Nathan Russell’s Post

🌿California governor approves consumption cafes, vetoes cannabis events bill☕️! The day after California Gov. Gavin Newsom vetoed a bill that would have allowed small farmers to sell their cannabis products directly to consumers, he signed a separate measure to legalize marijuana cafes akin to those in the Netherlands. “Lots of people want to enjoy legal cannabis in the company of others and many people want to do that while sipping coffee, eating a sandwich or listening to music,” the bill’s author, Assembly Member Matt Haney, said in a Monday statement. “That is now finally 🌿legal in California, and there’s no doubt that cannabis cafes will bring massive economic, cultural and creative opportunities and benefits to our state.” Last year, Newsom vetoed a similar bill proposed by Haney that would have allowed California marijuana retailers to operate traditional kitchens and host events on their premises, saying it did not do enough to offer workplace protections. The cannabis cafe bill Newsom signed into law Monday might be the only relief California operators get from the state for some time. Newsom’s initial $291 billion budget proposal for the 2024-25 fiscal year does not include any cuts in taxes or fees as the state faces a $38 billion budget deficit. The Origins Council, which serves about 800 members from the state’s famed Emerald Triangle of legacy growers, voiced disappointment in the governor’s decision, which was followed closely in other regulated markets. Assembly Bill 1111 would have allowed farmers to obtain a license to sell marijuana products directly to consumers at licensed cannabis events in government-sanctioned jurisdictions, expanding on legislation that allowed marijuana retailers and brands to sell products at the California State Fair in Sacramento for the first time this year. #California #Cannabis #ConsumptionCafes #Legislation https://lnkd.in/gS9yyqUy

Great news! California is on the verge of evolving its cannabis experience economy through two legislative initiatives: AB 1775 and AB 1111. AB 1111 legalizes cannabis farmers markets, giving cannabis farmers the right to sell directly to consumers and tourists the same way craft wineries do in the state. AB 1775 further legalizes cannabis cafes by allowing them to sell food and host ticketed events. Both bills are sitting on Newsom's desk awaiting signature and if signed, will widen the experience landscape in California and create new opportunities California destinations, brands, and businesses. #cannabistourism #cannabistravel #experienceeconomy

This ties together so many important issues. Almost all new products/services start out at small scale serving a particular niche. Very occasionally, a new product/service is so magnificent that someone decides it should be available to anyone and everyone. However, the product/service can't be scaled well, and in trying to do so, the scalers end up killing the very features that made the product/service so magnificent. The optimal response is to figure out how to improve the process for scaling. Unfortunately, that takes time and know-how. Instead, all-too often the focus shifts to simply trying to cash in on the growing demand for the new product/service. That's where we are right now in cannabis. There are many people honestly trying to figure out how to improve the processes. Unfortunately, in the meantime, the people trying to cash-in are doing a lot of damage. I just hope the short-term outcomes don't end up killing it for the people trying to do it right.

There was a post recently about people in #cannabis needing to change their business to fit into the current regulatory framework. Something about maturing. That’s easy to say when you aren’t #marketing or #hospitality focused. The current framework in #Canada doesn’t support cannabis consumption - what’s needed for #tourism and #hospitality to flourish in this sector. Don’t talk about research licenses like that’s a hospitable environment. As someone that had a business, team, and funding, ready to launch an edible business in 2018… and to have that fall flat on its face when they banned edibles at the outset. Dont talk about fitting into a framework. I had to give up on the business that I wanted to run on day one, at 8am. When they pulled that loop we watched Second Cup, Pita Pit and a number of other culinary service businesses just straight give up on cannabis industry out the gate. Nobody asked them what the plan was either. No one asks questions. My plan was a chain of small storefront bakery coffee shops selling fresh made, low dose cannabis edibles and beverages to order. So, we scrapped the Butter Baron Bakeries. We launched Aggressive Organics, we built a vessel to get us through the turmoil of this learning curve that our ‘industry leaders’ have taken us on.. With Agrow my crew has a method to build out what we wanted to do from the get go without having to commit to being a part of the industry at all. For us, the game isn’t fit into the framework (to chew us up and spit us out)… The game is to break the mold. That’s why we spent the first three years as a corporate entity only doing research and development. That’s why you don’t see me out producing cannabis edibles on this market. Hell, there’s no butter on the shelf after five years. There really is no place for me and my specializations within this current framework. That’s not a bad thing though. I was taught that if you don’t have a seat at the table, to build my own table. And I build beautiful tables. That’s why you see me out here lobbying for change. To make my own mold that fits my vision. I’m thankful we are legal. It’s a good start. I’m disgusted that the medical patient has been left behind in this framework, those sick little credit cards for pharma. I’m also disgusted that the majority of people prospering in this industry are elite that have zero history or connection to the plant, don’t care about the medical side, and have absolutely no respect for people that consume cannabis. Very bourgeois. That said, I still see a future with a small cafe selling fresh baked edibles on a busy Toronto street. Just appears that I not only need to build a new table to sit at, but a whole new stadium where the game is played. With that mentality in hand I looked around and was not surprised to find scores of other people with the same mindset. Come to think of it , there is a bakery model that works in Toronto…

A homegrower with very little experience will produce better quality than a 20 year veteran grower who is growing on a commercial scale. I was a homegrower for a decade and grew better quality in that 10 years than what I’ve achieved growing on a commercial level for the last 16 years. People are getting confused why consumers shop in the underground market, what the big players don’t realize is a consumer that is a connoisseur is willing to pay for high quality, and they likely know other connoisseur level consumers who are homegrowers. Those growers have very small batch, high quality because it is much easier to manage without sprays, and they understand that once sprayed, its trash… no matter if it would pass a COA or not. These homegrowers won’t even want to sell, but their friends will bag them to sell some to them because they don’t want to buy the large scale, heavily sprayed product at dispensaries. Not all the product at the dispensary is sprayed, but a very high percentage is, and it results in at best, harsh smoke and a terrible aroma after smoking it, at worse it will give you headaches, sore throats, nausea, etc. Good cannabis will smell better in the air than it did in the packaging. You can smoke it to ash and each hit will be smooth with great flavor. You won’t find craft cannabis from homegrowers on the street for sale, the underground product you find there is normally failed batches from the legal market on its way east, or it’s from the thousands of large scale grows in Cali from human traffickers. Long time cannabis connoisseurs are not buying from the street, or the dispensary.

2024 is the year of the cultivator. Let me explain I know this is going to sound radical: I know cultivators have been given the short end of the stick by the current regulatory landscape, all this talk about excuse relief for craft beer producers, but nothing for our struggling craft growers really has me thinking... brands are folding under fee and tax pressure: few brands have found a sustainable model. That being said, I've been sensing a shift towards care about where, who, when, and how the cannabis we enjoy was grown. Some brands use affordable products as an excuse to keep this information to themselves. I have personally experienced a bunch of frustration around ambiguous or rotating SKUs where strain information is absent, or hidden behind smoke and mirrors. I think every product should have a harvest date. Every product should have a label saying where the cannabis was grown, what methods were utilized and whether or not irradiation was used. The brands which are upset at the thought of this aren't putting consumers first and it shows. I'm noticing people avoiding "brokered buds of ambiguous origins" in favor of options that come from known cultivators. Look at the success of Homestead Supply Co Bandwagon SKUs, including their new 7g offering. I'm loving the quantity & quality of information shared, knowing that the cannabis was grown organically in my hometown is just an added bonus. or take a look at the back of any Book Club bag you can get your hands on (you should be trying them all, they're exceptional). That's what you're up against... Brands like Tweed are noticing and followed suit, I noticed them including *who* grew the cannabis, taking a page out of Book Club's playbook. Pay attention. Informed consumers aren't the only ones that want repeatable experiences, and some of these brokered bud brands are not keeping up with the competition: I'll take any Woody Nelson Inc. product or any Rubicon Organics™ product over a bag grown by [redacted] in [also redacted] using [who knows?], irradiation status? [take a guess]. If you're ashamed of putting a name on it, it's gonna tarnish the reputation of your brand. Trust me, people are starting to pay attention. Shoutout to the brands mentioned. Keep up the killer work. you too, Zevk Cultivation Inc.

Meet Joe your average cannabis consumer. Joe doesnt care nearly as much about quality flower as many commercial cannabis companies hopes he does. Joe just enjoys getting high after a long days work and he wants to spend as little money as he can to do it. He doesn't know or care what a terpene is, never heard of Cookies and still thinks dabbing is a dance move. Cater to people like Joe, they are your demographic whether you like it or not. Ask Jay-Z how is $50 joints did. 😎 Let's look at alcohol. According to the Brewers Association 40% of consumers are craft beer drinkers and honestly that surprised me, its gone up quite a bit since my beer brewing days, but still that's the minority of the market share, 60% of people just want something simple, good, cheap and contains alcohol...in steps the King of Beers, sure I'd say Bud is a terrible beer, but thats just my opinion, ill still drink one. In terms of scalability, shelf life, cost to brew, clarity, crisp and mild flavored it's got that figured out, and thus has sold millions of bottles of beer for decades, can't hate that at all 🤴🍻 However the difference between a Budweiser and a barrel aged triple IPA is ABSOLUTELY obvious to anyone, its not even close to being the same product and doesnt contain any of the same ingredients or production methods... With cannabis though, the difference between your bottom shelf flower and your topshelf flower really isn't that far apart from the way it was grown to the final product and usually the differences are purely asthetics. Of course we are assuming the bottom shelf flower is still clean, mold-free and properly grown flower, just as cheap beer is. So the differences will come down to a better smell, taste and appearance, so nuanced that your average consumer might not even be able to distinguish it when rolling it up in their daily joints 🤷♂️ Point being, as growers we should focus more on what the bulk of our consumers want and growing clean sustainable flower...not who can grow the most pretty, smelly and expensive flower. I've never claimed to grow the best flower, not because my flower isn't the best, but it's just never been a priority for me. My priority as a grower is getting cheap clean flower to people while using as little resources to do it. That's why I grow in a greenhouse with no lights, that's why I NEVER spray pesticides in flower and that's why I sell CBD flower direct to consumer at the lowest prices my margins can afford, sometimes less than $1 a gram. As a consumer I'd be more concerned about how the flower was grown than what it looks like...cuz I've never met a flower that didn't get me high, whereas looks can be very deceiving 😊✌️

Today's summary of Mark Brown's awesome daily about the wine/beer/spirits industry. Excluded a few to fit the word limit. One thing is clear... it isn't just wine facing a slowdown. It's happening broadly in the spirit market. A big name in the space recently said to me, "This makes '08 look like childs play. Because we all knew '08 would end. We don't know when this one will end": 1.) Pernod reports sharp -26% sales drop in China Pernod Ricard saw a significant sales drop in China for Q1 FY25, largely due to weak consumer demand, particularly for Martell cognac and Scotch, leading to a -26% decline. The group anticipates a more substantial full-year decline than last year, with key declines also noted in the US and Mexico. https://drinksint.com/ 2.) US Spirits – De-premiumisation Tracker October 2024 Jefferies reports on the trends in the US spirits market, highlighting a slowdown in premium spirits growth and a continued rise in ready-to-drink (RTD) beverages. The destocking cycle in the US is nearing its end, which could bring a return to pre-COVID growth rates in the spirits industry. https://finance.yahoo.com/ 3.) Moderate drinking and its enemies This article explores the controversial debate over the health benefits of moderate alcohol consumption, particularly focusing on studies that challenge these claims. It critiques the methods used by anti-alcohol researchers, suggesting their findings are influenced by preconceived biases. https://lnkd.in/gHnDi--M 4.) Legal Marijuana Contains Dangerous Mold. States Approve It Anyway An investigative report reveals that many legal marijuana products contain mold, just under the legal limit, suggesting that contaminated products are being cleared for sale. The Wall Street Journal's analysis uncovers how mold testing in the cannabis industry is often flawed, potentially putting consumers at risk. https://www.wsj.com/ 5.) Is Weed Bad For You? Marijuana's Health Impacts Still Aren't Known With the growing popularity of cannabis, especially among young adults, this article examines the lack of comprehensive research on marijuana’s long-term health effects. The article highlights the urgent need for scientific study in light of evolving legalization policies. https://www.bloomberg.com/ 6.) Status spirits adds $1bn to global economy Status spirits, defined as those with a retail price of $100 or more, contributed significantly to the global spirits market, with value growth of 9% in 2023. The report discusses how high-end spirits have remained resilient despite economic challenges, particularly in duty-free markets. https://www.theiwsr.com/ 7.) Bacardi Fends Off Cuban Co.'s 'Havana Club' TM Claim A legal battle between Bacardi and a Cuban company over the "Havana Club" trademark has ended in Bacardi's favor. A U.S. federal court ruled that Bacardi retains rights to the brand in the U.S., barring Cubaexport from enforcing its trademark due to U.S. embargo laws. https://www.law360.com/

A Week of Wins & Losses for California's Cannabis Industry. Governor Gavin Newsom has vetoed a bill that would have allowed sales farmers markets, dashing hopes for small growers to sell directly to consumers. This decision highlights the ongoing challenges small businesses face in navigating California's complex cannabis regulations. However, it's not all bad news! Newsom signed a separate measure to legalize cannabis cafes, similar to those in the Netherlands. Starting January 1, consumers will be able to enjoy cannabis in social settings, such as cafes where they can sip coffee, eat, and listen to music. As Assembly Member Matt Haney stated: "Lots of people want to enjoy legal cannabis in the company of others, and there's no doubt that cannabis cafes will bring massive economic, cultural, and creative opportunities to our state." With local approvals still pending, this new law could reshape how consumers experience cannabis in California. What impact do you think these cafes will have on the industry? https://lnkd.in/gS9yyqUy #CannabisIndustry #CaliforniaCannabis #CannabisCafes #SmallBusiness #Regulation #EconomicGrowth #CannabisPolicy

You don't need a consumer facing brand to be successful in #cannabis I used to believe that you did as a grower or manufacturer -> That without a brand you were dead in the water -> That without a brand you were at the mercy of the wholesale market -> That without a brand you weren't building maximum enterprise value Then I got exposed to some really talented operators, like Drew Nowak Drew joined the Elite Cannabis Operators Mastermind and I got to learn about his business He's been selling bulk flower since he opened his doors at Freedom Green Farms He's been profitable the whole time WTF I thought we had to be vertically integrated and have brands and all this shit Build these huge businesses that are complicated, hard to run, and harder to make profitable Then I took a hard look at my own business We sell a lot of bulk flower and distillate- profitable and easy to get paid We have 2 brands- profitable but less so than bulk, AR is a big issue We have 3 stores- not profitable Which lead me to this conclusion The cannabis industry has evolved and matured Operational excellence is the key to success, more so than business model -> There are no other industries where vertical integration is prevalent -> In other industries manufacturers white label products for brands, most brands don't manufacture -> In ag, farmers farm. Most don't have brands, or self distribute So why the hell are we still trying to do it all? Tax benefits? Meh, I don't think the juice is worth the squeeze So, what does it take to have a profitable grow or processor that just sells bulk? Economies of scale and operational excellence Basically low COGS If your cost to produce is low enough, riding the wave of the wholesale market is ok Some weeks you're crushing it, some weeks not But it's a much simpler model No big sales team, no huge marketing budget, no packaging costs, etc, etc I'm not saying vertical integration doesn't work, or that brands are bad Any model can work with the proper team and capitalization But an undercapitalized group with a skeleton management team (most of us) Is much better off getting really fucking good at doing one thing What do you think? Do producers need brands to be successful?