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Cannabis growers exit California market, helping stabilize prices

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California cannabis cultivation capacity is down significantly from early 2022, with some growers choosing not to plant or renew their licenses because of low wholesale prices and tough economic conditions.

The reduction in canopy is leading to wholesale price stabilization – and might even result in a slight increase in pricing – following months of declining prices in the nation’s largest marijuana market, according to some industry officials.

Cannabis wholesale technology platform LeafLink reports that the total square feet of cultivation canopy in the state has dropped about 15% from a year ago, to around 68 million square feet versus roughly 80 million square feet at this time last year.

Jason Vegotsky is among those who sees wholesale prices starting to level off.

The CEO of Petalfast, an Irvine-based sales and marketing agency for the cannabis industry, said there are simply fewer players in the market, which means prices have stopped tanking and might be coming up slightly.

“I think that trend will continue over the next six months,” Vegotsky said.

“I’m expecting a really nice, second half of the year for the folks who make it through the first half.”

By nice, he means he expects businesses to have an ability to make money with margin expansion, “rather than this margin decline that we’ve seen across the whole supply chain for really the last 18 months.”

Ryan Smith, co-founder and CEO of New York-based LeafLink, believes farmers are choosing not to plant or renew their cultivation licenses because:

  • Pricing for outdoor bulk cannabis is lower than the cost of production.
  • A weak retail sector makes it difficult to sell branded products in the state.

“Put together, these factors illustrate that grow operations do not have the margin or capital runway to make it through the current ‘down cycle,’” he told MJBizDaily via email.

Other factors at play

That down cycle he’s referring to is highlighted by the wholesale flower market.

According to LeafLink data, a pound of packaged flower is wholesaling in the $1,200-to-$1,400-a-pound range compared with $1,700-$1,900 a pound at the beginning of 2022, a year-over-year decrease of about 25%-30%.

Bulk outdoor flower has remained in the $200-$400-a-pound range in the post-harvest period of fall and winter the past couple of seasons, according to LeafLink.

“California produces more than three times as much legal cannabis than the total addressable market can consume, largely a result of uncapped cultivation licenses and limited retail capacity,” Smith said.

With only 50-100 more retail locations slated to come online in the state this year, Smith expects more growers will likely have to reduce capacity to balance the market.

Other factors are at play aside from the amount of production and retail capacity.

The devastating conditions of heavy rain and wind in early January might have an impact on the supply in the near future, for one.

On the flip side: A change in the law governing cultivation could add capacity to an oversupplied market.

Effective Jan. 1, the state Department of Cannabis Control began accepting applications for large cultivation licenses.

Those licenses are for cultivation sites with more than 22,000 square feet of canopy.

Seeing stability

Some of Scott Solomon’s cultivation clients were reporting a bleak scene about 18 months ago, but the situation is improving.

The CEO at Operational Security Solutions, headquartered in Fresno, said prices started dropping “pretty hard” about a year and a half ago.

“We have a revenue model that’s based off of the volume of cash that these businesses are generating,” Solomon said. “It impacted us significantly.

“In some instances, we had clients, cannabis businesses, that said the price dropped essentially 80% across some of their products.”

According to Solomon, the pricing picture started to improve somewhat last September and has begun leveling out.

Still, businesses are building out more cultivation capacity on the potential of future growth of the industry in event of federal legalization or other reform, he said.

Solomon’s seeing more grows developing from Fresno down through Bakersfield and toward Los Angeles.

The picture is even rosier at vertically integrated California cannabis company Glass House Brands.

Graham Farrar, president of the Santa Barbara-based business, said pricing went up by about 13% from the third quarter to the fourth quarter of 2022.

“I think what’s starting to happen is that the market is rationalizing that the pricing was so low that it was destructive to everybody,” he added.

“Eventually, if you’re growing product for more than you can sell it for, you quit doing that. And we can see that happening pretty drastically.”

Farrar is quick to point out that an uptick of three or four months isn’t enough to call it a trend.

“But even to see stability at this time, I think is a positive sign,” he added.

Doom, gloom

But not everyone is seeing the situation in such a positive light.

Doug Chloupek, the CEO and founder of Juva Life, a cannabis grower and life science research company with a cultivation arm in Stockton, said the market is confused about what defines good marijuana.

“The market has been driven by influencer hype,” he added.

Consumers are paying a premium for purple flower that tastes of fuel or fruit and tests at 30% or more THC content, according to Chloupek.

“The reality is that there is some phenomenal cannabis that is just not being received by the market because the market’s too naive to know what’s actually really good,” he added.

Anecdotally, Chloupek’s seeing green flower selling for $800-$1,000 a pound wholesale, while purple flower can fetch another $100 a pound or more. He said the same flower was selling for $800 more a pound last year.

The overall cost of production, including steep taxes and regulatory fees, is one of the leading factors driving cultivators to not renew their licenses, according to Chloupek.

He said some growers are going back to the unlicensed market because they were making a comfortable living before they tried to go legit.

An illicit market grower can make $150,000-$200,000 a year and not have to worry about their margins being eaten up by taxes and fees, according to Chloupek.

“It’s kind of a doom-and-gloom picture I’m painting, which I wish it wasn’t,” he said.

“But that’s a pretty stark reality of where things are in California right now.”

Source: https://mjbizdaily.com/cannabis-growers-exit-california-market-helping-stabilize-prices/

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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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