It can be tricky enough to find funding for a new business in any industry, but marijuana businesses are at that much more of a disadvantage. Strict regulations, less-than-favorable taxation laws, and straight-up illegality of federal funding stack up against those looking for their starting dollar in the industry.
Without having this backing, dispensary owners need to be creative and resourceful and draw upon the support of private investors to fund their dispensary goals.
Financial planning and sourcing of funds should be a large component of the business plan. Demonstrating an understanding of the scope of start-up costs for a dispensary includes:
Licensing/application costs
Working capital requirements
Cost of inventory (e.g. initial flower, edibles, accessories)
Technology costs (e.g. Point-of-sale system, server costs)
Real estate (e.g. mortgage payments or rent)
Staff training and compensation
Marketing and advertising
While budding cannabis entrepreneurs do have a limited number of funding options, there is still hope. You just have to know where to look.
Self-Funding
Many marijuana start-ups have invested a lot of their own savings into their businesses, recognizing their funding limitations. Speed in the industry is essential, but you may need to take a little extra time to raise your own capital before you turn the “Open” sign on.
Friends & Family
Crowdfunding is becoming increasingly popular for a variety of causes, and reaching out to like-minded individuals in the community who support your vision, and are willing to give you a boost in funds, is not at all unheard of. While there may be limitations in the ways you can publicly crowd-fund, you may be able to hold private events to raise money from your friends and family, as well as those in the community.
Partnerships
The “green rush” that marijuana legalization has caused makes finding potential partners, with similar goals and larger bank accounts, easier to find. There are so many facets to success in the industry, and valuable partnerships can take some of the strain off your own venture. After all, two heads are often better than one!
Cannabis-Specific Investment Groups
A great indicator of progress for the legal cannabis industry is the number of cannabis-specific investment groups that have cropped up across the country, giving entrepreneurs a helpful resource. In fact, last year, these groups provided 18% of marijuana funding.
Learn How to Fund Your Marijuana Business: While the situation for marijuana startup funding may seem grim, more and more investors are beginning to recognize the marijuana industry is thriving with opportunity.
Covasoft has put together a helpful resource to understand the various strategies in the marijuana business. Download our eBook today to learn about willing investors, ready to make a change in the legal marijuana market.
In a career that encompassed a dozen start-ups, Gary Cohen has held leadership roles with Verizon and AT&T, has managed technology-oriented research practices for Nielsen, Milestone Group and ITG/MScience, and led software/internet ventures Shoptok, Birdstep and Handmade Mobile. He has also been on the boards of several tech start-ups, including Onavo (acquired by Facebook), OpenSignal, Cenoplex and Adello. Gary has a Bachelor of Science in Finance and a Master of Science in Marketing.
Cova enhances the cannabis retail experience for both consumers and dispensaries through an integrated solutions platform (POS, ERP, CRM, eCommerce, Digital Signage and Dropship). Over 19,000 retailers with complex retail environments currently run Cova’s solutions in North America. Cova’s solution built for the legal marijuana industry focuses on compliance, UI, UX, reporting and a much better dispensary experience. Cova is headquartered in Denver, CO.
Video Spotlight: Sequoia Analytical Labs
This month, we visit with Jeff Hatley and Betsy Gribble of NCIA Member Sequoia Analytical Labs, based in Sacramento, California. Get a look inside the lab and hear more about the technology and methods used to ensure cannabis is safe, clean, and free of harmful contaminants.
Member Blog: Trade Credit in the Cannabis Market – What You Need To Know To Create A Smart Trade Policy
*Editor’s note: This blog is an excerpt of a full article which appeared in MG Magazine.
We attended the MJBIZ show in Las Vegas last fall and were fortunate to speak withmany companies that operate in virtually every aspect of the emerging cannabis market. The one thing they all hoped for, and felt confident would happen, is that the banking system will become available to the industry sooner rather than later.When that happens, business in the cannabis market is going to change dramatically. Access to the banking system means access to trade credit. When trade credit becomes available to growers, manufacturers, wholesalers, distributors, and retailers serving the cannabis market, things are going to change. At every level, the industry is going to have to learn how to provide and deal with managing trade credit and its inherent risk.
What is trade credit?
Trade credit is the credit extended by one trader to another for the purchase of goods and services. Trade credit facilitates the purchase of supplies without immediate payment. The system commonly is used by business organizations as a source of short-term financing. It is granted to customers who have a reasonable amount of financial standing and goodwill.
Many of the growers and manufacturers we spoke to at the conference, specifically those operating in the Colorado market, already have bank accounts and are extending limited amounts of credit. They accept checks (a form of credit) from their customers, and in many instances, they give customers up to fifteen days to pay their bill. These companies and cannabis entrepreneurs all agree: as the cannabis market matures, the business is going to change. In fact, whether you recognize it or not, you already use some type of trade credit to operate. Your rent is due monthly, your utilities are due monthly, etc. You are extended credit on a limited basis to operate and grow your business.
More and more states are passing laws legalizing medical and recreational cannabis use, and companies entering the industry are going to want to access the credit markets and use this money to fuel their expansion. A true trade credit system, at every level of the industry, will need to come into existence. Mainstream corporate America operates in this environment and the cannabis industry will as well. It’s just a matter of time. The financial underpinning that guides the nascent cannabis market today must develop to meet the industry’s growth needs. The way cannabis companies transact business is going to change, for the positive, and trade credit will fuel its growth.
Federal regulations force most companies operating in the cannabis space today to deal primarily in cash. If you look back at emerging industries, operating only in cash doesn’t foster an environment for growth. Think of it this way: in a cash environment, a company with $1,000 in cash can buy only $1,000 worth of goods, but in a trade credit environment, a company with $1,000 in cash and $2,000 in trade credit can buy $3,000 worth of goods. Potential income from retail sales has tripled.
So, for the cannabis market to grow, it cannot be a cash-only business. Without a doubt, the banking industry is on the side of the cannabis industry. Banks do not make money from cash businesses. They want a part of the billion-dollar cannabis market, and they will exert formidable pressure on federal lawmakers to reclassify marijuana as a legal substance, at least under medical supervision. Currently, nearly 300 banks offer services to cannabis-based businesses, but eventually the entire banking industry—more than 5,000 commercial U.S. banks—will join them. The question is, what must businesses do to implement a trade-credit model that fosters sustainable growth? It is imperative that companies understand how to create and implement smart trade credit policies.
Companies that operate in the cannabis industry will migrate toward a trade credit environment in which a grower grants credit—with terms specifying three days to thirty or more days—to the manufacturer, wholesaler, or distributor, who then grants credit to the downstream entity that sells its products to dispensaries, who retail the products to consumers. Or, a grower might grant credit directly to a retailer. Growers, in turn, will be extended credit by their suppliers: lighting companies, soil providers, packaging providers, etc. Once a company extends credit, it will need to manage accounts receivable.
In conclusion
Once federal banking regulations change and companies serving the cannabis market gain the same financial resources available to the rest of corporate America, entrepreneurs will need to implement formal credit policies that allow them to manage and grow revenue in a trade credit environment. Establishing the controls necessary to operate when credit and accounts receivable are commonplace will set companies on the road to even greater profitability.
Sam Fensterstock is the SVP of Business Development at AG Adjustments, a leading provider of 3rd party commercial collection services. Sam has spent his entire business career as an entrepreneur and senior executive in the commercial credit & collection space. He has been a founder and played a key role in the dynamic growth of several leading niche commercial credit risk management companies and is considered an expert in the order to cash and credit and collection process. Prior to joining AG Adjustments, Sam was the Director of Business Development at PredictiveMetrics, a statistical based credit and collection scoring and modeling company that he helped grow and sell to SunGard (FIS) in 2011. Sam can be reached at samf@agaltd.com or 631-719-8096.
NCIA’S Q2 #CannabisCaucus Events Continue Successful Run
by Brian Gilbert, NCIA Events Manager
NCIA just wrapped up the the most recent editions of our regular member event series, the Quarterly Cannabis Caucuses. These events are designed to prepare our members for the uncertain times ahead and provide them the tools they need to help continue the positive momentum seen for our issues on the federal level.
Over the course of three weeks in April, we brought together more than 750 industry professionals, representing more than 300 individual cannabis businesses in eight cities spread across seven states. In Colorado, Northern California, and Southern California, we had more than 150 attendees join us at each event, all surpassing our previous attendance records set in 2016. The continued growth and support of these events has been incredible to witness! Thank you to all those who participated last month and provided us the opportunity to foster this growing community. Read on to view photo and event highlights from this quarter, as well as date and location info for our Q3 caucuses hosted in July.
We were thrilled in our first week to be joined in Washington by Seattle City Attorney Pete Holmes, in the Northeast by Massachusetts Representative Dave Rogers (D-24), and in Colorado by State Senator Tim Neville (R-16).
The following week in Oregon, Jeffrey Rhoads, Senior Policy Advisor on Marijuana to Governor Kate Brown, and Tara Sulzen, Regional Director for Rep. Earl Blumenauer, spoke in Oregon at ecotrust.
In our final week we were joined at Meadow in San Francisco by Jeff Sparks with the Office of CA State Senator Scott Wiener (D – 11th District). Then we welcomed Pamela Epstein, consultant and attorney at Green Wise Consulting and Hoban Law Group, to the historic Andaz Hotel for our first event in West Hollywood.
Finally, Jeff Irwin, the Political Director of the Michigan Coalition to Regulate Marijuana Like Alcohol, spoke at a standing-room-only event at Om of Medicine in Ann Arbor, Michigan. The event was NCIA’s first Michigan gathering in nearly four years, and with 75 attendees, set an attendance record for our Midwest Caucus. We were incredibly excited to see such a strong show of unity among the advocates and industry players following the announcement of a coalition to put adult-use legalization on the ballot in 2018.
Special thanks go out to our generous guest speakers who all provided valuable insights for our attendees on regional legislative issues and hot topics.
This quarter we were also joined at a number of events by current candidates for our 2017 Board of Directors election. Thank you to all those listed below that made an appearance to demonstrate their commitment to providing leadership for their national trade association!
Caela Bintner – Faces Human Capital Management AC Braddock – Eden Labs Shannon Fender – Native Roots Hector Fernandez – G FarmaLabs Matt Hoffman – Hand Grown Christie Lunsford – Pro MAX Grow Sean McAllister – McAllister Garfield, P.C. Brad Nattrass – urban-gro Inc. Keegan Peterson – wurk
Continuing the 2017 tradition of broadening our reach within regions, we’ll be bringing the July editions of our Northeast, Midwest, and Northern and Southern California events to new cities. Mark your calendar now and stay on the lookout for complete details once registration opens up later this month!
Washington – Seattle, WA – Tuesday, July 11 Northeast – Portland, ME – Tuesday, July 11 Colorado – Denver, CO – Thursday, July 13 Oregon – Portland, OR – Tuesday, July 18 Tri-State – New York, NY – Tuesday, July 18 So. California – San Diego, CA – Thursday, July 20 No. California – San Jose, CA – Tuesday, July 25 Midwest – Columbus, OH – Thursday, July 27
Finally, NCIA deeply values the community which we’re building around these events and our advocacy efforts as a whole. To that end, we hope all those who attended will be taking their involvement to the next level by participating in our 7th Annual Cannabis Industry Lobby Days, kicking off next week in Washington, DC!
As always a huge thanks goes out to all our sponsors, media partners, and event hosts that made Q2 another success! Please join us in showing them some appreciation for the enormous support by following the links below and learning more about each of these amazing businesses or groups. Then reach out to see how they might be able to help you!
Interested in sponsoring an upcoming Cannabis Caucus in your area or a series of events across the country? Contact us at sponsorship@thecannabisindustry.org to learn more about supporting your industry’s political voice and highlighting your brand at NCIA’s remaining Quarterly Cannabis Caucuses in 2017!
Board Candidate – Brad Nattrass, urban-gro
Brad Nattrass CEO at urban-gro Lafayette, Colorado
Member since November 2015 Industry sector: Ancillary
I am Brad Nattrass, CEO of urban-gro. With voting now open for the 11 open spots for the 2017 NCIA Board of Directors, I would like to invite your vote.
Our team of nearly 30 employees, located across the country, works with large scale cultivation facilities to provide advanced technology products and systems solutions. Our company was honored to be awarded an inaugural Cannavation Award for Cultivation at the recent NCIA Seed to Sale Show.
I am looking forward to being in Washington DC this month with my team and fellow NCIA members for NCIA’s Lobby Days May 16 – 17. We will be exhibiting at NCIA Business Conference and Expo in Oakland in June. I also greatly appreciate the Quarterly Cannabis Caucuses, and we’ve been a sponsor for many of these. Members of my team regularly attend these events across the country.
In serving on the Board, I am motivated to be part of expanding the voice of the commercial cannabis cultivator and representing ancillary businesses.
You can count on me to attend board meetings and faithfully deliver on all action items. As a member of the NCIA board, I will be of service to NCIA and my fellow members in three ways:
Bringing attention to the challenges faced by cultivators in every region of the country
Bringing a network of professionals to drive NCIA membership and sponsorship, and
Providing a relentless entrepreneurial drive to make a difference
First, I bring the pulse of cultivators on a national scale. Because urban-gro sells to hundreds of commercial cultivation facilities in every stage of development, we have a unique opportunity to learn about the specific concerns and challenges that growers face in all regions of the country. My national team will report to me on a monthly basis, and I will compile this information and report to the Board. This added layer of industry feedback will help the NCIA continue to create relevant programming to members in all regions of the U.S.
Second, with my company’s strong customer base, I bring a strong, supportive network of industry professionals. As an active ambassador for the NCIA, I am confident that I will be able to play a strong role in driving both memberships and participation (financial and individual).
Third, I have an incredible drive. With an MBA, and over a decade of experience in large scale agriculture. As an entrepreneur, I bring a unique skill set to the Board. I am a solutions focused individual that rises to the occasion when I encounter challenges. I will use this passion in support of NCIA’s evolving goals and activities.
I will be honored and humbled if you vote for me to join the NCIA Board of Directors. If you haven’t met me yet, please don’t hesitate to reach out and introduce yourself.
Plus during the election process if you tag #NCIAElection with support for my candidacy on or any others, my social media team will be sure to engage with the post.
Candidate Bio
Serving as the CEO for urban-gro, Brad manages the strategic vision of the company and oversees the sales, marketing, and finance divisions. Founded in 2014 as a company of three, today urban-gro has nearly 30 employees across the United States serving large scale commercial cannabis cultivators. urban-gro is an agricultural technology systems integrator that provides full design and expertise on lighting, climate control, automated fertigation/irrigation, water treatment, integrated pest management, and air purification. The company was listed as the 19th largest Cannabis ancillary business in 2016 by Cannabis Business Executive.
urban-gro has been a sustaining member of NCIA since 2014 and an avid participant in NCIA-sponsored events. In February 2017, urban-gro was a recipient of NCIA’s inaugural Cannavation Award for Cultivation.
Brad ventured out to begin his entrepreneurial career in 2005 after spending a decade working for agricultural giant Cargill Ltd. He co-found his first commercial lighting company in 2012 in Colorado. Seeing a need in the Cannabis industry for sustainable and efficient lighting solutions he co-founded urban-gro. As the needs of cultivation facilities continued to reveal themselves, he has led the company’s growth and product line diversification to serve those needs as well. He holds a Bachelor of Commerce Degree (Marketing) and an MBA, and currently resides in Broomfield, CO with his wife, Wendy, and their three children.
Partner Spotlight: Minority Cannabis Business Association
NCIA recently launched a partnership with the Minority Cannabis Business Association in order to address the gap in racial and ethnic diversity within the cannabis industry. We caught up with MCBA co-founder Jesce Horton from Oregon to talk about MCBA’s mission, which exists “to create equal access and economic empowerment for cannabis businesses, their patients, and the communities most affected by the war on drugs.”
Cannabis Industry Sector:
Non-Profit Association
Jesce, tell us a bit about your background and why you launched MCBA?
After I received my degree in industrial engineering, I started working for a large corporate firm right out of college. There, I began my work of reducing energy usage and environmental footprint at industrial facilities in the Americas. Shortly after moving to Portland from Munich, Germany, I started growing medical cannabis for two elderly patients that were suffering from cancer and from that, Panacea Valley Gardens was born. I got really involved in the industry and started attending conferences and networking events. I started realizing that not many people in the industry looked like me and the issues plaguing the communities of people of color didn’t seem to be on anyone’s radar.
I collaborated with some other industry professionals and we formed the Minority Cannabis Business Association. We soon realized that the issues wasn’t just about morality or doing the right thing, but more about the health and sustainability of the entire industry.
What unique value does MCBA offer to the cannabis industry?
MCBA firmly believes that not including communities of color in the industry or ensuring that these communities benefit from its prosperity is a major mistake!
Cannabis businesses across the country are missing out on a huge segment of consumers. By being so slow to utilize this opportunity to provide economic opportunity, social justice, and patient awareness in communities that have been targeted by cannabis prohibition, the people who live there are becoming bitter towards the burgeoning industry. Just like in any market, diversity is a major benefit. This is true even more so in the cannabis industry where preferences and perspectives on our primary product can be very culturally specific.
On the flip side, minority communities can benefit greatly from the cannabis industry, in multiple ways. Health issues that affect minorities disproportionately (Minority Health Disparity Gap: Cardiovascular disease, diabetes, cancer, mental health, etc.) can be greatly relieved and even reversed through informed and measured use of safe and tested cannabis products. Also, many would find that their cannabis expenses can be reduced through information and access to the right cannabinoid profiles, application methods, and dosages. Not to mention there is a huge pool of jobs and entrepreneurship opportunities that can be available given the right policies and regulations. These things simply aren’t available at nearly the same capacity in the traditional, illegal market.
MCBA is uniquely positioned to serve as a bridge between the industry and communities that have been targeted by cannabis prohibition and the war on drugs. Our board of directors is made of up cannabis business owners, activists and legislators from across multiple cannabis markets in the country. Our programs are directly focused on
Policy improvements that lower barriers to entry and uplift targets communities
Educational experiences that increase access to information for people of color
Connection with successful businesses and people who understand that this is an important issue for the sustainability of our industry
Cannabis companies have a unique responsibility to shape this growing industry to be responsible and treated equally as any other industry. How does MCBA help work toward that goal for the greater good of the cannabis industry?
At MCBA, our belief is that this industry is stronger and more sustainable when the barriers of entry are low and support small business development, not special interests. This should be the goal of any industry, especially new industries that thrive with innovation, problem solving, and community support. The policies for which we advocate and programs we execute represent equal access, responsibility, and fair taxation, not reparations or special privilege. It’s important that we work to reconcile the harms done by cannabis prohibition, but these efforts won’t be effective without a strong, dynamic, and thriving industry. They go hand-in-hand.
What kind of challenges do you face in the industry and what solutions would you like to see?
The challenges that affect communities of color from benefiting from the cannabis industry are mainly fair policies, lack of education about the industry, and limited networks to assist with raising capital and business development. We would like to see the industry stand as one to push for lower barriers to entry, tax allocation for communities targeted by the war on drugs, and community outreach regarding health education and employment opportunities.
Tell us about the partnership between MCBA and NCIA?
The partnership between MCBA and NCIA will assist us in working closer and more effectively on programs that complement each organization’s mission. Both organizations strongly believe that diversity and inclusion are principles that will guide our industry to sustainable and responsible growth. We are very excited to work closely with NCIA to ensure that this becomes a reality.
There are many wonderful things about the cannabis industry – creation of new jobs, legal access to medicine, and reduction of drug war harms, to name a few. Every rose has its thorn though, and the cannabis industry is no exception. Like any industry pushed into the shadows, in this case by a misguided prohibitionist policy, unsavory individuals have found an opportunity to prey upon those without full access to the legal system or to legitimate sources of capital. All cannabis entrepreneurs need to be on the watch out for the tell-tale signs the person or business they are talking to is a scam artist. Below are ten common signs that something might not be legitimate in your business transaction. Not all these signs indicate something is foul, but they should be a red flag that the business dealings bear further investigation.
Extremely Tight Timeframe:
You’re given twenty-four hours to make a key business decision and you may have only just received the legal documentation formalizing the proposed deal.
There are many legitimate reasons why business decisions must often be made on short notice. And providing an opposing party with legal documents at the last moment is a time-honored negotiating tactic. However, the less scrupulous will often tell business owners (often in dire straits) that they need to decide in twenty-four hours, or in an even shorter time frame. This frequently means there’s no time for proper due diligence or legal review – exactly what someone with something to hide (e.g., they are trying to run a scam) wants.
Vague Website:
A website contains a lot of bold claims about a service or financing source, but is short on physical addresses, names of principals, or legal company names.
A lot of websites are vague. But scam artists like to leave out key information – which means it will be hard for you to report them to the investigators or sue them. Most legitimate companies will list a real street address that is associated with a business, not a residence. Why would a scam artist want to hide their real address? Well, think about trying to sue someone. You need to serve documents on them – not an easy feat when you have no idea as to their real name or address.
Pump and Dump:
Someone tells you they have a hot (marijuana) stock tip – it’s guaranteed to go up.
There are many problems with this scenario. If someone does have material insider information about a publicly traded company, they cannot legally trade on that knowledge. Nor can they tell someone else the information and have them buy or sell stock. Both persons are in violation of securities laws and subject to civil and criminal penalties. A common way this plays out is through a “pump and dump” scheme. This scam involves convincing the marketplace that an OTC stock (also known as a penny stock – a public stock that does not trade on a major exchange like the NYSE or NASDAQ) is a surefire win. As people buy into the hype, the stock price of the company soars (the pump part of the scam). Once the price climbs high enough, insiders of the company sell all their shares, making a tidy profit (the dump part of the scam). Everyone who bought shares of the company is then left with worthless penny stock as the share price tumbles after the major sell-off. Even people who don’t buy the stock can become accomplices to the scheme. Just by repeating rumors regarding the potential success of the company, they can help create the atmosphere necessary for the artificial inflation of the stock price. When it comes to OTC stocks, if it sounds too good to be true, it probably is.
Wire Money First:
An investor or other potential business partner has a great opportunity for you. The only catch is that you must first wire them money as a down payment for the process to get started.
This scam is a favorite of “Nigerian royalty” and now is making its way to the cannabis industry. Legitimate lenders do not require a prepayment prior to underwriting a loan. They will charge you fees for the work they do, and the work their lawyers do, but this is typically taken directly from the loan amount when funding occurs (this is called funding net). Except in exceptional circumstances that have been vetted by counsel, you should not wire money to someone on the promise they will help you raise money.
As a side note, many law firms and other businesses, will require a deposit before starting work. The difference is that these deposits are legitimate, and are refundable if no work is performed (always ask about refundability). Scam artists, on the other hand, are highly unlikely to return a deposit, even if a deal falls apart.
Refusal to Interact with Attorneys:
You’ve got a great source of financing lined up. The financier is telling you what you want to hear and you’re ready to sign on the dotted line. The only catch is she won’t speak to your attorneys (which may not necessarily take the form of outright refusal – it could also be a deliberate refusal to return or schedule calls), only directly with you.
Scam artists are understandably loathe to subject themselves to questioning from a skeptical lawyer. Sunlight is the best disinfectant and most scams will not stand up to a thorough vetting. Legitimate business professionals, however, while not always happy about it, accept that dealing with lawyers is the price to be paid to get deals done.
Multiple Company Names:
Every time you interact with a potential business partner you discover a new business name or web portal.
This is one of the harder red flags to interpret and on its own it may not mean there is something nefarious occurring. Almost every company of any size contains multiple legal entities. These legal entities often legitimately serve to contain liabilities (e.g., holding different real estate properties in separate LLCs so that a slip and fall claim on one property doesn’t result in a lawsuit against an entire portfolio of real estate assets). What most legitimate companies are not doing, however, is playing a shell game – setting up and shutting down companies to stay one step ahead of the law and angry creditors and customers. If you think this might be occurring, you should discuss your concerns with counsel before proceeding.
Unsubstantiated Claims:
You’re being told buying into a certain grow method will triple your yields, guaranteed, or someone claims they underwrite a tremendous dollar value of loans annually, but can’t give you names of past deals.
Beware unconditional guarantees. Sure, everyone knows the “best” grower and no one wins business by saying they are the worst in their field. When it comes to bold claims, trust but verify. Ask for concrete examples of a product’s or advisor’s success. Ask to speak directly to existing or previous customers. If they are offering payment processing solutions, ask which banks they work with and which credit card companies. Fate is fickle and the future is uncertain. No one can predict it with absolute certainty, especially not when it comes to the cannabis industry.
Ignorance of Basic Cannabis Laws:
When asked about the impact of certain laws or policies like the Cole memo priorities, the FinCen memo, or 280E on proposed business plans, someone responds these are not significant issues or, worse yet, they do not appear to have a strong grasp on what these items are.
It’s one thing to state that these obstacles can be overcome. Business are succeeding despite them every day. To cavalierly suggest they are not issues, or to somehow remain ignorant of their existence, however, is a major red flag. It may not always be a sign of fraud – it could also be the sign of rank amateurism. Either way, you should be hesitant to go into business with someone who does not fully appreciate the federal legal risks inherent in the cannabis industry, especially considering the current political environment.
Deliberately Opaque Documentation:
The definitive documentation for a deal is extremely poorly drafted and it’s not clear what business deal is being documented or the business deal you thought you had struck is not clearly reflected.
Legal documentation is, admittedly, frequently long, dense, and filled with antiquated terms. And for a non-lawyer, legal agreements can be hard to understand. Some of this is a consequence of the fact that complicated concepts are being addressed, and part of this is because lawyers adhere religiously to previously drafted documents, which results in the survival of Latin terms, clumsy turns of phrase, and other habits that make agreements hard to read for the layperson. With a scam, however, an agreement may be drafted to be deliberately obscure. Even unreadable documents could have a legitimate provenance – the cannabis industry is full of poorly trained transactional lawyers (or criminal lawyers moonlighting as transactional lawyers) and principals that don’t understand basic business concepts. What you need to be concerned about is a document that someone doesn’t want you to understand because they intend to fleece you.
Unclear Background of Principals:
The principal of a business claims he or she has 20 years of business experience and deep industry ties. However, when pressed, he or she cannot name an actual business they have worked for and no one in the industry has heard of them or their organization.
The cannabis industry certainly contains many successful people with eclectic backgrounds, but beware the individual with an unclear past. They may elude to successful enterprises, but never give specific names. They claim to be involved in other businesses, but never give enough information for you to track these down. The cannabis industry is still small and many of the pioneers of the industry have known each other for years. If someone claims to have been deeply involved in the industry, but can’t point to any specific businesses or individuals who they know, it’s a red flag.
If they come from the traditional business world, but don’t have a clear history (e.g., before they worked in cannabis, they were at X company for five years), be extra vigilant. There are often legitimate reasons not to name current or former employers (e.g., perhaps their employer doesn’t approve of the cannabis industry and it could put someone’s employment status at risk), but there are also many illegitimate reasons to obscure your past.
Final Thoughts
If you think you’re being scammed, step back and reevaluate the situation before proceeding. Do not sign anything or wire any money. Ask for items in writing and save relevant emails. Consider reaching out to an attorney. Better to spend time and money evaluating a deal upfront than to experience the heartache and headache that comes with trying to mitigate the damage of a scam. Remember, in the cannabis industry, the old expression caveat emptor remains as true as ever.
Charlie Alovisetti, Vicente Sederberg LLC
Charles Alovisetti is a senior associate and co-chair of the corporate department at Vicente Sederberg LLC. Prior to joining Vicente Sederberg, Mr. Alovisetti worked as an associate in the New York offices of Latham & Watkins and Goodwin where his practice focused on representing private equity sponsors and their portfolio companies, as well as public companies, in a range of corporate transactions, including mergers, stock and asset acquisitions and divestitures, growth equity investments, venture capital investments, and debt financings. In addition, Mr. Alovisetti has experience counseling portfolio and emerging growth companies with respect to general corporate and commercial matters and all aspects of compensation arrangements, including executive employment and consulting agreements, stock option plans, restricted stock plans, bonus plans, and other management incentive arrangements. Mr. Alovisetti has experience in both U.S. and cross-border transactions, and has advised clients across a range of industries including cannabis, technology, manufacturing, software, digital media, energy and clean tech, healthcare, and biotech. In addition to his corporate work, Mr. Alovisetti has worked with clients on multiple competitive licensing applications, including in Maryland, Hawaii, Pennsylvania, and Texas. He holds a Bachelor of Arts, with honors, from McGill University and a law degree from Columbia Law School, where he was a Harlan Fiske Stone Scholar. Mr. Alovisetti is admitted to practice in both Colorado and New York and is a Level One Interprener. He can be reached at charlie@vicentesederberg.com. Follow him on Twitter @CAlovisetti.
Jessica Scardina, Vicente Sederberg LLC
Jessica Scardina is an associate at Vicente Sederberg, LLC’s Denver office. Prior to joining Vicente Sederberg, Jessica worked at a small Denver law firm specializing in corporate law, business planning, and taxation. Jessica currently focuses her practice on corporate, licensing, and regulatory matters. Jessica is a graduate of the University of Denver Sturm College of Law, where she served as a staff editor for the University of Denver Law Review. Prior to moving to Denver in 2004, Jessica lived in Santa Cruz, California, where she received her Bachelor of Arts, cum laude, from the University of California at Santa Cruz.
Madeline Currie is a marketing professional working at Vicente Sederberg’s Denver office. Prior to joining the firm, she was a Senior Marketing Associate at Crystal & Company in their New York office. She has also worked with several other organizations to define and execute their brand strategy. Madeline has a Bachelor of Arts in Sociology & Policy Studies from Rice University.
Board Candidate – Sean McAllister, McAllister Garfield, P.C.
If you don’t know me yet, ask leaders in the cannabis industry about me. They will tell you:
I’m old school. I’ve been working for cannabis law reform for 21 years, beginning on a prison moratorium campaign, leading to my role as Chair of the Board of Directors of Sensible Colorado funded by MPP, and now evolving into a well-respected cannabis business lawyer.
I’m a fighter. I’m not afraid to speak truth to power. Cannabis law reform is not done and we need aggressive advocates for the industry who don’t apologize for wanting to be treated like any other industry.
I’m not an extremist. I have supported reasonable regulations on cannabis, similar to alcohol (but not identical). But I have opposed unreasonably high taxes and other efforts to over-regulate cannabis. I will resist efforts to regulate marijuana so strictly that all profitability is taken out of it.
I favor a free market approach whenever possible. I understand local reasons why limits on licenses might be needed or desired, but I generally favor open licensing processes that let the market sort out the best actors rather than the state.
My firm is growing. I now have 14 lawyers in four states, Colorado, California, Oregon, and Florida. I am one of the only major cannabis lawyers licensed in both Colorado and California. I have the national perspective needed to help the Board make good decisions.
I value inclusion and diversity in our industry. I will work to build our membership through my growing client base and ensure that all stakeholders have a voice in NCIA, including women and people of color.
I understand the problems with 280E. I have represented numerous companies in IRS audits and have seen how this issue is an existential threat to our industry.
I want to support and build the NCIA PAC. We must exert more political power to get laws changed.
I am a problem solver who believes in win-win situations.
I will be an articulate and professional voice for the industry as a Board member.
Sean McAllister Bio for NCIA Board Elections
21 years working on marijuana law reform, including founding Sensible Colorado in 2004 and serving as chair of its Board of Directors through adult use legalization in 2012.
McAllister Garfield has 14 lawyers, licensed in 5 states: Colorado, California, Oregon, Illinois and Florida.
Sean represents some of the largest infused products manufacturers in Colorado, which have been expanding to multiple states through licensing agreements and independent operations.
Sean’s firm has a Tribal Law Group that represents Native American tribes in multiple states seeking to do cannabis/hemp projects
Sean has litigated several groundbreaking cannabis cases, including defending the nation’s first cannabis products liability case, suing state regulators over enforcement actions, litigating pesticide standards, negotiating settlements for some of the most serious rules violations, litigating local bans on cannabis dispensaries; and assisting in authoring state and local ballot initiatives.
Sean handled the only federal prosecution of a licensed dispensary owner in Colorado, who was charged wrongly with federal money laundering and achieved a favorable outcome.
Sean is focused on being a top corporate counsel to dispensaries. His work involves all aspects of corporate formation, dissolution, governance, M&A, IP, promissory notes, civil litigation and land use matters.
Sean is a regular speaker at the nation’s largest cannabis conferences and is regularly quoted in the national press.
Sean has won several awards recognizing his advocacy for cannabis reform, including: Friend of Reform Award, Sensible Colorado, 2013 and 2015 MVP Award at the Cannabis Business Awards, and 2016 and 2017 named a Top Marijuana Lawyer by Denver’s 5280 Magazine.
Sean’s Firm is a sustaining member of NCIA. He also supports CCIA, NORML, DPA, MPP, Colorado Cannabis Chamber of Commerce, and National Cannabis Bar Association.
Folium Biosciences hemp farms are some of the largest in the USA. Location: La Junta, CO.
Hemp, more than any other plant on Earth, is unique in its ability to literally suck the heavy metals and toxic waste out of the environment. Hemp is even being used in phytoremediation at Chernobyl in Russia. What does this mean to consumers of hemp products? Knowing as much information as possible about your hemp is crucial to understanding its legality, limitations, and effectiveness.
Hemp from China, for example, contains some of the most dangerous heavy metals in the world. According to a 2011 study of Chinese hemp strains, the plant was able to absorb dangerously high levels of the heavy metal cadmium without detriment to the plant itself. Cadmium (Cd) is an extremely toxic industrial and environmental pollutant classified as a human carcinogen.
What is the heavy metals and residual solvent content of the hemp oil? Residual solvents and heavy metals can negatively influence the health benefits of the oil.
Besides CBD, what other cannabinoids and terpenoids are present in the extract? A full spectrum profile of synergistic compounds has been shown to be more effective than an extract with only cannabidiol.
Was the hemp grown using clones or seeds? Clones provide a much more consistent end product. With seeds, you never truly know what is going to grow.
Can your supplier provide you with a consistent and reliable product? What good is the product if you cannot get it the exact same way every time and when you need it?
Considering the fact that many people are relying on CBD for their health and wellness, ensuring that your hemp oil is the highest quality is vital to its effectiveness. Prior to purchasing bulk or wholesale CBD oil, make sure you know where your hemp was grown and processed. Ask yourself this question before purchasing imported Chinese or European hemp oil: Would you feed your child milk imported from cows located in China or Eastern Europe? Didn’t think so.
***EDITOR’S NOTE: Federal policy toward hemp-derived CBD products with respect to Section 7606 is currently subject to substantial debate. The USDA’s website states, “[S]ection 7606 did not alter the approval process for new drug applications or any other authorities of the FDA, nor does it alter the requirements of the Controlled Substances Act that apply to the manufacture, distribution, and dispensing of drug products containing controlled substances.”
Ryan Lewis is the VP and Head of Global Sales for Folium Biosciences of Colorado Springs, CO. Folium Biosciences is the largest vertically integrated producer, manufacturer, and distributor of hemp derived phytocannabinoids in the U.S. Folium, along with their exclusive distributor, Entourage Nutritional Distributors, supplies section 7606 US Farm bill compliant hemp derived phytocannabinoids to some of the leading brands and companies in the world. Ryan graduated with high honors from Brown University and attended Pepperdine University Law School and Business School.
VIDEO: Head to D.C. with us on the “Path to Marijuana Reform”
With NCIA’s 7th Annual Cannabis Industry Lobby Days less than a month away, Deputy Director Taylor West reports on some exciting news out of Washington, D.C., earlier this month. Several members of Congress introduced a package of legislation to support the growing cannabis industry, including a fix to the crippling taxation of 280E. Find out more about the “Path to Marijuana Reform” and get excited for your chance to speak directly with the lawmakers in the House and Senate about our industry’s future. Register for Lobby Days today and join us in D.C., May 16-17.
Member Blog: 5 Critical Keys to Cannabiz Marketing Success
It’s such a thrilling time to be an up and coming cannabis company. And if you’re looking to build a brand, it’s also a critical time to ensure you’re making all the right moves to build a solid brand foundation that can ensure you capture market share. The cannabis “brandscape” holds a lot of opportunity, if you use the right approach.
Here are 5 of the most critical keys to achieving your brand objectives.
1) Establish a compelling, differentiated brand
Communicate your brand vision by stopping customers in their tracks with killer design, then close the deal with messages that motivate shoppers to become customers.
2) Be agile, move fast
Buckle up partner because this industry is in the middle of a gold rush, and that demands flexibility so you can quickly address market and regulatory changes.
3) Get certified, test every product
We all know the hot topics here but the real question is: which brands will step up and lead the way to creating and adhering to valid standards for safe cannabis cultivation and consumption?
4) Grow your channels
Retail, wholesale or anything in between requires a channel strategy, and more importantly, effective tactics that drive response. Focused B2B marketing is critical – even in the age of Snapchat.
5) Show your digital prowess
Sure, social media has it’s place in cannabis. But the brands that will win the land grab are the ones that integrate digital mojo so they stand out in the crowded online marketplace.
From foundation building to execution, the number one key to success is to define clear objectives, identify your best resources (internal and external consultants, vendors and partners), measure results and continually adapt.
A little bit of planning goes a long way. Don’t skip this critical step.
Lisa Hansen has more than 15 years of marketing experience, working across a wide range of industries, from technology to packaged goods. At Plaid Cannabiz and its parent company, McDill Associates, she leads business development as well as execution of client marketing programs. Lisa is known for her sound strategic thinking, and excellent writing and presentation skills. An information junkie, she is a voracious reader, making her a valuable information resource for our clients. She stays on top of the rapidly changing cannabiz trends to drive innovative marketing strategies and programs.
A Closer Look at the “Flurry” of Cannabis Legislation in Congress
by Michael Correia, NCIA Director of Government Relations
Last week, we saw Congress introduce a flurry of marijuana related legislation, with many aspects directly affecting the cannabis industry.
Taking the lead on bill introductions were cannabis champions Rep. Earl Blumenauer and Sen. Ron Wyden of Oregon, who introduced a series of bi-cameral, bi-partisan bills that they referred to collectively as the ‘Path to Marijuana Reform’. In addition, the cannabis industry gained a new Republican champion – Rep. Carlos Curbelo of Florida. Rep. Curbelo is a member of the Ways and Means committee and is an original co-sponsor of the new legislation that aims to fix 280E. Their goal was to pave the way for regulation of cannabis at the federal level, and provide certainty in the 50 states. In addition, Colorado Congressman Jared Polis introduced his own stand-alone regulation bill.
This legislation would repeal the tax penalty that singles out state-legal marijuana businesses and bars them from claiming deductions and tax credits. Because marijuana is classified as a Schedule I drug, cannabis dispensaries operating legally under state law are prohibited from deducting normal business expenses from their net income on federal tax returns. In fact, many dispensaries have been forced to pay between 50 and 70 percent of their net income to the federal government. The lead sponsor is Republican Congressman Carlos Curbelo from Florida, who sits on the House Ways and Means Committee, the Committee of jurisdiction on tax bills. NCIA has been lobbying on this bill for years and is happy to have the Congressman help us navigate this bill through Congress.
H.R. 1824/S. 780, the Responsibly Addressing the Marijuana Policy Gap Act of 2017:
Congressional advocates say this bill reduces the conflict between state and federal law, without legalizing cannabis at the federal level. An all-encompassing bill, this legislation contains numerous sections addressing cannabis reform. Section 101 amends the Controlled Substances Act to exempt any person acting in compliance with state laws law from criminal penalties. Sections 201-207 address the 280E provision; makes exemptions for marijuana advertisements; allows access to banking services; allows access to bankruptcy relief; and allows tribal entities to pursue cannabis reform with fear of federal penalties. Sections 301-306 allow expungement of criminal records for certain marijuana-related offenses; limits marijuana drug testing for federal employment; excludes marijuana misdemeanors offenses from federal financial aid; limits federal civil forfeiture of state compliant marijuana businesses; limits immigrant deportation for marijuana related activity; and excludes marijuana related activity for federally assisted housing. Sections 401-403 lowers barriers to federal medical research of marijuana; authorizes Veterans Affairs doctors to allow recommendations for medical marijuana; and allows Indian Health Services to allow recommendations for medical marijuana.
This legislation would effectively legalize marijuana at the federal level by de-scheduling, taxing, and regulating marijuana. If passed, the Attorney General would have 60 days to remove marijuana from the Controlled Substances Act, but would still prohibit the transport of marijuana into any state in which it was still illegal under state law. Because of marijuana’s removal from the Controlled Substances Act, 280E would no longer apply to state-legal cannabis operators. In addition, this legislation would allow for a federal excise tax on marijuana. An excise tax of 10 percent would be in effect for the first two years after enactment. The rate would increase to 15 percent in the third year, 20 percent in the fourth year, and 25 percent thereafter. In addition, a $1000 per year occupational tax would be levied on each marijuana production facility.
H.R. 1841, the Regulate Marijuana Like Alcohol Act:
This bill, introduced by Colorado Congressman Jared Polis, would eliminate the federal ban on marijuana and establish a regulatory system that enables that choose to allow the use of marijuana without interference from the federal government. 60 days after enactment, marijuana would be removed from the Controlled Substances Act, but does not apply to interstate commerce. It would remove oversight from the DEA and move it to the Bureau of Alcohol, Tobacco, Firearms and Explosives; and would regulate marijuana like alcohol. It would establish a permitting system stemming from an annual licensing fee on marijuana producers. Finally, it would establish standards for advertising marijuana and its products.
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With uncertainty still remaining related to potential Department of Justice enforcement, more and more advocates in Congress are coming out in support of our efforts. NCIA will continue pushing for reforms at the federal level and our friends on Capitol Hill won’t stop until your cannabis businesses are able to operate freely, like all other businesses.
NCIA member looking to help advance our issues on Capitol Hill should register for our 7th Annual Cannabis Industry Lobby Days coming up May 16 and 17 in Washington, D.C.
Member Spotlight: W Vapes
This month, we checked in with Dr. Juli Crockett of W Vapes, a vaporizer and extraction brand that originally launched in California, and is a Sustaining level member of NCIA. W Vapes was named one of the “Best Vape Cartridges” of 2016 at the California Chalice Cup. Juli also sits as a Co-Chair on NCIA’s recently launched Policy Council.
Cannabis Industry Sector:
Extraction/Manufacturing
NCIA Member Member Since: December 2015
Tell me a bit about your background and why you launched W Vapes?
The first W Vapes products were officially launched in California in August of 2015. A short two years later, and we are about to transition to being a national brand with locations in Oregon, Nevada, and beyond. W Vapes is becoming W The Brand.
Dr. Juli Crockett with Edibles Magazine Editor-in-chief Patrick Moore
How it all began? A family history of multiple types of cancer, as well as other ailments, led our co-founders to the research and development of our extracts. A defining moment that confirmed their faith in this amazing medicine was after providing cannabis oil to a family member with Tourette’s syndrome who experienced more than 100 ticks per day. After a single dose of cannabis oil his ticks subsided completely. They then knew their mission was to bring high quality cannabis to the people. After working for years in every aspect of the cannabis industry, from growing to dispensaries to manufacturing, their small, home-grown pen company (RELM) was sought out by visionary investors that recognized the massive potential of their high quality oil. From that union, W Vapes was born. I suppose you could call me the midwife? I was recruited in early 2015 to help with the launching of the W brand in California. While my official title is Chief Compliance Officer, we all have worn a whole mess of hats in the past two years, which goes along well with my diverse background in the arts (playwright, theater director, singer, bandleader), PhD in Philosophy, experience as a Marketing Director in the adult toy industry, and undefeated professional boxer. It sounds like a unique resume, however, the cannabis industry has no shortage of dreamers, daredevils, and polymaths. I’m in excellent company.
What unique value does W Vapes offer to the cannabis industry?
W Vapes is a unique hybrid that combines incredible quality standards and a deep commitment to patient safety with sophisticated, sleek branding and marketing savvy. A big differentiator is that our extractions are single-origin, strain-specific, and always pesticide-free. The oil in our cartridges and dabs comes from a single strain of a single batch of cannabis flower. There are no additives, flavorings, store bought terpenes, mixing of strains, synthetics, or cutting agents. One source, one strain, nothing else. We work with farmers that employee pesticide-free practices to produce high quality cannabis flowers, which we transform via small batch CO2 supercritical extractions into the liquid soul of the plant.
We are purists, plain and simple. We believe that the mission of the extraction process is to preserve and amplify the authentic soul of each cannabis strain. The vaping experience should be the inhalation of the concentrated soul of a plant, with no additives, synthetics, flavorings, or adulterants in the mix. That is why we do small-batch, single-origin, strain-specific extractions of certified and lab-tested, pesticide-free, potency-proven cannabis flowers. Our motto is “Gold In/Gold Out.”
Cannabis companies have a unique responsibility to shape this growing industry to be responsible and treated equally as any other industry. How does W Vapes help work toward that goal for the greater good of the cannabis industry?
Our goal and mission is to make the highest quality extracts accessible to all. Everyone deserves excellent, pure medicine. We have already distinguished ourselves by bringing more healthy delivery systems (such as glass and stainless steel cartridges, rather than plastic) to the masses, which is quickly becoming the industry standard. We hope to continue to innovate and influence the cannabis space in positive ways by always demanding the best for ourselves, patients and all people.
Our mission is to bring pure, pesticide-free, clean medicine of the highest quality to patients that may not even know or care about quality, pesticides, and clean medicine. We are a high-end product that is still affordable, as we believe that good, clean medicine should be the rule and not the exception.
What kind of challenges do you face in the industry and what solutions would you like to see?
W Vapes Co-Founder, Amber Abbott
Staying on top of the ever-changing and ever-developing regulatory landscape is a big challenge. It can be difficult for a company to make future plans when the future is still somewhat unknown. As an industry we face the paradoxical challenges of lack of regulation in some areas and over regulation in others on the horizon. Overall, the solutions we seek are being treated like any other industry, held to those standards, and given the same incentives and opportunities. Access to banking, sensible taxation, functional regulations, all with a focus on patient safety and the healthy growth of the cannabis industry — allowing for maximum participation by the people who created the cannabis industry over the past decades.
Why did you join NCIA? What’s the best part about being a member?
Being engaged in the political process, locally and at the state level, is of the utmost importance during this time of transition, when so many laws and regulations are being created and implemented. This is why it was important for us to not only join NCIA, and our local state affiliate CCIA (California Cannabis Industry Association), but to become deeply involved with both organizations. I currently sit on the Board of Directors for CCIA, several of its committees, and serve as a Co-Chair on NCIA’s newly formed Policy Council. This is an unprecedented moment in which the pioneers of the cannabis industry have the opportunity to come together and speak with a collective and powerful voice. The future of the industry is being defined and decided every day, in every moment. We do not have time to waste. This is our moment.
Note: NCIA member profiles highlight members and stories within our cannabis industry community. They do not constitute an endorsement or recommendation of specific products or services by NCIA.
NCIA’S Quarterly #CannabisCaucus Event Series Continues!
by Brian Gilbert, Events Manager
NCIA started the year off with the continuation of our Q1 Quarterly Cannabis Caucus event series, this time seeing us return to the 8 strongest regions visited throughout 2016. Thank you to the nearly 600 cannabis business professionals which joined us across the month in Seattle, Cambridge, Denver, New York City, Portland, Santa Monica, Oakland and Chicago. Weren’t able to make it to one of our caucuses in January? Download the resources provided at the event on our Cannabis Caucus Resources page.
As the cannabis industry navigates the potential challenges of new leadership in Washington, D.C., there’s never been a more important time to connect with your fellow industry peers and arm yourself with information about possible changes to federal policy. In order to better prepare our members for the uncertain times ahead and provide them the tools needed to help continue the positive momentum seen for our issues on the federal level, we’re pleased to announce the dates & locations for the Q2 editions of our recurring networking and educational event series.
NCIA’s Cannabis Caucus events are the best place to network, hear from industry thought leaders and elected officials, and engage with our advocacy work on the national level! The Quarterly Cannabis Caucuses are held on Tuesdays and Thursdays in the first month of each new quarter. Read on to learn about specific speaker and location updates regarding our Q2 events. Then, mark your calendar, register today and join us at a Caucus near you next month!
Massachusetts champion Rep. Dave Rogers (D – 24th Middlesex District) will be addressing attendees in Cambridge, MA for our final Northeast event before heading to Portland, ME in July.
City Attorney Pete Holmes will be in joining us in Seattle, WA in order to educate attendees of recent developments and upcoming challenges for this Spring.
Colorado State Senator Tim Neville (R – 16th District) will be addressing attendees in Boulder, CO at The Riverside as we continue our back and forth between the two cannabis industry epicenters in Colorado. Senator Neville will be discussing the 2017 Colorado Legislature’s approach to cannabis and his efforts to protect Colorado’s cannabis industry from a possible Federal crackdown.
The Tri-State event is moving to Jersey City for NCIA’s first event west of the Hudson at the captivating Maritime Parc event complex featuring stunning views of the NYC skyline from their Atrium Room.
To avoid conflicts with the 4/20 holiday, we’ve rescheduled the Southern California event to take place on 4/27 and we’ll be joined by Pamela Epstein of Green Wise Consulting & Hoban Law Group as guest speaker.
We’ll also be bringing the Midwest NCIA community together in Michigan as we head outside of Chicago for our return to Ann Arbor. We’ll be hosting the event at Om of Medicine and joined by their owner & proprietor Mark Passerini to provide a regional policy update.
Cannabis Caucuses are FREE for current NCIA members and just $50 for non-members. In addition to intimate networking opportunities with leaders in the industry, you’ll get a detailed update on the latest federal policy developments, meet local policy-makers, and receive a packet filled with legislative analysis and information on how to get the most from your NCIA membership.
Northeast – Cambridge, MA – Tuesday, April 11 – REGISTER NOW Washington – Seattle, WA – Tuesday, April 11 – REGISTER NOW Colorado –Boulder, CO – Thursday, April 13 – REGISTER NOW Oregon – Portland, OR – Tuesday, April 18 – REGISTER NOW Tri-State – Jersey City, NJ – Tuesday, April 18 –REGISTER NOW No. California – San Francisco, CA – Tuesday, April 25 –REGISTER NOW So. California – West Hollywood, CA – Thursday, April 27 –REGISTER NOW Midwest – Ann Arbor, MI – Thursday, April 27 –REGISTER NOW
Not yet a member of NCIA? Join online prior to the event in order to access your free tickets or pay up front then have your admission fees applied toward membership once you join at or immediately following the event.
Finally, huge thanks as always to our sponsors, media partners and event hosts that made Q1 such a success and will be joining us again in April! We hope you’ll join us in showing them some appreciation for the enormous support. Please follow the links below to learn more about each of these amazing businesses or groups then reach out to see how they might be able to help you.
Wondering how your company can engage with the cannabis industry’s top decision-makers? Contact us at sponsorship@thecannabisindustry.org to learn more about supporting your industry’s political voice and highlighting your brand at NCIA’s Quarterly Cannabis Caucuses and NCIA’s 7th Annual Cannabis Industry Lobby Days in May!
Member Blog: Cannabis Branding Faces Uncertain Future
When it comes to cannabis labels and cannabis packaging, and for that matter everything branding-related, the marijuana industry is a many-splendored riddle. On one hand, the industry’s avant-garde nature and offerings lend themselves to eclectic and eccentric designs. On the other hand, a demand-heavy marketplace, lack of branding sophistication, and fears about sinking too much branding money into federally illegal enterprises have stifled forward progress.
At the same time, states with the longest track record of legal use have evolved in many cases to higher levels of professionalism and panache on such important elements as marijuana labels and packaging.
An August 2016 article in HighTimes.com assesses the state of the struggle: “A lot of goofy business names, awkward brand identities, poor design execution and amateur packaging solutions have been the norm…for cannabis companies up until recently, when increasing sophistication among those investing and working in this nascent industry resulted in more slick presentations, upscale appeal and mass market sales. After all, research suggests that 33 percent of all sales are influenced by branding and packaging.”
An article published on Entrepreneur.com in January points to hiccups across the board, noting that, “Businesses traditionally developed strong brands in logos, typography, color and composition. The idea was to become as ubiquitous and familiar as Hershey, Band-Aids or Scotch Tape. Left to web designers, cannabis businesses have yet to produce that attention grabber.”
Federal illegality creates consternation, conservative strategies
All along, marijuana has remained illegal under federal law, creating lots of confusion as well as a conservative approach to spending money on such branded items as marijuana labels and marijuana packaging. Illegality has impacted a wide swath of practices in such sectors as taxation and banking.
Cannabis companies have been reticent to sink too much money into endeavors that can’t be federally trademarked or patented for fear of being copied. Notes the Sacramento Record-Bee in a January article, “Branded pot products gained footing in recent years as California sanctioned medical use of marijuana, and other states began permitting recreational use. Now that California voters have approved a ballot measure allowing all adults to use the drug, cannabis businesses want more authority to brand their products…But officially trademarking marijuana is a tricky legal task. The federal government still considers it an illegal drug, and won’t grant patents or trademarks for pot or anything made from it. Cannabis brands fear they are at risk of being copied. So marijuana businesses in California—eyeing what could become a $6.4 billion industry—have turned to the state government for help.”
Given the uncertain direction that federal enforcement will take under the new administration and anti-marijuana attorney general, it’s anyone’s guess about if, how, when, and where cannabis branding will move forward.
Following are tips for cannabis companies addressing or reviewing their branding currently:
Look at purveyors/competitors in “pioneering” states that have the longest track record–to see how they have evolved their branding. Typically, Colorado and Washington are at the top of states where both recreational and medicinal are legal; California is a strong state for medicinal. After seeing what’s out there, decide on a path for yourself;
Match the design sophistication to the appropriate graphics team. In most cases, this means finding a branding specialist—not a one-size-fits-all web developer whose shingle includes the word “design;”
Protect the intellectual property through state and other non-federal regulations/laws where possible.
Given the omnipresent threat of federal intrusion in the overall operation, figure out what you can stand to lose upfront, spend accordingly, and keep your fingers crossed.
Lightning Labels uses state-of-the-art printing technology to provide affordable, full-color custom labels and stickers of all shapes and sizes. From small orders for individuals, to the bulk needs of big businesses, Lightning Labels is equipped to handle and fulfill custom label and sticker projects of all types. Lightning Labels was established in 2002 and based in Denver, Colorado. Mark Lusky is a marketing specialist who has worked with Lightning Labels since 2008.
NCIA Accepting Nominations for Board of Directors Candidates
NCIA is now accepting nominations for eligible candidates to run for its board of directors through April 21, 2017.
As the cannabis industry’s only national trade association, the National Cannabis Industry Association is a nonprofit organization run for and by its members, so we hope you’ll take advantage of this opportunity to get involved in NCIA’s annual board of directors election cycle.
Any representative of an NCIA Sustaining member business may run for a seat on the board through any other NCIA member’s nomination. Representatives of Basic or Sponsoring level member businesses who are interested in serving on the Board are encouraged to contact us at info@thecannabisindustry.org or (888) 683-5650 to convert to a Sustaining level membership before seeking nomination. More information on NCIA’s membership tiers can be found on NCIA’s website.
Log into our member portal and complete this form to nominate a board candidate through April 21, 2017.
Important notes about the board election:
Only current NCIA members may nominate a candidates for the board.
Any member may make a nomination but only Sustaining Members are eligible to run for a seat on the board.
Nominations for candidates must come from a representative of a member business other than the one represented by the nominee.
If you are a member of NCIA and don’t have access to your login information, please contact us at info@thecannabisindustry.org and we’ll reset your login credentials.
NCIA’s board is made up of 22 elected directors and the executive director. Elected members serve two-year terms, and elections are staggered, with 11 seats open each year. Board members are responsible for overseeing the association’s overall strategy and budget, and as ambassadors of NCIA, they represent more than 1,200 member businesses.
NCIA’s weighted-voting system means that each member business can cast one ballot, voting for up to 11 candidates. Each ballot is then weighted according to the voter’s membership tier, so that a Sponsoring member’s vote carries twice the weight of a Basic member’s vote, and a Sustaining member’s vote is weighted at five times that of a Basic member.
After the close of the nominations period, NCIA will provide all member businesses a Voter Guide, including information about all qualifying board nominees. A secure online election ballot will be open to all current NCIA members starting Thursday, April 27 until 11:59 p.m. ESTMonday, May 22.
Please participate. Only you can ensure your voice is heard, so speak up to nominate a qualified board candidate to help steer NCIA’s direction in 2017 and beyond.
Board Member Requirements: All board members shall maintain a current Sustaining membership during their term, in addition to contributing no less than $10,000 annually to NCIA, its Political Action Committee (PAC), or other funds as determined by the executive director. Board members may be exempt from the additional financial requirement if they raise the equivalent revenue through recruitment of new members as defined by the executive director within one calendar year.
For questions regarding NCIA’s Board election, please contact Meredith Bower Holt, Director of Membership & Development, at Meredith@TheCannabisIndustry.org.
NCIA & MCBA Announce Partnership and #CannaBizSummit Scholarships for 2017
MCBA exists “to create equal access and economic empowerment for cannabis businesses, their patients, and the communities most affected by the war on drugs,” and NCIA’s mission is “to promote the growth of a legitimate and responsible cannabis industry.” This partnership will align the two nonprofits’ work around respective projects and events that complement each organization’s mission.
A Steering Committee will be formed, initially comprised of NCIA and MCBA staff representatives and members of NCIA’s Minority Business Council, which will be absorbed into the new partnership. The Steering Committee will discuss each organization’s upcoming efforts and events, select the best opportunities for collaboration, and work out the details of each organization’s contributions to the other’s planned scope of work for the following year. MCBA members in good standing will receive discounted registration fees to select NCIA events, including its Quarterly Cannabis Caucus series, Seed To Sale Show and Cannabis Business Summit & Expo events. MCBA and NCIA’s respective Policy Councils may also collaborate towards mutually shared advocacy goals.
In addition, NCIA is pleased to again offer 30 scholarships, in partnership with MCBA, for free registration (valued at up $895) to NCIA’s 4th Annual Cannabis Business Summit & Expo, June 12-14, 2017, in Oakland, CA. The scholarship is for qualified applicants to support minority groups’ success within the cannabis industry.
Applicants must be:
A member of a racial/ethnic minority group
Currently employed as a mid-to-senior level industry professional or as a cannabis-related business CEO or founder for at least one (1) year
Have demonstrated professional, advocacy, or civic/community leadership experience
Committed to fully engage in all Cannabis Business Summit scholarship benefits
Have a demonstrable need for financial assistance to attend the Cannabis Business Summit
Applications are due Friday, April 21, 2017. Up to 30 scholarships will be granted to the highest-scoring applicants, as determined by members of the Steering Committee. Awardees will be notified the week of April 30. Interested applicants can find more information and fill out the form to apply for the scholarship online at thecannabisindustry.org/2017-CBS-Scholarship.
VIDEO: Spotlight on California Cannabis Industry Association
In this month’s NCIA video newsletter, we headed to Sacramento to attend the California Cannabis Industry Association‘s 2nd Annual Policy Conference. CCIA is NCIA’s state affiliate in California. Hear from CCIA members and California state legislators about the critical work CCIA does to represent the state’s industry, and how the NCIA/CCIA affiliation means members have a comprehensive and powerful voice at the state and federal levels. If your California cannabis business isn’t yet a member of CCIA, join today!
Member Blog: Cannabis and the Canadian Public Markets
While the American cannabis industry ponders the strange twist of fate that was the 2016 election, our cannabis neighbors to the north are experiencing unprecedented levels of capital markets activity. There are now over thirty publicly listed cannabis companies in Canada trading on three different exchanges. As a group, cannabis companies in Canada have a combined market cap of over four billion dollars; nine of these companies have market caps of over one hundred million Canadian and one, Canopy Growth, has recently become the first Canadian cannabis company with a market cap of over one billion Canadian dollars. Unlike in the United States, where most publicly traded cannabis companies are listed on the OTC markets with a few exceptions (mostly pharmaceutical companies that have limited exposure to cannabis), the publicly listed cannabis companies in Canada trade on exchanges with significant listing and reporting requirements.
If you’re a Canadian, or have experience dealing with the Canadian markets, this article likely won’t cover new ground. If you, however, like many Americans, have only a passing awareness of the Canadian economy, this article will provide the basics for understanding the current rash of fundraising in Canada. The securities law issues related to cross-border fundraising are complex and beyond the scope of this article.
2016 was a very active year for the cannabis capital markets in Canada, with the total amount raised by publicly traded cannabis companies exceeding $500 million Canadian (around $381 million U.S. at today’s exchange rate). Most of this activity took place after the April 20th statement by the Canadian government stating that legislation to legalize adult use of cannabis would be forthcoming in the spring of 2017. Unlike in the U.S., where investment banking services are generally not available to public cannabis companies, Canadian investment banks have been active in raising capital for Canadian Licensed Producers (LPs – described in further detail below). Also in contrast to the U.S. market, these firms have begun to publish research on the public companies.
There are several Canadian stock exchanges, the most significant of which is the Toronto Stock Exchange (TSX most commonly, but sometimes referred to as TSE), but almost all Canadian cannabis stocks trade on one of three exchanges: the TSX, the TSX Venture Exchange (TSXV), and the Canadian Securities Exchange (CSE). Below are the basics with respect to each exchange:
Toronto Stock Exchange (TSX): The TSX is Canada’s largest and most important stock exchange and the eighth largest in the world by market capitalization. An American-centric way to describe it would be as the Canadian version of the New York Stock Exchange. Reflecting the natural resource focus of the Canadian economy, the TSX is heavily populated by mining and energy companies, though financial services companies also make up a significant proportion of the exchange’s market capitalization. Many large Canadian companies have a dual listing on both the TSX and the NYSE. Currently only two cannabis stocks trade on the TSX: CanniMed Therapeutics and Canopy Growth Corp. (CGC), which is the holding company for Tweed Inc., Tweed Farms Inc., and Bedrocan Canada Inc.
Toronto Venture Exchange (TSXV): The TSXV is analogous to the NASDAQ Capital Market or the OTC markets. It serves as a public venture capital marketplace for emerging companies. Before 2001, this exchange was known as the Canadian Venture Exchange (abbreviated CDNX), but was renamed when the TSX Group purchased the exchange. Over sixteen hundred companies list on the TSXV, and the mining and energy sectors predominate.
Canadian Securities Exchange (CSE): Formerly known as the Canadian National Stock Exchange and dating back only to 2003, the CSE has lower listing and reporting requirements than the TSX and the TSXV. Over three hundred issuers list on the CSE. It is the most common exchange for Canadian cannabis companies.
Aequitas Neo (Neo Exchange): Canada’s newest exchange.The Neo Exchange was established with an aim for fairness, and has measures in place to eliminate what is perceived to be predatory high-frequency trading. As of the date of publication, the authors are not aware of any cannabis stocks that trade on this exchange.
George Bernard Shaw once said that “England and America are two countries divided by a common language.” Similarly, investors need to be careful not to confuse the Canadian and American public markets, which, while they have a great deal in common, also diverge in several key aspects. The full scope of these differences is beyond the scope of this article, but below are several important Canadian terms that highlight key differences:
Reverse Take-Over (RTO): This is the Canadian equivalent of a reverse merger. Like a reverse merger, it allows a company to gain access to the public markets without undergoing an IPO, but does not raise any additional funds.
Initial Public Offering (IPO): A Canadian IPO is quite similar to its U.S. equivalent, but is usually a less expensive and time-intensive process.
Amalgamation:An amalgamation is comparable to a U.S. merger, but lacks the concept of a surviving corporation. Instead, in an amalgamation, the amalgamated corporation takes on the identity (along with the rights and obligations) of each predecessor corporation.
Listing Requirements: Unlike in the U.S., listing requirements on a Canadian exchange can vary based on the industry of the issuer. For example, mining companies on the TSXV have their own listing requirements.
Ontario Securities Commission: Canada does not have a federal securities regulator like the SEC; instead, each province (there are ten provinces and three territories) has its own securities regulator. Ontario, as the home of the TSX, functions as the equivalent of the SEC.
Capital Pool Company (CPC): A CPC is a public shell company trading on the TSXV that has no commercial operations and no assets except for cash. A CPC uses its cash holdings to evaluate potential acquisitions, which it must complete within 24 months of listing – this is referred to as a “Qualifying Transaction.” Companies trading as a CPC have a “P” after their ticker symbol. Once the CPC completes a Qualifying Transaction, its shares continue to be traded on the TSXV.
LPs: Short for licensed producers, which hold a license issued by Health Canada under the Access to Cannabis for Medical Purposes Regulations (ACMPR). This license authorizes them to produce and sell to the public dried cannabis, fresh cannabis, cannabis oil, or starting materials to eligible persons. (The overall structure of the Canadian medical cannabis system will be addressed in a separate article.)
A publicly listed Canadian cannabis company (like any other publicly traded Canadian company) need not restrict its operations or its shareholders to Canada. Many have significant U.S. operations, which is only natural given the considerably larger size of the U.S. market. But U.S. expansion is not without its complications. It remains unclear how Canadian regulators, and the Ontario Securities Commission in particular, will treat publicly traded cannabis companies with U.S. operations if crackdowns occur under the Trump administration.
Compliance with securities law more broadly can also be an issue. To raise capital from U.S. investors, a Canadian public company will generally need to undergo a private offering for U.S.-based investors in addition to the public offering in Canada. The legal issues surrounding a cross-border fundraise are complex, but the payoff is the ability to tap investors in the U.S.
2017 promises to be another year of major fundraising, particularly with the anticipated introduction of legislation to fully legalize cannabis in Canada this spring, following which it would not be surprising to see further inflows of capital into the Canadian capital markets. It’s also not clear what effect Trump’s administration will have on the Canadian markets. While it is possible that investors will flee U.S. markets for the greater safety of Canadian markets, particularly if any crackdowns occur under a Department of Justice led by Attorney General Jeff Sessions, it is also possible that crackdowns could have significantly negative effects on the numerous Canadian public companies with substantial U.S. operations. However, the continued legalization of medical cannabis in other countries, such as Germany, will open additional opportunities for Canadian companies to trade with, and to offer their expertise to emerging cannabis markets. U.S. investors would be wise to continue paying close attention to developments north of the border.
As a reference, below is a list of the Canadian public cannabis companies and the exchanges on which they list as of February 23, 2017 (which does not include companies which are not currently actively trading). Many are LPs, but others are primarily engaged in a range of other cannabis-focused activities, including investing in U.S. operations, developing or researching cannabinoid therapies, developing infused cannabis products, and several other business lines. If any have been omitted, please let me know. I can be reached at charlie@vicentesederberg.com or on Twitter @CAlovisetti.
This information is educational only and shall not be construed as legal advice. Please consult your attorney prior to relying on any information in this article.
Charles Alovisetti is a senior associate and co-chair of the corporate department at Vicente Sederberg LLC. Prior to joining Vicente Sederberg, Mr. Alovisetti worked as an associate in the New York offices of Latham & Watkins and Goodwin where his practice focused on representing private equity sponsors and their portfolio companies, as well as public companies, in a range of corporate transactions, including mergers, stock and asset acquisitions and divestitures, growth equity investments, venture capital investments, and debt financings. In addition, Mr. Alovisetti has experience counseling portfolio and emerging growth companies with respect to general corporate and commercial matters and all aspects of compensation arrangements, including executive employment and consulting agreements, stock option plans, restricted stock plans, bonus plans, and other management incentive arrangements. Mr. Alovisetti has experience in both U.S. and cross-border transactions, and has advised clients across a range of industries including cannabis, technology, manufacturing, software, digital media, energy and clean tech, healthcare, and biotech. He holds a Bachelor of Arts, with honors, from McGill University and a law degree from Columbia Law School, where he was a Harlan Fiske Stone Scholar. Mr. Alovisetti is admitted to practice in both Colorado and New York and is a Level One Interprener. He can be reached at charlie@vicentesederberg.com. Follow him on Twitter @CAlovisetti.
Brett Williams is a law clerk at Vicente Sederberg LLC as well as a third-year law student at the University of Denver Sturm College of Law. During his law school experience Mr. Williams worked at United States Attorney’s Office – District of Colorado in the Criminal and Civil Division. Mr. Williams also clerked at Vicente Sederberg LLC working in their Corporate and Policy Departments. At Sturm College of Law Mr. Williams serves as the President of the Honor Board and as Executive Director of Students for Sensible Drug Policy DU Law Chapter. Additionally, Mr. Williams holds a Bachelor of Science in Economics from Arizona State University. He can be reached at bwillia7@outlook.com.
Member Spotlight: National Grow Technologies
In this month’s NCIA Member Spotlight, we speak with the team at National Grow Technologies, who offer a variety of services and products to support the cannabis industry. Recently, NGT sold a cannabis flower batching and sorting machine right on the expo floor of NCIA’s Seed To Sale Show to fellow NCIA member The Clinic.
National Grow Technologies
Cannabis Industry sector: Equipment and Consulting
NCIA member since: The NGT founders have been members of NCIA since 2010 through different endeavors. National Grow Technologies has been a member since its formation in 2015.
Tell us a bit about your background in cannabis and how the team at National Grow Technologies came to fruition?
National Grow Technologies‘ background stems out of the formation of the Colorado medical and adult-use cannabis markets. Our team brings 25 years of combined experience in the regulated cannabis industry as well as 50 years of combined horticulture experience. This includes build-out, ownership, and management of multiple dispensaries and full-scale cultivation operations, originating in 2009. We have since been involved in multiple projects, in numerous regulatory states, both nonprofit and for profit.
NGT team: Scott Field, Chandra Carleton, Bruce Granger, and Bill Campbell
From the beginning, the need for regulation was obvious, prompting our involvement at a legislative level. This includes involvement in SB 10-109 and HB 10-1284 as well as the Rule-Making Workshop in 2010. What an exciting, educational experience, helping create the first regulated cannabis market. If we only knew then what we know now.
As you can see, our passion for the cannabis industry runs deep. Through that passion, NGT developed organically, just as we developed our own dispensaries and cultivations. We immediately became involved in the national cannabis market, traveling to cannabis-related events, meeting many people in the industry and trading knowledge. We have always held the belief that “helping someone else learn strengthens our own education.” Through that enlightening experience, our processes to bring a quality commercial product to market were developed. Since that time National Grow Technologies and its partners have been working to help new and exciting businesses develop and refine the quality of their process.
What unique value does NGT offer to the cannabis industry?
National Grow Technologies does not just sell best-in-class equipment such as the GVS Precision Batcher or the GreenBroz trimmer; we also use our extensive experience to ensure that this equipment works for our clients. As the cannabis industry has evolved, many new products have been developed. Not all have effectively executed the operation for which they were designed, or are capable of integrating with commercial processes. Through extensive testing and use of various industry specific machinery, we are able to choose the highest performing equipment on the market. We take great pride in not just supplying this equipment, but also providing the training, services, and process development needed for repeatability of success.
Our training and support is what distinguishes our company. For every piece of equipment we sell, we strive to create an environment capable of its full potential. We realize even the best equipment can have its effectiveness diminished if used incorrectly. That is why NGT offers training programs with every piece of equipment we sell. Once you have successfully completed training and operations begin, the equipment must remain functioning optimally. NGT also has service programs for every piece equipment we sell. We recognize that our success is only possible with yours.
The GVS Precision Batcher, sold to The Clinic on the expo floor at NCIA’s recent Seed To Sale Show
While supporting our clients through the integration and implementation of new equipment, we are aware that changes in process produce ripple effects through other processes or even the Standard Operating Procedures of a facility. Since our inception, we have been fueled by a desire to increase efficiency of cultivation operations, while recognizing the limitations of each facility. We have the skills necessary to refine your process, review plans to assess proposed process, or put processes into SOP documents. We are here to help.
By viewing a facility systemically through its entire manufacturing process and integration of new equipment, NGT assists our clients to optimize production. We do not run cultivations. We help clients run cultivations more efficiently, allowing them to fast-track business execution, while minimizing their financial exposure, creating a quicker ROI.
Cannabis companies have a unique responsibility to shape this growing industry to be socially responsible and advocate for it to be treated fairly. How does NGT help work toward that goal for the greater good of the cannabis industry?
We at National Grow Technologies look to use our experience from helping create a regulated market to educate emerging markets on techniques proven to provide the safe access of cannabis for adults. It is the responsibility of everyone in this industry to engage in business practices that ensure a proper and clean seed-to-sale process designed with the health and safety of consumers as a core principal. Cannabis needs to be handled and processed in a way that is safe for human consumption. This is a process that can be clearly defined, which will align procedures that navigate an increasingly complex set of ever-changing rules and regulations, while remaining true to the value of safe access. Each and every one of us has the responsibility to move this industry to a safe and sustainable position in manufacturing and distribution of cannabis.
Why did you join NCIA? What is the best part about being a member?
Bruce Granger and Chandra Carleton
In 2010, one of the founding NGT members, Bruce Granger, was at the meeting with Aaron Smith when he said that he was going to build a National Cannabis Industry Association. Bruce has been a member ever since, through multiple business endeavors and now with NGT. We have stayed a member of NCIA due to the symmetry of our business models. We are both committed to the education, support, and unification of the industry.
NCIA has always been a resource of knowledge for ourselves and many in the industry, keeping us informed through their newsletters, Quarterly Cannabis Caucasus, and informative speakers at every conference. They have supported the cannabis industry by taking a message of positive reform to Washington, D.C. We will only be able to continue and expand our industry with the education and enlightenment of our political system.
Reconnecting with our friends or meeting new members, the business opportunities abound. In fact, thank you to NCIA for bringing NGT and The Clinic back together at the NCIA Seed to Sale Show this past January 31 – February 1. The Clinic is now the proud owner of the first GVS Precision Batcher in Colorado, a state-of-the-art piece of equipment capable of precise weighting and batching cannabis flower. It is all of these memories of where we came from, and all of the possibilities the future holds that keeps NGT coming back to NCIA.
Note: NCIA member profiles highlight members and stories within our cannabis industry community. They do not constitute an endorsement or recommendation of specific products or services by NCIA.
Work and Well-Being in the Colorado Cannabis Industry: Project Results
By Kevin M. Walters, MS and Gwenith G. Fisher, PhD, Colorado State University
Who works in the Colorado cannabis industry? What are health and safety issues that these workers face? How can we optimize well-being among cannabis workers in Colorado? These are some of the questions that our research team had as we conducted our project, which we call “Work and Well-Being in the Colorado Cannabis Industry.” We first wrote about our project back in this blog post, when we put out a call for participants in our study. (Some readers may have even taken our survey!) In that blog post, we also mentioned that we’d share a report with the industry once the project was completed – which we’re excited to do now in this post!
In a nutshell, the aim of our project was to get a pulse on health and safety in the Colorado cannabis industry on the ground floor, as it continues to grow in Colorado and in other states. During our early work in the Colorado industry in 2013, we saw a strongly supportive industry with happy workers, but also saw a need for clearer health and safety standards and practices. This led us to develop and conduct this project, in which we surveyed 214 direct-to-plant workers in the Colorado cannabis industry. Our project team is excited to share our “Quick Hits” report with the industry, which provides an overview of our project results and our recommendations to improve health and safety. Thanks to the Center for Health, Work, and Environment at the Colorado School of Public Health, the full report can be found at this link.
The “Quick Hits” report provides lots of detail on our project, statistics, and recommendations – far more than we could mention in one blog post. As such, we encourage you to download the report and share it with your friends, colleagues, and businesses. To provide a brief summary of what we found, here are some of our key findings and recommendations from the report.
First, in the report we provide a demographic overview of the industry in Colorado, such as the workers in the industry, their access to health care, and the organizations they work for. In addition to that, we describe a number of our findings on health and safety in the industry. Generally speaking, workers in Colorado’s industry felt like the work environment was fairly safe, and that their businesses strongly valued safety. That said, we also found that the quality and quantity of health and safety training varies greatly from business to business.
For example, just under half of our participants (46%) received no health and safety training or received sparse training when they were hired (like a brief discussion, or a piece of paper). Therefore, when workers don’t view cannabis industry work as hazardous, it might be due to inconsistent health and safety training. To speak more on that, we did identify some hazards associated with cannabis work, such as ergonomic issues when trimming plants throughout the day or working in tight grow spaces. Another hazard we identified was pesticide use, as some workers reported symptoms such as skin and eye irritation, headaches, and dizziness after handling pesticides (among some other symptoms as well). In the report, we provide more detailed discussion on these issues, as well as some data on worker injuries.
On the plus side, the Colorado cannabis industry is tightly knit – workers felt lots of social support from one another and from their businesses. Based on our experiences in the industry, this came as no surprise! Industry workers were also very satisfied with their jobs and their lives, and felt like their jobs were meaningful. This may relate to the fact that most workers in the industry have a strong connection to cannabis – nearly two-thirds were medical card holders, and nearly all workers we surveyed used cannabis in some capacity.
A key strength of our report is the recommendations we provide that address both the physical and psychological aspects of cannabis industry work. Given the various types of health and safety training that workers received, we provide a list of recommended training topics for businesses. In addition, we provide research-based tips on what to do before, during, and after training programs to make sure that what workers learn in training is properly transferred to the job. After all, what good is training if it doesn’t stick?!
In addition to training recommendations, we also provide info on other resources (like this CDPHE Guide to Worker Health and Safety in the Marijuana Industry) and other general recommendations. For example, we encourage businesses to implement health promotion programs at work, offer various supports to employees, and strive for diversity and sustainability in the industry.
These are only some of the key topics in our report – we hope you download the report, share it with others, and enjoy the content! We would like to thank our project team, NCIA, Kayvan Khalatbari, and our other industry partners and research colleagues for all your help throughout the project.
Gwenith G. Fisher, PhD, is an Assistant Professor and Program Coordinator of Industrial-Organizational Psychology at Colorado State University. She is also the Director of the MAP ERC Occupational Health Psychology Training Program. Her research focuses on work-life balance, as well as health and well-being of workers, with a special focus on older populations and those nearing retirement.
Members of Congress Announce Bipartisan Cannabis Caucus
by Michelle Rutter, Government Relations Manager
On February 16th, the House of Representatives took another step towards recognizing the need for federal reform of cannabis laws. Representatives Earl Blumenauer (D-OR), Dana Rohrabacher (R-CA), Jared Polis (D-CO), and Don Young (R-AK) announced their newly formed Congressional Cannabis Caucus. The bipartisan coalition will focus on issues like medical research, access for veterans, and business needs — including banking and 280E reform.
The four co-chairs of the caucus were united in their support for states to be allowed to determine their own cannabis policies. In addition, the group noted that the growing momentum for reform across the country has finally reached the halls of Congress. With eight more states legalizing some form of cannabis just this past November, the caucus co-chairs say there has been a “tremendous increase” in interest for joining the caucus, including from Republicans. The caucus will also allow members to talk freely about cannabis legislation and give the opportunity to show that cannabis consumers and entrepreneurs are an important part of the American economy.
Prior to the announcement today, the House had started an informal marijuana working group, but decided that it’s now time for a more formal cannabis caucus that seeks to educate other Members of Congress on the discrepancy between state and federal law, the importance of making sure that cannabis businesses are treated fairly, and that states’ rights are protected. The Cannabis Caucus is also an opportunity for NCIA to educate Capitol Hill staffers and policymakers on the issues our members face on a regular basis.
NCIA’s Cannabis Industry Lobby Days provide the best opportunity to show our nation’s decision-makers what a responsible and legitimate cannabis industry looks like and to help raise awareness of issues like the unfair tax and banking policies hampering our industry’s potential to grow and be treated like any other U.S. business sector. Your $25/person registration fee includes a lobby training session with NCIA’s government relations staff and two days of coordinated meetings with congressional offices across Capitol Hill.
VIDEO: The Importance of Making Your Voice Heard in D.C.
NCIA Deputy Director Taylor West delivers this month’s video newsletter, encouraging you to get involved and make your voice heard to the new administration and new Congress. As NCIA prepares for our 7th Annual Cannabis Industry Lobby Days, there’s never been a more important time to speak up for your business and the industry we’re building together by engaging with our advocacy work on Capitol Hill in Washington, D.C.
Thank you to the co-chairs of NCIA’s Policy Council for their premier sponsorship of our 2017 Cannabis Industry Lobby Days:
Are you interested in sponsorship opportunities for your company at NCIA’s most important policy event of the year? Contact us at sponsorship@thecannabisindustry.org to find out more!
Raising Money 101: Accredited Investors and Fundraising in the Cannabis Industry
*Updated to reflect new Rule 147A and Amendments to Rule 147
When raising capital from outside investors, companies are faced with several choices regarding terms, structure, filings to make or not make, and type of investor, among other decisions. One choice – whether or not to include unaccredited investors – should be easy to make. For the reasons outlined below, it is strongly advised that only accredited investors be allowed to participate in a fundraising process.
What is an accredited investor? An accredited investor can be an individual or an entity. An individual can be considered accredited if he or she meets one of the following criteria:
net worth of at least $1,000,000 dollars (excluding the value of his or her primary residence); or
income at least $200,000 each year for the last two years (or $300,000 combined income if married) and have the expectation to make the same amount this year.
For entities, different criteria can apply depending on the form of the entity, but generally speaking, an entity will be considered accredited if all of its equity holders are accredited or it has greater than $5,000,000 in assets. Persons or entities that do not meet the above standards are referred to as unaccredited or non-accredited investors. While this is not an insignificant amount of money, the threshold is not very high. Especially if the person in question is considering investing a substantial amount of money in an uncertain venture that, even in the best of circumstances, may not make any money for years to come.
To understand why this definition is important, you must understand how sales of securities are regulated in the United States. At a high level, federal securities law requires that any sale of securities must either be registered with the Securities Enforcement Commission (SEC) or issued pursuant to an exemption. A full description of each exemption available to companies is beyond the scope of this article. But most private offerings of securities make use of the safe harbor exemption from registration known as Regulation D (in the parlance of our times, Reg D). There are three exemptions under Reg D (note the descriptions below only address the accreditation and disclosure issues discussed in this article and ignore issues related to general solicitation and restricted securities):
Rule 504: Allows for an exemption for the offer and sale of up to $5,000,000 of securities in a single twelve-month period.* Unlike some other exemptions, this exemption allows for a private sale without any specific disclosure requirements (note that the anti-fraud provisions of the federal securities laws still apply). Sales can generally be made to an unlimited number of accredited or unaccredited investors.
*Prior to adoption of new rules on October 26, 2016, the aggregate amount of securities that could be sold pursuant to Rule 504 was $1,000,000. The new rules also eliminated Rule 505.
Rule 506(b) and (c): Has the same criteria and guidelines as Rule 505, with one additional requirement – in the case of a 506(b) offering, all non-accredited investors must be sophisticated (i.e., “must have sufficient knowledge and experience in financial and business matters to make them capable of evaluating the merits and risks of the prospective investment”). This is an amorphous standard and creates yet another potential issue for the company offering securities. While beyond the scope of this article, it is worth mentioning that a Rule 506(c) offering, which permits general solicitation and advertising (normally not allowed under a 506(b) offering), cannot include any non-accredited investors.
The most important takeaway from the descriptions of the exemptions above: if you wish to undergo an offering without limitations on the number of investors, size of amount raised, or without specific disclosure requirements, you must sell only to accredited investors. Any offering which includes unaccredited investors, whether done under 504 or 506, will impose at least one of these restrictions on the offering.
Beyond the above-mentioned restrictions, there are other reasons not to include unaccredited investors in an offering. For one, it is not unusual to give investors the right to invest in future financing rounds – often referred to as a preemptive right. This is fine, provided no investors are unaccredited, but would be an issue for a company that has existing unaccredited investors with the right to invest in future rounds. Suddenly, a future financing round may inadvertently involve unaccredited investors and this may require a company to spend time and money developing fulsome disclosure documents or risk violating securities law. Another concern, while not immediate, is that if the company wants to go public, the SEC may evaluate all prior issuances of stock by the company and require that it take remedial actions to cure any past violations of securities laws, which might delay or imperil the IPO.
While any emerging company would be wise to restrict its offering to accredited investors, cannabis companies should be especially vigilant. Securities regulators, both on a federal and on a state level, made it clear that they consider the cannabis industry to be an area of special concern. Not because of the ongoing federal illegality of cannabis, but because of the increased risk of fraud in such a new and dynamic industry. The last thing any cannabis company should want to do is take any action that could expose them to the ire of regulators.
What if your investors are Canadian? After all, almost $500,000,000 Canadian dollars were raised last year in the Canadian public markets, and many Canadian investors are eagerly eyeing U.S.-based assets. Setting aside any Canadian securities laws issues, which are beyond the scope of this article, a Canadian or Canadian entity can certainly qualify as an accredited investor and allow an issuer to rely on Reg D. But be sure to have any Canadian investors carefully review their accredited investor questionnaire (a document issuers should require investors to fill out certifying what criteria marks them as accredited) they provide in connection with the offering – while Canadians are familiar with their version of accreditation, the qualifications differ just enough from US qualifications to be a potential issue. Note that there can be additional complications involved with accepting foreign investment, both for the investors and the company raising capital beyond those related to securities law.
It is also worth mentioning that the underlying policy arguments for restricting offerings (in the absence of fulsome disclosures) to accredited investors become even stronger in the cannabis industry. The risk of failure, and the total loss of investment, is undoubtedly present in an industry and remains federally illegal and operates based on federal guidance that could be changed at any moment. And investing in a cannabis company requires an even higher level of sophistication than a typical deal because of the challenges involved. A company should not accept money from investors who cannot handle the risk of losing their entire investment – not only is this unfair to the prospective investor, but any burned investors who end up in a financially precarious situation increase the risk of damaging litigation. While it may be tempting to accept funds from non-accredited investors, all the above issues can be readily avoided if non-accredited investors are not permitted to participate in a company’s offering.
This information is educational only and shall not be construed as legal advice. Please consult your attorney prior to relying on any information in this article.
Charles Alovisetti is a senior associate and co-chair of the corporate department at Vicente Sederberg LLC. Prior to joining Vicente Sederberg, Mr. Alovisetti worked as an associate in the New York offices of Latham & Watkins and Goodwin where his practice focused on representing private equity sponsors and their portfolio companies, as well as public companies, in a range of corporate transactions, including mergers, stock and asset acquisitions and divestitures, growth equity investments, venture capital investments, and debt financings. In addition, Mr. Alovisetti has experience counseling portfolio and emerging growth companies with respect to general corporate and commercial matters and all aspects of compensation arrangements, including executive employment and consulting agreements, stock option plans, restricted stock plans, bonus plans, and other management incentive arrangements. Mr. Alovisetti has experience in both U.S. and cross-border transactions, and advised clients across a range of industries prior to focusing on the cannabis space. He holds a Bachelor of Arts, with honors, from McGill University and a law degree from Columbia Law School, where he was a Harlan Fiske Stone Scholar. Mr. Alovisetti is admitted to practice in both Colorado and New York and is a Level One Interpener. He can be reached at charlie@vicentesederberg.com. Follow him on Twitter @CAlovisetti.
Michael Heyward is a law student at the University of Denver Sturm College of Law and a law clerk at Vicente Sederberg LLC. He holds a Bachelor of Arts in History and Political Science, and a Master’s Degree in History from Florida Agricultural and Mechanical University.
Growing With Our Members: NCIA’s Membership Department in 2017
By Meredith Bower-Holt, Director of Membership and Development
2017 is well underway and all current NCIA members should have received their annual membership mailings. We hope you took a few minutes to review the contents of the folder, which contains information relevant to you and your business. As NCIA’s new Director of Membership & Development, I wanted to introduce the department and share an overview of our plans and goals for the coming year.
More NCIA staff to serve you
NCIA’s Membership Department has expanded substantially in the last few months! I joined the team in the fall of last year, as did Jon Dinh, our Membership Coordinator. Then Curtis Stafford and Rachel Kurtz were hired as NCIA’s Business Development Managers at the start of this year.
We are now five strong in the Membership & Development department, including NCIA veteran Jeremy DePasquale as Membership Manager. That evolution is really exciting, as NCIA is poised to grow its membership numbers significantly in the coming year.
Access to NCIA’s Government Relations team
NCIA membership comes with numerous tangible benefits. For example, did you know that if you’re planning a trip to Washington, D.C., NCIA’s Government Relations staff will work with you to set up meetings with your congressional representatives, establish your goals for the meetings, and even attend the meeting with you? It’s a fantastic opportunity if you find yourself in D.C. and want to advocate for your business and the industry as a whole.
NCIA Committees
NCIA’s councils are now called committees, and all current members will be invited to apply to sit on a committee during a formal process in the spring of 2017. The kick-off meetings for several new committees will take place during NCIA’s Cannabis Business Summit in Oakland, CA, June 12-14, 2017. You can read more about the committees on our website. If you have a suggestion for a committee other than those currently listed online, please contact us.
Your valuable contributions and participation can also grow your network within the industry and help further NCIA’s mission. Committee work helps establish the kind of industry that we all want by creating standards and establishing best practices for various industry sectors. Participating in an NCIA committee also demonstrates a commitment to industry development that proves our members are serious business owners with a common, united purpose.
Become an NCIA Ambassador
NCIA is expanding its Ambassador Program, which is a way for members to support NCIA and earn incentives by recruiting new members. NCIA Ambassadors help ensure the success of the association and the cannabis industry by strengthening our membership base. From promotional opportunities for your business to free event registrations, we’re making it easy for you to earn rewards for bringing more business owners into NCIA’s community.
Coming Soon! Member Community Forums
Coming soon is an online community platform that will allow for limitless members-only discussion groups on cannabis industry-related topics. For example, member lawyers can ask questions of fellow cannabis attorneys through a convenient online platform that will also allow for the sharing of documents and other media securely.
NCIA’s Committees will have their online ‘homes’ on this platform, as will members who’ve offered to speak at one of NCIA’s events. This platform will allow you to find other members like yourself via sophisticated search functions. We plan to launch this online platform in the late spring.
And more…
Additionally, we’re working on new partnerships that will add value to your NCIA membership and improve your bottom line, including new money-saving insurance options, an energy efficiency program for our cultivator members, and more.
In sum, there’s a lot going on in NCIA’s Membership & Development department, and we’re thrilled about what’s to come in 2017. We love hearing from you, so if you have questions, comments, suggestions, or concerns you’d like to share, please contact us at info@thecannabisindustry.org or (303) 223-4530.
Here’s to a happy, healthy, and successful 2017 from NCIA’s Membership Department!
Member Spotlight: Cannabase
In this month’s NCIA Member Spotlight, we speak with Jennifer Beck, co-founder and Managing Director of Cannabase, a wholesale cannabis marketplace and technology dashboard. Cannabase is headquartered in Denver, serving more than 75% of marijuana licenses in Colorado, with plans to expand nationwide in 2017.
Cannabase
Cannabis Industry Sector:
Wholesale Distribution, Technology
NCIA Member Member Since:
2014
Tell me a bit about your background in cannabis and why you launched Cannabase?
Cannabase co-founders, Chase Beck and Jennifer Beck
When my husband, Chase Beck, and I co-founded Cannabase, we had a background in technology and a passion for cannabis. Not only were we amazed by the incredible science surrounding medical marijuana, but we also believed that cannabis was a much healthier alternative to alcohol for general adult-use purposes. The idea of being part of an emerging industry – helping to shape the framework while increasing its validity and chances of survival – was a really exciting idea to us.
What unique value does Cannabase offer to the cannabis industry?
Cannabase is the oldest and largest online wholesale marketplace in Colorado, providing a safe and compliant platform for businesses to connect over wholesale bud, trim, extracts, seeds, and edibles. We represent over 75% of the licensees in the state in our intuitive, automated platform, streamlining wholesale purchases and aggregating the powerful market data that drives our market statewide. Cannabase will be expanding nationwide in 2017, and is the exclusive wholesale partner of BioTrackTHC and MJ Freeway point-of-sale systems, which makes Cannabase the only firm to have direct, non-self-report access to virtually the entire Colorado market’s real-time inventory.
Cannabis companies have a unique responsibility to shape this growing industry to be socially responsible and advocate for it to be treated fairly. How does Cannabase help work toward that goal for the greater good of the cannabis industry?
Cannabase was founded on the principle that legal cannabis was a statewide experiment, and the health of the industry was critical to that experiment being considered a success. As a result, we’ve treated compliance, transparency, and integrity as non-negotiable cornerstones of our company’s evolution and product development. We’re disciplined in our vetting of licensed businesses and ensuring that anyone using our product has a valid license with their state and uses the site appropriately. Similarly, we’re passionate about supporting industry groups like NCIA that are doing amazing work for the future of our industry. We believe that investing in industry groups is as important as ever, especially in light of the changing political climate.
What kind of challenges do you face in the industry and what solutions would you like to see?
We still see the ramifications of the overarching federal limitations and restrictions – primarily 280E (which squeezes capital industry-wide) and lack of banking. These roadblocks impede progress for all cannabis businesses, and make it more difficult for ancillary businesses to solve the critical day-to-day challenges faced by our customers.
Why did you join NCIA? What’s the best part about being a member?
We love the work NCIA does to strengthen, connect, empower, and fight for the legal cannabis industry. In the three years we’ve been in the cannabis industry, we’ve never experienced anything short of total professionalism from the staff at NCIA. It’s a group that never under-delivers, and has been a pillar for community and our community’s future. We are proud to be a part of NCIA and look forward to seeing what 2017 brings!
Note: NCIA member profiles highlight members and stories within our cannabis industry community. They do not constitute an endorsement or recommendation of specific products or services by NCIA.
VIDEO: Member Spotlight with Shift Cannabis Co.
This month, we introduce you to Travis Howard, co-founder of Shift Cannabis Co., a cannabis consulting firm for cultivators and retailers based in Boulder, Colorado. Travis explains his company’s values surrounding corporate social responsibility with an emphasis on boutique business models.
Note: NCIA member profiles highlight members and stories within our cannabis industry community. They do not constitute an endorsement or recommendation of specific products or services by NCIA.
Member Spotlight: THC Design
To kick off 2017, we’re highlighting NCIA Member THC Design, whom you may have met as a sponsor of some of our Quarterly Cannabis Caucus events in 2016. Seth Hilsabeck, the company’s Chief Operating Officer and Head of Research & Development, tells us a bit more about THC Design, a family-oriented cannabis cultivation company based in California, and what they’ve been up to as a company since launching publicly in 2014.
NCIA Member Member Since: June 2016
Tell us about your background in cannabis and why you joined the team at THC Design?
Seth Hilsabeck, COO & Head of R&D
President/Owner Ryan Jennemann and I both grew up in Oklahoma and have been close friends since grade school. Both of us have had a fondness and passion for cannabis and its many efficacies since being teenagers. Ryan was lucky enough to be taught to grow by his father in their backyard between their tomato plants. Ryan witnessed his father suffer from chronic migraines for as long as he can remember. With little to no access to safe cannabis, Ryan’s father was forced to continue managing his pain with opioid prescription drugs which ultimately lead to his death at the age of 47. Determined to prevent other families from suffering through similar tragedies, Ryan moved to California to spread his wings as an advocate and cultivator in the medicinal cannabis movement.
I was back home quietly using cannabis to alleviate the symptoms of my cerebral palsy. I soon began to take notice of the new legal movements in Colorado, quickly making new friends in the industry. Ryan and I were suddenly reunited back in Oklahoma in late 2013 at a funeral for a close friend of ours who had passed away. We quickly began comparing notes and talking of our passions for the future of cannabis. Soon after, I moved out to California to help with publicly launching THC Design with Ryan in Los Angeles.
What unique value does THC Design offer to the cannabis industry?
We aim to set the standard for advanced cultivation practices and techniques while taking steps to create a self-sustainable operation via renewable energy resources. By partnering with leading scientists in various fields, THC Design hopes to break new ground in the cannabis industry. We are committed to making scientific advances in identifying the roles of not only THC and CBD, but also the dozens of other compounds in cannabis that can potentially benefit patients. This will help us breed better plants that can acutely treat diseases and ailments, all while producing safer quality medicine year in and year out.
Cannabis companies have a unique responsibility to shape this growing industry to be socially responsible and advocate for it to be treated fairly. How does THC Design help work toward that goal for the greater good of the cannabis industry?
THC Design team, Beach Clean-Up with Surf Rider
Building a community and contributing our voice to the cannabis industry is extremely important to our THC Design Family. We support national and local advocacy groups such as NCIA, CCIA, and Americans for Safe Access to address legalization, access, and research of cannabis. We work closely with lawmakers and policy writers to ensure fairness in the ongoing organization and regulation of cannabis in California. Reaching out to the community is a huge part of who we are. Last year we worked with Surf Rider Foundation for a beach clean-up, Midnight Mission to help with their lunch service, and afterwards we hit the streets and passed out over 1,500 fleece blankets to the homeless just in time for the winter chill. Many similar projects are in the pipeline for 2017.
Why did you join NCIA? What’s the best part about being a member?
Joining NCIA is very important to us so that we can remain at the forefront of one of the few national organizations for cannabis advocacy. The network of top companies and individuals involved is a vital part of our efforts to help the cannabis industry in the U.S. grow and to be respected across the globe.
A Year of Cannabis Learning: The 2016 Member Post Round-Up
2016 has been another great year of connection, inspiration, and education within our growing industry.
Some of the most valuable wisdom, insight, and learning in the industry comes directly from our members, and you can find it right here on NCIA’s blog. Today we look back at the year in Member Posts. Did you miss any the first time around? Check them out here:
Are you interested in submitting a guest blog post for NCIA’s website? Please reach out to Bethany Moore by emailing bethany@thecannabisindustry.org to propose your topic.
Registration Now Open for NCIA’s 2017 Quarterly #CannabisCaucus event series!
Following the successful first year of NCIA’s Quarterly Cannabis Caucus event series, we are excited to announce our 2017 schedule starting in January. Thank you to the 3000+ people across the country that attended throughout 2016 to network, hear from industry thought leaders and elected officials, and to engage with our advocacy work on the national level!
The Quarterly Cannabis Caucuses will continue to be held on Tuesdays and Thursdays throughout the first month of each new quarter in the cannabis industry’s 8 most established regions. You can view the full list of dates and locations for Q1 hereand we will then follow the same schedule in April, July and October. Please join us next month in a region near you!
Northeast – Cambridge, MA – Tuesday, January 10 – REGISTER NOW Washington – Seattle, WA – Tuesday, January 10 – REGISTER NOW Colorado – Denver, CO – Thursday, January 12 – REGISTER NOW Oregon – Portland, OR – Tuesday, January 17 – REGISTER NOW Tri-State – New York, NY – Tuesday, January 17 – REGISTER NOW Southern California – Santa Monica, CA – Thursday January 19 – REGISTER NOW Northern California – San Francisco, CA – Tuesday, January 24 – REGISTER NOW Midwest – Chicago, IL – Thursday, January 26 – REGISTER NOW
an organizational update so you can keep up to date with what NCIA is doing for you
the opportunity to network with the leaders in the cannabis industry
In-person opportunities to learn about exciting new products and services showcased by our member businesses
So what are you waiting for?! Sign up today and join us in January to learn from the experts on what to expect and how to contribute moving into 2017.
Don’t see your region on the list? Don’t worry! There will be plenty of ways for you to engage with NCIA in 2017 and if you’re interested in learning more about ways to help grow the NCIA community near you please contact Jeremy DePasquale at membership@thecannabisindustry.org today.
We couldn’t be more thankful to all our sponsors, media partners and event hosts that made 2016 such a success and hope you’ll join us in showing them some appreciation for the enormous support! Please follow the links below to learn more about each of these amazing businesses or groups then reach out to see how they might be able to help you.
Interested in sponsoring an upcoming Cannabis Caucus in your area or a series of events across the country? Contact Brian Gilbert at brian@thecannabisindustry.org to inquire on availability and pricing.
See you at the next #CannabisCaucus in 2017!
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It can be tricky enough to find funding for a new business in any industry, but marijuana businesses are at that much more of a disadvantage. Strict regulations, less-than-favorable taxation laws, and straight-up illegality of federal funding stack up against those looking for their starting dollar in the industry.
In a career that encompassed a dozen start-ups, Gary Cohen has held leadership roles with Verizon and AT&T, has managed technology-oriented research practices for Nielsen, Milestone Group and ITG/MScience, and led software/internet ventures Shoptok, Birdstep and Handmade Mobile. He has also been on the boards of several tech start-ups, including Onavo (acquired by Facebook), OpenSignal, Cenoplex and Adello. Gary has a Bachelor of Science in Finance and a Master of Science in Marketing. 
Federal regulations force most companies operating in the cannabis space today to deal primarily in cash. If you look back at emerging industries, operating only in cash doesn’t foster an environment for growth. Think of it this way: in a cash environment, a company with $1,000 in cash can buy only $1,000 worth of goods, but in a trade credit environment, a company with $1,000 in cash and $2,000 in trade credit can buy $3,000 worth of goods. Potential income from retail sales has tripled.
Scam artists are understandably loathe to subject themselves to questioning from a skeptical lawyer. Sunlight is the best disinfectant and most scams will not stand up to a thorough vetting. Legitimate business professionals, however, while not always happy about it, accept that dealing with lawyers is the price to be paid to get deals done.
will tell you:
Ryan Lewis is the VP and Head of Global Sales for Folium Biosciences of Colorado Springs, CO. Folium Biosciences is the largest vertically integrated producer, manufacturer, and distributor of hemp derived phytocannabinoids in the U.S. Folium, along with their exclusive distributor, 
It’s such a thrilling time to be an up and coming cannabis company. And if you’re looking to build a brand, it’s also a critical time to ensure you’re making all the right moves to build a solid brand foundation that can ensure you capture market share. The cannabis “brandscape” holds a lot of opportunity, if you use the right approach. 
Lisa Hansen has more than 15 years of marketing experience, working across a wide range of industries, from technology to packaged goods. At 
2016 was a very active year for the cannabis capital markets in Canada, with the total amount raised by publicly traded cannabis companies exceeding $500 million Canadian (around $381 million U.S. at today’s exchange rate). Most of this activity took place after the April 20th statement by the Canadian government stating that legislation to legalize adult use of cannabis would be forthcoming in the spring of 2017. Unlike in the U.S., where investment banking services are generally not available to public cannabis companies, Canadian investment banks have been active in raising capital for Canadian Licensed Producers (LPs – described in further detail below). Also in contrast to the U.S. market, these firms have begun to publish research on the public companies.
Kevin M. Walters, MS, is a doctoral student at Colorado State University in Industrial-Organizational Psychology (
NCIA’s councils are now called committees, and all current members will be invited to apply to sit on a committee during a formal process in the spring of 2017. The kick-off meetings for several new committees will take place during NCIA’s 
We aim to set the standard for advanced cultivation practices and techniques while taking steps to create a self-sustainable operation via renewable energy resources. By partnering with leading scientists in various fields, THC Design hopes to break new ground in the cannabis industry. We are committed to making scientific advances in identifying the roles of not only THC and CBD, but also the dozens of other compounds in cannabis that can potentially benefit patients. This will help us breed better plants that can acutely treat diseases and ailments, all while producing safer quality medicine year in and year out.
