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Big California marijuana distributor Herbl collapses, brands left unpaid, sources say

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Herbl, a major licensed California marijuana distribution company, is in receivership after falling behind on a key loan, a source close to the situation confirmed to MJBizDaily on Tuesday.

The collapse of Herbl – which reportedly handled $700 million worth of product sales in 2022 – is the most prominent failure of a cannabis company in the state to date and has major implications across the industry.

Potentially tens of millions of dollars in unpaid invoices are due to brands across the state, which now fear that that revenue, including for product already sold, is lost forever.

The state might also be due millions in unpaid taxes.

Herbl’s financial troubles underscore the upheaval within California’s marijuana industry as brands struggle to collect on unpaid invoices.

The terms of Herbl’s receivership mean that investors and other claimants due money from Herbl might be paid before brands, according to people familiar with the situation.

Mike Beaudry, Herbl’s co-founder and CEO, did not respond to a voicemail and a text message from MJBizDaily seeking comment.

The company’s main lender is East West Bank, which also last week canceled a line of credit it had extended to the company, the source confirmed.

East West Bank did not respond to a telephone message and an email seeking comment.

The company’s other investors include Measure 8 Ventures, Salveo Capital and Silverleaf Venture Partners, MarketWatch reported last year.

As of September 2022, Herbl employed more than 200 – including salespeople and delivery drivers – and worked with 1,000-plus licensed retailers, according to MarketWatch.

Industry aware of Herbl’s problems

Though the company has not publicly confirmed the situation, Herbl’s collapse is common knowledge throughout the cannabis industry.

On LinkedIn, former Herbl employees reported last week that they were seeking jobs.

That has since been followed by a near universal acknowledgment among industry insiders on Tuesday that the company was finished as a going concern.

“The recent receivership of Herbl, one of California’s largest cannabis distributors, should be a wake-up call to policymakers that all is not well, and immediate action is called for to avert a crisis that has already started,” Wesley Hein, president of the Cannabis Distribution Association, a trade group representing distributors, told MJBizDaily.

Herbl remains listed as a member of the  group.

“Herbl was well-run, well-financed and stocked with well-known brands,” Hein added.

“However, even with these advantages, it was unable to overcome the structural challenges of operating in California and now finds itself in receivership.

“Herbl’s downfall is a stark reminder that if state and local policymakers don’t immediately address regulations, taxes and the illicit market, we are going to see the continued erosion of a vibrant industry.”

California’s mandatory distributor model requires brands to sell products through licensed distributors.

Distributors collect payment from retailers after product is sold and then remit both excise taxes due to the state as well as payment for the original product delivery to the brand.

Payment issues come to a head

Brands started reporting unpaid or partially paid invoices with the company this spring, but the situation appears to have come to a head within the past few weeks.

The company has reportedly laid off nearly all its workforce, leaving behind only a skeleton crew that’s attempting to collect payment from California retailers – who are, in turn, fielding calls from brands that are trying to collect payment that’s owed to them through Herbl.

“We’re trying to collect” on accounts receivable owed by Herbl, Ciencia Labs CEO Ben Mitchell told MJBizDaily on Tuesday.

“But the fact is, unfortunately, we’re not going to get paid through Herbl.”

Mitchell, who co-founded the social equity brand with his wife, Carolina Vazquez Mitchell, a recognized cannabis product developer, did not share how much the brand is owed.

But he said Herbl began falling behind on paying brands about six weeks ago.

The company previously sent out checks a few weeks ago.

In that time, Mitchell added, efforts to find out what was going on at Herbl did not yield answers.

Herbl’s downfall is the latest domino to fall after tax and regulatory burdens hit licensed cultivators and retailers, who have publicly called for major reform for years.

“Now it’s cascaded all the way down the brands,” Mitchell said. “I don’t really know how anyone’s going to get out of here, either.”

Source: https://mjbizdaily.com/big-california-marijuana-distributor-herbl-collapses-brands-left-unpaid/

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Jio’s 1,600-Satellite LEO Constellation Gets Technical Green Light

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Reliance Jio has crossed a significant milestone in its space connectivity ambitions after its proposal to deploy a Low Earth Orbit (LEO) satellite constellation of around 1,600 satellites received a positive technical assessment from the Indian National Space Promotion and Authorisation Centre (IN-SPACe).

The evaluation, conducted jointly by IN-SPACe, the Indian Space Research Organisation (ISRO), and the Wireless Planning and Coordination (WPC) wing of the Department of Telecommunications, reportedly concluded that Jio’s proposed system meets the required technical standards and is comparable to leading global satellite broadband networks.

India’s Indigenous LEO Satellite Vision

Under the proposal, Reliance Jio plans to deploy between 1,600 and 1,650 satellites in Low Earth Orbit at an altitude of around 650 kilometres.

The planned constellation is expected to provide high-speed satellite connectivity across India, with approximately 32 satellites visible from any location at a given time. The company aims to roll out the network within the next two to three years, subject to regulatory approvals.

According to industry estimates, the satellite system could deliver 4.5 to 5 terabits per second (Tbps) of total data capacity, making it one of the largest satellite broadband projects proposed in India.

The project is expected to require an investment of $10–15 billion (approximately ₹95,000 crore to ₹1.42 lakh crore), reflecting the scale of infrastructure needed for satellite manufacturing, launches, ground stations, and user terminals.

Regulatory Process Moves Forward

Following the successful technical review, the proposal is expected to move into the next phase of regulatory approvals.

The government may now assist Jio in securing orbital slots, coordinating spectrum usage, and filing applications with the International Telecommunication Union (ITU), the global body responsible for managing satellite orbit and frequency allocations.

Obtaining orbital rights remains a critical step, as Low Earth Orbit has become increasingly competitive due to the growing number of satellite broadband projects being planned worldwide.

Officials also indicated that the proposed satellite architecture has been designed to coexist with future Indian LEO constellations, allowing multiple domestic operators to share orbital resources efficiently.

Broadband, Mobile Connectivity, and Strategic Applications

Jio plans to use the satellite network to provide a range of communication services, including satellite broadband, mobile backhaul, enterprise connectivity, and direct-to-device (D2D) satellite communication, particularly in remote and underserved regions where conventional telecom infrastructure is limited.

The company also intends to establish 20 to 22 ground stations across India to support network operations.

Apart from commercial telecommunications, officials have highlighted the project’s potential strategic importance. A domestically developed satellite constellation could strengthen India’s communication infrastructure, reduce dependence on foreign satellite operators, and support national security requirements.

Reports suggest preliminary discussions are underway regarding the possibility of integrating defence-related payloads into some satellites, enabling both civilian and strategic use.

Major Step for India’s Space and Telecom Sectors

Industry analysts view the technical clearance as an important milestone in India’s expanding private space ecosystem. If Jio secures the remaining regulatory approvals and international orbital clearances, the project could become the country’s first large-scale indigenous LEO satellite broadband network.

The initiative also aligns with India’s broader efforts to expand digital connectivity while strengthening its presence in the global satellite communications market.

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Alleged Crores Pharma Scam Mastermind Arrested from Surat

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After evading law enforcement for nearly 13 years, an accused linked to a large-scale pharmaceutical fraud case has been arrested by Delhi Police from Surat, Gujarat. The suspect is alleged to have orchestrated a series of financial scams involving fake identities, forged documents, and dishonoured cheques used to procure high-value pharmaceutical raw materials.

Authorities say the accused, identified as Himmat Singh Lodha, is believed to have defrauded multiple pharmaceutical companies in Delhi of goods worth approximately ₹98 lakh before disappearing and remaining underground for years.

Fake Business Deals and Dishonoured Cheques Used in Fraud

Investigators claim the accused posed as a legitimate pharmaceutical trader and placed bulk orders for expensive drug ingredients, offering post-dated cheques as payment security.

In one documented case from 2013, he allegedly obtained around 550 kilograms of Gliclazide, a diabetes-related pharmaceutical ingredient, valued at over ₹26 lakh. When suppliers attempted to encash the cheques, they were reportedly returned with the remark “account closed.”

Following the transaction, the accused allegedly vacated his office and rented residence and disappeared without settling payments. He was later declared a proclaimed offender in 2016 after repeatedly failing to appear before court proceedings. Authorities had also issued a reward for information leading to his arrest.

Multiple Identities and Repeated Fraud Pattern

Police investigations further link the accused to another cheating case dating back to 2012, where he allegedly used a fake identity, “Kailash Jain,” to obtain a large consignment of Ambroxol HCL, a pharmaceutical compound used in cough medications. The value of that consignment was estimated at around ₹72 lakh.

Officials believe the accused followed a consistent modus operandi—posing as a credible businessman, securing high-value goods on deferred payment terms, and then disappearing after delivery while shutting down business operations.

Investigators suspect that forged business records, fake company credentials, and fabricated financial histories were used to build trust with suppliers and gain access to expensive raw materials.

Multi-State Surveillance Leads to Arrest in Surat

A special Crime Branch team tracked the accused through coordinated surveillance efforts across multiple cities, including Mumbai, Ahmedabad, and Surat. After nearly a month of technical monitoring and intelligence gathering, officials located and arrested him from a residential area in Surat.

Authorities also revealed that the accused had been involved in property-related activities while staying under the radar to avoid detection.

Growing Threat of Corporate Identity Fraud

The case highlights a rising trend of organised financial fraud targeting industries that rely heavily on trust-based transactions and deferred payments. Experts note that criminals increasingly exploit gaps in corporate verification systems by using fake GST registrations, temporary offices, and forged documentation to appear legitimate.

Cybercrime and financial fraud specialists warn that such schemes are becoming more complex with the widespread availability of digital business tools, making it easier to create convincing but fraudulent corporate identities.

Experts Urge Stronger Due Diligence in High-Value Transactions

Experts, including former IPS officer and cybercrime specialist Prof. Triveni Singh, emphasize the need for stricter verification procedures in commercial dealings. He noted that relying solely on paperwork or digital business profiles can expose companies to significant financial risk.

Authorities and industry experts recommend physical verification of business operations, bank account validation, and detailed background checks before engaging in high-value or deferred-payment transactions—particularly in sectors like pharmaceuticals, where single consignments can involve transactions worth crores.

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EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices

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A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.

Investigation Under Digital Markets Act Gains Momentum

The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.

Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.

Industry Groups Demand Swift Action

Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.

Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.

In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.

Google Denies Allegations

Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.

However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.

Potential Billion-Euro Penalties

If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.

Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.

Wider Implications for Big Tech

The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.

A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.

As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.

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