Issue 59: Public/Private Partnership Problems
I examine Trulieve's latest legal squabble. I also take a brief look at the weird world of weed smoke guns, and correct the record on something I said about Ohio.
I’m back again with another long issue. Some might say it’s too long.. so let’s get right into it.
Public/Private Partnership Problems
A Disagreement Over Profit Sharing With A Small Maryland Town is Trulieve’s latest Headache
The Washington Post had an interesting article this week about Trulieve’s public-private partnership with Hancock, Maryland – a small rural town where the company operates a cultivation facility.
Now that cannabis titan Trulieve has snatched up Harvest, town leaders want a full accounting of its profits. Hancock should be poised to share in the windfall of newly-legal adult recreational use, they say — a boom that saw more than $87 million in cannabis products sold in the state last month. But questions loom about whether the deal, which has no termination date, should go forward — and, if it does, how.
I’ve tried to look around to see if any other cannabis businesses have deals like this with other towns across the U.S., but I haven’t had any luck. In fact, this deal itself hadn’t received much attention before the Washington Post picked up on the story (with the exception of Hancock’s local paper).
It’s still a bit murky as to what the exact details of the agreement are, but you could argue this arrangement isn’t all that different from community host agreements in Massachusetts, which allow cities and towns to extract a percent of revenue from cannabis businesses.
Obviously, the main difference is the host agreement route allows cities and towns to profit without assuming any of the risks of being directly involved in the business. This route also allows Massachusetts municipalities to extract revenue from cannabis businesses without jeopardizing their ability to access federal funds in the same way that Hancock did.
It’s unclear if Hancock fully examined other ways that they could profit from the existence of Trulieve’s facility without the risks involved in taking an actual equity stake.
A Governor’s Citation?
Despite this on-going squabble with Hancock, Trulieve recently received a citation from the Governor’s office for their “continued commitment to the state of Maryland.”
It’s probably fair to ask if it’s a good idea for the Governor of Maryland to be issuing a citation that more or less reads as an endorsement of a private company – particularly this specific business – but it’s unlikely his office came up with this idea. Like many states, just about anyone can request a citation for a variety of different reasons or occasions, including birthdays and Girl Scout Gold Awards.*
Still, perhaps Governor Moore’s office will want to take a closer look at future citation requests, as I’m sure there’s plenty of people who would take umbrage with the idea that Trulieve’s leadership is going above and beyond in anything.
Rough Summer for Trulieve
To recap, here’s just some of the difficulties the company has been dealing with as of late:
They continue to be investigated in Massachusetts by the Cannabis Control Commission over conditions at their now shuttered Holyoke cannabis cultivation facility.
The company recently disclosed that they believe their former CFO Alex D’Amico racked up as much as $400K in bogus personal expenses. This news came after D’Amico’s replacement left the CFO role after just 10 days on the job.
They are locked in a lawsuit they filled against Harvest of Ohio, a company who had loan and other agreements with Harvest Health and Recreation, the MSO that Trulieve bought back in 2021. Harvest of Ohio is owned by Araine Kirkpatrick, a Black business owner. The company claims that Trulieve has interfered with the management of the business and has attempted to financially exploit them.
They are engaged in a legal battle with Florida’s Attorney General over the legalization ballot initiative that the company has sponsored. Trulieve has already thrown at least $40 million dollars at the campaign.
They had a disappointing Q2 result, which they partially blamed on high temperatures.
They recently received a warning in Arizona that they have six months to address the smell issue at their Phoenix-based grow before it will be shut down.
On a related note: People in Massachusetts may be wondering what happened to that OSHA-mandated study that the company was supposed to conduct after the death of Lorna McMurrey. I’m hoping to have more on that soon.
* = These citations don’t quite reach the level as a proclamation, like the one that Governor Moore recently release for Beyoncé Day.
Getting Blasted: A Brief Look Inside the Weird World of Cannabis Smoke Guns
From Thailand to Baltimore, Cannabis Smoke Throwers Keep Getting People In Trouble
There’s been a lot of headlines about tourists behaving badly recently. So much so that the BBC is asking “Is this the summer of bad tourists?”
I’m sure anybody is capable of being a bad sightseer, but even a casual examination of some of these headlines about vacationers being naughty will show you that America and the U.K lead the pack in the battle to determine which country’s travelers can be the worst.
Team USA scored another point in this contest earlier this month when a 55 year old Californian social media influencer named Angkhan Vorac Chhieng was detained by Phuket police after video emerged of him using a “smoke thrower” to douse pedestrians with weed smoke.
It’s unclear what the phuk was going through this guy’s mind when he decided to pull this stunt, but Chheing expressed regret to authorities over the incident, allowing him to be released from custody while also avoiding a ฿25,000 ($715 USD) fine.
Apparently his regret for the incident was fairly short lived, as once Chhieng was back stateside he took to social media to brag about the attention the incident had received on Thai television. It appears he then deleted that post, but he did keep a video of him visiting a Thai orphanage dressed as a skunk mascot to promote his “Kush Life” brand. Yikes.
The Smoking Gun
Readers will remember this isn’t the first time one of these smoke blower devices has made headlines. Back in June, Cookies had one of its Baltimore dispensary license suspended after video emerged on social media of an employee blasting customers with a smoke thrower during the store’s grand opening.
All of this news made me wonder who actually was creating these devices. An internet search lead me to a peculiar website: cookiessmokethrowers.us.
At first I didn’t know if this was a Cookies-led enterprise or just someone trying to mooch of cookies branding – the “our story” page on their website is blank – but by poking around the website I was able to determine that the devices are made by a company called Fuma Enterprises. If you look at pictures and videos of Berner and other Cookies employees, they appear to be wielding the same devices featured on the website.
Fuma
Fuma’s website reveals a number of apparent partnerships with a few other cannabis brands, including Tyson 2.0 and Ric Flair Drip.
I use the word partnership pretty loosely here, as the branded Fuma devices appear to be just the un-branded version with some stickers and bedazzler jewels thrown on them.
In general, Fuma’s devices look a bit like something that you might make in your high school shop class when the teacher wasn’t paying attention. They appear to be made with a lot of off-the-shelf plastic or PVC components and seem to use a Tupperware container as their smoke reservoir.
The most expensive model currently available on the site is the Cookies Medium Limited Edition Smoke Thrower, which retails at $1199. (Sadly, it’s sold out.) The company also sells a gas mask attachment for the device ($115), which appears to be a run-of-the-mill snorkeling facemask with a plastic hose attached to it.
Can We Chill With the Weed Guns?
While Fuma seems to be the dominant player in the weed-gun space, they’re not the only company making these devices. The gun utilized in Thailand seems to be either from a different manufacturer or some sort of DYI creation, and other companies like Raw also create their own similar smoke throwers.
While all of these devices strike me as childish, at least they are safer than DYI smoke throwers that people have made from leaf blowers. I guess I also have to respect the hustle of up-selling a piece of stoner engineering to people who apparently have a lot of cash (and weed) to burn.
I’m not quite ready to start an organization calling for weed-gun control legislation, but perhaps brands that are looking to actively participate in the legal side of the industry should think twice before getting involved with companies who are attempting to bring the worst aspects of alcohol culture into the cannabis world.
Plus, as I’ve pointed out before: if your weed was actually good, you wouldn’t be wasting it like that.
A Correction on Ohio
I Messed Up A Detail About The State’s Ballot Initiative, So Let’s Take A Closer Look
I’ve been off Twitter (or whatever Elon is calling it at this moment) for a while now, but this week I was alerted that somebody there was taking issue with what I said about Ohio in last week’s issue. Dawning a protective suit and respirator, I reluctantly logged back in to “X” to see what exactly I had gotten myself into now.
It turns out it was this tweet from Tony Lange at Cannabis Business Times:
While I have my suspicions that this Ohio lawyer may have a connection to the campaign, that doesn’t change the fact that it appears they’re correct, at least when it comes to the two year period.
While the law doesn’t seem to actually require that the state award the additional licenses within the initial two year period, the wording does leave this open as a possibility.
So upon further review, it’s true that my depiction of this as a prohibition of news licenses wasn’t accurate. I’ve edited last week’s newsletter accordingly.
It remains within the realm of possibility that Ohio gets its program up and running quickly enough that other businesses open within two years. I would argue that all remains possible much in the same way it’s still technically possible for me to still reach my childhood dream of being named the starting center fielder for the Boston Red Sox, but fair is fair.
What The Initiative Does (and Doesn’t) Mandate
While I don’t want to be too flippant about botching this detail, my re-examination of the initiative hasn’t exactly instilled me with more faith that it will result in an equitable market.
The initiative doesn’t mandate a timeline for the equity program to be up and running, meaning it could be significant amount of time before anyone can even claim to be a participant in the program.
Perhaps most notably, the initiative doesn’t actually require the 40 cultivation licenses and 50 dispensaries to be “social equity licenses.” In actuality, the text says that the division of cannabis control shall issue these licenses with a “preference provided to applicants who have been certified as cannabis social equity and jobs program participants,” leaving plenty of room for licenses to be issued to non-social equity applicants.
The social equity provisions are only “robust” if you ignore the obvious ways that they could be compromised.
Will Any of This Language Last Anyways?
The details of the initiative matter, but as I acknowledged last week, the proposed regulations are not set in stone and could be altered or deleted all together by the state’s legislature.
I’m not going to pretend that I can predict what will happen if the initiative passes, but with Republicans currently holding a large majority in the state’s House and Senate, it’s entirely possible we see lawmakers take an axe to the social equity requirements, even if other aspects of the proposal are left intact.
With some people questioning whether or not the state’s GOP legislature will even respect the will of voters on this issue at all, it seems more than likely that the social justice language of the bill will be targeted as “too woke.”
That doesn’t mean the details of the initiative aren’t important, but it does mean that passing the initiative is only the start of creating anything that resembles robust social equity in Ohio.
It’s also important to note that this criticism shouldn’t be confused as opposition. If I lived in Ohio (god forbid), I’d still probably vote yes on this initiative. It’s just naive to suggest that a ballot campaign funded largely by cannabis companies in a purple state is going to result in a situation where social equity program participants and small business owners are going to have meaningful participation.
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New England
MAINE ASKS DOJ TO HALT ALLEGED ILLICIT CHINESE MARIJUANA GROWS (MJBizDaily)
Maine’s congressional delegation on Thursday formally urged the U.S. Department of Justice to shut down a suspected statewide ring of illegal marijuana grows that’s allegedly connected to Chinese nationals.
According to the Bangor Daily News, U.S. Sens. Susan Collins, a Republican, and Angus King, an independent, and Democratic Reps. Chellie Pingree and Jared Golden asked U.S. Attorney General Merrick Garland in a letter for federal law enforcement to further investigate the situation.
ANALYSIS: The Daily Caller won’t actually share the memo or any evidence that supports the memo’s arguments, but that hasn’t stopped Maine’s Congressional delegation for parroting the right wing media site’s talking points.
Other than some commentary from unnamed federal law enforcement sources, this small chunk of an email seems to be the entire source for the article’s claims.
The author of the email (whoever they are) openly admits it may contain errors. They also relied on a lot of back-of-the-napkin math combined with use of the word “likely.”
I guess we’re supposed to be alarmed by this because these illegal operations are allegedly being led by Chinese gangs, rather than those good old fashioned American crime syndicates.
Rest of U.S. / National
WEEDMAPS AND "THE FREAK BROTHERS" GET LIT FOR SEASON 2 (PR Newswire)
Both brands synonymous with cannabis, the partnership will consist of in-episode Weedmaps integrations in the second half of Freak Brothers season two, beginning September 24th, as well as exclusive “Smoke & Screen” events throughout the U.S., which will bring together industry influencers and tastemakers at the intersection of cannabis and entertainment.
"We know comedy has the power to influence culture, and we are excited to partner with The Freak Brothers to amplify our message that weed is something to be celebrated," said Randa McMinn, Chief Marketing Officer at Weedmaps. "Since our company's founding, Weedmaps has been committed to elevating stoner culture everywhere, challenging outdated stereotypes and bringing the plant to the forefront of mainstream conversations. Now, 15 years later, to see the Freak Brothers' characters themselves embrace Weedmaps as their 'go to' for weed in the series is indicative of society's broader acceptance of the plant and the industry at large."
ANALYSIS: Despite the risk of blowing any chance of an invite to these Smoke & Screen events, I must say I’m sort of confused who’s supposed to be excited by a press release announcing some paid product placement in a television episode.
I’m also confused by the idea that anything about The Freak Brothers defies outdated stereotypes of cannabis users. Love them or hate them, it’s undeniable that the show/comic’s three main characters are perhaps the most stereotypical depiction of weed smokers imaginable.
I don’t want this newsletter to devolve into me just pointing at stuff and saying “isn’t this dumb?” but….. *points at this press release* isn’t this kind of dumb?
MARYLAND IS ‘CRAFTILY’ CODING MARIJUANA TAX REVENUE IN OBSCURE TERMS TO ‘PROTECT’ WELLS FARGO, STATE OFFICIAL SAYS (Ben Adlin | Marijuana Moment)
A Maryland tax official says the state has found an unusual workaround with Wells Fargo in order to avoid clearly identifying marijuana tax revenue on financial forms, yet another example of the creative workarounds being used by cannabis businesses and regulators amid ongoing federal prohibition.
ANALYSIS: When you do it, it’s fraud. When the government does it, it’s an “unusual workaround.”
AUDIT: MICHIGAN'S CANNABIS AGENCY NEEDS TO DISCIPLINE VIOLATION COMPLAINTS FASTER (Scott McClallen | The Center Square)
The Office of the Auditor General found the CRA “averaged 196 days and took up to 757 days to complete disciplinary action for 123 formal complaints involving licensee violations.”
The audit found CRA didn’t complete disciplinary action for “555 formal complaints with violations that, as of September 30, 2022, had been open an average of 529 days.”
ANALYSIS: I’m going to go out on a limb and say that a lot of people in Massachusetts (and other legal states) would appreciate this type of transparency.
International
🇪🇺 GERMANY IS SET TO MAKE CANNABIS LEGAL. WHERE DOES THE REST OF EUROPE STAND ON MARIJUANA USE? (Lauren Chadwick & Cornelia Trefflich)
Germany moved one step closer to becoming the second EU country after Malta to legalise cannabis for recreational use in a move that could influence other countries to follow suit.
But across most of Europe, cannabis remains illegal and some EU countries still have legal penalties that include jail time for possession of marijuana.
ANALYSIS: As various musicians have learned over the years, Sweden is a place you want to avoid if you’re a cannabis user. I guess I’ll stick to the IKEA cafeteria if I need my fix of köttbullar.
🇧🇧 Barbados Grants Approvals To Local Companies for Medicinal Cannabis Operations (News Americas)
Amalgamated Security Services (Barbados) Limited and Island Therapeutics Inc. have received a total of seven licenses combined, bringing the count to nine local businesses authorized to participate in the medicinal cannabis industry. This marks a collective total of 25 licenses. The initial set of business approvals and licenses were issued by the BMCLB in July 2022.
ANALYSIS: Barbados first legalized medical marijuana in 2019. The country has about 281,000 residents and is about six times smaller than the state of Rhode Island, so it will be interesting to see how large their local cannabis economy can actually get.
The Guardian did a look back at 50 years of Devo. It’s an interesting read, but I particularly liked this anecdote (which I suppose is technically not a “non-cannabis” thing):
Devo had gone from dealing with indifferent or violent audiences to being hot property and being chased by every label going. Richard Branson even flew them out to Jamaica to suggest John Lydon as a new member. Mothersbaugh was extra-confused due to the extreme potency of the local weed they had been smoking. “Branson was smiling a big ear-to-ear grin,” he recalls. “I just remember thinking: his teeth protrude like a brain-eating ape.” Devo said no to the ape and the former Sex Pistols man, who it later turned out knew nothing about Branson’s plans.
This week it’s cats of the week, as I highlight Mary and Puff. They are two very appropriately named cats for this newsletter, and are available for adoption at Worcester Animal Rescue League.
