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   From: newsom@failures.com   
      
   On 19 Nov 2023, Anne  posted some   
   news:ujdenu$3snkp$4@dont-email.me:   
      
   > If you smoke pot, you are also prone to smoking cocks.   
      
   This spring, rumors were swirling that HERBL, one of California’s largest   
   cannabis distribution companies, was on the verge of collapse. So Mike   
   Beaudry, the company’s CEO, sent out an email on May 18 declaring that   
   “these rumors are categorically not true. HERBL continues to be fully   
   operational.”   
      
   Less than a month later, HERBL had completely collapsed.   
      
   HERBL’s failure left a trail of damage that hurt small pot brands and   
   shorted the state some $17 million in unpaid taxes. HERBL is only the   
   latest high-flying California pot startup to crumble, following companies   
   like Flow Kana, which raised $175 million in capital only to collapse, and   
   MedMen, the California startup that earned a billion-dollar valuation   
   calling itself the Apple Store of Weed only to find itself this year on   
   the brink of financial ruin.   
      
   California state law requires distributor companies to work as middlemen   
   between pot producers and retailers. HERBL’s demise has become a giant   
   flashing red warning sign because of the vital role distributors play in   
   California’s market; if a company as large and entrenched as HERBL can go   
   under, experts say, then there are deep problems in the industry that will   
   only lead to more company failures.   
      
   “I do feel like we’re going to see a significant and material number of   
   closures, up and down the supply chain,” Wesley Hein, the president of the   
   Cannabis Distribution Association, told SFGATE.   
      
   Observers in the industry say that HERBL’s demise shows how cannabis   
   companies in California are forced to abide by a more difficult set of   
   rules than other industries. They also argue that if HERBL were a   
   different type of company, the state government would have stepped in to   
   save it.   
      
   “Sickening”   
   Tyler Kearns, the founder and CEO of Seven Leaves, a Sacramento-based   
   cannabis company, said it felt “sickening” in the moment in June when he   
   learned that HERBL had finally bit the dust. Kearns said HERBL owed Seven   
   Leaves $880,000, so when he found out in June that the company had started   
   laying off delivery drivers he realized it was going to be almost   
   impossible to get that money back.   
      
   “I knew this was going to be the biggest failure in U.S. cannabis   
   history,” Kearns told SFGATE.   
      
   HERBL wasn’t always arousing such fear. Founded in 2016 by veteran   
   executives from the food distribution industry, it quickly grew to be a   
   major player in California’s newly legal pot market. By 2022, the company   
   was delivering to over 1,000 stores and reportedly sold $700 million’s   
   worth of cannabis in 2022 alone, making it a massive pillar of   
   California’s $5 billion legal pot market. From 2018 to 2022, it was the   
   largest distributor in the state.   
      
   HERBL’s rapid rise was driven largely by two factors: its exclusive   
   distribution contracts with some of the biggest brands in the state, which   
   made HERBL attractive for retailers and even smaller pot brands; and its   
   tranche of investment cash, which allowed HERBL to keep paying its bills   
   even as the rest of the state’s industry sunk into a debt crisis.   
      
   Both of those factors started to unravel in the past two years. In January   
   2022, HERBL lost its contract with Raw Garden, one of the biggest   
   producers of cannabis in California. The distributor quickly filed a   
   lawsuit, alleging that Raw Garden had breached its contract, but the   
   lawsuit has yet to be resolved, leaving the distributor without one of its   
   top-selling products.   
      
   Without a big name like Raw Garden, California’s debt problems started to   
   drag down the company. HERBL had become known as the “bank of cannabis” in   
   California because it kept buying more cannabis from suppliers, even after   
   retailers stopped paying for goods they had purchased from HERBL. That   
   meant HERBL was effectively holding debt for the entire industry. As   
   unpaid bills piled up across California’s weed market — a 2022 report   
   estimated that the industry was sitting on over $600 million in debt — it   
   eventually became too much for HERBL to handle. Rumors started spreading   
   that the distribution company, which had a reputation for paying producers   
   no matter what, was no longer doing so. The panic led even more brands to   
   leave the platform.   
      
      
   [continued in next message]   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)