Vice Companies VS Payment Processors
Can weed learn from OnlyFans?
The Broccoli Report
Monday, August 30, 2021
Time to read: 5 minutes, 49 seconds. Contains 1166 words.
Good morning!
When the news first broke that OnlyFans, the platform where creators can get paid for their content through "fan” subscriptions—often adult content—was about to ban the content that made it a household name, over banking issues, I thought to myself, “Welcome to the club, OnlyFans.” Because we in the cannabis industry are all too familiar with the brutal exclusion from federally-backed financial service providers.
Then, the internet erupted and creators rallied outrage, resulting in the company tweeting out last Wednesday that they “have secured assurances necessary to support our diverse creator community and have suspended the planned October 1 policy change.” For now, explicit content is safe on OnlyFans again.
As a “vice” company, OnlyFans has had trouble finding investors this whole time, despite incredibly successful numbers. I am glad for these creators to continue to have a place where they can control and monetize their content, their way. However, it stings that anything remotely related to weed is still more controversial than the entirety of OnlyFans’ adult content.
I’m holding out hope that this viral news story got the rest of the world to notice just how much power banks have over e-commerce and digital content, perhaps giving weed-related and CBD companies a chance to progress the conversation around facilitating legal cannabis-related transactions. I’m not talking about selling weed online—just let us mail some damn rolling papers! Lifestyle brand Studio A-OK has been waiting months for PayPal to release a frozen $4k, with the payment processor saying that because A-OK went “against user guidelines,” they have no right to their cash. A reminder to always use mainstream processors with caution, and to transfer your balance to your bank as often as you can. Maybe, just maybe, these conversations about ethical, legal e-commerce can get digital banking services to consider working with the legal businesses doing legal things, compliantly.
Speaking of 💰, this Friday’s newsletter for paid subscribers will be alllll about raising more of it. I spoke with Alison Gordon—who co-founded 48North and is now the co-founder of Other People’s Pot, a sales and distribution company throughout Canada—an experienced cannabis entrepreneur who’s spent her share of time pitching to investors and deciding who to invest in. We talked through how to decide when fundraising is the right choice for your company, the different approaches to debt and equity to consider, and updates every cannabis company needs to know about the investor landscape right now.
One last thing before we get to the news: I’m taking Monday off for Labor Day, so no Monday newsletter next week. I’ll be back in time to kick off the weekend with Friday subscribers.
One-Hitters: Cannabis News at a Glance
New Jersey regulators just dropped their rules for the impending adult use program, bringing the state’s industry one step closer to retail sales. However, it’s looking like stores aren’t opening anytime soon to the growing numbers of cities opting out of legal cannabis. Over 71% of towns across the state completely opted out, passing ordinances that prohibit cannabis cultivation facilities, manufacturers, wholesalers distributors, delivery companies and legal weed dispensaries. Based on the areas that are moving forward with adult use, it’s looking like most weed biz will be happening in South Jersey and Central Jersey. The delivery services that open up shop just outside city limits in these banned towns are going to make an absolute killing.
Pending any future COVID-19 variants, cannabis consumption lounges in Nevada are on track to open up shop by mid-2022. Ancillary events happening around next year’s MJ BizCon are going to be nuts.
Speaking of, who’s going to MJBizCon and who’s going to MJ Unpacked? The Oct. 19–22 Vegas weekend has diverged into two parts this year, and it sounds like the OG event is staying big, with big speakers and networking opportunities for scaling supply chains, and the new Unpacked event providing a more intimate atmosphere for brands and investors. I haven’t yet decided...still watching the variant and travel climate. I’m also curious to see how this current spike may effect some of these in-person fall events—the National Cannabis Festival in Washington, D.C. last weekend required proof of a negative COVID-19 test within the past 72 hours or full COVID-19 vaccination to attend.
The founders of Rose edibles got featured in the latest episode of Eater’s podcast, Gastropod. Co-founder Nathan Cozzolino walks hosts Cynthia Graber and Nicky Twilley through the brand’s industrial kitchen in San Francisco, showing them the process of making their signature Turkish Delights-styled rosin gummies and discussing where the cannabis industry is headed next.
Perhaps only because of Lollapalooza, Illinois cannabis sales in July came in at double what they were in July 2020.
Weed job alerts: Xula is hiring a part-time Global Community Officer (remote, but ideally based in Mexico City for periodical in-office meetings). Further north, Groundworks Industries (Serra; Electric Lettuce; Farma; Pruf, et al.) is hiring a full-time Director of Operations with full benefits in Portland, OR.
Canappendix is a new supply chain software company providing POS systems and seed-to-sale compliance solutions, and they’re hiring too: a full-time account executive located in Oklahoma City or Long Beach, CA. What’s most interesting about Canappendix is that this is a social equity-licensed company—yes, one that doesn’t actually touch weed. It’s the first of its kind.
Mary Jane Gibson pens a surreal, weed-infused true crime piece for Rolling Stone about a Russian billionaire funnelling Russian money into California’s cannabis market, his shady cannabis company called Genius Fund, and his shocking, seemingly self-inflicted death.
Rosario Dawson joined the board of Cann, the California-licensed THC beverage company backed by a number of other celebs. Rumor has it Dawson may be in a relationship with Sen. Cory Booker (D-NJ)—one of the cosponsors of the Cannabis Administration and Opportunity Act currently being discussed on the hill. If that’s the case, I’m all for Dawson schmoozing with politicians in weed’s favor, and I thank her for any assistance. A big question remains: do celebrity endorsements actually move product in dispensaries? A bigger question: Can we look forward to a weed-fueled creative campaign featuring Dawson, à la fellow investor Tove Lo for the launch of Cann’s caffeinated Peach Passion Maté?
Lingerie brand Thistle and Spire expanded their embroidered cannabis leaf Brooklyn Haze collection to a more realistic range of sizes, now offering plus sizes up to a 3X.
A new, community-centric Black-owned dispensary opens in the Crenshaw neighborhood of Los Angeles. Gorilla RX, the first social equity licensed shop to open in LA, has waited a very long time to open its doors—founder Kika Keith actually sued the city over it in 2019. Now, Keith is proud to be providing cannabis and hemp goods, lifestyle offerings from Marley Natural and Malin + Goetz, as well as small business workshops for cannabis operators.
Masks are back—good thing High Society Collection’s dainty pot leaf mask chains have been restocked in gold and silver.
Be safe out there,
Lauren Yoshiko