fbpx
Cannabis Supply Chain Shortages Becoming More Prevalent

Cannabis Supply Chain Shortages Becoming More Prevalent

cannabis supply chain is being impacted
Getting basic materials like ceramics, stainless steel and computer chips from China has gotten so difficult that its about to hit one of the few industries that has so far been insulated from supply-chain woes: U.S. cannabis.

Rolling power outages in China have affected about six out of the 13 components that go into vape hardware made by the Blinc Group, according to Chief Executive Officer Arnaud Dumas de Rauly. There are also widespread problems with shipping. All of this may start affecting the price of cannabis vapes, but on top of all of this, Lunar New Year is coming. With it, disruptions and delays are expected to intensify as workers take long holidays, Dumas de Rauly said.

“I believe this issue will go on at least until the end of May,” Dumas de Rauly told me. “It’s not just vape devices. The raw materials for the equipment that fills them with cannabis, the LEDs for the grow houses — all of it comes from China.” The company has noticed shortages of chip sets, which are used in most technology devices, including those for vaping marijuana.

The cannabis industry has so far been shielded from supply-chain woes because most of it is hyper-local. Since it’s a Schedule I substance,  companies risk legal imbroglios unless they grow and process it in the state where it will be sold. But state-specific supply chains can only protect the industry for so long.

4Front Ventures, a company with operations in California, Illinois, Massachusetts, Michigan and Washington, hasn’t seen shortages of raw materials yet, but is already suffering from shipping delays from items such as vape cartridges and specialty packaging, including tin boxes.

“We’re trying to order ahead — we’re not paying more, but we’re paying up front, also we’ve begun to source domestic pools of inventory,” said Josh Krane, the company’s vice president of operations for California. This November, he made orders and paid deposits for goods that he won’t need until April, May or even June, he told me.

So far, both 4Front and Blinc say they’ve managed to avoid passing costs on to consumers by finding alternate suppliers and prepaying far in advance for orders. Whether consumers see an impact will hinge on the multistate operators and dispensaries that sell the end products. Thanks to market dynamics, however, many of them have some wiggle room.

Massachusetts Cannabis Company Makes 850 lb Pot Brownie

Massachusetts Cannabis Company Makes 850 lb Pot Brownie

massachusetts cannabis company makes world's largest pot brownie
In honor of National Brownie Day on December 8th, a Massachusetts cannabis company has created a record breaking cannabis edible treat.

MariMed, Inc. unveiled the 850-pound brownie infused with 20,000 milligrams of THC on Tuesday as part of its new edibles bakery brand, Bubby’s Baked.

According to USA Today, the brownie was made using 1,344 eggs, 250 pounds of sugar, 212 pounds of butter, 5.3 pounds of vanilla extract, 81 pounds of flour, 2 pounds of baking powder, 3 pounds of salt and 122 pounds of cocoa powder, and came in measuring 3 feet wide by 3 feet long and is 15 inches tall.

The previous world record for a cannabis brownie according to the Guinness Book of World Records was 243 pounds. The Bubby’s Baked brownie destroyed that record.

For a new edible company attempting to bring quality, tasty cannabis edible products to the Massachusetts cannabis industry, this was a great marketing effort.

“For many of us, homemade brownies were our first taste of cannabis-infused edibles. Bubby’s recreates and elevates that nostalgic experience, infusing full-spectrum, craft-quality cannabis into timeless recipes, for a reliable high reminiscent of simpler times,” said MariMed Chief Product Officer and SVP/Sales Ryan Crandall in a news release.

The new edible line will be available in Massachusetts cannabis dispensaries with plans to expand to Delaware and Maryland in 2022.

States Increase Microbusiness Licenses to Combat Multi State Operators

States Increase Microbusiness Licenses to Combat Multi State Operators

more states begin offering microbusiness licenses
More states are offering microbusiness licenses to cannabis entrepreneurs in an effort to diversify a market that some fear could become dominated by large, deep-pocketed multistate operators.

But the jury is still out on how successful such efforts will be.

So far, only three states have issued microbusiness licenses that require less capital to launch and operate a small, plant-touching enterprise: California, Massachusetts and Michigan.

Michigan already is moving to tweak its program to make it easier for microbusiness operators to survive and thrive.

“A lot of states are talking about the microbusiness game, but few have enacted it,” said Ed Keating, co-founder and chief data officer of Cannabiz Media, a Connecticut-based firm that provides licensing data and other business intelligence.

New recreational cannabis states that haven’t yet issued licenses – but have developed microbusiness and/or craft grower programs – include Connecticut, Illinois, New Mexico, New Jersey, New York, Vermont and Virginia.

A draft bill also is in the works in Washington state to provide a “craft cannabis endorsement” designed to allow small, independently owned cultivators and processors to conduct on-site retail sales to individuals 21 and older.

Helping those with less access to capital

The programs have similar goals.

“It’s a way to make the business more accessible to citizens of the state that don’t have access to large amounts of capital,” Keating said.

“It’s often a nod to social equity,” he added, referring to efforts to help entrepreneurs who have been disadvantaged by the war on drugs.

“And it’s also maybe a hedge against big cannabis.”

A microbusiness generally is defined as a small enterprise that employs 10 people or fewer.

DEA Backs White House Plan To Research Cannabis, Psychedelics

DEA Backs White House Plan To Research Cannabis, Psychedelics

DEA approves of more cannabis and psychedelic research
The Drug Enforcement Administration (DEA) and National Institute On Drug Abuse (NIDA) say they are in favor of a White House proposal to streamline the process of researching Schedule I drugs like marijuana and certain psychedelics.

The agencies testified at a House Energy and Commerce subcommittee hearing on Thursday, expressing support for the Office of National Drug Control Policy (ONDCP) research plan. While the focus of the meeting was mostly on a controversial move to strictly classify fentanyl-related substances, the Biden administration proposal’s research components would also help address concerns within the scientific community about the difficulty of studying other Schedule I drugs.

DEA said in written testimony that “expanding access to Schedule I research is a critical part of DEA’s mission to protect public safety and health.”

“It is critical that the scientific and medical community study Schedule I substances, as some may turn out to have therapeutic value,” DEA Principal Deputy Administrator Louis Milione said. “DEA supports the administration’s legislative proposal’s expansion of access to Schedule I research. DEA looks forward to continuing to work with the research community and our interagency partners to facilitate Schedule I research.”

In general, what the administration is proposing is to align the research requirements for Schedule I drugs with those of less-restricted Schedule II drugs. Scientists and lawmakers have consistently pointed out that the existing rules for studying Schedule I controlled substances are excessively burdensome, limiting vital research.

Rather than having each scientist involved in a Schedule I drug study obtain DEA registration, ONDCP wants to make it so multiple researchers at a given institution would be allowed to participate under a single registration. The administration also proposed a policy change where a research institute with studies taking place over multiple locations would only require one overall registration instead of needing to have a specific one for each site.

Another change would allow certain researchers to move ahead with conducting their studies after submitting a notification to the Department of Justice instead of waiting for officials to affirmatively sign off on their proposals. ONDCP’s plan would also waive the requirement for additional inspections at research sites in some circumstances and allow researchers to manufacture small amounts of drugs without obtaining separate registrations. The latter component would not allow cultivation of marijuana, however.

San Francisco Suspends Cannabis Tax to Combat Crime

San Francisco Suspends Cannabis Tax to Combat Crime

san francisco cannabis tax removed to fight against crime

San Francisco city officials approved an ordinance suspending the tax it planned to place on cannabis sales, according to multiple reports.

Set to go into effect on Jan. 1, 2020, the 1% to 5% it was going to impose was approved by San Francisco voters in November 2018, the San Francisco Examiner reported.

The decision is due to a rise in illegal sales and increased theft and meant to helping cannabis retailers who have been struggling, trying to compete with illegal cannabis drug dealers.

“Sadly, the illegal market is flourishing by undercutting the prices of legal businesses, which is bad for our economy as illegal businesses pay no taxes while subjecting workers to dangerous conditions and consumers to dangerous products. Now is not the time to impose a new tax on small businesses that are just getting established and trying to compete with illicit operators,” said Supervisor Rafael Mandelman, author of the ordinance, to the San Francisco Examiner.

Last month, a group of armed individuals stole thousands of dollars’ worth of merchandise from a cannabis retailer, BASA, which had already dealt with four thefts, according to the report.

Mandelman said he plans to work with the City Comptroller’s Office, the Treasurer, Tax Collector ‘s Office and the Office of Cannabis for recommendations — including a tax rate and structure — to implement in 2023.