Downstream Effects: April 2023 | Project CBD

This is first of an occasional column that updates developments pertaining to articles previously published by Project CBD. We start with some positive news from the Golden State. Then a follow-up on our investigative report about Curaleaf, the world’s biggest cannabis company. And freedom of expression takes a hit when it comes to cannabis advocacy in the Czech Republic.

Plastic Pollution in California

Inspired by Project CBD’s exposé, “Bag the Tags” (June 29, 2022), California state senator Ben Allen has introduced a bill to end the onerous requirement to apply a plastic tag to every cannabis plant grown by licensed cultivators, as is currently mandated under the state’s track-and-trace program. Sponsored by CannaCraft, Inc., a major cannabis producer (and longtime friend of Project CBD), and supported by several organizations including the National Product Stewardship Council and the California Cannabis Industry Association, Senate Bill 622 seeks to mitigate unnecessary labor and operational costs for cannabis cultivators, while eliminating the creation of millions of pounds of plastic waste that can’t be recycled.

As Project CBD reported last year: “With over 2,000 acres licensed to grow cannabis, California cannabis farmers put between 30 and 55 million plants in the ground every year. The tags are the definition of ‘single use’ – they can only be used on one plant and never re-used during subsequent growing seasons. That’s a lot of plastic tags for an industry with green pretensions.”

The ostensible purpose of imposing the tag rule was to monitor cannabis grown in California to make sure that it would not end up in the illicit market within or outside the state. But the factsheet summarizing SB 622 emphasizes that “individual plant tags are completely ineffective in preventing diversion.” Why? Because cannabis can’t be diverted until the plants are harvested! And the tags are removed and discarded after they are pulled from the ground.

The SB 622 factsheet asserts: “In a state that prides itself on championing environmentally sensitive initiatives designed to stop climate change and improve the environment, it is antithetical and irresponsible to continue to mandate plastic plant tagging, which does nothing to prevent diversion.”

The solution: “SB 622 replaces the individual plastic plant tagging with a digital plant tag, which provides the same level of transparency into the number of plants in the ground at any given time. Digital plant tagging is currently used by traditional farmers and has been recognized as an effective alternative by the California Farm Bureau as well as the U.S. Department of Agriculture.”

Curaleaf’s Complaint: Too Much Social justice!

In February 2023, Project CBD published a story about Curaleaf, the scandal-ridden, multistate and multinational company, which has achieved a leading position in the U.S. cannabis industry with nine-figure backing from unsavory Russian billionaires. “Small producers have long been wary of the cannabis industry coming under domination by multistate operators (MSOs) with the worst practices of corporate America,” we reported. “But the revelations of Russian oligarch money in the coffers of leading MSO Curaleaf appear to vindicate even the most cynical observers.”

Several states have launched investigations into Curaleaf’s business practices that were highlighted in our article, including product safety and labor violations. In April, New Jersey regulators declined to renew Curaleaf’s lucrative adult-use cannabis license, citing the layoffs following the closure of one of its cultivation facilities, as well as the company’s clash with unions and lack of transparency.

Things aren’t going well for Curaleaf in New York, either. According to a report in Green Market Report, Curaleaf CEO Boris Jordan feels social justice efforts have been “taken too far” in some states where cannabis is legal. In particular, Jordan was critical of the rollout of the adult-use market in New York, which has prioritized retail licenses for equity applicants, while delaying participation by well-heeled MSOs that already hold medical cannabis licenses.

“They went off on these programs, and we’re going to give these assets to felons and people that have two heads and this kind of stuff,” Jordan fumed while threatening to retaliate: “We’re talking to New York . . . If they don’t play ball and they violate the rules, we’re going to sue.”

“The industry has to consolidate,” Jordan asserted. “There’s no way there’s going to be 100 cannabis companies ten years from now. It’s probably going to be three or four large operators.”

Sure enough, in March a lawsuit was filed by a group called the Coalition for Access to Regulated & Safe Cannabis,” which includes Curaleaf and several other MSOs (Acreage Holdings, Green Thumb Industries, PharmaCann). The complaint argues that there is no provision in NY’s legalization law that stipulates equity applicants should be prioritized in the initial phase of the adult-use retail dispensary license rollout.

A few months earlier, Jordan spoke at MJBizCon in Las Vegas and predicted that the marijuana industry would inevitably undergo massive consolidation with a few companies controlling the global supply chain — a development he apparently favors. “The industry has to consolidate,” he warned. “There’s no way there’s going to be 35 or 40 or 50 or 100 cannabis companies ten years from now. It’s probably going to be three or four large operators.” Jordan obviously assumes that Curaleaf will be one them.

The future cannabis cartel will bring operating down costs by emulating the tobacco industry in order “to earn a very healthy margin,” he explained. Big tobacco companies “all use the same packaging. They all use the same paper. They all use the same machines. They all use basically everything the same, and they have different brands.”

But unlike Big Tobacco, there are hundreds of cannabis varietals with unique terpene and cannabinoid profiles, and cannabis products can be consumed in different ways — via inhalation, ingestion, or topical application. Cartels that operate to the detriment of small businesses are not conducive to a diverse, inclusive industry or a wide array of product choices.

Reefer Madness in Prague

As Project CBD reported a year-and-a-half ago: “Of all the post-Communist countries in Eastern Europe, the Czech Republic is seen as the one that has best finessed the transition to an open society.” A thriving alternative culture with a vibrant cannabis and psychedelic scene exists in Prague and other parts of Bohemia and Moravia, the two regions that comprise the Czech Republic.

But in November 2021 Robert Veverka, editor-in-chief and publisher of the Czech cannabis magazine Legalizace, was convicted by a district court for promoting “toxicomania,” i.e., positive depictions of cannabis. He was fined, and given a two-and-a-half year suspended sentence.

“The biggest danger of cannabis is its illegality,” Veverka told Project CBD shortly after the verdict. “We want to have cannabis social clubs. we want to stop the war on drugs. Every adult should have a right to grow in their own garden.”

Undaunted, he vowed to fight the decision.

But last month, the Czech Court of Appeal ruled against Veverka. He was ordered him to pay a fine of 250,000 Czech crowns (more than $10,000) and he was banned from publishing his magazine. In effect, the judge opined that it is legal to write about cannabis only if one criticizes it. Veverka called the recent ruling “a relic of totalitarianism.”