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High winds, flooding shutter cannabis operations across California

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The historic storms pummeling California have caused widespread fallout for cannabis operators across the state and are disrupting operations and possibly supplies.

As days of high winds and catastrophic rains batter the coast, some marijuana companies have temporarily closed operations and shored up their facilities in a desperate attempt to lessen the damage.

Several businesses told MJBizDaily their operations have been flooded, causing untold economic setbacks.

Others have reported product losses as heavy rains damaged crops.

Widespread power outages have also halted production lines and left plants vulnerable to mold and other contaminants.

Road closures and dangerous conditions have prevented several operators from even accessing their operations.

This storm system, which was expected to dissipate by Tuesday afternoon, is the latest climate disaster in California.

In late September, a heat wave wreaked havoc on the state’s cannabis industry, coming on the heels of another challenging wildfire season.

Washed-out roads are preventing workers from accessing cultivation facilities, which could lead to lost sales and delays in production, including packaging and trimming of flower.

That, in turn, could cause marijuana supply-chain disruptions and leave some retail store shelves empty.

The storm, which started on Sunday, has forced tens of thousands to evacuate and killed at least 15 people statewide. More than 34 million are under a flood watch.

The strong winds have also toppled trees and knocked out power to multiple locations.

In central California, parts of Ventura and Santa Barbara counties had received more than 16 inches of rain as of Tuesday morning, the New York Times reported, with more rain forecast over the next several days.

“We got hit really hard yesterday,” Graham Farrar, president of Santa Barbara-based cannabis company Glass House Brands, said about Monday’s storm.

The company closed both of its cultivation operations in Carpinteria early Monday to ensure workers could get home to their families and “wouldn’t get trapped on the wrong side of a road closure,” Farrar said.

Gif of storm system moving into California in early January.
This gif shows the recent storm system moving into California. (Image courtesy of National Oceanic and Atmospheric Administration)

More impact than just rain, wind

This rain hit five years after a Jan. 9, 2018, storm that caused mudslides in the hills above Santa Barbara, killing 23 and injuring many more.

This time, streets in downtown Santa Barbara are flooded again, with cars underwater.

“It looks like a monsoon,” Farrar said.

Despite the “rivers raging right now” Glass House facilities aren’t in any low-lying areas, so Farrar isn’t currently worried about property damage from flooding.

The high winds did break a few panes of glass, he said, but his workers shored up the facilities with sandbags and locked down the buildings before the storm hit.

Aside from the immediate impacts of the rain and wind, Farrar pointed out that cloudy weather the past several weeks has been the lowest light levels he can remember in years.

With the low light and high humidity from the storms, he’s worried about mold and botrytis contaminating his crops.

“So, managing the climate through these events takes at least as much focus as actually securing the facilities for it,” Farrar added.

Glass House operates as an “indoor sun-grown facility” and doesn’t use much supplemental lighting aside from photoperiod lights.

Farrar pointed out that his climate control systems are automated, but the cultivation facilities still need on-site workers.

“If a road closes to the north, we’ll send someone from the south; if it’s the other direction, we’ll do vice versa,” Farrar said.

“So we’ll definitely have people over there.”

The one silver lining, according to Farrar: California really needs the rain.

Power’s out

Aiden Rafii hasn’t been able to commute from San Francisco to his Monterey County company’s manufacturing facility for more than a week because of widespread road and highway closures.

The CEO of Euphoric Life, Rafii has been monitoring potential water breaches late into the night with security cameras.

He thought the company had escaped operational and product damages after sandbagging all the doorways and entryways.

But a few minutes after speaking with MJBizDaily late Tuesday morning, he called back to report that the power went out during a butane extraction run in the Hollister facility, which was starting to take in water from groundswells.

Meanwhile, roughly 2,800 pounds of fresh frozen biomass is stored in the company’s freezers.

“Without power, if the material thaws out, it will be ruined,” Rafii said.

“It’s close to a $140,000 batch of material. That’s going to be a pretty difficult blow for us.”

(By late Tuesday afternoon, the power was restored and the biomass was saved.)

Because of the federal ban on marijuana, Euphoric Life’s products can’t be insured.

Euphoric learned that lesson the hard way a few years ago after a rainstorm washed away about $10,000 worth of product after water seeped into the facility.

“There’s no recourse,” he said.

Nearly 225,000 residents and businesses had no electricity Tuesday, according to Poweroutage.us. And more than a quarter of the outages were in Santa Clara County, the heart of Silicon Valley.

Several prolific cannabis-growing counties experienced widespread power outages, including Mendocino, Monterey and Santa Cruz.

On Tuesday, the power had been out for a couple of days in Salinas, where Jesus Burrola lives and works.

The CEO of cannabis grower and packager Posibl said most of his workers haven’t been able to access the farm because of flooded roads.

Fortunately, Burrola said, one of his workers has a lifted pickup that allows him to traverse the mud.

“But. basically, all our trimming, drying, packaging, production – we employ over 100 people – those folks have not been able to come for the last two days,” Burrola said.

That disruption to the production process means the brands that rely on his company and have pending orders could likely run out of product.

“They’re going to encounter stock outs because any delay in our production ends up affecting this whole supply chain,” Burrola added.

In Mendocino County, high winds could jeopardize hoop houses utilized by several small farmers in the region and power outages could ruin curing and storage processes, according to Michael Katz, executive director of the Mendocino Cannabis Alliance.

He said at least one large, local manufacturer experienced significant flooding that blocked access to the facility.

“With the inability to write off normal business expenses, the damage caused by these storms could be very hard for some folks to address,” Katz said.

Not everyone hit hard

Kristin Nevedal, director of Mendocino County’s Cannabis Department, said warnings have been sent to growers who are operating adjacent to burn scars inflicted by massive wildfires a few years ago.

Those burn scars tend to turn into mudslides when they’re hit with a heavy rain such as this, she added.

But, ultimately, a lot of the growers in the Emerald Triangle (Humboldt, Mendocino and Trinity counties) are self-sufficient and can manage without electricity.

“Most of the rural homesteaders either have alternative energy sources or have figured out how to use very limited amounts of power,” Nevedal added.

It appears Napa and nearby Lake County, where several cannabis cultivators have operations, had been spared from widespread damages as of midmorning Tuesday.

Eric Sklar sounded relieved since his Napa Valley Fumé offices, operational facility and cannabis farm in Lake County had sustained no damages as of press time.

On Monday morning, he said, the Napa River in nearby St. Helena nearly crested over 17 feet, which would have triggered flooding.

“It never got there, it stopped a foot short,” said Sklar, who founded the Napa Valley Fumé cannabis business.

“Sonoma is having it a lot harder.”

Natalynne DeLapp, executive director of the Humboldt County Growers Association, said on Monday afternoon that some growers were experiencing wind damage stemming from some low-tech infrastructure – plastic getting ripped off hoop houses, for example – and roadways were closed because of downed trees.

“But it is not as catastrophic as the news makes it sound,” she added.

“Many of our people live off the grid, so the loss of power is negligible. We don’t have any significant landslides or flooding.

“Things could change, but right now, we’re doing OK.”

Source: https://mjbizdaily.com/high-winds-flooding-shutter-marijuana-operations-across-california/

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Business

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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AI & Technology

Amazon Faces Potential Criminal Trial in Italy Over €1.2 Billion Tax Evasion Allegations

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Milan: U.S. tech giant Amazon is facing the prospect of a major legal showdown in Italy, after prosecutors in Milan formally requested a court to move forward with criminal proceedings over alleged tax evasion totaling approximately ₹12,500 crore (€1.2 billion).

The case targets Amazon’s European division along with four senior executives, marking one of the most significant tax-related investigations involving a global e-commerce platform in Europe.

Trial Push Despite Multi-Million Euro Settlement

The move comes even after Amazon reached a financial settlement with Italian tax authorities in December, agreeing to pay around ₹5,500 crore (€527 million), including interest, to resolve part of the dispute.

Typically, such settlements lead to the closure of criminal investigations. However, Milan prosecutors have opted to proceed, signaling a tougher stance on alleged corporate tax violations.

A preliminary hearing is expected in the coming months, where a judge will decide whether to formally indict the company and its executives or dismiss the case.

Allegations of VAT Evasion Through Marketplace Sellers

At the center of the investigation are claims that Amazon’s platform enabled non-European Union sellers to avoid paying value-added tax (VAT) on goods sold to Italian consumers between 2019 and 2021.

Prosecutors allege that the company’s marketplace structure allowed thousands of foreign vendors—many reportedly based in China—to operate without fully disclosing their identities or tax obligations. This, authorities argue, led to substantial VAT losses for the Italian government.

Under Italian law, online platforms facilitating sales can be held partially liable if third-party sellers fail to comply with tax requirements, a key point in the prosecution’s case.

Italian Government Named as Affected Party

In their filing, prosecutors identified Italy’s Economy Ministry as the injured party, citing significant financial damage resulting from the alleged tax evasion.

Legal experts say the outcome of the case could have wide-ranging implications across the European Union, where VAT systems are harmonized and similar compliance rules apply to digital marketplaces.

Multiple Investigations Add to Pressure

The VAT probe is just one of several legal challenges facing Amazon in Italy. The European Public Prosecutor’s Office is reportedly examining additional tax-related issues covering more recent years.

Meanwhile, Milan authorities are pursuing separate investigations into alleged customs fraud linked to imports from China and whether Amazon maintained an undeclared “permanent establishment” in Italy—potentially exposing it to higher tax liabilities.

In a separate regulatory action, Italy’s data protection authority recently ordered an Amazon unit to stop using personal data from over 1,800 employees at a warehouse near Rome.

Amazon Denies Allegations

Amazon has consistently denied wrongdoing and indicated it will strongly contest the allegations in court if the case proceeds. The company has also warned that prolonged legal uncertainty could impact investor confidence and Italy’s appeal as a destination for international business.

Broader Impact on Europe’s Digital Economy

If the case moves to trial, it could become a landmark moment for the regulation of global e-commerce platforms in Europe. Governments across the region are increasingly scrutinizing how digital marketplaces handle tax compliance, especially in cross-border transactions.

With online retail continuing to expand, regulators are under mounting pressure to ensure that multinational platforms and third-party sellers adhere to the same tax rules as traditional businesses.

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Aviation

IndiGo Crisis Exposes Risks of Monopoly: What If Telecom or E-commerce Collapses Next?

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Airports across India witnessed scenes of distress and confusion as thousands of passengers were stranded due to IndiGo’s massive flight disruptions. Families with medical emergencies, funerals, and personal crises were left helpless as the airline cancelled hundreds of flights without adequate communication or support.

Passengers described desperate situations — a mother pleading for sanitary pads for her daughter, a woman unable to transport her husband’s coffin, and others stranded while trying to reach family funerals or hospitals. “It was like a lockdown at the airport,” one passenger said, describing the panic that unfolded as IndiGo’s mismanagement crippled operations nationwide.

Root Cause: IndiGo’s Market Monopoly

The turmoil, industry experts argue, stems from IndiGo’s monopolistic control over India’s domestic aviation market. The airline operates nearly 2,100 flights daily and holds around 60% market share — meaning every second plane flying within India belongs to IndiGo.

This dominance has given the company unparalleled influence. When IndiGo falters, the entire aviation system suffers. Passengers are left with few alternatives, as other airlines lack capacity to absorb stranded travellers. The result: skyrocketing ticket prices, chaos at terminals, and total dependence on a single private operator.

Aviation pioneer Captain G.R. Gopinath, founder of Air Deccan, criticised the government’s inaction, noting that on some routes, IndiGo’s economy fares surged to ₹1 lakh. He compared the situation to a hostage crisis, writing that the airline “held the system ransom” and forced regulators to defer new safety rules meant to protect pilots and passengers.

Government Intervention and Regulatory Weakness

The crisis erupted after IndiGo failed to comply with the Flight Duty Time Limitations (FDTL) — rules introduced by the DGCA in January 2024 requiring adequate rest for pilots. Despite having nearly two years to adapt, IndiGo blamed the rule for operational disruptions, citing a shortage of pilots.

Under mounting public pressure, the government stepped in, temporarily relaxing FDTL norms and capping airfare hikes. Officials claimed the move was to protect passengers, but analysts say it exposed the state’s vulnerability to corporate monopolies. “The government had no option but to yield,” said one aviation policy expert, pointing out that ignoring safety regulations for short-term relief could have long-term consequences.

The crisis also rekindled memories of the June 2025 Air India crash near London, which claimed over 240 lives. Experts warn that compromising pilot rest and safety standards to maintain flight schedules could risk another tragedy.

If Telecom Giants Fail: A National Paralysis

The article raises a troubling question — what if a similar crisis struck the telecom sector, where Jio and Airtel together control nearly 80% of subscribers and serve over 780 million users?

If both networks failed simultaneously, the repercussions would be catastrophic. Internet shutdowns would halt UPI transactions, online banking, OTP verifications, video calls, OTT streaming, and emergency communications. Critical services such as airports, hospitals, stock exchanges, and small businesses — many of which rely on WhatsApp and digital payments — would come to a standstill.

In essence, a telecom breakdown could paralyse India’s digital economy, exposing the nation’s dependence on a duopoly.

E-commerce Monopoly: Another Fragile Ecosystem

The same risk looms over the e-commerce sector, where Amazon and Flipkart dominate nearly 80% of the market. A disruption similar to IndiGo’s could cripple daily life — halting delivery of groceries, medicines, and essential goods, freezing refunds and customer support, and leaving small sellers without platforms to trade.

Local retailers, freed from competition, might exploit shortages by inflating prices. Such a scenario underscores the perils of market centralisation in sectors critical to everyday living.

A Wake-Up Call for Regulators

The IndiGo crisis, analysts say, is a warning shot for policymakers and regulators. A single company’s operational failure exposed systemic weaknesses in India’s infrastructure and consumer protection mechanisms.

As the aviation regulator DGCA investigates and IndiGo works to restore normalcy, the broader lesson remains clear: unchecked monopoly power in any essential service — whether air travel, telecom, or e-commerce — poses a direct threat to economic stability and citizen welfare.

Without stronger competition laws, redundancy frameworks, and regulatory oversight, India risks repeating this crisis across multiple sectors — each time with millions of citizens paying the price.

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