Originally published at Bare Magazine
SHWA LAYTART - FALL 2019
They say there’s never been a better time to get into the cannabis industry. With more and more states legalizing cannabis use and with a new proposed bill that will federally decriminalize cannabis, it appears a new gold rush is upon us.
If so, why are so many cannabis businesses being pushed out and returning to the black market?
THE UNPREPARED STATES AND LAME LICENSING PROCESS
For many states, the legislative path to legalization, whether medical or recreational, has been an upward battle. For those states that have achieved changing the state law, the battle is still real. Constantly changing regulations, erratic enforcement, and overly bureaucratic processes build a large barrier to entry for many. The high-cost along with the slow-road and stagnant process has made it almost impossible for the mom & pop shops and boutique cannabis companies to survive.
In the states that have accepted cannabis and are working out their laws and regulations, the government bodies leading the effort still have very little knowledge of what they are dealing with. The effect of the drug war has left scar tissue in multiple areas. One of those areas is education and the lack of proper enlightenment.
Much like talking about sex, the use of cannabis is still an uncomfortable conversation filled with misinformation and outright lies.
This has created a major issue for those states that have allowed counties and cities to decide if and where cannabis can be sold, manufactured and grown. Elected officials attempt to design a legal program yet have little to no experience in cannabis. The lack of quality, up-to-date information is still slow to reach those designing the details of these laws.
SHARK INVESTORS IN THE TANK
One of the most unfortunate aspects of the evolution of the cannabis industry is the flood of investors that have trampled and crushed an industry built on a movement of compassion for patients over profits. For investors looking to cash-in, cannabis seems like an easy gig. They can find their way in by buying into or taking over an existing cannabis company then strip that company from any personality it had and cookie-cut it into another white-labeled brand that focuses on what’s trending… If I hear one more investor say a company should focus on gummies I’m going to drown myself in a ebb-and-flow!
PRICE GAPS, EMPLOYEES VS. CEOS WHEN THE BIG COMPANIES TAKE OVER, WHO REAP THE BENEFITS?
Definitely not the patients, nor the employees. If MedMen is any indication, those that profit are ones at the top. With just a quick scroll through cannabis jobs on Indeed, it won’t take long to realize that the open jobs for employment pay less than a manager at a fast-food franchise. Cannabis positions being offered barely cover a living wage, many of them hovering the minimum wage, in the cities where jobs are located.
Cannabis CEO salaries, however, are 45% more than the national average. You do the math.
THE DISPENSARY DILEMMA & LACK OF SUPPORT
As a small business, getting your product to market is always a huge concern. The concern becomes a panic if you live in a region with few dispensaries because of heavy regulation. To add to this panic, most dispensaries that do sell legal products lack variety, carrying the major brands that focus on low price points over quality. For some reason, dispensaries also like to fill their shops with open space instead of products, leaving little shelf space for small cannabis companies just starting out. But wait, it gets worse! Many of those dispensaries are now charging brands to be on the shelves. Pay-to-Play has become the norm in states like California, once again increasing the barrier to entry for smaller companies.
TOO MUCH OF A GOOD THING?
Once a scarce commodity, cannabis is now being mass-produced and industrial cultivation has only just begun. When this happens, an overabundance allows those few dispensary buyers the ability to demand a bottom of the barrel price, which is seldom passed on to the consumer. This also pushes out the smaller companies who don’t have the margins that the larger corporate cannabis companies have. So what is the small cannabis company to do with their goods when there are no outlets to sell and no one to subsidize a commodity that quickly begins to lose value? With the inability to sell direct to consumers under the current regulations, that leaves them in a bind.
BACK TO BLACK
In Northern California, the historical hub of quality cannabis, CAMP raids are now referred to as the Campaign Against Mom & Pops. Those generational growers who have been struggling to get licensed, jumping through regulatory hoops that can take years to process, now having to deal with new and approved government threats and raids. Today, satellite images can easily let law enforcement know where and who is growing. With cannabis in the collective conversation more than ever, communities are finding ways to make sure the indoor grow or backyard garden is reported due to the smell or just plain fear.
Even though statistics show that legal cannabis has been safer than the illegal market, the fear of cannabis is still real for most communities with legal cannabis use.
It seems everyone wants a piece of the financial cannabis pie, but “not in my backyard” continues to be the loudest voice in most communities.
THE STRUGGLE TO SURVIVE CONTINUES
The drug war is far from over. Even as the treaties are being drawn in states with legal cannabis, landmines are still exploding and the cannabis warriors just trying to save lives are still catching shrapnel. Shockwaves of this new legal industry continue to produce painful collateral damage.
The new cannabis industry still has massive hurdles to overcome with the lack of diversity and inclusivity, so the struggle continues.
Maintaining or becoming a boutique cannabis company gets more difficult each day. Even smaller companies who finally got licensed and have survived the difficult, painful, confusing, and at times, impossible process, are still experiencing vertigo.
Jake Langhoff was born in Northern California are grew up around the redwoods and cannabis grows. “My Dad and Uncle Artie were both guerilla gardens in the pygmy forests. [They]
have a whole other story that dates back to the late sixties in the Bay Area. I began collecting pot seeds in ‘96 when I was twelve years old.” But it wasn’t until high school that he was successful at started some seeds, and over the last decade that he really started getting serious about producing quality sun-grown cannabis flower using only organic inputs.
Langhoff also got serious about his role in the medical cannabis industry of California. “I was a cannabis grower who supplied medical cannabis to dispensaries, concentrates makers and edible companies.” Which I personally can attest to. During the life of my medical cannabis edibles company, Langhoff produced the flower we used.
So what kept Langhoff from entering the recreational cannabis market? “There is a myriad of factors. The number one reason is undoubtedly that Sonoma County [California] would not grant vested permits to people who started businesses. Meaning that if the regulatory system changed and banned production then my business would not be protected and grandfathered in. This caused me to want to watch from the sidelines and observe before plunging into this unknown new business model. The hardest part of ending my large-scale production is that I enjoy being a student and there is still so much for me to learn and ways for me to grow as a cannabis cultivator.”
Langhoff points out,
“The black market is booming in California and healthier than ever. The irony of prop 64 is it has actually reinvigorated the unregulated market like I haven’t seen in my adult life.
This is mainly happening because many of the high-quality large-scale flower producers’ product is tied up in the regulatory maze of the legal market, and the Reaganesque drug war era style raids are targeting the unpermitted farms all over the emerald triangle. As a result, wholesale cannabis prices are shooting back up to where they were years ago.”
Where does Langhoff see the cannabis culture heading in the near future? “The biggest threat to the health of the cannabis community isn’t government regulation but the folks in the community not working together to define what we want the cannabis industry to become in this country. I’ve seen shops selling 10 packs of seeds for over $300, I’m all for making money from your work, but this is just plain greedy and unethical.
The sense of entitlement over cannabis strains is disheartening, and cannabis genetics and the ability to grow and consume herb should be more accessible.
The idea that a bunch of white guys in northern California is the reason there is quality cannabis genetics is historically wrong and just another example of our country’s amnesiac insistence on white exceptionalism. If we’re going to really be honest about where these genetics originated then give credit to the great cannabis cultures that have survived centuries of political change, war, and upheaval. This also makes me think that today many of the people in this country that are receiving the harshest sentencing for cannabis-related infractions are people of color.
The racism in the cannabis industry is easy to see and as a community, we can’t lose sight of how hostile many areas in this country are towards cannabis users, especially those of color.”
No longer in the legal cannabis industry, Langhoff and his wife Califa run a full-service video production and digital media company called Witsch
Digital. “Filmmaking is something I have been involved in for almost as long as cannabis and it rivals my passion for growing.” Langhoff even co-created a feature narrative film about the weed industry called “Green is Gold” (2016), which chronicles some of the intricacies of the medical cannabis world in Northern California.”
Don’t believe the hype. The dust has yet to settle and the cannabis industry continues to take in casualties every day.
It’s no wonder the black market is on the uprise again. As they say, when the system fails you, you create a new system. The legal cannabis market is being designed for those that can afford to play the exclusive capitalist game. Leaving behind people that fought for legalization, and many of those that have sacrificed everything to build the cannabis industry, in the dark.