by Wendy Barr, CEO & Creative Director, Barrcode Branding Member of NCIA’s Packaging and Labeling Committee
You want “that” package, the one that is flying off the shelves; the one that people photograph and post on social media; the one that makes the consumer feel something inside, something special, maybe even emotional. Maybe it’s a package they keep, reuse, save, share, and purchase over and over again.
If you’re in retail, you want a package that earns you shelf space. A package that retailers want at eye-level in their stores and dispensaries, featured on their website, in their app, directly in front of the consumer… tantalizing, educating, and urging them to purchase. Admit it, you have an amazing product, and you want irresistible packaging design!
What does all gorgeous packaging have in common?
YES!! Branding!
Cool, you have been listening…
Yes, it’s true, we’re extremely passionate about packaging design (and branding). That’s why we’ve committed our professional life to the packaging design industry. We want to understand why a consumer is compelled to purchase one package over another. What makes this package so hypnotic and desirable? We want the graphics, colors, messaging and overall design to appeal to something deep inside of the discerning adult consumer. It’s our goal to create a personal connection that expands beyond the product itself. The packaging is more than a mere vehicle. It should hold the sale, inform, and delight the consumer.
Did you know that packaging design is one of the last sustaining manufactured print products?
Think about it. Magazines, books and literature, posters, flyers, brochures, album covers (yes, I remember vinyl), even business cards are on their way out. But, product packaging is here to stay. It can’t be purely ‘digital’; the product has to go into something for transport, storage, information, and more.
Your packaging is a billboard that represents your entire brand.
Your branding will dictate the look and feel of your packaging, and the language used to communicate the product’s value to the consumer.When you get this part right, you can experience huge rewards. But if you get this wrong, you may never get a second chance. Ouch, that stings…
Many businesses get this wrong, especially those in newer industries like the legal cannabis, CBD, and hemp industry, for example. Some companies opt for a white label product and simple packaging design created by the white label company. Or they print their own labels using their DIY logo and wonder why it’s not selling. It’s a great product, tried and true, but the packaging doesn’t communicate the brand value to the consumer effectively resulting in #epicfail.
Why focus so much energy on Brand Driven Package Design?
If the goal is to be visible, popular, and profitable, your product packaging can’t be an afterthought. Your branded product packaging is part of the big picture. It’s functional marketing and should be treated as such. Keep it simple, clean, and on-brand, and you can’t go wrong. You got this!
Here is your mini cheatsheet:
Branding (need I say more?)
Your spot-on brand identity comes first, it has to, because your packaging design is a reflection of your brand. The logo, colors, fonts, imagery, and language must be indicative of your unique differentiation as a brand.
Sustainability (it’s time to save the planet!)
Make sure that your packaging materials reflect your brand values and mesh with the product. Sustainability issues and concerns are critical due to the potential negative impact on the environment. Consider recycled and/or recyclable materials, and work with regulators and lawmakers to improve access and feasibility.
Primary vs. Secondary Packaging (what does it all mean?)
Primary packaging is what directly holds and contains the product (like a bottle). Secondary packaging is the exterior packaging (like the box that holds the bottle) that protects and/or labels the product. Tertiary packaging is used for bulk handling, storage, and distribution.
Specialty Design Agency (can you say branding?)
Choose an agency that is or has worked closely with you on the development of your brand. A professional agency will have designers with expansive knowledge regarding packaging design, print production, branding, and marketing. Your packaging design, website, and marketing efforts must be intrinsically and cohesively linked to your brand identity.
Wait, maybe white label or private label would work for you. But, in that case, is branding still a valid concern?
I’m so glad you asked! White labeling is hot and trending in the cannabis industry. But, is it right for you? Let’s take a look…
What are White Label Products?
White label products are mass produced by a manufacturer as a generic product, and sold to a retailer who will in turn add their own label and sell it under their brand name. The formula is standard and typically, cannot be customized. So, the only thing that you can customize is the branding, packaging design and brand marketing.
What are Private Label Products?
Private label products are produced by a manufacturer as well, but in partnership with the brand to create a unique formulation. It is a longer, more expensive undertaking, but it results in an exclusive product. Retail brands use this to differentiate their products and cater to their niche audience.
White Label vs. Private Label
How do business owners decide which is the best investment for them? Well, it’s important to weigh the price differential. White labeling is more affordable, but the product is not original. Private label requires a more substantial investment, but it allows for collaboration, flexibility, and exclusivity with regards to formulation, and in some cases, trademarking and market share. But, unless you have a loyal, expansive customer base and exceptional branding/marketing, it could be difficult to compete against established, well-known brands.
What is exactly the same?
BRANDING! In the end, no matter the direction you choose, a white-label product or a private label, the only way to optimize your visibility and assure that your product stands out is branding. Having professional, eye-catching branding, a spot-on brand story and a unique branded marketing strategy can earn you distribution, shelf space, and loyal customers now and in the future.
Short story long, if you are in this to win this, do it right the first time! Make it custom, make it YOURS!
NCIA’s DEI Program New Year Update
by Mike Lomuto, NCIA’s DEI Manager
We must not let federal legalization become the “War on Drugs 2.0.” Rather, it must be the foundation for the building of generational wealth.
The modern-day cannabis industry is the product of a century of prohibition and the war on drugs. With federal legalization fast approaching, it is up to us all to ensure that this industry does not become the “Drug War 2.0.”
At the National Cannabis Industry Association, we recognize the importance of impactful Diversity, Equity, and Inclusion initiatives.
At the core of our DEI Program is our Equity Scholarship Program (ESP). Launched in 2020, nearly 200 ESP members are enjoying the benefits of a complimentary first year of NCIA membership thanks to this program and its financial sponsors.
Equity Scholarship Program Features
Complimentary passes to all NCIA events
Live Social Equity Workshops at our national conferences
Weekly video conference calls
Facebook community
Catalyst Conversation Educational Webinars
Unique Opportunities for ESP Members to Leverage NCIA’s Platforms
Greater representation on NCIA panels and webinars
“Being part of the program has transformed our company. The mentorship we’ve received has been instrumental in our growth. Being part of NCIA provided opportunities for us to gain new business relationships, become committee members, and participate in webinars. It’s also been great meeting other social equity members and building a community together.” – Kay Villamin, Hush Chicago, NCIA’s State Regulations Committee
As a trade association, at the core of NCIA’s mission is to create industry-shaping policy advocacy. Our Diversity, Equity, and Inclusion Program is ensuring that diverse voices are properly integrated into that advocacy, including:
Launching NCIA’s Sustainability Collaboration, in collaboration with several dedicated NCIA Committee Leaders, with an emphasis on incorporating the DEI perspective, which is too often left out of the sustainability conversation
A new Health Equity project in development
Of course, Diversity, Equity, and Inclusion would be meaningless unless we see that greater representation plays out on our biggest stages and in our board rooms.
NCIA has one of the most diverse boards of directors in the industry, including members who joined NCIA through our Social Equity Scholarship Program
Increasingly diverse representation across the leadership of NCIA’s fourteen sector committees
Consistently inclusive representation on panels – live and virtual. The overwhelming sentiment at our recent Midwest Cannabis Conference in Detroit was that it was “the most diverse and inclusive conference” many speakers and attendees had ever experienced
“I’m a firm believer that the more you give, the more you get, and my experience at NCIA is proof of that. Becoming a scholarship member at NCIA as a woman and minority founder has been an incredible opportunity… Committee work has rewarded me with new perspectives, recognition, and invaluable relationships that have strengthened my business.” – Helen Gomez Andrews, Co-Founder & CEO, The High End; Committee Organizer, DEI Committee
“The Scholarship Program gave way more than we could ever ask for. As a veteran and minority-owned company, with a core focus on community impact through cannabis, we have been provided with important opportunities and resources. The program is holding the door open for others like us to enter into the industry. You will not regret being a part of the Social Equity Scholarship Program.” – Keyston Franklin, The Doobie Room; Vice Chair, Banking Committee
As we continue to build for the integrity of the industry and future generations, we are looking for partners to join us.
Equity Member Spotlight: Better Days Delivery Service
This month, NCIA’s editorial department continues the monthly Member Spotlight series by highlighting our Social Equity Scholarship Recipients as part of our Diversity, Equity, and Inclusion Program. Participants are gaining first-hand access to regulators in key markets to get insight on the industry, tips for raising capital, and advice on how to access and utilize data to ensure success in their businesses, along with all the other benefits available to NCIA members.
Tell us a bit about you, your background, and why you launched your company.
I grew up in Colorado Springs in a single-parent home, overcame poverty, violence, houselessness, and a felony for marijuana possession to get to the place that I am in today. I’ll never forget the immediately depressing feeling of knowing that I’d lost opportunities, let my mom, my family, and my community down when initially being charged with a felony for marijuana distribution. Thankfully my people reminded me that I am much more than this scarlet letter F represents. I did my time, paid my restitution, and kept on grinding. Now a father of two beautiful babies, their presence is a constant reminder that I can’t give up. Left out of the weed industry, I focused on community and education as a 5th grade teacher. I decided to leave the classroom to start this business because I wasn’t happy due to the politics and wasn’t feeling valued in my career. I have worked hard to break out of the cages/boxes that I was placed in. I have been turned down for housing, employment, and have had doors closed because of this felony but I keep the belief that when one door closes another opens and because of that I’m determined to succeed. The weed industry seems much more of a fit for me, I chose delivery because it was the easiest point of entry however I dream of one day being vertically integrated.
What unique value does your company offer to the cannabis industry?
Our company, Better Days Delivery Service, offers a community aspect that is sorely missing in the industry. In my opinion, most of the industry hasn’t done their due diligence to truly serve and build relationships with patients. We have partnered with the nurse network so that they are able to give true medical advice while we work on the discreet, quick, personable service that we have become known for. Safe, affordable, discreet service is mandatory, we offer luxury and frequent flyer convenience as well. By focusing on the customers that are often overlooked, I am confident that we can provide a service that will revolutionize all of the industry. We want to deliver weed with the personable service that existed before the industry existed, I want to remind people that it’s still possible. Who wouldn’t love a delivery company that reminds our customers that our worst days are behind us? “Better Days Are On The Way.”
What is your goal for the greater good of cannabis?
In the words of 2Pac, “better days got me thinkin’ ’bout better days!” My goal for the greater good of cannabis is to remind people of the healing aspects of the plant. I want to help free everyone that has been incarcerated or charged for anything to do with the plant. I want to contribute to scientific research that will help heal and help people live despite their ailments. I would love to see it totally decriminalized and if I am able to pay my bills and make it better for my family in the process even better!
What kind of challenges do you face in the industry and what solutions would you like to see?
Michael Diaz-Rivera
The biggest challenge that I have is a lack of capital both financially and socially. It is not cheap to get into the industry and I have been bootstrapping and using my savings thus far. Having access to all of the money that I would need to reach my dreams and create generational wealth would be perfect. I’ve also noticed that in this industry, it pays to know people as a social equity licensee. I feel like the majority of the industry looks at us as if we’re begging for scraps. Because of that, I’ve worked to build relationships with powerful people who have a true commitment to equity and support for those who have less.
I’ve also begun the steps to make my business a social enterprise. The true challenge in being a business that works for social good will be to find a balance between profit, sustainability, and social impact. I aim to do exactly that!
Why did you join NCIA? What’s the best or most important part about being a member of the Social Equity Scholarship Program?
It was important for me to build a network and NCIA is just the trade organization to help me do that. NCIA has been a platform that helps me get into the doors that I usually wouldn’t be able to access. I am able to ask important questions about the development of my business to those with answers. The social equity program allows me to chat with those from similar upbringings while sharing the tools and resources to help us all succeed. The most valuable part has been the sounding board and emotional support that the group continues to provide.
As a nation, we have to be accountable for the “war on drugs” as everyone turns their eyes toward federal legalization. Without accounting for the harm that continues we’ll never get to the “better days” that the people deserve.
Member Blog: How a Better Understanding of Data Can Propel Cannabis Companies
Propelled by new legalization easing the regulations and laws surrounding its use and distribution, the nascent cannabis industry has experienced unparalleled growth. Expected to expand at a CAGR of 26.7% from 2021 to 2028, the market is loaded with potential for up and coming businesses.
However, to realize this potential and maximize one’s ROI requires a thorough understanding of the industry and the flexibility to evolve with the market. Thankfully, the recent legalization of cannabis in many states has spurred a significant increase in available data for organizations to use in facilitating their decision-making.
Understand key market trends
Lacking a mature market history due to cannabis just recently being legalized, businesses within the cannabis industry can’t reflect on previous purchasing trends in strategizing their approach to consumers. Whether or not a product experiences success largely depends on it being positioned in the right market segment.
By leveraging transactional data based on a variety of factors (demographic, seasonality, delivery method, etc.), organizations can identify which products are selling and who they’re being sold to. The wide diversity of both available strains and consumer demographics means there is no one-size-fits-all solution to cannabis.
Additionally, the cannabis industry’s young age and heavy investment in product innovation has produced a relatively volatile market. Businesses have to be able to quickly adapt to the always-evolving consumer trends if they’re to remain successful.
Utilizing data in their decision-making can also aid executive administrators in creating long-term business strategies and identifying realistic goals.
Identify opportunities for improvement
Many organizations still guide their decision-making based on factors like gut feelings and prior experiences, which are prone to error and often fail to address the underlying causes in any given situation. Without access to the right metrics, it can be very difficult for both young and mature businesses to identify weak points in their enterprise.
Hidden in the data are countless opportunities for improvement from product design to customer processing. Organizations need a way to transform their data’s potential into meaningful insights if they’re to successfully scale their business.
Comprehensive data analytics systems are capable of employing automated business rules to generate useful metrics for determining what steps an organization needs to take to grow its enterprise. Many platforms come with a host of built-in KPI measures as well as self-service features that allows users to define their own business rules custom-tailored to their businesses’ needs. This means that organizations can apply analytics in a manner that best suits their own unique circumstances.
Comply with regulatory policies
The complex legal status of cannabis has led to an extensive list of regulations and laws that must be abided if the industry is to experience any long-term sustainability. Even in regions where cannabis has been legalized, governing bodies still maintain strict requirements in terms of product quality and distribution. Many of these challenges are only complicated by the fact that the different regions a business operates in all have their own set of unique rules.
Because most of these requirements are monitored and enforced through data collection systems, businesses have to implement a reliable analytics platform that can track product data all the way from cultivation to retail. In addition to handling information governance on an organization’s behalf, enterprise data solutions also employ automated features to mitigate the penalties incurred from human error.
Furthermore, by reducing the employee labor costs associated with ensuring regulatory compliance, businesses can free up time and energy for staff to focus on other business functions.
Optimize supply-chain operations
Supply chains, regardless of industry, have always depended on data to guide the transportation of products and ensure that inventories always reflect market demand. However, the short shelf-life and complex regulations of cannabis has made it even more critical that businesses turn to comprehensive analytics platforms.
Due to the volatile nature of the cannabis industry, businesses need real-time data reporting that can allow them to adapt to the always-evolving market trends quickly and efficiently. Every level of the supply chain is prone to a variety of risks and potential obstacles that businesses must be able to respond to at a moment’s notice. The ability to address a minor setback before it turns into an emergency can have profound implications for both the short- and long-term success of a business.
Outside of responding to potential accidents, data analytics can also optimize the more general functions of the supply chain and increase a business’s ROI. By coordinating schedules, maxing cargo loads, organizing inventories, and addressing other potential areas of weakness, businesses are able to reduce wasted time and resources.
John Kievit is Dimensional Insight’s Vice President of Goods and Services, Industry Strategy, and Business Development. In this role, Kievit helps Dimensional Insight understand customers’ needs and their use of its products. Kievit has nearly 40 years of experience in such a role, including working as an Administrative Vice President for sales and marketing. In addition, he has handled multi-million-dollar portfolios during his years in the goods and services industry, many of which involved using Dimensional Insight’s products, and spent many years in direct sales management.
Deciding how your organization implements data analytics depends entirely on the needs of your business and what your long-term goals look like. Solutions like Dimensional Insight’s CannaBI provide a comprehensive data governance package and manage your data at every step of the way, from integration to visualization. To learn more about how analytics can help your business grow, check out Dimensional Insight’s webpage on the cannabis industry.
Video: NCIA Today – Friday, December 10, 2021
NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every Friday here on Facebook for NCIA Today Live.
Member Blog: When Sustainability Comes to Compensation in Cannabis
by Fred Whittlesey, Founder, President, and Principal Consultant of Cannabis Compensation ConsultantsTM
Member of NCIA’s Human Resources Committee
At the NCIA Cannabis Business Summit & Expo next week, there is an all-day workshop on the topic of sustainability. As a member of the NCIA Sustainability Committee, representing the NCIA Human Resources Committee, I have been actively involved in putting this together. While this session will not directly address my specialty, employee compensation, there will be discussion of how broad the idea of sustainability is, and how it permeates every element and every decision in a business.
Not a day goes by that I don’t receive in my inbox one or more blogs, articles, or studies on introducing ESG metrics into executive compensation incentive plans. It’s all the rage. Consulting firms that published opinions only two years ago that this was “not a prevalent practice” and “not consistent with the current corporate governance environment” have been proven wrong.
I have been presenting on this topic, in the context of compensation, since 2014 – in London, Vancouver BC, Los Angeles, San Francisco, Silicon Valley, and Seattle among other places and virtual spaces.
As recently as 2019 we still couldn’t figure out what to call it. CSR, ESG, Triple Bottom Line, etc. These discussions inevitably include reference to Conscious Capitalism as well. I went to my first Conscious Capitalism conference, in San Francisco, in 2013. The key concept of Conscious Capitalism is consistent and balanced treatment of all stakeholders, not just shareholders. Employees, customers, suppliers, the environment, the community.
But the discussions today are primarily about adding ESG metrics to existing executive compensation structures. There’s a lot of greenwashing going on there.
Sustainability is not just about metrics, as essential as good metrics are for measuring progress. Building a sustainable organization is about more than carbon emissions, recycling, water conservation, and biodegradable packaging. Sustainability is a risk management strategy.
A prominent risk factor in every business is people. Not just regulatory enforcement of labor laws, or risk of litigation from discrimination, or wage and hour law violations. Building a sustainable organization is reducing the constant churn of employees, avoiding destructive labor cost-cutting to pacify shareholders while extracting the funds from other stakeholders, and considering social justice goals when deciding how to pay people.
At that first Conscious Compensation conference for me, I was astounded that employee compensation was not mentioned once. Well, one speaker had one bullet point on one slide that said “employee ownership” – that was it. I returned from the conference and trademarked the term Conscious Compensation® because you can’t practice conscious business without considering how you share value with your employees. From the trademark grew a conceptual model and then dozens of conference presentations, gradually sliding in the sustainability theme while avoiding the appearance of a “save the whales” label.
Now it’s the core of my approach to compensation advisory services. I may not call it that, but it’s in there.
It fits perfectly with the ethos of the cannabis industry. If I was a speaker at next week’s Sustainability workshop, I’d be talking about all of this. In the meantime, check out my other blog this week on the session, Cultivating Your Workforce where we will be discussing compensation.
Fred Whittlesey is the Founder, President, and Principal Consultant of Cannabis Compensation ConsultantsTM, a Compensation Venture Group SPC company.
Fred is a member of the NCIA Human Resources Committee and the NCIA Sustainability Committee.
Fred is recognized by corporations, professional organizations, universities, media, and colleagues around the world as a compensation expert and thought leader. His ideas have been presented in numerous book chapters, journal articles, media interviews, conference and seminar presentations, and hosted blog postings.
Fred’s thought leadership in the field of compensation is evidenced by his delivery of more than 300 conference presentations, seminars, certification courses, webinars and podcasts. He has presented and taught in 26 US States, 4 Canadian Provinces, UK, Ireland, France, Germany, Netherlands, Switzerland, Turkey, and Indonesia.
He has authored more than 50 peer-reviewed journal and magazine articles, book chapters, white papers, and sponsored papers. He has been a paid writer for PayScale.com, Salary.com, InvestorJunkie.com, and SeekingAlpha.
Fred has been interviewed and quoted more than 100 times by more than 35 different media sources including Associated Press, Bloomberg, Business Week, Fortune, New York Times, Los Angeles Times, Orange County Register, Seattle Times, San Jose Mercury News, and San Francisco Chronicle. He has been retained to conduct research to support investigative journalism for The Los Angeles Times and The Boston Globe.
Cannabis Compensation ConsultantsTM is a division of Compensation Venture Group SPC, a Washington Social Purpose Corporation. The company is a Green America Certified Business.
The firm specializes in compensation strategy, executive and director compensation, equity-based compensation, incentive design, and employee pay with a focus on sectors driven by innovation. We also provide expert witness and litigation support for civil litigation and regulatory matters. Our clients include Boards of Directors and executive teams of public and private companies, LLCs, S corporations, and foreign subsidiaries.
Our Canadian sibling consulting firm is Conscious Compensation Group Inc. in Squamish, BC.
Member Blog: Compensation in the Wild West of Cannabis
by Fred Whittlesey, Founder, President, and Principal Consultant of Cannabis Compensation Consultants
Member of NCIA’s Human Resources Committee
At the NCIA Cannabis Business Summit & Expo next week, there will be a panel session titled Cultivating Your Workforce. As a member of the NCIA Human Resources Committee, I have been actively involved in putting this together, and as a compensation expert, I wanted to ensure there is going to be, of course, a lot of discussion about compensation – executive compensation, incentive compensation, and employee ownership.
It’s appropriate that this month’s #CannaBizSummit is being held in San Francisco, arguably the historical culmination of Wild West culture, with the Gold Rush as its driver. Not unlike today’s cannabis industry – a gold rush of sorts, by federal definition a lawless community, and a community culture of moving fast and defining as we go.
As a compensation expert, I typically prefer a more orderly and well-defined world, which is why I am fascinated with working in the field of compensation in the cannabis industry. It’s challenging because I am in the business of answering clients’ questions about compensation. It’s not always easy to do in cannabis.
There are three factors that explain where we are today in understanding and analyzing compensation levels and practices in cannabis, and three driving forces that will take us from today’s Wild West to tomorrow’s still innovative, still creative, but a bit more business-like approach to compensating employees in cannabis companies.
Today
No valid compensation surveys or databases exist for the cannabis industry. There are various publications that self-label as “surveys” but are merely data compilations missing the rigor of survey methods that have been established over the past decades:
Little or no definitions of jobs
Extremely wide ranges that defeat usability
Reports of cash compensation only, some with base salary only
Very small sample sizes, often not disclosed
No list of participating companies
In short, they’re not compensation surveys. Established survey companies have not entered the cannabis market due to legal and/or stigma factors. They will, eventually. But they’ll be late to the party, so to speak.
For now, we have no real market data. Except for some executive positions…
For executive positions and equity compensation plan design details, data from public company securities filings continues to be the most valid and reliable source
Securities and Exchange Commission EDGAR filings (U.S.)
System for Electronic Document Analysis and Retrieval (SEDAR) (Canada)
Despite currency, cultural, and governance differences, combining U.S. and Canadian data makes sense given the integrated labor market for talent. But it’s no easy task.
Unlike for publicly-traded companies in the U.S., executive compensation information for cannabis companies is difficult to obtain and interpret for multiple reasons:
Most companies are listed on Canadian exchanges
The Canadian disclosure requirements are less rigorous, such as:
Lack of a single table for all forms of executive pay
No dollar value required to be calculated for equity compensation grants
Limited disclosure of the history of equity compensation grants
Companies whose shares are traded in the U.S. are not on major exchanges and not subject to the extensive disclosure requirements of NYSE and Nasdaq companies. This is changing – as exemplified by last week’s listing of the SPAC Canna-Global Acquisition Corp (NASDAQ:CNGLU) on Nasdaq, but SPAC listings have a reduced set of disclosure requirements. (full disclosure: I am an investor in CNGLU.)
Most companies are of a size and status (e.g., Emerging Growth Company) that also have reduced pay disclosure requirements.
So, despite what is a rich source of executive and equity compensation data which we have relied on for decades now, these databases are not (yet) of the same usefulness as for other industries.
And even if we didn’t have those tactical issues… the characteristics of the cannabis industry exacerbate these difficulties:
Smaller companies and private companies
High-growth stage, resulting in the lag time in reporting rendering the information significantly out-of-date
High concentration of founders and insider ownership, which results in compensation levels and practices that are not free-market based – one CEO taking zero compensation and another in the 8 figures.
Top-heavy C-level position structures, e.g., an Executive Chair and a CEO and a President and a COO – too many chiefs
So, the question of how much this company pays its top executives… is an unanswerable question. I wonder if even the company could answer that question?
Tomorrow
The turbulence in executive compensation levels and practices will lessen, and our knowledge and understanding will improve, when three trends converge:
More public companies, including SPAC deals, and continued M&A activity, bring in more outside investors with expectations of corporate governance and practices consistent with other industries in which they are invested. This also will have the effect of lessening the influence of founders as more “professional” (hired external) Board members are added to the governance structure.
With more public companies will come more market data, as we have for most industries today both in the U.S. and Canada. While limited to the top 3 or top 5 executives in each company, these disclosures provide a factual and verifiable dataset for the most senior positions, for the use of equity compensation for employees, and for the breadth of executive compensation arrangements such as new hire packages, severance and change in control agreements, and various perquisites.
And of course, legalization. With the U.S. federal restrictions and the associated stigma removed, cannabis companies will become subject to the same governance, institutional investor and proxy advisor pressures, and the large consulting firms will push them toward the ISS/Glass Lewis “playbook” approach to advising. I’m not saying that’s a good thing, because it’s not, but we already see it happening in Canada where large multinational compensation firms are overlaying the boiler-plate ABCs.
It is my hope that the innovation and creativity we see in the cannabis sector today will not suffer from these three dynamics. There’s nothing wrong with living in the Wild West, if you’re comfortable with fewer rules, fewer constraints, and less transparency. But it helps when there is a Sheriff and a couple of Deputies in town.
This conversation is not limited to executive compensation. Equity compensation for all employees is a common aspiration in cannabis companies. Equity compensation plans are always complex to design, implement, and administer and are exponentially more so in cannabis companies. Complex organization structures with public entities, private companies, LLCs, and even nonprofits all bring talent from diverse industries with vastly ranging experience with and expectations for equity compensation.
A trimmer coming from agriculture or a Dispensary Manager from specialty retail has likely not received equity as a component of their compensation in the past.
A chemist coming out of biopharma or a software developer, if told there is no equity compensation plan for all employees at your company will be, at the least, disappointed if they even continue interviewing with you.
Similarly, a candidate from the financial services world may be surprised that every employee is not participating in one or more cash incentive plans, not just the sales reps. There is a LOT of work to be done on compensation planning in the cannabis industry, and I’m thrilled to be right in the middle of it.
Fred Whittlesey is the Founder, President, and Principal Consultant of Cannabis Compensation ConsultantsTM, a Compensation Venture Group SPC company.
Fred is a member of the NCIA Human Resources Committee and the NCIA Sustainability Committee.
Fred is recognized by corporations, professional organizations, universities, media, and colleagues around the world as a compensation expert and thought leader. His ideas have been presented in numerous book chapters, journal articles, media interviews, conference and seminar presentations, and hosted blog postings.
Fred’s thought leadership in the field of compensation is evidenced by his delivery of more than 300 conference presentations, seminars, certification courses, webinars and podcasts. He has presented and taught in 26 US States, 4 Canadian Provinces, UK, Ireland, France, Germany, Netherlands, Switzerland, Turkey, and Indonesia.
He has authored more than 50 peer-reviewed journal and magazine articles, book chapters, white papers, and sponsored papers. He has been a paid writer for PayScale.com, Salary.com, InvestorJunkie.com, and SeekingAlpha.
Fred has been interviewed and quoted more than 100 times by more than 35 different media sources including Associated Press, Bloomberg, Business Week, Fortune, New York Times, Los Angeles Times, Orange County Register, Seattle Times, San Jose Mercury News, and San Francisco Chronicle. He has been retained to conduct research to support investigative journalism for The Los AngelesTimes and The Boston Globe.
Cannabis Compensation ConsultantsTM is a division of Compensation Venture Group SPC, a Washington Social Purpose Corporation. The company is a Green America Certified Business.
The firm specializes in compensation strategy, executive and director compensation, equity-based compensation, incentive design, and employee pay with a focus on sectors driven by innovation. We also provide expert witness and litigation support for civil litigation and regulatory matters. Our clients include Boards of Directors and executive teams of public and private companies, LLCs, S corporations, and foreign subsidiaries.
Our Canadian sibling consulting firm is Conscious Compensation Group Inc. in Squamish, BC.
Member Blog: Cannabis Supply Chain Roadmap – Control What You Can, Plan For The Rest
by Gary Paulin, VP of Sales and Client Services at Lightning Labels
In a world where instant gratification has run headlong into supply chain snafus and delays, something has to give. In the cannabis industry, the keys to success are to control what you can and plan for what you can’t.
Being proactive, creative, and resourceful are the keys. Cannabis purveyors are facing shortages of products and packaging. Shipping challenges, both from suppliers and to consumers, also are in the mix. And, with consumer demand through the roof, competition for fewer supplies available in a timely manner has become superheated.
What can cannabis companies do to maximize customer satisfaction while minimizing stress levels at this critical time?
The short answer can be found in the Serenity Prayer, which states in part: “God, grant me the serenity to accept the things I cannot change, courage to change the things I can, and wisdom to know the difference.”
In short, take and keep control of what you can realistically control, do contingency planning for occurrences out of your control, and know the difference between the two. One example of how to keep control: Companies facing potential shortages in many cases can build up inventory of available products, including labels, containers, and the like. Extra costs involved in doing this can be substantial, but compared to not being able to fulfill orders and having to deal with consequences — including falling revenues and workplace stress — it can be a relatively small price to pay.
One example of how to do contingency planning: Cannabis companies not in direct control of manufacturing everything that goes into a product need to figure out workarounds. In some cases, this may include advising consumers of potential looming shortages. In others, finding substitute sources that can step in if needed may be well worth the time it takes to do the research.
Again, this may cost more, but at this critical time, cannabis companies need to compare that to the cost of not doing it.
Following are specific steps cannabis companies can take to stay on top of supply chain snafus:
Determine what suppliers are clearly able and willing to meet your needs. In the label world, for example, talk with your supplier to look at likely needs through at least the first quarter of 2022. Make this company your proactive partner to offer insights about the best strategies to ensure you’ll have what you need when you need it. In some cases, this is as easy as knowing they will carry adequate supplies and perform well because they think and work ahead. In others, work with the supplier to figure out options that can substitute for something that may be in short supply.
Ramp up customer service efforts. No matter how supply chain challenges are impacting your company, spend extra time and effort to keep your customers happy. Often, frustrated or demanding customers can be made happier with sincere, empathic customer service. In addition, where possible, be proactive with customers about what they’re willing to tolerate (e.g., longer turnaround in exchange for lower price). By assessing, then fully addressing, customer needs, you can achieve positive reviews and enhance reputation by showing your ability to tune into their needs. Be real and follow through on commitments. There’s almost nothing worse than promising performance, then not delivering. If you tell them you’re going to do something, including contacting them back, do it when you say you will.
Make shipping as predictable as possible. Both for incoming and outgoing, figure out what you can expect (e.g., transportation directly under your control), and where you’ll need to rely on third-party shipping. Do some research about shippers to identify emergent issues, talk to your regular shippers about what to expect/plan for, and find substitute solutions if needed. You may also have to factor in higher shipping costs, at least through the first quarter of 2022.
Research buying trends into near-to-mid-term planning. High consumer demand is here to stay, at least for a while. As best you can, figure out what the next few months are looking like, factoring in buying demand specific to cannabis as well as the bigger global picture. Between the pandemic roller coaster, economic volatility, political and social upheaval, and proliferation of severe weather destruction and disruption, there is much beyond the realm of cannabis that may impact buyer demand and the supply chain for months, if not years.
Build in breathing room where possible. Such options as subscribe-and-save and discounts for orders with longer lead times are two measures that can take pressure off cannabis companies to a certain extent. Following the lead of such companies as Amazon, provide incentives for discounts when customers select longer lead times or commit to a regular ordering pattern.
Gary Paulin is VP of Sales and Client Servicesat Lightning Labels, a Denver-based custom label printer that uses state-of-the-art printing technology to provide affordable, full-color custom labelsand custom stickers of all shapes and sizes. Contact: sales@lightninglabels.com; 800.544.6323 or 303.481.2304.
Video: NCIA Today – Friday, December 3, 2021
NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every Friday here on Facebook for NCIA Today Live.
Member Blog: Stickier Products Need Thicker Gloves, Right?
“My gloves keep ripping” is a common frustration we hear from cannabis businesses, especially growers and processors. If your gloves are ripping just buy thicker gloves, right? Maybe. It is a common misperception that thicker gloves are stronger, but this is not always the case. Here are four factors about glove thickness to understand that will help solve this chronic glove problem.
4 Things to consider before buying a thicker glove
Thicker does not mean stronger – A glove’s strength is directly related to the quality of materials used to make it. Period. A glove’s raw material ingredients account for 45% of the production cost. Gloves can have fillers, like carbon black, silica and chalk, added to manufacture them cheaper. Chalk doesn’t stretch. When fillers are added to reduce production costs, the glove’s durability and elasticity will reduce as well.
In one minute, this video shows how to estimate the quality of your nitrile gloves. When buying disposable gloves, always remember, a gloves’ strength is directly proportional to the quality of ingredients used to make it.
Musculoskeletal issues – Low-quality, thicker gloves have less elasticity which in turn makes workers’ hands use stronger muscle force, increasing the chance of injury. For example, a worker’s hand could have unnecessary force put on it with every hand movement they make while bucking or trimming the plant. A disposable glove needs to be of a high enough quality to perform the task and protect the product and the wearer, but excessive thickness can create additional issues. A better-made glove can be thinner while outperforming cheaper, thicker gloves.
Worker efficiency – Despite its thickness, a glove made with lower quality ingredients will rip more frequently. When your staff is constantly having to stop working to change failed gloves, productivity decreases. When workers are busy changing failed gloves they are no longer planting, growing, harvesting, trimming, or curing. Gloves that perform will increase overall productivity and efficiency, not to mention worker satisfaction.
Increased waste – Another possibly less considered consequence of buying thicker gloves is the environmental impact. Glove thickness directly correlates with the amount of waste, disposal costs, and environmental impact generated. A thicker glove equates to more material per glove being disposed of. A glove made of cheap ingredients that fails more frequently will also negatively affect a businesses’ sustainability efforts by increasing the overall quantity of gloves used. Generating more waste will in turn increase disposal costs and the amount of waste that ultimately is put into landfills.
Cannabis plants can be prickly, sticky, and sometimes relatively tough on disposable gloves. A better glove is needed. A better glove, not necessarily a thicker glove. Additionally, different stages in producing cannabis products, from growing to harvesting to processing to tinctures to edibles, can require different gloves. A single glove most likely will not live up to the performance and safety requirements at the various stages. The best way to know you’re buying a quality glove is to purchase from reputable suppliers with specific and ongoing quality control procedures in place. This ensures glove quality, performance and protection, all of which directly mitigate risk to your product and business.
Trustworthy and knowledgeable glove suppliers will be able to help arrange glove trials through which you will be able to determine the best glove to use for every task. Purchasing too heavy of a glove for a task increases costs unnecessarily. Investing the time into ensuring you are sourcing the correct gloves will protect your product, workers and budget.
Disposable gloves are not indestructible. Some tasks, like harvesting and trimming, do require a thicker glove even when they are made of the highest quality. But simply put, a thicker glove spec is not always the answer to a sticky situation.
Eagle Protect, the world’s only glove and PPE supplier to be a Certified B Corporation®. Eagle Protect supplies disposable gloves and protective clothing to the food processing, food service, cannabis, medical and dentistry sectors in both the U.S. and New Zealand.
Eagle is implementing Delta Zero, a proprietary third-party glove analysis program to ensure a range of their gloves are of consistent high-quality, and free from harmful contaminants, toxins and pathogens. The Delta Zero program mitigates the risk of product contamination and recall due to the unknown use of dirty gloves.
After establishing Eagle Protect as an industry leader in New Zealand, where the company supplies approximately 80% of the primary food processing industry, Steve Ardagh relocated with his family to the U.S. in January 2016 and launched Eagle Protect PBC. Steve brought with him Eagle’s values of providing products that are certified food safe, ethically sourced and environmentally better. Steve is driven to keep consumers safe, one high-quality disposable glove at a time, and has been instrumental in developing Eagle’s proprietary third-party Delta Zero program glove testing program.
Member Blog: Business SMS Basics for Cannabis
by Matt Hostacky, Regional Sales Manager, Flex IP Solutions/Cannabiz Text
Text messaging is the next wave of communication to customers. 98% of all texts get received. 92% are read within 5 minutes. And 45% receive a response, and if you think that your customers want to engage their favorite businesses this way, you’d be correct. 85% of people polled want text message marketing from their favorite companies.
But how do you get started? How does it work? Are there technology requirements? Etc. Here are some of the common questions we get to help you navigate this great communication tool for your business.
What are the technology requirements? An internet connection and a computer with a web browser are all that is required for most systems.
We’re not tech-savvy, is the SMS system difficult to use or learn?No, most systems are very user friendly and intuitive. Most systems work through your web browser and can be set up and used in minutes with little more than a user guide.
Can I use my existing business phone number? Yes, most platforms support text enabling your 10 digit business number. This helps people recognize who the text is coming from and build brand awareness.
What are some of the common features of an SMS system? Series (drip campaigns), Surveys (polls), Time-Texts (schedule now, send later), Contact Segments (Tags or Identifiers), Compliance tools, Reports, and Keywords (Text “Vegas” for a chance to win a trip to Vegas). Above and beyond these key features you may want to consider having 2-way chat and/or automations capabilities for your business to help answer any questions your patrons may have.
Who can I market to? Existing customers or those that have “opted-in” in some way to receive your promotions and communications. You may have new prospects or customers text a keyword to get opted in for example. However, if you acquire a list of telephone numbers for outbound communications they are considered SPAM under the TCPA and CAN-SPAM acts and you should not message these numbers.
Do I need to stay compliant?And how? Yes. Most systems (or at least the good ones) have some form of compliance automation and tracking to help keep you covered. At a bare minimum you need to have a “please reply stop to opt-out” message in each outbound marketing message.
What are the costs associated with an SMS marketing system? This is probably the hardest thing to compare apples to apples. Typically, an SMS system is a monthly charge either per text or as a package of texts. Some systems lockdown certain features and charge extra for them a’ la carte. Other systems are part of a CRM or POS system and either charge per text or a fee to unlock that feature.
What should my business have in advance of getting started with an SMS system?
1) Make sure you’re collecting phone numbers from your customers today.
2) Have a marketing disclosure statement that customers sign either electronically or physically so you are legally allowed to market to them.
3) Have said customers and phone numbers in or able to be exported to an excel or .csv file so you can upload them as contacts.
4) Have a plan. Don’t just set up a system and start sending texts. Understand why you want to text, how you will text your customers, and what you will be texting your customers.
Compliance
So why is compliance so important? We’ve all received annoying texts we didn’t ask for letting us know we’ve won a cruise or there is a sale on cheap erectile function pills. The FCC and Mobile carriers are already working to put more measures in place to mitigate the number of robo-texts and SPAM that is being sent. This is called 10DLC Campaign Registry. 10DLC Campaign Registry is too much to cover in this blog but you can find out more here 10DLC Campaign Registry.
If you’re soliciting anything to your existing customer base you must have consent, see the TCPA and CAN-SPAM acts. The best practice for this is what is called a “double opt-in”. A double opt-in is having the customers’ consent twice. The first form of consent is typically in some marketing waiver that is signed or checked during the buying process, it’s no different than getting consent to call or email promotions. The second opt-in is during the texting process. Typically, the first text received will have a message that asks the customer to reply “YES” to continue to receive texts. You usually see this with keywords that ask the person to text a word to a specific number, when that happens an automated message will then ask the person to reply with “YES” to continue to receive messages.
Another form of compliance is opting out. You must always have a “please reply “STOP” to stop receiving texts…” message in your messages. The first question you should ask about any SMS/texting solution is if this is built into it, meaning if someone replies back with STOP at any time, does it remove them from your marketing list even if you don’t have the wording in the text? If the answer is no, it’s not a system you want to use. Once again the TCPA and CAN-SPAM acts mandate that you give the consumer a way to opt-out of receiving messages from your business. And you’ll want a system that captures and can report on this as well.
Something to understand is that certain things are still illegal to promote via text, i.e cannabis. Mobile carriers (the companies that transport the SMS messages) like ATT, TMobile, and Verizon have filters that are looking for hot button or trigger words. So words like cannabis, marijuana, weed, edibles, and ganja are going to get flagged. This doesn’t mean that you can’t still use text message platforms. It just means that instead being obvious about what you text out you become a little more vague. Your customers will still know there is a sale on edibles if you say something like “2 for $20 on ABC brand yummy treats this week”.
Compliance doesn’t have to be all doom and gloom. Make it fun. The most successful businesses do an initial promotion or giveaway to get folks to opt-in to their text marketing. Another great tip is to put your business’ name at the front of the text with a colon so everyone knows who the text is coming from. i.e. ACME: Acme widgets on sale this week 20% off! Remember your customers want to hear from you, they want to stay informed of any new products or promotions… that’s why they’re your customers. They just don’t want to be bombarded with SPAM on their personal devices at all hours. So be courteous and make sure the number of text promotions is not too much and are being delivered at appropriate times.
Additional Use Cases
By now most folks are aware of the two most prominent use cases for business texting, 1) marketing and 2) appointment reminders. But there is a wide world of other use cases for texting that you may not have even thought about. And these use cases can help separate your business from others by delivering a “wow” customer experience.
Customer Service
Instead of phone calls, why not answer questions about your product or service using texts? The advantages of using text for customer service are:
Customers don’t have to wait on hold for the next agent
There is always a record for that customer to refer to
Your employees can handle multiple chats at one time unlike voice calls
You can automate answers to the most frequently asked questions.
Sales
Yes, this is different from marketing because marketing is one-way. With two-way texting you can interact with your customers the same as you would in-person or via a phone. Your sales force can provide the presales support that your customers expect but with the convenience of a text or picture message.
Delivery Notices
If you’re in the business of deliveries or in-home service these are a must for a great customer experience. Send pictures of your delivery driver in advance. Let your customers know when their package will be or has been delivered.
Alerts
During the COVID-19 lockdown, almost every business’ processes changed. Masks needed to be worn, social distancing observed, and a lot of businesses went to calling or texting when a customer or patient could be seen. The businesses that had an SMS platform ready to go didn’t miss a beat. There were signs like “Text our main number to let us know you’ve arrived” for things like veterinarian offices, healthcare, retail stores, and restaurants.
Business SMS is still relatively new, but the use cases continue to grow. Communication has moved to a person’s mobile device now and we don’t check or pay attention to email like we used to. People expect real-time alerts and notifications on their phones. Leveraging business SMS in multiple ways can provide a memorable customer experience to your patrons which will, in turn, create repeat customers.
Matt Hostacky, Regional Sales Manager, Flex IP Solutions/Cannabiz Text
Matt Hostacky, an IT and telecommunications industry veteran, takes a consultative approach to solve real-world business challenges with technology solutions. He serves as Regional Sales Manager for FlexIP Solutions Inc., a provider of managed communications services customized for businesses of all sizes and optimized for best value and performance. Hostacky advises customers on communications and collaboration strategies that leverage solutions, such as Cloud PBX, Unified Communications as a Service, Contact Center as a Service, Collaboration as a Service, SIP Trunking, Secure SD-WAN, Business Continuity and Disaster Recovery, and Business Text Messaging.
Immerse Your Business at #CannaBizSummit
by Madeline Grant, NCIA’s Government Relations Manager
The National Cannabis Industry Association (NCIA) will be holding its 7th Annual Cannabis Business Summit & Expo next month in San Francisco, California. From December 15-17, don’t miss the opportunity to network, engage with hundreds of exhibitors from the cannabis ecosystem, and immerse yourself in educational content. Also, you can discover the industry’s most exciting brands and next year’s best-sellers at the all-new BLOOM: A Brand Experience, debuting at #CannaBizSummit. For the first time at the nation’s most influential cannabis industry event, attendees will have the opportunity to see, touch, and smell products from dozens of brands specializing in flower, pre-roll, vapor, edibles, and more.
Are you a member of NCIA? Then use your benefits!
Depending on the tier of membership, don’t miss the opportunity to use your discounts and complimentary tickets for #CannaBizSummit.
Seeding members receive $100 discount on admission to NCIA trade shows
Blooming members receive five complimentary tickets to NCIA trade shows
Evergreen members receive ten complimentary tickets to NCIA trade shows
What educational content will be available?
Rest assured that there will be no shortage of educational content from speakers around the country. As the cannabis industry is ever-evolving, it is important to keep engaged and educated. This year, your ticket gives you access to all panel discussions and keynote sessions. You’ll get to join discussions on a range of subjects spanning cultivation, business services, licensing, compliance, retail, distribution, advocacy, and much more. Here are a few of the panel topics to check out:
Pathways to Federal Legalization: An Update from D.C.
Harmonizing Federal and State Cannabis Policy
Transparency, Values, Authenticity: The Principles for Successful Leadership
Wellness in Action: Elite Athletes as Cannabis Advocates
Founded in 2010, NCIA is the oldest, largest, and most effective trade association representing legal cannabis businesses. Through education and networking, you’ll discover new insights that help and grow your business all while meeting hundreds of industry professionals from around the country. With representation of all cannabis sectors and all business sizes, there is opportunity for attendees to gain invaluable knowledge.
Are you an NCIA member or interested in getting your business more involved?
Along with our annual trade shows, NCIA offers a wide range of membership benefits to help businesses become stronger, smarter, and more prosperous by working together to defend and expand the responsible cannabis industry.
I encourage you to meet with one of the NCIA staff in San Francisco to discuss how to fully utilize your benefits as a member. Membership with NCIA offers opportunities in marketing, business resources, policy, advocacy, networking, and education. Additionally, your support as members continues to propel our mission to promote the growth of a responsible, sustainable, and inclusive cannabis industry and work for a favorable social, economic, and regulatory environment. Please email Madeline@thecannabisindustry.org to set up a time to chat.
Are you interested in getting more involved in policy and advocacy work?
NCIA’s priority is to defend and advance the interests of the responsible cannabis industry in our nation’s capital. Central to our mission is the belief that our members should be treated fairly under federal law and that the cannabis industry much like any other legitimate business sector in this country. NCIA launched the Evergreen Roundtable for leading businesses looking to make a meaningful investment in shaping policy for the cannabis industry. Evergreen Member companies receive exclusive access to private briefings from members of Congress, inside information from NCIA’s government relations team, and many more opportunities to participate in the national conversation around cannabis policy. If your company is interested in supporting at this level please fill out the form HERE to set up a meeting with our Government Relations team.
Let’s Recap…
If you are an NCIA member, make sure you utilize your membership benefits. Find a refresh of your benefits HERE.
If you are not yet a member of NCIA and are interested in learning more please send an email to madeline@thecannabisindustry.org.
Don’t miss out on the opportunity to immerse your business and employees at #CannaBizSummit.
There is a lot of work to be done to ensure a value-driven, responsible cannabis industry and NCIA appreciates your support.
Video: NCIA Today – Friday, November 19, 2021
NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every Friday on Facebook for NCIA Today Live.
Thoughtful Legislation: States Reform Act Introduced
Photo By CannabisCamera.com
By Michelle Rutter Friberg, NCIA’s Deputy Director of Government Relations
Recent polling from Gallup showed that an astonishing 68% of Americans believe that cannabis should be legal. And while support spans age groups and party lines, cannabis is usually thought of as an issue Democrats champion – but one woman is looking to change that.
This week, freshman GOP Congresswoman Nancy Mace (SC) officially threw her hat in the cannabis reform ring with the introduction of the States Reform Act. Notably, this is the second comprehensive cannabis bill introduced by a Republican member of Congress (the other was sponsored by Rep. Dave Joyce, one of the co-chairs of the Cannabis Caucus).
According to Rep. Mace’s office, here are some of the things the bill does:
Ensures that no state or local government will be forced to change its current cannabis policies by removing cannabis from Schedule I and deferring to states.
Regulates cannabis federally like alcohol under USDA for growers, ATF/TTB for cannabis products, and FDA for medical use.
Institutes a low 3% federal excise tax on cannabis products to fund law enforcement, small business, and veterans mental health initiatives.
Ensures the safe harbor of state medical cannabis programs and patient access while allowing for new medical research and products to be developed.
Outlines the federal release and expungement for those convicted of nonviolent, cannabis-only related offenses. This will not include cartel members, agents of cartel gangs or those convicted of driving under the influence (DUI). Mace’s office estimates that approximately 2,600 releases will be expected at the federal level. State level releases and expungements will be left to each state to determine.
Protects military veterans by ensuring they will not be discriminated against in federal hiring for cannabis use or lose their VA healthcare benefits.
Protects children and young adults under the age of 21 from cannabis products and advertising nationwide. Incentivizes states to make cannabis illegal for anyone under the age of 21, with a medical exception for prescribed use. Provides funding to the Substance Abuse and Mental Health Services Administration to ensure protections for minors are being considered.
Protects medical cannabis for the following uses: arthritis, cancer, chronic pain, sickle cell, HIV/AIDS, PTSD and other medical uses per a state’s specific cannabis regulations.
NCIA applauds Rep. Mace for introducing this new and carefully thought out piece of legislation. There are many provisions in the bill that we support: low tax rates and barriers to entry, allowing states to lead – but also many areas with room for improvement like those pertaining to criminal justice and trade. NCIA will continue to work with Rep. Mace’s office to improve this bill and attempt to find common ground across political parties in order to advance cannabis policy reforms.
Member Blog: Why an Efficient Dispensary POS System is Crucial for Cannabis Retailers
Running a cannabis dispensary isn’t like running any other type of business. You don’t only have the stress of inventory, expenses, a demanding customer base, and sales to worry about, but also incredibly stringent state, county, and city laws. State compliance is at the core of keeping your storefront running, but automating reporting with software can alleviate some of the stress associated with compliance.
Selecting a cannabis software that fits your business model is crucial to scaling your business. Here are five essential things to look for in an efficient dispensary POS system and how they will benefit your cannabis operation.
Improving Customer Experience
Customer retention will make or break your business. Building a base of happy customers is imperative for your dispensary to survive and thrive. There are lots of ways to create a memorable and positive experience for your customers. Seamless transactions, loyalty rewards, and employees that understand buying habits make it enjoyable for customers to shop. A premier dispensary POS system will give you control over all of these. Checking out customers quickly and efficiently, while utilizing a rewards program to incentivize them to come back is what customers expect and not all POS systems deliver on these expectations.
Another sign that a POS system is worthy of your business is one that has a strong user base and an active support team. Frequent engagement with their users and regular help center articles are a good indication that the POS provider is actively working with their community to solve issues and create a better experience.
Furthermore, the software provider should provide multiple training sessions when you come on board. This gives you, your staff, and management team the knowledge and know-how to use the software proficiently. A good POS provider will also help you develop standard operating procedures that best work for your business and their software. Implementing your software in tandem with best practices will maximize the efficiency of your dispensary. After all, POS systems aren’t always cheap, so you should expect a “white glove” approach by their team.
Optimizing Cannabis Inventory
There is very little room for mistakes in the cannabis industry. Inadequate cannabis ERP systems can cause issues with inventory discrepancies which can easily lead to compliance fines, penalties, and even your license being revoked. A reliable POS system provides accurate, real-time data that seamlessly allows you to manage your stock and improves customer shopping experience.
Better inventory management also helps in team day-to-day operations. When your staff can easily audit inventory and use reports to see what is selling, they can make informed decisions when purchasing stock to keep your customers coming back. This results in high customer satisfaction, repeat business, and more sales. You want to optimize your inventory ordering so you can have enough of the right products at the right times to meet demand and offer a superior customer experience.
Automating State Compliance
Compliance is the x-factor for cannabis businesses. Few other industries deal with regulatory restrictions as stringent as the cannabis industry. That’s why it is so important to have cannabis POS software that is integrated with track-and-trace programs selected by the state. Metrc and BioTrack are the most commonly used track and trace systems. You’ll want to make sure you dispensary ERP automates compliance reporting to avoid any risk of human error.
Real-time compliance integrations with Metrc and BioTrack will report sales accurately as they happen. There are no shortcuts when it comes to compliance so your cannabis POS needs to factor in all the required taxes as well. Additionally, it should enforce customer purchase limits and verify age. These are two regulatory rules that can quickly cause easily get your shop shut down if not strictly followed.
Useful and Seamless POS Integrations
Be wary of POS systems claiming to be all-in-one solutions. These tend to be masters of none. A great POS will integrate with other leading softwares to bring you a well-rounded platform. Look for one with a wide range of integrations that help with things like marketing, e-commerce, loyalty, analytics, etc. Finding a dispensary POS that supports your current tech stack will save you time and headaches.
It’s also useful to do research on software review sites to see how these integrations hold up. Just having integrations isn’t enough. These integrations need to work seamlessly with your POS system and be as easy to utilize as the platform itself.
Cannabis Software That Scales
The last thing you should look for in a POS system is one that has the ability to handle your business as it scales into multiple locations or a delivery fleet. Not all dispensary software can support a multi-storefront or delivery. It really comes down to the features and functionality. Is there a master inventory catalog that can categorize inventory across multiple stores?
Does your dispensary POS also offer built-in dispatch and delivery functionality? Evaluate which software can serve you best long-term versus a short-term fix. Look for one that broadcasts its new features, integrations, bug fixes, and improvements. This will give you a good idea of how the POS is keeping up with the pace of new industry advancements.
How to Decide on a Dispensary POS
Looking for these five things will give you a solid understanding of what your POS platform should have and steer you in the right direction when it’s time to buy. There are a few additional ways to evaluate potential cannabis software providers. It never hurts to come prepared with specific questions during a demo that are relevant to the workflows utilized in your dispensary. This will give you a clear understanding if the dispensary POS system can seamlessly integrate with your current SOPs or if you’ll need to adapt your internal procedures.
Before making the big decision, inquire about the migration plan, the onboarding process, and any additional hardware that might be needed. These are important factors to consider so you can avoid future roadblocks. Lastly, call their customer support line just to test their response time. Waiting to be connected to a support agent can be frustrating if something does go wrong. It’ll give you more confidence in your decision if you know that the support team is easy to contact and capable of resolving issues quickly.
Steven Lynn, a California resident since 2011, has dedicated his career to destigmatizing and legitimizing the cannabis industry through technology. Steven started his career in cannabis as the Director of Marketing at IndicaOnline in 2017. He now serves as the Director of Marketing at BLAZE® responsible for driving all marketing strategy, brand development, and lead generation programs. His professional background in early-stage B2B cannabis SaaS startups has made him adept at executing scalable, impactful, and sustainable strategies to achieve exponential growth. Steven received his BA in Communications from the College of Charleston in 2006 and is a seasoned marketing professional with over 10 years of experience working in both the entertainment and canna-tech industries.
Founded in 2017, BLAZE, a VC-backed California technology company, offers unified seed-to-sale software and apps for the cannabis supply chain. Developed by tech entrepreneurs and former cannabis company operators, BLAZE makes tech simple with an easy-to-use frontend powered by an enterprise backend for dispensaries, delivery services, distributors, and cultivators. Customers can be more profitable and productive while creating a better user experience for end customers and employees. The company’s software ensures compliance with local laws and taxes. BLAZE offers full APIs and integrates seamlessly with over 40 technology vendors in the cannabis industry.
Member Blog: How Can Hemp Businesses Better Self-Regulate?
The hemp industry is still in its early stages, especially when it comes to emerging products like delta-8 THC. While there is some regulation for hemp products, it’s much less than for legal cannabis, and this gives companies some freedom in terms of how they operate and what they do. For the most part, this is a good thing, but there is a downside too. Our report into the industry found that 76% of delta-8 THC products contained illegal quantities of delta-9 THC. This is terrible for consumers, but it also poses a risk to the industry: if you keep raising red flags, the government will eventually swoop in and take action. This is why self-regulation is a crucial concept for hemp businesses going forward.
Why Self-Regulate?
Self-regulation is crucial for hemp businesses because of the scrutiny the industry faces and to improve consumer confidence. Although CBD is generally accepted, this is especially important for companies selling something like delta-8 THC, which attracts more scrutiny because of its psychoactive nature. With states like Texas attempting bans on the substance and the findings of our report showing that the vast majority of products break legal limits for delta-9, the industry is in serious danger of attracting the attention of more lawmakers who may opt for an outright ban. In fact, there are already 18 states with some form of ban or restriction on the substance.
Jayneil Kamdar, PhD from InfiniteCAL Labs commented to us that: “The current delta-8 THC products on the market are very concerning because there is no regulatory body monitoring the safety of these products.”
In our report, we also found that companies tend to undercut customers on delta-8, that only 14% of companies perform substantial age verification checks and that two-thirds of companies don’t test their products for impurities.
It isn’t that self-regulation would be a cure-all, but if companies opt to act responsibly, it is much less likely that they will attract attention from lawmakers. In addition to this, though, self-regulation sends a strong message to consumers that you care about them and that they will get what they wanted when they buy your products. When this doesn’t happen,people will tell others about it.
The more the industry can mirror the regulations of regulated cannabis companies, the better things will go in the long run.
How Can Companies Better Self-Regulate?
However, “self-regulation” can’t just become a vague, catch-all term for generally responsible business practices: clear recommendations are essential in making this goal a reality. Luckily, our in-depth investigation of the delta-8 industry and other similar investigations into the CBD industry have revealed some key areas companies can focus on.
Provide Transparent Lab Reports with QR Codes
Lab reports are a vital part of building consumer trust, and you should ensure there is a QR code on the report so it’s easy for consumers to verify the report on the lab’s website.90% of CBD companies already do this, based on our industry analysis.
Offer a Lab Report for Every SKU
Many companies, however, only offer a COA for the base distillate, rather than every specific type of product it produces. If you sell vape cartridges, for instance, you should have a report available for each variation in flavor, strain, and potency.
Choose Credible Labs for Your Report
Not all labs are equal. If you get a report from a questionable or unknown lab, savvy consumers will still be wary of your product, and in some cases, the results may be unreliable. It’s best to choose a lab with a strong reputation, such as ProVerde, Anresco, SC Labs, InfiniteCAL, and CannaSafe.
Test for Impurities
With two-thirds of delta-8 companies not lab testing their products for impurities, this is a good way to stand out in the marketplace as well as good practice in general.
Verify Customer’s Ages
With most CBD companies not performing robust age verification checks, using a credible age verification system such asAgeChecker is a great step towards self-regulation. They stay up to date with FDA requirements, state laws, and merchant account policies, so you can set it up and then continue basically as normal. This is especially important for delta-8, but it’s also crucial for higher-strength CBD products too.
Label Your Products Accurately
What you claim on the label should be what’s in the product. Lab reports help you verify that this is the case.
Warning and Caution Labels
Only about 55% of hemp delta-8 companies use a warning label, but this is another key part of self-regulation. Suggested verbiage includes:
This product should be used with caution when driving motor vehicles or operating heavy machinery.
Use this product under the guidance of a physician if you have a medical condition, are pregnant or lactating.
Keep out of the reach of children.
This product was manufactured from hemp material that meets federal requirements for hemp products; however, consumption may be flagged by some drug tests.
This goes hand-in-hand with the above, but also, having your products that looklike a bag of Cheetos or anything along these lines is not a good look.
Avoid Medical Claims
Although many people opt to use delta-8 and CBD for medical purposes, if you’re selling the products, making medical claims that might not meet official organizations’ standards of proof is simply a terrible idea. Leave it to your consumers to determine.
Get Industry Certifications
Getting certified by an organization like theU.S. Hemp Authority is a great way to show your customers that you’re one of the responsible companies.
Conclusion
Self-regulation really just means taking a few basic steps to establish to both customers and politicians that you’re running a legitimate business which does what it claims to and is socially responsible. It might increase costs in the short-term, but over time and especially as consumer knowledge increases, it will pay off many times over. And the next time there’s a situation like what happened recently in Texas, the industry will have a much easier time defending its practices.
Lee Johnson is a writer at CBD Oracle who has been covering science, vaping, and cannabis for over a decade. He focuses on research-driven deep dives into topics ranging from medical uses for CBD to industry and user statistics, as well as general guides and explainers for consumers. He is a passionate advocate of both CBD and cannabis, and a strong believer in informed choice for consumers.
CBD Oracle is a consumer research company working to improve the safety and transparency of cannabis products, producing in-depth statistics on CBD and cannabis, detailed research pieces and analysis of social and legal issues.
Bringing the Beltway to the Bay at Cannabis Business Summit & Expo
by Madeline Grant, NCIA’s Government Relations Manager
There is no doubt that we’ve missed the in-person, one on one interactions in the cannabis industry. For anyone that attended the Midwest Cannabis Business Conference in Detroit in September, it was refreshing to connect with friends and meet new friends in the cannabis industry. Fortunately, we have the chance to meet in person again at the 7th Annual Cannabis Business Summit and Expo (CannaBizSummit) in San Francisco, California. From networking with California-based cannabis companies to meeting new companies in the industry, there is no lack of connections to make at CannaBizSummit.
Pictured Right: NCIA member Sonny Antonio with Sunshine Design and I at MJBizCon at NCIA’s booth.
The National Cannabis Industry Association (NCIA) has been hard at work in Washington, D.C. With the introduction of the Cannabis Administration and Opportunity Act draft legislation, there had been an undeniable excitement to support momentum towards cannabis policy reform. The Government Relations team submitted comments to the sponsoring offices on behalf of NCIA’s members and will continue to work to support members’ best interests. We appreciate your support of NCIA and the missions we continually work to achieve.
At #CannaBizSummit there will be opportunities for educational panels on federal cannabis policy and opportunities to connect with cannabis professionals in all sectors of the cannabis industry. Below are just a few of the education panels and “Lightning Lessons” that will be taking place throughout the conference:
You can find more information and details on the agenda and sessions HERE.
NCIA is honored to welcome our 2021 #CannaBizSummit Keynote Speaker, Troy Datcher, CEO of The Parent Company. Leading a new generation of c-suite innovators, Chief Executive Officer Troy Datcher, together with Chief Visionary Officer Shawn “JAY-Z” Carter, helms a cannabis business for the post-prohibition era The Parent Company. Combining best-in-class operations with leading voices in popular culture and social impact, the company focuses on building brands that will pave a new path forward for a legacy rooted in equity, access, and justice.
Beyond the panels and educational resources, attendees will be able to meet others from around the country. From cannabis cultivators to cannabis retail owners, there is no shortage of potential to network. At NCIA, we continue to support our members’ best interests by providing a continued understanding of the political landscape of cannabis policy reform. It’s our goal to support value-driven reform and support a responsible cannabis industry. Remember, if you are an NCIA Blooming or Evergreen member, you have a number of complimentary tickets to our trade shows.
If you have any questions regarding your membership or the CannaBizSummit please reach out to me via email, Madeline@TheCannabisIndustry.org. There is a lot to be excited about this year and I hope to see you out in San Francisco this December!
Honoring Our Veterans – Cannabis Research and Legislation
Photo By CannabisCamera.com
by Michelle Rutter Friberg, NCIA’s Deputy Director of Government Relations
Every November, Americans around the world honor our armed service members on Veterans Day. While the holiday first appeared after the conclusion of World War I in 1918 as Armistice Day, it was later renamed Veterans Day in 1954. This week, we’re remembering all the veterans in our lives (shoutout to my Dad, a Navy veteran!) and providing you with the latest update on cannabis and veterans legislation from D.C. Let’s take a look to see what’s been happening:
H.R. 2916: VA Medicinal Marijuana Research Act
Sponsored by Congressman Lou Correa (D-CA), this bill would require the Department of Veterans Affairs (VA) to conduct clinical trials of the effects of medical-grade cannabis on the health outcomes of covered veterans diagnosed with chronic pain and those diagnosed with post-traumatic stress disorder. Covered veterans are considered as those who are enrolled in the VA health care system. The trials must include a control group and an experimental group that are of similar sizes and structures and represent the demographics of the veteran population, and the data collected in the trials must be preserved to facilitate further research. Importantly, under this bill, participation in the clinical trials does not affect a covered veteran’s eligibility or entitlement to other VA benefits.
The bill had a hearing in October where Dr. David Carroll, Executive Director at the Office of Mental Health and Suicide Prevention at the Department of Veterans Affairs (VA) essentially testified that the VA does not support this bill. I’d also like to highlight the statement Rep. Correa submitted for the record, which you can find here.
Most recently, just last week, the House Veterans Affairs Committee held a markup on the bill, where it passed by a vote of 18-11. It was a party line vote with just one Republican, Rep. Mariannette Miller-Meeks, voting in favor. Now that the bill has passed out of committee, its next stop could be the House Floor – stay tuned!
NDAA, cannabis, and veterans
As you may know, there’s been much discussion around cannabis policy and the upcoming must-pass NDAA. While we’ve already expanded upon that concept as it relates to banking, more recently, there’s been developments surrounding the NDAA, cannabis, and veterans. Late last week, Sens. Brian Schatz (D-HI), Bernie Sanders (I-VT), Tim Kaine (D-VA), Jeff Merkley (D-OR), Ron Wyden (D-OR), Jacky Rosen (D-NV), Alex Padilla (D-CA) and Gary Peters (D-MI) filed Schatz’s Veterans Medical Marijuana Safe Harbor Act as an amendment to the larger package. This amendment would federally legalize medical marijuana for military veterans who comply with a state program where they live and allow physicians with the U.S. Department of Veterans Affairs (VA) to issue cannabis recommendations. Further, it would require VA to study the therapeutic potential of marijuana for pain and reducing opioid misuse. Under current federal policy, VA allows its physicians to talk about cannabis use with veterans, but they’re prohibited from issuing recommendations that would allow their patients to obtain medical marijuana from state-legal markets.
It’s unclear whether either of these provisions will be enacted into law, however, we applaud our congressional champions for never forgetting about those who have served. NCIA will continue to lobby in favor of legislation that will provide our veterans with relief. Do you have a veteran in your life you’re honoring this week? Hop over to NCIA Connect and let me know!
Member Blog: Creating a Cannabis Website Optimization Strategy
By Dmytro Syvak, Business Development Specialist at MjSeo Agency
Generally speaking, there should be only one strategy and its essence lies in a fairly simple principle – to make a good product. If the advantages and strengths of your proposal are clear not only to you, then you are on the right track. New products or services in competitive niches like cannabis may take a little more time and effort to become recognizable and convince users to choose you. But at the same time, in an ideal situation, you will be working with an audience that:
is aware of a problem or any struggle;
knows that solutions exist and wants to try them;
is ready to communicate with solution providers to choose the most suitable option;
expects not only the benefits but also thinks about the potential profit of such cooperation.
Strategy and Tactics
The main thing when it comes to the cannabis industry is the fact that it has numerous political and legal regulations even though it has a great potential to boost state and national economies. For example, if you are doing out-of-home advertising, you should consider that it is prohibited to place ads near schools. It also means that you can’t use some effective advertising platforms suitable for other niches like radio, vehicle, or television. In that way, it is essential to have a strategy.
Strategy is your overall direction, the goal of your efforts. If you can answer the question “why” you are building links – most likely you have a strategy or at least a strategic vision. Tactics answer the “how” and “what is needed” questions. Why is it important not to confuse tactical action with planning and strategy? Basically – to avoid a mess.
There are about 10 basic link-building tactics, depending on whether your site is niche-oriented or not. These are actions aimed at increasing the qualitative weight of links for a site for the purpose of its advancement in search results, placement of various links of a resource on authoritative platforms. Link building is considered one of the most effective methods of SEO optimization, especially for the cannabis niche.
Link building is needed by:
young brands about which there is little information;
companies operating in niches with the high competition;
brands that want to improve visibility and are looking for ways to increase traffic.
In that way, it is a perfect strategy for the cannabis niche as it fits all three criteria. Link building is an essential part of promoting a business online and increasing the number of customers. Competent promotion of the site with links on certain sites can bring the web page to the TOP and improve the company’s image. Considering the number of regulations and prohibitions in the cannabis niche, link building is one of the best instruments to let people know about your brand.
Coverage
Also known as outreach, it is one of the main link-building tools. It is based on the spread of information about the project and obtaining backlinks from stakeholders, that is, a lot of communication and work with people.
When selecting potential partners, it is crucial to take into account not only the industry but also the segment, target audience, and the scale of your project. Those with whom you will communicate should not guess why and how you can be mentioned. The higher the relevance of your product to the partner site, the easier and faster the communication about placement will be. The first signal of low relevance is the lack of answers and reactions.
Thus, for cannabis businesses, it is better to place links in interested communities, thematic websites, or news portals.
Existing Links
This includes many tools limited only by your skillset, budget, and imagination. The main feature is that instead of trying to get in touch and create a completely new partnership, the work is carried out with already existing, most often published and indexed links.
Unlike outreach tactics, in this case, the key to success will be accuracy and automation of as many processes as possible – from collecting data to using mailings instead of single messages. Here are some examples of tactical work with existing links:
Guest blogging is also a good fit if, instead of publishing your own articles, you are building your work around existing popular content.
Broken links – old content, lost during migration or post updates, and so on. It may work great for niche or competitive content so, it is relevant to use it for cannabis businesses.
Own backlinks – as your project develops, some of the backlinks will be lost one way or another. But almost any search analytics service will be able to regularly provide you with a list of domains from which you have lost links.
Weak content – you simply find existing publications that can be easily improved and made more attractive without significant costs on your part. This is a great possibility to demonstrate your expertise in the niche.
Diversification of content. It is essential not only to post articles but also to add videos, presentations, and so on. For example, news or educational content are currently central in the cannabis niche.
Practice
If you want to learn more about getting organic backlinks, especially in competitive niches, sharing experiences and hands-on material will be most helpful. Conferences and meetups will allow you to receive the most complete and relevant context, info about updates and news, as well as specific information about which tools bring the best results.
If we talk about building a link mass for a niche project, then you will need to use at least three basic directions: working with communities and social networks, as well as placing guest publications and comments on relevant blogs. The main tip for cannabis businesses here is to educate, don’t sell. Try to engage the readers with the content you create. Useful or entertaining content will be the best choice. If you succeed, people will come to your website in search of more information.
Also, keep in mind that fresh domains with zero authority are more likely to experience the Google sandbox effect. If your organic search traffic isn’t going anywhere despite your best efforts, you will likely need to wait at least a month and reach a certain ratio of backlinks to estimated domain authority. Once the criteria are met, everything should return to normal.
It is also essential to remember that many social network platforms prohibit cannabis marketing which makes it much more difficult to increase the visibility of the brand. Among them are:
Facebook
Google AdWords
YouTube
Instagram
Twitter
However, there are still ways to publish content. For example, Facebook allows creating product pages where you can publish useful or entertaining information without bluntly promoting your product.
As a Result
At the very end, it is necessary to say that link building should not be a difficult process. Is it time-consuming? Yes, especially in competitive niches. But with the right planning and the right strategy, backlink building tasks shouldn’t take you much longer than regular site maintenance.
The mission of MjSeo agency’s cannabis marketing experts is to help our customers become world-famous by means of a well-thought-out SEO strategy, and increase their profits hundreds of times.
MjSeo exclusively focuses on SEO strategies for the cannabis segment. It offers tailored services, including customer needs analysis and SEO. Its customers have seen their traffic surge and their websites have risen to the top of search engine rankings. The company’s personalized promotional tactics help companies thrive in the digital space.
The cannabis SEO experts from the MjSeo agency know how to help your marijuana business increase site traffic and, therefore, the number of customers.
Email:hello@mjseo.agency
Video: NCIA Today – Friday, November 5, 2021
NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every Friday on Facebook for NCIA Today Live.
On the latest episode, Bethany announces the keynote speakers at #CannaBizSummit this December in San Francisco, shares a bit about Exspiravit this month’s Member Spotlight recipient, and covers compliance and extraction.
Registration to the Cannabis Business Summit in San Francisco is now open with special limited-time super early bird pricing on tickets available, head to our website for more information today.
Allied Association Blog: Memories of the Campaign for Prop 215
Scanning my collected newspaper articles from the era for our slideshow has really brought back memories of my early activist days working toward The Compassionate Use Act of 1996, commonly referred to as Prop 215.
The year was 1995…
Those were the days when you had to say “water pipe” not “bong” for fear of being kicked out of a head shop. I once had a pipe shop refuse to carry hemp lip balm citing that it would imply that their pipes were being sold for marijuana use. Even some in the hemp industry were opposed to associating marijuana with hemp. That said, there were supporters of medical marijuana, and some who just needed education.
I was 24 years old and my relationship with the cannabis plant had been purely recreational. Then I made a new friend, Alan Silverman, who introduced me to a community (and career path) that changed my life. He took me to a screening of a new film, “The Hemp Revolution.” It was an eye-opening event with the director in attendance, and notably several Sonoma County businesses selling their industrial hemp wares. I was deeply inspired, not having known the history and multitude of uses of the plant. I joined the hemp industry with the contacts I met that night, distributing their wares to local shops and tabling at festivals and markets. It was more of a public education service than a profitable business, as many were not familiar with the hemp plant and some saw it as an excuse to promote marijuana. I transitioned into a day job with HempWorld, an industry magazine. These were fun years even if we were ahead of our time.
Which comes first?
Alan also told me about a state initiative campaign that was in the planning stages and educated me on the medicinal uses of marijuana. I had previously studied ecology, the idea that our environment has countless symbiotic relationships between lifeforms fascinated me. So, learning about the fiber, oil, and seed of the hemp plant while also gleaning information about medicinal benefits of marijuana just strengthened my impassioned advocacy for both. I felt at the time that consumable marijuana would need to be destigmatized before industrial hemp would ever have a chance.
Allies!
I joined the volunteer group which we at first called “Sonoma County Chapter Californians for Compassionate Use” to match the name of the state-level group behind the current campaign. The term “compassionate use” was not so well known; when I set up our voicemail, the representative thought we were advocating for “Compassionate Youth.”
Being our media liaison, a news reporter from the local TV station called me one morning. The story we had discussed fell through and he asked if there was anything else he could cover. In a few frenzied hours, I was able to find an oncology nurse from a local hospital willing to be interviewed in support of medicinal marijuana. She led me to a medical marijuana patient she knew, who introduced himself to me on the phone by saying, “I’ve been HIV positive for ten years, and I’m fat!” He wanted to be interviewed, too. Enough local activists joined us that afternoon in front of our County Board of Supervisors chambers to fill the camera frame. The nurse requested her interview be conducted apart from the activists, as to not appear a part of our group, which was better optics for our message. She was being brave and outspoken.
We made up small binders with recent news pieces supporting medical marijuana and sent them out to all our local media contacts. We included a commentary published in the Journal of the American Medical Association, an editorial from The Lancet, along with a Universal Press Syndicate piece by William F. Buckley, Jr, and a Cannabis Canada article, “Cannabis Buyers’ Club Flourishes in ‘Frisco,” written by Rose Ann Fuhrman, a fellow local activist and writer. The soon-to-be iconic red cross with overlayed green leaf image was printed for the covers of the binders.
Education was Essential
The cross and leaf image for the movement so effectively portrayed the topic, some of us, while gathering signatures, simply wore 11 x 8.5” signs with this image around our necks to gather attention of potential signers.
All in all, Sonoma County was an easy place to gather signatures on this issue. Rather than approach people individually, I’d stand in a trafficked area and repeat the same spiel, it was along the lines of “Sign the medical marijuana petition, it helps with epilepsy, multiple sclerosis, chemotherapy, glaucoma…” I remember one man who walked right past me into a grocery store parking lot, only to turn around when I verbalized the ailment that affected his family member. Another signer who stood out was attending a concert. He walked up to me in the free speech zone between the parking lot and the venue. Signing his name, he said, “I’m a cop. I’m tired of the hypocrites.”
The local coverage that I was most excited about occurred on Friday, November 1, 1996, four days before the election. Elvy Musikka had been traveling around California speaking in favor of Prop 215. Elvy was interviewed by The Press Democrat newspaper about being one of eight people in the United States who not only could legally smoke marijuana, but also was being provided joints by the federal government. The story ran with a large photo of Elvy smoking a legal joint in my living room. Elvy will be speaking at the Cal NORML conference.
Meeting Dennis
Another inconsistency with what most knew at the time was the existence of the San Francisco Cannabis Buyers’ Club. Founded by Dennis Peron, who also wrote San Francisco’s Prop P, this ground-breaking club was raided by the DEA, but enjoyed great local support. Prop P passed by 80% of San Francisco voters in 1991, basically making marijuana possession and cultivation the lowest priorities for law enforcement. Dennis, who passed away in 2018, is a legend in the world of medical marijuana. I had the unexpected experience of meeting him when Rose Ann and I went to his club to pick up the initiatives for our group to collect signatures. We all had barely begun when informed that the first initiatives had a printing error and needed to be replaced. We had car trouble in the city and Dennis invited us to stay overnight in the club, an historic experience I relish. Dennis will be represented at the 25th Anniversary event via a recorded statement and through his family members, Jeff and Bryan Peron.
It was an exhilarating time for me, I met many truly impressive activists, authors, and businesspeople who were inspired to make the world a better place. I felt I was making the world a better place. Ellen Komp, one of my co-workers from my years with HempWorld, went on to become the Deputy Director for California NORML, she hired me onto the organization in 2017. For the 25th Anniversary of Prop 215 events this week, I will be celebrating with many of the folks who made 215 possible. I hope you’ll join us in honoring the history that launched the modern industry.
Kharla Vezzetti is the Business Membership and Advertising Manager for California NORML, a non-profit, member-supported organization that has been advocating for sensible and fair cannabis laws since 1972. She can be reached at kharla@canorml.org
Fireside Chats w/ NCIA’s GR Team | 10.27.21 | Going Green: Considerations for Businesses & Policymakers
Mike and Michelle carry on their monthly conversations with regulators, policy makers and cannabis industry thought leaders to discuss the latest developments in federal policy LIVE. In this edition of our Fireside Chats w/ NCIA’s Government Relations Team series originally aired on Wednesday, October 27, 2021 the panel dove deep into the current landscape and future outlook for sustainability in the cannabis industry.
As the cannabis industry continues to grow, so does its environmental impact. This fast-growing and highly regulated industry (at the state level) is poised to lead on evolving business challenges, including the adoption of environmentally sound business practices that demonstrate to the broader agriculture sector that comprehensive environmental sustainability is achievable. But, challenges remain and the stakes are ever-increasing.
We’ll look at the intersection of the current environmental footprint of the cannabis industry, existing sustainability solutions (packaging, regenerative farming, renewable energy), political and economic issues limiting adoption of these practices by operators, and lay out strategies to remove those barriers. We’ll also be talking extensively about NCIA’s 2020 white paper (Read Now: https://bit.ly/3uDogfa) on environmental sustainability, so be sure to take a look!
Speakers:
Sabrina Fendrick, Essentia Endeavors
Ron Basak-Smith, Sana Packaging
Tiffany Watkins, Vanguard Media
Kaitlin Urso, Environmental Protection Specialist, Colorado Department of Public Health and Environment
Moderating:
Michael Correia, Director of Government Relations (NCIA)
Michelle Rutter Friberg, Deputy Director of Government Relations (NCIA)
Member Blog: Selecting the Right Cannabis Extraction Approach for Your Needs
With demand for THC and CBD distillate products steadily increasing on a global scale, it’s never been a better time to be a cannabis cultivator, processor, or product formulator. When entering these industries, an often overlooked yet critical step in the planning process is choosing the right cannabis extraction solution.
What are your options for cannabis extraction?
Depending on the amount of cannabis biomass you plan to process each year and the type of distillate you are trying to produce, you have three main options for meeting your extraction needs. You can:
Partner with a mobile extraction lab company to extract at your facility without having to build your own lab
Build your own fully-compliant extraction lab at your facility
Hire a 3rd party processor (often called a “toll-processor”) who can manage extraction for you at their facility
Is a mobile cannabis extraction lab right for you?
A mobile extraction lab is a fully-certifiable clean room that has been retrofitted with ready-to-use extraction equipment. Built off-site to GPP, cGMP, and EU GMP standards, they are delivered and installed at your facility, staffed and operated on contract by the partner company. They allow for scalable production and help you avoid some of the pitfalls and obstacles of building your own extraction lab, keeping you focused on cultivation, product development, and sales & marketing.
Mobile labs allow you to extract at your own facility without having to build your own lab, outlay a large capital expenditure (CAPEX), or use a lot of floor space. You can leverage the expertise of the best engineers whose main priority is to create labs that produce the highest-quality distillate. Labs can be operational at facilities anywhere in the world within 4-6 months, and remove the burden of selecting the right extraction process and sourcing the right equipment.
Mobile extraction lab partners are a great fit if you’re processing 50,000 lbs. to 2 million lbs. of biomass each year and want to outsource the lab CAPEX and ongoing staffing, SOPs, maintenance and upgrades to a trusted partner. These labs can also be incredibly useful if you want to test the market for new products, or want to expand into isolate or THC-free products through remediation and separation processes.
[Check out this video of an extractX mobile lab being delivered to one of their partner’s facilities.]
Should you consider building your own cannabis extraction lab?
If you have your products perfected, biomass sourced, and have a strong existing customer base, building your own extraction lab may be the right decision. If you’re processing over 1 million lbs. of biomass each year and have the facility space and financing secured, building your own lab can put you in a very competitive position in this emerging market.
It’s important to understand that building an extraction lab is no small undertaking. You’ll need to hire engineers to design the right process and source the right equipment for your needs. You’ll need to meet regulatory requirements and hire experienced staff. The entire process can take 12-24 months (or more) and cost $3 million to $7.5 million before you’re able to start processing, depending on the size of the lab and type of distillate you’re producing.
Building the lab is also just the beginning. Since the extraction industry is evolving so rapidly, new technology is constantly emerging that continues to improve production efficiencies and distillate quality. If you’re willing to commit to the massive undertaking of building your own lab, you must also be willing to commit to the ongoing compliance certifications, maintenance, and upgrades required each year to ensure your lab is keeping up with advancements in the industry.
When is toll-processing a good option?
When processing smaller amounts of cannabis biomass (less than 50,000 lbs. per year), a toll-processor may be your best option. A toll-processor is a company that has built a large-scale extraction lab which they rent out to other companies. You would be able to load your cannabis biomass onto a truck, deliver it to the toll-processor, and then receive your distillate back from them.
It’s crucial that you ensure this contractor is operating a fully-compliant facility, following GPP, cGMP, or EU GMP standards. You should check their references, certifications, and quality assurance promises before engaging with them, as you could be held responsible for the quality and contents of the processed distillate. Based on their capture rate and processing costs, you can gauge whether the toll-processor is right for you, or if you need to seek out another partner.
This option is great for small cultivators and processors as it allows you to avoid the major costs of building your own lab, and helps you get to market quicker and test the market viability of your products. It’s important to consider that challenges can occur if there are production delays, transportation issues, or issues with quality control.
Weighing your options
Image caption: [Since high-quality cannabis distillate has never been in higher demand, selecting the right extraction option is crucial to the success of your business.]
When examining these three extraction options for your business, it’s important to consider the immediate and future goals of your company. Do you hope to expand your production capacity over the next few years? How quickly are you trying to get to market? Do you have the resources and technical expertise to go it alone?
These are just a handful of questions to consider when exploring which extraction solution is right for you. Thankfully, the emerging industry is constantly creating new options to meet your needs.
A pioneer in integrated marketing technologies, Albert established his first successful business in 1986 and went on to build a solid track record as an entrepreneur that helped shape the digital industry. A talented leader whose business ranked among Canada’s fastest growing companies for several years running, Albert has assembled the strong management team that will drive extractX business forward. His keen business development approach has resulted in early adoption of extractX labs in global markets.
extractX Ltd. designs, builds, and operates turnkey pharma-grade hemp and cannabis extraction laboratories at facilities anywhere in the world. These fully mobile, purpose-built facilities fit into established industrial-scale operations and scale to meet the needs of cannabis and hemp cultivators and producers. Labs require no lab CAPEX to install, and produce the highest-quality THC and CBD distillate while meeting all GPP, cGMP, and EUGMP requirements and standards.
Equity Member Spotlight: Exspiravit LLC
This month, NCIA’s editorial department continues the monthly Member Spotlight series by highlighting our Social Equity Scholarship Recipients as part of our Diversity, Equity, and Inclusion Program. Participants are gaining first-hand access to regulators in key markets to get insight on the industry, tips for raising capital, and advice on how to access and utilize data to ensure success in their businesses, along with all the other benefits available to NCIA members.
Tell us a bit about you, your background, and why you launched your company.
My name is Michael Webster, and I am the Founder & Managing Member of Exspiravit LLC, a licensed Michigan cannabis company. I earned a bachelor’s degree from the Harvard Extension School in Liberal Arts, and a master’s degree in Composition and Rhetoric from New York University. As a native New Yorker, I tried to wait patiently for cannabis legalization at the state level, but Michigan represented a unique entry point to the regulated market.
Like many NYC kids, my introduction to cannabis occurred at an early age. It was part of the local culture. However, it wasn’t until my late teens that I indulged. And it was even later, when my mom – a fierce cannabis advocate – was diagnosed with breast cancer, that I was introduced to the medicinal benefits of cannabis. I went on to write my graduate thesis on this very topic. From there, I embarked on my cannabis career path.
I launched Exspiravit for a myriad of reasons, not the least of which was to access a burgeoning market that held such promise for the creation of generational wealth. But as a frontline victim of the war on drugs – a simple possession charge of less than a gram of cannabis that temporarily derailed my academic pursuits – I saw an opportunity to educate and destigmatize this amazing plant, that, up until about 80 years ago, had been a staple commodity in human society.
What unique value does your company offer to the cannabis industry?
We are currently deploying our Cannabis Event Organizing license for consumption events throughout the state of Michigan – both large and small – while we raise capital for the build-out of our solventless extraction lab. We believe in clean plants and derivatives and are working closely with the Cannabis Certification Council on securing the “made with organic flower” seal. The event organizer license has proven the perfect complement to our other ventures, as it has allowed us to redefine what “an event” really is, and to take our show on the road. We also offer consultancy to other social equity and small operators, with a focus on regulatory compliance, helping to share what we’ve learned on our journey.
What is your goal for the greater good of cannabis?
When it comes to our company values, Exspiravit advances a unique position on social equity. For far too long, social equity has been considered a gift or non-transactional offering. We at Exspiravit believe equity – social or otherwise – is earned and therefore OWED. Most current social equity initiatives in the cannabis industry broadcast messages of handouts and favors. This is the wrong message. When accessing the equity in your home, or other assets, neither you nor the bank treats those transactions as gifts. Social equity represents a debt owed from those who have weaponized their racial or class privilege to monetize a commodity market that was built on the willful destruction of black, brown, poor white, and otherwise marginalized communities. Debts are owed. Debts are to be paid. And their payment represents the satisfaction of an obligation and not a benevolent gesture.
Quite the opposite, those tapping equity are claiming what is rightfully theirs. Again, equity is earned, accrued, developed, and owed, but certainly not to be asked or begged for. Exspiravit plans to use its voice to correct this adversely impactful interpretation of social equity, in hopes of realigning access to resources in the regulated cannabis sector. In addition to our work on the social equity front, Exspiravit’s goal for the greater good of the cannabis industry is to advance the for-purpose market. We believe that flower and euphoria only represent the tip of the iceberg when it comes to products and outcomes. We envision an ultra-specific and ultra-targeted market that features purpose-driven derivatives for a highly informed consumer.
What kind of challenges do you face in the industry and what solutions would you like to see?
Like many social equity cannabis operators, accessing capital has been our greatest challenge. And this challenge is intrinsically linked to our greatest criticism of social equity initiatives –- the lack of social equity funding. For social equity applicants, the process can be grueling. And for those of us who make it through to licensure, being greeted on the other side by predatory investment opportunities exacerbates our challenges. Social equity initiatives MUST feature a robust social equity fund. Without it, social equity operators are being positioned for failure. Diversion of existing tax revenue or special taxes levied against large and multi-state operators can easily address these challenges. Too, we would like to see more collaboration than competition. Regulated cannabis markets should be rolled out in ways that foster greater opportunities to collaborate. Support for collectives, and other similar strategies, are low-hanging fruit when it comes to solutions.
Why did you join NCIA? What’s the best or most important part about being a member of the Social Equity Scholarship Program?
We joined the NCIA for a variety of reasons. Firstly, it was accessible. Through its outreach, the NCIA met us where we were and provided us a robust package of resources that weren’t intended to lure us into paid membership, but rather to help us stand up and be able to recognize the benefits of such association. You can’t effectively inform a starving, homeless, injured person until you have fed, housed, and rendered aid to them. And that appears to be the NCIA’s philosophy – meet the immediate, pressing needs of social equity operators, positioning them to then effectively and efficiently access industry resources. The perfect example of this strategy is NCIA’s decision to offer one year of complimentary membership to social equity operators, including access to the national and regional conventions. The value here, to one’s first year of operation, is immeasurable. These events have provided the opportunity to forge important and lasting connections with other industry stakeholders that have made all the difference for us. Without question, we would not be enjoying such forward progression without the genuine efforts of the NCIA.
Service Solutions | 10.26.21 | Capturing the $27 Billion Opportunity in Legal Cannabis Manufacturing
NCIA’s Service Solutions series is our sponsored content webinar program which allows business owners the opportunity to learn more about premier products, services and industry solutions directly from our network of established suppliers, providers and thought leaders.
In this edition originally aired on Tuesday, October 26, 2021 we were joined by Aptean, an industry-leading cannabis technology company, for an in-depth look at the key obstacles standing between cannabis manufacturers and profit margin.
The legal marijuana manufacturing market will grow by $27 billion over the next three years. But as opportunities increase, so does competition. To be at the forefront of this dynamic sector, you need to move fast – and run lean.
So, how can your manufacturing business improve speed and efficiency of production to maximize profit? Without compromising on product consistency, quality and control? And how can you run a transparent, accountable, compliant operation, to continue building consumer confidence in cannabis products? Discover the answers in this webinar!
Aptean’s cannabis manufacturing expert, Daniel Erickson, will outline how you can break through operational barriers to increase productivity, by taking a digital approach to manufacturing using new-to-market cannabis ERP software.
In this session, you will learn how a digital manufacturing strategy will enable your business to:
• Maximize crop yield and quality using online cultivation management tools
• Improve traceability for complete compliance and quality control from seed to sale
• Increase employee security, productivity and all-round motivation
• Easily diversify into new legal cannabis products to enhance your business revenue
Panelists:
Daniel Erickson
Senior Project Manager
Aptean
Video: NCIA Today – Friday, October 29, 2021
NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every Friday on Facebook for NCIA Today Live.
On the latest episode, Bethany announces the keynote speakers at #CannaBizSummit this December in San Francisco, checks in with some spooky, chilling tales of compliance gone wrong, and checks in with NCIA Deputy Director of Public Policy Rachel Kurtz-McAlaine about some serious slowdowns in the vape sector.
Registration to the Cannabis Business Summit in San Francisco is now open with special limited time super early bird pricing on tickets available, head to our website for more information today.
Member Blog: What Every Cannabis Company Needs to Know About Compliance Now
By Nicole Cosby, Chief Data & Compliance Officer at Fyllo
Two Thirds of Companies in Highly Regulated Industries Such as Cannabis Say Compliance Is Key Barrier to Growth
Not long ago, the role of the General Counsel with regard to compliance in highly-regulated industries was largely about setting up sensible guardrails. The job was to ensure a solid approach focused on good reporting, defensible “best-effort” internal practices, and a rock-solid audit trail. The words “compliance” and “growth” wouldn’t be used in the same sentence.
However, according to a study Fyllo recently completed in partnership with The Harris Pollof more than 300 compliance leaders, nearly two-thirds of heavily regulated companies agreed compliance was the critical factor blocking growth. In fact, compliance issues ranked as a bigger barrier than having the right strategy or even capital to fuel growth. This belief was shared by companies as small as local cannabis start-ups managing rapid growth and global banks with deeply-experienced compliance leaders.
One of the biggest factors cited by compliance professionals is the inability to adapt quickly. Nearly two-thirds (61%) did not believe their organizations could adapt quickly to sudden changes in regulations, with 28% pointing to outdated technology as the cause.
Patchwork Legislation is a Significant Pain Point
When taking a look even closer, managing regulations across jurisdictions is a significant pain point for compliance professionals, with 76% citing that decentralization of regulatory information is a challenge. The majority of professionals discussed how complicated it is to decipher between local and state laws. More than half of respondents (51%) even went as far as to say that the number of regulations their organization needs to keep on top of is unmanageable. Moreover, the dynamic nature of regulations even has these leaders questioning their own compliance.
For cannabis operators, even basic functions of marketing and advertising are so restricted by location that it would take a literal army of compliance officers to humanly tackle the problem on a day-to-day basis.
Among companies in highly regulated industries, data for privacy regulations (59%), product-related regulations (45%), and marketing or advertising-related regulations (44%) are the three most common areas where regulatory or compliance issues are the most difficult to balance with business processes.
What risks must General Counsel (GCs) guard against?
Growth risks
Market expansion and innovation may be constrained
Opportunity risks
A lack of awareness of pending regulatory shifts that may open new opportunities may leave your company unable to respond quickly enough
Reputation risks
Companies with a poor track record may face harsher scrutiny from the government. In cannabis, this might make obtaining new licenses in new geographies slower and more difficult
Revenue risks
Every compliance misstep risks delays in products getting to shelves, or worse, requiring product to be destroyed. Every delay and loss of product results in lost revenue.
Cost risks
Keeping up to date with ever-changing regulations is costly and difficult, particularly for understaffed compliance departments
Compliance Missteps Go Beyond Financial to Reputational
While compliance citations have become the norm, with companies being cited on average 12.6 times for noncompliance over the past five years, the ramifications of those missteps reach far beyond fines.
Nearly two-thirds (73%) say that key stakeholders like consumers, employees, and regulators have lost trust in a company due to compliance issues, and almost half (49%) say it results in higher costs to attract new customers and investors.
Use Technology to Turn Compliance Into a Competitive Advantage
The emphasis on growth demands a different approach that encompasses both defense and offense. Fast-growing companies need to access new markets, develop innovative new products, and challenge the status quo — all while managing the challenges of dealing with an ever-changing patchwork of state, local, and federal legislation.
Compliance professionals need to redefine their compliance roadmap based on real-time intelligence which should take into account federal, state, and local laws and ordinances. In fast-paced, highly-regulated industries, the winners are the companies who know more and know it sooner. Leveraging technology can help.
Once GCs recognize that a compliance suite does much more than just protect a company from citations, they can begin to understand the true cost of non-compliance from a financial, operational, and reputational perspective, giving them a leg up in today’s most challenging regulatory environments.
Nicole Cosby, an attorney and ad tech executive, has an impressive background in digital advertising/data policy, brand strategy/licensing, and business alliance development across the advertising, media, fashion, and entertainment industries. After earning her bachelor’s degree at Tufts University and her JD law degree from Howard University, Nicole entered the fashion field in New York, working in licensing and business affairs for Donna Karan, Phat Farm, Anne Klein, and the Jones Apparel Group.
Prior to joining Fyllo, Nicole was senior vice president, standards, and partnerships for Publicis Media. She has also held director-level posts in product management, ad product marketing, and partnership development for AOL, Kai Communications, and BET Networks. Previously named one of Cynopsis Media’s Top Women in Digital, Nicole received the Facebook/PMX Marisa Marolf Strength Award and earned a place in Campaign Magazine’s Digital “40 Over 40” for 2019.
The Fyllo Compliance Cloud is a suite of software and services that enable organizations to navigate today’s ever-changing regulatory landscape, streamline compliance and scale with speed. Mainstream brands also use the Fyllo Data Marketplace to target previously inaccessible cannabis and CBD consumers.
The PACT Act Final Rule Has Been Released Prohibiting the Mailing of Cannabis/Hemp Vaporization Products. Is Your Business Ready?
By Rachel Kurtz-McAlaine, NCIA’s Deputy Director of Public Policy
After months of delay, the United States Postal Service (USPS) has released its FINAL rule enforcing the Prevent All Cigarette Trafficking (PACT) Act, effective October 21, 2021, and unfortunately, they are indeed applying it to cannabis/hemp vaporization products. The PACT Act has now made it extremely difficult for anything related to vaporization to be mailed, either business to business (B2B) or business to consumer (B2C). Your business could be affected even if you are not mailing out products. Although this is a massive burden on the cannabis/hemp vape industry, there are ways to deal with it. NCIA remains vigilant in making sure the federal government understands this unnecessary hardship to the industry, and making sure our members are fully educated on this issue.
What is the PACT Act?
The Prevent All Cigarette Trafficking (PACT) Act went into effect June 29, 2010, applying strict regulations to the mailing and taxation of cigarettes and smokeless tobacco products, effectively banning the mailing of cigarettes unless authorized by an exception. With the rise of e-cigarettes, especially their popularity among youth, Congress decided that vaporization products should be included in those provisions. On December 27, 2020, Congress modified the definition of “cigarettes” to include Electronic Nicotine Delivery Systems (ENDS), broadly defining ENDS to include nearly all vaporization products, regardless if they contain nicotine or are used for nicotine. Specifically:
“(1) any electronic device that, through an aerosolized solution, delivers nicotine, flavor, or any other substance to the user inhaling from the device; and (2) any component, liquid, part, or accessory of an ENDS, regardless of whether sold separately from the device.”
When the USPS issued their notice of proposed rulemaking, they received more than 15,700 comments, with many expressing frustration with the broad interpretation of ENDS, so the USPS delayed issuing FINAL rules while it considered the practical application to the unique cannabis and hemp industries. NCIA was proud to submit comments with a broad coalition and to issue an action alert to get our members to express their concerns.
In the meantime, the USPS issued a guidance document (“April 2021 Guidance”) (86 FR 20287) to help prepare businesses for the final rule and what documentation will be needed to apply for an exception. The exceptions include:
Intra-Alaska and Intra-Hawaii Mailings: Intrastate shipments within Alaska or Hawaii;
Business/Regulatory Purposes: Shipments between verified and authorized tobacco-industry businesses for business purposes, or between such businesses and federal or state agencies for regulatory purposes;
Certain Individuals: Lightweight, non-commercial shipments by adult individuals, limited to 10 shipments per 30-day period;
Consumer Testing: Limited shipments of cigarettes sent by verified and authorized manufacturers to adult smokers for consumer testing purposes; and
Public Health: Limited shipments of cigarettes by federal agencies for public health purposes under similar rules applied to manufacturers conducting consumer testing.
18 U.S.C. 1716E(b)(2)-(6). These exceptions are the ONLY way to mail these products moving forward. Unfortunately, the USPS was not accepting applications for exceptions until the final rule was published, but now that it has been published, it is time to apply for an exception.
FedEx and UPS have already banned delivering these products, so they are out as an alternative.
How can it affect me?
If you manufacture, sell, or buy vapor products, you will be affected. Manufacturers and distributors who use the mail to get their products to stores for resale (B2B) will have to apply for an exception through the USPS Pricing and Classification Service Center. If you are a business receiving these products, you will have to work with the business that mails it to you to be included in their exception as a recipient. If you are a retailer who delivers vaporization products to consumers via the mail, such as online retailers (B2C), you will also need to apply for an exception. If you buy the end products as a consumer, expect an increase in price because of the extra costs placed on the suppliers.
What should I do?
If your business has ANYTHING to do with the manufacture, delivery by mail, or retail of cannabis/hemp vaporization products, including liquids, batteries, empty cartridges, etc., you should get familiar with this final rule that is in effect as of October 21, 2021. The USPS spends the time addressing potential issues or suggestions from the comments it received, so any questions of why they did something are probably answered there.
You will also want to read the guidance document the USPS issued in the Spring that details if you qualify for an exception and how to apply for it. This will require cooperation between the mailer and the recipient, so make sure you are working with your supplier/retailer to get all the necessary information.
What is NCIA doing?
NCIA remains committed to making sure our members understand all of the legal ramifications and how to continue operations despite this rule. We continue to work with our coalition partners to better understand the effects and best practices, and will share with you as much information as possible to ease the transition via blog posts and webinars.
As a member of the NCIA, you probably already know how difficult so many of the aspects of business are due to the nature of the industry. Unfortunately, sometimes it seems like the laws and regulations are never-ending, and frankly, it can cause quite the impact on the way operations are handled.
As much as we hate to be the bearer of bad news, it is likely a good idea to be wary of these things, especially regarding compliance regulations.
Cannabis Compliance Regulations
While numerous states have legalized cannabis, it remains federally illegal under Schedule I of the Federal Controlled Substances Act. While the hope is that cannabis will soon be federally legalized and decriminalized, we haven’t quite gotten there yet.
Because of the state of our society and often the stigma associated with cannabis, not to mention the astronomical fines associated with being involved in the legal industry incorrectly, many financial institutions refuse to touch cannabis businesses. Yes, even when a client does everything correctly.
Cannabis companies constantly have to get creative with how they handle revenue –– which is enough to make any business owner pretty uneasy. Without banks, stores are often forced to take payment in cash and invest in ATMs for their shops while they’re at it. Holding so much cash means armored vehicles to collect the money and tremendous crime risk. Yikes, talk about a debacle.
In an attempt to make things easier, some companies have opted to funnel cash through shell companies, but as you can imagine, that puts a big target on their backs. “It can start to look a lot like money laundering,” says businessman Tim Cullen. Despite complaints from states that collecting hundreds of thousands of dollars in cash for taxes is troublesome (to say the least), little has been done to rectify the problem.
A Cautionary Tale
A Massachusetts company running three cannabis dispensaries has found itself in quite the mess despite believing they were following protocol properly. After an eight-month investigation, the company has been ordered to pay $300,000 in restitution and penalties.
This situation has resulted from unintentionally neglecting a state law requiring businesses to pay 1.2 times the regular hourly wage on Sundays and Holidays. The company has admitted that these errors have stemmed from difficulty in hiring a traditional payroll service provider.
Avoiding Compliance Related Repercussions
One way many owners are attempting to get around payroll and tax issues is to misclassify their employees as 1099 contractors to avoid many of the tedious payroll-associated hurdles. Sounds too good to be true? It is! The Department of Labor does not take this kind of infraction lightly, and if you think $300,000 for missing Sundays and a few holidays is a steep fine, buckle up, and fast. If the DOL suspects the misclassification was intentional, you can expect up to $1,000 in criminal penalties per employee and even jail time. So for some legal options……
A Promising IRS Initiative
The IRS has recently launched a program titled “Cannabis/Marijuana Initiative” with the hopes of implementing a strategy to increase voluntary compliance. This is fantastic news for the industry because, as was the case for the dispensary above, often, the breeches are simply a result of misinformation. Hopefully, with an initiative such as this one put in place, small business owners can grasp tax regulations before any compliance issues arise with the guidance of the IRS on the industry’s side.
A Helpful Hand
Another great option is investing in a software solution that supports the cannabis industry and won’t leave you hanging. With payroll support and full-service banking, HCM software can prevent issues that may arise by automating the systems that cannabis businesses spend a great deal of time on in avoiding any missteps. You must find a company that won’t leave you hanging with an unreliable banking service.
Conclusion
While more and more of America seems to be coming around to the idea of legal cannabis businesses being a legitimate industry, we still have some ways to go. In the meantime, covering all your bases and ensuring compliance is the best bet to ensure you don’t end up between a rock and a hard place — and as a result, spending a small fortune in fines and fees. Be sure to keep up with changing laws and consider your options for the best shot at easy and secure payroll and tax keeping.
PeopleGuru develops and supports cloud-based Human Capital Management (HCM) software to help mid-market organizations in the Cannabis Industry attract, retain, and recognize their people and streamline back-office HR and Payroll functions.
PeopleGuru HCM is a highly configurable, true single solution residing on one database that efficiently manages every stage of the employee lifecycle. Behind PeopleGuru’s best-in-class technology, is a team of Gurus who are passionate about helping clients meet their desired business goals by ensuring that they always have the tools and support they need to deliver on their strategic HR objectives, maintain tax & legislative compliance, and boost people productivity.
Alexa is the Assistant Marketer at PeopleGuru. With a B.A. in Advertising and currently pursuing an M.A. in digital strategy, Alexa has a passion for writing, content creation and branding strategy. Specializing in copywriting and unique niche positioning, the world of HCM Software is her latest and greatest challenge.
NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every Friday on Facebook for NCIA Today Live.
On the latest episode, Bethany discusses the millions of dollars the cannabis industry is losing each year to moisture, an update on cannabis policy reform in D.C. as the federal government acts on other issues, an upcoming Fireside Chat Webinar with our Government Relations Team on environmental sustainability, and more.
Registration to the Cannabis Business Summit in San Francisco is now open with special limited-time super early bird pricing on tickets available, head to our website for more information today.
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by Wendy Barr, CEO & Creative Director, Barrcode Branding
by Mike Lomuto, NCIA’s DEI Manager
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by Fred Whittlesey, Founder, President, and Principal Consultant of 
Gary Paulin
Matt Hostacky, Regional Sales Manager, Flex IP Solutions/Cannabiz Text
by Madeline Grant, NCIA’s Government Relations Manager
Steven Lynn, a California resident since 2011, has dedicated his career to destigmatizing and legitimizing the cannabis industry through technology. Steven started his career in cannabis as the Director of Marketing at IndicaOnline in 2017. He now serves as the Director of Marketing at BLAZE® responsible for driving all marketing strategy, brand development, and lead generation programs. His professional background in early-stage B2B cannabis SaaS startups has made him adept at executing scalable, impactful, and sustainable strategies to achieve exponential growth. Steven received his BA in Communications from the College of Charleston in 2006 and is a seasoned marketing professional with over 10 years of experience working in both the entertainment and canna-tech industries.
Pictured Right: NCIA member Sonny Antonio with Sunshine Design and I at MJBizCon at NCIA’s booth.
The mission of 
The cross and leaf image for the movement so effectively portrayed the topic, some of us, while gathering signatures, simply wore 11 x 8.5” signs with this image around our necks to gather attention of potential signers. 
A pioneer in integrated marketing technologies, Albert established his first successful business in 1986 and went on to build a solid track record as an entrepreneur that helped shape the digital industry. A talented leader whose business ranked among Canada’s fastest growing companies for several years running, Albert has assembled the strong management team that will drive extractX business forward. His keen business development approach has resulted in early adoption of extractX labs in global markets.
My name is Michael Webster, and I am the Founder & Managing Member of 
Nicole Cosby
By Rachel Kurtz-McAlaine, NCIA’s Deputy Director of Public Policy 
