Benzinga - by Maureen Meehan, Benzinga Editor.
Elliot Lewis, CEO of retail chain Catalyst Cannabis Co., told the crowd at the Benzinga Cannabis Market Spotlight: California in a stormy speech Thursday that legit cannabis companies are diverting enormous amounts of weed product to the illicit market and says he has the numbers to prove it.
"Look at quarter earnings. So they sell millions of dollars in consumer-packaged goods. That means the sh– that they actually package up goes to retail, right?"
Wrong.
“This company produces 210,000 pounds of flower…so where’s the other 190,000 pounds going? But on the [earnings] report, they’re calling it ‘biomass.'”
Lewis questioned the legitimacy of classifying cannabis trim as "biomass" and argued for more transparency regarding the sale of lower-grade products.
"Where I come from, maybe they redefined what the word biomass is trim. That’s gonna get f—— blasted. Because nobody’s asking the question and the question is OK. ‘Are you really white labeling it all?' Nah, because I know what the f— is on our shelf, right?, Lewis said.
“They’re calling it biomass… But why not ask details and say, ‘hey, how much is small? How much is big? How much is trim?'"
Also Read: EXCLUSIVE: California Cannabis Investor Takes Page From Warren Buffett’s Playbook — ‘Trust Is Everything’
Lewis argued that investors are not asking the right questions and called for more scrutiny of cannabis companies’ reported figures.
“The investors come in, you think you ask questions, but you aren’t actually asking the right questions. And when you only have $4.3 million in your reporting in consumer-packaged goods and you’re calling something biomass that isn’t biomass, you have to ask yourself, why is the person reporting doing that?”
What seemed to irk Lewis the most was that these discrepancies are contributing to the black market by driving down prices and forcing out smaller competitors, he said.
“The legal market is the black market,” he said. “There’s still a few off-site roads here and there, but they’re running around and forcing out everybody, right?”
Lawsuit Targets Alleged ‘Burner Distributors'
Lewis filed a lawsuit in 2021 in an attempt to force the state of California to crack down on these so-called "burner distributors." A case management conference is scheduled for Feb. 26, according to court records.
Meanwhile, he's spreading the word, in his inimitable and passionate way.
"So, you know, look, I’m not trying to be rude to the crowd per se, but you’re the one injecting money into the illicit market," he told the crowd as a panel moderator gently approached him from behind, but not before Lewis blasted the conference hosts and attendees for "the destruction of the legal market."
Lewis’s parting words to those trying to keep cannabis culture alive and spare it the harms of burner distributors but "don’t have f—— political protection nor the money to battle it. We gotta fight with f——what we have to try and survive, and it’s the money in this f—— room that doesn’t ask the right f—— questions that’s perpetuating this s— forward," Lewis said before dropping the mic, standing up from his chair and storming out of the room.
Now Read: EXCLUSIVE: Glass House CEO Says ‘Legalizing Cannabis Isn’t Just About The Economy, It’s About Righting Past Wrongs’
Photo by Dustin Blitchok.
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