California has been hailed with potential to rein as the world’s largest regulated marijuana market on the planet, but currently trails in per-capita sales when compared with other recreational markets across the United States. Much of this can be attributed to California’s rampant illicit cannabis market, and further compounded by the state’s stringent regulation requirements for lawful cannabis businesses.
California has not been as quick to block flavored e-cigarette, tobacco or cannabis vape products as other states across the country. But that could all soon change.
Until now, companies like Juul Labs Inc., a San Francisco-based manufacturer of nicotine pods and vape pens, have managed to squash bills intended to prohibit the sale of flavored tobacco throughout California. Jull Labs Inc. spent $600,000 last year alone, lobbying and supporting political campaigns aligned with their business goals. Continue reading
After two years of licensed cannabis stores selling legalized marijuana across California, the industry has encountered numerous teething problems. Crippling regulation and licensing costs, rising local and state taxes, local city usage bans, and a strong illicit market that shows little sign of waning, have all proved to hinder industry growth. At this point, it is safe to say the Golden State’s legal marijuana industry is in need of a little prod, to help it move forward.
Calling for a Return to the Ballot
With lawmakers seemingly finding it difficult to pass any changes as quickly as the cannabis industry needs them, Cody Bass has floated another idea.
Californian cannabis consumers should be aware that the Golden State is now flooded with toxic vape pens sold at illegal marijuana stores. Recent tests run on cannabis vaporizer cartridges purchased at bootleg pot stores across California show frightening levels of contamination, both in the way of toxic pesticides and dangerous vitamin E oil.
Amid a nationwide crisis that has seen more than 1,400 people sickened, and at least 33 dead from vaping-associated pulmonary injury (VAPI), counterfeit vape products sold on the black market are all too often a common denominator reported in VAPI related hospitalizations.
In the nation’s first ever vote on a stand-alone marijuana bill, the House of Representatives voted to allow federally insured banks to serve cannabis businesses in states like California, where marijuana use is legal.
First introduced by Rep. Ed Perlmutter, D-Colorado, the Secure And Fair Enforcement (SAFE) Banking Act simply states that deposit insurance cannot be cut off by federal authorities, nor can “any other adverse action” be taken against a financial institution for working with cannabis businesses in states and territories where marijuana use is permitted.
A great number of Democrats from Southern California were among the 206 co-sponsors of the bill, as was GOP Rep. Duncan Hunter of San Diego. Rep. Katie Porter, D-Irvine, also introduced an amendment making it clear that new banks and credit unions would be protected by the bill too. Continue reading
As California’s legal marijuana industry continues to bloom, so too does a well-stocked black market, comprised of unlicensed, locally grown cannabis, and a plethora of counterfeit cannabis products.
Fake THC Cartridges Are Flooding California
Of all counterfeit cannabis products, refillable THC cartridges used inside vaping pens are currently most common. Surprisingly, states like California – where recreational cannabis use is legal – appear to be most flooded with counterfeit products. Big brands like Kingpen and Rove have tried to get ahead of counterfeits by repackaging their products, but counterfeits have shown they can keep pace, often reproducing new packaging almost as quickly as the legitimate brands.
And industry insiders unanimously agree, the fakes are getting better all the time. Many knockoff THC vape pens are comprised of illegally but locally grown cannabis, which producers then stuff into refillable cartridge pens, before attaching counterfeit labeling they’ve purchased online, and selling the finished counterfeit pens at discounted prices to illegal pop up shops. To most consumers and law enforcement officials alike, it’s very difficult to tell a real pen from a fake one.
California’s unlicensed farmers in Humboldt County are on notice, with a new crackdown on cannabis growing now in effect. After issuing 1,500 provisional cannabis licenses, state and local authorities are increasingly pursuing farmers for operating without permits.
And it’s not what we’ve seen in years past. Growers need not fear raids from Sheriffs in Humboldt, as much as they should civil action. That’s right, fines are now being issued in the amount of $10,000 per day, for each violation, capping out only at $900,000. And if that isn’t deterrent enough, next comes property liens and forfeitures.
As the black market for pot sales shows little sign of slowing, Californian authorities have notably increased enforcement action against illegal cannabis traders. Over the last 12 months, raids by law enforcement on black market pot businesses have increased threefold, when compared with similar activity conducted in the year prior. As a result, unlicensed pot growers and sellers have seen a total of $30 million worth of cannabis products seized. But even amid this additional ramp up, cannabis industry insiders say even more activity is needed to curb illegal pot sales across the Golden State.
For context, in 2018 local law enforcement worked in conjunction with the state Bureau of Cannabis Control, and together they served six unlicensed cannabis businesses with search warrants. These raids resulted in the seizure of more than 1,500 pounds of marijuana, said to carry a street value of $13.5 million.
Comparatively, according to data release in July, within the first half of 2019 alone, the bureau had already served 19 search warrants to unlicensed sellers. Those raids were successful, and saw more than $16.5 million worth, or about 2,500 pounds of illicit marijuana, confiscated. Just shy of $220,000 cash was also seized from cannabis businesses operating illegally during this time.
California cannabidiol (CBD) products are on the map, and investors are taking notice. But given that CBD-infused products are still relatively new to market, regulators continue to closely review the category. For this reason, acquisition strategies may be a ways off yet, but industry insiders predict consumer companies will see high minority investment interest in the short term.
CBD is naturally found in cannabis plants, and is widely known for its relaxing properties. But CBD won’t produce a ‘high,’ as it lacks the psychoactive tetrohydrocanabidiol (THC), found in marijuana. CBD-derived products have quickly grown in popularity, thanks largely to a wide range of potential health benefits, including relieving pain, anxiety, seizures and brain injuries.
According to Michael Lux, partner at Crowe accounting firm, the next 6-12 months will involve strategic minority investments in the CBD space. He noted too that while the majority of CBD companies are of interest to investors, they are still less than five years old, so they’d likely need a little more time before preparing to engage in full exit strategies.
California shoppers are about to see a brand new line of cannabidiol (or CBD)-infused beverages hit supermarket shelves this week, despite the fact such products are still illegal. Even though federal U.S. law now allows for the creation of CBD based products (in the form of tinctures, capsules, lotions and oils, etc.), FDA guidelines restrict CBD food and beverage interstate product sales.
Alternative health food observers can likely tell you that locally made CBD food products have been steadily propping up all across the country for a couple of years now. As functional foods, CBD products have grown in popularity thanks to their relaxing properties, but they won’t produce a ‘high’ as they lack the psychoactive tetrohydrocanabidiol (THC) found in marijuana.
To buy CBD products until now, consumers have typically had to seek out alternative health food stores, neighborhood dispensaries, or mom-and-pop market stalls. Now, the Oki brand is about to change that. With its CBD-infused, flavored water and iced tea lines, Phivida – the premium functional food and beverage manufacturers of the Oki brand – is among the first to mass produce CBD-infused beverages and is poised to make its 360,000 bottles already produced, available in mainstream grocery stores.