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Cannabis Briefs for November 26, 2019

November 26, 2019

•California cannabis tax rates are increasing in the new year. As of January 1, the tax rate of cannabis transferred from a cultivator to a manufacturer or distributor will rise to $9.65 per dry-weight ounce of flower (it’s currently at $9.25), $2.87 per dry-weight ounce of leaves (currently $2.75), and $1.35 per ounce of fresh cannabis plant (currently $1.29). Meanwhile, the California Department of Tax and Fee Administration is raising the mark-up rate between the wholesale cost and retail selling price of cannabis and cannabis products to 80%, up from 60% currently. The mark-up rate, reevaluated every six months, is used to make sure the overall cannabis excise tax is meeting the 15% rate approved by the state’s voters. Industry players fear the higher rates will only intensify the struggles of legal operators in competition against the black market.

•Ceria Brewing will launch its portfolio of cannabis beer in California in January. The Colorado brewery, helmed by Blue Moon creator Keith Villa, currently produces its flagship Grainwave Belgian White Ale (5-mg. of THC) and Indiewave IPA (10-mg. of THC and CBD). Due to California labeling regulations, the beer descriptors will be dropped there and they will simply be known as Grainwave and Indiewave. Both styles will be sold individually and in 4-packs of 12-ounce cans, infused and distributed by Growpacker, which Ceria partnered with last March to facilitate this expansion.

•Breakthru subsidiary Kindred has signed the James E. Wagner Cultivation Corporation (JWC) to a brokerage agreement. Kindred will serve as JWC’s exclusive broker for its line of adult-use products in Canada. JWC currently sells a variety of cannabis strains including Holy Grail Kush, White Russian, Chemdawg, and Cherry Diesel, among others, and several cannabis oils. The brokerage agreement also covers JWC’s forthcoming extract products that are currently under development and expected to come to market early next year. JWC is based in Kitchener, Ontario.

•Wana Brands is expanding its product lineup in Oregon. The Boulder, Colorado-based company will launch its Sour Gummies in a 2:1 ratio of CBD to THC (10-mg. of CBD and 5-mg. of THC). Another popular Colorado release, a salted caramel chew, will also make the leap to the Oregon market. Wana has also updated its packaging, which the company says will reduce packaging waste by 60%. Wana distributes to Arizona, California, Colorado, Illinois, Michigan, Ohio, and Oregon.

•Boston, Massachusetts-based CBD company Beam is releasing two CBD powders in a collaboration with CrossFit icon Mat Fraser. Beam was founded by former MLB player Kevin Moran and former NHL player Matt Lombardi. The two powders are Clarity and Dream (both $50 for 15 single-serve packets), the first of which is designed to be energizing and the latter of which is designed to be relaxing. They join Beam’s lineup of CBD tinctures, lip balm, and energy bars.

•Ontario may move away from the lottery system that has hamstrung retail operations in the province as early as January, Bloomberg Canada reports. The province may radically expand the market by changing to an “open allocation” system that would allow anyone to apply online and receive a license, contingent on passing a series of background checks. Analysts estimate this system could ultimately lead to between 750 and 1,000 retail locations in Ontario. The province is Canada’s most populous, but only 24 dispensaries are currently operating, in contrast to Alberta, which has more than 300 outlets.

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