Behind Closed Doors: NCIA at CANNRA’s June Conference
The discussion about the future of cannabis legalization is ongoing, to say the least. Recently, Cannabis Regulators Association (CANNRA) held a two-day conference in early June to gather Marijuana government regulators, trade associations, and businesses. The Cannabis Regulators Association (CANNRA) is a national nonpartisan organization of government cannabis regulators that provides policymakers and regulatory agencies with the resources to make informed decisions when considering whether and how to legalize and regulate cannabis.
Representatives from NCIA participated in the conference – NCIA Board Members Khurshid Khoja (Chair Emeritus) and Michael Cooper (Board Secretary), and we caught up with them in this blog interview to better understand the goals and outcomes of the event.
From a bird’s eye view, what was the overall goal of this conference?
MC: The conference was an opportunity for regulators from around the nation to hear directly from stakeholders on the current and future challenges that face these markets and different models of regulation to tackle them.
KK: I’ll add that our own goals, as the current Policy Co-chairs for NCIA, were to better understand the priorities of state and local cannabis regulators across the country, and anticipate future developments in cannabis policy early on, so we could take that back to the NCIA membership and the staff – especially Michelle Rutter Friberg, Mike Correia, and Maddy Grant from our amazing government relations team.
Let’s talk about who was invited to participate in these panel discussions. From cannabis industry associations to those who regulate cannabis, who else was there?
KK: Michael and I each spoke on a panel. The other speakers included reps from federal trade associations, lobbyists, vendors, and ancillary companies who were helping to underwrite the event (along with NCIA). Given that CANNRA is a non-profit that doesn’t receive any funding from their member jurisdictions, and has a single paid full-time staff member, I thought they were still able to obtain a fairly diverse and interesting set of speakers at the end of the day – including NCIA Board and Committee alums Ean Seeb, Steve DeAngelo, Amber Senter and David Vaillencourt (representing the Colorado Governor’s Office, LPP, Supernova Women and ASTM, respectively), as well as folks from Code for America, Americans for Safe Access, and the Minority Cannabis Business Association, U.S. Pharmacopeia, NIDA, the CDC, and the Alcohol and Tobacco Tax and Trade Bureau, representatives of the pharmaceutical, hemp, tobacco and logistics industries, and public health officials.
Were there any organizations or sectors of the industry that were not in attendance, whether they weren’t invited or just didn’t participate, and why is it important to note the gaps of who was not represented?
MC: No licensed businesses were invited. Instead, organizations that represent industry members were invited. As a result, we felt it was crucial to inform these discussions with the perspective of the multitude of small and medium-sized businesses otherwise known as Main Street Cannabis that have built this industry and continue to serve as its engine.
KK: Sadly, we did not have an opportunity to hear from members of the Coalition of Cannabis Regulators of Color. I can’t speak to why that was, but it was unfortunate for us nonetheless. And while we had some public health officials there, I know that CANNRA Executive Director Dr. Schauer would have preferred to see more of them in attendance.
Across the spectrum of policy and regulations and legislative goals, what topics were covered in the panel discussions across the two-day conference?
KK: We covered a ton, given the time we had, including the federal political and policy landscape; interstate commerce; the impact of taxes on the success of the regulated market; social equity and social justice; preventing youth access; regulation of novel, intoxicating and hemp-based cannabinoids; the prospects for uniform state regulations; technological solutions to improve compliance and regulatory oversight; and delivery models.
What information or perspectives did NCIA bring to the panel discussions that were unique from other participants? What does NCIA represent that is different from the other voices at the event?
MC: There really are a wide variety of perspectives on how best to regulate this industry. We felt it was essential that NCIA give a voice to Main Street Cannabis, the small businesses that so many adult-use consumers and medical patients rely upon. We emphasized, for example, that these are often businesses that cannot simply operate in the red indefinitely, but provide essential diversity (in the background and life experience of operators as well as in product selection and choice). NCIA wants to make sure that the future of cannabis isn’t simply the McDonalds and Burger Kings of cannabis. There are times when consumers want that, but there are also times when they want something unique and different. And it’s crucial that policy not destroy the small and medium-sized, frequently social equity-owned, businesses that provide those choices.
What else was interesting to you about this gathering of minds? Were you surprised by anything, or was there anything you heard that you disagreed with?
MC: There are a ton of different perspectives and approaches to cannabis, and that’s no surprise to anyone who has followed these issues closely because the tensions are very clear in the policy debates that are ongoing.
As the voice for the industry, we sought to urge an approach grounded in reality. Americans want these products. That’s clear from the ballot box and public polling. The question should be about how to encourage Americans to purchase regulated, tested versions of these products.
KK: There was definitely stuff we didn’t agree with – some of it from folks that we otherwise largely agree with. For example, our good friend Steve Hawkins of the USCC shocked a few of us in the audience when he seemed to indicate some receptivity to re-scheduling cannabis on an interim basis, rather than moving to de-scheduling immediately. I think that while rescheduling may benefit scientific research and pharmaceutical development, it could ring the death knell for Main Street Cannabis businesses. NCIA has consistently advocated for de-scheduling rather than re-scheduling.
After two days of panels, did anything new come through these discussions, or were any accomplishments achieved?
KK: I think there’s a growing recognition that addressing social equity solely through preferential licensing and business ownership for the few isn’t enough and that the licensing agencies and regulators that execute social equity policies have a very limited (and often underfunded) arsenal to comprehensively redress the harm caused by federal, state and local governments prosecuting the war on drugs. In my remarks, I said it was time for us to start discussing additional forms of targeted reparation and had a number of regulators approach me afterward to continue the discussion. Candidly, I expected my remarks to fall on deaf ears. They didn’t. That was very encouraging.
MC: There was definite progress. At the end of the day, these cannabis regulators are working hard to try to get this right. But in such a new area, and with so many competing perspectives and voices, their job isn’t easy. We were heartened to see the level of engagement from regulators on these points, including follow-ups to get more information on some of the pain points we identified for small and equity businesses in the industry.
It was definitely rewarding to provide NCIA and our members’ perspectives in a forum like this, and we’re looking forward to continuing to further strengthen NCIA’s relationship with CANNRA and regulators around the country.
Committee Blog: Cannabis Lounges – Coming to a City Near You?
Although the concept of state-legal cannabis has been around in some shape or form since 1996, cannabis remains illegal to consume in most public places. In other words, legal cannabis consumption remains relegated to back alleys, derailing efforts to “normalize” cannabis use. Tourists visiting popular cities where weed is legal are caught in the unenviable Catch-22 of being able to purchase, but not publically consume, the product. And those who attempt to use cannabis in public still face criminal penalties in some states, with minorities three times more likely to be targeted for arrest, perpetuating racial disparities at a tremendous social cost.
Enter the cannabis lounge. Cannabis lounges — also known as “consumption lounges,” cannabis cafes, or some variation on that theme — are in simplest terms the cannabis equivalent of a bar or restaurant. Depending on state and local regulations, lounges offer users the chance to congregate in a public place and smoke a joint, try out a $500 gravity bong, or sip on a cannabis drink. With any luck, consumers may enjoy their cannabis with a snack or dinner, but mixing with alcohol is typically not allowed.
As with any “new” risks, some cities, states, and insurers are… concerned. Despite some obvious tax and social benefits, detractors cite a host of reasons to prevent lounges from coming to a city near you, including at the forefront: fears of public nuisance (odors, theft, and disruption) and overconsumption — especially because most states insulate cannabis cafes from liability for harm caused by obviously intoxicated or underage users, unlike dram shop laws for alcohol.
As another NCIA member recently pointed out, even in states that do allow cannabis cafes, regulatory bodies continue to struggle with how to shape the laws and regulations governing lounges to afford adequate consumer protection while allowing businesses to thrive. Moreover, without a better understanding of the regulatory landscape, some insurers — whose business model hinges on the ability to accurately price a risk — may be unwilling to play in this new cannabis lounge market.
A Sampling of State Approaches to Cannabis Lounges
Alaska led the country in 2019 in licensing on-site consumption. A handful of states and localities have followed Alaska’s guide, and more are anticipated to join this year, including Michigan and New York. We compare a few regulatory schemes below and also consider the impact of dram shop legislation on risks faced by the industry.
California
California, governed on the state level by the Medicinal and Adult Use Cannabis Regulation and Safety Act, delegates to localities the right to open consumption lounges. Put simply, cities have to affirmatively “opt in” to allow lounges. With a few contingencies — including that patrons must be 21 or older and no alcohol or tobacco can be sold on premises — “a local jurisdiction may allow for the smoking, vaporizing, and ingesting of cannabis or cannabis products on the premises of a” licensed retailer. SeeBPC § 26200(g).
To date, only a few localities have opted in to allow cannabis lounges, including San Francisco, Oakland, and Palm Springs. West Hollywood, in efforts to create an epicenter for canna-tourism, plans to allow up to 16 lounges within its jurisdiction. Because state law provides little regulatory guidance for lounges, localities generally provide more specific guidance. As an example, West Hollywood’s local municipal code requires security guards on site, as well as within a two-block radius surrounding the business during operation, and allows the sale of cannabis to an individual “in an amount reasonable for onsite consumption.” West Hollywood Municipal Code §5.70.041. Only one lounge is currently open in West Hollywood, the Artist Tree’s Studio Cannabis Lounge, which offers not only lounge access but cannabis yoga, live music, and comedy shows, along with a revolving selection of local art. The Woods, another West Hollywood dispensary with a soon-to-open courtyard lounge space, is also slated to open in 2022.
Although California law significantly limits third-party liability for alcohol-related accidents, it does not afford cannabis owners the same protection. For example, California Civil Code §1714explicitly states that furnishing alcohol “is not the proximate cause of injuries resulting from intoxication,” which has essentially absolved bars, restaurants, party hosts, and most others of potential liability for selling or furnishing alcohol to customers and guests with an exception for liability arising from the furnishing of alcohol to an “obviously intoxicated minor.” SeeCalifornia Business & Professions Code § 25602.1. Without similar protections for cannabis lounges, injured parties could attempt to sue under a negligence theory if a business or employee serves an intoxicated patron who causes harm.
Colorado
As of January 1, 2020, local jurisdictions in Colorado can opt-in to the state’s cannabis hospitality business license regime (Colo. Rev. Stat. § 44-10-609), and as of March of 2022, the City of Denver has approved cannabis hospitality businesses for operation. Denver operators include the first social equity applicant in Denver approved for a hospitality license, the Tetra Lounge, although from its website Tetra Lounge’s website describes itself as “a private lounge,” requiring a monthly or annual membership fee and a liability waiver to gain access.
As to dram shop liability, although Colorado law authorizes damages against a licensee for willfully and knowingly selling or serving alcoholic beverages to a visibly intoxicated person, the Colorado Legislature caps liability at $150,000 (Colo. Rev. Stat. § 12-47-801 (3)(II)(c)). This damages cap improves (i.e., reduces) the ISO hazard grade, resulting in the improvement of insurance options available for liquor liability. The legislature has not adopted the same or a similar damages cap on liability for cannabis consumption establishments.
Nevada
In June 2021, Nevada’s Governor signed Assembly Bill 341 into law, authorizing the Nevada Cannabis Compliance Board (“CCB”) to license and regulate consumption lounges across the state, subject always to local approval. The State plans to issue up to 65 lounge licenses (40-45 for lounges attached to existing dispensaries, 20 for independent lounges) with 10 reserved for social equity applicants.
Most recently, on June 28, 2022, the CCB voted to unanimously approve a host of regulations for cannabis consumption lounges. Nevada’s extremely detailed state regulations prohibit the sale of “single use cannabis products” with more than 3.5 grams of “usable cannabis” and 10 mg of THC for edibles; prohibit the removal of any cannabis products from a lounge; require a mitigation plan for impaired driving and detailed employee training for overconsumption; and require consumer education and warnings to customers, among other things. As with other states, Nevada allows local jurisdictions to prohibit consumption lounges and to implement more stringent regulations than state law.
Unlike other states, however, Nevada law carves out protections for cannabis lounge operators just as it does for alcohol. Nevada law already protects businesses that serve or sell alcoholic beverages from injuries inflicted by an intoxicated person. And while any person who knowingly furnishes an alcoholic beverage to any person under 21 years of age is guilty of a misdemeanor, the law provides only for criminal penalties, not civil liability. The Nevada Supreme Court has repeatedly refused to impose responsibility on vendors selling alcohol absent a legislative provision. SeeSnyder v. Viani, 885 P.2d 610 (Nev. 1994) (holding consumption is the proximate cause of alcohol-related injuries and dismissing the negligence claim against a tavern owner for alcohol service). The same rules will apply to cannabis operators.
Illinois
Over two years after full legalization of adult-use commercial cannabis in Illinois, cannabis lounges in Illinois are still relatively rare, with the first Chicago-area marijuana consumption lounge opening on April 20, 2022. Like other states, the State of Illinois does not directly license lounges, but it allows local governments to opt in.
Illinois creates a cause of action against sellers for injury by an intoxicated person. § 235 Ill. Comp. Stat. 5/6-21. The standards for liability under the Illinois dram shop law include: (1) sale of alcohol to any person who, while intoxicated, causes injury, and (2) any person owning, renting, leasing, or permitting the occupation of any building or premises with knowledge that alcoholic liquors are to be sold therein, severally or jointly, along with the person selling or giving liquor. In Illinois, the Dram Shop Statute provides the exclusive remedy for alcohol related injuries. See Charles v. Seigfreid, 65 NE.2d. 154 (Ill. 1995). The Statute also provides stringent limitations on recovery of damages. There is no equivalent in Illinois for cannabis entities.
The Takeaway for Business Entities and Insurance Providers
As with cannabis law generally, lounge operators face a patchwork of state and local regulations that vary tremendously by jurisdiction. In most places, cannabis lounge owners are not protected by dram shop/gram shop laws that otherwise insulate bars and restaurants from liability for overconsumption. This means that companies must be vigilant in protecting themselves from liability by instituting compliance and risk-management procedures.
In some instances, such as California’s West Hollywood, which has far fewer safeguards and guidelines than Nevada, operators are largely left to their own devices in implementing adequate risk transfer and risk management, compliance, employee training, and consumer education to limit risk of liability. While the West Hollywood municipal code requires lounges to limit cannabis sales of cannabis “in an amount reasonable for onsite consumption,” the “reasonableness” standard is rife with ambiguity and could lead to disputes regarding liability and assumption of risk if a patron overconsumes.
Evaluating and preventing overconsumption and intoxication will be particularly difficult for cannabis when: patrons have varying experience levels with cannabis; products can be sold in more than a single serving, and no specific consumer education is required. Thus, even in locations that have more stringent regulatory oversight, companies would be wise to consult with experienced counsel and consultants to avoid or limit potential risks associated with regulatory uncertainty, civil liability, and government penalties for non-compliance.
This brings us full circle to the question of insurance. Even in the states that allow consumption lounges, very few insurance companies provide coverage for on-site consumption (although some do). If an exclusion prohibits coverage, the company may not have coverage for important and sometimes catastrophic events, such as property damage by fire, theft/robbery, cyber events, sexual harassment or discrimination claims by employees or others, and bodily injuries to, or caused by, patrons (on and off premises).
Most existing property, general liability, products liability, and other insurance policies — including those written for the cannabis industry — expressly exclude coverage for on-site consumption or bodily injury caused by intoxication. In fact, some existing cannabis insurance companies include a “health hazard” exclusion in their policies, which exclude coverage for any bodily injury arising in any way from the use of cannabis, including any health injury. Cannabis insurance policies may also exclude coverage for intentional or illegal acts, which some insurers may try to apply to any claim involving cannabis on the basis that the sale of cannabis violates federal law (the Controlled Substances Act), even if it is state legal.
For current licensees that are planning to open an attached or adjacent consumption space, current insurance policies may not cover injuries arising in the lounge space. Further, any failure to identify a change in business type could prompt an insurance carrier to deny coverage for subsequent claims based on a theory of misrepresentation.
In closing, cannabis owners should attempt to negotiate separate and/or broader coverage that carves out coverage for their cannabis-related activities, including on premise consumption, with their current insurer or seek to obtain coverage from a different carrier. Experienced insurance coverage counsel can assist with identifying reputable insurance brokers and negotiating policies that provide such coverage. Because of the limited options, companies would be wise to begin the process of identifying experienced insurance coverage advisors at the beginning of their licensing journey.
Video: NCIA Today – Thursday, July 28, 2022
NCIA Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. This week Bethany is joined by NCIA CEO Aaron Smith and Deputy Director of Government Relations Michelle Rutter Friberg. Join us every other Thursday on Facebook for NCIA Today Live.
Equity Member Spotlights: Where Are They Now?
Where are they now? This month, NCIA’s editorial department continues the monthly Member Spotlight series by following up with three of our Social Equity Scholarship Recipients as part of our Diversity, Equity, and Inclusion Program. Participants are gaining first-hand access to regulators in key markets to get insight on the industry, tips for raising capital, and advice on how to access and utilize data to ensure success in their businesses, along with all the other benefits available to NCIA members.
First off, we have rebranded. We are now Cannvas Events. The name change was part of our evolution and maturation as a startup. As we scaled, more resources became available for things like branding. We brought in Greg Hill of Brand Birth to deploy the science of branding and the end result was a new name, new logo, and new understanding of where we were situated in the regulated cannabis ecosystem. The transformation led to the planning and production of our signature Cannabis Event 2.0 offering, the inaugural Saturnalia Canna Carnival, taking place at the Trinity Health Arena in Muskegon, MI on August 2oth. We are powering a traditional indoor/outdoor carnival – rides and attractions included – with a hassle-free, normalizing consumption solution. If you’re in the Midwest, come join us as we celebrate the first year of an iconic, perennial cannabis festival. Tickets and info at cannvasevents.com and follow us @saturnaliacannacarnival
Would you like to share anything that came out of being in the Spotlight previously?
The Spotlight feature presented tremendous value. The first year of the cannabis startup journey is devoid of financial revenue. Unless you’re needle-in-the-haystack lucky, it’s not even a consideration. The money is flowing in the opposite direction. So, the only available revenue, or currency, are the relationships. If you’re fortunate, these become renewable resources upon which you can draw repeatedly, and managed properly, they have no expiration date. You can bank them like any currency and you have much more influence on their stability, than on fiat currency. For me, that one relationship was with Michael Schwamm, who leads the Duane Morris cannabis practice out of New York. Michael opened doors for me and got me into rooms that I was previously unaware existed. That access has made all of the difference for me, personally, and for Cannvas Events. And had it not been for the Spotlight, I would have never been in position to enjoy that access.
Endo Industries
Since the last spotlight, you’ve joined the DEI Committee and its Regulatory Subcommittee. Anything you’d like to share about that experience thus far?
I’m impressed by the brilliant folks on the committee, and their dedication to making cannabis equitable. It takes time out of our grueling work days to contribute time on these committees but the contribution to making the industry better is crucial during these developmental years of cannabis. Perhaps our current misguided, harmful CA cannabis policies could have been prevented with more early participation from stakeholders who are stewards of the plant. However, there were many factors involved with the way CA policies were created, including special interest money from those who don’t care or want to see the industry fail.
It’s been a painful journey living through the consequences of these challenging policies as a cannabis operator. It takes a long time to change once it’s been passed. However, companies who are willing to work together in these important processes will survive and write a new path to move forward. Most of us can’t wait anymore for things to change so we need everyone’s active participation now, whether it’s writing an email to your constituents or being a part of NCIA!
California cannabis seems to be going through terrible challenges. Is there anything you’d like to share about what you’re seeing, or about some of the solutions our members can support with?
Overburdensome taxes and high barriers to entry for licensing throughout the state are most obvious right now. The lack of diversity and equity, consumer education, state and federal funding for further research and development also play a huge role in CA’s struggles. I’m frustrated that the State doesn’t understand that those who have been dedicated to the industry, collaboration and this plant are the only ones who can truly guide this industry forward.
NCIA members can lend support by truly including legacy, equity, and other diverse teams into your conversations and partnerships, and opening our eyes to value brought to the table by different communities. I would also encourage members to think about ways we can create awareness to our consumers to make better buying decisions. We have left all the medical properties of cannabis while legalizing, and that’s also why the industry is failing. Lastly, we need to keep pushing for more consumption lounges and events!
At Endo Industries, we built our company on principles of collaboration, science, equity and inclusion. Most notably, we offer critical supply chain support through our tissue culture services, and certified virus-free clean clones for growers, breeders and brands. If you know good operators who could benefit from our support, please send them our way. I cannot stress enough that the work Endo is doing is crucial for the success of the supply chain right now.
Would you like to share anything that came out of being in the Spotlight previously?
We’ve gotten great exposure for being featured in Spotlight. Endo and myself are more internet searchable, which in this day in age means we are real people!
People started sharing the link to the Spotlight to use as an introduction to Endo and myself as a founder. We’ve been told by clients who decided to work with us because they came across the feature when researching Endo. It solidified their desire to pick us because we are bullish about our values because our business model is strategic and collaborative.
It’s great to be co-signed by a credible organization like NCIA, and it goes a long way for a small business that doesn’t have an abundance of marketing and PR resources. I’ve hid in the shadows for far too long. My journey and passion for cannabis needs to be told and celebrated. Endo as a company needs exposure so we can reach a larger audience. I’m grateful for NCIA and look forward to our continued relationship.
Next Level Edibles
What’s new in the world of Next Level Edibles?
There is a lot new in the world of Next Level since our Equity Spotlight in September of 2021. In December, we had a booth, sponsored by the awesome team at The People’s Ecosystem, in Moscone Center at NCIA San Francisco. It was our first time attending an expo, let alone having a booth, and it was a great opportunity to grow our brand while creating relationships for future business opportunities. In the second week of the new year we launched our 1000 mg full spectrum coconut oil in Ivy Hill Oakland. And, later that month, we were welcomed into the Third Cohort of Momentum, Eaze’s Cannabis Business Accelerator. Two weeks before classes began, in early April, we launched our infused fast-acting brown sugar in 7 Star Holistic Healing Center. And in May, we attended MJ Unpacked NYC with other graduates of Our Academy.
California cannabis seems to be going through terrible challenges. Is there anything you’d like to share about what you’re seeing, or about some of the solutions our members can support with?
California Cannabis is facing challenges on many fronts. Countless unnecessary hurdles to legal entry, political red tape, and excess packaging waste to name a few. But the biggest challenges are around security. Every week there is news of a new dispensary, farm, distributor, and friend being burglarized. High tech security systems, gates, and cameras are no match for organized thieves and slow police responses. Until we can get a portion of our excessive taxes dedicated to funding police divisions that specifically targets cannabis thieves, the best solution to combat this is to support your favorite brands by purchasing their products through legal cannabis retail sources.
Would you like to share anything that came out of being in the Spotlight previously?
Being in the Spotlight helped our company tremendously. It allowed us to grow our cannabis network as plant-touching and ancillary companies reached out from all over the country. In addition, the visibility it provided us helped connect with the team at The People’s Ecosystem which led to our booth at NCIA’s Cannabis Business Summit and our new supply chain partners. It provided the traction we needed to help us get to the next level.
Member Blog: As Professionals in the Cannabis Industry, It’s Our Responsibility to Unmask the 4 Big Lies
The vast majority of U.S. adults support the legalization of cannabis, with 60 percent supporting legalization for medical and adult use, and 31 percent supporting medical use only. Only 8 percent say it should not be legal for use by adults in any scenario. These numbers are promising for those of us in the industry, but behind the numbers, many stigmas still exist.
Breaking the stigma against cannabis is the responsibility of each and every individual currently working in the cannabis industry. In particular, for those of us working in retail, we are on the front lines of changing the criminal and negative perceptions associated with cannabis.
As front-line workers, it is important to understand how the stigma against cannabis came about and how it has harmed not just the cannabis industry and cannabis users, but our entire country. We’ve all been lied to. These Big Lies have shaped our beliefs about race, cannabis, and addiction, and it’s time to unmask these Big Lies for what they are: lies.
#1: Black Men Are Dangerous
The lie that Black men are inherently dangerous extends far, far back into our country’s history, but we’re going to start in the 1930s, with a man named Harry J. Anslinger. Anslinger became the commissioner of the Federal Bureau of Narcotics in 1930.
Anslinger initially spent most of his time chasing down bootleggers. When Prohibition ended in 1933, he suddenly found himself out of a job. For the Federal Bureau of Narcotics to continue to have purpose — and receive the funding that paid his salary — Anslinger had to find a new bogeyman to prosecute.
He chose marijuana, a term that itself has racist roots and was a way to otherize cannabis as a “Mexican drug.” At this time, cannabis was not regulated in any way in the United States, so he first had to make it illegal. In order to do that, he needed people to fear it. He figured, why not link it to something people already fear: Black people — particularly Black men.
And so, the propaganda began. Anslinger sparked a national anti-cannabis movement by tying cannabis usage to the Black community and other marginalized groups.
Obviously, Anslinger didn’t invent racism, but his propaganda propagated and amplified it. In short, Anslinger used the lie that Black men are dangerous to help make cannabis illegal, and then he weaponized cannabis against minority communities.
To this day, people of color are disproportionately impacted by the war on drugs. In fact, though Black and white people use cannabis at similar rates, a Black person is 3.64 times more likely to be arrested for possession. And, as industry professionals, we need to understand the racist roots behind the stigma of cannabis and do our part to elevate those groups disproportionately and unfairly impacted by the war on drugs.
#2: Cannabis Is Dangerous
Using fear of Black men, Anslinger convinced people that cannabis was dangerous. The idea that cannabis makes people dangerous is ludicrous to me. I grew up during the war on drugs, and I bought into many of the lies. I truly believed cannabis was bad, but never once did I think of cannabis users as dangerous.
As a child, I spent time around both alcoholics and cannabis users, and the difference was clear to me. Drunk people were violent, abusive, and dangerous. High people were safe, normal, and most importantly not violent.
However, in the drug education I received, I learned that all drugs are fundamentally bad, with no differentiation. Cannabis, meth, heroin, LSD, cocaine — they were all grouped together. And even when people acknowledged that cannabis was less harmful and addictive than harder drugs, they emphasized that it was still incredibly dangerous because it was a “gateway drug.”
Today, despite all the evidence that cannabis is safe for most people, the lie persists. Cannabis is classified as a Schedule I drug, meaning it has “no currently accepted medical use and a high potential for abuse.” Other Schedule I drugs include heroin and meth.
As a country, it’s long past time that we focused our attention on true dangers. As a cannabis retailer, it’s important to recognize that even though you know cannabis is not dangerous, your customers might not.
#3: Opioids Are Safe
Because of the lie that cannabis is dangerous, it was not normalized (or legal) as a method of pain management. There was a need for pain management, though, and so in 1996, Purdue Pharma, under the direction of the Sackler family, developed and patented OxyContin.
It was hailed as a miracle drug that took all the pain away, as if by magic. Magic often comes at a cost, though, and in this case, the cost was hundreds of thousands of American lives— more than five hundred thousand, to be specific.
Within a few years, evidence emerged that the drug was addictive and led to overdose deaths. While we were all being told that cannabis was the gateway drug, Purdue Pharma was flooding our country with the real gateway drug—opioids. They funded research studies that supported the use of OxyContin, and Richard Sackler put intense pressure on sales managers to sell more.
This Big Lie has harmed hundreds of thousands of Americans. Opioids destroy lives, and the ripples extend beyond the addict alone. An entire generation of children will be shaped by addiction and the absence of their parents.
You may not be personally connected to the Opioid Endemic, but as a cannabis retailer, you are in the business of pain management. By understanding this Big Lie and providing people with an alternative to addictive opioids, you could literally save lives.
#4: Addiction Is the Addict’s Fault
I understand the impulse to blame addiction on the addict. An addict’s struggles with addiction can be enough to tear their loved ones apart inside. You want to scream, “Why can’t you just quit?” But blaming addiction on the addict makes as much sense as blaming someone for having cancer, asthma, or migraines.
Who is responsible for addiction, then? The people who caused the Opioid Endemic, people like the Sackler family. As Patrick Radden Keefe puts it in Empire of Pain, “Prior to the introduction of OxyContin, America did not have an opioid crisis. After the introduction of OxyContin, it did.”
So, if you want to blame someone for addiction, blame the Sacklers. Blame Big Pharma. Blame the people who knew this drug was addictive but lied to us, told us it was safe, and pumped it into our communities.
Every single person I know who got addicted received their first pill or hit from a trusted source. This is how the Opioid Epidemic started. It didn’t start with irresponsible drug dealers on the street. It started between patients and doctors. Opioids moved through our world via trusted sources.
Cannabis and opioids are very different drugs. Cannabis is far safer than many people realize. Due to the nature of cannabis, I do not believe cannabis retailers will be creating addicts the way Purdue Pharma did, but it’s still important to understand this Big Lie because some of your customers may have struggled with addiction and need compassion from you.
The Consequences of These Lies
These Big Lies are all connected. Without racism, cannabis wouldn’t have been stigmatized. Without the stigma against cannabis, we would have had a nonaddictive alternative to opioids. Without the lies that opioids are safe and that addicts are to blame for addiction, hundreds of thousands more people would still be alive today.
When it comes to breaking the stigma, you are on the front lines. In knowing the truth about where the stigma came from and why it’s so harmful, you can begin to change it.
One customer at a time, you can begin to undo the Big Lies and share the reality of cannabis.
For more advice on how to undo the Big Lies and share the Big Truths of cannabis, you can find Breaking the Stigma on Amazon.
Charlena Berry is the author of Breaking the Stigma: Racism, Lies, the Opioid Endemic, and Inviting Grandma to the Dispensary. In this book, she exposes lies that created the stigmas associated with cannabis, and how these stigmas must be addressed to see continued growth in the marketplace. She then outlines a framework that provides key strategies for retailers to implement to improve the customer experience and increase profitability.
Writing from her experiences in the industry, Charlena is a global cannabis business executive and the founder of Cannabis Business Growth, a premier cannabis business consulting firm. Prior to that, she spent more than a decade in Supply Chain and Retail Operations for Fortune 500 companies like Whirlpool and Office Depot/Office Max. She also serves as the Chief Operating Officer for The Cake House, a chain of dispensaries in Southern California.
Midsummer Movement: The Pre-August Recess Rush in D.C.
Photo By CannabisCamera.com
By Michelle Rutter Friberg, NCIA’s Deputy Director of Government Relations
As Congress gets ready to beat the D.C. heat and leave Washington for their annual August recess, there’s at least one thing on their minds: cannabis.
Last week, Senate Majority Leader Chuck Schumer (D-NY) along with Finance Committee Chair Ron Wyden (D-OR), and Sen. Cory Booker (D-NJ) introduced their much anticipated Cannabis Administration and Opportunity Act (CAOA), which is now the Senate’s only pending legislation that would provide comprehensive cannabis policy reforms across the nation.
The landmark bill would remove cannabis from the federal Controlled Substances Act and move regulatory responsibility from the Drug Enforcement Administration (DEA) to the Alcohol and Tobacco Tax and Trade Bureau (TTB), the Food and Drug Administration (FDA), and other agencies to protect public health and safety. The bill would also institute a federal excise tax of 5-25% on cannabis on top of the already-hefty state taxes imposed on the industry, concerning advocates for small cannabis businesses and equity operators.
The long-awaited CAOA was introduced after sponsors circulated a discussion draft last year. NCIA and other advocacy organizations provided comprehensive feedback to the bill’s authors last year. Notable changes to the legislation include:
Increases the permissible THC by dry weight from the current 0.3 percent to 0.7 percent and refines the definition of “hemp,” and consequently “cannabis” by taking into account the total THC in a cannabis product, rather than just delta-9 THC.
Changes to the weight quantity to qualify a person for felony cannabis distribution or possession charge under the section from 10 pounds to 20 pounds.
Provides that a court shall automatically, after a sentencing review, expunge each federal cannabis conviction, vacate any remaining sentence, and resentence the defendant as if this law had been in place prior to the original sentencing.
Enables a noncitizen who has received a deportation order based on a cannabis-related offense to file a motion to reconsider that decision. If the motion to reconsider is filed within 30 days of the removal order, the motion may allow for the cancellation of the deportation order.
Establishes a new 10-year intermediary lending pilot program in which SBA would make direct loans to eligible intermediaries that in turn make small business loans to startups, businesses owned by individuals adversely impacted by the war on drugs, and socially and economically disadvantaged small businesses.
Removes the requirement to maintain a bond for any cannabis business that had less than $100,000 in excise tax liability in the prior year and reasonably expects excise tax liability in the current year to be below such amount.
Incorporates rules similar to rules currently applicable to permitted malt beverage producers and wholesalers.
While the historic nature of the CAOA cannot be understated, the bill has a multitude of challenges ahead of it. Not all Senate Democrats support the legislation, making the 60-vote filibuster threshold nearly impossible. Plus, with only a couple dozen legislative days between now and the end of the session, time is also working against advocates.
Dovetailing with the introduction of the CAOA, the Senate Judiciary Committee’s Subcommittee on Criminal Justice and Counterterrorism will hold a hearing titled “Decriminalizing Cannabis at the Federal Level: Necessary Steps to Address Past Harms” this Tuesday. While the witness list has not been made public as of publication, expect the hearing to focus on the newly introduced legislation and how it would affect communities most impacted by the war on drugs.
In other news, the House and Senate will vote on a revised research bill, the Cannabidiol and Marihuana Research Expansion Act, this week. The bill is expected to pass both chambers and be sent to President Biden’s desk for his signature. The Senate bill is sponsored by Sens. Dianne Feinstein (D-CA), Chuck Grassley (R-IA), and Brian Schatz (D-HI) and passed by unanimous consent in March. The House bill is sponsored by Reps. Earl Blumenauer (D-OR) and Andy Harris (R-MD), and passed 343-75 in April. One of the notable areas of compromise? The House bill would have allowed researchers to do their studies on cannabis that’s actually being sold to consumers in dispensaries. That was removed during negotiations, meaning that researchers will still have to obtain their cannabis from the University of Mississippi’s cultivation facility.
There’s still time before recess begins, so make sure you stay tuned to NCIA’s podcast, social media, and newsletter to stay up-to-date on all the latest from Washington, D.C.! Interested in making more of an impact? Don’t forget to register for our upcoming 10th Annual Cannabis Industry Lobby Days on September 13-14, 2022!
Making History In Congress, Thanks To NCIA Members!
by Aaron Smith, NCIA’s CEO and Co-founder
History was made today as Senate Majority Leader Chuck Schumer (D-NY) along with Senators Ron Wyden (D-OR) and Cory Booker (D-NJ) introduced the Cannabis Administration and Opportunity Act which would finally remove cannabis from the federal Controlled Substances Act and begin the process of federal regulation.
For the last year, NCIA has been working behind the scenes to ensure this landmark legislation not only ends prohibition but also creates an environment where small and medium-sized businesses can thrive under national legalization. These businesses – who we now call “Main Street Cannabis” – are the heart of our industry and we’re proud to have been giving them a seat at the table in our nation’s halls of power for over 12 years.
We will continue working with our allies in the Senate to advance this bill and advocate for some necessary amendments to better ensure that small, equity, and women-owned businesses (in particular) are well-positioned to thrive after the end of federal prohibition.
We would not be where we are today if not for your support which has allowed us to effectively represent the interests of small businesses like yours in the halls of Congress and in the court of national public opinion.
I hope you’ll join us in making national legalization a reality by making your voice heard at our upcoming 10th Annual Cannabis Industry Lobby Days in Washington, D.C. September 13 & 14!
Thanks to your membership, NCIA’s government relations staff represents Main Street Cannabis in D.C. every day but Lobby Days is your chance to show up and tell your unique story to our nation’s lawmakers, firsthand.
Lobby Days is also the best opportunity to connect with your fellow industry leaders who are truly invested in the future of cannabis and sensible national policy. Please register today so you don’t miss out on making history with us! Reach out to my colleague Madeline Grant to learn more about how you can be as impactful as possible at this year’s Lobby Days.
Thanks, as always, to all NCIA members for their support of the cannabis industry. If your company is not yet a member of NCIA, now’s the time to join and have your voice heard in the halls of Congress.
Watch this video update with Aaron Smith and Michelle Rutter Friberg:
Member Blog: Another Day, Another Lawsuit – Cannabis Companies Are Finding Out the Hard Way They Need EPLI
Harassment, wrongful termination, race, gender and age discrimination, and hostile work environments are wreaking havoc on the cannabis industry, resulting in an upswing of recent lawsuits that are costing companies hundreds of thousands of dollars and causing harm to the workforce and brand damage that is – oftentimes – beyond repair.
With the average claim costing small-to-mid-sized cannabis companies between $100,000 and $500,000, there needs to be more of a focus on creating a workplace environment free from harassment, discrimination, and bias. Furthermore, cannabis businesses need to be proactive in having the proper insurance policies in place.
You may make a mistake and be exposed to liability. You may do everything right, yet still be sued. Employer’s Protection Liability Insurance (EPLI) is key to protecting your business from employee-related risks and detrimental lawsuits.
What is EPLI and What Does it Cover?
EPLI is a type of management liability insurance that helps safeguard businesses against employee claims alleging inappropriate or unfair treatment. Former, current, and potential employees who believe the company has violated their legal rights can file lawsuits for a variety of reasons. The most frequent types of claims covered under EPLI include sexual harassment, discrimination, and wrongful termination/retaliation. However, EPLI can also cover a broader array of employment issues, such as breach of an employment contract, negligent evaluation, failure to employ or promote, wrongful discipline, deprivation of a career opportunity, wrongful infliction of emotional distress, defamation, invasion of privacy and mismanagement of employee benefit plans.
While policies vary, EPLI generally covers settlement, judgment, legal costs, fines and penalties. EPLI also protects a company’s directors and officers, management, and other employees from being held personally liable in a lawsuit.
Over the past few years, there has been a surge in sexual harassment claims in the cannabis industry. One such suit filed by the U.S. Equal Employment Opportunity Commission (EEOC) alleged that a general manager at a medical marijuana dispensary in Maryland engaged in “unwelcome touching,” made “highly offensive sexual comments to and about staff and customers,” and “showed an employee a nude picture on his phone.”Although employees complained for months about the harassment, the company did not investigate until after it learned a complaint had been filed with the EEOC. The courts ruled in favor of the plaintiff, and the dispensary and its parent company were remanded to pay $175,000 to settle the suit.
The cannabis industry is plagued by many of the same gender issues as other mainstream industries. In a study conducted by WeedMaps, 53% of women in the cannabis industry have experienced workplace harassment with 46% reported feeling sexually harassed.However, it’s not just women and lower-level employees making claims. Last February, a large publicly traded California cannabis flower distributor came under fire when its former Chief Revenue Officer – a male – accused the company of fostering a culture of sexual harassment and coverup. In the official complaint, the executive said he was subject “to severe and pervasive sexual harassment, both hostile work environment and quid pro quo, as a result of unwanted sexual advances and other discriminatory conduct.” The pending court case seeks an unspecified amount of damages from the company and also names three of its related companies liable.
Discrimination.Title VII is the Federal Civil Rights Law that prohibits employment discrimination on the basis of race, color, gender, national origin, and religion. For women, the cannabis industry remains a harassment-filled boys club. The latest in the battle to fight misogyny in the cannabis growing and retail industry, is a lawsuit filed by two workers at cannabis-growing companies in California who claim they were “wrongly fired after protesting workplace conditions and gender bias, including prohibitions on women working in growing rooms and pregnant women working at the companies.” The complaint also alleges that the companies conducted “a sham investigation of their complaints of bias, to further create pretense for firing them.” The plaintiffs are seeking compensatory and punitive damages, as well as other penalties against the companies.
Wrongful Termination/Retaliation.According to the EEOC, this is the most common claim brought against employers. The latest case to make headlines was filed in June 2022 by a former employee of a Chicago-based health center who claims she was fired under the pretense that she had bullied a coworker, but in reality she was terminated because she had reported her supervisor’s unwelcome behavior.In the suit, she alleges “violations of Title VII of the Civil Rights Act of 1964 and the Illinois Human Rights Act, and asked the court for damages for emotional distress, humiliation and her loss of employment, as well as punitive damages.”
EPLI – Is it Worth It? Critical Points to Consider:
Navigating employee-related issues can be tricky business. Cannabis companies that land in legal hot water are often more focused on boosting profits and growing their business rather than implementing HR policies and ensuring they have the proper insurances in place to protect themselves against legal claims. The dozens of companies over the years that were embroiled in legal litigation and did not have EPLI learned the hard way that they are solely responsible for paying significant defense fees, compensatory and punitive damages, fines and penalties.
When considering an EPLI, it is critical to negotiate policy limits, selection of counsel and defense limits, when you are first obtaining EPLI insurance or when you are renewing your policy. A qualified cannabis insurance broker can walk you through all the options and guide you on the policy that best meets your needs and budget.
While EPLI can be offered as a stand-alone policy, it is typically more affordable to combine EPLI with an existing policy, such as Directors & Officers Liability (D&O). Certain policies automatically include sexual harassment, but others do not, or you may be required to get a special endorsement for sexual harassment. Keep in mind that coverage is specific and EPLI cost is based on the business type, employee numbers and past lawsuits associated with the organization. Your broker should do the leg work for you and present coverage options and cost comparisons, so management can make an informed decision.
In Summary
Prevention is the cornerstone of reducing the risk of employee-related lawsuits. However, even if you develop and enforce a zero-tolerance policy for sexual harassment, discrimination, and other harmful issues, and take immediate and appropriate action when a complaint is made, claims can and will happen.
As you hire more employees, your risk of discrimination and sexual harassment increases. An EPLI policy can help your legal defense and settlement of such claims. In today’s climate, business owners and managers need to be proactive and understand the risk management tools and options available to them to protect their business.
Eric Rahn, Managing Director of S2S Insurance Specialists, is a highly specialized insurance broker and risk management professional with over 30 years of experience providing C-Suite executives strategies and solutions that protect and safeguard their businesses.
Eric has held several executive positions in the maritime and casino/gaming industries, including CEO of the largest privately own casino concessions company operating on cruise ships around the world. He transitioned his knowledge of corporate business practices in highly regulated industries into the burgeoning cannabis space, establishing S2S Insurance Specialists in 2017.
Eric has served on the National Cannabis Industry Association’s (NCIA) Risk Management Insurance Committee since 2016. He is also a national speaker on cannabis insurance and author of NCIA’s Risk Management and Insurance’s “Introduction into Cannabis Insurance.”
Video: NCIA Today – Thursday, July 14, 2022
NCIA Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every other Thursday on Facebook for NCIA Today Live.
Midterm Election Voters Will Likely Determine Cannabis Legalization Amid Several States
By Sadaf Naushad, NCIA Intern
With midterm elections just four months away, cannabis activists are paving the path for major reformations to take place nationwide.
In order for voters to see cannabis legalization on their state’s midterm ballot, cannabis advocates are scrambling to collect the number of signatures necessary. Fortunately, residents within various states are in support of cannabis legalization, as demonstrated through the high volumes of submitted signatures.
The rapidly emerging cannabis industry has led to spiked encouragement of cannabis legalization across the U.S., emphasizing the demand for lawmakers to implement safe and secure cannabis policies.
Let’s take a closer look at some of the state-level progress:
Arkansas
Cannabis activists are highly optimistic after their recent efforts to push for legalization on Arkansas’ midterm ballot. Last week, advocates turned in more than twice as many signatures to the Secretary of State’s office as required to appear on the ballot. According to Responsible Growth Arkansas, 89,151 signatures are needed to qualify for the measure. Advocates stunned the Secretary of State when they delivered just over 190,000 signatures.
Provisions on the measure would permit anyone at least 21 years of age to possess up to one ounce of cannabis. Additionally, Arkansas would grant its current medical shops permission to add adult-use sales on March 8, 2023. A lottery would also distribute 40 additional licenses for adult-use dispensaries, and municipalities would need to hold a referendum if they prefer to prohibit adult-use businesses. On the other hand, the measure does not include expungements of prior marijuana convictions.
While many view the signatures as enhanced legalization support, Arkansas True Grass and Arkansans for Marijuana Reform have raised concerns about the potential provisions. Both organizations state that the measure would favor large businesses in the present medical cannabis industry. But Steve Lancaster, Responsible Growth Arkansas’ spokesperson, believes that the “constitutional amendment provides a sound infrastructure for reform that prioritizes regulations.” If voters approve legalization, Lancaster intends to advance further reforms in the legislature.
At the moment, however, two weeks remain for Arkansas to verify the submitted signatures.
North Dakota
Cannabis consumers find themselves one step closer to legalization in North Dakota. Just three months ago, lawmakers approved the cannabis legalization ballot language, clearing the procedural obstacle to begin gathering signatures.
On Friday, cannabis activists collected numerous signatures, exceeding North Dakota’s 15,582 minimum requirement. The New Approach North Dakota campaign claimed they obtained 21,400 valid signatures and anticipate that number to increase before today’s deadline.
The measure’s initiative would allow those 21 years of age and older to purchase and possess a maximum of one ounce of cannabis, along with permitting adults to cultivate a maximum of three plants for personal use. Furthermore, the Department of Health and Human Services would be responsible for conducting regulations and overseeing licensing for cannabis businesses. The department’s regulators would have until October 1, 2023 to incorporate rules regarding security, advertising, labeling, packaging and testing standards. To mitigate the possibility of a monopolized market, North Dakota’s initiative specifies that any individual or organization can only own up to four retail locations or one cultivation facility.
Nebraska
Tremendous momentum builds across Nebraska, as activists exceed the amount of signatures to qualify medical cannabis legalization initiatives for the midterm ballot.
Nebraska requires each proposal to have 87,000 valid signatures from registered voters to qualify for November’s ballot. On Wednesday, however, advocates encountered a legal hurdle when a federal court overturned a lower federal court’s ruling that had momentarily eased ballot prerequisites. The ruling states that signatures “must come from a minimum of five percent of voters in at least 38 counties across the state.” The Nebraskans for Medical Marijuana Campaign, in addition to many activists, deem this ruling as unconstitutional, stating that it generates a detrimental burden that gives oversized influence to small, rural communities that are more challenging to reach.
Nevertheless, these barriers have not fazed activists assembling cannabis legalization support. In May, the campaign collected 20,000 signatures on each petition, and now that number has increased to over 90,000. To guarantee sufficient valid signatures, the Nebraskans for Medical Marijuana campaign aim to gather several thousand more signatures before Thursday’s turn-in deadline.
Minnesota
With Minnesota’s recent legalization of edibles and drinks infused with low amounts of THC, consumers remain excited for what’s to come.
But for lawmakers, this means acknowledging Minnesota’s current absence of statewide cannabis regulations. For now, local governments are responsible for enacting market rules within their jurisdictions. According to U.S. Representative Heather Edelson (DFL), “the ability for municipalities to offer important guidance and clarity on day-to-day operations and compliance within a city is vital.”
That being said, Representative Edelson has conducted meetings with mayors, city council members, city managers and the League of Minnesota Cities to inform them about how the new law could shape their areas and how they can execute parameters within local markets.
Oklahoma
Oklahoma is yet another state pushing for cannabis legalization to surface on the November ballot. Last Tuesday, The Oklahomans for Sensible Marijuana Laws campaign submitted over 164,000 signatures to the Secretary of State’s office, surpassing the minimum number of 94,911 signatures necessary to qualify for the ballot.
If passed, the measure would permit adults 21 and older to possess and purchase up to one ounce of cannabis. Adults would also be able to grow a maximum of six mature plants and six seedings for personal use. The Oklahoma Medical Marijuana Authority Department is in charge of regulating the market, as well as issuing cannabis business licenses. The department would impose a 15% tax on adult-use cannabis products, in which its revenue would go towards the “Oklahoma Marijuana Revenue Trust Fund.” These funds would initially cover the costs of managing the program, while the rest of the funds would be allocated between municipalities where the sales followed, the State Judicial Revolving Fund, the general fund, public education grants and grants for organizations involved in substance abuse treatment and prevention.
Finally, for those serving time due to prior cannabis convictions, the measure allows inmates to “file a petition for resentencing, reversal of conviction and dismissal of case, or modification of judgment and sentence.” Those who previously served a sentence for past cannabis convictions can petition for expungement.
Altogether, the cannabis industry is witnessing a growing number of legalization support nationwide. From Minnesota to Oklahoma, cannabis consumers are eager to have their voices heard and addressed on November’s midterm ballot. The recent legalization efforts across states shine a light on the mounting acceptance of the industry’s movement, setting the stage for crucial cannabis reformations to follow.
Stay tuned for more updates on cannabis policy reforms. If you are interested in learning more about NCIA’s government relations work and how to get involved, please reach out to Madeline@thecannabisindustry.org.
Video: The Voice of Main Street Cannabis
Founded in 2010, NCIA is the oldest, largest, and most effective trade association serving the cannabis industry. Our membership consists of hundreds of small businesses and tens of thousands of cannabis professionals who know that we are stronger and more prosperous when we work together to lift up our entire industry.
As the only national advocate for small cannabis businesses, NCIA works every day to advance policy reforms favorable to the whole industry — not just the wealthiest few.
Equity Member Spotlight: Banyan Tree Dispensary – Adolfo “Ace” Castillo
NCIA’s editorial department continues the Member Spotlight series by highlighting our Social Equity Scholarship Recipients as part of our Diversity, Equity, and Inclusion Program. Participants are gaining first-hand access to regulators in key markets to get insight on the industry, tips for raising capital, and advice on how to access and utilize data to ensure success in their businesses, along with all the other benefits available to NCIA members.
Tell us a bit about you, your background, and why you launched your company.
My name is Adolfo Castillo. People who know me call me Ace. Before I started my first cannabis business, I had a 10-year career in the banking industry. I started in a call center as a customer service associate. I then moved into a traditional banking center where I learned sales and eventually became the assistant manager. It was at the end of my tenure in 2008 that my Tia Eloise was diagnosed with terminal cancer. At the request of my mother, she asked me to get some cannabis in hopes that it would help her sister eat. Although it did not cure cancer, it really helped her appetite and gave her a bit of relief. Unfortunately, my Tia Eloise lost that battle, but it was the relief that I was able to provide that helped bring me peace when she passed away. This all happened around the same time that bill SB 420 was signed into California law, establishing statewide guidelines for Prop. 215. This law paved the way for cooperatives and collectives to begin operating legally in my city. It was at that moment that my love for cannabis became a passion. I felt a need to help more people gain access to cannabis, so I partnered with a friend of mine who sold weed and I took what I had learned about business and applied it to opening my first medical cannabis dispensary.
What unique value does your company offer to the cannabis industry?
I named the dispensary Banyan Tree after an experience I had in Maui about 13 years ago. It was my first visit to Maui so I decided not to bring any cannabis products to avoid any problems at the airport. When I arrived, I asked a few locals where I could find some good smoke and they all pointed me to the Banyan Tree. It was true. As soon as I found the Banyan Tree, I could tell this was the place to be. The smell was in the air and I met some really nice Hawaiians who were happy to hook me up. I want our guests to have the same experience when they visit our dispensary. Banyan Tree is a destination. A place where friends can meet to find quality cannabis.
As a local native, I understand the cannabis culture in my town. The legacy market has thrived for so long in Fresno. One of our biggest challenges will be convincing medicinal users and cannabis connoisseurs to buy their cannabis from a licensed facility and not from the streets. In order to create the best experience possible, it starts with a well-trained, knowledgeable staff. I am lucky to have two educators on my team who have helped me put together a robust employee development program that will ensure that the Banyan Tree staff will be primed for success.
My goal for Banyan Tree is to be the #1 dispensary to work for. I truly believe that the success of your business relies heavily on its employees. I want our employees to have purpose and feel proud of the work they do. Banyan Tree was built upon the idea of helping our surrounding community achieve wellness and enjoyment through cannabis. When you come to Banyan Tree, you will not be rushed, you will feel safe, your questions will be answered, and the price you pay will not shock you.
What is your goal for the greater good of cannabis?
I am hopeful that I will see full legalization in my lifetime. As a cannabis business operator, I would like cannabis to be recognized as a normal commodity and not this taboo substance that has so much negativity around it and red tape. As a business owner, I would like cannabis commerce to transact and be accepted without any special rules in regards to banking and filing federal income tax. As outdated stereotypes are finally fading away, more and more consumers view cannabis as an integral part of their health and wellness routine. I’m confident that in 20 years we will look back at the history of cannabis and just laugh at all the nonsensical rules surrounding cannabis in the early 2000s.
What kind of challenges do you face in the industry and what solutions would you like to see?
Most cannabis operations are running all-cash businesses because mainstream, national banking institutions are not willing to support a federally illegal industry. A small number of state-chartered banks and credit unions have offered financial services to compliant operations, but establishing these relationships continues to be a significant challenge for operators.
An equally frustrating financial challenge is IRS Tax Code 280E, which states that “no deduction or credit shall be allowed in running a business that consists of trafficking a controlled substance.” This archaic code impacts cannabis businesses across the nation, causing unnecessary fiscal and operational stress.
Why did you join NCIA? What’s the best or most important part about being a member through the Social Equity Scholarship Program?
I joined NCIA through the Social Equity Scholarship program to extend my network of cannapreneurs and to help develop best practices and guidelines that will shape the future of our industry. I would say for me, the best part of being a member of NCIA is the synergy. One of my favorite parts of the program is the “Power Hour.” Each week, Mike Lomuto hosts a zoom meeting dedicated to Social Equity members. It is where we have an opportunity to share ideas and find solutions to the issues we all face in our industry. I am very capable, but I recognize that by fostering relationships and collaborating with others in my industry, I can achieve far more than I could ever achieve on my own.
Video: NCIA Today – Thursday, June 30, 2022
NCIA Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every other Thursday on Facebook for NCIA Today Live.
Positioned for Success – Highlights from the Insights & Influencers: NY Opportunity Tour
Any cannabis insider knows that New York is poised to become the next cannabis epicenter since legalizing last year. As such there is naturally incredible interest in learning about the business opportunities, how to best position yourself for success, as well as networking with potential future partners and clients. To meet these needs for our members and supporters, NCIA hosted the “Insights & Influencers: NY Opportunity Tour”, a weeklong series of events across New York featuring stops in Rochester, Albany and Brooklyn in partnership with founding members Canna Advisors, a trusted advisor to cannabis entrepreneurs who are starting or expanding a cannabis business.
(C) Sam C. Long / Honeysuckle Media, Inc.
Returning with our first in person events of the year, we couldn’t have been more thrilled to meet face-to-face with nearly 150 attendees who were either current or prospective business owners operating in New York and interested in expanding their operations or trying to break into the industry. With stops in Rochester, Albany, and New York City, the events brought together attendees from across the Empire State to not only learn about the developing regulatory landscape and opportunities to get involved with the burgeoning cannabis industry, but also the latest developments with NCIA’s work on federal cannabis policy.
(C) Sam C. Long / Honeysuckle Media, Inc.
Speakers were NCIA CEO and co-founder Aaron Smith and representatives from Canna Advisors including Bob Wagener, Vice President of Real Estate Development; Sumer Thomas, Director of Regulatory Operations; and Vincent DiMichele, Regulatory Content Manager. During the hour long presentation, numerous topics were covered that were relevant to business owners in the cannabis industry such as:
• The possibility of federal legalization and the work NCIA is doing to ensure small — or “main street” — cannabis businesses have a seat at the table as legislation is written
(C) Sam C. Long / Honeysuckle Media, Inc.
• Benefits of starting the license application process early and the importance of community engagement efforts
(C) Sam C. Long / Honeysuckle Media, Inc.
• Understanding zoning requirements and ensuring your business can operate in the best location possible
(C) Sam C. Long / Honeysuckle Media, Inc.
• Developing staffing needs and protocols so the team behind your operations is positioned for success and growth
• Engaging in public comment periods including the New York Office of Cannabis Management’s (OCM) current 60 day comment period open now through August 15 surrounding regulations for packaging, labeling, marketing, advertising, and laboratory testing of adult-use cannabis
Throughout the tour, representatives from the OCM were on-site to chat with participants, answer questions that attendees had, and generally get to know those interested in owning or operating a cannabis related business in the state. We are proud to facilitate those connections at our events time and time again, so that regulators and business owners alike can meet in person to build relationships which in turn helps break down the barriers to communication down the line.
Nevillene White, Manager of Community Relations and External Affairs for OCM, joined our Albany gathering right next door to The Egg performing arts venue located inside of Empire State Plaza. Throughout she was able to supplement the presentation by providing comments directly to crowd feedback during updates on the licensing process in the Capitol.
(C) Sam C. Long / Honeysuckle Media, Inc.
Trivette Knowles, Press Officer and Manager of Community Outreach for the OCM, was present in Brooklyn and commented ”We need more events like this to show people that cannabis touches all walks of life,” he said. “It’s part of the culture.”
(C) Sam C. Long / Honeysuckle Media, Inc.
NCIA’s Aaron Smith closed out each of the events with a final call to action for everyone in the room: Contact New York’s U.S. Senators Chuck Schumer and Kirsten Gillibrand to urge them to support the SAFE Banking Act and bring it to the floor for a vote. As the Majority Leader in the Senate, Sen. Schumer has the power to allow the legislation to be voted on but has not done so, stating a preference for more comprehensive legislation. Smith also discussed the Cannabis Administration and Opportunity Act (CAOA), which addresses federal legalization on a broader scale. A final version of that bill is still yet to be introduced however, and passage of the SAFE Banking Act would provide protections to financial institutions working with cannabis business and would have a positive impact on the cannabis industry while support for CAOA and comprehensive reform builds in Congress.
Of course we encourage anyone reading to take this call to action even further, and plan to join NCIA at our upcoming 10th Annual Cannabis Industry Lobby Days from September 13-14 in Washington, D.C. Find out more details and register online here.
We can’t thank all our members and supporters who attended the events on our “Insights & Influencers: NY Opportunity Tour” enough, as well as our co-hosts, Canna Advisors, for making these events possible!
(C) Sam C. Long / Honeysuckle Media, Inc.(C) Sam C. Long / Honeysuckle Media, Inc.(C) Sam C. Long / Honeysuckle Media, Inc.(C) Sam C. Long / Honeysuckle Media, Inc.(C) Sam C. Long / Honeysuckle Media, Inc.(C) Sam C. Long / Honeysuckle Media, Inc.
Interested in attending our next in-person event this Summer? Register now for the Colorado Industry Social taking place on Thursday, July 28 in Denver, CO.
Want to know how you can sponsor events like these? Please contact our Events Team at events@thecannabisindustry.org to explore possibilities.
Mixed Bag in D.C. – SAFE Banking and New Bills
Photo By CannabisCamera.com
by Michelle Rutter Friberg, NCIA’s Deputy Director of Government Relations
There’s no getting around it: last week was a mixed bag for cannabis policy in Washington, D.C. While there was excitement around the introduction of two bills in the House of Representatives, it was tempered by the fact that congressional leaders removed the SAFE Banking Act language from the America COMPETES/USICA trade bill.
SAFE Banking: what happened and what’s next?
The cannabis industry (and many others) were disheartened to learn that the SAFE Banking Act language that had been attached to the House’s America COMPETES Act was stripped out during negotiations last week. Over the last couple of months, both parties have been scrambling to negotiate the legislation into something that could pass both chambers and get across the President’s desk. Unfortunately, Majority Leader Schumer (D-NY), Minority Leader McConnell (R-KY), Speaker Pelosi (D-CA), and Minority Leader McCarthy (R-CA) decided to put the SAFE Banking Act on the chopping block again despite pleas from businesses, financial institutions, and numerous state officials.
While SAFE will not be included in this legislative package, lead sponsor Rep. Ed Perlmutter went to Twitter to talk about what’s next:
“By excluding the#SAFEBankingAct from the#USICA/#COMPETES bill, the Senate continues to ignore the public safety risk of forcing cannabis businesses to deal in all cash. In the wake of the Senate’s inaction, people continue to be killed and businesses continue to be robbed. I will continue to push for#SAFEBanking to be included in COMPETES, other legislative vehicles, or for the Senate to finally take up the standalone version of the bill which has been sitting in the Senate for three and a half years.”
But don’t give up just yet: there’s been much talk on Capitol Hill about a “SAFE+” package of some type. Read more about that here.
New bills: the CLIMB Act and the Veterans Equal Access Act
Last week, we saw the introduction of two cannabis bills in the House: one was a new bill that’s never been introduced, while the other has been introduced in many Congress’ past. The former: the Capital Lending and Investment for Marijuana Businesses (CLIMB) Act; the latter: the Veterans Equal Access Act.
Led by Reps. Troy A Carter, Sr. (D-LA) and Guy Reschenthaler (R-PA), the CLIMB Act looks to:
Provide safe harbor for private financial institutions to offer lending services state-legal American businesses. Due to federal prohibition, a majority of American banks will not offer loans or lending options to small, minority and veteran-owned cannabis businesses.
Protect government agencies such as Community Development Financial Institutions (CDFI) and the Small Business Administration (SBA) and Minority Business Development Association (MBDA) from issuing grants and other sources of government funding. The CLIMB Act will allow entrepreneurs and small businesses to apply for funding to start and grow their business in the cannabis industry, particularly in areas most adversely impacted by the War on Drugs.
The Veterans Equal Access Act has been introduced in the past; this session, the bill is again led by champion Rep. Earl Blumenauer (D-OR) and newcomer to the legislation and Cannabis Caucus co-chair Brian Mast (R-FL).
The bill states that the secretary of the VA must “authorize physicians and other health care providers employed” by the department to 1) “provide recommendations and opinions to veterans who are residents of states with state marijuana programs regarding the participation of veterans in such state marijuana programs” and 2) “complete forms reflecting such recommendations and opinions.”
The bill has previously cleared the House Veterans’ Affairs Committee and was then turned into an appropriations rider; however, it has never been passed into law.
One thing is clear: we have our work cut out for us as we look to the last six months of this Congress. Want to get more involved with our government relations efforts? Consider becoming an Evergreen Roundtable member today, and mark your calendar for September 13-14, as we return in-person for lobby days in Washington, D.C.!
Member Blog: Reflections On Banking Reform For Cannabis Operators
Isn’t it crazy to think that the legal cannabis industry could be worth $57 billion by 2030? Or that nearly half of the country’s adult population (49%) has tried marijuana, the largest number ever recorded.*
At the time of this article, nineteen states, two territories, and Washington D.C. have legalized cannabis for adult recreational use. With more than two-thirds of U.S. states that have legalized the sale of both adult-use and medical cannabis and nearly half the population of potential cannabis consumers – it’s safe to say the cannabis industry is thriving.
But can it continue to grow without banking reform?
Cannabis businesses have a hard time accessing traditional banking options because the plant is still federally illegal. This means that banks are hesitant to work with cannabis companies for fear of retribution from the federal government.
This lack of banking options creates a difficult environment for cannabis businesses to operate in. Since they can’t deposit money or write checks, they have to operate on a cash-only basis, which can lead to security problems.
Cannabis operators also have a hard time securing financing because most traditional lenders are unwilling to work with them. This leaves them struggling to get the capital they need to grow and scale their business.
When cannabis businesses lack financing options for basic business growth, a banking system more ideal for cannabis operators is needed.
The Federal Law Guides Everything
Despite the growing opportunities in the cannabis industry at the state level, many prospecting business owners are stalled by a lack of capital. Businesses in the cannabis industry might celebrate legalization in their respective states but still deal with the challenge of accessing banking services.
Cannabis dispensaries that run cash-only operations are forced to confront security challenges in a new way. Online ordering, credit and debit card processing, taking business loans, and accessing other revenue-driving financial services are denied to cannabis businesses due to their federal status.
This shows an immediate need for financial reprieve in the cannabis industry.
Getting Financial Reprieve
The House of Representatives has passed several bills supporting the cannabis industry. Some of these bills include:
Bill to decriminalize marijuana
The Marijuana Opportunity Reinvestment and Expungement (MORE) Act
Legalization of adult-use cannabis
Legislation for medical marijuana programs
Legislation to reduce barriers to cannabis research
Approval of measures for adult cannabis use
One such bill that focuses on banking reform is the Secure and Fair Enforcement (SAFE) Banking Act, which aims to reduce the banking services challenges in the cannabis industry. If the SAFE Banking bill passes in Congress, financial institutions can open their services to cannabis businesses without the fear of violating anti-money laundering (AML) laws.
In return, cannabis businesses reduce the risk of theft and employee welfare by transitioning from cash-only services to banking services. However, this financial reprieve doesn’t address the cannabis tax code that prevents cannabis businesses from deducting business expenses from the gross income as per the Controlled Substances Act
Nonetheless, the SAFE Banking bill is a step in the right direction. The remaining concern is whether these financial reprieves will pass in the Senate and legalize cannabis businesses at the federal level.
Another financial option expected to reform the cannabis industry is crypto. The authenticity and security of blockchain currencies like Bitcoin are becoming a lucrative consideration for financial reprieve in the cannabis industry.
Currently, there are cryptocurrencies like PotCoin and CannabisCoin mined to cater to various needs within the cannabis industry. However, the uncertainty in the crypto world makes it challenging for the cannabis industry to settle on using crypto as a financial banking solution.
Granted, some crypto technology like blockchain technology is used to transact sales in the cannabis industry, where buyers make cashless payments, and the dispensaries convert this into crypto. But these transactions are not fully transparent.
But Is The Banking Industry Prepared For This Reprieve?
Financial institutions are gathering more courage when working with the cannabis industry. In 2021, 755 banks showed working relationships with cannabis clients. However, this comfort is more prevalent at the state level than at the federal level, where cannabis is yet to be legalized.
But since support from the federal government is anticipated, banking institutions must equally prepare for the capability to host cannabis businesses legally. Banks must stay compliant with the anti-money laundering (AML) laws.
Banks should conduct due diligence on cannabis businesses that want to use their services. Since federal legalization of cannabis is still pending, some cannabis operations might be illegal. Therefore, it is prudent for banks to start preparation by ensuring any new partners are not lawbreakers.
This means checking for legalization and registration licenses and conducting due diligence on employees and angel investors. Business transactions are also an excellent indicator of whether a cannabis business is involved in illegal activities.
For instance, a cannabis business in a state that frowns upon international shipments shouldn’t have any international transactions. Avid AML monitoring controls should quickly identify legitimate cannabis businesses.
In a nutshell, every business that partners with a cannabis business should be prepared to support its decisions with factual claims. In case of any suspicious activity, the bank should be ready to give an account of their due diligence procedure and the findings.
Creating relationships with federal regulations is also prudent since they help make the regulation process easier. Regulators also help ensure that banks remain compliant with the Federal cannabis laws, which protect their banking operations.
Cannabis business owners must also prepare for the possibility of using open and traditional banking services for their operations. If, or when, cannabis is Federally legalized, the cannabis industry will streamline its operations throughout the U.S.
This means added investments in research, cultivation, marketing, production, and sales of cannabis and cannabis products, whether medicinal or recreational. And the added boost of a legal banking system would further increase employment and boost the economy.
Cards On The Table
Does the cannabis industry need a banking reform? Absolutely. The challenge, however, is that, despite the willingness of the House of Representatives to support the SAFE Act bill, among other proposed banking reforms for the industry, approval in the Senate is still in question. Cards on the table, bank financing in the cannabis industry will propel businesses into more growth, which, in turn, should pragmatically influence the overall U.S. economy. But this starts with active congressional action.
FAQs
What is the current cannabis banking system?
The current cannabis banking system is not ideal for cannabis businesses because the lack of Federal legalization keeps banks from offering traditional banking services to cannabis businesses for fear of violating anti-money laundering (AML) laws.
What are the challenges of using non-FDIC banking options?
Non-FDIC banking options are not secured by the FDIC, meaning businesses that operate under these banking services are not protected by the Federal laws against theft or failure.
What can a banking reform do for the cannabis industry?
A banking reform allows banking institutions to offer cannabis businesses the same banking services they offer other businesses, like capital loans, online bill payments, and debit and credit cards.
Joshua Gilstrap is the Marketing Manager for e2b teknologies, in addition to his marketing responsibilities Joshua leads business development for e2b teknologies emerging Canna Suite product line. A business graduate with a focus in marketing from Miami University in Oxford, Ohio, he joined the e2b team in the Fall of 2019. Josh brought with him a wide array of business and practical experience in planning and execution. Since coming aboard he has led multiple project’s including website hosting and theme standardization company wide, marketing automation streamlining the efficiency of the customer journey, and sales automation where he is changing the conversation from promotion to education, from pitching to catching, and from push to pull in order to keep up with the shifting tides of a digital transformation.
Video: NCIA Today – Thursday, June 16, 2022
NCIA Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every other Thursday on Facebook for NCIA Today Live.
An Optimistic Congress Aims to Legislate a Bipartisan Cannabis Omnibus Package
By Sadaf Naushad, NCIA Intern
As the cannabis industry progresses nationwide, the public demands Congress to pass major cannabis reforms. After months of opposition met among Congress members, a breath of fresh air awaits cannabis advocates, lobbyists, and consumers.
Last Thursday, two crucial congressmen revealed objectives to establish an extensive package of incremental cannabis proposals.
While Senate Majority Leader Chuck Schumer (D-NY) expects to file the final version of the Cannabis Administration and Opportunity Act (CAOA) sometime this summer, lawmakers are using the draft language as a guide to propose an alternative backup bill in creating a cannabis “omnibus” package.
With the wide-ranging package garnering support across Democratic and Republican lawmakers, industry insiders have high hopes that both chambers could come together to endorse an effective, bipartisan bill by the end of this year.
Let’s discuss the potential inclusions within the bipartisan cannabis package.
Recently, a number of Congress members have discussed the possibility of creating a new cannabis bill that would comprise several incremental measures, including provisions focusing on banking, access to medical cannabis for veterans, research expansion, access to SBA programs, drug sentencing reformations, and more.
Lead sponsor of the Secure and Fair Enforcement (SAFE) Banking Act, Rep. Ed Perlmutter (D-CO) is hoping to incorporate protection for financial institutions operating with state-legal cannabis businesses in a potential package. According to Rep. Perlmutter, members also have interest in including Rep. Dave Joyce’s (R-OH) Harnessing Opportunities by Pursuing Expungement (HOPE) Act, a bill designed to expunge prior marijuana convictions. Additionally, lawmakers are deliberating over granting cannabis businesses access to SBA loans and services that are obtainable to every other industry, a reform initially advocated by Sen. Jacky Rosen (D-NV).
These four concerns –- veterans, research, expungements, and banking – constitute a small portion of the package’s considerations.
Congress will also potentially consider including a non-cannabis item as part of the wider deal, known as the EQUAL Act, which looks to alleviate racial disparities within the criminal justice system by eliminating the federal sentencing disparity between crack and powder cocaine.
Leader Schumer, however, faces the requirement of having a 60-vote threshold to pass legislation. Although the chamber comprises a slim majority of Democrats with the vast majority of GOP members opposing numerous past bills, the 60-vote requirement may be attainable. In contrast to Schumer’s CAOA, indications are that the incremental package has more broad bipartisan support.
Though members have not reached an official deal as these major reforms remain under deliberation, Congress members are not abandoning their efforts to push for a broader-based CAOA bill.
Currently in the bicameral conference committee remains the large-scale manufacturing bill, known as the America COMPETES Act. Leader Schumer has rejected attempts to integrate the SAFE Banking Act as currently written into the COMPETES Act, alleging that it may weaken the ability to approve a slightly larger cannabis reform package. Having passed the House six times, industry insiders feel certain that the Senate will authorize the SAFE Banking Act later this year.
Altogether, the above-mentioned legislation would come up short in federally descheduling cannabis; however, these provisions may acquire the support necessary to reach U.S. President Biden’s desk.
Video: NCIA Today – Thursday, June 2, 2022
Happy PRIDE! NCIA Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every other Thursday on Facebook for NCIA Today Live.
Make the investment, take the time, and do the work to position yourself for success in the Empire State!
Equity Member Spotlight: Ontogen Botanicals – Dr. Adrian Adams
NCIA’s editorial department continues the Member Spotlight series by highlighting our Social Equity Scholarship Recipients as part of our Diversity, Equity, and Inclusion Program. Participants are gaining first-hand access to regulators in key markets to get insight on the industry, tips for raising capital, and advice on how to access and utilize data to ensure success in their businesses, along with all the other benefits available to NCIA members.
Tell us a bit about you, your background, and why you launched your company.
Hello, I’m Adrian Adams, EdD. I spent a decade teaching Biology and Chemistry as well as coaching football. I chose to spend several years as a stay-at-home dad (the hardest job by far) and then worked in the pharmaceutical industry. I know many of the physicians in my area. While at dinner one night with a couple of doctors, the conversation revolved around having to combat the misinformation that patients come in with from “Dr. Google.” Minutes later, one doctor asked the others what they were saying to the increasing number of patients who come in asking about cannabis therapy. There was a prolonged silence until another doctor said “I just tell them I don’t know anything about that and to look online.”
Another doctor said, “me too.” The irony within the few-minute span was worthy of a fork drop. The FDA has approved CBD as a medicine. To me, not educating a patient about a legal, safe, and effective treatment option meant they just didn’t have the cannabis knowledge. That also meant more legal, safe, and effective products needed to be made for doctors and their patients. In that moment, Ontogen Botanicals CBD was born.
What unique value does your company offer to the cannabis industry?
We offer reduced costs, which can be a barrier to entry for consumers. And a deep knowledge of the intersection between cannabis and medicine. Physicians are a choke point for the industry that is overlooked. Simply put, doctors are good people. Most of them have simply had zero training on the endocannabinoid system as it was only identified in the 1990s. Ontogen Botanicals believes if they knew better, they’d do better. We offer doctors the information to make an informed decision on the utility of cannabis for their patients. We also offer the ability for doctors to provide legal cannabis products for their patients right in their office as part of a sound treatment plan.
Ontogen provides effective CBD products that are truly full-panel lab tested for safety. We strongly believe in starting at a low dose, which also lowers cost. Using the least medication necessary is part of medical training. Low-dose products work for many people and reduce the cost barrier of entry to try CBD and other cannabis products.
What is your goal for the greater good of cannabis?
We want to increase the healthcare provider and patient knowledge of what this plant can do, as well as provide quality of life-improving products. Now we’re expanding to help the population at large. Medically speaking, cannabis is as good as advertised. The more people use it, the more legitimate the industry becomes.
Cannabis gets a bad rap for being a gateway drug to the opioid crisis. In fact, doctors are beginning to address the pain that often starts and underlies chronic opioid use. You cannot pull opioids and not address the pain that drives many folks back to opioids. Regulated cannabis can reduce pain without the many harmful side effects of opioids – especially unregulated heroin.
With industry growth, and Ontogen Botanicals‘ growth, will come the capital for Ontogen to address the challenges that poverty creates for people who may have much less access to healthcare and prescription drugs to get the medicine they prefer. There is enough money in cannabusiness to use it for social good.
What kind of challenges do you face in the industry and what solutions would you like to see?
A big problem for any small business is finding the right people to do business with. Minority business owners face discrimination and mistrust when trying to do business in general. Now add cannabis to the equation. I’ve been asked for $5K just for the right to open a business checking account.
Groups like NCIA, MCBA, and Minorities for Medical Marijuana help us find each other to do business with as well as bridge the gap between us and traditional business communities like banking for access to capital.
This industry has shown the ability to help remediate the cannabis criminalization harms done to minorities during the war on drugs. Big tobacco and many other industries are already investing and awaiting federal law changes. I fear that once the flood gates open to large companies investing billions of dollars, the feeding frenzy will create an extinction-level event for smaller minority-owned companies. We need federal and state-level legislative dams in place before then to protect minority-owned smaller businesses.
Why did you join NCIA? What’s the best or most important part about being a member through the Social Equity Scholarship Program?
I joined to try to help advocate for social equity and social justice for minorities to have a once-in-a-lifetime chance to start an industry. The best part about the NCIA Social Equity program is that it brings minority entrepreneurs together weekly to support each other. We’ve locked elbows, pick each other up in hard times, and celebrated the good.
U.S. Federal Appeals Court Legalizes Delta-8 THC, Setting Precedent for the Cannabis Industry
By Sadaf Naushad, NCIA Intern
Thanks to the Agricultural Improvement Act of 2018 (2018 Farm Bill), hemp is now federally legal, permitting U.S. farmers to cultivate, process, and sell hemp. Since its passing, however, businesses in the hemp industry have found themselves in a legal gray area.
With the 2018 Farm Bill eliminating restrictions on the psychoactive cannabinoid delta-8 THC, the companies deemed their delta-8 THC products within legal guidelines. Several jurisdictions disagreed, calling for clarification on the status of delta-8 THC.
Last week, the U.S. Court of Appeals for the Ninth Circuit addressed the dilemma, claiming delta-8 THC products as federally legal.
Let’s consider what delta-8 THC legalization means for the future of the cannabis industry.
Because recreational cannabis use remains federally illegal, delta-8 THC products continue to gain popularity nationwide. Manufacturing developments have led to enhanced consumer products, in which cultivators safely extract delta-8 THC cannabinoids from hemp plants.
While delta-9 THC constitutes a major psychoactive cannabinoid in the marijuana plant, delta-8 THC appears in trace amounts of the plant. Its psychoactive properties grant consumers gentler side effects compared to delta-9 THC.
On Thursday, a three-panel judge of the U.S. Court of Appeals published their opinion regarding delta-8 THC, ruling products containing the psychoactive ingredient as federally legal. According to the panel, delta-8 THC qualifies as a legal substance under the present federal definition of hemp. Federal law outlines hemp as “any part of” the cannabis plant, in which “all derivatives, extracts and cannabinoids” with less than 0.3% delta-9 THC by weight are allowed.
Had U.S. Congress unintentionally created a loophole leading to the legalization of delta-8 THC, the U.S. Federal Appeals Court stated that Congress should be responsible for resolving the issue. The panel specified that they would not replace its own judgment with Congress’ policy rulings. In the meantime, the Court defines the federal hemp law as “silent with regard to delta-8 THC.”
According to a Politico article, “Members of Congress have proposed fixes to federal hemp laws that would close this loophole. Rep. Chellie Pingree (D-Maine) introduced a bill in February to limit hemp and hemp products by calculating the total THC rather than focusing on Delta-9 THC. At the same time, state hemp regulators are voicing for a similar change advocating for the 1 percent total THC definition of hemp. Meanwhile, some states have moved to ban the sale of Delta-8 THC products or to regulate them similar to recreational marijuana.”
NCIA takes a strong position that Delta-8 products and any other psychoactive cannabinoids must be restricted to adults over 21 and regulated by the states so that these products are subject to the same testing requirements, track-and-trace rules, and excise taxes as other adult-use cannabis products.
Furthermore, if you are interested in learning more or getting involved with NCIA’s Government Relations work please contact Madeline Grant at madeline@thecannabisindustry.org to schedule a call. As the oldest and largest trade association, our Government Relations team has been hard at work for over a decade educating and working with congressional offices. NCIA held its Virtual VIP Lobby Days last week, May 16-19 on Capitol Hill. NCIA’s Evergreen members participated in congressional meetings all week long to advocate and educate members of Congress(s) and staff on the importance of cannabis policy reform. We discussed the importance of keeping the Secure and Fair Enforcement (SAFE) Banking in the America COMPETES Act and descheduling cannabis at the federal level. You can read more about cannabis and banking from last week’s blog HERE.
NCIA members were able to share their personal stories about being in the cannabis space and relay their expertise to further understanding of the struggles and hurdles cannabis businesses face every day. There is never a time more important than now to support NCIA’s efforts for cannabis policy reform.
Member Blog: Illinois Adult-Use Dispensary Applicants Hope Licensing Process Doesn’t Go Up in Smoke
Recently, after delays in issuing any adult-use dispensary licenses, Illinois has attempted to push ahead with simplifying the application and issuance process. Interestingly, this has occurred even as recent developments in ongoing litigation indicate potential further delays in issuing the previously awarded licenses that are currently in limbo, and in one case, even threaten to upend the entire process.
Delays and Initial Lottery Announcement
On September 3, 2020, after multiple delays, the Illinois Department of Financial and Professional Responsibility (“IDFPR”) announced the application scoring results for the initial 75 new adult-use dispensary licenses to be issued under the Illinois Cannabis Regulation and Tax Act (the “Act”). Only 21 of the 900-plus applicant groups had achieved a perfect score, and the available licenses would be awarded via a series of lotteries involving only those applicants. Although all 21 applicants with a perfect score were deemed too qualified for “social equity” status under the Act, there were public allegations that only 13 of the 21 accepted applicants were actually owned and controlled by people of color.
Faced with multiple lawsuits claiming various flaws in the process, the Governor suspended the initial lottery. He announced that IDFPR would distribute Supplemental Deficiency Notices explaining where applicants missed out on points, and providing an opportunity to correct any identified issues. Unfortunately, this satisfied neither the excluded applicants nor those applicants who had already received a perfect score, and litigation continued. As of May 1, 2022, none of the proposed new adult-use licenses have been issued.
HB 1443 and New Lotteries
In July 2021, the Illinois legislature adopted H.B. 1443 in an attempt to address social equity concerns and expedite the issuance of dispensary licenses. It established procedures for three adult-use dispensary lotteries to occur in July and August of 2021, in which a total of 185 adult-use dispensary licenses were to be issued.
The first lottery, for 55 new licenses, included only applicants that received 85% or more of the available points. The second lottery, also for 55 additional licenses, included applicants that received a score of 85% or higher and met the ownership and control requirements for Social Equity Applicants. Applicants that qualified for social equity status solely by hiring qualifying employees were excluded from this lottery. The final lottery, for the original 75 licenses, included the 21 applicants who initially received a perfect score, as well as an additional 134 applicants who perfected their application using the Supplemental Deficiency Notice process. Although IDFPR announced the winners, none of the licenses have been awarded yet due to the ongoing litigation.
More recently, on March 15, 2022, Governor Pritzker announced another planned lottery process to occur later this year to award 50 new adult-use dispensary licenses. The proposed rules governing this process were released on March 25, 2022, and include a new, simplified online application process and an administrative review provision designed to help address issues without the need for litigation.
Status of Litigation
As Illinois attempts to streamline its processes, three different ongoing lawsuits involving Illinois dispensary licenses have continued to progress, one of which threatens to upend the entire lottery process.
First, Wah v. IDFPR claims that the additional points given to veteran-owned applicants create a special class of applicants in violation of the Illinois constitution. The most recent relevant development, in this case, was the stay order that prevents IDFPR from issuing any of the 185 dispensary licenses until the issues raised in Wah have been resolved, which remains in place.
A second lawsuit, which is really a group of fourteen different lawsuits involving dozens of plaintiffs consolidated into one “supercase,” challenges the application process on the basis of alleged violations of Illinois administrative law, and asks that the plaintiffs be provided additional licenses beyond the 185 currently allocated. The judge in that case recently had the opportunity to take control over the stay in Wah, but declined. As a result, the resolution of this case will affect only the parties to the case, and will not affect the larger issue of the stayed licenses. At a recent hearing, the parties discussed a supplemental lottery process for the plaintiffs that would attempt to recreate the odds that those plaintiffs would have faced in the original lottery, had their applications not been improperly excluded, and the fact that plaintiffs would need to succeed in that lottery in order to have a viable claim to a license. IDFPR and the judge indicated their belief that this lottery should occur soon so that unsuccessful plaintiffs could avoid further litigation costs. However, not all plaintiffs were amenable to this proposal, raising the issue that if none of the plaintiffs were successful in the proposed lottery, IDFPR might never be held to account for any flaws in the application process.
Finally, a third case was recently filed that could upend the entire licensing process. That case, Finch, et al. v. Mario Tretor, Acting Secretary of IDFPR, 1:22-cv-0158 (N.D. Illinois, March 23, 2002), claims that granting additional application points to Illinois residents (as well as the Illinois residency requirements included in the qualifications for social equity status) should be deemed unconstitutional under what is known as the “dormant commerce clause” because it unfairly discriminates against residents of other states. The plaintiffs in Finch have already won a similar case in federal court challenging similar requirements in Missouri, so those watching the case closely are concerned that this court may reach a similar result. In addition, because this case challenges the constitutionality of the entire scoring process, a win for the plaintiffs could mean a reset for the entire licensing process, even affecting those 185 licenses that have already been awarded.
All that interested Illinois applicants can do now is wait, and hope that these issues are resolved soon and licenses are finally released. Once that happens, expect a flurry of activity as those lucky enough to receive a license seek capital and expertise, with some likely to explore options for selling their newly-acquired license.
Andrew Halbert is a member of the National Cannabis Law Practice at Fox Rothschild LLP, based in its Chicago office. He focuses his practice on representing public and private clients, including cannabis companies, in a broad range of transactions including: state and local cannabis regulatory and licensing transactions; stock and asset acquisitions and divestitures; mergers; tender offers; private equity investments; reorganizations; private offerings; and financing transactions facilitated through the issuance of equity and debt securities.
Video: NCIA Today – Thursday, May 19, 2022
NCIA Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every other Thursday on Facebook for NCIA Today Live.
As the middle of May approaches, cannabis advocates, lobbyists, associations, and many more continue to educate congressional offices on the importance of cannabis policy reform.
So far, 37 states have legalized medical marijuana, and 18 states – including the District of Columbia – permit adult recreational cannabis use. With more businesses operating within the industry, one major issue remains: enacting cannabis banking legislation.
The Secure and Fair Enforcement (SAFE) Banking Act addresses the ongoing hurdles between financial institutions transacting with cannabis-related businesses. Congressional lawmakers have been working to include the SAFE Banking Act as a provision to the House’s U.S. Innovation and Competition (COMPETES) Act.
Let’s take a look at where Congress currently stands with the SAFE Banking Act.
This week, 24 U.S. Senators focused their attention on pressuring congressional leaders in ensuring that cannabis banking provisions are enacted into law as part of the broader-scale, House-passed America COMPETES Act.
Led by U.S. Senators Jeff Merkley (D-OR) and Jacky Rosen (D-NV), the 19 Democrats and five Republicans wrote a letter to the leaders, outlining the significance of the SAFE Banking Act, along with its potential impacts on the emerging industry.
The rapidly developing field has led to remarkable job growth, generating significant tax revenue as a result. Thus, if implemented, the SAFE Banking Act would authorize banks, credit unions, and other financial institutions to provide banking services to legally-operating cannabis businesses without facing punishment by federal regulators. Additionally, the banking provision attached to the America COMPETES Act “fosters innovation, supports small businesses, and raises revenue in states that have chosen to legalize cannabis, while reducing safety risks to industry employees and the public alike.”
As of now, financial institutions remain unwilling to transact with cannabis businesses. Due to the indistinct federal and state laws, banks and credit unions fear the regulatory risks associated with the inconsistent policies. Allowing legal cannabis businesses to operate in compliance with state law in obtaining financial services without federal penalties would confront public safety matters, ultimately assisting communities to lessen cash-motivated crimes.
According to the 24 senators, law enforcement administrations have previously addressed the risks accompanying an unbanked cannabis system, many of which include theft, robbery, and violence perpetrated against employees. They emphasize the need to transfer the substantial amount of cash within the industry into the banking system to ensure safe monitoring of accounts pursuant to present federal anti-money laundering regulations and the Bank Secrecy Act.
The National Cannabis Industry Association’s (NCIA) Government Relations team in Washington, D.C. continues to educate Senate offices this week through our Virtual VIP Lobby Days. As we continue to speak with Senate offices on the inclusion of cannabis banking provisions in the America COMPETES Act, our VIP participants are relaying their day-to-day struggles of operating in the cannabis industry. Additionally, participants are pressing for federal de-scheduling, and making sure our nation’s leaders understand the challenges that small and medium-sized cannabis businesses face every day.
Stay tuned for more details about our next Lobby Days coming this September. For more information on NCIA’s Government Relations works or how to get involved please reach out to madeline@thecannabisindustry.org.
Committee Blog: Social Equity Perspectives on Interstate Commerce – Part 3
Previously, in part 1 and part 2 of this series, the DEIC examined the problems inherent in existing social equity programs and the merit for federal social equity in regulating interstate commerce. The DEIC also examined the key components of a proposed framework to address these challenges, how to define social equity federally, and the merit of determining the types and numbers of permits to be issued.
Sadly, as written currently, all proposed federal bills fail to meet the critical objective of creating as much NEW generational wealth for the most number of those disparaged from participating in the legal cannabis industry because of the socioeconomic impacts of more than 80 years of federal marijuana prohibition and due to the barriers to entry created amid state regulatory regimes.
To conclude this policy framework proposal, the DEIC will look at the key considerations for a federal program to ensure it functions as designed and how this framework can create social equity technical assistance, qualification, and a phased approach of implementation to ensure that social equity operators have ample time to qualify, have adequate funded, and are set up for success with an equal starting line in the new interstate commerce industry.
Qualifying Social Equity Operators – Federal Technical Assistance Program
It is imperative that any federal social equity framework helps the industry and their new partners, by ensuring permit holders are qualified in both cannabis and business backgrounds, and by helping them bring financing to the table to start a permitted interstate commerce cannabis business that can be as ready, as quickly as possible, to help import, export, and transport cannabis between the States.
To carry out these provisions in the policy, we recommend that amendments to any federal act include:
Requiring that qualified social equity interstate commerce permit holders:
Have a path to educational qualification (training and development)
Can qualify with equivalent experience
Can pre-qualify for the SBA’s funding once they obtain education or equivalent experience (funds issued upon state licensing approval)
Obtain the majority of initial permits offered for interstate commerce (95%)
In alignment with how long and at what percentage the current industry has been dominating the ownership of licenses
Entities should have 51% or more verifiable ownership and control by a social equity qualified applicant.
Advisory Committee to determine how to verify the 51% social equity ownership
Providing social equity qualified permit holders exclusivity for at least 5 years to ensure the qualifying process takes place equitable to the average time in which the industry developed for adult use without considering social equity.
Mandating laboratory testing as national permitting for interstate commerce to work.
Ensure parity amongst states and tribal nations such that tribe-to-tribe trading and interstate trade routes can be protected.
Avoiding overly limiting interstate commerce permits, but also giving them value by not making them unlimited either.
DEIC suggests 1,500 permits as a starting point divided among the three primary types as a fair balance initially.
These pillars of federal act amendments will proactively resolve interstate commerce concerns that are inherent in descheduling cannabis. Further, pre-qualifying permit holders based on their experience, education, as well as federal financing for their business (contingent on state licensing), will accomplish two primary concerns:
Incentivizes state governments to create social equity licensing regimes that emulate federal efforts
Reduces “predatory” operating agreements that use “token” social equity applicants who do not participate in the business license, contribute little to no financing, and are thereby diluted by existing operators and investors
We believe the U.S. Small Business Administration (SBA) is best to handle collaboration efforts to define this new “Minority Cannabis Business” (MCB) certification program for both program providers on the educational side and for pre-qualifying federal funding for qualified applicants.
Through this qualification, the Alcohol and Tobacco Tax and Trade Bureau (TTB) and (SBA) would issue an interstate commerce permit to be tied to state licenses, and only then would funding be issued to the applicant by the SBA. All funding issued is contingent on obtaining a state licensed facility or partnership with an existing operator in any given state.
Phased Approach:
We believe it is also important that the amendments clearly lay out a multi-phased approach to the rollout of interstate commerce permitting to ensure those most qualified operators proceed first, and to then qualify others with enough time to do so. Encapsulating the proposed amendments, we envision the following steps to ensure a smooth transition that maximizes the opportunity for social equity applicants to succeed:
Initially, establishing the advisory board for the regulatory agencies and mandates to allow for education providers to apply and be approved to provide the educational qualification to social equity applicants. These education providers may also be prioritized based on social equity and curriculum requirements designed in collaboration with cannabis business experts and diversity, equity, and inclusion advocates in cannabis.
For those who lack the experience in operating an interstate commerce permitted business, but who are impacted by the war on cannabis, approved educational programs are invaluable to overcoming the barriers in not knowing how to operate a regulated cannabis business.
Those with experience may qualify, without the need of an educational provider, and each are evaluated for priority licensing according to the following priority:
Applicants with cannabis and business experience (most qualified)
Applicants with legacy experience but limited regulated business experience
Applicants with business experience but limited cannabis experience
Applicants with little cannabis or business experience (least qualified)
If qualified in both, the applicant goes first and can qualify for SBA funding fastest.
If they have limited experience in cannabis or business, then the applicant can take the coursework to qualify and apply for SBA funding.
During this time, it is also crucial to increase community education efforts so that communities impacted most by the war on cannabis can be made aware of the opportunity to qualify, be trained/educated, and approved, and get access to the information necessary to pursue the opportunity along the above pathways.
Provide an education fund for state and municipal governments to promote the benefits of cannabis social equity, responsibilities, and risks of cannabis.
Access to financing is critical for social equity applicants and must be made available through the qualification process for social equity qualified businesses. Once qualified on education or equivalent experience, the SBA may pre-approve funding for qualified applicants. By achieving these qualifications, applicants have access to *reserved* funding appropriated by the federal act. Pre-approved financing in the form of grants and low-interest business debt instruments that are contingent on successful completion of course requirements and other “qualifying” factors for a Minority Cannabis Business is critical to ensuring success for operators and the federal government.
These government loans say how one qualifies and is “pre-approved” so that applicants can negotiate with existing industry license holders as valuable partners and receive federal funding contingent on state licensing approval. The idea is to promote partnership and participation between the existing industry and newly established social equity entrepreneurs while ensuring equal opportunity for social equity operators who do not choose to partner with the industry.
Follow Through
To ensure the program functions as designed and that the advisory committee is provided with as much data as possible to improve upon these suggested amendments, the Diversity Equity and Inclusion Committee (DEIC) recommends a final amendment in the form of a best practices study, along with collected data from participating states, to be instituted and reviewed annually for the first five years and subsequently every three years.
The intention of this study and report is to ensure the enforcement of laws, standards, and programs and to monitor that the activities of social equity operators are in alignment with the intention of the program in benefitting the social equity entrepreneurs permitted, that policies against predatory operating agreements are being enforced, and that policies are truly beneficial to creating social equity in the cannabis industry. The study will provide evidence of the benefits and challenges of the program, as well as possible improvements at federal and state levels.
Conclusion
It seems obvious that unless any social equity partner can “bring more to the table” to balance a “mega player’s” contribution, be educated in all aspects of their chosen field in the industry, recognize predatory agreements, and otherwise be positioned more equally to meaningfully participate in the cannabis industry, social equity programs will continue to fall short of meeting the goal of creating new generational wealth.
History has shown that as long as there’s an opportunity for inequality to be wielded as a weapon for those in power, it will be. No amount of good intention can change that fact.
Social equity requires empowerment opportunities for social equity candidates to bring more to the table as equals with “mega players.” We recognize partnerships can be an ideal path forward when the power dynamics within them are balanced and fair. The DEIC proposes these amendments to any federal act to serve as solutions to the traditional problems of inequality, exclusion, and gatekeeping that once spurred prohibition in the first place and that continue to prevail in the inequity the cannabis industry is still experiencing and to solve the shortcomings of social equity programs thus far.
We recognize that the role for the federal government in these federal act amendments is to even the odds in interstate commerce permitting. Their role is to oversee the fairness in qualifying candidates, to ensure a meaningful value for the permits issued, to give permittees the chance to catch up to the privileged few already in the industry with lockout periods for non-social equity applicants, limited licensing, and to provide access to financing for those traditionally locked out of access to financing or wealth as aa result of systemic oppression caused under prohibition.
Interstate commerce permitting seems like the last true chance for America to atone for 80+ years of marijuana madness and its detriment on our society. It is also the last chance for the industry to search for its soul to balance the impacts prohibition has had on these operators in excluding their participation in legal cannabis initially – born as a result of systemic discrimination overall and colonized on by those with clean records.
In doing so, a more equitable federal act can create the bold ideas and incentive to bring traditional wealth and experience into partnership with underprivileged social equity operators and their expertise/culture to form partnerships that truly represent the intent behind the policies intended for social equity and to create a more diverse, equitable, and inclusive industry for all.
State-Level Insights: Momentum Builds Across Our Nation
By Sadaf Naushad, NCIA Intern
Although the action-packed April must come to an end, the fight for cannabis reform never stops! With U.S. Senators delaying the much-anticipated introduction of the Cannabis Administration and Opportunity Act (CAOA) last month, Congress has a lot of work to do.
In the meantime, a congressional bicameral bipartisan committee is considering the Secure and Fair Enforcement (SAFE) Banking Act as an amendment to the House’s U.S. Innovation and Competition (COMPETES) Act.
Now let’s focus on action occurring within the states. State-level updates help provide us with insights on cannabis reform progress at the federal level. As more state constituents vote in favor of cannabis initiatives, reformation support overall increases within the United States. Efforts to reform cannabis policies at the state level encourage members of Congress at the federal level to enact legislation.
Let’s take a look at this week’s state-level insights:
New York
As the legal cannabis market is set to launch later this year, New York lawmakers intend to ensure that a sufficient supply of marijauna exists. Last month, state regulators voted to allow conditional marijuana cultivation licenses to several hemp businesses. Regulators also established that adults with prior cannabis convictions, along with family members who have previously faced criminalization, would receive the first round of adult-use cannabis retailer licenses – ahead of present medical marijuana businesses. This week, lawmakers recently approved a second round of applications for recreational cannabis cultivators. Additionally, the Cannabis Control Board (CCB) passed amended regulations granting medical marijuana patients to grow their own plants for personal use.
Delaware
A Delaware House Committee approved a bill that would terminate 50 years of cannabis prohibition and criminalization. For the second time in history, Delaware’s District 24 Representative Ed Osienski (D) introduced House Bill 371, legislation legalizing cannabis possession and gifting. The legislation is attached to a companion measure that would build a regulatory framework for the market. Its two-piece model comes after the House defeated a prior measure in March that incorporated both components.
South Carolina
An eight-year attempt to legalize medical marijuana in a largely conservative state abruptly came to an end on the House floor Wednesday. South Carolina’s District 13 Representative and House Leader John McCravy (R) ruled that the Session 124 measure comprises an unconstitutional tax increase, thereby ceasing further consideration of the bill. According to Representative McCravy, since the bill contains a tax on medical cannabis, lawmakers should have introduced the bill in the House under the state constitution’s article for legislation that raises revenue. The bill’s sponsor, U.S. Senator Tom Davis (R), is rapidly seeking other ways to keep the issue active as the session concludes.
Missouri
In preparation for the 2022 midterm elections, a Missouri House Committee approved a GOP-led joint resolution seeking to place cannabis legalization on the November ballot. Missouri’s District 98 Representative Shamed Dogan (R) sponsored an amended version of the legislation, in which The Special Committee on Criminal Justice passed in a 7-2 vote. The amended bill eliminated provisions that would remove the state’s current separate medical marijuana program and set regulations regarding taxation in the legal market. Under the amended resolution, marijuana offenses would be removed from the Missouri criminal statute, permitting adults to possess, use and sell cannabis without facing penalties.
Washington
State officials Lieutenant Governor Denny Heck (D), Attorney General Bob Ferguson (D), Treasurer Mike Pellicciotti (D) and Governor Jay Inslee (D) sent a letter to congressional leaders, outlining the urgency of passing the Secure and Fair Enforcement (SAFE) Banking Act. With Washington being one of the first states to legalize cannabis, lawmakers remain frustrated at the industry’s lack of access to essential financial services stemming from federal prohibition.
New Jersey
Last month the state attorney general’s office released a controversial document detailing how New Jersey’s marijuana laws currently authorize police to use cannabis when not working. This week, New Jersey lawmakers introduced a string of bills designed to encourage employers to penalize workers from consuming cannabis off duty in compliance with state law. Punishable workers specifically include law enforcement officers and first responders. Now, three new bills exist that intend to enforce restrictions on such activity for particular employees. New Jersey’s 6th Legislative District Representative Louis Greenwald (D) aims to amend state statute to contain the following provisions: penalizing police for using cannabis, conducting random drug tests and the right to refuse job applicants due to lawful cannabis use. Although Representative Greenwald’s bill targets police officers, two other measures presently remain that would also impose employment-based restrictions on lawful marijuana use.
Ohio
The Coalition to Regulate Marijuana Like Alcohol (CTRMLA) filed a lawsuit to keep cannabis legalization on Ohio’s November 2022 ballot. In December 2021, CTRMLA turned in petition signatures to Ohio’s secretary of state’s office, but the office deemed the signatures insufficient. To advance the legislative review of their measure, CTRMLA turned in additional petitions on January 13, 2022. According to the state statute, however, a ballot petition must be submitted “no less than ten days prior to the commencement of any session of the general assembly.” The session commenced on January 19, falling outside of that ten-day certification window. As a result, CTRMLA contacted Franklin County Court of Common Pleas, requesting a ruling on a prospective challenge concerning the timing of the group’s initial signature submission to Ohio for the reform proposal.
Stay tuned for more updates on cannabis policy reform. If you are interested in learning more about NCIA’s government relations work and how to get involved please reach out to Madeline@thecannabisindustry.org.
Video: NCIA Today – Thursday, May 5, 2022
¡Happy Cinco De Mayo! NCIA Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every other Thursday on Facebook for NCIA Today Live.
CAOA Delays, House Negotiations, and a Cannabis Festival
Photo By CannabisCamera.com
By Michelle Rutter Friberg, NCIA’s Deputy Director of Government Relations
Hopefully you’ve had a chance to recover after 4/20, but here in Washington, D.C. the work never ends!
Over the last few weeks, there have been developments on the timeline for the Cannabis Administration and Opportunity Act (CAOA), updates on the path forward for SAFE Banking, and a slew of pro-legalization events took place in the D.C. Keep reading for the latest:
More Delays for the Cannabis Administration and Opportunity Act (CAOA)
In February 2021, Senate Majority Leader Chuck Schumer (D-NY) along with Sen. Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) announced that they would be introducing a comprehensive cannabis bill to deschedule cannabis, enact a regulatory framework for this new industry, and seek to repair some of the harms that the war on drugs has created. In July of that year, the trio released the long-awaited, detailed discussion draft of the Cannabis Administration and Opportunity Act (CAOA) and asked for comments and feedback from stakeholders (you can read NCIA’s here) to be submitted by September 1, 2021. Since then, the Senators have been diligently reviewing and working on the legislation.
The sponsoring offices had hoped to introduce the CAOA in the beginning part of the year, and more specifically April 2022, however, they recently announced that they are continuing their diligent work and will introduce the bill before August recess.
While this announcement can be frustrating at face value, I’m happy that the Senators are being thoughtful, careful, and considerate about crafting this legislation. Precedent matters a lot on Capitol Hill, so getting it right on the first try (or attempting to!) matters.
SAFE Banking & the America COMPETES Act
The House of Representatives has passed the SAFE Banking Act three times this Congress; first in April 2021 as a standalone bill by vote of 321-101 and most recently as an amendment to the House’s version of the America COMPETES Act, which is now being negotiated by a bicameral, bipartisan conference committee.
While many in D.C. had hoped that negotiations would conclude by Memorial Day, lead sponsor Sen. Todd Young (R-IN) recently said that a more realistic timeline for the bill would be the end of summer. This week, the Senate will vote on 28 motions to instruct- these are procedural, non-binding resolutions that guide the conference committee through the negotiation process. After that, the conference committee can begin meeting
National Cannabis Festival and more!
Founded in 2016, the National Cannabis Festival is an annual event held in Washington, D.C. with a focus on cannabis and music, advocacy, education, and activism. Now boasting well over 20,000 attendees, NCIA is proud to have been involved with the event since its inaugural year, and I even sit as an advocacy committee chair!
This year, the festival was back and better than ever with an entire week of events celebrating cannabis advocacy in the nation’s capital, including an incredible Policy Summit featuring members of Congress, advocates, journalists, and more.
Like I said – the work never ends in D.C., and the NCIA team is gearing up for another busy month filled with Evergreen virtual lobby days, Hill meetings, coalition building, and more! Want to get involved? Consider becoming a member today!
Equity Member Spotlight: Puff Couture LLC – LaVonne Turner
NCIA’s editorial department continues the Member Spotlight series by highlighting our Social Equity Scholarship Recipients as part of our Diversity, Equity, and Inclusion Program. Participants are gaining first-hand access to regulators in key markets to get insight on the industry, tips for raising capital, and advice on how to access and utilize data to ensure success in their businesses, along with all the other benefits available to NCIA members.
Tell us a bit about you, your background, and why you launched your company.
I am LaVonne Turner, President of PUFF COUTURE LLC. Before my interest in cannabis, my career was focused on marketing, communications, public relations, event management, and community advocacy. After working for non-profit and for-profit organizations, I became increasingly interested in public policy and community advocacy to help the underprivileged and unrepresented. I hold a bachelor’s degree in executive leadership/marketing, a master’s in public administration, and currently working on a master’s degree in clinical mental health counseling. I am a block club president and serve on a couple of boards and committees. I have spent many years mentoring children and youth.
My journey into the cannabis industry as an entrepreneur started when my mother began experiencing debilitating pain, and her only relief was prescribed medication. While I still haven’t found the right product to deal with her pain, I have taken great interest in the industry and the incredible products born from seeds. I plan to open a microbusiness and consumption lounge in Detroit, MI, that serves aromatic, exotic strains and infused products.
What unique value does your company offer to the cannabis industry?
PUFF COUTURE LLC is a minority-woman-owned cannabis company slated to open a microbusiness and consumption lounge in Detroit. We want to bring a sophisticated community-driven cannabis business that offers a contemporary atmosphere for clients. It will convey the importance of the cannabis flower by providing a chilled environment for clients to consume unique, flavorful, and aromatic cannabis. PUFF COUTURE will support mental health counseling, volunteerism, public policy, and minority representation in the cannabis industry, especially among women. According to a recent special report by MJBbizDaily Women and Minority Report, only 3.8% of Blacks or African Americans are cannabis business owners, the percentage of minority women in Michigan is even smaller; our responsibility is to open doors for future female entrepreneurs and people of color.
What is your goal for the greater good of cannabis?
PUFF COUTURE LLC would like to change the face of cannabis through participation and contributions to critical public issues that affect the community values of our clients and neighbors, as well as giving back through donations and mentoring. The organization will support issues affecting women who suffer from traumatic situations through our community advocacy campaign. Still, there will be plenty of time for spoken word, intimate art shows, parties, etc. PUFF COUTURE will take care of our people, support the cannabis industry, and create an atmosphere of excitement.
What challenges do you face in the industry, and what solutions would you like to see?
A few years ago, I couldn’t get anyone to advise me or take the time to mentor me. However, after many no’s, I have been blessed to partake in the City of Detroit’s Homegrown cannabis program and training by the Detroit Cannabis Project. LUME’s Vice President of Retail Operations, Michael Dowdell, has taken the time to speak with me and allowed me to observe the business sales and operations of one of the company’s recreational and medical stores. That first opportunity let me know I could continue to grow in the cannabis industry given a chance.
I have continued to expand my knowledge about cannabis, staffing, and cultivation through a mentorship provided by one of the award-winning co-owners of Oak Canna, LLC/CannaBoys, Jason Tueni. Mr. Tueni has devoted a great deal of time to educating me about caring for the flowers at every growth stage. I am currently interning at the cultivation center, which allows me to see everything first-hand, e.g., flowers, business, human resources, all aspects of creating and running a successful microbusiness and consumption lounge. These types of opportunities should be more readily available. I often hear people complain about not having access to mentors, which I completely understand. I joined the CRA DEI workgroup and from there was able to make a connection to LUME and Mr. Dowdell, who by the way is African American, and I asked for the opportunity. I did the same thing with Mr. Tueni. I was at a Weedmaps event and started talking to people and let them know I was looking for a mentor and from there, introductions were made. We met a few times for two to three hours, a couple of months after, and I asked if I could intern at the cultivation center and he said yes. We continue to meet, although not as often, and I see him on a regular basis. Hopefully, when the time is right, we will partner on a project.
Both of these events have provided a great deal of information for me in preparation for my future cannabis venture and I won’t stop reaching out for more knowledge and advice. Knowing how mentorship has helped me, I will continue to look for opportunities to build my business and while doing so pay it forward by mentoring future Detroiters interested in the cannabis industry. As important is my need to stay involved in public policy and community advocacy.
Why did you join NCIA? What’s the best or most important part about being a member of the Social Equity Scholarship Program?
I joined the NCIA to learn and network. Through the social equity scholarship, I serve on the DEI Committee and am also serving on the Cannabis Regulatory Agency-DEI Workgroup for the state of Michigan. The weekly social equity meetings held by the DEI Director are informative and build camaraderie among social equity entrepreneurs. The added weekly conversations help push to get to the finish line. I believe many social equity members will have an opportunity to work together in the future.
I look forward to growing with the National Cannabis Industry Association.
Video: NCIA Today – Friday, April 22, 2022
Happy Earth Day! NCIA Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every other week on Facebook for NCIA Today Live.
This episode of NCIA Today is brought to you by Senseon.
MC: The conference was an opportunity for regulators from around the nation to hear directly from stakeholders on the current and future challenges that face these markets and different models of regulation to tackle them. 
By Jodi Green, Miller Nash LLP; Shay Gilmore, The Law Office of Shay Aaron Gilmore
Where are they now? This month, NCIA’s editorial department continues the monthly Member Spotlight series by following up with three of our Social Equity Scholarship Recipients as part of our Diversity, Equity, and Inclusion Program. Participants are gaining first-hand access to regulators in key markets to get insight on the industry, tips for raising capital, and advice on how to access and utilize data to ensure success in their businesses, along with all the other benefits available to NCIA members.
First off, we have rebranded. We are now Cannvas Events. The name change was part of our evolution and maturation as a startup. As we scaled, more resources became available for things like branding. We brought in Greg Hill of Brand Birth to deploy the science of branding and the end result was a new name, new logo, and new understanding of where we were situated in the regulated cannabis ecosystem. The transformation led to the planning and production of our signature Cannabis Event 2.0 offering, the inaugural Saturnalia Canna Carnival, taking place at the Trinity Health Arena in Muskegon, MI on August 2oth. We are powering a traditional indoor/outdoor carnival – rides and attractions included – with a hassle-free, normalizing consumption solution. If you’re in the Midwest, come join us as we celebrate the first year of an iconic, perennial cannabis festival. Tickets and info at cannvasevents.com and follow us @saturnaliacannacarnival
The 
I’m impressed by the brilliant folks on the committee, and their dedication to making cannabis equitable. It takes time out of our grueling work days to contribute time on these committees but the contribution to making the industry better is crucial during these developmental years of cannabis. Perhaps our current misguided, harmful CA cannabis policies could have been prevented with more early participation from stakeholders who are stewards of the plant. However, there were many factors involved with the way CA policies were created, including special interest money from those who don’t care or want to see the industry fail. 
Overburdensome taxes and high barriers to entry for licensing throughout the state are most obvious right now. The lack of diversity and equity, consumer education, state and federal funding for further research and development also play a huge role in CA’s struggles. I’m frustrated that the State doesn’t understand that those who have been dedicated to the industry, collaboration and this plant are the only ones who can truly guide this industry forward.
There is a lot new in the world of Next Level since 
California Cannabis is facing challenges on many fronts. Countless unnecessary hurdles to legal entry, political red tape, and excess packaging waste to name a few. But the biggest challenges are around security. Every week there is news of a new dispensary, farm, distributor, and friend being burglarized. High tech security systems, gates, and cameras are no match for organized thieves and slow police responses. Until we can get a portion of our excessive taxes dedicated to funding police divisions that specifically targets cannabis thieves, the best solution to combat this is to support your favorite brands by purchasing their products through legal cannabis retail sources.
For more advice on how to undo the Big Lies and share the Big Truths of cannabis, you can find Breaking the Stigma on 
by Aaron Smith, NCIA’s CEO and Co-founder
Eric Rahn, Managing Director of S2S Insurance Specialists, is a highly specialized insurance broker and risk management professional with over 30 years of experience providing C-Suite executives strategies and solutions that protect and safeguard their businesses.
By Sadaf Naushad, NCIA Intern
NCIA’s editorial department continues the Member Spotlight series by highlighting our 
My name is Adolfo Castillo. People who know me call me Ace. Before I started my first cannabis business, I had a 10-year career in the banking industry. I started in a call center as a customer service associate. I then moved into a traditional banking center where I learned sales and eventually became the assistant manager. It was at the end of my tenure in 2008 that my Tia Eloise was diagnosed with terminal cancer. At the request of my mother, she asked me to get some cannabis in hopes that it would help her sister eat. Although it did not cure cancer, it really helped her appetite and gave her a bit of relief. Unfortunately, my Tia Eloise lost that battle, but it was the relief that I was able to provide that helped bring me peace when she passed away. This all happened around the same time that bill SB 420 was signed into California law, establishing statewide guidelines for Prop. 215. This law paved the way for cooperatives and collectives to begin operating legally in my city. It was at that moment that my love for cannabis became a passion. I felt a need to help more people gain access to cannabis, so I partnered with a friend of mine who sold weed and I took what I had learned about business and applied it to opening my first medical cannabis dispensary.
Joshua Gilstrap is the Marketing Manager for 
NCIA’s editorial department continues the Member Spotlight series by highlighting our 
Hello, I’m Adrian Adams, EdD. I spent a decade teaching Biology and Chemistry as well as coaching football. I chose to spend several years as a stay-at-home dad (the hardest job by far) and then worked in the pharmaceutical industry. I know many of the physicians in my area. While at dinner one night with a couple of doctors, the conversation revolved around having to combat the misinformation that patients come in with from “Dr. Google.” Minutes later, one doctor asked the others what they were saying to the increasing number of patients who come in asking about cannabis therapy. There was a prolonged silence until another doctor said “I just tell them I don’t know anything about that and to look online.”
We offer reduced costs, which can be a barrier to entry for consumers. And a deep knowledge of the intersection between cannabis and medicine. Physicians are a choke point for the industry that is overlooked. Simply put, doctors are good people. Most of them have simply had zero training on the endocannabinoid system as it was only identified in the 1990s. Ontogen Botanicals believes if they knew better, they’d do better. We offer doctors the information to make an 
A big problem for any small business is finding the right people to do business with. Minority business owners face discrimination and mistrust when trying to do business in general. Now add cannabis to the equation. I’ve been asked for $5K just for the right to open a business checking account.
Andrew Halbert is a member of the National Cannabis Law Practice at 
I am 
PUFF COUTURE LLC is a minority-woman-owned cannabis company slated to open a microbusiness and consumption lounge in Detroit. We want to bring a sophisticated community-driven cannabis business that offers a contemporary atmosphere for clients. It will convey the importance of the cannabis flower by providing a chilled environment for clients to consume unique, flavorful, and aromatic cannabis. PUFF COUTURE will support mental health counseling, volunteerism, public policy, and minority representation in the cannabis industry, especially among women. According to a recent special report by 
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Committee Blog: Cannabis and Cardiovascular Disease
Rooted in Community: Fox Rothschild