by Brooke Gilbert, Director of Events and Education
NCIA’s inaugural Seed To Sale Show was a smashing success! Take a look at some of the highlights below, which made this a must-attend event for those in the cannabis industry:
More than 2,200 attendees.
The first ever Cannavation and Cannatech Awards, which recognized trailblazing individuals and companies driving the growth and elevation of the cannabis industry. You can see a full list of the winners here in our official press release.
An in-depth informational keynote from Mowgli Holmes, co-founder and chief scientific officer at Phylos Bioscience, on the evolving genetic understanding of the cannabis plant and what that means for further transparency within the cannabis supply chain.
Eight hours and 15 minutes of educational content over two days, featuring breakout sessions, committee-guided roundtables, and open Q&A sessions led by more than 40 industry experts.
More than 50 media personnel from more than 30 media companies joined us throughout the two days, generating more than 4.5 million impressions worldwide.
In this month’s NCIA Member Spotlight, we speak with the team at National Grow Technologies, who offer a variety of services and products to support the cannabis industry. Recently, NGT sold a cannabis flower batching and sorting machine right on the expo floor of NCIA’s Seed To Sale Show to fellow NCIA member The Clinic.
National Grow Technologies
Cannabis Industry sector: Equipment and Consulting
NCIA member since: The NGT founders have been members of NCIA since 2010 through different endeavors. National Grow Technologies has been a member since its formation in 2015.
Tell us a bit about your background in cannabis and how the team at National Grow Technologies came to fruition?
National Grow Technologies‘ background stems out of the formation of the Colorado medical and adult-use cannabis markets. Our team brings 25 years of combined experience in the regulated cannabis industry as well as 50 years of combined horticulture experience. This includes build-out, ownership, and management of multiple dispensaries and full-scale cultivation operations, originating in 2009. We have since been involved in multiple projects, in numerous regulatory states, both nonprofit and for profit.
NGT team: Scott Field, Chandra Carleton, Bruce Granger, and Bill Campbell
From the beginning, the need for regulation was obvious, prompting our involvement at a legislative level. This includes involvement in SB 10-109 and HB 10-1284 as well as the Rule-Making Workshop in 2010. What an exciting, educational experience, helping create the first regulated cannabis market. If we only knew then what we know now.
As you can see, our passion for the cannabis industry runs deep. Through that passion, NGT developed organically, just as we developed our own dispensaries and cultivations. We immediately became involved in the national cannabis market, traveling to cannabis-related events, meeting many people in the industry and trading knowledge. We have always held the belief that “helping someone else learn strengthens our own education.” Through that enlightening experience, our processes to bring a quality commercial product to market were developed. Since that time National Grow Technologies and its partners have been working to help new and exciting businesses develop and refine the quality of their process.
What unique value does NGT offer to the cannabis industry?
National Grow Technologies does not just sell best-in-class equipment such as the GVS Precision Batcher or the GreenBroz trimmer; we also use our extensive experience to ensure that this equipment works for our clients. As the cannabis industry has evolved, many new products have been developed. Not all have effectively executed the operation for which they were designed, or are capable of integrating with commercial processes. Through extensive testing and use of various industry specific machinery, we are able to choose the highest performing equipment on the market. We take great pride in not just supplying this equipment, but also providing the training, services, and process development needed for repeatability of success.
Our training and support is what distinguishes our company. For every piece of equipment we sell, we strive to create an environment capable of its full potential. We realize even the best equipment can have its effectiveness diminished if used incorrectly. That is why NGT offers training programs with every piece of equipment we sell. Once you have successfully completed training and operations begin, the equipment must remain functioning optimally. NGT also has service programs for every piece equipment we sell. We recognize that our success is only possible with yours.
The GVS Precision Batcher, sold to The Clinic on the expo floor at NCIA’s recent Seed To Sale Show
While supporting our clients through the integration and implementation of new equipment, we are aware that changes in process produce ripple effects through other processes or even the Standard Operating Procedures of a facility. Since our inception, we have been fueled by a desire to increase efficiency of cultivation operations, while recognizing the limitations of each facility. We have the skills necessary to refine your process, review plans to assess proposed process, or put processes into SOP documents. We are here to help.
By viewing a facility systemically through its entire manufacturing process and integration of new equipment, NGT assists our clients to optimize production. We do not run cultivations. We help clients run cultivations more efficiently, allowing them to fast-track business execution, while minimizing their financial exposure, creating a quicker ROI.
Cannabis companies have a unique responsibility to shape this growing industry to be socially responsible and advocate for it to be treated fairly. How does NGT help work toward that goal for the greater good of the cannabis industry?
We at National Grow Technologies look to use our experience from helping create a regulated market to educate emerging markets on techniques proven to provide the safe access of cannabis for adults. It is the responsibility of everyone in this industry to engage in business practices that ensure a proper and clean seed-to-sale process designed with the health and safety of consumers as a core principal. Cannabis needs to be handled and processed in a way that is safe for human consumption. This is a process that can be clearly defined, which will align procedures that navigate an increasingly complex set of ever-changing rules and regulations, while remaining true to the value of safe access. Each and every one of us has the responsibility to move this industry to a safe and sustainable position in manufacturing and distribution of cannabis.
Why did you join NCIA? What is the best part about being a member?
Bruce Granger and Chandra Carleton
In 2010, one of the founding NGT members, Bruce Granger, was at the meeting with Aaron Smith when he said that he was going to build a National Cannabis Industry Association. Bruce has been a member ever since, through multiple business endeavors and now with NGT. We have stayed a member of NCIA due to the symmetry of our business models. We are both committed to the education, support, and unification of the industry.
NCIA has always been a resource of knowledge for ourselves and many in the industry, keeping us informed through their newsletters, Quarterly Cannabis Caucasus, and informative speakers at every conference. They have supported the cannabis industry by taking a message of positive reform to Washington, D.C. We will only be able to continue and expand our industry with the education and enlightenment of our political system.
Reconnecting with our friends or meeting new members, the business opportunities abound. In fact, thank you to NCIA for bringing NGT and The Clinic back together at the NCIA Seed to Sale Show this past January 31 – February 1. The Clinic is now the proud owner of the first GVS Precision Batcher in Colorado, a state-of-the-art piece of equipment capable of precise weighting and batching cannabis flower. It is all of these memories of where we came from, and all of the possibilities the future holds that keeps NGT coming back to NCIA.
Note: NCIA member profiles highlight members and stories within our cannabis industry community. They do not constitute an endorsement or recommendation of specific products or services by NCIA.
Work and Well-Being in the Colorado Cannabis Industry: Project Results
By Kevin M. Walters, MS and Gwenith G. Fisher, PhD, Colorado State University
Who works in the Colorado cannabis industry? What are health and safety issues that these workers face? How can we optimize well-being among cannabis workers in Colorado? These are some of the questions that our research team had as we conducted our project, which we call “Work and Well-Being in the Colorado Cannabis Industry.” We first wrote about our project back in this blog post, when we put out a call for participants in our study. (Some readers may have even taken our survey!) In that blog post, we also mentioned that we’d share a report with the industry once the project was completed – which we’re excited to do now in this post!
In a nutshell, the aim of our project was to get a pulse on health and safety in the Colorado cannabis industry on the ground floor, as it continues to grow in Colorado and in other states. During our early work in the Colorado industry in 2013, we saw a strongly supportive industry with happy workers, but also saw a need for clearer health and safety standards and practices. This led us to develop and conduct this project, in which we surveyed 214 direct-to-plant workers in the Colorado cannabis industry. Our project team is excited to share our “Quick Hits” report with the industry, which provides an overview of our project results and our recommendations to improve health and safety. Thanks to the Center for Health, Work, and Environment at the Colorado School of Public Health, the full report can be found at this link.
The “Quick Hits” report provides lots of detail on our project, statistics, and recommendations – far more than we could mention in one blog post. As such, we encourage you to download the report and share it with your friends, colleagues, and businesses. To provide a brief summary of what we found, here are some of our key findings and recommendations from the report.
First, in the report we provide a demographic overview of the industry in Colorado, such as the workers in the industry, their access to health care, and the organizations they work for. In addition to that, we describe a number of our findings on health and safety in the industry. Generally speaking, workers in Colorado’s industry felt like the work environment was fairly safe, and that their businesses strongly valued safety. That said, we also found that the quality and quantity of health and safety training varies greatly from business to business.
For example, just under half of our participants (46%) received no health and safety training or received sparse training when they were hired (like a brief discussion, or a piece of paper). Therefore, when workers don’t view cannabis industry work as hazardous, it might be due to inconsistent health and safety training. To speak more on that, we did identify some hazards associated with cannabis work, such as ergonomic issues when trimming plants throughout the day or working in tight grow spaces. Another hazard we identified was pesticide use, as some workers reported symptoms such as skin and eye irritation, headaches, and dizziness after handling pesticides (among some other symptoms as well). In the report, we provide more detailed discussion on these issues, as well as some data on worker injuries.
On the plus side, the Colorado cannabis industry is tightly knit – workers felt lots of social support from one another and from their businesses. Based on our experiences in the industry, this came as no surprise! Industry workers were also very satisfied with their jobs and their lives, and felt like their jobs were meaningful. This may relate to the fact that most workers in the industry have a strong connection to cannabis – nearly two-thirds were medical card holders, and nearly all workers we surveyed used cannabis in some capacity.
A key strength of our report is the recommendations we provide that address both the physical and psychological aspects of cannabis industry work. Given the various types of health and safety training that workers received, we provide a list of recommended training topics for businesses. In addition, we provide research-based tips on what to do before, during, and after training programs to make sure that what workers learn in training is properly transferred to the job. After all, what good is training if it doesn’t stick?!
In addition to training recommendations, we also provide info on other resources (like this CDPHE Guide to Worker Health and Safety in the Marijuana Industry) and other general recommendations. For example, we encourage businesses to implement health promotion programs at work, offer various supports to employees, and strive for diversity and sustainability in the industry.
These are only some of the key topics in our report – we hope you download the report, share it with others, and enjoy the content! We would like to thank our project team, NCIA, Kayvan Khalatbari, and our other industry partners and research colleagues for all your help throughout the project.
Gwenith G. Fisher, PhD, is an Assistant Professor and Program Coordinator of Industrial-Organizational Psychology at Colorado State University. She is also the Director of the MAP ERC Occupational Health Psychology Training Program. Her research focuses on work-life balance, as well as health and well-being of workers, with a special focus on older populations and those nearing retirement.
Members of Congress Announce Bipartisan Cannabis Caucus
by Michelle Rutter, Government Relations Manager
On February 16th, the House of Representatives took another step towards recognizing the need for federal reform of cannabis laws. Representatives Earl Blumenauer (D-OR), Dana Rohrabacher (R-CA), Jared Polis (D-CO), and Don Young (R-AK) announced their newly formed Congressional Cannabis Caucus. The bipartisan coalition will focus on issues like medical research, access for veterans, and business needs — including banking and 280E reform.
The four co-chairs of the caucus were united in their support for states to be allowed to determine their own cannabis policies. In addition, the group noted that the growing momentum for reform across the country has finally reached the halls of Congress. With eight more states legalizing some form of cannabis just this past November, the caucus co-chairs say there has been a “tremendous increase” in interest for joining the caucus, including from Republicans. The caucus will also allow members to talk freely about cannabis legislation and give the opportunity to show that cannabis consumers and entrepreneurs are an important part of the American economy.
Prior to the announcement today, the House had started an informal marijuana working group, but decided that it’s now time for a more formal cannabis caucus that seeks to educate other Members of Congress on the discrepancy between state and federal law, the importance of making sure that cannabis businesses are treated fairly, and that states’ rights are protected. The Cannabis Caucus is also an opportunity for NCIA to educate Capitol Hill staffers and policymakers on the issues our members face on a regular basis.
NCIA’s Cannabis Industry Lobby Days provide the best opportunity to show our nation’s decision-makers what a responsible and legitimate cannabis industry looks like and to help raise awareness of issues like the unfair tax and banking policies hampering our industry’s potential to grow and be treated like any other U.S. business sector. Your $25/person registration fee includes a lobby training session with NCIA’s government relations staff and two days of coordinated meetings with congressional offices across Capitol Hill.
VIDEO: The Importance of Making Your Voice Heard in D.C.
NCIA Deputy Director Taylor West delivers this month’s video newsletter, encouraging you to get involved and make your voice heard to the new administration and new Congress. As NCIA prepares for our 7th Annual Cannabis Industry Lobby Days, there’s never been a more important time to speak up for your business and the industry we’re building together by engaging with our advocacy work on Capitol Hill in Washington, D.C.
Thank you to the co-chairs of NCIA’s Policy Council for their premier sponsorship of our 2017 Cannabis Industry Lobby Days:
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!
Raising Money 101: Accredited Investors and Fundraising in the Cannabis Industry
*Updated to reflect new Rule 147A and Amendments to Rule 147
When raising capital from outside investors, companies are faced with several choices regarding terms, structure, filings to make or not make, and type of investor, among other decisions. One choice – whether or not to include unaccredited investors – should be easy to make. For the reasons outlined below, it is strongly advised that only accredited investors be allowed to participate in a fundraising process.
What is an accredited investor? An accredited investor can be an individual or an entity. An individual can be considered accredited if he or she meets one of the following criteria:
net worth of at least $1,000,000 dollars (excluding the value of his or her primary residence); or
income at least $200,000 each year for the last two years (or $300,000 combined income if married) and have the expectation to make the same amount this year.
For entities, different criteria can apply depending on the form of the entity, but generally speaking, an entity will be considered accredited if all of its equity holders are accredited or it has greater than $5,000,000 in assets. Persons or entities that do not meet the above standards are referred to as unaccredited or non-accredited investors. While this is not an insignificant amount of money, the threshold is not very high. Especially if the person in question is considering investing a substantial amount of money in an uncertain venture that, even in the best of circumstances, may not make any money for years to come.
To understand why this definition is important, you must understand how sales of securities are regulated in the United States. At a high level, federal securities law requires that any sale of securities must either be registered with the Securities Enforcement Commission (SEC) or issued pursuant to an exemption. A full description of each exemption available to companies is beyond the scope of this article. But most private offerings of securities make use of the safe harbor exemption from registration known as Regulation D (in the parlance of our times, Reg D). There are three exemptions under Reg D (note the descriptions below only address the accreditation and disclosure issues discussed in this article and ignore issues related to general solicitation and restricted securities):
Rule 504: Allows for an exemption for the offer and sale of up to $5,000,000 of securities in a single twelve-month period.* Unlike some other exemptions, this exemption allows for a private sale without any specific disclosure requirements (note that the anti-fraud provisions of the federal securities laws still apply). Sales can generally be made to an unlimited number of accredited or unaccredited investors.
*Prior to adoption of new rules on October 26, 2016, the aggregate amount of securities that could be sold pursuant to Rule 504 was $1,000,000. The new rules also eliminated Rule 505.
Rule 506(b) and (c): Has the same criteria and guidelines as Rule 505, with one additional requirement – in the case of a 506(b) offering, all non-accredited investors must be sophisticated (i.e., “must have sufficient knowledge and experience in financial and business matters to make them capable of evaluating the merits and risks of the prospective investment”). This is an amorphous standard and creates yet another potential issue for the company offering securities. While beyond the scope of this article, it is worth mentioning that a Rule 506(c) offering, which permits general solicitation and advertising (normally not allowed under a 506(b) offering), cannot include any non-accredited investors.
The most important takeaway from the descriptions of the exemptions above: if you wish to undergo an offering without limitations on the number of investors, size of amount raised, or without specific disclosure requirements, you must sell only to accredited investors. Any offering which includes unaccredited investors, whether done under 504 or 506, will impose at least one of these restrictions on the offering.
Beyond the above-mentioned restrictions, there are other reasons not to include unaccredited investors in an offering. For one, it is not unusual to give investors the right to invest in future financing rounds – often referred to as a preemptive right. This is fine, provided no investors are unaccredited, but would be an issue for a company that has existing unaccredited investors with the right to invest in future rounds. Suddenly, a future financing round may inadvertently involve unaccredited investors and this may require a company to spend time and money developing fulsome disclosure documents or risk violating securities law. Another concern, while not immediate, is that if the company wants to go public, the SEC may evaluate all prior issuances of stock by the company and require that it take remedial actions to cure any past violations of securities laws, which might delay or imperil the IPO.
While any emerging company would be wise to restrict its offering to accredited investors, cannabis companies should be especially vigilant. Securities regulators, both on a federal and on a state level, made it clear that they consider the cannabis industry to be an area of special concern. Not because of the ongoing federal illegality of cannabis, but because of the increased risk of fraud in such a new and dynamic industry. The last thing any cannabis company should want to do is take any action that could expose them to the ire of regulators.
What if your investors are Canadian? After all, almost $500,000,000 Canadian dollars were raised last year in the Canadian public markets, and many Canadian investors are eagerly eyeing U.S.-based assets. Setting aside any Canadian securities laws issues, which are beyond the scope of this article, a Canadian or Canadian entity can certainly qualify as an accredited investor and allow an issuer to rely on Reg D. But be sure to have any Canadian investors carefully review their accredited investor questionnaire (a document issuers should require investors to fill out certifying what criteria marks them as accredited) they provide in connection with the offering – while Canadians are familiar with their version of accreditation, the qualifications differ just enough from US qualifications to be a potential issue. Note that there can be additional complications involved with accepting foreign investment, both for the investors and the company raising capital beyond those related to securities law.
It is also worth mentioning that the underlying policy arguments for restricting offerings (in the absence of fulsome disclosures) to accredited investors become even stronger in the cannabis industry. The risk of failure, and the total loss of investment, is undoubtedly present in an industry and remains federally illegal and operates based on federal guidance that could be changed at any moment. And investing in a cannabis company requires an even higher level of sophistication than a typical deal because of the challenges involved. A company should not accept money from investors who cannot handle the risk of losing their entire investment – not only is this unfair to the prospective investor, but any burned investors who end up in a financially precarious situation increase the risk of damaging litigation. While it may be tempting to accept funds from non-accredited investors, all the above issues can be readily avoided if non-accredited investors are not permitted to participate in a company’s offering.
This information is educational only and shall not be construed as legal advice. Please consult your attorney prior to relying on any information in this article.
Charles Alovisetti is a senior associate and co-chair of the corporate department at Vicente Sederberg LLC. Prior to joining Vicente Sederberg, Mr. Alovisetti worked as an associate in the New York offices of Latham & Watkins and Goodwin where his practice focused on representing private equity sponsors and their portfolio companies, as well as public companies, in a range of corporate transactions, including mergers, stock and asset acquisitions and divestitures, growth equity investments, venture capital investments, and debt financings. In addition, Mr. Alovisetti has experience counseling portfolio and emerging growth companies with respect to general corporate and commercial matters and all aspects of compensation arrangements, including executive employment and consulting agreements, stock option plans, restricted stock plans, bonus plans, and other management incentive arrangements. Mr. Alovisetti has experience in both U.S. and cross-border transactions, and advised clients across a range of industries prior to focusing on the cannabis space. He holds a Bachelor of Arts, with honors, from McGill University and a law degree from Columbia Law School, where he was a Harlan Fiske Stone Scholar. Mr. Alovisetti is admitted to practice in both Colorado and New York and is a Level One Interpener. He can be reached at charlie@vicentesederberg.com. Follow him on Twitter @CAlovisetti.
Michael Heyward is a law student at the University of Denver Sturm College of Law and a law clerk at Vicente Sederberg LLC. He holds a Bachelor of Arts in History and Political Science, and a Master’s Degree in History from Florida Agricultural and Mechanical University.
Growing With Our Members: NCIA’s Membership Department in 2017
By Meredith Bower-Holt, Director of Membership and Development
2017 is well underway and all current NCIA members should have received their annual membership mailings. We hope you took a few minutes to review the contents of the folder, which contains information relevant to you and your business. As NCIA’s new Director of Membership & Development, I wanted to introduce the department and share an overview of our plans and goals for the coming year.
More NCIA staff to serve you
NCIA’s Membership Department has expanded substantially in the last few months! I joined the team in the fall of last year, as did Jon Dinh, our Membership Coordinator. Then Curtis Stafford and Rachel Kurtz were hired as NCIA’s Business Development Managers at the start of this year.
We are now five strong in the Membership & Development department, including NCIA veteran Jeremy DePasquale as Membership Manager. That evolution is really exciting, as NCIA is poised to grow its membership numbers significantly in the coming year.
Access to NCIA’s Government Relations team
NCIA membership comes with numerous tangible benefits. For example, did you know that if you’re planning a trip to Washington, D.C., NCIA’s Government Relations staff will work with you to set up meetings with your congressional representatives, establish your goals for the meetings, and even attend the meeting with you? It’s a fantastic opportunity if you find yourself in D.C. and want to advocate for your business and the industry as a whole.
NCIA Committees
NCIA’s councils are now called committees, and all current members will be invited to apply to sit on a committee during a formal process in the spring of 2017. The kick-off meetings for several new committees will take place during NCIA’s Cannabis Business Summit in Oakland, CA, June 12-14, 2017. You can read more about the committees on our website. If you have a suggestion for a committee other than those currently listed online, please contact us.
Your valuable contributions and participation can also grow your network within the industry and help further NCIA’s mission. Committee work helps establish the kind of industry that we all want by creating standards and establishing best practices for various industry sectors. Participating in an NCIA committee also demonstrates a commitment to industry development that proves our members are serious business owners with a common, united purpose.
Become an NCIA Ambassador
NCIA is expanding its Ambassador Program, which is a way for members to support NCIA and earn incentives by recruiting new members. NCIA Ambassadors help ensure the success of the association and the cannabis industry by strengthening our membership base. From promotional opportunities for your business to free event registrations, we’re making it easy for you to earn rewards for bringing more business owners into NCIA’s community.
Coming Soon! Member Community Forums
Coming soon is an online community platform that will allow for limitless members-only discussion groups on cannabis industry-related topics. For example, member lawyers can ask questions of fellow cannabis attorneys through a convenient online platform that will also allow for the sharing of documents and other media securely.
NCIA’s Committees will have their online ‘homes’ on this platform, as will members who’ve offered to speak at one of NCIA’s events. This platform will allow you to find other members like yourself via sophisticated search functions. We plan to launch this online platform in the late spring.
And more…
Additionally, we’re working on new partnerships that will add value to your NCIA membership and improve your bottom line, including new money-saving insurance options, an energy efficiency program for our cultivator members, and more.
In sum, there’s a lot going on in NCIA’s Membership & Development department, and we’re thrilled about what’s to come in 2017. We love hearing from you, so if you have questions, comments, suggestions, or concerns you’d like to share, please contact us at info@thecannabisindustry.org or (303) 223-4530.
Here’s to a happy, healthy, and successful 2017 from NCIA’s Membership Department!
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Kevin M. Walters, MS, is a doctoral student at Colorado State University in Industrial-Organizational Psychology (
NCIA’s councils are now called committees, and all current members will be invited to apply to sit on a committee during a formal process in the spring of 2017. The kick-off meetings for several new committees will take place during NCIA’s