Posted on 12/25/2022 by Steven M Smith — Leave a comment

Happy Holidaze – NYC Starts Legal Weed Sales in Time for the New Year, and the Profits Go to Charity

NYC Starts Legal Weed Sales in Time for the New Year, and the Profits Go to Charity

New York state will kick off legal recreational marijuana sales on Dec. 29, just in time to meet its goal of launching regulated, taxed sales before the end of the year.

Housing Works, a New York City-based nonprofit that runs a chain of thrift shops, will launch sales at a 4,400-square-foot Manhattan dispensary at 1 Astor Place, Governor Kathy Hochul said on Wednesday. All proceeds will be directed to the nonprofit. The charity, which provides services to people who were formerly incarcerated and those living with HIV or AIDS, is one of three dozen groups and individuals awarded the state’s first retail licenses last month.

“Their decades of work with marginalized communities make them a perfect partner in the effort to ensure that New York’s cannabis market provides meaningful opportunities to those most impacted by the failed cannabis criminalization policies of the past,” said State Senator Liz Krueger in a statement.

The launch represents more than just what could be the world’s second-largest legal marijuana market outside of California’s, but a stab at getting regulations right where other states have failed. New York has taken a novel approach that aims to include African Americans — disproportionately arrested for marijuana in the past — in the legal industry. It’s also pledged to separate suppliers from retailers in a so-called two-tier system, in order to try and create a lot of “mom-and-pop” small businesses.

Retail licenses were granted to people who have a cannabis conviction and organizations that provide services to people who were harmed by past drug enforcement. There are plans to let those licensees do delivery by bike and scooter. New York has also given out licenses to 280 farmers to grow the first adult-use cannabis in the state.

A growing tide of illicit sellers have opened storefronts to make inroads with customers who don’t know the difference between their cheaper — but sometimes tainted products — and licensed, contaminant-tested weed. The state passed legislation in 2019 to decriminalize marijuana and has since loosened restrictions on purchase and consumption of cannabis. However, it took months to formulate regulations and grant licenses, leading to the proliferation of illegal storefronts that popped up across the state.

Now, regulators and law enforcement are trying to rein in the $2 billion market in illegal sales by providing support to licensed sellers. Measures so far include a verification tool that will be posted in the window of licensed sellers, and a universal symbol on each product to show it meets standards set by the state.

“We are eager to take the lead as a social equity model for America’s cannabis industry, specifically with our hiring practices and continued support of individuals and communities disproportionately impacted by the unjust war on drugs,” said Sasha Nutgent, store manager of Housing Works Cannabis Co., in a statement.

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Posted on 12/20/202212/21/2022 by Steven M Smith — Leave a comment

Paying Taxes With Duffel Bags Of Cash Like Scarface. SAFE Banking – It’s Not About Legal Pot.

As the cannabis industry holds its breath while waiting to hear if marijuana banking reform will be part of a must-pass omnibus spending bill, James Hagedorn, a CEO of the lawn care giant Scotts Miracle-Gro (NYSE: SMG) shared

Paying Taxes with Duffel Bags of Cash Like Scarface, Scotts Miracle-Gro CEO On Need For SAFE Banking Act© Provided by Benzinga

his thoughts on the importance of this bill.

Tap to activate or exit full screen

Scotts Miracle-Gro’s 2014 development of subsidiary Hawthorne Gardening Company “to meet the demands of hydroponic (cannabis) was considered one of the first large investments by a major U.S. corporation in the marijuana space. Nevertheless, Hagedorn wants to see the SAFE Banking Act passed for more than merely personal reasons.

It’s Not About Legal Pot

In an exclusive interview with Fox Business, Hagedorn pointed out that the idea behind the banking legislation is not to make pot legal but to allow businesses that represent the legal cannabis market to use banks, instead of having cash everywhere.

“It’s very dangerous. It’s inefficient. It’s really dysfunctional for the banking industry, not to be able to take this money in, allow people to deposit in, make capital investments in illegal businesses,” Hagedorn said.

The interview came on the heels of Senate Minority Leader Mitch McConnell calling the banking bill a “poison pill.”

It looks like the SAFE Act needs the support of both McConnell, and Senate Majority Leader Chuck Schumer, the reporter said and asked Hagedorn what he’d say to them if they were listening.

“Well, first of all, I think there are 60 votes to get this out of the Senate. It’s been passed multiple times on a bipartisan basis in the House with a lot of Republican support, and there are some really good people out there. The co-sponsor on the Republican side in the Senate is a guy named Steve Daines. He’s a really good Republican. I’m a Republican, out of Montana, and what he told me is – ‘Jim, I’m not in favor of marijuana,” Hagedorn said. “What I’m not in favor of is dysfunction and banking. In my state, by voter initiative, they made it legal. And if it’s going to be legal, my citizens should be able to bank.’” Tap to activate or exit full screen

Hagedorn continued. “This is not about pot. This is about dysfunction in banking, people today have to pay taxes on legal businesses with duffel bags of cash and counting machines like Scarface. It’s not the way it’s supposed to be in America. There are almost a half million people that are employed in this space. Americans that vote. They have problems getting mortgages this way. These are all people who are working in legal industries. This is dysfunctional and bad, and all the Senate has to do is allow legal businesses legal access to banking. “

Ifs the bill passes during the lame-duck session, Hagedorn says he doesn’t believe that big financial names like JP Morgan Chase (NYSE: JPM) and Fifth Third (NASDAQ: FITB), are going to embrace the industry in the same instant because there’s “a lot of sensitivity about compliance.”

While many believe the SAFE Act is a small step in much-needed marijuana reform, Hagedorn agreed with Senator Danes that it is indeed a big step forward in rationalizing banking for legal businesses.

“Let’s remember one thing when you have a lot of cash, it brings crime. There are people killed every day, where they have a lot of cash lying around. And people have to take this money in cash.”

Price Action

Scotts Miracle Grow shares were trading 0.39% higher at $48.50 per share during Monday’s pre-market session.

UPDATE ON OMNIBUS SPENDING BILL

Marijuana advocates were given a massive setback after the Senate did not include a provision to remove federal restrictions on cannabis businesses from receiving banking services in the $1.7 trillion omnibus spending bill.

The provision, which would have been modeled after the House’s SAFE Banking Act, was excluded from the Senate’s spending bill, likely thanks to Senate Minority Leader Mitch McConnell (R-KY), who has been a fierce opponent of the legislation.

The CEO of the U.S. Cannabis Council, a pro-marijuana group, said of the provision’s exclusion, “To say that we are disappointed is an understatement.”

US Cannabis Council Names Cannabis Veteran Khadijah Tribble as CEO

August 19, 2022

WASHINGTON–Today, the US Cannabis Council (USCC) named Khadijah Tribble, a leading figure in the cannabis reform movement and expert on equity and inclusion, as the organization’s CEO. Tribble succeeds Steven Hawkins, who led USCC since its founding in February 2021.

“We thank Steven Hawkins for his integral role in launching USCC, and we are thrilled to welcome Khadijah Tribble’s to the role of CEO at this critical juncture for the cannabis industry,” said Jessica Billingsley, chair of USCC and CEO of Akerna. “She is deeply respected for her leadership, expertise and wide-ranging experience and is well-positioned to advance our mission of ending prohibition and creating an equitable, values-based industry.”

Tribble serves as Senior Vice President of Corporate Social Responsibility at USCC member company Curaleaf, a role she will continue in during her interim term as CEO. She previously founded Marijuana Matters, a cannabis education and advocacy incubator, and served as CEO of the Marijuana Policy Trust, which helps develop and run DEI programs in the cannabis industry. Tribble, who has advocated for fair and equitable policies on behalf of marginalized communities throughout her career, also serves on USCC’s DEI Task Force. She holds a master’s degree from Harvard University’s John F. Kennedy School of Government.

“The US Cannabis Council unites my deep commitment to cannabis legalization with my passion for addressing the harms of prohibition,” said Tribble. “My priority is advancing meaningful cannabis reforms through Congress this year that will provide the foundation for achieving our ultimate goal of federal descheduling while fostering an equitable and inclusive legal cannabis industry.”

Since launching last year, USCC has established itself as the leading voice for cannabis reform in Washington, DC. The organization has brought cannabis industry CEOs to meet with lawmakers in Congress, partnered with the sponsors of leading cannabis bills to advance reform and launched a campaign to advance passage of the SAFE Banking Act. Earlier this year, USCC launched its DEI Task Force with leaders in law, business and civil rights and partnered with the Congressional Black Caucus Foundation to create an internship program for Black college students and recent graduates at leading cannabis companies and organizations.

US Cannabis Council Names Cannabis Veteran Khadijah Tribble as CEO (uscc.org)

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the idea behind the banking legislation is not to make pot legal but to allow businesses that represent the legal cannabis market to use banks, instead of having cash everywhere

#Marijuana #CropGrowth

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Posted on 12/18/202212/18/2022 by Steven M Smith — Leave a comment

Marijuana Crop Growth Report for 2021. Green Lighted 2022?

‘Cannabis Harvest Report’ values US crops 5th in the nation in 2021. What is up for 2022?

David Downs and Bruce Barcott

Updated December 18, 2022

America has begun winding down its disastrous, century-long war on marijuana. We’re beating swords into plowshares. So, what’s coming in from the fields? The answer: America’s 5th most valuable crop.

The first-ever Leafly Cannabis Harvest Report, counted 13,042 cannabis farm licenses in the 11 legal states where retail stores are open. This unprecedented peek into US pot production found farmers growing 2,278 metric tons per year. It’s a mind-boggling number—enough to fill 57 Olympic-size swimming pools, or more than 11,000 dump trucks stretching more than 36 miles.

Tracking cannabis agriculture production
Highlights from the Cannabis Harvest Report
Cannabis Harvest Report methodology
What’s next for cannabis farmers?

With US state cannabis prices ranging from about $500 to $3,000 per wholesale pound, you’re looking at a crop worth $6.175 billion per year. As measured against US Department of Agriculture (USDA) data, the value of America’s legal cannabis crop ranks fifth nationwide, ahead of cotton. And yet state and federal officials generally do not track it or acknowledge it.

Tracking cannabis agriculture production

Cherry Cheesecake harvest at Sonoma Hills Farm, Petaluma, CA on October 6, 2021. (David Downs/Leafly)

Why did we count the crop? Because cannabis is as stigmatized as it is valuable.

USDA economists track annual yields, prices, and estimated values for nearly every commercial crop grown in America. But they do not track legal cannabis due to the plant’s status as a federal Schedule I drug.

Our goal with the Leafy Harvest Report is to quantify annual cannabis production in operational adult-use states, just like the USDA’s Economic Research Service does for all non-cannabis crops. This is the first time anyone’s done this, as far as we know.

Voters, lawmakers, and industry leaders need these basic facts to make informed decisions. The Harvest Report is the third in this year’s Leafly Reports series, including the Leafly Jobs Report and Leafly Seeds of Change: Strategies to create an equitable cannabis industry.

Highlights from the Cannabis Harvest Report

Leafly’s Cannabis Harvest report is one of the most comprehensive summaries on cannabis agriculture production. Here are a few of the biggest takeaways from the report.

When compared to cannabis crops, only corn, soybeans, hay, and wheat return more wholesale revenue to American farmers annually.
Legal cannabis is the single most valuable crop in Alaska, Colorado, Massachusetts, Nevada, and Oregon.
In each of the 11 states with adult-use retail stores operating, cannabis crop value ranks no lower than fifth—often within two years of the first legal stores opening.
In a surprising result, Colorado’s seven-year-old legal cannabis farming industry outproduced California (627 metric tons for Colorado vs. 514 for California). But that lead might not last. After years of slow growth, California’s licensed cannabis cultivation sector is finally taking off.

Cannabis ranks 5th in value of crops produced in the US. (Leafly)

Cannabis Harvest Report methodology

Leafly News senior editors David Downs and Bruce Barcott teamed up with Beau Whitney at Whitney Economics to aggregate annual crop data from the 11 states with active, legal adult-use cannabis sales.

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We followed the USDA’s method of computing crop value by finding the average wholesale price per pound in a state and multiplying it by the state’s amount of cannabis produced. In those 11 states, we counted crops destined for both adult-use and medical outlets.

Freelance cannabis journalists Amelia Williams (Debunking Dispensary Myths, 2020) and Zack Ruskin assisted with research and reporting.

Read our full methodology on page 15 of the report.

What’s next for cannabis farmers?

(David Downs

Prohibition, over-regulation and over-taxation infringe on Americans’ constitutional right to pursue happiness with regard to cannabis gardening and farming.

The federal government must legalize cannabis for adults, and grandfather in legacy cannabis farmers by establishing low fees and easy licensing procedures.

The Leafly Cannabis Harvest Report summarizes the discrimination cannabis farmers face at both the federal and state levels—years of review and millions of dollars in extra expenditures—just to put seeds in the soil.

Additionally, this $6 billion agricultural sector is under-banked and under-insured. Most farmers have to pay taxes in cash. Thirty-eight state attorneys general have called on Congress to pass the SAFE Banking Act, which would increase public safety and tax compliance. Reform measures like the SAFE Banking Act, and especially the MORE Act (which would legalize federally) are long overdue.

Cannabis agriculture predates our country’s union. And a more perfect union would acknowledge and respect the power of this plant.

UPDATED 12/2022

Harvest time has come, but U.S. cannabis farmers may not burst into cheers for the results achieved.

Although cannabis has become the sixth most valuable crop in the United States, the illegal status of the plant at the federal level doesn’t protect the industry’s farmers and affects the value of wholesale production.

The second annual harvest report published by cannabis information resource and marketplace Leafly has found that adult-use cannabis farmers grew some 2,834 metric tons of adult-use cannabis in 15 legal cannabis states in 2022.

Compared to the previous year, cannabis farmers grew 554 (24%) more metric tons of cannabis in 2022, but the crop’s value fell by around $1 billion due to the decrease in prices of legal cannabis.

The 2022 report estimates that cannabis grown in the U.S. is worth $5 billion a year, while the value of America’s legal cannabis crop ranked fifth nationwide in 2021.

“Only corn, soybeans, hay, wheat, and cotton bring in more money on a wholesale basis,” the report reads.

Leafly’s data is limited to only the production of adult-use cannabis harvested in 13,297 active legal cannabis farms in 15 legal cannabis states. So, it doesn’t consider the crops for medical cannabis and the cultivation grown by illegal operators.

The report aims to fill a void of federal and state authorities in assessing the adult-use cannabis supply chain’s value.

In fact, the United States Department of Agriculture (USDA) doesn’t track adult-use cannabis production as the crop used for recreational purposes is still illegal at the federal level under Schedule I of the Controlled Substances Act.

But even some legal cannabis states still lack to gather information about adult-use cannabis cultivation.

“The federal government isn’t alone in ignoring the value of the harvest. Many legal states still fail to capture this important information,” the report reads.

Therefore, Leafly collaborated with the cannabis and hemp business consulting, data, and economic research firm Whitney Economics, to collect data, conduct interviews, and analyze wholesale prices and classes of cannabis quality.

Leafly estimates that cannabis ranks no. 1 crop in Alaska, Massachusetts, and New Jersey, but the report highlights that regulators don’t publish production totals in two of those states.

Today, 19 U.S. states and the District of Columbia have legalized the adult use of cannabis. In 15 states, the legalization is fully operational, and cannabis can be sold under state license, while the remaining legal cannabis states are implementing the regulations to start the sales.

The illegality of adult-use cannabis at the federal level affects cannabis farmers’ ability to perform the most basic functions of a business, such as own bank accounts, obtain crop insurance, and get loans.

As farmers can’t sell their crops directly to consumers and don’t have enough legal retail outlets for their production, prices per pound of wholesale cannabis have fallen despite the rising inflation for most products and services in the country.

For instance, California farmers increased production by 63 metric tons on the legal side, but the cannabis harvest’s value slipped from 5th to 8th in the state because of those price drops.

“The average untrimmed, dried pound might have been worth $786 wholesale in August 2022, but individual outdoor pounds have drawn prices as low as $100,” the report reads.

Furthermore, the condition of cannabis farmers has also been worsened by the local municipalities that have ‘opted out’ from allowing legal cannabis sales, “creating economic protection zones for unlicensed, illicit cannabis sellers” at the expense of the legal operators.

Overall, the report shows a scenario in which Western U.S. cannabis farmers grew too much cannabis over the last year, while Midwest and Eastern farmers didn’t grow enough to meet their region’s demand.

As a result, western farmers haven’t enough demand to sell their harvests, while Midwest and East Coast customers overpay for cannabis products.

In addition, the fact that the illegal status of cannabis at the federal level prohibits farmers from selling adult-use cannabis across interstate lines has repercussions on cannabis prices.

Thank you for consideration.

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Posted on 12/15/2022 by Steven M Smith — Leave a comment

Wholesale Marijuana Flower Prices Plummet. Michigan subject of new dynamics.

Wholesale marijuana flower prices plummet.

Michigan, in particular, subject to new dynamics.

Prices of wholesale recreational marijuana in Michigan are now as low, or lower, than those in older adult-use states

– underscoring how new markets are ramping up more quickly and, in some cases, becoming glutted.

Industry insiders say cannabis flower in Michigan is readily available for less than $1,000 a pound on the wholesale market – and often for much less – because of oversaturation as more and more cultivation companies come online in a state with no limit on business licenses.

Connie Maxim-Sparrow, a cannabis consultant and marijuana business license holder based in Muskegon, Michigan, characterized the state’s current market conditions as “unstable” – in particular, cannabis growers are spending at least $800 to grow a pound of flower and getting only $600 for it on the wholesale market.

According to Maxim-Sparrow, a year ago a midgrade pound of indoor-grown wholesale flower that tested at around 20% THC potency would sell for $1,800-$2,200.

Now, that same grower is lucky to get $600 a pound, and she’s heard of some selling for as low as $300.

The dynamics playing out in Michigan could offer a harbinger of what’s to come in other new markets.

In particular: As more multistate operators learn how to quickly set up shop in new regions with many producers, the pace of a newly legalized state’s market hitting an oversaturation point is speeding up.

This is more likely to happen in states without licenses caps or that have many growers – unlike limited-license markets that seem more common on the East Coast.

Michigan began marijuana sales at the end of 2019, and the wholesale market prices now more closely resemble those in older markets such as Colorado or Oregon, where wholesale prices have been falling for a year or more.

Colorado’s adult-use sales launched in January 2014, while Oregon’s market launched in October 2015.

Both markets took longer than Michigan’s to experience product saturation and falling prices.

Survival tactics

To survive, cannabis companies across Michigan are tightening their belts, relying on vertical integration and trying to build brand recognition to be more competitive.

Others are limiting their expansion plans or selling out as a wave of consolidation sweeps through the state’s industry.

A few Michigan marijuana retailers have downsized, including major retail chain Lume Cannabis, which closed four of its roughly 30 stores earlier this month.

Meanwhile, Michigan regulators in March implemented new rules, including lower application fees and the removal of licensing tiers, that will further open up the market.

“Everybody’s panicking,” Maxim-Sparrow said.

“Some of us knew this was coming – others are getting caught off guard by the oversupply issue.”

The learning curve for entering the cannabis industry is steep. Start with the fundamentals.

Any cannabis company executive who has been watching what has happened in other mature marijuana market with relatively unlimited licensing, including Colorado and Oregon, should have seen the market headed in this direction, industry insiders aid.

“We’ve seen this movie before,” said Tyson Macdonald, adviser to and former chief financial officer of Cloud Cannabis Co., based in Troy, Michigan.

“It is definitely happening with an accelerated pace in Michigan.”

Macdonald partially attributes that to a regulatory structure that allows for stacking of cultivation licenses, which has created very large facilities, many of which came online around the same time.

Not limiting licensing also sped up the situation.

Cannabis businesses executives “should have absolutely been aware that this market was going in this direction when there was not a single cap on a cultivation or processing license,” Maxim-Sparrow said.

The pricing situation

Over the past year and half, the state has seen a “ton of new capacity come online,” said Ankur Rungta, co-founder and CEO of C3 Industries, a vertically integrated Michigan marijuana company that also has operations in Massachusetts, Missouri and Oregon.

Rungta, who started out in the cannabis industry with a business in Oregon, said he saw a similar market drop there with overproduction in 2017 and again in 2018.

“Our first market was Oregon, so if anybody should have seen it coming, it was us,” he said.

Yet, Rungta said, the speed of how quickly the Michigan market has become saturated has taken him by surprise.

“We’re definitely getting into a fully supplied or even oversupplied marketplace,” he added.

“That’s definitely putting a lot of pressure on the wholesale market. People are buying the same amount of cannabis; it just costs half of what it used to cost before.”

That’s before the coming fall harvest of outdoor-grown flower hits the market.

“A lot of people are looking at this fall and saying, ‘What’s going to happen?’” Rungta said. “I don’t know that we’ve hit the bottom, to be completely honest with you.”

Macdonald said retailers and manufacturers can buy anything they need for less than $1,000 a pound for wholesale flower.

At Michigan stores, ounces of flower sell for as low as $59-$99, according to Macdonald.

“And a lot of that at the $79-$99 price point, it tests pretty well,” he said. “It’s not terrible product.”

Access isn’t the issue

Some municipalities in Michigan have opted out of allowing marijuana retail stores.

One major area that has yet to open a recreational cannabis store is metro Detroit.

The city finally began accepting license applications for adult-use marijuana businesses on April 20.

That doesn’t necessarily mean there’s a question of consumer access – despite many municipalities opting out of legal cannabis sales.

Maxim-Sparrow said most customers probably must drive only half an hour at most to find a store.

“If you look at a map of Michigan, there’s very few areas that don’t have access,” Rungta said.

Cities such as Ann Arbor are glutted with retail stores, said Mahja Sulemanjee-Bortocek, CEO and founder of High Haven, which owns cannabis business licenses in Bay City, Michigan.

She would like to see municipalities show a better understanding of the economics of cannabis before licensing too many stores in one place.

“They look at it as a revenue stream for them through taxes, which it certainly is,” Sulemanjee-Bortocek said.

But the towns and cities will lose that revenue stream if the retailers can’t turn a profit and stay open, she added.

“It’s a short win for them. Not a long-term situation,” Sulemanjee-Bortocek said.

Turning to vertical integration

Some companies are banding together to increase their brand power through collaborations and white labeling.

Others are trying to become vertically integrated but are running out of capital as they try to build out their retail or cultivation businesses.

Rungta said that a vertically integrated business structure is becoming more important, so a company can have a “hedge or cushion against some of the wholesale volatility that’s out there.”

He expects more businesses will head in that direction over time.

His strategy is to both move a “sizable chunk” of business through company-owned retail stores while also selling on the wholesale market.

The successful companies are those who saw this coming and built their business model around current pricing, not when the market opened and prices were much higher.

Rungta said the companies that will survive have a clear strategy such as offering a value product or a premium product with a business structured accordingly and a reasonable margin to support their operations.

By “reasonable,” he said a 40% gross margin is a good baseline.

“Those people are having success and, in some cases, continuing to even grab market share,” he said.

But, Rungta said, the branding and quality need to match the product for it to work.

As this all plays out, expect to see more consolidation as business are swallowed up by larger ones and some even go under. The amount of capital a business has could be the deciding factor.

“In this environment, it’s challenging for everybody,” Rungta said. “But it’s most challenging for the smaller businesses.”

Bart Schaneman can be reached at bart.schaneman@mjbizdaily.com.

Thank you for consideration.

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4 Hemp key points being Health Hope and Happiness, thru Hemp“.

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Story by Bart Schaneman

Posted on 12/14/2022 by Steven M Smith — Leave a comment

Marijuana Companies laying off hundreds of workers, deemed “essential”.

Marijuana companies lay off hundreds, retrench amid economic woes

By Margaret Jackson
September 6, 2022

Image depicting economic woes, layoffs, recession

While business around the world shuttered as COVID-19 spread, the marijuana industry was deemed “essential” in nearly 30 states and stood to gain from the pandemic.

But more than two years later, amid rising inflation and fears of a recession, North American cannabis companies are cutting hundreds of jobs, closing retail outlets and cultivation facilities or shuttering altogether.

The marijuana industry mirrors mainstream companies that saw similar demand and now are struggling to right-size their businesses.

Sales of Peloton bikes spiked when gyms closed and people sought fitness alternatives; but the New York-based company has axed more than 4,000 jobs so far this year.

The pandemic-era e-commerce boom that boosted Shopify’s business also appears to have cooled, and the Canadian company, which makes the technology that powers online stores, has laid off about 1,000 workers.

The cannabis industry layoffs and retrenchment have affected plant-touching companies large and small as well as tech businesses such as Akerna of Colorado, Dutchie of Oregon and delivery operator Eaze of California.

The factors behind the cannabis retrenchment are numerous. They include falling wholesale marijuana prices, cash-strapped consumers and structural changes affecting the industry, experts said.

Among the more notable plant-touching companies that have been caught up in the fallout in recent months:

California-based cannabis advertising giant Weedmaps cut 10% of its roughly 600-member workforce, citing market contractions in California, Colorado and Oklahoma.
Arizona medical marijuana grower Nature AZ Medicine laid off around 100 employees as medical sales drop and recreational sales spike.
Michigan-based Lume Cannabis closed four of its roughly 30 stores in the state but did say it plans to open three additional stores in more populated areas. The realignment, disclosed in July, comes at a time when marijuana prices in Michigan have tumbled because of market saturation.

Corporate turnarounds

In addition to inflation and economic woes, cannabis businesses are grappling with staffing issues.

For one, many public marijuana companies are undergoing turnarounds, which often translate into the shedding of employees.

“The guys who come in to handle turnarounds don’t understand the market and cannabis,” said Avis Bulbulyan, CEO of Siva Enterprises, a California-based marijuana consulting firm.

Edmonton, Alberta-based Aurora Cannabis said in June that it was cutting 12% of its workforce as part of a corporate restructuring.

The company expects the move will save up to 90 million Canadian dollars ($69 million) and put it on the path to profitability. The company’s goal is to turn its first profit next year.

Another Canadian public company, Canopy Growth Corp., disclosed in August it cut 245 employees – or about 8% of its workforce – as part of sweeping changes across the company designed to help stem recent losses and nudge the struggling producer to profitability.

Canopy said it expected the cuts and adjustments to generate up to CA$150 million in savings in 12-18 months.

Canopy also closed its cultivation facilities on 23 acres in Niagara-on-the-Lake, Ontario, last year.

Echoes of the dairy industry

“The legal cannabis business is volatile,” said Daniel Sumner, professor of agricultural and resource economics at the University of California, Davis and co-author of “Can Legal Weed Win? The Blunt Realities of Cannabis Economics.”

“It’s a new industry,” he said, “and companies are coming and going and being acquired in all parts of the industry – not just growing and processing and selling.”

Consolidation in the marijuana industry is similar to what happened to Wisconsin’s dairy industry, which lost 10% of its farms in 2019 and 44% over the past 10 years.

“Production went way up, but the number of farms went way down,” Sumner said. “It’s consolidation. A lot of that consolidation means if you’re a manager, you call it labor-saving efficiencies.

“But if you’re a worker, you lost your job.”

Despite the cost of other products rising because of inflation, the price of marijuana has declined, another factor impacting companies’ ability to retain employees.

In Colorado, for example, the wholesale price per pound of marijuana was $709 as of July 1 – an all-time low – and down 46% from $1,309 a year ago and nearly 60% from $1,721 in January 2021, according to Colorado Department of Revenue data.

“Farm-level cannabis costs coming down is the reality of this business,” Sumner said. “It’s partly improved management; some is technology.”

But, Sumner said, like other agricultural crops, price declines in the marijuana industry should be expected.

“Adjusting for inflation, we now spend 10% of our income on food – not 4% like we did two generations ago – and there’s no reason to think cannabis won’t follow that trajectory.”

Structural changes

And just as practices shifted from a customer-focused approach at grocery and liquor stores where someone would tell you about the products, practices at cannabis retail stores also are likely to see changes that result in the need for fewer employees.

“Everybody used to buy their beef or their fish from the person who really knew beef and fish – you walked in and talked to the baker, the butcher or the fish monger about what you want,” Sumner said.

“That’s the way it’s handled in cannabis now. But cannabis is moving away from it. It will be cheaper and more available, but there won’t be the services and employment.”

Like other industries, venture capital funding also has become scarce for cannabis businesses seeking investors to fuel their growth.

Without financing, it’s tough to keep as many employees as possible on staff, said Karson Humiston, founder and CEO of Denver-based cannabis recruiting network Vangst.

“People are really tightening the belt and working to preserve cash because funding is hard to come by,” Humiston said.

“When companies have a harder time raising capital, they need to make sure they have enough cash to weather the storm. The first thing to go is expensive headcount.”

The majority of job cuts are at the senior level – not hourly employees who work in grows or retail shops, Humiston said.

And with many multistate operators using more gig employees than in the past, Vangst is having its busiest summer ever.

“People are still purchasing and consuming cannabis, so these hourly workers are essential,” she said.

“Cannabis still needs to be grown, packaged and delivered to customers. Those are hourly roles.”

Posted on 12/13/2022 by Steven M Smith — Leave a comment

DEA Announces How Much Marijuana, MDMA, Psilocyn, LSD, Mescaline, 5-MeO-DMT, MDA, 2-CB Can Be Produced For Research In 2023

Story by Lara Goldstein

The DEA has shared its final production quotas for research drugs for 2023 and is now aiming for further manufacturing goals of several psychedelic compounds than the already substantial increases regarding 2022 initially proposed, reported Marijuana Moment.

DEA Announces How Much Marijuana, MDMA, Psilocyn, LSD, Mescaline, 5-MeO-DMT, MDA, 2-CB Can Be Produced For Research In 2023© Provided by Benzinga

The compounds include marijuana, MDMA, psilocyn, LSD, mescaline, 5-MeO-DMT, MDA, and 2-CB.

The agency stated that it is “committed to ensuring an adequate and uninterrupted supply of controlled substances in order to meet the estimated legitimate medical, scientific, research, and industrial needs of the U.S., for lawful export requirements, and for the establishment and maintenance of reserve stocks.”

As such, 2023’s production quota numbers for psilocyn would go from the original 8,000 grams to 12,000 grams, 5-MeO-DMT from 6,000 to 11,000, MDMA from 8,200 to 12,000 grams, MDA from 200 to 12,000 grams, and 2-CB from 25 to 5,100 grams.

In the case of marijuana, the DEA suggested the production of 6.7 million grams -or 14,770 pounds- for medical and scientific purposes, more than double that of 2022. Licensed cultivators can now apply to become federal marijuana suppliers under the National Institute on Drug Abuse (NIDA.)

Several companies have already made recommendations to raise DEA’s 2023 proposed quotas in view of pre-clinical and clinical research particularly for PTSD, TRD, schizophrenia and anxiety.

The proposal also received a comment regarding the creation of “diversified categories” for production and research on psilocybin-containing fungi fruiting bodies/sclerotia/liquid culture similar to cannabis (flower), fruiting body extract (akin to cannabis extract), and psilocybin and psilocyn separately as purified compounds (akin to delta-9-THC), as well as applying that same system for mescaline and other plants, fungi and lifeforms producing these compounds.

But the agency replied stating that the suggestions “do not impact the analysis involved in establishing” the production quotas for each substance.

Nonetheless, the DEA seems to be listening to what is taking place in the psychedelics space, as it has recently backed down on banning two psychedelic compounds claimed to have scientific value as well as a separate project to list five tryptamines as Schedule I substances.

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