Veterans And Cannabis: A Discussion With Congressional Champions
by Michelle Rutter Friberg, NCIA’s Deputy Director of Government Relations
Last week, NCIA’s Government Relations team honored the veteran community and Memorial Day through our latest #IndustryEssentials webinar. Our Director of Government Relations, Mike Correia, and I “Zoomed” with congressional cannabis champions Congressman Lou Correa (D-CA) and Congressman Earl Blumenauer (D-OR), as well as the cofounders of the Veterans Cannabis Coalition, Eric Goepel and Bill Ferguson. During the webinar, we talked about how through cannabis, veterans of all generations and with various conditions have experienced improvements in their quality of life and also discussed policy and legislation to address this conundrum. NCIA members can catch the full webinar recording, but in the meantime, check out a few highlights:
Congressman Earl Blumenauer (D-OR):
“In fact, if we were able to have the Veterans Administration (VA) embrace medical cannabis, veterans would get better care because they could deal directly with their primary care physician, who is in the best position to give them appropriate advice. But sadly, the VA is caught with this federal restriction and they have a very narrow interpretation of what they can do, and how they can do it, and they simply do not permit their physicians to work with veterans to discuss and work with — let alone prescribe — medical cannabis.”
Congressman Lou Correa (D-CA):
“These folks came back from the theater of war with a lot of invisible, psychological scars– many of them that never were addressed. Back when I was the Chair of the Veterans Affairs Committee in the state of California, I would go on to have town halls and I remember veterans more and more would ask me, ‘Hey state senator, what’s going on with cannabis? I prefer cannabis to opioids, it makes me feel a lot better, I’m being able to function much better, why can’t I be prescribed cannabis by my VA doctor?’ And that really set me off on a quest to address medical cannabis in reference to veterans. Now in Congress, that’s something that I’m trying to work on front and center, and when I say trying to — I am working on it — I’m trying to score some victories there and get this legislation to the President’s desk for a signature, but again in the context of an election coming up, it’s going to be a challenge. But nonetheless, I think it’s a task all of us must take to heart and work hard towards.”
Veterans Cannabis Coalition Co-Founders:
Bill Ferguson: “I think it’s really cool that both of those politicians you know — and you know, they’re not backbench guys either — they essentially say that, you know, like if we can get the VA bill to pass, that will be like opening the floodgates for the rest of the cannabis legislation, you know like the banking and all that kind of stuff. And I think they’re right because you know once you poke a hole in a dam, you know eventually a dam is going to break.”
Eric Goepel: “The problem is that they’re largely out of step with the population — like the general population and the veteran population. I mean Pew’s been tracking public support for medical cannabis legalization and adult-use legalization and it’s 92% in favor of medical use and 60 plus in favor of legalization. That’s pretty overwhelming when it comes to any political issue. Like these issues out-poll most politicians and popularity and certainly, maybe beyond like universal background checks, I can’t think of too many other major policy issues that have this level of public support that see no conversion into federal legislative change.”
We are all so grateful to the Congressmen and the VCC team for joining us. While Memorial Day has now passed, I’m continuing to feel so appreciative of our fallen service members. While all gave some and some gave all, the vast majority of our veterans are still unable to access safe, regulated cannabis, and since they fought for us, we’ll keep fighting for them.
Legal cannabis, for all of its promise, has failed – in some markets spectacularly – to live up to its economic potential. But while each self-contained state market faces its own combination of political and regulatory challenges, the core of the problem everywhere is basic economics. Legal markets exist to efficiently move goods from where they are best produced to where there is the greatest demand. But cannabis, straddling the line between emerging state regulation and the remnants of federal prohibition, has negotiated that legal chasm by violating the inviolable laws of supply and demand, with predictably disappointing results. Perhaps now, in the face of a disastrous recession, with legal and legalizing states in desperate need for jobs and economic stimulus, is the time to get it right by allowing licensed commerce between legal markets.
The inability to move cannabis across state lines creates myriad problems for legal cannabis market operators that have far-ranging effects for all stakeholders in the cannabis industry, from investors to employees down to the patients and consumers who use the end products. The hindrance to economic activity also slows economic growth, employment, and tax revenues to states that have legal cannabis sales.
Oversupply Vs. Undersupply
Oversupply of cannabis in states like Oregon, which has excellent growing conditions and a favorable regulatory environment, are completely artificial and created not by the true excess of cannabis, but by the current inability to export to more populous states. This oversupply causes prices to plummet, which benefits consumers in the short term but is disastrous for small and medium-sized businesses and has far-reaching impacts on the communities that rely on this agricultural cash crop. Long term, the effect of these artificially low prices is that small businesses fail and large businesses take their assets to scale, which reduces employment and revenues in the communities that produce cannabis and extract the profits for investors in the large firms. This reduces competition and diversity in the industry, which hurts the same consumers in the long run who briefly benefited from the low prices. This is not a theoretical or academic argument, as we have seen these exact dynamics play out in Oregon over the past three years, with a staggering failure rate and rapid consolidation across the industry. Hundreds of millions of dollars of local capital have been eradicated as small businesses funded by friends and family have been forced to sell out to larger operators just to cover the worst of their debts.
In states which experience undersupply of cannabis, whether due to poor growing conditions or unfavorable regulations (or both) prices rise, hurting legal customers and patients of state-legal operators right away. Businesses can ultimately suffer losses of potential revenue, even as prices climb when consumers turn to cheaper cannabis from the illicit market. This undermines the legal systems set up by these states and pushes consumers to less-safe, unregulated products. As consumers drift from the legal to the illicit market, again the small and medium-sized businesses that currently represent the majority of the industry become financially unsustainable will suffer most, with the same end result to cannabis stakeholders as an oversupplied market.
Meanwhile, the artificial boundaries make scaling a business nearly impossible without access to an unlimited pool of capital. If a company from Washington, for example, wished to scale up and access new markets, they would have to completely recreate their entire supply chain, and most of their administrative operations, equally increasing their overhead with physical space and labor, for each new state that they wanted to enter. Effectively, they would have to create a brand-new small business in each state instead of scaling their operations efficiently and just expanding sales efforts to new territories. This is complicated in the extreme, both logistically and financially. What is worse, those redundant operations will become completely obsolete when cannabis is de-scheduled and interstate commerce allowed. This will almost certainly lead to a mass lay-off in the cannabis industry for all multi-state operators seeking to consolidate their operations. This will improve their cost competitiveness and further accelerate price drops that particularly hurt small businesses and stakeholders across the industry.
In fact, the extreme difference between the current state of the industry and a future in which interstate trade is allowed creates perverse incentives to investment, as opportunities that may be attractive in the short-term will ultimately prove disastrous long term. For example, massive energy and water-intensive indoor growing operations would be needed for New York to supply its population locally, and those facilities would require billions in investment dollars. These investments would look fantastic if one could be assured that the current regulatory environment would not change. But, if de-scheduling or other federal action allows for interstate trade, these facilities would have only a few years to reap the benefits of high margins before having to compete on cost with cannabis grown outdoors in the fertile Emerald Triangle of Northern California and Southern Oregon, which can produce much larger quantities of high-quality cannabis with a fraction of the inputs.
Newly legal net consumption states like New York and New Jersey will struggle to match supply to demand for years after initial legalization, resulting in millions of dollars of lost revenue, lost employment opportunity, and lost tax collections as the state struggles to develop the capacity to meet demand in a place that has no history of large scale production. If states that have historically been net importers plan for interstate trade from the outset, they can have a thriving retail industry with fully stocked shelves by taking high-quality products from producer states like California, Oregon, and Colorado within months of being able to import. The rapid change from essentially no legal industry to a robust, rich, and diverse retail environment would provide immediate economic stimulus in the form of jobs, thriving small businesses, and tax revenues. If new states are forced to rely solely on cannabis that is grown, harvested, processed, and distributed within state lines, it could take many years to develop the full economic benefits that a legal market could bring to bear.
All of these issues can be avoided, or at least mitigated, by a shrewd approach to incremental interstate trade instead of an instantaneous switch from 25 or more siloed industries to one national, or potentially international, market. The dynamics of how different state regulations interact can be tested and worked out thoughtfully, allowing for a more seamless transition and a clear roadmap for federal regulation when cannabis is de-scheduled. Successful interstate trade on any scale, between even just two states, will clearly signal to investors that the future of interstate trade is of pressing urgency to incorporate into their investment strategy. An investor in New York could then focus on opportunities related to local product development with the promise that affordable raw materials would be available from California and skip investing in indoor agriculture. Consumers and patients in states that allow for trade across their borders will instantly have access to a wider array of products, and as the size of the market that the industry has access to increases the dramatic supply and demand swings will be dampened by a larger and more diverse base of both consumers and producers.
Ultimately, the purpose of markets is to maximize the efficiency and utility of the flow of goods. They should move from the places where they are cheapest to produce to the places where the demand is highest. This is most effective with commodities and consumer goods, like cannabis. The current restrictions against moving cannabis across state lines completely hobble the market’s ability to perform this critical function. The result is bad for producers, consumers, regulators, and state governments. Interstate commerce for cannabis means better markets for producers, more choice for consumers, and a massive economic stimulus for all participating states in the form of job creation and increased tax revenues.
Gabriel Cross is a Founder and CEO at Odyssey Distribution, LLC, a distributor for locally-owned craft cannabis producers and processors in Oregon. Gabe worked in the sustainable building industry for a decade before starting Odyssey and brings his experience with sustainability and systems thinking to his work in the cannabis industry. Odyssey manages logistics, sales and marketing for boutique producers so they can focus on creating great craft cannabis products for the Oregon market.
Gary Seelhorstof Flora California has a passion for developing high-quality cannabis products so their most therapeutic effects can be realized. His 25 years in pharmaceuticals and medical devices helps him bring scientific rigor to the cannabis industry. Gary is very active at both the State and Federal level as an advocate for policy reform/higher quality standards. He enjoyed lengthy stints at Eli Lilly and Pfizer (in clinical development and corporate development) and worked with several start-ups developing corporate and compliance strategies. Gary has a B.S./B.A. from UC San Diego in Biochemistry/Psychology, an M.S. in Clinical Physiology from Indiana University, and an MBA from the University of Michigan.
Watch The Webinar: An Insight into Cannabis Attitudes, Uses, and Trends
This informative webinar recording from January 28, 2020, provides insightinto recent market research on state-by-state consumer attitudes, usage, and trends. Cannabis consumer segments and profiles will also be presented along with media consumption and lifestyle attributes, along with preference insights from medical dispensaries and the role of cannabis in the treatment of severe pain and key findings and takeaways from their latest consumer research. Featured speakers include Stephen J. Gongaware and Jennifer Wolfe of Management Science Associates (MSA).
Take The Survey By Friday: What Educational Content Does Our Industry Need?
NCIA is exploring a partnership with the Community College of Denver to deliver educational content to their students and the industry.
To get a better understanding of the industry’s education needs, we’ve developed a survey to gauge them. This data will also help us enhance the content we’re delivering during conferences, webinars, and other offerings in development.
The cannabis industry today is characterized by rapid growth and a degree of unpredictability as it faces issues including legality, stigma, and all the challenges that come with offering a product never before mass-retailed.
Dispensaries and other key market players have long been operating in the dark when it comes to their customers. With little data around the attributes and lifestyles of their target consumer, the new industry has a long way to go when considering marketing opportunities.
In order to shed light on the best marketing practices for this burgeoning industry, we surveyed over 8,000 consumers between the ages of 21 and 64, in the 21 states where cannabis is currently legal to create LOCALiQ’s Canna Curious Report. The report reveals the lifestyle attributes, shopping behaviors, consumption motivators and brand selection drivers for the industry’s top customer segments. The surveyed individuals were split into two groups, current consumers and acceptors.
Here are the key segments of consumers that industry companies should pay particular attention to impress:
Affluent Families with Children
We found that affluent families with children under the age of 18 were an active cannabis consumption group. Spending over $623 million on cannabis-related products, this group has the potential to grow to a market worth over $1 billion.
In this segment, dads were typically the more active purchasers, shopping at more than 4 dispensaries in the past 3 months, while moms tended to be more brand loyal and shop at the same dispensary.
The data supports that to impress this segment, dispensaries should focus on offering a wide variety of products, as well as prioritizing price and convenience.
Baby Boomers
Baby boomers were another top consumption group, with the majority of those surveyed going to a dispensary monthly, and 60 percent of non-consuming boomers more likely to consider it than millennials.
To reach this customer segment, companies will likely have the most success maintaining strong websites, advertising in newspapers, and creating online videos as these are top discovery sources for the baby boomer group.
The top motivator for usage in this group is strongly tied to health and pain management, with 58 percent of baby boomer respondents displaying a preference for alternative medicine.
Frequent Shoppers
The frequent shopper group is more diverse in demographics than our previous two categories, but has the most focused purchasing pattern, with most shopping at a dispensary 3-4 times per month. The frequent shopper group boasts the highest spending but tends to be the least loyal, easily swayed to competitors due to price, product variety and staff friendliness.
Promotions are more likely to be impactful with this segment, as 62 percent indicated receiving notifications of promotions through news sites and email or text message.
Acceptors
Defined as current non-users who are open to cannabis consumption in legal states, this group spans many demographics. These cannabis curious consumers cited reasonable prices, a good selection of products/strains, and friendly and helpful staff as their top brand selection drivers.
As dispensaries become more established in cannabis-legal states and competition intensifies, it’ll be more important than ever for sellers to understand their consumer, whose preferences vary widely by segment. For example, while a frequent millennial buyer may be well-targeted through personalized text message or email promotions, a baby boomer is much more likely to consult their local news for a trusted recommendation.
To grow alongside the quickly expanding industry, cannabis businesses should work to prioritize legal, digital marketing, storytelling, and target marketing expertise, to continue to attract and retain customers.
Anthony Bratti is the Regional President – West for the USA TODAY NETWORK/LOCALiQ. In this role, Anthony leads and supports the west coast sales teams as they drive digital advertising and strengthen relationships with local businesses. Anthony’s success as a leader and executive is rooted in nearly 20 years of global business experience ranging from early-stage start-ups to mid-level enterprises and Fortune 50 companies, as well as local community involvement. He is actively involved in the greater Phoenix economic development group and Phoenix Chamber of Commerce.
Prior to joining the USA TODAY NETWORK, Anthony enjoyed a long, global career at AT&T where he served both domestic and international markets, served as the SVP of Business Development at Buzzboard, and most recently, as the Head of Channel Sales at ReachLocal. His vast experience, deep knowledge of digital media, and innovative thinking make Anthony one of the most transformational sales and marketing leaders within the USA TODAY NETWORK.
Looking Back On Ten Years Of Cannabis Reform – The Road Behind, The Struggle Ahead
By Morgan Fox, NCIA Media Relations Director
NCIA’s Media Relations Director, Morgan Fox
August in Washington D.C. means heat, which is probably a big reason why lawmakers take the month off and return to their home states before coming back to confront the issues of the day. With this Congress – which has been more supportive of cannabis policy reform than any in history – out on recess, it seems like a good time to reflect on how far we’ve come as a movement and as an industry, we well as to recognize how much farther we still need to go.
I’ve been working exclusively on cannabis issues for more than a decade, and when I started my first job in the field at the Marijuana Policy Project all those years ago, the landscape looked much different. At the time, there were only a handful of states with effective medical cannabis laws, and no states where it was legal for adults. Opponents would consistently claim that cannabis has no medical value with a straight face, and people would believe them. The nonsensical argument that providing medicine to sick people would somehow lead all teenagers to become addicted to hard drugs often ruled the day and frequently delayed reform efforts. Access to cannabis, even in states with good laws, was limited and hard fought. Cannabis consumption by anyone except the most seriously, visibly ill people was largely portrayed as criminal and immoral.
Now, cannabis is legal for adults in 11 states, D.C., and two territories; 33 states and several territories have comprehensive medical cannabis laws; and nearly every state allows cannabis in some form. Tens of millions of people can now safely access cannabis without fear of arrest. Dozens of states are looking at cannabis policy reform legislation every year, and we can expect to see several ballot initiative campaigns taking place next year.
As more and more states have regulated cannabis in some way, new legal markets have emerged, allowing the industry to grow and thrive in many ways. At the start of my involvement, there were a shockingly small number of cannabis businesses, and the problems they faced were quite different than what we tend to deal with today. Non-existent access to banking was of trivial concern when the threat of raids by armed federal agents was a daily concern. Videos of jack-booted thugs pointing rifles at disabled patients and dragging dozens of plants out of smashed windows were commonplace. Long prison sentences for cultivators and providers were the norm.
New state laws and increasing public acceptance helped to ease the crackdown on the cannabis industry, but the real game changer came in the form of an unexpected federal policy directive. In 2013, Deputy Attorney General James Cole issued a directive to federal prosecutors, telling them not to target businesses or individuals who were in compliance with state cannabis laws. Known as the Cole Memo, this directive did not carry the force of law and did not prevent the enforcement of federal prohibition. Some Department of Justice employees took it more seriously than others. However, it did drastically reduce the number of prosecutions of state-legal cannabis businesses, and gave people enough confidence to really pull out all the stops. Since then, the industry has grown and professionalized by leaps and bounds. Huge trade shows, once unheard-of, are now commonplace and attracting people from a wide range of professions. Businesses no longer hide in the shadows, but are actively competing for exposure. There are now more than ten thousand licensed plant-touching businesses in the U.S., and many thousands more ancillary businesses working in the cannabis space. According to a recent report by Leafly, more than 200,000 jobs have been created by the legal cannabis industry.
One of the most important changes to happen over the years is the increased and deeper focus on justice in the cannabis reform movement, including equity in the cannabis industry. Legalization has always been about freedom and justice, but it has largely been talked about in the general sense of the injustice of criminalizing people for consuming a substance that is objectively safer than alcohol. The disproportionate harms inflicted on people of color and the destructive impact that prohibition has had on entire communities for generations were well known to many, but it wasn’t until the ACLU released its groundbreaking report that these facts started gaining more attention in the public sphere. It has still taken far too long for this issue to come to the forefront of the cannabis policy debate, but things are moving in the right direction. Most modern legalization legislation now contains provisions related to expungement, community reinvestment, and equity in the emerging cannabis industry, and indeed these are now required in order to be taken seriously by voters, activists, and policymakers. But it wasn’t always so.
During the ballot initiative campaign for Amendment 64, which would go on to pass in November 2012 and make Colorado the first state in the nation to regulate cannabis for adults, polling showed that including even a limited provision to expunge minor cannabis convictions would have killed the chances of victory. Fast forward to this year, where legislation to make cannabis legal in New Jersey stalled because it did not go far enough to address the disparate harms caused by the war on cannabis. Illinois, the first state to regulate cannabis through its legislature, included language in its legalization bill which passed earlier this year that will expunge the vast majority of marijuana convictions and will help to ensure that people of color can take advantage of the opportunities being created by the legal cannabis market. And even Congress is starting to come around, with multiple active bills containing restorative justice provisions being considered and a House subcommittee holding a groundbreaking hearing on the issue this summer.
Speaking of Congress, the differences between now and then could not be more stark. Until somewhat recently, there was little appetite for addressing cannabis policy reform, and tremendous opposition from both sides of the aisle. While states continued to pass cannabis legislation, most federal lawmakers wouldn’t go near the subject except to shut it down. Even those whose own states had passed good laws were actively undermining their constituents. In 2014, an amendment was added to the annual spending bill that codified the protections outlined in the Cole Memo, but only for medical cannabis programs. Despite this provision being included in all subsequent budgets, it was never extended to adult use programs. Progress on stand-alone bills related to cannabis was generally slow and did not receive serious consideration in either chamber.
This Congress has been extremely different. Dozens of cannabis bills addressing all sorts of issues have been introduced, often with bipartisan support. Hearings have actually been held and taken seriously in the House and Senate, often with mostly supportive testimony. The SAFE Banking Act, which would provide safe harbor for financial institutions to work with cannabis businesses and increase access to capital for small businesses and disenfranchised communities, has seen unprecedented movement and support this year. In the House, it has 206 cosponsors and was approved with a bipartisan vote in the Financial Services Committee. It now waits to be called for a vote, which it will likely win. In the Senate, despite some lingering opposition, key committee heads and Republican leaders are softening their stances and held an informational hearing on the bill last month. More comprehensive bills such as the Marijuana Justice Act, the FAIR Act and the MORE Act are being given more attention than we’ve ever seen for legislation that would deschedule cannabis. It seems that politicians are finally catching up to public opinion and are more comfortable with supporting reform in the open.
Some of the credit for this can be given to the media. When discussing this topic, I always like to relate a story told to me by my first boss in cannabis policy reform. In the late 2000’s, he called CNN’s newsroom to pitch a story about a new positive cannabis study. He identified himself and his organization at the beginning of the call, which prompted the person on the other end to start laughing so hard they had to put my boss on hold. When they finally returned, they greeted him by saying “OK, Mr. Marijuana. How can we help you?” Needless to say, the story did not get picked up.
For years, we’ve had to deal with a media environment where cannabis policy reform was treated as a joke at best, and as a horrible scourge at worst. Stories were riddled with bad puns (I can’t count the number of times I’ve seen the phrases “blunt truth” or “clearing the smoke” or “hazy proposition” in headlines), or only referred to cannabis as “pot” or something equally stigmatizing. Many of them took prohibitionists at their word as they spewed falsehoods and fear, while giving limited or no space to reformers. Most major media outlets were not even interested in looking at the issue to begin with.
All that has changed. Cannabis is finally being taken seriously, and news organizations are devoting massive resources to covering it and even creating cannabis beats for dedicated journalists. Dozens, if not hundreds, of cannabis-specific publications are now available, with advertisers clambering for space in them. The coverage is much more fair, and the puns are (mostly) gone. Changes in the way the media talks about cannabis have certainly had a positive impact on how the public, and by extension lawmakers, thinks about this issue.
It can be tempting to look at all this progress and pat ourselves on the back for a job well done, and in some senses it is deserved. Tens of thousands of otherwise law-abiding individuals around the country will no longer be saddled with the disastrous consequences of having a criminal record every year. Hundreds of thousands are gainfully employed in an industry that is steadily displacing the illicit market while making cannabis safer and less stigmatized. The federal government is getting closer and closer to making real progress on cannabis issues. Support for legalization is a ubiquitous topic in the 2020 presidential field and has become almost a prerequisite for being considered as a serious candidate. Two-thirds of Americans think cannabis should be legal for adults. All of this is a world away from where we were a decade ago, and the benefits being reaped because of the hard work of advocates are significant.
But we have a long way yet to go.
There are still roughly half a million cannabis arrests in the U.S. annually, mostly at the state level. The majority of states have yet to regulate cannabis for adults, and support for doing so in many of them is still very weak. Advocates and industry leaders need to redouble their efforts to reach out to lawmakers, voters, stakeholders and communities, and work with them to pass sensible cannabis legislation. Even states with relatively good laws still need help: home cultivation is still illegal in Washington state, for example, and Vermont and D.C. do not yet have regulated cannabis markets or legal sales.
State and local restorative justice efforts have had limited success, to put it generously. Funds intended for community reinvestment have been diverted or delayed, and equity programs are sometimes being exploited by predatory operators. High application fees, arbitrary license caps, criminal record bans and other unnecessary barriers of entry are preventing marginalized people from becoming a part of this industry. Decreasing arrests, while vitally important, cannot be the only gain made by disproportionately impacted communities as we continue to reform our cannabis laws.
Despite growing support for change in Congress, cannabis is still a relatively low priority for most federal lawmakers. Without constant pressure on them, reform will come slowly or not at all. NCIA’s in-house federal lobbying team, as well as outreach efforts like our annual Cannabis Industry Lobby Days, help keep this conversation going at the Capitol and sway legislators to our side. Federal legalization is far from inevitable, and we are committed to maintaining and increasing our efforts to make sure it happens.
But we need your help. Now is the time to get involved, get active, and help end prohibition once and for all while we build a responsible, competitive, and inclusive cannabis industry. We still have much work to do, but if the accomplishments of the last decade tell us anything, it’s that we can do this together.
Re-Cap of House Judiciary Hearing on Marijuana Laws in America
On Wednesday, for the first time ever, lawmakers in the House of Representatives held a hearing to address the disproportionate ways in which marijuana prohibition has negatively impacted people of color and marginalized communities. The hearing, entitled “Marijuana Laws in America: Racial Justice and the Need for Reform,” was called by the House Judiciary Subcommittee on Crime, Terrorism, and Homeland Security and exclusively featured testimony from witnesses in favor of sweeping cannabis policy reforms.
Notably, none of the members of the subcommittee or witnesses advocated for keeping cannabis illegal.
Rep. Tom McClintock (R-CA) participated as acting subcommittee Ranking Member, and began his opening statement by saying, “Marijuana decriminalization may be one of the very few issues upon which bipartisan agreement can still be reached in this session.” He added, “it ought to be crystal clear to everyone that our laws have not accomplished their goals.”
Chairwoman of the subcommittee, Rep. Karen Bass (D-CA), also gave strong opening remarks: “The collateral consequences of even an arrest for marijuana can be devastating. These exclusions create an often permanent second class status for millions of Americans. Like drug war enforcement itself, these consequences fall disproportionately on people of color.”
While there seemed to be a consensus on reforming our outdated cannabis laws, how to reform them was more murky than anything else. Essentially all of the Republicans who spoke during the hearing iterated their support for the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act, while Democrats on the subcommittee stressed the need for reforms that address equity, inclusivity, and diversity — which the STATES Act does not address in any way.
NCIA’s written testimony, submitted at the hearing by Rep. Steve Cohen (D-TN), urges Congress to remove cannabis from the Controlled Substances Act (commonly known as de-scheduling); to enact legislation repairing the damage prohibition has inflicted on communities of color; and to begin the process of regulating cannabis products at the federal level. However, NCIA also recognizes that the STATES Act (and other incremental reforms) deserve the support of the industry, given that it addresses many of the problems plaguing cannabis businesses today.
On behalf of the largest and most-diverse membership base of any cannabis trade association in the U.S., NCIA’s team in D.C. is continuing to work with allies in Congress to end federal prohibition and replace it with federal jurisdiction that benefits an inclusive, diverse, and legal cannabis industry.
NCIA thanks our nearly 2,000 members who have made this progress possible. If your business is not yet a member of NCIA, please join the movement today.
FDA Rulemaking on Hemp/CBD – Hurry Up And Wait?
by Andrew Kline, NCIA’s Director of Public Policy
In April of 2019, the National Cannabis Industry Association (NCIA) formed a coalition of more than 100 CBD/Hemp entrepreneurs, scientists, medical doctors, and FDA lawyers to inform and influence FDA rulemaking on cannabis and cannabis-derived compounds. Over the past two months, coalition members worked tirelessly to draft public comments. Our goal was to answer all of the questions posed by FDA (including scientific questions), to be helpful to FDA by informing their rule-making process, and to influence the direction of their rule-making.
NCIA Files Public Comment And Testimony
On May 30, 2019, we filed 60 pages of formal comments which can be found here. I’m really grateful for the coalition’s collaborative work and quite proud of our final product. I’m also extremely grateful to the authors, including Alena Rodriguez of RM3 Labs, Dr. Paul Murchowski of Dr. Pauls, Khurshid Khoja of Greenbridge Corporate Counsel, Vanessa Marquez and Chris Elawar of CBD Care Garden, Jonathan Havens from Saul Ewing, Andrew Livingston from VS Strategies, and many others who devoted time to produce a great submission.
On May 31, I testified before the FDA and listened intently as dozens of others spoke. My takeaways were that most of the industry echoed our sentiment – that CBD is generally safe, but that safety issues do arise with adulterated products and with irresponsible manufacturing and marketing practices. I spoke about the need for consensus-driven industry standards, to include marketing and labeling practices, and for mandated lab testing. These practices will go a long way toward making certain that the industry is safe for consumers.
Concerns And Misinformation
I am genuinely concerned that there is currently great confusion in the market. People seem to think that CBD is federally legal as a result of passage of the Farm Bill of 2019. But, that is only partially true. While CBD was de-scheduled, the FDA still retains the authority to regulate the industry as a result of their prior approval of a prescription drug for epilepsy, Epidiolex. In the absence of clear regulatory guidance, people are making health claims that violate federal law. And banks and payment processors are shutting off accounts for CBD businesses because they are having difficulty assessing whether a particular business is operating lawfully.
We hope that FDA will act with deliberate speed in drafting regulations for the industry. If FDA takes its time in crafting regulations, there is danger that many CBD companies will shudder because of a lack of banking and payment processing. And we will inevitably lose market share to Canada and other international players. As always, NCIA stands ready to help.
Learning objectives for the panel include, (1) what the FDA was interested in learning about and why, (2) understanding how our industry coalition responded to the FDA’s scientific questions, (3) predictions for how the FDA will regulate CBD/Hemp and what it might mean for cannabis regulation in the future. Panelists will include members of the coalition who drafted our public comments to FDA.
In the coming weeks, NCIA will be releasing some new policy papers via NCIA’s Policy Council – the think tank for the state-legal cannabis industry. As always, if you’re interested in joining the Policy Council or have any thoughts about how we can propel this industry, please reach out me at andrew@thecannabisindustry.org.
Committee Blog: Social Justice in the Cannabis Industry – Your Answers Will Take Minutes, But The Impact Could Be Long-Lasting
By Rudy Schreier, MMLG
NCIA’s Marketing & Advertising Committee’s Social Justice Subcommittee
The cannabis industry is evolving at light speed. From nationwide legalization, to massive corporations developing green thumbs, cannabis culture is shifting daily. Exciting, yes, but this rapid cultural shift poses a threat to social justice by disregarding the harms caused by the war on drugs. Now, more than ever, the cannabis industry needs to come together and determine a course of action to ensure that social justice isn’t brushed aside.
Where should we start? And how can all of us in the industry handle something as daunting as social justice with the appropriate sensitivity? Let’s review some of the basics.
Cannabis has been aggressively policed since the mid-to-late twentieth century. Minorities from marginalized communities were disproportionately punished for cannabis crimes, contributing to the rise of mass incarceration. Those same communities punished for past involvement with cannabis face an extremely high barrier of entry in the newly legal industry. Many cities and states are adopting social equity programs to lower the barrier. For example, Los Angeles recently approved $10.5 million in funding over the next three years for its social equity program. Initiatives like Los Angeles’ are a step in the right direction; however, there’s still a lot more to be done.
While social justice in the cannabis industry is a new focus for some, others have been fighting for decades. Omar Figueroa, a cannabis lawyer and advocate located in Northern California, helped to convince the Sonoma County District Attorney to clear cannabis convictions and has defended numerous activists pro bono over the years. When asked how the cannabis industry should address social justice, Omar replied, “[We need to] provide grants and loans to address disparities in access to capital, continue to advocate against cannabis prohibition, and create a leadership institute to empower people directly affected by the war on cannabis.” Omar, like many other committed ‘canna-pros’, are constantly fighting for fair and equitable practices in our industry. With so much work to be done, it can be challenging figuring out where to start. This is where you come in.
As we build the new cannabis culture, we have the unique opportunity to do things differently, ethically, and better. NCIA’s Marketing & Advertising Committee’s Social Justice Subcommittee is developing an approach to social justice for the cannabis industry, and we need your help. Since we can’t tackle everything, we’re asking you to make your voice heard and help us navigate the difficult terrain ahead. Please take this 4-question survey about what social justice should mean in the cannabis industry. Your answers will take minutes, but the impact could be long-lasting. Feeling ambitious? Share this ‘gram-sized graphic’ in your own social channels to spread the ‘poll power’ far and wide!
Interested in learning more? NCIA’s Social Justice Subcommittee will be hosting a panel titled “Cannabis Reform Stops Short: Why We Can’t Let Social Justice Get Lost” at NCIA’s Cannabis Business Summit & Expo in San Jose on Tuesday, July 23, from 1:30 PM – 2:30 PM. Register for the conference today!
Marketing and Advertising Committee: (MAC) of National Cannabis Industry Association (NCIA) — develops best practices in cannabis industry marketing /education, opening dialogues with media outlets that ban cannabis-related advertising.
Social Justice Subcommittee: An arm of the MAC committee, the aim is to ensure that social justice issues are positively addressed via cannabis reform. Team Members: MMLG, Cannawise, Canna Advisors, Annabis.
The Author: From operations and marketing, to office and project management, Rudy Schreier wears many hats for the Los Angeles-based licensing and compliance consultancy MMLG. Schreier co-founded the #StartsAtThePolls campaign, which utilized social media platforms to inform voters on how to register to vote, how to get to the polls, and pro-cannabis candidates running for the 2018 elections. The Panel: Be sure to catch the Social Justice Subcommittee’s panel featuring Lisa Jordan (Canna Advisors), Omar Figueroa (Law Offices of Omar Figueroa), Shanita Penny (Minority Cannabis Business Association), and Felicia Carbajal (The Social Impact Center) at NCIA’s Cannabis Business Summit & Expo titled, “Cannabis Reform Stops Short: Why We Can’t Let Social Justice Get Lost.”
Today’s SAFE Banking Act Committee Markup
[updated 11:00 AM ET, Thu March 28]
Today, H.R. 1595, the Secure and Fair Enforcement (SAFE) Banking Act of 2019, received a markup by the House Financial Services Committee and passed in a vote of 45-15. This is the first time in history that a cannabis banking bill has reached this point in the legislative process. As a reminder,a markup is the process by which a congressional committee debates, amends, and rewrites proposed legislation.
Now that the bill has passed out of the House Financial Services Committee, it will continue in the legislative process and be sent to the House Judiciary Committee. It is unclear whether or not the Judiciary Committee will waive its rights to the legislation. If the Committee does waive its rights, the SAFE Banking Act will then be referred to the powerful House Rules Committee before receiving a floor vote from the full House.
If you remember, HR 1595: the Secure and Fair Enforcement (SAFE) Banking Actwas just introduced in the House of Representatives by Reps. Ed Perlmutter (D-CO) and Denny Heck (D-WA) less than two weeks ago. In a stunning, historic surprise, the legislation was introduced with a whopping 108 original cosponsors, and that number has already risen to 151.
There were multiple amendments agreed upon by the committee, however, most were technical and required minimal change. Of note, however, included an amendment from Rep. Ed Perlmutter which would add provisions requiring the federal government to track and issue recommendations on how to expand financial services to minority-owned and women-owned cannabis businesses. Rep. Katie Porter (D-CA) also introduced an amendment that would provide the same protections to de novo financial institutions, which was agreed to. In addition, one of the bill’s lead sponsors, Rep. Steve Stivers (R-OH) offered an amendment that would give much needed clarity for insurers that wish to provide financial services in states that have legalized cannabis.
As a refresher, the SAFE Banking Act would prevent federal banking regulators from punishing banks for working with cannabis related businesses that are obeying state laws or halting their services, taking action on loans made to those businesses, or limiting a depository institution’s access to the Deposit Insurance Fund. The bill would also protect ancillary businesses that work with the cannabis industry from being charged with money laundering and other financial crimes, and requires the Financial Institution Examination Council to develop guidance to help credit unions and banks understand how to lawfully serve cannabis businesses.
Interested in helping with these efforts? You can:
Call your representative and ask them to cosponsor HR 1595: the SAFE Banking Act. If they’re already a cosponsor, thank them for their support. You can find out how to contact your member of Congress and find some helpful tips here.
There is little doubt that lack of access to banking is one of the most immense challenges facing cannabis retailers. Legally-operating cannabis businesses are at a significant disadvantage, as well as the communities they operate in. Luckily, there are positive signs that a new day is quickly approaching and cannabis banking laws in the United States are about to go through a major change.
What’s Going on with Cannabis Banking Laws?
Recently and for the first time, the U.S. Congress held hearings on the all-cash nature of the cannabis business. The bill at the center of these monumental hearings: the Secure and Fair Enforcement (SAFE) Banking Act, originally introduced in 2006 and has been stuck in a holding pattern, as have similar bills, ever since.
The committee heard testimony from cannabis industry stakeholders, police departments, and banking executives. These witnesses painted a robust picture of the cannabis banking problem, from the danger it poses to communities in the form of increased risk of armed robbery, to the burden it places on legal dispensary owners who have to find alternative cash management solutions, to the lack of accountability cash creates from a tax perspective.
The bill has yet to come up for a vote. While there are elected officials who reject the concept outright, there is an ever growing coalition in both houses of Congress pushing for a cannabis industry banking solution. More than ever, it seems the U.S. could finally see a loosening on federal restrictions to banking legal cannabis business.
4 Reasons why the U.S. will Loosen Cannabis Banking Regulations Soon
There is more political will for the legal cannabis industry than ever before.
While one hearing is far from passing the law, it is a sign that times are changing. Ten states have legalized recreational cannabis and 33 more have some form of medical cannabis laws in place; this is a drastic increase in the last decade. Shockingly in a time of so much partisan rancor, 62% of Americans favor legalizing marijuana. That is more than double the approval rating cannabis enjoyed in 2000 (31%).
The cannabis banking law being discussed is relatively innocuous. It does not legalize or reclassify cannabis at all, just allows banks to offer services to state-legal cannabis businesses. All in all, considering the strong support across party lines and the success of state industries, passing this law would be an easy win for Democrats, Republicans, and President Trump in a time when political wins are a rarity.
Current banking solutions are prohibitively expensive and states want to see their prosperous legal cannabis industry grow.
Credit unions and banks that currently offer cannabis industry banking charge prohibitively expensive fees, up to $2,000 a month for a simple business checking account. This is a problem for state elected officials.
Recreational and medicinal cannabis states seem, generally speaking, to enjoy the tax revenue they receive from this robust and rapidly growing industry. It is in the best interest of the state for legal cannabis businesses to thrive. If cannabis business owners can’t afford the currently available banking services, it hinders their ability to build upon their business. Even worse, these prohibitive fees keep dispensaries operating on an all cash basis, creating a much higher risk of robbery and violence in the community.
California’s behemoth market is drastically tipping the scales.
It is hard to overstate just how massive California’s legal cannabis market is. Expected to rake in over $50 billion by 2026, the influence this one state industry has is profound and its cash management problem will significantly magnify the problem.
The industry will continue to grow and mature, pushing out the gray market over time. As more cash comes flowing into the legal cannabis industry, it will begin to strain the cash supply and law enforcement to such a degree that action, more than it already is, will be imperative.
Money talks; state and federal governments want their tax revenue.
More than anything else, what will ultimately carry a cannabis banking law across the finish line is money. Cash-only businesses are fertile for tax fraud, simply pocket a little cash here and there and then never report it to the IRS. If there is one thing that can motivate an otherwise slow-moving government, it is tax revenue being left on the table. Allowing cannabis industry banking is a clear way to increases transparency and ensure the state and federal government get their share of the profits.
Access to banking will allow the rapidly growing cannabis industry to advance even faster. Will you be ready? Subscribe to our blog to stay up to date on the latest cannabis news, industry trends, and best practices for running your cannabis dispensary!
Gary Cohen leads Cova’s charge into the legal cannabis space by guiding the vision, strategic development, ‘go to market’ plans and culture.
Before joining Cova, Gary was a principal in over a dozen tech start-ups in the mobile communications industry ranging from small VC funded companies to Fortune 100 firms, including Onavo, which was later acquired by Facebook. In those companies he led sales, marketing, business analytics and market expansions. He has also held a multitude of leadership roles with Verizon and AT&T.
Gary holds a degree in finance with a master’s in marketing from the University of Colorado.
VIDEO: NCIA Submits Testimony At U.S. House Committee On Financial Services
Last week, as NCIA wrapped up another successful Seed to Sale Show, we were vigilantly preparing for a historic hearing about the issue of cannabis banking and the SAFE Banking Act. This is an incredible milestone for our industry. If this bill passes, it would allow marijuana-related businesses in states with existing regulatory structures to access the banking system.
The Consumer Protection and Financial Institutions Subcommittee of the U.S. House Committee on Financial Services held this historic hearing about a draft bill that provides safe banking services for legal cannabis businesses. This was the first Committee hearing on stand-alone legislation that is a priority for our industry. Learn more about the hearing from NCIA’s Aaron Smith.
Read NCIA’s Executive Director and Co-Founder, Aaron Smith’s official testimony here.
To find out more about what NCIA is doing to support this bill and other legislative priorities, join us at a Cannabis Caucus event near you!
VIDEO: The Benefits of Legalizing Cannabis
In this third installment of NCIA’s animated educational video series, we explore the benefits of legalizing cannabis nationwide and beyond. Learn how ending federal prohibition can improve public safety and add economic opportunities to our communities, and how you can help.
Do you have views on the regulations that will govern California’s cannabis industry? If so, California’s window for the public to make comments on the proposed permanent industry regulations is about to draw to a close. But you don’t need to be an expert on arcane administrative procedure or even a lawyer to participate in the comment period. Keep reading to learn more about what is at stake and how to make sure your voice is heard.
Overview and Introduction to the Regulatory Process
On Friday, July 13, 2018, California’s three cannabis licensing agencies (the Bureau of Cannabis Control, or “BCC”; the Department of Food and Agriculture, or “CDFA”; and the Department of Public Health, or “CDPH”) released their much-anticipated proposed permanent regulations for cannabis businesses pursuant to the Medicinal and Adult Use Cannabis Regulation and Safety Act. This began the 45-day public comment period of the regular rule-making process. During this time, the public has a chance to review and comment on the proposed regulations, and the agencies must consider these comments and may make changes based on this feedback.
Below are links to the proposed regulations and the summary sheets released by the agencies:
Currently, cannabis businesses in California are operating under emergency regulations that were originally adopted in December 2017 and re-adopted (with a few changes) in June 2018. The emergency regulations will stay in effect until the regular rule-making process is complete and the final regulations have been formally adopted at the end of this year.
In addition to publishing the proposed regulations, the agencies also each published a Notice of Proposed Rulemaking Action (NPRM), which contains various information about the proposed rules such as a summary of existing law and who to contact with questions and comments. The agencies were also each required to publish an Initial Statement of Reasons (ISOR), which contains the agencies’ reasoning and basis behind why they crafted a rule the way they did.
These regulations will have a number of impacts on how the cannabis industry operates in California. For example, new advertising regulations would go into effect; packaging and labeling requirements would change; certain edible products could contain up to 500mg THC per package (versus the current limit of 100mg THC per package); and outdoor licensees would be prohibited from using light deprivation.
Those are just a few of the key proposed changes. Please refer to the summary sheets published by the agencies, listed above, for a more comprehensive list.
What Makes an Effective Public Comment?
There are six standards in the Administrative Procedures Act (APA) that agencies including the BCC, CDPH and CDFA must follow when conducting rulemaking actions. They are:
Authority – The agency must be permitted or obligated by law to craft a particular regulation. (Gov. Code § 11349(b))
Reference – The agency must refer to the provision of law that the agency is implementing or interpreting via the regulation. (Gov. Code § 11349(e))
Consistency – The regulation cannot be inconsistent with other laws and/or regulations, and needs to be harmonious with existing provisions of law. (Gov. Code § 11349(d))
Clarity – The regulation must be easily displayed or written so that it will be easily understood by the people affected. (Gov. Code § 11349(c))
Nonduplication – The regulation cannot serve the same purpose as another existing state or federal law or regulation. (Gov. Code § 11349(f))
Necessity – There must be substantial evidence in the record for needing the regulation in order to fulfil the purpose of the statute or other provision of law that the regulation implements or interprets. (Gov. Code § 11349(a))
Since the BCC, CDFA and CDPH have to comply with the standards above, it’s a good idea to focus your comments around one or more of those specific areas, as opposed to just making a comment that you dislike a particular proposed regulation without giving any reason why. That way, it is more likely that the agency will respond to your comment by making an adjustment to the proposed regulation(s) in question.
How to Submit Your Comments
Comments on the proposed regulations can be submitted to the agencies by mail or email, or offered in-person at one of the agencies’ scheduled public hearings. Your comment must include the following: (1) the subject title of the proposed regulation; and (2) specific concerns regarding the proposed regulation, which the agencies deem most helpful if they identify the section number in question, discuss the issue, suggest changes to the text, and explain why any desired modifications address the issue.
Please note that all comments received during the public comment process become part of the official record which is public information. Thus, you may not want to include any confidential or identifying information in your comments.
All comments must be submitted to the respective agencies by 5:00pm on August 27, 2018 or provided at one of the scheduled public hearings. Below are the locations of the public hearings, which will take place throughout the state during the months of July and August. (This information is subject to change; please check for updates on the California Cannabis Portal.)
Bureau of Cannabis Control Hearing Dates and Locations
The first two BCC public hearings have passed. There will be a final public hearing on August 27, 2018 from 10:00 a.m. to 12:00 p.m. at the Tsakopoulos Library Galleria, 828 I Street, Sacramento, CA, 95814.
California Department of Public Health Hearing Dates and Locations
The first two CDPH public hearings have passed. There will be a final public hearing on August 27, 2018 at 10:00 a.m. at 8400 Edes Avenue, Oakland, CA, 94621.
California Department of Food & Agriculture Hearing Dates and Locations
The first three CDFA public hearings have passed. There will be a final public hearing on August 28, 2018 from 1:00 p.m. to 3:00 p.m. at the California Department of Food & Agriculture Auditorium, 1220 N Street, Sacramento, CA, 95814.
Some Final Words
Collaborate. Join with other groups, trade associations, brain trusts, friends. Have reading groups. Get together and consider problems and solutions from multiple points along the supply chain, so that the solutions you offer can be relevant, functional, and comprehensive. There are many smart people working on this right now, so if you don’t have the time to this by yourself, link up with a trusted group that is commenting in accordance with your interest. Comment letters signed on by many stakeholders are very powerful.
Most importantly, “Keep Calm and Carry On!” Even though operators may see major changes being contemplated in these regulations, these are NOT YET IN EFFECT. Operators still need to remain compliant with the EMERGENCY regulations that are currently in effect, until the final regulations – post comment period – are officially adopted. This draft can and will change, so folks shouldn’t be making major business decisions based on the draft, as elements may either fall away, shift, or be added. (Think about the 24-hour security guard requirement in the Readopted Emergency Regs – it came and went within a 5-day comment period.) There are items in this draft that are sure to receive a LOT of comments and suggestions, so keep calm and carry on following the emergency regulations during this comment period.
Finally, even for operators outside of California, this process is nevertheless important to watch as the path that California takes will impact how the rest of the country chooses to regulate the cannabis industry, and it is also important to participate in if you plan to expand into the Golden State.
NCIA’s member-led State Regulations Committee (SRC) examines and reviews the varying cannabis industry-specific statewide regulations and works to establish best practices or guidelines for states and municipalities to facilitate the development of regulations and compliance procedures.
New Policy Directives For Cannabis Issued By NCSL
by Michelle Rutter, NCIA Government Relations Manager
Last week, the National Conference of State Legislatures (NCSL) met in Los Angeles for their annual Legislative Summit. NCSL was created in 1975 with the goal of establishing a single national organization to support, defend and strengthen state legislatures. NCSL prides itself on being bipartisan and seeks to improve the quality and effectiveness of state legislatures, promote policy innovation and communication among state legislatures, and ensure that state legislatures have a strong, cohesive voice at the federal level.
At the Legislative Summit last week, NCSL hosted two separate panels on cannabis policy. The first was titled “Crossroads: States, the Federal Government and Marijuana,” while the second was titled “Changing Federal Landscape: Financial Services for Marijuana Businesses.” NCIA’s own Director of Government Relations, Michael Correia, spoke eloquently on the banking panel and educated attendees and legislators about the importance of cannabis business’ access to financial services.
NCSL isn’t the only policy related group to show interest in cannabis policy: both the U.S. Conference of Mayors and the National Association of Counties have recently adopted similar positions. In June, a group of 12 governors, both Republican and Democrat, signed a letter to congressional leadership asking that they pass the STATES Act.
Following the summit, NCSL issued two new policy directives related to cannabis: the first stated that NCSL “maintains that the federal government should respect state decisions to regulate cannabis, including hemp in non-FDA approved cannabis products,” while the second said “NCSL acknowledges that due to the expansion of legal cannabis, legitimate business enterprises need access to financial institutions that provide capital, security, efficiency, and record keeping.”
Over 2,100 businesses, organizations, election officials, schools and civic groups are joining together to celebrate National Voter Registration Day across America, and the GREEN TEAM is excited to be an official 2016 partner for the event. In part, the GREEN TEAM is asking all sponsor businesses and volunteers to participate by signing up as a participating voter registration location or as an individual volunteer. Over 600 voter registration events will be hosted nationwide as part of this year’s National Voter Registration Day, and we would like to increase that number significantly by signing up additional cannabis dispensaries.
The GREEN TEAM and New Era Colorado will provide the volunteers and materials needed for the voter registration drive. This nonpartisan event is an easy way for your business to support civic engagement. Simply sign up your business’s location, and let us know which dates/times work for you, and we will take it from there!
CLICK HERE to sign up as a participating voter registration location!
Participating Locations Details:
The GREEN TEAM and New Era Colorado are searching for more locations for the 2016 voter registration drive volunteers. We are not asking your staff to take on any of the responsibilities, as we will supply the volunteers and materials needed as long you can provide us with access to your waiting room or front doorway area. The form above allows you to select the dates and times that work best for your business.
Our volunteers will hit the streets beginning Tuesday, September 27th, to register new voters, help current voters update their addresses, and provide information about mail-in ballot deadlines and polling locations.
(Volunteer training is provided)
We are beginning the voter registration drive on National Voter Registration Day, Tuesday, September 27th, and continuing the drive until Tuesday, October 11th.
National Voter Registration Day Details:
The day was founded in 2012 in response to over six million Americans reporting that they didn’t vote as a result of missing the registration deadline or not knowing how to register. On August 6, 2016, President Obama announced the White House’s official support of NVRD during a speech marking the 50th Anniversary of the Voting Rights Act, joining with state election officials of the nonpartisan National Association of Secretaries of State (NASS) that has been championing the holiday since 2012.
NVRD is led by a diverse, non-partisan group including the Bipartisan Policy Center, League of Women Voters, Bus Federation, Rock the Vote, Vote Latino, Asian Pacific American Labor Alliance (APALA), Fair Elections Legal Network, Nonprofit VOTE, and National Association of Secretaries of State represented by Secretary of State John Merrill (R- AL) and Secretary of State Steve Simon (D -MN). Also lending their support of the day include iHeartRadio, Tumblr, Univision Contigo, Pandora, Americans for Tax Reform, Headcount, and The Skimm. The National Voter Registration Day is a nonpartisan event.
by Michelle Rutter, Government Relations Coordinator
Earlier this month, the Senate Judiciary Subcommittee on Crime and Terrorism held a hearing entitled ”Researching the Potential Medical Benefits and Risks of Marijuana,” which was presided over by Sens. Graham (R-SC), Whitehouse (D-RI), Klobuchar (D-MN), Grassley (R-IA), and Blumenthal (D-CT). Witnesses included Sen. Kirsten Gillibrand (D-NY) and Sen. Kirsten Gillibrand (D-NY), federal officials from NIDA (National Institute on Drug Abuse), NIH (National Institute of Health), and the FDA (Food and Drug Administration), and members of the medical and legal community. For more information on the hearing and the witnesses, click here.
The first panel included Sens. Gillibrand (D-NY) and Booker (D-NJ), who both testified on the benefits medical cannabis can provide and noted that they are both original co-sponsors of the Compassionate Access, Research Expansion, and Respect States Act (S. 683), better known as the CARERS Act. Some of the key points that the Senators mentioned during the hearing included removing cannabis from its designation as a Schedule I drug, dismantling NIDA’s monopoly on cannabis used for research, and the urgent need to ease restrictions to allow for more research.
The next panel was comprised of two government agency officials: the Director of the Division of Extramural Research at the National Institute on Drug Abuse at the National Institutes of Health, and a doctor who is Deputy Center Director for Regulatory Programs at the FDA. Both panelists repeatedly stressed the importance of continued research into the therapeutic and medicinal benefits of cannabis, as well as the development of cannabis-based drugs. The FDA official also highlighted that the DEA is currently reviewing a recommendation on cannabis’s designation as a Schedule I drug, and the decision is pending.
The third panel included two doctors and a lawyer representing the DEA. The first doctor noted that THC and CBD do have therapeutic value but stressed the need for more research to determine if/how to mitigate any negative side effects of medical cannabis use. The second doctor on the panel is a well-known cannabis opponent, whose testimony sounded more like “reefer-madness” than a Senate hearing on cannabis in 2016. The lawyer present gave a moderately short statement, but did state that the DEA regulations around Schedule I drugs already provide a great deal of flexibility for research and can and are waived to allow legitimate studies and that the reclassification of cannabis to Schedule II would have little impact on the barriers to research – a statement that most in the cannabis community would strongly disagree with.
During questioning, Sen. Graham (R-SC) asked if the witnesses believed that cannabis should be re-scheduled as a Schedule II drug. Both the FDA official and the NIDA/NIH official weighed in, and with the same conclusion: more research is needed in order to make that determination. Chairman Graham also asked how to best facilitate medical cannabis research, which was answered by the DEA’s lawyer, who responded that the “flexibility” in the regulatory system could allow for it.
What does it mean?
Past Congressional hearings regarding cannabis have typically focused on the harms, not the benefits, of marijuana. As such, it’s a positive sign that the Chairman of the Senate Judiciary Subcommittee on Crime and Terrorism, Lindsey Graham (R-SC), held a hearing on the potential therapeutic benefits of medical cannabis. The main takeaway from the hearing was the desire from all parties – Senators, government officials, and medical professionals alike – for more research on cannabis, its compounds, and its effects.
Regardless, this hearing shows the progress that the industry has made in Congress and the momentum building nationwide behind the cannabis movement.
Guest Post: 2015 Cannabis Industry Market Analysis
2015 was a very exciting time in the cannabis industry. According to public opinion polls conducted in the U.S., between 51% and 58% of respondents were in support of legalization. The highest level of support comes from the age range of 18-34, showing a staggering 71% supporting full legalization.
In 2015, several states voted for some form of cannabis proliferation, and many more have taken decriminalization measures. With a year of adult-use retail cannabis now completed in Colorado and Washington, and the start of full legalization in Oregon, the tide seems to be slowly but steadily shifting.
Reflecting back on 2015, here were a few of the notable developments that resonated throughout the cannabis industry.
Emerging Markets
Currently there are twenty-three states and the District of Columbia that have laws legalizing cannabis usage in some form. Four states have completely legalized cannabis use for adults 21 and older.
On the medical side, several states opened their first cannabis dispensaries to the public in 2015. Nevada, Massachusetts, Minnesota, Delaware, and Illinois were among these states. Though sales have been slow going for various reasons, 2016 should be a landmark year for legalization in many of these newly developing cannabis markets.
Adult-Use Cannabis Boom
Colorado, Washington, Oregon, and Alaska have all completely legalized the possession of cannabis. On January 1, 2014, Colorado opened its first adult-use cannabis stores, which effectively combined their medical and retail markets. Their combined medical and adult-use system generated more than $699 million in gross revenue in 2014, with approximately $76 million in tax revenue collected. Washington, by comparison, opened its adult-use market in July of 2014 and finished the year with $64 million in total sales and $16 million in tax revenue collected.
The revenue figures for 2015 have eclipsed the previous year’s marks substantially. Colorado gross sales came in just over $996 million for 2015, with $135 million in tax revenue collected from close to 800 stores, servicing about 5.5 million residents.
Washington, by comparison, generated more than $357 million in retail sales, with more than $115 million going to the state as an excise tax. This revenue was generated at approximately 205 licensed stores, servicing 7 million residents.
Meanwhile, Oregon started a partial foray into adult-use cannabis sales by utilizing the existing network of medical dispensaries selectively approved for retail sales of cannabis flowers to anyone 21 and older. In July of 2016, Oregon will completely open its adult-use market. Alaska, with no medical dispensaries or infrastructure, will likely take much longer to develop as a viable market.
This chart references data from the Washington Liquor Control Board as well as The Cannabist website.
2016: Legalization Abounds
With the level of success, both fiscally and socially, that was achieved in relatively small states, it should be expected that 2016 will be a big year for ballot measures legalizing cannabis. There are several states that are gearing up for potential 2016 ballot initiatives. Massachusetts, Maine, Missouri, Ohio, Nevada, California, and Hawaii are the states that seem likely to make it to a vote.
Northeast
In the Northeast, there have been several developments causing optimism throughout the region. New England has taken a very progressive path to legalization. Every state has a medical cannabis market and has decriminalized possession of small amounts of cannabis with the exception of New Hampshire. New Hampshire has made at least six attempts to get decriminalization measures passed, but so far these initiatives have been unsuccessful getting past the State Senate. Ironically, four dispensaries are set to open in 2016 for medical patients that meet the qualifying conditions.
Midwest
Ohio had a ballot measure to legalize cannabis late in 2015. The legislation featured a basic monopoly on production being designated to 10 predetermined groups comprising wealthy residents. Unsurprisingly, there was overwhelming opposition, with the proposed legislation getting shot down by a margin of almost 2:1 against. We’ll likely see a second attempt to pass a legalization measure in 2016.
West Coast
With Washington and Oregon taking legalization measures, California is the next in line. At the end of the session in 2015, Californians passed the Medical Marijuana Regulation and Safety Act. This piece of legislation sets up the regulatory framework for a state-recognized medical marijuana industry. California, being one of the largest states, with a population of over 38 million residents, has had a vibrant quasi-grey market with an estimated 2,000 stores operating within the state. Despite the lack of reported sales figures, estimates of the California market are conservatively $3 billion to $5 billion annually. Should this market be legalized and regulated at some level, this could generate an estimated $450 million to $750 million in tax revenue, should the state impose a 15% tax rate.
2016 should be another historic year for the cannabis industry. With public opinion steadily growing in support of legalization, and the hysteria of an election year, it would not be surprising to see cannabis proliferation take the forefront in the national conversation.
Jim Makoso, Vice President of Lucid Oils
Jim Makoso is an entrepreneur in the cannabis industry. He joined Vuber Technologies as one of the original investors in February 2014. He is currently an Advisory Board Member and shareholder responsible for guiding strategic development. January 2015, Mr. Makoso founded Lucid Labs and Lucid Oils. He currently holds the position of Vice President and is responsible for strategic partnerships and business development.
US marijuana policy edges toward acceptance | Christian Science Monitor
Uncle Sam isn’t ready to light up just yet, but the Obama administration and at least some Republican governors seem to be edging toward a more accepting attitude toward marijuana use. Or at least they’re falling in line with that majority of Americans – 58 percent, according to Gallup – who favor legalization of marijuana.
US Attorney General Eric Holder this week said the federal government will issue banking regulations for state-approved marijuana businesses licensed to sell the drug for recreational or medical use.
Intense Media Spotlight on Marijuana Bodes Well For Cannabis Industry | Marijuana Business Daily
This week alone, dozens of media outlets covered daily developments on everything from Florida’s medical marijuana legalization push and the latest favorable cannabis poll, to marijuana billboards near the Super Bowl and the first licensed cultivation operations in Connecticut. Others ran features on the top marijuana websites (TheStreet.com), the growing acceptance of cannabis (Christian Science Monitor) and the industry’s banking issues (Politco).
This is having a real-world impact on the cannabis industry.
The mainstream media’s intense coverage of all things cannabis not only reflects changing attitudes about marijuana in the United States, it’s also helping to accelerate that shift. The coverage has brought marijuana into homes and executive suites across the country, sparking conversations, spreading awareness and spurring debate among everyday Joes and politicians alike.
DEBATE: How has marijuana changed Colorado’s image? | 9NEWS Denver
DENVER – A new NBC News-Wall Street Journal poll finds a majority of Americans support legislative efforts to legalize marijuana.
Fifty-five percent say they would support laws in which adults 21 and older are allowed to buy limited amounts of marijuana for personal use.
About a quarter would not approve of legalizing marijuana, but they wouldn’t actively oppose it either. Nineteen percent would actively work to oppose and overturn any legalization efforts.
There is no question that marijuana has changed Colorado’s image. Whether that’s for the better or worse is still up for debate.
“To the extent that the cannabis industry has changed Colorado. I think Colorado has even more changed the image of cannabis industry. We are showing the world that there is a sensible alternative to the underground black market for marijuana by taking it off the streets, out of the underground and putting it behind a highly regulated counter,” Taylor West of the National Cannabis Industry Association said.
Medical marijuana dispensary operator and NCIA Founding Member elected mayor of Sebastopol, CA
In another signal of the improving public perception of cannabis, cannabis consumers, and the industry that serves them, Sebastopol, CA has elected a medical cannabis advocate to be its mayor. Robert Jacob, 36, is the founder and executive director of Peace in Medicine and CEO of SPARC — both NCIA Founding Member businesses. Originally elected to city council in 2011, Jacob was selected as the next mayor in a unanimous vote of the city council.
Like many long-time cannabis entrepreneurs, Jacob entered the field through social work with people living with debilitating chronic illnesses. In addition to founding Sebastopol’s first medical marijuana dispensary in 2007, he has extensive experience at the head of nonprofits unrelated to medical marijuana and led a nationally-recognized charter school.
While he doesn’t attribute his election to his medical marijuana background, this out-front advocate identifies what’s changed in recent years in an interview with TIME: “what it signifies is that medical cannabis is no longer your whole identity. Historically, if you were a medical-cannabis advocate, that was your defining factor.” As cannabis businesses become more integrated in their communities through strong outreach and philanthropic programs, cannabis business leaders will become more integrated in traditional community leadership circles, and even elected to top positions.
“For me, to serve successfully — the organizations, communities or constituencies I represent — collaboration is key. I encourage anyone interested in getting more involved in cannabis or in local government to go for it. Starting at the local level, participation is how we shape our future” Jacob said in a statement to NCIA.
TIME has dubbed Jacob America’s “first ganjapreneur turned mayor”, but he is by no means the first to blend a career in public service with a career in cannabusiness: professionals joining the ranks of the cannabis industry now include a former DEA agent, aformer member of Congress, and former marijuana industry regulators.
“In fact, if we were able to have the Veterans Administration (VA) embrace medical cannabis, veterans would get better care because they could deal directly with their primary care physician, who is in the best position to give them appropriate advice. But sadly, the VA is caught with this federal restriction and they have a very narrow interpretation of what they can do, and how they can do it, and they simply do not permit their physicians to work with veterans to discuss and work with — let alone prescribe — medical cannabis.”
Gabriel Cross is a Founder and CEO at 
Gary Seelhorst
