LOCAL NEWS

CALIFORNIA

$100 Million in Funding Issued

Looking to start 2022 off on a positive note, California’s Department of Cannabis Control announced on January 7 that the state had awarded $100 million in funding aimed at aiding in the development of local Cannabis markets.

Emphasizing the need to assist Cannabis businesses with the process of becoming fully licensed, the DCC has distributed funds to 17 cities and counties in which provisional licenses disproportionately outnumber the number of full-year (or annual) licenses being issued. Locales selected for funding include Desert Hot Springs, Long Beach, Monterey, San Francisco, Sonoma and Trinity. In a statement, DCC Director Nicole Elliott detailed the criteria used in determining this round of grant recipients, which she noted favored local jurisdictions that “incorporated innovative approaches to meet the specific needs of their license communities.” Those receiving funds are encouraged to use them in pursuit of expanding staffing, establishing IT systems dedicated to licensing, and assisting with environmental assessments and other initiatives aimed at renewable energy and water reduction. Additional funds will also reportedly be made available to any jurisdictions with established social equity programs.

Hungry for Edibles, Glass House Brands Acquires Plus Products for $25.6 Million

Continuing in their self-proclaimed pursuit to create “the largest Cannabis brand-building platform in California,” vertically integrated Glass House Brands has acquired Plus Products for a reported $25.6 million.

Clearly aware of the value of edibles as one of the fastest-growing categories in the Cannabis industry, the deal between Glass House and Plus brings the latter into a company already excelling as a top seller in the flower space. By adding Plus – ranked by BDS Analytics as the No. 1 brand in the California gummy category – Glass House will look to diversify its offerings at a moment when the edibles market continues to spike in popularity.

This deal notably falls far short of the estimated $298 million valuation Canopy Growth gave to leading edibles brand Wana in acquiring them last October.

This disparity in price can partially be explained by the fact that Plus filed for bankruptcy protection in September, though it also reflects lofty expectations on the part of Glass House when it comes to what they believe Plus will bring to their seemingly ever-widening portfolio of products. As of now, the deal between Glass House and Plus is expected to close by early 2022.

Some California Cultivators Forced to Let Crops Rot

There is arguably no better visual to depict the current struggles facing California’s craft growers than that of quality Cannabis crops literally left to rot in the ground. Though such a fate seems difficult to process with so many places across the state – let alone the nation – still unable to access quality, legal Cannabis in any form, it has sadly become a reality.

Swami Chaitanya, the reputed grower behind Swami Select, recently confirmed that he knew of growers in Mendocino County who were opting to simply skip the entire harvest process due to costs associated with such efforts, which in many cases can exceed what cultivators like Chaitanya can expect to earn back.

With the price of flower in the state at a historic low, if a strain isn’t likely to achieve a high price point, it can sadly be less of a loss from a fiscal standpoint to let one’s subpar crops rot.

Part of the painful logic here stems from cultivation taxes, which must be paid immediately, rather than upon completion of a sale.

Faced with the obligation to pay taxes on product that is now going for a mere $300 to $500 a pound (if not less), the math simply isn’t adding up. Surely a better solution is possible, though the window to enact meaningful policy change appears to be rapidly slamming shut.

West Hollywood Seeks to Become CA’s Answer to Amsterdam

West Hollywood is a small slice of Los Angeles with an outsized reputation. Time and time again, this tiny city has repeatedly placed itself on the map, from its Prohibition tenure as a welcoming home to speakeasies to its role as a 1960s rock mecca courtesy of the Sunset Strip. In the 1980s, when

the AIDS epidemic hit, West Hollywood again went against the grain by playing host to some of the first medical marijuana dispensaries to open anywhere in the country. Recalling this history, it thus makes sense that West Hollywood officials and the Cannabis industry are now eyeing the city (home to a mere 35,000 residents) as a potential West Coast answer to Amsterdam.

Currently home to six dispensaries, West Hollywood officials reportedly plan to approve as many as 40 additional Cannabis permits over the next year and change.

The idea of establishing a socalled ‘Emerald Village’ as a southern counterpoint to NorCal’s Emerald Triangle also partially hinges on the involvement of several A-list celebrities with plans to open West Hollywood Cannabis businesses.

They include rapper Jay-Z, comedian Bill Maher, and actors like Patricia Arquette and Woody Harrelson.

While West Hollywood’s Cannabis businesses currently generate approximately $2.2 million a year in taxes for the city, officials reportedly expect to collect up to $6 million once all licensed businesses in the queue finally open.

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