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Only 24.4% of Cannabis Operators Profitable Due to 280E, Other Challenges

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According to Beau Whitney of Whitney Economics, policy solutions include safe banking, 280E reform, and opening up interstate commerce.

A new report on the U.S. cannabis market is making the rounds, and paints a pretty dire picture of where the industry is today economically, with just 24.4% of survey respondents saying their business is profitable. High Times recently sat down with Beau Whitney, the CEO of Whitney Economics, who headed up the economic analysis of the data their survey found to get a more complete picture. 

No Longer Able to ‘Work from Stoned’ Harms Cannabis Economy

You might remember when the COVID-19 pandemic started in the spring of 2020, many states said cannabis was an essential industry that couldn’t be closed down and cannabis sales were “booming.” Unfortunately, behavioral changes after the pandemic have taken a toll. “People could no longer Work from Stoned,” which Beau said “hurt the industry at a time when they needed more revenue but [received] less.” While Whitney’s data found that just ten out of 36 state markets were not growing, “The growth is coming from states that just launched, and while they are growing, it is a much smaller chunk of the total cannabis market.” The ten states that weren’t growing included large, mature markets like Colorado, California, Oregon, and Washington. 

Oregon: Regional Bias or a Harbinger of Things to Come?

The report admits there was a “strong regional bias, as Oregon-based respondents made up nearly 90% of the total.” That means that out of the 224 responses received, just 24 were from operators outside of Oregon. As any longtime observer of cannabis markets will note, Oregon’s cannabis economy has been struggling for over half a decade, to the point where many cannabis cultivators jumped into the hemp market. As Beau lives in Oregon, he is no stranger to the struggles of their local cannabis industry and made many attempts to control for the regional bias in the responses they received by triangulating the data – using more than one data point. 

“I do a lot of expert witness testimony and have been doing individual state-level research,’ said Beau, which is why he knows “Michigan is mirroring Oregon, with too much capacity, too much supply, and a strong illicit market.” Beyond his research, Beau followed up on the survey by “calling business leaders.” All of the data from states less represented in the survey “indicated that Oregon was a harbinger of things to come.”

Plans for Next Year’s Survey

Their first two years, Whitney created an annual report, but they are trying “to go from an annual to a quarterly survey.” As a result, Beau said they “will likely trim down the number of questions.” 

The reason why there was such a strong representation of Oregon-based operators is that Oregon’s cannabis regulators sent the survey out directly to their licensees. Other than Oregon, the only two states where they had such strong regulator participation were Washington and, surprisingly, South Dakota. Next year will be a different story. Beau now has stronger relations with the Michigan regulators, expects more support from Colorado regulators, and has better relationships with business leaders in Florida; all states that were notable omissions in this year’s data. Beau also mentioned that “the Cannabis Regulators Association (CANNRA) sees a lot more value in this data and supports me more than they did previously,” and their support could help expand his available pool of data significantly. 

Necessary Reforms to Save the Industry

The key factors limiting growth are IRS tax code 280E, “a lack of access to banking, a limited demand market because supply and demand are all in one state, and the influence of the illicit market.” Whitney’s survey data and Beau’s personal research have revealed some policy reforms that could save the cannabis industry. Beau’s top policy solutions are safe banking, which “lowers the cost of capital,” 280E reform, which would relieve “up to 70% taxes in some cases,” and opening up interstate commerce to deal with imbalances of supply and demand. Beau did an analysis of 280E taxes earlier this year and found that “the cannabis industry paid $1.8 billion more in taxes than if they had been treated like any other business.” 

Beau put in practical terms, “There is a threshold for economic viability that must be met to account for product acquisition, labor, and federal taxes.” He pegged that threshold at around $2.5 million a year currently, but with 280E reform that threshold goes down to $1.5 million, which greatly raises the chance for success. “280E is doing exactly what it was supposed to do when it was designed 40 years ago,” said Beau, which is to make it impossible to run a business profiting from the sale of federally illegal drugs. Beau cautions that “while it sounds doom and gloom,” and he doesn’t anticipate growth until the Federal Reserve cuts interest rates, the businesses that survive “will thrive in 2025 when growth takes off again.”

Source: https://hightimes.com/business/only-24-4-of-cannabis-operators-profitable-due-to-280e-other-challenges/

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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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