance committee advanced SB 1336, a labor-supported bill which would offer cannabis businesses tax credits equal to “employment compensation, safety-related equipment and services, and employee workforce development and safety training.”    

Regulation:

• Three quarters of California’s nearly 13,000 licenses are still provisional, a sign of backlog at DCC.
  North Bay Business Journal 

Legal:

• A federal judge threw out claims that corrupt law enforcement officials conspired to extort Mendocino Co. growers.
  Courthouse News

Crime: 

• The Modesto Bee checked out “Weed Week,” five days of raids on illegal operations in Stanislaus Co.

Local:

• Trinity Co.’s fabled growers are frustrated with the county licensing process.
  @trinitycounty_ag_alliance
• Carnaval SF, over Memorial Day weekend, could be the first California street fair with legal sales and consumption.
  SF Chronicle 
• Los Gatos, near Silicon Valley, is considering a plan to allow dispensaries.
  Mercury News
• Manhattan Beach (Los Angeles Co.) residents could face dueling ballot measures in November on whether to allow dispensaries.
  The Daily Breeze
• MJBrand Insights checks out West Hollywood’s new Emerald City tourism initiative. 
• The Santa Barbara County Planning Commission will have a May 11 hearing on whether to change the required permit for commercial cultivation from a Land Use Permit to a stricter Conditional Use Permit. Meanwhile, oversupply has dragged on pot taxes in the county.
  Santa Maria Sun
• There will be a May 18 hearing in Concord (Contra Costa Co.) to discuss a dispensary hopeful.

Fun and interesting:

• LA’s pot-smoking moms are tired of being judged.
  LA Times

This week’s data, from point of sale software provider Cova, looks at 4/20 sales across its shops in two big SoCal counties. Recent same store growth looks especially strong in Riverside.