By Willis Jacobson
When California cannabis regulators accused Kushy Punch, a brand known for its THC gummies and vapes, of simultaneously running an illegal operation alongside its licensed one, the complaint shocked several in the state’s cannabis industry.
Many were stunned that a brand as visible and popular as Kushy Punch would get accused. But to some, the allegation of a licensed company simultaneously operating in the illegal market was less of a surprise. (Representatives of Kushy Punch and its parent company Vertical Bliss did not respond Monday to requests for comment.)
Commonly referred to as “double-dipping,” the practice of legal businesses operating in both the licensed and illicit markets has caught the attention of operators and regulators alike. While the extent of it is unclear, the practice has been blamed, at least in part, for the continued vitality of California’s illegal cannabis market. A report this year by New Frontier Data suggests 80% of the state’s cannabis sales are illicit. And some business owners feel the state isn’t doing enough to curtail what they see as unfair competition from double dippers cutting into their bottom line.
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