San Francisco Strengthens Cannabis Social Equity Program

The San Francisco Board of Supervisors recently voted to approve a measure designed to strengthen the city’s cannabis social equity efforts. The legislation, which was proposed by San Francisco Mayor London N. Breed in April, builds on the city’s cannabis social equity program, which was launched in 2018 to lower barriers to cannabis licensing and provide employment opportunities for members of communities most impacted by the War on Drugs.

In a statement from the mayor’s office, Broad said that the new provisions of the social equity program approved by the board will help the city in its recovery from the economic crisis brought on by the coronavirus pandemic.

“As San Francisco works to recover from COVID-19, it’s important that we support small businesses, including our cannabis industry,” Breed said. “This legislation helps us make sure the program continues to achieve its goals and ensure that cannabis business owners are supported and have the resources they need to be successful in San Francisco.”

Measure Supports San Francisco’s Cannabis Social Equity Program

The measure, which was passed by a unanimous vote of the board on October 5, modifies the permit process for cannabis businesses and creates new priorities for the city’s Office of Cannabis to increase opportunities for prospective social equity applicants. The legislation also provides greater ownership flexibility for approved social equity businesses while preserving original commitments of the program, according to the mayor’s office.

“Thank you to Mayor Breed for strengthening social equity and creating more economic opportunities for those hurt by the War on Drugs,” Marisa Rodriguez, the director of the Office of Cannabis, said in a statement. “Mayor Breed’s legislation ensures that there will continue to be a legacy of equity in the city for years to come.”

The legislation adds new provisions to ensure that San Francisco’s cannabis industry supports communities that have suffered the brunt of the impact from the War on Drugs. Under the program, cannabis equity applicants who are sole proprietors will be prioritized during the permitting process. Owners of non-equity businesses that support cannabis equity applicants by offering shared manufacturing opportunities will also receive heightened priority by city regulators.

Additionally, the measure shortens the time period to transfer more than a 50 percent ownership stake in a cannabis equity business from the current 10 years to five years, giving equity owners more flexibility to take on new investors and grow their companies. The legislation also requires cannabis businesses to make additional social equity contributions if they wish to reduce an equity applicant’s ownership interest by 20 percent or more. Such commitments could include opportunities to provide hiring, training and mentorship, as well as other support to cannabis social equity businesses or local community organizations.

State Grants Support Social Equity Applicants

Since San Francisco launched its cannabis social equity program in 2018, 94 social equity applicants have applied for permits to operate cannabis businesses in the city. The Office of Cannabis has so far issued a total of 36 permits to social equity applicants, including temporary and permanent permits.

City cannabis regulators also administer grants funded by state programs for individuals that meet criteria based on residency, income, criminal justice involvement and housing insecurity. 

To date, San Francisco has received $6.3 million dollars in grants from the California Department of Cannabis Control and the Governor’s Office of Business and Economic Development, which can be used for business start-up and operating costs. City officials have so far awarded approximately $3 million in grants ranging from $50,000 to $100,00 each to 45 social equity applicants.

“I’m grateful to the city and the state for this opportunity,” said Ali Jamalian, founder and CEO of Kiffen LLC and a social equity permit holder. “Thank you to the Office of Cannabis for standing up this Pilot Program. The money is incredibly helpful and allows me to scale my business during a difficult time. I’m hopeful that all eligible equity applicants will take advantage of the opportunity.”

Cindy De La Vega, an equity permit holder and the CEO of STIIIZY Union Square, said that being the owner of the first Latina-owned cannabis dispensary “feels surreal.”

“My grand opening was October 9, 2020, during a very difficult time for all of us, and especially for areas like Union Square. I am grateful for the San Francisco Equity Program and proud to be permit number eleven. I look forward to using my opportunity to show others that the San Francisco Equity Program does work and should be the blueprint for others to bring to their cities.”

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Burb, Green Label and Coffee & Kush: Partnership over Competition

Everyone involved in the legal industry in California has seen, while being green with envy, the moves happening up in Canada. Our neighboring country to the north legalized cannabis seemingly ages ago at this point (almost four years?), though their roll-out hasn’t been without its challenges.

While I believe we all celebrate the increased access to the plant we care for so dearly, silly federal restrictions aimed at “protecting the kids” have certainly dampened the celebrations. Though they may have more access on paper, it’s actually been more restrictive to build a brand that resonates up there.

Down here in California, however, despite still facing a federal prohibition that requires all its THC wares to remain within the state, it’s clear that the sky’s the limit when building a brand name here. With many of our elite, commanding, top-dollar the world over, even the government can’t contain the hype that’s built off of what most consider to be the best bud in the world. In fact, many don’t even have to have thorough brand identities to pop—just the right goods.

So what would happen if Canada and California combined forces? Could the prolific BC bud make the same kind of waves down here that it has up north for so long? Could the California market make a Canadian brand pop in a way that resonates internationally? Could a brand that finds success down here ride the wave across the provinces? A new amalgamation of brands is betting on it.

Burb Co-Founder John Kaye
Courtesy Burb

Enter Burb

Founded in early 2018, Burb is a British Columbia-based, culture-minded cannabis retailer and merchandiser of quality goods. Led by John Kaye, who serves as the brand’s CEO and Creative Director, the brand was initially founded to support artists and creative movements.

As John tells me, “In a time of corporate cannabis takeover, we set out to build a brand that kept the bridge between cannabis and the arts alive, so we built weed stores that gave us plenty of cash flows to put back into the community.”

Originally born in Minsk, Russia, and having lived in Israel, Vancouver, and Los Angeles, Mr. Kaye is something of an artist himself. Having toured across North America playing in a four-piece rock ‘n’ roll band in his youth, it was the business side of things that interested him the most.

After going back to school and getting his diploma, and after a brief gig in finance left him creatively starved, he called his BCIT classmate, Clayton Chessa, with the idea of building a cannabis testing lab.

After a successful exit with their lab, Northern Vine, Kaye saw an opportunity to get back to his roots while supporting a community that was losing its grip in the face of legalization. With Clayton by his side, and with the help of another childhood friend, Steve Dowsley, who had just sold his previous company, the trio started Burb.

“For me, a great brand is defined as a real community. It’s not the logo. It’s not the packaging. It’s on-the-ground relationships—late nights and being in the fucking trenches. You say you’re a ‘lifestyle’ brand? Show me,” John explained.

Burb
Courtesy Burb

What started as a Canadian pipe dream, a lifestyle shop and dispensary to lead, as opposed to follow, the culture, evolved into a full-fledged lifestyle brand. Now with five shop licenses, three of which are already operating Burb-branded dispensaries in Vancouver, with three more on the way—including the upcoming first-ever dispensary on a college campus at the University of British Columbia, Burb has rapidly established itself as a formidable player in the legal market up north.

Alongside their cannabis retail business, the team established a media arm to produce content from industry-leading creators like Paper Magazine founder David Hershkovits, and a merchandise line that includes apparel and smoking equipment you’ll actually want to have around.

What’s better, each store aims to provide a unique experience compared to other cannabis retailers. The team is hard at work building their evolution of the retail experience, a creative exploration site, which, while providing retail and merchandise sales on the first two floors, will have two more above, built exclusively for artists, by artists. Featuring specific cultural cornerstones, like music studios, and even potentially basketball courts in the future, it’s clear that pushing things forward was always part of the game plan.

 “At Burb, we’re honoring the legacy and designing the future of cannabis culture” Kaye stated matter of factly.

“Creating My Own Destiny”

Although things have been moving quite well up north, the team at Burb couldn’t help thinking there was more room to flex, both creatively and culturally. In an effort to skirt some of the restrictions plaguing them back home, the gang started working towards establishing roots south of their border down here in California.

Problem Wearing Burb’s Forthcoming Fall Collection at Hall of Flowers
Courtesy Burb

Having been connected with Los Angeles artist and producer Problem for his ‘4 the Low’ music video shoot, it seemed like the stars had started to align.

“For us, there’s a big crossover to the music space. We were already doing it. When Problem’s team approached us to be in his video with Wiz, we started to consider the bigger opportunity, especially after learning about the cannabis business he was building in Cali.” John continued.

What started as a conversation around product placement in a music video quickly snowballed. Burb was looking to make a play down here, Problem was looking to further dip his feet into the space, and it just so happened that Problem’s wife Daphne knew a woman named Chanel, who had an opp set up with her friend Kelly and her husband, Jason McKnight, who he had already heard was a real OG. The pieces were falling into place on their own.

In that vein, let’s zoom out a second and take a look at the other players here.

Coffee & Kush

Problem, born Jason Martin, had already lived several lives himself by this point. Raised in Compton, he surprisingly never planned to be a rapper, or a cannabis entrepreneur. Problem actually grew up wanting to play basketball. In fact, that’s where his name comes from.

“They used to call me a ‘Problem’ on the court!” he told me.

After realizing that basketball might not go according to plan, music—which at first was purely for fun, and impressing women, of course—became something that took more and more of his time. Eventually, it became the focus.

Now, this isn’t a piece on his storied career as an independent artist, but it’s worth noting that after being monetized by other brands throughout his career, Problem saw an opportunity with his last contracted album to utilize all his efforts to build something for himself and for his community.

Originally conceptualized as a merchandise line, Coffee & Kush has always been more of a lifestyle brand—despite how overused that term has become, this one’s it. The thing is, this wasn’t always his lifestyle, so just how much of a difference that equation makes is all the clearer for him.

Courtesy Burb

You see, Problem didn’t start to consume until he was having his first child. While he has memories of the plant dating back to childhood, having grown up with a mother who was growing and smoking as long as he could remember, he didn’t see the allure when he was young, especially with an eye on the NBA. However, it was ironically his mother who eventually got him to give it a shot.

“My mom was the one who was like, ‘You need to smoke. You’re taking on a whole lot at a very young age.” He explained, “So I tried it, and it became part of my lifestyle, in my day to day. All that shit I’ve seen since the early 80s, so to me, weed has never been wrong, I just didn’t want to do the shit my mom did,” he continued. “But the system was running me through it … Then it all happened at the same time. I’m smoking, doin’ music. Smoking, doing music.”

“Let Me Pimp Me For A Second”

Having found success with his music career, Problem began to set new sights for himself. Understanding how his creative content could be used to propel products, the rapper set his sights on diversifying his offering.

“It just came to me: Coffee & Kush. This is what I’m rapping about all day, because this is what I’m doing all day. What I’m using to finish this album.” Problem explained.

“It was really just a unique way to brand the music. Then I figured, so many companies have used me to sell their products, if I’m going to start talking about Coffee & Kush all the time, I need to have my own products. I use my own content to push my own products, not the other way around.”

Before even exploring the cannabis route, Problem had two products almost immediately ready to launch alongside the project: Coffee & Kush mugs (with a bowl fashioned into the mug so you can smoke while you drink), and Green Hour Coffee (sold exclusively through Harun Coffee in LA).

It wasn’t until his friend Mike Asseraf suggested a preroll line that things really started to take off. After putting the pieces together for the Burb video, Problem remembered a story his wife had told him about Kelly’s husband …

Green Label Rx Founder Jason McKnight
Courtesy Burb

Becoming A Pharmacist

Of all the players in this new squad, likely the most deserving of his spot is legacy operator Jason McKnight. Born in Los Angeles, and having moved to Northern California at a young age, Jason has been proliferating the plant since 1996—long before the glamorous industry we all hear about today.

Although he didn’t begin to build his own cultivations until 2001, much like Problem, Jason became familiar with the plant at a very young age. Living with family members who dealt as their primary source of income, cannabis was originally just a way for him to make ends meet.

“It was a survival tool.” Jason explains. “I wanted to make some money. It was a hustle, I didn’t even smoke weed at first. I didn’t want to do drugs. I had seen drugs destroy lives. I was going to play football.”

“But it became something that I loved,” he continues. “I remember the day I smoked … Football doesn’t always pan out. So I was stressed out; I was by myself, and I smoked some weed. My life changed, instantly. It was the medicine I needed in life to really calm me down. And then that became something that I loved.”

His love, plus his fortunate position of being in the right place at the right time, lit the fire.

“I was someone that was from Northern California at a time when there wasn’t good weed in LA. I already knew everybody from Football, but then I became the plug!” Jason recounted excitedly. “I was always wanting to try to advance myself in life, whether through cannabis or hard work. Whatever it is, I’m gonna work hard at it, but I just felt like cannabis was the thing, the future.”

A feeling that he doubled down on when a friend approached him with a $6,400 pound of OG, and he realized that the need for indoor cultivation would skyrocket.

“2001 is when I got my first plants … I was self-taught at that point because indoor cultivation, that wasn’t information that people shared. It was very hush-hush. I perfected it, learning the hard way, going through the ups and downs. It wasn’t always a success.”

“But back then, if you had five, or man, 10 pounds of [indoor] product, buyers would go crazy. There was not enough flower.”

It was at a High Times Cannabis Cup in San Bernardino, ironically the event where Problem performed, that Jason realized he needed to begin branding his work, and Green Label RX was born.

Courtesy Burb

The Dues Paid for Green Label

Despite following the rules set forth by the state at that time, scaling up proved to be a devastating blow for McKnight. After obtaining a delivery license with his wife Kelly, he was raided by the LA County Sheriff Narcos on January 19, 2016.

Having seized his products and property, the state even took his three children. It was clear, despite being only months from adult-use legalization in the state, that the government was trying to make an example out of the trailblazers of this burgeoning industry. However, despite the setbacks, the McKnights didn’t quit.

Though it took four-and-a-half years, the McKnights fought the case tirelessly. After 11 months, their children were returned—which they were told was a fast turn around. (As an aside, it’s worth noting that their now four children are all flourishing in their home, with both of their parents).

That was only the beginning of the battle, though. Upon the return of their children, prosecutors charged Jason and his wife with 30-plus felonies and used a swath of low brow tactics to try and break up their family and make an example out of them. While this also isn’t a piece on the disturbing realities of the criminal justice system in America, it’s worth looking up for yourself.

Again, though, the McKnights didn’t quit. Since Proposition 64 had passed during this process, Jason and his wife began to apply for licenses to become legal cannabis operators while on trial. Although it certainly seems like the whole case should have been thrown out after the state legalized the very products they were selling, that didn’t happen, and the McKnights ended up losing their case.

It was while he was in jail, waiting for sentencing, that Jason found out he was awarded his license—ironically because of the case he had just faced. Jason, with the help of his wife Kelly, built the foundation for his new legal business while locked up for participating in the legacy industry.

Flash forward to today, and it’s a much different picture for the McKnights. Jason is now running multiple facilities, growing some of the best cannabis in the state, and is partnered with some of the most amazing brands and breeders in the world. In his eyes, he went from his absolute rock bottom, to as high as he could imagine, in just a few years. He had already been whitelabelling for others when some Canadians, and Problem approached him to talk, so the deal just made sense.

Courtesy Burb

“You Gotta Become the Avengers to Go Against the World”

“When you know somebody has been through something, you can kind of talk to them in a different kind of way, so I just said I think we can do something really special,” Problem recalled of his first conversation with Jason.

With Burb understanding retail logistics and branding in a way their new partners couldn’t fathom, Green Label’s legacy cultivation skills earned on the back of trial and error, and the creative and marketing engine that is Problem and his team, the synergy between the three groups was almost instantaneously realized.

Although they’re quick to point out that there isn’t one parent company running the whole show, this partnership represents their collective understanding that there’s room for everyone to eat, and everyone to grow.

“It’d be impossible to push that through one brand, in one bag, the way I was thinking about it,” Problem noted.

“And that’s kind of the social equity thing, like you have two groups that come together. You have one person that, obviously he’s gone through the system, whether it’s a conviction or whatever, an arrest that’s cannabis related, and then you have another group that’s supposed to bring the financing, or someone that knows how to run a business. That’s the main thing they’re trying to add. We already got that,” Jason explained.

“This right here is a different crew of guys. I see what everybody else is doing. I get excited just watching how things get rolled out. But this—this is not built in fluff. This is built in a very very true story, and that, that’s what’s going to attract people to us. And then when you get here, the weed is so fucking fire that you’re going to stay,” Problem joked.

“We are not growers ourselves; we always come from the consumer mindset, and we know what we like. We partner with the best—we’re curators first and foremost. When I came down here, and I saw what was happening, I was convinced. This is an incredible team,” John noted.

“We’re basically bringing the future here. These guys, Burb—they’re living in the future. So you’ve got to exchange information. It’s not about who gets what, it’s about the minds melding,“ Problem continued.

“I’m looking at this like, if Martin Holdings is Interscope Records. I know what it’s like when you get a Kendrick Lamar. You can leverage everything. So what if you get a Kendrick AND Drake? Oh wow, they (consumers) are going to buy everything.”

Courtesy Burb

Teamwork Makes the Dream Work

So what did this new crew claiming Compton, NorCal, and BC turn out? So far this alliance of brands has seen a handful of their ideations enter the market, and thanks to Jason’s cultivation skill, they’re all smoking proper.

First, there was the California launch of Burb’s cannabis products at Hall of Flowers, including cultivars Butter Tarts and Beaver Tail. Then there was Green Label’s own branded eighths, as well as their new hemp blunt line, which also powers Burb’s Beaver Tail Blunts (which include a plastic beaver tail mouthpiece).

This was followed by Problem’s Coffee and Kush cannabis line, which was released exclusively through Wonderbrett in Black, and Cappuccino, and Mocha varietals. It’s clear the squad has hit the ground running in just a few short months working together.

With plenty of other projects on the horizon, including Benny’s prerolls, Roots Genetics (which will serve as Jason’s breeding and development company), as well as Burb retail stores within California’s state limits, I expect we’ll all be seeing and hearing more from the weed avengers soon.

“I’m pinching myself because, this is it. This is the dream.” Jason concludes. “I’m so excited for these next few years in the cannabis space, just to grow, and to try and achieve even higher goals. Whatever it is, I just want to always have a blunt in my hand like this.”

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Los Angeles County Earmarks $5M to Combat Illicit Cannabis

The Los Angeles County Board of Supervisors has allocated nearly $5 million to combat illicit cannabis, earmarking the money to address the proliferation of unlicensed dispensaries across the county and illegal marijuana cultivation sites in the region’s Antelope Valley. Supervisor Kathryn Barger announced the approval of the funding last week, characterizing the illegal cannabis growing operations and retailers as dual “crises.”

“Illegal cannabis operations continue to threaten the well-being of our residents, water supply and environment,” Barger said in a press release. “By empowering and equipping our law enforcement partners with the resources they need, we can better protect our communities.”

The funds allocated by the Board of Supervisors includes $2.4 million dollars Los Angeles County Sheriff’s Department to reinforce its efforts to eradicate unlicensed cannabis cultivation sites in the Antelope Valley and stop water theft in the area. The board cited environmental damage and quality of life nuisances as reason for the move.

The money allocated to the sheriff’s department includes $1.2 million for overtime pay for the department’s Marijuana Eradication Team for efforts to eliminate unlicensed cannabis cultivation. Another $503,000 will be spent on overtime for patrol deputies at the sheriff’s department’s Lancaster station to deter ongoing water theft in the area, and $707,000 will be spent on trucks needed to conduct investigations of illegal grow sites and other operations often carried out on dirt roads and in rough terrain. 

The sheriff’s department also received $2.5 million for its Cannabis Consumer Health and Safety Task Force to combat illegal cannabis dispensaries in unincorporated areas across Los Angeles County, as well as unlicensed marijuana growers in the Antelope Valley. Barger’s office noted that since last year, the number of illegal cannabis cultivation sites in the Antelope Valley area has increased from approximately 150 to more than 500.

Massive Bust of L.A. County Illicit Pot Farms

During a 10-day operation this summer, the L.A. County Sheriff’s Department and law enforcement officers from other federal, state and local agencies seized about 16 tons of harvested marijuana and nearly 375,000 unlicensed cannabis plants in the Antelope Valley. Officials stated the plants and pot seized in the bust were worth $1.19 billion, although critics claim that estimates of the value of illicit marijuana operations are often exaggerated by law enforcement agencies.

“Inflating valuations of drug busts in the press” is a “fairly common tactic in law enforcement,”  Alex Kreit, a law professor at Northern Kentucky University and director of the school’s Center on Addiction Law & Policy, wrote in a July email to Forbes after the massive Antelope Valley bust was announced by the sheriff’s department.

“That’s not to say it is legitimate; I think it is incredibly misleading,” he added. “But I do believe it’s common.”

The L.A. County Sheriff’s Department 2021-2022 budget also includes an additional $500,000 in previously approved grant funding for cannabis eradication efforts from the Drug Enforcement Administration for the county’s participation in the Domestic Cannabis Eradication Suppression Program for the elimination of unregulated marijuana cultivation. 

In a memo to the Board of Supervisors, Los Angeles County chief executive officer Fesia A. Davenport “recommended that LASD continue to explore grant opportunities to expand their ability to combat illegal cannabis grows, water theft and illegal cannabis dispensaries.”

Despite the legalization of cannabis with the passage of Proposition 64 by California voters in 2016, illicit marijuana production continues to be an issue in the state. Late last month, law enforcement officers in the San Francisco Bay Area seized more than 100,000 cannabis plants, at least six tons of harvested pot and millions of dollars in cash during raids at more than a dozen illicit marijuana cultivation sites across Alameda County.

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100,000 Cannabis Plants Seized In Historic San Francisco Bay Area Bust

Law enforcement officials in the San Francisco Bay Area seized more than 100,000 cannabis plants from more than a dozen unlicensed cultivation sites last week, taking down a “modern day bootlegging” operation in a series of raids that spanned two days. The massive bust carried out by the Alameda County Sheriff’s Office across the East Bay resulted in the confiscation of millions of dollars in cash and cannabis plants representing tens of millions in potential illicit marijuana sales, according to law enforcement estimates.

“This is an organization operating outside the law and the protocols of governance of marijuana in California, unsanctioned and making millions in profits,” said Ray Kelly, public information officer for the Alameda County Sheriff’s Office.

Kelly said that the illicit cultivation operations, which he described as “high tech” and “very sophisticated,” were “motivated by extreme profit and greed. It was a pure cash grab by the organizers of this enterprise.” Several suspects have been arrested during the raids, although officials have not released the names of those individuals taken into custody.

18-Month Investigation Led To Bay Area Raids

More than 100 sheriff’s office personnel and agents with the Alameda County Narcotics Task Force were involved in an 18-month investigation that culminated in last week’s raids, which saw search warrants served at 18 sites in East Oakland, Hayward, Castro Valley and San Leandro. The investigation was begun by narcotics detectives with the sheriff’s department after they received a tip about an illegal marijuana cultivation operation. The raids yielded about six tons of pot as well as Rolex watches and other jewelry.

“We’ve seized 12,000 pounds of processed, harvested marijuana product ready to go to sale,” Kelly said.

At one raided cultivation site in an Oakland warehouse, deputies seized as much as $10 million in cash along with evidence of a money-laundering operation. Kelly noted that the Bay Area cultivators could have avoided police action if it had been licensed by the state. 

“What’s crazy about this is had they applied for proper permits and fees and paid all their licenses and tax fees, we wouldn’t be here,” he said at a press conference at the Oakland warehouse on Thursday, where he displayed a bag he said contained $1 million in seized cash. “This is one of the largest grows we’ve ever seen in recent memory. It’s a massive operation.”

“These people are not doing that,” Kelly told Newsweek, referring to gaining the necessary permits to cultivate cannabis legally. “They’re operating similar to 1920s bootlegging operation. They’re very sophisticated, very organized. They’ve invested millions of dollars in their infrastructure. We estimate they have somewhere near half a million square feet of real estate grow space that they use.”

Kelly said that the operators of the illicit cannabis cultivation sites would purchase warehouses and other buildings, outfitting them with sophisticated growing equipment including computers and timers. The suspects would pay plumbers and electricians inder the table to install the equipment, and hired cultivators, trimmers, and transporters to produce and distribute the cannabis.

12 Truckloads of Pot Up In Smoke

The sheriff’s spokesperson said that 12 tractor-trailer loads of cannabis had been transported to a site in California’s Central Valley to be incinerated. He added that required taxes had not been paid on cannabis sales and that forensic accountants would be involved in the ongoing investigation. In a social media post on Wednesday, the sheriff’s office wrote that it would take several days to process the search warrant sites and haul away the contraband. 

“This organized and sophisticated network of individuals were making tens of millions of dollars in profit and avoiding California [marijuana regulations],” the sheriff’s office wrote on Facebook. “We estimate at this time that we have seized over 100,000 plants and upwards of $10,000,000 in cash. In addition, there are millions of dollars in infrastructure, equipment, lighting, generators and supplies used to facilitate the grows.”

Kelly said that at least seven people have been arrested in the operation so far, and more arrests could be forthcoming. In addition to offenses involving illegal marijuana cultivation and money laundering, detectives are investigating if any environmental laws have be broken by the operation.

“The environmental impact that these locations cause is concerning,” he said. “We’re talking about fertilizers, chemicals, chemicals known to cause cancer.”

Despite the arrests and seizures, Kelly said that the potential profits from illicit cannabis are so high he doubted the operation would serve as much of a deterrent.

“There is nothing to stop them from doing it again,” he said. “It’s such a lucrative business.”

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OpenNest Labs Unveils Afterdream with AMASS Botanics, and Pine Park with Esports Icon HECZ

Cannabis venture studio OpenNest Labs (ONL) announced two iconic drops: Afterdream—in collaboration with premium spirits brand AMASS Botanics—as well as fine quality cannabis brand Pine Park, in collaboration with esports entrepreneur and legend Hector Rodriguez aka @HECZ (or H3CZ). 


OpenNest Labs and Afterdream

Sip Afterdream on the rocks with a splash of tonic water or in a non-alcoholic cocktail. Afterdream contains 3.5 mg THC, 3.5mg CBD and 3.5mg Delta-8 per serving, blended using 14 botanicals and eight terpenes—the result being a “limb-loosening, mind-mellowing sip that mirrors the feeling that comes from drinking a strong cocktail.”

This will be AMASS’s first venture into the cannabis space after developing a portfolio of high-growth premium botanic beverages and self-care products.

“There are a lot of challenges that come with creating a beverage in the non-alc space—three of those things being education (addressed by Afterdream’s exclusive partnership with Sweet Flower in California), the drinking experience itself and liquid excellence,” ONL CEO Tyler Wakstein told High Times.

“What’s awesome about working with AMASS and their master distiller Morgan McLachlan, is that she solves the liquid excellence problem; an area in canna-beverages that’s been completely disregarded,” he said. “If any other cannabis beverage on the market took away the cannabis element, no one would enjoy sipping them. During the creation of Afterdream, we purposely took the opposite approach and started with a base formulation that goes through a rigorous distillation process, thoughtfully integrating botanics and terpenes that compliment each other, ultimately creating an incredible taste profile. The result is unlike anything else available on the market today.”

Wakstein went on to say that you can’t deny that more people are moving away from consuming alcohol and even joints on a regular basis—moving toward wellness solutions that are going to relieve stress, reduce anxiety or produce a euphoric high. “Cannabis is at the intersection of these desires,” Waksten said. “You can feel the excitement around the alternatives that are popping up on the market and it’s been inspiring to be able to guide the sober-curious toward a new possibility, the canna-curious.”

Afterdream is made in California and available exclusively at Sweet Flower both online and in all four southern California dispensary locations for $70.


OpenNest Labs and Pine Park

Given the announcement of Pine Park, could this be where esports and cannabis collide? There are 3.1 billion gamers worldwide, amounting to a global market of $162 billion with a CAGR of 10.5 percent by 2026. Pine Park spearheads this vacant gap in the industry by directly engaging with HECZ’s network of millions of devoted fans—quickly becoming one the most anticipated cannabis launches this year.

“HECZ is co-founder, CEO and a lead investor in Pine Park,” said Wakstein. “HECZ is one of the world’s most notable leaders in the gaming space. Not only is he interested in learning about the therapeutic potentials of cannabis, but he’s excited to use his platform and serve as both a tour guide and educator for his fans who are learning alongside him. HECZ has also been a great partner in that he’s passionate about bridging a gap between esports and wellness solutions by sharing his accumulation of knowledge about cannabis in a thoughtful way.”

Wakstein went on to explain that the esports star is fundamentally involved with every aspect of the business—from sourcing the flower, choosing strains from our farm partners, to creating content. The team is excited to continue developing THC and hemp products under the Pine Park umbrella with him in the months to come.

HECZ is a Call of Duty player and investor, currently the co-CEO of NRG Esports and the CEO of OpTic Chicago. With his expertise, plus the background behind AMASS, Afterdream is poised to shake up the esports and cannabis worlds.

Hector “HECZ” Rodriguez is co-founder, CEO and a lead investor in Pine Park. Photo Courtesy of Pine Park.

“Cannabis is, and always has been, an essential part of my life,” said HECZ. “Now that cannabis is legalizing, I wanted to responsibly introduce it to my community. OpenNest Labs understood my vision and helped me bring Pine Park to life. I’m thrilled to be working with their team, and together, we’ve landed on a brand and business strategy that’s become one of the proudest accomplishments of my career to date.”

ONL’s mission is to launch and incubate leading cannabis brands in innovation and expansion, but leading the development of creating an equitable global cannabis market—earning backing from investors such as M13, Babel Ventures, Coran Capshaw and more.

With a genuine commitment to the equitable development of the industry, ONL and HECZ have conceived Pine Park from the ground up—bringing the world’s first esports cannabis brand to life.

Pine Park will be available for retail online and in-store in October 2021.

The post OpenNest Labs Unveils Afterdream with AMASS Botanics, and Pine Park with Esports Icon HECZ appeared first on High Times.

Los Angeles County to Dismiss 60,000 Cannabis Convictions

It was recently announced that 60,000 cannabis convictions will be dismissed in Los Angeles, California. Los Angeles County District Attorney George Gascón and The Social Impact Center, which is a nonprofit organization with ties to government, grassroots organizations and people in underserved communities, are behind the dismissals. 

The decision follows the passing of Assembly Bill 1793, which dismissed around 66,000 cannabis convictions in 2020. The latest dismissals were announced during “Week of Action and Awareness (WOAA),” once known as National Expungement Week. Now, around 125,000 dismissals in total have been granted. 

In 2016, Gascón co-authored Proposition 64, known as The Adult Use of Marijuana Act. It legalized the possession, transport, purchase, consumption and sharing of up to one ounce of marijuana and up to eight grams of marijuana concentrates for adults aged 21 and older. 

“Dismissing these convictions means the possibility of a better future to thousands of disenfranchised people who are receiving this long-needed relief,” Gascón said. “It clears the path for them to find jobs, housing and other services that previously were denied to them because of unjust cannabis laws.”

Gascón made the announcement with Felicia Carbajal, who’s the executive director and community leader of The Social Impact Center. “I have made it my life mission to help and support people who have been impacted by the ‘war on drugs,’” Carbajal said. “Giving people with cannabis convictions a new lease on life by expunging the records is something I have worked on for years, and I am grateful that we can now make it happen.”

Cannabis prohibition largely affects the Black and Latino communities, notably in Los Angeles. It remained a problem after the passing of Proposition 64. Lynne Lyman, who’s the former director of the Drug Policy Alliance, believes past mistakes are now being corrected. 

“This is the unfinished work of Proposition 64,” Lyman said. “We created the opportunity for old cannabis convictions to be cleared, but it was up to local district attorneys to actually make it happen. Proposition 64 was always about more than legal weed; it was an intentional effort to repair the past harms of the war on drugs and cannabis prohibition, which disproportionately targeted people of color.”

Assembly Bill 1739 led to prosecutors reviewing past convictions. Unfortunately, the review only focused on cases from state Department of Justice data. Once the Los Angeles County court records were read, three decades worth of misdemeanor cases were discovered. There were 58,000 felony and misdemeanor cases remaining after 2020. Prisoners were unaware they were eligible for dismissal or resentencing. Now, their records have been sealed, as well, in hopes it won’t affect their immigrant status, educational and job opportunities. 

After the passing of Proposition 64, communities of color continued to face injustice over cannabis in California’s most populated county. In 2021 alone, Black and Latino people accounted for over 75 percent of cannabis arrests in Los Angeles. Marijuana prohibition didn’t stop in Los Angeles County after legalization, although it didn’t largely affect white people. In 2019, whites only accounted for 10 percent of cannabis arrests. From 2004 to 2008 in Los Angeles, black people were arrested for cannabis at a rate seven times greater than white people. 

Roadblocks were still in place after Proposition 64 and Assembly Bill 1793, which Alternate Public Defender Erika Anzoategui believes are now being taken down. 

“The dismissal of 60,000 marijuana-related cases by DA Gascón is a pivotal step in reforming our criminal justice system,” Anzoategui said. “This sends the right signal to the community that the nation was wrong in its ‘war on marijuana’ and that criminal convictions for marijuana offenses have a disproportionately negative impact on communities of color. We join DA Gascón in removing roadblocks to employment, housing and education through the dismissal and sealing of these convictions.” 

The post Los Angeles County to Dismiss 60,000 Cannabis Convictions appeared first on High Times.

Fed Up With Pot Smoking, Burger Spot Bans All Unsupervised Patrons Under 18

The crew behind Garden Valley, California-based burger spot, Red Rooster Burgers & Brew, had enough with teens smoking pot in the bathroom, among other things, leading to a ban of all unsupervised customers under the age of 18.

“It is with GREAT sadness that we have made the decision to not permit underage kiddos in the restaurant without a parent or legal guardian for the following reasons…” Red Rooster Burgers & Brew posted on September 24. Red Rooster Burgers & Brew sells burgers, fries, shakes and ice cream sundaes, as well as alcoholic drinks such as beer or wine.

The post continued, adding a list of dozens of complaints—the first one on the list being “marijuana being smoked in the bathroom.” The list included littered condoms, skateboarding, the use and sale of e-cigarettes, as well as coins, fries and candy being thrown at employees.

With a brief review of California law, there is no possible way for people under the age of 18 to legally consume cannabis, unless it is for medical use and approved by a physician, under the supervision of a legal guardian.

“For the last two years we have spoken to kiddos and voiced our concerns numerous times!” the post continued. “Then, we implemented rules so they could still feel like they had a place to go, feel safe, and hang with their friends. It’s very clear to us that the bad behavior is not going to end. If you have a kiddo that needs a safe place to be after school please reach out to us. It is not our intent to exile the youth in our community but to protect our property. Some of their actions are unlawful and we won’t allow it.”

In California, only adults ages 21 and older can legally purchase pot for recreational purposes. There is no age limit on medical cannabis use, however minors under age 18 need permission from their legal guardians to use medical cannabis. So that means that young adults ages 18-20 are allowed to visit state-licensed medical dispensaries, but not adult-use dispensaries.

Unfortunately, pot smoking wasn’t the only problem at the burger restaurant, Red Rooster Burgers & Brew. “We also have issues with youth roaming the streets at night vandalizing the neighborhood,” the post continues. “Recently a neighbor’s Kalloween display was vandalized. We found pieces of it in our parking lot. It’s unfortunate but we will have to install security cameras to catch these vandals. We live in such a quaint beautiful town. I wish it didn’t have to be this way.”

Beyond the Burger: Teens and Pot

Sandwich chain Cheba Hut, makers of “Toasted” subs, took the exact opposite approach, marketing to young adults through sandwiches like “Thai Sticks” or “Kali Mist.” 

But most business owners don’t want a mess to clean up when teens take over. In August, Oregon-based Burgerville took an even more extreme measure and closed a franchise in Portland permanently, due to underage criminal activity.

The Centers for Disease Control and Prevention (CDC) strongly recommends against allowing teens to smoke pot, given the developmental changes in the brain. “Unlike adults, the teen brain is actively developing and often will not be fully developed until the mid 20s,” the CDC warns. “Marijuana use during this period may harm the developing teen brain.”

Those considerations from the CDC are apparently falling on deaf ears, however. A comprehensive study published two years ago in the American Journal of Public Health. looked at 1991-2017 American federal health data on more than 200,000 high school students, and found that the number of students who said they’d smoked pot at least once over the past month rose 10-fold, rising from 0.6 percent in 1991 to 6.3 percent by 2017.

The post Fed Up With Pot Smoking, Burger Spot Bans All Unsupervised Patrons Under 18 appeared first on High Times.

Judge Rules County Can’t Stop Water Deliveries to Hmong Weed Farmers

A Northern California federal judge ruled this month that Siskiyou County officials cannot stop trucks delivering water to Hmong unlicensed cannabis growers, writing that the ban raises “serious questions” about their right to be free of racial discrimination. 

In a decision handed down earlier this month, Chief U.S. District Judge Kimberly J. Mueller wrote that preventing the deliveries to the Mount Shasta Vista subdivision in the Big Springs area of inland Northern California also leaves the families living there without a source of water for drinking, cooking and bathing. To enforce her order, Mueller issued a temporary injunction against the county’s ban on water deliveries trucked into the community.

“Without an injunction, the plaintiffs and other members of the Shasta Vista Hmong community will likely go without water for their basic needs and will likely lose more plants and livestock,” she wrote. “Fires may burn more homes. People may be forced to leave their homes and land behind without compensation.

“The plaintiffs have also raised serious questions about their constitutional right to be free from racial discrimination,” Mueller added.

Thousands of Illicit Greenhouses

Officials estimate that there are 5,000 to 6,000 greenhouses growing unlicensed marijuana in the Big Springs area, many of them in the Shasta Vista subdivision operated by Hmong and Chinese immigrants and their families who have moved to the community over the last five years. Officials say the illicit grow sites have led to a rise in crime in the area and complaints from residents who say the cannabis cultivation operations are causing their wells to run dry.

To address the issue, Siskiyou County officials approved ordinances this spring to prohibit selling well water without a permit and to ban water trucks on roads leading to Shasta Vista. County deputies enforced the ordinances by aggressively pulling over people they believed were hauling water illegally, according to reporting by the Sacramento Bee.

Attorneys for a group of Hmong farmers filed suit in federal court in Sacramento to block the ordinances, arguing that they were racially motivated and left the families without water for their homes, gardens and livestock. They also noted that the ban left the community without water to fight wildfires, such as the Lava Fire that burned through parts of Shasta Vista in June after a nearby lightning strike.

Suit Alleges Ordinances Were Racially Motivated

Mueller wrote in her September 3 ruling that the growers have a case to allege “the ordinances are motivated by racial animus,” but acknowledged that Siskiyou County attorneys had presented a compelling case that crime was on the upswing in the area.

“Violent crime in Shasta Vista has also spiked in recent years,” she wrote. “The Sheriff’s Office has responded to reports of armed robbery, assault and murder. In just one recent week, a man was pistol-whipped and robbed; another was the target of gunshots fired by a neighbor, and six people were bound and robbed by gunmen wielding AK-47s. Few similar crimes were reported in Shasta Vista before illegal cannabis cultivation took hold.”

Mueller let stand a county ordinance that specifically banned selling water for illegal cannabis cultivation. The injunction only applies to water sales and deliveries to the community intended for needs including bathing and gardening. Mueller rejected county arguments that the prohibition on water deliveries was needed to protect residents of Shasta Vista, many of whom live in unpermitted residences and are subject to unsafe living conditions. The judge ruled that the county has other laws including zoning ordinances to address those issues.

“Shasta Vista residents might drink and bathe in unpotable water trucked into Shasta Vista from nearby agricultural wells, but the alternative is very little water or no water at all,” she wrote. “If potable water is in fact ready available, as the county claims… this order in no way prohibits officials from helping the people in Shasta Vista find and use that potable water.”

Raza Lawrence, an attorney for the Hmong growers, said that he hopes that Mueller’s injunction becomes permanent in order to avert a “humanitarian crisis” in the area.

“Now they can finally get back to living their lives like normal on their land,” he said.

The post Judge Rules County Can’t Stop Water Deliveries to Hmong Weed Farmers appeared first on High Times.

Growers in the Emerald Triangle are Facing a Potential Extinction Event

“This is an extinction event,” Johnny Casali, owner of Huckleberry Hill Farms, a cannabis farm in southern Humboldt County, said over the phone. “Things are really, really bad.”

Casali is referring to a recent wholesale price collapse in California’s outdoor-grown cannabis market. 

This time last year, a pound of the best quality sun-grown, light dep weed on the market cost between $1,200 to 1,600, according to Chris Anderson, founder of Humboldt County-based distributor Redwood Roots and a former cannabis farmer himself. Wider wholesale prices settled between $800 to 1,000 per pound.

Now, the same quality cannabis is fetching as low as $400 to 600 a pound and “going downhill,” though some outdoor growers are still getting in the $800-1,000 range, Anderson explained. That is for the best outdoor pot money can buy, “fresh, sun-grown, light dep,” which he said is genuinely limited and harder to find. 

Courtesy of Huckleberry Hill Farms

For contrast, Anderson says that indoor-grown “shitty, low end” flower is fetching around $1,000/pound, up to $3,000/pound for the best “designer, truly AAA, best indoor pot in the industry.” He added that lower quality pot, whether indoor or outdoor grown, exists in nearly “endless” quantities.

Data firms like Leaflink have not yet registered a price drop. A representative for Leaflink said it’s too soon to see definitive or robust data for this summer’s outdoor price drops.

That’s just in the legal market. Elsewhere in the country, pounds of the same pot trades at higher multiples in the illegal market, in some cases reaching upwards of $5,000. Supply and demand still rule the day, Anderson said, followed by quality. Indoor pot always fetches higher prices and outdoor lower, owing to outdoor weed’s relative lack of potency compared with top-shelf indoor, as well as its potentially variable appearance.

The decline in pricing, which began at the beginning of June, is expected to get worse as the cannabis harvest season proliferates and finishes in late October and November.

Emerald Triangle
Courtesy of Huckleberry Hill Farms

Following that, a remaining glut of outdoor-grown cannabis from last year’s and this year’s harvests is expected to keep prices low for “at least the next couple of years,” said Anderson. By that point, industry insiders say, many small farmers could be all but wiped off the legal cannabis cultivation map.

The immediate cause is a lingering market surplus from last year’s grow—a supply that has proved to be too large to be absorbed by the legal market.

In years past, since outdoor cannabis is not harvested during the winter, an autumn harvest will supply the market for several months. Come spring, supply is lower, therefore, prices are typically higher. Late spring and early summer are when the first rounds of harvest—referred to as “light deps” for the cultivation technique employed (which involves light deprivation)—typically begin. From there, prices begin to drop, usually to more reasonable levels. The harvest continues and the cycle begins anew.

This year, farmers are beginning a new harvest with last year’s cannabis still in hand. The expected spring price drop never came, which signaled to small farmers that something was seriously wrong. 

Fast-forward to now, after the first rounds of deps, and farmers are realizing that not only could they not sell last year’s weed, but they will have to sell this year’s crop at a steep loss if they are able to sell it at all. Off the record, many growers commented that this is the weed that ends up on the illegal market.

“This state has an over-production problem,” said Natalynne DeLapp, executive director of the Humboldt County Growers Alliance. She explained that owing to the local control provision of Proposition 64, so many municipalities in California have opted out of allowing sales and distribution within their limits that there simply are not enough places to sell the amount of legal cannabis grown in the state. 

Emerald Triangle
Courtesy of Huckleberry Hill Farms

“Currently, there are 1,775 acres of cannabis licensed by the state, which conservatively produces more than six million pounds of cannabis,” Delapp said. “CDFA [California Department of Food and Agriculture] has estimated in its Standard Regulatory Impact Analysis in 2017 that California likely consumes 2.5 million pounds of cannabis. Not all cannabis consumed in California is purchased at legal retailers, so a very conservative estimate is that we’re producing twice what the legal market can consume, but in reality it’s probably worse than that.”

That 2.5 million number, Delapp explained, is the “only and ‘best’ number we have from the state back in 2017.” She added that the state’s opacity and not releasing data from METRC, the tracking system, that shows what amount of cannabis is legally sold in licensed retail shops is part of the problem.

At the same time, the state and its counties continue to issue cultivation licenses, the fees from which produce revenue for municipalities. As the number of growers increases in size, so does the amount of cannabis being produced, but the pool of would-be legal customers isn’t following in lockstep.

Bigger cultivators pose a very specific problem. In addition to flooding the market with large amounts of cannabis, driving down prices, they are also able to sustain market fluctuations, seeing as they are highly capitalized. 

According to industry insiders, like DeLapp and Genine Coleman of legacy grower advocacy organization Origins Council, larger cultivators weren’t supposed to be able to participate in the legal market until 2023, but the provision that granted small farmers a five-year-long head start in the market was scrapped just as Prop 64 was passed.

“It’s basically systemically dysfunctional,” said Coleman. “As for prices, the lowest I heard was $275. But that was a month ago. The thing to remember is that that farmer is paying a $150-per-pound cultivation tax,” she added, citing a harsh truth that applies to every cultivator regardless of what price per pound their weed ends up being sold for.

Coleman also lays out immediate solutions that she and others in California’s small grower community say would provide meaningful relief.

Emerland Triangle
Courtesy of Huckleberry Hill Farms

“Between COVID, the fires, that reality [of crashing market prices], and the budget process unfolding, there could be some legislation and a trailer bill. There could be temporary actions taken while time is taken to sort out a broader policy issue,” Coleman said, referring to a potential temporary moratorium on issuing cultivation licenses, as well as amending the cultivation tax, which are two fixes many growers say they would gladly welcome.

“From our perspective, the most immediate thing that can happen is some kind of tax restructuring, that at least offers temporary relief from the cultivation tax. Because the rest of the supply chain is better positioned than small farmers, in particular,” Coleman said. She added that these larger operations are also much more equipped to handle compliance as it relates to state regulations, like the California Environmental Quality Act (CEQA), from both a manpower perspective and a monetary one.

“The next order of business is, ‘What can be done for market expansion?’ The lateral growth in the retail sector is unacceptable and can’t carry the production trajectory that we have,” Coleman explained. She said that larger-scale operations continue to come online and everyone in the industry is preparing for an eventual interstate market that doesn’t exist yet while at the same time there has been a contraction of customer access.

For Coleman’s part, she is on the board of the Alliance for Sensible Markets, another advocacy organization that has been in conversation with a number of states to evaluate interstate compacts and prospective trade between legalized states. Nothing has been decided on that front as of yet, but she indicated that news was coming soon.

As for the state, Nicole Elliott, director of the Department of Cannabis Control, shared, “The Administration has always been committed to supporting small and legacy businesses in the cannabis market, as evidenced by a number of the policies and programs that have been pursued and implemented in our 2.5 years in office.”

Elliot points to the creation of a standalone state department, the Department of Cannabis Control, which recently consolidated from three separate state agencies to help simplify the administration of regulated commercial cannabis businesses. She says this includes a “sustained focus on streamlining licensing processes and regulatory requirements. All of this is being done with an eye towards making it easier for businesses, particularly small businesses, to operate within the legal, regulated market.”

Elliott added that the state’s budget, which is enjoying a $75.7 billion surplus this year, allocated $100 million for a Local Jurisdiction Assistance Grant Program. 

“These grants specifically target regions with high numbers of small farmers and was structured in a way that really sought to preserve significant funding locations with legacy small cultivators that often have unique regulatory needs,” Elliott said. She also adds that some legacy operators in the Emerald Triangle are also equity beneficiaries who receive funds from a $35.5 million Local Equity Grant Program and $30 million for fee waivers and deferrals.

Both Coleman and DeLapp said they appreciate this cash injection from the Local Jurisdiction Assistance Grant Program but that the money is already earmarked for other projects. Specifically, DeLapp said that in Humboldt County, they are looking to use it to bulk up water storage systems, which addresses the other looming catastrophe of climate change. Across the board, cultivators and their advocates say the state needs to do more. Halting the cultivation tax and enacting a moratorium on new cultivation licenses appears to be at the top of everyone’s lists.

There are other longer-term measures the state and industry advocates have taken, like the recent ratification of Senate Bill 67, which creates appellations of origin for cannabis grown in specific geographic areas. This is expected to increase tourism and provide an extra layer of education and protection around legacy growing areas that believe their cannabis is unique to where it’s grown. In an age where interstate commerce looms, it should be a huge boon—who from further afield is not going to want to buy California weed? But it’s not expected to meaningfully take effect for at least a couple of years.

Meanwhile, back in the Emerald Triangle, farmers are hurting. DeLapp says this is not only a likely “extinction event” for small legacy farmers but that it’s one of several. Back before Prop 64 passed, there were a number of cultivators who jumped ship, claiming they knew the bloodbath to come. Just after legalization was another when small farms struggled to find the capital and manpower to get and stay licensed. This outdoor price collapse is expected to be another.

Jackie McGowan, who is currently running as a candidate in Governor Newsom’s recall election, told us that she’s running specifically because she knew “at least four” grower friends of hers who died by suicide since the beginning of June 2021, owing to the price collapse. Her despair over the lives of her friends and colleagues, as well as the state of the industry, is what has compelled her to run, she said.

Coleman said that, apart from the injustice done to the small farmers who quite literally began and weathered cannabis cultivation in the United States throughout prohibition and into the legal area by allowing them to fail at this critical juncture, there are other potential losses to consider should small farmers be forced out of business.

“Something I’m always aware of regarding the extinction of small legacy farmers and farming communities is the extinction of a whole bunch of genetics,” Coleman said. “From the broader, more international perspective and especially in the medical realm of cannabis research, that’s a lot of loss in terms of the genetic library that should be researched and preserved. For an annual plant, in particular, it happens really quickly,” she added soberly.

At the end of the day, the growers and their advocates lay the blame both on the state’s failure to properly implement rules and regulations for a healthy legal cannabis market, as well as the large cultivators who are taking advantage of a law that was, frankly, made just for them.

“We were supposed to have this runway to 2023 before the market was overfilled. We didn’t get that,” DeLapp said.

She added, “What is the state going to do to fix this? Is the plan going to be to just let the legacy regions die?”

Growers in the Emerald Triangle are Facing a Potential Extinction Event

“This is an extinction event,” Johnny Casali, owner of Huckleberry Hill Farms, a cannabis farm in southern Humboldt County, said over the phone. “Things are really, really bad.”

Casali is referring to a recent wholesale price collapse in California’s outdoor-grown cannabis market. 

This time last year, a pound of the best quality sun-grown, light dep weed on the market cost between $1,200 to 1,600, according to Chris Anderson, founder of Humboldt County-based distributor Redwood Roots and a former cannabis farmer himself. Wider wholesale prices settled between $800 to 1,000 per pound.

Now, the same quality cannabis is fetching as low as $400 to 600 a pound and “going downhill,” though some outdoor growers are still getting in the $800-1,000 range, Anderson explained. That is for the best outdoor pot money can buy, “fresh, sun-grown, light dep,” which he said is genuinely limited and harder to find. 

Courtesy of Huckleberry Hill Farms

For contrast, Anderson says that indoor-grown “shitty, low end” flower is fetching around $1,000/pound, up to $3,000/pound for the best “designer, truly AAA, best indoor pot in the industry.” He added that lower quality pot, whether indoor or outdoor grown, exists in nearly “endless” quantities.

Data firms like Leaflink have not yet registered a price drop. A representative for Leaflink said it’s too soon to see definitive or robust data for this summer’s outdoor price drops.

That’s just in the legal market. Elsewhere in the country, pounds of the same pot trades at higher multiples in the illegal market, in some cases reaching upwards of $5,000. Supply and demand still rule the day, Anderson said, followed by quality. Indoor pot always fetches higher prices and outdoor lower, owing to outdoor weed’s relative lack of potency compared with top-shelf indoor, as well as its potentially variable appearance.

The decline in pricing, which began at the beginning of June, is expected to get worse as the cannabis harvest season proliferates and finishes in late October and November.

Emerald Triangle
Courtesy of Huckleberry Hill Farms

Following that, a remaining glut of outdoor-grown cannabis from last year’s and this year’s harvests is expected to keep prices low for “at least the next couple of years,” said Anderson. By that point, industry insiders say, many small farmers could be all but wiped off the legal cannabis cultivation map.

The immediate cause is a lingering market surplus from last year’s grow—a supply that has proved to be too large to be absorbed by the legal market.

In years past, since outdoor cannabis is not harvested during the winter, an autumn harvest will supply the market for several months. Come spring, supply is lower, therefore, prices are typically higher. Late spring and early summer are when the first rounds of harvest—referred to as “light deps” for the cultivation technique employed (which involves light deprivation)—typically begin. From there, prices begin to drop, usually to more reasonable levels. The harvest continues and the cycle begins anew.

This year, farmers are beginning a new harvest with last year’s cannabis still in hand. The expected spring price drop never came, which signaled to small farmers that something was seriously wrong. 

Fast-forward to now, after the first rounds of deps, and farmers are realizing that not only could they not sell last year’s weed, but they will have to sell this year’s crop at a steep loss if they are able to sell it at all. Off the record, many growers commented that this is the weed that ends up on the illegal market.

“This state has an over-production problem,” said Natalynne DeLapp, executive director of the Humboldt County Growers Alliance. She explained that owing to the local control provision of Proposition 64, so many municipalities in California have opted out of allowing sales and distribution within their limits that there simply are not enough places to sell the amount of legal cannabis grown in the state. 

Emerald Triangle
Courtesy of Huckleberry Hill Farms

“Currently, there are 1,775 acres of cannabis licensed by the state, which conservatively produces more than six million pounds of cannabis,” Delapp said. “CDFA [California Department of Food and Agriculture] has estimated in its Standard Regulatory Impact Analysis in 2017 that California likely consumes 2.5 million pounds of cannabis. Not all cannabis consumed in California is purchased at legal retailers, so a very conservative estimate is that we’re producing twice what the legal market can consume, but in reality it’s probably worse than that.”

That 2.5 million number, Delapp explained, is the “only and ‘best’ number we have from the state back in 2017.” She added that the state’s opacity and not releasing data from METRC, the tracking system, that shows what amount of cannabis is legally sold in licensed retail shops is part of the problem.

At the same time, the state and its counties continue to issue cultivation licenses, the fees from which produce revenue for municipalities. As the number of growers increases in size, so does the amount of cannabis being produced, but the pool of would-be legal customers isn’t following in lockstep.

Bigger cultivators pose a very specific problem. In addition to flooding the market with large amounts of cannabis, driving down prices, they are also able to sustain market fluctuations, seeing as they are highly capitalized. 

According to industry insiders, like DeLapp and Genine Coleman of legacy grower advocacy organization Origins Council, larger cultivators weren’t supposed to be able to participate in the legal market until 2023, but the provision that granted small farmers a five-year-long head start in the market was scrapped just as Prop 64 was passed.

“It’s basically systemically dysfunctional,” said Coleman. “As for prices, the lowest I heard was $275. But that was a month ago. The thing to remember is that that farmer is paying a $150-per-pound cultivation tax,” she added, citing a harsh truth that applies to every cultivator regardless of what price per pound their weed ends up being sold for.

Coleman also lays out immediate solutions that she and others in California’s small grower community say would provide meaningful relief.

Emerland Triangle
Courtesy of Huckleberry Hill Farms

“Between COVID, the fires, that reality [of crashing market prices], and the budget process unfolding, there could be some legislation and a trailer bill. There could be temporary actions taken while time is taken to sort out a broader policy issue,” Coleman said, referring to a potential temporary moratorium on issuing cultivation licenses, as well as amending the cultivation tax, which are two fixes many growers say they would gladly welcome.

“From our perspective, the most immediate thing that can happen is some kind of tax restructuring, that at least offers temporary relief from the cultivation tax. Because the rest of the supply chain is better positioned than small farmers, in particular,” Coleman said. She added that these larger operations are also much more equipped to handle compliance as it relates to state regulations, like the California Environmental Quality Act (CEQA), from both a manpower perspective and a monetary one.

“The next order of business is, ‘What can be done for market expansion?’ The lateral growth in the retail sector is unacceptable and can’t carry the production trajectory that we have,” Coleman explained. She said that larger-scale operations continue to come online and everyone in the industry is preparing for an eventual interstate market that doesn’t exist yet while at the same time there has been a contraction of customer access.

For Coleman’s part, she is on the board of the Alliance for Sensible Markets, another advocacy organization that has been in conversation with a number of states to evaluate interstate compacts and prospective trade between legalized states. Nothing has been decided on that front as of yet, but she indicated that news was coming soon.

As for the state, Nicole Elliott, director of the Department of Cannabis Control, shared, “The Administration has always been committed to supporting small and legacy businesses in the cannabis market, as evidenced by a number of the policies and programs that have been pursued and implemented in our 2.5 years in office.”

Elliot points to the creation of a standalone state department, the Department of Cannabis Control, which recently consolidated from three separate state agencies to help simplify the administration of regulated commercial cannabis businesses. She says this includes a “sustained focus on streamlining licensing processes and regulatory requirements. All of this is being done with an eye towards making it easier for businesses, particularly small businesses, to operate within the legal, regulated market.”

Elliott added that the state’s budget, which is enjoying a $75.7 billion surplus this year, allocated $100 million for a Local Jurisdiction Assistance Grant Program. 

“These grants specifically target regions with high numbers of small farmers and was structured in a way that really sought to preserve significant funding locations with legacy small cultivators that often have unique regulatory needs,” Elliott said. She also adds that some legacy operators in the Emerald Triangle are also equity beneficiaries who receive funds from a $35.5 million Local Equity Grant Program and $30 million for fee waivers and deferrals.

Both Coleman and DeLapp said they appreciate this cash injection from the Local Jurisdiction Assistance Grant Program but that the money is already earmarked for other projects. Specifically, DeLapp said that in Humboldt County, they are looking to use it to bulk up water storage systems, which addresses the other looming catastrophe of climate change. Across the board, cultivators and their advocates say the state needs to do more. Halting the cultivation tax and enacting a moratorium on new cultivation licenses appears to be at the top of everyone’s lists.

There are other longer-term measures the state and industry advocates have taken, like the recent ratification of Senate Bill 67, which creates appellations of origin for cannabis grown in specific geographic areas. This is expected to increase tourism and provide an extra layer of education and protection around legacy growing areas that believe their cannabis is unique to where it’s grown. In an age where interstate commerce looms, it should be a huge boon—who from further afield is not going to want to buy California weed? But it’s not expected to meaningfully take effect for at least a couple of years.

Meanwhile, back in the Emerald Triangle, farmers are hurting. DeLapp says this is not only a likely “extinction event” for small legacy farmers but that it’s one of several. Back before Prop 64 passed, there were a number of cultivators who jumped ship, claiming they knew the bloodbath to come. Just after legalization was another when small farms struggled to find the capital and manpower to get and stay licensed. This outdoor price collapse is expected to be another.

Jackie McGowan, who is currently running as a candidate in Governor Newsom’s recall election, told us that she’s running specifically because she knew “at least four” grower friends of hers who died by suicide since the beginning of June 2021, owing to the price collapse. Her despair over the lives of her friends and colleagues, as well as the state of the industry, is what has compelled her to run, she said.

Coleman said that, apart from the injustice done to the small farmers who quite literally began and weathered cannabis cultivation in the United States throughout prohibition and into the legal area by allowing them to fail at this critical juncture, there are other potential losses to consider should small farmers be forced out of business.

“Something I’m always aware of regarding the extinction of small legacy farmers and farming communities is the extinction of a whole bunch of genetics,” Coleman said. “From the broader, more international perspective and especially in the medical realm of cannabis research, that’s a lot of loss in terms of the genetic library that should be researched and preserved. For an annual plant, in particular, it happens really quickly,” she added soberly.

At the end of the day, the growers and their advocates lay the blame both on the state’s failure to properly implement rules and regulations for a healthy legal cannabis market, as well as the large cultivators who are taking advantage of a law that was, frankly, made just for them.

“We were supposed to have this runway to 2023 before the market was overfilled. We didn’t get that,” DeLapp said.

She added, “What is the state going to do to fix this? Is the plan going to be to just let the legacy regions die?”

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