Cannabis Companies in California Have Lost Millions Due To Poor Regulations. California’s New Bill Could Change That.

Keerthi Vedantam

Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.

Cannabis Companies in California Have Lost Millions Due To Poor Regulations. California’s New Bill Could Change That.
A $1.9 Billion Canadian IPO Could Make LA the 'Center of the Cannabis Universe'

When PSI Labs started testing cannabis for THC levels and pesticides in 2015, it entered into an unregulated industry that would soon grapple with the effects of legalization and—perhaps more troubling—was prone to sloppy testing practices that gave varying results on potency and toxicity levels.

“A client comes to you. They don't like the numbers that they see,” said Ben Rosman, co-founder of the Michigan-based PSI Labs, which expanded into California earlier this year. “And they're like, ‘I can find another lab who's going to give me the numbers I like,' or 'I don't like that you failed me. And I know there's another lab that's going to give me a pass.'

What Rosman is referring to is the potency rating on marijuana. The higher the rating, the more powerful the drug.


“A lot of folks sort of test as marketing, not just quality control, and they want to see the highest potency possible,” Rosman added. “Or they just test purely to drive their product to market alone.

But times are finally changing. Five years after California legalized marijuana in 2018, both the state and industry players are wrestling with standardization and varying regulations that have cost cannabis producers tens of thousands of dollars while endangering consumers and the environment.

A law signed by California Governor Gavin Newsom has ordered the state to develop clear and specific guidelines to test cannabis products.

The bill will require California’s Department of Cannabis Control to create a strict set of standards for testing cannabis products, including pesticides, contaminants, cannabis potency and heavy metals. The standards will be established by 2023 and all cannabis labs in California will have to follow them.

“Testing standards provide consumers with confidence about cannabis product safety and accuracy of cannabinoid content,” the DCC said in an email. “These standards are what distinguish legal, regulated cannabis from illicit cannabis. Cannabis sold through unlicensed sources is not tested, may contain unsafe contaminants or undisclosed ingredients, and is often labeled with higher cannabinoid content than the product actually contains.”

What labs test for, and how they test samples, is often at the discretion of the lab itself. The cannabis buds at the top of the plant are often more potent than the bottom-most buds, and some portions of the plant may contain more microbiological contamination than others. Labs claim to strive to collect a representative sample of the entire batch of cannabis (though how they determine what a representative sample is is also up for grabs).

The process has led to “lab shopping”, by which cannabis processors and growers go to labs that will produce more favorable results, even if they’re less accurate.

Kurvana, a cannabis vape pen company founded in 2014, has lost millions of dollars over the years due to poor regulation. Varied results in sample collection has led to contaminating entire cannabis production facilities. Kurvana employees had to travel to pot farms and observe how it was grown and cultivated to make sure it was up to standard. In 2019, a lab they tested with got shut down for poor practices, endangering the company’s reputation, forcing it to recall their products tested in that facility, and burning around $150,000 in testing fees.

“It got a lot more complex, too, because the different testing labs were using different instruments and different sample prep methods and testing methodologies,” Moghaddam said. “So one testing lab made tests for pesticide and says it'd pass and another testing lab made tests for pesticides in it, [and it might fail]...And that was a big challenge at the time.”

But some wonder if further regulating the legal cannabis market may end up inadvertently bolstering the illicit cannabis market.

“The more expensive you make the product for the end use, so the more you tax it and regulate it, the more expensive it is for the user,” said David Wolf, co-founder of the cannabis testing lab maker Greenbox Builders. “And then that's why a black market can crop up. The black market in California is bigger than the legal cannabis market.”

Despite having some of the most lax cannabis laws in the country, California still has a robust underground cannabis market where growers and sellers are not confined to the increasingly strict rules legal cannabis sellers are. The market is nearly double that of the legal pot market in the state and, between having a cheaper product and lax cannabis penalties, it’s nearly ubiquitous.

Large homes for illegal pot cultivation are tucked away in the Mojave Desert and Antelope Valley, where water (already sparse in those areas) is stolen from local residents and toxic pesticides (a few drops could kill a large bear) are sprayed all over the plants, endangering people and wildlife.

In 2020, the California Department of Public Health tested illicit cannabis vape cartridges seized by the state and found additives and harmful dilutants that lead to E-Cigarette and Vaping Associated Lung Injury (EVALI). Almost all cases of EVALI, according to the DCC, come from unlicensed products.

But Rosman is hopeful standards will fully legitimize his industry.

“One of the things that was most exciting about...expanding into California is generally having a bigger platform and having a louder voice in speaking about the importance of data integrity and raising the bar and talking about the importance of standardization of lab tests, cannabis lab testing practices,” he said.

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🚁 One Step Closer to Air Taxis in LA
Image Source: Joby Aviation

🔦 Spotlight

Joby Aviation, a pioneering electric air taxi company, has achieved a significant milestone by successfully flying a hydrogen-electric aircraft demonstrator for 523 miles with only water as a byproduct. This groundbreaking flight showcases the potential for emissions-free regional travel using vertical take-off and landing (eVTOL) aircraft, eliminating the need for traditional runways. The company's innovative approach combines its existing battery-electric air taxi technology with hydrogen fuel cells, paving the way for longer-range, environmentally friendly air travel.

For LA residents, this development holds exciting implications for future transportation options. Joby's technology could potentially enable direct flights from LA to destinations like San Francisco or San Diego without the need to visit conventional airports, offering a cleaner and more convenient alternative to current travel methods. The company's progress in both battery-electric and hydrogen-electric aircraft positions it at the forefront of next-generation aviation, promising to revolutionize urban and regional mobility.

Notably, Joby Aviation has already made strides in Southern California by securing an agreement with John Wayne Airport earlier this year to install the region's first electric air taxi charger. This strategic move sets the stage for LA to be among the initial markets where Joby will launch its electric air taxi service. With plans to commence commercial operations as early as 2025 using its battery-electric air taxi, LA residents may soon have access to a fast, quiet, and environmentally friendly mode of transportation that could significantly reduce travel times and traffic congestion in the region. In the not too distant future, LA might find itself in an identity crisis without traffic and excess smog 🤞🤞.


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Fuel Innovation: 7 Unforgettable Team Building Experiences in LA
Image Source: Discover LA

In today's competitive business landscape, team building activities have emerged as a crucial tool for fostering a positive work environment, enhancing productivity, and crucially, improving employee retention. Studies have shown that such activities help employees feel valued, with one report indicating that 93% of those who felt appreciated were more motivated at work. Importantly, team building events may improve retention rates, as employees who feel connected to their colleagues and company culture are more likely to stay long-term. With these benefits in mind, let's explore some of the most engaging and effective team building activities available in Los Angeles.

Pickleball

Image Source: Modern Luxury Angelino

Pickleball is a fantastic team bonding activity because of the easy-to-grasp rules and gentle pace make it perfect for everyone, regardless of age or fitness level. The game thrives on communication and teamwork, as players must collaborate and strategize to outplay their opponents, boosting team cohesion. Plus, the lively, fast-paced action sparks friendly competition and laughter, creating a fun and spirited atmosphere that brings everyone closer together. Los Angeles boasts numerous pickleball courts that are easy to rent if you have your own equipment. If you need additional assistance organizing your pickleball outing, there are plenty of full-service companies ready to handle every detail for you.

Resources: Pickle Pop, Corporate Pickle


Escape Room

Image Source: The Escape Game

Escape rooms are a great way to build camaraderie. They require participants to work together, combining their problem-solving skills and creativity to overcome challenges and puzzles. The immersive and time-sensitive nature of escape rooms fosters collaboration and communication. Additionally, the shared experience of tackling complex tasks and reaching a common goal helps build trust and foster positive emotions among colleagues.

Resources: The Escape Game, 60Out


Day Trip to Catalina Island

Image Source: Love Catalina

Catalina Island is a perfect day trip for a team because it provides a break from the usual work environment, allowing team members to relax and connect in a new setting. Shared experiences during the trip, such as exploring new places and participating in fun activities, help build stronger relationships and foster a sense of camaraderie. There are numerous team-building activities such as an arboreal obstacle course, an island tour, scavenger hunts and more.

Resources: Catalina Island Group Activities


Top Golf

Image Source: Topgolf

Topgolf is an excellent team building event because it provides an inclusive, relaxed atmosphere that accommodates players of all skill levels, fostering personal connections and improving team morale. The unique blend of competition and entertainment creates an ideal setting for building trust, enhancing communication, and revealing hidden skills among team members. Additionally, Topgolf offers structured team building packages with guided activities, discussion prompts, and lessons on culture, change, collaboration, and strategy, making it a versatile and effective platform for strengthening relationships and boosting overall team performance.

Resources: Topgolf El Segundo


SoFi Stadium Tour

Image Source: Discover LA

A SoFi Stadium tour offers a unique, behind-the-scenes experience of one of the world's most advanced sports venues, allowing team members to explore exclusive areas like premium suites, team locker rooms, and the player tunnel together. The tour provides a shared, memorable experience that can foster camaraderie and spark conversations among team members, regardless of their interest in sports. Additionally, the stadium's state-of-the-art features and impressive architecture can inspire creativity and innovation, while the group setting encourages interaction and collaboration, making it an engaging and enjoyable activity for teams of various sizes and backgrounds

Resources: SoFi Stadium Group Tours


Corporate Volunteering

Image Source: L.A. Works

Volunteer work serves as an excellent team building activity by uniting employees around a shared, meaningful cause, fostering a sense of purpose and collective accomplishment. It provides opportunities for team members to collaborate in new ways, often revealing hidden strengths and leadership qualities that may not be apparent in the regular work environment. Additionally, engaging in community service can boost morale, enhance the company's reputation, and instill a sense of pride among employees, leading to improved workplace relationships and increased job satisfaction.

Resources: Habitat for Humanity, L.A. Works, VolunteerMatch


Corporate Improv Sessions

Image Source: Improv for the People

A corporate improv class encourages spontaneity, creativity, and quick thinking, skills that are valuable in the workplace. It promotes active listening and collaboration, as participants must work together to create scenes and respond to unexpected situations, fostering better communication and trust among team members. Additionally, the playful and often humorous nature of improv helps break down barriers, reduces stress, and creates a shared positive experience that can improve team morale and cohesion long after the event.

Resources: Improv-LA, Groundlings, Improv for the People

🎬 Paramount and Skydance Are Back On
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Happy Friday Los Angeles! Hope you all had a fantastic Fourth!!

🔦 Spotlight

Paramount and Skydance Media have rekindled talks to merge after negotiations abruptly halted in June. The proposed deal, contingent on approval from Paramount’s board, aims to combine Paramount’s extensive media holdings—including CBS, MTV, and Nickelodeon—with Skydance’s film expertise showcased in hits like "Top Gun: Maverick." This merger signals a potential transformation in the media landscape, positioning the new entity to compete more effectively amid challenges from streaming services and the decline of traditional cable TV.

Led by Shari Redstone, Paramount’s controlling shareholder via National Amusements, the deal represents a pivot towards revitalizing Paramount’s strategic direction amidst financial struggles and shareholder concerns. The involvement of major investors like RedBird Capital Partners and David Ellison underscores the financial backing aimed at stabilizing Paramount’s operations and addressing its $14 billion debt burden. Importantly, the agreement includes provisions to protect National Amusements from potential legal challenges, addressing previous hurdles that stalled earlier negotiations.

The deal also includes a 45-day period for Paramount to explore alternative offers, highlighting continued interest from other potential buyers like Barry Diller’s IAC and media executive Edgar Bronfman Jr. This flurry of activity underscores the significant stakeholders’ interest in Paramount’s future and its potential as a key player in a rapidly evolving media industry.


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