A new lawsuit has been filed in Los Angeles County Superior Court over the City of Angels’ social equity program. The social equity applicants behind the suit oppose the city providing licenses to any more businesses until it reviews the plaintiffs’ applications, according to Law360.

The applicants allege in their Oct. 30 suit that the Los Angeles government has not considered their retail license applications, violating their due process and equal protection rights under the U.S. Constitution, the site reports.

According to the L.A. County Superior Court’s website, Angel City Partners LLC, CA Equity Advisors, Equity Awareness Group LLC, Reviving Our Community Alliance LLC and four individuals filed the suit against the city, its Department of Cannabis Regulation and that agency’s executive director, Cat Packer.

The allegations follow others related to the city’s social equity program. In one suit, prospective equity business owners claimed they were shut out of the application process. In another, later suit, applicants claimed that because the city amended its cannabis regulations as part of a legal settlement, additional inequities arose.

In today’s high-stress, socially distant world, many people are exploring cannabis as a tool to manage anxiety and depression. For those newer consumers, the ease of a pre-roll might be an attractive consumption method, but the typical 0.7-gram serving size might be too much for someone being introduced to the cannabis experience.

That’s the idea besito, an L.A.-based cannabis brand, had when it began developing its mini pre-roll line. The smaller, 0.35 gram joints are targeted to cannabis newbies who might not be able to handle a larger smokable product by themselves, or might not have the ability or comfort in “saving” leftover cannabis, according to besito founder Maggie Connors.

“To me, dosing was going to be the biggest barrier to entry for this new mainstream consumer,” Connors told Cannabis Dispensary about what inspired her to launch this product line. “Most pre-rolls, in California, at least, are 1-gram, which, for a heavy consumer, that can be one serving. But for most folks it's just way too much.”

besito, which is Spanish for “little kiss,” was founded in 2017 as a brand for cannabis-curious newcomers. Cannabis, Connors said, “doesn't have to be that horrible brownie experience you had in college. It can just be a little buzz that takes the edge off and is more akin to a glass of rosé,” and she has developed her brand around this concept. The company’s first launched product was a disposable vape pen line with a milder 2:1 THC-to-CBD ratio.

Pre-rolls only represent roughly 5% of shelf space in California, according to data from Brightfield Group, and typically are viewed as luxury products, according to Connors. That said, she markets her company’s pre-rolls as perfect for the less-experienced consumer. While regular, heavy consumers might not be willing to give up rolling their own joints, “it's a bit extreme behavior for a lighter consumer and more mainstream consumer,” she said. The pre-rolls are sold in a 10-pack totaling 3.5 grams of cannabis, and retail for $40—about the price of a mid-tier eighth, in California.

“Pre-roll feels like a luxury, but for my target, the only way that they're going to smoke weed is having that finished product done for them,” Connors said. The besito team designed a portable tin to carry the pre-rolls, making them easy to carry around. Connors made design a priority, utilizing her background in working with Pepsi and Starbucks to create a brand that would attract consumers. “Design is something that I think is a powerful strategic tool that has especially been deprioritized in cannabis,” she said. “We used human-centered design thinking in our initial brand development to these pre-rolls and the next product innovation we're working on. … That has been a huge aspect of our work philosophy: showing this new aesthetic that's diverse, that's young, that's queer and [represents] our communities who we know to be smoking weed and enjoying it.”

Without knowing when it will be safe to puff, puff, pass again, mini pre-rolls also can allow people to be communal without passing a single joint around, she added. For more regular consumers, the mini pre-rolls can serve to better control the experience in a “modular dosing” way, she said.

Manufacturing mini pre-rolls is a longer process than regular-sized joints. Connors wasn’t able to find an automated pre-roll machine that could accommodate the smaller-sized joint, and so all besito’s minis are hand-packed and -rolled. “There is more labor in that, but I think that's exactly what my target's looking for,” she said.

Being attuned to her target market is the lesson that Connors has taken from the COVID-19 pandemic. Navigating this landscape “comes back to our end-consumer … understanding who they are and what they are uniquely going through right now,” she said. With the increase of online delivery and curbside pickup, the educational relationship with budtenders can be lost. To help fill in the gap, Connors suggested retailers look to expand or improve on online education about different types of cannabis products and dosing.

Images courtesy of besito

Editor's note: Map and data from CBT. Analysis below from Brightfield Group.

The past 12 months have changed the landscape of the legal cannabis industry in the US. Michigan, Illinois, and Maine began adult-use sales, and all cannabis measures on state ballots passed on election night, including adult-use measures in New Jersey, Montana, Arizona, and South Dakota.

The map on this page may help predict future legislation changes, as mature medical markets tend to pass adult legalization. States with high numbers of registered medical cannabis patients are more likely to have just passed (MI, IL, AZ, NJ). Oklahoma’s unique medical market is already operating similarly to an adult-use market. Following this thread, it appears that Florida, Maryland, Pennsylvania, New York, and Ohio will likely legalize recreational use in the next couple of years.

 

Michigan and Illinois shed some light on how the regulatory landscape surrounding adult-use sales can affect the patient count. The states began adult-use sales just a month apart from one another—with Michigan getting underway in December 2019 and Illinois in January 2020. Through September 2020, Michigan's patient count has dropped by 8.2% while Illinois's has increased by nearly 32%. Though neither market has its kinks perfectly worked out so shortly after legalization (Michigan, for instance, still has many more medical dispensaries than adult-use and adult-use retail has not commenced in a number of municipalities), a few key insights can still be gleaned.

Looking at Illinois predictably demonstrates that states which initially only allow for dual-use programs without a significant increase of new licenses have underwhelming adult-use sales due to supply shortages. Though both consumers and patients have equal access to retail facilities, patients have first access to most products and are typically treated to better pricing. Couple these factors, which are ongoing though less prescient than when the market initially opened, with the state's large sales tax on adult-use products likely means medical consumers are unlikely to shift to the adult-use market. Not just that, these factors are driving people who were previously not registered to the medical market instead of the adult-use market. Though adult-use is growing, the growth of medical alongside it demonstrates Illinois's market is still not meeting the demands of heavy users with qualifying conditions. This is also exasperated by the fact that Illinois's patient population was small prior to full legalization, less than 1% of the state's overall population, so the medical market had yet to reach maturity in the first place.

Michigan, on the other hand, has lower prices across the board, a less steep tax structure, and does not struggle with the same issue of under-supply. Couple these factors with its higher rate of overall patient enrollment, indicative of a mature medical market, and the patient count has decreased following the legalization of adult-use, despite the fact that there are still more retail facilities available to serve the medical community. Regulations and licensing really do make a difference when it comes to the health of an adult-use market, and patient counts should decline following full legalization if everything is done effectively to maximize overall access.

Pennsylvania and Florida are both key medical states to watch and are set to have the largest market sizes by 2025. Pennsylvania still licenses relatively few dispensaries as compared to its population and the state's patient count has grown rapidly since sales began in early 2018. Florida, which saw sales commence around the same time, has a similarly large population and expanding patient count, albeit with nearly triple the number of dispensaries as Pennsylvania. Other states with decently sized populations and average-to open-levels of regulations, such as Arizona and Maryland, will also constitute a significant portion of the overall market growth over the next five years.

As of September 2020, the COVID-19 pandemic has not negatively affected medical cannabis patient registrations and, in fact, actually spurred many to receive recommendations from their doctor and stop by their local dispensary for curbside pick-up or get delivery (where available). Virtually all medical markets (where adult-use is prohibited) are continuing to set record sales numbers on a month-by-month basis, indicating that patients do view their medical cannabis as essential and that the medical market is largely recession-proof.

Though Oklahoma has a significantly smaller population than the other top medical states (less than half of Arizona's population), its hands-off regulatory system and liberal list of qualifying conditions have allowed it to punch well above its weight. The state has over three times the number of dispensaries as California and also has a plethora of cultivators and manufacturers, making product extremely cheap while ensuring that patients from all over the state can find a retail location within a few miles of their home. Less populous states which choose to adopt Oklahoma's style of regulations will be able to scale rapidly and constitute a sizable portion of the market.

Medical cannabis is seen overwhelmingly positively by much of the country, even by more conservative individuals who may remain opposed to adult-use legalization. As ordinary citizens make their voices heard and talk to their elected officials, policies are likely to shift. In the face of legislatures that refuse to act, ordinary people organizing ballot initiatives have proven to be a driver behind new market openings. Half of the states which began sales in 2019 only have medical cannabis programs due to the organizing efforts of citizens in their states, and the newest medical market opening, Utah, also legalized because of citizen action.