The Denver City Council on Monday signed off on a measure designed to bolster the city’s cannabisThis post contains affiliate links! delivery services, and do right by individuals who have been adversely affected by the War on Drugs.
Axios reports that city lawmakers “approved a measure that will make delivery exclusivity permanent for social equity transporters, or business owners considered disproportionately harmed by the war on drugs,” and will also slash “licensing fees for social equity delivery companies and the retailers they partner with.”
The new ordinance is a lifeline of sorts to struggling delivery companies. As Axios explains, Colorado’s capital city “launched its weed delivery program last year — which requires dispensaries to deliver through social equity transporters through July 2024 — nine of Denver’s 206 pot shops offer the service.”
“With few businesses to deliver for, the licensed social equity transporters are faced with ‘severe challenges’ to avoid going out of business,” Axios reports.
City officials in Denver passed a measure permitting cannabisThis post contains affiliate links! deliveries in the city last year, designating the licenses exclusively for social equity candidates for a period of three years.
With that rule scheduled to expire in 2024, the ordinance passed by the city council on Monday makes it permanent.
Molly Duplechian, the executive director of the Denver Department of Excise and Licenses, said last year that the word on the street was that a number of cannabisThis post contains affiliate links! dispensaries were waiting for the three-year exclusive period for social equity applicants to end before entering the delivery business.
“What we’ve heard is that some of the existing industry may have been waiting the exclusivity period out, or they could have been investing in a social equity transporter and then planning to move to do their own delivery in two years,” Duplechian said.
But weed delivery in the Mile High City has been a slow burn thus far. As Axios reports, the Denver cannabisThis post contains affiliate links! market “might be so oversaturated with dispensaries that delivery will struggle to catch on,” and the “reality is that many people would rather pick up their pot than pay extra for delivery.”
Eric Escudero, a spokesman for the city’s Department of Excise and Licenses, said that cannabis delivery services have been slow to get off the ground in Denver.
“It is easy to see that Denver preventing stores from doing their own delivery so social equity businesses have the first crack at this business type is resulting in the industry choosing profit over supporting more equitable access to the industry,” Escudero told local news station 9News.
The station reported that Escudero “said only one in 20 Denver dispensaries offer delivery services,” compared with “80% of stores in Aurora, where the dispensaries can do their own delivery.”
According to the station, the social equity requirements “mandate delivery services be owned by people who lived in disadvantaged areas, make less than 50% of the state’s median income, or who have a personal or familial past marijuanaThis post contains affiliate links! charge or arrest,” and Escudero contends that “extending that requirement forever will incentivize dispensaries to make a deal” with delivery drivers.
“[It] gives the market regulatory certainty so any stores holding out for the opportunity to do their own delivery in two years have no reason to hold out anymore,” Escudero said, as quoted by 9News.
The newly passed ordinance may be enough to keep struggling delivery companies in business.
The station highlighted Michael Diaz-Rivera, owner of Better Days Delivery, who “said his company would likely not make it without city council intervention.”
“It has been tough getting dispensaries to match with us, and we can’t do anything without dispensaries buying in,” Diaz-Rivera said. “Business has been slow.”
Washington State Settles With Unicorn Brands Following Synthetic THC Probe
The Liquor and Cannabis Board in the state of Washington said Wednesday that it has reached a settlement with Unicorn Brands LLC over a “a year-long investigation and multiple Administrative Violation Notices (AVNs) for creating synthetically-derived THC from hemp and distributing it into the state-regulated cannabisThis post contains affiliate links! market.”
The board said that Unicorn Brands “cooperated with the investigation” and ceased the conversion process that was under question. Last summer, the Liquor and CannabisThis post contains affiliate links! Board issued a policy statement that “made clear that synthetically-derived THC from hemp was prohibited under current rules and law.”
“This was an important case about the integrity of the legal cannabis system voters approved ten years ago and which today flourishes in Washington with a carefully controlled system of production, processing and selling of cannabisThis post contains affiliate links! to adults,” Liquor and Cannabis Board chair David Postman said in an email to marijuanaThis post contains affiliate links! license holders in the state, reminding the businesses “of the prohibition on the sort of laboratory conversions involved in the Unicorn case.”
In October of last year, the board’s Education and Enforcement Division issued an Administrative Violation Notices to Unicorn Brands for four violations in its synthesis process: “1) Misuse of License, 2) Criminal Conduct, 3) Noncompliant Extraction, and 4) Traceability Failure.”
Under the terms of the “comprehensive settlement” between the two sides, the board said that Unicorn Brands “will not resume converting hemp into THC and brings an end to a lengthy and complex investigation.”
The board provided more details on the back-and-forth that preceded this week’s settlement.
“After extensive negotiations, the agency and Unicorn reached an agreement to settle these cases. As part of this settlement, the Enforcement and Education Division has agreed to fully withdraw the alleged criminal conduct charge,” the board said in a statement. “In exchange, Unicorn stipulates and fully admits to the remaining three violations: Misuse of License, Noncompliant Extraction, and Traceability Failure. Further, Unicorn has agreed to pay the standard monetary penalties for the three stipulated violations, accept forfeiture of the seized products, and waive further administrative review. Finally, Unicorn has agreed to the condition that “it shall not use its license to produce or manufacture Delta‑8 THC, Delta-9 THC, or any similar synthetically-produced THC from any hemp-based sources in the State of Washington unless explicitly authorized by a subsequent change in state law that allows the licensee to do so.”
The case highlights concerns surrounding the burgeoning Delta-8 market, with state regulators throughout the country struggling to stay on top of new (and, in some cases, illicit) products.
In its press release on Wednesday, the Liquor and Cannabis Board called on lawmakers in Washington to take steps toward providing greater regulation on that front.
“The next important step in protecting the public health is to eliminate the burgeoning market for Delta 8 products and other synthetically-derived products outside the regulated market. These gummies and other edibles are being illegally sold in convenience stores and online in Washington and across the country. We hope the 2023 legislative session will see action to assist in eliminating these illegal sales,” the board said.
Regulation of Delta-8 is far from the only pressing matter facing Washington’s cannabis industry. The state experienced a surge in armed robberies of cannabis dispensaries earlier this year, a problem attributed to the large sums of cash on hand at such retailers.
A spokesperson for the Liquor and CannabisThis post contains affiliate links! Board said in February that the agency recommended dispensary owners “hire armed security guards, make frequent cash deposits so there isn’t much cash available in shops, post signs in businesses explaining that staff don’t have access to much cash, clearly communicate safety guidelines with staff so they know what to do in the event of a robbery.”
Japanese Health Officials Propose Revision of Law To Allow Import, Medical Cannabis
The Japanese Ministry of Health, Labour, and Welfare stated on Sept. 29 that it recommends an amendment to the country’s drug law, known as the Cannabis Control Act. According to Reuters, the agency expressed the need to allow cannabis to be imported and permitted for medical use, which would align it with other countries that already have established medical cannabis programs.
Medical cannabisThis post contains affiliate links! would be regulated like pharmaceuticals, and “would apply to marijuanaThis post contains affiliate links! products whose safety and efficacy were confirmed under laws governing pharmaceuticals and medical devices,” according to Reuters.
According to translated documents published on Sept. 28 by the Japanese Ministry of Health, Labour, and Welfare, a large number of individuals contributed to the review and recommendations, including professors and medical professionals. According to the report, only 1.4% of people in Japan report having ever used cannabisThis post contains affiliate links!. In western countries, consumer percentages range between 20-40%.
In the U.S., Epidiolex is the first CBD medicine approved by the Food and Drug Administration (FDA) for treating children with epilepsy, and specifically those who suffer from Lennox-Gastaut syndrome, Dravet’s syndrome, and tuberous sclerosis complex. As of March 2019, Epidiolex began undergoing clinical trials in Japan, although there have been no further reports or updates. The trials are exempt from the country’s Cannabis Control Act, which prohibits cannabis import/export and consumption. At the time, the country reported having 3,000 residents who suffer from Dravet syndrome, and 4,300 who suffer from Lennox-Gastaut syndrome.
In its current form, the Cannabis Control Act is limiting all forms of progress in relation to cannabisThis post contains affiliate links!, including hemp.
In January 2021, the Hokkaido Industrial Hemp Association (HIHA) released a statement addressing the Japanese Ministry of Health, Labour, and Welfare’s investigation on cannabis and other drugs. “The Cannabis Control Act is a profoundly unreasonable law that restricts all cannabis regardless of the quantity or even presence of THC (Tetrahydrocannabinol, the active ingredient in marijuanaThis post contains affiliate links!, the chemical synthetic substance of which are designated as an illegal drug in Japan), and even prohibits the cultivation of hemp from overseas (see note below) containing none of this substance,” HIHA wrote. “First, concerning the CannabisThis post contains affiliate links! Control Act and problems with its application, we would like to recommend the development of a more reasonable law formulated based upon discussion that is made public to the citizens of Japan and upon scientific knowledge.”
HIHA concluded that the Cannabis Control Act is preventing the hemp industry from flourishing since it was enacted in 1948. “In order to develop a hemp industry on par with those overseas and protect national interests concerning industrial hemp, this country must revise the Cannabis Control Act and other related laws as soon as possible, position the hemp industry appropriately within the legal system, and strike a balance between the control of drugs and the encouragement of industry.”
In August 2021, the Japanese Ministry of Health, Labour, and Welfare released a report detailing their recommendations for allowing medical cannabis for patients. Earlier this year in May, the ministry met again to continue the discussion of medical cannabis, addressing the need for treatment for those who abuse cannabis use and how to address youth consumption.
In December 2021, the gaming company Capcom partnered with the Osaka Prefectural Police to use its fictional character Ace Attorney to campaign against cannabis youth consumption. According to the Japanese National Police Agency, there were 5,482 people who were caught violating the country’s cannabis law (4,537 were in possession of cannabis, while 273 were illegally selling the plant, and 230 were arrested for illegally cultivating). Beatles band member Paul McCartney received an 11-year ban from Japan for possessing half a pound of cannabis back in 1980.
Canadian Government Tells Hockey Players in Russia, Belarus To Leave
The Canadian federal government recently sent word to hockey teams traveling in Russia and Belarus to leave as soon as possible, according to the Toronto Sun. Forty-eight Canadian hockey athletes are on the roster for the Kontinental Hockey League, and 44 of them are playing in Russia and Belarus (the other four are in Kazakhstan).
Russia invaded Ukraine on Feb. 24, and Canada was an early supporter of Ukraine since the war began. The Canadian government has given $626 million in military aid, and $320 in humanitarian relief. “Our government has been very clear. Canadians should avoid all travel to Russia and Belarus,” Global Affairs Canada said in a statement to The Canadian Press. “If they are in Russia or in Belarus, they should leave now. Our ability to provide consular services may become extremely limited.”
There could be a possibility that a situation similar to the imprisonment of U.S. WNBA athlete Brittney Griner could occur due to the ongoing conflict. According to Maria Popova, Associate Professor of Political Science at McGill University in Quebec, there is a real threat to players. “Anybody who is in Russia is always in danger of being framed, incarcerated, used as a pawn in whatever the local government, central government et cetera decides to do,” Popova said. “I think something like what happened to Brittney Griner is possible. The same playbook can be repeated in a case against a Canadian player for sure.”
Griner was detained in Russia on Feb. 17, just before Russia invaded Ukraine. Popova did add, however, that while there’s a risk for players playing abroad, she doesn’t see a clear reason why Russia would choose to detain more athletes. “I don’t see why Russia would try to use these people as a pawn because Canada is not Russia’s main problem in this war,” Popova said. “There isn’t really any hope that Russia could change Canadian policy in Ukraine. They know Canada is firmly in NATO, clearly backing Ukraine.”
Adrien Blanchard, press secretary for Canadian Foreign Affairs Minister Melanie Joly, told CBC.ca that players should explain why they are choosing to stay in Russia and Belarus. “President [Vladimir] Putin’s war in Ukraine is a war on freedom, on democracy and on the rights of Ukrainians, and all people, to determine their own future,” Blanchard said. “Athletes who decide to play and associate with Russia and Belarus should explain their decisions to the public.”
Player-agent Ritchie Winter, based in Alberta, manages three players currently involved in the Kontinental Hockey League. In his opinion, players have every right to continue making a living.
“We live in a world where individuals are allowed to make those decisions. It’s just an individual decision related to an employment opportunity. Has every player that’s gone, push, tugged and pulled and wrestled with the decision? Yeah, absolutely,” Winter said. “At the end of the day, they’re husbands and fathers who have responsibilities to their families. If you’re a young family with limited resources because you played mostly in the minors, there’s a desire to take care of your family. Sometimes that leads people to the oilfields in Kazakhstan and sometimes it leads them to the KHL.”
An NBC News report from March shared that players often compete in Russia because they can possibly earn four or five times more than their U.S. salaries. Citing Ketra Armstrong, a professor of sport management and the director of the Center for Race & Ethnicity in Sport at the University of Michigan. “It’s a sad situation in many regards, but it’s not totally beyond the realm of understanding,” said Armstrong. “The amount of money that athletes can make throughout other parts of the world is incredible and almost a no-brainer depending on how good you are and your overall market appeal.”
The National Hockey League (NHL) does conduct THCThis post contains affiliate links! drug tests on players, but CBDThis post contains affiliate links! is permitted. Rather than being punished for cannabisThis post contains affiliate links! use, the NHL refers the players to a Substance Abuse and Behavioral Health Program.
Deadline Passes in New York for First Round of Dispensary Licenses
The deadline for the first adult-use cannabisThis post contains affiliate links! dispensary licenses in New York arrived on Monday, and now hundreds of applicants await feedback from the state.
Monday’s deadline came a month after the state’s Office of Cannabis Management officially opened the application portal on August 25.
Since then, the agency has been flooded with applications from individuals hoping for the first crack at the Empire State’s legal marijuanaThis post contains affiliate links! market.
Earlier this week, The New York Times reported that roughly “500 applications had been submitted by Sunday,” adding that hundreds “of ineligible people have been turned away, but so have dozens more who did qualify and needed help navigating the state’s online portal.”
The state will award 150 licenses for the first round this fall, and those have been designated exclusively for applicants who have previously been convicted of a pot-related offense (or a family member of someone who has).
Billed as the “Seeding Opportunity Initiative,” the policy goes further than most of the so-called “social equity” provisions in other states’ marijuanaThis post contains affiliate links! laws.
“New York State is making history, launching a first-of-its-kind approach to the cannabis industry that takes a major step forward in righting the wrongs of the past,” New York Gov. Kathy Hochul said in announcing the policy back in March. “The regulations advanced by the Cannabis Control Board today will prioritize local farmers and entrepreneurs, creating jobs and opportunity for communities that have been left out and left behind. I’m proud New York will be a national model for the safe, equitable and inclusive industry we are now building.”
New York City has taken similar steps toward enhancing opportunities in the emerging cannabis industry for individuals adversely affected by erstwhile marijuanaThis post contains affiliate links! laws.
The city’s mayor, Eric Adams, announced last month “a first-of-its-kind initiative and suite of services to support the equitable growth of the cannabis industry in New York City.”
The initiative, known as Cannabis NYC, will provide “technical assistance for cannabisThis post contains affiliate links! license applicants, as well as other business services to take entrepreneurs beyond licensing to a thriving operation,” while also supporting “cannabis entrepreneurs and their workers as the industry develops.”
It will also collaborate with “industry stakeholders to create good jobs, successful small businesses, and sustainable economic opportunities, while also addressing the harms of cannabis prohibition.” Adams’ office said that the “first phase of Cannabis NYC will focus on ensuring that justice involved New Yorkers are able to apply for and secure retail licenses from the state.”
“Today, we light up our economy and launch Cannabis NYC — a first-of-its-kind initiative to support equitable growth of the cannabis industry in New York City,” Adams said in a press release last month. “The regulated adult-use cannabis industry is a once-in-a-generation opportunity for our underserved communities that have, for too long, faced disproportionate rates of drug-related incarceration to get in on the industry on the ground floor. CannabisThis post contains affiliate links! NYC will plant the seeds for the economy of tomorrow by helping New Yorkers apply for licenses and understand how to open and successfully run a business, while simultaneously rolling equity into our economy by giving those who have been justice-involved and those with a cannabis conviction a chance to succeed. This is about creating good jobs, successful small businesses, and finally delivering equity to communities harmed by the ‘War on Drugs.’”
The first state-regulated recreational cannabisThis post contains affiliate links! dispensaries in New York are not expected to open until late this year (as the earliest).
But countless small business owners there have not waited to get in on the “kush rush.” New York City in particular is teeming with illicit cannabis shops, prompting state regulators to crack down on some.
Is Big Tobacco Pivoting to Big Cannabis?
British American Tobacco announced Monday that it has acquired a non-controlling minority stake in the Berlin-based marijuanaThis post contains affiliate links! startup Sanity Group GmbH.
Kingsley Wheaton, the chief growth officer at BAT, characterized the deal as an example of the company’s “ongoing work to explore numerous areas beyond nicotine, positioning BAT for future portfolio growth across a range of categories and geographies.”
“We continue to transform our business, through better understanding of our current and future consumers, as part of our A Better Tomorrow purpose,” Wheaton said in a press release.
The acquisition could also be seen as a reflection of an emerging trend: cannabis is the future, while tobacco––specifically cigarettes––is increasingly a relic of the past.
A survey from Gallup last month found that a mere 11% of Americans reported as cigarette smokers, an all-time low. By contrast, 16% said they consider themselves current cannabis smokers.
Those consumer trends may continue to shift as marijuanaThis post contains affiliate links! becomes legal in more markets both in the United States and beyond.
That coming change in policy almost certainly made Monday’s deal even more enticing for British American Tobacco, one of the largest tobacco companies in the world.
According to Bloomberg, Sanity “secured $37.6 million in the BAT-led Series B funding round,” noting that almost “half of the amount will go toward strengthening Sanity’s medical business, while the company will spend the rest on preparing for the potential legalization of recreational marijuana in Germany.”
Per Bloomberg, British American Tobacco made the investment along with Verde Capital, the investment fund co-founded by Snoop Dogg.
Sanity Group was founded in 2018 and now has more than 100 employees and has raised tens of millions from the likes of “Navy Capital, Redalpine, HV Capital, Calyx, Cherry Ventures, Bitburger Ventures, SOJE Capital, and various business angels and celebrities such as Will.i.am (Black Eyed Peas), Scooter Braun, Hollywood actor Alyssa Milano and German soccer player Mario Götze,” along with Verde Capital and now BAT.
The company says that its focus “is on pharmaceuticals (medical cannabis; finished pharmaceuticals) and medical products on the one hand, and cannabinoidThis post contains affiliate links!-based consumer goods on the other.”
Finn Age Hänsel, the founder and chief executive officer of Sanity Group, hailed the funding from British American Tobacco as “an important milestone for us and a strong signal towards the future of cannabis in Germany and Europe.”
“I am grateful for the belief shown by both new and existing investors. Our goal is to leverage the full potential of the cannabis plant and to explore and harness the different cannabinoids – with the new capital, we will be able to accelerate our medical and consumer business units whilst preparing accordingly for cannabis legalization in Germany,” Hänsel said in a statement, as quoted by Tech Funding News.
According to Max Narr, the chief investment officer for Sanity Group, the “financing round is not only the largest funding round achieved by a European cannabis company to date, but also one of the few upsizing rounds in this current economic phase of the German startup scene.”
Hänsel told Bloomberg that Sanity has attracted “strong interest, not only from tobacco, but also from other industries like fast-moving consumer companies.”
He also said that the German government is “working actively on [the new marijuana law] and really want to come to a good draft of the law by the end of this year.”
“This is really a priority topic for the government,” he said.
House of Kush to Go Global with Clever Leaves, Bringing Classic Strains to the Masses
Classic genetics such as Bubba Kush Pre-98 and OG Kush varieties will be available on a global scale, as two powerhouses team up. On September 21, Colombia-based multinational juggernaut Clever Leaves announced a partnership with legacy brand House of Kush, to be the exclusive grower and distributor of genetics globally.
Clever Leaves will produce genetics for House of Kush—thus expanding their reach outside of the United States and Canada.
Clever Leaves will cultivate House of Kush’s genetics at facilities in Colombia and Portugal over the course of the next three years. Clever Leaves’ footprint is global with smokable flower already being sold in Germany, Israel, and Australia.
Clever Leaves will produce House of Kush’s signature strain—Bubba Kush Pre-98—as well as other classics such as San Fernando Valley OG Kush. Different theories abound, but Bubba Kush appeared on the market in the ‘90s, noted by its sedative effects. People have turned to it to help with pain, anxiety, and insomnia.
The scale is massive: In Colombia, Clever Leaves boasts 18 hectares (44.4 acres) of cultivation. More importantly though, the company holds European Union Good Manufacturing Practices (EU GMP) Certification, a Good Manufacturing Practices (GMP) Certification by Colombia National Food and Drug Surveillance Institute – Invima, and Good Agricultural and Collecting Practices (GACP) Certification.
In Portugal, Clever Leaves operates on about nine million square feet of land, with 260,000 square feet of greenhouse facilities. They also have regulatory privilege there with a license from INFARMED I.P., the Portuguese pharmaceutical regulatory authority, with (EU-GMP) certification and are (GACP) certified.
House of Kush Genetics
The partnership will deliver House of Kush’s genetics to a wider market. “Going international was really a big step,” says House of Kush co-founder and Chief Sales Officer Steve Gardner. “Clever Leaves do such good work. And we’ve been so impressed with them. And we’ve really been working on this deal for almost a year. But when you get plugged in with a group like that, that can take you all over the place.” Gardner’s roles as serial entrepreneur, advisor, investor in sports and entertainment date back 30 years.
“I would echo that sentiment and also just bring in the point that other countries are more quickly adopting and having more open, flexible laws than what we’re experiencing currently in the U.S.,” says House of Kush co-founder and Chief Executive Officer Reggie Harris. “So having the opportunity to get there early in our growth strategy not only helps us improve our status as a U.S. company, but everybody’s in the game to be able to spread that knowledge and the product and be able to get out there. So [it’s as much of an] exposure type thing as it is a financial benefit as well, that the two kind of go together. It’s not one without the other.” Harris’ background as a senior executive in sports and entertainment goes back two decades.
“Our first introduction to Bubba Kush was actually through Matt Bubba Berger, who was one of the original cultivators, and obviously Bubba Kush was part of that founding group that came up with OG Kush as well,” Harris adds. “And I was looking at it and reached out to Steve [Gardner] and said, ‘You know, I got this interesting call, product opportunity. Let’s go sit down and talk about it.’”
Protecting those genetics is another story. While House of Kush has explored blockchain technology and other ways of protecting their genetics, continuing to develop their reputation as a brand is more valuable.
“The biggest protection for us is quality assurance,” Harris adds. “We’ve created a kush certified program, to where we go through and we tell people, these are the recommended ways of growing the genetics, this is the proper way, the proper soil, the proper water, all that type of stuff, because we know ultimately, right now, federally, we can’t protect it, it’s going to be some somebody could take it, we will lose more money trying to defend it, then we will just go on out being better than they are. So we spent a lot of time just trying to have the great genetics and the great SOPs around that to make sure that it comes out right on the other side and up to our standard.”
Regulatory Perks of Going International
Clever Leaves’ footprint is all over the globe, but each facility has a distinctive purpose. “We have two facilities, one in Colombia, one in Portugal,” says Julián Wilches, co-founder and Chief Regulatory Officer of Clever Leaves. “The Portugal facility is focused on flower. And in Colombia, the Colombian facility has been focused on extracts, raw materials, and finished products such as oils. Now, we have the opportunity, also of exporting flower from Colombia, which is something that we plan to do in the coming months. But now it is very important for us and we’re going to have access to additional genetics.”
One of Clever Leaves’ advantages is holding certifications in Europe. But one of the keys to growth is expanding internationally to improve chances of success.
“If you cultivate in the U.S., you cannot export it, because of the federal prohibition in the U.S.,” says Gustavo Escobar, co-founder and Chief Operating Officer of Clever Leaves. “So the fact that we can cultivate in Colombia and export it for medicinal purposes, opens the global market. We’re focused on four markets in addition to the U.S.: Australia, Israel, Germany, and Brazil. In Brazil, we cannot sell flower. So I would say three markets for flower: Israel, Australia, and Germany. But there are additional markets like Portugal and Italy, U.K., Ireland, most likely France, and Spain. Now we have Thailand. So the world is moving towards medicine and medicinal legalization.”
The partnership benefits both companies in ways that were not possible before.
“Working together, you can do better things,” Wilches adds. “So partnering with people with good genetics, and having the capabilities that were described—that will give us a better opportunity of success in those markets. So we believe in partnerships and we believe in working together and creating long-term relationships for being in the market in the long term with really high quality and good product.”
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