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Sean HockingSean HockingMay 6, 2020



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AUTHOR:  aBIZinaBOX Inc. CPAs – Jordan S. Zoot, CPA


This is the first of four articles we have been writing while sheltering-in-place.

This first article summarizes our views on the impact of the COVID-19 crisis on the cannabis industry with respect to financial record-keeping and tax reporting issues. More accurately stated, we will address the impact of the economic depression triggered by the COVID-19 crisis on the financial future for the cannabis industry.

As our followers are aware, we have regularly addressed financial record-keeping and tax reporting issues relating to the cannabis industry as well as the impact of tax management on success in this industry. It appears this lesson has not yet been learned by many in the cannabis industry.

See, The Growth of the Marijuana Industry Warrants Increased Tax Compliance Efforts and Additional Guidance]

The importance of tax compliance will eventually be learned by everyone involved in the cannabis industry.

On February 28, 2019, we published [Dispensaries Need Accurate Receipts] to describe the financial records a dispensary must prepare and maintain, and the receipts it must issue, in order to establish it complied with its tax responsibilities.

We published [Which Set of Books?] to provide every California dispensary with a guide for the preparation and maintenance of the financial records a dispensary needs to have in order to be prepared for the inevitable tax audit.

Learning the importance of tax compliance will be expensive for some. For a number of players in California this lesson may prove particularly costly. The fall-out from the Grand Jury investigation that is the basis for the Weedmaps subpoena may take-down a number of California cannabis businesses even if all of the targets of this investigation avoid criminal prosecution.

The information secured by the U.S. Attorney through the Weedmaps subpoena will eventually find its way to other governmental agencies for use in civil proceedings, both federal and state. Further, the California Attorney General is very likely already involved in this investigation. Cannabis businesses evade far more in California taxes than in federal taxes.

The cannabis industry was turning downward before the COVID-19 crisis. California’s cannabis industry was facing a dramatic downturn coming into 2020. The depression precipitated by the COVID-19 crisis converted what would have been a substantial market-place adjustment into a chaotic collapse. California’s cannabis boom was the biggest. California’s bust is of comparable dimension.

Our primary interest in cannabis involves California’s industry. Our insights relating to tax management for California’s cannabis industry can be readily adapted by qualified professionals for other jurisdictions. Challenges similar to those that confront California’s cannabis businesses are commonly encountered in other jurisdictions.

Our second article describes “Better Mousetraps” for the ownership and operation of cannabis dispensaries.

Our second article also discusses the difficulties cannabis dispensaries will encounter in adjusting to the post-COVID-19 new normal.

Our third article describes the approaches that will maximize profitability in moving cannabis from cultivator to consumer. Profits for all businesses are maximized through the selection of operating entities, careful financial analysis, and the management of taxes and other financial obligations. Our third article describes those techniques that will maximize profitability for this segment of the cannabis industry post-COVID-19.

Our fourth article addresses the impact of the COVID-19 crisis on “Social Equity” programs in the cannabis industry. Our fourth article will be primarily of interest to individuals involved in California’s cannabis industry. California has been a leader in the effort to utilize Equity Programs to remedy some of the social inequities created by failed governmental policies relating to cannabis.

The COVID-19 induced depression will prove a death knell for those Equity Program businesses that do not adjust. Equity Program businesses that quickly adapt to the new normal will be able to accomplish far more than they would have been able to accomplish in the absence of this crisis. For those Equity Program cannabis businesses that quickly adjust, the financial collapse of the past four months creates opportunities for success that would not have existed in the absence of this collapse.

We have read at least fifty articles in recent weeks offering advice to cannabis businesses relating to the impact of the COVID-19 crisis. Most of these articles accurately address some issues. Most provide some worthwhile thoughts.

However, any article that does not assume the cannabis industry will be dramatically transformed by the COVID-19 induced depression is flawed.


The cannabis industry began a downward adjustment in a number of jurisdictions in 2019. California’s cannabis industry in particular was poised for a substantial market-driven adjustment by the end of 2018. The inevitable downturn in California’s cannabis industry was obvious to any astute observer. California growers have produced far more cannabis than Californians consumed since the ‘70s. The combination of an ill-conceived and poorly-drafted amendment to the California Constitution to legalize adult-use cannabis, incompetent implementation of California’s regulation of cannabis, and excessive expansion of this industry, made a precipitous downturn inevitable.


The COVID-19 crisis has condensed what would have been a tumultuous restructuring of California’s cannabis industry driven by market forces into a precipitous collapse.


The preceding statement should surprise no one. Everyone involved in California’s cannabis industry could see it was in difficulty in 2019. Now the entire United States economy has gone from steady growth to severe depression in a period of weeks. The cannabis bubble in California was the biggest cannabis bubble, and it has popped.

The U.S. economy will recover. California’s economy will recover. Full recovery for both will take years. Of greatest significance for purposes of planning, the new normal will be different. Some industries will be little changed by this depression. For other industries the change will be dramatic and permanent. California’s cannabis industry will rapidly recover. The foundation for a successful cannabis industry in California remains. Long-term success in California’s cannabis industry, however, will require dramatic changes for most businesses.

The days of easy money in California’s cannabis industry will soon disappear. Recovery from this crisis for California’s legal cannabis industry will necessarily take place in a severely depressed economy. Long-term success in California’s legal cannabis industry will require that such businesses become financially competitive with the underground distribution of cannabis. Price-competition and smaller margins will eliminate all cannabis businesses that are not financially efficient.

We are writing this article, and the three that will follow, to describe how climbing out of this depression has created an opportunity for success for some California cannabis businesses.

All commodities that move from cultivators to consumers:grapes, tomatoes, corn, etc, are different.

Cannabis is an agricultural commodity. It is a precious commodity, but it is not the most precious commodity. Saffron is far more precious than cannabis.

We have always preferred to compare cannabis as a commodity to tomatoes. Both of these commodities are easily grown. Both lend themselves readily to backyard cultivation. Cannabis is readily grown in small, valuable quantities on a small scale.

There will always be an underground cannabis market because cannabis is so easily grown in a backyard. Both tomatoes and cannabis also lend themselves to mass production, processing and retail consumption in a wide variety of forms.

Tomatoes are most efficiently grown on large farms where the tomatoes are picked by machines and trucked in massive gondolas to factories for processing into consumer products.

Cannabis on the other hand is most efficiently grown in relatively small quantities by knowledgeable growers. For many years the Emerald Triangle produced a substantial portion of the high-quality cannabis consumed throughout the United States. This phenomenon was the consequence of the many expert growers who settled in California’s Emerald Triangle.



The “new normal” for California’s cannabis industry will not be the industry most visualized six months ago. While we cannot wholly describe the contours of this new normal, we can describe the business practices that will maximize financial efficiency for the operation of cannabis businesses in this new normal. Those cannabis businesses that are most financially efficient will be far more likely to survive in the long-term than the less financially efficient.

Many features of the new normal can be extrapolated from an examination of the forces that drove the growth of California’s cannabis industry. The lure of financial success was very likely the strongest driver of the bubble that just burst. The real and supposed medical benefits of cannabis use was a significant driving force for some. The increased recognition of the social injustice caused by federal and state prohibitions of cannabis was another significant force. A new source of tax revenue was a critical motivator for many who would otherwise have been inclined toward continued prohibition. The opportunities for success opened by a big new legal industry demanded exploitation by brokers, developers, manufacturers, trade show promoters, and experts of all shapes and sizes. Those who saw profit in building this new industry was a substantial driving force in California and elsewhere.

No doubt there are forces we failed to mention. We may not have accurately interpreted the significance of some forces. Any errors in this regard are of little import.   An understanding how various forces drove the growth of the cannabis bubble in California merely provides a foundation for selecting the courses of action that are most likely to assure success for California cannabis businesses in the new normal. The new normal will require success in a severely depressed economy in a highly competitive, regulated industry with too many participants. It will not be easy.

One of the more interesting aspects of business planning for the cannabis industry is the fact the industry is so heavily impacted by state laws even though cannabis is an easily-grown agricultural commodity. Another interesting aspect of business planning for the cannabis industry is that local jurisdictions, cities and counties, invariably impose local taxes and regulations on the cultivation and sale of this commodity.



One additional item must be noted as it is likely to have a greater impact on the future of California’s cannabis industry than the COVID-19 induced depression. Governor Newsom’s proposed budget for California for the 2020-2021 fiscal year makes a significant change in the collection of cannabis taxes. If this change in law is adopted, it will dramatically alter the flow of money through California’s cannabis industry.


See Governor’s Cannabis-Related Proposals published February 14, 2020.] We will discuss the impact of Governor Newsom’s proposal in the next three articles. [California Gov. Gavin Newsom’s administration on Friday announced plans to simplify the state’s cannabis regulatory and tax systems, which have been blamed for enabling an illicit market to continue to thrive.]

[The proposed changes, which will be in Newsom’s state budget proposal, come in the wake of recommendations by an independent agency that the state overhaul its cannabis tax regime.]

What will be the new normal for California’s cannabis industry? Cannabis trade shows are history. They will not return. Too much production equipment has been sold into the industry to support continued increases in the sales of such equipment. Real estate promoters have created more cannabis investment opportunities than this industry can support.

The lure of financial success in cannabis continues to exist, but easy access to investment capital has ended. The regulatory agencies California established for this industry will not disappear. Administrative agencies are more difficult to eradicate than crabgrass. California continues to expect to collect substantial tax revenue from its cannabis industry. California will figure out how to collect this tax revenue. California will make certain its cannabis industry survives. More than ever before California needs the tax revenue a regulated and taxed industry will generate.

The new normal in California will consist of regulated, tax-paying cannabis businesses that can compete commercially with an underground market. The three succeeding articles will describe how regulated, tax-paying cannabis businesses can survive and prosper in this new normal.



Sean HockingSean HockingMarch 30, 2020


Guest post by Hanson Bridgett

On Thursday, March 19, 2020, Governor Gavin Newsom issued a stay at home order to protect the health and well-being of all Californians and to establish a consistent approach across the state to slow the spread of COVID-19. This order went into effect on Thursday, March 19, 2020, and is in place until further notice.

The order identifies certain services as essential, including food, prescriptions, and healthcare. These services can continue despite the stay at home order. Because cannabis is an essential medicine for many residents, the Governor clarified his order on March 22, 2020, by declaring that cannabis retailers are an essential business and workers supporting cannabis retail and dietary supplement retail are an essential worker force. In conjunction with the Governor’s declaration, the California Bureau of Cannabis Control (BCC), the California Department of Public Health (CDPH), and the CalCannabis Cultivation Licensing division of the California Department of Food and Agriculture (CDFA) have issued advisories stating that licensees may continue to operate at this time so long as their operations comply with local rules and regulations.

Any licensee that continues to operate must adopt social distancing and anti-congregating measures and must follow the CDC’s Interim Guidance for Businesses and Employers to Plan and Respond to Coronavirus Disease at all times.

Further, the CDPH’ s advisory states that to continue to ensure the integrity of products, it is important that employees handling cannabis or cannabis products continue to follow good manufacturing practices (GMPs), as required by regulation. GMPs include safe handling practices to prevent contamination, such as washing hands and work surfaces, wearing clean outer clothing, and any precautions necessary to prevent allergen cross-contact or other contamination. CDPH encourages posting the poster below in cannabis manufacturing facilities to highlight these essential routine tasks:

There are no requirements to notify CDPH if one of your employees is subject to quarantine or tests positive for COVID-19. However, CDPH requests that licensees do what they can to limit exposure to other employees, and follow all social distancing and safety instructions provided by your local and state public health departments.

The analysis in this article is limited to current local or state laws and regulations as they relate to the cannabis industry. Readers should note that there is a divergence between Federal law and California’s laws regarding the legality of the production, distribution and sale of cannabis. This article does not address the applicability of Federal law in this area and should not be considered legal advice.


Kaitlin DomangueKaitlin DomangueFebruary 13, 2020


Its time for your Daily Hit of cannabis financial news for February 13th, 2020. 

On the Site

Meet the Weedy Award Finalists 

The founder and Editor of WeedWeek, Alex Halperin, has created the Weedy Awards, with winners being announced on February 28th in Hollywood. Awards will be presented in categories like best grow, the most socially responsible company, the best delivery company, the best edibles, and the people’s choice cannabis celebrity. 

Aurora Cannabis Stock Slides as Revenue Falls

Canadian-based Aurora Cannabis Inc. (NYSE: ACB) saw its shares falling in early trading after the company said that revenues fell in the second quarter of fiscal 2020 ending December 31, 2019. Aurora reported that its total net revenue reported in Canadian dollars fell 26% sequentially to $56 million in the second quarter from $75 million in the first quarter of 2020. It was higher than the 2018’s second quarter, which delivered net revenue of $54 million.

Neptune Wellness Delivers Solid Quarter as Sales Increase

Neptune Wellness Solutions Inc.  (NASDAQ: NEPT) (TSX: NEPT) announced its financial results for its fiscal third-quarter ending December 31, 2019. Total revenues for Neptune were $9.1 million, a sequential increase of $2.6 million or 41% over the second quarter ended September 30, 2019. This was also an increase of $2.6 million or 40% compared to $6,538 for the three-month period ended December 31, 2018. 

In Other News

SLANG Worldwide Partners with Cali Cannabis Cookie Company 

SLANG Worldwide Inc. (CNSX: SLNG), leading cannabis consumer packaged goods company, has partnered with Cookies, a leading California-based cannabis brand. 

Pursuant to the deal, SLANG will bring Cookies’ products to the Oregon market. 

Cresco Labs Expands C-suite

Cresco Labs will name marketer Greg Butler as its first-ever Chief Commercial Officer. Butler has past supported the brand in a CMO capacity, developing the commercial growth strategy for the brand. He has strong plans to develop Cresco’s market in 2020, as well as promoting diversity and social equity in the cannabis space. 

Kaitlin DomangueKaitlin DomangueFebruary 12, 2020


Amid layoffs appearing as a constant, The Supreme Cannabis Company is the latest in the industry to let a percentage of its staff go. Last night after the market’s close, the company announced a 15% layoff, releasing a third of corporate positions and 13% of its operational ones. This report comes after the announcements of companies like Tilray and Aurora also slashing jobs. 

All hope is not lost though in the ganja workforce. Leafly found 243,700 full-time-equivalent (FTE) jobs in the United States that are supported by legal cannabis as of January 2020. That is a 15% annual increase. 

This data was reported in Leafly’s fourth annual Cannabis Jobs Report. Even more encouraging, the report shows that the industry created 33,700 new jobs nationwide in 2019, effectively making it the fastest-growing job arena in the United States. 

According to the report, Massachusetts, Oklahoma, and Illinois are leading the fight in terms of employment expansion. Massachusetts recently celebrated the one year anniversary of legalizing cannabis for adult-use in the state and added 10,226 jobs to boot. Oklahoma saw a 221% growth in 2019, supporting 9,412 full-time jobs. Illinois adult-use market rolled out on the first of the year, and early 2020 data shows this is already a $470 million annual market supporting 9,176 jobs.

An interesting tidbit of information, Massachusetts has more cannabis industry workers than hairstylists and cosmetologists, and Illinois has twice the number of cannabis industry workers than they do meat packers. When compared to other industries, it is truly amazing to see the creation of jobs in the United States by the industry, as well as the cannabis industry’s growth in general. 

Though the previously mentioned states take the prize for the fastest job growth, California is still America’s largest cannabis employer. However, Colorado may be the nation’s biggest per-capita cannabis job market. With California offering one job per 980 residents, Colorado supplies one job per 165 residents. 

Colorado is also passing Washington state in terms of jobs. Though both states legalized cannabis for adult-use in 2012, Colorado supplies nearly 10,000 more jobs than Washington state, despite Washington’s population containing nearly 2 million more residents. 

Despite cannabis job expansion’s rapid growth in most of the country, California and Michigan suffered technical job losses. 

Leafly’s experts estimate that their job markets fell due to changes in laws and regulations. In California, an estimated 8,000 jobs moved from legal to non-legal status, but as mentioned before it is still America’s largest cannabis job provider. Michigan’s new regulatory processes pushed hundreds of legally operating dispensaries into illicit status. 

Leafly started their annual job counts four years ago, upon the discovery that federal and state labor economists do not account for state-legal cannabis jobs in their employment reports. The reason? Federal prohibition. The NAICS (North American Industry Classification System) codes classify cannabis retail stores in the same category as art supply stores, hot tub stores, and auction houses. While cannabis cultivators have the same job code as hay farmers and agave growers. 

It is important to note that this report does not include jobs created by CBD since it’s recent change in legal status. Because the regulations for CBD differ from state-legal cannabis, there is no data to build from yet.

Debra BorchardtDebra BorchardtOctober 27, 2019


On the October 27 episode CBS news program exposed the California cannabis illegal grow problem. The show highlighted that more supply is grown than is sold within the state and that most of the surplus is being shipped east to states where marijuana is still illegal and can be sold at a higher price.

The program interviewed one farmer, who was trying to grow his cannabis legally, but because of onerous taxes and numerous fees, he can’t make a profit. Mikey Steinmetz, Co-founder of Flow Kana walked the CBS reporter through the company’s clean, shiny and very expensive factory to show what a legal operation looks like. He, too, bemoaned the state’s inability to control the illicit market.

Todd Kleparis, the CEO of cannabis security and distribution company Hardcar wrote, “Last month, it was announced that there had been a significant license contraction for cultivators, manufacturers, and retailers in the state. There was a 48% drop in active cultivation permits and a 29% drop in licensed manufacturers, according to statistics offered by Marijuana Business Daily. This loss in licenses for cannabis was because those who had been approved for temporary licenses for cannabis-related operations (that expired earlier this year) couldn’t meet the regulatory requirements for obtaining provisional and annual permits.”

He went on to add, “More importantly, there is a significant barrier to entry, both financially, and in terms of compliance, to the legal cannabis market in the state that once held such promise for cannabis. Those who once had a hope of moving from grey to legal are left to consider going back into the shadows, rigorously pursuing the investors needed to build capital for licensing, or give up altogether.”

Jordan Zoot pointed this out in a previous piece on Green Market Report saying, “California’s underground economy generates between $60 to $140 billion in unreported revenue annually, according to a University of California at Los Angeles Labor Center report, depriving the state of $8.5 billion in corporate, personal, and sales and use taxes each year.

A pilot program has allowed a team of agencies in Sacramento and Los Angeles to work together to investigate and prosecute the most outrageous felony-level multijurisdictional underground economic crimes in California. AB 1296 builds on the success of a state pilot program by permanently establishing law enforcement teams in Sacramento and Los Angeles and authorizing additional teams in the three other major metropolitan regions of the state: San Diego, the Bay Area, and Fresno.

Investigative teams have identified $482 million in unreported gross receipts and $60 million in an associated tax loss to the state. Additionally, through its criminal enforcement actions, the pilot program has recovered over $25 million in lost tax revenue, victim restitution, and investigation costs.

The legislation strengthens the program by ensuring multi-agency collaboration between several governmental entities, including the Department of Justice, the Department of Tax and Fee Administration, the Franchise Tax Board, and the Employment Development Department. Together these agencies combat wage theft, tax evasion and other crimes in the underground economy.

Zoot also determined that “The taxes that California should be collecting are approximately 31% of the gross receipts of cannabis businesses, or $960K for each “black market” cannabis entity, and $1.1MM per legal cannabis entity. The annual total for cannabis taxes for the “black market” and legal business should be $3.66B. It is our recollection CDTFA recently announced the cannabis taxes collected for the second quarter of 2019 were $144.2MM[3] vs. $915MM California should be collecting.”


StaffStaffOctober 18, 2019


Guest opinion piece by Todd Kleperis, CEO of Hardcar. 

Protecting What’s Left of the California Cannabis Industry

Many people within the cannabis industry operate on the assumption that it’s safe to move cannabis products and cash within states; after all, peace and love are all that the plant is about, right? 

As an established cannabis security professional who has been operating in California since before legalization with my cannabis security company, HARDCAR, I can confidently confirm that when it comes to participating in the legal market, many are willing to trade in the peace and love of the plant for criminal activity and potentially life-threatening situations. 

I hate to say it, but the California cannabis industry is slowly killing itself and has the potential to literally endanger lives as a result of this loss of a promised regulated system that intended to keep cannabis clean of criminal activities. 

Pushing Cannabis Back into the Shadows

With a recent contraction of hundreds of cannabis licenses, California could be getting itself into is a situation that threatens the security and safety of those moving cannabis, and cannabis cash, across the state. 

Last month, it was announced that there had been a significant license contraction for cultivators, manufacturers, and retailers in the state. There was a 48% drop in active cultivation permits and a 29% drop in licensed manufacturers, according to statistics offered by Marijuana Business Daily. This loss in licenses for cannabis was because those who had been approved for temporary licenses for cannabis-related operations (that expired earlier this year) couldn’t meet the regulatory requirements for obtaining provisional and annual permits. 

More importantly, there is a significant barrier to entry, both financially, and in terms of compliance, to the legal cannabis market in the state that once held such promise for cannabis. Those who once had a hope of moving from grey to legal are left to consider going back into the shadows, rigorously pursuing the investors needed to build capital for licensing, or give up altogether. 

The Bureau of Cannabis Control has done what it can to regulate a ferociously growing market, yet the job just proved to be too tremendous to regulate cannabis on such a large scale. No matter who is at fault for where we’re finding ourselves now, the State of California has deprived good human beings of the ability to provide reliable and convenient products to their established clients with these barriers for entry that make participating in the legal market a no-go. 

Is Cannabis in California Safe at All?

Those who operate in the grey market of cannabis are forced to do business within the shadows, but unfortunately many aren’t taking the necessary precautions to protect their safety while moving cannabis and cannabis cash. We’ve heard of, and even seen, cars with cannabis leaves peaking out of the trunk in an effort to transport the crop. People are transporting thousands of dollars of cannabis cash across cities, even the state, with no protection or precautions to protect the employee against being robbed. 

Licensed growers, manufacturers, distributors, and retailers are even putting themselves at risk with a lack of security on cash, product, and people. Despite the ideals that cannabis-related crime would begin to fall with the legalization of cannabis, people are still facing gun-related violence in California over cannabis. “People are getting shot over this plant,” said Ben Filippini, a deputy sheriff in Humboldt County said to The Atlantic, “All legalization did here was to create a safe haven for criminals.” In Humboldt County, the largest cannabis-producing region of the United States, 717 per 1 million people go missing each year. 

Across the state, delivery drivers, who can carry up to $10,000 in cash, are being robbed by criminals eager to take what the legal market has. To carry cannabis and cash without protection is just sheer lunacy. Shame on anyone involved in cannabis who will willingly put their people in harm’s way for a profit.  

Despite efforts to keep gangs and drug cartels out of the legal markets, it is speculated that those involved in organized crime are heading from prohibitionist states in the east to west to use California’s legal cannabis to feed illicit markets. 

While the headlines may feed us contradictory statements on the connection between cannabis and crime rates, we can’t deny that crime within cannabis still exists and persists. People want what licensed cannabis can provide and produce, and are willing to go to any lengths to get it. 

Simply put, the California cannabis industry is killing itself and endangering what’s left of it by its own lack of foresight towards its own regulations towards safety and security right after they got out of the gates.

Whether they like it or not cannabis will continue to be bought and sold in the Golden State and regulators will just lose their hold on a large portion of what could have been a tremendously large regulated market. 

Protecting What We Have Together

The regulated cannabis market in California has come too far to endanger what we’ve built. 

HARDCAR was built from the ground up to protect the cash, product, and most importantly the people of cannabis to ensure the safety of California’s legal cannabis while setting a standard for the state to strive to as far as enforced safety and security compliance. 

Our efforts have come from recognizing that cannabis can be dangerous and will continue to be if we don’t get the safety of cannabis under check now before more lives are unnecessarily lost. 

California and other states can work to develop the intelligence to recognize cannabis crime and put in the security measures to ensure it no longer persists. Just recently, we have uncovered one firm out of Colorado that carries up to half a million dollars in cash at a time, without any protection, and as expected, they have a target on their head. As a community around cannabis, we need to work together to intervene in these criminal activities before they have a chance of coming to fruition. 

Catching the cannabis industry before it becomes victim to crime starts with lessening the barriers to entry to receiving a cannabis license to allow people to operate legally, while also taking the proper security measures to ensure that cannabis product, cash, and people are safe. 


Debra BorchardtDebra BorchardtOctober 16, 2019


Green Market Report reported news last week that Trump associates who had been arrested for campaign finance violations had applied for marijuana licenses in Nevada. It also seems one of the gentlemen tried to pursue licenses in California as well.

The San Francisco Chronicle reported that Andrey Kukushkin had attempting to build a cannabis business in the Bay Area. The paper said that Kukushkin had some control in a variety of cannabis companies named Oasis Venture, Legacy Botanical Co., and Venture Rebel Inc. It was reported that Kukushin first entered the space in 2015 as his Rebel Venture Inc. company was contracted by the medical marijuana dispensary MediThrive to manage its Mission Street location.

This information came about as Kukushkin sued his partners in 2018 claiming they cost him $1 million by running the company into the ground. Venture claims it gave MediThrive a million dollars to renovate a storefront and purchase inventory. The case alleges that the inventory got diverted to another business and the investment was squandered.

It looks as if this case is continuing as the latest filing is dated 9/3/2019. Cannabis law firm Greenspoon Marder seems to be representing Kukushkin in this case and Green Market Report is in the process of confirming whether this is still the case.

More recently, his Oasis Venture company planned to turn a large ranch in Livermore into a cannabis farm. It seems the neighbors weren’t so keen on the idea. Oasis Venture originally applied for a cultivation permit in 2017 but was denied. The paper reported that a business partner by the name of Chuk Campos wrote a letter to the Alameda County saying Oasis was going to use the cannabis to advance cancer research. The article says Campos is now distancing himself from Kukushkin.

According to CannaBiz Media, Andrey Kukushkin appeared on 11 cultivation and manufacturing licenses in California relating to Trava Group LLC., which wasn’t mentioned in the Chronicle story. Trava Group is based in California. CannaBiz said that the licenses appear to have expired, yet a story in the Mojave Desert News says a license was awarded to Trava Group for delivery only.

The Sacramento Bee is reporting that the FBI is investigating whether cannabis business people have tried to bribe California politicians. The Bee is suggesting that it could be Kukushkin that is being investigated, which is a logical conclusion since the group also tried to bribe politicians in Nevada in order to get licenses approved.

The Sacramento Business Journal reported that “Kukushkin’s business dealings extend to Sacramento’s legal cannabis industry, where he is a business partner of Garib Karapetyan, the CEO of Capitol Compliance Management, which is the group behind nearly one-third of Sacramento’s cannabis dispensaries.”

The Kolas dispensary brand is owned by Capitol Compliance and is up to nine of the 30 dispensaries licensed by the city of Sacramento. “Karapetyan has permits for eight dispensaries in Sacramento, according to The Sacramento Bee, making him the single largest permit holder for dispensaries in the city.”

The Bee had this statement: “If this story is true, then our cannabis licensing process, which was designed to protect consumers and reward local law-abiding businesses, is being improperly exploited,” said the mayor’s spokeswoman, Mary Lynne Vellinga, in a statement provided to the Business Journal. “The mayor is calling for an immediate investigation and will lead an effort to add additional safeguards to licensing process.”



Video StaffVideo StaffDecember 13, 2018


Humboldt County in California has seen its fair share of boom and bust cycles. From gold mining to logging, this county continues to reinvent itself. Now it’s cannabis that is fueling the county and specifically the town of Eureka’s latest boom. Rob Holmlund, the Director of Community Development in Eureka California tells the Green Market Report how the area has been transformed by the cannabis industry that has brought meaningful jobs to the residents.

William SumnerWilliam SumnerDecember 12, 2018


Earlier this week, the cannabis technology platform LeafLink released its 2018 Wholesale Cannabis Pricing Guide and the company learned that Alaska and Maryland are the two most expensive states to buy legal cannabis, followed by Nevada and California.

Examining the wholesale landscape of some of the most mature cannabis markets in the United States, the guide looks at the average wholesale price of cannabis in eight states: Alaska, Arizona, California, Colorado, Maryland, Nevada, Oregon, and Washington. The product types covered by the report include concentrates, cartridges, edibles, flower, and pre-rolls.

Although the report does not dive into the specifics of why one state is more expensive than another, the authors speculate that the Alaska and Maryland’s high prices are due to the states having a low number of cannabis cultivators. In the two states where cannabis is cheapest, Washington and Oregon, there is currently a glut of cannabis cultivators; leading to low prices and oversupply.

“As the standard wholesale marketplace for the industry’s leading brands, we are able to provide crucial market information to cannabis retailers and brands, which will help inform their plans for 2019,” said LeafLink Co-Founder and CEO Ryan G. Smith in a statement. “As more states like Massachusetts, Connecticut, Pennsylvania, and Michigan continue to establish wholesale operations, we will be able to provide a larger scope of market activity to further empower the LeafLink community, as well as the industry at large.”

Nationwide, the average price for a pound of cannabis flower is $2,124 per pound, while a gram of pre-rolls costs around $5.66 per gram. The average price for cannabis concentrates costs approximately $26.07 per gram and cartridges are priced at around $39.55 per gram. Edible cannabis products, on average, cost around $0.20 per milligram.

When taken on a state-by-state level, cannabis prices start to vary. With regards to cannabis consumer preferences, the report found that consumers prefer products in the lowest 25% price range. The exception to this was pre-rolls. On average, consumers preferred pre-roll products in the 25%-49.99% price range.

The report also examined the relationship between pricing and discounted sales. On average, approximately 16% of the products sold through LeafLink’s platform have a discounted price. Across all eight states examined, discounted products generated 3% more sales than regularly priced products.

The discount effect is magnified when combined with larger sales campaigns. During the last year, LeafLink ran two sales promotions, one in the month leading up to 4/20 (dubbed 3/20) and one in July called 7/10; which is a considered an industry-wide “holiday” for concentrates.

When combined with those larger sales campaigns, discounted products generated 37% more sales on 3/20 and 38% more sales on 7/10. This seems to suggest that cannabis retailers stand to significantly boost their sales numbers by combining sales promotions with discounted cannabis products.

Debra BorchardtDebra BorchardtAugust 20, 2018


The state of California released its tax data for Q2 cannabis sales last week.  Tax revenue from the cannabis industry totaled $74,240,257.00 million from April 1, 2018, through June 30, 2018, which includes state cultivation, excise, and sales taxes. It does not include tax revenue collected by each jurisdiction.

According to GreenWave Advisors, that means that the implied recreational retail revenues increased 36% to ~$290M from $213M in Q1.  In addition to the retail revenues, the implied wholesale revenues would have reached roughly $29.9M vs $10.7M quarter-over-quarter.  “We note while these results fall below expectations, it does not include medical marijuana sales in which sales and excise taxes are excluded,” said Matt Karnes, the founder of GreenWave Advisors.

The California Department of Tax and Fee Administration also noted the excise tax on cannabis generated $43,490,668.00 million in revenue during the second quarter of the calendar year 2018. The cultivation tax generated $4,482,119.00 million, and the sales tax generated $26,267,470.00 million in revenue.

California cannabis retailer MedMen (MMNFF) said on Monday that its stores accounted for roughly six percent of all legal retail sales of cannabis and cannabis products in the second quarter for the state. MedMen said in a statement that its eight stores represent about two percent of all retailers, meaning on average MedMen stores outperform non-MedMen stores by a factor of three.

“The strong growth in tax revenue in the second quarter of the year shows that the legal cannabis industry is delivering on its promise of economic activity and greater public resources to the people of California,” said Adam Bierman, MedMen chief executive officer, and co-founder.

While MedMen is clearly happy with its results, the actual tax receipts are far lower than what the state had projected in the budget proposals. Governor Jerry Brown had estimated that the state would pull in $175 million in the first six months and instead the number was $135.1 million.

GreenWave went on to add that approximately 100,000 medical marijuana cards have been issued by the state since 2004 so Karnes believes that total retail sales are likely considerably much higher with med marijuana included and he estimates that its near $700M  for the first half of the year.

“As the regulated market in CA continues to evolve, it will likely experience ongoing sales pressure in the near term.  However, we remain optimistic that these “growing pains” will ultimately be resolved to achieve a $7B retail market over the next 5 years,” said Karnes. He went on to add that the average revenue per dispensary for the first half of the year is roughly $300,000 per month.

At the end of June, there were approximately 64 medical only licenses representing 15% of the market and 331 licenses for outlets selling both medical and recreational. At that time there were only 21 recreational only licenses representing 5% of the market.

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