OPINION a city permit before a state licensed can be issued. Out of 488 cities, only about 25% of them have created a structure for cannabis licensing. The state made it illegal for cities to prevent deliveries or distribution vehicles from entering said city. As a result at least 25 cities are suing the state over this. 8) Extremely High Insurance Costs: • The minimum cost for insurance coverage for cannabis companies averages $40,000 a year. That's the average salary of an annual employee. Only a few companies even underwrite the kind of coverage required by the state of California. To top it off, it's unclear how and if insurance will actually pay out in the event of an incident, and how much the premium will increase as a result of a claim. 9) Metrc™ Track-and-Trace Problems: • No Lab Testing Integration existed for Test Results for two years up until now • No way to check out Booth Display Samples in Metrc™ • No longer a way to create multi-destination transfers • No way to track sales in Metrc™ • It takes 2 weeks for Metrc™ to reply if you need to troubleshoot for any reason, they reply 'Read the Manual' • When you start Metrc™ access, it takes 6 weeks to get your tags, but you must first discover that they blocked access to tags in order to request the tags • When something is destroyed in Metrc™, it doesn’t actually adjust the original “package” • Because Metrc™ is a web based software the access gets throttled and sometimes at peak business hours it takes as long as 3 minutes for a page to load to execute a transfer. 10) No Consistency in Lab Testing - No Mandatory Calibrations or Protocols If the lab doesnt have the $500,000 machine, they're only getting 80% of the yield and the lab results are going to be outside the 10.% plus or minus buffer from the state. We've sent the same sample to 3 labs and got 3 completely different results. That means that businesses are on the edge all the time, just one mishap or bad compliance test could put a company out of business. Final Thoughts: They are literally making it impossible to do business and stay afloat in California as a licensed cannabis company. If the state wanted more tax revenue, the answer is simple, reduce the barrier to entry and reduce the application fees and taxes to encourage more people to get licensed and legal. Instead, the exact opposite is happening. California's broken legal market continues to drive the black market, creating the demand for low cost cannabis products and encouraging people to feed into the illicit market because there's no profit to be made legally. Everyday we see another cannabis company (big and small) go down, quit, or exodus leaving the state for other more promising markets. It's a massive intentional purge and only big companies backed by millions will survive. The Reality Issue
Issue 62 I Page 21
