Written By: Jessica Kemp
People smoke marijuana for a variety of reasons, from fueling creativity to relaxing with friends.
However, the world is starting to realize the true value of cannabis with its medicinal functions. The use of cannabis for pain relief may be one of the most significant. Whether it’s the popular seaweed strain or another cannabis product, many people have found that pain, inflammation, and the effects of anxiety, depression, and even PTSD can be held at bay. If there is physical pain from an injury, combining this type of treatment with services like https://tulsaspineandrehab.com can be highly beneficial at hitting the pain head-on. As always, a consultation with your doctor before embarking on this is a must.
In this article, we’ll look at the reasons why having cannabis available in your kitchen can help to keep pain at bay.
How Does Cannabis Relieve Pain?
There can be confusion around the methods by which cannabis improves feelings of pain. There are different types of pain, so not every method of pain relief will be effective in every situation.
Both CBD and THC are effective in treating pain, although in different ways. This means that you can have success with pain treatment using only CBD if you would prefer not to feel the psychoactive effects of cannabis.
Check out the stock on the Sleep Relief website if you think this is the right option for you.
There are two main types of pain. You can use cannabis to relieve both in different situations.
Inflammation (Nociceptive Pain)
This is pain that arises with the damage of bodily tissues, which your body responds with inflammation. It can appear in many different guises. Swelling, redness, and pain are all common symptoms of inflammation.
There are also certain recurrent health conditions that result from chronic inflammation, such as arthritis and type 1 diabetes.
THC attaches to CB2 receptors in a way that reduces inflammation. This study outlines the way this takes place in the body and concludes that THC can reduce inflammation in patients with a number of autoimmune conditions.
CBD is also effective in the reduction of inflammation. While more studies are required to properly chart the physiological reasons, many patients have succeeded in easing inflammatory pain with CBD.
Neuropathic pain is pain that arises from some dysfunction with the body’s nervous system. Common examples of conditions that bring neuropathic pain include multiple sclerosis, HIV, and cancer.
Neuropathic pain is different from inflammatory pain in that drugs like ibuprofen will not have any effect, which makes it much more difficult to treat.
However, cannabis can ease symptoms. Research has shown, for example, Lazarus CBD has the potential to activate serotonin receptors and, for example, lessen the effects of some treatments like chemotherapy-related pain without undoing the benefits of the therapy.
How Should I Take Cannabis for Pain Relief?
Every cannabis enthusiast knows that there are many different ways to ingest it. Modern technology has only added to our range of choices when it comes to consumption methods, as we’ll see below.
Sometimes, the classic methods are the best, and smoking is the best-known way of ingesting weed across the world.
Whether you’re smoking a bong, bowl, or joint, the benefits of smoking are the same. You’ll feel the effects almost instantly, which means that you won’t have to wait longer than a minute to start enjoying pain relief. It also means that you can top up your dose carefully to reach the desired outcome.
Vaping continues to grow in popularity. Once you buy a vape, you simply refill it with dry herb or oil (depending on the type of vape) and take hits by pressing the button and inhaling.
This makes it the most convenient method of ingestion. It is particularly useful for those who need pain relief at regular intervals throughout the day.
Eating cannabis products is another popular option that has been around for a long time. However, you cannot simply eat the plant itself; you need to cook it gently in oil or butter before using this oil or butter to make edibles, such as cakes or cookies.
An issue with this approach is that the effects tend to be far more intense than smoking or vaping. They also last for far longer once they hit.
If you’re looking for something to keep you pain-free throughout the night for a good sleep, however, an edible might be an option to try.
“Dabbing” is the name usually given to the practice of consuming cannabis wax through a special glass pipe.
Like smoking or vaping, you feel the effects of dabbing almost immediately. However, because the wax used is often highly concentrated, it can be much more intense than that of smoking or vaping.
For these reasons, dabbing is only recommended for experienced users.
What Are the Best Types of Weed for Pain Relief?
One of the key considerations, when you’re taking cannabis for a specific reason, is strain selection. There are many different kinds of cannabis strains and each one has different genetics and different properties.
This means that certain strains are particularly effective when it comes to the relief of pain. Scientists are not yet sure why certain strains are better than others. They do believe, however, that the role of minor cannabinoids in cultivating the entourage effect may be relevant to this issue.
Below are some of our favorite strains for pain relief;
- Girl Scout Cookies
- Afghan Kush
- Black Dahlia
- White Widow
All of these are readily available in dispensaries. You should experiment with different options until you find a strain that works for you.
A Pain Reliever for 2020
Taking cannabis to treat pain is becoming more and more popular every day. Considering its effectiveness and the lack of harmful side-effects it causes compared to other medications, this is not surprising. If you like this kind of content, we’ve got plenty more just like it. Follow us on social media or subscribe to our newsletter to enjoy more posts like this every day.
FDA AND DEA BLAME EACH OTHER FOR KEEPING MARIJUANA ILLEGAL
Written By: Michael Ashworth
With all the health benefits of marijuana, it is common to wonder how it has ever been illegal. In fact, both the FDA and the DEA blame each other for keeping the prohibition of marijuana going and not legalizing it sooner.
Celebrity doctor Mehemet Oz, Dr. Oz for short, TV host from the popular daytime program of his namesake, was interviewed recently and asked for his professional opinion on marijuana and has been quoted as saying, “marijuana is one of the most underused tools in America.” He has had conversations with individuals from both enforcement agencies, saying they feel the same way. So, why has it not been legalized sooner, or why is not fully legal on a federal level?
Apparently, both agencies feel it should be used more widely, but it is hard to study it because of the way it is regulated. The DEA says that it should be legal but that the US government needs to get fully on board while the FDA, who regulates it, says it should be used but until the DEA says it should be allowed, they cannot prescribe it everywhere, like a catch-22 stalemate between both agencies.
“It’s a lot safer than alcohol. It’s safer than narcotics. It ought to be used more widely and we can’t even study it that easily because of the way it’s regulated,” Dr. Oz said. “You know what, I called the DEA—they said, ‘we don’t want this to be illegal. Your government ought to change that. But we got to enforce the law.’ I call the FDA that regulates the drugs, they say, ‘we think it ought to be used, but until the DEA says it’s allowed, we can’t let people prescribe it everywhere.”
Federal marijuana reform outside of Congress falls largely within the jurisdictions of both these agencies. The DEA itself denies several rescheduling attempts, saying the FDA has determined medical cannabis has no proven medical value and poses potential risks.
Dr. Oz has made public comments about the therapeutic effects of cannabis and previously asserted it could serve as an effective tool to combat the opioid epidemic. He said, “I’m hoping the federal government at some point—someone’s going to say, ‘come on, this is a farce, open it up for the entire country.’ That way, the right people can begin to prescribe it.” Influential voices such as this, help to point out what federal red tape can really look and sound like and it makes sense for the cannabis industry to use them, so that federal reform decisions can be made with staying power.
CBD on Top
With all the hype surrounding CBD and skincare, we thought we would test some products out and give you the low down on some of the brands we are loving at the moment. Hemp, CBD, and THC are some of the “star ingredients” you will see when you are browsing serums, creams, and special elixirs. What do those do for you, though? Do they really work? What’s the difference between and hemp oil and a CBD oil?
We’ve narrowed it down for you, so that next time you are browsing the CBD product section, it will be easier to determine the best one for you and your lifestyle.
It’s essential to know the difference between Hemp and CBD. Although these ingredients come from the same plant and are both beneficial, they are a bit different when applied topically.
Hemp oil is extracted from the seeds of the cannabis plant and is moisturizing and can be anti-inflammatory. Typically, hemp seed oil is less expensive than cannabis oil because it’s a lot easier to produce. If you are unsure about a product, look on the ingredient list. Hemp seed oil will say “hemp oil, hemp seed oil, or cannabis seed oil.” Hemp oil is used in cooking, salad dressings, and is also found in skincare products. It is rich in fatty acids and proteins, so topically, it would be great for smoothing the skin and adding some extra glow.
CBD oil uses the whole plant, not just the seeds. On the ingredient label, you will find terms like “full spectrum or whole plant extract,” you will also see the dosage (in milligrams) that is in that particular product. While companies don’t legally need to put the dosage on the label, a lot of them do as a selling point; it also makes it easier to spot the difference between CBD oil and hemp oil. CBD oil is packed with antioxidants. Why is this important? Antioxidants fight free radicals in the body. Free radicals come from pollution, stress, diet, and so many other outside aggressors. They are the pesky little suckers that make you age by causing dehydration, wrinkling and sagging. The only way to eliminate free radicals inside the body is with antioxidants (which CBD oil has). CBD oil also reduces inflammation in the skin. Inflammation in the skin looks like acne, eczema, rosacea, or any other skin instance of redness or sensitivity.
While the studies on CBD used in skincare are fairly new, the reviews from shoppers have been nothing but praise. Here are some of the ones we have tried and our honest thoughts about them:
Kiskanu – Hemp CBD Face oil and Intimacy Oil.
I loved this oil right when I put it on my face and had the most amazing glow. Now, I know you’re thinking, “of course you had a glow, you just put oil on your face”, but the “glow” that came from this oil was very light, which is not usually typical for an oil. I loved that this oil wasn’t as dense as others because I could use it during the day or in the summer. Kiskanu is a woman-owned brand that only uses virgin, cold-pressed oils in their topical products, which basically means the ingredients are top-notch. Kiskanu is also known for their incredible intimacy oil! The intimacy oil is a plant-derived lubricant that creates a tingly sensation to increase pleasure in (or out) of the bedroom. I also love the intimacy oil to keep ingrown hairs at bay. At such a great price point, these oils are ones I will always have on hand.
Mineral – Maison Recovery Balm
Ok, first of all, I’m obsessed with Mineral. Their minimalist branding acts like decor pieces on my nightstand, and their products are pure luxury. They recently came out with a broader range of skincare and topical products that I’m dying to try, but that’s a different story. I tried and have been using their Maison recovery balm for a little less than a year, and I love it, it has become part of my nighttime ritual. Maison was created to ease stressed or sore muscles, but I love using it every night to relax and get myself ready for sleep. It has 300mg of CBD hemp extract and has notes of mint, sandalwood, and sage. To use, you melt a tiny bit in your hands and massage stressed areas of your body (for me, its usually my neck and shoulders). The linalool and limonene terpenes create an earthy scent, and the mint is such an added treat. Although Maison was made for easing tension and soreness in the body, I have found it can be used for a multitude of other things as well.
Vertly- Lip Balm
This is a very simple product that packs a punch. Lip balms are a dime a dozen, but finding a good one is hard to find. For me, lately, the concern has been ingredients. Because lip products sit on your mouth, you ingest whatever ingredients are in that product throughout the day. So many lip products have the most toxic ingredients and are typically the one product that you apply multiple times. In comes Vertly with their CBD lip balm. Made with cocoa butter, shea butter, and coconut oil, this lip balm has 25mg of CBD and is infused with peppermint oil for a slight tingly and minty sensation. I loved this lip balm because the scent was amazing, and it wasn’t super sticky. It was very light on the lips and didn’t get everywhere, which was huge for me. I loved putting it on throughout the day, before I went to bed, and loved using it to give my cuticles a little bit of love in the dry desert heat. I also loved the fact that anyone can use this lip balm for pretty much anything. I brought this balm on a family vacation, and everyone used it- women, men, and toddlers all loved it.
I have been obsessed with every product that Saint Jane has released. With only four products (so far), Saint Jane puts focus on luxury and quality. Their black and gold packaging is iconic and so beautiful to look at, but what’s inside is even better. The Saint Jane Luxury Body Serum is made with 200mg of full-spectrum CBD, 28 omega-rich botanicals, and fruit acids that gently exfoliate the skin to keep it feeling (and looking) smooth and hydrated. I love using this oil right when I get out of the shower on semi-damp skin. My skin has never been so soft, and I look forward to this luxurious ritual every time I shower.
Saint Jane- Luxury Body Serum
Securing Funding and Strategic Investing Within the Cannabis Industry
By Serge Chistov, Chief Financial Partner, https://honestmarijuana.com/
Every new industry experiences some obstacles at the outset, particularly when it comes to securing funding. Investors, whether venture capitalists or standard banks, can be weary when the industry involves product lines that aren’t universally embraced, or as in the case of marijuana, are illegal at the federal level.
State by state regulatory hurdles for production, packaging and so on, is just one of the issues that can make it more difficult to fund a cannabis business, but there are ways that companies can grow, with fewer bumps in their road. Some may look towards websites like https://l3funding.com/business-loans to see if they are able to secure the funding that they need.
Typical hurdles for securing investment for cannabis businesses
The cannabis industry is no different than any other business except for the fact that it is a specialty business. With that comes the need to look for funding among investors who have some knowledge or appreciation for the business.
As to some of the hurdles mentioned above, the state by state difference in regulations surrounding the cannabis industry is one of the concerns that investors can have. Since cannabis is still illegal at the federal level, there can be an array of hurdles at a state and local level that makes opening a cannabis-based business trickier to work with.
Lenders might also have some objection because their religious beliefs will prevent them from touching this sector. The morality question is a factor in other industries as well, including gambling, adult entertainment, and so on, but as you likely know, morality has not prevented those industries from growing exponentially over the last decades.
Banks will work with cannabis money to some extent, but won’t invest
Banks and credit unions may be more open to working with cannabis money, but investing isn’t an option. They let the industry pay to keep the money in the bank. Cannabis companies have access to check writing and bank reconciliations and cash/check deposits, but it’s unlikely financial institutions would invest or put their license at risk.
There are limits to a bank’s willingness to work with income from a cannabis business as well. For example, they will try to exclude this money from your income statement. That income would not come into play with a decision to lend business money for something else. They will not use money coming as a result of the cannabis industry as justification in giving a customer a loan.
Finding and vetting potential investors
Any cannabis business that is searching for funding will need to have a very clear, well-articulated business plan. It is important to understand all of the same factors of opening any other business, including cash rate, regional build-out, the best/ worst scenario of sales and growth. Presenting all of this information is something that any investor would be looking for.
From that point of view, a business in the cannabis industry is no different when it comes to getting funding. That said, it might be to your advantage to look for unique lending or investing groups that either currently specialize in the cannabis industry or are starting to open their books with a plan to ultimately specialize in cannabis.
Funding has opened up to more players. There are more industry participants who have their own funding right now. There is also more interest in the sector, more participants, and more insiders of the industries that are willing to invest in the right idea. If you have a good business plan with the right technology, right idea, right people, right places and a general understanding of why consumers will pay money in whatever retail location for your product, then this proposition should not be any different than opening a pizzeria, for example.
In terms of finding those investors to pitch to, one viable way is to attend investment conferences. Go and speak to people in the industry. Visit people at national expos and shows. The internet is also a good resource. Different cannabis capital groups are out there, but it’s a question of what we call “smiling and dialing.” You’ve got to put in the legwork to find the right investors. It is really not much different than if you wanted to open a chain of salons. You need to allocate and isolate people that historically have been investing in the industry. They already have an interest, so start the conversation, and you’ll be surprised that one conversation will usually bring a result that will take you to the next level.
Opportunities to invest in the cannabis industry this year
From the standpoint of the investment community, there is an opportunity to work with the data that is already out on the market. You can definitely see the trends and sales, which makes it easier to get an accurate picture of the local market. I believe that the brands are becoming a point of interest to some national investors. The advice is the same for investors looking for opportunities in the cannabis industry as any other: do your research. There are more information sources available than ever.
Production and retail facilities are self-sufficient operations, producing steady cash flow and profits. An ability to consolidate a profitable operation and stay independent will create a pretty powerful stateside distribution, production, and retail environment.
Technology will continue to be a beautiful thing to look into because, at one point or another, our belief is that cannabis will become part of our vitamin portfolio just like vitamin E, B, and A. We are going to be consuming cannabis as a part of our diet, as a part of our tribal engagement and as a part of our healing processes.
Another aspect of the business is the consumer product innovation in packaging. Reducing the amount of plastic in the packaging is a positive step, and some brands are innovating plastics that become more earth-friendly, just like any other industry.
There are plenty of opportunities to look at, so long as you remember that this is a rapid growth industry, at least for the time being. When clear federal legalization comes into play, the big guys will come in and run cannabis businesses in their existing facilities. For now, though, there is still a tremendous opportunity for investors to find niches and do well. And that, after all, is what investing is all about.Serge Chistov is a cannabis industry expert and Chief Financial Partner with Honest Marijuana Co. Honest Marijuana has been a leader in cannabis innovation since it’s inception with an organic approach to the growth, production and packaging of cannabis, the launch of the first-ever organic hemp wrapped machine rolled blunts, the invention of the now patented Nanobidiol Technology, and the first company to bring THC-O-Acetate technology and products to market.
The Confusion Between Hemp and Pot
Although they have different functions, cultivation and application, our lawmakers seem to still be confusing the two; causing serious issues for farmers and transporters.
How does the confusion between hemp and marijuana affect both markets?
The lack of education and differentiation between hemp and marijuana in the U.S. causes a lot of misunderstandings and inconsistencies in public behavior and purchasing patterns; mostly affecting the hemp market. Consumers simply do not have the confidence in what they are buying in the hemp market due primarily to inconsistencies in production and testing.
With hemp producers and transporters being arrested, and California hemp crops actually growing as THC, how are both markets affected by the ongoing confusion?
Anyone who grows hemp understands that they are growing something very profitable if you know what you are doing. It can also be a risky business. The current regulations do not allow for the hemp plants to be in the possession of farmers if they exceed the state and mandated levels of THC. That can put an owner of such a crop in direct violation of the local laws.
When you grow a plant with the intent to meet all state regulations, that will not guarantee that the plant will not grow defective. There’s still a chance that the hemp will test at 4 percent THC by value which is 1 percent more than the state allows. Now the livelihood in the field including the nutrients and the time that was put into the harvesting and producing of this plant is gone. By law, it needs to be fixed or the crop will be destroyed. As the laws are written currently, farmers are in violation if they are caught with plants testing above 3 percent. Some advocate allowing for hemp at a 1 percent legal dose. Anything below will be less, anything more will get destroyed. That will allow for more species of the plant and also allow farmers to grow it safely with more open parameters, rather than locking themselves into the 3 percent.
The bottom line is what the government is currently asking from farmers, they are not able to do themselves. The way the law is written, it’s written one-sided without a deep understanding of what the reality of manufacturing and supply chain is.
How can lawmakers determine what Is hemp and what is marijuana?
By federal definition, whatever has less than 3 percent THC is hemp and whatever has more than that amount is marijuana. Distinguishing them is not really difficult. You just have to look at the testing results.
Are there any solutions?
Constant consumer education to bring the public’s attention to the topic is the only way we know how to educate the consumer. The rest is going to take time. The different regulating agencies need to figure out their conversations among themselves and realize that maybe there’s a better way.
Serge Chistov is a cannabis industry expert and Chief Financial Partner with Honest Marijuana Co. Honest Marijuana has been a leader in cannabis innovation since it’s inception with an organic approach to the growth, production and packaging of cannabis, the launch of the first ever organic hemp wrapped machine rolled blunts, the invention of the now patented Nanobidiol Technology, and the first company to bring THC-O-Acetate technology and products to market.
Cannabis Industry And COVID-19: All You Need To Know
COVID-19 has devastated even the most developed countries in the world, decimating the economy and bringing non-essentials to a halt. A pandemic is an unprecedented event that has directly or indirectly affected more than three-quarters of the world population.Â
The cannabis industry is also majorly impacted, falling under the pharmaceutical and agricultural domains, which fall in the essentials category. Here is how the COVID 19 Pandemic hasÂ changed the cannabis industry.Â
Practicing Social Distancing
Several cannabis companies have issued guidelines for their cannabis growing facility to practice social distancing among employees. Similarly, many businesses have resorted to reducing staff working hours and the number of personnel they deploy to harvest or keep the plant in check. They aim to keep the supply chain running while complying with the necessaryÂ precautionary measures to prevent spreading the virus.Â Most countries are trying to make cannabis available to users, especially those with chronic conditions, to help them navigate the pandemic in better health.Â
Most dispensaries are trying to cut down on the workforce and establish safe sales protocols to ensure they can still make products available for customers. The government enforced home quarantine has shown an increase in the consumption of cannabis products.Â
E-commerce delivery has seen a drastic rise in all countries with a specific demand for groceries and medical products. Safe shopping from the ease of their homes without risking exposure to the virus has encouraged more shoppers to pick delivery alternatives.
Cannabis is not left behind with a surge in online orders. With some states declaring marijuana as essential and keeping the stores open, businesses are rushing to adopt cannabis delivery practices to encourage sales.Â
Enabling customers to place orders through the web or telephone that can then be delivered to their home the same day makes for safer shopping experiences for customers, resulting in an overall boost in sales and customer base.Â Delivery drivers have sharedÂ that their working hours have increased dramatically since COVID-19 and that customers are grateful to have their orders delivered to their doorsteps.Â
By deploying delivery drivers who follow proper social distancing protocols to reduce contact during the sales process, businesses are sustaining during this pandemic.
Telemedicine and curbside pickup service are on the rise in several states. Some states have seen a surge in telemedicine for patients to obtain medical marijuana cards to purchase products. Many dispensaries are also now offering curbside pickup service to customers so they do not have to enter the store and can still buy products.Â
The grow shops are also seeing better demand because of the pandemic. More people are now buying seeds to cultivate their cannabis plants at home. It is far more common to see peopleÂ purchase green crack feminized seedsÂ for their use at their homes since COVID-19.Â
Â Consumption Trends
Consumption trends are drastically shifting in many COVID affected countries. AÂ surveyÂ by the AmericanMarijuana.org consists of 1000 self-identifiedÂ medical cannabisÂ users, and recreational cannabis users showed over 40 percent of respondents say that their consumption volumes remain the same as before. About 29 percent suggest that they are consuming more. The industry has also seen an increase in new user consumption since COVID-19.
Â The first change in behavior is majorly towards sharing cannabis equipment and joints. Many fear that this could transmit infections, and about 70 percent of them say that they have stopped sharing blunts, bongs, mouthpiece, joints, vape pens.Â Â
The stock market for cannabis has also been affected and has behaved reactively to the situation.Â Cannabis company stocksÂ have seen steeper losses compared to other markets but have also responded quickly to market upticks. Given it is a newly evolving market, companies in the cannabis supply chain could lose money due to restrictions imposed on the industry and a slow economy.Â Â
While it is true that many businesses are suffering due to the pandemic, many have also shown increasing revenue due to quick thinking and new measures to prepare for self-quarantine. For example, enabling delivery channels early, combining grocery deliveries with cannabis or other medicine deliveries, video calling infrastructure, and increased production while adhering to government advised safety precautions are some of the measures taken by prominent companies.
Many new and small companies have had been able to pivot and make quick changes to their business models to adapt to the changing federal and local policies and requirements. Additionally, businesses are marketing to a broader audience than before, which reflects in the surge in their revenues.Â
Demand and SupplyÂ
There has been a tremendous uproar of demand for cannabis for both recreational and medicinal purposes. With the unpredictability of the lockdown, people have started hoarding supplies to last them for months, which has impacted the supply chain hard.Â
The classical model of economics dictates that when a commodity’s demand rises, companies tend to decrease prices to gain market share. But in this unprecedented situation, companies reluctantly have had to increase the prices to account for delivery prices, inflation, and the rising cost of doing business, and in some cases, to retain the workforce.
Many companies have doubled the shifts of their growers, increased packaging machinery, and have adopted new business models where production and delivery are key. Their biggest fear, however, is running out of the products.
Companies are expecting the government to help with the situation by providing financial relief packages to aid with production or deliveries. The unmatched demand and supply levels have triggered individual growers to start black market sales to sustain their business.Â
Whether it is medicinal or recreational, the government’s recent statements start to eliminate the negative bias over the use of cannabis persisting over decades now.Â
This step indicates that the government embraces the necessity of the product for those who use it, eliminating the stigma of criminality that affects the industry. States are continuing to develop innovative means to utilize technology to make cannabis available during the pandemic.
Many medicinal and recreational cannabis consumers have started questioning companies and authorities regarding the demand and supply of cannabis. The most important thing for these businesses is keeping their employees safe so their companies can continue functioning. Measures adopted by the cannabis supply chain to accommodate the changes in the industry can help companies to survive.
About the author: Rebecca is a cannabis and health industry consultant who frequently writes about the latest trends in the industry with only one motive that is to create awareness about healthy living. She has been writing for a long time now and is becoming a recognized name in the cannabis industry.
Honest Answers: COVID-19 & the Cannabis Industry
Serge Chistov, Honest Marijuana’s Chief Financial Partner, sat down with NUGL Magazine for a Q & A on the impacts COVID-19 is having on the Cannabis Industry.
How Will the Pandemic Change Cannabis Consumption Habits?
I believe that people will definitely give a second thought to exchanging personal objects such as passing a joint. Likely they will concentrate more on the individual pre-rolls. I think it will definitely affect some old practices that were not only just prevalent in smoking cannabis but also to eating in general and personal hygiene. I believe that part of the tribal tradition will always exist and there are those that take the responsibility of personal hygiene differently than others. Overall, I would expect an improvement in the practices but I also think that some of the traditional users will still be around for a while.
What Might Cannabis Consumers Turn To Instead?
Pharmaceutical grade products with different variations of consumption will give more visibility to the edibles, including fast-acting edibles, as well as transdermal applications-specifically pain directed, etc.. It will bring about better awareness and understanding of the industry in general and the options consumers will have access to.
Has Cannabis Use Increased During the Pandemic?
When people have more time on their hands, they tend to partake in substances more often. So yes, the consumption of cannabis has increased for the consumer that has more free time right now. Many people take free time as an opportunity to relax and some choose to do this with cannabis. It also goes without saying that this is a stressful time for many who are turning to cannabis and related products as a way to reduce stress and relax. The pandemic is becoming similar to an extended war which will create a lot of PTSD and a lot of nervous breakdowns.
Also, the fact that the cannabis business in the legal cannabis states has been deemed an essential business during the shutdown is a huge endorsement to the importance of the industry in the medicinal, tribal and cultural life of our society. This gives the industry an additional level of legitimacy among skeptics.
How has Covid-19 Impacted the Business Side of the Industry?
With the industry not being centralized, many states who have legalized cannabis are not able to depend on the income that is derived from tourism- those people that are traveling to those specific states to enjoy that state’s liberties. As in any industry right now, we are experiencing a shortage of customers who would normally be shopping in the dispensaries. So the growth in use really balances out the missing dispensary, tourism-related customers. I think that as cannabis consumption becomes more available, many new consumers will follow. Right now, we are still in the growth stage.
In addition, the effects of coronavirus will bring about a brand new future which will be based on more electronic communication- people will be migrating from place to place, simply because they will realize there is no longer a physical connection to the infrastructure, working from home is as productive if not more productive. The direction was there, to begin with, it has just been expedited to move into a more virtual/distant education and workplace. A lot of people will begin to make their decisions based on expanding their geographical horizons. Who’s to say that they will not select to go to the states where using cannabis is legal? “
Has the Pandemic Stimulated Any New Product or Technological Developments?
It is very difficult to say what individual companies are doing right now. Currently, the industry as a whole, is aiming on recreating a smoking experience without inhalation, without smoking- so a fast-acting, expedited experience, controlled experience, all of these innovations have become important to the industry regardless of the COVID-19 pandemic and we will continue to see those innovations brought to market.
Serge Chistov is a cannabis industry expert and Chief Financial Partner with Honest Marijuana Co. Honest Marijuana has been a leader in cannabis innovation since it’s inception with an organic approach to the growth, production and packaging of cannabis, the launch of the first-ever organic, hemp wrapped, machine-rolled blunts; the invention of the now patented Nanobidiol Technology, and the first company to bring THC-O-Acetate technology and products to market. https://honestmarijuana.com/
United for Skid Row
In Wake of Covid-19 Crisis Hitting Skid Row, Organizations to Unite to Rally Support
As the world struggles to respond to the Covid-19 crisis, a new battle front is percolating in the heart of homeless capital of the world, Skid Row. Access to protective gear, food and other vital services is dangerously lacking in the community long plagued by systematic injustice, mental health and housing injustice.
City and County responses are underway as the need for rapid deployment of resources has become clearer.
Community-based organization are also stepping up to the plate. Known as “United for Skid Row”, an initiative to raise $20,000 for protective gear and food has been initiated by community and business leaders from across multiple sectors and regions. A Go Fund Me Page and a Benefit Comedy Show, Live Auction and Concert taking place this Saturday night on Zoom and FB Live will take place to raise funds for the initiative.
The idea originated by Don Garza, a long-time Skid Row Activist, after observing the lack of protective gear, inability to social distance and the health risks affecting most people in the area as putting his neighbors at imminent risk.
“For me, it was stepping in and bringing the larger community into supporting and Uniting for Skid Row. I noticed that that the typical support through food drives, and regular donations coming to the area were suddenly gone. I noticed the need and contacted my close friends like Joseph Chicas to start to mobilize our resources and bring them to Skid Row Community.
Lead organizations including Breaking Through Barriers to Success, the Latino Coalition of Los Angeles and the United Latino Fund are leading the campaign as part of their larger Covid-19 rapid responses.
For Daniel Mejia, Executive Director of Breaking Through Barriers to Success, who is on the front lines of community Covid-19 food and masks drives, the need for a specific Covid-19 response to Skid Row could not be clearer. “Right now, Skid Row needs our full support. Social distancing and staying home is a privilege they can’t afford. We need to distribute protective gear, food and other supplies immediately. United for Skid Row is doing that.
To support the United for Skid Row visit, www.unitedforskidrow.com
For more information contact Daniel Mejia, Executive Director of Breaking Through Barriers to Success at 213-840-7974 or 213-378-4937.
Honest Answers: 2020 Election
Serge Chistov discusses the impact 2020 Election might have on legalization, his thoughts on the 2019 cannabis stock plunge, technological and product innovations we can expect in 2020.
How do you see the 2020 election playing out for the cannabis industry?
“I believe that if Trump serves a second term, we will see a federal legalization of cannabis, perhaps, though, at the end of his second term. Even if he is not re-elected, I believe that he will sign off on it before leaving office. Trump is going to make it happen because it makes financial sense. It creates jobs, and it brings more money to local residents and local community while being done safe and responsibly.
In terms of Biden, he was always opposed to the full legalization of marijuana during the Obama and post-Obama administration. He is now looking to possibly decriminalize cannabis and expunge some cannabis-related records, giving states more opportunities for more research. The only thing he did help to create during that administration was the Cole Memorandum, which protects marijuana-legal states from federal prosecution. During the Obama era, they agreed to disagree with the states on a federal level but let them make their own decision regarding the legalization of cannabis. If he were to become president, I don’t know that he would do anything differently.”
Cannabis and the stock market. 2019 saw a plunge in cannabis stocks, why did it happen and what’s ahead.
“Like anything else, cannabis stocks came out of left field. Those are not standard issued stocks like we would use to describe AT&T, IBM, Google, or even Tesla. Cannabis stocks were running on sheer excitement and enthusiasm. Oftentimes, when something like that happens, stocks become overvalued. The consumer was buying them, not because they made sense as a business at that time, but rather because a). They loved the idea- it was a topic of conversation and b). they were afraid not to make it in time- in the sense that the stock prices would start to go through the roof. Cannabis has been in the media for the past three or four years as the talk of the town, so more and more people were familiar with both the concept and the product.
Speaking from an investor standpoint, last year we went through the excitement, the plateau and then the reality of Wall Street which says we only run companies that actually present value as a business. Since the profits weren’t there, I believe that is what caused stocks to be depressed and sold out. As an active investor, you have to pay attention to the people who were selling them at the end of 2019. Running them from the heights of 45-50 stocks to 18 down 75 cents. When you start to see the rapid motion of stocks, this is an extreme.
Originally they were being run up, now, they are running them down because they start to think it’s never going to happen, there are too many regulations, it’s not going anywhere, let me cut my losses and move on. Both of these extremes present value to the active investor. My advice would be to be careful, review the major players, and see how their value is related to their extended history. Today, it’s a more favorable stock for investor dollars because they can get some bargains and we have a little more history within a specific company to show what can happen with upswings and downswings, what’s happening with their management, are they utilizing their capital, etc..”
What might we see from the cannabis industry in 2020 in terms of product and technology?
“I think we will see more consolidation. More products coming into the market. Larger companies taking out the smaller ones. More competition, thus bringing the price of cannabis lower in the wholesale side and hopefully in the consumer market. Specific technology in terms of the fast acting, easily delivered, non-smoking experiences will become a bigger piece of the pot market. Consumers are getting more educated and are demanding quality, price, and consistency. The consumer wants to feel something sooner- like within three to five minutes. They don’t want to pay a high retail price. And slowly but surely, on the industry level, we are becoming more developed. Quality of packaging, quality of the materials, quality of the manufacturers- all of that is improving. So that’s a win-win for the consumer.”
How about in five years?
“I see cannabinoids being more widely incorporated in day-to-day food. We might be able to see hemp derivatives be a part of the diet. I believe that smoking in the general sense will become less of an item. The consumer will treat smoking cannabis similar to that of smoking tobacco- they are looking for different alternatives to smoking with the same benefits but limited downsides.”
How has the average cannabis consumer changed over the last couple of years and how does the industry/companies need to adapt?
“Today’s cannabis consumer knows two numbers: The content of THC and the price. Originally, the consumer only wanted to know one thing: Is it available? There was no interest in the potency, varietals, it was more about the availability at the local level. So the consumer has become a little bit more educated and right now is trying to treat cannabis flower as a commodity. They are looking to find a bargain, they are learning about new consumption methods, forming their opinions by trying different delivery mechanisms, and finding their favorites. There is more tendency for the consumer to want to be slightly elevated during exercise and/or working hours. Consumers are trying to consume better and for less money.
We are going to start seeing industry leaders become more consistent in their offerings, acquiring smaller companies, consolidating their resources, and trying to maintain the pricing along with new offerings.”
States with pending legalization, where might it pass and what are the hurdles for those where it likely won’t?
“This is pure speculation on my part- approving anything new in states like New Jersey will come down to the attitudes of the state or its special operations, who is going to receive the licenses, and who is going to be awarded the stuff. This state is going to be a challenge as will New York for it, too, is a big politics state. It is more about deciding who is going to grow it, where are we going to grow it, who will make the money and when.
South Dakota’s legalization should go through easily. They experience such tough winters and they are in a distant location from normal sources of legal cannabis. Arizona, Missouri and Alaska all have medical programs so there should be a smooth transition into legalization in 2020.
The decision is not to decide whether to legalize cannabis or not. It’s more about trying to decide who’s going to do it, who’s going to make the money, who knows who and when will they be ready to supply one of the largest markets in the nation. I am reasonably optimistic about what will play out in 2020.”
How is the industry doing in the more recently legalized states
“It’s a new market with newly legalized states, which typically brings new excitement, higher prices, small offerings. As the market develops a little bit more, capitalism comes in to play. Regarding the licensing of cannabis- any new market right now is great if you’re in and a challenge if you’re out.”
About Serge Chistov and Honest Marijuana Co.:
Serge Chistov is Chief Financial Partner for the Honest Marijuana Co. and an industry expert. Honest Marijuana has been a leader in cannabis innovation since it’s inception with an organic approach to the growth, production and packaging of cannabis, the launch of the first-ever organic hemp wrapped the machine rolled blunts, the invention of the now patented Nanobidiol Technology, and the first company to bring THC-O-Acetate technology and products to market. Learn more at https://honestmarijuana.com or @honestmarijuanaco.
Influencer Marketing & The Cannabis Industry
Influencer Marketing. A term we’ve been hearing more of over the past decade and will continue to in the years to come. With social media exploding and people utilizing this channel of communication and transforming it into a business, influencer marketing has become bigger than anyone could have foreseen. What is influencer marketing? How does it work? Is influencer marketing worth the large budget it demands? All questions businesses in every industry try to determine as influencer marketing continues to grow. We may not have all the answers just yet but keep reading…
We’re dissecting everything we do know about influencer marketing and even got some insight from the source, the influencers themselves! After this introduction and quick guide to social media influencer marketing keep coming back because we will have all the info and news for you. In every upcoming issue on our “Influencer Pages”, we will be highlighting this topic in all aspects. A section of the magazine that will showcase influencers and cover everything you need to know about social media influencer marketing in the cannabis industry and beyond.
Brands are estimated to spend up to $22 billion on influencer marketing in the next few years, yes BILLION. Maybe small compared to the $150 billion spent on advertising but remember, advertising dates back to the 1920s, where influencer marketing only began about 10 years ago. So, what is it? Influencer marketing is governed by the same idea as a celebrity endorsement. To put it simply, companies will partner with influencers in their industry, as a result, their brand awareness is increased. The immense value of social media influencers lies in the ever-rising popularity of social media platforms and the creative, visual content. Also, each influencer works to carefully curate their audience, almost like little families that interact daily. The influencers’ followers trust them, they know the platforms, and can create immediate returns for brands. Influencers leverage their popularity on the platform in order to make deals with these brands. In essence, the more followers they have, the more valuable they are to a brand. Influencers operating on Instagram, for example, can boost their growth on the platform organically using growth services like those of Nitreo – https://nitreo.com/instagram-growth-service. This way they can appeal more to these brands looking to forge relationships with online personalities.
Reach vs. Niche. The crossroad you come to when deciding what kind of influencer is right for your company or campaign. Macro-influencers are those in the “reach” category, including those with very large followings 500k+ up to celebrities. Micro-influencers are those in the “niche” group, they have a smaller but targeted following and high engagement. The macro-influencers have huge fan bases and mass reach on social media. Imagine how many eyes your brand would have from one post on an influencer page with 20 million followers. Micro-influencers may not have as far of a reach, but they do have more genuine connections with their followers and a lot higher audience engagement. “We are more relatable to consumers because we are more similar to the average consumer compared to a celebrity buying Gucci,” Kirin of @sunshinespiffly (55.6k followers) told us. Both groups hold a ton of value but also have their pros and cons. Audience engagement is also a very big factor when it comes to influencer marketing. Which type of influencer is right for you can be determined according to your needs and budget.
These online creators have become so trusted that influencer marketing is now a vital part of businesses large and small. Alongside advertising, influencer marketing is becoming one of the heavy hitters when it comes to propelling a brand to success. When conducted effectively, influencer marketing can be one of the most valuable aspects of the business marketing sector. And when something has been known to work, you’re hesitant in making changes that could jeopardize this. But when the roles are reversed and something isn’t working, you’re striving to find ways to improve your marketing strategy as soon as possible. The best way to do this would be to look for a company like Epsilon, (see their site here for more information) who would be able to help you drive personalized communications with your audience. Why? To keep them interested of course. The more you engage with your customers, the more likely they are of using your product or service, and when you have influencers assisting you along the way, you’re only going to see your business grow. Brands are not only seeing direct return when working with influencers, but they are also creating relationships with individuals starting and leading trends in their industry. Even Kirin of @sunshinespliffy (55.6k followers) concurred telling us, “We (influencers) have such a strong pull on consumer trends, wants, and styles”. These influencers know the space and are experts in their industries. So do your research to find the best matches and the more authentic the better.
Influencer marketing in the cannabis space is a bit different from most mainstream industries. Due to the long, bumpy road of legalization, influencer marketing in the cannabis industry has probably gone through the most recent and drastic transitions. Before the start of legalization, social media and cannabis were enemies. Any social media including anything cannabis-related was highly regulated and prohibited leading to profiles being deleted and banned. Even in the transition, cannabis influencers and brands alike, still face some barriers while navigating social media marketing. For example, cannabis brands are unable to write off marketing expenses, so they do not have the same budget as brands in other industries. This directly affects cannabis influencers negatively as they have to adjust their rates lower than an influencer in most other industries. Bess of @imcannabess (94.1k followers) gives us more insight on the impact, “We can’t do paid google ad words or paid advertisements on social media, so influencer marketing helps us work around that“. Influencers and brands are working together to jump the hurdles and utilize cannabis social media marketing. Over the past 5 years, we’ve taken huge steps in the right direction to allow the cannabis industry to utilize the social media space just as any other industry would.
With total cannabis legalization on the horizon, more and more opportunities arise in the social media space. We are seeing dispensary tours, entertainment industry product placement, brand/product launch campaigns, large events, and almost everything other industries are doing with influencer marketing. Fewer cannabis profiles are being deleted and banned and there are even new platforms and technology that are pushing cannabis content to the forefront. Cannabis influencers can now show the cannabis world on social media and are driving growth. There are cannabis creative agencies, modeling agencies, marketing agencies, public relations agencies, and more. We even have celebs, like Rhianna, Wiz Khalifa, and Seth Rogan advocating and identifying with cannabis. It’s an exciting and powerful time for the cannabis industry. We only predict expansion in the cannabis social media industry and that’s another reason for our “Influencer Pages” section.
Is influencer marketing worth it and the expenses it comes with? The answer is yes absolutely! But only if you are using the tools and tricks to analyze so that you can determine the reach, effectiveness, and impact. Social media analytics and measurement tools such as engagement calculators can help measure the success influencer marketing has. As we said, do the research! Just like any other marketing tool, influencer marketing must be targeted, and quality is equally or more important than quantity. Being informed about the cannabis influencer marketing space is the best thing you can do to successfully utilize it.
This expansion is also giving cannabis influencers opportunities they did not have access to before. Some of these creators are starting businesses, creating events and even more. There are even award shows and festivals globally dedicated to cannabis and expanding. What started as wanting to share photography, hobbies, and favorite brands turned into something so much more for @imcannabess (94.1k followers), she tells us, “my page evolved by staying true to myself, all the things on my account are ME and the things I love combined with weed“. In upcoming stories, you can count on the best, most important content in the cannabis influencer industry. Next issue you’ll get the insider scoop on cannabis influencer Marley of @medicatedmarley (223k followers) a badass Las Vegas cannabis influencer, model, rapper, business owner and more. Stay tuned because you’re not going to want to miss her!
What’s Happening in the International CBD Marketplace
One of the hottest new markets domestically and internationally is the CBD market as both the U.S. and other world nations legalize hemp farming. One of the most sought after cannabinoids from hemp is cannabidiol aka CBD. CBD is an essential component of medical marijuana, and it is derived directly from the hemp plant, which is a marijuana plant having less than 0.3% Delta 9 THC.
After Congress passed the Farm Bill of 2018, the U.S. Government opened a path to the legalization of the hemp market and “all its derivatives.” So long as the hemp has a Delta-9 THC content of 0.3% or less, the derivatives from hemp are exempted from the U.S. Controlled Substances Act, which is the federal law criminalizing cannabis/marijuana generally. Individual States within the U.S. have started legalizing hemp, and a few states have expressly legalized CBD notwithstanding the FDA’s limitations on selling ingestible CBD products to consumers. Despite these challenges, North America is leading the global CBD market due to increasing consumer demand for CBD products. The overall market for CBD will be driven by high demand for CBD products because of consumer belief in the numerous claims about CBD’s health benefits. It is expected that many consumers/patients may ask their physicians for “off label” use of CBD, causing a rise in the global CBD pharmaceutical market, as more evidence proves the claims regarding CBD’s health benefits. It is presently believed that most consumers are waiting for regulators to determine the safe amount of use, and the proper marketing and labeling of CBD products for the over-the-counter consumer market. Because of growing consumer demand, we expect to see more American-based manufactures seeking legal pathways for CBD products to participate in both domestic and international markets.
CBD can be derived from marijuana, a controlled substance, or from the non-psychoactive hemp plant, which are both derived from the Cannabis L Sativa plant. Because of the higher costs and taxes associated with growing marijuana, it is much cheaper to extract CBD from hemp. While CBD is a component of psychoactive marijuana (one of hundreds), by itself, it does not cause a “high.” According to a report from the World Health Organization, “In humans, CBD exhibits no effects indicative of any abuse or dependence potential…. To date, there is no evidence of public health related problems associated with the use of pure CBD.”
A recent Harvard Medical School blog recently posted the following regarding the health benefits of CBD:
CBD has been touted for a wide variety of health issues, but the strongest scientific evidence is for its effectiveness in treating some of the cruelest childhood epilepsy syndromes, such as Dravet syndrome and Lennox-Gastaut syndrome (LGS), which typically don’t respond to antiseizure medications. In numerous studies, CBD was able to reduce the number of seizures, and in some cases it was able to stop them altogether. Videos of the effects of CBD on these children and their seizures are readily available on the Internet for viewing, and they are quite striking. Recently the FDA approved the first cannabis-derived medicine for these conditions, Epidiolex, which contains CBD. CBD is commonly used to address anxiety, and for patients who suffer through the misery of insomnia. Studies suggest that CBD may help with both falling asleep and staying asleep. CBD may offer an option for treating different types of chronic pain. A study from the European Journal of Pain showed, using an animal model, CBD applied on the skin could help lower pain and inflammation due to arthritis. Another study demonstrated the mechanism by which CBD inhibits inflammatory and neuropathic pain, two of the most difficult types of chronic pain to treat. More study in humans is needed in this area to substantiate the claims of CBD proponents about pain control.
There is also growing anecdotal evidence suggesting many health benefits from CBD beyond use as an FDA-approved, prescription anti-seizure medication. Accordingly, market analysts predict the CBD market will grow significantly in the near future.
One such analyst, Fior Markets, predicts that the global CBD market is expected to grow from USD 1,453.81 Million in 2018 to USD 17,345.80 Million by 2026 at a compounded annual growth rate of 36.3% during the forecast period 2019-2026. Adoption of various cannabis products, growing consumer spending on cannabis products, increasing usage of CBD in medical applications, and high R&D investments by the pharmaceutical industry, have all spurred the growth of the international market. Interestingly, Fior Market’s data showed that the therapeutic grade segment is dominating the market with a 59.90% market share in 2018. Fior further predicts the CBD market will keep growing in 2019. The therapeutic grade segment dominated the market apparently due to CBD’s claimed health benefits that help in the treatment of neuropsychiatric disorders. CBD is also being used to treat other chronic disorders, which is likely to further spur demand. Since CBD isolate does not have any synthetic ingredients or harmful contaminants, it is generally viewed as safe to consume, despite FDA warnings that consumption of significant amounts of CBD for extended periods may result in liver stress in humans.
Part of the expected growth of CBD are claims that CBD drugs have the potential to treat chronic disorders, such as fibromyalgia, irritable bowel syndrome, Crohn’s disease, and Parkinson’s disease. Some claim that CBD efficiently reduces pain, improves sleep, and reduces headache pain for people with fibromyalgia and migraines. Others claim it lessens irritation in persons suffering from irritable bowel syndrome. Regarding Parkinson’s disease, some claim CBD lessens the negative effects of this disease. If FDA-approved studies can support such claims, it is expected that the CBD market will grow exponentially and internationally. See https://www.fiormarkets.com/report/cannabidiol-cbd-market-by-product-food-grade-therapeutic-396106.html.
Regarding who some of the leading CBD product manufacturers are presently, we see Aurora Cannabis, Canopy Growth Corporation, CBD American Shaman, CV Sciences, Inc., Elixinol, Folium Biosciences, Gaia Botanicals LLC, IRIE CBD, Isodiol International Inc., NuLeaf Naturals, LLC, and Pharmahemp. These companies are adopting strategies such as product innovations, mergers & acquisitions, joint ventures, collaborations, and strategic partnerships to maintain their presence in the global CBD market. Some companies, like Elixicure in Southern California, have made the effort to get FDA over-the-counter approval for its CBD-based topical pain relief roll-on to ensure its expansion in the consumer market.
Regarding upcoming and growing CBD markets beyond the medical and consumer sectors, we see growing interest in CBD-based products for pets. In February of 2018, Marijuana Company of America (MCOA) launched its hempSMART Full Spectrum Pet Drops with a specially formulated product containing naturally occurring CBD, which is derived from a combination of hemp seed oil, a full spectrum hemp extract, fractionated coconut oil, and a rich bacon flavor. While the FDA has not yet approved CBD in pet food, many pet owners claim that CBD helps their dogs with arthritic pain. Part of the theory as to why dogs benefit from CBD is that dogs have more cannabinoid receptors in their brains than humans do. Studies are presently under way showing CBD’s health benefits in pets. See https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5109620/.
As more consumers look for natural, plant-based foods and medicines, consumer demand for hemp and naturally derived CBD also rises. CBD is being added to foods and beverages, pet products, and cosmetics in both the U.S. and throughout the world. Hemp not only produces CBD, but also provides fibers that can be effectively used in consumer goods from textiles to concrete. As more countries legalize hemp and CBD, both commercial and consumer consumption of hemp and CBD rises globally, making these markets expand exponentially. Accordingly, CBD’s market future is bright.
John Armstrong is a founding partner of Horwitz + Armstrong, a professional law corporation, practicing general business litigation and providing business legal advice in the cannabis and hemp industry. Mr. Armstrong graduated cum laude from Creighton University School of Law in 1996 where he was the Lead Articles Editor for the Creighton Law Review. He earned undergraduate degrees in English and Political Science from California State University Fullerton in 1993, where he was a member of the speech and debate team. Mr. Armstrong has been admitted to the California State Bar since 1996, and is admitted to the U.S. Northern, Eastern, Central, and Southern Federal District Courts for California, the U.S. Second, Ninth, and Tenth Circuit Court of Appeals, the Federal Circuit Court of Appeals, the U.S. Court of International Trade, the U.S. Court of Federal Claims, and to the United States Supreme Court.
Mr. Armstrong represents a significant number of clients in the cannabis industry, including growers, manufacturers, and distributors, assisting this growing industry in the areas of regulatory compliance, general litigation, intellectual property, and capital raises.
Global M&A for the Cannabis Markets
Driving Factors, Trends & Sample Transactions from 2019
S T O N E B R I G H T
Cannabis M&A Advisory
The fragmentation of the cannabis industry, resulting from the disparate regulatory environment in the United States and throughout the world, often forces operators to favor accretive acquisitions over organic growth. In just five years, the industry has transformed from cottage to skyscraper, producing many transactions valued at at $100 million or more. In this article, we analyze global factors and trends driving M&A activity for the industry, together with specific examples of transactions illustrating those factors and trends.
The global cannabis and hemp markets already operate at light speed. Mergers and acquisitions will continue to shape the face of the global cannabis markets over the next decade – a trend consistent with any nascent industry. Near-term consolidation will progress at every level from micro-cap to large-cap issuers, inevitably leading to mega-mergers after federal legalization occurs in the United States.
2018 M&A in Cannabis Topped $15 Billion USD
SEVEN GLOBAL TRENDS SHAPING THE M&A LANDSCAPE IN CANNABIS
- Boards and management teams face increased pressure from investors to perform.
- Large scale production assets need expansive sales channels creating vertical integration opportunities.
- Opportunities abound to leverage huge valuation gaps between private and public transactions.
- Otherwise restricted by the NYSE, NASDAQ, or TSX/TSX-Venture stock exchanges, large-cap issuers are getting creative to gain exposure to the US prior to federal legalization.
- Having made a few “bets” – Big Alcohol, Big Tobacco, and Big Pharma are just scratching the surface.
- Global stock exchanges will allow or expand their tolerance for cannabis-related listings – driven by continued legalization.
- Emergence of Special Purpose Acquisition Companies (SPACs) increase access to capital for M&A transactions.
HOW THE 7 TRENDS AFFECT M&A ACTIVITY
Boards and management teams face increased pressure from investors to perform. Put simply, buying operating companies provides a quantifiable increase to revenue, margins, and in many instances – profits. Licenses and/or licensed facilities create faster entry to (or expansion within) markets when compared to new applications. Companies can instantly leverage their existing brand and product portfolios through acquisitions. Further, acquirers often integrate proven management teams that have demonstrated success in this dynamic industry – which can save them years of pain and instability. Jared Younker, Chief Compliance officer of CREC Compliance, a leading licensing and consulting firm, estimates that “groups may spend well in excess of $300,000 on average and not secure an eventual license.” With license competitions increasing risk and cost, regulated operators have increasingly turned to an acquisition strategy to eliminate the risk of securing a license, while diversifying both geographically and frequently vertically along the supply chain.
- Curaleaf Holdings (CSE: CURA) announced in June 2019 that it agreed to acquire Glendale Greenhouse and Phytotherapeutics Management Services for a total value of $25.5M USD – with $22M USD in cash and $3.5M USD in stock1. This transaction provides Curaleaf with production and retail assets in Arizona – together with $7.4M USD in annual revenue.
- On October 8, 2019 – Cresco closed the acquisition of Gloucester Street Capital, LLC2 – providing the leading multi-state operator Cresco with one of only ten (10) vertically integrated licenses in New York State.
- In July 2019 – emerging MSO Jushi Holdings, Inc. expanded into Virginia through a $16M USD investment for a controlling 62% interest in Dalitso3, after agreeing to acquire various interests in Pennsylvania for $63M USD the month before.
Large scale production assets need expansive sales channels creating vertical integration opportunities. Operators who have built vast production infrastructure in hopes of selling their wares can instead acquire brands with existing demand. Alternatively, well-positioned brands with customer demand are acquiring production assets to secure reliable supply for their wanted products to ensure quality, consistency, and availability. Channels to the market can also be purchased to ensure off-take of production, such as producers of indoor flower acquiring retail or distributors.
- Cresco Labs (CSE: CL) agreed to buy Origin House (CSE: OH) for approximately $850M USD4, after originally buying a majority stake of SLO Cultivation in California – a large-scale greenhouse operation – and entering the California market with their brands. The transaction provides Cresco with definitive access to most dispensaries in California, while increasing the likelihood for offtake or sales of their raw materials produced by SLO Cultivation. The Origin House acquisition recently passed a mandated waiting period under United States anti-trust laws and is expected to be finalized in the coming months.5
- Cresco buys Gloucester Street Capital, LLC for $32.5M USD in cash and 13,466,667 Class F units – providing Cresco with one of only ten (10) vertically integrated licenses in New York State.6
- The pending acquisition of private company Curaleaf Partners, Inc. and the Select brand by Curaleaf Holdings, Inc. was followed by aggressive M&A to leverage the Curaleaf brands through the acquisition of production or vertically integrated assets across key markets in the United States. In addition to the Glendale Greenhouse and Phytotherapeutics Management Services deal in Arizona, Curaleaf also announced the closing of Acres Cannabis in Nevada on October 31, 2019 – providing the company with 269,000 square feet of cultivation and 3,200 square feet of processing in Nevada – with a dispensary acquisition in Las Vegas still pending. Curaleaf currently operates in 12 states with 49 dispensaries, 14 cultivation sties, and 13 processing sites to power the Curaleaf and Select brands.7
Opportunities abound to leverage huge valuation gaps between private and public transactions. In more stable and efficient capital markets within mature industries, valuation gaps between public and private issuers typically hover near 30% — with a public issuer achieving a 30% premium to valuation based upon the revenue or earnings of their target. Public cannabis companies still trade above 5X revenue (even after recent corrections in valuations), whereas private transactions often range from 1X to 2X revenues. With issuers raising capital or utilizing their stock as currency, acquisitions present immediate shareholder value over organic growth. Private companies may also favor share exchanges, granting shareholders liquidity as they spin privately held assets onto public company balance sheets.
- The aforementioned Curaleaf acquisition of Glendale Greenhouse and Phytotherapeutics Management Services featured a multiple of approximately 3.5X revenues – however, Curaleaf’s market cap as of October 20, 2019 was approximately $2.8B USD on an annual revenue run rate of $194M USD (based on their quarter ending June 30, 2019). That means Curaleaf traded at a revenue multiple approaching 14.5X, suggesting this transaction was a premium for the buyer compared to other industries… but a major win for Curaleaf shareholders based on this metric.
- Further, the Curaleaf transaction upon its initial acquisition terms valued the company at $950M USD on revenues of $117M USD for the prior year – or a multiple of more than 8X last-twelve-months revenue. Acquisitions with higher revenue, such as this one, or within limited license states, tend to drive higher valuations of private-to-public transactions. Interestingly, on October 30, 2019 – Curaleaf announced a restructuring of the original deal, reducing the minimum consideration by 42.5% and structuring additional payments as an earn-out. This tracks back to trend number 1: boards and management face increased pressure to perform. While some observers8 have suggested that this is a broader trend related to M&A, we estimate this restructuring is more closely related to falling sales attributed to the “vape crisis.” In any event, by mutually agreeing to change the terms, this transaction now has an increased chance of success to drive value for Curaleaf shareholders.9
Otherwise restricted by the NYSE, NASDAQ, or TSX/TSX-Venture stock exchanges – large-cap issuers are getting creative to gain exposure to the US markets prior to federal legalization. Capital just “finds a way.” Variations on the structures below will allow aggressive acquirers to pave their eventual way into the United States while tip-toeing around their respective exchange regulations.
- Canopy Growth, a leading Canadian operator with a global footprint, structured a deal to acquire Acreage Holdings in the future, a company with substantial United States operations – combining the two behemoths conditioned upon the federal government legalizing cannabis in the United States. The proposed $3.4B USD deal was approved by an estimated 99.05% of shareholders.10
- Canopy Rivers (TSX: RIV.V), an offshoot of Canopy Growth (NYSE: CGC, TSX: WEED) structured as a “venture capital investor” that is publicly listed, invested in TerrAscend (CSE: TER)11 – helping to drive a series of transactions with TerrAscend investing in or acquiring US-based, operating assets like those of Ilera Healthcare. Ilera gives TerrAscend one of the few vertically integrated licenses in Pennsylvania, and incredible top-line growth (from $8M USD in revenues in 2018 to a run-rate of $43M USD in 2019).12
- Cronos, a leading Canadian operator (NASDAQ: CRON) leverages its investment from Altria to acquire Redwood Holding Group13 – giving Cronos immediate scale for the hemp and CBD markets in the United States.
- Innovative Industrial Properties (NYSE: IIPR), a public REIT dedicated to cannabis, was an early pioneer as the first industry issuer to get NYSE approval, granting them exposure to the enhanced lease terms and cap rates of the cannabis industry while concurrently benefitting from a “big board” listing in the United States. Leveraging insider experience from the biotech industry – Innovative Industrial Properties gives operating companies a platform to divest real estate assets through a sale-leaseback structure, providing much-needed cash for growth or acquisitions to the operating company. As of October 30, 2019, Innovative Industrial Properties owned 38 properties in 13 states totaling 2.8 million rentable square feet (including approximately 903K square feet under development/redevelopment). Per the company, the average annual yield on these investments is 13.8% with an average remaining lease term of 15.6 years.14 Measuring this yield against the entire market, REITs average an 11.8% annual return.15 Look for other cannabis REITs to pop up on major exchanges that allow US institutions to play, driven by our first and fourth trends – management is under increased pressure to perform, and issuers are getting creative to gain exposure to US markets. Real estate is simply not the core business for an operating company seeking to expand market share with their products, but cannabis real estate offers a premium yield compared to other industries.
Big Alcohol, Big Tobacco, and Big Pharma are just scratching the surface. These industries feature market caps that completely dwarf the largest players in cannabis. The last two years have already seen Big Alcohol and Big Tobacco make initial bets. With Big Beer struggling to grow, and Big Tobacco facing a crisis to retain market share – particularly in light of the new vape crisis – the coming years will see more transactions in global markets where these players can easily transact in countries with federal legalization.
- Constellation Brands, Inc. (NYSE: STZ), owner of Corona and Robert Mondavi wines, made a $4B investment in Canopy Growth Corporation (NYSE: CGC, TSX: WEED) in 2018. Considering Canopy Growth Corporation also agreed to acquire Acreage Holdings (CSE: ACRG.U), and Constellation Brands, Inc. has a relatively easy path to own a majority of Canopy Growth – Constellation’s reach extends to both Canopy Growth and Acreage Holdings, providing Constellation with future consolidation opportunities to become what could become the largest cannabis company in the world.
- Also in 2018, Altria Group, Inc. (NYSE: MO), maker of Marlboro cigarettes, made a $1.8B investment for a 45% stake in Cronos Group Inc. (NASDAQ: CRON) – a company engaged in the production and sale of cannabis in federally legal jurisdictions.16 Expect Cronos to face increased pressure to creatively gain exposure to the US cannabis market, leveraging their NASDAQ listing and strong market cap – and positioning Altria for a future, majority stake (or outright acquisition/consolidation).
- Molson Coors (NYSE: TAP; TSX: TPX) took a controlling interest in a JV with HEXO (NYSE: HEXO) to develop cannabis-infused beverages17, while InvBev (NYSE: BUD) and Tilray (NASDAQ: TLRY) each committed to invest up to $50M USD into a JV dedicated to cannabinoid-infused beverages.
- Another Big Tobacco juggernaut – Imperial Brands (OTC: IMBBY) invested $123M CAD through a convertible debenture in Auxly Cannabis Group (TSX: XLY) to acquire a 19.9% interest – also granting them the exclusive partner rights for cannabis-related initiatives.
- While some observers believed that Big Pharma would stay on the sidelines until cannabis became federally legal in the United States – Novartis AG (NYSE: NVS) crushed that assumption by inking a global supply and distribution agreement for medical cannabis with Tilray (NASDAQ: TLRY) in December 2018. This expanded upon a previously inked deal between the parties. Novartis CEO Vas Narasimhan told the market that “cannabis is not a priority,”15 although this was the first major partnership (of what will inevitably be many) between a pharmaceutical company and a cannabis business.
Global stock exchanges will allow or expand their tolerance for cannabis-related listings – driven by continued legalization. The once fledgling Canadian Stock Exchange (CSE) is a thriving market with hundreds of issuers, known now by many as the “Cannabis Stock Exchange.” The trend of new stock markets or acceptance by large, existing stock markets will continue to invite M&A strategies because public capital leads to consolidation.
- Aequitas NEO Stock Exchange (“NEO”). Canada’s “next generation stock exchange, founded on the principles of fairness, liquidity, transparency, and efficiency” – the NEO benefits from an overrun and logjam on CSE listings in the cannabis industry. Listings from Columbia Care, Inc. (NEO: CCHW), Horizons US Marijuana Index ETF (NEO: HMUS), Halo Labs, Inc. (NEO: HALO), Jushi Holdings (NEO: JUSH.B), and several SPACs as detailed below are strong indications of NEO’s bright future in cannabis.
- London Stock Exchange (“LSE”). Cannaray, a British medical cannabis company, is planning to list “a £100M float”17, making it the biggest company on the LSE. While this transaction may be small by current standards established by Canada and the United States exchnages, this signals a broader trend of acceptance by yet another major global stock exchange. Medical cannabis in England is defined according to low-THC content, but if history is any indication, the LSE will likely expand acceptance of high-THC issuers as consumer and patient acceptance increases.
Emergence of SPACs increase access to capital for M&A transactions. A SPAC, or special purpose acquisition corporation/company, allows an issuer to raise capital before they identify a target to acquire. The leading investment bank in the cannabis industry in terms of total underwriting and transaction size, Cannacord Genuity, has been actively involved in creating and underwriting these vehicles through their affiliates. Using a SPAC solves the chicken-or-egg scenario of raising material blocks of capital first, then deploying it opportunistically. Funds are raised into a trust for a SPAC, an acquisition is identified, and a transaction is completed within 24 months with shareholder approval to conform to the various restrictions placed on a SPAC structure by regulators. Look for SPACs to increase as federal legalization occurs in the US, and as other capital markets globally increase acceptance of cannabis listings of all forms. This structure may become the preferred avenue for larger transactions as opposed to the tried-and-true reverse-takeover, or “RTO.”
- Cannacord Genuity Growth Corp. (formerly NEO: CGGC) agreed this year to merge with Columbia Care18 – a New York-based medical cannabis business. Prior to the agreement, the SPAC estimated Columbia Care’s value at $1.35B USD. The entity is now known as Columbia Care, Inc. (NEO: CCHW).
- Ayr Strategies, Inc. (NEO: AYR.A) was previously Cannabis Strategies Acquisition Corp. (NEO: CSA.A, CSA.WT, CSA.RT) prior to its qualifying transaction with Ayr Strategies, Inc. Ayr’s strategy is predicated upon M&A, targeting revenue of $750M CAD by 2020 according to early information from the company.19
- Mercer Park Brand Acquisition (NEO: BRND.U) raised $402.5M USD, and intends to focus on acquiring companies with an enterprise value between $300M USD and $800M USD.20
- Subversive Capital Acquisition Corp. (NEO: SVC.UN.U), was formed and capitalized to “identify, acquire, and…assist in the growth of a business in the cannabis industry.” It raised $575M USD in its IPO, making it the largest SPAC IPO in Canadian history.21 The company is now focused upon identifying and closing its qualifying transaction with a large war chest.
- Canaccord Genuity Growth II Corp. (NEO: CGGZ.UN) also completed its IPO in 2019, and is “targeting companies with an enterprise value between $50M and $250M.”22
THE FUTURE OF CANNABIS INVESTING IS SHAPED BY CURRENT M&A TRENDS
The days of irrational exuberance when cannabis was a novel investment are officially behind us. Increased activity in the M&A markets will invariably impact seed- and venture-stage companies seeking capital – as investors have more options than ever to add cannabis to their portfolio.
Once promising business opportunities featuring entrepreneurs who have little to no experience in the industry (or business, generally) will have reduced access to capital. Established executives, previously reticent to dip their toes in the once muddy waters, are becoming increasingly receptive to the global cannabis industry. Relationships of these executives will lead to even more access to capital and mainstream acceptance of cannabis – and the path of least resistance to scale in the global cannabis market for new entrants will be through aggressive M&A.
Expect consolidation to continue at every level of the market, preceded by more mega-mergers intended to create economies of scale (or to diversify and hedge against the loss of consumers). The Aurora Cannabis (NYSE: ACB) acquisition of MedReleaf in a deal valued at more than $2.5B USD 23 was only an indication of the future. Expect non-industry juggernauts to leverage their market cap and balance sheets to enter the industry through near-majority investments like those made in Canopy Growth by Constellation Brands or Cronos by Altria, only to be followed by outright absorption of those companies. SPACs will increase in size, leveraging the firepower and wisdom of investment banks like Canaccord Genuity.
When the United States federal government finally legalizes cannabis, expect the Goldman Sachs of the world to aid in massive consolidation by underwriting transactions that could shape the future of the United States economy – not completely unlike the industrial revolution.
Stonebright is an M&A advisory firm dedicated to the cannabis and hemp industry. The firm operates the cannabis practice for a leading, middle-market investment bank in the United States. Uniquely suited to closing premium-priced transactions, Stonebright utilizes senior resources and a proven process that has successfully closed more than 500 transactions across multiple industries with numerous awards – with sell-side and buy-side transaction experience ranging from $1M to $1B+ in enterprise value. For information on selling or buying companies in the industry, please contact us through www.Stonebright.com or via email: firstname.lastname@example.org
DISCLOSURES & DISCLAIMER
MB Partners LLC DBA Stonebright (the “Company”) is not a registered broker-dealer. The Company offers compliant M&A advisory pursuant to U.S. Securities and Exchange Commission (“SEC”) guidance according to certain criteria defined by the SEC which can be found here. None of the information presented in this article is intended to form the basis for any investment decision, and no specific recommendations are intended. Accordingly, this article does not constitute investment advice, counsel, or solicitation for investment in any security. This article, its contents, and citatinos do not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or any invitation to offer to buy or subscribe for, any securities, nor should it or any part of it form the basis of or be relied on in any connection with, any contract or commitment whatsoever. The Company expressly disclaims any and all responsibility for any direct or consequential loss or damage of any kind whatsoever arising directly or indirectly from (i) reliance on any information contained within this article or others delivered from the Company, or documents attached thereto; (ii) any error, omission, or inaccuracy in any such information; or (iii) any action resulting therefrom. The Company makes no warranties nor representations concerning the information contained within this article – which is intended for informational purposes only. Neither Company nor its principals own positions in the companies referenced within this article, however, Company and its principals reserve the right to buy or sell shares in these companies at any time without notice.
Investing in U.S. Real Estate
Prepared for Global Cannabis Investor Magazine
Written by Rick Payne | Co-Founder of Cannabis Real Estate Consultants
Traditional Commercial Real Estate Market Trends in the United States
Trade war talks with China, the popularity of online shopping for American consumers, and the death of “big box” retailers has begun to transform the demand for various asset classes in the traditional investment markets.
Over the past decade the United States commercial real estate market has undergone a historical cycle that could be compared to a roller coaster ride. Meaning that there are commercial notes for sale for people to free up their capital during this time. After the housing crisis and the economic meltdown that ensued shortly after in 2008 and the years to follow, the stabilization of the capital markets has been a slow, yet steady, and consistent process that has resulted in what most investors and analysts would describe as a “healthy” market with strong growth. Although the current trends are vastly different than they were a decade ago and the market demands have undergone a complete transformation, there is a substantial amount of stability in certain commercial real estate asset classes. Quite simply, investors in commercial real estate sense profits can be attained. It is for that reason that they are keen to work with experts similar to R&M Concrete in order to create buildings of a lucrative nature.
Such as industrial, multifamily, central business district (“CBD”) office space, and even retail in certain instances.
The most stable asset class with the highest demand, lowest vacancy rates, most new construction, and stable growth is undoubtedly industrial. In 2019 it was estimated that roughly 88% of cap rates for industrial investments ranged on average anywhere from 4.6% to 8.0%. This can be attributed to the rising popularity of third-party logistics providers and other B2C businesses that are focused on home delivery to their customers such as Amazon. Even retailers that traditionally relied on large spaces for their operations such as Home Depot, Walmart, and Best Buy are all beginning to deploy some type of home delivery service to remain competitive.
“The most stable asset class … is undoubtedly industrial.”
Cannabis Real Estate as a New Asset Class
The unique operational requirements of cannabis businesses and complex government regulations related to zoning and land use for the cannabis industry have created an extraordinary opportunity for commercial real estate investors looking to capitalize on a thriving new industry.
Commercial cannabis operations have become as commonplace as Starbucks in certain parts of the United States. Considering the fact that there are now 33 medical marijuana states and 11 adult use marijuana states it is safe to say that the chances are that the majority of Americans have been exposed to the cannabis industry in their hometown or state one way or another. This is even more pronounced in states like California that have had an established and burgeoning medical cannabis system in place for over two decades since 1996.
As legalization has spread throughout the U.S., there have been a number of states, like California, that have opted to give local municipalities the authority to ban or regulate commercial cannabis activity within their city or county limits. For instance, the State of California has 482 cities and 58 counties for a total of 540 different municipalities. Each municipality has their own set of laws and there are still over more than half of the 482 cities in California that have outlawed dispensaries, deliveries, or any type of cannabis sales despite the recent state law, Proposition 64, which legalized recreational cannabis businesses.
To add insult to injury, cannabis is technically still federally illegal since it is considered a Schedule I Controlled Substance under the Controlled Substances Act. Because of its federal status many landlords in the past have been apprehensive about renting their property to cannabis businesses. It can often cause complications if there is a loan on the property. Typically, lenders will get what is referred to as a “rent roll” on a frequent basis from their borrowers. If a lender such as a bank discovers that one of the tenants in a building that they have a loan on is a cannabis business, they can typically call the loan “due” in which case the borrower has to pay off the entire balance immediately. As you can imagine, this is less than ideal and can often be reason enough for a property owner to decide against leasing their property out to any cannabis businesses.
Supply & Demand of Limited Real Estate
The complex framework and extreme lack of available cities to do business in have created a disproportionate supply and demand. There are substantially more businesses that are trying to get locations and become licensed than there are viable locations that are eligible for commercial cannabis businesses. This overwhelming demand and undersupply of inventory have created a brand new and highly valuable asset class within the commercial real estate market more commonly referred to as “cannabis real estate” nowadays.
“Cannabis Real Estate is any property that is eligible to obtain licenses to operate a cannabis business.”
There are several different verticals within the cannabis industry supply chain and corresponding types of real estate such as cultivation, manufacturing, distribution, testing, retail, delivery, and adult use on site consumption.
Cannabis Industry Supply Chain in California
Cultivation is either grown “outdoor”, “greenhouse”, or “indoor”. Vacant land is most common for outdoor and greenhouse cultivation operations while warehouses and industrial space with a substantial power supply is required for indoor cultivation. Manufacturing is also done in commercial kitchen facilities or industrial warehouse space and also often requires more power for all the equipment used in the operation. Distribution also requires warehouse space, but typically doesn’t require as much power and can often be ran from other types of less industrial space such as flex or even office space if that is all that is available.
Most of the production side of the supply chain such as nurseries, indoor cultivation, manufacturing, and distribution require industrial type real estate typically ranging from as small as 1,000 square feet to as large as 100,000 square feet plus.
The Retail Vertical and It’s Unique Value
Retail operations are by and large the most difficult to accommodate due to the lack of viable locations, but they are also the most in demand and the least in supply. Most retail businesses are required to be a certain distance from schools, daycares, and other types of “sensitive uses” that have been identified by the city or county that is regulating the cannabis activities.
“Most retail locations in California see hundreds or thousands of people per day and sell anywhere from $100,000 per month to upwards of $1,000,000 per month in sales.” Additionally, to prevent oversaturation and “clustering”, typically most jurisdictions require cannabis retail businesses to be at least 600ft to 1000ft away from each other. As a result, most cities or counties only have a couple or a few retail locations if they have any. The lack of abundant retail locations has caused the locations that are able to become licensed retailers to be very successful in terms of generating revenue. Most retail locations in California see hundreds or thousands of people per day and sell anywhere from $100,000 per month to upwards of $1,000,000 per month in sales
As a result of the success that many of these cannabis retailers have experienced (which from the landlord’s standpoint provides higher rent levels), there are now many landlords that are willing to take the risks associated with renting their property out to cannabis businesses.
Cannabis Real Estate Entitlement, Development, and Valuations
Since retail has appeared to emerge as the most stable vertical with consistent growth, real estate developers and other investment groups are realizing the amount of money that stands to be made from entitling properties and securing the necessary licenses to operate. They have also realized that they would prefer to get involved in the cannabis industry or at least investing in it through real estate instead of through actually “touching the plant”. Those involved have quickly learned that there are millions of dollars at stake for going through the development process and obtaining the necessary licenses to become operational. The cost of entitling a property for a proposed cannabis business can range anywhere from tens of thousands of dollars to over a million per location, and that is prior to doing any construction or tenant improvements. Frequently, even upon expenditure of these amounts, there is no guarantee that the applying party will secure the required license. Having said that, the value of a retail license in select markets can be upwards of ten million dollars or event substantially higher. Valuations of 1 to 2x gross revenues are certainly not unheard of presently.
Cannabis Real Estate “Comps” or Lack Thereof
The value of most cannabis businesses is very difficult to quantify since there are relatively very little “comps” or data on previous similar transactions. As an industry standard, most operational businesses are worth somewhere between a multiple of .5x to 2x of their annual gross revenuea . It’s difficult to base company valuations on the net profit or retained earnings since under IRS Tax Code 280E no cannabis business can deduct normal business expenses. As a result, most cannabis operators have to write off the majority of their expenses through the “Cost of Goods Sold” (“COGS”) since that is the only currently accepted type of deduction for cannabis businesses. This is not as much of an issue for cultivators or manufacturers since they can write off virtually everything that goes into their final product, but for retailers that are only able to write off the cost of the inventory that they are selling and this results in more difficulty and expense in operating.
Commercial Real Estate Service Providers
The most valuable type of asset in the cannabis real estate niche is an operational business that is generating revenue and has a “credit worthy tenant”. Given how new the cannabis industry is and how little time most businesses have been established it is very difficult to differentiate the good tenants from the bad ones. However, there are multiple publicly traded companies that have been born from the wave of legalization that has spread throughout the United States and even more private companies that are all competing against each other for the finite number of licenses available. In order to be able to help landlords vet interested parties looking to lease their property, several companies have been formed with the intention of providing asset management and advisory services to property owners and other investors in the cannabis industry. Our company, Cannabis Real Estate Consultants (www.cannabisrealestateconsultants.com) was formed with the intention of being able to assist our clients through various services such as technology, brokerage, compliance, government affairs, and other ancillary services as well.
“…Cannabis Real Estate Consultants was formed with the intention of being able to assist our clients through various services such as technology, brokerage, compliance, government affairs, and other ancillary services as well.”
Real Estate Investment Trusts (REIT) in Cannabis
In the past couple of years there are cannabis REIT’s that have been formed and are targeting various types of investments. We have seen some REIT’s in the cannabis industry aimed at only acquiring assets that are generating 12% to 15% cap rates and have a minimum value of $30mm. The management teams that have been assembled for these various companies are experienced real estate and investment professionals from other industries that have excelled in their space and see an opportunity in transitioning to the cannabis industry. Many analysts attribute the overwhelming success that many of these REIT’s have had to the transfer of professional talent from other industries that are extremely competitive and require talented and educated professionals. Consequently, there are more and more options that are becoming available for investors looking to get in on the green rush without actually touching the plant or really being “in the business”. As the industry continues to evolve and the inevitable legalization on the federal level takes place, there will be another surge in investment capital and equity searching the market for places to invest. The future is bright, and the winners stand to get in on the ground floor of a new era and one of the fastest growing industries in the world, all through real estate if they want, without ever touching one plant.
NUGL Money: The Public Cannabis Sector
Writers Credit: Larry Horwitz
In 2014 an index covering cannabis stocks was launched and it immediately shut down from the organic traffic spontaneously finding its way to the site. There were no real cannabis stocks, but the interest was strong and it continues to this very day.
Fast forward to 2019 and capital markets throughout the world now trade stocks in virtually every sector of the international cannabis industry, mid-tier underwriters provide analyst coverage and cannabis itself is now a recognized “sector” trading in unison in a somewhat predictable fashion contingent upon economic and political events.
At no time in the modern era has a previous criminal enterprise been legalized, capitalized, launched and then traded in the public securities markets. IT JUST DOES NOT HAPPEN! But it did.
To best develop a working model of cannabis capital markets, its instructive to examine how we arrived at our present circumstances and identify forces shaping the cannabis capital markets throughout the world. This allows some basic predictions for the future of the cannabis stock sector.
The International Capital Markets.
United States federal cannabis prohibition distorts which stock markets trade which stocks and as a result, price performance and market capitalizations then respond accordingly.
We are not kidding when we make the following statements:
- Companies with cannabis operations in the United States cannot trade on the NYSE or NASDAQ, but cannabis companies operating outside the United States have full access to these markets. So American companies do not have access to the American capital markets, but everyone else does!
- Companies with cannabis operations in the United States cannot trade in Australia (ASX) nor on the senior exchange in Canada, the Toronto Stock Exchange (TSX); again American companies do not have access to these trading platforms either, but the balance of the world does.
- So Companies with United States cannabis operations trade either on the OTC Bulletin Board (which is not even a stock exchange) or on the Canadian Stock Exchange (certainly the junior exchange in Canada relative to the TSX).
It is not unusual for companies to secure a joint (gotta love that word) listing, where for example a United States company might trade on the OTCBB and the CSE, but this does not change the fact that American companies are shunned by major stock exchanges throughout the world, including the exchanges in their own country. No one knows if or when this will change, but when it does no doubt it will fundamentally change the dynamic between the cannabis sector and the capital markets.
A Look Backward
November, 2014, remember that long ago date? This is when financial market professionals began to pay limited attention to cannabis as a trading sector. Viridian Capital (certainly one of the recognized leading observers of the space at that time), listed the following eight companies as the sector leaders:
- Mentor Capital: woops, they almost immediately took that one down when their numbers were challenged;
- Novus Acquisition & Development;
- Abattis Bioceuticals
- United Cannabis Corp.
- Cannabis Sativa, Inc.
- mCig, Inc.
- Greengro Technologies
- TerraTech Corp.
So here is where they are today:
- Novus has one employee and is trading at six cents.
- Abbattis is trading at two cents
- United Cannabis has 65 employees trading at 43 cents.
- Cannabis Sativa lost over $500,000 on gross revenues of $210,000 and is trading at $1.23 with a market cap of around $25m.
- MCig is trading at 3 cents with a market cap of $17m losing $3m on $3m in revenues.
- Greengro Technologies is no longer reporting but it still trades at one cent.
- TerraTech has lost 60% of its value in the last twelve months, with a $43m market cap trading at approximately 40 cents. It is certainly at the head of the 2014 class with $31m in revenues, but still operating at a substantial loss.
None of these companies would be mentioned as a leading cannabis stock today. So what happened? First the formation and then the subsequent invasion of the Northern Alliance.
The Northern Alliance Forms.
So unlike the United States, as all of us know, the country of Canada legalized cannabis throughout the country, putting its own “socialistic” spin with tightly controlled regulations and an oligopolistic approach to the industry (relative to the more free market, capitalist approach of the United States and other countries).
We use the term Northern Alliance because it has been a very well done partnership between the Canadian government and the industry, with the launch, support and continuation of what are now the largest, highest profile cannabis companies in the world. All of which occurred in the five years since November, 2014.
A number of companies moved quickly to take advantage of this government support and no doubt three leaders were Tilray, Aurora and Canopy. As the charts below illustrate, no doubt all of these companies have lot billions of dollars in market cap, but none of these companies are operating profitably with some continuing to lose substantial amounts. The “ball-park” metric is 20x gross revenues and that is a remarkable statement.
3 year Tilray ($2.5b market cap) $100m
3 year Aurora ($6.2b market cap) $300m plus in revenues
Canopy 3 years ($8.29b market cap) $300m revenues
3 year composite
5 year composite
The American Revolution
We characterize this phase as a revolution as it involves individual states legalizing recreational cannabis to the exclusion of the federal regulatory quagmire. So Colorado and Washington in 2012 and Alaska and Oregon in 2014 all went recreational, but did not move the proverbial needle in the capital markets whatsoever. The combined populations of these four states was half that of Canada and each state was its own isolated market assuring that American companies could not achieve the scale of the Canadian companies. And then California went recreational and everything changed.
So unlike 1776, this revolution started in California and it redefined the capital markets…for a period of time. Three major players, all of which exceeded the $1 billion market cap level were Med Men, Harvest and Acreage. While they are all not exclusive California operations, no doubt it was California recreational in 2016 that sent the movement of stock exhibited in the charts in motion.
Med Men two years
Harvest Health & Recreation, Inc. 3 years
Market cap: $891m
Acreage Holdings 3 year (ACRG.U:CNX)
Richard Eastman: “Legalization is a Trap House”
When I met up with Richard Eastman at Gower’s Gulch in Hollywood to discuss his NUGL profile, I was fortunate to again find him in a talkative mood. Over the course of several discussions — mostly at and in front of Kebab Daddy, who’s employees and manager were so impressed with Richard’s gregariousness and work for weed that they threw in a free drink and baklava — we touched on Richard’s friendship and many collaborations with dearly departed cannabis legend Dennis Peron, his status as an icon for both the cannabis and AIDS communities, and his opinions about the current, past and future state of the cannabis industry.
Richard has long secured his legendary status in the cannabis culture and history; his extensive history as an activist for cannabis access and rights since first lighting up in 1957 includes organizing and partying with gay icon Harvey Milk while joining the fight for gay and cannabis rights in his birth city of San Francisco, opening the first ever cannabis buyers club and cannabis hotel in his hometown of Los Angeles in collaboration with Peron, and being a tireless and outspoken advocate for gay rights, justice and cannabis.
Sunday, December 1st is World AIDS Awareness Day, and our conversations transpired just before that date, so we discussed his activism and involvement with AIDS research and treatment, and how the movement for access to medicinal cannabis has been intertwined;
On his miraculous survival after being written off for dead, and living with AIDS, 25 years after diagnosis, and the absurdity of his remaining diagnosis:
December 1 is World AIDS Day. There’s like 36 to 40 million people living with HIV and AIDS in the world, and about an equal amount has died in the last 35 years. I’ve been living with HIV since 1994. I had 22 T-cells back in 1994. The city (of Los Angeles) just recently honored me for living for 25 years with AIDS and HIV. And now I have over 800 T cells.
What does that mean? When you have less than 200 T-cells, the definition – according to the United States government – means AIDS. And that’s how people such as myself, the patients that are living with AIDS today, 25 years later still have an AIDS diagnosis because they can’t take that away.”
That’s right, once a person has been diagnosed with AIDS in the US, there is no way for that diagnosis to change, even if, like Richard, their immune systems have recovered to a point that they would not be diagnosed with the disease if tested for the first time today.
“Even though it sounds confusing, because now I have 800 T-cells which should mean I’m HIV positive, or do I have AIDS? Technically I have AIDS. I had less than two years to live right at 22 T-cells, that was 23 years ago. A normal human being fluctuates, their T-cells can range anywhere from 500 to 2500 T-cells. Everybody has a genetic difference in their T cells. Average human being, male and female, has somewhere between 500-2500 T-cells. Some people might go their whole life and not have AIDS or cancer and only have 500 T-cells. There are people whose average is around 1500 T-cells. Okay? There are some people that have like 2000 T-cells. I’ve never heard of anything over 2500 T-cells — this is the immune system that fights anything including pneumonia and colds, and all the horrible things that happen to people [and are often deadly to AIDS patients with severely weakened immune systems]”
On his experimental treatments with legendary AIDS researcher and activist Dr. Charles Farthing: “When Dr. Farthing, who’s dead now, asked me to be on the study for drugs. I was like, ‘Okay,’ I had to drink a horrible liquid, It was in liquid form, it tasted like gasoline, thank God, I only had to do that for a month or two until they developed it into a pill form. And then in the early days of HIV 25 years ago, I literally had to take 25 to 50 pills per day. Now it’s down to eight pills in the morning and four at night. So it’s about 12 pills that includes vitamins, fish oil, statins for triglycerides — some of the protease inhibitors to medications raise your triglycerides, which could be detrimental to your heart. I don’t eat a lot of fatty things, though it’s hard to avoid it because it’s in everything. But you know, from a life expectancy of two years 25 years ago to now a life expectancy of decades…”
“…There’s a million and a half Americans living with HIV and AIDS in America. In Los Angeles alone, there are 60,000 people living with HIV and AIDS and there’s another 40 or 50,000 running around that don’t even know they have it.”
On Proposition 64, and why ‘Legalization is a Trap House’: “Now marijuana, you know, Prop 64 sort of screwed up everything for the patient. That’s why we had to do Senate Bill 34, The Brownie Mary Dennis Peron Compassion Act which can restore the compassion programs to help not only people with AIDS and cancer – also people that have headaches and backaches and insomnia and whatever reason you need medical marijuana.”
…“My take on the legal industry is (that) recreation is a trap house. And what is a trap house? Well, in the marijuana industry, a trap house is an illegal operation, a place that doesn’t have permits or whatever, and they don’t take care of their employees and if they get arrested, they usually bail them out – it’s a trap house! And laws can be a trap house and Prop 64 by Sean Parker – who was the guy that helped start Facebook, [who largely funded the Proposition 64 tax and regulatory campaign, giving] $25 million. (At the time) Dennis Peron was on his deathbed, Richard Eastman had no money – (I was busy) producing the 47th and 48th Smoke-Ins, and Prop 64 passed,” –without the criticism, or enough of the input of the warriors of compassion who did so much to bring the movement to the point where legalization could even be considered on a State level. “And why do I think recreation is a trap? Ultimately, it’s all about the same bosses. And what do I mean by the same bosses? I mean, the alcohol industry, the pharmaceutical industry, the tobacco industry, the gangsters, the politicians. What they did by legalizing marijuana was creating a new revenue not only for themselves, the political pockets of corrupt politicians, but the cops.” Indeed, as larger and larger corporate interests jockey for ways to consolidate and commodify as much of the lucrative hemp and cannabis industry as possible, there are also massive amounts of tax revenue from Proposition 64 still somehow ending up in the hands of law enforcement, despite decades of irresponsible, dishonest and socially destructive policies toward cannabis and it’s users by those same cops.
Richard is aware that there have been constructive intentions or applications for the massive tax revenues currently being collected by California State; “Sure, they’re helping a small segment of society, supposedly, with homelessness. I heard that’s a great thing. Dennis would have been happy with that. But a lot of the money here in California, specifically in LA, the Bureau of marijuana control in Los Angeles, I understand took in a lot of fear millions of dollars in taxation. Where’d the money go to the police department? And what is the government using it for, to attack people that are homeless, to attack people perhaps that are still smoking marijuana in the street don’t have a doctor’s letter. They shouldn’t be harassing people because all us is medical. The legalization movie is a mean movie. It’s really a bad movie because legalization is a word. ‘All use is medical’ is a word too, and ultimately, with Prop 64, the people that need it the most — grandma can can pay her rent on her Social Security check. She doesn’t have food stamps because they don’t give food stamps to a lot of people on Social Security. And you want her to take $5+ out of her purse to go to these legalization shops and get a joint when the Medicare and MediCal should be providing for her for free, instead of giving her a handful of pills like Oxycontin and morphine and an antidepressant and everything else that’s going to kill you. So the legalization movement was a trap. And ultimately it still is a trap.”
On the implementation of SB-34 – The Dennis Peron and Brownie Mary Act to re-institute and protect California’s cannabis compassion programs: “I’m giving you a scoop; I went into a clinic recently, La Brea Collective, one of the nicest clinics in LA — Dennis and I really liked the owner and they were really fun, kind and compassionate for poor people. So when Prop 64 came along, they had to end their compassion program. I recently went over to LBC there on La Brea and Pico. They’re one of their original pre-ICO places. And like I said, Dennis and I know the owner. And ultimately I said, ‘What are you going to do about SB 34 being implemented?’ The lady behind the counter said, ‘Well, Richard, we’re going to restore the compassion, but you have to go get a California medical marijuana card so we can implement it.’ Well, that’s interesting, because see, I didn’t see anything (in SB-34) that said we were required to get a California medical card to get free marijuana from these dispensaries, but LBC has told me that they can’t give medical marijuana to any of their patients unless they have a California medical marijuana card. Now, some poor people don’t have $100 to get this card, which has to be renewed annually. They have to pay a doctor to get the doctor’s recommendation to get the state card. So how much does that costs? So we’re still in a quagmire of Senate Bill 34 happening and a good place like La Brea Collective wants to give marijuana but they even gave me an application form. And I said, ‘Well, what if I don’t have the money?!’ They said, ‘Oh, Richard, maybe the owner will pay for you. Or some of these places might want to pay for some of their patients that have no money.’ But you and I both know that 99% of these dispensaries are not going to pay for poor people $100 so they can get the California ID so they can write them off. Senate Bill 34 might have a flaw in it already.”
On the sweet absurdity of life: “What a big joke that the universe did to me; understand that I’m just a stranger in paradise that loves squirrels. Living on a little planet, grew up to be this hippie, grew up to be gay, ultimately got this horrible disease that was supposed to kill me because it killed Freddie Mercury and Rock Hudson and 36 to 40 million people have died and I just told you there’s still another 35 million people living with it.”
On the pharmaceutical industry: “So now, they created a cash cow society with these pharmaceutical companies, with the cancer drugs, with the HIV drugs, with drugs for pretty much anything, because the Rockefellers and the DuPonts – when they put marijuana out of business as a medicine – created all these harmful pills that ultimately killed more people than they heal.”
“…This is just another example of how the pharmaceutical industry kills people. The government kills people, the DEA kill people, people kill people, and marijuana never killed anybody. So ultimately, the goal of me talking about HIV in the final moments of this great interview that you’re doing for NUGL magazine, which I hope will reinvigorate the times when Dennis Peron and I opened the first two medical marijuana dispensaries in America, (and) we started the first medical marijuana magazine, called the LA JEMM – ‘ Journal for the Education of Medical Marijuana.’ We opened America’s first medical marijuana expos in West Hollywood Park Auditorium. grabbed it and you make the clone out of it. And marijuana is a medicine and it’s going to be a medicine long long after you and I are gone. “
On his legacy, and why he’s dedicated his life to cannabis Freedom: “Ultimately, I don’t even care if my name is remembered in a hundred or five hundred or a thousand years. I would rather really think that Brownie Mary and Dennis Peron should be remembered……”
“Why did I do this? I didn’t just do it to this to get high for myself. I did it because I love marijuana, and marijuana loves me. I’m a hippie at heart. I love the birds and the bees and the squirrels and the kids. I love straight people. I love gay people.”
‘DREAM’ Big In Vegas: WOW Organics Launch Party at MJBizCon Builds On The Magic of ‘Cannabis Wonderland’
Throwing an epic and memorable afterparty at MJBizCon is no small task. The combination of high-end expectations existing in Las Vegas, and those established by the hardworking and hard-partying annual BizCon crowd mean production and entertainment levels must be of the highest level for any company wanting to distinguish itself. After an extremely successful event debut last year, Dan Schmink of WOW Organics, a multi-state hemp extraction services and products company, knew he would have to go all out creatively to build on the success and momentum of ‘Cannabis Wonderland.’ His packed 2018 afterparty featured an immersive theme and a little bit of something for everyone attending. DREAM, his followup event this year on December 12th in Las Vegas, is just one example of how he is moving forward creatively and professionally in the cannabis industry.
I spoke to Dan about this years event, for which we are a media partner. About NUGL, he says “NUGL and I have a natural synergy! As a tech platform that aims to connect the cannabis industry, NUGL pairs well with WOW Organics’ inclusive business approach.”
(AUTHOR/EDITOR DISCLOSURE OF BIAS: I have worked with Dan in the past and like him very much)
Dan’s path into cannabis is a particularly interesting and inspirational one; a US Army veteran, it was the search for pain relief from combat injuries that led him to the plant and industry. “Before cannabis, I was in nursing school and working towards a career in the medical field.” Finding cannabis, however, changed his life course. “The effects were instant, my back pain disappeared, and I began researching as much as I could about this plant. To say it was life-changing to walk without pain is an understatement. Soon, I entered the cannabis industry on the ground floor as a budtender for a dispensary, helping to open it from day one.” Now he looks forward to similarly building his own company, WOW Organics, from the ground up. The DREAM event connects many of the dots that Dan incorporates into all of his work. “We’re focused on a data-driven, analytical approach to our brand’s development, so DREAM connected a lot of dots on the board.”
How are you building on or transcending the success of last years event?
“Last year’s event, ‘Cannabis Wonderland,’ was a resounding success. This year, the DREAM event is an interactive performance within our ‘Elemental Oasis of Gaia.’ For those who don’t know, Gaia is considered Mother Earth, the transcendent being that created all of existence from total chaos. The story of Gaia mirrors what the cannabis industry is going through right now – we’re creating a community from total chaos. This event, from the smallest details to the largest activations, is created to speak directly to the ideals we share. Done correctly, our guests will say ‘WOW!’ and feel that this event was made just for them.”
What, in your view, is distinct about this years BizCon, and how will that be reflected in your event?
“I consider MJ BizCon the current ‘Super Bowl’ of our industry. Each year, they step up their presentation and quality of attendees. WOW Organics is doing the same at DREAM for the afterparty scene. Our team pores over every detail to ensure that anything and everything you’d expect to have at a professional, high-end afterparty, is there. That means ample space heaters, a quick check-in line, coat check, food and drinks aplenty, and enough entertainment that you can start a conversation with anyone.”
Which BizCon attendees NEED to be at DREAM?
“Our guest list includes some very well known personalities within our community and a full roster of owners/founders, investors, community advocates, and genuinely good people. We design our event for all types of attendees. Anyone that wants to be at the best of the best, should attend DREAM.”
Besides throwing what he expects to be the best afterparty of the year, Dan’s overall mission for MJBizCon is to launch WOW Organics to the public and highlight their community sponsors and service. As a longstanding member of the Veteran advocate community. DREAM is a natural progression in his personal mission to help Veterans.
Who is WOW Organics?“Our goal is to act as a champion for selfless service. Our first goal is to help 500,00 Veterans through low-cost, no-cost, and charitable giveback programs. We do this by empowering our Veteran and Women-led teams to provide hemp products and services across the globe.” WOW Organics is putting people first. You can meet the full WOW Organics team at DREAM in Las Vegas this December 12th during MJ BizCon week.
Compassion Over Destruction: Promoting Compassionate Care And Sustainability For Cannabis Trade Shows
An idea formulated at this year’s Hall of Flowers came to fruition over Veteran’s Day week. Compassion Over Destruction was spearheaded by cannabis industry leader Eden Enterprises/Garden of Eden, with the help of its partners the Hall of Flowers, Sweetleaf Collective, and the many vendors who participated. Typically, unsold cannabis goods at the end of a permitted cannabis trade show, such as the Hall of Flowers, have been destroyed, due to regulations that prevent them from returning to the supply chain, and burdensome taxes that have made it impractical or unaffordable to give the products to the compassion programs that the recent passage of SB-34 is intended to protect and reinstitute. The Compassion Over Destruction event transferred over $30,000 worth of cannabis products to low income and terminally ill patients via their very worthwhile partners at Operation Evac, Rossmoor Senior Center, and Sweetleaf Collective.
Shareef El-Sissi, CEO of Eden Enterprises, was inspired by the heartbreaking scene at the prior iteration of the Hall of Flowers event, when clean and tested product was forcibly destroyed, in order to maintain compliance with overly complex and unforgiving California cannabis regulations. Compassion Over Destruction was born out of the principles that Garden of Eden was founded on in 2003, and he told NUGL why he and the Eden team are honored to continue the tradition of compassionate giving after 16 years. “Witnessing the destruction of hundreds of units of clean tested cannabis (after the previous Hall of Flowers) was heartbreaking, and from that moment it became our mission to find an alternative pathway, and the idea of the Compassion Over Destruction initiative was born.” Shareef hopes that the leadership shown will spread as a model through the industry. “Ultimately, the goal of this program is to lift up the entire cannabis community and strive for better industry-wide sustainability. No product should be going to waste, regardless of what dispensary or supplier it is coming from when there are those in need that can directly benefit, but may not have the resources to obtain it.”
Joe Airone of Sweetleaf Collective has been involved in compassion programs for over 20 years, since they were the basis for medical marijuana’s legalization with Proposition 215 in 1996. He has fought for measure like The Dennis Peron and Brownie Mary Act (SB-34), which was passed by the California state senate and signed into law in late 2019. SB-34 was intended to correct the oversight in Proposition 64 (the California Marijuana Legalization Initiative) which taxed almost all of the compassion programs in the state to the point that nearly all had to shut down completely, or severely cut back on their giving. Though the effects of SB-34 have not yet been fully implemented, Joe hopes that this program is a sign of the return of compassion and common sense to cannabis culture and community. “Before Prop 64, products like these could be restocked and sold. Now with the changes in regulations to the supply chain because of proposition 64, products that go to events cannot go back to distribution to be sold. The state wants them destroyed.” Joe hopes to continue to work with Garden of Eden and Hall of Flowers to encourage vendors at HOF and other cannabis events and trade shows to similarly pass along the overflow to those in desperate need.
For the team at Eden Enterprises, they believe they’ve found a successful model for incorporating compassion and sustainability into an industry that has at times ignored or misregulated those crucial elements. Pamela Epstein, Chief Regulatory and Licensing Officer for Eden Enterprises says, “True sustainability in cannabis is more than just recyclable packaging and solar panels, it has to be a holistic approach that fundamentally touches all aspects of operations and engagement, which is why this is such an exciting opportunity to be involved in this new category of cannabis waste reduction.” Shareef El-Sissi also pointed out how the wasteful elements of destroying unsold or used trade show designated cannabis goes beyond just the high quality product being intentionally destroyed. “It is extremely wasteful and not environmentally friendly, especially when taking into account the considerable amount of required packaging materials that must also be destroyed.”
For the immediate future, Compassion Over Destruction will continue to work with Hall of Flowers and other trade shows, and all of the participants are optimistic that as the effects of SB-34 are implemented, more compassion programs will be formed or re-instituted. Joe Airone of Sweetleaf urges NUGL readers and cannabis community members to support compassion programs by encouraging and pressuring trade shows and events they attend or work with to keep the medicinal benefits of California cannabis compassionately provided to those who need them most.
To get involved with supporting Cannabis Compassion programs, please contact Sweetleaf Collective: https://www.sweetleafcollective.org/
Cresta: Executive Level Staffing Experience For The Cannabis Industry
CRESTA Management Services has been providing executive-level staffing services since its inception, and founder and CEO Josh Rothman saw an opportunity to incorporate his 15 years of experience when the tide of cannabis legalization began to sweep across North America. CRESTA responded by becoming one of the first established staffing agencies to pivot to supporting a fast-growing yet under-served market in need of experienced professionals. From offices in California and New York, CRESTA now builds high-performing teams for cannabis companies across the US. A particular focus of late has been the need for executive-level talent, especially as more executives from other industries transition to cannabis, or start considering it as access and revenue grow across the country.
The movement of workers of all levels that are considering changing jobs or fields parallels the boom in the automobile industry in the 1920s, the steel industry in the 1940s, and the dot com explosion of the 1990s; the cannabis industry is exciting, refreshing, and profitable. According to a recent Glassdoor study, job openings in the cannabis industry are increasing rapidly. In December 2018 alone, there were 1,512 job openings in the US, a 76 percent increase over the same period in the previous year. The same study found that available roles in the cannabis industry are highly diverse, and require an array of skills and backgrounds. From marketing and retail to research and agriculture, the cannabis industry is opening opportunities for very profitable ventures. Last year, Arizona brought in $406 million from medical cannabis. For recreational use, California brought in $2.75 billion and Colorado, $1.56 billion. The latest statistics show that a small, regulated cannabis dispensary business can average about $3 million in revenue per year.
The potential for profit is enormous, and allows employers to offer more options and higher salaries to potential job candidates. According to a study conducted by the Marijuana Policy Group, in 2015, over 18,000 full-time jobs were created in Colorado in the cannabis sector. While many cannabis industry jobs pay about $15 per hour for entry-level work, bud trimmers or collectors of harvest, other higher level, and higher-paying jobs are emerging. For example, a Greenhouse Production Manager can earn around $70,000 and a Director of Cultivation up to $100,000. Servicing top tier cannabis companies and well-funded startups, CRESTA directs much of its focus on finding the most elite seasoned professionals for its clients, including former executives from companies like ____ have all been placed into cannabis companies by CRESTA.
In an often volatile economic and regulatory landscape, CRESTA makes lasting connections that serve the needs of all parties, with over 15 recruiters incorporating their CEOs’ “relationships-first” approach. Before founding CRESTA, Josh served as Managing Partner and Director of Human Resource at HR Outsourcing and Recruiting companies. He has used that experience in building a robust array of the top ‘C-Level’ talent – CEOs, CFOs, and other chief executives – that are crucial to guiding and developing the fledgling legal cannabis industry into the market force prognosticators expect it can become. Bringing their decade-plus of experience and longstanding corporate relationships into the cannabis space, CRESTA has a unique advantage when it comes to executive placement for companies ready to grow apace with the market.
Cannabis Sales in a Time of Turmoil; Welcome to the Most Wonderful Time of the Year
Canna-Curious by Cleopatra Cohen
Times have been tough for our industry this last year, and I have seen an immense amount of suffering, like many brands, and products I once loved have disappeared. My email blasts are coming back with 30% bounce back rates, and the headlines are full of licensing violations, stock degradation, and financial loss around the Cannabis nation. I recently attended the NCIA Conference, and learned a staggering statistic; 80% of California Cannabis Sales and it’s subsequent revenue is currently in the Traditional Market, leaving just 20% of revenue to the Recreational Marketplace. The giants we looked up to, who started leading the charge, have fallen under attack, and have retreated to the drawing board for re-evaluation and re-positioning. I ask myself – what happened?
Basically, the California Cannabis industry has crapped the bed. The legislation came to clean up, but they took the crappy sheets and tried to flush them down the toilet, resulting in severe backpressure. The backed-up pipes and pressure resulted in blown-out bottom lines and flooded the traditional marketplace…with a bunch of crap. Because crap rolls downhill, everyone, including ancillary companies, has suffered from this. Think about it… If 80% of revenue is coming from traditional market sales, then why would brands spend money advertising in the recreational market? This month alone, over 400 licensed dispensaries were fined for backdoor sales, and most of the revenue paid in taxes is being spent on enforcement.
Last year in the industry, regarding revenue-analytics reported the highest-grossing week in cannabis sales to be the week before Thanksgiving, continuing to thrive through the last week of the year. I can imagine this trend will continue due to the “season of giving” and seasonal emotional lulls that always seem to result from shorter days and longer nights. Black Friday is known as such because it is when most retail stores go from being in the “red” to turning a profit and coming into the “black.” Green Friday is a new phenomenon, and I encourage EVERYONE in the market to participate, but also to gain an understanding of these economic waves. If you are operating in the recreational market, how you are taking advantage of these few weeks that could potentially bring you out of the red and into the “green”? Acting on this timing may help you meet crucial sales goals that investors are looking for.
Why Media & Advertising Is so Important:
Psychology experts report that you need to see a brand logo 21 times before you are familiarized and begin to trust their reputation. MedMen became as big as they are because they had aggressive marketing tactics that familiarized the public with their name and branding. From the billboards and city bus stops to their digital imprint, and in basic conversation, I end up thinking about MedMen on average of 3 times per day. They have successfully imprinted themselves in the minds of their local demographic in just one week, with a combination of guerrilla and mainstream marketing. Now, MedMen has also been under scrutiny for allegations of squandering away funds, and not adhering to federal guidelines regarding advertising, resulting in huge tax payouts & penalties. This reflected a loss in their overall company value, and they most definitely came in undervaluation and had to take aggressive loans just to stay afloat. While I do not recommend trying to write off your marketing spend on federal taxes (because of 280-E), I can give you a few tips to help you find a better way to reach your audience without breaking the bank this holiday season.
Throwing Spaghetti at the Wall: Stop It, Your Momma Raised You Better Than That!
One Marketing tactic that you should not subscribe to: “Throw spaghetti at the wall, and see what sticks.”
On average, brands should be spending about 3-4% of their gross monthly revenue on marketing. Some brands are conditioned to think that marketing is some pricey, mystical phenomenon that does not result in their desired ROI (return on investment) or is completely out of reach for their “small brand.” This is 100% false, and to be honest, the fate of your brand depends on how well you market it. Anyone can develop a product, and most companies have that before they have a solid plan on what to do with it. If no one knows about your product…then what? Sure, you may have relationships with tons of retailers, but they too want to know how you are marketing your brand so it actually moves off their shelf. Marketing is emotional intelligence, combined with statistical data. One of the secrets to marketing your brand effectively is creating a story – or a caption – that speaks to your audience. You can wow them with fancy colors and expensive packaging that feel ergonomically good, but in the end- the packaging is tossed out, and the consumer is left with one thing: The memory of how they felt.
If I am feeling sad, I want something uplifting and easy. If I am ready to paint the town, I might want something more extreme. If I am broke but I need the medicine, I want something cheap and effective. I am left with emotion at the end, and to gauge whether or not re-purchase the product, based on that feeling I am left with after I consumed the product. Figuring out who your customer is, and how to speak to them, is something you can also discover if you market with the right media company, that will share the tracked data they retrieve to help you laser focus in on your target demographic. An easy way to blow your marketing budget and get really discouraged is to metaphorically “throw spaghetti at the wall, just to see what sticks.” Be specific with your marketing budget, audience, and goals!
Guerilla Marketing + Viral Marketing + Mainstream Media = Integrated Marketing Strategy – With Profitable Results.
Guerilla and Viral Marketing both utilize mainstream media as a platform for development and exposure. Viral can be more cost-efficient than Guerilla Marketing – and both can reach consumers in memorable ways that translate to higher sales numbers. Understanding and applying these strategies in your marketing campaigns can provide distinct competitive advantages that can help you grow your brand and achieve your financial goals. All marketing uses some type of mainstream platform to reach your desired target demographic.
Using imagination and ingenuity, this style of marketing breaks conventional rules and can be much more affordable for smaller marketing budgets. Guerrilla marketing is the art of non-traditional marketing tactics – backed by science – to bypass traditional outlets and reach your target. The term “Guerilla” comes from none other than the likes of Che Guevara, made famous by his book “Guerilla Warfare,” where he describes new rules of engagement to outsmart opposing forces. For Example:
The power of “word of mouth” and “the referral” is a great example of Viral Marketing to reach your audience through your friends and contacts. We have all seen viral videos, memes, and campaigns, but the mystery is in how to get a piece of content to go viral. The key to this type of result is a mixture of timing and mainstream platforms. Your content will never go viral unless you utilize the right media platform, at the right time. For example, The best time to post an intended viral holiday campaign is before November 25th, 2019. NUGL Media provides a great platform for cannabis products and information, but it may not be the best platform for “Home Improvement” content.
Most cannabis brands are limited to the states in which their license resides, and sometimes even more hyper-local borders. For instance – the city of Los Angeles has approximately 100 to 150 licensed dispensaries at any given time. If your brand resides in 50% of those dispensaries, you are going to want to target customers that are within a few miles of the dispensaries where your product is located. If you distribute through delivery services, you may want to focus on the greater Los Angeles metropolitan area vs. hyperlocal efforts. Marketing campaigns also need to be implemented with timing and structure. For instance, if you want the best results, you should start advertising at least 90 days prior to your target time to reach your marketing goals. If you are running a Valentine’s Day sale, you’ll want to begin your marketing efforts in mainstream media no later than January 1st – with a small lead-in – and a powerful marketing push starting Feb 1st. This will subconsciously imprint your brand in the minds of your consumers, and your catchy campaign messages will be so familiar that consumers cannot resist your brand as a purchase option. Once purchased, they will share that message with their friends, who, in turn, share it with more people, fueling the cycle of exponential growth.
“DON’T HAVE A MARKETING BUDGET? THROW AN EVENT”- Richard Branson
Nothing sells your product better than the opportunity to get face-to-face with your consumers and retailers. Experiential marketing is one of the MOST effective tools that marketers have. Unfortunately, due to sampling laws, brands are no longer able to sample their products on-site, but they can utilize clever event planners and organizers, to purchase the products for their own personal use, and have them on-site for their event attendees to try out. I express to every brand I come across to get involved with their local event companies and team up with them to collaborate and create culture, community, and loyalty to your brand.
Integrated Marketing Strategy:
Warner Brothers created a successful integrated marketing campaign, creating fake news, fake political campaign websites for Harvey Dent, providing fans with shareable campaign posters, and other tools to create hype around its release of “The Dark Knight” in 2008. Using guerrilla, viral, and experiential marketing techniques to create marketing campaigns can leverage the power of the local and mainstream audience’s attention. Your job is to tell the story of your brand – or the story that you want your brand to tell. Understanding your audience, timing, and utilizing mainstream media platforms is crucial to your brands’ marketing success. With strict marketing and advertising laws, Cannabis brands can still achieve their desired results without breaking the bank, by just using these techniques.
With all of the current challenges this burgeoning new industry faces, we need to pull together now more than ever if we want to survive in a legitimate, thriving marketplace. WE have to create the change we wish to see — and get a hose to clean up all this crap!!
Stay tuned each week for more Canna-Curious topics, and tips for the canna-curious at heart.
OG Eddy Lepp: Still Growing
Eddy Lepp, born Charles Edward Lepp, is a Vietnam War veteran and California-based medical marijuana activist, world-renowned cultivator, author, poet, and artist born in 1952. His cannabis journey has now led him to the Northeast legal cannabis market, and the NUGL family!
After gathering signatures to get California’s original medical marijuana bill (prop 215) on the ballot with Jack Herer and Dennis Peron, he was the first American to be arrested, tried, and acquitted in 1997 for growing medical cannabis under California’s Prop 215. After refusing to back down from allowing patients and members of the ministry to produce cannabis on his property, providing care to his wife (Linda Senti, who was ill with cancer) and 2,700 other patients who needed safe access to medical cannabis in California, he was raided and faced 4 consecutive life sentences, plus 40 years in federal penitentiary, and $17,000,000 in fines. Eddy ended up sentenced to federal prison in 2008 for conspiracy to manufacture marijuana, as well as conspiracy to distribute a controlled substance, and served 8.5 years of a 10 year sentence – the absolute minimum of time required, and no fines as the judge presiding over the case saw the injustice of his original charges. He was finally released in 2016. His wife lost her tumultuous battle with cancer just prior to Eddy leaving for his prison sentence.
Eddy’s Medicinal Gardens – the now famous Lake County, California site where Eddy oversaw the planting and growing of more than 32,524 medicinal cannabis plants for the thousands of members of his Multi-Denominational Ministry of Cannabis and Rastafari sadly no longer exists. Eddy, however, remains a true hero to everyone who now enjoys safe access to cannabis as medicine and sacrament. Before prison, he was known to never deny a patient access to the healing plant based on income or lack thereof. He made a space for everyone to take their health under their own control in a world where access to medicine is blockaded by one’s own income and social status. Throughout his journey, he has given away millions of dollars worth of medicine.
Eddy and Linda created California’s first open-public clinics for doctor’s recommendations to access medicine. Between 1998 and 2003, these clinics provided more than 1?3 of the state’s legal recommendations for cannabis. Among Eddy’s numerous accomplishments, he was the first cultivator to bring his garden into 100% organic standards. He has been recognized by Jack Herer, Dennis Peron, Kyle Kushman, and many others, as one of the world’s greatest cultivators within the space, receiving awards from numerous cannabis groups for exceptional garden quality.
Specifically speaking, his gardens have been named as two of the top ten best gardens ever!
He has been honored by numerous groups and publications, among them Emerald Cup, Cannabis College Amsterdam, and many more. Bringing earth-friendly standards to the community, he is also the first cultivator to encourage applying root mycorrhizae and the use of Gro-Kashi – a now commercially produced vital probiotic and nutrient essential for healthy plants.
Eddy, a celebrity in his own right within the cannabis community, is an OG founder of the freedom fighting movement in cannabis reform, rubbing elbows and bouncing ideas for legislative reformation off the likes of the late legendary cultivator and author, his dear friend Jack Herer , Dennis Peron (Cannabis Activist, Author of Prop 215), Ed Rosenthal (Cannabis Activist, Horticulturist, Author), Mark Leno (CA legislator), Willie Brown (former SF mayor, State Sergeant at Arms), Gavin Newsom (current Governor, previous Mayor of SF) and many more infamous individuals who dedicated their lives to changing the unnecessary social stigma around the life-sustaining plant. He has created countless famous strains of cannabis, and even has a Cannabis Cup winning strain named after him, OG Eddy Lepp.
Ironically, Eddy served the last few years of his prison sentence in Colorado, while the rest of the state – along with seven others – were enjoying complete legality at the end of a path he paved.
After experiencing the anguish of being incarcerated for something that is now legal, that he helped pioneer, Eddy is looking forward to sharing his stories, art, and intellect with his freedom. He is also very passionate about prison reform, the alarming rate of veteran suicides,and the many different uses of industrial hemp, recognizing that hemp will save the world from its current path of destruction. NUGL and our readers can look forward to Eddy’s regular insight in his upcoming regular column “Hey, Eddy!!!”. Look out for that on our site, and in our upcoming print issue, which will be launched at this years MJBizCon in Las Vegas.
Why Invest In Cannabis?
By: Steve Monaco, Chief Investment Officer at Wrazel
Intelligent investors and professional asset managers are always looking for new opportunities to diversify their portfolios and mitigate their risk exposure to traditional investment assets like stocks and bonds – typically accomplished with alternative assets. Alternative investments refer to a broad range of investment assets that are “non-correlated” to the price- movement and volatility of stocks and bonds.
Hedge-funds, real estate, franchises, private company stock and franchises are examples of alternative investments. Cannabis is an example of a newly emerging alternative asset class that all accredited investors should have some exposure to as part of a well-diversified portfolio.
Cannabidiol or CBD or Hemp is LEGAL and classified as therapeutic – so it’s free from the stigma attached to THC and marijuana.
Hemp is a unique plant with over 25,000 diverse uses worldwide! Hemp intersects more markets and industries globally than any other crop in the agricultural economy.
In fact, cannabis touches so many verticals that investors can focus their attention on which verticals are the best fit for their portfolios and investment goals.
Diversified Investors can have investments in virtually every aspect of the agricultural spectrum known as “seed to sale” knowing that it’s all investable.
? From genetic-level seed breeding
? to hemp cultivation, harvesting and drying
? to the process of distillation and extraction
? to thousands of CBD based products, cosmetics,
? to Real Estate opportunities that include investing in facilities and land for grow operations
? to “quality and consistency” testing facilities –
? to grow hardware and technology –
? to thousands of Pharma related applications –
? to virtual unlimited Culinary applications – way beyond edibles.
Ultimately, given the diversity of investment opportunities in the cannabis industry – the challenge for investors and their advisors is about finding which vertical(s) provide the “best fit” for their portfolios!
Wrazel is an online platform focused on cannabis businesses that helps investors, entrepreneurs, and cannabis business owners work together. As part of our efforts to facilitate deals and create business relationships in the cannabis space, we have monthly investor events. This week, we will be in Burbank, CA.
This event is a great opportunity to grow your network, meet Cannabis professionals, and learn about new and exciting opportunities in the industry.
If you are an investor, you can attend this event for free. This is one of the perks of being an accredited investor on the Wrazel Marketplace. Click here to see if you are eligible.
Cannabis Compassion Vs. Hyper-Regulation: The Struggle For Medical And Charitable Care Programs Continues in California
When the movement for medical marijuana gained mainstream traction in California in the ’90s, the basis was apparent; suffering people – particularly with debilitating, life-threatening, and life-ending conditions such as AIDS and cancer – should be able to legally and freely access the healing that cannabis was already providing many of them through heroes like Dennis Peron and Brownie Mary. The Compassionate Care programs, which provide free or extremely low-cost medicinal cannabis to people in need, became able to operate more openly after the passage of Proposition 215 in 1996. After serving as a critical healthcare source in the state for over twenty years, the vast majority of Compassionate Care programs have shut down in California in the past year, the victims of the overburdening and inflexible regulations, and short-sighted tax structure of Proposition 64. The Dennis Peron and Brownie Mary Act (SB-34), which was introduced by Senator Scott Weiner and quickly passed the state legislature, was signed into law on October 12, 2019, by California Governor Gavin Newsom. The goal of SB-34 is to remove the oversight in the regulations instituted by legalization in 2018 that taxes compassion programs at the same rate as for-profit businesses, which raised costs by over 500% in some cases, effectively forcing almost all of them to shut down. Nugl will regularly be reporting on the battles for a system in California, and throughout the country, that prioritizes the needs of some of the most vulnerable and desperate members of the population.
Zach Kuchera is the CEO of Circadian farm in Mendocino County and has provided “literally tons” of cannabis to compassion programs, according to his longtime collaborator, Compassionate Cannabis hero and provider Joe Airone of Sweetleaf Collective. He and other compassion providers had to halt their programs when Proposition 64 passed with no regulations or tax exemption in place to sustain them. “When Prop 64 passed, it came to a complete halt, and medical marijuana and compassion programs – which are really one and the same – were all left in the dust. Nothing was really there to go by, let alone do because there was no protection written into any of the laws for the programs.” The lack of any regulatory loopholes for his and other programs meant that there was no way to legally run them without prohibitive costs, so they unfortunately closed. Now that SB-34 has passed, he says the mood among farmers who had previously supported the programs has grown optimistic, as they hope to get medicine back into the hands of the suffering and needy as soon as possible. “ Everybody is super ecstatic about the fact that the bill passed, and that Governor Newsom was willing to do what Governor Brown wasn’t, despite being on his way out of office.” He is referring to previous Governor Jerry Brown, who vetoed an earlier version of SB-34 before leaving office, claiming it left open too many potential tax loopholes for bad actors. “Things are definitely looking on the up and up, and everyone is excited that we’re not looking at just for-profit cannabis; that we can start treating it as a medicine again, as it was when legalization started in 1996.”
Zach notes that the struggles of the compassion program have not been covered regularly in media around the state. He suggests that members of the cannabis community who want to be sure that the programs are being re-implemented and maintained should pay attention to updates directly from those who directly operate and fight for them. “A bunch of people got left in the dust, and you don’t hear anything about it in even local media, let alone national publications.” Reliable news can be easier to find on social media accounts of direct providers, such as his old friends and collaborators at Sweetleaf Collective, who regularly update their feeds with important news. Donations to Sweetleaf also go entirely to the costs of providing cannabis to patients. We’ll explore a bit more of the history and future of Sweetleaf Collective in our next report on Cannabis Compassion.
Decriminalize Nature Portland Announces Launch of 2020 Initiative To Decriminalize Psychedelic Plant Medicines
Decriminalize Nature Portland (DNP), the Portland branch of the growing national grassroots activist group Decriminalize Nature, who are working to decriminalize natural psychedelic plant medicine, has filed its petition committee paperwork and language for a 2020 ballot initiative to decriminalize psychedelic plant medicines in Portland, they announced in a press release October 29, 2019. Decriminalize Nature formed as part of the successful initiative in Oakland. If the measure is successful, Portland would become the 4th major city in America to decriminalize psychedelic plant medicine, after Chicago, the 3rd largest city in the country by population, somewhat quietly passed their own decriminalization measure earlier the same month.
Oregon recently made national news on the psychedelic front with the announcement of a measure introduced by PSI 2020 (Psilocybin Service Initiative 2020), an organization working on a statewide therapy model to institute regulated psilocybin based therapy in the state, supported and funded in large part by David Bronner of Dr. Bronner’s Magic Soaps. Decriminalize Nature has been supportive but critical of the measure, releasing a statement decrying the removal or addition of language that may restrict access, particularly to the working class, and people of color that have traditionally been left behind in drug reform progress, whether by intent or neglect.
Bryan Kim, director of public outreach for Decriminalize Nature Portland, and one of three DNP chief petitioners on the initiative says, “We’ve been looking at this as companion legislation to PSI 2020, because especially given the changes made, and the fact that they removed their penalty reduction and decriminalization language, what we’re doing is absolutely necessary in the context of the therapy model, because we have to ensure that people outside the therapy model still have access to medicine, and aren’t in danger of being criminalized for pursuing their own cognitive liberty and mental health.”
In their press release, DNP fleshed out their motivations and intentions “Oregon is in the middle of a peak in its mental health and homelessness rates,” said chief petitioner and DNP organizer Holly Sullivan. “And the last thing we need to be doing is locking up more of our most vulnerable folks for the possession or homegrowing of medicines that are clinically proven to treat depression, PTSD, and addiction.”
Further on in the release, another chief petitioner shared his personal story, which parallels that of many who have struggled with addiction and found relief in plant medicines. “”I was able to cure myself of a ten year IV opiate and amphetamine addiction. ” said Nicholas Combest. “The powerful psycho-spiritual experiences that psilocybin mushrooms and San Pedro cacti provided were instrumental in my healing process. They facilitate a deeper level of self analysis and compassion. These medicines get to the root cause and can fundamentally transform us.”
DNP also point out in the statement that polling conducted by PSI 2020 showed a majority of Oregonians in favor of medical psychedelic therapy and the decriminalization of possession, further illustrating why DNP are confident of success in this measure, along with their overall goal of full national decriminalization and access to entheogenic plant medicines.
Bryan also added on behalf of DNP in their press release; “We agree with the folks in Oakland and Denver that we have to put people before profits and liberty before licensing. In a country without universal healthcare, it’s more important than ever that we ensure equality of access through the protection of non-therapeutic possession and personal use homegrowing.”
Decriminalize Nature is also looking forward to their upcoming December 14th statewide Oregon Decriminalization Congress. “We’re meeting with decriminalization activists from Eugene down there to do a Decrim Congress. We’re trying to recruit people from cities all over Oregon who are interested in getting moving on this, and sharing what we and Edelic Center for Ethnobotanical Services have been working on, and trying to spread that to activists around the state at a central meeting point and time.” Bryan Kim elaborated to Nugl. “The therapy model is fantastic, but at the same time is not fantastic if you only have a therapy model, and using outside that model becomes an excuse to crack down on minority and vulnerable populations.” This speaks to a fundamental point that DNP and Bryan repeatedly highlight in interviews, literature and their ideals as a group. “Every time you pass a law in the U.S., the enforcement of that law disproportionately impacts oppressed communities, especially communities of color and working class communities, and it’s really important to ensure that people without traditional class and race based access to (mainstream) therapy have access to this medicine.”
The Congress, which is being organized by Edelic in coordination with DNP, will also reiterate the organizational belief that entheogenic plant medicines must be treated as a sacred and individually considered category, as movements in the state for full drug decriminalization gain momentum. “It’s our belief that psychedelic plant medicines deserve extra consideration and protection than other Schedule 1 drugs, because these are a natural birthright of humanity, given to us by nature or God depending on your belief system, and it is not right to put them on the same level as meth, cocaine, and chemically derived psychedelics, though of course we support all the decriminalization and access bills and campaigns.” While Decriminalize Nature as a group is specifically advocating for entheogenic plants, they are committed to continuing to work in tandem and support with other initiatives aimed at increasing access to psychedelics, and ending the Drug War.
Signature gathering for the Portland measure will begin as soon as the templates are received back from the Secretary of State, approximately 11 business days after the October 29th announcement.
The Edelic team is currently registering RSVP’s for the December 14th event in Eugene through their email; email@example.com
Featured image of Arlene Schnitzer Concert Hall, Portland by Zach Savinar
Bernie Sanders 4:20 Announcement: The Progressive Icon Unveils His Presidential Plan For Cannabis Legalization
Vermont Senator and 2020 Democratic Presidential candidate Bernie Sanders announced his anticipated plan for full legalization of cannabis at 4:20 P.M. Eastern Time (yes, really) on Thursday, October 24, 2019, via a statement on his campaign website and social media. Sanders has been a stalwart supporter of issues that are important to the cannabis community since entering the national political consciousness as the ‘Democratic Socialist’ mayor of Burlington, Vermont in 1981. The eventual congressman and senator was also the first major presidential candidate to support legalization, in 2016. He has spoken out in the halls of D.C. power loudly and often since the Reagan era for legislation and causes that have included reforming or ending the military industrial complex and Drug War. Many expected Sanders plan for cannabis to be reflective of his progressive and social justice credentials, and he did not disappoint.
“We will legalize marijuana and vacate and expunge past marijuana convictions.” immediately announces the newly launched section on his campaign site dedicated to ‘Legalizing Marijuana’, and in describing the details, clearly and immediately addresses the systemic issues he seeks to redress. “When we talk about criminal justice reform and ending institutional racism in America, we are talking about ending the disastrous war on drugs, which has disproportionately targeted people of color and ruined the lives of millions of Americans.” He elaborates on that point further in the campaign statement; “It is time to admit the criminalization of marijuana was a disaster, especially for communities of color, and allow those most impacted to move forward with their lives. Our job now is to legalize marijuana and vacate and expunge past marijuana convictions, and ensure that revenue from legal marijuana is reinvested in communities hit hardest by the War on Drugs.”
Sanders commits in his plan to immediately issue an executive order directing the Attorney General to declassify marijuana as a controlled substance, completely de-scheduling it as cannabis and health advocates have been suggesting, demanding, and pleading for years. His campaign is clear about the need for immediate executive action; “While Congress must aggressively move to end the war on drugs and undo its damage, as president Bernie will not wait for Congress to act.” Further in the plan for his first 100 days, Sanders and his campaign flesh out how they will release, vacate and expunge past pot convictions and current prisoners. Included are details of how the process of release and expungement will work, with some parts based on California’s system with Code for America, and others incorporated into the Senator’s previously released Justice and Safety for All plan.
Another section focuses on how as President, Sanders would “ensure that revenue from legal marijuana is reinvested in communities hit hardest by the War on Drugs, especially African-American and other communities of color”’ Included in the specific outline for that reinvestment is a $20 billion investment into a grant program within the Minority Business Development Agency to provide grants to entrepreneurs of color, another $10 billion grant program to focus on businesses that are at least 51% owned or controlled by those in disproportionately impacted areas or individuals who have been arrested for or convicted of marijuana offenses, and a further targeted $10 billion USDA grant program to help disproportionately impacted areas and individuals who have been arrested for or convicted of marijuana offenses to start urban and rural farms and growing operations, to ensure people impacted by the war on drugs have access to the entire marijuana industry. The funds for the grant programs would come from new cannabis tax revenue. Other highlights of the program include eliminating drug testing requirements and restrictions on public benefits for convicts, and allocating funds from cannabis revenue to address the opioid crisis.
Finally, the Sanders campaign directly addresses how they will keep cannabis from becoming Big Tobacco. Legal states and media commentators have been wary and increasingly critical of the rise in companies and business tactics they feel veer into an unethical and socially harmful side of cannabis capitalism. An outright ban on tobacco and cigarette companies participating in cannabis, and a commitment to “provide resources for people to start cooperatives and collective nonprofits as marijuana businesses that will create jobs and economic growth in local communities” are likely to be met with approval by cannabis growers, entrepreneurs and activists, while the language around taxes and regulations – which include “partner(ing) with USDA to establish safety inspection and quality control processes” may trigger skepticism and even concern. In many states the burdensome taxes and regulations of recreational adult legalization have many pining for previous days of relatively simple medically based decriminalization. In California, which led the charge on medical cannabis, the state passed legalization with Proposition 64 in 2018. The overly restrictive system of taxation and regulation instituted in the last year in CA includes taxes at every point of transfer and up to 30 percent to the retail consumer, and effectively destroyed the compassion programs the movement is based on. California’s legal cannabis industry was recently described as “a mess” by the LA Times, and many others.
There is an unmistakable feeling in the cannabis community of battle weariness from past politician promises and optimistic legislative goals, and some will surely see room for skepticism and improvement. Candidate Sanders has put out what will surely be considered by many to be the most progressive plan for legalization and addressing the impacts of criminalization in the election cycle thus far. Of course, no politician should be trusted to independently or singlehandedly implement the legislation or reforms they claim to support, but with decades of activism from within and without the political establishment on his record, it is realistic to hope and expect that the cannabis and justice communities would have an ally in President Bernie Sanders.
California State Legislature Holds an Emergency Recess Session on Vaping Illnesses and Deaths
The California Legislature – despite ending session for the year in late September – reconvened for a Joint Informational Hearing held by the Assembly Committees on Governmental Organization, Business & Professions and Health on October 16th for an intimate discussion with department leaders and health experts, officially called the Assembly Committees on Governmental Organization, Business & Professions, and Health Joint Informational Hearing: Vaping Tobacco and Cannabis Products: Health Effects and Deficiencies in Regulation and Current Law.
Thus far in what the CDC is calling an “outbreak”, at least 1,100 people have been sickened and approximately 3 dozen have now died, including a 17-year-old from New York, the youngest death yet.
The 4 hour hearing, chaired by Assembly Members Adam Gray, Evan Low and Jim Cooper, listened to testimony from three panels who dove into elements of the problem, and some of the solutions to it that can be enacted upon once the Legislature reconvenes in January, in order to be prompt and proactive in addressing the outbreak.
The panels featured the likes of Dr Elisa Tong, Associate Professor of Internal Medicine at UC Davis, Nicolas Maduros, Director of the California Department of Tax and Fee Administration, Lori Ajax Chief of the Bureau of Cannabis Control , and Dr. Charity Dean, the Assistant Director of the Department of Public Health.
The purpose of the meeting was to discuss the cause of the outbreak, and impactful solutions moving forward.
The very morning of the hearing, the reported number of fatalities rose again, and in addressing the first panel Assembly Member Robert Rivas stated; “This seems to be a race against the clock” as he referenced the announcement of the increase by Center of Disease Control.
In his elaboration, Assemblyperson Rivas affirmed his position that outright bans on vaping won’t work, and the legislature must look to a more strategic approach. Mr. Rivas pointed out that he represents a rural district where access to basic healthcare services are inaccessible to many, let alone the funds for education and treatment, and that enforcing a ban would simply not work there.
Assemblyman Gray noted in questions directed at the Bureau that language used in flavors and marketing names can appeal to minors, giving examples such as Wedding Cake, Key Lime Pie, Peanut Butter Breath and Banana Split, as seen in his visit to a licensed retailer.
“We talk here in this legislature about local control and upholding the promise of Proposition 64 in regards to that (local) control,” stated Assemblymember Low, the Chair of the Business & Professions Committee, “Right now they have no control of the situation.” further elaborating on the fact that it has been among the most contentious issue in both houses, and a primary problem in allowing for access to quell the illicit market.
This compounds issues facing the Bureau in regards to licensing and resources to efficiently operate, and as Assemblyman Cooper stated; “In my 5 years I have never seen a department head say they do not have sufficient resources.” – indicating that it has clearly been a massive detriment to the integrity of the regulated market
Low suggested creating a more uniform approach including consolidation of department resources with a proactive plan of action to address local control and even asset forfeitures.
One of the most profound statements made during the Public Comments, was from a gentleman that admitted to being an illicit market operator, saying; “I work, I’m doing my best to get through licensing and becoming a compliant participant and just trying to feed my family.” He pointed out that when the Legislature and BCC – referring to them as “the powers that be” – are focused on enforcement instead of creating more opportunities for licensing, it makes it difficult for those who really are trying their hardest to transition to the legal market while still making a living. He posited that a great faction of companies currently operating legally were previously in the “gray market”, and that there needs to be focus on more of the activity necessary to the supply chain besides enforcement.
The majority of other public commenters seemed to hold the position that more regulations and laws are needed, and to create more funding for enforcement, to “crack down” on the illegal market, with a minority amplifying the lack of opportunities for licensing, local bans, and the need to deregulate barriers to entry.
There was no mention of creating more efforts to enhance outreach and education to the public.
CDPH’s Dr. Dean disclosed data in her testimony from private interviews held with 78 patients suffering Vaping Pulmonary Lung Injury (VPLI) finding that of those patients, 72% of patients reported use of THC vape products, 38% CBD vape products and a mere 10% of them had used nicotine vape products. Only 1 person disclosed that theirs originated from a product purchased at a licensed retailer. Dr. Dean further explained that in the epidemiology they found that Vitamin E acetate was found in some but not all products, leaving many unanswered questions as to the primary culprit behind the lung injuries and deaths.
Many on the dais noted how vaping is not at all new and perhaps this outbreak is in direct relation to the illicit market, which has exponentially grown. Towards the end of the hearing, Dr. Dean affirmed to Assemblyman Wood when asked, how surprising it is that this is all of a sudden happening, many years after the rise in popularity of vaping. A similar question came from Assemblyman Gray to the Dr. about how “odd” it is that there are only a handful of cases in Canada, with the vast majority being isolated to just the states and nowhere else in the world. Dr. Dean responded that “It is interesting.”
Due to the Legislative Session being on recess, the legislature cannot motion any actions but made it clear that this would be more than just discussion and intend to act with “a great sense of urgency.”
Los Angeles Moves to Next Round of Cannabis Retail Licensing
The City of Los Angeles just wrapped up round 1 of phase 3 cannabis retail licensing. A total of 802 applications were submitted in what will be become the largest cannabis retail capital of the world – many say it is already there, and yet 250 retail licenses have yet to be issued.
For many, the moments leading up submission were a culmination of years and months of hard work, anxiousness, and hurry-to-wait pacing. A list of awardees can be found here. The first 100 that meet the criteria of round 1 will be awarded the much-coveted retail license. There are no assurances on how this will shake out, but it will be interesting to see the final list of 100 applicants.
Lives will change very quickly when this happens, and for those social equity applicants who make it through and who were affected by the War the Drugs, this would offer a life-changing opportunity.
While this all shakes out, the following are some points to keep in mind as you prepare for the next round of licensing, and are also some essential things to keep in mind as you track what is happening in Los Angeles:
- Though a preliminary list of top 100 applicants have been issued, there is likely to be a lot of shift. Applicants may get bumped for several reasons: priority of tier 1 vs. tier 2, incomplete application or incorrect documents, in-compliant property or, areas meeting a soft cap requirement.
- Based on extensive anecdotal evidence and observations, there were technical glitches in the submission process that have been reported to the city. There were even some claims of alleged ‘robots’ that entered the system, but the city has indicated no foreign intrusions. For those looking to appeal their time-stamps and the application process for whatever discrepancy they claim, there is no formal appeal process announced just yet.
- Regardless of the outcome, round 2 still presents an extraordinary opportunity for social equity applicants and partners to pursue a retail license. An estimated 150 licenses will be issued in this round. According to city officials, round 2 is looking like it will also be a first-come, first-serve basis model. There is also speculation that the application will also be merit-based; thus based on a point system. The final guidelines on this are not clear yet but should be coming out soon.
- For Round 2, real estate will not be required as part of the application process. This is great news for applicants. If applicants are approved, they will have 90 days to be in the property. What is not clear is whether having real estate will generate more points on the citys point system. This, of course, will be a massive point of interest for applicants, given what headaches came with securing property in round 1.
- The city is still looking to launch a delivery pilot program before the new year. The city is expected to open 60 delivery applications (20 for tier 1, 20 for tier 2, and 20 for general applicants). Formal announcements with guidelines have yet to be made but should be
All and all, the cannabis industry in Los Angeles has yet to settle into the mecca of cannabis; it is expected to be. Licensing is still shaking out, and the city’s full supply chain has yet to be materialized. Nevertheless, there is a positive movement happening, and progress is starting to show. There is much to be optimistic about, and plenty of opportunities are still out there for us to collectively look forward to.
Branding your cannabis business in a saturated industry
An Informed Business Marketing How-To Guide by Dino H. Carter
Saying the cannabis industry is saturated is the understatement of the year. While sitting on my Harley the other day, waiting for the red light to change on a busy Los Angeles junction, I saw that all the billboards in the junction promote a different dispensary. And this is just a small example that shows how many players in the cannabis space try to get the consumers attention. Some will contact a logo maker to create an outstanding logo that will catch the eyes of their intended audience, hopefully generating more business from it.
May it be medical, recreational, THC, or CBD, the market is overflowing with cannabis businesses. Everybody jumps on the cannabis wagon. Big money and corporate America is already deep in the cannabis space, and if you think that flooding your Instagram feed with images of your oil or tincture is what will make you a millionaire, you are mistaken. I am sure a lot of you who read this now already discovered that it is much much harder than you thought, right?Â
As a brand & marketing consultant I meet, talk, and work with many different sorts of cannabis businesses, and just like in any other industry, only a few understand what branding and marketing are all about and why it is so important for your business success.Â
Last week I was at a cannabis business event and met a lot of cannabis business owners and entrepreneurs. After the event, I went online to check their websites. Almost all the websites look the same, sell the same products, offer the same services, and have the same messaging (if they have any messaging at all). How many companies can claim “Your trusted source in cannabis” if all of you are my trusted source, how do you expect me to believe any of you?! This is where brand strategy comes in.
Branding is not designing your logo or great looking packaging, and marketing is not influencers or facebook ads. You use branding & marketing in a very deep and highly strategic way. The goal is to get in front of as many specific customers as possible. You want to make them understand why they should buy or use your cannabis product or service, and not the competition. If you think the features of your product are what create sales, you are in for an excruciating realization of the truth. People don’t buy products; people buy personality.Â
People buy what makes them feel in a specific way. Why do you see a line of people outside an Apple store but not outside any other mobile phone store? Is it because the iPhone is such a superior device than others?
2019 research shows that more than 60% of marketers today do not understand what branding and marketing are and how to implement them in an effective way. Unfortunately, there are not enough pages in this magazine for me to cover all that you need to know about branding and effective marketing. I will give you the most critical aspects of branding, which is crucial for effective marketing in a saturated industry.
The best way to look at branding & marketing is through ‘customer acquisition’. The customer can not relate to your product if they do not understand why they should buy YOUR product and not the competitions. Because of this, how can you expect to have high customer acquisition rate? That is why you need to build brand personality; you need to discover your brand and its differentiation.Â
It is hard to find your brands differentiation because:
Â 1) the distinction is usually an intangible aspectÂ
2) the differentiation should be from the consumers’ point of view, not the businessÂ
3) because most owners and managers are too involved with the product or service they sell, thus can not see its perception from the consumers’ point of view
The differentiation can be in many aspects, one of them is the features of your product or service, but the functions are not what generates long term business longevity. I am sure some of you have great products or services, but sales are low. It is usually not because of the product or service; the sales are low because of the marketing – the branding was wrong.Â
Now, when I say the branding is wrong, I do not mean the logo or packaging is not good. I mean the product or service did not have a personality or did not communicate its personality in a way that is aligned with its target consumers.Â
The best way to build brand personality and align it with the right consumers is to think of your brand like a person: Who is the brand? How does it make the customer have a positive emotional connection to your brand? How does the brand make the consumer feel? What is your brand’s voice? Is it an educating voice, fun, professional, street style? What are your brand’s values and personality traits? Helpful, fearless, energetic, reliable? What is your brand’s ‘reason why’ – why does your business exist?Â
When you have this brand personality, you need to focus on your specific customer base. Let’s say you sell soil or nutrients for growers. If you focus only on home growers, instead of all kinds of growers for instance, it will be easier for you to know your brand better. You will understand how your brand is making this specific consumer base feel, what media outlets you should use to get in front of your consumers, and what kind of ads and content they want to see, read, and consume.Â Â
When you say that “everyone” is your target consumer, you are in for a fall. Believe me, I have seen it happen in all industries in many different countries in more than 20 years of marketing work.Â
Who exactly do you target and why? You should design and produce service/product that is targeted at a specific customer, specific demographic. For example, a vape pen that is aimed at very affluent young females, which is a small base but a powerful one. In this case, everything must be aligned to this customer base. From the product to the website, to the packaging, to the ads, everything must suit the demographic. The product should be well made from the best materials; the packaging should be extremely luxurious (and cost appropriate). For this brand, the ambassadors must be rich young females, the brand events must take place at super-exclusive venues (with Moet & Chandon champagne served), and this brand’s ads shouldn’t be in stoners magazines, but in luxury living magazines. Make sense?Â
When you think about brand differentiation, think about this: brands are like celebrities – there are some actors, musicians or athletes you like and some you do not. Not just because of the way they act in movies or the way they play football or sing. Some of them you feel more ‘connected’ to and some less, some have a personality you like and some not so much, right? The same goes with brands – to some, you have positive emotions, and to others not so much, and your best friend might like one brand that you do not care for.
Everything you do with your brand; from the dispensaries you sell your product at, the packaging, events, and trade shows you appear at, or sponsor, your tagline, to your social media and the rest of your content; everything needs to be “on brand” and not on trend! Focus on a specific customer base, find out how your product can make them feel the way they want to, and then communicate clearly.Â
This is how you elevate your cannabis business above all the noise in the industry.
To conclude, here is an excellent example of brand differentiation: Tesla and Prius. Both are electric cars, but they are two completely different brands focused on two extremely different customer bases. One is about the environment, being environmentally conscious, and saving money, while the other is about speed, style and show you have the funds to drive a Tesla. That is why both brands marketing activities are entirely different, even though they are both very similar products.Â
Dino H. Carter is the Founder ofÂ D Branding, a Global Branding & Marketing consultancy accelerating growth for businesses and entrepreneurs. Dino has over 20 years of international marketing experience, including work with MTV, Levi’s, National Geographic, and more. He is a speaker, podcasts guest, a regular contributor to different publications in the USA and Europe, a member of the AMA and the Hollywood Chamber of Commerce.Â
Hall of Flowers Season 3: A Curated Collection of Cannabis Business
Hall of Flowers launched ‘Season 3’ of it’s wildly popular business-to-business cannabis trade show this September 18th. Launched in 2018, the event is produced by a team responsible for producing some of the largest and most popular fashion industry trade shows, including ‘Agenda?‘, and the curation and attention to detail they’ve brought from their fashion experience manifests throughout.
The production commenced again at the Sonoma County Fairgrounds – the site of many larger events, including the annual Sonoma County Fair, which drew over 125,000 people this year, as well as many large cannabis industry shows and festivals. Hall of Flowers presents a much more intimate setting for direct business to business cannabis sales and networking, with about 6,000 industry attendees over the two days.
NUGL was on hand for the business action and festivities, and in between learning about exciting new products and innovations within the industry, meeting and connecting with some of the most creative and innovative minds and personalities in cannabis, and of course enjoying some of their creations and innovations, we also managed to talk to some folks about their products, work and experience at Hall of Flowers.
It seemed like everyone at the event stopped in at the Sonoma Pacific Outdoor Lounge. A big and welcoming tented area in a prime location with plenty of comfortable seats in the shade, it was impossible to miss, and difficult to pass up on two straight warm and sunny days. A dazzling floral arrangement by ?California Sister? featuring carnations, magnolias, and of course, cannabis made it that much easier to oblige the welcoming vibe. Once settled onto one of their many sofas, one could enjoy a regular stream of prerolls, dabs, accessories and swag from brands like Zkittles, ?Medicine Box?, and Big Sur Extracts, with help from their dispensary partner Heritage Mendicino, who facilitated the sampling.
Brit June, Director of Brand Relations for Sonoma Pacific, told us that a successful multifaceted production like the lounge that she helped to create is reflective of the ethos and mentality of Hall of Flowers as a whole. “The experience from the fashion show world, and implementing that into cannabis curates something that’s pretty special and doesn’t really exist in terms of that structure and attention to detail. It seems they have a criteria they’re trying to meet, not just internally, but in terms of progressing and directing the community while creating an environment thats super-friendly and very experiential”.
Another of the uniquely enjoyable experiences was Hall A, which ?featured a group of ‘arena booths’, where brands got the chance to operate a pop up shop style experience and exhibit. Showcasers included industry stalwarts like Lowell Farms and ?Rebel Coast? Winery, whose cannabis infused non-alcoholic beverages (?enjoyed ?by 2 Chainz) pair nicely with their non-infused, alcoholic Sunday Funday Sauvignon Blanc.
The trippiest booth in Hall A surely belonged to Pluto Extracts, whose pop-up featured an outer space inspiration and aesthetic that went right down to the NASA suits the brand reps were rocking. The thousand or so who lined up for a chance to check out their extracts and interplanetary display were inspired by the aesthetic design of the Hanu Stone vape carts they’ve launched their first extract pod with (rated for ‘space flight’ on the package, which is an accurate description of how far we blasted off). Co-founder Lincoln Barnett III was actually one of the first several employees of Hall of Flowers before they launched, and curated the initial 80 brands of the 2017 opening season. After participating in the first two iterations, he took a step back from direct production involvement to launch the Pluto cannabis experience. When he and co-founder Michael Garganese Jr. launched their brand, they conceived of Pluto with its position as the farthest planet (or ‘?planet?’) from the earth, as what they call a ‘scenic balcony from which to observe time and space’. “We’re really focused on the visuals and art behind our world, and how we can continually adapt and manipulate that to create experiences, both digitally and in person.” Barnett says. He has been working in the cannabis space since 2009, and his journey so far has taken him from learning to cultivate in his garage in Orange County to working with some of the biggest talents in cannabis, and now all the way to Pluto. Pluto’s immediate plans are to continue to collaborate with the best growers and extractors they can find, and help fill the growing niche market for top shelf extracts created by specific artists and farms.
There were numerous inspiring socially beneficial innovations and brands, such as Brother David’s, a not for profit farm whose mission and structure their representatives Les and Bobcat likened to ?Newman’s Own?, and which was founded by Dr. Bronners Soap Company CEO David Bronner, a longtime supporter of cannabis, psychedelics and ?other cool things?. Brother David’s mission and commitment, according to their website, is that ‘all profits from Brother David’s go toward protecting the land, lives, and communities of our cannabis family — promoting small-scale family farms practicing regenerative organic agriculture, and fighting a system that unjustly criminalizes cannabis.’
The halls and grounds were filled with all manner of tasty and interesting treats and experiences. Cold Lagunitas HiFi Hops – a non-alcoholic ‘beer’ infused with 5-10 milligrams of Absolute Extracts were available, and the thirsty crowd kept them serving nonstop. Vacation, a new brand partnership between Green Street, Sublime with Rome, and Dirty Heads gained a lot of attention and at least one very happy and lucky customer with a $50,000 cash raffle. If you were wandering around the grounds on day 2, you may have even bumped into cannabis entrepreneur/consumer and actor/producer Seth Rogen (you probably didn’t, there were people around him. But still. ?Seth Rogen? was there!!). Award-winning chefs Mike Magliano and The Franks curated a culinary experience on-site called Pantry, and a Speaker Series hosted panels from Shep Gordon, Jim Jones, Coltrane Curtis, Bong Appetit’s Vanessa Lavorato, Miss Grass’ Kate Miller, and Van der Pop’s April Pride.
At the end of the two hazy days, Hall of Flowers showed once again how and why it’s one of the most engaging, enjoyable and buzzworthy industry events. This year marked the first time that the second day was open to the general public, so even more cannabis consumers, enthusiasts and aspiring entrepreneurs can stay tuned and look forward to experiencing Season 4.
The Secret War Against Cannabis Prohibition
By Joseph Chicas & Amanda Carrillo
After decades of wars and domestic service, our U.S. Veterans stand strong as our nation’s pillars of hope, resiliency and patriotism. Over 19 million veterans currently live in the U.S. and are leaders various facets of political, social and economic life.
Nevertheless, physical and psychological injuries of service have been well documented and have led to significant national efforts to heal our all of our veterans and their families.
Our most recent generation of Post 9/11 veterans returned home, they were met with positive reception. Welcome home parades, veterans hiring fairs, and increased VA/community resources were existent across the nation. But underneath it all, service members who were lucky enough to return home came home with significant wounds –both visible and invisible. Physical injuries were rampant, due to unique war tactics such as suicide bombers and IED’s at unprecedented scale. Thousands lost limbs and many suffered from traumatic brain injuries not just through combat, but during training exercises.
Though up to one-third of veterans returned with such wounds, the vast majority have shown tremendous resiliency in their transition home and have made powerful assets to their community and local economies.
But for those who needed that extra support and more intensive services, unfortunately, our nation has failed on delivering its promises to our heroes. Despite strong efforts, the primary system set up to assist with veteran transition, the Veterans Affairs administration, has been ill equipped to serve our post-9/11 veteran community. The embattled agency has struggled meeting the unique needs, resulting in well-documented challenges plaguing the system: exorbitantly long wait-times, inability to prevent high suicide rates and inadequate mental health treatments. Gaps exposed have also adversely affected veterans other eras.
To tackle the physical and psychological needs of the veterans, the VA, like other health care systems, has primarily relied on harsh drugs such as opioid prescriptions. In a 2012 study by the Journal of the American Medical Association, it was found that veterans with PTSD were two times more likely to receive an opioid prescription, and also at higher more frequent doses. Taken at scale this contributed to a generation of veterans hooked on pills. Eventually the VA changes its practices to significantly reduce its reliance on opioids. But for many veterans it was too late.
As this surge happened, recognition that these methods were doing more harm than good led to many veterans turning to other alternatives such as cannabis for natural healing. The Weed for Warriors story embodies this shift in our veterans’ consciousness as they coped with the harsh realities of transitioning from the military back to civilian life.
Why and How Was WFWP Founded?
Weed for Warriors was founded in 2014 by Kevin Richardson who turned to cannabis after attempting to commit suicide and leaning on the plant to alleviate the pain felt by him and millions of others. In a span of 30 days, Kevin was off opioids and alcohol. Cannabis offered a healthy alternative for him and he couldn’t wait to share the healing effects of the plant with others. But he knew fellowship was key. After-all, military service was about camaraderie and fellowship—something most veterans find missing when they return home. So he opened the first chapter of WFWP in San Jose and there the story began. With 8 chapters in California, 3 in Florida and “friendlies” near and as far as the UK and Australia, WFWP is leading the charge in providing veterans access to medical cannabis.
The mission was propelled when Kevin met Sean Kiernan at a Denver cannabis event in 2015. Kevin and Sean immediately clicked and aligned themselves on this vital mission. Sean, the current CEO, served in the U.S. Army and is a UC Berkeley graduate. He also worked as a Hedge Fund Manager on Wall Street before the white collar hypocrisy pushed him too far and his own service related injuries began to wear him down. Sean began working with the organization to fight for the rights of veterans and give a voice to the voiceless. He feels that although WFWP began primarily as a cannabis organization, it is also their duty as a group to bring awareness to the judicial and poverty issues surrounding veterans and the Veterans Administration.
Mark Carrillo, COO and Director of Chapters, began giving away cannabis from a personal garden in January 2015 under the name Meds4Vets. After joining the United States Marine Corps at age 17, Mark completed his enlistment in 2007 and found cannabis again after experiencing serious side-effects from alcoholism. When he realized how expensive and often unreliable the availability of medicine was, he eventually began to grow his own in order to ensure he was never without it. What started as helping himself and a few brothers, eventually encouraged him to help more in his community. He held his first gathering at a local dispensary and within 90 days of having meetings in Sacramento, CA, the group had outgrown the location; and as Kevin had seen, he realized the camaraderie was what brought veterans back over and over. After meeting Founder Kevin Richardson in 2015, the two began working together and Mark officially changed his Meds4Vets group to WFWProject Sacramento. Together, Kevin and Mark organized other veterans to develop all of the California chapters and then the additional Florida and Wisconsin chapters.
The Weed for Warriors moniker might seem playful and even ironic; after-all its providing weed for warriors! But make no mistake, this group means business. WFWP is operating at multiple levels to ensure that veterans get access to cannabis to alleviate the physical and psychological pain that affects them. They have closed a gap that an agency like that VA simply cant fill. Through their support networks, advocacy and entrepreneurial initiatives they lead by example. And they are well respected for their authentic approach to service –there is no question their mission on the home-front is as serious as their military battles. In fact, as it was in the battlefield, it’s still a matter of life or death.
As a Support Network
One on Sunday afternoon, we had the opportunity to drive up to the Stockton WFWP monthly meet-up alongside NUGL President, Ali Ganji. Veterans of all eras and of all ages were united together as they enjoyed some delicious prime rib fresh off the grill and their cannabis of choice. There was no judgment, just love. Veterans had traveled for hours to come down and join other vets to share war stories, vent about life circumstances and get lifted.
While hanging out and catching the magic, the NUGL team had the chance to meet several WFWP members. Without much hesitation, many went on to say how tough life had been post transition. Nobody understood what they had gone through and their relationships were just not the same. Several had lost a fellow patriot. All battled with substance abuse as the VA over -prescribed them pills (mainly for chronic pain) and struggled to curve their drinking. Most surprisingly, many said they seriously considered killing themselves because of the rampant PTSD, TBI, depression, substance abuse or other issues they experienced upon their transition home.
And yet throughout their battles, you couldn’t even tell. Cannabis, according to everyone we spoke to, was their life saver. Claims of cannabis normalizing their emotions and calming them down were made throughout conversations. In one instance, we had a profound conversation with a wife and veteran, Kim Yarbrough, where she even stated that “cannabis helped bring her husband back.” Till that point, he was not the same.
Kim’s husband Neil Yarbrough had been prescribed up to 28 pills at one point. His military service took an immense tool on his mind and body. After this transition home, his world was turned upside down. And he hit rock bottom when he attempted suicide. But cannabis saved him and once he turned to cannabis, things changed. He changed and for the better. He has a tattoo of the numbers “22” to remind him that he has 22 brothers and sisters that commit suicide everyday and he could have been one of them. But his strength and the love and support around him allow him to be here today. And now he is a success story and gets to enjoy fellowship with his WFWP members and of course his wife is happy to have her husband back.
Amanda Carillo, Mark’s wife and caregiver, also echoed similar sentiments when it came to her husband’s transition: “Cannabis is just a tool in the toolbox during the journey through wellness; you could have vitamins, exercises, hobbies… all as tools too. It’s a journey because influences around you shift, both slightly and drastically, and so you must adjust as well. There’s a misconception that cannabis patients are lazy or avoiding their issues, when in fact they’re using this tool to face them head on and get back to living.” says Mrs. Carrillo, who’s grandfathers, father, and brother are also veterans and members of WFWP.
Therein lies the special magic with WFWP. They are creating a space and sharing acceptance for a plant that had saved them. And for them, that sense of unity, of team, of family once felt in the military, they found at home. It’s on this front that Mark get’s most excited. For him its about providing veterans and their families “something to look forward to every month.
That space is sacred too – Mark ensures chapters and chapter leaders are prepared for the challenges they will face as they cultivate this space in other cities and stay true to the WFWP Mission.
As a Policy Advocate Powerhouse
At the macro level, WFWP is a force to be reckoned with. WFWP were strong advocates of the California Prop 215 system that allows them and others to provide free cannabis to patients who may be in need, but don’t have the economic means to purchase their medicine. For WFWP, providing access to cannabis for veterans is a social, economic and health equity issue.
When California voters passed Prop 64, WFWP came out in strong opposition against the initiative because they anticipated barriers to access medicine would increase exponentially. They were right. The costs of cannabis products has increased over 35% and 80 % of cities still do not allow for dispensary retail sales. While such issues are common pain points in the industry, WFWP wasn’t concerned about the financial bottom line. To them, their bottom line is that that veterans can no longer access affordable or free medicine to help with their ailments. It’s a health justice matter; as opiate and barbiturates statistics climb, veterans are demanding better options.
And for WFWP the passage of Prop 64 also meant they couldn’t legally provide free cannabis to their members who may need it. And though providing free cannabis might sound like a light mission for some; the gravity of this gift cannot be understated. The medicinal benefits of cannabis are well documented in international research and even in Dr. Sue Sisley, a renown researcher, suggests that cannabis may be able to offset symptoms of PTSD.
WFWP has also been on the front-lines in advocating for more research on the efficacy of medical cannabis. Sean knows this battle well and is working alongside researchers like Dr. Sisley to advance medical cannabis research. Research is key to eventually obtaining FDA approval for medical cannabis, which may be the final piece (besides descheduling) that will allow for veterans to get reimbursed by the VA for medical cannabis prescriptions. Doing so would bring significant health and financial relief to the millions of veterans that reportedly use medical cannabis to treat their service related injuries.
Furthermore, for WFWP Prop 64 exacerbated issues for veterans. In a letter addressed to Governor Gavin Newsom, Sean wrote: Prop 64… “created two California’s for Cannabis. One for those with resources who will be able to afford the tremendous cost increases associated with consumption or production that AUMA will entail; and the other, the black market where the sick, poor and disenfranchised will be forced to turn to.”
Nevertheless, WFWP has fought hard to advocate for the passage of California Senate Bill 34, also known as the Dennis Perone and Brownie Mary Act. Once passed, this bill would allow for licensed retailers to partner with organizations such as Weed for Warriors to offer free medical cannabis to patients. The significance of this measure could not be understated and WFWP is unwavering in seeing this happen. Sean travels to Sacramento frequently to speak and advocate for the passage of this bill and thanks to his effort and the support of other advocates SB 34 has strong bi-partisan support and looks on track to heading to Governor Newsom’s desk to be signed. This feat would be a huge victory for WFWP and for veterans across the state.
As an Engine Fueling Veteran Entrepreneurship
Besides support and advocacy, WFWP is looking expand their for profit arm to develop a vertically integrated cannabis operation. Doing so will allow them to build out the WFWP cannabis brand and provide economic opportunities for other veterans and ensure products are made “For Vets by Vets.” This ambitious mission is coming to fruition quickly. The organization has secured multiple cannabis licenses, has secured some capital investments and is building strong relationships with reputable brands across the supply chain. Cannabis will not be the only market the brand will touch: apparel, media – both documentaries and series, health, housing… the list goes on.
Ultimately, there is no stopping WFWP from embarking on their mission. Their commitment to each other is evident as their commitment to their country. Their mission is beyond cannabis and really leads to healing. Their physical and psychological scars may be present, but it’s clear that’s in their rear view mirror as they look to the future and plant their seeds in the cannabis industry.
The Road Ahead
As the future of federal legalization remains uncertain, its evident that the veteran community carries the key to the eventual passage. There is no denying the damage of pain we’ve inflicted on a generation of veterans who were harmed by overprescription of harsh pain pills who are now healing through cannabis. Bipartisan support in Congress and the Executive Branch shows support for more research on the medical benefits of cannabis — and that’s a good sign. But it’s nowhere near enough and we can no longer wait as we don’t want to hold back our veterans from access to a plant who can bring them much healing.
States with cannabis legislation have seen a decrease in suicides, overdoses, and DUIs. Evidence suggests that healing is happening in those areas at exponential numbers. It’s only a matter of time before we follow suit too. We’re closer now than we’ve ever been. And something tells us WFWP will be there at the forefront, leading the way and creating the next generation of healed and resilient veterans.
Cannabis Dispensary Law 2014
In August 2019, the State Supreme Court ruled that San Diego County failed to sufficiently analyze potential impacts of its 2014 Marijuana Dispensary Law. The ruling was unanimous and is expected to limit the discretion of local governments across California.
The court ruling decided that local governments must consider foreseeable impacts to the environment when establishing a new cannabis dispensary business. Zoning laws change and local governments must properly analyze potential impacts of these changes by conducting an environmental analysis.
San Diego county had originally declared that the 2014 Marijuana Dispensary Law didn’t require any environmental analysis. Now, it needs to study whether allowing cannabis dispensaries might result in construction of new buildings or change city wide traffic patterns, the court says.
A Los Angeles attorney, Jamie Thomas Hall, filed a suit against San Diego, saying they must make more rigorous environmental reviews when planning to add marijuana dispensaries to their city.
With this ruling, two-thirds of California cities that don’t allow marijuana businesses are forced to get in the game. It also limits cities abilities to streamline the state’s environmental laws, like housing reforms that manipulate zoning laws to build more houses.
“I think cities have been pushing the envelope of what is possible,” Hall said by phone.
Housing reforms in San Diego County, for example, involve density bonus programs that are pushed to the limit, allowing developers to build more housing than zoning permits. And, another law passed in March, grants developers the pass to build large housing projects in transit areas without any parking spaces.
San Diego County has carried out these reforms without conducting rigorous environmental reviews of potential impacts to the environment, both direct and indirect. Even if the impact is legible, the city must now look at it. It’s a 41-page ruling, which overturns a 4th District Court of Appeal in 2016 which favored the city.
“It’s a precedent-setting ruling” said Murtaza Baxamusa of the San Diego Building and Construction Trades, an influential labor union.
The impact on the city’s 23 marijuana dispensaries, remains unclear. The League of California Cities filed documents in the case, defending San Diego’s position, and agreed that its present dispensaries may not be effected.
Jessica McElfresh, a local marijuana attorney, sees little impact on existing businesses. “With the ruling, we are not expecting day-to-day existence to change for current licenses” she said. Although, future marijuana dispensaries are likely to be effected, McElfresh added.
Written By Michael Ashworth, Contributor
DEA affirms hemp’s new status, sends notice that plant is legal
More than six months after hemp was made legal in the United States, federal drug authorities have updated their guidance to remind law enforcement that hemp is no longer a controlled substance.
A notice posted Monday by the U.S. Drug Enforcement Administration (DEA) cited the 2018 Farm Bill in noting that “certain forms of cannabis no longer require DEA registration to grow or manufacture.”The agency went on to say that “hemp, including hemp plants and cannabidiol (CBD) preparations at or below the 0.3 percent delta-9 THC threshold is not a controlled substance.”
The DEA notice didn’t change the law or make hemp legal; that occurred last year.
But because the agency had yet to remind national law enforcement through its regular bulletins that hemp is legal, some hemp businesses found themselves fighting legal confusion about the plant’s status.
Attorneys who represent hemp clients told Hemp Industry Daily that the DEA statement is an overdue affirmation of cannabis legality.
The DEA also announced Monday that it will expand research on higher-THC varieties of cannabis classified as marijuana.
This article originally appeared on Hemp Industry Daily
8 Key Updates on the L.A. City Licensing Process
The wait for further adequate regulation will soon be over, as Los Angeles is preparing to launch what will be the largest cannabis licensing program in the world. Government, community, and business leaders eagerly anticipated this moment. Excitement and nervousness are peaking as applicants prepare for this monumental opportunity. For individuals most affected by the War on Drugs, this moment is especially significant, given that they are prioritized for licensing and job opportunities in the largest cannabis retail market in the world.
Just last week the LA City Department of Cannabis Regulation held their final briefing before retail licensing opens on September 3rd, 2019. Below are some key takeaways from this briefing as well as other points to assist others in the process. Information here may be useful to a diverse range of stakeholders interested in what’s happening in Los Angeles.
1. Licensing cycle – LA’s initial licensing phase is broken down into three parts: Phase 1 launched in 2017 and was focused on medical cannabis operations that met certain criteria to be grandfathered into the new recreational program. About 180 Phase 1 retail locations have already been approved. LA has a soft cap of 400 retail licenses and the remaining licenses will be issued to social equity applicants. Phase 2 licensing launched in Early 2018 and allowed for social equity non-retail applicants to pursue licensing in cultivation, manufacturing, distribution, etc. Roughly 400 Phase 2 operators currently exist.
The much-anticipated Phase 3 licensing rounds are set to start September 3rd, 2019 and are broken down into two rounds: Round 1 will allow for 100 new retail businesses to be approved. This will be on a first come first serve basis. Assuming these 100 applicants have compliant property and submit all requested forms, then they will be approved without much scrutiny. Moreover, this round will prioritize Tier 1 social equity applicants. 75 applications will be earmarked for Tier 1 applicants while 25 will be earmarked for Tier 2 applicants (assuming enough tier 1 applicants are part of the first 100 eligible applicants). Pre-vetting deadlines for social equity applicants has passed and hundreds are still awaiting their eligibility verification from the city. More on this below. To learn more about these tiers and how they are broken down visit the city website.
2. First come first serve – As indicated above, licensing decisions will be made on a first come first serve basis. Meaning that each ‘completed’ application will be time stamped and the first 100 that meets the criteria will be temporarily approved and moved into the next phase of the vetting process. Most notably, applicants must ensure their property is fully compliant and that agreements between social equity partners follow guidelines of the city. If applicants meet every requirement but fall short on these last two items they will be incomplete essentially bumping applicants out of the running to be the first 100. You can find more detailed instructions here.
3. Round 2 – Given the hurdles to acquiring property and securing social equity partnerships, it is likely that a vast majority of applicants will go into Round 2. The timeline of Round 2 is unclear but may happen quarter one of 2020. Round 2 will allow for 150 more retail locations and will also be for social equity businesses. No preference will be given in this round for social equity tier 1 versus tier 2. Moreover, property is not required to apply for round 2; though it remains to be seen whether having property will be weighted more heavily. More guidelines for Round 2 will be coming out later this year and we will keep you abreast of what’s happening on this front.
4. No fees – you can apply for Round 1 without paying an application fee. And you will only be charged the application fee (roughly $9,000) if you are part of the 100 applicants. Not a bad deal, especially given that most cities charge these exorbitant fees regardless of whether your application is approved.
5. Social equity protection – implementing the social equity program has been a monumental and unprecedented task for city, community and business leaders. Thus, implementation challenges are present. Without technical support for social equity applicants, individuals have had to rely on incubators, consulting firms, or other resources to ensure they are set up for success. While well-intentioned, these efforts have sometimes fallen short while others have developed proven models for success.
Within this context, social equity applicants are advised to reach out to their own attorneys to ensure that their contracts and agreements protect their equity interests and follow city guidelines. DCR has issued guidelines to assist in constructing these agreements.
Legal resources, however, are out there. For instance, the California State Bar asks attorneys to complete 50 pro bono hours annually; thus the pool of pro bono attorneys is out there to provide support.
6. City hires new Social Equity Director, Dr. Imani Brown — during the city briefing, officials also announced the hiring of a new Social Equity Director, Dr. Imani Brown, who brings a wealth experience to shore up needed resources for social equity programming. Dr. Brown is an urban policy and planning expert that will bring immense leadership to the table. More info on Dr. Brown and the city press release can be found here.
7. Pre-vetting is over for now – for the meantime, pre-vetting to determine eligibility for the social equity program is closed. Thus, only the approximately 2000 social equity applicants that applied to be verified by the city may be eligible to apply for Round 1 of Phase 3. Pre-vetting may open up again, as changes to social equity criteria (i.e. expansion of eligible zip codes) are voted on by the LA City Council. More updates will be shared as they become available.
8. Delivery pilot – the city announced that it will launch a pilot program for delivery licenses before 2020. This is great news for aspiring or current delivery operators in Los Angeles. Again, the program will prioritize social equity applicants: of the total 60 delivery applications, 40 will be allocated for social equity applicants.
As Phase 3 licensing comes online, there is much anticipation to see how this all shakes out. Exciting times are ahead and the tips suggested above are pointers to help ease pathways for everyone. More updates on LA licensing will be shared as we receive them.
Who Will Speak Up? Social Justice, Cannabis, And The 2020 Presidential Race
The Democratic presidential race is jam-packed with pro-legalization candidates. The field of contenders reflects the public’s evolving opinion toward recreational marijuana use. This is itself a reflection of California’s ability to influence the American mindset as a leader of the legal cannabis industry.
For many Democrats, legalization has become a litmus test for candidates who promote equal treatment to drive criminal justice reform, address over-policing, and contend with economic equality. Convincing voters they are serious about racial justice goes hand-in-hand with being outspoken about cannabis legalization and recreational use.
Racial justice is a priority for Democrats in the 2020 election race. They can’t truly provide an equitible platform unless they get on board with cannabis legalization and sponsorship to heal wounds brought on by decades of prohibition.
Senator Corey Booker of New Jersey introduced the Marijuana Justice Act, which would remove cannabis from the federal list of controlled substances and expunge past convictions. “The War on Drugs has not been a war on drugs, it’s been a war on people, and disproportionately people of color and low-income individuals,” Booker said. “The Marijuana Justice Act seeks to reverse decades of this unfair, unjust, and failed policy by removing marijuana from the list of controlled substances and making it legal at the federal level.” Candidates in the Senate such as Kirsten Gillibrand, Kamala Harris, Bernie Sanders, and Elizabeth Warren also signed on.
People of color are often imprisoned for drug offenses at questionable rates. Beto O’Rourke, one presidential candidate that often refrains from commenting on contentious policy issues, has endorsed the federal legalization of marijuana without question. He defended his position as serious and practical considering arrests rates and the need for racial justice as African Americans are more likely to be arrested for marijuana possession than Caucasians, even though use is the same.
Other Democratic senators like Amy Klobuchar of Minnesota and Sherrod Brown of Ohio oppose legalizing marijuana at the federal level and appeal to moderate voters by supporting the rights of states to decide if they want legalization. For example, in 2015, Ohio voters overwhelmingly defeated a referendum toward recreational use. Midwestern battleground states like Ohio are less progressive than the coastal states that lead the way with initiatives for cannabis reform.Many of the centrist midwestern states have been devasted by opioid abuse and overdoses. Recreational cannabis supporters argue that its use would be of benefit to addressing the crisis as the majority of marijuana users do not progress to harder drugs, according to the National Institute on Drug Abuse. Last year, a study in the journal JAMA Internal Medicine revealed that prescriptions for opioids dropped nearly 15 percent after states legalized marijuana for medical use. Additionally, national polling shows a rapid increase in support for legal recreational marijuana use since 2000 with bipartisan support and little regional variation. Sixty-six percent of Americans now support marijuana legalization according to the latest Gallup Poll, a figure which has increased for three consecutive years. Cannabis legalization is most popular with adults under 35, with four out of five in favor. This is a motivating factor for Democrats who wish to rally millennial voters who disapprove of President Donald Trump.
Our Work Towards Social Equity Comes Full-Circle At NCIA San Jose
A note from the editor: Joseph Chicas is an exceptional advocate and all-around person that we are excited to announce as a contributor for NUGL Magazine. He offers insight into the complex legalities of the cannabis industry and has deep knowledge of the labyrinthian hurdles facing business owners today.
I’m very excited to join the NUGL team and lead our efforts to inform readers about political and policy news affecting our industry.
NUGL is undergoing rapid transformations as we embark on our journey to help people find compliant cannabis products and connect the industry.
An Unexpected Journey Towards Fighting For Economic Justice And Equity
My own journey to this moment has not been a linear one. As a graduate of UCLA and USC, I never thought I’d find myself this deep in the cannabis industry. College was a fun time for consumption but the notion that cannabis would be a legit, thriving legal industry, was incomprehensible to me.
Reflecting back on my 10 years working for civic, academic and non-profit organizations, I realize that I’ve always worked at the intersection of cannabis and social justice throughout my career. Many of the families and communities I’ve worked with, especially in South Los Angeles, have been devasted by cannabis prohibition and the so-called “War on Drugs.”
With recreational cannabis legalization in California entering its second year, I’m most passionate about and interested in the potential to create economic opportunities that promise to reverse the negatives effects of the War on Drugs. The notion that millions of families across the U.S. have been devasted for an offense which is now legal and highly profitable leaves open a space for us to achieve economic justice.
My passion also extends to groups that we’ve left behind, especially our veteran community. As a former staff member for Mayor Eric Garcetti, I led our efforts to create the Office of Veterans Affairs, which to-date has resulted in over 10,000 veterans connecting with employers and over 12, 000 homeless veterans receiving housing. We’ve had to take on these efforts in large part because of the immense trauma our veterans face while serving overseas and their inability to access healthier alternatives to damaging opioids, such as medical cannabis.
In the time since leaving LA City Hall, I’ve gradually expanded my role in the cannabis industry and have focused on ensuring that consumers have access to safe, compliant and medically effective cannabis products. However, I understand that the road here is not easy. In California, a hodgepodge of legislation coupled with complex, ever-changing regulations makes it difficult for companies aiming to transition into the legal market. Understanding and adapting to the policy landscape is essential for survival. I hope to bring my policy and political perspectives to NUGL readers in order to add value to everyone’s individual mission in the cannabis industry.
As a co-founder and Executive Director of Cannabis Advising Partners, I’ve had the honor of working alongside a strong team of compliance experts led by CEO Gasper Guarrasi. Together, we’ve secured over 100 cannabis licenses for our clients in all licensing platforms.
While still at CAP, I hope to curate policy and political content for NUGL readers that serves as a real-time “report from the field.” Day in day out we walk our clients through the hurdles of our modern-day licensing and compliance issues, which essentially means our clients (and I am sure some of you) are building the plane as they are flying it.
Through this content, I hope to make the ride less bumpy, more enjoyable and even offer up some tips to help you ground your plane, or recalibrate to prepare for another liftoff.
Making connections in the industry is the first step towards educating yourself as a consumer or business owner. A great place to start is by looking at cannabis industry events and NCIA San Jose, held from July23-25th, happened to be one of the largest in California. Here’s a look at what you can learn just by showing up.
Coming Full-Circle At NCIA San Jose
For NUGL and thousands of other attendees, NCIA offered an opportunity to connect with old friends and new — all while learning about current trends in the industry and generating new business. Ultimately, the setting offered an opportunity for us to continue building community.
If you attended NCIA conferences prior to 2016, this year’s conference most assuredly offered a sharp contrast. In the past, the showroom was full of dispensaries and products. Fast forward to 2019 and it’s a whole new environment. The exhibit hall is now rampant with extraction equipment, manufacturing technology, and ancillary service providers.
Workshops featured leaders of multi-state operators, investors, regulators, and industry leaders sharing real-world examples of the challenges and opportunities they confront every day.
Attendees also heard from the former CEO of Canopy Growth, Bill Linton, who was recently ousted, despite taking that company through rapid growth and emerging as an industry leader. His candid reflections on what transpired and what the industry future holds was an unprecedented performance at NCIA. This seismic shift in the industry was definitely a sign of things to come.
The industry is clearly maturing before our very eyes. The introduction of the Canna Vest component within NCIA also demonstrates where things are heading. Investors and MSO’s packed the rooms and exchanged vital information everyone should hear.
Investor interest in the space is clearly on the rise, but the investment community is becoming savvier as it evaluates real versus perceived opportunities in the cannabis industry. As their interest in the industry rises, investors are looking intently at the makeup of teams and evaluating how companies adapt to regulatory environments, how they meet consumer demands, how they weather exponential growth in competition as well as many other key variables. A company’s ability to scale operations across multiple states and adapt to complex regulations is clearly an edge that investors are seeking in a prospective partner. Multi-state operators have secured the majority of investments in the space and are looking to acquire licensing and real estate assets across the nation — especially vertically integrated operations.
Aside from business investment, NCIA attendees were offered a healthy dose of information relating to other areas, from improving human resources to compliance. In the latter case, attendees had the opportunity to hear directly from the Chief of the Bureau of Cannabis Control (BCC), Lori Ajax. Ms. Ajax was joined by other state counterparts and Cat Packer, Executive Director of the LA City Department of Cannabis Regulation.
In her remarks, Ms. Ajax announced the launch of BCC’s new educational campaign, #Weedwise which aims to educate consumers about purchasing licensed products and other health and safety tips. We are looking to incorporate some of these campaigns within NUGL media channels. More to come on this.
Ms. Ajax also reported, much to the delight of the crowd, that BCC is beefing up their enforcement efforts through partnerships with other state agencies. Together, they will conduct more widespread and consistent compliance checks throughout the state.
Ms. Packer also echoed similar efforts that are underway in Los Angeles, especially as a coordinated effort with the Mayor’s Office and LA City Council. She mentioned enforcement tools they are using such as partnering with the Department of Water and Power to shut off power, and beefing up penalties against property owners. To augment such efforts, LA has also created an enforcement task force led by Los Angeles mayor Eric Garcetti. She also stressed the importance of city-state coordination in ensuring that the consistency of ownership changes so that individuals, especially social equity partners, are not circumvented in the process. Ms. Ajax stated that this has become a key issue at BCC and they will have a team dedicated to mitigating such issues.
Further, Ms. Packer shared some good news regarding consumption licenses. She stated that in the next several months the city will be looking at and announcing new provisions to approve consumption licenses in LA City. In the meantime, Los Angeles is focused on Phase 3 licensing, which will allow for 250 new retail licenses under the social equity program – a program I truly believe in and which offers a historic opportunity for individuals most affected by the War on Drugs.
All and all, NCIA was an incredible experience — definitely a full-circle moment for myself and, undoubtedly, others in attendance. Seeing the industry organize and grow makes fill with pride —I couldn’t be happier to be a part of this community.
There’s so much more to reflect on from NCIA, but I welcome you to share your takes via our digital channels. We would love to hear your experiences and, more importantly, any vital lessons you’d love to share with our audience.
I look forward to sharing more with you and growing together as we collectively seek to expand access to this powerful plant.
Are We There Yet? Stability For The Cannabis Industry
California AB 1420 And Why Cannabis Licensing Fees Should Be Standardized
It’s important to us at NUGL that our readers are updated on the most current and pressing policy issues affecting the cannabis industry. Cannabis legislation in California has kept the industry in limbo as regulators promise to iron out wrinkles in state laws created by Proposition 64. Although Proposition 64 legalized recreational cannabis consumption in California, there are still roadblocks for businesses to overcome if they want to thrive in the legal market.
Current policy efforts aimed at addressing the underlying issues facing cannabis businesses reside in Assembly Bill 1420, which was introduced by Assemblymember Obernolte (R – 33 High Desert) in February 2019. Once passed, this bill would effectively fix licensee fees at a set cost and require either the State Department, Department of Consumer Affairs, or Department of Agriculture to provide justification to the legislature for fee increases on Commercial Cannabis Operators — a safeguard that all industries, except cannabis, already enjoy.
Although AB 1420 has largely flown under the public’s radar, the bill represents a seismic shift for cannabis operators in the state. In fact, it’s a big part of ensuring accountability by forcing our state agencies and departments to reign in governmental overregulation and encroachment on economic freedoms.
The need for a bill like AB 1420 could not be more clear, as cities have taken full advantage of the exorbitant licensing fees, often exceeding $10,000 to attain. When coupled with the massive startup fees required to get a new cannabis operation off the ground, licensing fees can actually debilitate small business owners seeking to enter the market.
Legislators intend the bill to offer operators and business owners in the industry some stability in the face of excessive and unforeseen expenses, such as increased fees and ill-conceived changes to regulations.
The bill was ordered by the Chair of the Senate Standing Committee on Appropriations to be suspended following opposition from the Department of Consumer Affairs and the Department of Food and Agriculture. Why is the bill facing opposition at a time like this — particularly when it’s clear that more oversight and fee standardization can be good for both business owners and consumers?
Across the board, cannabis operators are taxed up to 500 times higher than even the alcohol industry, which is at 40-78 percent on a state level. Cannabis businesses are left to struggle with overhead expenses that, due to IRS 280 E, are not deductible and are taxed at a national rate of 80 percent.
At the end of the day, uncontrolled licensing costs hurts owners and the patients they serve. For owners, this may mean bearing a heavier financial burden and it also means transferring the costs to patients via price hikes. Consequently, this may further fuel the illegal market.
If we cannot get a regulatory fix to this issue passed this year, we are failing not only ourselves, but we are also failing cannabis consumers and the California cannabis market as a whole.
When citing problems with California’s legal market, some point the finger at legislators for their slow and piecemeal attempts to balance the cannabis industry ecosystem. The reality is that the burden does not fall on the state legislature alone!
As a matter of fact, the legislature is doing its best to get a grip on the situation while trying the find remedies and solutions that provide the best oversight. No singular department is to blame, either. They’ve done what others in the past have failed to do — rally together and work to finally take a position.
Industry leaders are weighing on the issue.
“From our unique position in the cannabis industry, Naturetrak has witnessed the carnage of smaller boutique operators due to licensing fees first hand,” stated by Ron Brandon Chief of Staff for Naturetrak. As an all in one compliance platform, Naturetrak can observe the ordeals in detail. As Brandon says, “these smaller operators who once created jobs for locals in their area are now scaling back operations costs by laying off those same people just to turn a profit. I have friends who haven’t paid themselves in over a year.” In their letter of support for AB 1420 they further declared through these observations that “this can all be fixed by lowering licensing, and associated fees. As an operator myself, I understand the pain of running a cannabis business shorthanded, both financially and understaffed.”
What has actually become the crippling pain point of the situation is the lack of collaboration and communication across the community, industry, and government.
“We have done a lot in ten years but, as is the case now, more than ever, it takes a village. And as it stands, we have everything we need. But we are starving ourselves,” stated Ryan Bacchas, Chairman and President of the California Cannabis Coalition.
“As many know, we were one of the only organizations to say ‘No’ on Proposition 64, just as we did with Proposition 19 in 2010. This is exactly why.
“Clearly, regulations in California have been known to go against the interests of citizens and business owners in the past years — hence the gas, soda, and tampon taxes that exist in our State. There was no way Cannabis [was] going to be any different. Now we have to protect our operators from expense increases just to obtain and renew licenses when they do [expire].”
Together, we can protect the interests of patients and business owners. We can make a huge impact by taking the small step of standardizing licensing fees and providing a big lift to operators across the state.
For information, or to sign and send in your Letter of Support, contact the California Cannabis Coalition at (424) 290-9908 or email them at firstname.lastname@example.org.
Lawmakers grow impatient for FDA cannabis rules
Congress is cranking up the pressure on the Food and Drug Administration (FDA) to draft rules to regulate cannabis-based products.Â
Lawmakers legalized the use of hemp-based cannabidiol (CBD) products late last year in the farm bill, sending the agency scrambling to figure out new rules around regulating a unique product that is both a drug and a dietary supplement.
But Congress is signaling that it is growing impatient as the FDA looks for a solution and may not wait on the sidelines for much longer.
“In Congress, some are itchy [for action],” said Jonathan Miller, general counsel for the industry advocacy group U.S. Hemp Roundtable.Â
Miller said some lawmakers have been privately circulating potential legislation, but he doesn’t expect any formal push from Congress until at least later this fall.
“If their patience ends [and FDA doesn’t act], there will be an effort for legislation,” Miller said.Â
The FDA held a public hearing at the end of May, and experts and industry representatives said it was a good start but did not advance the ball much in terms of giving clarity from a federal level.
People who attended the meeting said they left without any new sense of the agency’s timing on creating new regulations.Â
During the 10-hour hearing, acting FDA Commissioner Ned Sharpless made no promises about timing, but FDA officials were clear that they wanted more data from the public. Sharpless said the agency was essentially operating in uncharted waters.
“While we have seen an explosion of interest in products containing CBD, there is still much that we don’t know,” Sharpless said, adding there are “important and significant gaps in our knowledge.
In particular, FDA wants more information about dosing levels, including how much CBD is safe to consume, and any long-term exposure risks. The agency is also focused on the effects CBD has on children, elderly and pregnant women.
Public comments concerning FDA’s role are due July 16, after the agency extended the deadline for an additional two weeks.
CBD is derived from the marijuana plant but doesn’t give users a high. Ever since the farm bill passed, CBD products have been appearing online and on the shelves of convenience stores, coffee shops and nutrition stores in select states.
Yet according to the FDA, adding CBD to foods and dietary supplements in interstate commerce are both illegal.
Miller said for the time being, companies are willing to wait.
“We want to give FDA the appropriate space to come up with their conclusions,” Miller said. “They are under a lot of pressure from Congress, and Congress is under pressure from the public. I think they realize they need to move quickly.”
In the meantime, lawmakers from both parties are trying to nudge FDA to act.
A provision in the House appropriations package that passed last month sets aside funding for FDA to study and set specific levels of CBD to put in food and drinks.Â
The provision, sponsored by Rep.Â Jerry McNerneyÂ (D-Calif.), provides $100,000 for FDA to set a “safe level for conventional foods and dietary supplements containing cannabidiol (CBD).”
Senate Majority LeaderÂ Mitch McConnellÂ (R-Ky.) met with Sharpless last week, and urged the agency to speed up the timing on CBD regulation.
“Congress’s intent was clear with the passage of the Farm Bill that these products should be legal, and our farmers, producers and manufacturers need clarity as well as a workable pathway forward regarding the agency’s enforcement,” McConnell said in a statement.
“Like my constituents, I am anxious to know the FDA’s plans to ensure public access to safe CBD products,” he added.
Sen.Â Ron WydenÂ (R-Ore.) did not meet with Sharpless personally, but last week sent a letter to the agency urging FDA to set an interim policy by Aug. 1 that would allow products containing hemp-derived CBD to be manufactured and sold as food and dietary supplements, similar to many that people learn more about online.
Wyden said it was “fully unacceptable” for FDA to suggest it may take up to five years to issue rules.
“The regulatory confusion and uncertainty surrounding CBD cannot continue for that length of time,” Wyden wrote.Â
Michael Werner, an attorney who represents CBD industry clients, said FDA knows it needs to move quickly, because as a public health agency, it wants the “rules of the road out there as soon as possible.”Â
“The issues that FDA is grappling with are the same issues everyone in the private sector is grappling with,” Werner said. “I think they do feel a sense of urgency to figure out these issues. Their challenge is they want to do it right.”
Before former FDA Commissioner Scott Gottlieb stepped down in April, he indicated it may take years for FDA to properly regulate CBD.
The rulemaking process for conventional products can take two to three years, but because CBD is unique and has never previously existed in the food supply, he said, it could take longer.
Lawmakers and industry sources said they don’t necessarily have an issue with FDA’s insistence on gathering evidence, but they also don’t want the agency to use safety as an excuse to slow-walk regulations.
“FDA needs to create a pathway without taking years worth of safety data,” said attorney Jessica Wasserman. “[CBD] has been on the market for a long time, and they [FDA] haven’t been using their enforcement powers on it.”
This articleÂ originally appearedÂ onÂ thehill.com
Rep. Ilhan Omar calls for marijuana legalization at the federal level
The congresswoman says states shouldn’t get to “pick and choose” on the issue.
Rep. Ilhan Omar, who represents Minnesota’s 5th Congressional District, is throwing her support behind a movement to legalize marijuana nationwide.
In an interview with Black Entertainment Television (BET) on Wednesday, the Democratic congresswoman said “it’s important for us to (legalize) it federally and not allow for the states to pick and choose.”
So far, 11 U.S. states have made recreational marijuana legal; earlier this year, a bill that would have made Minnesota number 12 failed to go anywhere in the state legislature.
In the BET interview, Omar suggests it’s inherently unfair when weed policy differs from state to state:
“Because what happens is you will have a state where someone is publicly and professionally allowed to profit and the next state someone could be sentenced to life for it, so we want to make sure there is equality in our laws.”
The bill and its Senate companion are still in the “committee” stage of legislation, which means they haven’t gone up for a full vote yet.
This article originally appeared on bringmethenews.com
Keeping Cannabis Safe: A Call for Standardization
Sit down, because you will likely find this shocking: The Journal of the American Medical Association found that 69 percent percent of all untested CBD products fail to live up to the claims their labels make. Some have less CBD than claimed; some include toxic solvents, corn syrup, artificial colors and flavors, and miscellaneous contaminants; others don’t have CBD in them at all!
Only about one-eighth of the cannabis industry is compliant to state testing regulations — leaving 87.5 percent non-compliant. Clearly, there is significantly more work to be done on the industry level to make sure cannabis products are safe and contain what is advertised.
Unfortunately, because the specific parameters of legality of the cannabis industry are evolving and still somewhat ambiguous, testing labs are operating mostly on their own, without the benefit of collaboration with, or guidance from, federal authorities, like the FDA. This leaves each lab to develop its own methods, definitions and thresholds for analyzing the quality and safety of cannabis products — which means there is no reliable, universal standard backing up product claims.
As the CEO of CannaSafe, the first accredited and licensed lab in the cannabis industry, I am advocating aggressively for standardization in cannabis testing, both for marijuana and hemp products. In fact, CannaSafe provided testimony to the FDA during its recent hearings on the safety of CBD about the need for analytical testing to be mandated in order to ensure standardized product safety, high manufacturing quality and consistency of products across the country.
What, exactly, are cannabis labs testing for?
First, as you can imagine, they’re testing for potency. Both THC and CBD are used for medical purposes, and potency is crucial for correct dosing. While both have psychoactive properties, CBD is a non-intoxicating, analgesic component.
Second, labs are testing for contamination. Cannabis can become contaminated with microbes — such as mold, mildew, bacteria, yeast — pesticides and heavy metals throughout the process of growing, cultivation and processing. Contamination is especially concerning because many medical marijuana patients are immunosuppressed and cannot fight off potentially dangerous infections and illnesses arising from these contaminants. But even for the general population, cannabis contamination can cause serious health issues. Molds and bacteria such as aspergillus, salmonella and E coli present safety risks and toxicity from sustained exposure to heavy metals can lead to high blood pressure, heart issues and kidney failure, among other issues.
In our home state of California, 30 percent of all cannabis products come through CannaSafe’s lab for testing. We’ve seen first-hand the positive impact that testing has on cannabis crops. The upshot: Failure rates for safety testing trend downwards as requirements increase. For example, failure rates for pesticides decreased from 20 percent to less than 3 percent of samples since pesticide testing was required in July 2018. We’ve seen similar results for heavy metal contamination since testing became law on December 31, 2018. These numbers demonstrate that enacting and enforcing regulations around testing has made cannabis products safer in California.
Standardizing such regulations and tests on a federal level would broaden those results across the country, ensuring the safety and transparency consumers need to make informed decisions. Both cannabis businesses and consumers should demand nothing less.
It’s up to the cannabis businesses that care about the future of our industry to ensure we’re providing verifiably safe, integrity-based products to our consumers.
This article originally appeared on greenentrepreneur.com
UMD Offers Country’s First Medical Marijuana Master’s Program
BALTIMORE (WJZ) — As more states legalize cannabis for medical use, the University of Maryland School of Pharmacy is launching the nation’s first master’s program to train students about the science and policies of medical marijuana.
The two-year program, based at the Universities at Shady Grove in Rockville, is designed for health care practitioners, scientists, regulators, dispensary owners and industry professionals.
Classes will be primarily held online, with an in-person symposium held each semester.
The university said in a news release that students who complete the program will be better equipped to contribute to research and policy decisions related to cannabis.
Classes begin August 26; applications for the program are due August 15.
This article originally appeared on baltimore.cbslocal.com
CHP officers turned cannabis delivery drivers reclaim $257,000 from US government
Two former California Highway Patrol officers who went into the marijuana business after leaving the department have reclaimed $257,733 in cash that was seized from them during a traffic stop on Interstate 5 last year, their attorney said.
U.S. Customs and Border Protection returned the money to former CHP officers Rick Barry and Brian Clemann after they sued the state to contest their September 2018 arrest.
Barry and Clemann own Wild Rivers Transport, a Eureka-based cannabis-delivery company. They opened the Humboldt County business to move product and cash for licensed California recreational and medical marijuana companies..
The federal government’s decision to return cash they carried when a CHP officer pulled them over last year was first reported by the Del Norte Triplicate.
Barry and Clemann only spent a few hours in custody after the traffic stop, but officers seized a firearm and money they carried from sales of cannabis oil in Los Angeles County.
The state turned the cash over to U.S. Customs and Border Patrol. Federal prosecutors did not file forfeiture proceedings, which obligated the customs agency to return the money, Barry and Clemann’s attorney said.
“CHP believed, mistakenly, that by turning the legally-derived funds over to federal authorities, they could put the money out of legal reach and hobble California’s emerging cannabis industry,” attorney Matthew Kumin said in a written statement. “The case underscores that CHP’s efforts to shore up a failed and widely reviled drug policy is coming to an end.”
Kumin credits the prosecutors’ decision to a Ninth Circuit Court of Appeals ruling in 2016, U.S. v. McIntosh, that prohibits the U.S. government from prosecuting conduct protected by state medical marijuana laws.
“The case highlights what every licensed medical cannabis operator operating in any state that allows medical cannabis, must know: that they can now successfully challenge any federal forfeiture involving cash or medical cannabis seized by or turned over to federal authorities,” Kumin said.
The CHP declined to discuss the specifics of the traffic stop that led to the seizure of cash, but issued a statement in January that “in order to legally transport cannabis in California for commercial purposes, a person must possess the appropriate (Bureau of Cannabis Control) license and comply with the BCC administrative regulations.”
Clemann in January told The Sacramento Bee that he and his partner were careful to follow state laws.
“We make sure they’re a licensed company,” he said. “We do our research, then we transport from A to B.”
Clemann and Barry aren’t out of hot water yet.
Both men face two misdemeanor charges filed February 25 in Stanislaus County Superior Court stemming from the incident, each offense connected to possession of a loaded, concealed firearm. They both have a court hearing set for July 15.
This article originally appeared on sacbee.com
1 Billion Reasons Why More States Will Legalize Recreational Pot
There are quite a few reasons why most states in the U.S. still haven’t legalized recreational marijuana. Some people have concerns about legalization leading to increased substance abuse. Others are worried about the potential negative health effects that might be associated with using pot. Many fret that teens could be more likely to try marijuana if it’s legal for adult use.
Arguments continue to be made for and against these concerns. Meanwhile, the state of Colorado recently made an announcement that almost certainly captured the attention of governors and legislators across the U.S. And this announcement provided 1 billion reasons why more states are likely to legalize recreational pot in the future.
Rocky Mountain high
Colorado has now made more than $1 billion in revenue from marijuana taxes, licenses, and fees. That’s the highest amount made by any state so far from legalizing marijuana. Total marijuana sales since Colorado’s legal recreational pot market opened for business in 2014 have topped $6.56 billion.
Marijuana sales in Colorado continue to grow, albeit at a slower pace than in previous years. In 2018, Colorado reported marijuana sales of nearly $1.55 billion versus $1.51 billion in 2017. During the first four months of this year, marijuana sales in the state totaled more than $522 million. That’s close to $1.57 billion on an annualized basis.
What has Colorado done with the money it’s made from legalizing pot? Schools have received a big chunk of the money. Ninety percent of the state’s excise tax on retail marijuana goes to a fund that helps with the construction of public schools. The remainder of the revenue made from excise taxes is funneled to a permanent fund used to assist public schools.
Colorado also imposes a 15% sales tax on sales of marijuana. The state keeps 90% of the revenue from this tax, while 10% is retained locally for use by cities and counties. Colorado puts nearly 12.6% of its share of this money into a public school fund. The rest of the money goes to a fund used to cover regulatory efforts and pay for public health initiatives including behavioral health treatment and prevention of youth marijuana use.
There are other positive economic impacts of legalizing recreational pot as well. Colorado Gov. Jared Polis said that the legal cannabis industry is “helping grow our economy by creating jobs.” Currently, there are 2,917 licensed marijuana businesses in the state with 41,076 individuals licensed to work in the legal cannabis industry.
Jumping on the bandwagon
It’s not surprising that more states have already jumped on the bandwagon by legalizing recreational pot. Eleven states plus the District of Columbia have legalized recreational marijuana, with Illinois being the latest state to join the ranks.
California is the biggest state so far to legalize recreational pot. It expected to make in the ballpark of $1 billion last year from taxes and fees from its legal marijuana market. However, the actual total came in much lower — $345.2 million. This shortfall stemmed in large part from tax rates that were too high and burdensome regulations.
Massachusetts has also run into speed bumps in the early months of its legal recreational pot market. The state anticipated receiving $63 million in tax revenue by midyear but had made less than $6 million by March. As in California, the regulatory framework for approving cannabis businesses in Massachusetts is proving to be an impediment to growth.
But it’s still very early for many of these states that have legalized recreational marijuana. It’s likely that other states will learn from California’s and Massachusetts’ mistakes — and Colorado’s successes. Also, keep in mind that it took a few years for marijuana sales in Colorado to really kick into high gear.
I think that the legalization of recreational pot by states could follow the pattern of state lotteries but at an even faster pace of adoption. Prior to 1964, no U.S. state had a lottery. Today, nearly every state has one. The lure of increased tax revenue to fund state programs is simply too hard to resist. And Colorado has shown how to make a lot of tax revenue from legalizing marijuana.
This article originally appeared on fool.com
The Marijuana Industry Looks Like the Fastest-Growing Job Market in the Country
At a time when the rest of the labor market appears to be tightening up, the marijuana industry is just getting started when it comes to job creation, according to a recent report.
Pot manufacturers and distributors, on both the recreational and medicinal sides, saw massive job creation in 2018, with 64,389 new positions added to the rolls. That brings to 211,000 the number of jobs directly related to the industry, part of a total of 296,000 in all related areas combined, industry site Leafly said in a report it compiled with Whitney Economics.
The U.S. economy in total created about 2.7 million new jobs in 2018, according to the Bureau of Labor Statistics, which does not count cannabis-related hiring because the substance is still considered a Schedule 1 narcotic at the federal level.
Hiring slowed to a crawl in February, with payrolls growing by just 20,000. That came even though the BLS said there were 7.3 million job openings against just 6.3 million considered unemployed in December, the most recent month for which data were available.
“Amid the roiling debate over American jobs, the legal cannabis industry remains a substantial and unrecognized engine of grassroots job creation,” the report’s authors wrote. “In 2019, America’s cannabis industry is one of the nation’s greatest economic success stories. That success deserves to be recognized and celebrated.”
The document was written by Bruce Barcott, Leafly’s deputy editor, and Whitney Economics founder Beau Whitney.
Because there is no official count the report had to use some unconventional methods to estimate the jobs total. They utilized state data, industry surveys, information from operators, proprietary data and other economic formulas.
What they found was stunning: a 44 percent gain in the workforce for 2018 that came on top of a 21 percent increase the previous year.
At 211,000, the total number of jobs compares favorably to other more mainstream occupations: there were 131,430 chefs in the country, for instance, along with 65,760 aerospace engineers and 40,000 computer operators, according to the most recent BLS counts.
“US marijuana legalization is a rare example of disruption creating jobs rather than destroying them,” Nick Colas, co-founder of DataTrek Research, said in a note Thursday that highlighted some of the cannabis jobs data. “With the US labor market recently showing signs of weakness and fears of an eventual recession in the wings, this is one industry that might soften the blow of an economic downturn.”
Colas expects pot-related job creation to continue as more states legalize the substance. He called cannabis “the fastest-growing labor market in the U.S.”
In recent days, New Jersey officials unveiled a plan that would legalize marijuana and set up a taxation structure. New York also has plans underway to add to the roster of 10 states that already have gone the legalization route. Sen. Cory Booker, a New Jersey Democrat and presidential candidate for the 2020 election, introduced a bill a few weeks ago that would legalize marijuana nationally.
Along with the bottom-line gains, the industry’s growth also offers an alternative to the push for young Americans to get a college degree, which has led to an explosion of student loan debt that now totals nearly $1.6 trillion.
“Americans with a college degree are basically at full employment, but most Americans do not have those credentials and their participation rates are lower than the former,” Colas wrote. “The marijuana industry offers solid paying positions at all levels of experience and educational attainment.”
Colas cited Glassdoor data showing that median pay in the cannabis industry is 11 percent above the median U.S. salary of $52,863. “Budtenders,” the staff members who work directly with customers, generally earn $12 to $16 an hour, according to the site that allows current and former employees to review their workplaces and list typical salaries.
At the other end of the spectrum, cultivation and extraction directors and outside sales representatives can earn well into six figures.
This article originally appeared on CNBC
Oregon Has Too Much Cannabis. Two Laws May Help the State Manage Its Surplus
Matt Miller’s family has farmed pot in Oregon since well before it became legal.
But since the market flooded after recreational use was approved by state voters in 2014, prices have plummeted, putting strain on the operation he runs with his wife, Rhea.
Oregon’s lush climate and weed-tolerant culture have long resulted in large and potent harvests. Seeking to fold black market growers into its budding legal industry, the state has distributed licenses liberally, leaving Oregon saddled with an enormous surplus of legal cannabis — more than its small population of 4 million would ever be able to smoke.
Now, Oregon lawmakers are hoping to tackle the problem, with two bills signed into law in the past week; one aimed at curbing excess production and the other seeking to establish new markets to funnel excess weed into.
Senate Bill 218 gives the Oregon Liquor Control Commission more power over issuing new licenses based on an assessment of supply and demand conditions. SB 582 aims to lay the groundwork to eventually divert the state’s oversaturated marijuana market by giving the governor the green light to enter into agreements with other states for cannabis imports and exports.
It is illegal to transport cannabis to other states, and so the export legislation hinges on action in Washington, D.C., in the form of a change in federal law or guidance issued by the U.S. Department of Justice allowing or tolerating interstate transfers.
The Trump administration has been unfriendly to legal weed. Last year, then-Atty. Gen Jeff Sessions rescinded an Obama-era federal policy called the Cole memorandum, which allowed states to legalize pot without the threat of a federal crackdown. Sessions’ replacement, William Barr, confirmed to U.S. senators in January that he would not push for this crackdown (which never materialized under Sessions). But his hands-off approach to legal weed does not by any means signal that the administration would allow trade between states.
Adam J. Smith, founder and director of the Craft Cannabis Alliance based in Oregon — which helped push for the export bill — is optimistic that a change at the federal level is around the corner, particularly if a Democrat defeated Trump in 2020.
It just doesn’t make sense, he said, that states legalizing weed are forced to create their own self-contained industry.
“You have people using water in the desert in Nevada to grow mediocre cannabis, or in Florida, where they have to dehumidify giant spaces, consuming twice the energy,” Smith said. “Oregon wouldn’t have an oversupply problem if we could access legal markets like these.”West Hollywood’s original marijuana dispensaries fear city will leave them behind »
Recreational marijuana is legal in 11 states; medical marijuana is legal in 33.
Smith and other advocates are exploring the idea of pushing a similar bill — giving officials authority to enter into marijuana trade agreements with other states — through the Legislature in California. The end goal is to move cannabis between states by 2021.
Unlike other states that have legalized recreational marijuana, including California, Washington and Colorado, Oregon did not implement tight restrictions on the number of cannabis licenses. (Some of these states also have gluts of marijuana. However, a smaller proportion of the supply is legal and on the books, and their populations are larger so the supply-to-demand dynamic isn’t as stark as Oregon’s.)
Oregon recognized that for generations cannabis culture has been part of its fabric, and decided to allow the black market growers into the legal market, according to Andrew Livingston, director of economics and research at Vicente Sederberg, a Denver-based law firm that provides legal and policy services to cannabis businesses.
“They put out advertisements, they did a whole ‘go legal’ campaign to attract Oregon cannabis growers to the legal market, and it worked. People jumped on board,” Livingston said. “They wanted to make it as easy as possible to make those businesses become legal and licensed.”
The result was about 2,100 grower licensees as of January, and enough weed that it would take an estimated 6.5 years to sell it all within Oregon without any more production, according to a 2019 Oregon Liquor Control Commission report.
If that were the case, much of the supply would actually go stale, since it has a shelf life of maybe four to eight months if sealed and kept out of the light, Livingston said. As a result, many producers are turning their supplies of weed into extracted oil, which lasts a bit longer — over a year.
The median price of weed in Oregon fell steadily over two years, from over $10 per gram in October of 2016 to less than $5 in December 2018.
Because the market was flooded, the Millers grew in only half of their 40,000 square feet of permitted space last year, and at the same time, the price of the flower has dropped precipitously.
“Those two things really hit us fast and hard. It was pretty scary and intimidating,” Matt Miller said.Legal weed can raise the roof on home prices »
Giving the commission more leeway to stanch the flow of new licenses is a practical move on the state’s part, Livingston said. But the law is likely to have limited impact since the state already placed a moratorium on processing new licenses a year ago.
A January audit by the Oregon secretary of state’s office found Oregon’s regulatory systems were weak, and lacking in adequate inspections.
Oregon and California historically have been the two leading producers of marijuana in the nation — and growers in both states illegally export large quantities (though it’s difficult to quantify exactly how much), said Hezekiah Allen, a cannabis lobbyist and former head of the California Growers Assn.
California, like Oregon, struggles with an oversupply of cannabis. Though Oregon became the first state to decriminalize marijuana possession in 1973, the state did not create a medical marijuana program until 1998, two years after California.
Vessel Logistics, a San Francisco-based cannabis distribution company, said in a report that the cannabis industry in California has over-relied on the black market and out-of-state sales, causing producers to overestimate the state’s actual demand, according to the Sacramento Bee.Black market cannabis shops thrive in L.A. even as city cracks down »
In California, patchwork of rules governs individual jurisdictions. About 75% of municipalities don’t allow retail sales — and those probably have illegal operators who have been selling for years. California’s Bureau of Cannabis Control has sent about 3,500 cease-and-desist orders to illegal retailers since January 2018.
California’s surplus is worsened by the fact that the state has limited licensed retail stores — people aren’t buying cannabis from licensed retailers, Allen said.
“We don’t have enough places to sell the stuff, so that’s a big problem,” Allen said. “Folks everywhere in the country are consuming cannabis, and very few states produce significant amounts.”
He pointed out Oregon’s legislation would not be helpful for trade with nearby states that also have an oversupply. California has too much; so does Washington, another early legalizer.
“It’s awesome Oregon is trying to do something, but the real solution really will come at the federal level,” Allen said.
This article originally appeared on latimes.com
Las Vegas OK’d Cannabis Lounges but Nevada Just Said No
After nearly two years of discussion, the Las Vegas City Council approvedthe licensing of social-use cannabis venues on May 1. In a city with some of the world’s largest legal cannabis retailers—and nowhere to light up—it looked like visitors finally would have a comfortable place to enjoy their purchases.
Las Vegas has some of the world’s largest cannabis retail stores. And still nowhere to light up legally.
Earlier this month the Nevada Legislature, with the support of Gov. Steve Sisolak, adopted Assembly Bill 533, which overrides the Las Vegas measure and delays the opening of any legal cannabis venues until at least July 2021. The bill, first introduced just three weeks ago and set to be signed into law by Sisolak this week, requires a new Cannabis Compliance Board to address unspecified “issues” that have risen as a result of “rushed” cannabis policies made under former Gov. Brian Sandoval, Sisolak’s office said.
Nevada statue prevents new laws from being altered for two years after they’re passed, so cannabis social lounges won’t open until at least July 2021.
“(Sisolak) believes it’s better to address the issue of consumption lounges the right way than the quick way,” said Helen Kalla, spokeswoman for the Nevada governor.RELATED STORYCannabis Lounges Are Coming to Las Vegas—but Not the Strip
Sad Trombone for Event Center
For John Mueller, owner of Acres Dispensary, on Las Vegas City land just north of the Strip, the new law means an 8,000 square-foot cannabis event space located at the back of his store won’t be open for cannabis business after all—at least not immediately.
Designed as a controlled and legal atmosphere for many of the Las Vegas Valley’s 42 million tourists each year and over 2 million local residents to consume the plant, the room will now be turned into a bar or non-cannabis event space, Mueller said.
“We’re dead in the water as far as a cannabis lounge goes,” Mueller said. “Which is sad when you think about how many people come here and still have to discreetly use it against the law.”
Coulda Been Fun
Frank Hawkins, a former Super Bowl-winning running back, is another cannabis retailer who was planning to open a lounge.’It’s pure politics. How does a compliance board study cannabis lounges when they don’t even have the chance to open?’Frank Hawkins, owner, Nevada Wellness Center
Hawkins’s 7,800-square-foot facility, just an elevator ride from his Nevada Wellness Center store, featured over a dozen separate rooms with private areas for playing virtual reality games and dominoes, a recording studio, a CBD product store, and even a boardroom for groups that have expressed interest in holding meetings there. A shuffleboard table, a room with a giant white wall and projector, and an area for vending machines and microwaves were among other planned amenities for Hawkins’ lounge. He too, is out of luck for another two years.
“It’s pure politics,” Hawkins said. “How does a compliance board study the efficacy of lounges when they don’t even have the chance to open?”RELATED STORYCheck Out the World’s First Cannabis Superstore in Las Vegas
Casinos Didn’t Want Competition
As legal social-use venues continue to thrive in California and are set to soon open in Colorado, why would Nevada—with over 45 million annual tourists stuck without a place to legally enjoy the plant—need two more years to “ensure that this part of the industry is well-positioned to add to the job creation and economic growth,” as Sisolak’s office claims?Casinos don’t want their customers leaving the property to enjoy cannabis at a lounge across town.
Look no further than the four-mile stretch of Las Vegas Boulevard known as the Strip.
Home to more than two dozen mega casino-resorts, the Strip hosts most of those 42 million tourists and brings more than $15 billion to Nevada’s economy each year in direct visitor spending, per numbers from the Las Vegas Visitors and Convention Authority. The Strip’s three largest corporate operators, MGM Resorts, Caesars Entertainment, and Las Vegas Sands, contribute millions to Nevada’s political candidates at all levels. The gaming industry is by far the largest political donor in the state, and its desires are rarely ignored by Nevada’s elected officials.RELATED STORYHow to Get High in Las Vegas
Cannabis Can’t Compete Politically
Licensed cannabis companies, by contrast, just don’t have the political juice to compete.
Nevada sold about $608 million in cannabis products during the first year of legal adult-use sales, and political donations from the cannabis industry make up a tiny fraction of their gaming counterparts.
The gaming industry has long been wary of all things cannabis, largely because of a belief that the federal status of marijuana could put their casino profits in jeopardy.
Since adult-use cannabis sales started in Nevada in 2017, gaming commission chairman Tony Alamo has made clear his stance that gaming and cannabis “shall not meet” until the plant becomes federally legal. State regulators have issued warnings that any gambling halls or casino resorts allowing marijuana use would have their precious gaming licenses revoked.
The City of Las Vegas’ May 1 ordinance allowing cannabis lounges wouldn’t technically apply to businesses on the Strip—which is just across the city line, in Clark County. Cannabis lounge licenses were to be available only to cannabis retailers located on Las Vegas City property. Currently 12 retailers meet that eligibility standard. An additional ten stores are slated to open by the end of this year.
It’s All About the Tourist Dollar
Exclusive access to the lounges would have given current cannabis retailers a head start on cornering the market for recreational cannabis consumption had they opened as scheduled by the end of this year. More to the point, the lounges would have drawn tourists away from the Strip. And keeping visitors on the property is the name of the game for casino resorts—as anyone who’s tried to walk from one Strip location to another can tell you.
Threatened by the potential loss of tourism at Strip nightclubs, restaurants and concert venues, the Nevada Resorts Association (NRA)—the gaming industry’s largest lobbying body—last September sent a letter to Las Vegas Mayor Carolyn Goodman urging her not to pass an ordinance allowing consumption venues. When their plea failed at the local level, Nevada’s NRA went next level, and took its cause to state legislators.
“Communities have little or no experience with the impacts of lounges on the communities or surrounding businesses,” NRA President Virginia Valentine said.
The “stall tactic,” as Nevada’s cannabis industry is calling AB533, will allow gaming to hold off on losing business. If marijuana is not federally legal by 2021, dispensary owners like Mueller and Hawkins expect the NRA to step back in and kick the can further down the road.RELATED STORYLeafly Study Debunks Dispensary Myths Around Crime & Teen Use
Sisolak Had to Choose
Sisolak has long been a supporter of Nevada’s cannabis industry, and his administration helped guide a number of progressive bills into law this session. But his support of, and from, the gaming industry has much deeper roots. For the governor, whose days of accepting high-dollar donations from gaming vendors goes back to his 10-year stint on the Clark County Commission, the resorts association’s request might as well have been a mandate.
MGM Resorts, Station Casinos (a Las Vegas resort chain that operates casinos off the Strip) and Las Vegas Sands accounted for the governor’s three largest donors for his gubernatorial campaign last year, donating a combined $330,000 during the 2018 election cycle. Pressed whether Sisolak pushed the bill to appease his gaming donors, Kalla, his spokeswoman declined further comment. MGM Resorts International, who alone donated over $170,000 to the Nevada governor also declined comment. Neither Stations Casinos, Las Vegas Sands nor Caesars Entertainment responded to multiple interview requests.
Cannabis Industry Just Watched
Perhaps most surprising, while gaming did its damage, Nevada’s cannabis industry essentially stood by and watched.’We’re missing out on the opportunity of a lifetime. It’s just mind-boggling.’Tick Segerblom, Clark County Commissioner
Deeply fractured by a December disagreement over the allocation of 60 new marijuana licenses from the Nevada Department of Taxation, the Nevada Dispensary Association took a “neutral” stance on the lounges, said executive director Riana Durrett. About a dozen dispensary owners who were not chosen for the dispensary licenses are currently in litigation against the taxation department for alleged corruption in allocating the new permits.
Tick Segerblom, a longtime state senator who was the driving force behind legal marijuana from 2013 to 2018, now sits on the Clark County Commission. Segerblom, a Democrat, was essentially powerless as the governor and state legislators from his own party worked to reverse what he had long worked to pass.
“We’re missing out on the opportunity of a lifetime,” Segerblom said. “It’s just mind-boggling.”
This article originally appeared on leafly.com
Legal Weed Suppliers Pressure L.A. Officials to Crack Down on Illegal Shops
The legal marijuana industry urged Los Angeles City Hall on Monday to get tougher with illegal shops that are gouging their businesses in open sight.
Illegal pot shops are widespread throughout Los Angeles and typically look like the real thing. And they’re thriving — they sell cheaper products than their legal rivals because they don’t charge hefty state and local taxes.
In a letter Monday, the industry group Southern California Coalition recommended the city consider seizing cannabis inventory and cash from illegal shops that are found to be selling tainted products.
In the legal market, marijuana, concentrates, cookies and other products must be tested by independent labs for consumer safety — a requirement that illegal shops can ignore.
The group said that the failure to seize cash and pot products from illegal shops after raids allows the business to quickly reopen.
With no testing safeguards in place in the illegal market “there’s a high probability the … cannabis products in these shops are contaminated,” the group wrote.
They urged the city “in the strongest possible terms to continue testing cannabis … in unlicensed shops.”
California’s effort to transform its longstanding illegal and medicinal marijuana markets into a unified, multibillion-dollar industry kicked off last year. But the transition has been uneven and it’s likely to take years for the legal market to find its footing.
Many communities ban marijuana sales and growing, leaving residents in those places without access to legal shops. Businesses complain about hefty tax rates that can approach 50 percent in some communities, which they say drive consumers into the tax-free illicit market. There’s on ongoing fight over home deliveries, and a promised tax windfall never arrived.
There have been problems in other states with legal marijuana. In Nevada, a court fight is underway after some businesses charged that the state system for awarding licenses is unfair. In Oregon last year, an excess of marijuana in the supply chain prompted regulators to suspend processing new applications for marijuana business licenses.
In Los Angeles, the industry group said that many legal shops are being driven toward bankruptcy because they are surrounded by rogue shops undercutting them.
Because of taxes and heavy regulatory fees, legal operators “cannot compete with illicit operators,” the group said.
The group also recommended ticketing employees at rogue shops to discourage them from returning, and having building inspectors always accompany police on raids to close down unsafe structures. They also suggested the city consider placing tax liens on illegal shops.
This article originally appeared on ktla.com
Here’s What Last Week’s FDA CBD Hearing Really Means for Cannabis Stocks
Ten hours of testimony, more than 100 individuals speaking, and still a lot of unanswered questions. That’s the quick overview of the public hearing held by the U.S. Food and Drug Administration (FDA) last Friday to get feedback on regulations for cannabidiol (CBD).
This public hearing included presentations from several representatives of companies with a lot of money riding on what the FDA ultimately decides. Those companies included Corbus Pharmaceuticals (NASDAQ: CRBP), CV Sciences (NASDAQOTH: CVSI), GW Pharmaceuticals (NASDAQ: GWPH), Medical Marijuana (NASDAQOTH: MJNA), and Zynerba Pharmaceuticals (NASDAQ: ZYNE).
But what does last week’s FDA hearing really mean for cannabis stocks like these and the many others that hope to profit from what could soon be a multibillion-dollar U.S. hemp CBD market? Here are three things you can expect.
1. More confusion and volatility for longer than anyone would prefer
I wrote in a preview of the FDA hearing last week that the status of CBD products in the U.S. was currently “clear as mud.” It isn’t any clearer after the hearing. But no one should have expected any different.
The public hearing on Friday was just the first step for the FDA in establishing regulations for CBD. In one sense, the hearing isn’t even over yet. The FDA will continue to accept public comments on the hearing through July 2, 2019. There’s a lot of work to be done to define regulations that will bring clarity to the U.S. CBD industry.
The good news is that the FDA appears to recognize the need for urgency. Dr. Amy Abernathy, the FDA’s principal deputy commissioner and acting CIO, who is leading a working group to explore how CBD products could be sold legally, tweeted on Friday that “given the rapid expansion of the market, timely clarification of the path forward is critical.”
The bad news, though, is that the FDA probably won’t move nearly as quickly as the industry would like. Abernathy’s tweet also stated, “But it’s our responsibility to ensure that the regulatory path is scientifically sound and in the interest of public health.” That comment implies that the agency has a lot of data to review before it’s ready to finalize CBD regulations.
Expect continued confusion for the U.S. CBD industry for the rest of this year and quite likely even longer. That confusion will probably translate to high levels of volatility for many CBD stocks.
2. Cannabis-focused biotechs seem likely to be protected
I think it was important that three top biotechs focused on the development of cannabinoid drugs were selected by the FDA to participate in the hearing. Corbus Pharmaceuticals vice president of pharmaceutical development and manufacturing Robert Discordia made oral comments. Alice Mead, vice president of U.S. professional relations for GW Pharmaceuticals’ subsidiary Greenwich Biosciences, and Ray Mannion, vice president of manufacturing for Zynerba Pharmaceuticals, delivered formal presentations with slides.
Mead represented the only company that has actually won FDA approval for a CBD product, prescription drug Epidiolex, which treats two rare forms of epilepsy. She noted that “the FDA approval process is the only way to answer important questions about a drug,” adding that “no one knew CBD was potentially toxic to the liver until we [GW Pharmaceuticals] conducted clinical and preclinical studies.”
I suspect that Mead’s point resonated with FDA officials. The FDA wants data to help guide decisions. And biopharmaceutical companies have the clinical studies underway that can give the agency the data it needs.
I also think that the FDA doesn’t want to do anything that would negatively impact the efforts of drugmakers that are researching cannabinoid drugs. My prediction is that whatever comes out of the agency’s regulatory guidelines for CBD, it will be to the liking of cannabis-focused biotechs like Corbus, GW, and Zynerba.
3. Tighter regulations could hit food and beverage products the most
Acting FDA Commissioner Ned Sharpless perhaps made the most important statement of the day on Friday. He said, “There are important reasons to generally prohibit putting drugs in the food supply,” adding that cannabis compounds such as CBD aren’t exceptions.
It seems probable that the FDA will take the hardest line on CBD products that are included in foods and beverages. The FDA will want to ensure that CBD is safe and at what levels.
Don’t be surprised if the agency first establishes regulations for other types of CBD products, for example, cosmetics and pet products, then later finalizes regulations for CBD foods and beverages. Canada, which legalized adult-use recreational marijuana last year, still hasn’t finalized its regulations for cannabis-infused foods and beverages.
All of this could especially impact the stocks of companies that are banking on hemp CBD foods and beverages. New Age Beverages (NASDAQ: NBEV) shares skyrocketed last year with the company introducing a line of CBD beverages. But its stock has dropped in recent days with the questions raised by the FDA hearing. Tilray‘s (NASDAQ: TLRY) purchase of leading hemp CBD food company Manitoba Harvest could also look iffy at least in the near term in light of the FDA’s concerns.
What should investors do?
Does the uncertainty about what the FDA might do regarding CBD mean that investors should stay away from CBD-related stocks? Not necessarily. Actually, the lingering questions could create a great buying opportunity.
I think the best stocks to buy are those of companies that don’t have most of their fortunes riding on CBD foods and beverages. The FDA seems to have a higher level of uneasiness with CBD foods and beverages than with other CBD products.
One thing to keep in mind is that you need to have a long-term perspective. There’s no way to know how long the FDA will take to establish CBD regulations.
This article originally appeared on Yahoo Finance.
Making Moves – Big Percy Brings NUGL to the People
Big Percy is a force in the music industry who built his career by bringing some of the most notorious gangsta rappers in the game to mainstream America. Now, he’s set his sights on his biggest challenge yet: bringing cannabis culture into popular consciousness.
Big Percy has never been one to shrink from a challenge. He’s a mover, a shaker, the one leading the pack. It’s just part of who he is, and it’s served him well: his influence and strategic vision have allowed him to position his clients in the hearts, minds, and lives of mainstream America.
It’s that kind of authenticity and interconnectedness is what Big Percy aims to bring to his work with NUGL. Cannabis and social media might seem like an offbeat combination, but to Big Percy, it’s right in time. “Cannabis is a way of life,” he says. “It’s a lifestyle. Every asset and every facet of the world, every sector of the world, has something to do with cannabis.”
He makes a good point: the history of cannabis use by humans can be traced back all the way to 8,000 BCE, on the Oki Islands near Japan. Since that time, cannabis (as both the familiar marijuana plant and newly-hyped hemp) has played an important role in societies all over the globe. The legal market for cannabis is new, but the plant itself is, in a way, older than some of our most cherished parts of our humanity, like complex societies or even written language.
Viewed through that lens, bringing cannabis into the mainstream doesn’t seem like such a tall order. In fact, to Big Percy, it’s a necessity. “Me, my team and everything else, we’ve always been a part of it, but now we’re really stepping into the forefront.”
NUGL is certainly a part of that plan, but it’s not the only aspect of Big Percy’s Plan. Ask him what he’s working on, and he’ll give you a list: “The CBD, the magazine line, NUGL, and some other good things” are in the works, and those are just the highlights. Big Percy has never been one for small thinking, and he doesn’t intend to start now.
His arrival on the NUGL Board of Directors may seem sudden from the outside – to be fair, it is his first board position – but in the context of Big Percy’s overall vision, it makes perfect sense. He explains his thought process behind teaming up with the brand: “NUGL was just a place I had to be, you know? It was on my table for a year and change now, being through BiggA.” That relationship allowed Big Percy an inside look at the nuts and bolts of NUGL as an up-and-coming disruptor of the cannabis and social media scenes.
“I watched what they were doing,” Big Percy says of that year and change NUGL spent on his radar before he came on board in earnest. “I watched how they moved. I liked the structure they had, and I liked the comfort level that they gave me to be myself and still do the other things that I was doing.” That independence is important to Big Percy and what he stands for.
If you ask Big Percy what he values, he’ll be straight with you. “Being a man of your word,” he says with gravity. “Always stepping to the forefront – fearless – and if you say you’re gonna do something, you must complete.”
That commitment to authenticity, tenacity, and unabashed boldness is a part of Bigg Percy at his core, and he aims to bring those values with him to his work with NUGL. It’s not a far reach: NUGL was founded for the purpose of serving the vibrant and diverse cannabis community, honoring the individuality of users while promoting collaboration and cooperation among businesses and consumers alike.
That’s a mission that Big Percy can get behind. To him, cannabis is already here for the long haul, and bringing it into mainstream focus is the next logical step in an increasingly friendly legal climate. The blossoming legal market has opened up new opportunities for innovation within the industry, and Big Percy believes consumers are hungry for the coming change.
For Big Percy, NUGL is about more than just launching an app or publishing a magazine. It’s an opportunity to challenge people’s preconceptions of what the cannabis community is capable of and what the place of cannabis within everyday life is. “Cannabis is here,” he says, “and it’s here to stay.” On what’s to come for Big Percy at NUGL, he has this to say: “Don’t watch me, watch the moves I make.”
How Hotels Are Adapting to Cannabis Legalization
In most legal cannabis states, consumption is allowed only in private residences. Cannabis enthusiasts are prohibited by local laws from consuming in public—as well as in most public housing, hotels, restaurants, cafes, bars and other venues.
That ‘where-to-smoke’ dilemma is forcing change in local laws and the hospitality industry.
There are a handful of consumption lounges in San Francisco, but outside the Bay Area most consumers are out of luck.
That’s left millions of legal consumers in a bind. Cannabis may be legal to grow, sell, purchase, and possess—but if you’re just visiting a legal state, it can be almost impossible to legally light up.
That ‘where-to-smoke’ dilemma is slowly forcing changes in both local laws and the hospitality industry.
In recent months, a number of states have moved on reform measures:
- Colorado: The Legislature recently approved a measure that would allow “marijuana hospitality spaces” where cannabis may be consumed. It would also permit retail cannabis stores to create similar consumption spaces. That bill, which also amends Colorado’s Clean Air act to provide an exception for these hospitality spaces, is heading to the state’s governor for final approval.
- Nevada: Earlier this month the Las Vegas City Council voted to approve Nevada’s first marijuana consumption lounges, which will offer safe locations for tourists and residents to partake in cannabis. “I’m not advocating smoking marijuana,” Councilwoman Michele Fiore told the Las Vegas Review-Journal, “but what I am advocating for is making sure we as a government agency do not create criminals by basically not giving them an outlet after we’ve passed a state law.”
- Massachusetts: The state’s Cannabis Control Commission has green-lighted a pilot program for adult-use, social consumption establishments.
Cannabis at Mainstream Hotels
Many cannabis consumers already get around the obvious risks of public cannabis smoking by instead consuming edibles, cannabis-infused tinctures and beverages. There are already a variety of independent 420-friendly hotels and resorts in legal states and across Canada, where people can stretch out and light up without fear of prosecution.
But experts say that until cannabis is legalized under U.S. federal law, the nation’s mainstream hospitality industry—companies like Wyndham, Marriott, Hilton, and Best Western—will continue to tread carefully when it comes to marijuana.
“What we see more and more today is the hospitality industry reaching out to their legal providers to help rewrite their policies, procedures, manuals and operational plans on how to deal with this,” Louis J. Terminello, chair of the Hospitality, Alcohol and Leisure Industry Group at the Greenspoon Marder law firm, told Leafly.
“But it’s constantly changing; it’s a moving target because legislation surrounding the use continues to move on in the United States, and at this point we’re only second-guessing and questioning.”
Most mainstream hotels, Terminello said, want to accommodate cannabis consumers, “while at the same time trying to respect the rights of those who do not want to be exposed to cannabis smoking.”
Change Is Coming
Some hotels still offer rooms where tobacco smoking is allowed. And they charge expensive cleaning fees to a guest who goes against the rules and lights up in a non-smoking room. Yet many cannabis consumers still risk those hefty fees to light up—as any guest who’s strolled down a hallway in a Colorado hotel can tell you.
So it is possible that we might, at some point, see hotel rooms reserved specifically for cannabis smokers?
“I think it would be a huge mistake would be to try to blend [cannabis] into existing hospitably brands,” Theresa Meier Conley, an associate professor of the practice at the University of Denver’s Daniels College of Business Marketing Department, told Leafly.
The risk for a major hotel chain, she added, would be a negative response from their mainstream tourism and business customers when it comes to on-site cannabis consumption. There are also concerns regarding younger guests.
At the same time, most major chain hotels offer alcohol in lobby bars and restaurants as well as in each room’s mini-fridge.
420-friendly Boutique Brands
Conley believes big chain hotels, resorts and other spaces within the hospitality sector could best serve themselves and cannabis consumers by creating 420-friendly sub-brands, like boutique hotels known for their comfort with cannabis.
In spite of the stigma still surrounding marijuana Conley acknowledges there is a growing market for cannabis-friendly public venues.
“I think what you have now is a real tension,” she said. “You’ve got [cannabis] tourism coming, you’ve got consumers. You still have a need for people to consume, and to consume in a safe space that is clearly away from underage guests.”
Consumers in the Driver’s Seat
What we might also see in the near future, according to Conley, is the hospitality sector charging consumers premium prices at cannabis-branded and marketed hotels. These would be similar to resorts, vineyards and distilleries that have wine and whiskey tours, and on-site beverage tastings.
“Part of that premium will be education, along with a safe and comfortable environment,” she said.
She also expects consumers to start seeing more sophisticated marketing and branding directed specifically towards cannabis enthusiasts looking for a relaxing and fun 420 experience.
Because cannabis has become big business, “consumers are in the driver’s seat,” she noted, “upping the experience, driving down the price. And that’s why we’re in a situation right now that is critical for this industry; for hospitality to really consider their role.”
Too Much Money to Ignore
And of course, the financial potential of cannabis-friendly public venues may become too much for both state legislatures and hospitality companies to ignore.
“Are you suggesting that money and politics may collide?” laughed David Helbraun. He’s a founding partner at Helbraun Levey, a New York-based law firm that specializes in the cannabis and hospitality industries.
“Eventually it’s got to come down to that,” he told Leafly. “In New York there’s a lot of jockeying going on between the legislature and the governor’s office. At some point the pressure is going to be too much, to get part of these tax dollars.”
A Tip: ‘Don’t be a Jerk’
And many of Helbraun’s clients in the hospitality industry, especially in the Empire State, already see the changes coming.
“I think a lot of people [in hospitality] are winking [at cannabis use] and just saying ‘hey, keep it cool.’ In New York City you’ll find places to consume. Don’t be a jerk. If you’re a jerk, you’re going to get busted.”
This article originally appeared on leafly.com.
Coloradans Can Soon Get Medical Marijuana in Place of Opioids
Governor has signed bipartisan Senate Bill 13, which easily passed the General Assembly
Colorado doctors will soon be able to recommend medical marijuana to treat any condition they’ve been prescribing painkillers for.
Gov. Jared Polis on Thursday signed Senate Bill 13, bipartisan legislation that easily passed through the General Assembly. The new law, which is scheduled to go into effect Aug. 2, is a win for marijuana proponents although it concerns some addiction doctors, however, there are plenty of doctors are for the legalization. Patients who have been cleared to use medical marijuana and/or are requesting to use medical marijuana can check their marijuana medical card status using resources like mmregistry. They can then discuss dosages with their doctor once their card has been issued.
“Even in states with flourishing nonmedical cannabis markets, it is important to remember that thousands of people count on cannabis as a medicine,” said David Mangone with Americans for Safe Access, a medical marijuana group. He predicts the bill will reduce opioid overdose deaths. However, some of these deaths may have been prevented in the first place, especially if a 5-panel drug test from somewhere like Countrywide Testing, (https://www.countrywidetesting.com/collections/5-panel-drug-tests) was ordered for the individuals, so that the true nature of the substance was discovered. But if this new bill comes into fruition, it could welcome a positive change.
Under Colorado law, medical marijuana can be recommended for qualifying medical conditions, which were previously defined as cancer, glaucoma, HIV and AIDS, post-traumatic stress disorder or other chronic disorders that cause severe pain, seizures and nausea. The new law adds to that list all conditions for which opioids could be prescribed to treat.
“Our real concern is that a patient would go to a physician with a condition that has a medical treatment with evidence behind it, and then instead of that treatment, they would be recommended marijuana instead,” said Stephanie Stewart, a physician in Aurora who cares for addicted patients. This is why if medical marijuana is offered as a treatment, it should always be noted that you should personally get more info on how medical marijuana could affect you and your condition.
“This will substitute marijuana for an FDA-approved medication – something that’s unregulated for something that’s highly regulated,” she added.
The new law applies to adults and minors. People under the age of 18 who are taking medical marijuana must do so in a non-smokeable form when using it on school grounds or school buses.
“Adding a condition for which a physician could recommend medical marijuana instead of an opioid is a safer pain management tool that will be useful for both our doctors and patients,” said Ashley Weber, executive director of Colorado NORML, a pro-marijuana advocacy group.
The bill passed through the General Assembly in the final week of session. The House voted 47-16, with some Republicans joining Democrats in support. The Senate voted 33-2, with only conservative Sens. John Cooke, R-Greeley, and Bob Gardner, R-Colorado Springs, in opposition.
The legislation drew considerable attention when it was introduced early this year by two Democrats and two Republicans. A Senate hearinglasted 150 minutes and featured about 40 people, almost all of whom testified in support.
Alexis Bortell, a 13-year-old medical marijuana advocate, told senators she hasn’t had a seizure in the years since she moved from Texas and began taking marijuana to treat her epilepsy. Though Bortell won’t be affected by the new law – seizures are already a qualifying medical condition – she urged senators to expand medical marijuana to all who may need it.
“Colorado law already states that cannabis can be recommended as a medicine by doctors,” Bortell said. “My point is that every patient should have equal access to every medicine our doctor thinks can improve our lives.”
Jennifer Hagman, a psychiatrist who spoke for several Colorado medical groups, called the state and nation’s opioid crisis “a very serious problem” but argued the bill, while well-intentioned, is not a solution.
“Marijuana is not a benign substance,” Hagman told senators. “As a child psychiatrist, I see several kids a month who require admission to an impatient psychiatric unit for the onset of psychosis, which can be quite severe and associated with the use of marijuana.”
This article originally appeared on Denverpost.com.
Media Veteran Suing Facebook Over Cannabis Ban, Represented Pro Bono By NORML’s David Holland
Cancer survivor and CBD medical consumer Felicia Palmer is taking a swing at the anti-cannabis establishment.
According to documents procured exclusively, Ms. Palmer, founder of the longest-running hip-hop news website in the world, SOHH.com, and her new company, Cannaramic Media, Inc., are commencing federal, civil action against Facebook, Inc., the social media behemoth running Facebook and Instagram, after a series of ads intended to promote the company’s educational Cannaramic Online Summit were rejected on the platforms, and the company’s follower page was disabled temporarily.
Interestingly, the suit is very timely, as the paperwork was completed on Thursday May 18th, the same day as the White House announced it is monitoring censorship by Facebook, and asking people to submit their complaints directly to the administration using this form.
Litigation attorney, David C. Holland, Esq., who serves as the Executive Director for the New York chapter of national marijuana advocacy organization, NORML, is representing the plaintiffs, Ms. Palmer and Cannaramic, pro bono. The suit is still open to other interested co-plaintiffs.
‘A Pattern Of Censorship’
Talking about the issue, Ms. Palmer and Mr. Holland explained that they see a “pattern of censorship and suppression of information and content pertaining to legal uses of cannabis across Facebook’s platform as well as that of the popular social media app, Instagram, also owned by Facebook.”
This is what has been outlined in the formal complaint: It was not just Ms. Palmer and Cannaramic’s rights to transmit information that were violated, but also those of Facebook users who had voluntarily chosen to get the information from the page.
The plaintiffs will be demanding a jury trial.
As per the legal documents, Palmer and Cannaramic Media quoted “deceptive acts and practices, and New York common-law fraud” as the formal reasons behind the complaint. “Such practices engaged in by Facebook have resulted in economic loss, censorship, and prevention of the dissemination over the Facebook platform by Plaintiffs of critical information pertaining to cannabis and matters of public health, scientific research and governmental policy which are important to the national interest,” the complaint reads.
Felicia Palmer FELICIA PALMER
In short, the 17-page document details how the Facebook algorithm systematically removes, bans and limits not only the promotion, but also the sharing of information related to legal cannabis, the industry, legalization, social equity and medical uses of marijuana, even though the plant is now legal in 33 states, the District of Columbia, several U.S. territories, and dozens of countries around the world.
This censorship of Cannaramic-related ads and the blocking of their Facebook page took place after the plaintiffs were induced to spend money to boost their posts promoting the free online educational summit, Palmer assured.
Commenting on this matter, Mr. Holland said access to information on cannabis is “vital to millions of everyday people nationwide who are now or will soon be impacted by the growing movement toward cannabis as a useful and valuable resource in our society.
“When a private company like Facebook (our largest resource for communication) prohibits the flow of this type of information, it essentially amounts to a threat to the public health, social welfare and economic vitality of our communities,” Mr. Holland concluded.
Facebook Is The New Public Square
One might wonder if there any legal precedent to hold Facebook, a non-governmental organization, to similar standards as public officials and government agencies. Well, there is.
In 2017, the Supreme Court of the United States acknowledged, in Packingham v. North Carolina, that social media in general, and Facebook in particular, have arisen to hold a position comparable to that of the traditional public forum:
A fundamental principle of the First Amendment is that all persons have access to places where they can speak and listen, and then, after reflection, speak and listen once more. The Court has sought to protect the right to speak in this spatial context. A basic rule, for example, is that a street or a park is a quintessential forum for the exercise of First Amendment rights …. Even in the modern era, these places are still essential venues for public gatherings to celebrate some views, to protest others, or simply to learn and inquire. While in the past there may have been difficulty in identifying the most important places (in a spatial sense) for the exchange of views, today the answer is clear. It is cyberspace–the “vast democratic forums of the Internet” in general, … and social media in particular. Seven in ten American adults use at least one Internet social networking service …. One of the most popular of these sites is Facebook, the site used by petitioner leading to his conviction in this case. According to sources cited to the Court in this case, Facebook has 1.79 billion active users …. This is about three times the population of North America
The Cannaramic Online Summit is scheduled to broadcast between May 20 and May 24, and features more than two dozen experts including Dr. Raphael Mechoulam; Dr. Monica Taing of Doctors for The Reform of Cannabis Regulations, Roz McCarthy of Minorities for Medical Marijuana; multi-platinum artist RedMan; Melissa Moore of the Drug Policy Alliance; UFC Champion Frank “The Legend” Shamrock; former NHL lineman Riley Cote; and U.S. Army combat veteran José Belén – yes, the same one who sued Jeff Sessions over cannabis’ Schedule I status.
Disclosure: While I am one of the speakers of the Cannaramic Online Summit, I have received no compensation from the company, and only learned about the news after a series of ads the company intended to run were rejected on Facebook and Instagram. At the time of the writing of this article, I have no involvement in the court case, and don’t plan to receive any sort of compensation from Cannaramic in the foreseeable future.
This article origin v ally appeared on Forbes
7 Statistics Entrepreneurs Need to Know About Legal Cannabis and CBD
How fast is the stigma of cannabis fading? Consider the numbers: Cannabis, whether for medical use or recreationally by adults, is legal in 33 states, Washington, D.C. and the U.S. territories of Guam and Puerto Rico. An estimated 73 million Americans live in the 10 states that have legalized for adult use. A record-high 62 percent of Americans agree cannabis should be legalized.
2019 marks the start of the second year of legal adult cannabis in California, the world’s largest legal market, yet consumers and business owners still must overcome significant hurdles. Cannabis consumers want to support the legal market but high prices, whopping taxes and impeded access to legal cannabis drives them to thriving illicit market. California has done a good job of telling consumers that cannabis is legal but has a long way to go to make it easy to get safe, legal and affordable cannabis.
Several studies have shown that high taxes are the most common driver of illicit cannabis purchases. An Eaze Insights survey of cannabis consumers found that a 5 percent reduction in California taxes on cannabis could lure 23 percent of illicit market buyers into the legal market. States looking to legalize should learn from California’s experience.
Below are some key stats to know about the legal use of cannabis and where we are as a nation right now:
Age groups are diversifying
Image Credit: Eaze
As more states allow cannabis for adults, new demographics of consumers are discovering the legal marketplace. Baby Boomers are one of the fastest growing segments, increasing by 25 percent over the past year.
Women are making their mark.
Image Credit: Eaze
Female cannabis consumers nearly doubled over 2018, and CBD is driving a new demographic of consumers who are turning to CBD for wellness needs. The growth of women entering the market outpaced men and continued the trend of increasing female participation, now making up 38 percent of cannabis consumers.
Cannabis is a wellness alternative.
Image Credit: Eaze
Cannabis products are used for a variety of wellness applications: overall, 71 percent of consumers reported they reduced (53 percent) or stopped (18 percent) their over-the-counter (OTC) pain treatment, and 60 percent have reduced or stopped their alcohol consumption.
It has holidays throughout the year.
Image Credit: Eaze
Curious what the most popular cannabis holidays are? Hint: It’s not what you think! The day before Thanksgiving, or “Green Wednesday,” was the most popular holiday for cannabis consumption in 2018 with 4/20 coming in second. Two Jewish holidays fall in the top 10 holidays list, including Sukkot and Hanukkah.
Social justice and inclusion efforts are critical.
Leaders in the cannabis industry are ensuring that social justice programs and diversity and inclusion efforts are a key part of the next phase of growth. We don’t want to leave behind those who have been affected by the “War on Drugs” prior to legal adult use in some states. As part of these efforts, Eaze is partnered with Code for America on 4/20 this year in a first-of-its kind partnership to clear 250,000 criminal records through the nonprofit’s Clear My Record program.
Consumers across the U.S. can now access it.
Since the legalization of hemp-derived CBD via the Farm Bill earlier this year, we’re seeing the product sold in traditional brick and mortar stores like Sephora, CVS, and The Vitamin Shoppe and we only expect that to continue. According to research by NORML, , 15 states have specifically legalized CBD for therapeutic purposes
Women are the faces of CBD brands.
Eaze Wellness is an online marketplace that ships hemp-derived CBD to 41 states across the U.S. More than 75 percent of the brands on the platform are female-led or have a female founder, including Mary’s Medicinals, Kush Queen, Kana and Hora Skin Care.
Whether you’ve been enjoying cannabis and its benefits for years, or are newly canna-curious, it’s important to be educated about the history of the industry, where we are today and what to expect in the future.
This article originally appeared on Green Entrepreneur
Millennials Are Beginning Cannabis Careers Through Summer Internships
An increasing number of North American cannabis companies are reaching out to college students, offering summer internships as an opportunity to get their foot in the door in the growing industry.
Students now are being given opportunities that students only 5 years ago could have only dreamed of!
A Full Resume Required
Upon graduating from college, students can no longer rely on their college credentials to land a job; experience and evidence of engagement are becoming increasingly important for recruiters as they seek to fill entry- and mid-level spots in their growing companies.
Internships within the cannabis industry provide new graduates a professional advantage because they have received a baseline of business acumen, have learned how to engage in professional environments, and have been able to focus their studies to meet their desired career path.
Students who have engaged in an internship, a form of experiential learning, enter industry job ready, resulting in a new crop of graduate ready to take to the cannabis industry.
An Industry Growing at Exponential Speeds
Average salaries in the cannabis industry also increased over 16% from 2017 to 2018, and aren’t showing any signs of slowing down. To anyone about to enter the professional job market, these statistics look promising.
Cannabis internships are going to be the new norm across college campuses as more states and countries legalize cannabis, and more educational institutions recognize and embrace the wealth of opportunity available to their students within the cannabis industry.
Summer Internships Offered in 2019
The following North American cannabis companies are offering summer internships to college students in 2019:
- Springbig is located in Boca Raton, FL, and is a cannabis dispensary CRM and loyalty rewards software company. Growing like wildfire, Springbig is looking to hire interns in the following departments: marketing, client services, development, and sales.
- CannaSafe is California’s #1 accredited cannabis testing laboratory. Located in Los Angeles, CannaSafe is looking to hire lab technicians and assistants for the summer. As an added enticement to future recruits, a few of their interns from last summer are returning this year with full-time positions!
- LeafLink is the cannabis industry’s #1 wholesale e-commerce platform and is looking to hire both a Graphic Design intern and a Sales & Development intern for their New York, NY office.
- Green Thumb Industries (CSE: GTII) is a national cannabis consumer packaged goods company and retailer located in Chicago. They are looking to hire a full-time Corporate Sales intern for what they call a “cannabis career immersion” experience, offering an in-depth look into the inner-workings of one of the largest multi-state cannabis companies in the world.
- High There! is cannabis social network, directory, and community, that just relaunched their app in April. They are looking for undergraduate students that are eager to learn about marketing in the cannabis industry to join their Venice, CA team.
- Canadian Cannabis Chamber, which is focused on promoting cannabis businesses and enabling policies, is hiring a summer student to act as a Marketing Analyst at their Calgary, Alberta office
- Cronos Group, which sells cannabis at the federal level in Canada, is hiring an HR Intern to work within their Human Resources Offices in Toronto.
- Tilray, a cannabis licensed producer located in Nanaimo, British Columbia, is offering a Health, Safety and Environment Assistant summer internship
Students who complete internships demonstrate a record of employability in their chosen field, planning and purpose for their chosen career field or industry, and oftentimes find themselves in full-time positions with the companies for which they interned.
Brush up your resume, students, and take advantage of these incredible opportunities to ensure you’re job-ready within the growing cannabis industry.
This article originally appeared on Green Market Report.
Attorney General Nominee Vows to Respect State Marijuana Laws
Barr stated in confirmation hearing Tuesday that he would not use federal resources to target state-legal cannabis businesses, urged Congress to end legal conflict
WASHINGTON, D.C. – During Senate confirmation hearings on Tuesday, attorney general nominee William Barr stated that he would respect state cannabis laws and legal businesses when it comes to enforcing federal marijuana statutes. In response to questioning from Sen. Cory Booker (D-NJ) and Sen. Kamala Harris (D-CA), Barr stated that if confirmed, his “approach to this would be not to upset settled expectations and the reliant interests that have arisen as a result of the Cole memorandum.” Upon further questioning, he stated that he “is not going to go after companies that have relied on the Cole memorandum.”
The Cole memo, issued in 2014, directed federal prosecutors not to use resources to target businesses or individuals that were in compliance with state cannabis laws and met a set of public safety criteria. That guidance, which gave many businesses and state governments the confidence to move forward with implementing regulated cannabis markets, was rescinded in January 2018 by then-Attorney General Jeff Sessions.
“Mr. Barr is correct in acknowledging that many Americans rely on the legal cannabis industry and the successful state marijuana programs operating throughout the country today,” said Aaron Smith, executive director of the National Cannabis Industry Association. “His pledge not to use Department of Justice resources to undermine state laws provides assurance to over one hundred thousand cannabis industry employees, thousands of legal businesses, and the many state and local governments reliant upon marijuana tax revenue.”
During the hearing, Barr stated that he supports federal marijuana prohibition even though he would continue the policy of non-enforcement, but was critical of the disparity between state and federal law, calling on Congress to pass legislation that would address this issue.
“State marijuana laws are successfully replacing criminal markets with responsible small businesses and it is long past time for Congress to enact legislation that respects those laws,” continued Smith. “We will continue to work with lawmakers to make sure it is a priority during this session.”
Several comprehensive cannabis policy reform bills that would allow states to determine their own laws without federal interference are expected to be considered this year, including the STATES Act and the Marijuana Justice Act, as well as a number of other bills related to issues such as allowing banks to more easily work with cannabis businesses and reforming the tax code to treat the cannabis industry fairly.
Punch Edibles Looking to Operate but Stuck in Limbo as It Awaits License
BY JOHN TUDHOPE
Thirty years ago, buying cannabis was difficult, expensive and illegal. Buying cannabis in 2019 is somewhere between picking up a prescription from a pharmacy and buying beer from a liquor store. Join columnist John Tudhope each week as he visits cannabis companies in Los Angeles and discusses the budding industry.
The first time I purchased cannabis was in my high school parking lot from an older guy in my Boy Scouts troop. It was a chocolate cannabis edible, wrapped in green foil, and it immediately stunk up any room I brought it into.
More important than the ethics behind my 15-year-old self buying drugs at school is the fact that an edible was my segue into the cannabis world. Cannabis-infused edibles are a category of cannabis products that have expanded rapidly in California’s new legal market, in part because of their accessibility for those trying cannabis for the first time and the ease with which foods can be infused with cannabis.
I have seen the standard brownie and gummy edible options cascade into products ranging from granola to gourmet truffles to canned beverages. Edibles are less harmful and more discreet than traditional cannabis because you don’t have to smoke to feel the effects.
Almost any food can be infused with tetrahydrocannabinol and cannabidiol, more commonly known as THC and CBD. These two active ingredients in cannabis are responsible for a variety of effects which can range from a simple “buzz” to anti-inflammatory effects, and are becoming more quantifiable as scientific research on cannabis progresses.
I visited Punch Edibles’ industrial kitchen and extraction facility to see how these products are manufactured and how the market has changed since legalization. Their cannabis-infused chocolates and fruit snacks contain nine servings and include 90 milligrams total of THC or CBD. This is a standard-dose edible and is just under the legal limit of 100 milligrams per product. Their edible is straightforward, well-made and sold in small colored boxes the size of floss containers.
When I visited their facility in Canoga Park I saw a business that creates a solid edible, but is hamstrung by strict regulations and bureaucracy moving at a snail’s pace – a trend I have observed in cannabis businesses throughout LA.
The City of Los Angeles Department of Cannabis Regulation is LA’s permitting body for cannabis businesses. Though California voters approved cannabis legalization in 2016, three years later, many cannabis manufacturing businesses have yet to receive the required local permits in LA. This means that currently, only a small number of businesses are even eligible to be manufacturing legally, and Punch is not one of them.
Punch has been selling cannabis-infused chocolate bars since 2014, but has been forbidden from producing their products since Dec. 31, 2017. If you’re confused, as was I, this means that since legalization, businesses have come to face much harsher and more prohibitive regulations. Despite Punch’s home in a state-of-the-art extraction facility, they would be breaking the law if they continued making their edible chocolates and gummies, so they don’t. Instead they have a stockpile of products made before the ban and are focusing on improving the capacity of their industrial kitchen so they can compete when they are fully licensed.
Their 7,000-square-foot factory in the San Fernando Valley is at a standstill while they await permits. When I visited them, the preparation space was completely empty save for the seemingly untouched machines – it was a sight of unfulfilled potential.
Because LA has yet to issue manufacturing permits to businesses like Punch, the companies are in a state of limbo where they must spend hundreds of thousands of dollars to comply with strict regulations, but are not permitted to engage in any manufacturing activity. Andrew O’Donnell, the owner and founder of Punch, says the situation is costly and frustrating.
“What were they thinking? We have payroll, we have mortgages, we have all of these things. Were we just supposed to sit on our hands for nine months?” he said. “You need at least a million dollars.”
Though Punch seems to be surviving this less-than-ideal bureaucratic shutdown, my fear is that not all of LA’s cannabis edible manufacturers will be able to as well. O’Donnell said this situation is in fact hurting small businesses that are trying to be legally compliant.
“(The city) literally choked out all the small guys,” he said. “Not only the small guys, but the small guys that are trying to do it legally.”
Of course I would have liked to focus on the tastiness of a product, the kindness of the business owner or the enjoyable time I had walking through the factory, but unfortunately, above all, I felt a type of frustration. I felt the frustration of business owners who want to sell their product, comply with regulations and compete in the free market, but are currently stuck twiddling their thumbs and burning through cash while they wait for the city to give them a piece of paper.