California is full of both tremendous opportunity and challenges and nowhere is this more apparent than in the cannabis industry.
With a harsh tax environment that starts with a cultivation tax that doesn’t exist in any other state, a regulatory environment that still has vast “deserts” of cities and municipalities where cannabis can’t be sold, and a thriving illicit market, California has plenty of challenges.
But with those challenges comes the promise of the largest individual market on the planet, innovation and a physical environment that is perfect for growing cannabis. And that is why I was excited to talk to Hirsh Jain, the Founder of Ananda Strategy. Hirsh is a leading California consultant with years of experience advising cannabis companies on operationalizing their companies and regulatory compliance.
Prior to Ananda, he was the Director of Government Affairs at Caliva, which is now owned by The Parent Company (OTC: GRAMF) and before that was West Coast Director of Government Affairs at MedMen. Going back even farther, Hirsh has a B.A. in Philosophy from UC Berkeley, where he worked as the Cannabis Lead in the Campus Public Defender’s Office, defending students that were accused of cannabis violations by the University. He also has a J.D. from Harvard Law School, where his focus was the legal and political impacts of The War on Drugs. In summary, he knows what he is talking about.
Here is what I learned:
1. Hirsh thinks that the odds are really good that California eliminates its punitive cultivation tax. This would be a major boost for California cultivators and especially Glass House Brands (OTC: GLASF), which I have written about.
2. Please note this interview was done last week before the Governor’s budget was released. While the governor did not call for the cultivation tax, he did indicate that he will be working with legislators about “stabilizing the market through tax policy.” Since the current California environment is crushing small cultivators who represent 80% of production, I believe that can only mean one thing, the cultivation tax is on the chopping block.
3. Hirsh talked about Glass House, Harborside (OTC: HBORF) and The Parent Company, and I was most surprised about his positive comments about The Parent Company, which I have been very skeptical about in the past. He especially had positive things to say the new CEO Troy Datcher.
I learned a lot in our conversation and if you have any interest in the largest cannabis market, there is simply no better person to learn from than Hirsh Jain. I hope you enjoy our conversation.