New Knowledge Accessible for California Hashish Testing and State-Large Gross sales in 2019

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Over 12% of California Hashish Failed Required Laboratory
Testing as of February 1st, 2019

A current California Bureau of
Hashish Management’s (BCC’s) weekly report exhibits that merchandise generated by licensed cultivators and
processors proceed to clear required screenings in rising proportions.
Moreover, the replace, at the side of knowledge offered completely to
Hashish Benchmarks by the BCC, gives a glimpse of the quantity of flower
shifting by means of California’s regulated market, though some {qualifications} could
apply.

In accordance with the BCC replace,
33,040 batches of all product varieties have been submitted for California’s obligatory
high quality assurance and security testing as of February 1st. Of these batches,
4,072, or 12.3% failed for some purpose. Two months in the past, originally of December
2018, over 14% of batches have been failing necessary screenings, previous to new exams
being added on the finish of final 12 months. Moreover, these figures are decrease than
the virtually 19% failure price documented a couple of month after an expansive slate
of stringent new screenings was put in place in July 2018.

To this point, solely 51 whole batches
failed screenings for heavy metals and water exercise, the brand new exams which solely
turned required on the finish of 2018. Consulting the primary BCC weekly report
issued in 2019 exhibits that over 4,300 batches have been examined within the opening
month of this 12 months. Nonetheless, batches of product harvested or manufactured in
2018 aren’t topic to screenings for heavy metals or water exercise, so many
of the over 4,300 submitted in January have been most likely being examined to the
requirements that utilized in H2 2018. On condition that exemption, it’s possible too early
to inform whether or not the brand new heavy metals and water exercise exams will affect
discernibly the quantity of provide obtainable in California’s wholesale market.

Additionally, concerning required testing,
BCC spokesman Alex Traverso earlier this month offered knowledge to Hashish
Benchmarks on the typical dimension of batches of flower submitted for necessary
screenings. In accordance with Traverso, batches of bulk flower submitted for testing
between July 2018 and early this 12 months averaged roughly 16.5 kilos. The BCC’s
report exhibits that, as of February 1st, 15,470 batches of flower have handed the
state’s obligatory screenings.

Presuming that each one flower that
handed testing has “entered the business market,” within the parlance of
California regulators, that signifies that 255,255 kilos of flower have been bought
by licensed California cultivators within the seven-month span from July 2018
by means of the tip of January 2019. (Traverso additionally confirmed to Hashish
Benchmarks that the interval lined by the BCC’s weekly reviews commences on
July 1, 2018, slightly than January 1, 2018, as some shops have reported.)

The quantity of flower traded in
California’s regulated market within the previous seven months is surprisingly
small at first look. For context, Colorado cultivators bought or transferred
over 411,000 kilos of flower in all of 2017, an quantity that we anticipate to
enhance barely in 2018. It should be famous, nevertheless, that solely about 540
retailers have been licensed in California by the tip of 2018, lower than the 550
permitted adult-use storefronts in Colorado on the similar juncture, with not all
the California shops working all through the complete 12 months. On condition that truth, it
is feasible that licensed retailers in California are shopping for comparable quantities
of flower relative to these in Colorado.

Nonetheless, as we’ve reported
beforehand, a number of market individuals said to Hashish Benchmarks final
12 months that they suspected product from unlicensed sources was making its approach
into the regulated market. That is doable resulting from statewide plant and
stock monitoring software program not being required of California cannabis
companies that held momentary licenses, as basically all operators did
all through 2018. Such product wouldn’t be accounted for in testing knowledge,
probably explaining the surprisingly small quantity of flower traded that’s
indicated by inspecting such info in isolation.

In our upcoming Annual Evaluate & Outlook we estimate the volumes of flower traded within the
state markets lined in our reporting, in addition to their greenback values. We’ll
interact in a extra intensive examination of gross sales and tax assortment knowledge out of
California’s market, together with the testing info mentioned
right here, in an effort to formulate a extra knowledgeable estimate of the quantity of flower
and trim that modified palms within the Golden State’s licensed system in 2018.

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