Q3 2015 Chuma Holdings (OTCQB: CHUM) Corporate Update to Shareholders
LOS ANGELES, CA–(Marketwired – Sep 10, 2015) – Chuma Holdings, Inc. (OTCQB: CHUM) (“Chuma” or “the Company”) is pleased to provide shareholders an update of current corporate activities.
Chuma’s dual focus is on creating the tools to allow growers and sellers of legal marijuana in California — and other US states — to comply with the law, and to make strategic, hard asset investments in the growing, lawful, marijuana sector.
Letter to Shareholders
Dear Fellow Shareholders,
California appears headed to full marijuana legalization.
The California State Assembly recently attempted to establish an agency to oversee the multi-billion dollar California marijuana market. Governor Jerry Brown rejected the State Assembly’s approach and called for direct regulation. A ballot Initiative to regulate the industry is also proceeding. As the legislature struggles with attempts to regulate the industry, the state of California continues to lose millions of dollars in tax revenue each year.
The legislative picture is complicated and we include a summary below. What is clear is that all of the proposals will require growers and sellers to adhere to a strict compliance regime. From seed to sale, California proposes to regulate the marijuana industry closely.
Regulatory compliance is Chuma’s core competence. We are set to provide a solution to benefit both the State and legal marijuana dispensaries and cultivators. Our solution will ensure industry participants stay compliant with pending regulations and alert the user of any compliancy concerns and address what needs to be corrected.
Chuma’s compliance package would enable tracking of inventory and revenue to both assist the state in capturing lost tax dollars and assist legitimate cannabis industry participants in maintaining their compliancy.
We’ve developed our compliance package to meet the current medical marijuana rules in Los Angeles and other municipalities in California. Using automation and a deep knowledge of the marijuana business we are confident that our systems will meet the challenge of the new, California wide, regulatory system likely to emerge in the next 18 months. We’ll be updating our shareholders on the progress of our system and what we are doing to anticipate legalized, regulated, marijuana in California.
A Hard Asset Strategy
Medical marijuana is a rapidly growing industry in America. As more states legalize medical and recreational marijuana, more opportunities for experienced, compliant businesses arise. What has been a clandestine, fringe activity is being brought into a legal, regulated environment. Change creates opportunity and Chuma is uniquely positioned to offer real business solutions and outstanding services and branding to an emerging multibillion-dollar industry.
Professionalism within the marijuana industry will take strong regulations followed by tools for compliance. Tools that Chuma has already developed and used successfully, and service contracts which have produced revenues.
We anticipate being able to redeploy cash flow and earned funds into additional service and compliancy contracts this quarter. This model has proved to be successful in Los Angeles, California, and we look forward to expanding.
We believe Chuma’s intrinsic value could outperform our industry competitors in the coming years. We remain focused on what we do best, and our management team is firmly committed to growing Chuma, and delivering value for our customers, partners and shareholders.
Our sincerest appreciation to our shareholders for your commitment to us and for your continued support.
President on behalf of the Board of Directors
About Chuma Holdings, Inc.
Chuma and our wholly-owned subsidiaries provide turnkey financing and support solutions to the rapidly evolving and growing legal cannabis industry. We provide “seed to sale” key business services including financing, compliance consulting, dispensary solutions, banking and payment processing solutions, and marketing and sales consulting. Chuma’s experienced team has over thirty-five years combined experience in the lawfully organized cannabis industry in California, and we are currently generating revenue from existing financing and service solutions. We are planning on expanding throughout California and bringing our array of services to each new state that legalizes the use of cannabis. For more information, please visit www.chuma.us.
Safe Harbor Statement
This release contains “forward-looking statements” that include information related to future events and future financial and operating performance. The words “may”, “would”, “will”, “expect”, “estimate”, “can”, “believe”, “potential” and similar expressions and variations thereof are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause these differences include, but are not limited to: the ability of Chuma to secure appropriate funding to implement its business plan, the demand for Chuma’s services, Chuma’s ability to maintain customer and strategic business relationships, the regulation of legal cannabis on both state and federal levels, the impact of competitive products and pricing, growth in targeted markets, and other information that may be detailed from time-to- time in Chuma’s filings with the United States Securities and Exchange Commission. Chuma undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
California Legalization: It’s Complicated
The California State Assembly recently approved a proposal for establishing an agency to oversee new licensing regulations, in the multi-billion dollar California marijuana market, which would be enforced by several state departments. As the legislature struggles with attempts to regulate the industry, the state of California continues to lose millions of dollars in tax revenue each year.
The bill, AB 266, is a combination of two rival proposals, one backed by the cannabis industry, the other backed by cities and law enforcement. With some Republican support, the measure passed by a vote of 50 to 5. The entire bill was then gutted by Governor Jerry Brown, who inserted a directive to the California legislature to establish controls and regulations of the marijuana industry.
California Marijuana Control, Legalization and Revenue Initiative (#15-0020 and #15-0039) has been approved for circulation in California as a contender for the November 8, 2016 ballot, as an initiated state statute that legalizes under state law marijuana use, cultivation, possession, transportation, storage, or sale. The Initiative further creates a Commission to regulate and license the state’s marijuana industry and apply general retail sales taxes to marijuana, unless medical or dietary exemptions apply.
The Initiative permits taxes on nonmedical marijuana sales, up to a maximum of 10% of its retail price. The Initiative prohibits discrimination against marijuana users or businesses prohibits Legislature from enacting marijuana laws and imposes personal liability on law enforcement for wrongful marijuana destruction or assisting with certain marijuana investigations. The Initiative requires voter approval to zone beyond set limits.
This ballot measure would invalidate the City of Los Angeles Prod D measure as it nullifies other local regulations exempting medical marijuana collectives from licensing and local zoning. AB 266 was of almost identical language, so the Governor’s actions essentially took it from the hands of the legislatures and put in the hands of the voters. California’s recent legislative attempts to implement regulations and controls over the marijuana industry, although sidelined for now, will create a compliance challenge for the state’s proposed cannabis Commission.
While the path to legalization of marijuana in California is more than a little complicated, it is clear that California will legalize marijuana on a highly regulated basis. Ensuring cost effective compliance with whatever regulatory regime emerges from the California process requires a deep understanding of the business and the issues which growers and dispensaries face as they provide legal marijuana to the public.