Mark Javier

ALCOHOL RETAILERS TAKE NOTE: USING A DELIVERY SERVICE COMES WITH CERTAIN RISKS Last week, the Washington State Liquor & Cannabis Board (WSLCB) cited a local wine and spirits store for selling liquor to a minor. The citation shocked the owners and their employees because they were certain they had never sold alcohol to a minor in their store. It turns out the violation actually was committed by the retailer’s contracted delivery service because a driver for the delivery company failed a WSLCB alcohol delivery compliance check. A state regulator purchased spirits from the retailer online; a delivery driver picked up the alcohol and delivered it to an 18-year-old man at the purchaser’s address, even though the ID tendered by the recipient to the driver clearly showed he was under 21 years of age.  The result: a retailer with a spotless compliance record was forced to pay a $1000 fine or suffer a ten day suspension of its license. The cited retailer feels unfairly punished, insisting that its contract with the delivery service guaranteed that every recipient of a delivery would be ID checked to assure a lawful consumer. However, the retailer failed to appreciate that under Washington State’s alcohol laws a spirits retail licensee is ultimately accountable for all deliveries of liquor made on its behalf. This is nothing new. The Massachusetts Supreme Court set this precedent back in 2008, with its decision in eVineyard Retail Sales-Massachusetts, Inc. v. Alcoholic Beverages Control Com'n., 450 Mass. 825, 882 N.E.2d 334 (Supreme Judicial Court of Massachusetts, March 18, 2008). In that case, which also involved a lawful internet sale of wine followed by an unlawful delivery to a minor, the Court found that the licensed retailer made the sale and was responsible for the alcohol’s safe and lawful delivery, regardless of what its agent promised contractually. Alcohol regulators have jurisdiction, and the concomitant power of enforcement, over licensees, not contractors. Unlike retailers, existing beverage delivery services typically are unlicensed by the reigning alcohol regulatory agency. Consequently, when violations occur, such as deliveries to a minor or an intoxicated person, the regulators look to their licensee for accountability. As more and more alcohol beverage purchases occur online, it is important for licensed retailers to know the laws in their markets.   #ALCOHOLDELIVERY #INTERNETLIQUORSALES #LIQUORRETAILERLIABILITY #LIQUORDELIVERYFAILURE

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California tax revenue from cannabis has declined each of the last two years from a peak of 2021. (Source:DCC) Where do we expect 2024 to finish? It sure seems to be a broken system, with very few profitable operators. The state is trying, and AB 2223 will be a pivotal moment for the industry. Many brands have given up, and are finding better margins and consumer access in hemp, that allow them to do basic things like make payroll. I voted in favor of prop 64. At the time, I had faith that the state supported profitable industry to boost the economy and provide jobs. I didn't believe they had altruistic motives to improve access to a beneficial plant. I didn't think the mismanagement would be so bad that the industry would already be in a decline 3 years into it. Question: How much tax revenue would we generate for the state if we had low-dose cannabis beverages accessible everywhere alcohol was? How much would we need to tax cannabis beverages to achieve their goal? Allowing adult beverage producers, distributors and retailers to freely sell low-dose cannabis beverages isn't competing for revenue from the dispensary channel. People buy beverages where they already are. Someone ordering a Coke at McDonalds or a Red Bull at a concert wasn't going to buy the same drinks at a grocery store later that day. Please tell me where I'm wrong, or your ideas to fix this decline -

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What's a no brainer in business? Spend $75K, make additional $6.5M in revenue. This is the difference between a 10,000 sqft cannabis #CEA cultivation growing 2.0lbs a light (57g/sqft) x 4 harvests per year and the same cannabis grow running our Grow Perfect 10 program conservatively getting 2.5lbs per light (75g/sqft) x 5 harvests per year. If you go with our facility design + SOPs we can consistently get you to 3+ lbs per light 5+ harvests per year of top shelf quality. Data doesn't lie, combine that with proven SOPs and processes and you don't lose. #cannabiscea #cannabisdesignbuild #doitforthehorticulture

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📢New hemp product retail/wholesale license alert for Oregon📢 📝Relevant links on comments 🔵Effective 7/1/24 a "vendor" is required to obtain a license from OR Dep't of Ag 🟠Each vendor site must have this license prior to storing, transferring, or selling hemp products 🔵The license is required for online vendors that sell into or out of OR 🟠The license is annual and expires 6/30 each year 🔵The fee is $100 🟠The license is site specific - vendors need separate licenses for each vendor site 🔵There are a few exceptions which don't require this license - 1) If the person only facilitates the sale or transfer by connecting buyers and sellers and the person does not store the industrial hemp or hemp items at any time 2) A licensed grower, handler, or agricultural hemp seed producer is (with some notification requirements) 3) any sites licensed by OLCC 4) a person who only transports industrial hemp or hemp items and does not store the industrial hemp or hemp items at any time other than as necessary for transportation or delivery

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This is a call to all California Cannabis Operators: If you're concerned about being profitable, need help with upgrading equipment or processes, if you are looking to get more yield from your canopy space- please reach out to me. If you work as a grower or IPM manager at one of these facilities and struggle to keep your crops from improving their overall output, I can provide a referral credit for making an introduction. Verne Bioanalytics uses a host of solutions, each custom fit to your specifications, we will customize a solution to keep your crops pest and infection free plus we can help with overall plant health and efficiency. Quit wasting money guessing what's wrong, let us test and diagnose and provide an answer this WEEK and not in a few months when you're losing money due to process inefficiencies and lack of strong SOPs. We employ AI and humans to tackle the largest issues in cultivation today. DM me for a quick intro to what we can do for you.

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🌿 Cannabis Industry Insight: Declining Distillate and Flower Prices 🌿 Lately, we've observed a noticeable decline in both distillate and flower prices. 🔍 Potential reasons include: Increased production capacity: Many producers are scaling up, leading to a surplus. Rising competition: More players in the market are pushing prices down. Regulatory changes: Evolving laws are making production more accessible and less costly. Shifting consumer preferences: Demand is diversifying across different product types. I'm curious to hear from others in the industry. What trends are you seeing, and why do you think prices are falling? #CannabisIndustry #MarketTrends

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Tier One Earnings Analysis: So Far, So Good With four of the top five plant-touching US cannabis companies reporting, the "tier-one" MSO earnings have largely been better expected. On average, the group exceeded revenue expectations by 2.27% and adjusted EBITDA consensus by 9.15%. Curaleaf modestly missed consensus analyst expectations, while Green Thumb Industries (GTI), Trulieve, and Verano beat on revenue and adjusted AEBITDA. The first quarter is typically the softest and we saw revenue for the four tier ones that have reported sliding on average by 1.43% Q/Q while adjusted EBITDA improved 0.79% sequentially. Trulieve showed the strongest sequential improvements in both categories, while Verano saw the biggest Q/Q revenue and adjusted EBITDA decline. Year-over-year, average revenue for this group grew by 3.65%, and adjusted EBITDA jumped by 13.52%. Green Thumb Industries (GTI) had the biggest revenue expansion, +11.00%, and Verano was the only operator with negative revenue growth, -2.60% Y/Y. Trulieve AEBITDA growth of 35.50% was the best, while Verano was the weakest, with AEBITDA contracting 5.00%. Tighter SG&A controls have helped drive the broadly better AEBITDA results. We'll refresh the data after Cresco Labs reports on Wednesday, but for the tier ones: so far, so good.

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While the California Cannabis Industry Association (CCIA) is still evaluating the investigative report prepared by Paige St. John and Alex Halperin, and released by the Los Angeles Times, we are deeply concerned by any data that suggests consumer safety is at risk. "California has some of the most stringent cannabis standards in the nation, designed to protect consumer safety and public health. However, the state’s continued failure to enforce against those who fail to comply — both inside and outside of the regulated market — has put the credibility of the entire adult-use market in peril, and now threatens the very consumers we aim to serve. "Due to overly burdensome regulations, high taxes, and a lack of oversight, the state has inadvertently created an environment where bad actors feel compelled to cut corners to compete and survive. This undermines the integrity of the market and compromises consumer safety. "It is the explicit role of a regulator to establish and enforce standards that protect consumer safety. Compliant industries rely on these standards to guide their practices. Given the known safety risks associated with certain pesticides, we would expect the state to implement the strongest protections with which we can effectively comply. "It is equally important to recognize that the findings from this report, based on a limited sample from a few brands, do not represent the industry as a whole. Many reputable operators work tirelessly to ensure the safety of their products, often far exceeding California’s regulatory standards while pioneering innovation across the industry. The actions of a few should not tarnish the efforts of those who are committed to compliance and consumer safety. "CCIA has been calling on policymakers for years to take action to address the thriving illicit market and non-compliant licensees that threaten market integrity and put consumers in harm’s way. Effective policymaking must be accompanied by rigorous compliance and enforcement. We remain committed to collaborating with the governor, the legislature, and all stakeholders to improve enforcement mechanisms, uphold high standards, and ensure that consumers can trust the safety and quality of the legal cannabis products they purchase. #California #Cannabis #ConsumerSafety

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Cannabis startups are DEF a rollercoaster - 2 wks ago I was reeling from several gut punches... but today, things are looking bright: ✅ LOTS of new products in the pipeline that I'm SO pumped about... our Live Resin Vapes drop in NY before 710 and they're 🔥 🔥 🔥 . A bunch more new stuff I can't reveal them yet too… ✅ in NY, LIVE NUGS are in almost completely sold out - with most places re-ordering after < 2 wks selling a $100+ SKU! We’re getting a ton of inbound interest - shows that innovative products that deliver real value sell. Still early, but we should 2-3X our best month ever... NY as a market feels like it’s FINALLY getting its footing (hope I’m not jinxing us here). ✅ in CA, we've signed 4 MONSTER accounts since HoF and our new SKUs (esp Live Rosin Pre-Rolls and Live Rosin Vapes) are FLYING... it's painful for our cash flow to be scaling to meet demand, but feeling very positive about the turnaround in the most challenging state. About to sign up for the next big show in Sept… ❓thinking about expansion - though it's still early (wanna make sure our foundation & processes are solid in CA / NY)... but what potential partners should we be talking to in NJ for cultivation / processing / sales & distro? HMU via DM pls... None of this would be possible without our incredible team (Martin Mills, Cirona Labs, Peter Pietrangeli, Euphoric life , Lowell Farms Inc.) and our amazing retail partners. In general, I try not to get too high or too low - but feeling immensely optimistic about the state! Gotta celebrate the wins - as tomorrow I'm fully expecting to be punched in the face again LOL. BTW, in the rollercoaster analogy - which part is “good”? I assume it’s when you’re going downhill (despite Kevin Hart’s face)?! But then when we talk about life’s ups and downs or highs and lows - it’s the opposite right? Make it make sense?!

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Increase yields, increase profits. 📈🌱 Terra Vera will help your business grow while decreasing profit loss due to crop damage, fail rates, and labor costs. Learn more at: https://buff.ly/3lj3OAi #cannabisbusiness #greenbusiness #indoorfarming

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Good morning California Cannabis Industry, Today, in the economic evolution of cannabinoids (both cannabis and help), there's one question remaining: WHO WON THE RACE TO THE BOTTOM?  I'd love to hear your thoughts.  

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This is a good read on the state of cannabis in California. High taxes, not enough retail, and a thriving traditional market continue to present challenges, but there will be survivors who emerge stronger and capitalize as California cannabis recovers. Gold Flora and LEEF Brands, Inc. are two companies we cover that are positioned to survive the current challenges and lead as the market improves. Glass House Brands Inc. is another example. "Wesley Hein, an executive at Mammoth Distribution and board member of the California Distributors Association, compared the present pot crash to the dot-com crash of 2001 and 2002, when the Nasdaq lost 78% of its value in two years as exuberance in the Internet Age ended with widespread business failures. “It looked like anything associated with technology was going to go out of business. And one after another they were going down,” Hein told SFGATE. “But out of those ashes the companies that had real business … were growing. Google, eBay, PayPal all came when it felt like the sky was falling.” https://lnkd.in/gFDrc935

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To all of the folks following the cannabis space, the attached represents what will inevitably head to the Supreme Court. The federal government has exclusive control over the instrumentalities of interstate commerce. Regardless of whether a state has legalized cannabis, the federal government has exclusive control over the highways, interstates, and most especially, the border. Because "a thing" is legal at the state level, and is compliant at the state level, doesn't mean that the U.S. government doesn't consider that drug trafficking. Obviously, there is a sympathetic element in the federal government, because the article on mentions seizures, and doesn't mention arrests. It makes you think that there is a test case coming, on whether: (1) the supremacy clause applies and cannabis is still an illicit drug for federal purposes (it does and it is); and possibly, (2) whether the prohibition against cannabis is unconstitutional (it isn't, and the courts are likely to say that this is a political issue resolved by Congress, unless there is another element I'm missing). Have fun out there - just posting out of curiosity, and because I think that "Gibbons v. Ogden" is nifty. Article below:

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James E. Malackowski, Co-founder and Senior Managing Director of Ocean Tomo, a part of J.S. Held, provides insights into the future of mergers and acquisitions (M&A) in the cannabis industry. "Despite financing challenges, companies increasingly rely on M&A to support long-term growth in this category," said James. "Several trends are shaping the future of M&A in cannabis, including the push for vertical integration, geographic expansion, and consolidation among multistate operators, among others." The Cannabis Industry Report features six key predictions for the industry, including the increasing reliance on M&A for long-term growth and the potential impact of reclassifying marijuana from a Schedule I to a Schedule III drug. The report also identifies six critical factors influencing the cannabis market, such as regulatory complexities and the importance of intellectual property protection. To read the full report, visit: https://lnkd.in/ewjqmC6r #IntellectualProperty #Cannabis #CannabisIndustry

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"The cannabis industry has undergone significant transformations, evolving from a budding market to a booming sector with complex regulatory frameworks and increasing acceptance," said Brent Hull, an Analyst in the Management Consulting and Valuation practice of Ocean Tomo, a part of J.S. Held. "Intellectual property (IP) has emerged as a critical factor in the industry's growth, providing companies with the means to protect their innovations, maintain competitive advantages, and foster brand recognition. Despite the opportunities, the cannabis industry faces unique IP challenges, complicating the enforcement of IP rights." The Cannabis Industry Report provides an extensive overview of the industry's growth, challenges, and opportunities and results from a collaboration between Ocean Tomo's IP specialists and J.S. Held's Environmental Health & Safety and Corporate Finance experts, offering a multidisciplinary perspective on the cannabis sector. To read the full report, visit: https://lnkd.in/ewjqmC6r #IntellectualProperty #Cannabis #CannabisIndustry

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Talarya Brands CEO Dustin Milner breaks down the fallacy of investing in new cannabis markets during the main stage M&A panel at Benzinga's Cannabis Capital Conference: “The issue is, with most of these new markets, the operators have very healthy margins, they’re demanding high prices for the businesses, but over time those margins compress substantially. So we do not believe in first-mover in advantage in new markets. We think that that’s a fallacy. We also think that it’s a mistake when making an investment to go into a new market, because unless you can exit that market in three years, you’re going to be left in a mature, consolidating and price-compressed market.” Catch the fascinating full panel discussion with Poseiden Investment Management's Emily Paxhia, GREEN LIFE BUSINESS GROUP, INC.'s Eric Espinoza and Foley & Lardner LLP's Rob Nederhood here:

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Hey #cannabisindustry I'm interested in talking to folks who have familiarity with state procurement processes, especially California's. Leave any thoughts in the comments or DM

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