Fireside Chats with NCIA’s Government Relations Team: HHS Recommends Rescheduling; Now What?

NCIA’s #IndustryEssentials webinar series is our premier digital educational platform featuring a variety of interactive programs allowing us to provide you timely, engaging and essential education when you need it most. The Fireside Chat series of NCIA’s #IndustryEssentials webinars are an opportunity for industry professionals to hear from our government relations team and guests about the latest developments in federal policy LIVE.

For more than fifty years, the federal government has maintained that cannabis is a Schedule I drug, meaning that it has a high potential for abuse and no accepted medical value.

That recently changed when the Department of Health and Human Services (HHS) recommended to the Drug Enforcement Administration (DEA) that cannabis be placed in Schedule III, meaning that it has moderate to low abuse potential, a currently accepted medical use, and a low potential for psychological dependence.

There’s no doubt this move was an historic one– but what does it mean? What’s next? How will it impact your business?

Join NCIA’s Aaron Smith and Michelle Rutter Friberg as they unpack all these questions and more! Register today and don’t miss your chance to hear from two of the foremost government relations experts in the cannabis industry.

Panelists:

Aaron Smith
Chief Executive Officer
National Cannabis Industry Association

Michelle Rutter Friberg
Director of Government Relations
National Cannabis Industry Association

Cultivating Community in a City Near You: Announcing NCIA’s 2023 Event Calendar

It’s been a year of big change for NCIA. As we come to the end of 2022, we want to take a moment to send a message to our members and supporters about these changes, and most importantly, get excited for what’s next for the future of NCIA events.


The End of An Era

The events industry has faced unforeseen challenges these last couple of years, and NCIA was not isolated from these issues. Outside of needing to postpone our large tradeshows until late 2021, we also had to postpone a whole calendar of approximately 40+ events nationwide which was our primary way of connecting our community and meeting with our members face to face. Our team overcame these challenges by building our expansive digital presence and online events program to continue to provide education and exposure opportunities to our members, however this did still require a significant pivot in organizational strategy.

Due to the residual hardships brought by the pandemic, we learned earlier this year that the Cannabis Business Summit & Expo was not going to be able to be produced on the scale or quality that we or our members had come to expect throughout the years. So, in tandem with our previous tradeshow co-producers, we made the difficult decision to dissolve our existing partnership and accepted an offer from them to acquire our tradeshow portfolio. For those who have been attending our tradeshows since 2014, we can’t thank you enough for your participation in those events and making them so impactful for the industry. There are too many good memories to revisit, and hope you take a moment to remember some of your personal highlights throughout the years as we look forward to coming together for new events in 2023.


Looking Ahead to 2023

For now, we will be taking a hiatus from the tradeshow space. This will allow our team to refocus our efforts into other impactful networking and educational opportunities. We’re excited to get back to our roots and focus our efforts on intentional and innovative gatherings that connect Main Street cannabis businesses with each other and with NCIA’s advocacy efforts.

We’ve listened to the feedback from our members, and know that in-person networking remains essential to building your business and growing your network. In these uncertain economic times, every dollar spent and any time away from your business impacts your bottom line. As the leading cannabis trade association representing small-business owners, we’re committed to making the investment to meet our members where they are, and to continue facilitating experiences where our members can make key connections with fellow business owners. Moving into 2023, we’re reinvigorating our events program starting with our regional Industry Social and Cannabis Caucus event series, leading into the cannabis industry’s biggest policy and advocacy event of the year: NCIA’s 11th Annual Cannabis Industry Lobby Days

We invite you to move forward with us as we enter a new chapter in our history. Without further ado, we are excited to announce the lineup of events for the first half of 2023!

 

Register Now:

01/25/23 – Missouri Industry Social – St. Louis, MO

01/31/23 – Northern California Industry Social – San Francisco, CA

02/07/23 – Southern California Industry Social – Los Angeles ,CA

02/15/23 – Colorado Cannabis Caucus – Denver, CO

03/08/23 – Washington Industry Social – Seattle, WA

03/30/23 – Massachusetts Industry Social – Boston, MA

04/12/23 – Florida Industry Social – Miami, FL

04/19/23 – Oregon Industry Social – Portland, OR

04/25/23 – New York Industry Social – New York, NY

05/04/23 – Illinois Industry Social – Chicago, IL

05/09/23 – Michigan Industry Social – Detroit, MI

05/16/23 – 05/18/23 – 11th Annual Cannabis Industry Lobby Days –  Washington, DC

Join NCIA to Take Advantage of Complimentary Tickets

As always, NCIA members receive complimentary access to all of these events based on membership level. Looking to have an expanded presence at each event? Consider upgrading your membership today in order to include your entire team or prospective clients.

 

Join Now!


Thank You to Our Sponsors

Huge thanks to the initial sponsors of these events which have made a significant investment in NCIA’s community building efforts moving into 2023! Learn more about each of these pioneering businesses helping drive our mission forward and reach out to schedule a meeting with their team surrounding the upcoming events.

 

Gold Sponsor


Silver Sponsor


Bronze Sponsor


Support These Events Through Sponsorship

Has your company had trouble breaking through the noise on a crowded expo floor this past year? Is your brand looking for quality B2B connections with market leaders? Want to play a larger role and align your business with NCIA’s community building and educational efforts?

Consider one of our affordable sponsorship packages, starting for as low as $500, which will allow you to reach thousands of leading cannabis businesses while supporting NCIA’s advocacy work on behalf of small cannabis businesses. Contact our team at sponsorship@thecannabisindustry.org to learn more.

I want to sponsor!


Be in Good Company for 2023!

We can’t thank our community enough for the continued support of NCIA and our events. We look forward to seeing you, in person, next year!

Meet The Team: Rachel Kurtz – NCIA’s Deputy Director of Public Policy

I grew up an Army brat. By 1992, when I was 18 years old, I had lived in Wisconsin, New York, Texas, Oklahoma, Indiana, Alabama, and Germany. I was fortunate my father served during a 23 year period where he would never be sent into a conflict, especially as a physical therapist. I reaped the benefits of experiencing various cultures and socialized medicine. 

I started my cannabis activism in 1995 volunteering with the Washington Hemp Education Network in Olympia, WA, while attending The Evergreen State College. Following a stint in Congressman Brian Baird’s district office, I went to law school at the University of Washington School of Law, figuring that having a law degree would give me more respect while pushing for such a controversial issue. Serendipitously, during my 2L year, the King County Bar Association (where my school was located) started a Drug Policy Project, where I was fortunate to get a job after graduation. I worked there, and simultaneously for the Voluntary Committee of Lawyers, until around 2010 when my boss was running for his third term in the state legislature and I wanted to focus on more local issues around medical cannabis implementation.

I spent some time as an acting-executive director for the Cannabis Defense Coalition, advising businesses on the medical cannabis laws, and became a partner in a medical authorization clinic and wellness center. I was also volunteering with Seattle Hempfest — where I started in 2004 and have continued to commit my free time to this day, now as part of the board of directors.

After the legalization initiative passed in Washington state in 2012, I began using my law degree to represent businesses during the licensing process, working with Wykowski Law and Gleam Law. But billing clients was not for me, and circumstances in my life made me want to run a cannabis business. 

It was 2016, and by then I had moved to Oregon where they had also passed a legalization initiative. With a partner who had previously had a successful medical cannabis business, spent a year forming the business and pitching it, only to fail to secure enough funding to continue in such an expensive endeavor.

I became disheartened in the whole process and the future for all small businesses trying to make it in the industry. I knew the only way to truly have a successful industry that worked for all stakeholders and citizens was to legalize at the federal level, and the main organization focused on that effort was NCIA.

On a whim, I looked at the NCIA website to see if they were hiring. Lo and behold, they had a business development position open and wanted someone located in the Pacific Northwest and connected in the industry. Business development wasn’t quite in my skill set, but we made it work and I have had a hand in multiple areas at the organization since I started January 2017. My biggest effort so far has been the creation and development of NCIA’s Allied Associations Program; it has been very satisfying bringing together cannabis trade associations from around the country.

I am now Deputy Director of Public Policy and feel so fortunate to work with the brilliant Andrew Kline and all the work that is coming out of the Policy Council. I continue to work with the Allied Associations Program, alongside Amy Rose, to keep my finger on the pulse of state policy, and I’m coordinating NCIA’s member committees and their content, along with Morgan Fox.

Moving forward, I’m feeling like probably most people, ranging from the anxiety of existential uncertainty to the optimism of knowing cannabis is considered essential in society and the endless possibilities as we all navigate this new normal. The creativity and tenacity of all my amazing colleagues at NCIA and our members leave me full of hope.

Committee Blog: Ending The Ban On Interstate Commerce (Part 1)

By Gabriel Cross, CEO of Odyssey Distribution
Member of NCIA’s State Regulations Committee

Oversupply and shortages, high prices and lack of choice for patients and consumers, illicit markets, tainted products, and the inability to access banking and capital all plague the burgeoning cannabis industry. While cannabis advocates and industry leaders are working on each of these problems, there is one solution that would ease the burden on all of them. Allowing for interstate trade between states with legal cannabis markets would improve each of these issues while supporting the individual solutions to each that the industry has been working on. This is the first post in a series that explores the benefits and barriers to setting up a legal framework for interstate trade, even before wholesale legalization at the federal level.

Since the beginning of legal, adult-use cannabis, when Colorado and Washington passed the first ballot measure allowing for adult-use, the industry was guided by the Cole Memo, which laid out the parameters for the federal government staying out of the states’ cannabis experiments. Among other things, the Cole memo stated that the DEA could crackdown on cannabis moving from states with well-regulated systems to states that do not allow cannabis. This statement has been interpreted conservatively to mean that no cannabis should cross state lines for any reason, ever, based on the fact that at the federal level, cannabis is still a Schedule I drug under the Controlled Substances Act.

Today, there are 10 states which have legalized adult-use, another 19 which allow for medical use, and six more which allow the use of CBD products only. Many of these states share borders, and producer states could serve several nearby markets without ever entering a state that does not allow cannabis in any form. Furthermore, the Cole Memo, which was rescinded by Jeff Sessions in 2018, has not been replaced by any guidance whatsoever. This means that each U.S. Attorney’s office is free to set their own enforcement priorities around state-legal cannabis activities, and there is no official overriding policy at the DOJ on interstate trade between states with medical or adult use. Corresponding guidance from FinCEN, however, remains in effect and similarly discourages the transfer of cannabis between states. 

Cannabis markets vary widely from state to state with regard to the underlying market dynamics and challenges that they face. Some states produce too much while other states experience shortages. Meanwhile, new states pass legislation or have voter initiatives that allow medical or adult-use every year without any infrastructure in place to supply that state’s demand. In each new legal market, the vast majority of demand had long been met through illicit market supply, and generally from outside of the state’s boundaries.

The artificial boundaries around cannabis markets have far-reaching impacts for local economies, patient access, illicit market activity, and social equity. Later posts in this series will take a deep dive into each of these issues, and in this post, we will look at how this has impacted states, the industry, and consumers so far.

Lessons Learned:

  • Washington State chose to take the strictest possible reading of the Cole Memo, and insist that not only must cannabis not cross state lines but also sources of funding must come from within the state. Combined with their high capitalization requirement for licenses, the result was a disaster from an equity standpoint: only wealthy and well-connected individuals in the state (which are overwhelmingly white males) were able to even attempt a license. This decision was based substantially on the fact that interstate trade was not allowed.
  • In Oregon, which has an ideal growing climate and a long tradition of exporting cannabis (albeit in the illicit market), the artificial boundaries created by the ban on interstate trade lead to a massive oversupply for its small population, which crippled the industry and tanked many small businesses. Despite the fact that Oregonians consume more cannabis per capita than any state, their climate and culture have led to growing massive quantities of world-class cannabis that cannot reach patients and consumers, even in neighboring states that might have under-supply issues. The result is that hundreds of small, mom-and-pop shops and family farms have gone out of business, eradicating millions of dollars of local capital, and accelerating mass consolidation of the industry into the hands of a few foreign corporations. Meanwhile, in medical markets like Illinois and Michigan, patients have had sporadic access to quality cannabis-based medicines.
  • When Nevada originally launched, due to the influence of local liquor distributors, it was almost impossible to get products to market, and the state’s dispensaries sold out on the first day of sales. After ironing out some of the kinks, sales are going strong, but the practice of growing thirsty plants indoors in the desert is of dubious value when the same plant can be grown with a fraction of the inputs in northern California and southern Oregon.
  • California’s legal system is a perfect example of how over-regulation fuels illicit market activity. Because of the structure of their regulatory framework and high taxes, the state is served by only 800 licensed dispensaries, whose prices are double and triple those found on the illicit market for similar products. This has led to the emergence of thousands of “pop-up” or unlicensed dispensaries, selling untested products tax-free in a thriving illicit market. The booming illicit market in California has also led to massive wholesale markets of hardware, branded packaging, and flavoring and cutting agents (all technically legal) to supply the illegal operators with everything they need to look legitimate. This is a major contributing factor to the wide-spread vaping related illness cases popping up all over the country, as many illicit market operators purchase their supplies in downtown Los Angeles.
  • The ban on interstate trade promises to continue to create new and novel problems as well. If New York, the 4th most populous state in the union, legalized adult-use (which seems likely in the near future), and interstate trade were still banned, it would require a massive investment, on the order of billions of dollars, to create enough indoor and greenhouse grow facilities to supply the demand created by its 19 million inhabitants. The recent legalization of hemp under the last Farm Bill has created a number of legal dilemmas as well, as some individual states that do not recognize any difference between hemp and cannabis flower have seized products and arrested individuals taking hemp legally grown in one state to a market where it is legal to sell.

Some suggest that these issues will be sorted in local markets, and in each state individually this approach might seem to make sense. When you add these problems together, though, a much more elegant, efficient, and obvious solution emerges: let states that have always exported cannabis send it to states that have always imported it. A set of different and seemingly unconnected problems become each other’s solutions.

Historically, people across the country have consumed cannabis, and the vast majority of it was grown in a few locations that are particularly well-suited to the plant. It is highly likely that a fully-matured nationwide legal market (one which must account for not only interstate, but also international competition) will ultimately be best served by the same general market dynamics. The only question is: how long will we allow the artificial market boundaries around each state to decimate local capital, curb access for patients and consumers, encourage investments that are attractive short-term but disastrous long-term, and prop up the illegal markets that pose a public health risk?

Interstate trade between states that allow some form of legal cannabis would provide much-needed relief on a number of fronts for cannabis businesses, and could be structured in such a way to support social equity efforts. With a little guidance on enforcement and thoughtful programs and agreements between states, there is a path to legal interstate commerce even before cannabis is removed from the Controlled Substances Act. The state of Oregon has already passed legislation allowing for the export and import of cannabis products provided that the Federal Government allows it. This could be either through legislation such as the proposed Blumenauer/Widen State Cannabis Commerce Act, or though DOJ enforcement guidance (whether from the Attorney General or the relevant local U.S. Attorney’s). There are multiple paths that can lead to the end of banned interstate trade, and it seems increasingly inevitable that we will see legal cannabis trade across state borders in the near future. For most operators in the cannabis industry, and for all patients and consumers, this will be a good thing, and can’t come soon enough.


Gabriel Cross is a Founder and CEO at Odyssey Distribution, LLC, a distributor for locally-owned craft cannabis producers and processors in Oregon. Gabe worked in the sustainable building industry for a decade before starting Odyssey and brings his experience with sustainability and systems thinking to his work in the cannabis industry. Odyssey manages logistics, sales and marketing for boutique producers so they can focus on creating great craft cannabis products for the Oregon market.

Five Reasons Why NCIA’s Industry Socials Were A Huge Success

At the end of 2018, NCIA’s events team looked ahead at how to make our line-up of 2019 events even better and respond to an increasingly popular demand for more networking opportunities. As a team we dreamed up how to make a B2B networking series that was not only delivered maximum ROI, but was super fun and fit the cannabis industry culture.

Ultimately, we devised what might be the magic elixir of networking events. Artsy venues, delicious drinks and food, live local music, old-school Nintendo, giant Jenga and Connect Four. We even threw in a raffle-wheel contest to win limited edition NCIA merchandise. The result? NCIA’s January Industry Socials were a total hit. Although there are many, here are the top five reasons why NCIA’s Industry Socials were a huge success.

1. Impressive Attendees

Throughout January, Industry Socials kicked off with a West Coast Tour in Seattle, WA, Portland, OR, Las Vegas, NV, Salt Lake City, UT and Phoenix, AZ. We were excited (and a bit nervous) about the turn-out for the Utah Industry Social in Salt Lake City, since the exciting passage of Utah’s Proposition 2 happened only a few months before the event. As NCIA’s Aaron Smith remarked “we’re excited to bring our world-class industry events to new markets like Utah, and later this year in Missouri, North Dakota, and Texas!

Overall, January’s Industry Socials turned out about 500 impressive cannabis industry professionals and advocates, representing 250 current NCIA member companies! Even better? We saw more than 75 attendees in the brand new Utah market!

2. Incredible Feedback

The post-event survey results are in and they are stellar! The majority of survey respondents reported that they would highly recommend the event series to a friend or colleague.

More than 50% of survey respondents said they made between 11-20 new contacts at the event and that at least three of these contacts were potential sales deals.

When asked what the biggest return on investment of the event was attendees stated:

  • “Getting to know our local business community.”
  • “The low key but targeted exposure in our local market.”
  • “Continued relationship building and network expansion.”
  • “We gained a lot of insight into the industry and where we fit as a company… the insights we gained were invaluable.”
  • “Foot in the door to get involved in rule making and learning about the application process in Utah.”

Kyle Rooney from Have A Heart, Sustaining Members with adult-use dispensaries in four states, says that “attending NCIA’s new Industry Socials is a chance to network in a more personal and low-key environment. National conferences are great, but these events provide a platform to talk to people in the regions that you want to connect with.

RizePoint, who became members of NCIA just a week before the event in Salt Lake City, attended with several team members. Ed McGarr, RizePoint’s Vice President of Sales and Marketing says, “We began working with cannabis companies last year to advise on food safety, quality control and management for adult-use and medical cannabis edible products. NCIA’s Industry Socials provide a forum for us to connect with the industry and learn from them, as well as gain new business contacts. The event was priceless relative to networking and establishing ourselves further in the cannabis industry. It was refreshing that NCIA helped to establish the networking opportunities in a new, emerging market like Utah.

3. Innovative Networking and Entertainment

Introducing a retro arcade station including Super Mario and PAC-MAN at our Industry Socials was the brilliant idea of our events team. Now that we know how fun it was, we’re seriously considering having it as an NCIA event standard.

But seriously, we now know that a cash bar is not the only way of lubricating conversation and community building. Adding fun games like Nintendo, giant Jenga and Connect Four is another way cannabis industry professionals can “connect” in an authentic, fun, and meaningful way. If more networking happened while playing a competitive game of PAC-MAN, the business world would be a much better place.

Additionally, at every event we had talented local DJ sets and interactive activities like a raffle-wheel and Polls Everywhere with cannabis industry trivia. As a value-added complimentary activity at our Nevada Industry Social, attendees had the opportunity to participate in two private tours of the world’s only immersive cannabis museum, Cannabition!

4. Our Sponsors and Partners

From helping us spread the word, to investing in NCIA’s Industry Socials, none of these amazing events could have happened without the help of our sponsors and partners.

We’re grateful to Silver Sponsors: Emerge Law Group, Aspen Technology Group, Bronze Sponsors: Cannabis Radio, Cannasure Insurance Services, Lilu Financials and Host Sponsor: The Commune PDX.

Lastly, a huge thank you to our promotional partners: Growers Network, Cannabis Collaborative Conference, Utah Patients Coalition, Epilepsy Association of Utah, Marijuana Policy Project and TRUCE Utah.

5. Setting the Stage for 2019 Events

To kick off 2019 with a successful inaugural event series sets the stage for an incredible year of NCIA events. We are looking forward to hosting the next tour of Industry Socials in new cities and markets again in April and August.

But, you don’t have to wait until April to attend more NCIA events. NCIA’s March Cannabis Caucus series is kicking off soon, followed by the most impactful cannabis industry advocacy event of the year – NCIA’s 9th Annual Cannabis Industry Lobby Days.

Lastly, thank you to our nearly 2,000 member-businesses and to all event attendees for supporting NCIA’s mission. NCIA’s event revenues support the work we are doing to lobby at the federal level on your behalf on Capitol Hill and to build public support for the cannabis industry.

If you were at the January Industry Socials, be sure to check out our Facebook album and tag yourself!

Member Blog: Advice for Surviving and Thriving in the New Era of Legal Cannabis From Those Who Have Climbed The Mountain (Part 1)

by James Schwartz, CEO of Cascade High Organics

Look to the past to see the future

The challenges facing companies pioneering a new industry where each state deals with its own issues are numerous. The importance of strategic business planning and the ability to predict future problems are essential to survival. Colorado, Washington, and Oregon have each dealt with their unique issues and challenges but there are also common problems that every cannabis business experiences: burdensome regulation, unfair taxation, and banking prohibition to name a few. Building your company and brand is dependent on your ability to maneuver your company through the obstacles that will arise in your state market while also planning for a future of legal interstate commerce through a change in federal policy. To place your company in a position to be successful, you should understand the past to predict the future. 

Quick Summary of Cannabis History

The history of cannabis is long and distorted, however a few basic points of what brought us to the current state of federal prohibition and individual state markets should be noted for context.

Cannabis use as medicine dates back to 2700 BC in China, and has been used throughout history. In 1850, it was added to the U.S. Pharmacopeia. Prior to state and then Federal prohibition, cannabis was an elixir/tincture used in many common household cough/cold syrups and other medications for stomach-aches, asthma, depression, and many others. In the 1930s, cannabis was regulated as a drug in all states, and in 1937, the passing of the Marihuana Tax Act regulated it federally. Then in 1970, the Controlled Substances Act determined cannabis to be a Schedule 1 drug meaning it has no medical benefit and a high risk for abuse. From 1970 to 1996 the manufacture, use, or possession of cannabis was illegal in all fifty states.

CALIFORNIA

In 1996, California became the first state to legalize the medical use of cannabis through Proposition 215. California was the first domino to fall and further background of the early days of California medical cannabis will be addressed in later blogs in this series focusing on California. Over the next twenty years, 37 states have joined California with medically legal cannabis, and nine states have passed and implemented legal “recreational” (now referred to as “adult use”) cannabis programs.  

OREGON

Oregon was the second state to pass medical cannabis in 1998 and that was the start of this author’s journey through the cannabis industry. Prior to 1998, Oregon had been a bastion of black market cannabis cultivation due to its climate and wide open spaces especially in rural southern and eastern Oregon. After 1998, the state “protections” offered by medical cannabis state law allowed the cultivation industry to flourish. However, as opposed to California the state was more focused on growing weed and selling it around the country rather than setting up a distribution system to the medical patients of Oregon. This led to some of the early challenges of the medical cannabis program in Oregon. At this time, the Oregon population was relatively small compared to the state’s cannabis production. Oregon was on its way to being one of the largest cannabis producers in the country. But because cannabis was so easily accessible there was little effort put into a healthy distribution system to Oregon patients. Most patients either grew for themselves or had a designated “grower” and that is where I started in the industry.  

OREGON: FORMATION OF RETAIL ESTABLISHMENTS

As a nurse who had self medicated with cannabis for ADHD, I began growing for patients because I wanted to provide others with access to the amazing health benefits of cannabis. This was the common way most patients accessed their cannabis. There were no dispensaries when the program started and patients who didn’t have a grower were relegated to barter trade types of acquisition. In 2005, the Oregon Legislature allowed growers to be reimbursed for the cost of production and in 2010, the first dispensaries began to pop up. However, it wasn’t until 2012 that legal retail entities were allowed. This lack of a retail access point for patients was one of the first impediments to the program and allowed states like Colorado and California to take the mantel on progress of a robust program of medical cannabis distribution.

COLORADO

In 2000, Colorado became the sixth state to allow medical cannabis with Amendment 20. Its medical program remained low key until 2010 when the Colorado Medical Marijuana Code was created, which provided for licensing of production and retail establishments. This change was a giant step to the progress of cannabis legalization.

Colorado followed the early model presented in California and began implementing licensed retail establishments for card carrying medical cannabis patients. Retails stores began to flourish and this laid the groundwork for the establishment of the Adult Use program. In 2012, Colorado became the first state to legalize what was originally referred to as recreational cannabis now called “Adult Use” cannabis, which allowed the sales of cannabis to all adults aged twenty-one and older and the boom began. Colorado’s medical program developed into a rapidly growing Adult Use system and with the new federal guidance of the Cole Memo in 2013 canna-businesses began growing rapidly.

COLORADO: SEED TO SALE TRACKING

The primary language of the Cole Memo highlights a “robust tracking system” of all products produced and sold. The Cole Memo did not provide protections for cannabis businesses but provided guidance that helped assure businesses of some safety from federal interference. With the advent and implementation of a tracking system we could now be assured of where products came from and be able to track them back to their origin.

COLORADO: LAB TESTING

Once tracking was in place, lab testing for the safety of the consumer came to the forefront of industry progress. This was one of the first problems Colorado realized it had with its blossoming industry. As opposed to Oregon which required all products sold through its immature dispensary system since 2012, Colorado had not required lab testing of all its products until 2016 after several large quarantines and destruction of unsafe contaminated products. Many Colorado producers struggled with new pesticide regulations and was an early sticking point to growth of the industry. Over the first years of Adult Use cannabis program, Colorado struggled with the infancy of a brand new industry and how to regulate it and consequently, businesses suffered.

Other early challenges that the first legal state dealt with were allowable dosages and changes to dosing, as well packaging changes and the look of products, specifically how or if the products were attractive or marketed to children. The obstacles of a new industry most directly affect the businesses and their bottom lines. These are important points to consider when strategizing your business model and planning for inevitable changes to regulations. The time spent preparing for a system that will change will go a long way to ensuring for success.

WASHINGTON

Now let’s talk about Washington.

Washington was the third state to approve medical cannabis but had problems with implementation due to legislative issues. As multiple pieces of legislation were offered, adopted, and repealed, the lack of clarity prevented the medical cannabis industry from launching. Washington passed its adult use cannabis program at the same time as Colorado in 2012. In Washington, the two major obstacles the industry faced were licensing issues and taxes. A previously existing strong medical program in Colorado allowed for a seamless transition to an adult use program, but that was not present in Washington and this added to difficulties with implementing an adult use program.

Because the industry was just getting off the ground, both states relied on their medical programs as a foundation to the adult use. However, Washington’s medical program was murky and disorganized which lead to complications, Washington also limited licenses and put unfair taxes on the industry.  These two factors aided in keeping the black market as the primary driver of the industry, rather than pulling people or businesses into a controlled, tracked, and regulated system.

280E TAX CODE

This provides a nice segue to one of the challenges all cannabis business face: unfair taxes in the 280E tax code. Internal Revenue Code section 280E specifically denies a deduction or credit for any expense in a business consisting of trafficking in illegal drugs “prohibited by Federal law or the law of any State in which such trade or business is conducted” which translates to only “Cost of Goods Sold” as the only deductible expenses. This means administrative costs, executive salaries, marketing and advertising, banking fees, etc., are non-deductible expenses for any cannabis business and subjects them to much higher taxes as most normal business deductions are prohibited. This challenge is one all cannabis businesses deal with and must be factored into financial modeling.

BANKING

While we are on the the subject of taxes and non-allowable deductions, banking is the other major challenge all cannabis businesses face. Due to federal policy around an illegal substance, FDIC insured institutions force canna-businesses to operate in all cash for fear of prosecution under racketeering and money laundering laws. There are a handful of financial institutions, credit unions, or state banks that offer “Enhanced Monitoring Accounts” for cannabis companies. However, they are highly priced and rare. The average cannabis bank account is likely to run $1,000.00 a month, just to have access to banking services, not including additional fees. This $12,000 a year budget line item, while not only expensive, is not a tax write-off per 280E tax code.

One can quickly see from just these two major hurdles or challenges to the industry, normal operations can be difficult. These obstacles are not to be taken lightly; they can be addressed but it must be factored into operating procedures, financial planning/budgeting, and strategic vision.  

NOW BACK TO STATE SPECIFIC ISSUES

As Washington and Colorado dealt with its issues, Oregon voted to approve “Adult Use” cannabis in 2014. Using Colorado and Washington as a guide, Oregon implemented their system with more deliberation and vision based on what had been experienced in the first two states. But as was seen with the unique challenges in the first two states, Oregon encountered an entirely different set of problems. Oregon currently faces a massive oversupply problem which has affected all facets of business across the industry. In normal business and supply and demand economics, if an area is oversupplied, business move their products to where the demand is higher or the supply is lower. However, cannabis remains a federally illegal product and therefore interstate commerce remains illegal.

Oregon’s unique problem originated from two main issues:

  • Oregon had already established itself as a cultivation mecca
  • The regulatory authority decided against a cap on licenses

This lack of license caps has allowed the number of licensees to explode and thereby allowed the oversupply issue to occur and continue to grow. As stated, this is not a problem exclusive to cultivator/producers. Because of a 75% drop in value, cannabis attorneys, electricians, HVAC, security companies and other ancillary businesses are not getting paid. The oversupplied market and decreased revenue has reverberated across the industry and driven otherwise thriving companies into bankruptcy.  

As you can see, each state deals with its unique challenges when implementing its Adult Use cannabis program, while we all deal with some issues that affect us all. The key to thriving… or surviving is to prepare your company to deal with the current challenges shared by us all and predict the challenges that your business will face in your state while preparation is taken for a national and international market.


James Schwartz RN, BSN, LNC, is an experienced medical legal consultant and CEO of CascadeHigh Organics with 20 years experience cultivating legal cannabis. James is a self-described organic minimalist cultivating in the most sustainable manner. James believes in clean cannabis and its use as a wellness drug. His Oregon licensed cultivation, Cascade High, has been featured in Dope Magazine and on the cover of Oregon Leaf’s Sustainability issue (March ‘18). James was featured as the Inaugural Stoner Owner by OR Leaf in Dec 2018. He has articles published by Dope Magazine about Cannabusiness and the Pharmaceutical Industry (May 2017), as well as a medical cannabis article in the Jan. 2019 Healthcare issue of OR Leaf. James is currently on the NCIA Cannabis Cultivation Committee and has presented Cannabis topics to multiple audiences at conferences including Cannabis Science Conference, PDX Hempfest, Cannabiz Convention, CBD Expo and Webinar series, Cannabis Collaborative Conference(CCC), Cannabis Nurse Conference, NCIA and educational industry mixers. His business, legal, medical, and agricultural knowledge provides a unique perspective on the industry. James has lobbied for Cannabis on both the national and state level with Oregon Cannabis Association and is a fierce advocate for the plant and all who use it.

NCIA at the Washington Cannabis Summit

by Rachel Kurtz, Outreach Manager

NCIA had the pleasure of attending and presenting at the recent 5th Annual Washington State Cannabis Summit, presented by The Cannabis Alliance, Washington state’s leading trade association for the cannabis industry and a member of NCIA’s Allied Associations Program. This conference is always extremely well done, with high caliber speakers on informative panels covering topics such as cannabis economy and markets, agronomy, and therapeutic values. Plenty of time left for Q&A allowed further engagement with the audience, sparking deeper conversations throughout the day.

NCIA’s Government Relations manager Michelle Rutter spoke on a policy panel about what’s happening around cannabis at the federal level in the other Washington, D.C. The panel was a holistic view of policy from around the country, including panelists Casey Houlihan, Executive Director of the Oregon Retailers of Cannabis Association; Cat Packer, the first Executive Director of the Department of Cannabis Regulation for the City of Los Angeles; and Rick Garza, Director of the Washington State Liquor and Cannabis Board (WSLCB).

The attendees were very interested in the social equity work happening around the country, and we learned that the WSLCB is making efforts in that area. It was also heartening to see Rick Garza taking notes when Cat Packer spoke about ways that California is trying to help the industry reach its customers by allowing consumption events without compromising safety or the integrity of the traceability program.

The highlight of the event came early in the day when Governor Jay Inslee, who had just three days prior announced his candidacy for President, told the room he planned to pardon thousands of people convicted of small cannabis possession charges. This would be done by creating an expedited process where people could apply for and receive a pardon in a simple fashion without needing a lawyer. It is expected to affect around 3500 people.

Why it’s Critical For Cannabis Business Owners to Advocate for Policy Reform

by Rachelle Lynn Gordon, NCIA Editorial Contributor

Cannabis legalization reform has been in the works for years and will certainly continue for years to come due to the plant’s Schedule I status. In addition to the activists and organizations who have paved the way for marijuana legalization for decades, such as NORML, Marijuana Policy Project, and Students for Sensible Drug Policy (SSDP), cannabis business owners are now at the forefront of what will most certainly be a multi-billion dollar industry within a short matter of time. But why is it important for these cultivators, dispensary owners, and investors to be directly involved with legalization advocacy?

“Advocacy is critical at this stage, where there is still so much progress to be made at the state and federal levels,” says David Murét, Co-founder & COO of Viridian Staffing. “While I believe that national legalization is now a foregone conclusion, the form in which it takes and who it will end up benefiting is still an open question.”  

At this point in time, 30 states and the District of Columbia have legalized medical and/or adult-use cannabis, each one with their own set of rules and regulations. As more and more states begin to come online and design their own programs, lawmakers will look to states where cannabis is already legal in order to learn from both successes and mistakes. At the federal level however, things are far more complicated.

While marijuana remains an illegal drug in the eyes of the federal government, certain protections are in place for businesses that are operating in compliance with their own states’ regulations. Several members of Congress representing these states have been pushing for even further protections and/or straight legalization, in spite of current Attorney General Jeff Sessions’ staunch anti-cannabis stance. In January, Sessions rescinded the Cole Memo, which had previously stated that federal funds shall not be directed towards enforcing federal cannabis policy within states that have passed for those operating in compliance with the items stated in the memo. However, this doesn’t mean that state prosecutors have to go after compliant businesses

Fortunately, the move was a moot point. A rider bill in the federal budget proposal, which is essentially a must-pass in order to prevent a government shutdown, maintained the protections that the Rohrabacher-Farr amendment (now Rohrabacher-Blumenauer amendment), which prevents the DOJ from going after state-legal medical cannabis. A bipartisan group of 62 members of Congress sent a letter to House appropriations leaders calling for action.

“We respectfully request that you include language barring the Department of Justice from prosecuting those who comply with their state’s medical marijuana laws,” the lawmakers, led by Reps. Dana Rohrabacher (R-CA) and Earl Blumenauer (D-OR), wrote. “We believe such a policy is not only consistent with the wishes of a bipartisan majority of the members of the House, but also with the wishes of the American people.” These protections are now included through September 30th.

David Sutton, President & COO of NanoSphere Health Sciences, agrees that time is of the essence in order to create new legislation that will positively impact the industry in years to come.

“Cannabis business owners and professionals have to participate in advocacy,” he argues. “No matter how many states adopt some form of cannabis legalization, the industry still needs change at the federal level. Without a federal shift in cannabis policy, operators in the industry will remain hampered and handcuffed from growth.”

Many canna-business owners are not only involved with pro-legalization policy efforts with the industry’s future in mind, but also the end consumers. High-profile cases of medical marijuana patients becoming ill due to flower containing mold and instances of widespread pathogen prescences from certain cultivators have increased efforts to prevent these products from getting to market.

“We have a responsibility to ensure this business grows in the right way,” explains Brett Johnson, Founder & CEO of Spectrum-Gro. “We have to be the adults in the room. I am always advocating for the end users – we need to guarantee safe and consistent products that are free from harsh chemicals and other pathogens. If the current leaders in this industry do not advocate for the future, there could be negative results across the board – from cultivation to the consumer.”

There are many ways business owners and professionals within the cannabis space to get involved with advocacy. NCIA Lobby Days brings hundreds of industry professionals and thought leaders to Washington, D.C. in order to tell their stories to lawmakers and push for cannabis reform. In addition, working with local organizations within their own states and jurisdictions is a wonderful way for entrepreneurs to spread awareness and potentially help build legislation in their communities.

“If we want to see how big the industry could be and how many lives can be changed for the better, you cannot simply rely on just hope, everyone needs to act,” adds Sutton. “Change comes from the masses and the masses need each and every owner and professional to participate in industry advocacy.”


Rachelle Lynn Gordon is a Minneapolis-based writer and reporter and graduate of Hamline University. She has contributed to publications such as Cannabis Now Magazine and High Times.

 

Register today! NCIA’s Cannabis Industry Lobby Days – May 16-17, 2017

Eager to get more involved in cannabis politics and make your voice heard? Wondering how you can help secure the future of our industry in a time of uncertainty? Good news! NCIA’s annual Cannabis Industry Lobby Days in Washington, D.C. are coming in May.

It’s one of the most important ways you can stand up for cannabis reform and your business, and we don’t want you to miss it.

So CLICK HERE TO REGISTER TODAY and join us on May 16 and 17 for NCIA’s 2017 Cannabis Industry Lobby Days. NCIA’s Lobby Days provide the best opportunity to show our nation’s decision-makers what a responsible and legitimate cannabis industry looks like.

NCIA’s 2016 Cannabis Industry Lobby Days.
Photo: Kim Sidwell, Cannabis Camera

NCIA members from across the country descend on Capitol Hill to tell their stories and urge their representatives to fix the unfair tax and banking policies crippling our industry.

With victories in eight states across the country during the 2016 presidential election, as well as the challenges ahead of us as we see a new administration come in to the White House, fixing federal policies is more critical than ever. Our team in Washington, D.C., works every day to make the industry’s voice heard, but nothing matches the power of a personal story personally told.

Ready to sign up? Register for NCIA’s 2017 Cannabis Industry Lobby Days now, and we’ll start the planning to make your experience the most influential it can be. (NOTE: NCIA’s Lobby Days event is only open to members, so if you haven’t joined NCIA yet, now is the time!)

We’re excited that this year’s Lobby Days are being held in conjunction with the Spring 2017 Marijuana Business Conference & Expo , May 17-19 in Washington, D.C. MJBizCon is generously extending a $100 discount on full conference registration for Lobby Days attendees so be sure to register for Lobby Days and we’ll send the discount code in your confirmation e-mail.

We look forward to seeing you in D.C.!

Thank you to the co-chairs of NCIA’s Policy Council for their premier sponsorship of our 2017 Cannabis Industry Lobby Days:

Medmen.LogoHorizontalRed.Reg

LivWell - LogoCanndescent_Logow_vapes_logo

Are you interested in sponsorship opportunities for your company at NCIA’s most important policy event of the year? Contact us at sponsorship@thecannabisindustry.org to find out more!

VIDEO: Member Spotlight on Solstice

In this video newsletter, we share the story of Solstice, a commercial cannabis producer founded in 2011 and based in the state of Washington. Vice president and co-founder Alex Cooley has infused his business model and practices with values that elevate the conversation around environmental sustainability and corporate responsibility in the cannabis industry.

Want to learn more about best practices and innovation for your cannabis business?
Register early for the best deals to attend NCIA’s Seed To Sale Show in Denver, January 31 – February 1, 2017.
Sponsorship opportunities are also available!

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Member Spotlight: District Growers

dglogoWhile the fate of establishing a well-regulated cannabis industry in the District of Columbia remains up the air, a small handful of medical marijuana dispensaries have been operating for several years to serve extremely ill patients in our nation’s capital. Located in the northeast neighborhood of our nation’s capital, District Growers is a close-knit, local business founded with the goal of creating only the highest quality cannabis products on the market. This month, we chat with owner Corey Barnette to hear more about efforts to serve the community of Washington, D.C.

Tell me a bit about you and why you opened District Growers?

District Growers owner Corey Barnette
District Growers owner Corey Barnette

My background is that of an engineer-turned-investment-banker-turned-venture capitalist. In early 2003, I stepped away from the Small Enterprise Assistance Fund, an emerging market venture fund, to acquire small high-growth companies operating in traditional industries. Between 2003 and 2010, I and my team acquired six different small businesses across the country in numerous industries.

In 2008, a friend and colleague invited me to serve on the board of – and eventually acquire – the San Diego Medical Collective (SDMC), a dispensary in San Diego, California. The purchase of SDMC was my entry to the formal medical cannabis industry. While operating in San Diego, my team and I built two of the ten largest dispensaries out of more than 238 dispensaries in the San Diego area. We served a patient base greater than 16,000 patients strong and produced approximately 30% of the medicine provided within our own patient gardens. After federal authorities began threatening landlords in the San Diego area, I sold the operations in San Diego to my employees after converting our platform to a delivery service.

Upon winning a license in Washington, D.C., where I maintained residence since 1999, I founded District Growers to offer medical marijuana program patients with safe, high-quality, medicinal-grade cannabis and cannabis-infused products. I also acquired the Metropolitan Wellness Center, a licensed dispensary in Washington, D.C., to provide a high-quality, dignified purchasing experience to patients in a comfortable and aesthetically pleasing environment. Leveraging our prior experience, knowledge of local preferences, and superior operating tactics, we have become the largest dispensary operator in Washington, D.C., with approximately a third of patients belonging to our dispensary exclusively.

Why should patients seeking medical cannabis seek out District Growers?

districtgrowersAt District Growers, we recognize that patients depend on our products for their livelihood and well-being. Further, many of those patients are our employees, relatives, and friends. Because of this, we engage in a constant quest to offer the best quality products – bar none.

Internally, we use the phrase “Grow True” to define our efforts. We use this term as a constant reminder of our goal to provide to those who depend on our solutions. To accomplish this, we marry cutting-edge cultivation solutions, proven technologies, and nature’s very own touch to achieve unmatched quality. When it comes to cultivation, we believe that convenient shortcuts should never overcome proven methods. Consequently, we have taken the time to optimize our methods and processes to deliver the highest quality. From our production methods to our service, we endeavor to exceed all expectations. It is not enough to be the best if the best is not perfect. Put simply, to Grow True is to pursue perfection.

As a business owner, you’re very involved in your community and in causes that you care about. Can you tell us more about what matters most to you, and how your business participates in pushing for progress?

The team at District Growers
The team at District Growers

As a provider of relief solutions to the sick and vulnerable, District Growers views its entire offering as a betterment to the community. Additionally, we recognize that our industry carries with it a negative taboo. To combat this taboo and to carry the burden of good stewardship within our community, we push for progress primarily in three ways: in the garden, in the community, and in the town hall.

In the Garden – Simply put, we endeavor to be the most trusted source of medicinal grade cannabis to patients seeking treatment with cannabis.

In the Community – District Growers is a strong supporter of community gardens in Washington, D.C. We offer employees paid time-off when such is approved in the service of working with community gardens and in-home fruit & vegetable gardens.

In the Town Hall – District Growers actively works with legislators, regulators, and activist organizations to set policies around cannabis that better serve the public interest. It is our belief that today’s prohibitionary policies do more harm than good to our society. Consequently, we actively seek to change these policies for the betterment of our communities and our industry.

Why did you join NCIA?

Because we exist in an industry that suffers a negative stigma, it is imperative that we organize as an industry to promote our industry image, to promote good policy, and to promote good outcomes. NCIA is best positioned generally to do that. Consequently, we seek to be supportive.

Member Spotlight: Cannabis Basics

To kick off 2016, we speak with Ah Warner of Cannabis Basics, whose company saw a landmark year in cannabis policies in her state of Washington. She also recently won ‘Best Topical Brand’ at the 2015 Dope Industry Awards in Washington. Many in the industry and movement look up to her involvement in both her community and her direct activism, setting a tone for others looking to create a successful and responsible business in the cannabis industry.  

cannabis-basics-logo-2015Cannabis Industry Sector:

Cannabis-Infused Products

NCIA Member Since:

February 2013

How do you uniquely serve the cannabis industry?

We are dedicated to true whole genus cannabis topical therapy.

Cannabis Creations, now Cannabis Basics, was founded in 1995. Back in those days, there were many hemp body care manufacturers working with hempseed oil because of its amazing nutritive value for skin care. Today there are a host of cannabis topical producers that focus on cannabinoids from the plant and also CBD-derivatives from hemp that speak to our CB2 receptors. Cannabis Basics is this rare and beautiful place where the essential fatty acids and anti-inflammatory properties of hempseed oil and the multiple cannabinoids and terpenoids from cannabis are blended together with an arsenal of other botanical constituents to provide natural localized therapy for symptoms brought on by a myriad of conditions.

Why should customers seeking cannabis-infused topical products use Cannabis Basics?

ah-in-labWe never use animal products, man-made fragrance oils, or chemical preservatives. We buy locally and organically whenever possible. Supporting Cannabis Basics is also activism because it enables us to continue to work for the betterment of our industry and community as a whole.

Still working!

You achieved two important milestones in the cannabis industry this year: You secured one of the first U.S. cannabis trademarks, as well as achieving passage of the Cannabis Health and Beauty Aid Exemption. Tell us about that.

On August 25th, 2015, the USPTO awarded Cannabis Basics the first federal registration to a brand/logo displaying both the leaf and the word “cannabis” representing an actual product that contains cannabis, not a service or institution. Cannabis Basics has two distinct lines, one that contains cannabis (industrial hempseed oil) that can be sold anywhere in the world, and the other that contains cannabis (I.H. and multiple cannabinoids including THC) sold only in the state of Washington.

It is important to note that the USPTO did not award federal registration based on my cannabinoid line of products. Federal protection was awarded for my cannabis industrial hemp products however, and due to same branding, will by default provide protection to the entire Cannabis Basics family of products.

ah-with-senatorWhat started out as stand-alone sister bills with bipartisan support actually passed on June 30th as Section 7 of HB 2136, an I-502 tax fixer bill, and was signed into law by Governor Enslee. This law was enacted on July 1st, 2015, and is the first of its kind in the country. The CHABA law defines Cannabis Health and Beauty Aids for the first time in our legal lexicon as “cannabis products for topical use only, non-intoxicating and contains less than .3% THC.” It defines these products as not marijuana and allows for them to be sold to any mainstream retailer in the state of Washington, i.e., any health food stores, salons, or spas. The much larger significance of this new law is that it is the first removal of anything cannabis from the Washington State Controlled Substances Act.

I would be remiss if I did not take this platform to thank all the legislators who played a part in moving CHABA through Olympia, especially Washington State’s Cannabis Champion Senator Jeanne Kohl-Welles and my co-author/policy advisor Kari Boiter. The state of Washington and anyone who uses or produces CHABA are forever in your debt.        

Why did you join NCIA?

Our goal at Cannabis Basics is to make Cannabis Health and Beauty Aids accessible to all health-conscious consumers everywhere in the U.S. and to be able to export to any country that is interested in importing these types of products. Being a member of NCIA has given me access to the movers, shakers, and policy-makers so that I may work efficiently at this ultimate goal.

Contact:
Website
Facebook

Guest Post: Legislation, Rule-Making, and the Necessity to Be a Unified Industry

teamworkBy John Davis, Northwest Patient Resource Center

In the 2015 legislative session, much changed in Washington State cannabis law. As with any change in cannabis law in any state, there is much drama that happens after such a change. Usually there is much bickering, finger-pointing, rumors, and misinformation in general. People seem to come out of the woodwork with often nonsensical interpretations of the new law. This often makes me wonder where they were during the legislative session when they may have been able to change the details that seem to trouble them now.

The fact is that all laws passed are imperfect. They are going to need to be fixed and those fixes are going to need to be fixed. There is not just one person that writes what is passed as law. There is a plethora of authors that include industry, interest groups, law enforcement, localities, citizen groups, and many others. Omnibus laws are going to advance some things and create problems elsewhere. This is to be expected.

The thing about law is, once it has passed and been signed by the Governor, it is what it is until the next session. This is not the time for bickering for those that are serious about making positive change. This becomes a time to work together. Once a bill becomes law, the legislative verbiage is put through a process called “rule-making.” In this rule-making, things can be steered within the framework of the law. In addition, the time before the next legislative session is a perfect time to solicit consensus and to author and shop legislative verbiage to potential bill sponsors.

After passage, no matter whether you like the law or not, it needs to be studied. It should be done dispassionately. It should be done section by section. You should ask yourself:

  • What does this section say?
  • What is the legislative intent of the section?
  • What is the synopsis of the section?
  • What rule-making does this section call for and by which agency?
  • Are there things in this section that need to be changed in subsequent legislative sessions?

You should write your answers to these questions down so that you can refer to them later. This is the way that you can be most effective at influencing rule-making and achieving success in subsequent legislative sessions. Really, how are you to influence rule-making when you don’t know what rule-making is going to happen with which agency? How are you going to achieve consensus enough to get changes in a legislative session when you don’t know specifically what needs to change?

We in the cannabis industry need to stop the self-destructive habit of thinking of legislative changes as “good” or “bad.” During session we need to do our best to be influential to produce the best results possible. After a law is passed we must come together to produce the best possible results in rule-making and plan for the next legislative session. To do this we need to stop finger-pointing and work together. Divisiveness and name-calling poisons the well for consensus-building.

Approaching a rule-making body or legislature as one person or organization is not going to be very influential.

Approaching the same as an industry with a common voice is powerful and will be extremely helpful in creating positive change.

We must put aside the pettiness and ego and work together for the betterment of the industry and the movement. Those that are willing to work together need to be finding the others that are willing to work together. We need to be focused on listening to others in the industry to understand what their ideas and concerns are. We need to include the end users and to consider their points of view. We need to have patience with each other. We need to put in the work to build consensus on the changes that need to be made. We need to be willing to compromise for the greater good. We need to accept that what happens in the end will not be perfect. We need to, in short, be an industry.

Prohibition is the enemy, not each other. To that end, we have been working to bring together the various industry groups in Washington State to form a super organization that is allied in its purpose. The Coalition for Cannabis Standards and Ethics, CAUSE-M, WAMJA, WMA and Northwest Producers, Processors, and Retailers have formed a Steering Committee to bring these organizations under a common banner. These groups represent the full spectrum of the industry, consisting of producers, processors, retailers, and ancillary businesses. It is my belief that there needs to be industry consensus even when there may be differences in perspective. Retailers and producers working against each other in a lobby effort really just has the effect of negating both. We are looking forward to merging together and ultimately forming a commission that is state-recognized.

Together we will move into the future.


John Davis, Northwest Patient Resource Center
John Davis, Northwest Patient Resource Center

John Davis, an entrepreneur and drug policy activist in Seattle, is founder of Northwest Patient Resource Center. After managing the oldest and longest running medical cannabis dispensary in the state, Compassion In Action, John founded Northwest Patient Resource Center, where he currently serves as the organization’s Chief Executive Officer. John is a founder of the Coalition for Cannabis Standards and Ethics (CCSE) and currently serves as the Executive Director of the industry group. He also chairs the CCSE Access Point Subcommittee. John is on the Board of Directors of the National Cannabis Industry Association (NCIA) and the Cannabis Defense Coalition (CDC), and is on the Advisory Board for Blue Sage Microbes and Life Sense Technologies.

Member Spotlight: Pioneer Nuggets

NCIA’s Member Spotlight for the month of May takes us up to Arlington, Washington, to speak with Fitz Couhig, CEO of Pioneer Nuggets, an indoor craft agriculture company that supports the adult retail consumer industry for cannabis in Washington State.

Cannabis Industry Sector:Circle

Cannabis Cultivation

NCIA Member Since:

2014

How do you uniquely serve the cannabis industry?

We focus on the core competency of making a quality flower product for consumers. Focusing on a core competency and providing effective just-in-time inventory services are setting us apart. Our assembly-line work flow and perpetual production that supports our made-to-order inventory management system are unique as well.

Why should customers buy cannabis grown by Pioneer Nuggets?

Black Haze cannabis strain, grown by Pioneer Production and Processing, LLC
Black Haze cannabis strain, grown by Pioneer Production and Processing, LLC

We serve consumers over the age of 21 that enjoy cannabis and visit an adult-use (+21) retail shop in the State of Washington. Adults should go with Pioneer Nuggets because they enjoy cannabis that is smooth and high in flavor profiles.

Can you give us some insight into the cannabis community in Washington, the challenges, upsides, and where you’d like to see it go?

The most unique challenge is being a wholesaler. No other taxed and traded system involves wholesaling and distribution, and we are required to do it without the help of any other organization. Serving retailers is what we do. We would like to see the industry move in the direction that allows retailers, processors, and producers to all thrive. We need tax reform and we need to be treated like normal businesses.

The Pioneer Nuggets team, based in Arlington, WA
The Pioneer Nuggets team, based in Arlington, WA

How many employees do you have and how many customers do you serve?

We have 18 full-time employees and serve around 25 licensed retailers. It takes a lot of great people to continually make sensational products and provide excellent customer service.

Why did you join NCIA?

We joined NCIA for two reasons. One, the organization structure is well designed to develop a quality trade association for the cannabis industry we are a part of. Two, the team of people responsible for the NCIA and supporting its efforts and mission. We believe NCIA will succeed in creating the standards and forums industry professionals need, that our employees need, and that our organization needs.

Contact:

Pioneer Nuggets Website

Pioneer Nuggets Facebook

Pioneer Nuggets Twitter 

NCIA Member Profile: Green Chiefs Baked Botanicals

This month, NCIA spoke with Stesha Reis, director of operations for Green Chief and Baked Botanicals in Washington state. They were the first edibles on the recreational market in Washington and will soon be launching a line of topicals. She is also the president of the Washington Marijuana Association as well as being involved in many other groups.GreenChiefs_logo

Cannabis Industry Sector:

Infused Cannabis Products

NCIA Member Since:

2014

A selection of infused chocolates by Green Chiefs Baked Botanicals
A selection of infused chocolates by Green Chiefs Baked Botanicals

How do you uniquely serve the cannabis industry?

Baked Botanicals uniquely serves the cannabis industry through the largest selection of tested cannabis edibles in the state of Washington. We strive to provide a safe, enjoyable, and consistent experience to everyone. Many of our employees have been in the cannabis industry in one way or another for more than 10 years. We honestly care about our products and are continuously striving to have the best – the best experience, the best tasting, the best ingredients. We have people who love what they do and it shows in our products.

Why should those seeking infused cannabis products look for Green Chiefs Baked Botanicals?

Those seeking cannabis-infused products should look for Baked Botanicals because we make everything by hand, from scratch, with quality ingredients. We offer edibles that you would find in a good bakery, or in your mom’s kitchen…only infused with high-grade cold-pressed CO2 Oil. We want the consumer to be able to look to us as the “Gold Standard” in cannabis edibles.

You’ve been working closely with various groups in Washington state on cannabis regulations. Tell us more about what you’ve been doing to “raise the bar” for the cannabis industry.

CO2 extraction machine
CO2 extraction machine

We as a company have striven to be an answer and sounding board for other new producers, processors, and retailers as they go through the processes to become cannabis entities. We want everyone to feel like we can get our questions answered, and we want to help get other people’s questions answered. The more knowledgeable that we are as a state and as a group of entrepreneurs, the more successful we will be and the better we will be able to educate the general public.

Why did you get involved in NCIA?

We got involved in NCIA to be a part of something bigger – something that would have a positive impact on the cannabis market in Washington. We are here to learn from the best and exchange ideas and information relevant to our market.

Contact:

Stesha Ries

Green Chiefs Baked Botanicals Facebook

If you are a member of NCIA and would like to contribute to the NCIA blog, please contact development officer Bethany Moore by emailing bethany@thecannabisindustry.org.

Guest Post: Marijuana Victory in Oregon! Now What?

Oregon passes Measure 91, legalizing cannabis for adults on November 4th, 2014

By Ford T. Pearson, Flip-Side Magazine

[Editor’s note: Congratulations to everyone who worked so hard on the Measure 91 campaign to pass legal cannabis laws for adults in Oregon. The initiative passed with 52% of the vote. Well done! – Bethany Moore, NCIA]

(Excerpt submitted by Flip-Side Magazine)

Measure 91, Oregon’s adult-use marijuana legalization initiative, is likely the most elegant articulation of US regulated marijuana enterprise to date.

To be fair, Flip-Side Magazine’s paradigm of what is a good piece of marijuana legislation is heavily skewed by the economic opportunity it presents for stakeholders. While it’s clear the authors of Measure 91 remedied many of the flaws within Colorado and Washington state’s still new marijuana programs, where the measure really excels is the astounding potential for commercial endeavor.

Wholesaler category

“’Marijuana wholesaler’ means a person who purchases marijuana items in this state for resale to a person other than a consumer in this state.” —Measure 91

Measure 91 includes four stakeholder categories for which you can apply for a license. Like Washington’s I-502 categories, Measure 91 categories include producer (grower), processor, and retailer licenses. But Measure 91 also includes an exciting new category: wholesaler. The wholesaler license category, missing from Washington’s marijuana program, will make life easier for Measure 91 producers/processors and expand employment within Oregon’s marijuana program. As Washington’s I-502 producer/processors are now learning, selling marijuana can be an extremely daunting task. Even with just 66 of the planned 334 retail stores open, many I-502 processors are surprised at how time-consuming it is to manage and reconcile the preferences of 66 different buyers. Under Washington’s I-502 rules, processors have to sell directly to retailers or hire third-party marijuana sales or strain acquisition consultants to facilitate sales activities for them. Those consultants have to provide their services within a very narrow definition of activity in order to keep the transactions compliant with I-502 rules. Among the restrictions they face is the inability to actually purchase and resell marijuana the way a traditional wholesaler would. Oregon’s Measure 91 wholesaler category provides a remedy for that specific limitation and adds an entirely new facet of economic opportunity to Oregon’s implementation of a regulated, legal marijuana industry.

No “tied house” prohibition

“The same person may hold one or more production licenses, one or more processor licenses, one or more wholesale licenses, and one or more retail licenses. ” —Measure 91

Measure 91 allows for a completely vertically integrated marijuana organization. For example, under its generous licensing scheme, Measure 91 stakeholders could own several producer/processor operations, a couple of wholesale operations, and dozens of retail outlets throughout the state. Allowing this kind of structure not only increases economic opportunity, but also creates an environment that can eliminate inventory volatility and would enable micro-chains to provide consistent and reliable access to the most marketable strains of marijuana and marijuana products.

No residency requirement!

Perhaps the most significant characteristic of Measure 91 is that it does not require stakeholders to be residents of Oregon. Both Colorado’s and Washington’s programs restricted engagement (including investment from speculators) of their legal marijuana industries to residents of the state. I have to admit, when I first learned of this characteristic of Measure 91, I was disappointed. I’ve spoken to literally hundreds of I-502 applicants and licensees, and every single one of those was a small, usually family-run, business. Once Washington’s cannabis program catches its stride, those families will lay claim to their share of a half-a-billion-dollar-a-year industry, and that’s a beautiful thing.

After considering it, I think the benefits the non-residency characteristic presents likely outweigh the negatives. True, one could worry about giant companies coming into Oregon and buying up all of the strategic locations and/or resources needed to grow Oregon’s new marijuana industry, and that’s certainly possible under Measure 91 rules. However, even if that did occur, those out-of-state entities would rely upon locals to implement their plans and this would create significant employment and economic opportunities for those people. Also, and quite ironically, legal marijuana’s primary nemesis, its status as a Schedule 1 drug per federal law, works against large companies investing heavily in Oregon’s program. Federally speaking, not only would those large, out-of-state corporations be breaking the law, but they would also be crossing state lines to do so. There’s a good chance that’s more stress than your typical VP of marketing and development can tolerate. Also, it’s possible that there are quite a few Oregonians with the proverbial rich uncle who lives out of state, so the no-residency requirement would prove beneficial should they decide to engage the industry.

Anthony Johnson celebrates the passing of Measure 91 on November 4th 2014. Photo courtesy of Sam Chapman.
Anthony Johnson celebrates the passing of Measure 91 on November 4th 2014. Photo courtesy of Sam Chapman.

Go with a pro

Consider hiring a cannabis-centric attorney such as Oregon’s Paul Loney or Canna Law Group, or a marijuana enterprise consultant (usually cheaper than attorneys), or both, to guide you through the startup and license application phase.

Know the numbers

Starting up a legal marijuana business ain’t cheap. Many of the mandatory regulatory aspects of a legal cannabis business, such as fencing, surveillance and security, insurance, zoning, etc., can be big-ticket items. In Washington, even a small, Tier 1 Producer operation is easily a $100,000 investment. And if you’re a wannabe retailer, don’t forget inventory cash! Right now in Washington state, there’s a retailer bank-wiring $230,000 to a producer/processor for what is likely a 10-day supply of marijuana. Make sure you’re clear on the cash requirements for implementing your business and make sure you can access that cash. Also, be prepared to show the OLCC precisely where that cash is, and where it came from.

Hang tough!

Enduring bureaucratic scrutiny can be exceedingly frustrating. The hoops through which Measure 91 stakeholders will have to jump are significant, and you may reach a point where you consider just bagging it. Don’t. I know people who’ve quit the I-502 process, and not a single one of them is content with that decision. Don’t forget that you’re fighting for an opportunity that represents potentially generations of prosperity for you and your family.

Ford T. Pearson is Publisher/Editor of Flip-Side Magazine, a sponsoring level member of NCIA since 2014. Ford has significant experience within the legal marijuana industry, including working as a publicist for cannabis-related businesses, and as a consultant helping applicants of Washington’s Initiative 502 legal adult-use marijuana program, Oregon’s HB3460 program, and Oregon’s Measure 91 program. Flip-Side Magazine provides news and resources for the northwest cannabis industry, and is the only marijuana trade publication serving Oregon and Washington cannabis professionals.

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