Ben Larson: 0:00

Do they object to it because they just dislike the industry, or do they just not understand economics?

Amy O'Gorman Jenkins: 0:06

They do not understand economics. They do not understand economics. It's, it's and frankly, it's infuriating to me.

Ben Larson: 0:20

Hey everybody, welcome to Episode 96 of High Spirits. I'm Ben Larson and with me, as always, 96 of High Spirits. I'm Ben Larson and with me, as always, is NRA Grabstein. We're recording Tuesday, july 8th 2025, and we have a great show today for you, not for me. I'm gonna keep my cool. We're gonna talk about California cannabis reform, including taxes and hemp and all the fun things, and I'm going to keep this demeanor the whole time. I promise, Before we get there. Anna Rae, long time, no see, how are you doing?

AnnaRae Grabstein: 0:55

I'm doing great. It's Tuesday, which is so weird After all of the last two years of recording on Thursday. This is our second week recording on a Tuesday and it's just thrown me for a loop. It feels like it should be the end of the week.

Ben Larson: 1:09

The energy is a little different, but I think I'm enjoying it. It was great seeing you this weekend. Thank you so much for having us up to the old abode.

AnnaRae Grabstein: 1:18

Yeah, I had Ben's whole family over. We made lunch. The kids hung out. Our boys really got along well. I thought they were thick as thieves immediately. Yeah, the boys immediately went into my son's room and started listening to records, which I thought was pretty cool, and there was lots of fun outside. Yeah, it was great and your wife is awesome. She is beautiful and smart and all the things you guys. Ben's wife is really cool.

Ben Larson: 1:47

Don't let her go to her head. Yeah, there's a lot going on, but it is nice that every state is starting to wrap up their legislative sessions, with the exception of our lovely state of California, which we'll talk about later. So it feels like news is slowing down, which is appropriate, as we journey through summer and get to go on our vacations and do all that. So I'm actually kind of grateful for that, getting to spend some more time in the office, like I am today, and reconnect with the team a little bit.

AnnaRae Grabstein: 2:22

Yeah, I think the bigger news that's not cannabis news that's important to acknowledge is just this terrible flood that's happened in Texas.

Ben Larson: 2:30

Oh, my God, yeah.

AnnaRae Grabstein: 2:32

I want to just extend some compassion and empathy and just strength to everyone that's dealing with the tragedy there. It's really, really terrible.

Ben Larson: 2:42

It's really hard to listen and to read. Like many folks, I tend to whip out the phone. It's really really terrible. It's really hard to listen and to read and, like many folks, I tend to whip out the phone right before bed and kind of just peruse some of the news that I miss throughout the day, and I've had to stop myself mid-reading at times just to make sure that I could at least sleep at night.

AnnaRae Grabstein: 3:31

You know, there's a lot that weighs on the mind when you start kind of technology.

Ben Larson: 3:36

So, yeah, we'll cede our time and energy and send it down to Texas for everyone impacted by this flooding. Down to Texas for everyone impacted by this flooding.

AnnaRae Grabstein: 3:44

But let's jump into the episode. This week has and really for the past month it's been really top of mind California tax reform for cannabis businesses here in the state, where we both are and we've talked about it a little bit here and there on the episodes and we thought that it was time to bring in really the person that is leading the largest coalition of folks lobbying for cannabis tax reform in California and someone that Ben and I both know from our work in the state for a long time, and so I'm really excited to introduce Amy Jenkins, who's one of the most influential cannabis lobbyists in California. She's currently serving as the director of the California Cannabis Operators Association, which represents over 300 licensees across 125 jurisdictions, and it's quickly become the state's largest cannabis industry association, which is amazing. Amy is amazing. She's on the front lines of California cannabis policy and she joins us to share what's happening behind the scenes. Amy, we are stoked to have you. Thanks for being here.

Amy O'Gorman Jenkins: 4:52

Well, I am stoked to be here. Thank you so much and it's so good to see you both. So thank you for having me, yeah.

Ben Larson: 4:59

Amazing. Yeah, I've been spending a lot more time in Sacramento these days, and sometimes on the opposite side of the conversation that you are, but we'll keep it kosher on this recording. That's right. As I spend more time at the state capitol and even in DC, I realize what a neophyte I am when it comes to politics and understanding how it all works.

Ben Larson: 5:20

It all works, and I think that goes for a lot of the people in our community, especially online, the LinkedIn warriors that are constantly quote unquote, advocating, you know, for their side of the plant, and so I think it would be helpful for us if we kind of just started from a high level and talk about state lobbying, especially when it comes to cannabis and hemp, and just kind of give us a good like lay groundwork for us about how this all kind of comes to be, these different organizations, the push and pull of it all. But, more importantly, as, like, the cannabis industry starts to evolve and kind of intermix with the hemp category and there's a lot of outside interest, right, there's a lot of people that look at California and have a lot of, yeah, interest in seeing California grow and succeed beyond the California operators, and I would just love a little bit of guidance from you on how we can be most effective in those conversations. You know what's worth spending our time on, you know, and so on and so forth.

Amy O'Gorman Jenkins: 6:23

Well, thank you. There's a lot I can share with those questions and comments, ben, what I will start with is I've been lobbying for the California cannabis industry since 2014. I'm kind of an OG in the space and there have been many lobbyists that have come and gone, that lobbied and are no longer lobbying, and then we have, you know, kind of a new host of lobbyists. More specifically, to your question about how the industry can lobby and be more engaged in advocacy, what I would start with is you know, this industry is very, is very, divided in most instances right.

Amy O'Gorman Jenkins: 7:07

So you've got, you know, numerous license types and we don't always agree. There's not that kind of unity that you see in in maybe more um seasoned is not a good word, but but you know different entities and organizations and business types where you've kind of evolved over time and there's a little bit more unity. I think we're a little bit more fractured right now. We're working to change that and I think you know we're going to talk a little bit about tax reform and that's really been. That's really created a lot of unity amongst industry associations and the lobbyists who represent them. So it's been very encouraging and inspiring to be united as it relates to taxation and tax reform. But a lot of work still needs to be done. Most of the associations are pretty anemic. They're small. They have a hard time attracting and retaining members.

Amy O'Gorman Jenkins: 8:08

This industry doesn't have a strong history of joining associations and engaging and I certainly appreciate some of the reasons why. One, as you noted, it's very intimidating, it's really unfamiliar to most people, but it's also engagement. Those things are really really important because what we have, not what we are trying to achieve now and we're having some success, but what has been challenging is legislators don't look at us and see the industry in their communities, right. So I'll give you and then I'll be quiet, but I'll give you an example of that. I used to be the. But I'll give you an example of that.

Amy O'Gorman Jenkins: 9:05

I used to be the director of public affairs for the league of California cities. It was a hundred years ago, at least it feels like that to me. But what the league was so successful at doing is they'll go in and lobby and the legislators don't see the lobbyists, they don't even see the league. They see their individual mayor, their council members, their people in their community. And so the more we can get engagement from the legal industry both cannabis and hemp and familiarize policymakers with who we are in their communities, I think the more successful we'll be. Sorry, that was probably a long answer to your question.

Ben Larson: 9:44

No, but that last piece really resonates because yesterday I was meeting with someone and I was there with my lobbyist and we were like this is what they care about.

Ben Larson: 9:53

These are the topics. Now we need to go find operators that represent those topics in those areas and bring them into the office with us so that they really hear it Right. And this comes up for a lot for me and I know boo hiss, but like on the hemp side of the business, you know, as we get you know into conversations around texas and even california, you know there are many large brands that are national that are looking at these states and like they want to help open them up or help educate on on the hemp opportunity and there's a lot of noise that's being caused, whether it's certain associations that are going in without any local representation, or even law firms that are based in other states, going into other states and and thinking that they're going to rally the troops. And we have seemingly found more success going in and finding the local organizations with the local constituents and being an assist to them instead of leading the charge.

Amy O'Gorman Jenkins: 10:55

Yeah, I think that's right. I think that's right. I think putting kind of a local face on anything you do is going to move the needle. At least, that's certainly been my experience. It's not always the case, but that's that's where I have found the most success, so I think that is a good strategy, whether you're cannabis or hemp. Another way to answer your original question there's I mean this this is California. This is the fourth largest economy in the world. Policymakers have a lot of things they have to focus on, whether it's housing, homelessness, mental health, transportation, ai, and so putting that local spin or that local face on an issue really resonates with them in a very meaningful way in most instances, really resonates with them in a very meaningful way in most instances. And, again, that's something that I think any trade association or any industry should be striving to do, because I think, again, that's where I have found the most success.

AnnaRae Grabstein: 11:54

I think what you're highlighting, which is interesting, is this push and pull that happens especially when people are going and lobbying on behalf of cannabis. It's often because they are a cannabis business operator and they have some type of tremendous pain and suffering that they're feeling because of an existing law or regulation and that is causing them to try to change it. But the push and pull is that that is their whole world, but these policymakers have way more going on and don't understand it at all. And it's just like how do we deal with this to be able to create mutual alignment amongst these parties that are just not aligned? Inherently, policymaking in cannabis is like a layer cake. It starts at the local level. There's all of these laws that might be happening in your city, and then you've got your state laws, and then you've got the federal stuff that complicates things all on top of it, and there's lobbying going on at all of those levels.

AnnaRae Grabstein: 12:55

I think, specifically, we want to talk with you because you are a policy guru for Sacramento, which is where it all happens. In California, you've been leading the charge for a long time. Really, you're behind one of the largest coalitions that I've seen in the past five years around tax reform and we're going to talk about tax reform in a second. But I want you to give us a little bit of insight about Sacramento specifically. Bit of insight about Sacramento specifically. How does Sacramento work from a policy perspective in terms of the seasons of lawmaking, the budget, all of that? Can you just give us a download as we go into this tax?

Amy O'Gorman Jenkins: 13:35

conversation, absolutely. So there's 120 legislators that I'm responsible for getting to know. I wish I could tell you I knew them all personally. But 120 legislators, so you have 80 assembly members and 40 senators.

Amy O'Gorman Jenkins: 13:50

It is a full-time legislature which means you know the session really commences in January, it concludes in or around August, september generally, and then they go, they recess and then you've spent that fall kind of planning for the following year. It's much more, it's very accelerated pace, despite it being, you know, almost the full year, unlike part-time legislators or states where you have a real condensed timeline. There's a lot of work to be done within you know again that year's timeline and there's kind of two different to be done within within. You know again that that year's timeline and there's kind of two different tracks you mentioned kind of policy and budget. So both are critically, critically important. The the policy track again, really starts in January and concludes in the fall, whereas the budget track is a little bit more condensed. It also commences in January but it concludes in June and that's actually kind of a critical piece as we talk a little bit about what's been happening. That literally just happened. So we just concluded the budget process which again is much more accelerated. There is a budget released every year. It is not a two-year budget, it is a single-year budget and our fiscal year starts July 1.

Amy O'Gorman Jenkins: 15:11

But then again, as you're advocating via the budget process, you're also advocating via the legislative process and to give you a flavor of kind of how it works, in California it is not uncommon to see about 2,000 bills introduced in a single year. So there's a lot of policy work that you've got to track and monitor. Interestingly enough, up until this year, the number of cannabis bills was overwhelming and I certainly think that kind of speaks to a lot of the challenges we have. If you've got a lot of legislation, you're clearly trying to address a lot of different issues. Up until this year, I was tracking anywhere between about 35 to 60 bills that directly touched cannabis, and I'm not even talking about indirect issues around. You know worker protections or you know different business related issues. These were actual bills affecting cannabis. So it's a very, again, robust process. It's a very complex process and there's just a lot of players and I should also note there's well over 2,000 lobbyists as well. So it's just a lot of-.

AnnaRae Grabstein: 16:31

But not all working on cannabis.

Amy O'Gorman Jenkins: 16:32

No, no, no, not all working on cannabis, I just mean, in general, you can have in excess of 2,000 lobbyists registered at any given time and so, again, you have to compete for attention, attention with legislators, attention with policy staff, attention with budget staff. So it's a very complex process, it can be very intimidating, but yeah, that's kind of a highlight or an overview. And yeah, that's kind of a highlight or an overview.

AnnaRae Grabstein: 17:04

Yeah, it's really helpful. I think so many people don't learn how the sausage is made until all of a sudden it really affects them At least, that was my own process is that I didn't understand how policy was made in Sacramento until I was running a business that was trying to affect that policy, and then I was forced to. I think we should now talk about taxes, because this is the hot topic. It's, I'm sure, what all of our listeners want to hear from you. Ab 564 is legislation that is moving through the Senate this week. It's already passed through the assembly. Why don't you give us an overview of what's been happening with California cannabis tax, where we are, where we're going and what you're fighting for?

Amy O'Gorman Jenkins: 17:49

Yeah and thank you. And just to give people kind of an overview and I'm sure most of your listeners are quite familiar with the state of the industry but legal cannabis sales have dropped 30% since Q2 of 2021. We've got, you know, 22% decline in excise tax collection. We've got revenue forecasts that are continually on the decline in the state and these are forecasts that are projected by the State Department of Finance and others. And we just saw the largest decline in excise tax collection in a single quarter. We dropped 11% just January through March. So the state of the industry is pretty dire right now and I don't think I have to tell you that and I probably don't have to tell your listeners that.

Amy O'Gorman Jenkins: 18:36

So, as we went into this year, taxation and the cannabis tax rate was really the top priority and that was primarily due to two factors One, just the general state of the industry the industry is in decline but two, the fact that we were facing an automatic tax hike that actually just went into effect last Tuesday, july 1. We went from 15% to 19%. That's just the state cannabis excise tax. While that may seem small, that represented a 25% increase that would be paid directly by consumers and patients. So, going into January. That was what we were facing and so we, as I previously mentioned, we strategized and decided to pursue two tracks. So first the policy track and we introduced AB564. But, as I mentioned, that is not a track that would conclude on July 1, meaning that we would not avert the tax increase. But it's so. That was a policy bill that was introduced and then simultaneously we fought to, you know, advocate for a budget track which would have averted the tax hike entirely. So that was kind of the initial strategy. So we were kind of marching along. Ab 564 was, and has continued to be, on a very positive trajectory.

Amy O'Gorman Jenkins: 20:13

As you indicated, anna Rae, it passed the assembly 76 to zero, which is just unheard of. We're talking about a very, very new legislature. By the way, 70% of the assembly has been there less than four years, so a lot of new faces. We were still able to pass that despite tremendous opposition. But again, all the while we were trying to negotiate what was in the Haney bill into a budget bill and thought we were going to be successful.

Amy O'Gorman Jenkins: 20:46

And in fact I will say and I know I said this to you guys privately I was literally being congratulated by budget committee staff prior to them walking into negotiations, I knew what the budget bill number was going to be. I knew what the budget bill number was going to be. I knew what the language looked like. We thought we were all in the clear and then, for whatever reason, behind those closed doors, negotiations blew up and within several hours time I was informed, just a week before the new fiscal year, that we were unsuccessful, ultimately, in getting the tax freeze in the budget. So, fortunately, we do have our plan B, and that is the Haney bill, and that is what we're focused on now that we were unsuccessful with the budget track, which, again, I can elaborate on. So, yeah, ab 564 would revert the tax back to 15 for at least five years. We wanted it to be longer, but I can get into all those details too if you're interested.

Ben Larson: 21:56

I want to double click on the budget negotiations a little bit, to the extent that you're comfortable, Because something that we hear in DC especially right is that hemp is kind of like this lower level cannabis same, you know, but it never rises, and so when we talk about negotiations in DC, it's usually just a chip that's, you know, often easily given up on in Sacramento. Or was it actually the tax that was being negotiated? Is that the negotiation that itself blew up? Because it sounds like, if it passed with such resounding support that that would have been reflected and it would have been protected in said negotiations.

Amy O'Gorman Jenkins: 22:39

That is what we thought as well, and I should say, without trying to create any confusion, oftentimes you run a policy bill just to take the temperature of the legislature. So when it passed the Assembly 76 to 0, we thought, wow, we've got all the support. What we didn't anticipate was the Senate's reaction. So the Senate who, you know. We didn't work as hard because the policy bill was moving through the assembly.

Amy O'Gorman Jenkins: 23:07

The Senate, you know, was largely responsible, in all candor, for the deal blowing up, and the word I got was that we didn't work, the Senate, hard enough, we didn't have enough Senate champions. And so at the tail end of what are called third party negotiations, when you're negotiating budget language between the assembly, the governor and the Senate, it was basically the Senate that said yeah, no, we don't, we're not, we're not willing to support the inclusion of the tax freeze in the trailer bill. And so, absent all three parties agreeing, it blew up. And so now we are in the Senate with AB 564, hoping that in the last two weeks or so since those negotiations blew up, we have made enough of an impact to move our policy bill through the Senate process, and that first hearing in the Senate occurs tomorrow morning.

AnnaRae Grabstein: 24:07

Wow. So, if you take his words at face value, governor Newsom is supportive of tax reform for the cannabis industry and largely in support of bolstering the legal cannabis industry. However, this budget option to save the cannabis tax issue failed. I look at what's happening in DC and how Trump seems to be really effective at pushing around the Senate and Congress and his whole entire coalition. Is the Senate not listening to Governor Newsom? Does he not have the power? Are the power dynamics different, like what is going on? If Newsom supports this effort, why isn't it happening faster or at some accelerated kind of emergency pace to get these businesses the help that they need right now?

Amy O'Gorman Jenkins: 24:59

Yeah, very well said. I appreciate the question. So, as I previously stated way back, there's so many competing interests. So one of the big policy objectives going into budget deliberations was CEQA reform to build more affordable housing in the state. So there's a whole host of other issues film tax, credit extension. So all of these different policy objectives that you know were prioritized and so I don't want to suggest or speak or suggest in any way that the governor did not prioritize cannabis.

Amy O'Gorman Jenkins: 25:37

The fact that he went on record, you know, kind of the final hour of negotiations where we still had a little bit of a chance to get this slipped into a trailer bill the fact that he went on record. You don't typically see that. So I have to say that was greatly appreciated. But to your question about being able to kind of strong arm or nudge the Senate, I think that the calculation when he put out that news release so it was reported in SF gate and elsewhere I think that was really the nudge that he thought would would get us over the finish line and it was certainly something we celebrated amongst the lobby core. It's like you don't again, you don't see the governor way in, but he very clearly said you.

Amy O'Gorman Jenkins: 26:25

You get something to. You get a cannabis tax freeze or a reduction to my desk. I will sign it Kind of. Another way to answer your question, anna Rae, is the way the budget process works. Yes, the governor can weigh in and try to push, generally speaking, but our budget process does require all three parties to agree and, from what I understand, there was a fair amount of nudging and trying to push the Senate to accept this deal and they were just ultimately unsuccessful.

AnnaRae Grabstein: 26:59

And this is not a party line type of a thing. I mean, these are Democrats versus other Democrats versus other Democrats, mostly right.

Amy O'Gorman Jenkins: 27:07

Yeah. So third party negotiations include, yeah, the leadership and the assembly, the leadership in the Senate and then the governor's office, and in California it's Democrats, it's Democrat, democrat, democrat, yeah.

Ben Larson: 27:21

Okay, so well, we we seeded some ground on on the budget, but we have this bill that that seems to have broad support and and we will know come August, maybe September, whether that bill passes. What does the aftermath look like if that does pass? You know when? When, when could we see the taxes reduced back to the goals? To get it reduced back to? The goal is to get it reduced back to 15.

Amy O'Gorman Jenkins: 27:43

15, yes, and I would say on that piece that's actually a conversation that is happening in real time. So the way the bill is currently written, it's a tax levy. It would take effect immediately upon signature and I think that is certainly from an industry perspective. We want the tax to revert back to 15% as soon as possible. Frankly, we want it lower than 15%. We can talk about that. The challenge with that is how you avoid operator error, if you will, and that applies to both the state and the industry itself. So if the tax reverts back to 15, kind of mid-quarter, there are chances that you will remit an incorrect amount. The California Department of Tax and Fee Administration also has to adjust their systems accordingly. So back to your question.

Amy O'Gorman Jenkins: 28:44

There is a lot of discussion about whether we have to wait and not have this take effect the day of signature but have to include a date certain, and there is some speculation that that will be raised during the committee deliberations tomorrow and the timeframe that's been floating out there and again this is all happening in real time is October 1. That would be the beginning of Q4, the fourth quarter, and that would be kind of a clean way to reduce the tax back. The concern obviously I have is can the industry wait that long? Because every day, you know, consumers are seeing that 20% tax hike and you know my biggest concern is are we losing consumers and will we get those consumers back if we have to wait, you know, again till October 1? And so those are the conversations that we're deliberating right now in real time and will be, in all likelihood, during tomorrow's policy hearing.

AnnaRae Grabstein: 29:48

Yeah, this tax bill doesn't seem like it's good enough to me. I'm just going to be honest here 15% you went over the data that we're seeing reduction in the revenue that's coming in the industry is hurting. Why didn't the industry take a more aggressive approach to this bill and try to lower the taxes beyond just keeping them where they have been for the past few years and averting the tax hike?

Amy O'Gorman Jenkins: 30:17

So a couple reasons for that. So, first off, I agree with you 100% and I was recently asked by a publication as to what would be a preferred model, and I always reference Michigan, which has a quarter of the population of Californians and California's and sells more cannabis than we do legal cannabis in the state, and they have a 10% excise tax, a 6% sales tax, no local taxes. So, yes, I would much prefer to be exploring a very significant tax reduction. Going into this year, there was a lot of uncertainty. You had the fires in LA, you had a projected budget shortfall of around $14 billion. You had uncertainty at the federal level. We continue to have a very significant amount of uncertainty, by the way that federal money makes up about a third of California's total state budget and we are expecting to lose a considerable amount of that.

Amy O'Gorman Jenkins: 31:18

There were a lot of factors that we had to weigh going into this year and then also looking at a very new legislature. As I indicated, 70% of the assembly has been here less than four years. So in kind of exploring all those factors, talking to key policymakers that are our friends and champions, the bottom line was there was no appetite to pursue anything but this tax freeze and avert that 19% hike. So it was a bitter pill for the industry to swallow. There were a lot of internal debates and discussion. People were not happy, but it was what we thought was politically achievable at the time and I think, as we're now going through these policy debates in the Senate, it was probably the right calculation. We do have a significant amount of opposition to this bill to 564. We're not, despite the positive outcome in the assembly. We are competing with a lot of different interests who strongly object to even reverting us back to 15.

Ben Larson: 32:32

Do they object to it because they just dislike the industry, or do they just not understand economics?

Amy O'Gorman Jenkins: 32:39

They do not understand economics. They do not understand economics and, frankly, it's infuriating to me.

Amy O'Gorman Jenkins: 32:46

I had to sit with with some of these folks and and and I don't, you know, certainly have nothing disparaging to say about the organizations, but it's it's largely the beneficiaries of of the cannabis tax revenue and they, they truly believe that if you raise taxes, you're going to realize more revenue.

Amy O'Gorman Jenkins: 33:07

And the numbers and the data, as you just noted, ben, is not there we're looking at about a 38% tax on cannabis right now, when you factor in the 19% plus local taxes, plus the sales and use tax, the 19% plus local taxes plus the sales and use tax.

Amy O'Gorman Jenkins: 33:30

Consumers are not interested in paying that high amount in taxes, particularly in this economy, but nonetheless, these beneficiaries are convinced that, essentially, by not allowing this 19% tax hike, their narrative right now is that you are shortchanging us to the tune of $180 million annually and you are supporting corporate profits, corporate cannabis, to the detriment of children and the environment. That is their frame and that is what I am dealing with. And they are in the building, that Capitol building, every day, every single day, they are lobbying and, to put that in perspective, there's really only a handful of cannabis lobbyists left. We are under-resourced as an industry, and for good reason. We just talked about the data, and for good reason. We just talked about the data, but I am in there. It is probably one lobbyist for every 610 beneficiaries of the revenue that are running around, and these are you. Very difficult to make this case when you've got those different interest groups that you're competing with.

AnnaRae Grabstein: 34:51

I saw a quote from you. I thought it was really well said and I don't have it in front of me, but you basically said that we're not debating the use of the cannabis tax revenue and we support the good causes that the money is going to. It's just that we need to get this in order. We need to fix it so that the businesses can keep paying into these tax funds. So we're at this critical juncture. You're one of only a few lobbyists. What is the call to action for everybody of what's next to do? Most of our listeners are probably on your side here, so you're talking to a group of folks that want California cannabis to succeed in some way. What's next? What's the coalition look like? What do you want people to do?

Amy O'Gorman Jenkins: 35:31

Well, we have been asking members of industry, patients, consumers, ancillary businesses that support the cannabis industry contact your senator, contact your state senator. That is the most important and immediate call to action. I don't, frankly, believe everything I'm hearing from the Senate, that we weren't loud enough, that we didn't speak loud enough. But okay, if that's the case, then we all need to be calling our senator and communicating the importance of this bill for the state of the industry, at least preserving the state of the industry. We are being taxed out of existence currently, communicating that message and, as I said before, really personalizing it. So when you call your senator and you say you represent me and I am ex-business and I employ this many people, that resonates, that's meaningful for them. They remember that. They remember that far more than what I'm saying.

Amy O'Gorman Jenkins: 36:27

So that would be the first thing I would say in terms of call to action. The second would be, again, to support one of the handful of associations that are left trying to advocate for this industry. I know, again, budgets are tight, but the associations are. Again, we're the largest, but we're all still struggling. We all still have shoestring budgets. We don't have the resources that are necessary, we don't have the lobby support. So that would be a secondary ask, call to action that I would urge listeners to consider. All right, folks urge listeners to consider.

Ben Larson: 37:02

All right, folks, call your senators, join your associations. We'll drop a link to Kakoa, amy, I think we've really covered a lot of what's happening right now. I do want to kind of suspend that for a bit and start thinking about the future. Say we get this optimistically put into place, taxes go back down to 15%. To Anna Rae's point we have a lot more to do to kind of make this state viable and let it live up to the opportunity that it once was like the largest economy, the largest cannabis economy. How do we get there? Like, what is the next step? Like? I've heard new voter initiatives that could cost $40 million or something like that. Is that the way? Is there a way we iterate our way through this? At what? At a what seems like a snail's pace? Give us some hope.

Amy O'Gorman Jenkins: 37:53

It has been a snail's pace. I, I, I don't disagree with you and I'm sure there's probably some listeners out there who think, well, what the hell has she been doing for the last 10 years If she's been lobbying for the industry? I mean, look at the state of the industry. And I and I and I, I really appreciate that. And what I will say to you is that Prop 64 imposed a lot of limitations from the standpoint that it's a voter approved initiative and the legislature has very little say in terms of how it can shape the initiative.

Amy O'Gorman Jenkins: 38:28

So people have real concerns about local control. 57% of cities and counties still ban cannabis retail. We can't change that. That would require going back to the voters. Even the tax structure. I mean, we've been kind of chipping away at the tax structure, but there are limitations in terms of what we can do. In fact, even with the Haney bill potentially passing and getting signed, there's threats of lawsuits. So that all sounds dismal.

Amy O'Gorman Jenkins: 38:58

But what I will say is, because the legislature has acknowledged, and in some cases very publicly acknowledged, its limitations, there is a core group of us that are really trying to think through what we can do in terms of addressing some of these real core impediments, like local control, for instance, and that does require another initiative. And the thing for people to know is that you can put an initiative on the ballot as a legislature and that bypasses that signature gathering process which is one of the more costly elements to the initiative process. So what the legislature can do is a Senate constitutional amendment or an assembly constitutional amendment. An example of that was Prop 1, which was passed a year ago, march. So the legislature has the capacity to do that and and again, recognizing the impediments that they have to really affecting positive change for this industry.

Amy O'Gorman Jenkins: 40:00

We are talking about how we can maybe draft a constitutional amendment and and move it through the legislature and get it on the ballot. And we're having those. We were having those conversations at the beginning of the year. We were continuing to have those conversations and frankly, it's a personal goal and objective of mine is really trying to achieve again some truly meaningful reform for the industry. But that's going to take again going back to the voters. So that's the process that I'm really wanting to focus on and again is maybe potentially doing it next year. I think we've unfortunately been caught up in these tax conversations which have really dominated debate or discussion, but again I would like to focus on a constitutional amendment, working with some key allies in the legislature and we do have, despite our setback with the budget, we do have many that are really interested in this topic and wanting to work with us.

Ben Larson: 40:59

Yeah, well, the other conversation and the other bill that's kind of on the docket is AB8. And that really kind of addresses the influence of hemp and cannabis and that's a really unique conversation in California as well. I feel like we're embarking on a whole new episode by introducing this. I'll be your contact. Yeah, I don't know how we keep it lightweight. As we talk about the future and we talk about saving the cannabis industry, we can't ignore what is happening all around the nation with the convergence of hemp and cannabis, and that's a unique conversation in here in California From your vantage point. How do you imagine that kind of being addressed as we get into 2026, as we look at AB8 and maybe just a very quick primer on what that's looking to do?

Amy O'Gorman Jenkins: 41:48

AB8 is really kind of a reaction to what we saw happening in California. So what AB8 does is it establishes a very comprehensive regulatory and enforcement framework around intoxicating hemp products, so hemp products containing THC and the hemp industry is not pleased with the bill currently. But again, I would suggest that AB8 is kind of a reaction to really the proliferation of these products and without any real guardrails. Okay, so whether you support hemp or you don't support hemp, hemp products were readily available and sold in total wine and more up until recently, and so that really infuriated the cannabis industry, because obviously there's very tight regulatory guardrails around where we sell cannabis products. So we started to see this direct competition. So AB8 is really kind of a strong reaction to the you know the proliferation of these products and the availability of these products. So it really has. It essentially says if you are a hemp operator and you want to sell these products in the state you are, you are subject to all the rules governing cannabis, which means you you have to sell your products and dispensaries, you have to adhere to all of our child packaging and labeling laws. You've got to participate in the track and trace system. The way I would maybe more simply kind of frame. It is our governing statutes. Our laws would govern cannabinoids, essentially intoxicating cannabinoids, and so you wouldn't really distinguish between hemp and cannabis.

Amy O'Gorman Jenkins: 43:34

That bill is also moving. It's also being heard tomorrow in the same committee, so it's going to be an interesting policy discussion. We'll talk about the tax bill. We'll talk about AB8. Longer term and you know this well, ben there's a lot of discussion about meeting consumers where they're at and supporting a low dose channel outside traditional dispensaries. Right now that's being met with pretty fierce opposition from cannabis retail the cannabis retail community as well as small farmers retail the cannabis retail community as well as small farmers. But I think that's going to be an ongoing debate and discussion, even if we're successful at passing AB8 this year, that the hemp industry and the number of products are not going away. So we can try to regulate it under our cannabis framework. But I think that discussion is going to be ongoing in the next couple of years.

Ben Larson: 44:31

Is there a particular format that gets less pushback?

Amy O'Gorman Jenkins: 44:38

Not currently. I know where you're going. I would say probably the most actively engaged segment of the hemp industry is the beverage component. So the low dose beverage groups have been very actively lobbying for a low dose channel outside dispensaries for a whole host of reasons. A lot of folks would argue that you know our system and our system of distribution and our regulatory requirements don't really fit the beverage product line. So I think that conversation is going to continue again, even if we ultimately pass AB8.

AnnaRae Grabstein: 45:22

What occurs to me in this discussion around AB8 and what you're bringing up is some of the frustration that dispensaries have had with the proliferation of cannabinoid products outside of the regulated channel is just that if Prop 64 had created a healthy business environment and we weren't having to spend time trying to just keep taxes where they are instead of rising, and there wasn't an overall decline in performance of the businesses that have invested so heavily in this space, that there would be a more easy path for people to collaborate, for businesses to find alignment and opportunities to broaden a consumer access discussion, as opposed to what we're doing right now, which is everyone is just fighting to survive, and it feels like this fight to everyone has to protect themselves and protect their little fiefdom, because they're barely holding on, and so my hope is that some of these incremental steps will give people some runway and confidence that the industry is moving in the right direction so that there can be collaboration to figure out a way to best serve consumers, which is ultimately what is going to stop the proliferation of the illicit market.

AnnaRae Grabstein: 46:42

And that's like what hemp has done is created like a third leg of of competition for for these cannabis operators. It's like there was the illicit market and now there was the intoxicating hemp that got added outside of it and it just became too much, I think, for dispensaries to to be able to handle, and so that nobody was able to come to a problem solving place to figure out a win-win and that ended up with a ban. Which space to figure out a win-win? And that ended up with a ban which, you know, depending on where you land, you can see it as positive or negative, but I think that it isn't serving consumer access for sure.

Amy O'Gorman Jenkins: 47:21

I think that well said, very, very well said, and I couldn't agree with you more. And I will say too that you know, one thing I didn't share about AB8 is that it does provide a path to integrate hemp cannabinoids into cannabis products. So CBD, cbn, cbg, you know, and in some cases limited amounts of THC. That's kind of step one. But I also think you know, unfortunately, to your point, given the condition and the state of the industry, we were well on a path at one point to really having this broader conversation about how we regulate cannabinoids.

Amy O'Gorman Jenkins: 48:01

And hemp was kind of seen, even just three years ago, as kind of this way to chip away at our framework. So again, hemp is a crop, we're a cannabis product, and so we kind of looked to the hemp industry as being like what we had aspired to be as cannabis. And then, to your point, hemp kind of came in. There was this influx, massive influx of products, and then it created this immediate competition at a time when the legal cannabis industry was really struggling. So, unfortunately, to your point, now everyone's kind of back in this protectionist mode and it's it's hemp versus cannabis, and I think that's really unfortunate. So I think there is a place in time to have those broader conversations, but as as long as the house is burning down and that is legal cannabis I think those conversations are a ways away.

Ben Larson: 48:56

Yeah, that makes sense. Well, Amy, I really appreciate you coming on and sitting on the hot seat. It's been really informative. As we approach the end of the show, I would love to hear your last call. It's our time for our guests to take the mic and give a plug, give a shout out. I think I know what it might be, but we're going to give you the opportunity. Say whatever you want, cannabis related or otherwise. This is your moment.

Amy O'Gorman Jenkins: 49:24

Oh, gee, and you know it's so funny. I remember there was something I forgot to do was figure out what my last call was going to be. I think what? What I just maybe just to restate, um, you know, just really encouraging this community, this, this wonderful, unique community that is cannabis, to make your voices heard. I, you know, I, that is my appeal.

Amy O'Gorman Jenkins: 49:49

My last call to all of you is there is a place for you to engage and advocate here in Sacramento. Again, you don't have to work with me, but, but you know, I think we will be successful, more successful, when, again, our policymakers can see how cannabis is, you know, woven into the fabric of their own communities, whether it's you being a consumer, a patient, a business owner. We need to get there, and there's a lot more work to be done, and so your voice matters, your voice is important and it will dramatically contribute to the work that we're doing up here. So, hopefully, this is an entree into much more engagement on the part of the broader cannabis community that I am honored to represent. But, again, I need to hear and see more of you. So that is my call and my plea.

Ben Larson: 50:47

Awesome. Well, thank you so much. Thank you again. Thank you for the decade plus of work that you've put into this industry, no matter what side of the table you're on in any given conversation. Yeah, but the passion, the dedication, it's very much appreciated. So thank you.

Amy O'Gorman Jenkins: 51:02

Thank you, and thank you for your time and for having me today.

Ben Larson: 51:05

Absolutely All right. Anna Rae, do you feel a little bit more in the know and what's going on in Sacramento?

AnnaRae Grabstein: 51:12

yeah, I'm hopeful, uh, I'm hopeful good let's, let's, save this industry in the state. California's got to win it.

Ben Larson: 51:18

We right, we have to absolutely, uh, we have our work cut out for us, though. All right, folks, what did you think? Do you feel like you know more about what's going on in Sacramento? How are you going to get involved? Who are you going to back? It is a race to September here in Sacramento. Thank you to our teams at Virtosa and Wolfmeyer. As always, we couldn't do it without you guys. Thank you to our producer, eric Rossetti. I feel like we're falling into a groove. Tuesdays is our new recording day, hopefully putting out the recordings by Thursday. If you enjoyed this episode, please drop a review on Apple Podcasts, on Spotify, wherever you listen to your podcasts, or maybe YouTube. Maybe you can subscribe to us on YouTube. As always, folks stay curious, stay informed and keep your spirits high Until next time. That's the show.