As cannabis ages, many of its therapeutic components degrade and transform into less effective compounds. Here’s everything you need to know about cannabis degradation, how the compounds are affected, and a few ways to restore products that have seen better days.
How long do cannabis and hemp buds stay fresh?
Cannabis is made up of various naturally occurring chemical compounds, including cannabinoids, terpenes, flavonoids, lipids, and fibers. Just like all organic materials, these components break down and degrade over time.
Think about your favorite fruits. Fresh oranges for example, will eventually rot as they age and their molecular compounds break down. When exposed to light, their outer layers start to spoil in a process known as photodegradation that causes discoloration and loss of flavor, vitamins, and proteins.
Further enzymatic chemical reactions occur and transform water, vitamins, and other molecules into different formations that can degrade even further with added heat or moisture loss. The oranges will lose their zesty aroma, sweet flavor and will be more susceptible to microbes, which will eventually cause the fruit to spoil. That said, dried fruits can be stored in a pantry for much longer before they’re no longer safe to eat as the “conditioning” or “curing” process can make them shelf-stable for up to a year.
Like dried fruits, cannabis and hemp undergo a curing process that helps to equalize the moisture content among the buds. This process reduces the risk of mold and spoilage while keeping the flower fresh, flavorful, and potent. Following this process correctly can keep cannabis and hemp flower “fresh” for 3-6 months or longer if stored properly. However, even with the most disciplined processes and practitioners, eventually, all organic materials begin to break down from exposure to the elements.
Much like our dried oranges example above, cannabis and hemp stored in suboptimal conditions are more susceptible to “rot” and can lose everything that makes them special. Light and temperature can contribute to the degradation of these natural features, but the biggest factor in terpene degradation is moisture content – or the lack of it. Moisture helps to preserve these compounds for prolonged periods of time.
What happens to the terpene profile and moisture content of cannabis and hemp over time?
On average, 12% of all cannabis and hemp biomass is moisture. As that moisture evaporates, it takes valuable terpenes and other essential oils with it leading to dry and brittle plant matter. Terpenes are naturally occurring chemical compounds found in plants that are responsible for their unique aromas and flavors. They also add and help preserve moisture. Cannabis and hemp contain an unparalleled profile of 100+ different terpene isolates that all evaporate at different rates based on temperature and humidity.
While live terpenes smell most potent during the flowering phase, terpene degradation starts immediately after the buds are cut from the stem. This happens because terpene oils, especially the most pleasant ones found in tiny amounts, tend to have low-temperature tolerance thresholds and evaporation levels. Once these terpenes have evaporated they will not be replaced by the living plant after cutting. This is why curing and storage is so important post-harvest. The curing stage allows for the terpene profile to mature but, even during this process terpene potency will continue to weaken.
When flower is stored below 50-55% RH (Relative Humidity) it leads to the fragile cannabinoid and terpene-rich trichomes to become brittle and break off. This lowers potency and causes the terpenes to evaporate with the remaining moisture content. The longer cannabis and hemp are stored in these conditions, the less potent, flavorful, and aromatic they become. On the other hand, going over 65% RH is in the danger zone of where mold can thrive and wreck a harvest with bona fide rot.
Who is affected by terpene and moisture degradation?
In short, terpene degradation affects everyone. Growers see the most significant profit loss as evaporation can take pounds and pounds of cannabis away from their final numbers in as little as 14 days. Dispensaries also see a loss of profit as the flowers dry during transit and while sitting on the shelf, making it so that they paid for more than what they actually ended up selling to their customers.
In the end, consumers are eventually the ones left holding the bag. Not only is the flower at its highest degradation stage by the time it gets into their hands but loss in weight can turn a pre-packaged 3.5g eighth into 3.15 grams or less.
The example in the graphic below outlines how moisture degradation affects both yields and profit.
How can you stop your cannabis from drying out?
Using orange peels and pieces of bread for rehydration used to be the norm in what feels like ages ago. In the more recent past, cultivators, dispensaries, and consumers alike have relied heavily on moisture-control products like Boveda brand or Boost brand humidity packs. These products can help to keep moisture in the 50-65% optimal range. However, they do have their drawbacks.
The humidity packs have a definite shelf life and in extremely dry conditions, they can’t keep up with the rate of evaporation – almost to the point where many claim they don’t actually work. While they can help maintain some moisture content, they can’t rehydrate buds that have gone below the 50% humidity threshold. This makes them closer to a moisture stabilizer of sorts than a moisture booster or replenisher. Beyond using the aforementioned “ancient ways” to rehydrate abused cannabis flower, these packs have been the only option available to the industry.
However, recently a new product on the market called the “Cure-Egg” has been making waves and has been proving invaluable when it comes to product reclamation and preservation. The Cure-Egg’s patented ergonomic design and utility works in a similar way to the hydration packs but boasts the ability to rapidly rehydrate biomass in a few days’ time while staying under the mold growth threshold.
In addition to its ability to quickly rehydrate cannabis and hemp flower it also comes with the added benefit of terpene infusion to counteract terpene loss. Oftentimes beautiful-looking flower is grown but it somehow misses the mark when it comes to the nose. This product could be a game-changer for farms, dispensaries or anyone sitting on older product that has lost its zing from prolonged storage or errors in production.
Users are quickly finding out that they can take less than premium flower destined for the world of “affordable pre-rolls” and easily turn them into a flavor and aroma-packed desirable product that doesn’t have to come at a discounted price. Time will tell if this product will become the next industry staple but one thing is for certain, innovative new products are definitely shaking things up.
Peak Supply Co provides the first true all in one solution providing terpenes, vape cartridges, package design and production, helping clients progress from starting creative to finished product.
A Full Plate For Congress – Status Update for SAFE Banking, MORE Act, CAOA, and Veterans
Photo By CannabisCamera.com
by Michelle Rutter Friberg, NCIA’s Deputy Director of Government Relations
I’m not sure if you’ve seen the news, but Congress has had a lot on its plate recently: negotiations over infrastructure, the budget, the debt ceiling, reconciliation, not to mention the ongoing COVID-19 pandemic! And while the path to cannabis reform has been slightly overshadowed by some of these larger issues, for the time being, the NCIA team is continuing to work tirelessly and incessantly on your behalf to enact legislation that would help you and your business. Let’s take a look at some of the more recent developments from Washington, D.C:
SAFE Banking:
Last month, the House passed the language of the SAFE Banking Act for the fifth time via the must-pass National Defense Authorization Act (NDAA). NCIA and our allies on Capitol Hill are always trying to be creative and come up with new, different avenues to advance our policy priorities, and the NDAA was a great opportunity that we were able to take advantage of! NCIA will continue to work with members of the Senate Armed Services Committeeand other stakeholders to push for the SAFE Banking Act to be included in the final bill language. Stay tuned as the NDAA process unfolds throughout the remainder of autumn.
The MORE Act:
Also last month, the House Judiciary Committee passed the MORE Act out of committee by a vote of 26-15 but the bill still has a long journey ahead of it. It’s unlikely that committees like Ways and Means and Energy and Commerce will waive their jurisdiction again, and it’s critical to remember that the chamber actually became slightly more conservative following the 2020 election. Committee schedules are jam-packed right now, however, we continue to meet with those with jurisdiction over the MORE Act and encourage them to take up this important piece of legislation.
CAOA:
The discussion draft of the Cannabis Administration and Opportunity Act (CAOA) was unveiled back in July by Senate Majority Leader Schumer (D-NY), Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ). In the following month, NCIA worked diligently with our Evergreen Roundtable, board, committees, social equity scholarship members, and others to provide detailed feedback on various topics as requested by the Senators. NCIA continues to be a resource for the Sponsoring Offices and committees of jurisdiction, however, official bill introduction likely won’t happen until early-2022.
Veterans:
Last week, the House Veterans Affairs Committee: Subcommittee on Health held a hearing on a number of bills; among them H.R. 2916, the VA Cannabis Research Act of 2021. While this bill is not a piece of NCIA priority legislation, we applaud the committee, longtime sponsor and ally Congressman Correa (D-CA), and their teams for discussing this important topic. Of note is testimony from Dr. David Carroll, Executive Director at the Office of Mental Health and Suicide Prevention at the Department of Veterans Affairs (VA). His testimony is only about a page long, but the gist is 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.
Even though Capitol Hill’s bandwidth is stretched, NCIA will continue our work in Washington, D.C. to get these (and other) cannabis provisions enacted into law. Have questions or thoughts? Find me over on NCIA Connect!
Video: NCIA Today – Friday, October 15, 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.
Take A Survey: U.S. Cannabis Industry Sentiment and Business Conditions
NCIA chief economist and his cannabis economics firm, Whitney Economics, are collaborating with NCIA to conduct a national survey of businesses and stakeholders in the U.S. cannabis industry. Below, please find a link to the Survey of U.S. Cannabis Industry Sentiment and Business Conditions. It examines the key issues facing the industry including what you are experiencing when doing business in the industry. The survey seeks to investigate what is working and what can be improved from the perspective of businesses and stakeholders in the cannabis industry.
The goal of the survey is to tabulate ancillary business and cannabis operator opinions on the state of the U.S. cannabis market. Responses are confidential and will be kept anonymous.
Your participation and insights will help policymakers understand the issues that face the industry from your perspective. The survey takes between 4–5 minutes to complete. Please complete the survey by Sunday, October 31.
As we make our way closer to 2022, the world is also entering a new paradigm for the cannabis industry. Due to advancing global legalization efforts, cannabis use is gaining mainstream acceptance for the first time in history. With these shifting perspectives also comes the rapid deterioration of traditional stereotypes.
Today, cannabis is not only widely regarded as a legitimate medicine, but many people also look to it as a performance tool. To this end, the endorsement of the herb by pro athletes, media icons, and high-powered executives has again turned our conceptions of cannabis on its head.
With such rapidly shifting perspectives, we are witnessing a monumental moment in time where propaganda is being replaced with factual evidence. As things evolve, active people are not only endorsing legalization, but many swear by cannabis as a performance tool.
Indica and Sativa
The more places that legalize cannabis around the world, the more opportunities we have to study cannabis in controlled settings. As our knowledge expands, so does our ability to use specific compounds in cannabis to aid particular activities.
In the early days of legalization, broad terms such as “Indica” and “Sativa” were used to describe just about every attribute of cannabis – including both product descriptions and psychoactive effects. To this end, Indicas are widely accepted as calming, while Sativas are known to be energetic.
Terpenes & Strains
While the effects of Sativas and Indicas are still widely accepted across the industry, we are also beginning to see a much more nuanced approach to cannabis consumption. Especially when it comes to performance, a more granular perspective of cannabis is necessary.
To maximize the performance benefits of cannabis, it’s critical to understand the constituent parts of the cannabis flower. By understanding the effects of different strains and cannabinoids, and terpenes, people can better choose the right products for their performance needs.
Notable cannabinoids and terpenes and their effects:
Tetrahydrocannabinol (THC): Cannabinoid that provides energy and focus during activities helps boost creativity. Pain reliever after physical activity.
Cannabidiol (CBD): Cannabinoid that relieves anxiety before and during performances. Pain reliever and anti-inflammatory agent after physical activity.
Cannabigerol (CBG): Cannabinoid, which promotes motivation and stimulates pleasure. Pain reliever and anti-inflammatory agent after physical activity.
CLS Holdings’ own City Trees developed several popular products based on the effects of certain cannabinoids and terpenes. Their Calm, Relief, Rest, and Energy distillate vape cartridges offer simplified shopping experiences for new cannabis consumers. By building product messaging around the effects of the products, they help people understand exactly what they are purchasing.
Physical & Mental Performance
While a detailed assessment of the compounds found in cannabis can go a long way, you must also account for your specific performance needs when finding the right cannabis product. Depending on how your body and mind react with cannabis, you can utilize it to help with physical activities and cerebral pursuits.
Whether you are interested in feeling more energized for your workout routine or getting the creative juices flowing for a writing assignment, there is likely a cannabinoid and terpene combination to suit your needs.
Olympic gold medalist snowboarder Ross Regalati swears by cannabis during both training and competition. The famous Canadian snowboarder feels cannabis “improves concentration” and is great for training because flowers are both “fat-free and calorie-free.” While no longer a professional snowboarder, Regaliti is still a world-class athlete. Today, his choice cannabis strain for exercise is the Sativa-dominant hybrid Bruce Banner.
The famous female vocalist Alanis Morisette swears by cannabis as part of the creative process. In an interview with High Times, she states, “As an artist, there’s a sweet jump-starting quality to [marijuana] for me… So if I ever need some clarity… or a quantum leap in terms of writing something, it’s a quick way for me to get to it.” Morisette can utilize the right cannabis product for her needs and push through creative boundaries and explore new territories.
Tips for Finding the Perfect Fit
While studying different terpene profiles and cannabinoids is a great way to learn about the effects of cannabis, you also need to consider your physiology. Notably, a cannabis product that works well for one person won’t necessarily do the same with another.
For example, if you are an introverted, anxiety-prone person, using an energetic strain like Diesel for a social situation might not be a good idea. In this case, a mellow Indica CBD hybrid like Cannatonic might be just what you need to feel relaxed and engaged. Yet, a naturally extroverted person would likely enjoy an energetic strain for social situations and need the CBD hybrid to wind down at the end of the day.
If you aren’t sure what cannabis products will work for you, we recommend visiting a credible dispensary with well-trained budtenders. Once you have sound recommendations, always start small when experimenting with new cannabis products. With a bit of careful trial and error, you will likely discover cannabis products that can help you with anything from enhancing your workout to stimulating your sex life.
Summary
Having been on pain management therapies since the age of 17 for my Kyphosis, I now rely solely on concentrated cannabis extracts to manage my pain and keep my Activities of Daily Living at peak performance. Being diagnosed at 17, I was prescribed 1x Hydrocodone per day to manage my pain. By the time I graduated from Pharmacy School, I was taking 18 pills a day (540/month) to manage my pain and the side effects of other medications. It’s been 8 years since I’ve taken a prescribed medication and cannabis and cannabis products have replaced every medication that I was on prior. I’m grateful and humbled to be a key member of a team that produces the very own products I use to manage my health and wellness.
Looking back just a few short years to the genesis of legal cannabis, it’s remarkable to see how far we have come. In the industry’s early days, people didn’t have the luxury to match a specific cannabis product to a particular performance need. Not only was our knowledge of cannabis not sophisticated enough to accomplish this task, but Good Manufacturing Practices (GMPs) were still lacking in the early days.
As our knowledge of cannabis continues to expand, so does our ability to make informed decisions on the products we use. Whether you are a trail runner who enjoys a Sativa before you head to the mountains, or a musician who likes to settle into practice with hybrid flowers, some careful study will lead you to the right products for your performance needs.
During this period of rapid change, it’s exhilarating to see negative stereotypes of lazy cannabis users finally being upended. Even more, it’s incredible to witness pro athletes, high-powered executives, and famous artists not only advocate for legalization but openly promote cannabis as a performance tool.
Dr. Monaco is the Director of Laboratory Operations forCLS Holdings’ newly opened approximately $4 million laboratory, and is responsible for all day-to-day operations inside the North Las Vegas facility. Dr. Monaco brings over 8 years of licensed & regulated cannabis experience, starting back in 2012 when medical marijuana first opened in Arizona, he has held numerous positions, with escalating responsibilities year over year. He graduated from the University of Arizona College of Pharmacy, in Tucson, Arizona, with a Doctor of Pharmacy in 2010.
Member Blog: Pitch Deck Creation – Attracting the Right Investors
Although it should have taken only a few weeks, it took three months for our team to craft one of our most successful pitch decks. Why? This was an extremely complicated cannabis organization with a holding company that had ownership in numerous LLCs, various product brand companies with varying financial needs. Eventually, all of the complex components were streamlined, and the investment package was simplified, resulting in a stellar pitch deck that was pre-approved for $20.5m. But how was this accomplished?
The Three Key Pitch Deck Secrets
There are three main secrets that we have found when reviewing, revising, and creating pitch decks across the cannabis industry. Below are a few concepts we consider when crafting a fundable pitch deck for clients:
The Investor’s Criteria
Depending on the amount of funds that a company is seeking to raise and the ROI structure, each entity is placed into one of two categories: a. Angel/VCs or, b. Investment companies/family offices. Once determined which category you’re in, you’ll have a greater understanding of your target audience. Unfortunately, after interviewing over 300 cannabis companies, we’ve learned that most pitch deck creators do not know who their target market is, and therefore are unclear in their pitch deck offering. Rather than presenting yourself, your company, and your idea to an investor, it’s vitally important that you know the criteria each investor wants to see before crafting your pitch deck.
For instance, we recently reviewed an amazing cannabis pitch deck that was seeking $65M for its first phase to gain seed capital. Since the company is pre-revenue and the proof of concept still being developed, in our three-page analysis we stated that the wording would need to be geared toward an Angel/VC audience since they did not fit the Investment Company criteria.
The Graphic Design
The quality and layout of the graphics used within your pitch deck cannot be understated. In fact, the quickest way to end any form of communication with an investor is to present a low-quality pitch deck with pixelated graphics, photos without uniformity, or those that lack a modern feel. We know many companies that decided to save money and “wing it” only to discover that seasoned investors make lightning-quick decisions based on the quality of what they see. The secret? Ensure that the quality of the deck matches the size of the raise.
The Blending Formula
What is the primary purpose of a pitch deck? Is it: a. Educational, b. Motivational or, c. Financial? The answer is, of course, all three. However, very few companies know how to skillfully blend these components together effectively and in proper proportion. The majority of pitch decks only focus on thoroughly educating the investor, droning on and on, page after page, citing the facts and statistics of the industry. Competitive advantage, product efficacy, and detailed projected growth charts and graphs are better left in the business plan. Seasoned investors are masters in their industry and are looking for a pitch deck that lightly educates and motivates them through interesting concepts that make financial sense.
In Conclusion
The purpose of a pitch deck is to be a visual representation of the company’s integrity. It reveals a true picture of the value that the team places on the future success of the company. Although it’s now easier than ever to gain funding (especially thanks to tokenization), the first step is to craft a pitch deck that attracts the right investors who will want to fund your cannabis dream.
May this be your year to accomplish all that you and your company could imagine.
David B. Wilkinson is the Co-Founder of The Hemp Business Advisors, Inc., and the Founder & President of The Investment Training Institute, LLC. For over 20 years he has been providing executive coaching across various industries but his passion for the Cannabis plant and the people who are connected in this space, are his target audience. He also speaks at conferences across the U.S. on funding, pitch deck creation and other types of business topics. He is directly involved in vetting cannabis companies who are looking for funding and trains business owners how to gain capital effectively.
The Hemp Business Advisors, Inc., was founded in Fort Collins, Colorado in 2018 and has been a platform for connecting companies across the cannabis Industry, creating dynamic business curriculum that is tailored to the needs of the industry and providing online and live presentations that motivate, inform and equip business individuals who are seeking to increase their company’s financial growth.
Committee Blog: Five Best Practices to Future-Proof Your Cannabis Brand on Social Media
By Jake Setlak, Receptor Brands on behalf of NCIA’s Marketing & Advertising Committee
Social media platforms can be perilous for cannabis businesses. Every brand feels the need to have a presence on social media. Their typical approach is to accumulate followers by posting what you think those followers want to see. Then one day, without notice, those followers — and the platform algorithm’s understanding of why your brand was relevant to them — vanishes. Cannabis brands on social media are surrounded by so much gray area, it’s hard to know what makes your presence vulnerable to risks of suspension or worse. To help brands avoid those gray areas, here are five practices to help cannabis marketers future-proof their brands on social media.
1. Embrace standards.
Brands are held to higher standards on social media than users are. This is especially true for brands in regulated categories like cannabis. Why? Standards help protect against fraud and deception. These protections serve both consumer (users) and commercial (brands, businesses) interests across a wide variety of media channels. Think: truth in advertising and consumer protection laws. Get familiar with the federal, state, and municipal or regional laws that apply to all commercial interests where your cannabis brand operates (or find someone to do this on your behalf).
2. Think about your reputation.
How you behave on social media says a lot about your brand. There’s more than content to consider — bad behavior can permanently discolor your brand’s reputation. Why? Everyone can see what you’re doing. Openly engaging in deceptive practices shows consumers, partners, and regulators that your brand isn’t trustworthy. Those duplicate and back-up Instagram profiles? They signal to the rest of us that you know you’re taking risks. That could be all it takes to inspire someone to flag or report you. Social platforms notoriously rely on users to police the community — if users like you don’t report violations, the platforms tend not to know about them.
3. Safeguard your brand’s presence.
This is worth repeating, regardless of being in cannabis or another category: avoid getting banned. Why? No back-up profile can magically restore lost followers and engagement. When social media platforms decide to allow cannabis brands to use paid advertising, you’ll be locked out. This is why it’s important to set clear goals and objectives for maintaining your brand’s social presence.
Establish a compliance strategy for your social media efforts with three must-haves:
Social Media Policy for Employees
Community Management Guidelines & Protocols
Legal Counsel (professional advice regarding cannabis category regulations, truth-in-advertising standards and consumer protection laws, and social media platform policies)
4. Know what you can say and how you can say it.
Be careful not to misinterpret another brand’s social media activity as setting a precedent for yours. Why? Seeing someone else break the rules is not license or permission for us to break those same rules. Plus, let’s face it — legitimate cannabis brands are already working uphill against prohibition-era prejudices. Know a bad example when you see one, and more importantly know what you can say and how you can say it on social media platforms.
What you can say:
DO stick to “social” objectives. Take the higher ground. Speak from your brand values, not necessarily what the “insta” know-it-alls might insist. Be a valuable presence in the community, not just more clutter in their feed.
DON’T antagonize the community. Remember, you’re a commercial interest and held to higher standards than users. It looks bad when brands argue with competitors, followers, or other brands. The Internet is full of trolls who prey and depend on your impulsive responses — even if it isn’t your aim to deceive or misinform, you may already be a target because of the stigma that still comes with cannabis.
How you can say it:
DO communicate generally. Make observations. Be insightful. Grow your audience. Engage the community.
DON’T advertise or promote. Explicit calls-to-action (CTAs) like “get”, “find”, “try”, or “buy” aren’t allowed for cannabis, especially on platforms where you can’t guarantee your audience is of a compliant age. This is the same reason you want to avoid depicting or promoting over-consumption.
5. Set the bar higher.
Aim to be the most upstanding citizen in the cannabis community. Why? No one knows when federal legalization will happen or how quickly a platform’s policies will change. This means no one can say it’s too soon to start preparing for such an eventuality!
There are four ways you can start raising the bar right now:
Make content that makes a difference.
Content creation for startups and small businesses doesn’t have to be overwhelming. Start with measurable objectives that justify your content creation process and budget. Scale your efforts toward more effectiveness, not merely more frequent posts. Set aside time to regularly evaluate and optimize your efforts. This is where well-placed focus will go a long way for you. It might take more effort to get beyond the “recommended” or popular approaches, but you will discover that you move faster and spend less when you go with what you know: the meaning and value your brand offers the cannabis community.
Apply paid advertising standard to organic content.
These apply to paid advertising but may in some cases also apply to organic content posted by commercial interests (brands). Platforms change frequently and without warning, so it’s wise to stay current on the policies and guidelines of the platforms you use.
Here are helpful resources for the five social platforms where many brands — regardless of category — typically start on social media. Enforcement may still be a mystery in many cases, but these policies help us understand when a post or profile might venture into gray areas and risk a suspension or worse.
Jake Setlak is a founding member and head of Creative Strategy / Brand Experience at Receptor Brands, an agency custom-made for cannabis that transforms relationships between cannabis brands and their customers. Prior to his work in cannabis, Jake spent 20 years guiding the digital transformation of some of the world’s biggest brands and their advertising agencies. He’s worked in social media channels since before they were called “social media” and invented the Facebook Comment Ad format (now known as the boosted or promoted post). Jake is a member of NCIA’s Education Committee but produced this content while a member of the Marketing & Advertising Committee and serving on its Next-Generation Advertising subcommittee.
Video: NCIA Today – Friday, October 8, 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.
How Sweet It Is… Contemplating Cannabis Confections
by Rachel Kurtz-McAlaine, NCIA’s Deputy Director of Public Policy
Have you ever had a bad experience eating edibles? Someone gave you a homemade brownie, you ate it, and they were like, “You weren’t supposed to eat the whole thing!” There are many people who won’t eat edibles at all because of past negative experiences. Maureen Dowd’s now infamous column about her harrowing experience eating too much of an edible was from an infused chocolate bar she bought from a licensed retail facility in Colorado. That didn’t do much to help the scary reputation of edibles.
Dowd’s article quoted Andrew Freeman, Colorado’s Director of Marijuana Coordination at the time: “There are way too many stories of people not understanding how much they’re eating. With liquor, people understand what they’re getting themselves into. But that doesn’t exist right now for edibles for new users in the market.” To imply that liquor is somehow safer was disingenuous and dangerous. In the seven years since this article was written, it’s clear that the alarmist predictions about cannabis edibles aren’t coming true, but I just read an article about another fraternity pledge that died recently from alcohol poisoning.
However, Dowd and Freeman were both correct that as the responsible cannabis industry that we are, we should be educating our consumers on the potential harm from overconsumption (e.g. extreme discomfort) and how to properly titrate. While we know it’s not as dangerous as it’s made out to be, happy customers make for repeat customers. We have gotten more sophisticated as an industry in the last seven years with things like labeling, dosage, and consistency, but there is so much potential for more innovation and refinement.
I consider edibles to be one of the best things to come out of the legal, regulated cannabis marketplace, and they’re gaining in popularity. According to BDSA, the edibles market grew 39% over the past year, and with good reason: people prefer the healthier aspect of eating to smoking, it’s more discreet, and it’s consistent. For some people it’s like eating a gummy vitamin or dietary supplement. There is also a trend toward micro-dosing, especially if the edible is so tasty it should be enjoyed in larger quantities, and playing with ratios between THC, CBD, and other cannabinoids. People can pay attention to their bodies and discover what amount works best for what they’re trying to achieve.
I was honored to speak recently at the American Association of Candy Technologists’ 2021 Technical Seminar. They were incredibly friendly people, and I’m not just saying that because they gave me enough candy it reminded me of trick or treating in that good neighborhood where there are a ton of kids and all the houses are decked out and you come home with a huge bag full of candy. They were genuinely nice! We played trivia and roasted s’mores in the evening. It felt like the summer camp every kid dreamed of going to.
They were also extremely interested in learning more about the cannabis industry. NCIA was invited to speak through one of our common members, Clara Food Technology, who provides expertise in making better cannabis edibles through science. In fact, most of the people I met who were interested in the industry weren’t planning on starting their own edible company, but providing the industry with some pretty incredible food science expertise that can only make the industry better as a whole. Cool things like making sure candy doesn’t get too hard or stick together, the ingredients are properly mixed so they’re consistent throughout, ramping up production with new systems and machines, and staying shelf-stable.
People who are entering the edibles market should absolutely find one of these food science consulting companies from the start to help avoid costly errors. Edible companies should have a food science consultant on hand, or even on staff, to elevate the quality and consistency of the products, and bring fresh ideas.
If you’ve been hesitant, take another look at edibles and the value they bring to the cannabis industry. We’ve come so far since the Dowd article, but the potential is limitless.
Member Blog: Protecting Your Cannabis Business from Ransomware
The question many cannabis businesses are asking themselves these days is – could I be a target, too?
The answer is yes, since ransomware gangs target businesses of all sizes and in all industries, including cannabis. At the same time, there are a couple of reasons why many cannabis businesses are less likely to be targeted, which we’ll get into.
What Is Ransomware?
By definition, ransomware is a type of malware that encrypts your files so that they’re inaccessible and demands a ransom in the form of cryptocurrency in exchange for a decryption key to restore your data.
Ransomware is designed not only to encrypt the files on the device it infects, but also the files on anything that the device has access to, including other computers, servers, company file shares, and backups. You can run into a situation where literally all your company’s important files are encrypted before you even realize what’s happening.
Why Windows Is Key
Most forms of malware, including ransomware, are designed to target Windows devices only, mainly since it’s the most popular operating system (OS) in the world and the one that most businesses use.
Fortunately for cannabis companies, most of their actual operations don’t rely on Windows. Most cannabis point of sale (POS), enterprise resource planning (ERP), and cultivation software and industrial systems are non-Windows or cloud-based, though there are a few exceptions to this including BioTrack.
A lot of their most critical data – including track-and-trace and inventory and transaction records – are on these non-Windows platforms, and so are relatively safe from being encrypted by ransomware.
Still, a lot of them still use Windows PCs and servers in their back offices and headquarters.
So while a ransomware infection might not be a complete disaster for most cannabis businesses – resulting in days and weeks-long outages and recoveries for the entire company – you still have to worry about critical administrative and other non-operations data being encrypted, as well as whatever damage hackers might do with access to your back office and HQ networks, including stealing intellectual property and banking info.
Protecting Yourself from Ransomware
Firewalls
Network-level firewalls, the IT equivalent of a dispensary security guard checking IDs at the door, can protect you from ransomware by blocking traffic from unknown, suspicious, or blacklisted domains (keeping hackers from both entering your network and transferring data in and out); preventing users from accessing malware-laden sites like adult, gambling, and piracy sites; filtering out malware and spam; and alerting you to suspected intrusions.
Employee Training
The most common source of ransomware? Employees doing things they shouldn’t, like opening attachments in emails from people they don’t know, getting tricked into entering their passwords into phishing websites, visiting websites they shouldn’t be accessing at work, or setting passwords that are easy to guess. Make sure to train them on how to use IT securely when at work.
Secure Your Windows Machines
Including by protecting all Windows machines with strong passwords; setting up encryption (the good kind that prevents hackers from accessing your data); never giving users admin-level Windows access; requiring that users get permission before installing applications; giving users access to only the applications, files, and servers they need access to; applying security updates as soon they’re released; and installing antivirus or enabling Windows Defender.
Backups
Backing up your data won’t prevent a ransomware infection, but it will allow you to recover your data without having to pay the ransom. Just make sure your backups are isolated enough from the rest of your system that 1) your backups aren’t encrypted; 2) you don’t overwrite your backups with the encrypted versions of your files; 3) you don’t back up the ransomware itself.
Ransomware Isn’t Just a Threat, It’s a Wake-Up Call
We don’t know all the details about the Colonial Pipeline hack, but recall that it reportedly wasn’t actually ransomware that brought down the pipeline itself. Instead, ransomware affected some other areas of the company, and Colonial shut down the pipeline to be safe and determine the full extent of the hack.
So just because your most important applications and data are relatively secure from ransomware doesn’t mean you’re not susceptible to hacking in general.
Even if hackers break into your systems and can’t encrypt your files to hold them for ransom, they can still:
Steal credentials
Lock you out of your accounts
Steal sensitive data including intellectual property, banking info, customer data, embarrassing emails, etc. and leak this data on the internet
Use their access or stolen information to trick employees into wiring them money
So don’t view ransomware just as a threat in itself that may or may not affect your business. Cyber attacks existed before ransomware and will still exist after it, if they’re ever brought under control.
View it as an opportunity, now that IT security is as on the top of everyone’s mind as it’s ever been, to take a serious look at your IT security and make the needed investments to protect yourself against both current and future threats.
Eric Schlissel is the CEO/CTO of Cure8, one of the world’s leading cannabis IT services providers. His company helps dispensaries, distributors, manufacturers, and cultivators throughout the U.S. and Canada to plan, install, secure, manage, and scale their IT.
He has been a featured panelist at many cannabis industry events, including those put on by the NCIA and CCIA. He’s also a respected IT thought leader outside of the cannabis industry, being quoted in publications such as Wired, the Los Angeles Times, InfoWorld, and Information Week. Outside of work, Eric can be found gardening with his two small children, trying to perfect the feat of growing a thriving basil plant and ripened tomatoes at the same time. He is currently developing in the fine art of bourbon tasting, enjoys travel, and is a foodie-wannabe.
Equity Member Spotlight: Endo Industries – Nancy Do
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.
Endo Industries CEO & Co-founder, Nancy Do
I was raised in Eastside San Jose by parents who are Vietnam War refugees and moved to San Francisco 12 years ago where my cannabis entrepreneurship journey began. I started off as a grower in my garage in San Francisco and started to expand into grow houses, greenhouses, and warehouses to build what is now Endo Industries.
I built Endo Industries because despite living through some of the lowest times of my life such as getting raided, going to jail, and going through years of emotional roller coasters with the criminal justice system, I know my experience, passion, and background is what cannabis needs. Endo is grounded in science, elevated by culture. Endo represents equity, diversity, the hustle, and the grind and we are building something in cannabis that is exceptional and collaborative. I love this plant and everything plant medicine can represent. I’m not going to let this industry become one-dimensional.
What unique value does your company offer to the cannabis industry?
Endo is a queer female, legacy, and social equity-owned and operated parent company, which is a mouthful but also a unique value proposition in itself. I’ve seen legacy and equity cannabis companies come up with great ideas, passion, experience, and drive but are lacking in organization, upper management, high-level strategy for the long game, and key resources such as genetics, a reliable supply chain, and capital (including in Endo’s own experiences!). As a team, we deeply understand this plant and the creativity of what cannabis culture is and can be. We bring something different and fresh.
Endo provides a few unique things in our model:
Plants from tissue culture free of pests and diseases to our growers and tissue culture services to elevate and protect our brands and breeders
A strong stance of direct and real support for equity and legacy operators through our partnership with Locals Equity Distro to provide distribution services for over 25 equity, legacy, queer and women-owned brands in CA
Workforce and economic opportunity for the Re-Entry Community who have been formerly incarcerated
A tech, blockchain component to collect and share data
What is your goal for the greater good of cannabis?
Virus-free tissue culture plants at Endo’s lab in San Francisco
My greater goal is to create a platform and community that enables the normalization of safe, affordable access to cannabis while uplifting communities that have been affected by the war on drugs. I want to build a world in which we can celebrate art, culture, diversity, and cannabis all in one. And no, it’s not the idealist in me; I know this is the way the world needs to reconnect, compassionately with each other in spite of our differences. We’d certainly find that we have more in common than meets the eye if we let our walls down.
What kind of challenges do you face in the industry and what solutions would you like to see?
Being a queer women of color while also building a business that serves the greater good of our communities is no walk in the park. I would like to see investors and potential partnerships trust, respect, and invest in leaders like me. We need access to real capital and partnerships without undervaluing or controlling our businesses. We can build profitable, thriving businesses if we are just given the chance and there is no better place than the cannabis industry to start.
Why did you join NCIA? What’s the best or most important part about being a member through the Social Equity Scholarship Program?
I’ve always wanted to join NCIA but the membership fee was a barrier to entry. I’m grateful for the opportunity to be a part of an organization giving a voice and making space for equity and under-represented founders both on the legislative level and through NCIA’s channels.
Anything else: What is Endo’s growth plan for the next year?
We just launched a smaller raise of $1M and will be going for a larger round of $4M shortly thereafter. These funds will be used to expand our plant genetics offerings into new territories in the US and globally, which will allow us to foundationally launch the Endo model in every new territory. No doubt, Endo is going to make big waves this coming year to set ourselves up for the many years to come.
Committee Blog: Don’t Wipe Out – Riding the Wave of Cannabis Standardization
Staying ahead of the quick rollout of state, national, and international cannabis regulations is a huge and complex challenge. The patchwork of more than three dozen (and counting) different state regulatory regimes remains disconnected as cannabis remains federally illegal as a Schedule I drug. The framework of regulations and standards that guides allied sectors such as Foods, Dietary Supplements, Pharmaceuticals, or Tobacco is just beginning to take shape. Where do you look for guidance? How do you choose how to invest, how to design your operation, and how to produce?
There are a number of considerations and industry-relevant organizations to become familiar with when looking to conduct business in the cannabis space. In doing so, businesses can operate more successfully and mitigate risk. Risk should not be underestimated – many cultivation and manufacturing facilities will fall seriously short of the expectations of agencies such as the Federal Food and Drug Administration (FDA), Occupational Safety and Health Administration(OSHA), the Environmental Protection Agency (EPA), if risk, both business and consumer health and safety, is not considered upfront. Market pressures will build quickly as brand-savvy companies with significant capital and operational expertise enter the field. One way to avoid wiping out – is looking to national and international standards, guidelines and regulations already in place. For a comprehensive list of relevant standards regulatory bodies, refer to our recent blog post here.
As standards continue to be developed by industry experts for adoption by regulators, businesses can be empowered to run their operations with more predictability and reliability knowing that they demonstrate compliance with approved industry guidelines. Laboratories will have access to valid test methods and reference materials. Equipment specifications will require globally accepted certification marks or labels (such as CE or UL) which ensures safety and longevity of operations.
What is the cost of not adhering to established standards?
A simple batch loss can easily exceed tens of thousands of dollars of lost product, let alone the damage to your brand, labor costs surrounding rework, and relationships with your clients. Crop and batch losses due to subpar equipment sourcing, processes that are not validated, and worse – risk of fines or losing your license are all symptoms of a business lacking standardization.
Credible standards – they are data-driven, go through a rigorous and transparentprocess. In most cases, these standards were developed with input and guidance from federal and international regulatory agencies.
Here is the snapshot today. Read it fast, because it may be out of date next month:
The NCIA has several relevant committees sharing best practices and developing guidance for our industry.
ASTM International, one of the oldest and most recognized Standards Development Organizations (SDO) formed Committee D37 on Cannabis in 2017, and has already approved over 25 standards that provide guidance on key areas such as:
AOAC International, another 100+ year old SDO has a Cannabis Analytical Science Program (CASP) where cannabis standards and methods have also been developed – principally in the area of product standard method performance requirements (SMPRs) and methods of analysis such as:
You don’t have to put your business at risk of wiping out! The resources that NCIA Committees continue to create have your best interest in mind. Stay tuned to ensure you have the latest resources and guidance!
Video: NCIA Today – October 1, 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.
Catalyst Conversations | 9.28.21 | Risk, Security, and Insurance Mean Something Completely Different in Regulated Cannabis
NCIA’s Catalyst Conversations series is an advanced webinar series curated to give enrollees in our Social Equity Scholarship program the opportunity to network and gain access to valuable knowledge that will help them excel in the cannabis industry.
In this edition of our Catalyst Conversations series originally aired on Tuesday, September 28, NCIA’s Risk Management and Insurance Committee teamed up with the Diversity, Equity, and Inclusion Committee to create a powerful discussion every Social Equity operator should join in on.
Legacy and Social Equity operators face many hurdles. One of the biggest hurdles is creating a risk management strategy and gameplan in the regulated industry, which can prove to be very different from the risk management strategies that may have gotten them here in the first place. In the regulated industry, the greatest risks to survival aren’t always so obvious, and the ways to mitigate those risks can often seem too expensive, or even worse, the service providers may be difficult to trust. The still-existent impact of the War on Drugs cannot be underestimated in the role it plays in this dynamic.
During this webinar, we host a lively discussion about the very real threats to the survival of small cannabusinesses, and the ways to mitigate those risks.
Attendees will walk away with these key insights:
• Understand the current state of Security and Insurance in the regulated industry
• Get pragmatic information on what to look for when vetting Security and Insurance firms and coverage
• Learn how to incorporate simple tactics into your current business strategy.
• Understand how the impact of the War on Drugs and making the transition from Legacy markets may affect your outlook on Security and Insurance in a unique way, and what you can do about it
• Recognize the importance of assessing and mitigating financial risk in the regulated industry
A special thank you to the benefactors of NCIA’s Diversity, Equity and Inclusion Program which are listed below!
House Floor Debates, Markups, and Beyond for SAFE Banking and MORE Act
Photo By CannabisCamera.com
By Michelle Rutter Friberg, NCIA’s Deputy Director of Government Relations
Usually, things are somewhat slow when it comes to cannabis policy reform in Washington, D.C., but the last week has been quite the whirlwind! In the span of one week, the SAFE Banking Act was included in (and passed via) the must-pass National Defense Authorization Act (NDAA) and the House Judiciary Committee marked up and subsequently passed the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act!
Last week, the House passed the language of the SAFE Banking Act for the fifth time via the must-pass NDAA. NCIA and our allies on Capitol Hill are always trying to be creative and come up with new, different avenues to advance our policy priorities, and the NDAA was a great opportunity that we were able to take advantage of! At first, there were some concerns that the language (proposed as an amendment to the larger package) would not be ruled germane, however, we were able to clear that hurdle in the House Rules Committee, allowing the provision to move forward for Floor debate and a vote.
The amendment was then debated for a short period of time on the House floor and for the first time ever, passed via voice vote! This is incredibly exciting and reinforces the strong, bipartisan support that this legislation has.
SAFE’s inclusion in the Senate’s version of the bill is a bit more uncertain. Currently, the Chair and Ranking Member of the Senate Armed Services Committee (which has jurisdiction over the NDAA) have circulated their draft of the package that differs in many ways from the House’s bill. Here at NCIA, we will be working with Senate allies to determine what’s next for the NDAA in that chamber and collaborating with other stakeholders to ensure that the SAFE Banking language is included and passed into law. I’ll be the first to admit that I am not (nor have I ever been) a defense lobbyist, however, I’m definitely getting a crash course now!
Then, less than 24 hours later, the House Judiciary Committee announced that they would be holding a markup on the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act. You’ll recall that the MORE Act was marked up in that committee in November 2019 (during the last Congress), and passed by a vote of 24-10. Then, after all of the other relevant committees waived their jurisdiction, the MORE Act was brought to the House Floor in December 2020 and passed 228-164.
While the MORE Act passed out of the Judiciary Committee this session by a vote of 26-15, the bill still has a long journey ahead of it. It’s unlikely that committees like Ways and Means and Energy and Commerce will waive their jurisdiction again, and it’s critical to remember that the chamber actually became slightly more conservative following the 2020 election. Additionally, there is no companion legislation in the Senate as of publication.
As always, NCIA will continue to work with our allies and stakeholders on and off Capitol Hill to get these policies enacted into law. Have questions? Find me on NCIA Connect. Want to become more involved with policy at NCIA? Learn more about our new Evergreen Roundtable here.
Video: At a Glance – Highlights from #MWCannaBizCon!
The industry’s most influential trade association guided the Midwest into a wealth of opportunity and growth at the 2021 Midwest Cannabis Business Conference last week in Detroit, Michigan. At #MWCannaBizCon, attendees networked with industry leaders, found products and services to grow their cannabusiness, and took advantage of the specially curated content focusing on the Midwest market.
Watch this video for highlights, and be sure to join us in December at #CannaBizSummit on December 15-17 in San Francisco.
Member Blog: 8 Ways Not to Blow it with Cannabis Customer Acquisition
Cannabis dispensaries are at a crucial inflection point: as dispensaries become ubiquitous in consumer markets, the stigma of purchasing cannabis products is declining rapidly. What does this mean? Cannabis consumers with significant discretionary income are ready to begin with their first dispensary experience.
It is absolutely crucial to acquire these customers early in the lifecycle before your competitors capture them. The good news is that this first experience offers incredible potential to create a loyal and accretive customer. The bad news is that it is really easy for the cannabis dispensary to completely blow it.
Let’s take a page out of the luxury hotel operator playbook. They really get to know new guests, and they use what they learn to mint those guests into repeat customers who continually increase spend and refer like-minded customers.
Hoteliers talk and strategize about the Guest Journey. They track the touchpoints that guests encounter during the stay, and create service standards (like the 10&5 Rule described below) for these ‘moments of truth.’ For your staff, the Guest Journey begins with arrival and ends with departure.
Here’s how the best hoteliers prosper, and how cannabis dispensaries can participate.
Watch What You Say. Words Matter.
Terms like users, consumers and customers are words that don’t exist in hotels. Their customers are guests. And here is why that is both useful and critical. Every person in every culture receives guests, not customers, into their homes. Your staff needs to be thinking that the dispensary is their home and they are receiving guests there.
The 10&5 Rule: Know it, Love It.
When guests are in the proximity of a staff member, staff makes eye contact at 10 feet and greets first at five feet. Also called ‘having your radar on,’ ensure your staff understands this golden rule and practices it. Never burden your guests with having to begin a guest interaction. Extra credit if your staff acknowledges guests in line.
Make Curb Appeal, Curb Capture.
Details matter. Signage is where new guests’ eyes go first, and it should look professional – perhaps even homogeneous. Funny names, caricatures and double-entendres risk alienating new customers before they pull into your lot. The quality of the signage must absolutely be pristine. Chipped paint, dirt, or poorly lit signage sends out a constant radio signal that a business doesn’t pay attention to presentation or detail.
At a luxury hotel, the grounds are impeccably maintained and the point of entry is like a stage. You don’t need a grove of regal palm trees in your drive to make a good impression, but neatly cut grass, a perfectly maintained parking area, sidewalks free of cracks, and a front door that looks well cared for are table stakes.
Make Your Doorman a ‘Welcome Man.’
Often, dispensaries have a staff member at the door checking identification. It’s a mistake to view this interaction simply as compliance. If the door staff are provided a seat or something to rest on, have them rise to their feet when a car pulls in and make sure they hit the 10&5 every time.
Have you ever arrived at any hotel and seen the door staff sitting down? People interact naturally with each other standing up, ‘in-person.’ New guests are going to learn a lot about your dispensary from this initial encounter with your staff. Don’t blow it by making it solely about checking ID. Checking an ID is a transaction. Welcoming a guest is engagement. Speak in full sentences and start with a greeting. “Good morning/afternoon/evening” works every single time, and why not add the word ‘welcome’ to set the tone? Eliminate the meaningless ‘How are you?’ and do away with the command, ‘ID Please.’ First impressions are everything!
There is no need to be stiff or formal, but retire phrasing like ‘no problem,’ ‘thanks guys,’ and ‘how are you doing’?
‘The Luxury Concierge’ Starring Your Budtender.
The concierge is central to the luxury hotel experience. Concierges are experts as it pertains to everything a guest needs, but they are much more than that. A concierges’ main purpose is to surprise and delight guests. Why? Because surprise and delights create deeply emotional reactions that not only last a long time, they lead to storytelling.
In order to surprise and delight, the concierge/budtender must first be disarming and approachable (10&5 Rule, again). A real smile, focused eye contact and at-the-ready posture tells the guest ‘you can trust me.’
Next, the master concierge/budtender will engage and connect by reading the guest for cues, asking relevant questions, and then – and only then – beginning the collaboration. In a hotel, the family of four shlepping suitcases gets the same greeting as a tense-looking businesswoman… but the master concierge offers them very different surprises and delights.
‘What and how’ questions are the cornerstone of collaborative guest interactions. Asking questions that can be answered with a simple ‘yes’ or ‘no’ is not only unproductive, but it can be misleading. ‘What brings you in today?’ is so much more powerful than ‘can I help you?’
With the above said, it is so important for your staff to be authentic. Stay away from scripts, and insist on outcomes. Let the guest do most of the talking; your staff needs to be using their eyes and ears – not their mouths – as meaningful guest interactions start to unfold.
For instance, when a guest asks a concierge for a restaurant recommendation, it doesn’t just end there. The concierge will instead ask what kind of restaurants they like, if there are places in which they are already interested, who will be dining, or if there is a special occasion. Within 30 seconds, the concierge can learn that the guest is celebrating a birthday and that people in the party don’t like noise.
A good rule of thumb is to answer a question with a question that advances trust and engagement. ‘Do you have edibles?’ is better answered with, ‘Certainly, we have a lot of varieties that are popular, what types of edibles are you interested in?’
Guest Appreciation Equals Business Appreciation.
Okay, so the guest has arrived and had a positive first impression; your budtender probed a bit and has the guest excited to go home with some really great products. Don’t let this end on a transactional note dictated by the payment process.
Appreciation needs to be shown before the payment begins, making it a singular, impactful act. Don’t let meaningful guest appreciation get muted or lost in the process of exchanging payment for goods. So many retail transactions end with the tasks of discussing payment, bagging products, and closing out the sale.
Thank the guest for coming in today. You can compliment and/or thank them for sharing useful information with you. You can express your enthusiasm for the purchase decisions they made.
Your new guest has just agreed to trust you and your team with their health and lifestyle. Again, avoid scripts, but challenge your staff to create an outcome where the guest really feels appreciated.
Ask for More Business.
What’s the best thing you could hear when you have had a great stay somewhere? An invitation back.
People love to be invited back. Instead of, ‘thanks, come again,’ why not tell the guest that you can’t wait to hear how they like the gummies, or ask for feedback when they return. Pairing the invitation to come back with a request for feedback is how a relationship with your customer is made.
Hire What You Cannot Train.
Time and again, top hotels hire great people. And while training and learning/development is central to hospitality, there are some things you simply cannot train people to do or be. When we ask leaders about their best staff members, the following traits consistently arise:
An Innate Desire to Help.
The best staff are the first to hold a door, offer directions and clean up the dishes. They don’t have to be trained to jump in and help.
Curious Extroverts.
The best hotel staff lean in, they like talking to people and are not afraid to chat with surgeons, duck hunters, auto mechanics, and hospital patients about anything.
Passion for the Experience.
Ask a potential hire what they love most, and they will undoubtedly talk about great experiences and great relationships. They like having a great time and they want others to feel the same.
Founded in 1996, Coyle Hospitality Group is a market leader in designing and implementing mystery shopping, quality benchmarking, brand compliance and market research programs globally. The company has facilitated over 200,000 evaluations since its inception through its worldwide panel of over 35,000 professional evaluators representing its clients’ true customer profiles. Areas of expertise include cannabis dispensaries, restaurants, hotels, resorts, retail, cruises, spas, timeshares, and other high-touch experiential industries.
Jim Coyle has developed and deployed customer experience and brand measurement programs for over 500 companies in travel, property management, cannabis and healthcare. Jim is especially passionate about hospital patient experience and the ever-evolving consumer interest in experiences.
Member Blog: How to Avoid Compliance Issues with Your Cannabis Business
All businesses must adhere to tax rules and regulatory compliance, but for cannabis companies, the laws are significantly more challenging to navigate. The cannabis industry has specific tax rules that differ from other sectors, and failing to follow them can result in severe financial and legal implications.
At Green Space Accounting, we know that managing your finances as a cannabis company can be much more complicated than the average start-up. Keeping a compliant financial system in place is not always easy with constantly changing state laws and regulations.
Here are a few tips on how to avoid compliance issues with your budding cannabis business.
Have Your Business Documentation in Order
One of the first steps to staying compliant is to have all the appropriate financial information and licensing for your business on hand.
Always be prepared with copies of your cannabis license, information from your seed-to-sale tracking system, and your point of sale software records. Having this paperwork, along with legal documents like operating agreements, Articles of Incorporation or Organization, and EINs will ensure that you have a fully compliant relationship with your bank, as well as local and state government.
It’s also a good idea to have detailed records on all sales transactions within your business, especially ones dealing with cash. Cash is used more frequently in cannabis dispensaries than in other retail industries. Having proper cash-handling procedures in place can save you from theft and keep you ready for any unexpected auditing.
Stay up to Date with State and Local Regulations
It’s important to remember that regulations surrounding cannabis change over time, so monitoring your state legislature and all applicable state and local agencies is crucial to keeping your business compliant. By making yourself aware of the rules for the cultivation, manufacturing, and distribution of cannabis, you can avoid the risk of fines or legal action and build a better relationship with your local government, law enforcement, and, most importantly, customers.
One way to stay up to date with regulatory compliance laws is to consume state and industry news surrounding cannabis daily. Not only do these publications keep you informed on business and consumer trends, but they also avoid complicated legal jargon, speaking directly to business owners in a way that’s easy for them to understand.
Another great way to stay on top of state and local cannabis laws is to network and build relationships with your local regulators. While maintaining compliance internally is the biggest goal, creating an ongoing relationship with the regulators in your area can help you better understand the changes within the industry and the steps you can make to conduct business more transparently.
Develop SOPs, Training, and Reporting Systems
Think of these SOPs as a set of rules that all employees need to abide by to keep your company’s production, sales, and accounting processes consistent and safe. Having a set of standard operating procedures can help you recognize potential compliance issues and fix them before they occur. These procedures can include an employee handbook on proper handling and storage of cannabis consumables to installing a seed-to-sale tracking system for inventory management purposes.
The best way to stay on top of your SOPs is to create reports, checkbooks, and logs in all aspects of your operations to show regulators that you are a transparent business that has a complete understanding of your state’s compliance laws. Frequent compliance training sessions are also an effective way to educate your entire team on the legal and tax regulations associated with your business.
Cannabis Payroll
To avoid issues concerning payroll, installing time tracking software for employees is also a great way to keep your staff organized and stay on top of the 280E tax code. The 280E law denies cannabis businesses federal income tax deduction for operating business expenses, which means that the wages for some employees may be deductible, and some may not be. By introducing software where employees can specify the tasks they’re doing and track the salaries they’re receiving, you’ll stay compliant with the tax code and better understand the productivity your team is generating.
Frequently Audit your Business
Hiring an outsourced accounting team to audit your cannabis business is a great way to avoid any potential risks regarding compliance. Auditors serve as an additional, unbiased set of eyes that will examine all areas of your organization and identity aspects that might need improvement.
If you are looking to stay on top of the legal and tax regulations for your cannabis business on a tight budget, self-auditing your company is a great way to check whether or not your training, bookkeeping, and SOPs are being appropriately implemented.
Entrepreneurs who belong to the National Cannabis Industry Association can receive discounted access to an acclaimed compliance management platform created by Simplifiya, which gives licensed operators a self-audit checklist that helps them identify, track, and mitigate potential issues before it’s too late. The platform also provides templates for creating SOPs customized for each license type and tied directly to your state regulations.
The Bottom Line
Whether you are a start-up, a growing business, or a multi-state operator, complying with federal and state compliance laws is essential. By following the above tips and staying transparent with your employees, partners, and investors, you’ll be ready for any audit that comes your way.
Whether you’re looking for cash flow management, business planning, or internal controls, our team is dedicated to helping you achieve peace of mind when it comes to your company’s finances and compliance. We understand that the financial side of your business can be daunting, complicated, time-consuming, and most of all: stressful. You don’t need to go through it alone. Our team is prepared to help you achieve your financial goals. Whether you’re looking to earn more revenue, scale your business or achieve a little peace of mind, you can trust Green Space Accounting to guide you.
Video: NCIA Today – September 17, 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.
Service Solutions | 9.15.21 | 5 Growth Hacks Cannabis Retailers Can Learn from Mainstream Retailers
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 Wednesday, September 15, 2021 we were joined by American Security Services, a leader in home & business safe solutions for 75 years, to discuss cash management problems facing the cannabis industry today and what retailers have discovered as a solution.
In this session you’ll hear from operator-owners in cannabis retail and their financial partners about the growth hacking tips helping them grow greener profits, faster. Still UNbanked? This session will give you the tools you need to make decisions about your cash and asset management today and in the future.
In this session, you will learn:
• How to improve operational efficiencies at the point of sale through end-of-year financials.
• How to get provisional credit from the bank and increase cash flow.
• How to select the right Cannabis-friendly financial partners.
• How to identify hidden threats to your bottom line and overcome those threats with technology.
• How to set the bar for compliance safety and security that will last you the next 30 years.
Speakers:
Albert Porto, National Sales Manager, Smart Safes, American Security
Rony Ghaby, Director of Operations, Sectran Security
Steve Morss, Chief Cash Operations, Dama Financial, Cannabis Banking
Member Blog: Want to Open A Dispensary In Oklahoma? Here’s What You Need to Know.
In Oklahoma, the cannabis business is thriving. Yes, the controversial plant that users were prosecuted for using so very recently, is on a roll. You could even say, there is a cannabis rush.
In this article, we will cover how you can go about opening a dispensary, including how to acquire a license, and some laws you should be aware of. And we will also touch on how to set up your dispensary operations and software! Let’s dig in!
What do you need to open a dispensary in Oklahoma?
The process of opening a dispensary should go smoothly if you fill out an application form and follow the Oklahoma Medical Marijuana Authority’s guidelines. Although the costs of opening a cannabis dispensary in Oklahoma are significantly lower than elsewhere, it is critical to have accurate information and to review some of the most relevant regulatory constraints.
Let’s start at the beginning, if you intend to learn how to open a dispensary in Oklahoma for commercial purposes, you must be at least 25 years old before proceeding. You must also make the following items available:
Proof of Oklahoma residency
A tax ID number, as well as a general business license
Valid identification documents
You’ll need to assess your commitment after you’ve got everything in place. Not only must you be informed of current cannabis production and sales regulations, but also of proposed legislation and revisions that may shortly come into force.
Now that you’re certain you’re ready to make this big move, it’s time to proceed to the next step: finding a suitable property.
You should check the following:
Rent cost
Cost of license
Licensing application fee
Employee salary
Transportation and storage of product
Security
How to get a dispensary license In Oklahoma.
Licenses for growers in Oklahoma come in the form of a certificate and are issued through the OMMA website. The charge to producers, processors, and dispensaries for applying for a license is $2,500. You must provide the following to apply:
A business plan
A financial plan
An inventory control plan
Patient education
Record keeping
Security plans
There are distinct rules in every state in the United States about opening dispensaries. Each state sets its own standards. You will need to study the rules that apply in Oklahoma.
The general requirement for opening a dispensary in Oklahoma is that you undergo marijuana dispensing training and acquire a license.
How to keep your dispensary compliant in Oklahoma.
You must abide by all of Oklahoma’s strict marijuana regulations to keep your dispensary compliant. These include:
Marijuana dispensaries in Oklahoma are prohibited from selling more than the following amounts in a single transaction:
Three ounces of cannabis
Concentrate of one ounce
72 ounces of cannabis
Oklahoma dispensary owners, like any other legitimate business, must pay taxes and ensure that they give the following information:
All cannabis-related information with other permitted firms
Details of batch numbers that show the weight of cannabis acquired at wholesale
The number of plants that have been approved for relocation to other locations
Batch numbers showing the weight of cannabis sold
Record of all items that have become obsolete
Substantial fines are imposed for noncompliance. There is a $5,000 punishment for a first infraction while a second offense will result in license revocation. Because of this, you are going to need the assistance of technology to automatically update you if the OMMA cannabis rules change.
Understanding Metrc in Oklahoma.
Metrc is an integrated system for tracking and tracing marijuana products in real-time. Every plant and its wholesale shipment has a unique tag attached by licensees. To uniquely identify each plant, these tags use readable text, barcodes, and radio frequency identification (RFID) chips for easy identification.
Metrc is already being used in Oklahoma following the state’s legalization of marijuana. The OMMA can only see and track inventory once it has been entered into Metrc by a commercial licensee.
To get started with Metrc in Oklahoma you should:
Watching their training videos and schedule training.
Request online access and complete the New Business System Metrc training with your dedicated Metrc Account Manager.
Connect all of your employees with Metrc and make sure they have the permissions they need for their jobs.
Request Metrc plant tags, package tags, and other UID tags and document the physical receipt of requested Metrc UID tags.
Assign UID tags to your cannabis items.
Access the Beginning Inventory Guide in Metrc for proper guidelines and references to other important factors.
What are the dispensary laws in Oklahoma?
Cannabis laws in Oklahoma are the guidelines that every cannabis dispenser must heed while dispensing medical marijuana. Every prospective cannabis retailer will be guided by these same rules, and it is one of the first things you discover when learning how to operate a dispensary in Oklahoma.
Some of these rules include:
To legally sell cannabis, you’ll need a state-issued license, but CBD oil made from industrial hemp is permitted without one.
Patients must first obtain an authorized medical marijuana card to acquire and consume medicinal cannabis.
Possession of paraphernalia is a misdemeanor that carries a maximum sentence of one year in prison and a fine of $1,000.=
Individuals under the age of 18 are only allowed to enter a dispensary with an adult who has a valid medical card.
The sale of fewer than 25 pounds of marijuana is a felony punishable by a two-year prison sentence and a $20,000 fine.
Who can your dispensary sell to in Oklahoma?
Only medical cannabis patients (or their caregivers) with valid patient licenses can shop at an Oklahoma dispensary. Medical cannabis is available to Oklahoma residents over the age of 18 who have a physician’s recommendation.
A physical medical marijuana ID card or the state’s database can be used to verify a patient or caregiver. Out-of-state persons or companies are not permitted to purchase medical marijuana from licensed dispensaries. Licensed processors can sell to other licensed processors and licensed dispensaries.
Oklahoma dispensary market size and opportunity.
Despite its accomplishments, the cannabis industry in Oklahoma is still in its infancy, and the environment is rapidly changing. Marijuana laws in the state are continually changing to make it more accessible.
Another feature that distinguishes Oklahoma from other states is that it allows cannabis smoking and vaping anywhere that tobacco can be lawfully consumed, such as on the sidewalk or in a bar that allows smoking. As a result, Oklahoma has morphed into an industrial cannabis state with a variety of dispensary options.
There are only a few challenges to overcome. Any sort of cannabis — from raw flowers to topical lotions, from oils and gels to vaporization and patches — can be sold by anybody who pays $2,500 for a dispensary license.
Cannabis legalization has resulted in a significant expansion in legal cannabis cultivation and distribution, as well as an explosion of related service providers in many states. Cannabis has become a lucrative business prospect for many inhabitants in the state.
What cannabis software do I need to run a dispensary?
To run a compliant dispensary in Oklahoma, you will need the following business software:
One of the most important technologies in a dispensary is a point-of-sale system. A compliant POS system will make sales transactions easier for your dispensary’s staff and provide the greatest payment options for customers. A POS can help run the following tasks:
Regulate inventory control and legal compliance
Manage customer check-in and ensure that your customers follow the daily sales tracking guidelines
Assists you in automatically rejecting transactions for people who are not authorized to buy.
Integrate with the Metrc system, and keep you compliant.
Integrate with yourscheduling softwareand provide labor forecasts for scheduling.
Produce all sales and customer reports for the approval of cannabis authorities.
Dispensary payroll software.
Integrated dispensary payroll software will assist you in managing your employees’ pay. It manages all expenses and interfaces with other systems such as personnel administration and payroll tax deductions. It makes direct contributions to the IRS and compensates employees via direct deposit. Another benefit of using an integrated payroll system is that you can integrate your company’s payroll with the rest of your workforce management suite; performing tasks like approving clocked hours to payroll, and running payroll in the click of a button. Dispensaries who used this type of system report saving 5 hours per week on running dispensary payroll.
Scheduling and time tracking software.
Also known as workforce management software, integrated scheduling and time tracking software makes creating staff schedules, and managing staff hours very hands off. With this type of software, you are able to create schedules remotely, and staff can request shift swaps or time off. With time tracking, staff can sign into work using facial recognition technology, and staff-approved hours can be streamlined to payroll – so staff who clock into their shifts, get paid with the click of a button.
Dispensary HR software.
Recruiting, hiring, interviewing and onboarding can take up a lot of time. Especially when staff have important documents they need to sign, and criminal record checks that need to be completed. With dispensary HR software you can automate recruiting, and onboarding, by having staff onboard themselves and sign digitized documents.
A Security system.
A good security software system with cameras to monitor what goes on inside and outside your dispensary should be paramount to ensure your dispensary remains compliant. You will need a system where you can monitor all the affairs of your dispensaries at one glance without being in different places at the same time.
Inventory management software.
You require some software to help you manage your inventory, and the process of placing orders and confirming inventory counts from your vendors. You’ll also need a system that will remind you when new orders are needed when it detects product shortages.
Website.
If you are in a state that allows e-commerce for dispensaries, a website should be a top priority for competing for top rankings in today’s market. Because of technological advancements, you may now open an e-store where customers can buy cannabis online and have it delivered to their doorsteps.
Your website should be able to collect KYC information from your consumers to verify their identities and eligibility to acquire cannabis products, so you can be confident you’re following the cannabis serving guidelines. If you deliver a cannabis product to someone who isn’t eligible for it, you’ll be breaking the rules guiding cannabis consumption, and this might be a huge risk for your new business.
Metrc.
Metrc, also known as Marijuana Enforcement Tracking Reporting Compliance is a regulatory compliance system and was built to keep track of cannabis cultivation, preparation, and packaging. Basically, Metrc is a database for tracking cannabis from seed to sale, and identifying it using RFID tags. In Oklahoma, you must submit data to Metrc to run a compliant dispensary. Reporting to Metrc can be done manually, however cannabis-specific POS systems are offering a Metrc integration, meaning it is done automatically for you as you sell your product.
What else do I need to know?
Now that we have covered all the technical and operational bases, the rest is up to you.
Other key parts of opening a dispensary include considering where your store might be located, what your brand value and vibe will be, and how your product and store will look.
Marketing should also be a consideration, as well as staff training, and company culture.
Many new cannabis entrepreneurs hire consultants to help them navigate these areas.
For now, we hope this has been a helpful way to get you started.
Tommy Truong is the Director of Partnerships at KayaPush; the cannabis software helping dispensary owners manage their HR, scheduling and payroll all from one easy to use platform. KayaPush also integrates with leading dispensary POS systems, giving you an end-to-end solution. Tommy loves hot sauce, fried chicken, and running with his Boston terriers.
Video: NCIA Today – September 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 on Facebook for NCIA Today Live.
Equity Member Spotlight: Next Level Edibles – Anthony Jenkins Jr.
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 me a bit about your background and why you launched your company?
I was born in Hayward, California and spent most of my childhood in Mesa, Arizona, and in the Bay Area, in Northern California. After high school, I spent some time at The Farm (Stanford) and graduated from The House (Morehouse College).
Next Level was started almost 10 years ago. During a particularly trying part of my life, a medical professional recommended antidepressants and anti-anxiety medicine for symptoms I was experiencing. Taking these drugs made me feel slightly better, but came with a host of other problems; twitching, irritability, weight gain. I needed another solution.
In college, I experimented with cannabis and as an adult, I found that it alleviated my symptoms without the side effects. Unfortunately, the halflife for cannabis is only 90 minutes which wasn’t nearly long enough to cover my full workday. I learned about edibles and how they can last for 4 to 6 hours and I was really attracted to their lack of smell. As a business professional, a deal could be broken if I smelled like cannabis. Edibles did not have a negative connotation and were perfectly discreet for my work environment.
Unfortunately, edibles only came in two different types at this time period: tasty, but completely lacking on potency, or absolutely disgusting and potent. No one should ever need a chaser for their edibles. The industry was ripe for a company with absolutely delicious products that could also provide a strong dosage.
What unique value does your company offer to the cannabis industry?
Next Level empowers people to infuse any food or beverage and accurately dose it for higher tolerances. With our products, the home cook can imbue any dish her heart desires and the morning warrior can add a kick to his favorite hot beverages.
Cannabis companies have a unique responsibility to shape this growing industry to be socially responsible and advocate for it to be treated fairly. How does your company help work toward that goal for the greater good of the cannabis industry?
When we started this venture, there was not much information out there about equity cannabis companies. Realizing there are probably many other minority entrepreneurs trying to start a cannabis business, I started a Facebook group called CES (Cannabis Equity Success) to help disseminate information about equity programs across America and to raise the profile of equity companies to support. In addition, I’ve been assisting new entrepreneurs to get connected with resources to see their vision come to light. As a minority-owned business, it is very important that we celebrate and support other businesses owned and operated by women, veterans, those with disabilities, and people of color.
It is Next Level’s vision to support these minority-owned businesses. Partnering with women-owned businesses, like Changemaker Creative, not only makes good business sense as they are local leaders in the industry, but also allows us to gain key insights into our target market. The owner and head creator, Lilli Keinaenen, is able to provide details and cater designs that appeal directly to her demographic. Other awesome women-led companies that are our strategic partners include our copacker, the Galley, and Supernova women.
In our distribution chain, we work with BIPOC owned companies like Local Equity Distribution and Breeze which provide jobs and revenue to the people and communities negatively impacted by cannabis arrests.
What kind of challenges do you face in the industry and what solutions would you like to see?
The biggest challenge we face in the industry is getting dispensaries to buy small company products. We are a small “mom and pop” owned by family members from Oakland, CA. It’s more challenging to get dispensary buyers to sit down with us because they prefer to save their time and shelf space for the larger established brands. One possible solution for this problem is to have each dispensary dedicate a certain portion of its stock to legacy brands/small mom and pops/equity companies.
The other challenge we face is getting access to capital. This is a bootstrapped venture, and issues in cannabis take a lot more time and money to solve than other industries. Unfortunately, there are not a lot of angel investors or investment companies putting money in cannabis and even less in minority entrepreneurs. The solution for this is to make the investment world much more equitable and inclusive.
Why did you join NCIA through the DEI Scholarship Proogram? What’s the best part about being a member?
I joined NCIA through the DEI Scholarship Program for an opportunity to learn best practices for my industry and to network with the finest minds in cannabis.
Across the Country – State Cannabis News and Movement
by Madeline Grant, NCIA’s Government Relations Manager
As the deadline to submit feedback for the Cannabis Administration and Opportunity Act approached last week, our Government Relations team worked tirelessly to submit a detailed analysis and recommended improvements on behalf of the legal cannabis industry. The full comments and an executive summary can be downloadedhere.The Cannabis Administration and Opportunity Act (CAOA), submitted in July by Majority Leader Charles Schumer (D-NY) and Senators Cory Booker (D-NJ) and Ron Wyden (D-OR), would remove cannabis from the schedule of controlled substances, create a regulatory structure and federal guidelines for cannabis products and state-legal markets, and is intended to support restorative justice for the people and communities that have been disparately hurt by prohibition while ensuring fair opportunities in legal cannabis markets for small businesses and marginalized communities.
The introduction of the comprehensive draft language was a pivotal moment for the United States Senate and NCIA will continue to do whatever we can to ensure value-driven policies for the cannabis industry. Meanwhile, we continue to see movement at the state level as support for cannabis legalization efforts continues to grow. Here are some important updates happening at the state level.
California
California officials announced that they are soliciting proposals for a program aimed at helping small marijuana cultivators with environmental clean-up and restoration efforts. The California Department of Fish and Wildlife’s (CDFW) Cannabis Restoration Grant program will release applications this fall and remain open through spring 2023. The $6 million in potential funding, which comes from cannabis tax revenue, must go to government agencies, California nonprofits, or Native American tribes who would then work with cultivators on environmental efforts.
New York
The newly inaugurated governor of New York says she wants to “jumpstart” the implementation of cannabis legalization. Governor Kathy Hochul took a major step by making two key regulatory appointments to oversee the state’s cannabis market. Soon after they were quickly confirmed by the Senate during a special session. Former New York Assemblywoman Tremaine Wright (D) will serve as chair of the Cannabis Control Board, and former Drug Policy Alliance (DPA) staffer Christopher Alexander will be the executive director of the state’s Office of Cannabis Management.
Ohio
Ohio activists can begin collecting signatures for a 2022 ballot initiative to legalize marijuana in the state. The Coalition to Regulate Marijuana Like Alcohol (CTRMLA) launched its ballot effort last month. The new initiative is a statutory proposal and if supporters collect 132,887 valid signatures from registered voters, the legislature will then have four months to adopt the measure, reject it, or adopt an amended version. In the case of lawmakers not passing the proposal, an additional 132,887 signatures will be required to place the proposal before voters on the ballot in 2022.
Missouri
Another adult-use legalization proposal has been filed. Legal Missouri 2022 submitted the latest measure to the secretary of state’s office, and it will now go through a review period before potentially being certified.
New Mexico
The Cannabis Control Division announced applications are now open for businesses interested in legal cannabis producers licensed by the state of New Mexico. After an application is submitted, regulators will have 90 days to issue a determination.
Colorado
Colorado voters will decide on an initiative in November that would raise cannabis taxes to fund programs that are meant to reduce the education gap for low-income students. The secretary of state confirmed that the campaign behind the measure collected more than the required 124,632 valid signatures to make the ballot. The measure would give low and middle-income families a $1,500 stipend to have school-aged children participate in afterschool programs, tutoring, and summer learning programs.
As states continue to legalize medical and adult-use cannabis, be sure to check out our state policy map for updates. Our Government Relations team will continue to educate congressional offices as states move forward. It’s vital to have accurate information and resources for members and Congress and staffers on Capitol Hill. With advancements at the state level, we continue to relay the importance of cannabis legalization at the federal level. Please stay tuned for more updates from our Government Relations team.
Committee Blog: Managing Your Workforce During Fall Harvest
It’s that time of year again, the busy fall harvest season. While indoor growers can harvest year-round, the fall can create significant workforce challenges, especially for outdoor producers and processors. Here are three tips to make sure you are ready to go for the fall harvest!
Plan ahead! If you have not already thought through your fall harvest plan, you will want to figure this out immediately. Most cannabis companies need additional workers during harvest season, unless their grow schedule is structured where they are harvesting on a regular basis, depending mostly – if not entirely – on their permanent employees for harvesting, de-leafing, trimming, etc. However, given the increased demand for workers by outdoor growers, even in a normal year, the demand for labor often exceeds the supply, placing added pressure on anyone competing for this talent.
Every fall we receive a rash of calls from producers, who failed to plan ahead, requesting workers that same week, if not the same day. Unfortunately, by this time, nearly all the available labor, especially those with experience and skill, have already been scheduled and committed elsewhere. In rare cases, staffing companies might be able to provide workers if they had another client in the area back out, at the last minute due to a heavily damaged crop or not being ready for harvest at the time they originally projected, however, cannabis growers shouldn’t count on this. A good rule of thumb is to provide at least 2-3 weeks’ notice, minimum, to request your harvest crews during the fall, and the further in advance the better. Many cannabis companies that have struggled in the past with worker shortages during the fall have started locking in their fall staffing as early as spring.
COVID-19 has created an even more significant labor shortage. Before 2020, we saw thousands of workers coming into the United States from other countries to take their ‘vacations’ working on unregulated market farms doing harvest work and trimming and getting paid cash. Due to COVID-19 travel restrictions keeping much of this seasonal labor out of the U.S., the regulated and unregulated market were increasingly forced to compete for the same domestic talent with the unregulated market often winning this battle as they were paying tax-free cash at higher wages, given their relatively lower costs compared to the regulated market. Thus, many cannabis companies ran into situations last year where, unless they were able to pay premium rates for harvest workers, their in-house staff were forced to work a ton of overtime to make up for the shortfall. We hope that in 2021 this won’t be the case, however with COVID-19 numbers rising again, this is something that cannabis companies should plan and budget for just in case.
If your cannabis operations are relatively remote or not within an easily commutable distance from a large population center, you may need to go the extra mile to make it easier for workers and staffing companies to assist you. If nothing else it is essential to take an inventory of nearby resources and be prepared to communicate them easily. For example, if you can’t provide lodging to your seasonal workers, you will want to create a list of local hotels/motels, RV Parks, and campgrounds that offer services. Many of these workers are accustomed to traveling from site to site in RV’s, camping, etc. Create a list of grocery stores, gas stations, and other retail establishments the crews may need to access. If there aren’t any lodging options close to your farm, and you have the means, you might want to consider buying some land nearby and building some basic lodging. We have even seen some cannabis companies open a cafe or restaurant close to their farm when there weren’t any good or healthy options in the area so that workers would have a place to go on their lunch breaks or after work. The more of a positive experience you can provide to these workers, even though they are seasonal, the better. Production will typically be quicker, you may gain a customer and even an ambassador for your product, and that worker may be excited to return for years to come, which will keep you from having to deal with some of the labor shortage issues other producers struggle with.
Have a contingency plan. Many of you already know this, but you should always have a plan B and plan C, maybe even a plan D. 2020 and 21 have definitely been years of fires, hot temperatures, and floods. If air quality is deemed especially poor in your area, due to smoke, many harvest workers won’t be able to work outdoors as worker’s compensation policies won’t cover workers laboring in such conditions and few people will want to. We’ve also noticed an uptick in state governments coming out with restrictions and safety guidelines during times of poor air quality or extreme heat. If you’re in an area that has a fire season, you’ll want to have a plan for workers during this time. Perhaps you will need to have them work indoors when the air quality is poor, focusing on things like bucking, trimming, and packaging; then back outside to continue the harvest when conditions allow.
Given the increase in COVID-19 cases, you’ll definitely want to have SOPs and contingency plans in place in the event your crew is exposed to COVID-19. To be proactive, you should also take precautions to protect workers from exposure before it occurs including having masks and hand sanitizer supplies on hand in abundance. Contingency plans could include having a partnership with a staffing firm to provide workers for your fall harvest or offering overtime and bonus incentives for your regular workers to pick up the slack, if necessary. If you’re working with a staffing company, most crews of harvest workers will have a team lead who is there to assist with any HR-related issues that might come up (i.e., sick workers, injury, etc.). However, if for some reason there is not a team lead assigned for your crew, you’ll want to make sure that the workers have a point of contact at your company for any HR-related issues that come up.
Last but not least, if you’re looking for great, experienced harvest talent, especially when it comes to trimming, you will need to budget for the kind of talent you want. With the most talented crews, you’ll likely need to pay some form of a retainer upfront as many of them have trimmed more seasons than adult-use has been around and have not always been paid for their work. Last year, we typically saw trimmers making $15-$25/hour. This was before bonuses. Companies who want to incentivize things like speed and quality increasingly offer bonuses for the quantity and quality of output. This has resulted in the best workers making nearly $50/hour!
The Godmother of Cannabis Industry Recruiting, Kara Bradford, MBA, MM, is Co-Founder & CEO of Viridian Staffing. Founded in 2013 as the first professional, full-service staffing, recruiting & HR consulting firm in the Cannabis industry, Viridian Staffing has led the way in providing temporary, temp to hire, direct placement & HR outsourcing services. Kara has been an HR professional, specializing in Talent Acquisition, Talent Management, Workforce Planning, Employer Branding, Compliance, Federal/State Employment Laws, and Organizational Design for over 15 years. Her career has spanned multiple Fortune 100 companies & start-ups in a wide variety of industries. More importantly, she has more experience recruiting in the cannabis industry than any other Recruiter globally. Kara has an MBA in Human Resources & Organizational Behavior and is LinkedIn Recruiter Certified. Kara is active in many organizations, including NCIA, The Cannabis Alliance, Women of Weed, etc., and was the Founding Chair of the NCIA’s Human Resources Committee.
Video: NCIA Today – September 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.
Fireside Chats w/ NCIA’s Government Relations Team | 6.30.21 | CAOA or Chaos? – Unpacking Cannabis Administration & Opportunity Act
In this edition of our Fireside Chats w/ NCIA’s Government Relations Team series originally aired on Wednesday, September 1, 2021 we were joined by our CEO & Co-founder, NCIA’s board chair, and our esteemed Policy Council Co-Chair to unpack the Cannabis Administration & Opportunity Act with Mike & Michelle.
In response to a call for input on the draft language for a bill that would make cannabis legal and regulated at the federal level, NCIAhas submitted a detailed analysis and recommended improvements on behalf of the legal cannabis industry.
Since the discussion draft was released, the NCIA team has been hard at work putting together our comments, as well as soliciting feedback from key stakeholders like our board, policy council, Evergreen Roundtable, social equity scholarship program members, and our general membership. Now, at long last, it’s finally time for us to reveal to you what NCIA has submitted! You can expect a deep dive into restorative justice policies, regulatory frameworks, and the outlook for getting to 60 votes– don’t miss out– tune in now!
Speakers:
Michael Cooper, Esq., Co-Founder & Managing Member, MadisonJay Solutions, NCIA Policy Council Co-Chair
Khurshid Khoja, Esq., Founder, Greenbridge Corporate Counsel, NCIA Board Chair, NCIA Policy Council Co-Chair
Aaron Smith, CEO & Founder, National Cannabis Industry Association
Moderating:
Michael Correia, Director of Government Relations (NCIA)
Michelle Rutter Friberg, Deputy Director of Government Relations (NCIA)
Committee Insights | 8.31.21 | Taking Human Resources Higher as a Strategic Partner
In this edition of our NCIA Committee Insights series originally aired on Tuesday, August 31, 2021 we were joined by members of our Human Resources Committee for a discussion on how to create a healthy workplace, a positive employee experience and an effective relationship with your leadership team to make the right decisions for your company’s success.
Human resources is the hub of the workplace, the employee experience and leadership decisions with the cannabis industry being no different. Join our panel of human resource experts as they equip you with the skills needed to create positive employee experiences and influence change with other strategic leaders within their organization by effectively utilizing data.
Panelists:
Shawnee Williams (Moderator)
Recruiter & Account Manager
Illinois Equity Staffing
Nichole McIntyre
Director of Human Resources
urban-gro
Dan Walter
Managing Consultant
FutureSense LLC
Member Blog: Commercial Property Assessed Clean Energy (C-PACE) – A Competitive Funding Source for the Cannabis Industry
The state-by-state level of legalization and expansion of cannabis continues to pick up momentum across the United States, however, the adoption at Federal level is a much slower movement. The absence of federal legalization has created a situation where federally insured lending institutions like banks and traditional investment capital markets are prohibited from funding cannabis projects. The direct result of this restriction in capital has historically forced the cannabis industry to rely exclusively on private loans and individual investors as the primary sources of development and operating capital. These sources of capital are limited in capacity and can garner interest rates from 15-25%. While the legalized cannabis industry has made great strides in removing much of the negative stigma surrounding the products and their uses, resulting in the opening of some additional funding sources such as crowdfunding and angel investors, the cost of these capital sources is still significantly above the conventional market rates. At Ebee Management Group, we would argue that the most underutilized yet best financing tool presently available for the cannabis industry is the Commercial Property Assessed Clean Energy (C-PACE).
C-PACE is an innovative financing tool that gives owners of commercial, industrial, and multi-family properties access to long-term fixed-rate financing for energy efficiency, water conservation, and renewable energy projects. The C-PACE legislation authorizes municipalities or counties to partner with private capital providers to deliver financing options to commercial property owners for energy qualified improvements with the collection of the debt repayment through a special assessment on the property’s tax bill. The C-PACE funds provide upfront capital with 100% financing for qualified improvement often with terms up to 20 years. The resulting energy savings and reduced operating and maintenance costs typically exceed the amount of the assessment payment and often contribute to a positive cash flow to the operating budget.
The primary caveat to the use of C-PACE for cannabis is that the property must be in a state that has passed the legislation that empowers local municipalities to provide C-PACE as a funding tool. C-PACE can be funded directly by the municipality through a bond issuance; however, most projects are presently being funded by the private equity markets. Typical terms on a C-PACE-funded cannabis transaction are 100% financing, fixed for a term up to 20 years at interest rates ranging from 7%to 9%. The maps below illustrate the current enactment of state-level policy for both cannabis and PACE.
Map provided and maintained on the PACENation website
C-PACE can be utilized for any improvement that saves energy with maximum lending limits influenced by individual state legislation and program guidelines. Typically, the maximum loan amount is capped at 20-25% of the completed appraised value and restricted to funding only qualifying improvements. Typical qualified improvements include lighting, HVAC systems, and building controls, doors, windows, roofs, and alternative power generation like wind and solar. PACE can be used for retrofitting an existing building, new construction, and in some states, refinance of existing debt. For the established cannabis market, the refinance option is an extremely attractive tool because it can be utilized to pay off higher-cost investor debt and is non-recourse to the owner. The debt is tied to the physical facility as a special assessment, not a mortgage lien, and is thus fully transferable at sale. You heard me right. If you have a short-term hold strategy for a facility, any remaining obligation you have associated with your PACE assessment does not have to be paid off at closing. The balance of the debt follows the tax bill and transfers directly to the new owner like any other existing tax-based assessment.
The table below outlines the benefits and features of C-PACE
Owner Benefits
Financing Features
Qualified Equipment
• Lower cost capital
• Non-recourse to owner
• Preserves owner’s capital
• Debt transfers at sale
• 100% financing of qualified improvements
• Long-term fixed-rate up to 20 years
• Competitive interest rates ranging from 6.5%-9.5%
• Debt securitized by a special assessment on the property
• Lighting
• HVAC
• Controls
• Roofs
• Doors & Windows
• Insulation
• Power factor conversion
• Alternative energy generation
The future of a wider array of funding options for the cannabis industry will clearly be impacted by both the ongoing adoption on a state-level and the possible federal-level legalization. Presently the pressure from states like New York and Chicago that house the two largest capital markets in the United States is leading to the expanded conversations about tapping into some of these sources of capital. That being said, arguably the best real-time solution for structuring a cannabis capital stack is C-PACE. New construction, building retrofit, or refinance, C-PACE can fill a gap or serve as a lower-cost replacement of other investment capital or equity.
Dr. Teresa Smith leads the Strategic Growth & Development for Ebee Management Group where she is recognized as an industry expert in sustainable development, leveraging PACE financing solutions for qualified energy efficiency projects throughout Ohio and Michigan. Prior to joining Ebee in 2019, Teresa was the Business Development Manager for the Toledo-Lucas County Port Authority where she built a robust growth process that delivered a 280% annualized increase in Property Assessed Clean Energy (PACE) loan transactions, driving loan balances from $3 million in 2011 to $47 million in 2019. Teresa obtained a Bachelor Degree in Economics from Eastern Michigan University, a MBA in Executive Management from the University of Toledo and a Doctorate Degree in Business Management with a specialty in Leadership from Capella University.
Ebee Management Group is a full-cycle construction, finance, and energy management firm, offering our clients the most cost-effective and appropriate development strategies — never compromising integrity and quality. We oversee every aspect of the project with a proprietary process and unique energy financing programs, delivering a custom designed, state-of-the-art energy savings solution with a guarantee to save you time, energy, and money. Ebee offers a wide array of financing solutions for the Cannabis Industry that reduce equity requirements and replace much more expensive sources of capital. Our flagship financing tool for new construction, renovation and refinance of commercial facilities is Commercial Property Assessed Clean Energy (C-PACE). This financing tool makes it possible for owners and developers of commercial properties to obtain low-cost, non-recourse, long-term financing which is paid back through an annual assessment on the organization’s property tax bill. For more information, contact Teresa Smith at 419.340.0420, tsmith@ebeeco.com or visit our website athttps://www.ebeeco.com/
Committee Blog: Successful Retail Outcomes of SAFE Banking
By NCIA’s Retail Committee
Have you ever wondered where or how a cannabis retail business banks? You should know that it’s complicated because of federal prohibition. So what do you do? Some are finding workarounds and loopholes, others are able to obtain services with smaller financial institutions for exorbitant costs, while many others struggle to maintain an expensive, risky, and dangerous cash-only ecosystem.
The 2020 elections set the creation of four new regulated state cannabis markets in motion, and four more state legislatures followed suit in the first half of 2021, making the last year arguably one of the most consequential and momentous periods for the cannabis industry and policy reform.
However, cannabis is still illegal at the federal level, classified as a Schedule I substance under the Controlled Substances Act, despite state-level regulated cannabis markets in more than half the country. This prevents banks from doing business with cannabis companies because of fear of prosecution or reputational risk, as these businesses aren’t viewed as legal under outdated federal laws.
The cannabis industry is optimistic about the future, though, thanks to an increasing interest in cannabis, public safety, and economic development in Congress. Lawmakers in both chambers are actively debating comprehensive legislation to remove cannabis from the schedule of controlled substances and regulate it federally while repairing some of the harms caused by prohibition, but there are also incremental reforms in play that have a track record of success in the House as well as bipartisan support. Chief among them is the Secure and Fair Enforcement (SAFE) Banking Act, which would provide safe harbor for financial institutions that wish to work with state-legal cannabis businesses and allow them to provide services to the industry without fear of prosecution. This legislation originally passed the House in 2019 and was the first piece of standalone cannabis policy reform legislation ever to receive a vote or be approved by a full chamber vote.
Since then, cannabis banking has been approved in the House three more times in various forms, mostly recently when it passed the SAFE Banking Act again – and with record bipartisan support – earlier this year. The bill is now awaiting consideration in the Senate, but has yet to be taken up by the Senate Banking Committee.
So, what does the SAFE Banking Act mean for retail cannabis businesses?
Loans, capital markets, and credit card processing are common interests for cannabis companies. Access to traditional lending is particularly important for small businesses that usually lack connections to angel investors and venture capital. However, some of the benefits of this legislation are of special interest to cannabis retailers. Check out what some of the Retail Committee members are considering to be important aspects of broadened access to banking and financial services:
Safety
“As a retail cannabis business operator, safety is of our top priorities as it directly affects our staff, our patrons, and our bottom line,” said Larina Scofield, director of retail operations at Lucy Sky Cannabis Boutique dispensary chain in Colorado and vice-chair of NCIA’s Retail Committee. “We are required to operate as a predominantly cash business in a high-risk industry that can sometimes lead to criminal targeting; this can put not only our business at risk but also the potential individuals on-site if a targeted crime were to take place.
“There is also no doubt that operating a cannabis business is costly, due in part to the fact that we do not receive the same benefits and protections that other businesses have; cannabis companies are also subject to higher fees in order to get similar services, if those services are available at all. Lucy Sky is fortunate enough to have banking and armored services, as well as a cashless ATM service to allow for safer money handling, but this does not come without a price… a high price. Our company pays top dollar every year in order to have banking and secured payment delivery (something that is not seen in traditional businesses), in order to provide safety for our business and to the individuals who frequent our facilities.
“SAFE Banking would mitigate that and allow for retail cannabis companies to operate without having to “constantly look over their shoulders” so to speak. It would provide an enormous sense of security in an already high-risk business, it would allow for small business owners to receive proper funding to allow for safer operations, and it is truly crucial in the progression of the industry as a whole.”
Less Cash on Premise
“Less cash during COVID-19 is always a plus. The goal is to limit contact, and we all know cash is constantly being passed from person to person. There are plenty of studies highlighting how many germs really are on physical cash. Researchers found plenty of questionable microbes on $1 bills in a more recent study. In a world where we are all concerned about our physical health, the time is now to reduce physical cash in cannabis businesses. Or at least, give people the choice to go cashless if they want to. Let’s also not forget the security benefits of carrying less cash on the premises”, said Byron Bogaard, CEO of Highway 33, a cannabis dispensary in Crows Landing, California, and chairperson of NCIA’s Retail Committee.
Contactless Delivery for Retail
“Golden State Greens had a spike in deliveries during the COVID pandemic but were still forced to collect cash and signatures from customers. When online orders can process card transactions we can make a true contactless delivery where both payment and signature are managed from the customer’s device. This will increase the safety of our drivers by maintaining safe distancing practices and allow new types of deliveries to drop boxes or to customers’ homes similar to Amazon,” said Gary Strahle, chief growth officer for California dispensary Golden State Greens.
Beyond these major issues, there are a number of potential outcomes that could impact retailers as well.
Revamping the relationship between cannabis businesses and banks will likely trigger higher competition for banking services, resulting in lower fees. This would clearly benefit small businesses but could also have an impact on the frequency and nature of mergers and acquisitions in the cannabis space.
Regulatory frameworks will certainly change, and outstanding litigations will most definitely become more complex. Chargebacks from credit transactions will be a constant problem, due to the level of surveillance and data collection they will more easily be disputed.
Better access to banking also positions technology companies for success, as there will be a high demand for mobile wallets, online ordering, and automatic recurring memberships. We can’t predict everything, and there might be more hurdles to cross than we realize, but the technologically-agile retailer may benefit most. Studies show that most of the Top Fortune 500 Companies use software platforms such as Salesforceto manage their enterprise, however many of the canna-specific solutions are missing much of the integration and scalability needed to immediately handle broadly increased access to the banking system.
Speak your voice.
The SAFE Banking Act is critical to the cannabis industry’s success, and your voice will tip the scales. Reach out to your members of Congress, especially your Senators, and tell them what safe banking means to you as a cannabis retailer. Remember, policy needs to support logic over emotion. Emotions are important, but remind Senators of the logic behind implementing safe banking solutions for cannabis businesses:
Reducing the risk of robbery & theft with less cash on the premises
Supporting the demand cannabis businesses receive, which in turn supports the local and national economy and helps minimize the unregulated market
Reduce pathogen transmission by limiting physical cash transaction
If your senator already supports the SAFE Banking Act, please politely ask them to prioritize this legislation in the current session.
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Dr. Monaco
by Rachel Kurtz-McAlaine, NCIA’s Deputy Director of Public Policy
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