State Assemblyman Matt Haney, D-San Francisco, plans next week to introduce AB 564, or the Cannabis Tax Relief bill, to stop a tax hike — from 15% to 19% — set to go into effect on July 1.

Haney also authored AB 1775, which this year allowed dispensaries to open Amsterdam-style cannabis cafes with food and non-alcoholic drinks. While that bill and the one Haney is introducing next week could help boost local dispensaries’ revenues, some shops are nevertheless worried a tax hike will drive more cannabis consumers to the black market.

“The illicit or unregulated market is the biggest competition,” said Zoe Schreiber, director of compliance and public affairs for The Highlands Dispensary, which opened in unincorporated Livermore in 2022. “As a full retail community, our biggest competitors are not each other, but rather a market that’s unregulated.”

Schreiber said customers often complain of the high taxes on cannabis products at her dispensary, which can make up about 30% to 40% of the overall price out the door, she said. She said that in addition to the expected 4% excise tax increase, licensing and regulatory fees continue to drive the prices of legal cannabis products up, while pushing consumers away from the regulated market.

“‘I know a guy,’ or ‘my guy can get it to me for less.’ Those comments are ones that we do hear,” Schreiber said. “By continuing to do things to make regulated cannabis more expensive, or even where it’s at now, we lose over half the market. We lose the ability to create that safe space, which is what consumers voted for in 2016 with Prop. 64.”

Haney said he is putting the Cannabis Tax Relief forward to protect legal cannabis businesses from closing as the illegal market continues to grow at a faster rate.

“California’s cannabis industry is struggling. And a huge tax increase right now could be the nail in the coffin,” Haney said in an interview Wednesday. “This is absolutely the wrong time for a 25% tax increase on a fledgling legal cannabis industry that is trying to follow all of the rules and pay their taxes and is losing out everyday to those who are not.”

He also compared the legal weed industry’s tax bracket to that of wine or beer, saying a glass of alcohol includes about one or two cents in taxes, whereas taxes on a joint can cost over a dollar.

Haney added that California’s legal cannabis industry appears to be falling behind the cannabis-industry growth of other states such as Michigan, Colorado and Washington, which have lower taxes and friendlier regulations.

“I think that when cannabis was legalized in California, they did not expect that the illegal market would continue to thrive and grow and compete at the scale that it has,” Haney said. “They are operating outside of our laws entirely.

“Until California takes action to put a stop to that, we have to make sure that our businesses that are following the law are not so overly taxed and burdened that they cannot operate at all. This is common sense.”

Mel Gibson, the well-known actor and director who lost his Malibu home in the Palisades fire, went to Altadena on Wednesday, Feb. 26, to show his support for an effort to recall Gov. Gavin Newsom, who was also in the Los Angeles area.

“Gov. Newsom and (L.A. Mayor) Karen Bass let us all down,” he said, expressing his sympathy for other victims of the fire, some of whom were in attendance.

“California was ill-prepared and had scant resources to deal with the inevitable fires,” he said. “They knew that. So are we supposed to believe our elected officials didn’t know that? Of course they knew that.”

Gibson said California has the highest levels of taxes in the country, a state where high wage earners have long paid the country’s highest state income tax rate of 13.3%.

“Now, for that kind of money, we deserve much more and much better,” he said. “And there is absolutely no adequate excuse the governor or mayor can make for this gross mismanagement and failure to preemptively deal with what they knew was coming.”

About 100 people, many wearing Trump merchandise, stood in the hot sun in the Altadena foothills at the fire-burned property of Marylee Blueford, a 98-year-old woman who had lived there since 1970.

Randy Economy, the chair of Saving California, who served as senior advisor during a 2020 effort to recall Newsom in response to the pandemic, said, “We’ve been working on this recall effort for six months. It’s not just about the fires, it’s about the political firestorm that has erupted over this whole situation.”

Economy, a radio host and media professional, said this effort is different from the Recall Gavin 2020. “I was the senior advisor of that recall. It’s totally different (now) than it was then.”

He said Newsom had an approval rating of 53% during that recall effort, and claimed that Newsom’s approval rating had fallen to the 20’s. A poll last June by Public Policy Institute of California found 44% approved of Newsom’s performance as governor.

Economy called the wildfires “emblematic of the whole situation.”

Nathan Click, a spokesman for Newsom, criticized the group and its efforts.

Nathan Click, a spokesperson for Newsom, said in a statement that the governor “is focused on leading the state and the recovery from the L.A. fires – not politics.”

Many of the same people were involved in other unsuccessful recall attempts against Newsom in the past, “each of which have failed spectacularly,” Click said.

Economy and Gibson, meanwhile, implied that Newsom could not be trusted with the $40 billion he’s requested in federal aid.

The failed recall against Newsom was only the second attempt to recall a sitting governor in California history to reach the ballot after voters recalled Democrat Gray Davis in 2003. Voters then replaced him with Republican Arnold Schwarzenegger.

Recall proponents must conduct some preliminary steps, such as filing a notice of intention, then prepare a petition. For statewide officeholders, the petition must be signed by registered voters equal in number to 12% of the last election for governor. That means petitioners are seeking 1.5 million signatures within a 160-day period of the secretary of state’s certification.

On Wednesday, fans in the crowd called out to Gibson that he should run for governor.

“We love you, Mel,” they called.

He claimed that Newsom had made it too costly to film movies in Los Angeles, and questioned the governor’s handling of money.

“Why would we trust him with that kind of funding?” Gibson said. “Along with that federal money should come a federal investigation.”

Following comments by Gibson and Economy, Bishop Juan Carlos Mendez, founder of Churches for Action — a group supporting the recall — spoke in support of their cause, but was apparently overcome by the heat. The press conference ended and an ambulance was called to help Mendez.

Jarret Liotta is a Los Angeles-based freelance writer and photographer.

By ISABELLA VANDERHEIDEN | Times-Standard

The Humboldt County Board of Supervisors appointed 1st District Supervisor Rex Bohn to serve as a county representative for the California Cannabis Authority (CCA) Tuesday following 5th District Supervisor Steve Madrone’s decision to resign from the appointment. Bohn will represent Humboldt County for the CCA alongside county Treasurer-Tax Collector John Bartholomew.

“The CCA is a Joint Power Authority created by contract between counties with cannabis regulatory or taxing authority,” according to the staff report. “The purpose of the organization is to develop and manage a statewide data platform that will gather, collect, and analyze information from a myriad of data sources into one resource, to help local governments ensure cannabis regulatory compliance and also provide necessary information to financial institutions that wish to work with the cannabis industry.”

Bohn emphasized the need for “more unity” between counties and the Department of Cannabis Control to deliver an across-the-board approach to cannabis taxation.

“I would do it. I mean, it’s not like I don’t have enough committees or anything else. But, I think, after watching yesterday and the importance of getting a focused across the board situation so everybody is on the same page (is important),” he said, referring to the board’s decision to slash the county’s cannabis cultivation tax Monday.

Bartholomew noted that he has served on the CCA “since before it was established as an organization” but questioned whether the $28,000 annual membership was really worth it.

“Data can be tracked from Humboldt County and thereby make the platform that CCA offers useful for county operations and understanding of what’s happening within the cannabis industry here in Humboldt County. Unless the county is going to do that, I don’t know that there’s a lot of value in staying active with the CCA because it’s costing I think $28,000 a year,” he said. “I hate to say this because I’ve been a huge supporter of CCA since the beginning. …I think the county should decide if operators will be required to participate on the CCA platform or not. If not, your board should make a decision for what kind of value the CCA is really providing to the county.”

Bohn made a motion to sit on the board in the meantime. Third District Supervisor Mike Wilson offered a second.

Madrone agreed and encouraged the board to consider a future agenda item regarding future CCA membership.

“The main reason (other counties) are involved, as I understand it, is because they use it as an enforcement tool in terms of trying to use the metric data to figure out if farmers are reporting accurately or not,” he said. “Frankly, it does nothing for enforcement, for compliance, or unlicensed applicants because that’s not the way it’s set up and it costs $28,000 a year for the county to be involved in this and we get very little value out of that.”

County Administrative Officer Elishia Hayes said staff could bring back an agenda item to reevaluate the board’s involvement with the CCA at a future date. “Supervisor Madrone and I did discuss this yesterday and given the reductions to the excise tax revenues, this can also be incorporated into the budget process as well,” she said.

During public comment, Natalynne DeLapp, executive director of the Humboldt County Growers Alliance, expressed her support for Bohn’s appointment to the CCA and asked whether it would be possible for California counties involved with the CCA to negotiate a lower cost for membership. DeLapp also thanked the board for approving tax relief for cannabis cultivators.

The board ultimately voted 4-1, with Madrone dissenting for an unknown reason, to appoint Bohn to the CCA.

Isabella Vanderheiden covers Humboldt County government, environment and cannabis news for the Times-Standard. Isabella earned a bachelor’s degree in Journalism from Humboldt State University and has written for several Humboldt County news outlets.

By ALEX VEIGA AP Business Writer

The U.S.’ expanding legal marijuana market is helping drive strong sales and profit growth for multistate operators like Trulieve Cannabis Corp.

The Quincy, Florida-based company sells cannabis products in 11 states from Arizona to Pennsylvania. It reported $408.9 million in revenue in the first half of this year, an 89% jump from the same stretch of 2020. Its net income surged 67% over the same period.

The company recently completed its acquisition of Tempe, Arizona-based cannabis company Harvest Health & Recreation in a deal valued at $2.1 billion.

Trulieve’s latest expansion bid comes as more states allow sales of marijuana in some form or another.

Adult recreational use of marijuana is now legal in 19 states, with Connecticut, New Mexico and Virginia among those that enacted such laws this year.

Even so, the cannabis industry remains constrained by legal impediments to accessing capital and other challenges stemming from marijuana being illegal at the federal level. The industry is hoping Congress will deliver on long-sought legislation, including the Secure and Fair Enforcement (SAFE) Banking Act, which would free up banks to do business with licensed marijuana companies.

Trulieve CEO Kim Rivers recently spoke to The Associated Press about the impact of the Harvest deal, how her company has weathered the pandemic and the need for federal pro-cannabis legislation. The interview has been edited for length and clarity.

Q: You’ve referred to your company’s expansion plan as your “hub strategy.” What does it entail?

A: What that means is dividing the country into five regions: the Southeast, Northeast, Southwest, Central and Northwest. And to capitalize not only on near-term catalysts that will likely happen at the state level, but also thinking about how our distribution platform will look as federal change potentially occurs. We started down the path of developing out the Northeast. We acquired two companies in Pennsylvania, began operating in Massachusetts as well as Connecticut, and decided to look broader as we felt that we were positioned at that time to embark on a more transformational acquisition. That’s when Harvest came into focus.

Q: How does the Harvest acquisition fit in?

A: Harvest expands on that national hub strategy by increasing our footprint in the Southeast with additional cultivation, production and retail outlets in the state of Florida, as well as the Northeast. We’ll have one of the largest combined footprints in the state of Pennsylvania, as well as adding a new state, Maryland, to our portfolio, and adding a brand new region to our combined platform in the Southwest. We will be the largest company from a retail outlet perspective. We have 149 locations as well as on the cultivation and production side of the business, we have 3.1 million square feet, which is approximately 50% more than any of our competitors.

Q: The House recently passed the SAFE Banking Act again. How important would this bill be should it become law?

A: There are significant increased costs for those of us participating in capital markets right now. But maybe more importantly is the fact that a lot of small businesses that are cannabis businesses can’t get loans at all because they don’t have that pool of capital available to them. At this point, it almost seems kind of ridiculous that a majority of our states have cannabis programs but banks that absolutely want to participate in the industry are not able to and don’t have protection because of the federal position on the industry.

Q: What impact has the pandemic had on your business?

A: We did see consumption trends increase quite significantly. We had record growth, posting like 25% quarter over quarter, so it did have a significant positive impact on the business. What we’re seeing now is a normalization, of course, post-COVID. And what’s really exciting, I think for many of us, is that we’re still seeing growth even off of those highs.

California is in the thick of fire season. This year, wildfires have burned more than 1.9 million acres in California. More than 15,300 firefighters are on the frontlines of 16 major and five extended attack wildfires across California. The Caldor Fire is the 15th largest fire in California history and the Monument fire is the 20th largest.

We know these fires can wreak havoc on our community of licensed cannabis businesses. We want to ensure you are aware of the resources available to you in the event you face a fire-related emergency. We are here to help you navigate these challenging times. If you have questions or need help, email us at mailto:DisasterRelief@cannabis.ca.gov.

Disaster Relief Program

The Department of Cannabis Control (DCC) has a disaster relief program for licensees affected by wildfires. This program allows you to:

Request temporary waiver of a regulation when you cannot meet the rule due to a declared disaster

Move cannabis goods to another location immediately to prevent loss, theft or degradation due to the disaster.

Qualifying disasters have a State of Emergency declared by the Governor or a local emergency declared by the city or county.

To request disaster relief:

You can use form DCC-8101.PDF (this is a pdf file) to request disaster relief. If you prefer not to use this form, you can submit a detailed email describing your request.

Submit the form to DisasterRelief@cannabis.ca.gov.

DCC reviews and responds to each request received. If we approve your request, there may be conditions, such as a specific timeframe for the relief.

Moving product due to immediate threat of a disaster

You don’t need to notify DCC prior to moving cannabis or cannabis product if you are facing an immediate threat. After you move your cannabis or cannabis product, you must meet the following requirements:

The cannabis and/or cannabis products must be moved to a secure location where access is restricted to the licensee and the licensee’s employees and contractors.

Within 24 hours of moving the cannabis, notify DCC that the cannabis has been moved. Do this by emailing DisasterRelief@cannabis.ca.gov.

Upon request, you must allow DCC staff to access and inspect the location where the cannabis has been moved.

Within 14 days of moving the cannabis, notify DCC describing your request for regulatory relief using form DCC-8101.PDF (this is a pdf file). Email the completed form to DisasterRelief@cannabis.ca.gov.

Resources

DCC regulations – Read the full requirements for disaster relief in sections 15038, 16207, and 17122.
DCC Disaster Relief – Additional information and resources related to DCC’s disaster relief program
CAL FIRE: Active Fire Incidents – A map of fires and incident locations
CAL FIRE: Ready for Wildfire – Resources for preparing for fires
Office of Governor Gavin Newsom: Newsroom – A listing of the Governor’s State of Emergency declarationsInformation provided by cannabis.ca.gov

By Associated Press

Cannabis provider Ultra Health says it has completed the purchase of a former bakery and adjacent land in southern New Mexico that will open the way for a large-scale marijuana growing and manufacturing campus.

The property purchase in Alamogordo takes place as New Mexico prepares for the start of recreational marijuana sales by April 1, 2022. Regulators are putting the finishing touches on the licensing process for an array of marijuana businesses.

On Monday, Ultra Health Chief Marketing Officer Marissa Novel said the property deal at Alamogordo was nearly two years in the making. 

Ultra Health plans to grow cannabis both indoors and outside at the new facility, with space to trim, dry and cure the onsite crop and offer services to other growers, she said. The property includes production facilities spanning 5 acres (2 hectares).

“It’s envisioned to be this campus where you can see a variety of cannabis activities take place in a very collaborative environment,” Novel said. 

Ultra Health — headquartered in Bernalillo and Scottsdale, Arizona — also announced intentions to apply for a license with federal government to conduct research on cannabis cultivation.

The investment highlights the financial stakes in a new statewide marketplace for recreational marijuana.

More than 100,000 residents already are enrolled in the state’s existing medical marijuana program for people with qualifying conditions such as cancer, chronic pain and post-traumatic stress.

Democratic Gov. Michelle Lujan Grisham signed legislation in April to allow possession of up to 2 ounces (56 grams) of weed and levy taxes on sales of recreational marijuana. 

A chemical cousin of pot’s main intoxicating ingredient has rocketed to popularity over the last year, and the cannabis industry and state governments are scrambling to reckon with it amid debate over whether it’s legal.

The chemical, called delta-8 THC, is billed as producing a milder high than the better known delta-9 THC, and delta-8 is often marketed as being legal even where marijuana is not. That argument stems from the fact that most delta-8 is synthesized from CBD, a popular non-intoxicating chemical that’s prevalent in hemp, a form of cannabis that Congress legalized in 2018.

Delta-8’s rise is “a phenomenon that has taken the industry quite by storm,” says John Kagia of cannabis industry analysis firm New Frontier Data, and it offers “fascinating insight into some of the growth and growing pains.”

There are no hard-and-fast statistics on sales of delta-8, which is available in vapes, gummies and other forms. It has been the fastest-growing segment of the market for hemp chemicals for roughly the last year, after wholesale CBD prices plummeted amid oversupply and other issues, says Ian Laird of data analytics company Hemp Benchmarks.

After a few years in the CBD business, William Goodall and partner Katiana Kay began selling delta-8 products through their online shop Bay Smokes in December. It quickly became a main source of revenue.

Goodall said that after talking to lawyers and suppliers’ chemists, he’s confident Bay Smokes products are safe and federally legal (other attorneys divide on how risky it is to sell delta-8). But the Miami-based company has had to filter out customers from a growing list of states that are prohibiting delta-8.

Still, he’s sticking with it, figuring that legal markets for it will endure at least in states where marijuana is permitted.

“Ultimately, I think delta-8 is a great product,” he says.

But some other hemp businesses are steering clear.

“The easy money is tempting, but that’s not an avenue we wanted to go down,” says Gair Laucius, the chief scientific officer of Southbridge, Massachusetts-based CBD producer High Purity Natural Products. “There were too many unknowns.”

The 2018 federal law that OK’d hemp products said they couldn’t be more than 0.3% delta-9, but it said nothing about delta-8.

Enthusiasts interpret that silence as a green light for delta-8, and some officials also see an opening for it. Wisconsin’s Legislative Council, a research service for lawmakers, concluded last year that delta-8 products may qualify as hemp if they’re below the delta-9 threshold, though the council cautioned it wasn’t giving legal advice.

But within the last year, the federal Drug Enforcement Administration has said that “synthetically derived” THC and delta-8 specifically are top-level controlled substances — effectively illegal, except for strictly limited research.

There’s not much research on delta-8, especially in people, though a small 1995 study said it showed promise as an anti-nausea treatment in child cancer patients. But officials in states such as Colorado and Washington worry that converting CBD to delta-8 could produce harmful byproducts, at least in some cases.

This spring, regulators in Washington said producing or selling synthetically derived delta-8 is against state law, while Colorado said manufactured delta-8 isn’t allowed in food, dietary supplements or cosmetics and doesn’t qualify as hemp. Kentucky and Vermont told hemp growers that selling delta-8 risks criminal prosecution.

Over 10 other states’ controlled substance lists include delta-8, sometimes under a different name. Lawmakers in more than a dozen other states, from Alabama to Hawaii, have made or considered some move on delta-8 this year.

Some sought effectively to ban it. Others aimed to allow but regulate it much like their legal marijuana markets, concerned that intoxicating delta-8 items were being sold at gas stations, convenience stores and elsewhere without the same standards and limits that apply to pot dispensaries.

“It is still a form of cannabis that can get you high, and it is unregulated and untested,” says Jacqueline McGowan, a California cannabis licensing consultant and candidate for governor. Proposed legislation in California would require testing and taxation of consumable “noncannabis cannabinoids,” including delta-8.

In Oregon, newly passed legislation gives the state Liquor Control Commission authority to limit THC — of any kind — in products sold to minors, among other provisions. Commission research director TJ Sheehy says it will ensure consumer safety without outlawing delta-8 for adults.

Texas lawmakers hit an impasse this spring over a measure that producers said would have barred delta-8 from consumable hemp products.

House sponsor Rep. Tracy King, a Democrat from a rural district, says he “just wanted to do something to help the growers and the processors” by stripping that measure out of proposed hemp legislation that was heading toward passage. It ultimately stalled as the legislative session ended.

The U.S. Hemp Roundtable, an industry group, fears that portraying delta-8 products as hemp with a high could jeopardize the plant’s hard-won federal legal status. But another group, the Hemp Industries Association, worries that lawmakers are rushing to crack down.

Delta-8 is getting onto law enforcement’s radar, too, prompting raids of shops in multiple states.

In Wisconsin, Waukesha County authorities alleged in April that a CBD shop was offering products labeled as delta-8 THC that actually contained illegal amounts of delta-9. Authorities say they started investigating after two children accidentally ingested products their parents got at the Superstar Buds store in Menomonee Falls, near Milwaukee.

Shop owner Chris Syrrakos denies the allegations and says authorities haven’t given him detailed testing results. No criminal charges have been filed to date, though prosecutors have brought a civil forfeiture case involving about $14,000 seized in the probe.

“Delta-8 came to the rescue and saved our life” as a business, enabling six new hires, Syrrakos said. “Then, all of a sudden, everything came crashing down with the police raid.”

He has since closed the shop but opened a new one in Milwaukee.