Hi all,

Coming in late today. Thanks for your patience.

Here’s something super cool that happened this week: Brian “Box” Brown’s Legalization Nation comic strip featured our recent story about the draft of a deal between Shryne Group and a social equity partner in Oakland.   

In the newsletter:

• Two tech startups changing how weed gets sold
• A reprieve in Sacramento

Enjoy,

Alex

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Correction: Last week I incorrectly said Big Pete’s Treats is one of the portfolio of brands at sales and marketing firm PetalFast, which works with distributor Nabis. Big Pete’s no longer works with Petalfast and is distributed by Herbl.

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In May, Gov. Newsom’s budget blueprint zeroed-out the hated cultivation tax but proposed raising the excise tax from 15% to 19%, a move the industry strongly opposes.  

The state legislature’s proposal, which dropped last week, is “far more preferable” to the cannabiz, lobbyist Amy Jenkins, president of Precision Advocacy said.

• The document includes concepts to be detailed in the state spending bill, which has to pass by midnight on Wednesday, or budget trailer bills where there is an “informal expectation” that they will pass next week, Jenkins said.

The key thing is the it would keep the excise tax at 15% for three and a half years with the potential for it to stay there indefinitely.

Additionally, the legislative document calls for:

• Relief for social equity businesses. Jenkins said she’s hearing about a provision being drafted that would create a $20M set- aside for social equity businesses based on a tax rebate or credit. She speculates that it might only apply to retailers, who would take over the role of collecting the excise tax, now handled by distributors. 
• Additional worker protections
• Stepping up enforcement against illegal operators. 

Also happening in the capitol:

Equity group Supernova Women held a rally Thursday on the capitol steps to condemn Gov. Newsom’s proposal.
East Bay Express   

• “My great-grandfather was a sharecropper who bought his own freedom,” said Morris Kelly, CEO of SF Roots dispensary. “That’s the dream BIPOC California operators bought into with Prop 64, but the 26% increase in the excise tax will kill this dream.”

Plus:

• The state is reportedly targeting the industry over unpaid taxes.
  MJBiz
• State pot tax revenue dipped about 7% year over year in early 2022.
  North Bay Business Journal
• The industry-opposed bill to add bigger warning labels on cannabis products is still in play.
  KQED

Silver Spike Capital co-led $170M loan to Shryne

Touted as one of the biggest debt instruments ever made available to a cannabis company, Silver Spike Investment Corp. co-led a loan worth up to $170M to Shryne Group, the vertically integrated parent of vape brand Stiiizy. The interest rate and the other lenders were not disclosed. Silver Spike previously created the SPAC with merged with Weedmaps to go public.

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LA city council votes to join county “emblem” program

Licensed dispensaries in LA have a new way to show they’re above board: a sign to display in their windows. Approved businesses would also have to provide a handout with health info and inspection results. The city council passed motion instructs the city attorney to write an ordinance, with the program likely to launch this year.

Business:

• “Last mile” delivery tech platform OnFleet raised $23M.
• ERP software shop Canix raised $10M.
• The Street suggests that the anonymous purchase of a relatively small plot on the Vegas strip could be weed related.
• USC law professor Julia A. Werner-Simon says the recent sentencing of Central Coast “King of Cannabis” Helios Dayspring on federal bribery charges is a cautionary tale for the industry.

Local:

• A report commissioned by Sacramento found cannabis is now the city’s ninth-largest employer, with almost 8,000 workers.
  SacBee
• Canna Law Blog discusses LA’s new upcoming round of retail licensing.
• Santa Barbara Co. supes voted to allow a controversial grow project to move forward.
  Coastal View
• On Monday, Humboldt Co. supes will hold a special meeting to consider a controversial proposed grow in a remote area.
  Redheaded Blackbelt
• In Huntington Beach (Orange Co.), which has no dispensaries, it appears voters approved a measure on how to tax pot shops should they ever arrive. It needed two-thirds support to pass. 
  Voice of OC
• Fox5 Vegas has the latest on consumption lounge deliberations in Sin City.

Health and science:

• Santa Cruz-based testing company SC Labs is participating in a study on how wildfire smoke affects wine grapes.

Fun and interesting:

• Casey O’Neill of Happy Day Farms in Mendocino Co. celebrates the June rain.
  Redheaded Blackbelt
• Critic Jimi Devine goes off on the “great cannabis microdosing PR conspiracy.“
  High Times

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California’s weed deserts may be slowly shrinking, but they’re still out there. The new Chart of the Week draws on WeedWeek Maps data to highlight the state’s biggest cities without an open dispensary.

Company milestones:

• Glass House said it has completed the first harvest at its massive new Ventura Co. greenhouse.
• MSO Jushi opened its fourth Nevada store on the north end of the Vegas Strip.
• Multi-state brand Bhang partnered with Petalfast in California.
• Palmdale (LA Co.) delivery service Mary Daze is merging with Inland Empire delivery service Cali Care Group for undisclosed terms.
• Nevada operator Flower One received a $5M loan. It comes after the company delayed the release of its annual filings. 

Job moves:

• Vertosa, which makes active ingredients used in infused products, named Manon Daoust, a former exec at spice company McCormick, and investor James Pelligrini, of booze-oriented VC Goat Rodeo Capital, to its board. 
• The Parent Company named former MedMen exec Roz Lipsey EVP, operations and wholesale. 
• Retailer Harborside named Kavi Bhai VP, financial planning and Angela Pih, VP, marketing. Bhai was previously CFO and Colorado-based house of brands Bellrock. Pih has previously headed up marketing at brands Papa & Barkley and Cannacraft.

Local:

• Tonopah, Nev. about halfway between Reno and Vegas, is getting its first dispensary. Stash Fine Cannabis says it will be providing a direct to consumer “farmer’s market” type experience, the first of its kind in Nevada.
  News4

Upcoming:

• The Las Vegas Cannabis Awards Music Festival lands at event space Area15 on 7/10.
• There will be a lounge and dispensary at The Hog Farm Hideaway, a jam band festival in Mendocino Co. this weekend.

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