by Madeline Grant, NCIA’s Government Relations Manager
Like the Olympics, we only have a presidential election every four years. Usually, this means more voters are engaged and paying attention to the political process than normal. It’s more important now than ever for voters to get involved, and there are many ways to do just that. Some people campaign by making phone calls and knocking doors to get out the vote, others simply vote on election day. Some choose to make financial contributions to candidates or issues-based PACs (political action committees) that they care about.
As a trade association, NCIA has a PAC (the NCIA-PAC) that collects and contributes funds to candidates that support cannabis reform on Capitol Hill. In recent years, you may have heard that PACs are considered “special interest” or part of the “D.C. swamp.” Some candidates go so far as to not accept contributions from PACs to their campaigns. However, many small PACs, like the NCIA-PAC, are misrepresented by these characterizations and are fully funded by the hard-working members of their associations. The NCIA-PAC gives our cannabis professionals a united voice in the political process. Keep reading below to learn more about NCIA’s PAC and how you can get involved.
There is a common misconception that political contributions buy votes, however, the reality is that political contributions gain access. Of course, a politician’s goal is to get elected or re-elected and campaign contributions are a vital component of that goal. The NCIA-PAC helps support our champions and politicians that will fight for us on Capitol Hill so that they can continue fighting for our industry in D.C.
Another common misconception people have is that a one-time contribution will get you a friend for life, but unfortunately, that is not always the case. As long as a member stays in office, they will continue to ask for financial support. Think of it like this: supporting the NCIA-PAC lets us support elected officials who support the cannabis industry, and it’s imperative that they continue to be re-elected! Even the smallest donations make an impact.
At this point, you may be asking yourself: why should I support the NCIA-PAC? Well, your dollars support candidates who understand the cannabis industry’s concerns and who focus their attention on issues important to NCIA. A donation also affords you opportunities to collaborate with other concerned and politically active members to ensure our industry’s involvement in the legislative process and provides engagement, support, and information that is helpful to you, our cause, and your business.
NCIA’s government relations team works year-round to build relationships on Capitol Hill and represent the cannabis industry. As a team, we reiterate the importance of access to banking, fixing the 280E tax provision, the necessity of descheduling cannabis, and ensuring that our industry is diverse and equitable, among other issues. Our efforts here in D.C. make an impact, but members of Congress and their staff also need to hear from you. So, we hope you will consider joining us and NCIA’s PAC Leadership Circle at our 2nd Annual VIP Day in Washington D.C., on May 19.
Through a donation of $1,000 dollars or more, you will participate in an exclusive day including briefings, a luncheon and meetings with members of Congress, meetings with committees of jurisdiction, complimentary entry to the NCIA-PAC Fundraiser, and networking with NCIA’s most politically active members. Additionally, you will receive even more benefits all throughout the year, such as complimentary registration for our annual conferences, prominent listing and link to your company website featured on NCIA’s PAC page, customized branding opportunities at NCIA’s Cannabis Business Summit & Expo, and much more. If you are interested in attending VIP Day or hearing more about the NCIA-PAC, please fill out an interest form here or contact Maddy Grant at Madeline@TheCannabisIndustry.org.
It was January 28, 2020: It’s a full house at the Berkeley City Council meeting, with comprehensive changes to the city’s marijuana regulations on tonight’s agenda. The biggest issue, with supporters of both sides attending, is the vote to consider legalizing cannabis consumption at specially designated licensed dispensaries.
The proposal to allow smoking, vaporizing, and consumption of edible goods is supported on one side by a phalanx of marijuana advocates and dispensary operators, and on the other side, it’s the city Health Department and Berkeley’s famously NIMBY neighbors. This conflict runs deep; cannabis users want dignified, legal facilities where they can gather and use marijuana, and several dispensary neighbors and the health department want this idea squashed, full stop.
Fact is, people have long gathered together to share cannabis, as shown by an extensive recorded history of use. This spans from ancient Sumerians, who built huts and vaporized cannabis on burning coals inside, to underground marijuana smoke-ins in the 70s and 80s, to now, where cities are licensing legal cannabis consumption facilities for adults.
California is helping lead the United States consumption lounge movement. For example, California’s Bureau of Cannabis Control (BCC) regulations (Section 5025) explicitly contemplate the possibility of consumption lounges, stating that “this section shall not be interpreted to prohibit cannabis consumption on the premises of a licensed retailer or licensed microbusiness authorized to engage in retail sales,” as long as they are locally licensed and approved.
The state law also created Temporary Cannabis Event Licenses, where onsite consumption is allowed at festivals like the High Times Cannabis Cup and the Emerald Cup. Yes, with city or county and state permission, it is possible to throw your cannabis dream event, but there are a limited number of locations in only a handful of places that allow these uses (including my hometown, Oakland). This makes it hard to get these licenses, and the costly and complicated regulations are hard to meet once you have one. Anyone hosting a Temporary Cannabis Event can expect to interact closely with the BCC regulators, who will surely attend to ensure compliance.
Cannabis consumption facilities are nothing new in California. They have long existed, ever since Dennis Peron opened his first dispensary in San Francisco in the early-1990s. His famous location on Market Street was five stories high, literally, as each floor contained tables, couches, and chairs where patrons could hang out and consume cannabis. When the Compassionate Use Act of 1996 passed, collective dispensaries started opening across the state, despite federal illegality and the occasional raid because of it (Dennis was raided by the feds and forced to close in 1998).
I opened my first cannabis consumption lounge at Berkeley Patients Group in 1999, which was long before it was legal to do so. This was under the cover of tolerance provided by Proposition 215; after all, not even dispensaries were actually made legal by this groundbreaking initiative. That didn’t happen until the state legislature passed the aptly named SB 420 in [year], after which most cities grandfathered in their existing cannabis dispensaries. (Not all, though. Some municipalities used this transition as an excuse to ban dispensaries, or to close existing ones, during long periods of regulatory contemplation.) Berkeley allowed onsite consumption until the early 2010s, when the local regulatory processes changed. Hence, the City Council vote tonight to decide the fate of onsite consumption here once again.
Now, I own Magnolia Wellness dispensary in Oakland, where local regulations have allowed cannabis consumption at specifically licensed dispensaries since 2017. Magnolia’s Dab Bar and Vapor Lounge was the first legal consumption lounge in the East Bay. We have café style tables, a gorgeous full, copper top bar, glass dab rigs with e-nails, Vapexhale and Volcano vaporizers, and a variety of tasting events where people can try samples. Unfortunately, Oakland’s dispensary law only allows vaping, edibles, and topicals, limiting smoking to additionally permitted outdoor patios, none of which currently exist. (Full disclosure: I also co-own Hi Fidelity dispensary in Berkeley, too.)
San Francisco, on the other hand, has more than a dozen shops where cannabis smoking, vaping, and edibles consumption are all allowed. SPARC, one of the first lounges in the city, has tasteful tables and chairs right in the main dispensary, where volcano vaporizers can be used onsite. Vapor Room, a few blocks away, is a smaller neighborhood joint, with a handful of seats for people to sit and enjoy smoking or vaping. According to owner Martin Olive, it was a costly HVAC system, at a near six-figure expense, that allowed his facility to host its cannabis smoking patrons. Moe Greens, the latest licensed lounge to open in the city, took four long years to get licensed, but is now a beautiful facility, with cushy booths for smoking and a counter service dab bar with top-of-the-line e-nails and dab rigs for patrons to use.
West Hollywood is the biggest news on the California consumption lounge scene, as the city recently licensed 16 facilities for on-site consumption. Half of these facilities will allow retail sales and consumption, while the others are allowed to sell only single-use items, designed to be consumed café style, while patrons are on-site. This plan has been controversial, though, because in issuing these licenses, the city took permits away from several of the long-existing dispensaries, re-issuing them to new operators. The ensuing lawsuits and legal battles will surely play out through 2020.
There is another big problem in West Hollywood: the state law does not match up with their rather forward-looking ideas for cannabis cafes. For example, cannabis cannot be blended into café food and served on the spot, as the city imagined when creating this law; Cannabis can only be sold pre-packaged and tested, per BCC regulations. Furthermore, state-licensed cannabis businesses are not allowed to sell anything but cannabis products (and a shortlist of branded items like mugs, lighters, and pipes). In other words, they can’t sell non-infused foods or beverages like coffee, soda, or tea (or, since we are talking West Hollywood, kombucha and smoothies).
Until state law changes, the plan is stuck in limbo, with facilities looking for creative workarounds to allow food and beverage service.
So, despite the West Hollywood ordinance passing in late 2018, only one facility has opened there, and even this has hit roadblocks. In fact, they recently re-branded after only a short time in business, from Lowell’s Café to the Cannabis Café, after a regulatory crackdown hit the Lowell’s brand hard. It remains to be seen when the other 15 cannabis lounges will open there.
Back in Berkeley, staff from the Health, Planning, Police and Economic development offices joined forces with the Berkeley Cannabis Commission to present the City Council with a comprehensive plan to update the city’s cannabis ordinance. Diverging opinions meant that the agenda contained competing proposals on several of the ten proposed ordinance changes, with the Cannabis Commission leading efforts to create progressive changes, and the Health Commission stuck on the old trope, “we need more research.”
Elizabeth Greene, City of Berkeley Senior Planner, explained to Council that these proposals have been in development since 2017, with the goal of expanding the rules to protect the entire cannabis supply chain, from seed to sale. This includes development of two new license types, cannabis consumption lounges and non-retail dispensary licenses.
“State law allows for consumption lounges as part of a retail license, as these are the only facilities open to the public,” Greene says. “Currently, consumption lounges are not permitted in the City of Berkeley.” Her presentation made it clear that city staff recommended cannabis lounges be permitted, despite the worries of the Health Commission, whose representative commented that “legalization is new,” despite that cannabis sales have been regulated by the city for around 20 years.
Long time senior advocate, and ICANN dispensary owner, Sue Taylor spoke eloquently in support of the proposal to allow lounges. “Seniors need a place to learn about cannabis, how to use it and dosing, and you could do that in a vape lounge. I can’t go into their homes, but I can provide this education at a lounge,” says Taylor. “It’s not like a bar; at a bar, you just get sicker. A vape lounge helps people.”
Ultimately, the City Council agreed. By 11:30 PM, Mayor Jesse Arreguín called the vote, with the Council unanimously approving the entire proposal. Supporters filled the room with cheers, and long-time advocates like myself reflected on the fact that, yes, hard work and determination do pay off. Together, we may just end prohibition, once and for all — and have some fun, too.
Watch The Webinar: An Insight into Cannabis Attitudes, Uses, and Trends
This informative webinar recording from January 28, 2020, provides insightinto recent market research on state-by-state consumer attitudes, usage, and trends. Cannabis consumer segments and profiles will also be presented along with media consumption and lifestyle attributes, along with preference insights from medical dispensaries and the role of cannabis in the treatment of severe pain and key findings and takeaways from their latest consumer research. Featured speakers include Stephen J. Gongaware and Jennifer Wolfe of Management Science Associates (MSA).
Committee Blog: Why We Should Know About Our Endocannabinoid System
So why should we know more about our endocannabinoid system?
The short answer is: that we should all be in awe of it! Here’s why; although not widely known, the Endocannabinoid System (ECS) is extraordinarily important because it maintains balance for most functionally relevant activities in your body! Why does the general public and our health care providers know little about the ECS? Why is it that when you Google “systems of the body,” the ECS rarely comes up? Why did I, someone who’s been educating adults on functionally relevant activities in the body for 35 years, not know about this system for most of those years?
The ECS is a set of millions, perhaps even trillions of these molecules that are found in cells widely spread everywhere in the body. Though there are many molecules that are considered part of the ECS, currently it is described as having two receptor molecules, CB1 and CB2 (aka CB1R and CB2R); two endocannabinoid molecules, AEA and 2-AG; and, two enzymes, FAAH and MAGL, that break down AEA and 2-AG respectively. There are several other enzymes that make or break down the endocannabinoids, but there is not a clear consensus of which belong to the ECS. The ECS as a whole plays a vital functional role in an extensive variety of cell types, maintaining balance in the body in the face of constant environmental changes, both external and internal.
The majority of ECS components reside in the Central Nervous System (CNS), Peripheral Nervous System (PNS), and the immune system, which is not surprising given the critical roles the ECS plays in these systems. But it is far more widespread than that, a PubMed search found papers discussing ECS components in all types of cells widely distributed all over the body including keratinocytes (skin cells), smooth muscle cells of the uterine wall, chondrocytes (cells that make cartilage), fibroblasts (cells that make ligaments and some other type of connective tissues), hepatocytes (cells of the liver), endothelial cells (line blood vessels), cells of the kidney, epithelial cells of the seminal vesicles (small glands that produce semen), osteoblasts (cells that make bone), osteoclasts (cells that break down bone), skeletal muscle cells, cells of the endocrine glands, cells of the corpus cavernosum (erectile tissue of the penis), and myocardial cells (the muscle cells of the heart). Collectively, the molecules of the ECS regulate or modulate most of the physiological and biochemical processes that occur in our bodies. In spite of this, the ECS is not even mentioned in the latest edition of the number one physiology textbook used in medical schools across our country!
I recently accompanied a good friend to her gastroenterologist appointment because she was having serious digestive issues. I joined her because of my extensive background in cell biology, human health, and the ECS and knowing that many experts suggest the ECS plays an important role in the cause of irritable bowel syndrome, Crohn’s Disease, colitis, and other novel therapeutic targets. The doctor is a professor at a highly respected, well-known medical school in D.C. with several years of practical experience. After he gave his diagnosis, I asked “do you think there could be an endocannabinoid deficiency disorder involved?” He looked confused and quickly changed the subject. When it comes to the ECS, this kind of evasiveness is the status quo in the ‘place’ known as modern medicine.
Sadly, I estimate at least 80-90% of the time, patients hear the same thing from their doctors, whether it is an endocrinologist managing a patient with diabetes, psychiatrists monitoring depression and anxiety, or a pediatrician who manages the care of young children with autism. All of these conditions could qualify you for a medical cannabis card in one state or another, yet medical practitioners in those same states are misinformed, at best, regarding the role of the ECS in human health and wellbeing.
There are millions of people suffering from debilitating diseases that could possibly benefit from the use of cannabis and many of them do not have access to this medicine. These diseases, which constitute 7 of the top 10 causes of death according to a 2016 CDC study, include heart disease (99), cancer (350), chronic respiratory disease (32), stroke (91), Alzheimer’s (63), Diabetes (240), and suicide (24). The number in parentheses represents the number of scholarly papers you’ll find on a PubMed search of the ECS and the name of each of the conditions. Pubmed is a search engine for peer-reviewed scientific articles provided by the National Institutes of Health. This is a collective 899 referenced papers. Many include astounding research that describes what’s happening at the molecular level. With all this recent research, it is becoming obvious that the ECS has an enormous role in human health.
Oftentimes these conditions exist because of problems with the ECS and many believe the phytocannabinoids in cannabis can help. Imagine how different the quality of life for these millions of suffering people would be if cannabis was returned to the revered place it held for the vast majority of medical history. Think of the potential impact of simply asking your health care provider if they’ve heard of the ECS. It may prompt more doctors to do a PubMed search and start reading the more than 5,064 papers that appear! They might have the same reaction that I and many others have had. “How is it possible I did not know about this global system that seems to have some kind of a role in the regulation of just about every kind of relevant physiological process you can think of?” Hopefully having these conversations with our doctors will increase the number of doctors practicing cannabis medicine. According to an online article,the average number of patients for a family practice physician in 2018 was between 1,800-2,000. This one simple question has the potential to change the lives of thousands of people!
Fortunately, there are now 33 states where medical cannabis is legal and 13 additional states where patients can access CBD or low THC cannabis. However, here in the United States, it remains federally illegal, which creates a host of ethical dilemmas that are far too extensive to address in this discussion. Looking at all legal cannabis states, the number of conditions that qualify a person for a medical cannabis card is up to 95 and several states include “any condition the qualifying doctor deems will be improved with the use of cannabis” on their list. How in the world is one plant capable of helping with so many varied conditions and diseases? The answer is, of course, the ECS which performs the incredibly important job of maintaining homeostasis, balance of physiological activities within the body. In other words, it is a state where the body responds to a changing environment by making sure your internal environment remains within specific limits to sustain health. When homeostasis fails, disease results. And so is the case when the ECS fails. In fact, there are numerous conditions where decreases in circulating endocannabinoids have been documented, called Clinical Endocannabinoid Deficiency Syndrome (CEDS). Experimental evidence suggests this is the case for migraines, post-traumatic stress disorder (PTSD), fibromyalgia, irritable bowel syndrome and more.
We are in the infancy of understanding the incalculable intricacy of the entourage effects of more than 400 phytonutrients in cannabis interacting with the multitudinous potential responses from the immeasurable number of components in our ECS! We know that THC and other cannabinoids found in cannabis bind to the CB1 and CB2 receptors on our cells. Although CBD is a cannabinoid too, it does not actually bind to either of these receptors, but rather acts to change the binding activity of other cannabinoids.
Not a single double-blind placebo-controlled study was mentioned in this article, so my words may fall on some deaf ears, though I’m certain there will be more people interested in learning about this amazing avenue to health. Empirical evidence has been used for about 98% of the 5,000 or so years of recorded medicine practice. Interestingly, cannabis has been successfully used as a healing and spiritual agent for the same percentage of time! It seems like a no brainer, especially given the varied side effects and sometimes failure of pharmaceutical medicines used during the remaining 2% of recorded history where medicine has been practiced. In 2017, 70,273 deaths were caused by pharmaceutical medicines. In contrast, cannabis has caused zero deaths in the 5,000 years of recorded medicine!
The bottom line is that the ECS is fundamental to remaining healthy. Each of us has an ECS; made up of receptors, endocannabinoids, and enzymes widespread in all types of cells scattered throughout our bodies. Remember, this system maintains balance in our body, literally keeping an eye on all the important functions that occur. When something goes wrong, ECS components immediately fix it. But, when the ECS is unable to maintain balance, the result is often disease, a vital fact you should keep at the forefront of your mind and share whenever visiting your health care professional!
In her first year of undergrad, Ann developed a great interest in embryology while taking Anatomy & Physiology. After graduating, she enrolled in a Ph.D. program in cell biology and studied mammalian eggs and embryos. For several years after completing the program, she continued this research at Tufts University Health Sciences Center while working as a Gross Anatomy instructor. Next, Ann worked as an assistant professor at Howard University College of Medicine, continued teaching Gross Anatomy and began studying breast and ovarian cancer cells.
After 19 years in medical academia, Ann did a 180 and moved on to the natural product industry, where she learned there were many alternatives to pharmaceuticals to achieving health. And among other topics, taught the immense value phytonutrient rich foods and herbs have to optimal health and well-being for almost 15 years. Upon learning of the existence of the endocannabinoid system (ECS) in March 2019 she was shocked she had never heard of it, but she is far from alone. The general public is for the most part clueless about the ECS and the medical establishment, by and large, ignores its existence. So, she decided to create a company, Cannabis Education Solutions, dedicated to illuminating minds to the expansive nature of the ECS and its unparalleled importance to human health.
Meet Anya – NCIA’s New D.C. Office Intern
By Michelle Rutter Friberg, NCIA Deputy Director of Government Relations
There’s no shortage of work to be done in cannabis policy reform here in Washington, D.C. and it seems like there’s never enough hours in the day! That’s why for more than two years, the NCIA D.C. office has utilized the help of interns to assist us with all of the important work we do here. From attending meetings and briefings, to doing research projects, to doing social media, our wonderful interns have done it all. This week, we want to introduce you to our newest intern in D.C., Anya Vining.
Tell us about yourself! Where did you grow up and go to school?
I was born in Ukraine but spent most of my childhood in upstate New York. I then moved to Boston where I went to school at the University of Massachusetts and studied political science and psychology.
What did you do before this internship?
After graduation, I began working at one of the first licensed hemp farms in Massachusetts, BayGrown Farms. It was a great opportunity to learn more about cultivation and product development. After the harvest season, I spent some time traveling around the United States exploring new places!
When did you realize you were interested in cannabis, whether personally or professionally?
Once I began working for BayGrown Farms I got to see the importance of legalized cannabis. I met so many people who relied on cannabis to improve the quality of their lives and saw first hand the positive effects! We also worked to repurpose old and unused farmland which provided farmers with another source of income. The positive impact on the community really inspired me to pursue cannabis professionally!
Do you see yourself entering the cannabis industry in the future?
I would love to continue to work in the cannabis industry. I have been considering law school and specializing in cannabis law but I am always open to new opportunities. I think this will be an eye-opening experience and hopefully will give me more insight into what I want to do in the future!
What interests you about the cannabis space?
The cannabis industry is ever-changing and growing rapidly which keeps the space interesting and exciting! So many people are impacted by the industry and there is always room for more education and advocacy.
What are you most excited to do or learn while interning here?
I am most excited to gain more professional experience and learn more about lobbying for a cause that I am passionate about. I am also looking forward to meeting more people in the industry and hope to become more involved and invested!
If you’re interested in learning more about the work we do in Washington, D.C., or meeting Anya and our government relations team, make sure you save the date for NCIA’s 10th Annual Cannabis Industry Lobby Days, happening May 19-21, 2020! See you there!
Video: Episode #2 of NCIA Today – #NECannaBizCon recap, Safe Vaping, Illicit Market Summit, and more!
Tune in to episode #2 of our new monthly video series: NCIA Today!
Off the top, Bethany looks back at #NECannaBizCon in Boston, MA this past month, our first trade show of 2020.
In our policy update, Bethany discusses “The Key to Consumer Safety: Displacing the Illicit Cannabis Market – Recommendations for Safe Vaping,” a recent report produced by our Policy Council and informed by a variety of subject experts, with NCIA Director of Public Policy Andrew Kline.
Oour annual in-person member policy and government relations update event series, the Cannabis Caucuses, are only days away in March. See where your caucus is happening!
We’ll see you next month for NCIA Today!
Member Blog: The Days Of Breaking Bad Are Over… Sort Of
With the expanding decriminalization of marijuana and hemp and increasing market demand for cannabis concentrates, more people are assuming the role of pseudo-chemists or lab technicians without formal training. People no longer need to ‘break bad’ by extracting and processing cannabis in their garages, kitchens, or old RVs. Commercial laboratory spaces are becoming more common. Unfortunately, without formal laboratory training, appropriate laboratory safety habits are often not established. The ‘whatever-it-takes’ mentality plus some questionable lab techniques add up to be quite dangerous in a pursuit for the ‘good stuff.’
Solvents used for extraction, though often odorous, are clear and colorless and therefore invisible in vapor form. They are often handled in the lab like water. For those manufacturing cannabis concentrates for retail, the focus has been on possible regulations set by the FDA, but these new, small businesses are also under the jurisdiction of OSHA. While studying industrial hygiene standards written by OSHA, most safety practices seem like common sense, but only after the chemical hazards are recognized.
For more in-depth safety standards and fire codes for non-glassware or non-laboratory-scale (read: industrial-scale) extraction and processing equipment, ANSI/CAN/ UL/ULC 1389 or NFPA 1 Chapter 38 are great starting points.
Most of What We Breathe Is Invisible
As mentioned above, the solvents used to extract and process cannabis are either gases compressed into their liquid form or clear, colorless organic liquids. [Note: here ‘Organic’ means a substance that contains carbon, not the label you find at your grocery store]. These solvents include ethanol, propane, butane, pentane, hexane, isopropyl alcohol, methanol, acetonitrile, and other less common ones.
The danger of these solvents is that even when they are cold they vaporize easily enough for inhalation, some without harsh odors as a warning. Opening containers, glassware, or vessels without proper ventilation or PPE (personal protective equipment) exposes laboratory workers over a short time and many times a day. This exposure can occur during simple acts of pouring, transferring, heating, drying, mixing, or weighing on a balance. While many of the solvents used have a GRAS designation (generally regarded as safe) by the FDA, this label is used for food additives with the intention of ingestion, not inhalation. There are a few research studies on the toxicological effects of breathing in these VOCs (volatile organic compounds) in a short period of time. However, chronic studies of consistent exposure for years are rare. NIOSH, or the National Institute for Occupational Safety and Health, provides a decent summary of worker exposure studies for common industrial chemicals. Some of which can cause respiratory effects that evolve into allergies or even neurological damage. Unfortunately, most of the toxicological literature available can be decades old.
Yet laboratory technicians are not the only ones exposing themselves to a potential hazard. Working onlarge-scale extraction equipment, workers come into contact with large plums of high concentrated VOC when opening extraction tanks and vessels. This process happens many times a day when workers reach in to load and unload bags of cannabis biomass. Exposure also occurs through skin contact, as many of these solvents absorb into uncovered skin.
Gases under pressure are yet another non-chemical hazard. Compressed gas tank cylinders need to be transported and stored safely to keep them from falling over and crushing limbs. If a cylinder valve breaks off, they turn into a projectile missile, or they become damaged enough to rupture and release thousands of liters of suffocating gas within minutes or seconds.
Carbon dioxide solid in the form of ‘dry ice’ is often used in large amounts for cold traps in cannabis oil processing. Dry ice easily sublimes, where the solid form converts directly into a gas. Gaseous carbon dioxide is much heavier than general air and can easily displace oxygen in closed-off storage areas. Oxygen sensors, proper ventilation, and limited exposure help to avoid hazardous side-effects of oxygen deprivation.
The Tools to Keep Everyone Safe Are Out There
Any workplace that handles or stores chemicals should have the corresponding Safety Data Sheets (SDS) of the chemical. These are usually obtained from the manufacturer of the chemical, but there are also free databases online for easy access. All SDS’s should be available for easy access to workers who handle or are in an environment that uses chemicals.
OSHA also provides its own chemical database system that lists the physical properties of chemicals as well as their permissible exposure limits (PELs) and short-term exposure limits (STELs). These limits are used for compliance purposes, but in short, they provide a rough guide for how dangerous it is to breathe in some of these chemicals. Note that OSHA’s exposure limit guidelines may be outdated as many have been written 50 years ago when OSHA had been founded! For the latest guidelines visit NIOSH and ACGIH. These organizations/agencies keep up with current toxicological research and provide more up-to-date exposure limits that are sometimes significantly lower. Air sampling of your workers can always be done through an AIHA-accredited laboratory that will send out certified industrial hygienist to sample during a work shift.
Any industrial hygienist will tell you that the use of PPE is the last line of defense against chemical hazards and exposure. Engineering controls like proper room ventilation and local ventilation, including fume hoods, exhaust hoods, and elephant hoses, are some of the best ways to avoid exposure through inhalation. Fume hoods are almost always found in laboratory spaces; however, it’s easy to form bad habits when using them. For example, storing large objects and numerous chemical bottles inside the hood significantly blocks the proper airflow that needs to occur to make sure any vapor is properly ventilated. The sash (or glass door) should always be kept as low as possible and especially below the chin of the person working at the hood. Newer models of fume hoods have airflow monitoring devices and alarms systems to make sure the face velocity of the hood is between 80 and 120 fpm (feet/min).
Finally, PPE that fits comfortably, doesn’t interfere with the flow of work, and is rated properly for the hazards of the chemicals used, is a definite requirement when working with chemicals even when other controls are in place.
When effective local ventilation is not available for situations where a large plume of solvent vapor is expected (e.g., opening an extraction vessel to remove biomass bags), a full-face or half-face respirator is the best option to prevent exposure.
Respirators have specific cartridges that stop the inhalation of certain hazards. VOC cartridges are required to keep out the organic solvents most used. However, respirators will only protect as they meant to be if they are fit-tested, and properly cleaned and stored.
Last, eye protection via safety glasses is an obvious and thankfully well-practiced habit even in workplaces without chemicals. Unfortunately, the commonsense practice of making sure workers are wearing long pants, shirts with sleeves or lab coats, and closed-toe shoes (preferably non-absorbent) is more difficult to enforce if the location is in warmer climates.
All that said, for those who are dabbling in the new, exciting world of cannabis extraction, let’s hope they are following Walter White’s lead and suit up before they get to work.
With more than 15 years of experience working and teaching in chemistry laboratories, Meghan McCormick, Ph.D. is the Senior Chemist and a part of the Herban Legends team at Spektrum Cannabis Technologies, an innovative, fit-for-purpose engineering services company. Meghan serves as the resident expert in the chemical processes that occur during cannabis extraction and post-processing and has helped design and test the Spektrum industrial-scale cannabis processing modules. Meghan worked as a Senior Chemist for the OSHA Salt Lake Technical Center for 3 years. She received her Ph.D. in Inorganic Chemistry at Indiana University studying organometallic electrocatalysis and anti-cancer prodrug activation mechanisms.
Member Blog: What’s new in Cannabis Compensation – CannaComp Update for 2020
By Matt Finkelstein, BlueFire Cannabis by FutureSense
Opening up the new year, NCIA and FutureSense LLC released results for the inaugural Cannabis Compensation Study. The collaborative effort sought to uncover trends in compensation and establish benchmark data, creating a singular industry-wide resource for all to use. With the initial report released, we have some exciting updates to share for the coming year’s development.
Culture Shift
The cannabis industry at-large has been transitioning from the black/traditional/legacy market to a legal one and understandably still maintains tinges of a culture of secrecy. Emerging markets also tend to be initially trepidatious about sharing critical business info, so this is especially prevalent in this line of work.
As the market expands and evolves, the need to understand trends and have accurate data supporting it is becoming more and more important. Cannabis companies can spend between 65-70% of their expenses on payroll. Being even 5% on- or off-the-mark can mean make-or-break in this highly volatile industry.
More and more cannabis companies are realizing the value of this type of market data. It is useful for establishing competitive compensation packages, setting growth trajectories, and managing tight budgets. To establish this data and reap the benefits of its findings, companies are becoming more comfortable with some transparency via an independent 3rd party service provider.
Expertise, Confidentiality, and Anonymity
FutureSense LLC brings over 30 years of compensation expertise across multiple industries. We worked with NCIA to establish a confidential and compliant salary survey that follows all Department of Justice and Department of Labor regulations to protect and ensure anonymity.
Our efforts producing the Cannabis Compensation Survey in 2019 laid out a solid foundation to continue to grow and expand the project. A couple of the key takeaways from the survey include:
Nearly 50 participating companies
Reportable data for 80+ positions in 12 job families
More than 100 additional job title benchmarks established
Growth and Development in 2020 and Beyond
In 2020, we are expanding the project by opening enrollment for submissions throughout the year, and by bringing in supporting partners such as recruiting firms and cannabis payroll applications.
Expanding participation will allow us to present data via demographic breakouts such as:
Industry sector
Location/region
Size (employee count, revenue, etc.)
We will also collect and report on benefits, incentives, sales, and equity compensation. We believe this will provide participating companies with an even deeper perspective into their own business practices and needs.
New Names
FutureSense LLC has recently established a cannabis-specific brand to support our on-going work and dedication to this industry. We brought on BlueFireHR – a human resources services firm with years of experience serving cannabis clients and other industries – and formed BlueFire Cannabis by FutureSense. BlueFire Cannabis will now be the main project partner alongside NCIA for the Cannabis Compensation Study. We’re excited to announce our other supporting partners in the very near future.
Sign-Up!
All cannabis companies with 10 or more individuals are encouraged to participate. We also welcome inquiries from other professional service firms or ancillary services about opportunities for supporting partnership.
NCIA Board of Directors Announces 2020 Board Officers
On Tuesday, February 18, NCIA’s Board of Directors met in Boston in advance of NCIA’s Northeast Cannabis Business Conference. During the meeting, new board officers were voted upon and instated into their roles for the current term.
NCIA is pleased to announce the following board officers:
Prior to this most recent officers election, Khurshid served as the board’s Vice-Chair and Kris served as Treasurer. This will be Henry’s fourth year as Secretary and Narbe’s first year as Treasurer. All four officers now make up the Executive Committee of NCIA’s board, along with Executive Director and Board Member Aaron Smith. NCIA deeply appreciates the dedication of our new officers and the entire board of directors.
Member Blog: Cannabis Software Solutions – The Case for Connectivity
In the cannabis industry, it is critical for cultivators to track crops throughout their production. Traceability benefits and protects cannabis companies, state governments, and the consumer. Without proper tracking systems in place, it would be impossible for states to tax businesses appropriately, it would be dangerous for consumers, and the burden of risk is placed almost entirely on the operator.
To combat this risk, states have mandated certain systems to track cannabis products called track-and-trace or seed-to-sale systems. There are a few leaders in the space – Metrc, MJ Freeway, and BioTrack. All three provide tracking software solutions for operators and contract their software to state governments.
These systems are designed for regulators, not cultivators. Growers instead have to purchase a second system to manage their operation. We’ve highlighted why it’s important for growers to implement a cultivation management platform (CMP) in the past, but it’s important to note how difficult it is to implement a CMP in the current market.
Growers are second class citizens in the cannabis world – and that’s a major failure of the industry right now. Growers are the backbone of this industry and we, as innovators, should be making it as easy as possible to track products through the supply chain. This is not just because it’s a good business decision or because it makes it easier for governments to tax products, but because it’s good for the industry. It’s good for the consumer. It’s the right thing to do.
However, the industry is disconnected. For Metrc required states, it takes weeks before you will hear from the company regarding connectivity and months before integration can happen. The regulatory systems all tout their API as a way for other software companies to integrate into their systems, but in reality, it’s not that simple.
Here’s what that means for growers. Growers are mandated to use regulatory systems to record weights and plant IDs (as well as other data) for the benefit of the regulator and the chosen software provider, but they cannot use those tools to their advantage. Instead, they have to choose to purchase a third-party system that may or may not be able to integrate into the regulatory system or they are forced to purchase the cultivation software from the same regulatory software provider, which again, may or may not fulfill their needs. If the grower chooses a system that they like but cannot integrate, it means they have to enter information twice. This is a costly burden and often leads to unnecessary data entry errors.
Most of the regulatory systems on the market today are ill-equipped to provide enterprise-ready software in the first place, but it’s not the fault of those software providers. This is a new industry. Most of the software companies on the market are undercapitalized and many are outsourcing development as a result. This leads to serious security issues and system outages, like we’ve seen in Washington and Pennsylvania.
A better way to handle the growth of this industry would be to regulate in a connected and open environment. Instead of mandating a particular software solution, mandate traceability and let the grower decide how to meet that requirement.
For example, under the Controlled Substance Act, the DEA requires certain reporting requirements and these are submitted to the DEA database ARCOS (Automated Reports and Consolidated Ordering System). However, a company could choose to use Microsoft NAV for its management solution and sync to ARCOS for submittal of reports.
In food, the USDA governs food safety requirements under FSMA (the Food Safety Modernization Act). FSMA mandates food producers create and maintain a food safety plan, however it does not require a specific format or content. There is guidance for how to create a plan, but FSMA also allows for flexibility in operations and there is trust that operators will create a plan that is right for their operation.
This idea of trust in the grower and a unified framework of requirements is missing in the cannabis industry. Some software providers have tried to close that gap, but relying on mandatory software and changes on a state-by-state basis will only hurt the industry. We need to enable growers to scale efficiently and legally. We should support growers and provide tools that make it easier for them to implement new regulatory requirements, not harder. Our industry should consider opening up the software market for regulatory reporting and at a minimum should encourage data integrations, not limit them.
Allison Kopf is the Founder and CEO of Artemis, the market-leading Cultivation Management Platform serving the fruit, vegetable, floriculture, cannabis, and hemp industries. Artemis won the highly coveted Disrupt Cup at TechCrunch Disrupt in San Francisco. Kopf was recently named one of Forbes 2019 30 Under 30 as well as one of New York Business Journal’s 2019 “Women of Influence.” Allison is an Investment Partner at XFactor Ventures and serves on the boards of Cornell University’s Controlled Environment Agriculture program and Santa Clara University’s College of Arts and Sciences. She is a Techstars Farm to Fork mentor and holds a BS in Physics from Santa Clara University.
Artemis provides a world-class Cultivation Management Platform that enables owners and managers of enterprise horticulture facilities to drive efficiency, profits, and growth while ensuring security and regulatory compliance. With Artemis, users can manage workflow and daily tasks, register crop batches, trace food safety issues, manage workers, and leverage data insights to increase workforce efficiency and crop productivity. Read our software buyer’s guide for more information.
Committee Blog: Cannabis Banking – Regulatory Outlook and Effective Compliance
During a recent webinar, we polled the audience on their current positions on offering financial services – traditional financial services – to direct marijuana-related businesses (MRBs). The results, as you might imagine, were mixed but we identified one common theme: The vast majority have taken action to address cannabis banking issues. This has been the theme we’ve been championing for years. The dichotomy between state and federal cannabis laws has placed our financial institutions in a precarious position: Bank the cannabis industry, be first to the market in doing so, create a non-traditional revenue stream and help to solve public safety and other logistical issues by solving the all-cash conundrum OR continue to watch from the periphery as others take the leap?
We see the number of financial institutions – banks and credit unions – that offer financial services to cannabis businesses expanding, but not to the level suggested by FinCEN SAR data. There remains a critical need for financial services within the cannabis industry.
Why the hesitancy in tackling this issue?
The current regulatory environment is a critical factor. As it stands, our industry is relying primarily upon the FinCEN guidelines to offer financial services to cannabis-related businesses. These guidelines, coupled with a surge of proposed legislation and a regulatory perspective on risk-based risk-taking, have allowed financial institutions across the country to effectively provide financial services to cannabis-related businesses. There is a key term we’ve been using: cannabis-related businesses. Within this term, we encompass direct and indirect marijuana-related businesses, hemp, and CBD entities. The majority of those polled feel more comfortable with hemp and CBD entities primarily due to the passage of the 2018 Farm Bill. Getting into the intricacies of how the Farm Bill and the USDA’s resulting interim final rule have added a layer of complexity to banking hemp and CBD businesses is more than we can cover in this blog post. Let’s focus instead on those providing financial services to direct MRBs, those that are state-legal, licensed cultivators, extractors, and dispensaries.
It IS possible to actively bank direct MRBs, to offer stable banking services that bring the cash off the street and provide a means for these businesses to operate more effectively and efficiently, and surely in a less costly manner than an all-cash business. The regulators are not criticizing financial institutions for providing financial services to MRBs; they review these services as they would any higher-risk, complex activity. When an institution takes on too much too fast or does not have sufficient controls to know whether it actually has a higher risk or complex business concentration within its customer base, the regulators will be critical… as they should be.
So, what are they looking for?
This goes back to the theme we mentioned: Financial institutions actively addressing cannabis banking issues.
Every financial institution, whether it intends to bank direct or indirect MRBs, hemp or CBD should have a Cannabis Banking Program that assesses the inherent risks of doing so, speaks to the controls necessary to effectively manage those risks, and determine whether they are well-positioned, or have a risk-appetite for, providing financial services to the cannabis industry. Conversely, if a financial institution that has no appetite for, or does not reflect sufficient regulatory health to bank cannabis, it must establish effective controls to ensure that position can be maintained.
But, this post is about empowerment. It is about speaking to the regulatory environment in which we find ourselves. It is about providing the perspective that banking marijuana, hemp and CBD CAN be done effectively, safely and soundly. Yes, there is a significant level of infrastructure needed to do so. Yes, it does come with the need for ongoing, strong risk management and control enforcement. Yes, it can be a bit scary. By establishing a Cannabis Banking Program, comprised of a comprehensive risk assessment that drives an equally comprehensive policy, a financial institution can provide financial services across the spectrum of marijuana, hemp and CBD, and undergo regulatory scrutiny with confidence. Moreover, such a program has become a regulatory expectation to support a financial institution’s cannabis position. This is also not a program where a financial institution will set it and forget it. The risk assessment and policy must remain dynamic as legislation evolves, as regulatory perspective changes, and as a financial institution’s position or outlook may shift.
This is an industry that has already proven prolific. This is a time that will be ingrained within our nation’s history. Let’s be remembered as those who championed the issues, established the country’s infrastructure, and set the standard for those who follow.
As a former Federal bank regulator and seasoned consultant, Angela’s knowledge of regulatory compliance, risk management and investment advisory services has established her reputation as a leading resource within the financial consulting industry, spanning consumer protection and anti-money laundering statutes, fraud and cannabis banking issues.
Angela is the Managing Partner and Co-Founder of Sterling Compliance, LLC, a consumer compliance consulting firm based out of Pittsburgh, Pennsylvania. Sterling specializes in consumer protection and anti-money laundering compliance within the community banking industry and enjoys a significant online presence with a client base spanning the coasts.
In December 2019, Angela joined Integrated Compliance Solutions, LLC (ICS) upon the ICS acquisition of Sterling Compliance as an independent operating subsidiary. Angela oversees the firm’s Compliance Strategies division, of which cannabis banking is a significant component. ICS is a financial technology, banking compliance and innovative payments solution provider helping financial institutions with complex solutions. In joining the ICS team, Angela has continued the firm’s mission of bringing its complete SEED-TO-BANK™ solution to financial institutions and cannabis-related businesses throughout the United States, and has expanded the firm’s industry engagement as a well-respected authority on the regulatory and compliance issues surrounding cannabis banking.
Member Blog: Job Description Templates to Build Your Dispensary Team
When it comes to opening a successful marijuana dispensary or cannabis retail store, the importance of building a strong, trustworthy team simply cannot be understated. Depending on the rules of your market, you may even be required to have certain positions filled before applying for a license. Either way, the people you hire — from front-line staff to shift leaders to managers — will ultimately make or break your operation.
If you’re new to the industry, you may be wondering just exactly what positions you’ll need to fill. Cannabis does share some similarities with other traditional retail industries; you’ll need customer service reps (often referred to as “budtenders”) as well as shift supervisors and general managers. But there are some significant differences between cannabis retail and other industries, mainly with regard to compliance, and you’ll see these reflected in some of the critical positions listed below.
Read on to discover a few of the most critical positions you’ll need to hire for in your cannabis dispensary — plus how you can get your hands on our free dispensary job templates guide!
Crucial Cannabis Retail Roles
Let’s take a quick look at some of the more critical cannabis-specific positions every dispensary needs.
Compliance Manager
There’s one simple principle that cannabis business owners live by: no license equals no business. That’s why it’s imperative that you have a manager on your team whose sole function is to ensure that every aspect of your operation remains compliant at all times.
Typical compliance manager duties include conducting regular audits of dispensary operations, investigating and resolving compliance concerns, keeping up with regulatory changes and ensuring understanding and adherence throughout the company, and liaising with regulatory and law enforcement agencies.
Inventory Manager
While inventory managers are also found in traditional retail operations, this role is particularly important in cannabis due to inventory compliance regulations. The inventory manager is responsible for overseeing product replenishment, conducting inventory audits, and ensuring all counts and reconciliations are correct and compliant.
Security Manager
Security is another major aspect of dispensary operations that is governed by regulation. Your local and state or provincial laws will spell out exactly what security measures you’re required to take, but at the very least, you’ll want a security manager on your team to help advise and implement security best practices and protocols.
Additional responsibilities of the security manager include compiling security reports, recruiting qualified security agents or guards, and ensuring all security systems and equipment are maintained and operable according to regulation.
Why Your Cannabis Job Descriptions Matter
The truth is, anyone can throw up a job ad online and attract some interest. But you don’t want just anybody working at your dispensary — you want the right people who understand the importance of the role they’re seeking and will do their best every day to uplift your operation.
It’s also important to set standards and clear expectations for your employees from the outset. A well-thought-out job description shows that you care about the role you’re seeking to fill and take the job seriously — just as you would want from any candidate who responds to the ad.
Finally, a thorough and comprehensive job posting that lays out all the responsibilities of the role makes it easier to hold team members accountable in their job performance. You don’t want to get caught with the old “that’s not in my job description” excuse — so cover your bases by making sure you lay out all the expectations of every position from the get-go.
Download Your Free Dispensary Job Description Templates
At Cova, we’ve helped hundreds of dispensary and cannabis retail operations across the U.S. and Canada maximize their operations. Plus, our parent company has 20+ years of retail tech experience under its belt — which means we know a thing or two about retail best practices.
We’ve compiled these dispensary job description templates to help you find the absolute best candidates for your cannabis store.
The California Statewide Utility Codes and Standards Program is considering the addition of energy efficiency standards to its Title 24, Part 6 Building Code for Controlled Environment Horticulture (CEH) facilities.
Currently, there are no existing energy efficiency standards in Title 24, Part 6 for CEH facilities and the Statewide Codes and Standards Enhancement (CASE) Team is actively working to help code-setting bodies develop building energy codes that not only save electricity but are practical and cost-effective.
Right now, the CEH CASE Team is in the process of gathering data on the types of equipment that are commonly used in cultivation facilities.
California growers, the Statewide CASE Team needs your help!
Please take a few minutes to tell them what equipment you currently use by participating in a short 10-minute phone interview. Involvement from stakeholders is a critical part of the energy codes and standards development process. It is important to get direct input from California growers so proposed codes can achieve significant statewide energy savings without placing an unreasonable burden on you or the industry. This is the first time the Statewide CASE Team is analyzing CEH facilities and we would like California growers to be a part of this historic and monumental process.
Any information you share will be considered confidential and will not be shared outside the Statewide CASE Team. They understand privacy is important to growers and will not publish or share your name for any reason.
If you would like to participate, please email joe@CultivateEO.com with the subject line ‘CA Grower Survey’ and include your first name, phone number and the best time to receive a call in the body of the email.
This program is funded, in part, by California utility customers and administered by Pacific Gas and Electric Company, Southern California Edison, Southern California Gas Company, San Diego Gas & Electric Company, Los Angeles Department of Water and, and Sacramento Municipal Utility District Power under the auspices of the California Public Utilities Commission. The Statewide CASE Team will provide the Energy Commission with the technical and cost-effectiveness information required to make informed judgments on proposed standards for promising energy efficiency design practices and technologies in controlled environment horticulture facilities. For more information about this process, visit:www.title24stakeholders.com.
Thank you for partnering with us to help build an efficient and sustainable horticulture industry in California!
Joe Sullivan is the technical director and co-founder of Cultivate Energy Optimization, an energy management firm that works exclusively with utilities and governments to design and implement energy management programs specifically for the controlled environment agriculture industry. CultivateEO currently administers programs for utilities across the U.S. and Canada, including the country’s first state sponsored cannabis energy management program in CO. Joe serves as the company’s national expert on indoor ag. and energy management technologies working closely with over 100 cultivators to develop and implement energy management strategies. Prior to forming CultivateEO, Joe worked for the USDA supporting their research on global climate change and its effect on field crops. Joe is a Certified Energy Auditor through the Association of Energy Engineers and hold a bachelor’s degree from the University of Illinois Urbana-Champaign in Natural Resource and Environmental Sciences.
Member Blog: The Women in Cannabis Study – Advocacy, Allies, and Voting
It can be easy to forget the beginnings of the cannabis industry. The stigma we had to fight. The laws we had to change. The pounding anxiety stemming from societal pressure and legal threats. But here we are in 2020, leading a nearly $10 billion industry in the U.S. with a promising future.
Being at the beginnings of a new industry is a powerful experience; seeing the fruits of our labor and the positive effects of legalization have been galvanizing and heartening. We’ve built something unique. But it’s still subject to the pressures and pitfalls of any other industry.
We’ve worked on legalization, supply chains, and policy, but what about equity? What about ensuring that the industry was diverse? And most importantly, how do we even know where we’re starting from?
The only way to move forward was deceptively clear: gather the data. I founded the Women In Cannabis Study after hearing stories of real women and recognizing the need for our undivided attention to shift to diversity and inclusion in the cannabis industry.
Much like a lot of the research in the cannabis industry, anecdotal data has ruled. In some ways, the lack of clinical research in cannabis has gotten us away from valuing qualitative data when looking for insights into particular issues in the cannabis industry. Ultimately, we need substantial numbers and stories to understand our industry and ultimately, form a game plan for equity.
So let’s start with the numbers. So far, data from our survey shows that 68% of women identify as heterosexual compared with 2010 U.S. census data showing 95% heterosexual. It’s a heartening sign that on its face, this is a welcoming environment for people of various sexual orientations.
Unfortunately, our findings also show the industry isn’t immune to sexist behavior.
By asking hard questions through the study, we’ve pinpointed that 33% of our sample as of February 5 have been sexually harassed while working in the cannabis industry. 1 in 3 is a huge number. It’s also worth noting that in our survey, 52.6% of women reported being sexually harassed in another industry—a sign that there might be a substantial difference in the cannabis industry to build on so that we can get that number to 0.
Additionally, only 23% of our study sample say they are paid the same salary as male coworkers in similar positions and 52% feel they have lost opportunities because they are a woman. Fifty-nine percent of women have experienced bullying or lack of support from other women in the industry, showing that even new industries are not free of toxic professional dynamics in the wider business world.
So we have work to do. Or as I like to think of it, we have an opportunity.
That means not going down the same rabbit hole many industries have. It means data points sourced from an academically rigorous study. It means stories about bud-tenders, growers, scientists, extraction and edibles manufacturers, lawyers, doctors, and activists that emerge as a direct result of an academically rigorous study. It means industry-wide alliances.
Alliances come from a shared desire to make big changes. And that only happens when we decide that our goals are worth sharing.
The reality is, we need everyone’s help to tell the full story. While we have enough responses to tell the story of women as a collective group, we are lacking diversity and representation in our sample. We need at least 50 of each of the following populations of women in order to compare communities of women and we aren’t there yet.
If you believe our goal is worth sharing — if you believe that doing the work of creating equity is worth it — tell your story. Encourage your employees to tell theirs. This industry doesn’t belong to one person. Let’s find a way to show that to the world.
The Women In Cannabis Study (WICS) is an academically rigorous, global, comprehensive quantitative study to explore, document and ultimately support women’s participation in the cannabis industry. This groundbreaking study supports the development of actionable recommendations and strategies to make the cannabis industry equitable and inclusive for everyone. The WICS mission is to tell the story of women, as well as individual women’s stories—with data. The study was developed by Jennifer Whetzel, founder of Ladyjane Branding, joined by U.S. research lead Dr. Nicole Wolfe of Wolfe Research & Consulting.
Ladyjane Branding empowers entrepreneurs to build a smart, strategic and consistent brand identity. Founded by veteran marketing executive, Jennifer Whetzel, Ladyjane has simplified the branding techniques used by Fortune 500 companies. Her signature creations include the Two-Hour Brand Makeover, Ladyjane’s Brand Archetype Quiz, and an Archetypal Segmentation Model – all designed to provide inspiration and guidance to help brands create deep emotional connections with consumers, multiply the effects of marketing and advertising and increase their company’s value.
#IAmTheCannabisIndustry: Joseph Hopkins, The Greener Side
Joseph Hopkins, with his wife Chelsea, owns and operates The Greener Side, a dispensary in Eugene, OR. As some of the original entrepreneurs to open a dispensary in the state of Oregon, their story of being raided by federal authorities shows how resilient one needs to be in the cannabis industry. Hear their story in this video feature.
Committee Blog: Opportunities & Challenges with Next Gen Packaging In the Legal Cannabis Market
It’s a new year, a new decade and quite frankly—a new era of packaging in the cannabis industry. We are officially face-to-face with next gen packaging in our ever-growing market. But what is next gen packaging, anyway? By definition, next-generation packaging is “basically a packaging technology, which possesses different advanced features, such as traceability, offers various benefits such as product shelf life extension and provides product quality information.”
Essentially, it’s taking our cannabis packaging to the next level.
The Growing Opportunities
With new products, formats, and technologies available, the opportunities for next gen cannabis packaging are limitless. In fact, there are so many options for next gen technologies that our NCIA Packaging and Labeling Committee has organized a subcommittee that is dedicated to the topic. We’ve also created subcommittees for Sustainability, Honesty in Labeling and Intellectual Property and Protection. A new era for packaging indeed!
Today’s cannabis cosumers are supporting the legal market for its quality and transparency, and today’s cannabis retailers need accessible platforms to educate them. These dynamics create an environment where next gen packaging (and merchandising) can really shine. With these new tools, brands can immediately engage, inform, and incite action.
Dreams Vs. Reality
While our hopes are super high for next gen cannabis packaging, the reality can be a bit of a buzzkill. In a state-by-state market, the variables for packaging create an inherently significant expense. And with regulations frequently shifting, it makes investing in premium packaging challenging, to say the least. There’s also the complication of managing data and actions behind a next gen platform. Worth the effort? We sure think so. And the good news is that next gen packaging is designed to be measurable so there’s data to evaluate its impact.
Promising Examples
The applications of next gen packaging for cannabis are seemingly limitless. Everything from a simple QR code, to complicated anti-counterfeiting technology, are possible. Augmented and virtual reality, scratch and sniff add ons, and improved breathability all present powerful opportunities to quickly and effectively affect a purchase decision.
KURZ is really pushing the boundaries of cannabis packaging with value-added security and technology solutions that are not only effective but purposefully decorative. Think holograms on packaging that can be used for anti-counterfeiting and other special finishes that add pop but are also sustainably produced. Now we’re talking next gen!
BUNDLAR is getting ahead of the curve with what they call “AR made Easy.” By making aspects of AR technology publicly available as well as offering customization, brands can more easily experiment with this exciting new platform.
The strategic approach to structural design that Greenlane is taking and the inspiring steps SANA Packaging has made with hemp-based materials are other compelling examples of the momentum in next gen packaging. Perhaps the most promising example of all is that as an industry, we’re just getting started.
New Decade, New Attitude
Our subcommittee predicts more exploration in cannabis with packaging that covers the exciting world of next gen possibilities in this new 2020 era and beyond. Which brands will step up? Will retailers ask for it? Will consumers pay for the experience? In an industry that refuses to stand still, these questions will inevitably be answered. The Packaging and Labeling Committee will be watching and sharing more examples and insights in additional articles.
Are you using next gen packaging? Drop a comment and share your experience!
Committee Blog: Interstate Cannabis Commerce Will Benefit Public Safety, Consumer Choice, and Patient Access (Part 2)
By Sean Donahoe, Founder and CEO, Sungrown Developments Inc. Member of NCIA’s State Regulations Committee
In Northern California’s legendary cannabis growing region of Mendocino, the elected county sheriff was recently a competitor at a homebrew festival, jovially pouring samples of his “Pretty Sour Powerful Sider” (jokingly referring to the “Public Safety Power Shutoffs” recently implemented by the electricity utility PG&E to prevent wildfires.) While this relaxed scene of neighbors bonding in the wake of shared inconveniences was not exceptional in itself, here, Sheriff Allman was posing for selfies with licensed (but possibly a few unlicensed) cannabis cultivators sharing the liquid bounties of harvest for the benefit of a local nonprofit.
For nearly a decade, the elected officials and staff of Mendocino county have worked together to normalize the local cannabis farmers by providing a pathway for medical cannabis cultivation permits, long before the state established a licensing system. This public policy process brought once-outlaw cannabis growers into conformance with every regulation of modern life: from building code standards to streambed alteration regulations to the quantification of gross receipts for tax collection. Bringing regulators onto these farms has curtailed previous practices that may have threatened consumer safety: pesticide and other chemicals are now tracked and regulated, while every gram can now be tracked back to its very plot of origin (in case of a safety recall or other concerns post-harvest.) This has been unquestionably difficult for and disruptive to many heritage and small farmers, but it has also allowed in these regions for simple scenes of social bonding and neighbors trusting neighbors again, as participants in the illicit sector were normalized into first their local county’s community then into a system of state license and next (hopefully soon) into a web of regulated interstate commerce. The process of bringing every farm into the regulated supply chain is far from complete, of course, and there are still illicit operators producing for consumers in urban areas in the state and beyond.
Rather than dwell on the incomplete success of California’s ongoing efforts to bring order to the world’s largest cannabis marketplace, it is essential to focus on the quality of life benefits from every cannabis operation successfully brought over from the traditional market to the regulated sector. Each licensed operation makes for one more safe workplace, one more source for lab-tested products for consumers and patients, and one more farm abiding by environmental regulations while providing stable employment and economic sustainability in rural communities. Under the previous medical cannabis paradigm, while there was certainly an abundance of responsible operators, there was virtually zero guidance from the state on matters of workplace safety, manufacturing standards, or environmental compliance. We are now several years into a robust legislative and administrative rulemaking process that has established a (mostly) clear set of rules of the road for commercial cannabis activities. It has unquestionably been a bumpy road for many of the legacy farmers to comply with new regulatory standards, but we are nonetheless able to say that there are now thousands of well-regulated cannabis farms in California (and southern Oregon) eager to sell their clean and craft quality products in a hopeful system of interstate commerce.
Has every cannabis farm in California transitioned? Of course not, but neither have the illicit cannabis economies been entirely supplanted by adult-use cannabis retailers in Colorado and Washington. Sensible and sustainable cannabis policy reform is a process, not a simple flipping of a switch from “illegal” to “legal,” and Americans should be realistic about the progressive and iterative nature of this process. This process, like most evolutionary processes, has already experienced several inflection points, transformative moments that noticeably shifted public opinion or opened up new frontiers in policy reform. While the earlier era of medical cannabis state laws certainly created a base of public opinion and laws, it was questionably the passage of adult-use ballot measures in Colorado and Washington which brought onto the global stage and accelerated the awareness that adult consumers could buy cannabis in clean, responsible retail locations rather than furtive or even dangerous transactions in the illicit marketplace
Throughout this policy process, we have established that licensed retail options can be scaled without negatively affecting public safety and are highly efficient competitive enterprises, offering consumers ample product selection and low prices. In both Colorado and Washington states (but also in later states) we have seen imbalances for some time as market forces, regulatory factors and new cultivation capacity coming online have all helped to create price fluctuations, product shortages, and other supply disruptions. These disruptions were not unique to these early states and will likely continue in every market as new in-state regulated options come online in fits and starts (but when interstate commerce becomes possible we should expect significant price fluctuations unlike any seen to date.) During these fiscally trying periods, we have often seen cannabis operators attempt to cut corners on compliance to make ends meet, which can lead to compromised consumer safety and public safety. The goals of consumer availability and cost competitiveness should be foremost in the minds of policymakers crafting cannabis policy reform nationwide, most notably in the anticipated markets of the Northeast. As these next anticipated adult-use states are designing the framework of their retail and distribution systems, strong consideration should be taken on the potential benefits of quickly and effectively scaling their programs by incorporating interstate commerce as soon as (politically) possible.
The Interstate Commerce Conversation
As the serious policy conversations about compliant interstate cannabis commerce begin, it is helpful to study how in our proverbial laboratories of democracy we can see that decreasing retail friction and shifting consumers from the illicit marketplace benefits crime reduction efforts and improves overall public safety. We should also note that retail cannabis sales have continued to grow in Colorado and Washington, even after the initial novelty and the surge of tourism waned, while legal sales have supplanted illicit sales. These early-adopting states have created models that are addressing consumer demand as national interest in cannabis for wellness and adult-use purposes are soaring and the cultural normalizing continues to occur on a global scale. Interest is high, consumer demand is real, and evidence shows that our drug reform policies should be crafted to bring every cannabis consumer transaction into the regulated supply chain in order to fulfill the demand while benefiting from increases in public safety.Interstate commerce could provide not only safer products but also a greater variety of quality and highly competitive offerings. For medical patients and wellness-oriented consumers, interstate commerce may be the only viable means of access for certain formulated cannabis products or cultivars, especially in smaller state markets.
In addition to the above benefits, regulated interstate cannabis commerce system could provide a more robust and differentiated production and distribution network combined with the ability to rapidly scale retail sales and address insufficient cultivation capacity in new adult-use markets.Cannabis consumers are price sensitive and illicit market retail options continue to entice consumers in states with functional adult-use programs such as California (or Canada), where there is an insufficient amount of licensed retail options to address total consumer demand. With the beginning of adult-use sales in Illinois and larger adult-use states yet to come, it is frankly a bit difficult to envision how total consumer demand will be able to be fulfilled in any near term by relying on licensed cannabis cultivated in-state alone.
The Safe Vaping Discussion
While moving to allow interstate commerce will best position licensed operators to compete with the prices available to consumers in the illicit sector, moving towards a borderless system of production and distribution will also increase safety and access for patients and consumers. Most prominent is the recent nationwide discussion on vaping and vaping-related issues, where tainted products and resultant injuries have been found in the unregulated, illicit sector (or in a very few instances from licensed but arguably under-regulated sources.)Notably, NCIA’s Policy Council established a Safe Vaping Task Force to work on these issues and has released a more comprehensive document advocating for the expansion of a regulatory approach for the safe manufacturing and distribution of cannabis products, whether vape cartridges or otherwise.
The issue of vaping extends to broader issues of product safety including educational campaigns, quality assurance, and testing programs, supply chain integrity, track and trace, and other reporting systems, and (when all else fails) a capable and sophisticated product safety recall system and these are all necessary components of a well-regulated marketplace. These consumer safety programs have already been carefully designed and stress-tested in Colorado and California and the insights from these systems and those in other states should be incorporated into the crafting of interstate cannabis policy (which will require significant harmonization of Certificates of Analysis and testing standards, packaging and labeling standards, etc., again all of which will benefit patients and consumers by offering greater predictability and reliability of their preferred products.)
Multi-State Coordination
In various forums, we have begun to see state regulators liaise with each other and we hope to see more coordination in the future and potentially an earnestness in harmonizing standards where statutorily possible. This multi-state coordination on product safety standards would be accelerated as part of the regulatory coordination efforts that are likely necessary for interstate commerce and, again, consumers and patients will benefit from safer cannabis and cannabis products, and we see NCIA as the critical player in this coming national conversation. In conclusion, moving to a system of regulated interstate cannabis commerce will have tangible benefits for the general public, for consumers and patients and I encourage forward-thinking members of the industry to participate and help manifest a system of interstate cannabis commerce with NCIA, its Allied Associations and other industry groups.
After studying Russian affairs and working as a political consultant, Sean Donahoe co-founded the California Cannabis Industry Association. He served as its Deputy Director through 2014 when he transitioned to consulting for investors and operators, communicating with public stakeholders, serving on local government committees, and advising industry trade groups. He holds an MSc in Government from the London School of Economics and is CEO of Sungrown Developments Inc., an advisory firm and holding company in Oakland, California.
Member Blog: Common Interior Design Mistakes that Dispensaries Make
As the legalization of cannabis spreads rapidly throughout the United States and across the globe, new medical and adult-use dispensaries are opening just about every day. The progression of architecture and design within dispensaries has expanded just as quickly as the legalization of their products.
The saying, “never judge a book by its cover,” has been ingrained into our brains since our adolescence. The truth is, consumers are first drawn to a product or location simply by the look of it. That is why your space must stand out from your competitors. From choosing the right location to conceptualizing layouts, here are a few major mistakes to avoid when designing a dispensary.
Layout
The foundation of any dispensary design should be rooted in the customer experience. A poor layout can interfere with traffic flow, lead to security issues, and cause longer wait times, which upsets patients. The goal is to create an effective layout that provides efficiency for patients while encouraging them to spend more time in the store, discussing products and treatments.
To achieve this goal, designers must have a deep understanding of how a “typical” customer will move within space and in what order. Mastering that concept allows designers to make the best use of the available space.
Basic Interior Design Features
A dispensary does not have to be a cold, sterile environment; in fact, it shouldn’t be! New patients may already be intimidated; bright and welcoming furnishings and color palettes will contribute significantly to their experience. Additionally, an inviting design will help attract and retain patients.
Interior design can quickly become mismatched and overdone. To avoid your design and layout, looking discombobulated, stick to a style, and keep in mind that less is more. Adhering to an overall aesthetic will ensure your elements flow together and complement one another.
Another major factor contributing to the layout and function of a dispensary is the merchandise display. For starters, all of the displays should be made of the same materials. Whether it be wood or glass, keep it consistent.
Now, think about the customer experience. Products layered in vertical displays tend to make browsing the selection easier than a flat surface.
Finally, make sure you build out the appropriate amount of displays. Too much space and the dispensary will look like it’s lacking while not enough space will leave it looking cluttered.
Furniture Selection
To you, the words cheap and inexpensive may be synonymous, but to an interior designer, something defined as “cheap” implies that it is poorly made and, therefore, of low quality. With that said, avoid purchasing cheap furnishings. Opening a retail cannabis location is a costly feat. So, it’s understandable that you would want to cut costs where you can. Know that cheap furniture and furnishings can tarnish a customer’s experience as well as your dispensary’s reputation. Most importantly, buying cheap seating and tables from budget vendors that are not for commercial use can lead to unexpected claims.
Dispensaries follow the same rules as retail stores
As a store-front business, foot traffic will be consistent. Failing to prepare for the long-term wear and tear of your floors, couches, and tables, etc., can be costly.
Practicality is essential here. Select flooring and surfaces that require minimal maintenance and won’t show visible signs of deterioration. The furniture should be durable enough to last and comfortable enough to function well for all ages and abilities.
Lastly, remember that the design of a retail store does not change from year-to-year, if ever. Create a timeless design.
Location
Location is one of the most important elements that factor into the success of any retail business. Prime locations support long-term success.
Unfortunately, prospective dispensary owners can not pick any old retail space they want. Due to rigid state laws and local regulations, they are limited in terms of available real estate. Familiarizing yourself with an area’s zoning laws is critical for establishing your business in the best possible location.
ATMs
Given the current status of the banking laws within the cannabis industry, the majority of purchases still need to be made with cash. Do not overlook an ATM when conceptualizing the layout! If there is nowhere for a patient to withdraw the cash necessary for a purchase, owners are missing out on sales.
If your budget allows, offer cashless ATM services to enable quick and safe transactions, which not only makes purchasing more convenient for customers but also adds to the security of your dispensary by limiting the accumulation of cash.
Perpetuating Old Stereotypes
The modern-day cannabis consumer represents a cross-section of the diverse population. Creating an environment that plays into the negative stereotypes will turn off a good portion of consumers simply because they will not want to be associated with the old stigmas surrounding marijuana. Paying homage to Jeff Spicoli will not only offend a majority of potential customers, but it will also draw unwanted attention from the surrounding community and law enforcement.
Christina is a certified Interior Designer with 20+ years of experience in the industry. Chris received a Bachelor of Science in Interior Design from Philadelphia University and honed her skills as an interior designer with several large architecture firms in Philadelphia. Specifically, while with Ballinger and EwingCole, Chris gained considerable experience in a variety of market sectors including healthcare, research and development, government, education and sports and entertainment, overseeing dozens of multi-million dollar projects. Christina first established herself in the cannabis industry when she was recruited to join a team of experts assembled by Philadelphia-based attorneys and consultants Moriconi Flowers, Ltd. to assist clients in obtaining permits to grow, process, and sell marijuana. Moriconi Flowers intended to coordinate a group of diverse professionals to act as strategic partners to support marijuana permit application projects and identified Christina and Design 710 as ideal to provide building/zoning code analysis, budget and schedule development, and interior design services to their clients. Christina quickly became an integral part of the team.
Design 710’s successes have included designing the project for the winning application and first dispensary to open in Philadelphia, designing the project for a winning grower/processor applicant in the Delaware Valley, and designing the winning project for an additional marijuana dispensary permit holder in the Philadelphia area.
Design 710 was created to help assist both new and experienced businesses to navigate the ever-changing cannabis industry. Christina’s intuition and experience has made her the ideal interior designer for countless projects, including 3 dispensaries she opened with Restore Integrative Wellness Center in the greater Philadelphia area over the last 2 years. Christina’s experience working within the recreational and medical cannabis industry makes her an excellent strategic partner, and her unique vision is complemented by years of experience navigating the ins and outs of opening a dispensary. Having provided design assistance and consultation to projects in Pennsylvania, New Jersey, Ohio, Connecticut, Massachusetts, and Missouri, Christina has a wealth of experience navigating multiple markets.
What is Happening in D.C.? Come see for yourself!
by Madeline Grant, NCIA Government Relations Manager
There has been a lot of cannabis action in the 116th Congress and that is not an accident — it’s time for cannabis policy reform!
We’ve seen historical hearings, votes, and mark-ups take place with the help of our champions on Capitol Hill. We need to continue to support these efforts and support Members of Congress who fight for cannabis reform. So… how can you help to impact reform in Washington, D.C.?
Mark your calendars for NCIA’s 10th Annual Cannabis Industry Lobby Days on May 19-21! There is no better way to network with other NCIA members, meet with congressional staff and members, attend events, and most importantly tell YOUR stories on Capitol Hill.
What you don’t want to miss out on…
NCIA’s 2nd Annual VIP DAY(taking place during the day of May 19) forNCIA PAC Leadership CircleMembers! To participate you must be a member of the PAC Leadership Circle by contributing to the NCIA-PAC. The NCIA-PAC maintains no overhead costs so that 100% of donations are used to support industry-friendly candidates and build the political influence of our emerging business sector. For more information on joining and participating in this exclusive day please email Vanessa at Vanessa@thecannabisindustry.org.
Below are a few examples of what VIP Day consists of…
-Luncheon with Members of Congress -Meetings with Members of Congress -Meetings with committees of jurisdiction -Networking with NCIA’s politically active members -Capitol Hill briefings with Hill staffers and professionals
Pictured: Congresswoman Katie Porter (CA-45), NCIA’s Director of Government Relations, Michael Correia, and Maddy Grant, NCIA’s Government Relations Manager. Last year, Rep. Porter attended our VIP Luncheon.
Video: Episode #1 of NCIA Today – Industry Socials, #NECannaBizCon, and Sen. Crapo, and more!
Check out the first episode of NCIA’s new monthly video newsletter, NCIA Today! In this episode, we cover NCIA’s first Industry Socials and Trade Show of the year, Sen. Mike Crapo’s comments on cannabis legalization, and what NCIA’s Allied Associations Program is!
Member Blog: 2020 Foresight – What To Focus On (And What To Ignore) In The Year To Come
by Brian Chaplin, Chief Brand Officer at Medicine Box
Not even a month into the new year, and some of the biggest players in the cannabis industry have already been hit with several crippling blows. While we’re thankfully a long way away from the federal raids of yore, we’re seeing cutbacks, layoffs and corporate “realignments” in California across the board, some of them by the biggest names in the industry. When the big boys like this are struggling, what does that say for the OGs?
First off, speaking as a California cannabis entrepreneur who has survived both the post-64 aftermath, an armed robbery, AND subsequent charges by the Nevada County Sheriff’s Department, I can assure all of you that NONE of this can crush you if you are determined enough to survive and make the proper sacrifices at the right time. Not too soon ago, I posted some observations for a more inclusive, impactful and interconnected cannabis industry which went viral on Instagram, and I decided to expand upon them for the benefit of the NCIA’s members. There’s going to be a lot thrown at us this year, and I’ve found that I’ve raised my chances for survival by determining what to focus on and what to ignore.
WHAT MATTERS
Making the Right Alliances: Since our foundation in 2016, Medicine Box has carefully selected the sorts of partners we work with. Not only should they fill in the gaps in our organization, but they also have to understand the plant and the culture that has developed around it. People like the Caladrius Network, which has distributed medical cannabis for free to catastrophically ill children, or House of Harlequin, one of the original CBD breeders, have helped us become better stewards of our consumers. Simply put, alignment is not a trend; vet them wisely and give as much as you get.
Get out of the Cannabis Bubble: The cannabis consumer we’re all looking to reach simply isn’t going to meet us halfway. Some of our partnerships have provided valuable beachheads into the sorts of communities we all need to convert. The feedback we have gotten from the live music webisode series Jam in the Van and the LA-based popup concert promoters Silverlake Sessions has helped us to finesse our marketing and product creation immensely and connect to the audiences we need to reach. And we expect to do more of this in the year to come.
The Brand Is Key: I don’t have to tell you how powerful the Apples and Nikes of the world are. People are profoundly loyal to a brand that is in turn loyal to its foundational values. Our Seven Pillars of Nature, Music, Food, Mindfulness, Community, Collaboration and Recovery are emphasized in everything we do as a team
Education, Education, Education: You simply cannot do enough of this with the products we’re creating. We’re constantly having to fight back certain misconceptions, such as the idea that THC is strictly recreational, that even the industry itself tacity promotes. Even the most devoted consumer has something new to learn about many of the new products and methods of ingestion. You’ve got to keep at it until the numbers show it’s starting to sink in.
WHAT DOESN’T
The Rush to Vertical Integration: Too many people are trying to do it all at once. We’ve managed to avoid crashing early by picking a lane and sticking with it. So ask yourself: are you a medicine maker? A cultivator? A manufacturer that wants to make oil? Most of the big boys I just mentioned are suffering precisely because they tried to do it all too soon. Don’t let this happen to you!
Going Big: One of our strongest partners, Brent Gerson, heads the subscription box/research service The Study. To paraphrase him, one of the most important things he’s found from surveying his customers is that you can’t learn much about the average cannabis consumer from 30,000 feet. Making those consumer connections is crucial, and size often obscures those connections. You become so focused on compliance and data that you forget there’s a human being at the other end of the supply chain. My own social media work has helped start those conversations, and it means a lot for people to know who they’re buying from. You can’t get that from a billboard.
The CPG Mentality: The move to commoditize cannabis has not only hit craft growers and product makers hard; it has also short-changed the consumer. Moreover, it moves away from the core values of the heritage cannabis community here in California, which has sustained it for generations. Especially if you’re making a product that serves a specific wellness purpose, such as our relaxing tincture Equanimity, a commoditization approach is simply not appropriate. The sooner the industry learns that, the better.
This being 2020, we’re looking at an election and possibly a few more states coming online with legalization. While California is unique, it’s still a market everyone wants to crack sooner or later, and it’s made a few mistakes everyone is learning from. While the future is far from certain, I expect to be at this point next year looking back, regardless of the changes I’ve made, being thankful I executed on the priorities I’ve made over time. Will you?
Brian Chaplin started the cannabis/hemp-infused herbal wellness brand Medicine Box in 2016. Beginning his trade as an underground cannabis cultivator in 2009, Brian has released a series of award-winning edibles, snacks and tinctures, including Equanimity, which won second place for Best Tincture at the 2019 Emerald Cup. He lives, works, skis and meditates on the shores of North Lake Tahoe.
Member Blog: “What are companies like us doing?” – Revisiting compensation peer groups
Central to most discussions about executive compensation – not unlike any business discussion – is the question “what are other companies doing?” In compensation analyses, this guides the selection of data, typically for companies of a similar size in the same industry. Inherent in this approach is that a list of companies defines the landscape of business competitors, including competition for talent. Boards of Directors want to know – and are required to know – marketplace norms, trends, and practices as elements of their approving executive compensation.
Executive compensation in peer companies provides a guideline for determining appropriate pay levels and program design – what the other companies are doing. But these groups are typically determined by business-based characteristics – revenue, market cap, industry code, etc. In the rapidly evolving cannabis sector, these criteria may not yield a meaningful comparison group.
Most importantly, no data from a talent competitor aspect is typically included as a metric, though companies mention “talent competitors” as a criterion for inclusion in their “peer group” as we call it.
Peer Group Pressure
Proxy advisory firms (e.g., ISS, Glass Lewis) encourage and provide specific guidelines for the development of peer groups for executive compensation comparisons among public companies. In fact, they not only prefer but expect this process and disclosure. But their process may not make sense for every company as it focuses on market cap, revenue size, and industry code.
The problem for cannabis companies is:
There is no industry classification code for cannabis companies (with the exception of some suppliers that may serve multiple industries)
Most cannabis companies have not disclosed benchmarking peers
Size constraints are moot when #1 and #2 don’t exist.
And, none of this peer selection process gets to the root of the purpose: Identifying talent competitors to help guide the design of compensation programs to attract valuable employees from those competitors and keep employees from defecting to those competitors.
Complexities of a Cannabis Peer Group
Some of the largest cannabis companies are issuing proxy statements that parallel the norms for large mature companies in the U.S. For a cannabis company, constructing a peer group is a challenge given the characteristics of vertical integration of the business, merger and acquisition activity, and – most importantly – the breadth of occupational categories represented by these firms’ employees.
Here, for example, is the peer group disclosed by Canopy Growth – two sets of companies from four industry sectors – cannabis, fast moving consumer goods, specialized pharmaceuticals, and technology:
This is the most complex peer group structure I have seen among the hundreds and hundreds of companies’ disclosures I have reviewed. The cannabis sector poses this challenge: Covering some or all of the subspecialties that are under one roof with a group of similar companies, when there may be no similar companies
Some Recent Examples
“High Times… hires President”
“Cannabis producer Tilray taps ex-Molson, Revlon employees for Executive roles”
Interestingly, Molson Coors, Pharmaca, Revlon, Goldman Sachs, GE, and Apple have never included a cannabis company as one of their peers. That is likely because Tilray (drug manufacturers – specialty and generic) and High Times (not a public company) would not fit the criteria for those companies’ peer groups.
The peer group disclosed by Revlon (household and personal products) includes Hain Celestial (packaged goods), Clorox (household and personal products), and Tupperware Brands (packaging and containers).
Molson Coors’ peer group includes The Hershey Company (confectioners) and J.M Smucker Company (packaged foods).
Yet Molson Coors, Revlon, and other non-cannabis companies are rapidly losing executives to cannabis companies – the definition of talent competitors.
Let’s Try Peering Backwards
Maybe the current process is backwards. As cannabis companies face a limited supply of talent with cannabis experience, they will find the talent from diverse industries and then, perhaps, compile a list the companies from where those new executives came. That would indeed be a talent competitor peer group.
What would that look like? Based on publicly-available information about the previous employer of the executives in these cannabis companies, we can “peer backwards” into what their cannabis-relevant talent pool looks like.
What About Your Company?
Your company – in the cannabis sector – is hiring a new C-level executive, maybe even a CEO. Your company did not disclose a peer group because it has not thought about a peer group. Your company is vertically integrated – cultivation, extraction, distribution, branding, retail – so it is simply a matter of finding a candidate with experience in all of those, or some of those…or one of those?
Let’s continue “peering backwards” – looking at where executives have come from and having a compensation program that keeps our company off of the next company’s “from” list.
What would that look like? Based on publicly-available information about the previous employer of the executives in these cannabis companies, we can “peer backwards” into what their cannabis-relevant talent pool looks like:
Peering Backwards
Company
CEO
CFO
Tilray
Silicon Valley Bank (SVB)
Primo Water Corporation
Canopy Growth
Constellation Brands
Montana Mills
Gallo Winery
Pepsico
Charlotte’s Web
Kellogg Company
Crocs
Orbitz
Financial services, water dispensers, consumer products, bakeries, wine, soda and snacks, cereal, shoes, travel – not the usual mix of talent sources.
Cannabis Companies Finding Their Tribe
One will hear that the cannabis sector is in the “Wild West” phase, which is sort of like saying that a 14-year old is in the Wild West phase of adulthood. The only norms appearing are those carried over by the large consulting firms accustomed to consulting to mature companies. The entrepreneurial companies in the cannabis sector need not worry about self-appointed third-party opinions of their executive compensation practices – until they grow up. They can pursue practices that make sense for their business strategy, talent sourcing strategy, dispersion of locations, and other business-driven factors.
As we research executive compensation in the cannabis sector, we find a blend of compensation practices from these diverse industries, defying the notion that there is a “norm” or a “median” in the cannabis sector. Understanding executive pay in cannabis companies, for now, requires understanding executive pay in perhaps dozens of industries.
As cannabis companies grow, they will face the need for some additional structure and processes around executive compensation. But many of these companies are, and will continue to be, Smaller Reporting Companies,Emerging Growth Companies, Controlled Companies, TSX-V listed, or in another category with lesser disclosure requirements and lesser pressure from proxy advisers and institutional shareholders. With more of a grassroots shareholder base, they will have more maneuvering room in compensation design, less concern about the “optics” of a given executive compensation action or program, and more opportunities for the compensation program to fit the business, not fit a third-party’s unsolicited opinion of compensation. This is already leading to greater creativity and innovation in compensation design among cannabis companies.
Fred Whittlesey is the founder and President of Compensation Venture Group, SPC (CVG) – a Washington Social Purpose Corporation – operates as Cannabis Compensation ConsultantsTM and maintains a database of cannabis companies’ peer groups, executive pay levels, and executive hire sources. Fred Whittlesey is the founder and President of CVG, and with more than 35 years of experience in compensation, has worked for hundreds or companies across the industries that collectively comprise the cannabis sector – agriculture, biopharma, retail, distribution, manufacturing, marketing, branding, REITs, financial services, and technology.
There’s been a lot of positive press lately about the success of the cannabis industry in Nevada, and with good reason. The cannabis industry contributed more than $110 million dollars in FY19 to state coffers and is poised to overtake the mining industry in annual tax contributions; all of this in just its second year of operations. But while the tax-generating retail industry continues to steam ahead, much of the business and opportunity in the balance of the industry remains on hold (since early October). The responsible moratorium has largely been erased from public awareness by the intervening holiday season and the ongoing success of tax collections over projections.
Unfortunately, while this suspension was necessary in light of the surrounding circumstances, its indefinite duration has created market instability at a time when cannabis-friendly markets are competing for business and tax dollars. Regrettably, this uncertainty has made Nevada look more like the nearly paralyzed California market. The time has come to complete the necessary work, end this moratorium and let the critical behind-the-scenes elements of our nationally leading industry get back to work.
For those that don’t recall, the present moratorium was announced by the Nevada Department of Taxation on October 17, 2019 following the recommendations of a task force initiated by the Governor. The launch of the task force was in response to two scandals: one involving the awarding of retail licenses earlier in the year and the second being the discovery that the foreign nationals identified in a national campaign finance scandal (involving former New York Mayor Rudy Giuliani), had sought to invest in and seek influence over the local cannabis industry.
Few can argue the need for a regulatory pause given the state of affairs last October, and I believe the Governor’s response was the single most effective way to stifle inappropriate corporate activity. By the simple administrative step of freezing all pending and future license transfers, the state was able to get the lawyers involved in these transactions to shut them down. The final step in almost any merger or acquisition transaction became temporarily unlawful. There’s no need for a police force when every lawyer in the industry can be deputized.
This Friday will mark ninety days since the moratorium was put into place, and would be a fine time to release this de facto suspension of all mergers, acquisitions, sales, financing, etc. After a decade and a half of practice in transactional law, I can tell you that the “invisible hand” of the market that most of us rely upon to guide capitalism isn’t invisible to the people in the transactional trenches. If the machinery behind the scenes is seized up for too long, inevitably, even the very of the supply chain (i.e. retail) will suffer.
Many capital rich companies, who only recently became comfortable with the cannabis space, are looking to deploy resources into the cannabis industry. The mechanisms to do so, and to create the jobs and economic development desired by the state and its taxpayers, are restricted to mergers, acquisitions and equity investment. Capital markets are not static. They are as dynamic as the cultures they serve and forcing them all to the sidelines for an extended period owing to the misdeeds of a small number of them, is painting with too broad a brush. It is perhaps due to the recent legality of the cannabis industry and its vestigial stigma that a transactional moratorium has been tolerated for as long as it has. It is difficult to imagine a comparable capital markets freeze in any other industry.
In the ten years I have called Las Vegas home, I have watched our city and, indeed, our state, transform from side show to main event – as we are no longer content to ride shotgun to California’s success. We Nevadans have proven capable of, and even better equipped for, leading in multiple industries, including cannabis.
To that end, we are, or certainly should be, capable of completing an “extended review” of the license transfer process as well as developing a “more thorough and appropriate vetting process” in ninety days. Ostensibly, freezing all pending transfers was undertaken to ensure that those aspiring licensees were subject to such “more thorough” process. It is difficult to imagine, however, how this process could presently be incomplete. If anything, as the state is writing the rules as it goes, it makes sense to at least unlock the “pending” transfers and provide some guidance as to the expected timeline for future transfer approvals.
We spent most of 2019 advising clients to avoid cannabis transactions in California, as the regulatory structure there is widely agreed to be in disarray. During most of that time, we were able to credibly suggest Nevada as an alternative market, free from such chaos, and capable of sustaining robust merger and acquisition activity without issue. However, as large and popular adult-use markets (e.g. Chicago, IL; Detroit, MI) open and expand, and agriculturally experienced markets expand into hemp and CBD production, we are left to advising clients that their dollars are better spent elsewhere.
However, there is still time to start the new year and new decade with a local cannabis market that is looking to lead and provide prototypical regulatory and compliance guidance, as it was prior to last October. If we don’t, we can’t expect other cannabis-legal states or businesses choosing between them to wait for us to figure it out. And when federal legalization undoubtedly arrives, the loss of time in developing the Nevada market will no longer be treated trivially.
Glenn H. Truitt, Esq. is the Managing Partner of Ideal Business Partners, a boutique multi-disciplinary professional firm focusing on serving businesses in the cannabis, hemp and CBD spaces. He is a graduate of the U.S. Naval Academy and Stanford Law School, is licensed to practice in California and Nevada and has been practicing for 15 years.
NCIA Policy Council Publishes New Safe Vaping Recommendations Report
by Morgan Fox, NCIA Director of Media Relations
In September of last year, reports began surfacing of mysterious respiratory illnesses generally associated with the use of vape cartridges, including those containing cannabinoids. Over the following months, reports of these cases climbed to more than 2000 nationwide, including more than 50 deaths. The Center for Disease Control and state health agencies struggled to determine the proximate causes, but it became increasingly clear that the vast majority of these cases were linked to unregulated cannabis vape products. As the focus began to narrow on the presence of Vitamin E acetate and other additives in unregulated products, NCIA and members of the industry urged producers, regulators, and lawmakers to take steps to prevent the use of these substances in vape cartridges and enact changes that would make legal, licensed, and tested products competitive with illegal market products that were making people sick.
New reports of this illness – called EVALI – have slowed, and the CDC has ended its official state of emergency related to vaping. However, there is still significant confusion on the part of stakeholders and the government about how to avoid similar issues in the future and the huge causal role prohibition played in this outbreak. In an incredibly misguided statement earlier this month, the CDC even lumped all “commercial” sources for vape cartridges together as a source for one sixth of the harmful products, despite only a handful of links to regulated businesses out of thousands of cases. This is especially troubling for states like California, where no cases were linked to regulated businesses and where unlicensed storefronts greatly outnumber those with licenses. Equating licensed, regulated businesses to those operating without oversight or regulations completely misses the mark and creates a dangerously inaccurate set of assumptions that could lead to even worse public health issues in the future.
As such, NCIA is proud to be releasing a thorough report on EVALI this week entitled “The Key to Consumer Safety: Displacing the Illicit Cannabis Market – Recommendations for Safe Vaping” which was produced by our Policy Council and informed by a variety of subject experts. This paper explores not only the additives that were the primary culprit but also potential areas for future concern such as heavy metals in vape cartridge manufacturing, potential problems caused by poor temperature control, and the use of certain types of flavorings and terpenes. It clearly lays out suggestions for both producers and regulators that will help avoid potentially dangerous products in the legal market, as well as ways to make sure that unregulated counterfeit products don’t make it into the hands of consumers. Just as important, this paper offers a guide on how states – as well as the federal government – can combat the illicit market by removing the onerous burdens placed on legal businesses, lowering barriers of entry to the industry and creating easier pathways for legacy businesses to become licensed, and exploring non-criminal methods to shut down illicit operators.
Whether you are a producer, regulator, policymaker or just concerned with public health and cannabis policy, this paper is an important tool for you. We ask that you please read and share it with your networks and urge your elected representatives at every level to explore and implement these evidence-based recommendations.
As members of the responsible cannabis industry, it is our duty to look out for the safety of cannabis consumers and shine a light on the policies that are bolstering the unregulated market.
As this paper concludes, the American consumer clearly wants cannabis products to be both accessible and legal. It’s time for the federal government to deschedule marijuana and regulate it like alcohol. Legalization through descheduling, regulation, and testing is the best path forward to keeping consumers safe. In the end, sensible regulation and a clear path to licensure and compliance will be the most compelling force in driving people from the illicit market to the state-legal market.
When I first came into the market in 2016 almost every company told me that they don’t have collection issues, they either get paid COD or get paid “on time.” Well, as the recent reports about a dispensary stopping payments to vendors has hit the press, I thought it would be a perfect time to talk about an issue that has largely been ignored in the cannabis market: collections, and what you should do if you are not getting paid?
Almost every company I have spoken to, whether they are a grower, manufacturer, or service provider are extending some type of credit to some of their customers. With more companies in the cannabis space now extending credit to their customers, delinquent payments are on the rise and the management of your new “accounts receivable” can have a major impact on your cash flow.
Most of this credit extended today in the cannabis market is what we call “friendship credit,” credit that is extended to a customer who you have developed a personal relationship with and where no credit analysis was performed. Friendship credit may have worked in the past, but the rules are changing and as you may be experiencing first hand, many of these customers are not paying you on time and some are not paying you at all. If this is happening to you, what should you do?
The following is a common-sense approach to the problem of determining whether a customer has become a collection problem where you may need outside help. Customers that have a cash flow problem must choose which vendors they will continue to satisfy and which vendors they will not. If a company has insufficient cash on hand to pay all their vendors, some are not going to get paid on time. This can be a one-time problem, or it can be an endemic problem and if you don’t act promptly it may cost you.
The Customer is More Than 30 Days Past Due
Your customer always paid on a timely basis, you have transitioned them from paying you COD to credit terms and now they are 30 days past due. They answer your calls but promises for payments and clean up the past due balance are not met. Chances are you have a problem and depending on how old the debt gets, turning them over to a 3rd party collection agency may be the way to go and save you a customer. Yes, you read it correctly, save you a customer and get you paid, that is the goal of a collection agency.
The Customer is Not Returning Your Calls and Re-Ordering
Your customer is past due and ducking you. If they won’t talk to you after repeated attempts to reach them, their debt is 30-60 days past dues and getting older and they are not trying to re-order and pay down the old balance, a collection agency may be your only solution. Collection agencies have trained recovery professionals that focus on working with these types of accounts. A collection agency experiences this problem as a normal course of their daily activity and they are experts at getting your customer to the table because it’s what they do for a living.
The Customer Has Stopped Buying
If the customer has stopped buying and owes you money, even if it’s not past due you need to be on the alert. For whatever reason, if the account no longer needs you, they don’t have a reason to be prompt. If they go 60 days past due, you are probably going to need outside help to collect your money.
You Receive Negative Information on the Customer from Other Suppliers
Your customer is past due, and you receive some negative information on them from other suppliers who are also selling to them. When a company gets into trouble financially, they start allocating their available cash, the key important vendors may not see a problem, but the secondary vendors will. For example, if the account is a dispensary they need to have flower and concentrates on the shelf and therefore those suppliers will get paid first. But if you manufacture infused THC/CDB sports drinks that do not sell as well you might not get paid on time if the dispensary has cash flow issues. If you have relationships with other suppliers leverage them to find out what is going on.
Final Thoughts
If you are extending credit you will need to implement a collection policy that details how to manage and collect from a delinquent customer as well as what is your point of no return is where you need to pull the trigger and place the customer with a 3rd party collection agency. The warning signs listed above are usually evident during your internal collection efforts and the sooner you recognize them the better. Prompt action will save you money. If the account is behaving erratically, you should turn them over to a 3rd party collection agency as they trigger the 60-90 days past due signal because probably things are not going to get better, only worse.
Sam Fensterstock is the SVP of Business Development at AG Adjustments (AGA), a 48 yr. old provider of 3rd party commercial collection services where he oversees sales, marketing and revenue. Sam has spent his entire business career as an entrepreneur and senior executive in the commercial credit & collection space. Sam been a founder and played a key role in the dynamic growth of several leading niche commercial credit risk management companies including F&D Reports, CreditRiskMonitor and PredictiveMetrics (sold to SunGard/FIS in 2011) and AGA. Sam is widely considered a vendor expert in the order to cash and credit and collection process. AGA is the only national collection agency focusing in the cannabis market Sam has been an active member of the NCIA’s Banking & Finance Committee since 2017. Sam is the author of the NCIA published White Papers “The Future of the Accounts Receivable & Credit Function in the Emerging Cannabis Market” and “Implementing an Initial Trade Credit Policy for an Emerging Cannabis Related Business” as well has authored several articles on the topic of trade credit and collections in the cannabis market.
Member Blog: Condensate Recapture for Cannabis Cultivation Facilities – Making Informed Decisions to Save Resources and Improve Efficiency
Condensate capture for reuse is an intriguing new application within the controlled environment horticulture space. Addressing both environmental impacts and regulatory requirements, capturing and reusing condensate has many attractive benefits. However, several key questions have appeared surrounding the topic of condensate water capture and reuse applications that have slowed its adaptation in many facilities. In this article, we discuss common questions and concerns associated with condensate reuse and how each may be addressed with adequate, customized treatment processes.
Condensate water is generated by a number of processes within a controlled environment agriculture facility. Most commonly, dehumidification and HVAC systems are the primary sources of condensate water. The source of water and collection system plays a significant role in condensate water quality and associated concerns when considering reuse.
Why is collecting and reusing condensate water a good option?
Recycling available water streams reduces the amount of fresh water required and offsets associated costs.
Recycling minimizes discharges and waste. Coming regulations will require extensive discharge limits.
With adequate monitoring and treatment, risks may be greatly reduced, maximizing benefit.
Contamination – Don’t Let One Bad Apple Ruin the Bunch
In general, condensate water is low in Total Dissolved Solids (TDS)/Conductivity and is generally very clean. pH is typically low as carbon dioxide readily absorbs into solution (pH 5.5-6.5 range). Contaminates are easily introduced based on what the water contacts during collection and distribution. Volatile Organic Compounds (VOCs) and other organics can be absorbed and provide “food” for microbial proliferation – especially if the condensate is pooled and stored for extended periods. Metals leaching from dehumidification equipment and/or from dust/air pollutants also may accumulate. Identifying and managing emerging contaminates is crucial to successfully mitigate risk and maximize value when reusing condensate water.
Microbes and Organics
By themselves, most organics potentially found in condensate water pose little threat. However, organic (carbon-based) pesticides, foliar sprays, etc. have the potential to accumulate in exposed condensate water and could lead to downstream issues. Organics also provide a potential carbon source for various microbial populations to proliferate. This can create biosecurity challenges, plant disease and challenge existing water treatment processes. Microbes are ubiquitous in nature and although pathogens are presumed to make up less than 1% of the known microbial kingdom, contamination remains a threat. Airborne bacteria, viruses and fungal spores can be introduced to a condensate water system through its condenser plates. Microbial proliferation and the formation of biofilms on wetted surfaces downstream of dehumidification equipment can result in elevated levels of total and pathogenic microbes.
Heavy Metals
Heavy metals including lead, zinc, aluminum, and copper may be a concern if leaching from dehumidification equipment occurs. Soldered joints in copper tubing, for example, may introduce lead to condensate water. In that case, mechanical joints/brazed joints would be preferred. Aluminum, copper, and zinc may be stripped directly from metal surfaces as part of generalized corrosion. Even at relatively low levels, some metals, dissolved contaminates and other corrosion byproducts can bioaccumulate in plants resulting in compounded issues, including phytotoxic effects.
Water Treatment & Management
In many situations, the use of recaptured condensate water is a viable option to supplement make-up water demand and reduce waste discharge. Treatment prior to reuse is recommended to condition the condensate water to ensure water system stability over time and to prevent potential treatment and operational challenges that could otherwise arise.
Available treatment processes include Advanced Oxidation Process (AOP) gas and UV for disinfection, adsorptive media for dissolved organics and various other filtration processes for metals and other contaminate removal. The extent and type of treatment varies based on specific water challenges and end goals.
Baseline and routine subsequent water testing and monitoring is key to maintain a proactive approach to water management. Integrating smart water management programs limits waste, improves logistics, saves money, protects the environment and allows for current and emerging regulatory compliance. Equally important is choosing the right technical partner to help develop and implement your smart water management program.
Taylor Robinson is the Research & Development Manager and Chief Chemist for Silver Bullet Water Treatment with expertise in molecular and cell biology, general water chemistry, microbiology, and industrial (oil and gas) water treatment and reuse processes/chemistries. For the past 4 years, Taylor has led, conceptualized, organized, and completed numerous Silver Bullet research and development projects related to water treatment for the livestock, cooling water, horticulture, aquaculture and data center industries. Taylor joined Silver Bullet in 2016 and has been a key contributor to the advancements in the company’s technology and research base.
With over 15 years’ experience, Kyle Lisabeth has been focused on improving water management programs across multiple industries, with a central focus of treating water for reuse applications. Kyle attended the University of Texas – Austin, and upon graduation with a BS in Biology and Environmental Sciences, gained years of international water management experience in both North and South America. Since establishing Silver Bullet’s Horticulture Division, Kyle has exponentially grown the business unit’s install base and cultivated a nationally known water treatment brand for many controlled environment agriculture applications, including cannabis.
Take The Survey By Friday: What Educational Content Does Our Industry Need?
NCIA is exploring a partnership with the Community College of Denver to deliver educational content to their students and the industry.
To get a better understanding of the industry’s education needs, we’ve developed a survey to gauge them. This data will also help us enhance the content we’re delivering during conferences, webinars, and other offerings in development.
Call For Signatures: Move The SAFE Banking Act Through Senate Committee
The National Cannabis Industry Association, in collaboration with other cannabis-related organizations, drafted a letter to Senate Banking Committee Chairman Mike Crapo (R-ID), urging him to move the House version of the SAFE Banking Act through committee and to the Senate floor for a vote.
The letter also addressed serious concerns the industry finds with one of Sen. Crapo’s suggested amendments to limit the provisions of the SAFE Banking Act to products containing less than 2% THC. Now we need the help of businesses in the cannabis industry to join us in letting Chairman Crapo know how important it is to move the SAFE Banking Act through Committee this session of Congress. Please follow the link below to add your name to the growing list of industry voices calling for fair and safe banking access.
On October 29, 2019, the USDA released regulations establishing a domestic hemp production program, paving the way for hemp cultivation on an industrial scale in 2020. While the potential benefits of a robust hemp industry in California are exciting, large scale industrial hemp cultivation increases the risk of cross-pollination for hemp and cannabis growers, which may significantly impact the value of both crops.
Cannabis sativa, the plant used in both hemp and cannabis production, is a dioecious species, meaning that male and female flowers are borne on separate plants. Cannabinoids, including THC and CBD, are more concentrated in the female flower than in the male flower. Therefore, cannabis or hemp growers who desire a crop with a high yield and potency of either THC or CBD will typically use feminized seeds or clones and will weed out male plants if they appear. Growers of industrial hemp produced for seed or for fiber, however, are not concerned with producing potent cannabinoids and therefore will generally grow both male and female plants.
Cross-pollination between female and male plants can cause problems, such as seed production, lower crop yields, and altered THC or CBD content of the flowers that are produced. This can devastate the value of crops grown for their THC or CBD content. Moreover, if hemp exceeds the 0.3% THC concentration threshold allowed under the federal regulations, it must be destroyed.
Unfortunately, cannabis pollination can occur over large distances depending on the concentration of plants and weather conditions. Industry experts recommend a minimum distance of ten miles between outdoor growing operations, but research shows it is possible for cannabis pollen to travel much further. Therefore, cross-pollination is possible even if a neighboring farm is miles away. This dynamic poses a huge problem to the young industry.
At this point, there are few regulations in California designed to prevent cross-pollination. Several counties enacted temporary moratoriums on the production of hemp, primarily based on the USDA’s inaction. In those counties, cross-pollination has not been a problem since cultivation was not allowed in the first place. Now that the USDA has issued regulations governing the hemp industry generally, counties will likely lift these temporary moratoriums. But since the USDA regulations are silent as to the distance between hemp and cannabis operations, cross-pollination will almost certainly occur and will likely result in litigation in the near future. Indeed, cross-pollination has already caused litigation in other states. For example, lawsuits related to cross-pollination have already commenced in Oregon. In Jack Hempcine LLC v. Leo Mulkey Inc., et. al., a hemp grower alleges that cross-pollination by male plants on the property of several nearby growing operations raised the THC levels of the Plaintiff’s female plants, rendering his entire crop unmarketable. The grower who brought that action alleges damages exceeding $8,000,000 in lost crop value.
There are several legal theories available to growers seeking to recover damages caused by cross-pollination of their crop by a nearby hemp or cannabis operation, including negligence, trespass, nuisance, strict liability, and interference with prospective economic advantage. If your crop is or was negatively affected by cross-pollination or another grower alleged that you have damaged their crops via cross-pollination, you should contact counsel as soon as possible.
Ryan McGuire is an attorney at HK Cannabis Law, a practice group of Huguenin Kahn LLP, a full-service law firm representing clients throughout California and beyond. Ryan has years of experience litigating a broad range of legal actions, including personal injury, employment, contractual disputes, and construction defect claims. Ryan also has deep ties to California’s agricultural community, and has successfully represented growers, packers, and distributors. Ryan’s knowledge and experience are valuable assets for clients involved all aspects of cannabis production from seed to sale. Established to provide legal representation and counsel in the emerging field of cannabis law, HK Cannabis Law stands ready to serve clients at every stage of the cannabis business cycle, from business entity formation, real estate acquisition, land use, contracts, business transactions, regulatory compliance, licensing and permitting, enforcement defense and, should it ever be necessary, legal representation in both civil and criminal trials and appeals.
Committee Blog: Ending The Ban On Interstate Commerce (Part 1)
Oversupply and shortages, high prices and lack of choice for patients and consumers, illicit markets, tainted products, and the inability to access banking and capital all plague the burgeoning cannabis industry. While cannabis advocates and industry leaders are working on each of these problems, there is one solution that would ease the burden on all of them. Allowing for interstate trade between states with legal cannabis markets would improve each of these issues while supporting the individual solutions to each that the industry has been working on. This is the first post in a series that explores the benefits and barriers to setting up a legal framework for interstate trade, even before wholesale legalization at the federal level.
Since the beginning of legal, adult-use cannabis, when Colorado and Washington passed the first ballot measure allowing for adult-use, the industry was guided by the Cole Memo, which laid out the parameters for the federal government staying out of the states’ cannabis experiments. Among other things, the Cole memo stated that the DEA could crackdown on cannabis moving from states with well-regulated systems to states that do not allow cannabis. This statement has been interpreted conservatively to mean that no cannabis should cross state lines for any reason, ever, based on the fact that at the federal level, cannabis is still a Schedule I drug under the Controlled Substances Act.
Today, there are 10 states which have legalized adult-use, another 19 which allow for medical use, and six more which allow the use of CBD products only. Many of these states share borders, and producer states could serve several nearby markets without ever entering a state that does not allow cannabis in any form. Furthermore, the Cole Memo, which was rescinded by Jeff Sessions in 2018, has not been replaced by any guidance whatsoever. This means that each U.S. Attorney’s office is free to set their own enforcement priorities around state-legal cannabis activities, and there is no official overriding policy at the DOJ on interstate trade between states with medical or adult use. Corresponding guidance from FinCEN, however, remains in effect and similarly discourages the transfer of cannabis between states.
Cannabis markets vary widely from state to state with regard to the underlying market dynamics and challenges that they face. Some states produce too much while other states experience shortages. Meanwhile, new states pass legislation or have voter initiatives that allow medical or adult-use every year without any infrastructure in place to supply that state’s demand. In each new legal market, the vast majority of demand had long been met through illicit market supply, and generally from outside of the state’s boundaries.
The artificial boundaries around cannabis markets have far-reaching impacts for local economies, patient access, illicit market activity, and social equity. Later posts in this series will take a deep dive into each of these issues, and in this post, we will look at how this has impacted states, the industry, and consumers so far.
Lessons Learned:
Washington State chose to take the strictest possible reading of the Cole Memo, and insist that not only must cannabis not cross state lines but also sources of funding must come from within the state. Combined with their high capitalization requirement for licenses, the result was a disaster from an equity standpoint: only wealthy and well-connected individuals in the state (which are overwhelmingly white males) were able to even attempt a license. This decision was based substantially on the fact that interstate trade was not allowed.
In Oregon, which has an ideal growing climate and a long tradition of exporting cannabis (albeit in the illicit market), the artificial boundaries created by the ban on interstate trade lead to a massive oversupply for its small population, which crippled the industry and tanked many small businesses. Despite the fact that Oregonians consume more cannabis per capita than any state, their climate and culture have led to growing massive quantities of world-class cannabis that cannot reach patients and consumers, even in neighboring states that might have under-supply issues. The result is that hundreds of small, mom-and-pop shops and family farms have gone out of business, eradicating millions of dollars of local capital, and accelerating mass consolidation of the industry into the hands of a few foreign corporations. Meanwhile, in medical markets like Illinois and Michigan, patients have had sporadic access to quality cannabis-based medicines.
When Nevada originally launched, due to the influence of local liquor distributors, it was almost impossible to get products to market, and the state’s dispensaries sold out on the first day of sales. After ironing out some of the kinks, sales are going strong, but the practice of growing thirsty plants indoors in the desert is of dubious value when the same plant can be grown with a fraction of the inputs in northern California and southern Oregon.
California’s legal system is a perfect example of how over-regulation fuels illicit market activity. Because of the structure of their regulatory framework and high taxes, the state is served by only 800 licensed dispensaries, whose prices are double and triple those found on the illicit market for similar products. This has led to the emergence of thousands of “pop-up” or unlicensed dispensaries, selling untested products tax-free in a thriving illicit market. The booming illicit market in California has also led to massive wholesale markets of hardware, branded packaging, and flavoring and cutting agents (all technically legal) to supply the illegal operators with everything they need to look legitimate. This is a major contributing factor to the wide-spread vaping related illness cases popping up all over the country, as many illicit market operators purchase their supplies in downtown Los Angeles.
The ban on interstate trade promises to continue to create new and novel problems as well. If New York, the 4th most populous state in the union, legalized adult-use (which seems likely in the near future), and interstate trade were still banned, it would require a massive investment, on the order of billions of dollars, to create enough indoor and greenhouse grow facilities to supply the demand created by its 19 million inhabitants. The recent legalization of hemp under the last Farm Bill has created a number of legal dilemmas as well, as some individual states that do not recognize any difference between hemp and cannabis flower have seized products and arrested individuals taking hemp legally grown in one state to a market where it is legal to sell.
Some suggest that these issues will be sorted in local markets, and in each state individually this approach might seem to make sense. When you add these problems together, though, a much more elegant, efficient, and obvious solution emerges: let states that have always exported cannabis send it to states that have always imported it. A set of different and seemingly unconnected problems become each other’s solutions.
Historically, people across the country have consumed cannabis, and the vast majority of it was grown in a few locations that are particularly well-suited to the plant. It is highly likely that a fully-matured nationwide legal market (one which must account for not only interstate, but also international competition) will ultimately be best served by the same general market dynamics. The only question is: how long will we allow the artificial market boundaries around each state to decimate local capital, curb access for patients and consumers, encourage investments that are attractive short-term but disastrous long-term, and prop up the illegal markets that pose a public health risk?
Interstate trade between states that allow some form of legal cannabis would provide much-needed relief on a number of fronts for cannabis businesses, and could be structured in such a way to support social equity efforts. With a little guidance on enforcement and thoughtful programs and agreements between states, there is a path to legal interstate commerce even before cannabis is removed from the Controlled Substances Act. The state of Oregon has already passed legislation allowing for the export and import of cannabis products provided that the Federal Government allows it. This could be either through legislation such as the proposed Blumenauer/Widen State Cannabis Commerce Act, or though DOJ enforcement guidance (whether from the Attorney General or the relevant local U.S. Attorney’s). There are multiple paths that can lead to the end of banned interstate trade, and it seems increasingly inevitable that we will see legal cannabis trade across state borders in the near future. For most operators in the cannabis industry, and for all patients and consumers, this will be a good thing, and can’t come soon enough.
Gabriel Cross is a Founder and CEO at Odyssey Distribution, LLC, a distributor for locally-owned craft cannabis producers and processors in Oregon. Gabe worked in the sustainable building industry for a decade before starting Odyssey and brings his experience with sustainability and systems thinking to his work in the cannabis industry. Odyssey manages logistics, sales and marketing for boutique producers so they can focus on creating great craft cannabis products for the Oregon market.
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With more than 15 years of experience working and teaching in chemistry laboratories, Meghan McCormick, Ph.D. is the Senior Chemist and a part of the Herban Legends team at 
Allison Kopf
As a former Federal bank regulator and seasoned consultant, Angela’s knowledge of regulatory compliance, risk management and investment advisory services has established her reputation as a leading resource within the financial consulting industry, spanning consumer protection and anti-money laundering statutes, fraud and cannabis banking issues. 
After studying Russian affairs and working as a political consultant, Sean Donahoe co-founded the California Cannabis Industry Association. He served as its Deputy Director through 2014 when he transitioned to consulting for investors and operators, communicating with public stakeholders, serving on local government committees, and advising industry trade groups. He holds an MSc in Government from the London School of Economics and is CEO of Sungrown Developments Inc., an advisory firm and holding company in Oakland, California.
Brian Chaplin started the cannabis/hemp-infused herbal wellness brand 
Fred Whittlesey is the founder and President of 
Glenn H. Truitt, Esq. is the Managing Partner of 
In September of last year, reports began surfacing of mysterious respiratory illnesses generally associated with the use of vape cartridges, including those containing cannabinoids. Over the following months, reports of these cases climbed to more than 2000 nationwide, including more than 50 deaths. The Center for Disease Control and state health agencies struggled to determine the proximate causes, but it became increasingly clear that the vast majority of these cases were linked to unregulated cannabis vape products. As the focus began to narrow on the presence of Vitamin E acetate and other additives in unregulated products, 
Sam Fensterstock is the SVP of Business Development at 
Taylor Robinson is the Research & Development Manager and Chief Chemist for Silver Bullet Water Treatment with expertise in molecular and cell biology, general water chemistry, microbiology, and industrial (oil and gas) water treatment and reuse processes/chemistries. For the past 4 years, Taylor has led, conceptualized, organized, and completed numerous Silver Bullet research and development projects related to water treatment for the livestock, cooling water, horticulture, aquaculture and data center industries. Taylor joined Silver Bullet in 2016 and has been a key contributor to the advancements in the company’s technology and research base.
With over 15 years’ experience, Kyle Lisabeth has been focused on improving water management programs across multiple industries, with a central focus of treating water for reuse applications. Kyle attended the University of Texas – Austin, and upon graduation with a BS in Biology and Environmental Sciences, gained years of international water management experience in both North and South America. Since establishing Silver Bullet’s Horticulture Division, Kyle has exponentially grown the business unit’s install base and cultivated a nationally known water treatment brand for many controlled environment agriculture applications, including cannabis.
Gabriel Cross is a Founder and CEO at