0820_AUG Comstock's Magazine 0820 August | Page 51

offs by large California marijuana firms last fall as evidence that the high taxes threaten the legal industry’s survival. (In October and November, three San Francisco-based cannabis companies — Eaze, Pax Labs and Flow Kana — each laid off 20-25 percent of their workers.) Add the recession, and it will be hard to keep solvent all of the players needed to take cannabis from field to store shelf, she says. “We are concerned that this pandemic may end up being that final straw that breaks the camel’s back in terms of maintaining the supply chain as a whole.” And McGowan sees a dangerous buildup in accounts receivable among distributors not being paid by retailers. In April, industry publication Marijuana Business Daily reported that a group of California distributors was putting together a “blacklist” of retailers who were behind in paying their suppliers. The head of the state’s Cannabis Distribution Association said the total overhang of floating credit could be as high as $100 million. Some distributors have already shut down as a result, according to the Marijuana Business Daily report. Post-recession, McGowan foresees a stronger and more decentralized illegal market as people get desperate for income and turn to selling weed under the table. In the legal market, the opposite is likely, with more consolidation as many smaller players find it tough to survive. Josh Drayton, communications and outreach director for the California Cannabis Industry Association, says larger operations that can implement the coronavirus-related operational changes are faring far better than smaller ones. Harris Bricken, an international law firm specializing in the cannabis industry, wrote in April that it was being contacted almost every week by a cannabis company looking for a white-knight investor to bail them out. Houston expects to see mergers and acquisitions too but doesn’t think that’s all bad; friends of his have sold to local cultivation businesses in deals that ended up being good for them, he says. Back at Stillworx and Condorz, Dillon is one of those looking for chances to grow through those kinds of acquisitions. He and his partner want to buy another distributor in Southern California or a delivery business now that the coronavirus has caused a spike in remote sales. “We know there are a lot of companies looking for funding right now, and if they don’t get it, they’re not going to make it much longer,” he says. “(Opportunities) come across my desk every day.” Steven Yoder writes about business, real estate and criminal justice. His work has appeared in The Fiscal Times, Salon, The American Prospect and elsewhere. Online at www.stevenyoder.net and on Twitter @syodertweet. We Move or Ship Anything... Anywhere Local International Secure Storage • Office Licensed in all 50 states since 1979 Freight Forwarding Professionals International International Shipping Specialists Expert Packing, Crating & Rigging Local Freight Forwarding International Professionals Secure Storage • Office International Shipping Specialists Expert Licensed Packing, all Crating 50 states & since Rigging 1979 Freight Forwarding Professionals International Shipping Specialists Expert Packing, Crating & Rigging 800-324-6683 PUC Lic # T-170373 MC-308011 Local Secure Storage • Office Licensed in all 50 states since 1979 916-489-3322 ABetterMoving.com 6640 Fair Oaks Blvd. Carmichael, CA 95608 And now we’ve added TELEHEALTH PHYSICAL THERAPY FROM HOME! VIDEO & AUDIO CHAT WITH YOUR THERAPIST ONE-STEP SETUP ON YOUR PHONE (OR COMPUTER WITH WEBCAM) YES! Secure video therapy is COVERED BY INSURANCE! Available in addition to or instead of in-clinic appointments. 14 LOCATIONS TO SERVE YOU CONTACT US! [phone] [phone] [email protected] August 2020 | comstocksmag.com 51