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Supply and Demand Curves Starting to Become Efficient in California as Thousands of Cannabis Growers Call It Quits



supply demand curves cannabis

The struggles that California’s cannabis companies have been grappling with have been no secret. Still, it wasn’t until this year that a noticeable decline in the legal marijuana market started to unfold. According to permit statistics from the California Department of Cannabis Control, the market has shrunk by approximately 29%.


As of October 24, the state had only 9,900 active business licenses, marking a 28.5% decrease since July 2022, when there were 12,719 active provisional and annual cannabis business licenses, as reported by the DCC.

What Does the Stat Says

During the COVID-19 pandemic, the state’s marijuana market exhibited robust growth, benefiting from stay-at-home orders and emergency financial assistance. In July 2021, the California Department of Cannabis Control (DCC) reported 11,335 active business licenses. Over the subsequent year, the market expanded by more than 12%.


The most significant changes were observed in the cultivation sector. In July 2021, there were 7,897 active marijuana cultivation permits, which increased to 8,453 within a year but subsequently dropped to 5,727 as of October 24 this year.


The manufacturing and distribution sectors also experienced substantial fluctuations. In July 2021, there were 877 cannabis manufacturers, and this number grew to 911 over the next 12 months before decreasing to 768 this month. Among distributors, there were 1,168 in July 2021, 1,448 in July 2022, and only 1,297 this month.


However, not all sectors have experienced a similar level of decline. The retail, delivery, and microbusiness permit categories have steadily grown over the past two years. Nonetheless, industry insiders suggest that the opening of new stores has been counterbalancing the closure of many well-established shops in oversaturated cities.


Recent examples of closures include Liberty Cannabis-owned shops in both San Francisco and Los Angeles, as highlighted by marijuana consultant Hirsh Jain of Ananda Strategy. Additionally, several multistate operators, such as Florida-based Trulieve Cannabis Corp. and Arizona-based 4Front Ventures Corp., have exited the California market. This is due to the challenging market conditions, a move echoed by numerous smaller companies and brands.


Despite the challenging trends, retail storefront permits showed remarkable resilience. In July 2021, they numbered 774, then surged to 1,056 a year later, and as of this month, they have reached 1,229, according to the DCC.


Delivery licenses, on the other hand, were at 322 in July 2021, increased to 475 in July 2022, and have since stabilized at around 477. Microbusiness permits, which often include retail operations, were at 297 in July 2021, grew to 376 within a year, and currently stand at 402.

Struggles To Pay Tax


The California cannabis industry is teetering on the edge of what some are calling an “extinction event” as cannabis shops struggle to stay afloat, grappling with missed tax payments and drowning in millions of dollars of debt.


Debt troubles have haunted the industry for years, with a 2022 report estimating that the collective debt burden exceeded $600 million. Nevertheless, a recent alteration in tax regulations, which took effect this year, has prompted stakeholders to worry that the burgeoning debt crisis could potentially culminate in a severe disaster.


In reaction to these apprehensions, a San Francisco lawmaker proposed a bill in the state legislature to enforce stricter measures on cannabis businesses that cannot fulfill their debt responsibilities.


A significant shift in state law has shifted the responsibility for paying cannabis excise taxes from distributors to retailers. Historically, retailers have faced the most challenges in meeting their financial obligations, and recent state tax data obtained by SFGATE indicates that many shops lack the necessary funds to cover their state excise taxes.


More than 13% of California’s retailers, equivalent to 265 cannabis dispensaries, did not remit any tax payments, as reported by the California Department of Tax and Fee Administration. These businesses are now confronting a 50% penalty on their outstanding tax obligations, a financial blow that could prove fatal for many shops.


Furthermore, the number of affected shops could potentially increase. The state agency has revealed that it is still handling 581 tax returns, which may include retailers that failed to meet their payment obligations.


According to Michelle Mabugat, a cannabis attorney at the Greenberg Glusker firm in Los Angeles, the debt-related challenges are likely to force the closure of numerous shops in the state. She remarked that there’s been a mounting debt bubble over the past few years, reaching a breaking point. She anticipates many retailers going out of business this year, much like we witnessed with cultivators last year.”


Ali Jamalian, the owner of Sunset Connect, a cannabis manufacturer based in San Francisco, has observed pot shops with outstanding bills exceeding $500,000. He foresees the new tax structure triggering what he terms an “extinction event” for cannabis retailers in the state.

The persistent issue of debt has plagued the entire cannabis supply chain. Farmers have voiced concerns about not receiving payment for significant amounts of their products. Distributors have raised issues about non-payment by retailers and have resorted to blacklisting certain shops.


Furthermore, even the federal government has encountered payment issues. An analysis conducted last autumn by Green Market Report revealed that the ten largest cannabis companies in the country collectively owed over $500 million in unpaid taxes.


These financially strained retailers are now facing the possibility of closure due to the recent alteration in the state’s tax payment process. The state’s decision to transfer the responsibility for tax payments from distributors to retailers not only eliminated a source of financing (as retailers had been using excise tax collections to fund their operations) but also imposed a substantial penalty on cash-strapped retailers.


The California cannabis industry has faced significant challenges, with a 29% decline in active business licenses since July 2022. Despite growth during the COVID-19 pandemic, the cultivation sector saw fluctuations, and some multistate operators left the market due to its difficulty. However, the retail, delivery, and microbusiness sectors continued to grow, partly thanks to new store openings.


The shift in tax legislation, placing a heavier burden on retailers for paying excise taxes, has further strained the industry, with many retailers failing to meet their obligations. The industry’s future hinges on its ability to adapt to changing market conditions and proposed legislative solutions.





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Talking to God and Feeling the Warmth of Your Soul




what is tripping on DMT like

Dimethyltryptamine, or DMT, is a substance with hallucinogenic properties that may be found in a wide range of plants and animals. When taken in large enough quantities, DMT may produce a “high” and cause distortions in one’s senses, making things appear that they aren’t. Other names for it include elven spice, spirit molecule, businessman’s special, and Dimitri.


For ages, people from many cultures have utilized DMT in rituals and religious ceremonies. It is one of the active components in South American psychedelic beverage ayahuasca. Laboratories are also capable of producing synthetic DMT.


Recreational users go for DMT because it produces a strong, brief “trip,” sometimes referred to as a “breakthrough in DMT.” Although some studies point to possible advantages for both physical and mental health, the drug’s adverse effects may offset these advantages.


Some have described tripping on DMT “like dying”, but in a positive way of getting to see the universe and afterlife. Many people feel a deep euphoric feelling that can be humbling, like comparing yourself to a piece of sand in the universe.  In a religious sense, those say you become one with the universe or the “god in you”.




Both DMT and LSD, sometimes known as acid, are potent “psychedelic” substances that can change your perception. Their molecular makeup is identical to that of serotonin, a neurotransmitter found in your brain.


Differences between DMT and acid include:


Source. While LSD is manmade and derived from a material in a fungus that grows on rye grains, DMT is found in both plants and mammals.


Length of time. Whereas an acid trip can last up to 12 hours, DMT is a powerful, short experience lasting 15 to 60 minutes.


How Does DMT Trip Make You Feel?


DMT affects individuals differently, but common effects include:


– Visual or auditory hallucinations

– Out-of-body experiences

– Mood changes

– Heightened sensitivity to physical sensations such as pain, tingling, and warmth

– Feelings of euphoria or intense happiness

– Spiritual and emotional experiences

– Distorted body image

– The ability to unlock hidden memories


The effects of DMT depend on several factors, including:


– Your size, weight, and overall health

– Whether it’s your first time using it or not

– Whether you have taken other substances simultaneously

– The dosage

– The drug’s potency, which can vary between sources

– Your environment

– Your mood at the time of consumption


Set and Setting with DMT


When using DMT, your physical surroundings and mental state are referred to as your “set and setting.” These factors have a big impact on your experience, both good and bad.


The set is the state of mind you are in before using the drug; it includes your feelings, expectations, past psychedelic experiences, and any tension or worries you may be experiencing.


Setting includes the people and things in your immediate surroundings. You may be in a familiar setting with individuals you can trust, or you may be in a foreign area alone. You will be affected differently by a calm, peaceful setting than by a busy, boisterous one.


Can DMT Cause a Bad Trip?


It is possible to have a negative experience, or “bad trip,” when taking DMT. Instead of euphoria, you might feel:


– Intense anxiety

– Frightened by your hallucinations

– Very confused

– Paranoid


Being in a positive set and setting can help reduce the risk of a bad trip.


Due to limited research, the long-term effects of DMT are not well understood. Flashbacks, which can be unpleasant and occur days, weeks, or even months after taking DMT, are a commonly reported side effect.


While there are no reports of toxicity from long-term DMT use, there are concerns about its impact on heart health, as it can raise blood pressure.


Potential Therapeutic Uses of DMT


According to recent studies, DMT may have a variety of medicinal uses. Studies suggest that DMT may be helpful in the treatment of mental health issues, however, they are still in their early phases. Here are a few possible medicinal applications:


1. Treatment for Sadness and Anxiety: According to preliminary studies, DMT can affect mood in a quick and significant way, which may be able to provide treatment for those with sadness and anxiety. Because DMT experiences are strong and brief, they may provide immediate therapeutic effects without requiring lengthy therapy sessions.


2. Support Psychotherapy: People may find it easier to process trauma and unearth suppressed memories if DMT can elicit strong emotional and spiritual experiences. DMT may help make significant progress in psychotherapy under carefully monitored conditions, enabling patients to address and resolve ingrained psychological problems.


3. Potential for Addiction Treatment:

Some studies suggest that DMT and other psychedelics might be useful in treating substance abuse disorders. By providing profound insights and altering perception, DMT could help individuals break free from addictive behaviors and develop healthier coping mechanisms.


4. Neurogenesis and Brain Health: Some research indicates that DMT may encourage neurogenesis, or the development of new neurons, which may have an impact on cognitive performance and overall brain health. Conditions like Alzheimer’s disease and other neurodegenerative illnesses may benefit especially from this feature.


Even while these prospective advantages seem encouraging, it’s crucial to remember that DMT research is still in its early stages. To completely comprehend its therapeutic potential and create safe, efficient treatment procedures, more thorough, controlled research is required. To reduce hazards and optimize benefits, the DMT experience is intense, thus it must be administered in a controlled setting, ideally under the guidance of qualified specialists.


Bottom Line


DMT, or dimethyltryptamine, is a powerful hallucinogenic compound found in various plants and animals and can be synthesized in laboratories. Known by names like elven spice, spirit molecule, businessman’s special, and Dimitri, DMT has been used for centuries in rituals and religious ceremonies, particularly in South American cultures through the ayahuasca brew. Recreational users seek DMT for its intense, short-lived “trip,” which can include profound sensory distortions and out-of-body experiences. The effects of DMT vary greatly depending on factors like dosage, individual health, environment, and mental state. A positive “set and setting” can enhance the experience and reduce the risk of a “bad trip,” characterized by intense anxiety, confusion, and paranoia. Although the long-term effects of DMT are not well understood due to limited research, some studies suggest potential therapeutic benefits, such as treatment for depression, anxiety, and substance abuse disorders. However, these potential benefits come with risks, including the possibility of flashbacks and concerns about heart health due to increased blood pressure. In summary, while DMT offers intriguing possibilities for both recreational and therapeutic use, it should be approached with caution and ideally under professional supervision to mitigate risks and maximize potential benefits.





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Celebrating Juneteenth




Our offices are closed today in commemoration of the Juneteenth holiday. In the past, we’ve used this occasion to highlight the need for criminal justice reform, inside and outside of the cannabis industry.

Juneteenth is also a day of celebration, to commemorate the liberation of enslaved people in the United States.

We hope you have the day off today! And that you have the opportunity to celebrate and reflect on the significance of our newest federal holiday.

We’ll be back tomorrow with our regular programming.

The post Celebrating Juneteenth appeared first on Harris Sliwoski LLP.

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True or False – Legalizing Drugs Would Put an End to Human Trafficking?




stop human trafficking

How to Stop Human Trafficking: Legalize Drugs!

The largest illicit market on the planet is not weapons, exotic animals, or even human beings – it’s drugs. Since 1971, when the United Nations amended its narcotic charter and essentially declared an international war on drugs, the global drug trade has only grown in size and complexity.

Despite the best efforts of law enforcement agencies worldwide over the past five decades, drugs have become more prevalent, more accessible, and far more dangerous.

From the streets of American cities to remote villages in Afghanistan, the drug trade has left a trail of addiction, violence, and corruption in its wake. It’s safe to say that after 75 years of futile efforts, drugs have definitively won the war.

But the illegal drug trade does more than line the pockets of criminals and cartels. It also serves as a shield for one of the most horrific crimes imaginable: human trafficking.

The same shadowy networks that smuggle cocaine and heroin across borders are often deeply intertwined with the traffickers who buy and sell human beings as chattel.

In this article, we’re going to explore the number one thing the world can do to stop human trafficking – legalize all drugs.

But we’re not talking about a free-for-all where anyone can buy anything at any time. Instead, we’ll lay out a nuanced approach to legalization and regulation designed to reduce the harms of drug abuse while focusing law enforcement resources on the fight against human trafficking.

By removing the profits generated by the illegal drug trade, we can strip away the financial incentives that fuel trafficking networks. And by redirecting policing efforts towards identifying and protecting victims rather than endlessly chasing drug dealers, we can make a real dent in this abhorrent practice.

It won’t be easy, and it won’t happen overnight.

But if we’re serious about ending human trafficking, we need to start by rethinking the failed war on drugs. The evidence is clear – prohibition has only made the problem worse. It’s time for a new approach, one grounded in public health, human rights, and common sense. Let’s dive in.

Since the adoption of the Single Convention on Narcotic Drugs in 1961 and the subsequent declaration of the war on drugs in 1971, the illegal drug trade has exploded in size and reach. What was once a relatively small-scale, localized problem has morphed into a global behemoth with tentacles in every corner of the planet.

According to estimates from the United Nations Office on Drugs and Crime (UNODC), the global drug trade is now worth between $426 and $652 billion annually. That’s more than the GDP of most countries and represents a staggering increase from the pre-1961 era when the trade was a fraction of its current size.

But it’s not just the scale of the trade that has changed – it’s also the nature of the drugs themselves. In response to prohibition efforts, drug producers and traffickers have become incredibly innovative, constantly developing new synthetic substances to evade detection and skirt the law.

One prime example is “Spice,” a synthetic cannabinoid that mimics the effects of marijuana but is infinitely more dangerous. Because Spice is unregulated and its chemical composition is constantly changing, users have no way of knowing what they’re ingesting. The result has been a wave of overdoses and deaths that have devastated communities around the world.

Meanwhile, the financial institutions that are supposed to be safeguarding the global economy have become complicit in the illegal drug trade. Banks like HSBC have been caught repeatedly laundering money for drug cartels, yet they’ve only been slapped with fines rather than facing criminal charges.

In 2012, HSBC admitted to laundering nearly $900 million for the notorious Sinaloa Cartel in Mexico, yet no executives went to jail. Instead, the bank paid a fine of $1.9 billion – a mere slap on the wrist compared to the profits it had reaped from its illicit activities.

This double standard is a stark reminder of the inherent inequities of the war on drugs. While low-level dealers and users face harsh prison sentences, the wealthy and well-connected can profit from the trade with impunity.

Perhaps most tragically, drug prohibition has created a black market where profits are prioritized over safety. With no regulation or quality control, drug producers often cut their products with dangerous adulterants or increase potency to maximize profits. The result is a staggering number of drug-related deaths that could have been prevented with a more rational approach.

According to the CDC, over 93,000 Americans died from drug overdoses in 2020 alone – a record high. Many of those deaths were caused by fentanyl, a synthetic opioid that has become increasingly common in the illegal drug supply.

The numbers don’t lie – the war on drugs has been an abject failure. If the goal was to reduce drug use and combat criminal organizations, then by every empirical measure, it has fallen short. Continuing to support a failed system is not only misguided – it’s actively causing harm to individuals and communities around the world. It’s time for a new approach.

While the illegal drug trade may grab more headlines, human trafficking is a shockingly prevalent and profitable criminal enterprise. In fact, it’s the second largest illicit market in the world, generating an estimated $150 billion in annual profits for traffickers.

The scale of human trafficking is staggering. According to the International Labor Organization (ILO), there are over 40 million victims of human trafficking worldwide, with women and girls accounting for 75% of those trafficked. Perhaps most disturbingly, one in four victims of trafficking are children.

These victims are bought, sold, and exploited for a variety of purposes, including forced labor, domestic servitude, and commercial sexual exploitation. The primary motivations for traffickers are greed and the desire for power and control over others but mostly supply and demand.

While trafficking occurs in virtually every country, some regions are particularly prone to this horrific practice. Asia and the Pacific region account for the largest number of victims, with 15.4 million people trafficked in that region alone. Africa and Europe also have high rates of trafficking, with millions of victims in each region.

So who are the buyers driving this brutal trade? While there is no single profile, research suggests that many purchasers of trafficked persons are individuals with wealth and power. From corrupt politicians to wealthy businessmen to high-ranking officials, the demand for trafficked persons often comes from the upper echelons of society.

The infamous case of Jeffrey Epstein is a prime example. Epstein, a wealthy financier with connections to powerful figures in politics and business, was accused of trafficking and sexually abusing dozens of underage girls. He allegedly used his private island in the Caribbean as a base for his trafficking operations, flying in girls on his private jet to be exploited by him and his associates.

The Epstein case raises disturbing questions about the priorities of our justice system. While law enforcement agencies pour billions of dollars into fighting the war on drugs, how much attention and resources are being devoted to combating human trafficking?

The answer is that U.S. government spends roughly 64 times more on fighting drug trafficking than it does on combating human trafficking. ($35.6 billion in 2021 for drug trafficking vs $560 for human trafficking)

Could it be that the focus on drugs serves as a convenient distraction from the uncomfortable reality that some of the most powerful people in our society are complicit in the buying and selling of human beings? Is the war on drugs a way to protect the interests of the wealthy and influential while ignoring the suffering of trafficking victims?

These are not easy questions to answer, but they must be confronted if we are serious about ending human trafficking. It’s not enough to pay lip service to the issue or to prosecute the low-level traffickers who are often victims themselves. We must be willing to hold the buyers and enablers of trafficking accountable, no matter how powerful they may be.

The numbers don’t lie – human trafficking is a massive and growing problem that demands our attention and action. We cannot continue to turn a blind eye to the suffering of millions of victims around the world. It’s time to prioritize the fight against trafficking and to hold those who profit from this heinous crime accountable, no matter who they are.

The legalization of drugs is a complex and controversial issue that requires a nuanced, evidence-based approach. Simply declaring all drugs legal without any restrictions or regulations would be irresponsible and potentially dangerous. Instead, we must look to science and best practices to guide our policy decisions.

First and foremost, it’s important to recognize that not all drugs are created equal. Some substances, like fentanyl, are highly addictive and can be lethal in very small doses. These drugs should not be readily available to the general public and should be tightly controlled.

However, that doesn’t mean we should continue to criminalize addiction. Instead, we could follow the model pioneered by Switzerland in the 1990s, which provided heroin to addicts for free in designated clinics. This approach may seem counterintuitive, but it has proven to be remarkably effective in reducing the harms associated with drug use.

By providing a safe, regulated supply of heroin to addicts, the Swiss government was able to reduce disease transmission, overdose deaths, and crime associated with the illegal drug trade. Addicts were able to access the drug they needed without resorting to desperate measures, and many were eventually able to wean themselves off heroin entirely.

For other drugs like cannabis, LSD, and psilocybin, the risks of addiction and overdose are much lower. While these substances can still be abused, the vast majority of users do not develop problematic use patterns or experience significant harms.

In these cases, legalization and regulation may be the most sensible approach. By allowing the sale of these drugs to adults in licensed dispensaries, we can reduce the harms associated with the illegal market, generate tax revenue for prevention and treatment programs, and free up law enforcement resources to focus on more serious crimes.

Of course, legalization is not a panacea, and there will undoubtedly be challenges and unintended consequences along the way. But the alternative – continuing to pour billions of dollars into a failed war on drugs while neglecting the scourge of human trafficking – is simply unacceptable.

Consider this: the United States currently spends around $35 billion per year on drug interdiction and enforcement efforts, while allocating just $560 million to combat human trafficking. That means we spend over 60 times more on fighting the drug trade than we do on fighting the buying and selling of human beings.

By legalizing and regulating drugs, we could redirect those resources towards ending human trafficking and supporting its victims. The profits generated from the legal drug trade could be used to fund robust prevention, treatment, and recovery programs, while law enforcement could focus on dismantling trafficking networks and bringing perpetrators to justice.

It’s time to acknowledge that our current approach to drugs has failed by every metric. Despite decades of aggressive enforcement and trillions of dollars spent, drugs are more available, more potent, and more dangerous than ever before. Meanwhile, human traffickers operate with near impunity, exploiting the most vulnerable members of our society for profit.

We need a new approach, one that is grounded in science, compassion, and human rights. By legalizing drugs and focusing our resources on ending human trafficking, we can reduce the harms associated with both issues and build a more just and equitable society for all.

It won’t be easy, and there will undoubtedly be setbacks along the way. But the alternative – continuing down the path of prohibition and neglect – is simply not an option. We owe it to the victims of trafficking and addiction to do better, and to create a world where every person can live with dignity and freedom from exploitation.





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