A video leaked on social media last week that perfectly encapsulated one of the central issues in California’s legal cannabis market.
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In the 30-second clip, Norman Yousif, founder and CEO of the dispensary chain Off the Charts, is shown apparently bragging that he has saved money by “not paying the vendors.” To add insult to injury, Yousif seemed to specifically say that it was the “f—cking mom and pops” that his company wasn’t paying.
“We’ve saved hundreds and hundreds of thousands. I mean, if you don’t have to pay, you don’t have to pay,” Yousif said in the video.
With that comment, Yousif touched on a problem that has been rampant for years:
California’s cannabis farmers keep getting stiffed. They send their pot to cannabis stores, yet their invoices never get paid. They lose sometimes hundreds of thousands of dollars at a time, and those losses put these smaller enterprises, including third-generation family farms, out of business.
The video quickly ricocheted across social media where hundreds of people posted angry comments, calling Yousif’s comments “disgusting” and an example of “everything that is wrong” inside California’s pot industry.
Yousif apologized for the statement in a phone interview with SFGATE but said his quote was taken out of context. He declined to name where the video was taken, or who he thought had released it, but said it was recorded and posted without his permission. The video was shared by dozens of different social media accounts, including an Instagram account called @BigRedsFarm that received over 1,100 likes after it shared the video last Thursday.
Yousif said he is actively pursuing legal action against the people who released the video. He explained that the clip shows him discussing an incident from five years ago, when he said a number of different brands went out of business and disappeared before Off the Charts could pay them.
“I’m not the most polished person in the world. This was a big lesson learned from me,” Yousif told SFGATE.
Yousif added that his retail chain, which has 19 stores including one in San Francisco, has struggled to pay bills on time. But he said Off the Charts ultimately does always pay its vendors.
“My only flaw is paying them on time. Do they get paid? Absolutely. Do they get paid on time? Lately, this last year, not really,” Yousif said.
Unpaid bills have become one of the biggest problems in the state’s industry, with a massive “debt bubble” growing to over $600 million, according to a 2022 report. Pot stores not paying their bills contributed to the collapse of the state’s largest cannabis distributor last year.
The problem has worked its way up to the state’s tax collectors. Hundreds of pot shops failed to pay their state taxes last year and now face massive penalties. Observers say the backlog could cause an “extinction event” of business closures across the state.
Yousif said the video shocked him when it was released and instantly made him regret his use of words, especially calling out “these f—cking mom and pops.” He said he considers his own company a mom-and-pop shop and has supported many small cannabis operators in the past.
“That’s why I’m kicking myself in the foot,” Yousif said.
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