Core One Labs Inc C.COOL

RE:RE:RE:LA Resists Legalization while Outside Cities Open f/Business

[Stranius]

All very good points @Canuck21C.

I WAS trying to highlight the competitive advantage Adelanto has over LA without understanding the ever-changing dynamic situation in LA as it relates to issuing cannabis business licenses. So I appreciate your insights into what is happening in LA on a virtual real-time basis. Feel free to update us all on that front as the situation develop.

Regarding your second bigger picture point on the benefits of LA getting to a point where business licenses are issued by the city, thereby giving the industry more legitimacy - I must admit I hadn't quite looked at it that way. I see where you are coming from and agree that it will ultimately help in the long run. As you said, LA does represent an important/mature cannabis culture in California and assuming they came on board, it would provide considerable challenge to the federal legality issue surrounding cannabis. And you correctly pointed out that the cost of urban real estate would likely make any kind of large scale operation cost-prohibitive. Money will flow to lowest cost of production centers which is not likely to include any large urban center. There are no real benefits to being located centrally in a large urban center for cannabis cultivators (apart from proximity to customers which is offset by the higher real estate / operating costs mentioned above). It is much cheaper to produce in a rural environment and import to the city.

Lastly, I do not agree with your comment about LDS not looking at obtaining a dispensary. I have no concrete evidence backing up my statement. But as I had written here, I believe they are after one of the four coveted dispensary licenses in Adelanto. There are currently somewhere between 3 to 4 thousand dispensaries throughout the state of California and many (~75% are grey market). I expect that as we approach Jan 1, 2018, there will be significant crackdown on grey market operations. The legal dispensaries left standing will see a surge in business and having a legal storefront in that scenario will be highly highly lucrative.

~S

Canuck21C wrote: I should quickly add that while I assume that you were simply highlighting the words in that Marijuana Resources article to bolster the competitive advantage that Adelanto would have in cultivation and extraction--I too am completely for that--if LA continued with its extremely limiting policies, there is a bigger picture involved as I pointed out.  I covered the "limited immunity" issue which is mainly concerned with dispensaries--a business that LDS is not going into. If all this results in a stable, legitimate retail industry (free from harassment from the authorities) that LDS can sell into, I think that's all good. Yes, Wesson's new proposals do cover the manufacturing facilities that LDS is certainly doing but urban real estate and capital intensive machinery are cost-prohibitive so that limits the competition to a certain degree.  The new proposals for proper business licenses and permits also include legitimacy for cultivators but again, indoor grows presumably cannot economically compete with Adelanto's advantages.  

Taken as a whole, these new proposals or amendments made to the Draft Regulations are actually positive for LDS, IMO.  Overall stability is good for business and, most importantly, it's a step in the right direction for reducing the legal risks and liabilities associated with this industry and LDS in particular.