Ranting about the cannabis industry is part of working in the cannabis industry- its one of the defining qualities. However, every good rant is hollow without some practical call to action. Here are a few regulatory changes that we would love to see happen in our industry.&nbsp;<h2>Trim METRC Requirements for Farms</h2>I have to be pretty blunt here: METRC provides next to no value to farms, and in fact is a major resource drain on any operation. While the idea of safe track and trace has good intentions, METRC’s process for accomplishing this is barely viable. Massive time waste, system unreliability, and thousands of non-recyclable plastic plant tags are all a by-product of this poorly implemented government contract software.&nbsp;The problem with such draconian tracking for farms is that much of it does nothing to contribute to more accurate supply chain monitoring. In reality, all it provides is another set of hoops and pitfalls for compliant farms to deal with, and another rule to ignore for farms running gray market operations. Limited in-person farm inspections may catch one-off offenses and generate revenue through fines, but they do next to nothing to secure the supply chain against people who are willfully ignoring rules. Scanning a plastic tag isn’t going to make cannabis safer for the consumer, or tax collecting easier for the bureaucrats at any level of government.&nbsp;	We would like to see the requirements for in-depth METRC tracking scaled back significantly at the farm level. While we understand that some larger operators have integrated METRC pretty deeply into their operation, there’s no reason that everyone should be mandated to tolerate this level of waste. METRC should only be needed at a few steps in the process:<ol><li>Planting: Farmers would enter some basic information about their batches so the state knows what they intend to grow. No tags needed.&nbsp;</li><li>Harvesting: Plants are harvested and bulk weighed to determine yield. Weighing plants individually provides no regulatory benefit. Likewise bulk destruction and disposal should be allowed.</li><li>Packaging: This is where tags become actually useful as normal package labels. Just weigh it, pack it, tag it, record it. Repackaging works the same way.&nbsp;</li><li>Testing: Test results should be associated with the packages. This is one of the few reasonable functions of the regulatory system: to make sure that product can be associated with accurate test results for recall, safety, and responsibility reasons.</li><li>Transfers: The transfer process can remain fairly unchanged, since chain-of-custody between licensed operators is key to track and trace. (Also a personal request: let 3rd party integration software initiate transfers, please, for our founder’s sanity!)</li></ol><h2>Eliminate Minimum Taxes</h2>Taxes are a pain, we get it, but let’s be clear: they’re a part of business. The problem is when they go from being a reasonable portion of profits to a blatant cash grab. The worst of these is the minimum tax on farms. Depending on their jurisdiction, farmers who make zero income can still be required to pay thousands in taxes, generally determined by their license type and square footage. This amounts to a fine for not making any money. On top of licensing fees and everything else that bleeds away operators income, minimum taxes just add insult to injury. Get rid of them.&nbsp;<h2>Legal Definition of Marketing Terms</h2>What is Craft anyway? How small is a Small Batch? How much sun does a plant need to get to be considered Sun Grown? These terms matter, and they are being abused. Companies that have massive new operations can easily claim to be small batch craft, without any repercussions. We want to see California take a page from the <a href="https://usopenwhiskey.com/whiskey-and-spirits-definitions/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(17, 85, 204);">world of whiskey</a> and introduce a standardized (and enforced!) set of terms for who can use certain terms and for what products. Appellations enforcing regional labeling to protect terroir were a good start, but regional name is only one aspect of what makes an operation and its product unique. Here is a list of terms and definitions that we would like to see adopted.&nbsp;<ul><li>Craft: Reserved for small farms at a scale where each plant can receive attention from a skilled grower with a proven history of cultivation. The licensee must have been operating for several years, and have held a license for an extended period. Priority should be given to operators who were involved in prop 215 operations or other previous legal cannabis programs.&nbsp;</li><li>Small Batch: Reserved for product from a single planting of the same strain at a limited scale, with a very limited number of batches per year. This is just one way to do it however, and the exact definitions of weights, plant counts, license types, and strain differentiation would need to be clarified with significant industry input.</li></ul>The goal here is obvious and simple: create market definitions for products and producers to protect small legacy farms. We want to see specific sections in dispensaries for verified small batch craft cannabis, complete with premium pricing. This is already the standard in grocery stores for organic food, let’s adopt it. Likewise, the consumer education from this market segmentation would make buyers more selective in what they purchase. Large newly founded farms can compete via economies of scale and defend their market niches through capital and market flooding, whereas the small farms that started this industry (and are most prone to being driven back under the table) need a defensible way to define their product.As a consumer, I know I would be happy to pay more for small batch craft cannabis, especially if there was a legal framework in place to make sure that's what I was getting, not just another mega-farms misleadingly labeled mids.<h2>Clear Provenance- a Question of Scale and Potency</h2>	It’s still pretty hard for the average consumer to know where their cannabis comes from. Just a farm or manufacturer name on the packaging doesn’t clearly explain anything to your average person buying a jar. Clarity of sourcing is a major advertised goal of the regulators, so in order to achieve that we would support the following label requirements. The question is, how exactly should this be defined in order to accurately and fairly represent the source of the cannabis?From our perspective the most important fact that a consumer should know is the size of the operation that produced the product. Adding a labeling requirement for total square footage of the producing farm would inform the consumer of who they were buying from. This prevents brands from passing their product off as coming from small farms when it is actually coming from a large operation. In general, the cultural expectation for California cannabis is that it comes from a small farm with an emphasis on quality and skilled cultivation. Consumers should know if their product lives up to this expectation or not.&nbsp;Likewise, testing labs are part of this. As we have previously mentioned, testing labs provide inconsistent results on terpene and cannabinoid levels, and operations will shop for labs that will give them more favorable results. Since new legislation is standardizing testing and cracking down on lab shopping, clearly labeling the certifying lab on the final product will provide another layer of accountability.&nbsp;Ultimately, regulators are gonna regulate, but that doesn’t mean they always need to do it in wasteful and unproductive ways- there are real changes that can be made today that help out the most vulnerable members of the cannabis industry and still satisfy the bureaucrats in Sacramento.-Here’s hoping you only smell weed smoke and not wood smoke, keep growing!&nbsp;

This article covers changes we would like to see in how METRC is applied to California cannabis farms, as well as the elimination of minimum taxes, the legal definition of marketing terms, and clearer labels to clarify farm size and lab accountability

3 Changes We Want To See In The Cannabis Industry

<h2>Introduction&nbsp;</h2>Earlier this year we launched Higher Origins to serve the California Cannabis industry. And what a year it has been! Over the course of the last 9 months, our community/compliance platform has grown to serve 181 licensed facilities, track nearly 1.5 million plants, over 6,000 harvests, and over 40,000 packages of cannabis. This growth, coupled with thousands of hours of development, networking, and analytics has put us in a great position to achieve our goals for the coming year. None of this would have been possible without the support and contributions of the Higher Origins community. We are a team of two, helped by several part time collaborators. We are not funded or influenced by any large interests like Barclays, Casa Verde, or Y Combinator, so every decision we make is driven by the small license holders we work with.&nbsp;<h2>Mendo Mystic Farms</h2>Over the past year, our relationship with Mendo Mystic Farms has proven invaluable in building and testing out our compliance and marketplace features. For full disclosure, Mendo Mystic is owned and operated by our developer’s family. The ability to test our features on a legacy farm has allowed us to quickly iterate and figure out what works and what doesn’t. While other cannabis software companies rely on consultants or large-scale farms, we can field test our products right on the mountain. The pounds we’re tracking aren’t theoretical, they’re real, and we know the people who grew them- we even grew some of them ourselves. Thanks to Mendo Mystic and our other neighbors, we have concrete proof that our product and business model works and directly benefits legacy farms and their business partners.&nbsp;<h2>Higher Origins Marketplace</h2>The main development goal of 2022 has been to establish the Higher Origins Marketplace. This marketplace is designed to provide a central location to connect cultivation sellers and wholesale/retail buyers. Our core focus within the marketplace is to establish a template of partnerships which cultivators on Higher Origins can use to easily and affordably self-brand and prepare their product for retail. This process involves bringing together multiple partners and options to help with packaging, manufacturing, transport, and fulfilling the state distributor-as-middleman requirement. Ultimately, we have curated a path of least resistance through which small cultivators can sell their cannabis at a sustainable price level.This supply chain has now been established, and we are in the final stages of wrapping up our proof of concept transactions. Once we clear these first deals, we will be ready to scale the marketplace and begin to put the power to dictate price back in the hands of farmers. To get this far has taken thousands of hours of software development, hundreds of calls to farms and retailers, and dozens of drives the length of the state. And we’re only getting started.<h2>Forward Looking Statements for 2023:</h2><h3>Analytics</h3>In the coming year, data sharing and analytics will become a major focus. Using information sourced from State DCC data and our user base, we will be sharing insights and trends from throughout the California industry. Analytics will be both publicly accessible through our website and articles for large industry wide trends, and private for members only for more localized market trends. The more information that we can share to educate the market, the better. Keep an eye out for our 2022 market year in review analysis, dropping mid-January!<h3>Marketplace</h3>2023 will be the first year of growth for the marketplace user base. Our goal is to ensure steady growth and deal flow through the marketplace for all users. We will start the year with a solid base of Higher Origins users, and a network of fantastic industry partners and collaborators on our side. Practically, what we must do is expand and onboard the number of buyers and sellers on our marketplace in order to establish a healthy market volume. To date, our user base has mainly consisted of cultivators, but to balance the marketplace we must also attract a significant amount of retailers and distributors. Naturally, this means extensive networking and direct outreach to license holders throughout California.&nbsp;To be clear, development will not take a backseat to growth, as we will continue to provide support, bug fixes, and user-requested features during this growth phase. The official details of pricing, features, terms, and onboarding will be released in an announcement in early January.<h3>User Representation</h3>We will be expanding the ways in which we promote and platform our users. To start, all users will be given a free profile where they can upload an image or logo, describe their business, author articles, and display their products. This profile will function as an online presence which users can use to represent their business, as well as how they can be found on the marketplace. User created articles will be displayed on the Higher Origins homepage for visibility. This gives users a chance to share their stories, experiences, and expertise with the Higher Origins community and beyond.&nbsp;<h2>In Conclusion</h2>If you are reading this, Thank You! Community members like you are why we do what we do, and we are very excited for what the new year will bring. Cannabis is a hard industry, and we’re very glad you’ve been sticking with it. Happy Holidays, and we’ll see you next year!(Don’t forget to pack a bowl for Santa!)-The Higher Origins Team

In this article we share the progress of Higher Origins through 2022, including marketplace information, growth statistics, small farm collaborations, and our forward looking statements for our 2023 goals. 

Higher Origins 2022 Year End Review

After months of development, networking, and testing, we are proud to launch the Higher Origins Marketplace for the California industry. Our marketplace is an accessible, METRC-integrated platform where licensed wholesalers, retailers, and cultivators can buy and sell cannabis products. Sellers will be able to list packages for sale, and buyers will be able to browse, learn about, and order these packages. We have designed this marketplace with direct feedback from retailers, wholesalers, and legacy farms in the Emerald Triangle and beyond. Since this platform will evolve based upon the needs and feedback of its users, the features listed below are subject to change and improvements over time.<img src="https://higherorigins180721-prod.s3.us-west-1.amazonaws.com/public/images/7ca3af30-a045-4112-8e5a-98aed8d8373a.png">The main Marketplace interface, showing product listings and sorting toolGoalsThis marketplace was created with the following goals in mind:<ul><li>For Cultivators: Give cultivators a more transparent, stable, and fairly priced path to market for self-branded products, thereby reducing the likelihood that they get lowballed or robbed by middlemen who take a disproportionate markup.</li><li>For Retailers: Give retailers more direct access to a wider array of products. Through this Marketplace, retailers can get in direct contact with the product source and be sure they are getting exactly what they are looking for through our transparent supply chain.</li><li>For Wholesalers: Reduce the difficulty and cost of sourcing products for wholesalers, by giving them a compliance-backed environment in which they can look for exactly what they want.</li></ul><img src="https://higherorigins180721-prod.s3.us-west-1.amazonaws.com/public/images/3793dae0-f081-449d-bcdd-aeab4e4f5b84.png">The detailed product listing showing order tools, related products, and seller informationInitial Launch Features:<ul><li>Product Listings: Products can only be listed if they are associated with valid METRC entries. Each listing will include available inventory, base price, minimum price, images, description, and testing information.</li><li>Search and Filtering: Listings are displayed in a familiar marketplace layout, and can be sorted by county, type, cost, and other key criteria.</li><li>Minimum Orders and Pricing: Minimum orders can be set by the seller in order to make sure the order is large enough to be economical to manufacture and ship. Likewise a floor price can be set by the seller to auto-reject low offers.</li><li>Business Pages: Every buyer and seller has a searchable page, which they can add information, images, and links to in order to represent their business.</li><li>Make Offers: Any buyer can make an offer on a product or request more information, which the seller can respond to, accept, or reject.﻿</li></ul><img src="https://higherorigins180721-prod.s3.us-west-1.amazonaws.com/public/images/3e63c863-d03f-4599-9b94-0b361ecd34f9.png">The Business Page, where Marketplace users can share their story to potential customersFeatures to be Added in the Coming Weeks:<ul><li>Invoices: The marketplace can generate invoices for orders as they are placed.</li><li>Automated Notifications: Get notified of order status, new product drops from sellers you follow, and more via email.</li><li>Marketplace Analytics: See overviews of product price and volume on the marketplace and the industry beyond.</li><li>Package Tracking: View the path that packages you are buying or have sold take through the supply chain, even when they leave your facility.</li></ul>Pricing<ul><li>35$/mo+10$ for each additional license</li><li>Transaction fee of 5% charged from the seller for orders on terms.</li><li>Transaction fee of 3% charged from the seller for Cash on Delivery orders.</li><li>14 day full-featured free trial.&nbsp;</li></ul>ConclusionOther marketplace attempts have relied on exorbitant fees, weren’t designed by people who know how the cannabis industry works, or only focused on the retail end of the market. We are confident that our transparent and fairly priced marketplace, designed on the mountain from the perspective of the legacy grower, will provide the most direct and profitable path to market for self branded farms, and for buyers to source quality product. As this marketplace grows we will be able to generate accurate market-based insights to clearly explain what is happening in the industry. We invite any California licensed cannabis farm or buyer to <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.higherorigins.com/pricing">check it out</a>- all you need to create an account is your basic info and METRC API key. And tell your friends! We’d love to have you as a part of the Higher Origins community.﻿Keep Growing, and we’ll keep helping you get to market!

Announcing the Higher Origins Marketplace: an accessible, METRC-integrated platform where licensed wholesalers, retailers, and cultivators can buy and sell cannabis products.  Designed on the mountain with the cultivator in mind.

Announcing the Higher Origins Marketplace

In this article we deliver cannabis cultivation industry insights pulled from our current Higher Origins community. We share planting and harvest data since 2019 and explain what the data means. 


Industry Insights: How Much Cannabis Was Planted And Harvested?

In this article we introduce our new distribution partner, Maui Ben, explain the advantages of this partnership for our community cannabis platform, and share an interview with Ben about his experience in cultivation over the decades.

Interviewing Maui Ben: Our New Distribution Partner

In the first Farm Interview article, we speak with Venus and Francisco from Healing Wonders Farms, a cannabis farm in Mendocino county, about their experiences, struggles, and vision for the California Cannabis Industry

Farm Interview: Healing Wonders Farms, Mendocino County

On September 18th, Governor Gavin Newsom signed 10 cannabis related bills into law. We dug through the lawyer-speak to summarize these bills below, as well as added our own take on them. If cannabis is going to be legal, it pays to keep an eye on the laws!NOTE: The name of each legislator is linked to CalMatters, a site which provides detailed information on their political career including voting history, legislation, and industry overlords. Do your own research, and never take what politicians say for granted. &nbsp;<a href="https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB1706" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(17, 85, 204);">AB-1706</a> by <a href="https://calmatters.org/legislator-tracker/mia-bonta-1972/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(17, 85, 204);">Mia Bonta</a>, Democrat, OaklandCreates a clear path towards expunging cannabis legal records. Earlier laws already directed the California DOJ to review the cannabis criminal records and identify cases for expungement. The DOJ can challenge these expungements on a case by case basis.&nbsp;This law lays out the next steps in the process. For anyone with an expungement eligible charge, so long as the DOJ did not challenge the case before July 1 2020, the DOJ must clear that charge from the suspect's record. Additionally, the bill requires the state to inform and educate those who the bill applies to, as well as commit to reporting on their progress.In our opinion, this is a baby step in the right direction. Obviously, expungement of any kind is progress, and commitment (on paper at least) to moving the process forward is good. However, it’s still too slow, and it does nothing to offset the years of damage that has been done to people’s lives due to their criminal status. We would like to see the state actively do more to compensate the victims of its drug war.&nbsp; <a href="https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220AB1646" rel="noopener noreferrer" target="_blank" style="color: rgb(17, 85, 204); background-color: transparent;">AB-1646</a> by <a href="https://calmatters.org/legislator-tracker/phillip-chen-1978/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(17, 85, 204);">Phillip Chen</a>, Republican, Yorba LindaClarifies that beverages can be sold in any kind of container, whether clear or colored.As far as we can tell this really only affects beverage manufacturers by giving them a wider array of packaging options. Unfortunately, this may have the effect that beverage makers opt for single-use plastic containers instead of more environmentally friendly options like aluminum cans or glass bottles.&nbsp; <a href="https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB1885" rel="noopener noreferrer" target="_blank" style="color: rgb(17, 85, 204); background-color: transparent;">AB-1885</a> by <a href="https://calmatters.org/legislator-tracker/ash-kalra-1972/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(17, 85, 204);">Ash Kalra</a>, Democrat, San JosePaves the way for use of cannabis in veterinary applications. Essentially, it expands current medical cannabis rules to include animals, defines key terms, and clarifies the responsible organizations.&nbsp;While the exact scope of cannabis’s healing capabilities are still a topic for research and debate, it’s clear that it has plenty of benefits. It’s a no-brainer to extend cannabis into animal medicine, and we’re honestly surprised it took this long. This provides another market outlet for cannabis growers.&nbsp; <a href="https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB1894" rel="noopener noreferrer" target="_blank" style="color: rgb(17, 85, 204); background-color: transparent;">AB-1894</a> by <a href="https://calmatters.org/legislator-tracker/luz-rivas-1974/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(17, 85, 204);">Luz Rivas</a>, Democrat, ArletaRequires cannabis vape cartridges and vapes with built-in cartridges to be labeled as hazardous waste, and prohibits them from being marketed as disposable in the trash or recycling. The bill proposes no further clarifications on penalties for violating this policy, nor earmarks any funds for expanded hazardous materials infrastructure or access.&nbsp;This is a head scratcher. Single use electric vapes should be considered as E-waste, due to their batteries and circuitry. However, the traces of extracts leftover in old cartridges are of negligible risk. Furthermore, disposing of anything at a hazmat facility is a massive headache, considering that they aren’t always conveniently located, sometimes charge for disposal, and are not always open. This bill does nothing to solve the problem, and just creates another rule with little to no context or forethought. People will still throw them in the trash.What SHOULD happen is an across the board ban on single use electronic vapes. Vaping is an acceptable alternative to smoking and is a controllable way to deliver heat-sensitive terpenes from concentrates. That said, we find the idea of throwing the whole vape away when the cartridge runs out to be environmentally irresponsible. Lithium ion batteries and their charging circuitry can be cycled dozens of times before they begin to wear out.Ban single use electronic vapes, remove the hazardous material designation from empty vape cartridges, and ask Assemblyman Rivas to rethink this myopic and performative bill. Furthermore, this reflects poorly on Newsom, who frequently espouses environmental regulations. Mr Governor, if this is the kind of half-baked regulation you’re willing to sign, then it makes us doubt you even read it. <a href="https://legiscan.com/CA/text/AB2210/id/2595552" rel="noopener noreferrer" target="_blank" style="color: rgb(17, 85, 204); background-color: transparent;">AB-2210</a> by <a href="https://calmatters.org/legislator-tracker/bill-quirk-1945/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(17, 85, 204);">Bill Quirk</a>, Democrat, HaywardAllows temporary cannabis consumption event licenses to be issued to premises that also hold an alcohol license, and prevents ABC from penalizing alcohol license holders from having cannabis consumption events. The bill stops short of allowing co-consumption however, as the venue must cease alcohol sales and consumption during and for some hours after the end of the cannabis consumption event.While we’re glad to see more venues allowed to serve cannabis on special occasions, the prohibition of co-consumption is frankly ridiculous. It seems like Assemblyman Quirk has never been invited to a good party.&nbsp; <a href="https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB2188" rel="noopener noreferrer" target="_blank" style="color: rgb(17, 85, 204); background-color: transparent;">AB-2188</a> by <a href="https://calmatters.org/legislator-tracker/bill-quirk-1945/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(17, 85, 204);">Bill Quirk</a>, Democrat, HaywardMakes it illegal for businesses to discriminate against employees based on positive cannabis results in a drug test. This is exempt in the case of informed pre-employment testing (they have to specifically tell you before they hire you that it’s a condition of hiring), construction/building workers, and jobs that require federal background checks or use federal funding.This is a step in the right direction. Obviously where this interferes with Federal prohibition, the State rule has no jurisdiction. And while cannabis is pretty mild, it can affect some people more than others- if there’s a chance that someone doing a dangerous job is mentally fuzzy from their wake and bake, testing makes sense from a health and safety perspective. I wouldn’t trust myself to drive a forklift if I was high!&nbsp;Of course, there will be gray areas where jobs unaffected by off-the-clock cannabis use will still require pre-employment testing, but at least those employees won’t be able to be fired after they test clear and get hired. To companies that still want to pre-test cannabis as a condition of employment for low risk jobs, we say: Good luck hiring people, may the odds of the free labor market be ever in your favor! <a href="https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220AB2568" rel="noopener noreferrer" target="_blank" style="color: rgb(17, 85, 204); background-color: transparent;">AB-2568</a> by <a href="https://calmatters.org/legislator-tracker/ken-cooley-1953/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(17, 85, 204);">Ken Cooley</a>, Democrat, Rancho CordovaMakes it legal to provide insurance to people engaged in commercial cannabis activity.That’s it actually, that’s what the bill does. I’d like to congratulate Assemblyman Cooley for the clearest piece of legislation I’ve ever read. This is clearly a good thing, although it does nothing to prevent insurers from charging predatory rates. Also, since insurance is a massive financial industry, there are likely federal regulations that insurers will still wait to be lifted before the average insurer will cover your operation. <a href="https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB2925" rel="noopener noreferrer" target="_blank" style="color: rgb(17, 85, 204); background-color: transparent;">AB-2925</a> by <a href="https://calmatters.org/legislator-tracker/jim-cooper-1964/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(17, 85, 204);">Jim Cooper</a>, Democrat, Elk GroveRequires the Department of Healthcare Services to file a financial report on how much cannabis tax revenue it spent on certain youth health programs and services.	More financial oversight on spending is always a good thing. This bill ties into the confusing mess that is the California Cannabis Tax Fund, and all of its spending initiatives, both reasonable and ridiculous. Overall this seems like a routine reporting clarification rather than a substantive change.&nbsp; <a href="https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB1186" rel="noopener noreferrer" target="_blank" style="color: rgb(17, 85, 204); background-color: transparent;">SB-1186</a> by <a href="https://calmatters.org/legislator-tracker/scott-wiener-1970/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(17, 85, 204);">Scott Weiner</a>, Democrat, San FranciscoPrevents local governments from prohibiting the delivery of medical cannabis. This bill ONLY applies to medical cannabis, not recreational.&nbsp;This is a step in the right direction for patients living in prohibitive localities. Unfortunately, it does nothing to address the serious issue of local governments impeding the will of the voters and prohibiting recreational sales, something recently shown to actually <a href="https://calmatters.org/commentary/2022/02/banning-retail-cannabis-outlets-fuels-the-illicit-market/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(17, 85, 204);">support the illicit market.</a>&nbsp;Additionally, this may motivate more people to get medical cards, which would classify their purchases as tax free and deliverable under this new law. Obtaining a medical card recommendation is just as easy as it ever was from your nearest compassionate cannabis doctor. The <a href="https://cannabis.ca.gov/consumers/medicinal-cannabis/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(17, 85, 204);">application</a> fee is under 100$, and is 50% off for MediCal recipients. As far as we can tell, this law basically motivates people in prohibited areas to just go use that sore back as a way to get tax free legal delivery. Wouldn’t it just be easier if localities weren't allowed to prohibit sales?&nbsp; <a href="https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB1326" rel="noopener noreferrer" target="_blank" style="color: rgb(17, 85, 204); background-color: transparent;">SB-1326</a> by <a href="https://calmatters.org/legislator-tracker/anna-caballero-1955/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(17, 85, 204);">Anna Caballero</a>, Democrat, MercedLays out a framework of responsibility and accountability for establishing interstate cannabis commerce, in the event that such commerce becomes Federally legal.While this is an exciting prospect, and it’s a proactive move for California to have trigger legislation in place to prepare for such an eventuality, it’s still based on the eternal “What If?” of Federal legalization. Given the current tightrope of legislative polarization at the Federal level, cannabis legalization at best seems like a carrot to be dangled by partisan figureheads to promote voting, while at worst it seems like another wedge issue that will be kept in no-progress purgatory, regardless of public opinion.&nbsp;We’ll believe it when we see it, and if we see it, we’ll look back on Senator Caballero’s bill to see if it hinders or helps California’s entry to the mythical National Cannabis Market. That's all for now, happy Harvest, and don't forget to <a href="https://registertovote.ca.gov/?t=s" rel="noopener noreferrer" target="_blank" style="background-color: transparent;">VOTE!</a>

In this article we summarize ten recent pieces of legislation Gavin Newsom signed into law, and give our perspective on how they will impact the California Cannabis industry. 

Newsom's 10 New Cannabis Laws: What They Are and What We Think About Them

In our work with small cannabis farms, we’ve realized that there is a disconnect between the people growing the plants and the consumers buying the flower. While jar labels sometimes include information on who grew the product, that small paragraph squeezed in between the logo and legal warnings really doesn’t convey the connection to plant, community, and craft that is unique to each farmer and their signature crop. Add to this the prevalence of white labeling, repackaging, and the generally poor state of communication down the cannabis supply chain, and the consumer often only learns the strain name, brand name, THC content, and whatever the supposed Sativa/Indica genes are. Since most of those data points are flexible at best and lazy marketing at worst, there’s basically no connection back to the farm. Other industries have managed to solve this problem, so here we discuss a few examples of producer/consumer connection that we would love to see grow in our industry.&nbsp;<h3>Grower Guided Tastings</h3>The South end of the Emerald Triangle with the world’s best cannabis gives way to the Napa Valley/Sonoma area, which makes some of the world’s best wines. A good wine tasting guided by a sommelier with knowledge of the growth and terroir of the grapes- or even the vintner themselves- is a fantastic experience. Tastings like this represent one of the more intimate connections that a producer can have with their customers. Beyond wine, tastings for whiskey, tea, beer, cheese, and any other delicious craft consumable all share this intimate and educational theme which greatly improves the consumer experience.&nbsp;What if this was a thing with craft cannabis? Imagine, you go to a dispensary or consumption lounge, and instead of the budtender just telling you “oh yeah this one’s got a lot of THC and will make you feel creative,” the farmer who grew it is running a tasting that day and can actually explain WHY the cannabis tastes and hits the way it does. Someone who has been growing and refining genetics for a while can tell you the story of how this strain got to where it is now, and the decisions they made along the way. This could be even more interesting with different kinds of products from the same strain- comparing concentrate, flower, and hashish side by side would open up the spectrum of experience to a whole new level. This kind of connection is virtually nonexistent in the legal industry today, and would allow farmers and consumers to form lasting bonds. As consumption lounges become more common we would love to see this become the norm.&nbsp;<h3>Growers Educating Budtenders</h3>Obviously, growers can’t be at every point of sale to show off their product, and consumption lounges are still rare. Since budtenders are one of the primary sales faces of the industry, what if farmers could educate the budtenders to answer consumer questions and represent their product accurately? This is already a standard for alcohol and specialty food ingredients in the gourmet bar and restaurant industry. Bartenders and restaurateurs receive samples, training, educational materials, and recipes from the brand distributor for those products. In more craft production or farm-to-table arrangements, it’s the producer representing their own product.&nbsp;	What if farmers could craft a variety of training and education materials for budtenders who will sell their product, and know that it would be accurately and clearly represented to the customer? These materials could be delivered in person by the farmer, or with the product to the retailer, and include everything from tasting notes to the details of how it was grown. Ultimately, the success of this model depends on the quality of the dispensary, and the reliability of the middlemen to make sure that the connection is made and maintained. There are just a few farms and retailers out there doing this currently, but we would love to see this become the standard rather than a rarity.&nbsp;<h3>Farmer-Curated Subscription Boxes</h3>	You can get a subscription box for everything now. Clothes, watches, spices, wine, coffee, music, beer, even sex toys. You can tune your box contents by filling out questionnaires and sizing charts to get products and samples that match your tastes, intentions, and body. This allows consumers to explore a hobby or passion at their own convenience without the initial effort of going out and locating an expert and community.&nbsp;	This idea has already seen limited success in the cannabis industry, with companies like <a href="https://luckyboxclub.com/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(17, 85, 204);">Lucky Box</a> and <a href="https://nuggclub.com/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(17, 85, 204);">Nugg Club</a> leading the (still small) pack. While these offerings get good reviews, they don’t seem to prioritize farm-to-consumer connection and largely work with the bigger brands. What if there was a farmer-centric option, showcasing a variety of farms and their signature product in every box? Consumers would be able to pick boxes focused on certain appellations or product types, curated to the farmers choice. These boxes could come complete with material explaining the story of the plant and people behind it, farmer-specific merch, and any other goodies that the curators believe would enhance the experience. Imagine, you’re in San Diego and want the best Humboldt has to offer so you sign up for a box, and get samples from the most recent harvest delivered to your door, prepared for your enjoyment exactly as the farmer intended.&nbsp;<h3>Getting There</h3>These are all fairly realistic offerings, but the main reason they’re not prevalent at the moment is simply due to poor supply chain management and a regulatory system that places multiple financial and licensing roadblocks between the farmer and the consumer. You can walk into a distillery and have the distiller give you samples straight from the barrel, or get fresh-laid eggs straight from the farm, but you can barely find cannabis with the actual grower’s name and story attached, much less spark up with them on their farm. Supply chains are all about getting stuff from point A to point B, but in cannabis one supply chain is seriously underdeveloped: the one that brings the cultural craft reality from the farm to the consumer.&nbsp;Stay cool, water your plants, and keep Growing!

In our work with cannabis cultivators we've notice they lack a connection to their consumers. Here we discuss three ways to bridge the gap, including guided tastings, budtender education, and curated subscription boxes. 

Three Ways for Cannabis Cultivators to Connect With Consumers

Happy 4/20 everyone! As the growing season starts, we would like to take a look back at the first quarter of 2023, and see what trends in licensing are emerging that will influence this year’s market and crop. All data here is publicly provided by the State of California. As usual, remember that we aren't experts, and you should think very carefully and do your own research before making any significant business decisions based on this data.<h3>Overall Performance of the Cultivation Industry Year over Year for Q1</h3>Let’s start with the big one, cultivation. We prefer to break down cultivation by the size of business (how many licenses are held by one entity) and the square footage of legally licensed grow areas. We believe that this more accurately reflects the cultural and market position of these businesses.&nbsp;<img src="https://higherorigins180721-prod.s3.us-west-1.amazonaws.com/public/images/13a72e04-d7ff-4a0f-8421-00d5fca43fdd.png">As seen here, there has been a decline in the overall number of licenses, however, the disproportionate nature of this decline can’t be understated: large corporate grows are getting slaughtered out there. If we break it down by % change from the previous year, Huge businesses saw a 35% drop, Large businesses saw a 20% drop, Medium saw a 16% drop, and Small businesses only lost 7%. Overall, the market lost 18.3% of its total cultivation space from this time last year. This is a significant route, and the trend doesn’t seem to be at the bottom yet.&nbsp;As always, keep in mind that some huge cannabis farm businesses don’t actually grow any weed- they just have a large number of licenses held for speculative purposes that they aren’t cultivating. Since the State doesn’t report on which farms are actually growing (which they could, since they have the METRC data), we can’t actually tell if a valid license translates to pounds on the market, or if a lost license translates to a reduction in production.&nbsp; <h3>Types of Cultivation</h3><img src="https://higherorigins180721-prod.s3.us-west-1.amazonaws.com/public/images/a57cd524-01c6-4436-90f4-6af754f8c075.png">When we look at this by the trends in growth type, it’s clear that the lion’s share of the losses were in outdoor, which makes sense considering most of them were in Santa Barbara and Humboldt, both regions with good outdoor conditions. Mixed light suffered as well. Indoor is the clear underdog however, growing by over 20% this year, largely due to expansion in the LA area.&nbsp;<h3>Q1 Cultivation Gains and Losses</h3><img src="https://higherorigins180721-prod.s3.us-west-1.amazonaws.com/public/images/d0d581d9-5950-4efe-ae1c-960c40fcaca0.png"><img src="https://higherorigins180721-prod.s3.us-west-1.amazonaws.com/public/images/f07a24b8-5c2e-474a-b82b-8f7ae73121d8.png">Let’s take a closer regional look at where these losses are coming from. Overall, the biggest moves were in Santa Barbara and Humboldt counties. The biggest losses were between Canyon Produce and Heirloom Valley, two megafarms. The difference however is that virtually all changes in Santa Barbara were from large corporate megafarms, while Humboldt’s changes were mostly on smaller farms. As expected, Mendocino county sustained losses and no gains, likely due to their failed county licensing systems. Likewise, it wasn’t all bad- while they were much less, there were some gains as well. So where do these changes leave us? Let’s look at the overall breakdown.&nbsp; <h3>State of Cultivation in Q1</h3><img src="https://higherorigins180721-prod.s3.us-west-1.amazonaws.com/public/images/b5023763-d877-49ff-9416-12782456c618.png">At the end of Q1 2023, this is what the market looked like in terms of square footage held by different businesses. As expected, Small farms still dominate the market, and Huge businesses are about a quarter. Interestingly, Large and Medium businesses are less common, it seems like for the majority, it’s either stay small, or go as big as you can.&nbsp; <h3>Overall Performance of the Commercial Industry Year over Year for Q1</h3>All that cannabis has to go somewhere, so let’s look at what happened with the commercial supply chain market.&nbsp; <img src="https://higherorigins180721-prod.s3.us-west-1.amazonaws.com/public/images/8a34e6d6-ba7f-466b-8c53-fac869e78d83.png">It’s been an exciting year for the commercial space, with nearly every category rebounding in the new year after a significant fall slump. Transport seems level, while laboratories declined slightly, possibly due to increased scrutiny on testing fraud. Simply put, it looks like there’s going to be no shortage of retail options for sellers this year, although the competition might be brutal, especially in saturated areas like LA. <h3>Q1 Gains and Losses in Commercial Licenses</h3><img src="https://higherorigins180721-prod.s3.us-west-1.amazonaws.com/public/images/6c61d1b8-ba08-41ca-91fe-b90003405571.png"><img src="https://higherorigins180721-prod.s3.us-west-1.amazonaws.com/public/images/4609a6d9-a71f-4a20-b1bb-6c0792416ef0.png">What regions saw the most change in commercial licensing? It seems like the East Bay/Alameda area saw losses and turnover in delivery, while the biggest gains by far were in the LA delivery and retail spaces. Growth of commercial business naturally focused mainly on high population areas, although rural Humboldt saw some growth in distribution.&nbsp;There were no new Laboratories added in Q1.To clarify, the county marked “Data Not Available” covers Event Organizers that are not specifically located in any one county.&nbsp;<h3>Overall Performance of the Manufacturing Industry Year over Year for Q1</h3><img src="https://higherorigins180721-prod.s3.us-west-1.amazonaws.com/public/images/b85de60f-c494-4f4e-aa1f-95e50862ca32.png">Hey California, do you want to turn your flower into cool new products? Apparently, you do! Manufacturing absolutely went nuts this year, especially in the category of nonvolatile extraction. This covers products like hash, pressed rosin, and forms of refining that don’t use powerful chemicals. Since early last year, growth has stabilized across all categories, and there seems to still be a slight positive trend, so manufacturing seems pretty healthy at the moment.&nbsp;<h3>Q1 Gains and Losses in Manufacturing</h3><img src="https://higherorigins180721-prod.s3.us-west-1.amazonaws.com/public/images/161818cd-32bf-44c7-85f4-4acc9d0f9f25.png"><img src="https://higherorigins180721-prod.s3.us-west-1.amazonaws.com/public/images/2832aa1c-cfc3-4e2c-b198-b6152bfdf5a8.png">Losses in Q1 were negligible, but growth was clearly strong, especially in the LA area. It seems like the rapid expansion of indoor and retail in the City Of Angels is fueling quite a bit of production growth. Again, most notable growth was in the cities, although Humboldt added a few facilities, presumably to make concentrates in-house before shipping their product south.&nbsp;<h3>Analysis and Conclusions</h3><ul><li>Significant drops in huge cannabis farms in Santa Barbara county have driven much of the square footage loss in the last year, and that trend continues in Q1 of this year.</li><li>Retail and commercial licenses across the board are growing or remaining stable.&nbsp;Saturated and expensive areas like LA will see brutal competition, as retailers try and undercut each other on price, while trying to pay their huge licensing fees, creditors, and compete with the thriving illicit retail market in that area. A savvy consumer could try and get some good price matching deals...</li><li>The combination of dropping megafarm cultivation that produces commodity-priced cannabis, and the increase in retail and commercial services, indicates a seller’s market could be a possibility as we move forward into the year. With less cheap mass produced cannabis, and more buyers than ever, basic economic logic indicates positive price movement.&nbsp;Whether or not any increase in price per pound will trickle down to smaller farms or be absorbed by middle men remains to be seen.</li><li>Smaller farms did suffer a loss, however, they seem to be significantly more resilient than large farms.</li><li>Manufacturing capacity is bigger than ever and still growing. While unprocessed flower will be on top for a while, expect the increase in variety of cannabis derived products to only increase- California definitely has the production capacity for it!</li></ul>Thanks for reading, and we hope your business has stayed open through this period of sustained license loss! If you're a retailer looking to fill the gaps in your shelves left by failed megafarms, check out Higher Origins Marketplace to source some small farm fire!Onward and Higher!

In this article we break down the trends and changes in the California Cannabis Industry throughout the first quarter of 2023. We discuss trends in cultivation, commercial, and manufacturing licenses, and share our conclusions on the state of the industry. 

California Market Summary for Q1 2023

In this article we explain how METRC's track and trace tags work in California. discuss their usefulness to consumer safety, and question the sustainability of the newly announced environmentally friendly tags. 

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