The Grateful Dead's Jerry Garcia may have described the business situation facing his relatives running the "Garcia Hand Picked" marijuana brand in California when he wrote "Fire on the Mountain," whose lyrics in part say:
"You gave all you had, why you wanna give more?
"The more that you give, the more it will take."
The once Golden State has added another distinction to its growing notoriety list.
It's the state where people trying to sell pot legally can’t make a profit.
Garcia Hand Picked did its best, but that wasn’t enough.
Now the brand and product that’s synonymous with Jerry Garcia and California are leaving. Garcia Hand Picked had a different business model outsourcing much of its infrastructure expense to others.
Instead of growing its own "wacky-tobaccy," the company bought the crop from other California-based growers.
As one expert told the San Francisco Chronicle, "['Garcia Hand Picked'] had good cannabis grown by some of the state’s best outdoor cannabis growers, like Moon Made Farms and Sonoma Hills Farms."
Limiting the expense to buying the crop and then marketing the IQ reducer under the Garcia’s label still couldn’t produce enough revenue to satisfy both California and the balance sheet.
California legalized marijuana.
However, while the sellers may no longer be going to jail, their wallets received a life sentence.
The Chronicle further explains, "The state’s complicated cannabis regulations and high taxes add costs to legal operators, while widespread illegal farms and retailers undercut legitimate companies.
"Limited access to banking means these companies pay exorbitant fees for simple banking services and have almost no access to loans.
"Federal law blocks pot companies from deducting most business taxes from their federal taxes, making pot businesses pay an effective federal tax rate as high as 80 percent."
The state has a 15% tax on all sales and charges approximately $100,000.00 a year for a retail license. That doesn’t include local taxes and fees; nor the danger a cash business faces from armed robbers.
Meanwhile, the cartels are cashing in.
Andrew DeAngelo explained, "This was a hard decision for them, they love California.
"They were born and bred here. This is very painful for them, I guarantee that.
"Not only is Garcia leaving, a lot of people are leaving. It’s a real shame that California is losing out. We’re losing out on jobs and economic activity and other places are benefiting from that."
Observers have described the situation as a "Mass Extinction Event."
Whereas we called the legalization of marijuana a "Brain Extinction Event."
Leaving the once Golden State doesn’t mean Garcia Hand Picked disappears entirely.
Their product will still be available in Colorado, Maryland, Michigan, Massachusetts and Oregon.
The company claims the departure isn’t permanent.
A statement says, "We're taking a pause in California. We want to ensure CA consumers have the highest quality flower for the long term, so we are in the process of choosing a new local partner for cultivation, production, sales and distribution of Garcia Hand Picked in CA."
That’s just spin. Jerry's 1970s song, "Truckin," has a better take on things:
"Truckin', got my chips cashed in
"Keep truckin', like the do-dah man
"Together, more or less in line
"Just keep truckin' on."
Michael Reagan, the eldest son of President Reagan, is a Newsmax TV analyst. A syndicated columnist and author, he chairs The Reagan Legacy Foundation. Michael is an in-demand speaker with Premiere speaker's bureau. Read Michael Reagan's Reports — More Here.
Michael R. Shannon is a commentator, researcher for the League of American Voters, and an award-winning political and advertising consultant with nationwide and international experience. He is author of "Conservative Christian's Guidebook for Living in Secular Times (Now with added humor!)" Read Michael Shannon's Reports — More Here.