High Times, the magazine that has chronicled the world of cannabis for nearly a half century, is as good a symbol as any for the incursion on the pot business by money-driven weed-bros. After several years of turmoil and ownership changes, the mag is now getting into the pot-retail business, purchasing five outlets of the California dispensary chain Harvest Health, and holding an option to buy up to eight more.
- NO FUTURE FOR CANNABIS? High Times in its hey-day.
High Times was for years perhaps the ultimate counterculture magazine, brazenly reporting on and promoting illegal activity, while also running occasionally brilliant journalism and commentary. At its height in the '70s and '80s, it was a cultural force. Now it's owned by a private-equity shop and on its third CEO in just four months.
The magazine is in the hands of "a bunch of finance douchebags," said Peter Cervieri last week during a Zoom meeting with several California pot executives and advocates. Cervieri runs the Future Cannabis Project, which publishes articles and manages industry events.
Others on the Zoom call agreed. "The whole thing screams 'Hard Rock Cafe' to me," said Amanda Reiman, vice president of government affairs for Flow Kana, a cannabis manufacturer based in Mendocino County that has operations in the Bay Area. She said that if she ever visited a High Times-owned dispensary, "I'd expect to see Cheech's pipe in a case or something."
For someone like me who has covered several different industries as a journalist — food, media, finance and technology — some of the online meetings being held by cannabis people during the pandemic have been a revelation. There's a refreshing frankness that was fairly unusual even at the traditional, in-person conferences and trade shows that are now being canceled or delayed as we all shelter in place. This one, though, was particularly entertaining. Titled "Essential & On The Brink of Collapse," it was mostly focused on the problems faced by the California pot industry in particular. The state's decision to deem pot to be an essential service, thus allowing cannabis companies to continue operating, probably saved the industry from decimation. But, the participants all agreed, the underlying problems still remain.
The most arresting part of the confab came toward the end, just as the talk was turning to High Times and the general problem of growing corporate weaselry. Greg Meguerian, who owns The Reefinery, a dispensary in Los Angeles, suddenly arose from his desk, grabbed his phone, donned a mask, and set out to make deliveries, all while continuing to talk about the troubled California weed business. It made for a good visual representation of the situation. Among the many problems cannabis companies are facing is that it's hard to find good workers, especially ones who have to deal with the public, like delivery people. "I've lost a lot of staff," Meguerian said as he got into his car. "I'm the main delivery driver now." Some potential workers are afraid of catching the virus. "There's a lot of competition among businesses for good employees," he said. In one case, "I was outbid by another company, and I pay really good."
The "essential" designation likely did little more than delay the inevitable for many companies. The underlying structural problems remain. There have been layoffs and business closures. Where there is profit at all, margins tend to be thin, thanks largely to the high taxes and costs of regulation and security. Much of the cost is passed on to consumers, which encourages them to go back to their illicit weed dealers, further crimping sales. It's a vicious circle.
The participants all agreed that there isn't much hope that the state legislature will get around to doing anything about it this year. That is of course thanks to the pandemic, which is not only taking up the lawmakers' time and attention, but is also creating a gargantuan hole in the state budget. Assemblymember Rob Bonta (D-Oakland) has proposed lowering the state's excise tax on pot, and eliminating the cultivation tax altogether, at least temporarily. Some analysts have said that, in the long run, that would actually increase tax revenues for the state by driving more consumers into the legal market. But cannabis execs don't see lawmakers passing any kind of tax cut while the pandemic is still raging.
So those execs are left to do the best they can and hope to hang on. That turned out to be the major, unspoken theme of the Zoom meeting. Referring to the talk's grim title, Adam Spiker of the Southern California Coalition, a cannabis trade association, said, "It's a shame that it's not hyperbole."