UP IN SMOKE: The biggest pot distributor in California has collapsed.
California state law requires distributor companies to work as middlemen between pot producers and retailers. HERBL’s demise has become a giant flashing red warning sign because of the vital role distributors play in California’s market; if a company as large and entrenched as HERBL can go under, experts say, then there are deep problems in the industry that will only lead to more company failures.
“I do feel like we’re going to see a significant and material number of closures, up and down the supply chain,” Wesley Hein, the president of the Cannabis Distribution Association, told SFGATE.
Observers in the industry say that HERBL’s demise shows how cannabis companies in California are forced to abide by a more difficult set of rules than other industries. They also argue that if HERBL were a different type of company, the state government would have stepped in to save it.
Only in California (and maybe Colorado?) would the government’s “too big to fail” bailout ethos also apply to marijuana growers.