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Dumpster Fire: What Went Wrong with CA Cannabis?

dumpster fire

Cannabis is supposed to be relaxing and fun. What’s not to like about giggles, munchies, and a brief break from the mundane? Unfortunately, the news from California’s Emerald Triangle is anything but upbeat these days.

Report after report portends doom with headlines like “the world’s largest legal weed market is going up in smoke” (The Economist), “California pot industry facing ‘extinction event‘” (SF Gate), and “Despair in Emerald Triangle as CA legal cannabis collapses” (CalMatters).

Is It Really That Bad?

Yeah, it is.

Legal sales have been on a downward slide for over two years with no signs of relief on the horizon. At its roots, the main cause appears to be the overwhelming dominance of the illicit market, which is estimated to be twice the size of the regulated market (Politico).

The result: Cascading business failures across the industry.

One in five cultivators have voluntarily surrendered their licenses this year. Others are letting their licensed fields go fallow, unable to fund this year’s harvest on the heels of last year’s losses.

Things are no better in other corners of the industry. A year ago, there was a stunningly diverse and innovative brand community. In May 2022, there were close to 1500 brands in the market, according to Headset. A year later, less than a thousand remain.

Supply Chain Woes

Further up the supply chain, distributors are also buckling under. A 2022 report estimated that licensed California cannabis distributors are sitting on over $600 million dollars in aging accounts receivable that retailers are unable or unwilling to pay. One of the industry’s largest distributors appears to be in a full “meltdown” as brands call on retailers to halt payment for fear that they won’t be paid if and when it goes under.

As for California’s cannabis retailers, numerous industry observers are warning that hundreds of dispensaries will be out of cash and credit by the end of the year. The probable closure of a significant percentage of California’s retailers will further destabilize the overall industry as cannabis farmers and manufacturers lose access to legal-market customers.

One in five cannabis cultivators in California have voluntarily surrendered their licenses this year.

And for all the talk of social equity and “righting the wrongs” of the war on drugs, all of this is taking place in an industry where there are no bankruptcy protections, where individuals carry personal liability for business taxes owed regardless of the corporate structure, and where businesses are barred by federal tax law from writing off normal business expenses.

In other words, behind the industry’s imminent demise are thousands of personal stories of financial ruin.

Fatal Flaws

When Proposition 64 passed in November 2016, it established 27 voter-mandated goals. Five of these goals were about getting rid of the illicit market and providing a reasonable pathway to licensure.

From Prop 64: “It is the intent of the People in enacting this Act… to take marijuana production and sales out of the hands of the illegal market… to tax the growth and sale of marijuana in a way that drives out the illicit market….”

The failure to achieve these voter-mandated goals is at the root of much of the industry’s anguish. So, what happened? With the benefit of hindsight, it’s clear that Proposition 64 had two fatal flaws: high taxes and local control.

Just how high are California’s cannabis taxes? For comparison, the State Excise tax on a bottle of wine is a palatable four cents. The state excise tax on an eighth ounce of cannabis is $4.90 or over 100 times greater. Added to that, California products are taxed throughout the supply chain. A single cannabis product can be hit with a local cannabis cultivation tax, a local manufacturing tax, a local distribution tax, and a local retail tax. Heck, we’re even hit with a “road tax” for merely transporting products into some jurisdictions.

These taxes compound throughout the supply chain (meaning our taxes are taxed), resulting in a cumulative burden that goes a long way towards explaining why illegal products are typically half the price of licensed products.

That’s hardly the way to “tax the growth and sale of marijuana in a way that drives out the illicit market….” as required by Prop. 64. In the absence of real tax reform, enforcement against illegal cannabis will continue to be a losing game of whack-a-mole.

Local Control Means No Control

The second fatal flaw is the notion of “local control.” Local control refers to California’s dual approval approach, which means that every cannabis facility must secure local authorization and a state license. In concept, that doesn’t sound so bad. But in practice, it means that over 60% of jurisdictions have banned cannabis retail.

By allowing municipalities to opt-out, California has in effect surrendered most of the state market to illicit operators and criminals. Otherwise put, “local control” means no control. In these (legal) cannabis deserts across the state, unregulated, untaxed, and untested cannabis is king.

Adding to these woes, the face of illegal cannabis has changed in important ways. Thirty years ago, much of California’s underground cannabis economy was represented by off-the-grid, mom-and-pop growers hidden in the backwoods of Humboldt and Mendocino County.

Today, rumors abound about well-capitalized cannabis licensees, like mega-cultivator Glass House Brands, playing both sides of the fence and using massive profits from the illegal sale of cannabis to undercut their competitors in the regulated market or to offset the losses of legal operations.

Over 60% of jurisdictions in California have banned cannabis retail.

The glut of unregulated, intoxicating “hemp” products poses additional challenges. In spite of state prohibitions, a growing number of companies are openly selling highly intoxicating synthetic, lab-made cannabinoids under the guise of hemp. Chapo Extrax, for example – which proudly proclaims itself “the newest drug cartel in town” – sells gummies online with 175mg of uber-potent synthetic THC per piece, making it many times stronger than anything sold in the regulated market (which caps THC at 10mg per serving). These products are undermining the integrity of California cannabis, as well as endangering consumers.

Towards a Solution

There is still an opportunity to make changes that will enable California to build the vibrant, regulated, tax-generating industry Californians asked for in passing Prop 64. But that will require immediate and important changes to ensure that adult consumers across the entire state have access to legal cannabis that’s competitively priced.

It means significantly reducing the state and local taxes and prioritizing sensible law enforcement strategies that keep up with the rapidly changing market. It also means overhauling the dysfunctional two-tiered structure that allows local authorities to ban legal cannabis while unregulated markets flourish.

Cannabis is one of California’s great heritage industries, along with wine, technology, and entertainment – industries we’ve nurtured and fostered with supportive legislation and regulation. By right, we should also have a robust cannabis market that’s poised to be a dominate force in the national and even global markets in a post-legalization world. To ensure that, we need to address the urgent issues at hand.

Tiffany Devitt heads up regulatory affairs for CannaCraft and March and Ash and sits on the board of the California Cannabis Industry Association (CCIA).

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Cannabis & the Bible

Biblical scholars have written about the role of cannabis as a sacrament in the ancient Near East and Middle East. Archeological evidence confirms the use of the plant in fumigation rituals in ancient Israel. Scriptural references indicate that cannabis was a key ingredient in the holy anointing oil employed in religious rites. But Yahweh, the Almighty Jealous God, frowned upon the idolatrous use of cannabis, the polytheistic drug of choice. The Old Testament chronicles the embrace of One God instead of many, a major shift that coincided with the displacement of cannabis as a ceremonial substance, as Chris Bennett reports in his latest book, Cannabis: Lost Sacrament of the Ancient World.

Humankind’s connection to cannabis reaches back tens of thousands of years. The role of cannabis in the ancient world was manifold: with its nutritious seeds, an important food; with its long, pliable strong stalks an important fiber; as well as an early medicine from its leaves and flowers; and then there are its psychoactive effects . . .

Due to its usefulness, cannabis has a very long history of human cultivation. How long, exactly, remains unknown. “No other plant has been with humans as long as hemp,” says ethnobotanist Christian Rätsch. “It is most certainly one of humanity’s oldest cultural objects. Wherever it was known, it was considered a functional, healing, inebriating, and aphrodisiac plant. Through the centuries, myths have arisen about this mysterious plant and its divine powers. Entire generations have revered it as sacred . . . . The power of hemp has been praised in hymns and prayers.”

The Great Leap Forward

There has been interesting scientific speculation that the psychoactive properties of cannabis played a role as a catalyst in the “Great Leap Forward,” a period of rapid advancement for prehistoric humanity, which started about 50,000 to 65,000 years ago. In their fascinating paper, “The Evolution of Cannabis and Coevolution with the Cannabinoid Receptor — A Hypothesis,” Dr. John M. McPartland and Geoffrey W. Guy explain how ingestion of this plant may have aided prehistoric humans. “In a hunter-gatherer society,” they write, “the ability of phytocannabinoids to improve smell, night vision, discern edge and enhance perception of color would improve evolutionary fitness of our species. Evolutionary fitness essentially mirrors reproductive success, and phytocannabinoids enhance the sensation of touch and the sense of rhythm, two sensual responses that may lead to increased replication rates.”

The authors postulate that plant compounds, which interact with the human body’s endocannabinoid system, “may exert sufficient selection pressure to maintain the gene for a receptor in an animal. If the plant ligand [plant-based cannabinoid] improves the fitness of the receptor by serving as a ‘proto-medicine’ or a performance-enhancing substance, the ligand-receptor association could be evolutionarily conserved.” In essence they are suggesting that there’s a coevolutionary relationship between “Man and Marijuana” — and that somehow as we have cultivated cannabis, it may have cultivated us, as well.

Somehow as we have cultivated cannabis, it may have cultivated us, as well.

McPartland and Guy reference others who propose that cannabis was the catalyst that facilitated the emergence of syntactic language in Neolithic humans: “Language, in turn, probably caused what anthropologists call ‘the great leap forward’ in human behavior, when humans suddenly crafted better tools out of new materials (e.g. fishhooks from bone, spear handles from wood, rope from hemp), developed art (e.g. painting, pottery, musical instruments), began using boats, and they evolved intricate social (and religious) organizations . . . . This recent burst of human evolution has been described as epigenetic (beyond our genes) — could it be due to the effect of plant ligands?”

In his study on the botanical history of cannabis and man’s relationship with the plant, Mark Merlin, Professor of Botany at University of Hawaii, referred to hemp as one of “the progenitors of civilization.” Merlin was not alone in suggesting that hemp “was one of the original cultivated plants.” In The Dragons of Eden: Speculations on the Evolution of Human Intelligence, the late Carl Sagan conjectured that early man may have begun the agricultural age by first planting hemp. Sagan, who was known to have a fondness for cannabis himself, cited the pygmies from southwest Africa to demonstrate his hypothesis. The pygmies had been basically hunters and gatherers until they began planting hemp, which they used for religious purposes. The pygmies themselves profess that at the beginning of time the gods gave them cannabis so they would be both “healthy and happy.”

Gift of the Gods

Professor Richard E. Schultes, of Harvard University, considered the father of modern ethnobotany, believed it was likely in the search for food that humanity first discovered cannabis and its protein-rich seeds. Today, hempseed products are touted as a modern “super food” due to their richness in essential fatty acids.

“Early man experimented with all plant materials that he could chew and could not have avoided discovering the properties of cannabis (marijuana), for in his quest for seeds and oil, he certainly ate the sticky tops of the plant,” Schultes has written. “Upon eating hemp, the euphoric, ecstatic, and hallucinatory aspects may have introduced man to the other-worldly plane from which emerged religious beliefs, perhaps even the concept of deity. The plant became accepted as a special gift of the gods, a sacred medium for communion with the spiritual world and as such it has remained in some cultures to the present.”

Archaeological evidence attests to this ancient relationship as well. A hemp rope dating back to 26,900 BC was found in Czechoslovakia; it’s the oldest evidence of hemp fiber. Hemp fiber imprints over 10,000 years old in pottery shards in Taiwan, and remnants of hemp cloth from 8,000 B.C. have been found at the site of the ancient settlement Catal Hüyük in Anatolia (modern day Turkey). Much older tools for breaking hemp stalk into fibers indicate humanity has been using cannabis for cloth “since 25,000 B.C. at least,” according to prehistoric textiles expert Elizabeth Wayland-Barber.

Cannabis was also among our first medicines. A recent study by Washington State University scientist Ed Hagen suggests that our prehistoric ancestors may have ingested cannabis as a means of killing of parasites, noting a similar practice among the primitive Aka of modern-day central Africa. We do know that references to cannabis medicine appear in the world’s oldest pharmacopeias, such as China’s Shennong Ben Cao Jing, in ancient Ayurvedic texts, in the medical papyrus of Egypt, in cuneiform medical recipes from Assyria, first on a list of medicinal plants in the Zoroastrian Zend Avesta, and elsewhere.

Holy Smokes!

Evidence of cannabis being burnt ritually is believed to date as far back as 3,500 BCE based on archaeological finds in the Ukraine and Romania. In Incense and Poison Ordeals in the Ancient Orient, Alan Godbey attributes the genesis of the concept of “divine plants” to “when the primeval savage discovered that the smoke of his cavern fire sometimes produced queer physiological effects. First reverencing these moods of his fire, he was not long in discovering that they were manifested only when certain weeds or sticks were included in his stock of fuel. After finding out which ones were responsible, he took to praying to these kind gods for more beautiful visions of the unseen world, or for more fervid inspiration.”

Various Biblical scholars have written about the role of cannabis as a sacrament in the ancient Near East and Middle East. The ancient Hebrews came into contact with many cultures — the Scythians, Persians, Egyptians, Assyrians, Babylonians, and Greeks — that consumed cannabis. And these cultures influenced the Hebrew’s use of the plant in fumigation rituals and as a key ingredient in the holy anointing oil applied as a topical to heal the sick and reward the righteous.

There’s compelling evidence that in ancient Israel cannabis was used in fumigation rituals and as an ingredient in the holy anointing oil.

Compelling evidence of the ritual use of cannabis in ancient Israel was reported in a 2020 archaeological study, “Cannabis and Frankincense at the Judahite Shrine of Arad,” by the Journal of the Institute of Archaeology of Tel Aviv University. The authors noted that two altars with burnt plant residues had been found in a shrine at an ancient Hebrew outpost in tel Arad. One of the altars tested for frankincense, a well-known Biblical herb, and the other altar tested positive for cannabis resin.

The research, expectedly, caused a storm of controversy, with Biblical historians, religious authorities, and other parties weighing in. An article in Haaretz, headlined “Holy Smoke | Ancient Israelites Used Cannabis as Temple Offering, Study Finds,” raised a key question: “If the ancient Israelites were joining in on the party, why doesn’t the Bible mention the use of cannabis as a substance used in rituals, just as it does numerous times for frankincense?”

The Disappearance of “Kaneh Bosm”

Actually, several scholars have drawn attention to indications of cannabis use in the Bible. Polish anthropologist and etymologist Sula Benet contends that the Hebrew terms kaneh and kaneh bosm refer to cannabis. Benet identified five specific references in the “Hebrew Bible” (aka the Old Testament) — Exodus 30:23, Song of Songs 4:14, Isaiah 43:24, Jeremiah 6:20, and Ezekiel 27:19 — that mention kaneh and kaneh bosm. However, when one reads these passages individually and compares them, a stark contrast emerges.

In Exodus 30:23, the reference is to an ingredient in the Holy Oil, which was used in the Holy of Holies, the inner chamber of the Temple in Jerusalem, whereas in Jeremiah 6:20, this same previously sacred substance is wholly rejected as an item of foreign influence and disdain. It appears that Yahweh, the Jealous God, frowned upon the idolatrous use of cannabis, the polytheistic drug of choice.

The identity of kaneh and kaneh bosm has long been a topic of speculation. Benet’s view was that when the Hebrew texts were translated into Greek for the Septuagint, a mistranslation took place, deeming it as the common marsh root “calamus.” This mistranslation followed into the Latin, and then English translations of the Hebrew Bible. It should be noted that other botanical mistranslations from the Hebrew to Greek in the Hebrew Bible have been exposed.

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This article is adapted from Cannabis: Lost Sacrament of the Ancient World by Chris Bennett (TrineDay, 2023). Bennett is the author of several books, including Liber 420 and Cannabis and the Soma Solution.

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The Plant, the Whole Plant & Nothing But the Plant

It has long been known that resinous cannabis flower tops are infused with robust therapeutic properties. But there are also pharmacologically active components in other parts of the plant that shouldn’t be ignored when assessing the health benefits of cannabis.

The earliest reference to the therapeutic use of cannabis dates back to 2700 BC in ancient China, “the land of hemp and mulberry.” Cannabis (“Ma”) was subsequently included in the Shennong Ben Cao Jing, humankind’s first pharmacopeia, which had been assembled by Emperor Shen Nung, the legendary father of traditional Chinese medicine, who is credited with introducing the custom of drinking tea. Ma was recommended for more than a hundred ailments, including gout, rheumatism, malaria, constipation, beri-beri, and absent-mindedness.

The Shennong Ben Cao Jing called Ma one of the “Supreme Elixirs of Immortality.” It was said to confer longevity and good health. If consumed over a long period of time, Ma could “enable one to communicate with the spirit light and make the body light. It mainly supplements the center and boosts the qi [chi]. Protracted taking may make one fat, strong, and never senile.”1

When consumed in excess, however, “it may make one behold ghosts and frenetically run about.”

Seeds of Health

In traditional Chinese medicine, protein-rich cannabis seeds figured prominently both as a food source and a remedy — apparently more so than resinous cannabis flower tops. The seeds don’t contain CBD, THC, or any other cannabinoids. But modern science confirms that cannabis seeds are an excellent source of omega 3 fatty acids, which are indispensable biochemical building blocks for a healthy endocannabinoid system.

A 2011 study published in Nature Neuroscience states: “Nutritional omega-3 deficiency abolishes endocannabinoid-mediated neuronal functions.”2 Low levels of omega-3 fatty acids have been linked to neuropsychiatric diseases and impaired emotional behavior.

“Nutritional omega-3 deficiency abolishes endocannabinoid-mediated neuronal functions.”

Our endocannabinoids — the “marijuana-like” compounds that bind to the cannabinoid receptors CB1 and CB2, as well as other receptors in the brain and body — are actually derivatives or byproducts of omega 3 and omega 6 omega fatty acids. These are referred to as “essential” fatty acids because they can’t be produced by the body in adequate amounts and therefore must be ingested.

But the typical Western diet skews heavily toward corn, wheat, and other cereal grains, which are high in omega 6, whereas today we eat much less food — fish, nuts, leafy greens — that is rich in omega 3. This dietary imbalance is a major factor that contributes to many chronic diseases. It turns out that cannabis seeds (commercially available as hempseed oil, hemp hearts or hempseed protein powder) are gifted with an excellent balance of omega 3 and omega 6 fatty acids.

The Root of the Matter

Practitioners of traditional Chinese medicine also used an extract from raw cannabis roots to treat infections and to help women during childbirth. A decoction made by boiling the roots could be consumed orally as a tincture or juice or applied topically as a poultice.

Herbalists and healers have employed cannabis root preparations to treat a wide range of maladies not only in China but in other parts of the world. The first reference to the therapeutic properties of cannabis roots in Western medicine is found in the Natural Histories (77 AD) by Pliny the Elder. The Latin naturalist wrote that “the roots [of the cannabis plant] boiled in water ease cramped joints, gout too, and similar violent pain.”

Cannabis roots are endowed with medicinal compounds that have anti-inflammatory and analgesic properties.

As is the case with cannabis seeds, the roots don’t contain THC or CBD or any of the so-called minor cannabinoids. Nor are aromatic essential oils (which give cannabis flower its lively fragrance) present in the roots. Instead, the roots are endowed with other medicinal components that have analgesic and anti-inflammatory properties. Various alkaloids and sterols unique to cannabis roots are noteworthy antioxidants. Friedelin, a triterpenoid compound found in algae and lichen, as well as in cannabis roots, is known to reduce fevers.

A 12th century Persian medical text cited the antipyretic (fever-reducing) action of cannabis roots. And in 1542 the German physician Leonard Fuchs noted that a compress made with hemp root extract can soothe inflamed skin: “The raw root, pounded and wrapped, is good for the burn.” A hundred years later, English botanist John Parkinson recommended a decoction of hemp root “to cool inflammation of the head or any other part.” And Nicholas Culpepper’s Compleat Herbal, published in 1653, also mentions hemp roots as a remedy for inflammation.3

But keep in mind that cannabis is a bioaccumulator, meaning that its roots can draw heavy medals and other toxins from the soil. While that’s a great asset for cleaning up a contaminated ecosystem, it’s not what you want when growing an herb for human consumption. Where and how cannabis is cultivated are crucial factors that must be considered to avoid exposure to harmful material and to maximize the health benefits of the plant.

Flower Power

Cultivating high-quality cannabis isn’t rocket science, but it involves significant attention to detail. A hearty, adaptable plant that almost anyone can grow, cannabis lends itself to high-tech horticulture and sophisticated breeding methods designed to coax desired traits into prominence and fine-tune the quality of the high. The complexity of gourmet ganja — an adaptogen and euphoriant with an extraordinary range of smells and flavors and psychoactive subtleties — has reached a level of artistry comparable to today’s wine industry.

Growing the kindest bud ultimately depends on an ancient gardening ritual known as “sexing the plants,” a practice that entails separating male and female plants in their early stages to avoid pollination. Known as sinsemilla (Spanish for “without seeds”), the unfertilized female flower tops, oozing THC and CBD and a kaleidoscope of essential oils, are what cannabis is most famous for. The sexually frustrated females produce bigger buds with more sticky, aromatic resin in an unrequited attempt to catch pollen that never arrives.

Carl Linnaeus, the father of modern botany, wrote about this in his 1753 treatise Dissertation on the Sexes of Plants. The eminent Swedish scientist describes growing Cannabis sativa on his windowsill, an experience he greatly enjoyed:

“In the month of April, I sowed the seeds of hemp (Cannabis) in two different pots. The young plants came up plentifully . . . I placed each by the window, but in different and remote compartments. In one of them I permitted the male and female plants to remain together, to flower and bear fruit, which ripened in July . . . From the other, however, I removed all the male plants, as soon as they were old enough for me to distinguish them from the females. The remaining females grew very well, and presented their long pistilla in great abundance, these flowers continuing a very long time, as if in expectation of their mates . . . It was certainly a beautiful and truly admirable spectacle, to see the unimpregnated females preserve their pistilla so long green and flourishing, not permitting them to fade, till they had been for a very considerable time exploded, in vain, to access the male pollen . . .”4

Cannabis has been likened to a “pharmacological treasure trove.” CBD and THC are the crown jewels of this treasure trove. They are the power couple of cannabis therapeutics. But there are also dozens of secondary cannabinoids, terpenes, and flavonoids in the shimmering female inflorescence, each with specific healing attributes, which interact synergistically so that the therapeutic impact of whole plant cannabis is greater than the sum of its parts. From tap root to bud, whether seeded or seedless, the plant is the alpha and omega of cannabis medicine.

References

  1. Shou-zhong, Y. The Divine Farmer’s Materia Medica: A Translation of the Shen Nong Ben Cao Jing. Boulder, CO: Blue Poppy Press, 1997.
  2. Lafourcade M, Larrieu T, Mato S, Duffaud A, Sepers M, Matias I, De Smedt-Peyrusse V, Labrousse VF, Bretillon L, Matute C, Rodríguez-Puertas R, Layé S, Manzoni OJ. Nutritional omega-3 deficiency abolishes endocannabinoid-mediated neuronal functions. Nat Neurosci. 2011 Mar;14(3):345-50. doi: 10.1038/nn.2736. Epub 2011 Jan 30. PMID: 21278728.
  3. Ryz NR, Remillard DJ, Russo EB. Cannabis Roots: A Traditional Therapy with Future Potential for Treating Inflammation and Pain. Cannabis Cannabinoid Res. 2017 Aug 1;2(1):210-216. doi: 10.1089/can.2017.0028. PMID: 29082318; PMCID: PMC5628559.
  4. A Dissertation on the Sexes of Plants. Translated from the Latin of Linnaeus by James Edward Smith, F.R.S., into English and published 1786. Cited in Lee, Martin A. Smoke Signals. New York: Scribners: 2012, p. 22.

Martin A. Lee is the director of Project CBD. He’s authored and edited several books, including Smoke Signals, Acid Dreams, and The Essential Guide to CBD. © Copyright, Project CBD. May not be reprinted without permission.

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