Who said there are no good news from California?
In the spring, there were rumors of California’s prominent cannabis distributor HERBL facing collapse. The company’s CEO, Mike Beaudry, vehemently denied in a May 18 email. However, less than a month later, HERBL did collapse, leaving small cannabis brands in distress and the state with $17 million in unpaid taxes. HERBL’s downfall follows other failed California cannabis startups like Flow Kana and MedMen. The collapse has raised concerns about deep-seated issues in the industry, especially as distributors play a crucial role in California’s cannabis market. The failure is attributed to losing key contracts, like with Raw Garden, and accumulating debt as the industry faced financial difficulties.
Observers argue that California’s cannabis companies face more stringent regulations than other industries, and HERBL’s demise highlights challenges unique to the sector. Critics suggest that if HERBL were a different type of company, the state might have intervened. The lack of bankruptcy protections in the cannabis industry complicates matters for companies seeking payment after a partner’s failure. Some industry insiders see HERBL’s collapse as indicative of broader systemic issues, including overtaxation, competition from unlicensed businesses, and excessive regulations. The hope is that policymakers learn from HERBL’s story to improve and rectify the challenges in California’s cannabis industry. A smaller drugs industry is of course welcome…
