Connect with us

Cannabis News

The Rise and Fall of Pioneer Pot Markets



the rise and fall of pioneer pot markets

The Rise and Fall of Pioneer Pot Markets

When Colorado and Washington made history in 2012 as the first U.S. states to legalize recreational marijuana, they kicked off a green rush that rapidly transformed the cannabis industry. Colorado in particular saw a meteoric rise, with sales soaring to $2.2 billion in 2020 and the state raking in hundreds of millions in cannabis tax revenue. Some local entrepreneurs rode this wave to stunning success, building national brands from humble beginnings.

Fast forward to 2024 and the Rocky Mountain high has worn off. Colorado dispensaries that once couldn’t keep up with demand now sit shuttered. Statewide sales have plummeted over 30% from their peak. While still a sizable market, the trailblazing industry that put Colorado on the cannabis map is now a cautionary tale.

1,200 miles to the west, California – the country’s largest legal weed market – is facing its own reckoning. Despite the Golden State’s legendary cannabis culture and ideal growing climate, many legitimate operators are struggling to stay afloat. But while Colorado’s crash stems from market saturation and competition from newly legal neighbors, California’s decline has more to do with over-taxation enabling the tenacious black market to undercut legal businesses.

As more and more states jump on the legalization bandwagon, policymakers are looking to these early adopters to understand how to establish a stable and sustainable cannabis sector. In this article, we’ll unpack the factors behind the slumping sales in Colorado and California, and explore what lessons emerging marijuana markets can take away to avoid the same pitfalls. The great American pot experiment is far from over.

Colorado’s cannabis industry, once a roaring success story, has fallen on hard times. According to a recent Politico article, statewide marijuana sales have plunged from a high of $2.2 billion in 2020 to just $1.5 billion in 2023 – a jaw-dropping decline of over 30% in just three years. This has led to widespread layoffs, business closures, and a lot of nervous industry stakeholders.

So what’s behind this Rocky Mountain revenue recession? Industry insiders point to a perfect storm of factors. “It’s like the wind in our cannabis sails in Colorado has just been sucked all the way out,” laments Wanda James, founder of Denver dispensary Simply Pure.

A key culprit is the very success that Colorado pioneered – the spread of legalization to neighboring states like New Mexico and Arizona, which has siphoned off customers. “We’re a victim of our own success,” explains Jordan Wellington, a partner at Denver-based cannabis policy firm Strategies 64. “New markets drawing investment away, new markets drawing purchasing away — all of these different things combined into the soup of the challenges [facing] Colorado.”

Businesses have had to adapt to this new reality in different ways. Some, like Dank Dispensary in Denver, have had to cut back on employee perks and parties. Others, like Southern Colorado retailer Maggie’s Farm, have shuttered multiple locations.

Cannabis jobs in the state have plummeted 16% in the past year alone, according to a report from Vangst.

But while painful, this market contraction is a natural evolution for maturing cannabis markets, explains Beau Whitney of Whitney Economics. “Initially, supply is low and profits are high, which draws in new businesses. As supply and consumer access catch up, prices drop.”

 As more states legalize, Whitney predicts this boom-and-bust pattern will ease and interstate prices will normalize.

In the meantime, Colorado businesses are adjusting to compete in a crowded and dynamic market. Denver dispensary Simply Pure saw sales spike 60% during the COVID-19 lockdowns, only to come crashing down when cultivators ramped up production.[1] “The only problem … for a long time was that there was never enough weed,” recalls Jon Spadafora, CEO of wholesale cultivator Veritas Fine Cannabis. “We all overestimated the market. We all believed a little bit too much of our own PR.”

Veritas has since downsized from 144 employees to just 21.

This thinning of the herd is inevitable as the industry matures and stabilizes. But those businesses that are able to adapt and ride out the turbulence could be well-positioned for the next chapter of Colorado’s cannabis story.

As more states enter the legal fray, Colorado’s hard-won experience and expertise could prove invaluable. The green rush may be over, but the Centennial State’s influence is sure to endure.

While Colorado’s cannabis market struggles are largely due to increased competition and market saturation, California’s industry woes stem from a different root cause: overtaxation. Despite high hopes that legalization would cripple the illicit market, California’s hefty tax rates have instead enabled illegal operators to continue undercutting legal businesses.

California imposes some of the steepest cannabis taxes in the country, with rates up to 40% in some jurisdictions when state and local levies are combined.[1]

This has kept prices for legal products artificially inflated compared to the illicit market. “The tax rate is way too high,” argues Javier Montes, owner of Wilmington dispensary Delta-9 THC. “People got used to the black market, and then they were supposed to transition to the legal market, but there’s no incentive to.”[2]

This over-taxation has effectively acted as “prohibition 2.0”, allowing illegal grow operations and unlicensed dispensaries to thrive. Ironically, this has attracted an unexpected player: Chinese organized crime.

While Mexican cartels have largely pivoted to more profitable hard drugs like fentanyl, Chinese drug trafficking organizations have moved in to exploit the lucrative California cannabis black market.[3] Authorities have busted numerous large-scale Chinese grow operations hidden in suburban homes in recent years.[4]

But taxation is far from the only issue plaguing California’s legal cannabis industry. The state’s onerous and costly regulations have created immense barriers to entry for legal businesses. Lengthy licensing processes, restrictive zoning laws, and expensive compliance requirements have kept many legacy operators from transitioning to the legal market.[5] This has perpetuated the illicit industry, as many longtime growers and sellers see little benefit in going legit.

Furthermore, California’s patchwork of local cannabis laws has created a confusing and inconsistent market landscape. While the state legalized recreational use in 2016, municipalities can still ban cannabis businesses outright. As of 2022, fewer than 40% of California cities and counties allowed any type of legal cannabis operation.[6] This has left large swaths of the state underserved by legal operators and ripe for illicit activity.

These factors have led to a California cannabis market that is far underperforming its potential. Despite having nearly twice the population of Colorado, California’s legal sales in 2022 were only moderately higher at around $5.3 billion.[7] For the state to fully realize the promise of cannabis legalization, policymakers will need to overhaul the current tax and regulatory scheme to support licensed businesses and motivate illicit operators to transition to the legal market. Until then, California’s cautionary tale will continue.










As more states consider cannabis legalization, policymakers would be wise to study the cautionary tales of Colorado and California. These pioneering markets offer valuable lessons on what works – and what doesn’t – when it comes to crafting a successful and sustainable cannabis industry.

First and foremost, states must resist the temptation to overtax the newly legal market. While cannabis may seem like a cash cow for revenue-hungry governments, excessive taxation can backfire by perpetuating the illicit market.

California’s punitive tax rates, reaching up to 40% in some areas[1], have kept illegal operators in business and undercut the very legal industry the state is trying to foster. Policymakers should instead aim for a tax sweet spot – high enough to generate meaningful revenue, but low enough to motivate illicit operators to transition to the legal market.

Secondly, regulations must be designed with an eye toward fairness and equity. Overly burdensome licensing requirements, zoning restrictions, and compliance costs can shut out smaller operators and communities disproportionately impacted by the War on Drugs.

Equity must be baked into the framework of the legal market from day one, with measures like expedited licensing for legacy operators, fee waivers for social equity applicants, and reinvestment of cannabis tax revenue into hardest-hit neighborhoods.

By lowering barriers to entry and providing support, states can create an inclusive industry that benefits a broad range of stakeholders.

Finally, policymakers should embrace the free market’s ability to self-correct. As Colorado’s story illustrates, the invisible hand is already at work balancing supply and demand in maturing cannabis markets.

While the industry’s growing pains have been undeniably painful, with layoffs and closures roiling the once-booming market, this contraction is a natural stage in the evolution of a new sector.

As Beau Whitney of Whitney Economics notes, “As more states legalize, Whitney predicts this boom-and-bust pattern will ease and interstate prices will normalize.”[2] By allowing market forces to weed out inefficiencies and reward innovation, states can cultivate a leaner, more resilient cannabis industry.

Of course, the cannabis industry is still in its infancy, and there will undoubtedly be more lessons to learn as legalization spreads.

But by heeding the hard-won wisdom of trailblazers like Colorado and California – keeping taxes reasonable, prioritizing equity, and letting the market work – states can lay the foundation for a cannabis industry that is built to last. The road may be rocky, but with smart, forward-thinking policy, the future of legal cannabis is bright.








Source link

Cannabis News

90% of People over 50 are Using Cannabis for One Reason




cannabis for chronic pain and arthritis

Tilray Medical, a division of Tilray Brands, Inc., unveiled its latest scientific publication titled “Medical Cannabis for Patients Over Age 50: A Multi-Site, Prospective Study of Usage Patterns and Health Outcomes” on Tuesday.


This new research expands upon an earlier Tilray study revealing a rising number of older patients seeking medical marijuana. The study identified chronic pain (27.8%), arthritis (14.9%), and anxiety (9%) as prevalent conditions prompting cannabis use among older adults. Pain emerged as the primary symptom, followed by anxiety and insomnia/sleep disorders.


Known as the Medical Cannabis in Older Patients Study, this multi-site, prospective, observational research investigates how medical marijuana, guided by healthcare providers, affects patients over 50. It underscores the impact of medical cannabis on health outcomes, particularly focusing on pain relief, sleep improvement, and overall quality of life.


With 299 participants averaging 66.7 years old, the study found that 90% used medical cannabis primarily for pain management, notably chronic pain and arthritis. The results indicated that medical cannabis correlated with better pain scores, improved sleep, and enhanced quality of life among a growing subset of patients, along with a notable reduction in concurrent medications.


José Tempero, the company’s medical director, emphasized their commitment to advancing medical research and supporting products aligned with comprehensive findings. He underscored the role of medical cannabis in enhancing therapeutic options for an ageing population.


Study Focus and Methodology


Leading the way in examining the effects of medical cannabis use on the health of older adults, Tilray Medical’s “Medical Cannabis for Patients Over Age 50” study included 299 participants, most of whom were female and averaged age 66.7. The study was conducted at several sites and used a prospective, observational design to evaluate the effects of medical marijuana under the supervision of a healthcare provider on actual health outcomes.


The study’s central focus was on the efficacy of medicinal cannabis in treating chronic pain, arthritis, anxiety, and other diseases common among the elderly. Participants were followed to determine changes in pain ratings, sleep patterns, and general quality of life, offering information on cannabis’ medicinal potential in addressing age-related health issues.


The findings underscored a significant trend: approximately 90% of participants reported using medical cannabis primarily for pain relief, with notable reductions in co-medication observed. This research not only highlights the growing acceptance and application of medical cannabis among older adults but also underscores the importance of continued scientific inquiry into its benefits and implications for ageing populations.


Key Findings on Patient Demographics and Conditions


The study by Tilray Medical provided insightful demographics and conditions prevalent among older adults using medical cannabis. Among the 299 participants, the average age of 66.7 years reflects a cohort squarely within the ageing demographic seeking alternative therapies. Notably, over 62% of the participants identified as female, indicating a significant gender distribution in the study sample.


Of the participants, 27.8% cited chronic pain as their major reason for seeking medical cannabis treatment. This made chronic pain the most prevalent primary symptom driving medical cannabis usage. This result is consistent with more general healthcare trends, which show that older adults continue to have significant concerns about managing chronic pain. After chronic pain, arthritis was shown to be another common ailment that led to cannabis usage, as 14.9% of individuals used cannabis to treat this inflammatory chronic illness. With 9% of research participants suffering from anxiety, it was also a major ailment, underscoring the variety of therapeutic uses of medicinal cannabis among older persons.


The study’s emphasis on these particular disorders highlights medicinal cannabis’s growing potential as a therapy for illnesses that are typically linked to ageing. By clarifying the characteristics and ailments that are common among elderly medical cannabis users, the study offers a significant understanding of the incorporation of alternative treatments into geriatric healthcare procedures.


These results provide insight into the health problems and demographics of older adults who use cannabis medicinally. They also lay the groundwork for future research on the safety and effectiveness of cannabis-based treatments for age-related health disorders. Studying medical cannabis’s impact on conditions like chronic pain, arthritis, and anxiety is becoming more and more crucial for lawmakers and healthcare professionals as it gains acceptance as a therapeutic option.


Key Findings on Patient Demographics and Conditions


The study by Tilray Medical provided insightful demographics and conditions prevalent among older adults using medical cannabis. Among the 299 participants, the average age of 66.7 years reflects a cohort squarely within the ageing demographic seeking alternative therapies. Notably, over 62% of the participants identified as female, indicating a significant gender distribution in the study sample.


Chronic pain was identified as the most prevalent primary condition driving medicinal cannabis usage, with 27.8% of patients indicating it as the major reason for therapy. This conclusion is consistent with wider healthcare trends, in which chronic pain treatment remains a major problem among older populations. Following chronic pain, arthritis was found as another common reason for cannabis usage, with 14.9% of participants looking for treatment for this chronic inflammatory illness. Anxiety was also identified as a significant problem, impacting 9% of research participants, illustrating the broad therapeutic uses of medicinal cannabis in older persons.


By clarifying the demographics and conditions common among older medical cannabis users, the research adds important insights into how alternative therapies are being integrated into geriatric healthcare practices. The study’s focus on these particular conditions highlights the evolving role of medical cannabis as a potential treatment option for ailments traditionally associated with ageing.


As medical cannabis becomes more and more popular as a therapeutic option, legislators and healthcare professionals will need to understand the effects of medical cannabis on conditions like chronic pain, arthritis, and anxiety. These results shed light on the health issues and demographics of older people who use medicinal marijuana. They also serve as a foundation for future studies on the safety and effectiveness of cannabis-based therapies for age-related health issues.


Bottom Line


The Tilray medicinal research emphasizes how important medicinal cannabis is for older persons’ chronic pain, arthritis, and anxiety. According to the findings, cannabis can enhance pain ratings, sleep quality, and general quality of life, as indicated by the fact that 90% of the 299 participants used it primarily for pain relief. This study highlights the necessity for further research into the advantages of medicinal cannabis and its incorporation into geriatric healthcare, supporting its increasing recognition as a therapeutic alternative for older adults.





Source link

Continue Reading

Cannabis News

What Does the Corporate Transparency Act Mean (CTA) for the Cannabis Industry?




On January 1, 2024, the federal Corporate Transparency Act (CTA) took effect. The CTA requires a host of both domestic and foreign entities to disclose their beneficial ownership to the Treasury’s Financial Crimes Enforcement Network (FinCEN). Compliance with the CTA is required for all businesses, including those in the cannabis industry. In this post, I’ll overview some (but not all) key requirements of the CTA, and some of the implications for the cannabis industry.

What is the CTA?

The purpose of the CTA is to combat illegal activities like money laundering by disclosure of information concerning “beneficial owners” to FinCEN. Beneficial ownership essentially means the individuals who own or control a company (more on that below). FinCEN and other domestic governmental authorities can use this beneficial ownership information in certain contexts for law enforcement purposes. Detailed FAQs on the CTA are available here.

Who must report?

Corporations, limited liability companies, and other business entities are considered reporting companies for purposes of the CTA. Certain sole proprietors may not count as reporting companies, and CTA exempts 23 classes of entities, such as governmental bodies, banks, and certain large operating companies.

Figuring out whether a business qualifies for an exemption can in some cases be complicated, and businesses can flow in and out of exemptions over time. So it’s a good idea for businesses to confer with counsel to determine whether they are compliant.

When must reporting happen?

Reporting is done by submitting an initial beneficial ownership report (BOIR) with FinCEN via an electronic portal called the Beneficial Ownership Secure System, located at, free of charge. There are some key reporting deadlines, which change based on when a company was formed (for domestic companies) or registered in the US (for foreign companies) as follows:

  • Entities created or registered before January 1, 2024, must submit their initial BOIR by January 1, 2025.
  • Entities registered in 2024 are required to file within 90 calendar days of their registration becoming effective.
  • For registrations from January 1, 2025, onwards, the deadline is 30 calendar days post-registration notice.

CTA also has requirements to periodically update beneficial ownership information after changes occur. Failure to comply with CTA can lead to monetary penalties and even criminal liability.

What must be reported?

Reporting companies must disclose individuals with substantial control or those owning at least 25% of the entity. Substantial control includes abilities like appointing or removing directors, making significant business decisions, or other forms of major influence. For example, question D8 on FinCEN’s FAQs addresses how management companies could be considered beneficial owners of a reporting company. Sound familiar?

Disclosure itself is not dissimilar to state-level cannabis regulatory disclosures. Beneficial owners must provide their legal name, date of birth, address, and an identifying number (e.g., SSN).

How will this affect the cannabis industry?

In case you were wondering, CTA applies to cannabis businesses. There is no exemption for reporting by state-legal cannabis companies.

A lot of cannabis companies will probably get squeamish at the thought of making detailed beneficial ownership disclosures. That’s especially the case where CTA by its terms allows FinCEN to share beneficial ownership information with other federal agencies engaged in law enforcement activities, or federal agencies that supervise financial institutions.

So, expect to see owners of cannabis businesses engage in all kinds of corporate changes to obscure beneficial ownership or reduce equity and control rights to get out of disclosures. In some cases, this will not work and people will face penalties.

Also expect to see a lot of cannabis companies (and non-cannabis companies for that matter) make a good-faith effort to comply with CTA initially but fail to update information as required by law. This is just going to happen, the way CTA is set up. Whether or not people are actually penalized for late disclosures or updates absent some kind of misfeasance remains to be seen.


CTA is complicated and has already been a headache for many businesses – so much so that at least one group of businesses brought a challenge to its constitutionality and won. Fortunately or unfortunately (depending on how you look at it) the court did not issue a nationwide injunction but only enjoined enforcement of CTA against the specific plaintiffs. It’s possible that in different litigation or future appeals, the law itself is enjoined on a nationwide level. But for the time being, it’s the law of the land.

Source link

Continue Reading

Cannabis News

Could the Smell of Marijuana Ever Be So Strong That It Knocks You to the Ground?




knock you over marijuana smell

Ohio’s New Miami Village Council unanimously voted on June 27 to fire Police Chief Harold Webb after Mayor Jewell Hayes-Hensley accused him of having an office that smelled of marijuana. This information, reported by the New York Post, was based on a letter from the mayor’s office obtained by Ohio’s Fox 19.


A ballot initiative approved in November 2023 completely legalized cannabis in Ohio.


On June 20, when Hayes-Hensley and another council member went to Webb’s office to pick up his daily logs, they noticed a strong marijuana smell. This is when the incident started.


“When I first said, ‘Who has been smoking weed in here?'” The mayor of New Miami Village, a hamlet of 2,226 people in southeast Ohio, stated, “The smell of marijuana could knock you off your feet.”


Cananbis with a strong odor is known as “loud” or “dank” in the cannabis community.


Marijuana Odor from a Bust Four Months Ago?


In the same letter regarding the marijuana odor, Mayor Jewell Hayes-Hensley accused Police Chief Harold Webb of multiple infractions, including stealing hot dogs from a gas station where only free soda was allowed on duty, refusing to respond to 911 calls, “theft of office,” falsifying timesheets and daily logs, and “cashing his paycheck knowing he was required to show proof of his being at work.”


The mayor suggested that the marijuana smell might be linked to a bust that occurred four months prior, implying that Webb could have been smoking the confiscated cannabis. However, experts note that the smell of cannabis smoke typically lingers in a room for only four to six hours and does not cling to furniture or curtains like tobacco smoke. This casts doubt on the idea that the odor from a previous bust could still be present in Webb’s office months later.


The allegations against Webb extend beyond the marijuana odor, painting a picture of misconduct and unprofessional behavior. The claim about stealing hot dogs suggests a disregard for department policies and ethical standards. Refusing to respond to 911 calls is a severe accusation, indicating a failure to perform critical duties that could endanger public safety. The “theft of office” and falsification of timesheets and daily logs imply deceit and misuse of taxpayer funds.


Whether Webb’s dismissal was based on the marijuana smell, the stolen hot dogs, or the accumulation of these allegations, the situation underscores the importance of accountability and integrity in law enforcement. The controversy surrounding Webb’s behavior has undoubtedly affected the New Miami Village community, emphasizing the need for trust and transparency in public officials.


Ultimatum Delivered: Take a Drug Test or Face Consequences


On June 24, the New Miami town attorney delivered a letter to Police Chief Harold Webb at his home, informing him that he had until 5 p.m. the following day to take a drug test at the request of Mayor Jewell Hayes-Hensley or face “disciplinary action.”


Chief Webb arrived at the testing site on June 25 but refused to provide a urine sample in front of a nurse, describing the process as “belittling.” This refusal was a critical turning point in the situation, further complicating his position and raising additional concerns about his conduct.


Following his refusal to complete the drug test, Webb texted the mayor, expressing his frustration and feeling of being unfairly targeted. “You know what, you win,” he wrote. “This is the third time you have questioned my integrity.” This message highlighted the escalating tension between Webb and Mayor Hayes-Hensley, suggesting a breakdown in communication and trust.


The mayor responded decisively, instructing Webb to resign. “Sorry things didn’t work out,” Hayes-Hensley wrote. “Please turn in all your New Miami Village properties along with your resignation and leave all access to video cameras and computers turned over to me.”


This interaction highlights the greater confrontation between Webb and the village leadership, marked by claims of misbehavior, refusal to comply with directions and personal animosities. Webb’s unwillingness to take the drug test, exacerbated by the other claims against him, finally led to his dismissal. The event shows how difficult it is to uphold professional standards and responsibility in law enforcement and emphasizes the importance of following clear procedures and treating misbehavior claims with respect from one another.


Fallout and Community Reaction


The dismissal of Police Chief Harold Webb from New Miami Village has triggered a wave of reactions and repercussions within the community. Residents, caught off guard by the sudden removal of their police chief, are divided in their responses. Some express concern over the allegations leveled against Webb, particularly regarding the integrity and conduct expected of law enforcement officials. They emphasize the importance of accountability and transparency in local governance, calling for thorough investigations into the accusations made by Mayor Jewell Hayes-Hensley.


Conversely, others in the community rally behind Chief Webb, questioning the timing and validity of the accusations. They argue that Webb’s contributions to public safety and his tenure should be taken into account before any hasty decisions are made. Supporters of Webb highlight his past achievements and dedication to the village, urging for fair treatment and due process in resolving the controversy.


Meanwhile, the broader implications of Webb’s dismissal extend beyond local sentiment. The incident has raised broader questions about leadership and governance within New Miami Village. It underscores the challenges faced by small communities in maintaining effective law enforcement and ensuring public trust. Moving forward, community leaders and residents alike are seeking clarity and resolution, hoping to restore stability and confidence in the village’s administration amidst the ongoing controversy.


Bottom Line


The case of Police Chief Harold Webb in New Miami Village serves as a stark reminder of the complexities and responsibilities involved in local law enforcement. The allegations, ranging from a peculiar marijuana smell to serious accusations of misconduct, have deeply impacted both the community and its leadership. While some residents advocate for accountability and transparency in addressing these issues, others stand by Webb, questioning the fairness of his dismissal. As the village navigates through this controversy, the need for clear protocols, mutual respect, and adherence to professional standards remains paramount. The outcome of this case will likely shape the future governance and public trust in New Miami Village, underscoring the importance of due process and ethical conduct in all levels of public service.





Source link

Continue Reading


Copyright © 2021 The Art of MaryJane Media