Register today! NCIA’s Cannabis Industry Lobby Days – May 16-17, 2017
Eager to get more involved in cannabis politics and make your voice heard? Wondering how you can help secure the future of our industry in a time of uncertainty? Good news! NCIA’s annual Cannabis Industry Lobby Days in Washington, D.C. are coming in May.
It’s one of the most important ways you can stand up for cannabis reform and your business, and we don’t want you to miss it.
So CLICK HERE TO REGISTER TODAY and join us on May 16 and 17 for NCIA’s 2017 Cannabis Industry Lobby Days. NCIA’s Lobby Days provide the best opportunity to show our nation’s decision-makers what a responsible and legitimate cannabis industry looks like.
NCIA’s 2016 Cannabis Industry Lobby Days. Photo: Kim Sidwell, Cannabis Camera
NCIA members from across the country descend on Capitol Hill to tell their stories and urge their representatives to fix the unfair tax and banking policies crippling our industry.
With victories in eight states across the country during the 2016 presidential election, as well as the challenges ahead of us as we see a new administration come in to the White House, fixing federal policies is more critical than ever. Our team in Washington, D.C., works every day to make the industry’s voice heard, but nothing matches the power of a personal story personally told.
We’re excited that this year’s Lobby Days are being held in conjunction with the Spring 2017 Marijuana Business Conference & Expo, May 17-19 in Washington, D.C. MJBizCon is generously extending a $100 discount on full conference registration for Lobby Days attendees so be sure to register for Lobby Days and we’ll send the discount code in your confirmation e-mail.
We look forward to seeing you in 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!
State Campaigns: Yes on 1 to Regulate Maine
**Editor’s Note: As we enter the homestretch of the critical 2016 campaign season, NCIA has invited the state campaigns on marijuana policy to submit blog posts about the important work they’re doing. These campaigns need the support of the industry and the movement as they approach the finish line. If you haven’t already, please consider making donations of money or time to one or more of the state campaigns that are working to end the failed policies of marijuana prohibition.**
The Maine campaign to make marijuana legal is on track for victory on November 8! Yes on 1: Regulate and Tax Marijuana has held a double-digit lead in the polls since the beginning of this year. Mainers have a long history of cannabis reform, starting back in 1976 with the decriminalization of marijuana. Maine’s largest city, Portland, passed a local ordinance legalizing marijuana in 2013, and South Portland did the same in 2015. Over 100,000 Mainers signed our petition, and we are optimistic that the majority of Mainers agree.
Our messages are simple: regulating marijuana will generate tax revenue for our state, free up law enforcement’s precious resources, and give access to patients who don’t qualify for medical marijuana currently.
We are grateful to our supporters who stepped up to speak out in favor of Yes on 1 — supporters like Mark Dion, the former sheriff of Maine’s largest county, and Carey Clark, a registered nurse and university professor.
Soon, our advertisements, featuring these supporters, will be on TV and online. In the meantime, please take a moment to watch our latest campaign video:
To support the campaign financially or to get involved on the ground, please visit: www.RegulateMaine.org
Editor’s Note: In January, Ean Seeb, who serves on the Board of Directors for NCIA and is co-founder of Denver Relief and Denver Relief Consulting, coordinated with NCIA’s Director of Government Relations Michael Correia to arrange personal meetings with congressional offices in Washington, D.C.
Ean Seeb speaks at NCIA’s Policy Symposium in 2015
In December, while planning for a January business trip to Washington, D.C., I realized that I should take the opportunity to use some downtime to lobby Capitol Hill offices on issues affecting the cannabis industry. I reached out to NCIA’s Executive Director Aaron Smith and Director of Government Relations Michael Correia and announced my intention. I was amazed at their responsiveness and support for my idea.
The whole planning process was quite easy. I let them know the date I was available and the focus of my trip and let the D.C. office coordinate logistics. Denver Relief Consulting has business interests in Hawaii and I wanted to focus on that state’s Congressional delegation. My goals were to update offices on medical marijuana implementation in Hawaii and ask these offices to co-sponsor The Small Business Tax Equity Act of 2015 (S. 987 & H.R. 1855), which amends Internal Revenue Code Section 280E to allow cannabis businesses in compliance with state law to take standard tax deductions and credits relating to business expenses.
The trip went very smoothly. I met up with Michael the evening before our meetings to discuss issues and logistics. Although I am well-versed on issues affecting our industry, it was really informative for me to sit down with him and discuss our focus, strategy, and talking points. We were joined by NCIA Member Tae Darnell, CEO of Sensi Media, whose background on cannabis reform in Hawaii goes back many years and was a great asset to our meetings.
We visited offices in both the Senate and House of Representatives, and each office was very informed about cannabis issues, was responsive to our concerns, and asked insightful questions. I remember back in 2013 when NCIA held its 3rd annual member lobby days. During those meetings, staffers would drop their jaws and say “You’re here to talk about what?” It was almost humorous because, back then, staffers were still in shock that cannabis issues were being brought to them. This time, one of our meetings lasted a full hour! The reception from congressional offices has evolved significantly over the past five years, and that can be attributed to the work NCIA has done on the ground.
The National Cannabis Industry Association’s 5th Annual Lobby Days in Washington, D.C.
Although our meetings were with Democratic offices, who tend to be supportive of our issues, they were still not co-sponsors of legislation that would solve our 280E tax problems. The offices really appreciated tying the issue to Hawaii and answering questions specifically related to the state and how 280E will negatively affect their constituents. Each of the offices will discuss co-sponsoring legislation in the future, and our D.C. office will continue working with them to gain their support.
I did my homework with information provided by NCIA through newsletters, packets, and the website. An hour’s worth of studying on the front end made for some really powerful and effective meetings. As an NCIA member, it was personally and professionally fulfilling to be able to leave the Capitol thinking, “Today, I made some good progress on our issues, and for our industry, through the work done with these folks.”
We love nothing more than getting our members in front of lawmakers. That’s where change happens. https://t.co/kcdYFf6oJT
I wholeheartedly encourage other NCIA members not only to go to NCIA’s 6th annual Member Lobby Days in May — but also to go to D.C. on your own. The NCIA Government Relations team will be there with you every step of the way.
As I was leaving, Michael said, “Please tell other members who happen to be traveling to D.C. that we are available for any NCIA member, at any time, who wants us to coordinate personal meetings with congressional offices.”
If you are interested in contacting NCIA’s Government Relations department to schedule meetings with Members of Congress in Washington, D.C., please email Government Relations Coordinator Michelle Rutter at michelle@thecannabisindustry for more information.
2016: What’s Next?
by Michelle Rutter, Government Relations Coordinator
This year is arguably the most crucial yet for the burgeoning cannabis industry, especially as it relates to policy. Although NCIA primarily advocates for cannabis reform at the federal level, what happens in each individual state is vital to the stances Members of Congress take on our issues.
Members of Congress care deeply about issues that directly affect their specific state or district. It’s imperative that more states enact cannabis reform legislation so that more Members have a vested interest in protecting their constituents. While cannabis reform is sweeping the nation at an almost unprecedented rate, it takes time for politicians in Washington, D.C., to catch up with public opinion back home. If all of the federal lawmakers representing just the 15 states mentioned below were to vote positively on pro-cannabis legislation, it would add up to more than 180 Representatives and nearly 30 Senators.
Take a look below and see what’s coming up next in 2016. Remember that by becoming a member of NCIA, you are adding your voice to the coordinated and unified campaign at the federal level to allow cannabis businesses access to financial services, fix tax section 280E, and ultimately end federal cannabis prohibition.
The United States of Cannabis
Arizona activists remain ahead of schedule and have nearly gathered the 150,000 signatures needed to put the state’s Campaign to Regulate Marijuana Like Alcohol initiative on the November 2016 ballot. (The campaign ultimately aims to collect 230,000 in order to insure against signature drop-off.) It’s estimated that Arizona’s adult-use market could be worth up to $480 million.
With a multi-billion-dollar cannabis industry in California alone, passing an adult-use legalization initiative in the state is vital to ending federal prohibition. The most prominent full retail initiative gathering signatures for the November 2016 election is the Adult Use of Marijuana Act, which is backed by billionaire Sean Parker and the Marijuana Policy Project.
Legalize Maine and the Marijuana Policy Project have joined forces to legalize adult-use cannabis in 2016. Legalize Maine has already collected 80,000 signatures. Only 61,000 signatures are necessary to place the measure on a statewide ballot, but the organization’s goal is 95,000, to insure against drop-off. The deadline to submit signatures is February 1st.
Last August, a pair of cannabis advocacy groups separately filed paperwork to get adult-use legalization on the 2016 ballot in Massachusetts. The state recently confirmed that a measure to legalize recreational cannabis next year has enough valid signatures to force the legislature to consider the measure. If the legislature decides to pass, then the campaign will have to collect another 10,792 signatures to formally make the November ballot.
There’s no question that adult-use legalization will be on the ballot this year in Nevada. Initiative Petition 1, which would tax and regulate marijuana similarly to alcohol, has been certified for the 2016 ballot. Backers had previously collected nearly 200,000 signatures to either force legislators to enact their initiative or put it on the ballot. When state lawmakers abstained from voting on the issue, the measure was automatically forwarded to this year’s ballot for a popular vote.
In Florida, the group United for Care received clearance from the state Supreme Court for a 2016 ballot measure that would legalize medical marijuana. The group nearly succeeded in legalizing medical marijuana in 2014, garnering 58% of the vote but falling barely short of the state’s constitutionally mandated 60% margin needed to pass,
The nation’s capital continues to debate cannabis. In December’s federal budget bill, the taxation and regulation of marijuana in Washington, D.C., was blocked by Congress again, though possessing and gifting cannabis remains legal in the city.
This month, Hawaii will begin accepting applications for medical cannabis businesses. The bill signed into law last summer opens the door for up to 16 dispensaries on the islands.
It was recently announced that Illinois saw approximately $1.7 million in medical cannabis sales during November and December of 2015. There are already petitions being circulated in the state that would expand the law’s qualifying conditions.
Maryland will award cannabis cultivation, processing, and dispensary licenses this summer. Industry advocates were pleased with the amount of interest the state’s program garnered: more than 1,000 applications were submitted.
Officials in Michigan have approved language for three different adult-use cannabis legalization initiatives for the 2016 ballot. In order to have the best chance of passing, it’s important for these groups to coalesce behind one initiative.
At the end of 2015, New Hampshire began issuing medical marijuana cards to qualifying patients. It’s expected that the state will open medical dispensaries in 2016.
After a long and arduous journey, New York’s medical cannabis program became operational this month. The cannabis industry expects the program and the law’s qualifying conditions to expand this year.
In the first week of 2016, Oregon began accepting adult-use cannabis business license applications. The state has no limit on how many licenses they will decide to award.
Vermont may become the first state to legalize adult-use cannabis through the legislative process in 2016. The proposed bill would allow for up to 86 storefronts and five different business license types.
Bonus: Election 2016 – Yes, We Canna
As we all know, a new president will be elected this November, and with that a new administration will assume power next January. It is very crucial that Congress pass more pro-cannabis legislation before then.
It’s probable that Attorney General Loretta Lynch will be replaced in 2016 or early 2017. This is important because it is the Department of Justice that enforces and prosecutes federal marijuana laws.
Another possibility for 2016 is that the acting head of the Drug Enforcement Administration, Chuck Rosenberg, could be replaced as well. Rosenberg is notorious for his gaffe last year when he called marijuana “probably” less dangerous than heroin.
On New Year’s Eve, officials from the Substance Abuse and Mental Health Services Administration posted a notice on the Federal Register that calls for a report “presenting the state of the science on substance use, addiction and health” to be released in 2016. Industry advocates are hopeful that this report could be the first sign of re- or de-scheduling cannabis from the Controlled Substances Act.
During 2016, NCIA will continue working with D.C.-based public affairs firms Heather Podesta + Partners, and Jochum Shore & Trossevin PC to magnify our efforts to address the industry’s top federal priorities: access to basic banking services and fair federal taxation.
In addition to NCIA’s lobbying and advocacy efforts, NCIA exists to connect and educate our members on all facets of the cannabis industry. Our industry supports tens of thousands of jobs, tens of millions in tax revenue, and billions in economic activity in the United States.Our core mission is to ensure that our members are treated like businesses in any other American industry. Join NCIA today to get involved and be a part of the cannabis revolution!
NCIA’s Inclusion Initiative, headed up by our Minority Business Council (NCIA-MBC), had a good start this year, and we were able to make a difference for dozens of people in the cannabis industry or working to enter the industry. Considering the Council had its first formal meeting only seven months ago, we have achieved a great deal in raising awareness and beginning to take on the mandate of creating a more inclusive industry.
We also have a good start to 2016. We’ve added an Inclusion Initiative contribution option to the registration forms for the 2016 Cannabis Business Summit and have already begun building up the scholarship fund.
But we can never rest on our laurels, and the expectations of the industry are great. There is talk about what else we can do to help promote inclusion in this industry, and now is the time to start the discussion.
The next meeting of the NCIA-MBC will be a planning meeting at 2pm MT on Tuesday, January 19th. To join the meeting, simply call in to the conference call line at (303) 416-5167. (No PIN is necessary.)
With this meeting, we’ll seek to get a little more formal in our efforts. The goal is to establish a representative committee and meeting structure to ensure we are at the forward edge of our work and that what needs to be done is getting done.
In an effort to continue the development of this initiative and grow the opportunities for those who face barriers within the industry, we are putting forward the notion of creating a more formal structure – guiding the development of the NCIA Inclusion Initiative by expanding the Minority Business Council and establishing a less formal advisory committee as well.
Therefore, we seek your input into two areas:
Please review the proposed rules for serving on the NCIA Minority Business Council. Then let us know if you would like to serve on the Council under these rules or would like to stay or become involved with the Inclusion Initiative through the less formal advisory committee.
Proposed Requirements for NCIA Minority Business Council (MBC) Members
Council members must be employees of NCIA member-businesses
Council chair must be a member of the NCIA Board of Directors and thus report to and from MBC
Chair and Vice chair are elected by the Council members
Secretary is appointed from NCIA staff
Only one person from any given member-business can serve on the Council (but there is no limit to how many people from a business can serve on the advisory committee)
Council members must be able to attend at least 3 in-person meetings and 3 telephone meetings during a calendar year
Council members must commit to a minimum financial contribution to MBC activities (examples: scholarship pledges, in-kind donations, etc.), exact amount to be determined by the Council at an affordable level to all
We believe the optimal number of people on the Council would be about 12, so we are looking for 12 strong volunteers who have a point-of-view and are eager to contribute on these critical issues.
If you own or are employed at an NCIA member-business, please feel free to nominate yourself for the Council. We also welcome your recommendations for others for us to follow through on and ensure we have the best recruits we can get.
Even if you are not part of an NCIA member-business, we invite you to join the advisory committee for NCIA’s Inclusion Initiative. On this advisory committee, you will be invited to every meeting and kept fully informed of action and activities, as well as have direct input into the Council and the Inclusion Initiative.
Please let us know of your involvement and interest before January 11th, so we can schedule a meeting and put structure in place for fuller development.
And as we head into 2016, we invite you to suggest and share resources for the Inclusion Initiative page on NCIA’s website, so that we can build it into a helpful presence for those looking for industry support and knowledge.
Thank you for your interest in the Minority Business Council and NCIA’s Inclusion Initiative. We look forward to expanding and building upon the success of 2015!
NCIA’s Minority Business Council: Robert Van Roo, Palm Springs Safe Access Joshua Littlejohn, Accannadations LLC Dr. Lakisha Jenkins, Kiona T. Jenkins Foundation for Natural Health Luke Ramirez, Walking Raven LLC
Policy Update: Success in the Senate
by Michelle Rutter, Government Relations Coordinator
In the first week of June, the cannabis industry was celebrating its victories in the House of Representatives. At the end of last week, we were celebrating a victory in the US Senate, too.
At the beginning of the month, the U.S. House of Representatives debated the Commerce, Justice, and Science (CJS) Appropriations bill (HR 2578), which funds applicable government agencies for the upcoming FY2016. This year, there were four cannabis-related amendments under consideration in the House: the Rohrabacher-Farr medical marijuana amendment, the McClintock-Polis adult-use marijuana amendment, the Bonamici-Massie industrial hemp amendment, and the Perry CBD oil amendment. You can read about the results of the House votes in this NCIA blog post.
On June 11, two cannabis-related amendments were brought before the Senate Appropriations Committee. Cannabis champion Sen. Barbara Mikulski (D-MD) offered a medical cannabis amendment, which would ban the Department of Justice from interfering with state-compliant medical cannabis businesses. In addition, Sen. Jon Tester (D-MT) offered a hemp amendment that would protect state industrial hemp laws from the Department of Justice’s interference. These amendments are the Senate companions to the House’s Rohrabacher-Farr and Bonamici-Massie amendments, respectively.
The Senate Appropriations Committee voted with Sen. Mikulski to protect state medical marijuana laws 21-9. Senator Jerry Moran (R-KS) changed his original ‘No’ vote to a ‘Yes’, while presidential contender and Senator Lindsey Graham (R-SC) also attempted to change his ‘No’ vote to a ‘Yes’, but was too late. Sen. Tester’s industrial hemp amendment also passed through the committee via voice-vote.
Victory is sweet, but it’s important to remember that these appropriations amendments only protect states’ medical cannabis and hemp laws for the upcoming fiscal year. As encouraging as the appropriations season has been, it is still imperative that we pass comprehensive cannabis banking and 280E reform bills in order to be treated like every other American business.
Below is the detailed vote breakdown from the Senate committee’s vote on the Mikulski amendment:
Republicans
Democrats
Thad Cochran (R-MS): No
Barbara Mikulski (D-MD): Yes
Mitch McConnell (R-KY): No
Patrick Leahy (D-VT): Yes
Richard Shelby (R-AL): No
Patty Murray (D-WA): Yes
Lamar Alexander (R-TN): Yes
Dianne Feinstein (D-CA): No
Susan Collins (R-ME): Yes
Richard Durbin (D-IL): Yes
Lisa Murkowski (R-AK): Yes
Jack Reed (D-RI): Yes
Lindsey Graham (R-SC): No
Jon Tester (D-MT): Yes
Mark Kirk (R-IL): No
Tom Udall (D-NM): Yes
Roy Blunt (R-MO): Yes
Jean Shaheen (D-NH): Yes
Jerry Moran (R-KS): Yes
Jeff Merkley (D-OR): Yes
John Hoven (R-ND): No
Chris Coons (D-DE): Yes
John Boozman (R-AR): No
Brian Schatz (D-HI): Yes
Shelley Moore Capito (R-WV): Yes
Tammy Baldwin (D-WI): Yes
Bill Cassidy (R-LA): Yes
Chris Murphy (D-CT): Yes
James Lankford (R-OK): No
Steve Daines (R-MT): Yes
Member Spotlight: Pioneer Nuggets
NCIA’s Member Spotlight for the month of May takes us up to Arlington, Washington, to speak with Fitz Couhig, CEO of Pioneer Nuggets, an indoor craft agriculture company that supports the adult retail consumer industry for cannabis in Washington State.
Cannabis Industry Sector:
Cannabis Cultivation
NCIA Member Since:
2014
How do you uniquely serve the cannabis industry?
We focus on the core competency of making a quality flower product for consumers. Focusing on a core competency and providing effective just-in-time inventory services are setting us apart. Our assembly-line work flow and perpetual production that supports our made-to-order inventory management system are unique as well.
Why should customers buy cannabis grown by Pioneer Nuggets?
Black Haze cannabis strain, grown by Pioneer Production and Processing, LLC
We serve consumers over the age of 21 that enjoy cannabis and visit an adult-use (+21) retail shop in the State of Washington. Adults should go with Pioneer Nuggets because they enjoy cannabis that is smooth and high in flavor profiles.
Can you give us some insight into the cannabis community in Washington, the challenges, upsides, and where you’d like to see it go?
The most unique challenge is being a wholesaler. No other taxed and traded system involves wholesaling and distribution, and we are required to do it without the help of any other organization. Serving retailers is what we do. We would like to see the industry move in the direction that allows retailers, processors, and producers to all thrive. We need tax reform and we need to be treated like normal businesses.
The Pioneer Nuggets team, based in Arlington, WA
How many employees do you have and how many customers do you serve?
We have 18 full-time employees and serve around 25 licensed retailers. It takes a lot of great people to continually make sensational products and provide excellent customer service.
Why did you join NCIA?
We joined NCIA for two reasons. One, the organization structure is well designed to develop a quality trade association for the cannabis industry we are a part of. Two, the team of people responsible for the NCIA and supporting its efforts and mission. We believe NCIA will succeed in creating the standards and forums industry professionals need, that our employees need, and that our organization needs.
Guest Post: Illinois Cannabis Businesses – Guidelines for Compliance with Illinois Employment Laws
By Jennifer Adams Murphy, Esq., and Ryan Helgeson, Esq., of Wessels Sherman
If you are successful in obtaining a dispensing or cultivation license under the Illinois Compassionate Use of Medical Cannabis Pilot Program Act (“IMCA”), you have already made a substantial time and financial investment in your new business. You know that to be successful, you must have a dependable workforce. Continued success, however, will require employment policies which will minimize the substantial risks and costs of employment litigation and regulatory challenge. To that end, the following issues should be addressed before you begin to hire employees:
Hiring Considerations
Needless to say, your application process must be compliant with state and federal discrimination laws. Of specific relevance to your business will be federal and state laws pertaining to arrest and conviction records. The EEOC generally considers blanket rejection of applicants with conviction records illegal, and state and federal laws prohibit inquiries regarding arrest records. These laws require special attention in your business because the IMCA requires that all employees of a dispensing organization or cultivation center obtain an “agent identification card” which will not be issued under the (proposed) regulations when an applicant has been convicted of violent crimes and certain felonies. Without a card, an individual cannot commence employment under the IMCA. Because of the potential conflict between IMCA regulations and these employment laws, the safest practice is to advise applicants that their employment is contingent upon their receipt of an identification card from the state (rather than incorporating the conviction restriction into your application).
The IMCA requirements for issuance of an agent identification card, which appear to require an applicant to have a Social Security card, are in potential conflict with I-9 employment authorization requirements. Pursuant to I-9 regulations, an employer may not specify which documents an employee provides to demonstrate their employment authorization. An employee can provide any documents that satisfy the Form I-9 requirements; employers cannot insist upon a particular document such as a Social Security card. To avoid violation of federal law, your application process should clearly state that the required Social Security card and state identification card are to meet the agent identification requirements and not for employment authorization purposes.
A contract disclaimer should be included in your employment application to ensure the at-will status of any hired employees.
Employment Record Retention
The proposed IMCA regulations require that all employment-related documents be retained for five years. I-9 employment authorization forms must be completed and retained apart from employees’ personnel files.
Employee Classification
Employers who grow and transport cannabis may be able to take advantage of overtime exemptions under state and federal law. In certain situations, minimum wage exemptions may also be available. However, do not assume minimum wage or overtime exemptions apply — careful evaluation is required. Also, regardless of classification, hours worked must be recorded and retained.
Other Policy Considerations
An employment handbook should be considered. Handbooks should have contract disclaimers and must include anti-harassment policies. In addition, employment policies should address privacy issues, particularly given the regulatory requirements of video monitoring in this industry.
Required posters pertaining to employment laws must be posted.
Adoption of an employment dispute arbitration policy should be considered. A carefully drafted arbitration policy will provide for resolution of employee disputes through arbitration rather than in courts.
Voluntary compliance with the Illinois Drug-Free Workplace Act may be a wise choice. After a conditional offer of employment is made, cannabis cultivators may wish to require a drug screening. Thereafter, a program of reasonable suspicion or random drug testing could be implemented.
Employment laws are always challenging to navigate. The issues outlined above are examples of some of the issues which are easily overlooked or misunderstood. A thorough understanding of your responsibilities as an employer in this highly regulated area will diminish the risk of costly and disruptive claims.
For further information, please contact Jennifer Adams Murphy, Shareholder at Wessels Sherman Law Firm (630-377-1554 or jemurphy@wesselssherman.com) or Ryan Helgeson, Associate Attorney (312-629-9300 or ryhelgeson@wesselssherman.com).
Wessels Sherman is a law firm with offices in Illinois, Minnesota, Wisconsin, and Iowa with a practice limited to management-side labor and employment law, and has been a member of NCIA since September 2014. Ms. Murphy has been practicing for over 27 years, counseling clients and litigating before agencies and state and federal courts. Mr. Helgeson counsels and represents clients in connection with immigration and other employment-related matters.
For more on navigating the complex issues 0f human resources, register today for NCIA’s upcoming Educational Series event, Recruit, Retain, and Develop Your Talent, taking place on March 2 at the History Colorado Center in Denver!
Recruit, Retain and Develop Your Talent — This panel of experts will help you build your human resources competencies! They will present the latest trends in talent acquisition and management. You will learn how to select the best person for the position and your organization, discover how to set and align your teams towards organizational goals, and drive and engage your best performers while managing others, up or out! Acquire the knowledge and tools you need to ensure your employees and your organization are successful. Featuring: Kara Bradford, Chief Talent Officer, Viridian Staffing — Carole Richter, Principal, CRichter ~ HR Consulting, LLC — Maureen McNamara, Cannabis Trainers.
NCIA Member Profile: MBank
In the course of less than a week at the end of January, Oregon-based MBank went from announcing that they would be doing business with cannabis companies in Colorado to breaking the news that they would be retreating from Colorado for the time being, unable to support the infrastructure required to offer these services in the state. As NCIA’s first bank member, we sat down with CEO Jef Baker to ask a few questions and get to know them better.
Cannabis Industry Sector:
Financial Services
NCIA Sustaining Member Since:
December 2014
One of MBank’s brick and mortar locations in Lake Grove, Oregon.
How does MBank uniquely serve the cannabis industry?
One of MBank’s goals is to serve the underserved. We recognize that serving the cannabis industry very much meets that objective. With that mission in mind, we set about figuring out how to provide banking services. We’re a little unique in that way as a bank has to be creative and innovative in order to go about solving problems.
Why should cannabis industry professionals looking for financial services use MBank?
While we recognize there are very few banks legitimately operating in this space and therefore few good choices for cannabis industry professionals, our hope is people choose to bank with us for the same reason anyone does. That means they understand what we’re about and hopefully appreciate wanting to partner with someone that has a vision they agree with. Beyond wanting to change the status quo with regards to banking, we also take great pride in customer service through treating people with respect.
NCIA’s primary mission includes advocating for equal access to banking, but many banks in this country are reluctant or not willing to work with cannabis business owners. What are your thoughts on the future of banking in the cannabis industry? How will this situation improve for the industry going forward?
Smaller banks will most likely lead the way as they tend to embrace innovation a little more than larger institutions. As banks successfully demonstrate their ability to serve this industry, more banks will follow. If there are additional changes at the federal level, that most likely would generate more banks entering this space.
What are some of the challenges that banks have to deal with to do business with the cannabis industry?
CEO Jef Baker inside one of MBank’s Oregon locations.
Our challenge is to make sure we support and serve customers who understand that compliance is critical. We feel it is extremely important to ensure we implement strong policies and procedures, especially for new lines of business. The systems created are not designed to be intrusive or overbearing, but they are developed to help us manage risk, as we interpret it, as well as those that regulate us.
Do you still want to do business in Colorado, or other states?
The reason we are one of the first banks to so aggressively enter this space is part of our mission is to serve a completely underserved market. We very much want to serve customers in Colorado but have discovered we need to build our program to better handle the huge volume there.
How do you characterize your relationship with regulators on marijuana banking?
It is our belief that regulators do not object to their banks providing services to the cannabis industry. We believe they do have a high expectation of their banks developing strong compliance programs in this area. This is new and we are all learning together. It is critical for us to have a strong relationship with our regulators.
Why did you join NCIA?
MBank currently offers banking services for the cannabis industry in Oregon.
We believe this organization wants to see the cannabis industry be treated fairly by helping ensure that quality banking services are available. That is right in line with our mission of serving the underserved. Our position is not one that supports legalization or advocacy for legal matters (that is for others), but rather a focus on providing an industry banking services they deserve, which means both access to services as well as treating people with respect. We believe NCIA is an organization that will allow us to further and pursue that vision.
If you are a member of NCIA and would like to contribute to the NCIA blog, please contact development officer Bethany Moore by emailing bethany@thecannabisindustry.org.
Guest Post: Tax Time – Using an LLC To Minimize Section 280E Selling Costs
Although there are many legal considerations when choosing the right type of legal entity for your business, one consideration that is often overlooked is Section 280E. Corporations, including S corporations, are required to pay reasonable salaries to owners and officers working in the business. By “reasonable” in this context we mean a certain minimum salary amount. This requirement is due to Social Security tax issues that are beyond the scope of this article. The point is that owners must draw a salary and if that owner is involved in selling, marketing and/or delivery, then these salaries are subject to disallowance under 280E.
IS A LIMITED LIABILITY COMPANY RIGHT FOR MY BUSINESS?
A Limited Liability Company is different in this regard. There is no requirement to pay a salary to the business owner who works the business. Instead the net profit of the business is the income reported by the owner. (This applies to both single-member LLCs as well as to multi-member LLCs that are taxed like partnerships.) When owners report net income rather than salary, then they have no salary expense to be disallowed under Section 280E.
CONSULT YOUR CPA
Note that this benefit does not have to be limited only to the founder-LLC member. It is possible, with proper advice and planning, to create an LLC structure whereby all of the workers get treated as LLC members. Such a structure could substantially reduce your 280E expenses and give you the competitive advantage you need to succeed.
Want to learn how to navigate the complex tax & legal landscape of the growing cannabis industry? Join us for NCIA’s first Cannabis Tax And Law Symposium on January 21-22, 2015 in San Diego, CA, offering CPE and/or MCLE credits to attorneys or accountants that attend to learn more about these important topics! Register today.
Luigi Zamarra, CPA, has been a member of NCIA since 2013. Luigi CPA is an accounting firm located in Oakland, CA, that helps all types of businesses and individuals with tax planning, tax compliance, and tax dispute services. Luigi specializes in the medical marijuana industry. He helps these businesses comply with IRC Section 280E so as to balance tax cost against audit examination risk.
*Disclaimer: NCIA does not provide legal or financial services or advice. Any views or opinions presented in this guest blog post are solely those of the author and do not necessarily represent those of the organization. You must not rely on the legal information on our website as an alternative to legal or financial advice from your lawyer or other professional services provider.
A Cannabis Credit Union May Offer Some Businesses Banking Relief, But It’s Not A Silver Bullet
Recently, the Fourth Corner Credit Union has made headlines by promising to be the first of its kind institution to serve the cannabis industry exclusively and provide the very types of banking services businesses sorely need.
We here at the Cannabis Business Summit recently caught up with Colorado’s Director of Marijuana Coordination and Cannabis Business Summit panelist to get his take on the recent developments.
CBS: Can you explain what is happening right now with the Fourth Corner Credit Union?
AF: They went through the same credit union process anybody else would go through, applied for a state charter, got a conditional state charter based on their business plan and the things that normally go into a state charter.
They went to NCUA with that. NCUA came back, according to Fourth Corner Credit Union, with “it will take us a year or two to process.” Four corners then went back to the regulations and saw that, to get a final state charter, it was only necessary that you apply for NCUA insurance.
And so upon review, The Department of Financial Services, which is a division inside the Department of Regulatory Affairs, gave them a final charter so they are now a state chartered credit union. The only step really left is not actually anything to do with deposit insurance, it’s to get a master account with the Federal Reserve. So they are now looking to get that master account which shouldn’t go to the board of directors. It should be an administrative procedure so they have some level of confidence that they can get a master account.
CBS: Why is this different that previous efforts to provide banking services that have failed?
AF: Well I’m not sure any efforts have failed, some things have come to fruition. But our entire strategy is, as many reasonable solutions that there are going forward we will do everything we can to see them continue on because we do believe this is a public safety issue. We’re hoping this is a good procedure forward but, again, we don’t see it as the final solution to this thing and we’ll continue with as many solutions to this problem as possible.
CBS: How closely do you work with the industry to find a solution to the banking problem?
AF: We meet pretty regularly with anybody who thinks they have some kind of possible solution. So we make ourselves incredibly available to industry on that.
CBS: Do you think this will work and at least provide some temporary relief to some of these businesses?
We’re hopeful but I can’t put odds on it. We’re monitoring it really closely. If they are able to set up a credit union, we’re hope that will provide some relief, even if it’s not a total fix.
When things change as fast as they do in the cannabis industry, it pays to stay ahead of the curve. Sign up today for the Cultivation Management Symposium on February 24-26 in Seattle to gain insight and network with leading industry experts and businesspeople.
Guest Post: Child-Resistant Marijuana Packaging – Better Safe Than Sorry
While the legislative landscape in the cannabis industry continues to evolve both locally and nationally, one element that seems consistent is the need for producers and marketers of cannabis-related products to act responsibly in protecting children from unintended access to their products, and for good reason. Though less likely that a child under the age of five would have the desire or wherewithal to consume a harmful quantity of a floral-based product, the compelling nature of some of the edible offerings such as candies and cookies makes the likelihood not a matter of if, but when. And considering the potential liability, purveyors of such products would be wise to take every precaution as it relates to packaging.
Child-resistant packaging dates back to 1970 when after a series of accidental overdoses, Congress passed the Poison Prevention Packaging Act of 1970 and along with it, specific protocol testing to validate the functionality of child-resistant (CR) packaging. As time evolved, additional products deemed dangerous to children such as insecticides and pesticides were also added, and in 1995, the protocol testing was modified to include a ‘senior-citizen component’ as many of them found current forms of CR packaging difficult to open. When considered along with the oversight from the Consumer Product Safety Commission (CPSC), the governing body for determining what requires CR packaging, this legislation has served both industry and citizenry effectively since inception.
It is well documented that when Colorado began offering recreational marijuana products, there were few packages well-suited for the industry, and while a number of new offerings are in development, many products are currently packaged in the least expensive container and with some dubious CR performance or unverified claims of meeting CPSC guidelines. Indeed Colorado has put forth guidance on the requirements for the market, but prudent producers of cannabis products, especially edibles, would be wise to make purchase decisions based on the true protection the packaging affords and not on price alone. Sooner or later, it would seem, an incident will take place where this very issue will take center stage, and based on our considerable expertise in the packaging arena, we think it to your advantage to be able to demonstrate that balanced judgment (price vs. protection) and proven components were considered when choosing a CR package. Presuming this choice was made well, being able to cite components similar if not identical to those used by the ethical pharmaceutical industry should go a long way to demonstrate reasonable consideration was in fact used to protect the product from accidental ingestion by a child.
A quote often noted by the CPSC is that “child-resistant packaging is not child-proof packaging and as such the components should be considered the last line of defense.”
Scott Simpson is Vice President at TricorBraun XpressPak, a Sponsoring level member of NCIA since July 2014, based in St. Louis, MO, with an office in Aurora, CO. TricorBraun, launched in 1902, has grown to become a leading source of rigid packaging and related services, and has extensive experience in this packaging segment and offers assistance to NCIA members in evaluating options for current or future packages.
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Needless to say, your application process must be compliant with state and federal discrimination laws. Of specific relevance to your business will be federal and state laws pertaining to arrest and conviction records. The 
An employment handbook should be considered. Handbooks should have contract disclaimers and must include anti-harassment policies. In addition, employment policies should address privacy issues, particularly given the regulatory requirements of video monitoring in this industry.
