Welcome to the Cultivated Digest!

Here's what you need to know in cannabis today.

February 23, 2023

Happy Thursday everybody,

First: Welcome to the 400 or so of you that have subscribed since my last post. I appreciate it!

Second: Welcome to the first Cultivated Digest. A lot happens every day in cannabis, and you’re probably busy.

I’m going to break down what you need to know across business, markets, policy, and research in a twice-weekly digest so you can be equipped to make decisions, while also hopefully giving you something interesting to read or think about.

Basically, I’ll be plugged into the firehose 24/7 so you don’t have to be.

I’ll also use this space to give you my thoughts on major news events or particularly good stories from my colleagues at other publications.

And I’ll be transparent: I’ll make it clear when I’m writing about my own thoughts versus what my reporting shows, or what I’m curating from other sources.

It’ll be somewhere in the messy middle between the “Semaform” and “BE SMART.” (My sincere apologies if you already know what these terms mean).

I’ll also use this to update you on cannabis-world happenings like people moves, deals, funding rounds, job opportunities, cool events, and whatever else is useful.

The idea is to do this at least twice a week or more if there’s a lot of news. I’m going to start by sending it out Tuesdays and Thursdays, but I’ll listen to you and what the data tells me — let me know if you want it more, less, or earlier in the day rather than later.

Tell me if you love it or hate. And don’t be shy, send me your scoops!

Let’s get to it.

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💡What’s the big deal?

Something useful actually came from Elon Musk’s edict-by-tweet: Twitter will become the first social media giant to specifically allow cannabis companies to advertise.

Cannabis companies have, until now, been hamstrung by Google and the various Meta platforms’ unwillingness to play ball. It’s because of federal illegality, like pretty much every other challenge in the industry.

If you’re Mark Zuckerberg, and you have octogenarian Congresspeople scrutinizing every public statement and private decision you make, you probably aren’t going to jump at allowing ads for a federally controlled substance.

I get it, but at the same time, I’ve been shadow-banned from just trying to promote my own work reporting on cannabis, and anyone in the industry who’s tried to plan an event or just get a cool new product in front of potential customers knows the challenges.

So that’s why Twitter’s move is huge, despite its limitations.

Everything’s fair game (as long as you are licensed) in Canada, where cannabis is federally legal. In the US, companies won’t be able to promote the sale of cannabis products, but will be able to get their brands in front of customers, at least those of them that are among the Twitterati.

🌿 Jer’s take

Until now, LinkedIn has been the most friendly platform for the cannabis conversation, and Twitter — based on my recent and frequent inability to send my little tweets — has been going through a rough patch under Musk’s leadership.

Obviously there aren’t enough people only posting about cannabis to actually move the needle on user growth and other important metrics for giant social media companies, but adopting an early and friendly position to an emerging industry can only be good for business, despite the risks.

💬 Let’s talk about it

It begs some questions: Will you be planning ads on Twitter for your company, and why or why not? Will you be on Twitter more now that it’s friendlier to the herb?

Do you think other social media companies will follow suit? Is this a desperation move from Twitter or a good sign of things to come?

Let’s start a discussion in the comments below, or slide me an email or DM on the aforementioned platforms. I’d love to chat.

📉 Market moves

What’s happening: Beleaguered (love when I can use a word like that) cannabis company MedMen has retained ATB Capital Markets to explore selling off what it deems “non-core” assets in Arizona, Illinois, and Nevada. The company also said it reduced payroll costs by 34%, which amounts to a lot of jobs.

Why it matters: MedMen has had its own share of unique managerial struggles — read my feature story on the company’s founder, Adam Bierman, from last year — since it was dubbed the ‘Apple’ of cannabis in 2018. The company’s downfall tells the story of the boom-bust of cannabis over the past few years in one neat package.

The stock is now a little less than 3 cents a share — it was valued at nearly $1.7 billion when it went public in 2018. Whew.

But MedMen isn’t alone in reducing a once-ambitious footprint. Competitor Curaleaf has abandoned California, Colorado, and Oregon as wholesale cannabis prices have collapsed.

Expect to see more public cannabis companies shed assets and hone in on what’s profitable now, instead aggressively scaling.

Or, who knows what to expect, it’s cannabis.

If you work at MedMen, Curaleaf, or another large cannabis company and you have information to share, reach out: [email protected].

🧪 Science & research

What’s happening: Teen cannabis use declined from 2019 to 2021 and hit a record low for the past decade as more states legalize, according to The CDC’s Youth Risk Behavior Survey.

Why it matters: Eradicating teen use is one of the primary reasons why states pursue legalization, as well as one of the key bogeyman for anti-legalization activists.

Other cool studies:

  • We now have more evidence that medical cannabis can reduce reliance on opioids for patients with chronic pain, according to a study of 8165 patients in New York State and published in the The Journal of the American Medical Association.

  • Researchers found that there is little evidence that cannabis causes hangovers or ‘next day’ effects — at least, of the sort that would prevent someone from doing a safety-sensitive job.

    • This means that most people that consume modest doses of cannabis are able to safely drive or operate machinery the next day and has important implications for the types of jobs regulated by OSHA, though the researchers cautioned that more studies were needed.

🧑‍⚖️ Legal matters

What’s happening: A federal court ordered the maker of RAW Organic Hemp rolling papers to remove their products from shelves over what the court said are fraudulent claims, including that the papers are manufactured in a sustainable plant in Spain (evidently they’re not) and that the company’s founder invented pre-rolled cones (he didn’t).

The company also claimed to be donating a portion of profits to a charity called RAW Foundation, which the court says doesn’t exist.

Why it matters: Real cannabis consumer know that RAW rolling papers are, or I should say, were, everything. Outside of Zig-Zag, they’re the most commonly used and people often claim they’re cleaner burning and better for your lungs. That’s all now being called into question by consumers and federal courts.

🗓️ Cannabis calendar

The Business of Cannabis is hosting an event in New York City tonight dedicated to the next ten years in New York tonight at Work’n’Roll, a cannabis friendly co-working space, with representatives from companies like Leafly and Uber, as well as the state cannabis regulators like the New York State Office of Cannabis Management’s John Kagia.

💭 Thought bubble

I got into a Twitter back-and-forth (lesson learned…) about my point-of-view that cannabis consumption lounges, while a fun idea, won’t be viable businesses in New York City on their own.

Why? Well, for one, edibles exist. You can turn the rest of the city, including bars, restaurants, Barclays Center, or whatever, into a much more fun consumption lounge if you take one.

Two, it takes only a few minutes for the average person to get high, and weed is generally cheaper than a cocktail. If regulators don’t allow alcohol sales with cannabis sales, then how are consumption lounges supposed to make money?

People will only eat so many snacks for lounges to make their margins.

Three, if regulators do allow bars, restaurants, and other venues to serve cannabis or cannabis beverages, why would people go out of their way to go somewhere that only serves cannabis and nothing else?

Why would someone who doesn’t consume want to meet up at a consumption lounge when coffee shops and bars already exist?

Let me know where you fall on this argument in the comments. And if you’re trying to open a consumption lounge in the city, invite me and show me why I’m wrong.

📚 What I’m reading