Small Business Committee Congressional Hearing – The Cannabis Industry’s Unlocked Potential
by Michelle Rutter, NCIA’s Government Relations Manager
On Wednesday, June 19, the House Committee on Small Business will hold a hearing entitled “Unlocked Potential? Small Businesses in the Cannabis Industry.” This is the first time in history that this committee has ever considered this topic! As the nation’s oldest and largest trade association, NCIA is proud to represent thousands of small businesses at this hearing.
The hearing will “focus on the opportunities the legitimate cannabis industry presents for small businesses in states with legal cannabis, as well as entrepreneurs from traditionally underserved communities. The hearing will also enable members of Congress to explore the challenges currently faced by those businesses, and also those of “ancillary” or “indirect” cannabis businesses who may not be directly involved in the production or distribution of cannabis products.”
NCIA has been proud to work very closely with the House committee on this hearing. As a result, Dana Chaves, who is chairwoman of NCIA’s Banking Access Committee and the Senior Vice President and Director of Specialty Banking at First Federal Bank of Florida will be testifying at the hearing!
Other witnesses will include Shanita Penny, M.B.A., President of the Minority Cannabis Business Association, Eric Goepel, Founder & CEO of the Veterans Cannabis Coalition, and Paul Larkin, who is the John, Barbara, and Victoria Rumpel Senior Legal Research Fellow in the Meese Center for Legal and Judicial Studies at The Heritage Foundation.
The Committee memo also states “the marijuana legalization movement brings new opportunities for entrepreneurship and business start-up in the cannabis industry. Because this is such a nascent sector, legalization also allows policymakers to increase equity and diversity in the cannabis industry, which can take the form of addressing financial barriers to market entry and ensuring the industry reflects the local community.” It also recognizes that “because this is such a nascent sector, legalization also allows policymakers to increase equity and diversity in the cannabis industry, which can take the form of addressing financial barriers to market entry and ensuring the industry reflects the local community.”
According to a recent Leafly report, “Annual [cannabis] sales nationwide are nearing the $11 billion mark. And the number of Americans directly employed in this booming industry has soared to more than 211,000. When indirect and ancillary jobs—think of all the lawyers, accountants, security consultants, media companies, and marketing firms that service the cannabis industry—are added, along with induced jobs (local community jobs supported by the spending of cannabis industry paychecks), the total number of full-time American jobs that depend on legal cannabis rises to a whopping 296,000.”
NCIA applauds the House Committee on Small Business and Chairwoman Velazquez (D-NY) for discussing this important topic. NCIA is proud to represent all of the cannabis industry’s small businesses!
Member Blog: My Journey Through The Intersection of the LGBTQ Community and Cannabis Movement
By Erich Pearson, SPARC
NCIA Board and Founding Member
Reflecting on the decades-long fight to end prohibition of marijuana, one person comes to mind this month as we look at the similar and interconnected decades-long Gay Pride movement and what it means for the LGBTQ community today. One activist largely credited for legalizing medical cannabis in California is the original “cannabis influencer” Dennis Peron. We have much to be grateful for as we remember his legacy advocating for AIDS patients in California to have access to medical cannabis.
As for my role in both of these these important causes, I arrived in San Francisco in 2000 after graduating college in Indiana. I was happy to find San Francisco to be not only accepting of me as a gay man, but also accepting of me as someone interested in the cannabis movement. In the 1990s, there were a handful of medical cannabis dispensaries operating, un-permitted and un-regulated. It wasn’t until 2006 that Americans For Safe Access (ASA), Drug Policy Alliance (DPA), and Marijuana Policy Project (MPP) along with a handful of local advocates led the charge to regulate dispensaries.
A few of the most vocal advocates were veterans from the political days of Dennis Peron. Dennis was not involved in the regulatory process of 2006. It was widely known that Dennis didn’t like regulations (he repeated this during the Prop 64 campaign years later). Dennis thought cannabis should be grown and sold freely, outside of an alcohol-type regulatory environment. He was right, but unrealistic – hence his waning interest in the politics of it.
Dennis did have a few friends who wanted to see cannabis regulated in San Francisco, and one was Wayne Justmann, a gay man that used to work the door at Dennis’ cannabis club at 1444 Market Street. Wayne is a friend of mine today, and we worked closely together to advocate for a dispensary program that respected the existing operators, despite their “inappropriate” locations in many cases. We ultimately won this battle, as San Francisco has a healthy respect for social pioneers.
San Francisco was also the first city to regulate on-site consumption. This was allowed in order to provide AIDS patients a safe place to medicate, outside of government housing. This has proven to be a successful program, with little public resistance even today as we permit more of these lounges, primarily designed for adult-use consumption.
I started a free compassion program in San Francisco in the early 2000’s at Maitri AIDS Hospice. We still deliver twice a month to patients there. This has been an incredibly successful program and a very rewarding experience for myself and the staff who carry it out.
Today, I don’t see a lot of synergies anymore between gay progress and cannabis progress despite its intertwined history, but we at SPARC honor that history with a t-shirt claiming victory: “Legalized Gay Pot.” Of course, the fight for fair treatment and equality for both cannabis and LGBTQ right is far from over, but in San Francisco, I’d say we’ve come a long way on both fronts. And as cannabis legalization sweep through other states across the country, we can see studies that show gay, lesbian and bisexual people being the highest level of consumers among other select demographics, showing that our communities continue to overlap.
In looking back on all of this history and progress, I am thankful for all of the advocates who put themselves forward to fight for cannabis AND LGBTQ rights – we wouldn’t be here without their hard work, dedication, and selflessness. I now look forward to a future where everyone, in every state, can access the cannabis plant and be treated with respect and fairness.
Photo By CannabisCamera.com
Erich Pearson is a recognized leader in the cannabis industry – a long-time advocate, legislative consultant, dispensary operator, cultivation expert, and NCIA board member.
A proponent of medical cannabis regulation, cultivation, and best practices since 2000, Erich served on the San Francisco District Attorney’s Medical Marijuana Advisory Group and consults on state and local medical cannabis policy and legislation.
Erich was instrumental in the passage of both San Francisco’s Medical Cannabis Dispensary Act and the law enforcement “lowest priority” resolution of the San Francisco Board of Supervisors. As a result of Erich’s work he was appointed in 2007 by Supervisor David Campos to sit on San Francisco’s Medical Cannabis Working Group.
In 2010 Erich launched SPARC, a nonprofit medical cannabis dispensary providing safe, consistent and affordable medical cannabis to patients in San Francisco. SPARC provides high quality, lab-tested cannabis to qualified patients, and collaborates with local hospices, residential care facilities, and dispensaries to successfully supply medical marijuana at no cost to seriously ill patients.
How does SPARC do it? By growing cannabis more efficiently. Erich’s expertise is constructing and managing large indoor cultivation facilities. With a robust Research & Development team, Erich is meticulously focused on developing the optimal environmental recipe for high-yield cultivations using unique systems of lighting, ventilation and design.
SPARC is a Founding & Supporting Member of NCIA. Erich holds a BS in Construction and Project Management from Purdue University.
Webinar: Demo Of BDS Analytics GreenEdge Retail Sales Tracking Data Platform
Did you miss this recent webinar? You can still watch the recording of the demo of BDS Analytics GreenEdge Retail Sales Tracking Data Platform and learn more about how it will help your business:
– See what kinds of products consumers are buying
– Access accurate cannabis market data based on real point-of-sale transactions
– Study sales by category, sub-category, channel and region
– Improve your business’ profitability, mitigate risk to attract more investment, spot trends as they emerge, etc.
– Data for AZ, CA, CO, NV, OR, & WA markets available
Committee Blog: The Hiring Process Checklist
by NCIA’s Human Resource Committee: Kara Bradford of Viridian Staffing, Kerry Arnold of Canndescent, Heidi Quan of Murchison & Cumming LLP, Nichole McIntyre of Urban-Gro, Michelle Whitmore of H2 Talent, and Mark Hackett of Emerge Law Group.
Maybe you’re just getting your business started. Perhaps you’ve already been rolling full steam ahead. Either way, people are crucial to your business. The NCIA Human Resource Committee formed this past year. The committee, headed by Kara Bradford of Viridian Staffing, includes experienced HR Practitioners, Recruiters and Employment Attorneys, who have all brought their collective “best practices” together in an effort to assist NCIA members to navigate the often complex world of employment.
The HR Committee is starting off by releasing a series of checklists to provide some essential guidelines for your firm during the hiring, on-boarding and termination phases of employment. Without further ado…
Welcome to the first installment of the NCIA Human Resources Committee Employer Checklist Series! Today, we begin where every employer begins – the hiring process – and present the Hiring Process Checklist. Although laws may vary from state to state and each employer’s approach to hiring may differ, the Hiring Process Checklist provides a framework to assure your hiring process includes basic best practices, so you can attract and hire the best candidates.
Why is it important to have a well thought out hiring process? In this era of full employment, you just need to hire warm bodies before your competitors, right? Wrong! There are at least three critical reasons to make sure you put a good hiring process in place.
First, your hiring process must comply with the law. Are your job postings nondiscriminatory? Does your job application request potentially illegal information, such as criminal background, salary history or prior workers’ compensation claims? Are interviewers only asking applicants appropriate questions? Are you storing applications and other information about applicants for the required length of time? A good hiring process greatly reduces your risk of legal problems.
Second, hiring the wrong applicant is expensive. According to a study by SHRM (The Society for Human Resource Management), the average cost of hiring an employee is just over $4,100. This does not include the cost of training a new employee, a new employee’s lower productivity and greater likelihood of making mistakes or the stress on your other employees who must pick up the slack while the new employee ramps up. A good hiring process can improve your bottom line by significantly increasing the likelihood that you hire the right employee the first time.
The third and perhaps most important reason to lock down your hiring process: you are introducing potential employees to your company for the very first time. From the time they read your job posting until you inform them of your hiring decision, the applicant is assessing and judging your company. In this competitive job market, you need to quickly give that applicant a reason to want to work for you, rather than all the other hungry employers vying for their services.
An unstructured, haphazard hiring process sends all the wrong messages. Right or wrong, it tells an applicant that the company is not serious about hiring the best employees. It tells the applicant that you don’t value their time. Would you want to work at that company?
You only get to make one first impression, so make it a good one! Be upfront and clear with the applicant about the hiring process and your timeline and stick to them. Keep the interview process on schedule and make sure interviewers are well-prepared. If you tell an applicant you will get back to them by a certain date, get back to them by that date. If the timeline changes, let the applicant know. Treat every applicant with respect at every stage of the hiring process.
Once you establish your hiring process, the hard part begins – putting the plan into action. Even the best hiring process is useless if your staff doesn’t understand it. Clearly explain the hiring process to staff who will implement or supervise it. Provide them with the training and tools they need. Finally, periodically review the success of the hiring process and make improvements, so you continue to attract high-quality job applicants.
We hope you find the Hiring Process Checklist a useful tool as you develop your company’s hiring process, but it is not the only tool available. Take advantage of the many resources available to you in books and magazines, on the internet, and through the services of an HR professional or attorney.
Happy hiring!
The HR Committee needs and values your feedback. We exist to serve NCIA members, so please tell us how we can serve your needs by emailing us at HRC@TheCannabisIndustry.org. Thank you.
VIDEO: Looking Back On NCIA’s 9th Annual Cannabis Industry Lobby Days
On May 21-23, 2019, NCIA held it’s 9th Annual Cannabis Industry Lobby Days in Washington, D.C. with more than 250 NCIA members who represent the cannabis industry all across the country. NCIA’s Executive Director Aaron Smith highlights some of issues we brought to the halls of Congress to educate House Members and Senators, as well as our brand-new VIP Day for PAC Leadership Circle Members.
“One way that I think really demonstrates the leadership that NCIA has here on Capitol Hill and the way that we’ve moved the dial in Congress is that between all of the events at Lobby Days, over 20 members of Congress showed up to speak, attend, and mingle with NCIA Members.” – Aaron Smith, NCIA Executive Director and Co-Founder
Thanks to everyone who joined us in our nation’s capital to bring the advocacy, education, and community to our federal legislators and lawmakers.
Mark your calendars for next year’s 10th Annual Lobby Days happening May 19-21, 2020!
(Due to the COVID-19 pandemic, this has been moved to September 2022.)
Be sure to check out the full photo album from this year’s Lobby Days!
Partner Blog: The Top 10 Reasons to Participate in a Compensation Survey (And How to Use It)
By Dan Walter, FutureSense LLC
Compensation surveys don’t sound like much fun. In fact, they seem like a pain in the neck for everyone involved. Why then should you participate? Heck, why should the NCIA and FutureSense even make an effort to spearhead such an effort? Our driving force is a goal to see this industry reach its potential as quickly as possible. The National Cannabis Industry Association(NCIA) and FutureSense have joined forces to create CannaCompensation, our industry’s first comprehensive compensation survey.
One of the most common questions we hear is: “How is compensation survey data used?”
Companies in many other industries (if not most other industries) generally use the resulting data to determine how much the market pays each position and level in an industry. Data is reported in quartiles or deciles and allows companies to determine their own “compensation philosophy” for paying staff members. Companies use this information to set annual pay ranges, determine incentive compensation levels and track pay trends. Nearly every industry, from golf course management to construction, technology, and healthcare use surveys to create defensible compensation data.
A formal survey, such as CannaCompensation, must adhere to specific guidelines to ensure anonymity, carefully balance responses so data from big companies doesn’t overwhelm the data from smaller companies, and also avoid antitrust issues (these are DOJ regulations).
The following Top 10 List provides a bit more information about why you should sign up today for the 2019 CannaCompensation survey.
Pay is the largest expense at most companies. This is especially true for high-growth businesses. HR uses between $0.65 and $0.80 of each dollar your company’s revenue. This leaves an only tiny bit for real estate, marketing, security, product improvement and everything else your company needs. You better make sure you are getting your money’s worth. Paying even slightly more effectively can provide material benefits to budgets throughout your organization.
Our industry pays people well, and politicians need to understand that. Finances drive policymakers. Data that shows how well the cannabis industry pays employees relative to other comparative business will go much farther than scientific proof of the efficacy of our product, or the public’s desire to have easier access. The NCIA will use the results of this survey to further the cause of every company in and supporting, the cannabis industry.
Every company should comply with legal expectations and regulations. Compensation survey data is the de facto standard method for setting pay in nearly every industry. Most importantly, it is a sound defense against industry collusion and price-fixing. Antitrust laws are no joke. A well-run compensation survey provides competitive market data in an entirely confidential structure. Data resulting from the CannaCompensation survey will comply with the Safe Harbor guidelines established by the Federal Trade Commission (FTC) and the US Department of Justice.
Replacing a good employee is ridiculously expensive. The total cost of replacing an employee can be 150-200% of their annual salary! Every employee you keep saves you money, builds your knowledge base, and creates a more employee-friendly environment. Pay is seldom the only reason people leave, but your competitors will be perfectly happy to try and “buy” your best people.
More confidence in your pay data means more confidence in your hiring process. Other high-growth industries, like the technology sector, depend on reliable data to shorten the hiring lifecycle. Cannabis companies are growing incredibly fast. There’s no time to recover from mistakes, and every extra day you spend negotiating with someone is one more day they can’t help you grow.
Current pay data is either very limited, likely to be biased or too generic to apply to many cannabis positions. There are a few data sources, for a limited number of positions. These include data that mainly comes directly from employees. This data has been measured in other industries to be 125-135% higher than company-reported data. Data aggregators like Payscale, Salary.com, and Payfactors can be very useful as a component of your pay data but tend to lack the specificity needed in our industry. We can all probably agree that the head of a blueberry farm is not on par with the head of a legal grow operation.
Unique industries use unique data. Most high-quality compensation surveys are focused on narrow industry definitions. This allows similar companies to know that the pay data they are using is relevant and likely to be used by their peers. Healthcare companies don’t care what financial firms pay their accountants. Construction firms don’t care what software companies pay their project managers. The world of cannabis business is incredibly broad and very deep. Our pay data must be equal to that challenge.
Your investors will increasingly demand that you pay people correctly. Investments in cannabis companies continue to increase. When a Private Equity or Venture Capital firm invests many millions of dollars in a company, they need to know that you’ve handled the nuts and bolts like FLSA rules, gender equity, and general competitive pay. They expect to see defensible pay ranges for every position. They want to know that you aren’t wasting money on employees and that you aren’t at risk of losing people over compensation issues.
When hiring people away from other industries, it is critical that you can show your value proposition. Biologists, distribution chain professionals, security experts, finance pros, and countless other potential hires can choose to work in any number of other industries. Some may be passionate about our industries, but many may be curious but trepidatious. Jumping into an industry that is not fully proven can be difficult for someone with experience in and job offers from a more traditional industry. Great pay data will provide you with ammunition to compete. This has been incredibly effective for other emerging industries in the past.
Most importantly, participating helps you win the war for talent. Great people are hard to find in any business. They are even harder to hire. This is a major issue for any industry that is inventing itself on the fly. Your competitive advantage may come from your business model or product, but you cannot succeed without the right people to execute your vision. This survey will not only provide pay data, but it will also provide basic job descriptions and leveling information that will allow you to understand both entry-level and senior positions. If you don’t use this information to win, your competitors certainly will.
Regularly using a reputable and comprehensive compensation survey is a best practice of every company that is successful over the long-term. The cost of participation in 2019 is simply a bit of your time. The benefits pay for themselves and carry into every aspect of your business. It is a simple way to get the most out of your largest monetary investment.
Sign-up by June 14 to participate. Data collection takes only 30-60 mins on average.
FDA Rulemaking on Hemp/CBD – Hurry Up And Wait?
by Andrew Kline, NCIA’s Director of Public Policy
In April of 2019, the National Cannabis Industry Association (NCIA) formed a coalition of more than 100 CBD/Hemp entrepreneurs, scientists, medical doctors, and FDA lawyers to inform and influence FDA rulemaking on cannabis and cannabis-derived compounds. Over the past two months, coalition members worked tirelessly to draft public comments. Our goal was to answer all of the questions posed by FDA (including scientific questions), to be helpful to FDA by informing their rule-making process, and to influence the direction of their rule-making.
NCIA Files Public Comment And Testimony
On May 30, 2019, we filed 60 pages of formal comments which can be found here. I’m really grateful for the coalition’s collaborative work and quite proud of our final product. I’m also extremely grateful to the authors, including Alena Rodriguez of RM3 Labs, Dr. Paul Murchowski of Dr. Pauls, Khurshid Khoja of Greenbridge Corporate Counsel, Vanessa Marquez and Chris Elawar of CBD Care Garden, Jonathan Havens from Saul Ewing, Andrew Livingston from VS Strategies, and many others who devoted time to produce a great submission.
On May 31, I testified before the FDA and listened intently as dozens of others spoke. My takeaways were that most of the industry echoed our sentiment – that CBD is generally safe, but that safety issues do arise with adulterated products and with irresponsible manufacturing and marketing practices. I spoke about the need for consensus-driven industry standards, to include marketing and labeling practices, and for mandated lab testing. These practices will go a long way toward making certain that the industry is safe for consumers.
Concerns And Misinformation
I am genuinely concerned that there is currently great confusion in the market. People seem to think that CBD is federally legal as a result of passage of the Farm Bill of 2019. But, that is only partially true. While CBD was de-scheduled, the FDA still retains the authority to regulate the industry as a result of their prior approval of a prescription drug for epilepsy, Epidiolex. In the absence of clear regulatory guidance, people are making health claims that violate federal law. And banks and payment processors are shutting off accounts for CBD businesses because they are having difficulty assessing whether a particular business is operating lawfully.
We hope that FDA will act with deliberate speed in drafting regulations for the industry. If FDA takes its time in crafting regulations, there is danger that many CBD companies will shudder because of a lack of banking and payment processing. And we will inevitably lose market share to Canada and other international players. As always, NCIA stands ready to help.
Learning objectives for the panel include, (1) what the FDA was interested in learning about and why, (2) understanding how our industry coalition responded to the FDA’s scientific questions, (3) predictions for how the FDA will regulate CBD/Hemp and what it might mean for cannabis regulation in the future. Panelists will include members of the coalition who drafted our public comments to FDA.
In the coming weeks, NCIA will be releasing some new policy papers via NCIA’s Policy Council – the think tank for the state-legal cannabis industry. As always, if you’re interested in joining the Policy Council or have any thoughts about how we can propel this industry, please reach out me at andrew@thecannabisindustry.org.
Committee Blog: Social Justice in the Cannabis Industry – Your Answers Will Take Minutes, But The Impact Could Be Long-Lasting
By Rudy Schreier, MMLG
NCIA’s Marketing & Advertising Committee’s Social Justice Subcommittee
The cannabis industry is evolving at light speed. From nationwide legalization, to massive corporations developing green thumbs, cannabis culture is shifting daily. Exciting, yes, but this rapid cultural shift poses a threat to social justice by disregarding the harms caused by the war on drugs. Now, more than ever, the cannabis industry needs to come together and determine a course of action to ensure that social justice isn’t brushed aside.
Where should we start? And how can all of us in the industry handle something as daunting as social justice with the appropriate sensitivity? Let’s review some of the basics.
Cannabis has been aggressively policed since the mid-to-late twentieth century. Minorities from marginalized communities were disproportionately punished for cannabis crimes, contributing to the rise of mass incarceration. Those same communities punished for past involvement with cannabis face an extremely high barrier of entry in the newly legal industry. Many cities and states are adopting social equity programs to lower the barrier. For example, Los Angeles recently approved $10.5 million in funding over the next three years for its social equity program. Initiatives like Los Angeles’ are a step in the right direction; however, there’s still a lot more to be done.
While social justice in the cannabis industry is a new focus for some, others have been fighting for decades. Omar Figueroa, a cannabis lawyer and advocate located in Northern California, helped to convince the Sonoma County District Attorney to clear cannabis convictions and has defended numerous activists pro bono over the years. When asked how the cannabis industry should address social justice, Omar replied, “[We need to] provide grants and loans to address disparities in access to capital, continue to advocate against cannabis prohibition, and create a leadership institute to empower people directly affected by the war on cannabis.” Omar, like many other committed ‘canna-pros’, are constantly fighting for fair and equitable practices in our industry. With so much work to be done, it can be challenging figuring out where to start. This is where you come in.
As we build the new cannabis culture, we have the unique opportunity to do things differently, ethically, and better. NCIA’s Marketing & Advertising Committee’s Social Justice Subcommittee is developing an approach to social justice for the cannabis industry, and we need your help. Since we can’t tackle everything, we’re asking you to make your voice heard and help us navigate the difficult terrain ahead. Please take this 4-question survey about what social justice should mean in the cannabis industry. Your answers will take minutes, but the impact could be long-lasting. Feeling ambitious? Share this ‘gram-sized graphic’ in your own social channels to spread the ‘poll power’ far and wide!
Interested in learning more? NCIA’s Social Justice Subcommittee will be hosting a panel titled “Cannabis Reform Stops Short: Why We Can’t Let Social Justice Get Lost” at NCIA’s Cannabis Business Summit & Expo in San Jose on Tuesday, July 23, from 1:30 PM – 2:30 PM. Register for the conference today!
Marketing and Advertising Committee: (MAC) of National Cannabis Industry Association (NCIA) — develops best practices in cannabis industry marketing /education, opening dialogues with media outlets that ban cannabis-related advertising.
Social Justice Subcommittee: An arm of the MAC committee, the aim is to ensure that social justice issues are positively addressed via cannabis reform. Team Members: MMLG, Cannawise, Canna Advisors, Annabis.
The Author: From operations and marketing, to office and project management, Rudy Schreier wears many hats for the Los Angeles-based licensing and compliance consultancy MMLG. Schreier co-founded the #StartsAtThePolls campaign, which utilized social media platforms to inform voters on how to register to vote, how to get to the polls, and pro-cannabis candidates running for the 2018 elections. The Panel: Be sure to catch the Social Justice Subcommittee’s panel featuring Lisa Jordan (Canna Advisors), Omar Figueroa (Law Offices of Omar Figueroa), Shanita Penny (Minority Cannabis Business Association), and Felicia Carbajal (The Social Impact Center) at NCIA’s Cannabis Business Summit & Expo titled, “Cannabis Reform Stops Short: Why We Can’t Let Social Justice Get Lost.”
VIDEO: Member Spotlight – Magnolia Wellness
In this month’s video spotlight, get to know Debby Goldsberry, Executive Director of Magnolia Wellness, and her team based in Oakland, California. Debby is a community leader who is active in the campaign to reform the California state cannabis laws and to protect patients’ rights. Learn more about how the team at Magnolia Wellness creates a healing environment for their patients, including the East Bay’s only vapor lounge and dab bar, and how they give back to the community through various social programs.
NCIA’s 9th Annual Lobby Days – Strength in Numbers, Power in Progress
Just two short weeks ago, NCIA hosted our 9th Annual Cannabis Industry Lobby Days. This impactful event brought over 250 NCIA members to our nation’s capital to advocate and lobby on important issues facing our industry like access to financial services, amending IRC Section 280E, and addressing social equity.
Over the course of 48 hours, attendees met with nearly 300 congressional offices to share their stories and experiences, and dropped off informational materials to 200 offices that we did not schedule meetings with. In addition to these meetings, we had two briefings, held a PAC fundraiser, and hosted our first-ever VIP Day for members of our Leadership Circle. Let’s take a look at some of the highlights from this important event:
To kick off our first-ever VIP Day, we held a briefing at the House of Representatives entitled “SAFE Banking: Where We Are, and Where We’re Going,” where Congressman Ed Perlmutter (D-CO), the lead sponsor of HR 1595, the Secure and Fair Enforcement (SAFE) Banking Act, kicked off the day. On the panel was Tanner Daniel of the American Bankers Association, Becky Dansky of SARBA, and Gail Rand of ForwardGro, while attendees included NCIA members, congressional staff, and members of the press.
Following the briefing on banking, VIP Day attendees were shuttled to a luncheon featuring Reps. Joe Neguse (D-CO), Katie Porter (D-CA), Gil Cisneros (D-CA), and Steven Horsford (D-NV). All of these members of Congress are freshman who support cannabis reform, and talked about the importance of advocacy and the use of political action committees like the NCIA-PAC that they rely on.
After lunch, VIP Day attendees were shuttled back to Capitol Hill, where teams met personally with members of Congress, committees of jurisdiction, and congressional leadership.
Our first ever VIP Day was a huge success, and we thank the members of NCIA’s PAC Leadership Circle for their dedication to advocacy.
Lobby Days then officially started with a Welcome Reception attended by other advocates in Washington, D.C., NCIA members, and even congressional staff!
The following day, the work really began at our breakfast training. There, attendees met with the groups that they would be in for the day, were taught talking points on various bills and issues, and learned about how to use the app that housed all of their meeting information.
Washington, D.C. is full of great photo ops, so after our breakfast training, all of our attendees shuttled over to the Capitol… and snapped a few selfies, of course!
Meetings on Capitol Hill went from 12pm to 4pm. Each of NCIA’s 54 lobbying teams had at least four meetings over that course of time. Some groups were even lucky enough to sit down with members of Congress to talk about the issues that affect them and their businesses the most.
The day concluded with a fundraiser for the NCIA-PAC. This year’s event was wildly successful, as we had 15 members of the House of Representatives (Reps. Porter (D-CA), Charlie Crist (D-FL), Josh Harder (D-CA), Earl Blumenauer (D-OR), Ruben Gallego (D-AZ), Salud Carbajal (D-CA), Jared Huffman (D-CA), Jason Crow (D-CO), Brendan Boyle (D-PA), Diana DeGette (D-CO), Denny Heck (D-WA), Barbara Lee (D-CA), Dina Titus (D-NV), Susie Lee (D-NV), Matt Gaetz (R-FL)) attend and speak, as well as Sen. Jeff Merkley (D-OR).
The final day of Lobby Days began with a standing-room-only briefing that focused on NCIA’s new white paper titled “Increasing Equity in the Cannabis Industry” that our Policy Council worked on with the Minority Cannabis Business Association (MCBA). Opening remarks were given by MCBA’s President, Shanita Penny along with the Principal of Greenbridge Corporate Counsel, Board Vice-Chair of the National Cannabis Industry Association, and Co-Chair of the Minority Cannabis Business Association Policy Committee, Khurshid Khoja. We were also joined by two members of the Congressional Hispanic Caucus, Rep. Lou Correa (D-CA), and Rep. Ruben Gallego (D-AZ).
Lobby Days wrapped up with small groups dropping off folders with informational materials to congressional offices that we were unable to schedule meetings with. While some may think these drop-ins are ineffective, they actually prove to be incredibly helpful long after our attendees go home.
The dates for NCIA’s 10th Annual Cannabis Industry Lobby Days have already been chosen, so mark your calendars for our biggest year yet, happening May 19-21, 2020!
Be sure to check out the full photo album from this year’s Lobby Days!
Member Blog: How To Build A Successful Hemp CBD Company
The legalization of industrial hemp in December, 2018, has opened the door to a host of new products and processes that have the potential to enhance health and technological innovation while being environmentally sustainable and most importantly, highly profitable.
Entrepreneurs who want to stake their claim in the hemp space face some of the same challenges as others starting a new business, but other challenges are unique. Like anyone starting a business, you must understand your market. Right now hemp’s “low hanging fruit,” cannabidiol (CBD), is gaining popularity. Established brands such as Bluebird Botanicals, Endoca, and CV Sciences – which recorded $48.2 million in revenue for 2018, an increase of 133 percent over the previous year – are taking off.
Growth like this explains why predictions for overall expansion in the CBD market are meteoric, with cannabis industry analysts The Brightfield Group predicting it could hit $22 billion by 2022. But in order to get on that ride you will need to understand CBD consumers, prepare to meet their needs, and plan to expand their awareness of ways your product or service can help them. You will also need capital.
Stand out to investors
Once you have a good idea of the market and demand, you will be ready to start thinking about funding your company. It used to be that a passionate founder with a good pitch deck could attract investors after one meeting, but times have changed. Investors want cold, hard data to back up your claims, and they will want better analysis than your gut feeling, and a larger sample size than your friends and family.
Your pitch needs to not only support your market analysis with data, but differentiate your brand from others competing for the same investor dollars. The business model and differentiation need to encompass:
Revenue source
Where will you sell your product? Options include wholesale, white label, and retail through either online, brick-and-mortar store or a third-party vendor, or a combination of those.
Product category
Will you market your product as a cosmetic, pet supplement, nutraceutical, specialty beverage, functional food or something else? You will need specific information about the market for that product category and what roles CBD can occupy in them.
Product quality
What extraction methods are you using? Is your product purity third-party verified?
Are you using the highest grade of CBD isolate or distillate in your product line?
Product sourcing
Where does your hemp and raw materials come from?
How hands-on are you with your suppliers?
How stringently do you track your product from farm to consumer?
Vertical integration is increasingly seen as the optimal approach to CBD supply chain management. Producers such as Shi Farms in Colorado specialize in vertical integration.
Cannabinoid science:
Are your product and marketing firmly grounded in the best available science supporting the uses of CBD and other cannabinoids?
Product story
Do you have a compelling narrative that explains your personal investment in making the product available to consumers?
Does your marketing comply with FDA standards?
Some things you should not DIY
The issue of FDA compliance deserves special attention and professional support for CBD businesses. It is one of a few areas where hiring a consultant can make the difference between success and failure.
Your outward-facing communications will have to walk a line between including all the required elements without making any claims that violate FDA regulations. Cosmetic and nutraceutical labeling must list all ingredients, while nutraceuticals also need to provide a dietary supplement facts panel. Structure and function claims can be particularly tricky. CBD is not classified as a drug and therefore verbs such as treat, diagnose, prevent and cure are absolutely off limits. The language has to convey that some consumers use CBD in certain ways without employing medical terms or guaranteeing any particular outcomes. You can do your own research on compliance but it is always wiser to hire a consultant who specializes in this area.
As you get past the initial planning and push to get your business started, you will find there’s no substitute for long-term planning. Collecting ongoing data on the purity and potency of your product, the costs of raw materials and effectiveness of your marketing will enable you to make mid-course corrections in your projections so that your business and revenue grow.
Long-term planning based on robust data will ultimately make a huge difference for your business. I predict a failure rate of about 70 percent for CBD companies over the next five years. Whether they are underfunded, lack an effective management structure or are out of compliance with FDA standards, many new businesses won’t be able to compete with major players like Kraft, P&G and Unilever as they enter and begin to dominate in the CBD space. But some of those starting a CBD business now will not only learn how to stay afloat, they will prosper to the point that those major players will come knocking at their doors with generous offers to buy. Build in a pathway for your desired exit strategy and have all of your operating agreements and documents at the ready. If this looks like a possibility, or you want it to become one, you will need top notch, cannabis-savvy representation like McAllister-Garfield in your corner.
Learning and networking
If you want to make a deeper dive into starting or building a CBD or hemp concern, The Hemp Biz Conference is here for you. During symposia around the country you can learn about industry trends in an interactive forum, and get access to experts in discussion and workshop sessions designed for everyone from beginners to established professionals. Scheduled tracks – agriculture, processing, manufacturing, extraction, textiles, biofuels and plastics – allow you to focus your time where it matters most to you and your business. The Hemp Biz symposia attract the hottest hemp companies, investors and entrepreneurs in the industry so you will leave with connections that will help you grow for years to come.
Christie Lunsford, CEO, leads The Hemp Biz Conference’s charge into creating a sustainable hemp industry by bringing together the best experts, entrepreneurs, farmers and scientists in the cannabis space in the Hemp Symposium Series.
Before launching The Hemp Biz Conference in 2018, Christie founded Endocannabinioidology, a consulting firm providing cannabis science, FDA compliance support, technology and education management to businesses and individuals in the cannabis and hemp communities, where she successfully wrote or advised on winning cannabis license applications in several states. She has also overseen operations for a producer of horticultural LED technology, helped formulate and launch the first retail channel of CBD nutraceutical products derived from industrial hemp in the U.S, and was named Cannabis Woman of the Year at the 2015 Cannabis Business Awards. In addition to producing The Hemp Biz Conference’s Hemp Symposium Series she is a regular contributor on the business of hemp for Green Entrepreneur.
Congratulations to Ean Seeb For His New Public Policy Role!
Photo By CannabisCamera.com
NCIA leadership and its Board of Directors are thrilled to be celebrating the transition of one of our very own cannabis industry leaders into a prominent public policy role for the state of Colorado. Please join us in congratulating Ean Seeb for his new role as Governor Jared Polis’ Special Advisor on Cannabis.
Throughout his career, Ean has been a tireless advocate for replacing criminal marijuana markets with a socially responsible and well-regulated cannabis industry and now he’s bringing that experience into the public sector.
Ean has served the cannabis community and industry for more than a decade, and now moves on from his role as co-owner and founder of Denver Relief and Denver Relief Consulting, as well as other endeavors including Manna Molecular which he represented on the NCIA board of directors. Ean was an active member of the NCIA board of directors for nearly seven years and chairman of the board for two of those years.
“I can’t think of a better person to advise Governor Polis on cannabis policy. During his tenure in the private sector, Ean has always demonstrated a commitment to justice, personal liberty, and corporate social responsibility,” said NCIA executive director Aaron Smith. “The people of Colorado are very lucky to now have him now putting his talents and passion to work for them.”
“Ean is a leader in the cannabis industry and we are thrilled to have him on our team. We welcome his incredible expertise and know he will help us continue Colorado’s leadership in this growing industry,” said Chief of Staff Lisa Kauffman.
“I’m incredibly grateful to have had the opportunity to work with NCIA over the years to help promote the interests and best practices of the cannabis industry as a board member and citizen lobbyist. I entered the cannabis industry because I wanted to help people suffering under marijuana prohibition, and NCIA made it possible to that on a larger scale,” said newly-hired Ean Seeb.
It was through NCIA that I met then-Congressman Polis – at the very first NCIA event in Colorado in 2011, which eventually led to my new role in the Governor’s office. Now I have the chance to help even more people throughout the great state of Colorado and beyond in the coming years.”
Congratulations and best wishes, Ean!
Partner Blog: CannaCompensation – Are Recruiter Rates Accurate?
Recruiters are on the front lines in the competition for talent. When a role is critical, tough to fill, or requires specific expertise, recruiters can play an invaluable role. They have the contacts, the skills, and the persistence to get the people you need right now.
Recruiters are a special kind of farmer. They aren’t picking the low hanging fruit. They are working on selecting the very best fruit. But, quality can come at a premium price.
The cannabis industry now has several strong talent acquisition firms. They know the industry and the lingo. They have contacts, and their connections have contacts. Currently, they are also one of the few sources of compensation rates for many positions in the industry. The pay data they provide is accurate, but it may not be “right.” How can this be?
Remember, the best recruiters target the best talent. They also target people with current jobs. The best talent usually gets paid more than typical, and still perfectly acceptable, talent. Employed people cost more to hire than unemployed people. This can result in recruiter provided pay ranges that are above industry norms.
The top people in any position commonly make 10-20% more than mid-level people. Motivating someone to change companies can take twice the increase as promoting an internal employee. This means recruiter-provided pay rates are often 20-35% higher than a formal compensation survey would indicate. This is fine for critical people, but it’s a ridiculously expensive way to pay an entire staff. This is why formal compensation surveys, like CannaCompensation, are essential to your success.
Compensation is likely your biggest expense – it may eat up as much as 75% of your revenue. Saving even 5% on paying your staff can mean the difference between growth and failure. This type of savings can fund a marketing campaign, purchase new equipment, develop new products, or become the down-payment on new real estate. When you provide your pay data to the CannaCompensation Study, you are building a foundation for future success. Participating is easy and confidential.
Your recruiters will always remain a vital source of information for pricing your highest priority positions. CannaCompensation will serve as the foundation for your pay decisions. When you combine them, you will be armed to win the battle for both talent and future success.
On May 29, 2019, Governor Jared Polis signed HB 1090 into law, removing burdensome restrictions on who can own cannabis businesses in Colorado and permitting greater outside investment. The law, which goes into effect on November 1, 2019, drastically changes the regulations in Colorado by permitting public companies, currently prohibited from owning cannabis licenses, to own such a license in the state. Additionally, shareholders with equity interests below ten percent will largely be able to avoid the current extensive disclosure requirements.
Before industry participants rush to secure outside investments, there are important issues to be considered.
First, the rules and regulations promulgated pursuant to HB 1090 have yet to be drafted. While the new ownership framework is outlined in HB 1090, the actual rules that will govern Colorado businesses must still be written. Second, the law does not take effect until November 1, 2019. Regulators have previously penalized companies for hastily signing, or announcing transactions before a law takes effect or without first speaking with the regulators. This type of hasty action can put companies at risk of sanctions and hinder the application process. Lastly, this article is only a summary of HB 1090 and does not discuss the nuances of the law. Please consult a licensed attorney regarding specifics of any proposed transactions.
The signing of HB 1090 opens a new era for the Colorado cannabis industry. Where the old law prohibited public corporations from owning even indirect equity stakes, the new law allows certain publicly traded companies to own licensed cannabis businesses within Colorado. And where the old law required at least one owner to meet the one-year residency requirement, the new law only requires all individuals with day-to-day operational control to be Colorado residents. The new law also allows non-U.S. citizens to own equity in a licensed business.
What’s New
Many of the old categories of ownership have been scrapped. No longer are there Direct and Indirect Beneficial Interest Owners or Qualified Passive Investors. Where HB 1040 (the previous law that currently governs ownership) focused on any amount of control or ownership, HB 1090 generally requires more direct control or ownership to trigger disclosures and Marijuana Enforcement Division (MED) approval. HB 1090 creates three new types of ownership classifications and defines “Acquire” and “Control” more effectively. Control is the direct or indirect possession of the power to direct the management or policies of the cannabis business, whether through ownership of voting securities, by contract, or otherwise. This is important because the control requirement now specifically addresses management agreements within the industry. A person “Acquires” a cannabis business not only through the acquisition of ownership interest, but also through the acquisition of direct or indirect control, voting power, or through the sole power to dispose of the owner’s interest through transactions, subsidiaries, purchases, assignments, transfers, exchanges, successions, or other means.
There are three new types of ownership classifications within HB 1090.
First, a Controlling Beneficial Owner, which refers to (i) a natural person, entity, or affiliate (a person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with, the person specified) or a Qualified Private Fund, defined as a typical venture capital or private equity fund that, owns ten percent or more of a cannabis business, or a person who is otherwise in control of the cannabis business (including managers or others); or (ii) a Qualified Institutional Investor, which is defined as one of a list of entity types that largely reflect passive institutional investors, owning or acquiring at least thirty percent of the owners interest in the cannabis business.
Second, a Passive Beneficial Owner, which is any person holding any interest in a marijuana business who is not otherwise a Controlling Beneficial Owner or in control.
And, third, an Indirect Financial Interest Holder, which is a person that is not an affiliate, a Controlling Beneficial Owner or Passive Beneficial Owner, does not receive a percentage of the revenue or profits of the cannabis business as compensation and satisfies one of the following requirements: (a) holds a reasonable royalty in exchange for the cannabis business using its IP; (b) holds a permitted economic interest prior to January 1, 2020 in a cannabis business that has not been converted into an ownership interest; or (c) is a party to a contract with a cannabis business involving a direct nexus to cultivating, manufacturing, or the sale of cannabis. An Indirect Financial Interest Holder includes a person leasing equipment or real property for use in cannabis operations or cultivation; secured and unsecured financing agreements; security contracts; and management agreements.
Disclosure Requirements and Change of Ownership Process
Controlling Beneficial Owners and Passive Beneficial Owners each have their own separate disclosure requirements under the law. But with reasonable cause, the MED can require any person to report most of the same information as Controlling Beneficial Owners. All Controlling Beneficial Owners and, at the MED’s request and based on reasonable cause, any other person disclosed under the “business owner and financial interest disclosure requirements” provision must submit for a Suitability Judgment from the MED or apply for an exemption from such requirement prior to submitting a cannabis business application. “Reasonable cause” is defined as just or legitimate grounds (based in law and in fact) to believe that the requested action furthers the purpose of the law or protects public safety.
All Controlling Beneficial Owners must submit disclosure and fingerprint-based criminal history checks as required by the regulations. The MED will review the Controlling Beneficial Owner to see if it shows a history of good moral character. Currently, there is no test for what will justify denial based on the background check.
All applicants for the issuance of a state license must disclose a complete organizational chart reflecting the identity and ownership percentages of its Controlling Beneficial Owners. If the Controlling Beneficial Owner is a publicly traded company, the application must disclose the public companies’ managers and any beneficial owner that, directly or indirectly, owns at least ten percent of the Controlling Beneficial Owner. If the Controlling Beneficial Owner is a Qualified Private Fund, then an organizational chart must be disclosed that identifies the ownership percentages of the Qualified Private Fund’s managers, investment advisors, and anyone else that would control the manager or operations of the marijuana business (this means that, barring extenuating circumstances, funds will not need to disclose their Limited Partners). All applicants (including individuals) must take reasonable care to confirm that its Controlling Beneficial Owners, Passive Beneficial Owners, Indirect Financial Interest Holders, and Qualified Institutional Investors are not prohibited under the law, and failure to do such due diligence can lead to penalties.
For individual applicants, the natural person’s identification must be disclosed for persons that are both Passive Beneficial Owners and Indirect Financial Interest Holders in the cannabis business, any Indirect Financial Interest Holder that holds two or more indirect financial interests in the business or for persons that contribute over fifty percent of the operating capital of the business.
Despite specific disclosure requirements listed in HB 1090, the MED has discretion to mandate additional reporting. The MED may require an applicant or business to disclose each owner and affiliate and, with reasonable cause, may require a list of each non-objecting beneficial interest owner; business or Controlling Beneficial Owner that is publicly traded; Passive Beneficial Owners of the business; for any Passive Beneficial Owner that is not a natural person, the board members, directors, general partners, executive officers, and ten percent or more owners of the Passive Beneficial Owner; and all Indirect Financial Interest Holders of the cannabis business (including non-natural persons that own at least ten percent of the Indirect Financial Interest Holder).
The disclosure requirements primarily focus on individuals with ten percent or more interest in a cannabis business and those persons in control, but HB 1090 does include a strict prohibition on structuring any transaction with the intent to evade disclosure, reporting, record-keeping or suitability requirements, and any such action can lead to denial or revocation of an application.
Conclusion
Regulations for changes of ownership are still not known and will be clarified during the rule-making process. For most transactions, it appears that a new Controlling Beneficial Owner will need to be approved prior to submitting an application change of ownership for approval. HB 1090 will generate exciting opportunities for Colorado, but it is important to know the law, be patient while the MED promulgates regulations, wait until November 1, 2019 before initiating any outside investment transactions, and consult a licensed attorney regarding specifics of any proposed transactions.
Charlie Alovisetti, Vicente Sederberg LLC
Charles Alovisetti is a partner and chair of the corporate practice group at Vicente Sederberg LLP based in Denver. He assists licensed and ancillary cannabis businesses with corporate legal matters, and he has experience working with clients on a broad range of transactions.
NCIA Submits Public Comment To FDA On Hemp and CBD Products
Today, NCIA responded and submitted public comments to the U.S. Food and Drug Administration’s (FDA) request for comments on Scientific Data and Information About Products Containing Cannabis or Cannabis-Derived Compounds.
Given the substantial interest in this topic and the need for regulations and standardization throughout the industry, NCIA and this coalition are providing specific insight into all facets the FDA would like to examine, including health and safety risks, manufacturing and product quality, and marketing, labeling, and sales.
Hemp-derived CBD is in high demand by consumers, and the industry is eagerly awaiting the FDA’s regulatory framework for these products. Our industry coalition firmly believes that by working in partnership with the FDA to inform rulemaking, we can develop an appropriate regulatory framework to ensure the safety and efficacy of these important products.
Top Ten Female Industry Leaders to Meet at #CannaBizSummit
The cannabis community has seen an influx of female entrepreneurs and leaders laying the groundwork for the future. Whether they’re advocating for reasonable legislation, engineering extraction techniques, or hacking the crazy world of cannabis marketing, the cannabis industry continues to boast a higher percentage of female leadership than the national average – with even more room to grow. As a significant part of America’s fastest growing industry, the women of cannabis are determined not to be left behind.
Throughout her extensive career, Lisa has led large-scale corporate campaigns and has made a visible impact on premier organizations in the nonprofit sector. Her dynamic approach allows her to grow and shape organizations from the ground up. Lisa’s work has won numerous awards, including local ADDYs, national awards for predictive analytics, and a Bronze Lion at the Cannes Lions International Festival of Creativity.
Maureen has 25+ years of professional training experience; she is the Founder and Chief Facilitator with Cannabis Trainers™. She has led thousands of workshops and inspires cannabis industry professionals to create and sell products compliantly and professionally. She has combined her skills and expertise with Food Safety and Responsible Alcohol Service into a comprehensive, engaging program to ensure the responsible, knowledgeable and safe sale of cannabis: Sell-SMaRT™.
Kim brings her many years of social responsibility expertise, including participation in numerous and international CSR bodies and community boards, to her role as Executive Director. Prior to joining GCP, Kim spent 11 years at Atlantic Lottery Corporation (ALC) as Manager of Corporate Social Responsibility. During that time, Kim led, developed, prepared and executed ALC’s CSR strategy, which included a focus on diversity and inclusion, health and wellness, volunteerism and responsible gambling. A seasoned media and public relations practitioner, Kim is a proactive and dynamic leader who gets things done.
Laura Wilkinson is an entrepreneur with over 35 years of experience in emerging industries building several companies from zero. She has successfully launched broadcast companies, precious metals recycling entities, an information security company and consumer product manufacturing for retail – all industries with substantial compliance requirements. Between those, she worked in Broadcast Radio and Television in San Diego and Fortune 500 Marketing Communications leadership positions in the energy sector.
Diane has over twenty years of leadership experience in digital marketing and advertising. As CEO of iCre8t Digital Agency, she has crafted award winning national campaigns for brands such as PetSmart Charities, Mizuno and Ferrari. Diane has led digital advertising campaigns for clients such as Kimberly-Clark, Coke, The Home Depot and BMW. Additionally, Diane has executed national social media campaigns to drive in store sales at Walmart for Central Garden & Pet. That campaign increased sales by more than 128% and solidified their vendor shelf-space with the large retailer while winning the 2011 Best Online Brand Experience through social media.
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 and start-ups in a wide variety of industries. More importantly, she has more experience recruiting in the cannabis industry than any other recruiter globally. In addition, she has built companies from the ground up and loves putting together perfect teams. Kara has an MBA in Human Resources & Organizational Behavior and is PRC, CIR, & CSSR Certified.
Ms. Quan has experience representing individuals and businesses in a wide variety of matters, including areas of business litigation, general liability, professional liability, employment law, landlord/tenant, health law and product liability. Her clients have included owners of both small and large businesses, hotels, restaurants and bars, residential care facilities and nursing homes, security companies, national and international companies, and owners and property managers of shopping centers, commercial buildings and other properties. Ms. Quan also assists clients within the cannabis industry, as well as those affected by cannabis legalization.
For the past several years, Lauren has been active in the drug policy reform movement as well as other progressive and humanitarian efforts. She is the former Chair of the Board of Directors of Students for Sensible Drug Policy (SSDP), an international non-profit organization working to end the counterproductive “War on Drugs.” Currently, she sits on the Board of Directors of the Sonoma County Growers Alliance, an organization that advocates on behalf of local cannabis businesses.
Laura is a professional mechanical engineer specializing in the design of HVAC, plumbing, and process systems for the cannabis industry. Using her experience in traditional engineering methods through Root Engineers parent company, ColeBreit Engineering, she applies her team’s depth of knowledge to create efficient and economically sound solutions for cultivation and processing facilities. Taking a custom approach to each project, Laura has experience working in the traditional design-bid-build method, as well as in the design-build arena.
Before heading to law school, Karen was an executive in the advertising business, as well as having been a personal manager to a major recording artist. She also co-wrote of a Top-10 Hit song in Europe that also made Billboard Magazine’s Hot 100.
Today, Karen brings her unique background and skills to the practice of intellectual property and business law. Her firm is an active member of the National Cannabis Industry Association where Karen serves as Chair of the Packaging and Labeling Committee (PLC). Throughout the years, Karen has spoken at a number of NCIA meetings and other Cannabis industry conferences.
CBD (cannabidiol) is everywhere right now. Front page articles proclaim its virtues and ubiquity. New retailers announce their intentions to sell CBD products almost every day. But a lot of the media coverage of CBD is inaccurate or misleading. Below are five common misconceptions about the legal status of CBD.
CBD is legal in all 50 states
Unscrupulous promoters like to claim that the 2018 farm bill has fully legalized hemp as well as any and all derivatives of hemp. That’s not true. The 2018 farm bill exempted hemp and its derivatives from the definition of marijuana under the federal Controlled Substances Act (CSA), but it does not require states to do the same. Furthermore, under the 2018 farm bill, states are permitted to prohibit hemp production and several states continue to do so. While some states explicitly authorize and regulate the production and sale of CBD, or otherwise provide legal protection for authorized individuals to engage in commercial hemp activities, other states maintain outdated drug laws that do not distinguish between marijuana, hemp and/or hemp-derived CBD, resulting in hemp being classified as a controlled substance under state law. In these states, sale of CBD, notwithstanding origin, is either restricted to state medical or adult-use marijuana program licensees or remains unlawful under state criminal laws. Additionally, a number of states prohibit the sale of certain consumable CBD products, such as CBD-infused foods or dietary supplements. So, before you start selling CBD or invest into a CBD company, do your research on the states where you will be producing and selling product; you could be violating state criminal laws.
The FDA doesn’t regulate CBD products
Although the 2018 farm bill removed hemp and the cannabinoids derived from hemp from the purview of the CSA, the 2018 farm bill expressly preserves the U.S. Food and Drug Administration’s (FDA) authority to regulate food, dietary supplements, cosmetics, and drugs, including those that contain hemp ingredients. The FDA’s position is that THC and/or CBD cannot lawfully be added to food or marketed as dietary supplements. To date the FDA has sent warning letters to several CBD companies expressing this position and requesting corrective action. Therefore, although the FDA is accepting public comment and is holding a hearing to evaluate alternative approaches for regulating CBD products, the agency currently has jurisdiction over food, supplements, cosmetics and drugs containing CBD and continues to disseminate warning letters to CBD manufacturers for violating federal laws and regulations.
CBD is non-psychoactive
CBD is often marketed as the non-psychoactive cousin of THC. This is misleading. Research has indicated CBD has antipsychotic, anxiolytic (anxiety-reducing), and antidepressant effects – clearly demonstrating that it is a mood-altering substance (i.e., psychoactive or affecting the mind or behavior). It would be more accurate to say that CBD lacks the intoxicating effects of THC. From a legal perspective this matters because making deceptive claims in advertising is illegal and can result in serious consequences. Section 5(a) of the Federal Trade Commission Act prohibits “unfair or deceptive acts or practices in or affecting commerce.” We have seen the FTC jointly send warning letters with the FDA to a number of CBD companies and ongoing litigation surrounding the marketing of CBD products demonstrates there is meaningful risk that false or misleading label claims can create a cause of action for fraudulent inducement.
CBD has no side effects
There is increasing evidence that CBD has side effects and may interact with other medications, such as the anticoagulant warfarin, especially at high doses. The FDA has identified several safety concerns associated with the consumption of certain CBD drug products, including potential for liver injury, somnolence, lethargy hypersensitivity, decreased appetite, diarrhea and sleep disorders. FDA further noted that the potentially serious risk of liver injury can be managed through medical supervision, but questioned how effectively this particular risk can be managed in the absence of medical supervision and FDA-approved labeling. While more research is necessary to better understand the impacts of long-term CBD use at various levels, blanket claims that CBD has no side effects may provide false and misleading information to consumers.
CBD can be freely included in pet products
Although CBD products are widely marketed for pets, there are currently no hemp (or CBD) ingredients that have received express FDA approval for use in animal products. The FDA cooperates with the Association of American Feed Control Officials (AAFCO) for the implementation of uniform policies regarding the regulation of animal feed products, and although the FDA does not recognize animal supplements as its own regulatory category (it either classifies such products as food or drugs), the FDA’s policy has generally been to exercise enforcement discretion, allowing animal supplements where stakeholder groups such as the National Animal Supplement Council (NASC) permit them. At present, neither AAFCO nor NASC permits the use of CBD in animal products. While NASC’s position on the use of hemp ingredients in “dosage-form products” as of January 30, 2019, is that hemp is allowed in dosage form products (i.e. supplements) provided it doesn’t contain CBD concentrates, isolates, or synthetics, and the THC content is 0.3% or less, AAFCO has not approved any hemp ingredients for use in animal feed. As with human products, risk of enforcement and regulatory scrutiny is increased where products make any disease claims, where products are marketed as containing “CBD,” and where products are advertised widely in interstate channels. In addition, a product may be considered misbranded if its labeling is false or misleading in any way or fails to include required information.
Due to the highly nuanced nature of cannabis regulation, the infancy of the domestic legal industry, and the constantly changing regulatory landscape at both the state and federal level, businesses must be sure to stay informed, educated, and vigilant.
2 – Grayson, L., Vines, B., Nichol, K., Szaflarski, J. P., & UAB CBD Program (2017). An interaction between warfarin and cannabidiol, a case report. Epilepsy & behavior case reports, 9, 10–11. doi:10.1016/j.ebcr.2017.10.001
3 – Scientific Data and Information About Products Containing Cannabis or Cannabis-Derived Compounds; Public Hearing; Request for Comments 84 Fed. Reg. 90, 12969 (April 3, 2019) (to be codified at 21 C.F.R. pt.15).
4 – Id.
5 – Hemp and CBD in Pet Supplements Weaves Same Tangled Web as in Products for Humans (Jan. 31, 2019), NUTRA ingredients-usa.com
Charlie Alovisetti, Vicente Sederberg LLC
Charles Alovisetti is a partner and chair of the corporate practice group at Vicente Sederberg LLP based in Denver. He assists licensed and ancillary cannabis businesses with corporate legal matters, and he has experience working with clients on a broad range of transactions.
Courtney Barnes and Corey Cox are associate attorneys in Vicente Sederberg LLP’s Denver office. They both aremembers of the firm’s hemp and cannabinoid practice group, where they focus on policy, regulatory compliance, and risk management in the hemp space.
VIDEO: Innovation In Cannabis Science And Technology
The cannabis industry is full of scientific and technological advancements. Join the movement and register for one of our upcoming events so you can see it for yourself.
Hear more from these NCIA Members about the amazing industry we are innovating together:
Plus, check out our event calendar and get your team registered!
Not yet a member of NCIA?
Stay up to date about the rapidly evolving landscape by networking with nearly 2,000 member companies who are part of a movement to build a responsible industry.
Apply For A Scholarship to #CannaBizSummit Before May 15!
In an effort to create a more diverse and inclusive industry, we are thrilled to announce the partnership between NCIA and the Minority Cannabis Business Association has opened applications for its scholarship fund for qualified cannabis executives. Throughout the years, MCBA has consistently gone above and beyond to create equal access and economic empowerment for the communities most affected by the war on drugs.
NCIA is excited to have the opportunity to offer 60 applicants a complimentary pass to join us at the 6th Annual Cannabis Business Summit & Expo this July 22-24 in San Jose, CA. If you are a minority in an executive cannabis position, please take a moment to fill out the application. We look forward to seeing you in San Jose!
The scholarship application period closes on May 15, so get your application in today!
Applications are due by Midnight PST, May 15, 2019. Awardees will be notified on June 1, 2019. Scholarship recipients will receive complimentary passes to Day 1 and Day 2 (July 23 & 24) of the Summit. Access to workshops and tours taking place on the Pre-Conference day (July 22) will need to be purchased separately. Scholarship recipients will also need to cover & arrange their own travel and lodging needed to attend the event.
Member Blog: Put Your Cannabis Products to the Test – How Companies Can Work Closely with Labs to Maximize Efficiency and Quality
Laboratory testing regulations for the cannabis industry have been consistently inconsistent, leaving companies struggling to adapt. In the early stages of California’s legal medical marijuana market, labs limited testing to potency, disregarding purity, which put patients at risk. When California legalized adult-use, regulators drastically and rapidly increased testing requirements and purity standards, leaving many producers struggling to adapt.
But despite the frustrations that may arise from convoluted cannabis testing requirements imposed in many states, it is essential that the growing adult-use and, of course, medical cannabis industries ensure that their products across the board are reliable, safe, and pure – free of contaminants such as heavy metals, mold, and synthetic pesticides – and that levels of THC and CBD are accurately labeled.
Companies can prepare for more stringent rules, while being confident in both the purity and potency of their products, by selecting a trustworthy lab to fit their needs, and by developing a lasting relationship with that lab. Once a brand has chosen a lab that they are comfortable with and whose results have proved to be credible, it’s important to stick with that lab rather than play the field.
The first step is to develop a thoughtful selection process to find a lab that best fits your company’s needs and goals. Take the time to meet with various lab teams and have in-depth conversations about their experience, equipment and technology, and operating strategies employed to test for product quality, purity, and safety. This is not the time to take shortcuts, nor should you base your lab choice solely on price and turnaround time. With regards to the latter, a great lab may need a week or more to thoroughly test a product and confirm its purity and potency. The lab is simply doing its due diligence to ensure a company can be fully confident in the products they put forth in the marketplace.
Once you’ve chosen a lab that will work best with and on behalf of your business, consistently stay in touch with the lab team. Build relationships with account representatives so they can fully understand your products, so you can understand the progress the lab is making throughout the testing process, and together be fully prepared to address any issues that may arise. For instance, if there is an expected delay, companies who have stayed in regular contact with their lab of choice can be ready to prevent problems relating to supply chain and inventory.
Fostering a strong relationship with a reputable, objective, third-party lab is another way for brands to distinguish themselves from the pack within the legal market, and to encourage consumers to forgo the illicit market and instead place their trust in high-quality, licensed products that have been properly tested. Companies can add test results to their product labels and their websites for full transparency.
By carefully selecting a lab and learning to seamlessly work together, brands can not only adapt to stricter testing requirements, but can potentially use the increased regulations to their advantage by establishing consumer confidence and by going above and beyond regulatory requirements.
Dr. John Oram, Ph.D., is CEO & Founder of NUG, an Oakland-based, vertically-integrated cannabis company with strong historical growth and performance. Founded in 2014, NUG continues to expand and diversify its portfolio, which includes world-class R&D, state-of-the-art cultivation, extraction, and distillation facilities, one of California’s largest wholesale cannabis distributors, and the new, unparalleled NUG retail store experience. Follow NUG on Facebook,Twitter, Instagram and YouTube.
VIDEO: The Benefits Of Legalization
In this third installment of NCIA’s animated educational video series, we explore the benefits of legalizing cannabis nationwide and beyond. Learn how ending federal prohibition can improve public safety and add economic opportunities to our communities, and how you can help.
Join NCIA today help us push cannabis reform past the tipping point!
VIDEO: The Bright Future Of The Cannabis Industry
The future is bright for the cannabis industry!
Let’s build it together.
Despite the many struggles our industry faces due to federal prohibition, there’s strong optimism for the direction we are going into the future.
Hear more from these NCIA Members about the amazing industry we are building together:
For even more inspiration, download this NCIA Policy Council Report – “The New Politics of Marijuana: A Winning Opportunity For Either Party” – to learn more about the significant voter support for marijuana policy reform and the legal cannabis industry through thoughtful examination of recent public opinion polling and electoral wins.
Plus, check out our event calendar and get your team registered!
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Top 5 Reasons You Should Attend Lobby Days This Year
Will you join us as a united front in Washington, D.C. this year?
Hundreds of cannabis industry professionals from all over the country will descend on Capitol Hill this month for the 9th year in a row for NCIA’s Annual Lobby Days. It’s more important than ever before to make your voice heard and advocate for the federal reforms our industry needs to truly thrive.
Whether it’s access to banking for your business, much-needed federal tax reforms, or some of the many other struggles faced by our industry that could be remedied by congressional action, we need you to tell your stories on Capitol Hill with us on May 21-23.
Here’s our top five reasons for you to register today to join us for this exciting and impactful event this year:
Progress made on SAFE Banking Act
Earlier this spring, we saw historic movement on one of our key pieces of legislation: banking. The SAFE Banking Act of 2019 was introduced in the House of Representatives by some of our champions in Congress – Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA). Following an historic hearing, the bill received a markup by the House Financial Services Committee and passed out of the House Financial Services Committee in a vote of 45-15. This is important because it is the first time in history that a cannabis banking bill has made its way this far through the legislative process. NCIA vigilantly jumped in to collect and submit the testimonies of dozens of cannabis industry leaders for the hearing.
The momentum continues to grow as the bill now has more than 160 co-sponsors and will likely be debated again in the House soon. Now is the time to strike while the iron is hot. Join us at Lobby Days to educate and inform even more members of Congress about the struggles our industry faces to get and keep access to financial institutions!
New Attorney General is receptive to state’s rights issues
As the saying goes: out with the old and in with the new! Attorney General Jeff Sessions, who is known for his anti-cannabis stance, resigned from the Department of Justice earlier this year, and was replaced by William Bar. During his Senate confirmation hearing in January, Barr expressed his respect for the policies laid out in the Cole Memorandum, issued in 2014, which cannabis companies have relied on to continue doing business in a state-legal, regulated environment. Additionally, he wrote to the committee, “I still believe that the legislative process, rather than administrative guidance, is ultimately the right way to resolve whether and how to legalize marijuana.”
These statements hint at a more reasonable approach to cannabis reform, and the need for NCIA members to make their voices heard in the halls of Congress, particularly those in Congress with influence on the Senate Judiciary Committee and at the Department of Justice.
New members of Congress
Last November, we saw midterm elections bring in a new class of freshman members of Congress. Many of these new faces replaced the old guard of those with long-standing prohibitionist views toward cannabis. Many of them lean more progressive, which means they are more likely to be friendly toward our issues. This infusion of new blood, new minds, and new perspectives in the halls of Congress can work in our favor.
NCIA’s Lobby Days is the best way to get direct access to some of these offices so we can get off on the right foot with them on our issues. Joining us in D.C. means you will inform and educate these new members of Congress on the struggles we face like tax reform, veteran’s medical access, social equity, and of course, the SAFE Banking Act specifically. How many new co-signers can we get on this bill? Let’s find out together.
Meeting 200+ other politically active industry professionals
It’s not a conference — It’s different. There’s no expo floor or panel discussions, just people. And it happens to be some of the most politically engaged leaders of our industry who attend Lobby Days. You’ll rub shoulders and team up with cannabis industry pioneers who have been in the game for years. You’ll learn the “ins and outs” of the Beltway from lobby day veterans who join us every year to advocate for our industry. Hear about it for yourself by watching this re-cap video from last year’s 8th Annual Lobby Days:
Learn how to lobby and take those lessons home
This isn’t our first rodeo, but it might be yours, and that’s okay. Even if you’ve never done citizen lobbying before, NCIA’s government relations team makes it easy by offering trainings before the event, as well as on-site. We’ll give you materials to help you tell your stories including descriptions of our priority legislation, and background information on the offices you’ll be speaking with. And you won’t have to go it alone! We will team you up with a small group of your fellow cannabis industry peers to navigate the halls of Congress together.
Lobby Days with NCIA will empower you to go back to your home state to advocate on the industry’s behalf. You’ll know what to say, how to say it, and what to expect.
Together, we can make a real difference and push our industry past the tipping point. Hundreds of NCIA members have already registered for this event, so what are you waiting for? Register today, schedule your flight, and book your hotel. We can’t wait to see you there.
Discussing cannabis and approaching government officials can both be daunting, but with a little knowledge and confidence, both can work together quite well!
Join members of NCIA’s State Regulations committee to get guidance and your questions answered so that you can be your best and help your community at the same time.
NCIA’s State Regulations Committee examines and reviews the varying cannabis industry-specific statewide regulations and work to establish best practices or guidelines for states and municipalities to facilitate the development of regulations and compliance procedures.
As “4/20” Ends, Advocacy Ramps Up
This last weekend, cannabis advocates and supporters gathered in cities across the country to celebrate what is known as “4/20,” a cultural celebration of cannabis.
Michigan’s Hash Bash
In several states like Michigan, the celebration was particularly exciting because of recently passed adult-use laws. Earlier this month, NCIA’s Business Development Manager, Clarissa Kriek, attended the 48th annual festival in Ann Arbor called “Hash Bash.” Since 1972, activists have gathered on these grounds to rally and demand policy reforms. Considering this was the first Hash Bash since legalization, it was a particularly memorable occasion Clarissa gave an inspirational speech on stage about the long, hard battle to legalize cannabis in Michigan, which culminated in the passing of Prop 1 in November 2018. Approximately 15,000 people gathered to celebrate this historic event at the University of Michiganʻs Diag, including Congresswoman Debbie Dingell, who spoke about her late husband and how she believed he could have benefitted from cannabis to help treat his prostate cancer but that federal prohibition has stifled research.
National Cannabis Policy Summit
In the nation’s capital, advocacy was as prominent as celebration at the 4th annual National Cannabis Festival, which was preceded by its sister event, the National Cannabis Policy Summit. These events brought thousands of people from around the country to the District of Columbia to bring attention to the harms caused by prohibition but also to celebrate the victories of the movement in an atmosphere of cooperation, innovation, and culture. Dozens of lawmakers, industry leaders, and policy experts – including NCIA’s Michelle Rutter – shared opinions and advice about how we can make cannabis legal in a way that incorporates fairness and justice.
Advancing the reform of outdated cannabis laws is building in momentum, and public support for medical and adult-use cannabis is at its highest levels ever. In the halls of Congress, we’re seeing the reform measures that are important to our industry gain co-signers on both sides of the aisle. It’s an exciting time for ending the war on drugs.
Whether the date is April 20 or September 20, every day is an opportunity to be an advocate of the legal, regulated cannabis industry. From access to banking and tax reform, to social equity and veterans access, now is the time to speak up and tell your stories about how these key pieces of legislation will help your business thrive.
NCIA’s 9th Annual Cannabis Industry Lobby Days
While NCIA’s government relations team works year-round on the industry’s behalf to advocate for access to banking, fair tax policy, and states’ abilities to determine their own cannabis policies, for example, NCIA’s Annual Lobby Days is the most impactful opportunity to participate in democracy. As we prepare for hundreds of meetings on Capitol Hill on May 21-23, it’s crucial that cannabis industry professionals come together to send a powerful message to lawmakers. The industry is here to stay, and it is our industry’s responsibility to keep it that way.
Committee Blog: Cannabinoid Analogues Offer a Promising Future for Medical Cannabis
As outside industries fuse with the cannabis market, we will begin to see innovations that will flesh out our understanding of cannabinoids and how they interact with the human body. I had the opportunity to sit down with chemist Dr. Mark Scialdone and Chris Barone, founder and lead chemist at The Clear™ to discuss the introduction of semi-synthetic cannabis compounds to the market. We focused on hydrogenated cannabinoids; cannabis with a slight twist that could change everything about why and how we consume cannabis.
Hydrogenation is simply treating a compound with hydrogen, which causes a chemical reaction between hydrogen (H2) and another compound or element, usually in the presence of a catalyst such as nickel, palladium, or platinum. This is done in order to reduce or saturate organic compounds, imbuing them with properties the original compounds did not have. These cannabinoid analogues (or semi-synthetic compounds) have a number of applications in manufacturing and medicine.
Hydrogenation is a minor modification to the natural framework of the compounds the cannabis plant produces biologically. Barone describes the process as, “adding hydrogens across the double bonds, thus changing the molecular weight, the molecules geometry, and also its effects on the body.”
Benefits of Hydrogenated Cannabinoids
A major benefit to hydrogenation is that it offers stability at the molecular level, assisting with both shelf life, and resistance to heat. Scialdone explained, “hydrogenation is a chemical transformation on unsaturated compounds to improve their stability and resistance to thermo-oxidative breakdown,” – which occurs when these compounds are in the presence of air. This is the reason you cannot leave cooking oils on the counter exposed to sunlight, as eventually this reaction will cause them to go rancid. Hydrogenation improves the oxidative stability by removing the unsaturation.
Based on a study referenced in Scialdone’s patents (US10071127B2 & US9694040B2), the effects of cannabinoids and hydrogenated cannabinoids were examined, in reference to tumor growth in mice. In these cases, the hydrogenated cannabinoids showed significant improvement in the reduction of tumor sizes; with Hexahydrocannabinolic Acid (HHCA) at a 39.70% reduction, and HCBDA at 55.83% reduction (compared to the non-hydrogenated compounds THCA at 37.67% and CBDA at 47.02%) (source). It’s possible that hexahydrocannabinoid (HHC), being more stable than tetrahydrocannabinoid (THC), and less prone to dehydrogenation (converting to DHC and CBN), may have an impact on resistance towards oxidative metabolic breakdown in the liver, though there is no critical examination at this time. It has been observed in metabolic studies that hydrogenated compounds are resistant to this kind of breakdown, suggesting that hydrogenated cannabinoids may exhibit this trait as well.
Image: Cannabinoid Structures
Difference Between Natural and Semi-Synthetic Cannabinoids
There is still much research to be done to define the exact pharmacological differences between hydrogenated and their plant-derived cannabinoids, but the chemical differences are quite distinct. “Tetrahydrocannabinoids like THC are metabolized into the 11-Hydroxy-THC-metabolite and ultimately the nor-carboxy-THC-metabolite; because we’ve converted the THC to HHC, metabolites will differ from the ones derived from THC,” explained Scialdone. Thus, they will have a different pharmacokinetic profile because the metabolites are going to be different in hydrogenated compounds. Meaning, the hydrogenated compounds could have a longer half life and bind to different receptors within the ECS.
A study published in the Journal of Medicinal Chemistry evaluates the ability of various cannabinoid analogues to modulate the production of reactive oxygen intermediates (ROI) various metabolic functions as well as their binding capabilities to the cannabinoid receptor (CB1). It was found that hydrogenated CBD and Cannabidiol-dimethylheptyl (CBD-DMH) demonstrated bioactivities different from their original compounds (source). The study focused on the anti-inflammatory and immune responses that have been previously observed in the non-analogue compounds. To compare the hydrogenated cannabinoids, they observed the derivative compounds for their ability to suppress the production of ROI, nitric oxide (NO), and tumor necrosis factor (TNF-⍺) by activated macrophages in vitro. Some of the compounds (7 and 4) exhibited an increase in their suppressive effects of NO, TNF-⍺, and ROI. Compounds 7 and 8 are strongly bound to the central cannabinoid receptor (CB1), but with an opposite effect on their ability to modulate the release of inflammatory mediators. When compared to the effects of natural cannabinoids, it is noted that isolated cannabidiol (CBD) also has tumor growth suppressive qualities, with similar functions of hydrogenated CBD (source). The distinction between the two is the bioavailability and slow breakdown of the hydrogenated compounds, however more research is required.
Image: Chemical Structure of Cannabidiol Derivatives
The JMC study concluded, hydrogenated cannabinoids exhibited good binding to CB1, but have varying effects on inflammation – which could spring opportunities for anti-inflammatory and immunosuppressive properties in murine collagen-induced arthritis, as suggested by the Ben-Gurion University. This is because the hydrogenated cannabinoids seem to have a strong effect on hyper-inflammation, which would reduce pain and swelling of the joints.
Public Health and Safety
When dealing with new compounds, it is crucial that health and safety are considered. “We will want to look at what impacts the hydrogenation has on the metabolic profile, and whether or not the hydrogenation is having a beneficial impact on biological actions with the cannabinoids,” explained Scialdone.
It will still take a few years for a product like this to be available to the public. Although the market may see hydrogenated cannabinoids present in medical and recreational states sooner, extensive research on these compounds will remain difficult under current federal laws. The Federal Analog Act states any substance derived from a schedule I or II substance will be treated as the same schedule substance when its purpose is for human consumption. “Pseudo-synthetic cannabinoids should be allowed in my opinion,” Barone adds, “but only through close analysis of the SOPs and quality control conditions. In states where they do not have the resources, I believe manufacturers should be mandated to hire third-party chemical manufacturers to audit and approve the techniques being used.”
Image: Crystalized HHCA Captured by CM Botanical
Research in this arena will provide greater understanding as researchers gain further understanding about hydrogenated cannabinoids and their impact on the human body. Barone pointed out, “I’d like to emphasize that the human interaction with this molecule is the driving force of the progression. Without the idea and the human, the molecules sit untouched and unexplored.” Utilizing the unbound creativity of science, the cannabis plant has more to offer than we once knew.
Courtney Maltais is co-founder and lead biologist at The Clear; a California-based extract company that brought the first Cannabis distillate to market in 2013. Maltais works with industry leaders in cultivation, manufacturing, and product development to create efficient, safe, and standardized lab practices. Her passion for science and education has led her to expand into educational outreach for both business owners, employees, and consumers alike.
NCIA’s Scientific Advisory Committee is comprised of practicing chemists and other scientific field professionals to advise other NCIA committees as they work to develop standards and guidelines for the various sectors of our industry, ensuring that any formal recommendations produced by other NCIA committees are scientifically sound, sustainable, and legitimate.
Committee Blog: Accurate Pasteur Pipette or Grandma’s Turkey Baster – Cannabis Dosing
by NCIA’s Infused Products Committee; contributors Todd Winter, Ashley Hansen, Danielle Maybach, Lee Hilbert, Trevor Morones, and Greg Scher
Where is cannabis in the journey of dosing edibles?
Edibles are growing as a market share only behind concentrates. It is essential to have accuracy across the industry to protect human health and stabilize the consumer market. Potency, homogeneity, absorption rate, interpretation of dose (by State, County, International), percentage error/variance, labeling, and source of raw materials are just some of the items always questioned.
While we are discussing this issue, there will be no right answer for everybody. What is the dose? What is a serving? A check of an operator’s shelves will show chocolate bars with 800 mg of THC and a similar sized bar with 80 mg of THC. If you walked off the street and bought the 800 mg bar with only experiencing the 80 mg bar; you are in for a trip, and not a good one.
BDS Analytics’ GreenEdge Retail Tracking Platform as presented by Tamar Maritz in February had shown that when California consumers purchased cannabinoid products in 2018, they often want to know the CBD and THC content.
Label requirements vary state by state on the THC side and are often inaccurate both in the reporting of potency and the way they are displayed on CBD products. Extracts used as raw ingredients in product formulation come in various forms, it is important for the manufacturers to know the percent of actual CBD or THC when making purchase decisions. CBD extracts can be in the form of isolates with low bioavailability, or full spectrum which means the cannabinoid retains more of the plant’s original components.
Additionally, there are infused products, where the flower is extracted by an infusion into an oil, retaining even more of the original cannabinoid profile. All these extracts have specific formulation and labeling nuances that need standardization. The medical community wants even more specific terpene profile information as individual levels of Limonene, Myrcene, and other terpenes gain recognition for properties that have some additional benefit.
Do the terpenes solely earn the credit for their benefits or is it in combination with the other chemical compositions?
There are many ways to add cannabinoids into edibles; for example, when developing cannabis-infused products, are the manufactures using the “sprinkle” method to add the raw material/additive by literally sprinkling isolate? Are they using a pipette for exact measurement from a reputable supplier that is approved for food contact having been third-party audited, or a turkey baster from grandma’s kitchen utensil drawer which has seen some years? Methods abound!
Perhaps the most accurate method to create a homogenous product is to incorporate the raw material during the mixing step; before cooking, gassing (CO2), or pasteurization. Not everybody that starts an edible factory comes from the food or pharmaceutical industry. A standard serving size or dosage, whichever you prefer, could make life easier for all stakeholders with a few exceptions. As yield models mature for extraction, markets will adjust, and prices can stabilize based on real data.
In Iowa, they have just legalized for medical use, but the flower is not legal. It is 100% treated as a drug. Any product needs to have no more than 3% THC to be permitted. We can’t forget our colleagues dealing with burdensome regulation. I doubt they can measure with turkey baster there, and if we saw a manufacturer in Iowa, we would probably see a pipette. Consensus on a dose can help elected officials know more and lift heavy restrictions.
Caffeine, like cannabis, is a naturally occurring alkaloid in 60+ plants. Cannabis produces THC and CBD, which are cannabinoids. The next step for the industry in supporting cannabinoid dosing of THC and CBD or any other cannabinoid is to increase general public recognition, routine toxicology studies, and develop appropriate data and work methods to obtain public recognition or certification for food safety, public safety, and documentation.
In the United States caffeine, when in soda, is limited to 65 mg per 12 liquid ounces of beverage. In pill form, the FDA allows 200 mg of caffeine. While this is about THC/CBD, the parallels are plain. While the Cannabis industry addresses dosing challenges are many. Stakeholders composed of consumers, operators, manufacturers, laboratories, distributors, and regulators would like to see the order in the industry.
The Federal Government does not yet consider cannabis as a food additive that is “Generally Recognized as Safe (GRAS).” Caffeine, a GRAS substance under current regulation, attained status under industry practices over 60 years ago. Within our industry, GRAS is not a deeply-rooted measurement for quality or safety standards. Cannabis has no history of being hazardous when infused in products and defining a serving, or a dose should not impact the operations of notable brands that provide excellent food safety and quality.
Each consumer (patient or recreational user) has their personal approach to cannabis dosing based upon their due diligence. Manufacturers are producing THC and CBD products that range from “micro-dose” to “mega-dose” because they understand that no one standard dose is the right for every individual.
Consumers look at labels to determine which product to buy. Manufacturers rely on testing to confirm THC and CBD content. CBD and micro-dose product categories are trending; unfortunately, many laboratories are not equipped to test CBD products accurately and consistently. THC Micro-dose products have similar problems. Not all laboratories have equipment that can report trace amounts accurately. Homogeneity, labeling, and raw ingredient sourcing are opportunities for manufacturers to set themselves apart to the retail operators in a wide-open market. Let us collectively work together towards clarifying the issue and work with all the stakeholders to define for the public some language that can be understood by all, encourage federalization, and develop a standard of excellence.
NCIA’s Infused Products Committee (IPC) focuses on edible and topical products, reviewing existing business practices and state regulations. Regulation of these products is the IPC’s initial key focus, but the committee’s purpose is to ensure the infused product sector is helping shape its destiny, rather than being driven by differing jurisdictional regulations. The IPC is also working with the Policy Council and Council on Responsible Cannabis Regulation (CRCR) to develop standardized regulations for legislators and regulators to adopt as their states legalize the industry.
The Ending Federal Marijuana Prohibition Act and Marijuana Data Collection Act
Several new bills that support cannabis policy reform have been introduced in recent weeks. Last month, NCIA saw two bills reintroduced from last year, The Ending Federal Marijuana Prohibition Act and the Marijuana Data Collection Act, both of which received bipartisan support in the House of Representatives. In last year’s session, both bills had more than 30 co-sponsors each. The Ending Federal Marijuana Prohibition Act was first introduced in the House in 2011 in the 112th Congress.
This session’s pair of bills were introduced by Rep. Tulsi Gabbard (D-HI) and Rep. Don Young (R-AK).
The Ending Federal Marijuana Prohibition Act (H.R. 1588) would remove cannabis from the Controlled Substances Act and effectively allow states to determine their own cannabis policies and put an end to federal cannabis prosecutions. This is important for myriad reasons. First, it protects decisions that states have made to legalize marijuana, reflecting the will of the people and their elected representatives. Ending prohibition will also protect public safety by normalizing banking and other professional services. It will also save taxpayer monies by ending the “war on drugs” as it relates to federal enforcement of marijuana laws. Most significantly, it will allow important medical research to be conducted, free from fear of federal interference. NCIA is proud to include The Ending Federal Marijuana Prohibition Act in our priority legislation, and we look forward to working with members of Congress to build support for the bill.
The Marijuana Data Collection Act (H.R. 1587) would require the National Academy of Sciences to study and report on the status of state cannabis programs and their impact on public health, safety, and the economy. This is a critical first step in normalizing research into marijuana, including how state legalization has financially benefited states, how it has allowed for law enforcement to focus on more important public safety priorities, and how scientific research can benefit medicinal patients nationwide.
On March 7, a press conference hosted by NORML Executive Director Erik Altieri was held at the House Triangle of the U.S. Capitol to announce the bills. NCIA’s Government Relations team attended and captured photos of this historic announcement.
If you’re interested in lobbying in support of this bill, or any others, make sure you register for NCIA’s9th Annual Cannabis Industry Lobby Days in Washington, D.C. on May 21-23 so that you can tell congressional offices your personal story. There’s strength in numbers, and we can’t do it without you!
Member Blog: Weighing the Options for Cannabis Facility Construction
As more investors consider the cannabis industry as a growth market, the need for cannabis cultivation facilities, processing centers and dispensaries is projected to rise to keep pace with demand.
A report from New Frontier Data projects that by 2020 the legal cannabis market will create more than a quarter-of-a-million jobs. These are more than the jobs expected to be created from manufacturing, utilities or even the U.S. government, according to the Bureau of Labor Statistics.
Forbes magazine estimates that medical marijuana sales are projected to grow to $13.3 billion by 2020. With this growth will be the need for quicker, cost effective construction with investors likely to consider the remodeling option.
There is value in remodeling the interior design of existing abandoned or non-productive buildings into state-of-the-art cannabis facilities that can be brought to life quickly and on-budget so that the facility becomes a new source of jobs and tax revenue for the area. This is a popular option for investors looking to tap into the burgeoning cannabis market.
Cannabis businesses have to keep track of many moving pieces in the name of compliance, growth and sustainability. Industry experts are seeing value in integrating processing and cultivation at the same site, which can open the door for better quality control. A well-designed cannabis process goes far beyond just extraction; it overlaps heavily with cultivation on the front-end and product development on the back-end.
Security is a growing issue for cannabis dispensaries, cultivation and processing facilities. According to Security Sales & Integration magazine: “Once the products reach the warehouse or dispensary shelves cannabis companies rely on advanced security systems including visual and audio surveillance to protect their valuables and even their license. In order to prevent diversion of product, most state cannabis regulations require growers, storage facilities, processors and dispensaries to have advanced video security systems.”
Cannabis facility building contractors are charged with integrating top level security measures into their renovation. This is not only relevant to cultivation facilities, but also processing facilities and dispensaries. This builds confidence with clients and investors.
When building a cannabis cultivation facility, it is critical to understand that local codes are constantly changing as local building and fire departments try to keep pace with the rapid rate of changes in the industry. Rather than try to wade through these regulations, it is important to consult with a contractor who is experienced in the industry and is current with the latest changes.
Here are a few examples of buildings remodeled into high end cannabis facilities:
CFC renovated a 5,200 square-foot dispensary in Morris, Illinois that evokes old world charm, including a bar that originally was constructed in the Anheuser-Busch pavilion at the 1893 Chicago World’s Fair. The dispensary was originally the Rockwell Inn.
According to Mitch Kahn, CEO and founder of Grassroots, a national leader in medicinal cannabis, “It really is just a neat building with character that we wanted to keep, from the tin ceiling to the bar that’s over 100 years old, and retrofit it to our purposes. We saw the promise of remodeling an old building and turning it into a modern facility.”
A remodeled 40,000 square-foot cultivation facility in Illinois that was formerly a roller skate manufacturing facility. The facility was positioned in an Enterprise Zone that saved the dispensary owner more than $300,000.
Investors looking to build cultivation, processing and dispensary facilities, particularly in controlling construction costs, should:
Know there is an art and a science to converting raw materials of cannabis and finished products so any construction must meet all state regulations and local fire and safety codes.
Find a partner that can manage security infrastructure and planning as well as permitting and compliance support. It is critical to balance safety and customer-engagement.
Hire general contractors that will work on a fixed sum in lieu of a percentage of construction. This is especially important when it comes to a partner who will closely watch trade contractors to ensure they provide the best possible solutions, taking into account time and money.
Work with a partner that will watch their back from a relationship standpoint, not just the transaction.
Albert Marks is Client Relations Manager for Cannabis Facility Construction based in Northbrook, Illinois. Albert currently works with clients in three states, including Illinois, Wisconsin, and Massachusetts. Marks draws on his extensive knowledge of social media and digital marketing. He oversees the company’s blog, LinkedIn, Facebook, Instagram, and Twitter profiles. Marks is trained in using the SalesNexus CRM software, which he has used to make connections while working with clients, industry partners and trade partners in the residential, commercial, retail, restaurant, exterior and cannabis verticals.
Why March Was a Monumental Month for Our Industry
Over the past nine years, NCIA has advocated for the fair and equal treatment of the legal cannabis industry by pushing for federal policy reforms around critical issues that threaten our industry’s growth. While we have had steady success over the years, this March was monumental for a variety of reasons.
Most notably, we celebrated the historic passage of the SAFE Banking Act out of the House Financial Services Committee, a landmark step closer to resolving our industry’s ongoing banking crisis. On a micro-level, we also saw record-breaking attendance at our March Cannabis Caucus events.
Here’s a recap of what went down and why we think these are critical indicators of a tipping point for our industry.
The passage of the SAFE Banking Act out of Committee
On March 27, H.R. 1595, the Secure and Fair Enforcement (SAFE) Banking Act of 2019, received a markup by the House Financial Services Committee and passed in a vote of 45-15, including 11 Republicans who voted in favor.
This is the first time in history that a cannabis banking bill has reached this point in the legislative process. As a reminder, a markup is the process by which a congressional committee debates, amends, and rewrites proposed legislation.
Now that the bill has passed out of the House Financial Services Committee, it will continue in the legislative process and be sent to the House Judiciary Committee. It is unclear whether or not the Judiciary Committee will waive its rights to the legislation. But, since Rep. Doug Collins, the ranking member of the House Judiciary Committee sent a letter in favor of a hearing for the STATES Act, it seems like the prospect is positive. If the Committee does waive its rights, the SAFE Banking Act will then be referred to the powerful House Rules Committee before receiving a floor vote from the full House.
As a reminder, Secure and Fair Enforcement (SAFE) Banking Act was introduced in the House of Representatives by Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA), Warren Davidson (R-OH) and Steve Stivers (R-OH) less than three weeks ago. In a stunning, historic showing, the legislation was introduced with a whopping 108 original cosponsors, and that number has already risen to 158 – more than a third of the entire House.
Record-breaking attendance at Cannabis Caucus events
Over the past three years, we have hosted nearly 120 Cannabis Caucus events nationwide. What sets Cannabis Caucuses apart from our other regional events is their focus on federal policy news and ways that attendees can take action.
While these events are always well-attended, with a noteworthy lineup of speakers, our recent March Cannabis Caucuses were extraordinary.
For one, the events in San Francisco, Los Angeles, Denver, Lansing and Philadelphia saw a whopping 1,200 total attendees – more than any other Cannabis Caucus event series in our history.
Equally as notable was the turnout in what is expected to be the largest cannabis market in the world – Michigan. In Lansing, we partnered with the Michigan Cannabis Industry Association and hosted more than 400 industry professionals and advocates with an impressive lineup of guest speakers.
Not only were the guest speakers in Michigan tremendous, but across all events, we had noteworthy guest speakers discussing the importance of citizen lobbying. In Northern California: Jose Herndandez, Deputy Director, Rep. Barbara Lee’s Office; in Southern California: Nicolas Rodridguez, District Director, Rep. Ted Lieu’s Office; in Colorado: Rep. Diana DeGette (CO-1st District); in Michigan: Dana Nessel, Attorney General, Michigan and lastly in the Northeast: Shanita Penny, Executive Director of Minority Cannabis Business Association.
Despite the fact that visible progress on the Hill has been slow over the years, it is obvious that the passage of the SAFE Banking Act has transpired into a feeling of unity and strength for industry professionals and advocates alike. The outstanding attendance at our most policy-focused regional events aptly demonstrates this and continues to be a positive indicator of our industry’s momentum.
Were you at the March Cannabis Caucus events? Tag yourself in the Facebook photo album!
STATES Act reintroduced in Congress
While this didn’t happen in March, it deserves a note anyway. On April 4, the STATES Act to end cannabis prohibition was reintroduced by Sens. Cory Gardner (R-CO) and Elizabeth Warren (D-MA) in the Senate and Reps. Earl Blumenauer (D-OR) and Dave Joyce (R-OH) in the House. This would allow states to determine their own cannabis policies without fear of federal interference.
The timing of the reintroduction of the STATES Act is crucial because bipartisan support for cannabis policy reform is at historic levels in Congress and the general public. This legislation would allow the growing number of state licensed cannabis businesses to simply exist in peace, without fear of federal interference.
What’s next?
Overall, the course of events in the past month has proven that we are living through historic times for our industry. With that, we have every reason to believe that we’re getting close to a tipping point for our industry’s continued expansion at the federal level. As we continue this journey to achieve the fair and equal treatment our industry deserves, it is important to stop and celebrate our macro and microcosmic victories that denote extraordinary progress.
If you want to take the next step in supporting the legal cannabis industry, consider joining the nearly 2,000 business-members that make up NCIA’s membership base. By joining NCIA, you also get exclusive access to the industry’s most impactful advocacy event of the year – NCIA’s 9th Annual Cannabis Industry Lobby Days on May 21-23 in Washington, D.C.
For nine years, Lobby Days has been our industry’s opportunity to form a unified front on the Hill in advocating for the fair and equal treatment of our industry. This year – more than ever – we believe that telling our representatives why the SAFE Banking Act and the STATES Act need to be passed might be the final push our industry needs.
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On May 29, 2019, Governor Jared Polis signed 
1. Lisa Jordan
2. Maureen McNamara
3. Kim Wilson
4. Laura Wilkinson Sinton
5. Diane Myer Brown
6. Kara Bradford
7. Heidi Quan
8. Lauren Mendelsohn
9. Laura Breit
10. Karen J. Bernstein
Watch this webinar from 
