Copy
Calif Legal Sales Drop 12% in Year         Open this newsletter in your own browser 
Vol. 8, No. 23-  June 11, 2022 - Edited by Dr. Lloyd Covens
HOPE FOR SAFE AS SCHUMER, JOYCE TALK -- The INCBA (national MJ attorneys group) hosted the key sponsors for 2022 federal progress in DC( June 8) with  SAFE sponsor (left) Rep. Ed Perlmutter (D-CO), moderator Amber Littlejohn (MCBA) and (right) HOPE act sponsor Rep. David Joyce (R-OH).  Written with New York's Rep. Alexandria Ocasio Cortez, a possible combination of both SAFE/HOPE was reportedly discussed last week with Senate leader Sen. Chuck Schumer, as  a stand-alone bill, perhaps in place of Schumer's stalled COAO comprehensive cannabis reform bill promised for more than 14 months. 
       While the SAFE act passage through an attachment in the AMERICA's COMPETES competition bill remains the fastest possible route for Senate success, Joyce's key equity contribution in HOPE will fund "$20 million to the US Attorney General for the purposes of financially assisting states and local governments with the process of reviewing and expunging cannabis convictions."   Schumer can single-handedly kill the SAFE act attachment by overriding the conference committee, now meeting to hammer out final language in the AMERICA COMPETES bill.  Said Perlmutter  “as we expand this thing, then we start losing votes, particularly Republican votes and we've got enough votes in the Senate to do it” as is." Legislatures in over a dozen states have enacted laws explicitly facilitating the expungement of low-level cannabis convictions. State officials have vacated an estimated 2.2 million marijuana-related convictions under these laws over the past two years, according to NORML.
CMA Hosts MJ Marketers,
Facing Market Instability

The seven-year legal cannabis growth rocket began leveling  out earlier this year--  only now are the negative responses hitting industry segments as they run full-steam into company staff cutbacks, tightening promotional budgets, and the end to planned expansions on ice.  In Denver this week  400 delegates to this week's Cannabis Marketing Summit kept up 'hopeful-optimism' for cannabis prospects, however key presenter  Nancy Whiteman(founder, WANA Brands) reminded attendees  "the cannabis industry is not immuned from the larger economy."   
     
Even as MSOs and leading brands continue to seek greater consumer revenues, the downturn in 2022 MJ sales seems likely to continue cost-cutting related to marketing and promotion.  Schwazze/StarBuds marketing director Johari Rahim confirmed the situation, noting he is "the one-person marketing department, with no budget,"  even as his company moves beyond its' Colorado base with an aggressive $92Mil expansion into New Mexico (which reported new first month RMJ sales of $39Mil).
    "After 11 years, it's nice to still be here," said Keef Brands founder Travis Tharpe, noting his firm continues to be flexible in responding to consumer demands.    Supply side and energy costs are likely to increase MJ product retail prices, said Native Roots v.p., for marketing Buck Dutton, even as wholesale prices for flower continue to plummet (see chart below).  

            "What if your all-stock deal of two years ago is now worth 20% of its initial value?" asked co-founder Brian Vicente (law firm Vicente Sederberg) joining other panel members in expecting further M&A to be slowed in 2022. For MSO numnber 1, CuraLeaf senior vice president for social engagement, Khadijah Tribble, said her company has pledged more  more than $5Mil. thus far for social equity purchasing, including its' commitment to purchase goods and services from over 400 U.S. cannabis firms. 

     Joining new MJ marketing participants, veteran  brand managers remain challenged by the vagaries of Instagram and Facebook able to take down an entire consumer bridge, if those social platforms determined anything in the cannabis/CBD message was questionable.  "With 70% of our [REC] buyers uniquely reachable through social media, we must be mindful of platform concerns," noted CMA founder Lisa Buffo.  Marketing challenges continue with advanced customer profiling and segmentation hoping to drive higher "basket size," even as stretched MJ consumers face inflationary pressure on budgets.

     MJ Biz CEO Chris Walsh also noted that after five years of seeing un-stoppable states voting for legalization, the trend may be leveling off.  "The progress in the major states will be harder" said Walsh as state legislatures become more involved in the enacting scheme-- where one anti-MJ legislator can side-track an entire bill.   That occurred in Ohio which will not vote for RMJ until 2023 and the Pennsylvania legislature which failed to pass a voter measure for November voting.  In Florida,  advocates decided to push for an RMJ vote in 2024--and  in  Delaware,  Democratic Gov. Jay Carney vetoed the legalization bill last week, which was unable to be over-ridden by supporters in the House.  In November, state voters in Missouri, Maryland, South Dakota and Oklahoma will see RMJ measures on their general election ballots. 

        As one of the early post-COVID in-person meetings, Cannabis Marketing Summit hosted an enthusiastic industry after-party at one of Denver's three newly-licensed public social consumption sites, TETRA Lounge.    
  21 Webinars, Shows & Replays: Today's Update at Chemp7.com 
ABOVE:  The continuing slide in wholesale pricing for cannabis (less so for Med MJ at a recovered per pound average of $1,280) is estimated by Cannabis Benchmarks, ending June 3.  Outdoor-grown remains the bottom wholesale pound at $463, however continued energy price rises is likely to drive 'indoor" cultivation costs much higher, which have fallen 5.3% in one week.  See more analysis at:    https://www.cannabisbenchmarks.com/

CANNABIS News Briefs....
      
 Scott's Miracle Gro - is predicting a steep 40-45% decline in 2022 revenues for its' Hawthorne Gardening Co. subsidiary as demand for cultivation gear slows along with collapsing wholesale prices.  But Scott's is not leaving the sector, having spent $275Mil. to acquire New York's ETAIN (3 retail  MMJ  stores) through its RIV (traded NASDAQ-"CNPOF" & CSE: RIV) subsidiary, in April, signaling the companies likely intention of becoming a major MSO, on its own. “The revised guidance we are providing is our best estimate of where things currently stand in a fluid and rapidly evolving market. While we are striving to deliver the best outcome for fiscal 2022, our focus is shifting toward the future," said CEO Jim Hagedorn.  "We are committed to taking decisive steps to improve our margins and cash flow in fiscal 2023 and get the business back to a level of performance that our shareholders rightfully expect,” Hagedorn added.  With approximately $4.9 billion in sales, Scott's is one of the world’s largest marketers of branded consumer products for lawn and garden care--with brands Miracle-Gro® and Ortho® brands--both market-leading in their categories.   Hear Hagedorn's comments at the Wm Blair Growth Stocks conference, June 9th in Chicago at https://wsw.com/webcast/blair66/smg/1779354


   Hope to forstall some of the onerous MMJ changes from Colorado's House bill 2021-1317 have been quelled by a Denver district court throwing out a patient/doctor lawsuit. The lawsuit argued that the controversial 2021 law conflicts with the 2000 constitutional amendment that Colorado voters approved legalizing medical marijuana, by forcing doctors to include dosages and consumption methods on medical marijuana recommendations. Denver attorney Alex Buscher, representing patient Benjamin Wann said he hoped to fund an appeal, arguing that the 1317 provisions are reducing doctor participation since the bill forces doctors to include dosing information which conflicts with federal il-legalization.


Link-of-the-Week:  Leading cannabis employment agency, VANGST, released a study on cannabis industry representation for the LCBTQ+ community. Vangst estimates "the cannabis industry's LGBTQ+ population — 13.7% — is higher than that of the general U.S. population and corporate America. But overall U.S. numbers are likely skewed by generational differences. 20.8% of the U.S. Gen Z population identifies as LGBTQ+."  See the full report at: https://vangst.com/blog/2022-lgbtqia-representation-in-cannabis 
 

California legal consumer sales--and now taxes -- have fallen 11% year-over-year, as reported by the Cal Department of Tax and Fee Administration (CDTFA).  Taxable Sales for Q1 2022 were under $1.2 billion, down 9.9% from an upwardly revised $1.3 billion (previously $1.26 billion) in Q4 2021. California Spot price slipped 5.3% in Q1 2022, which may account in part for the sequential decrease in taxable sales. Year-on-year, Q1 2022 sales are down 6.1% from Q1 2021’s $1.24 billion.

 Total cannabis tax revenue collected in Q1 2022 was $294 million, down 7.3% from an upwardly revised $316.6 million (previously $308.6 million) in Q4 2021. Q1 2022 total tax receipts include excise taxes of $156.4 million, cultivation taxes of $32.7 million, and sales tax of $104.5 million. Total tax collections for Q1 2022 were down 5.9% from $312 million collected in Q1 2021. Excise tax receipts fell 3% to $156.4 million in Q1 2022, from an upwardly revised $160.6 million (previously $157.4 million) in Q4 2020. This is the third consecutive quarter of lower excise tax revenues.

California's black/gray market now commands nearly 78% of the total consumer MJ market, but a small initiative has begun to let buyers know who is a licensed/legal MJ seller.  The County of Los Angeles’ Emblem Program for Authorized Cannabis Stores was created in an effort to crack down on unlicensed marijuana stores as well as products sold in those shops that has not been tested in a laboratory for mold or other contaminants. The Los Angeles City Council approved a motion on June 7 calling for the “City Attorney to draft an ordinance implementing the county program in the city,” LA City News Service reported.



MONTH 4:  WNBA star Brittney Griner (above with wife, Cherelle) remains in a Moscow prison for her possession of two MJ vape carts.  Where is the Biden administration?  Where is the cannabis industry?  Where is the justice for this Black, lesbian Olympic gold medalist?  Watch:  https://sports.yahoo.com/brittney-griner-wife-pleads-her-091853469.html
WHAT DO CRESCO, GREEN THUMB, VERANO, PHARMACANN/LIVWELL AND AKERNA ALL HAVE IN COMMON?
ANSWER: HEADQUARTERS IN CHICAGO.  Special Report Next W420.

Copyright ©   West420 NewsWeekly is targeted to adults 21-plus and is not a solicitation for any cannabis product or derivative.   We appreciate your comments via email to "Dana@Chemp7.com"  Or  use QR above
  for 4-free issues.   Or, even better, Get all of our annaul 44 reports for $139/year at  https://bit.ly/3tk1SIL
Thanks for building the global hemp/cannabis community!  






This email was sent to <<Email Address>>
why did I get this?    unsubscribe from this list    update subscription preferences
Chemp7.com- West420 · 1660 So. Albion · Denver, CO 80222 · USA

Email Marketing Powered by Mailchimp