NCIA’s editorial department continues the Member Spotlight series by highlighting our Social Equity Scholarship Recipients as part of our Diversity, Equity, and Inclusion Program. Participants are gaining first-hand access to regulators in key markets to get insight on the industry, tips for raising capital, and advice on how to access and utilize data to ensure success in their businesses, along with all the other benefits available to NCIA members.
Tell us a bit about you, your background, and why you launched your company.
My name is Dr. Donise Floyd and I am the founder and managing member of Legacy Greens, a vertically integrated cannabis company. I was born and reared in Detroit, Michigan and I am a product of the public school system. I have a BS and MS from U of Detroit Mercy. I also have a Ph.D. in Leadership. Throughout my career, I have been instrumental in developing teams, building sustainable programs, formulating compliance models, and have been instrumental mentoring and impacting the community. I have been an administrator, educator, professor, mentor, business owner, and advocate for the community.
I experimented with marijuana when I was younger and like many others around me understood the value of the product for medicinal and recreational purposes. When I was younger, I would hear individuals reference marijuana as their medicine. In the late 1970s up to now, people use the plant to treat things like anxiety, depression, stress, and cancer. It was referenced and/or used as a medicine before it was popular. What is now known as the cannabis industry was known as a “side hustle” in my family and in some cases, a full-blown business that thrived and supported families and communities. But it was illegal. I look back now through very educated eyes and think how things could have been different if there were no legal implications. There was a high price to pay if you were caught! Especially if you were Black!
I have witnessed my family, friends, and community pay for it with their lives. Whether it was long-term prison sentences or loss of life; the sacrifice was tremendous and the impact far-reaching and long-lasting. I have seen, felt, witnessed, and lived the fallout of the war on drugs that ultimately decimated my community. We knew the penalty for “hustling” this plant was either incarceration or maybe even death. Today, the very thing that destroyed communities and families has become a multi-billion dollar industry. Legacy Greens was birthed to assist in restoring the community, build generational wealth, and repair some of the harm in family dynamics. Our goal is to vertically integrate this company so that it can lend itself to support, educate, and fund other entrepreneurial ventures that are connected, directly linked or outside of the cannabis space.
What unique value does your company offer to the cannabis industry?
Legacy Greens is a minority female and social equity-owned and operated company. We are committed to connecting the community to resources. Our desire is to build a network and partnerships with other minorities, BIPOC, women, LGBTQ+ and veteran-owned companies both in the cannabis and ancillary space. The goal is to build relationships that would build wealth, opportunity, community, and lasting relationships.
While Legacy Greens is a for-profit cannabis company, our vision and mission are rooted in a philanthropic belief and value system. We are currently raising capital to launch phase one of our plan to open a dispensary leading to a fully vertically integrated company. We have submitted applications for several licenses beginning with an event planner. Others include dispensary, grow, and processing. Our business will use its profits to restore the community and part of our purpose is to build bridges that will lead to the creation of pathways to business ownership.
What is your goal for the greater good of cannabis?
Part of our goal is to “turn the black market green” by building bridges to access (one entrepreneur at a time). That is to say that we will support businesses with undocumented years of plant-touching experience with no resources and maybe even a lack of understanding with running a formal business. Legacy Greens is committed to R.I.D.E. for its community – Restore, Invest, Develop, and Educate.
What kind of challenges do you face in the industry and what solutions would you like to see?
The major barrier, at this time, is access to capital. We have been bootstrapping this initiative and have been faced with many challenges that we have and are still overcoming. Access to capital is a huge barrier but being a minority women business owner is another. It would be great to see more access to capital for the BIPOC community. It is so disheartening that in some cases the access is limited because of the color of your skin. We shall overcome all barriers and become a successful business that builds wealth not only for itself but for the community.
Why did you join NCIA? What’s the best or most important part about being a member through the Social Equity Scholarship Program?
NCIA has been a great networking tool. Their commitment to support social equity businesses is extremely valuable. The access to information has been very beneficial. The relationships and exposure have been immeasurable and the connections have been extremely rewarding.
It is my goal to continue to build relationships and maybe even partnerships. In some cases, it has even been a support system. Having the opportunity to discuss and roundtable ideas or challenges has proven to be an invaluable resource. NCIA has been an extremely valuable resource for Legacy Greens and its efforts.
U.S. Cannabis Business Conditions Survey Report Reveals Critical Concerns for the Cannabis Industry in 2022
by Beau Whitney, NCIA’s Chief Economist
As the largest national trade association of the cannabis industry, NCIA works to advocate for and advance the interests of hundreds of member businesses. The recent publication of the Whitney Economics U.S. Cannabis Business Conditions Survey Report offers a granular look at how respondents are feeling, and what they are worried about.
Survey description
There were a total of 396 respondents to the Whitney Economics U.S. Cannabis Business Conditions Survey. Respondents were either licensed cannabis businesses or ancillary businesses to the cannabis industry, and were from 20 states across the country. According to the report, the objective of the survey was to “establish a baseline of data, and identify the successes and the challenges that operators in the industry are facing.”
The survey examined policy, regulatory issues, industry successes, and overall industry sentiment using questions around demographics, questions intended to definitively answer a specific question, and questions with the opportunity to offer multiple responses or comments. We are pleased that NCIA members participated in the survey. Because this survey is intended to be conducted on a quarterly basis moving forward, we expect that a growing number of the NCIA membership will want to participate.
Key Takeaways From the Survey
Only 42% of respondents are turning a profit. Further, in terms of profitability, female respondents and non-white respondents are faring much worse than white, male respondents.
While 58% of businesses overall are not making a profit (either breaking even or losing money), 62.5% of female-run businesses are not turning a profit and 67.8% of BIPOC businesses are not turning a profit.
Lack of banking, market volatility, and state & federal taxation are the key issues facing cannabis operators.
72% of respondents stated that access to banking and other financial services was the top issue facing them.
Smaller operators are struggling by being pulled in two different directions. On one side is the competition from the illicit market that competes for the same customers as the smaller operators and the other side is the ever presence of big businesses looking to consolidate the market.
Taxation is an issue that impacts all businesses regardless of size. Cannabis operators run the risk of being taxed out of business. State policymakers are focused on state issues without considering the impact of federal policy and federal policymakers are not considering the state policy. This lack of a unified tax policy is creating strain on business operators.
The concerns of the industry are weighing heavier on the minds of operators than are the successes, and this is impacting industry sentiment.
Business owners are quite proud of their accomplishments over the past year, from increasing opportunities for women and minorities, to doing more for their workers and educating an ever-increasing clientele.
Despite this success though, cannabis operators’ concerns far outweigh their feeling of success and this is impacting the overall sentiment.
The word cloud on the successes tells a compelling story.
We are very excited that we have now established a baseline of new data that reflects operator sentiment and business conditions. This can help support the narratives with data when having policy discussions at the state and federal levels and to help shape strategy for operators in this space.
“We are delighted on how this initial survey turned out and look forward to surveying the cannabis landscape regularly in the future. We really appreciate the support we received from leading national cannabis organizations such as NCIA.” – Beau Whitney
Video: NCIA Today – Thursday, January 27, 2022
NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every other Thursday on Facebook for NCIA Today Live.
Equity Member Spotlight: Raina Jackson – Purple Raina Infused Self Care
NCIA’s editorial department continues the Member Spotlight series by highlighting our Social Equity Scholarship Recipients as part of our Diversity, Equity, and Inclusion Program. Participants are gaining first-hand access to regulators in key markets to get insight on the industry, tips for raising capital, and advice on how to access and utilize data to ensure success in their businesses, along with all the other benefits available to NCIA members.
Tell us a bit about you, your background, and why you launched your company.
I am an Oakland-based hemp CBD & cannabis brand strategist, product developer/educator, and cannabis industry advocate who recently became a member of the NCIA DEI Committee.
I am a Black “urban hippie” born and raised in San Francisco’s Haight Ashbury neighborhood who earned a B.A. with honors from Stanford University in cultural anthropology and sociolinguistics as a first-generation graduate and an MBA from the NYU Stern School of Business.
A product junkie with over 15 years of experience in sales/marketing management, personal care product development, and education. I have worked in the cannabis industry in sales management, distribution, and field marketing since 2015 and have been a Verified San Francisco Cannabis Equity Applicant seeking a cannabis business permit and license since 2018.
PURPLE RAINA Self Care is the culmination of my personal and professional passion for self-care products, the color Purple, and the artist Prince. Prior to entering the cannabis industry, I worked for top NYC beauty/personal care companies Maybelline and L’Oréal Professional, trained at the Vidal Sassoon school in London, and taught cosmetology at The Aveda Institute in SOHO NYC.
Upon returning to the San Francisco Bay Area in 2013, I became enamored with cannabis dispensaries and the local cannabis culture. While waiting for my permit, I decided to offer a hemp CBD version of PURPLE RAINA to show proof of concept, gain market feedback, and to promote the benefits of hemp CBD to a broader audience. The THC:CBD version will be launched in mid 2022.
What unique value does your company offer to the cannabis industry?
PURPLE RAINA Self Care offers topical infusions that soothe sore muscles and joints, nourish the skin from head to toe, and pamper the senses with aromatherapy. PURPLE RAINA Self Care promotes “mindful self-care and grooming” and seeks to appeal to our collective humanity focusing on our common need for daily grooming and self-care on a physical, mental, and spiritual level.
PURPLE RAINA offers a fresh approach to the category through multi-purpose infused topicals that will serve a range of self-care and grooming needs from head to toe, regardless of gender. Most topical products addressing pain relief overlook daily skin/hair care, personal grooming, and aromatherapy. Many have unpleasant odors and can be irritating to sensitive skin. I created PURPLE RAINA for people like me seeking to moisturize dry/sensitive skin and to soothe sore muscles with aromatherapeutic plant-powered products free of allergens and artificial ingredients.
PURPLE RAINA will eventually employ people from the community. I plan to recruit a “Purple Posse” of brand ambassadors who will conduct impactful in-store product demonstrations for consumers and retail staff. The “Purple Posse” will earn income and gain valuable sales presentation skills training.
What are some lessons learned from the beauty industry that you brought into your cannabis business?
My career has more recently reached the intersection of beauty/personal care and cannabis products. I recently learned that some of the largest cosmetic/personal care companies in the world are now incubating emerging brands instead of regarding them as competition to be squashed or absorbed. Some are being groomed for future acquisition but not always anymore. It’s a more mutually beneficial business relationship.
These beauty behemoths realize the importance of an ecosystem of high-end products, mid-priced and value brands, mature institutional brands, and young indie/niche brands readily available online and in stores. It best serves the customer when they have multiple quality choices at a range of price points. These companies are also assuming their corporate responsibility to the industry and society. They are abstaining from unfair competitive tactics aimed at eliminating competition from emerging brands.
What is your goal for the greater good of cannabis?
The cannabis plant, as a metaphysical healing force, deserves to be represented by an equitable accountable industry under a new breed of conscious compassionate capitalism valuing Profit & People / People & Profit like Yin & Yang.
During the 2021 Meadowlands conference/retreat at Camp Navarro, CA, surrounded by majestic redwood trees, I imagined the notion of a relationship between big trees and little trees as an analogy for cultivating an equitable cannabis ecosystem where little trees can still thrive to grow among the big trees, some eventually becoming big trees themselves. Imagine if big trees could share the nutrients in their roots with neighboring little trees, as a metaphor for how corporate financial, technical, and educational resources could be redirected to help benefit emerging equity and legacy businesses. This doesn’t exist in nature but imagine the social and financial impact it would have on so many who have been systematically excluded and discriminated against, as well as on those who contribute these resources.
What kind of challenges do you face in the industry and what solutions would you like to see?
Challenges: I face financial challenges like so many other cannabis entrepreneurs. Yet this is compounded as a Black woman, a member of an underestimated undervalued group that is underrepresented as cannabis business executives and owners. We receive the lowest amount of investment funds across industries due to racism and sexism, though we are the fastest-growing group of business owners in the U.S. and tend to be successfully bootstrapped and financially savvy.
Additionally, there is a big disconnect in current equity programs between the criteria to qualify and the financial resources and business acumen necessary to succeed if you don’t have access to investors and sound cannabis business and legal advisors. Late in the game, I was even told that I didn’t need a cannabis license to make my products and can just hire a manufacturer to produce them under their license. This is a viable option initially to go to market but not long-term. I would have wasted significant time and money and missed the whole point if I abandoned the pursuit of my own license. Also, as a brand of customized topical formulations manufactured by contract manufacturers, my rare business model tends to be overlooked by local and state cannabis regulations. For example, it took a few years and forfeited application fees for the type 13 transport only/self-distribution license I now seek to be introduced, representing the only feasible path to licensure and the only way I could go to market, other than the type-S shared license which doesn’t work for me.
Solutions: As part of a corporate responsibility mandate, successful profitable cannabis businesses along the supply chain, MSOs, and future alcohol and tobacco corporations entering the industry should make contributions into a Cannabis Equity/Legacy Fund collected by state licensing agencies and administered by an industry non-profit like the NCIA or a group of B-corps operating in the highest integrity. These big trees would contribute financial resources and access to key technical services as part of their platinum “industry membership fees,” a standard cost of doing business. In the same way their license fees are proportionate to projected revenue, their contributions into the fund would be proportionate to recent and projected revenue.
Our allies are instrumental in helping those who are resistant or just don’t know what to do to recognize their responsibility to use their privilege for the greater good, ultimately benefiting all parties’ bottom lines and corporate morale. There’s no need for guilt or blame, just empathy, goodwill, good works, and collaboration to help undo historic wrongs over time.
I want to see U.S. cannabis legalization soon with equity and anti-monopoly policies already in place. The cannabis industry should under no circumstances become fully dominated by oligarchies/monopolies like the early telephone and utility companies that had to be split up or even the current social media and tech giants under scrutiny. This policy should demonstrate recognition of the value DEI and BIPOC partners bring to the cannabis industry along the entire supply chain. Government solutions would include SBA grants and forgivable PPP-like loans like any other industry receives.
Why did you join NCIA? What’s the best or most important part about being a member through the Social Equity Scholarship Program?
I always wanted to join the NCIA since I attended an annual conference years ago but couldn’t afford it. The best part of being a member through the Social Equity Scholarship Program is the weekly Zoom call held by Mike Lomuto for equity cannabis entrepreneurs and allies nationwide. We check in to discuss our triumphs and challenges and share valuable business insights and ideas for building a more equitable cannabis industry. These calls inspired me to apply for the DEIC and to intensify my cannabis equity advocacy and thought leadership.
Video: NCIA Today – January 13, 2022
NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every other Thursday on Facebook for NCIA Today Live.
NCIA’s DEI Program New Year Update
by Mike Lomuto, NCIA’s DEI Manager
We must not let federal legalization become the “War on Drugs 2.0.” Rather, it must be the foundation for the building of generational wealth.
The modern-day cannabis industry is the product of a century of prohibition and the war on drugs. With federal legalization fast approaching, it is up to us all to ensure that this industry does not become the “Drug War 2.0.”
At the National Cannabis Industry Association, we recognize the importance of impactful Diversity, Equity, and Inclusion initiatives.
At the core of our DEI Program is our Equity Scholarship Program (ESP). Launched in 2020, nearly 200 ESP members are enjoying the benefits of a complimentary first year of NCIA membership thanks to this program and its financial sponsors.
Equity Scholarship Program Features
Complimentary passes to all NCIA events
Live Social Equity Workshops at our national conferences
Weekly video conference calls
Facebook community
Catalyst Conversation Educational Webinars
Unique Opportunities for ESP Members to Leverage NCIA’s Platforms
Greater representation on NCIA panels and webinars
“Being part of the program has transformed our company. The mentorship we’ve received has been instrumental in our growth. Being part of NCIA provided opportunities for us to gain new business relationships, become committee members, and participate in webinars. It’s also been great meeting other social equity members and building a community together.” – Kay Villamin, Hush Chicago, NCIA’s State Regulations Committee
As a trade association, at the core of NCIA’s mission is to create industry-shaping policy advocacy. Our Diversity, Equity, and Inclusion Program is ensuring that diverse voices are properly integrated into that advocacy, including:
Launching NCIA’s Sustainability Collaboration, in collaboration with several dedicated NCIA Committee Leaders, with an emphasis on incorporating the DEI perspective, which is too often left out of the sustainability conversation
A new Health Equity project in development
Of course, Diversity, Equity, and Inclusion would be meaningless unless we see that greater representation plays out on our biggest stages and in our board rooms.
NCIA has one of the most diverse boards of directors in the industry, including members who joined NCIA through our Social Equity Scholarship Program
Increasingly diverse representation across the leadership of NCIA’s fourteen sector committees
Consistently inclusive representation on panels – live and virtual. The overwhelming sentiment at our recent Midwest Cannabis Conference in Detroit was that it was “the most diverse and inclusive conference” many speakers and attendees had ever experienced
“I’m a firm believer that the more you give, the more you get, and my experience at NCIA is proof of that. Becoming a scholarship member at NCIA as a woman and minority founder has been an incredible opportunity… Committee work has rewarded me with new perspectives, recognition, and invaluable relationships that have strengthened my business.” – Helen Gomez Andrews, Co-Founder & CEO, The High End; Committee Organizer, DEI Committee
“The Scholarship Program gave way more than we could ever ask for. As a veteran and minority-owned company, with a core focus on community impact through cannabis, we have been provided with important opportunities and resources. The program is holding the door open for others like us to enter into the industry. You will not regret being a part of the Social Equity Scholarship Program.” – Keyston Franklin, The Doobie Room; Vice Chair, Banking Committee
As we continue to build for the integrity of the industry and future generations, we are looking for partners to join us.
Equity Member Spotlight: Better Days Delivery Service
This month, NCIA’s editorial department continues the monthly Member Spotlight series by highlighting our Social Equity Scholarship Recipients as part of our Diversity, Equity, and Inclusion Program. Participants are gaining first-hand access to regulators in key markets to get insight on the industry, tips for raising capital, and advice on how to access and utilize data to ensure success in their businesses, along with all the other benefits available to NCIA members.
Tell us a bit about you, your background, and why you launched your company.
I grew up in Colorado Springs in a single-parent home, overcame poverty, violence, houselessness, and a felony for marijuana possession to get to the place that I am in today. I’ll never forget the immediately depressing feeling of knowing that I’d lost opportunities, let my mom, my family, and my community down when initially being charged with a felony for marijuana distribution. Thankfully my people reminded me that I am much more than this scarlet letter F represents. I did my time, paid my restitution, and kept on grinding. Now a father of two beautiful babies, their presence is a constant reminder that I can’t give up. Left out of the weed industry, I focused on community and education as a 5th grade teacher. I decided to leave the classroom to start this business because I wasn’t happy due to the politics and wasn’t feeling valued in my career. I have worked hard to break out of the cages/boxes that I was placed in. I have been turned down for housing, employment, and have had doors closed because of this felony but I keep the belief that when one door closes another opens and because of that I’m determined to succeed. The weed industry seems much more of a fit for me, I chose delivery because it was the easiest point of entry however I dream of one day being vertically integrated.
What unique value does your company offer to the cannabis industry?
Our company, Better Days Delivery Service, offers a community aspect that is sorely missing in the industry. In my opinion, most of the industry hasn’t done their due diligence to truly serve and build relationships with patients. We have partnered with the nurse network so that they are able to give true medical advice while we work on the discreet, quick, personable service that we have become known for. Safe, affordable, discreet service is mandatory, we offer luxury and frequent flyer convenience as well. By focusing on the customers that are often overlooked, I am confident that we can provide a service that will revolutionize all of the industry. We want to deliver weed with the personable service that existed before the industry existed, I want to remind people that it’s still possible. Who wouldn’t love a delivery company that reminds our customers that our worst days are behind us? “Better Days Are On The Way.”
What is your goal for the greater good of cannabis?
In the words of 2Pac, “better days got me thinkin’ ’bout better days!” My goal for the greater good of cannabis is to remind people of the healing aspects of the plant. I want to help free everyone that has been incarcerated or charged for anything to do with the plant. I want to contribute to scientific research that will help heal and help people live despite their ailments. I would love to see it totally decriminalized and if I am able to pay my bills and make it better for my family in the process even better!
What kind of challenges do you face in the industry and what solutions would you like to see?
Michael Diaz-Rivera
The biggest challenge that I have is a lack of capital both financially and socially. It is not cheap to get into the industry and I have been bootstrapping and using my savings thus far. Having access to all of the money that I would need to reach my dreams and create generational wealth would be perfect. I’ve also noticed that in this industry, it pays to know people as a social equity licensee. I feel like the majority of the industry looks at us as if we’re begging for scraps. Because of that, I’ve worked to build relationships with powerful people who have a true commitment to equity and support for those who have less.
I’ve also begun the steps to make my business a social enterprise. The true challenge in being a business that works for social good will be to find a balance between profit, sustainability, and social impact. I aim to do exactly that!
Why did you join NCIA? What’s the best or most important part about being a member of the Social Equity Scholarship Program?
It was important for me to build a network and NCIA is just the trade organization to help me do that. NCIA has been a platform that helps me get into the doors that I usually wouldn’t be able to access. I am able to ask important questions about the development of my business to those with answers. The social equity program allows me to chat with those from similar upbringings while sharing the tools and resources to help us all succeed. The most valuable part has been the sounding board and emotional support that the group continues to provide.
As a nation, we have to be accountable for the “war on drugs” as everyone turns their eyes toward federal legalization. Without accounting for the harm that continues we’ll never get to the “better days” that the people deserve.
NDAA Blues, But HOPE On The Horizon
by Morgan Fox, NCIA’s Director of Media Relations
The last week or so has been an interesting one in Congress when it comes to cannabis policy reform, and carried with it the usual mix of positive and unfortunate developments.
First, in yet another installment in the long and ongoing saga that is the SAFE Banking Act’s path toward becoming law, a minor setback. Champion and lead sponsor Rep. Ed Permutter had been working for weeks to get SAFE Banking language included in the NDAA, or National Defense Authorization Act. This spending package is typically focused on security and military matters, and is considered “must-pass” legislation by both chambers. Now, you may be asking what allowing banks to more easily work with legal cannabis businesses has to do with national security, and the answer – oddly enough – is a lot. Beyond the obvious public safety benefits of no longer forcing most cannabis businesses to operate entirely in cash and making them targets for crime, allowing access to banking would dramatically increase financial transparency in the industry. This would give law enforcement additional tools to help prevent the admittedly rare occurrences of criminals extorting legal businesses or using them to launder money, which is certainly a security concern. Perhaps even more relevant, being able to use the financial services that are available to other legal industries would help remove significant barriers to entry into the legal market and allow small cannabis businesses to be more competitive with unregulated operators, some of whom have ties to international drug trafficking organizations that present an ongoing threat to global security.
Unfortunately, Rep. Perlmutter decided not to add the banking language to the NDAA at the urging of Speaker Pelosi in order to ensure the spending package would pass without issue. Despite this compromise, however, Rep. Perlmutter has vowed to attempt to add it to every available legislative vehicle going forward. Given the fact that the Senate is currently stalling on the SAFE Banking Act as a standalone bill, this may be the most viable strategy of getting cannabis banking reform through both chambers before the end of the current Congress.
Speaking of other vehicles for reform, the ongoing appropriations process continues to hold hope for passing a number of cannabis-related items in the near future. Lawmakers recently approved a continuing resolution to fund the government through February and avoid a shutdown. This means that there will be no changes to the previous budget until then, but it does give us more garner support for the provisions that we want to make sure are part of that spending package. That includes preventing the Department of Justice from targeting state-legal adult-use cannabis businesses and programs, SAFE Banking, improving access for veterans, expanding research, and more.
In better news, Reps. David Joyce (R-OH) and Alexandria Ocasio-Cortez (D-NY) partnered up to introduce a bill that would provide federal support for state-level expungement efforts. The Harnessing Opportunities by Pursuing Expungement (HOPE) Act would allocate $20million for a grant program to help reimburse states for the costs associated with expunging non-violent cannabis convictions. This is incredibly important because most of the federal expungement conversation has focused around federal convictions, yet the vast majority of arrests and convictions occur under state laws. Most states lack the resources and infrastructure to effectively address this issue at a large enough scale and in a manner that is affordable to the victims of prohibition who are just trying to clear their records of convictions for behavior that is now legal for a majority of Americans. It is wonderful to see bipartisan support for this important legislation, and we look forward to working with lawmakers to push it through as soon as possible.
That’s all for now, but stay tuned for further updates from Capitol Hill. And don’t forget to register for NCIA’s Cannabis Business Summit in San Francisco next week!
Member Blog: Compensation in the Wild West of Cannabis
by Fred Whittlesey, Founder, President, and Principal Consultant of Cannabis Compensation Consultants
Member of NCIA’s Human Resources Committee
At the NCIA Cannabis Business Summit & Expo next week, there will be a panel session titled Cultivating Your Workforce. As a member of the NCIA Human Resources Committee, I have been actively involved in putting this together, and as a compensation expert, I wanted to ensure there is going to be, of course, a lot of discussion about compensation – executive compensation, incentive compensation, and employee ownership.
It’s appropriate that this month’s #CannaBizSummit is being held in San Francisco, arguably the historical culmination of Wild West culture, with the Gold Rush as its driver. Not unlike today’s cannabis industry – a gold rush of sorts, by federal definition a lawless community, and a community culture of moving fast and defining as we go.
As a compensation expert, I typically prefer a more orderly and well-defined world, which is why I am fascinated with working in the field of compensation in the cannabis industry. It’s challenging because I am in the business of answering clients’ questions about compensation. It’s not always easy to do in cannabis.
There are three factors that explain where we are today in understanding and analyzing compensation levels and practices in cannabis, and three driving forces that will take us from today’s Wild West to tomorrow’s still innovative, still creative, but a bit more business-like approach to compensating employees in cannabis companies.
Today
No valid compensation surveys or databases exist for the cannabis industry. There are various publications that self-label as “surveys” but are merely data compilations missing the rigor of survey methods that have been established over the past decades:
Little or no definitions of jobs
Extremely wide ranges that defeat usability
Reports of cash compensation only, some with base salary only
Very small sample sizes, often not disclosed
No list of participating companies
In short, they’re not compensation surveys. Established survey companies have not entered the cannabis market due to legal and/or stigma factors. They will, eventually. But they’ll be late to the party, so to speak.
For now, we have no real market data. Except for some executive positions…
For executive positions and equity compensation plan design details, data from public company securities filings continues to be the most valid and reliable source
Securities and Exchange Commission EDGAR filings (U.S.)
System for Electronic Document Analysis and Retrieval (SEDAR) (Canada)
Despite currency, cultural, and governance differences, combining U.S. and Canadian data makes sense given the integrated labor market for talent. But it’s no easy task.
Unlike for publicly-traded companies in the U.S., executive compensation information for cannabis companies is difficult to obtain and interpret for multiple reasons:
Most companies are listed on Canadian exchanges
The Canadian disclosure requirements are less rigorous, such as:
Lack of a single table for all forms of executive pay
No dollar value required to be calculated for equity compensation grants
Limited disclosure of the history of equity compensation grants
Companies whose shares are traded in the U.S. are not on major exchanges and not subject to the extensive disclosure requirements of NYSE and Nasdaq companies. This is changing – as exemplified by last week’s listing of the SPAC Canna-Global Acquisition Corp (NASDAQ:CNGLU) on Nasdaq, but SPAC listings have a reduced set of disclosure requirements. (full disclosure: I am an investor in CNGLU.)
Most companies are of a size and status (e.g., Emerging Growth Company) that also have reduced pay disclosure requirements.
So, despite what is a rich source of executive and equity compensation data which we have relied on for decades now, these databases are not (yet) of the same usefulness as for other industries.
And even if we didn’t have those tactical issues… the characteristics of the cannabis industry exacerbate these difficulties:
Smaller companies and private companies
High-growth stage, resulting in the lag time in reporting rendering the information significantly out-of-date
High concentration of founders and insider ownership, which results in compensation levels and practices that are not free-market based – one CEO taking zero compensation and another in the 8 figures.
Top-heavy C-level position structures, e.g., an Executive Chair and a CEO and a President and a COO – too many chiefs
So, the question of how much this company pays its top executives… is an unanswerable question. I wonder if even the company could answer that question?
Tomorrow
The turbulence in executive compensation levels and practices will lessen, and our knowledge and understanding will improve, when three trends converge:
More public companies, including SPAC deals, and continued M&A activity, bring in more outside investors with expectations of corporate governance and practices consistent with other industries in which they are invested. This also will have the effect of lessening the influence of founders as more “professional” (hired external) Board members are added to the governance structure.
With more public companies will come more market data, as we have for most industries today both in the U.S. and Canada. While limited to the top 3 or top 5 executives in each company, these disclosures provide a factual and verifiable dataset for the most senior positions, for the use of equity compensation for employees, and for the breadth of executive compensation arrangements such as new hire packages, severance and change in control agreements, and various perquisites.
And of course, legalization. With the U.S. federal restrictions and the associated stigma removed, cannabis companies will become subject to the same governance, institutional investor and proxy advisor pressures, and the large consulting firms will push them toward the ISS/Glass Lewis “playbook” approach to advising. I’m not saying that’s a good thing, because it’s not, but we already see it happening in Canada where large multinational compensation firms are overlaying the boiler-plate ABCs.
It is my hope that the innovation and creativity we see in the cannabis sector today will not suffer from these three dynamics. There’s nothing wrong with living in the Wild West, if you’re comfortable with fewer rules, fewer constraints, and less transparency. But it helps when there is a Sheriff and a couple of Deputies in town.
This conversation is not limited to executive compensation. Equity compensation for all employees is a common aspiration in cannabis companies. Equity compensation plans are always complex to design, implement, and administer and are exponentially more so in cannabis companies. Complex organization structures with public entities, private companies, LLCs, and even nonprofits all bring talent from diverse industries with vastly ranging experience with and expectations for equity compensation.
A trimmer coming from agriculture or a Dispensary Manager from specialty retail has likely not received equity as a component of their compensation in the past.
A chemist coming out of biopharma or a software developer, if told there is no equity compensation plan for all employees at your company will be, at the least, disappointed if they even continue interviewing with you.
Similarly, a candidate from the financial services world may be surprised that every employee is not participating in one or more cash incentive plans, not just the sales reps. There is a LOT of work to be done on compensation planning in the cannabis industry, and I’m thrilled to be right in the middle of it.
Fred Whittlesey is the Founder, President, and Principal Consultant of Cannabis Compensation ConsultantsTM, a Compensation Venture Group SPC company.
Fred is a member of the NCIA Human Resources Committee and the NCIA Sustainability Committee.
Fred is recognized by corporations, professional organizations, universities, media, and colleagues around the world as a compensation expert and thought leader. His ideas have been presented in numerous book chapters, journal articles, media interviews, conference and seminar presentations, and hosted blog postings.
Fred’s thought leadership in the field of compensation is evidenced by his delivery of more than 300 conference presentations, seminars, certification courses, webinars and podcasts. He has presented and taught in 26 US States, 4 Canadian Provinces, UK, Ireland, France, Germany, Netherlands, Switzerland, Turkey, and Indonesia.
He has authored more than 50 peer-reviewed journal and magazine articles, book chapters, white papers, and sponsored papers. He has been a paid writer for PayScale.com, Salary.com, InvestorJunkie.com, and SeekingAlpha.
Fred has been interviewed and quoted more than 100 times by more than 35 different media sources including Associated Press, Bloomberg, Business Week, Fortune, New York Times, Los Angeles Times, Orange County Register, Seattle Times, San Jose Mercury News, and San Francisco Chronicle. He has been retained to conduct research to support investigative journalism for The Los AngelesTimes and The Boston Globe.
Cannabis Compensation ConsultantsTM is a division of Compensation Venture Group SPC, a Washington Social Purpose Corporation. The company is a Green America Certified Business.
The firm specializes in compensation strategy, executive and director compensation, equity-based compensation, incentive design, and employee pay with a focus on sectors driven by innovation. We also provide expert witness and litigation support for civil litigation and regulatory matters. Our clients include Boards of Directors and executive teams of public and private companies, LLCs, S corporations, and foreign subsidiaries.
Our Canadian sibling consulting firm is Conscious Compensation Group Inc. in Squamish, BC.
Thoughtful Legislation: States Reform Act Introduced
Photo By CannabisCamera.com
By Michelle Rutter Friberg, NCIA’s Deputy Director of Government Relations
Recent polling from Gallup showed that an astonishing 68% of Americans believe that cannabis should be legal. And while support spans age groups and party lines, cannabis is usually thought of as an issue Democrats champion – but one woman is looking to change that.
This week, freshman GOP Congresswoman Nancy Mace (SC) officially threw her hat in the cannabis reform ring with the introduction of the States Reform Act. Notably, this is the second comprehensive cannabis bill introduced by a Republican member of Congress (the other was sponsored by Rep. Dave Joyce, one of the co-chairs of the Cannabis Caucus).
According to Rep. Mace’s office, here are some of the things the bill does:
Ensures that no state or local government will be forced to change its current cannabis policies by removing cannabis from Schedule I and deferring to states.
Regulates cannabis federally like alcohol under USDA for growers, ATF/TTB for cannabis products, and FDA for medical use.
Institutes a low 3% federal excise tax on cannabis products to fund law enforcement, small business, and veterans mental health initiatives.
Ensures the safe harbor of state medical cannabis programs and patient access while allowing for new medical research and products to be developed.
Outlines the federal release and expungement for those convicted of nonviolent, cannabis-only related offenses. This will not include cartel members, agents of cartel gangs or those convicted of driving under the influence (DUI). Mace’s office estimates that approximately 2,600 releases will be expected at the federal level. State level releases and expungements will be left to each state to determine.
Protects military veterans by ensuring they will not be discriminated against in federal hiring for cannabis use or lose their VA healthcare benefits.
Protects children and young adults under the age of 21 from cannabis products and advertising nationwide. Incentivizes states to make cannabis illegal for anyone under the age of 21, with a medical exception for prescribed use. Provides funding to the Substance Abuse and Mental Health Services Administration to ensure protections for minors are being considered.
Protects medical cannabis for the following uses: arthritis, cancer, chronic pain, sickle cell, HIV/AIDS, PTSD and other medical uses per a state’s specific cannabis regulations.
NCIA applauds Rep. Mace for introducing this new and carefully thought out piece of legislation. There are many provisions in the bill that we support: low tax rates and barriers to entry, allowing states to lead – but also many areas with room for improvement like those pertaining to criminal justice and trade. NCIA will continue to work with Rep. Mace’s office to improve this bill and attempt to find common ground across political parties in order to advance cannabis policy reforms.
Member Blog: Let the Good Times Roll – New Jersey’s Cannabis Markets Primed to Meet High Demand with Two Big Announcements from the Cannabis Regulatory Commission
New Jersey’s medicinal and adult-use cannabis markets are finally starting to take shape more than ten years after the medicinal marijuana program was launched. In the span of one month, the New Jersey Cannabis Regulatory Commission (“CRC”) not only announced awards for fourteen new medicinal cannabis licenses, but also, on November 9, 2021, gave the long-anticipated official notice that the state will soon begin the application process for the award of personal-use cannabis licenses.
In particular, the CRC announced this week that it will begin accepting adult-use applications for Class 1 Cultivator and Class 2 Manufacturer licenses, as well as licenses to run testing laboratories, beginning on Monday, December 15, 2021. Additionally, the CRC announced it will begin accepting applications for Class 5 Retailer personal-use cannabis licenses on March 15, 2022. While there is more information that will be forthcoming from the CRC, some major takeaways from the CRC’s November 9th notice are as follows:
The CRC set forth its scoring criteria and what applicants need to provide to score full points, as well as bonus points;
Bonus points will be awarded for, among other things, confirmation that at least one owner has been a New Jersey resident for at least five years as of the date of the application, and submission of a signed project labor agreement with a bona fide labor organization;
Local support for applicants will be critical as a municipality may, among other things, submit its preference to the CRC for the issuance of licenses to certain adult-use cannabis businesses;
Applications will be accepted on a rolling basis, with no limit on the number of licenses the CRC will award, other than a preliminary limit of 37 Class 1 Cultivator licenses prior to February 22, 2023. These cultivator licenses will be awarded to the first 37 applicants that meet all licensing, regulatory and operational requirements, and satisfy the conditions for priority approval;
The only exception to the above cap on Class 1 Cultivator licenses is for those applicants who apply as a “microbusiness” (there are residency requirements to qualify as a microbusiness, and operations of a microbusiness shall include no more than 10 employees; a facility of no more than 2,500 square feet; possession of no more than 1,000 plants per month; and/or a limit of 1,000 pounds of usable cannabis per month); and
Priority review and approval will be given to applicants who meet the CRC’s social equity, diversely-owned, and impact zone business criteria, in addition to other metrics.
The CRC will hold a pre-application webinar on November 30, 2021 for anyone interested in personal-use cannabis licensure. The medicinal and personal-use cannabis markets have put down deep roots in New Jersey, and consumer demand is budding like never before. Don’t let questions about this new regulatory landscape leave you and your business up in the air.
Charles J. Messina is a Partner at Genova Burns LLC and Co-Chairs the Franchise & Distribution, Agriculture and Cannabis Industry Groups. He teaches one of the region’s first cannabis law school courses and devotes much of his practice to advising canna-businesses as well as litigating various types of matters including complex contract and commercial disputes, insurance and employment defense matters, trademark and franchise issues and professional liability, TCPA and shareholder derivative actions.
Jennifer Roselleis a Partner at Genova Burns LLC and Co-Chair of Genova Burns’ Cannabis Practice Group. She has unique experience with labor compliance planning and labor peace agreements in the cannabis marketplace. In addition to her work in the cannabis industry, Jennifer devotes much of her practice to traditional labor matters, human resources compliance and employer counseling.
Daniel Pierreis an Associate at Genova Burns and a member of the Cannabis and Labor Law Practice Groups. In addition to labor work, he likewise assists clients in the cannabis industry, from analyzing federal and state laws to ensure regulatory compliance for existing businesses to counseling entrepreneurs on licensing issues.
For over 30 years, Genova Burns has partnered with companies, businesses, trade associations, and government entities, from around the globe, on matters in New Jersey and the greater northeast corridor between New York City and Washington, D.C. We distinguish ourselves with unparalleled responsiveness and provide an array of exceptional legal services across multiple practice areas with the quality expected of big law, but absent the big law economics by embracing technology and offering out of the box problem-solving advice and pragmatic solutions.
Our firm is proud of its proven track record of assisting multiple clients with being awarded medical licensure in New Jersey, and continuing to counsel clients on the dynamic federal and state regulatory landscape, as well as with corporate transactional, labor/employment, real estate, land-use and other issues.
Given Genova Burns’ significant experience representing clients in the cannabis, hemp and CBD industries from the earliest stages of development in the region, the firm is uniquely qualified to advise investors, cultivators, processors, distributors, retailers and ancillary businesses.
Equity Member Spotlight: Exspiravit LLC
This month, NCIA’s editorial department continues the monthly Member Spotlight series by highlighting our Social Equity Scholarship Recipients as part of our Diversity, Equity, and Inclusion Program. Participants are gaining first-hand access to regulators in key markets to get insight on the industry, tips for raising capital, and advice on how to access and utilize data to ensure success in their businesses, along with all the other benefits available to NCIA members.
Tell us a bit about you, your background, and why you launched your company.
My name is Michael Webster, and I am the Founder & Managing Member of Exspiravit LLC, a licensed Michigan cannabis company. I earned a bachelor’s degree from the Harvard Extension School in Liberal Arts, and a master’s degree in Composition and Rhetoric from New York University. As a native New Yorker, I tried to wait patiently for cannabis legalization at the state level, but Michigan represented a unique entry point to the regulated market.
Like many NYC kids, my introduction to cannabis occurred at an early age. It was part of the local culture. However, it wasn’t until my late teens that I indulged. And it was even later, when my mom – a fierce cannabis advocate – was diagnosed with breast cancer, that I was introduced to the medicinal benefits of cannabis. I went on to write my graduate thesis on this very topic. From there, I embarked on my cannabis career path.
I launched Exspiravit for a myriad of reasons, not the least of which was to access a burgeoning market that held such promise for the creation of generational wealth. But as a frontline victim of the war on drugs – a simple possession charge of less than a gram of cannabis that temporarily derailed my academic pursuits – I saw an opportunity to educate and destigmatize this amazing plant, that, up until about 80 years ago, had been a staple commodity in human society.
What unique value does your company offer to the cannabis industry?
We are currently deploying our Cannabis Event Organizing license for consumption events throughout the state of Michigan – both large and small – while we raise capital for the build-out of our solventless extraction lab. We believe in clean plants and derivatives and are working closely with the Cannabis Certification Council on securing the “made with organic flower” seal. The event organizer license has proven the perfect complement to our other ventures, as it has allowed us to redefine what “an event” really is, and to take our show on the road. We also offer consultancy to other social equity and small operators, with a focus on regulatory compliance, helping to share what we’ve learned on our journey.
What is your goal for the greater good of cannabis?
When it comes to our company values, Exspiravit advances a unique position on social equity. For far too long, social equity has been considered a gift or non-transactional offering. We at Exspiravit believe equity – social or otherwise – is earned and therefore OWED. Most current social equity initiatives in the cannabis industry broadcast messages of handouts and favors. This is the wrong message. When accessing the equity in your home, or other assets, neither you nor the bank treats those transactions as gifts. Social equity represents a debt owed from those who have weaponized their racial or class privilege to monetize a commodity market that was built on the willful destruction of black, brown, poor white, and otherwise marginalized communities. Debts are owed. Debts are to be paid. And their payment represents the satisfaction of an obligation and not a benevolent gesture.
Quite the opposite, those tapping equity are claiming what is rightfully theirs. Again, equity is earned, accrued, developed, and owed, but certainly not to be asked or begged for. Exspiravit plans to use its voice to correct this adversely impactful interpretation of social equity, in hopes of realigning access to resources in the regulated cannabis sector. In addition to our work on the social equity front, Exspiravit’s goal for the greater good of the cannabis industry is to advance the for-purpose market. We believe that flower and euphoria only represent the tip of the iceberg when it comes to products and outcomes. We envision an ultra-specific and ultra-targeted market that features purpose-driven derivatives for a highly informed consumer.
What kind of challenges do you face in the industry and what solutions would you like to see?
Like many social equity cannabis operators, accessing capital has been our greatest challenge. And this challenge is intrinsically linked to our greatest criticism of social equity initiatives –- the lack of social equity funding. For social equity applicants, the process can be grueling. And for those of us who make it through to licensure, being greeted on the other side by predatory investment opportunities exacerbates our challenges. Social equity initiatives MUST feature a robust social equity fund. Without it, social equity operators are being positioned for failure. Diversion of existing tax revenue or special taxes levied against large and multi-state operators can easily address these challenges. Too, we would like to see more collaboration than competition. Regulated cannabis markets should be rolled out in ways that foster greater opportunities to collaborate. Support for collectives, and other similar strategies, are low-hanging fruit when it comes to solutions.
Why did you join NCIA? What’s the best or most important part about being a member of the Social Equity Scholarship Program?
We joined the NCIA for a variety of reasons. Firstly, it was accessible. Through its outreach, the NCIA met us where we were and provided us a robust package of resources that weren’t intended to lure us into paid membership, but rather to help us stand up and be able to recognize the benefits of such association. You can’t effectively inform a starving, homeless, injured person until you have fed, housed, and rendered aid to them. And that appears to be the NCIA’s philosophy – meet the immediate, pressing needs of social equity operators, positioning them to then effectively and efficiently access industry resources. The perfect example of this strategy is NCIA’s decision to offer one year of complimentary membership to social equity operators, including access to the national and regional conventions. The value here, to one’s first year of operation, is immeasurable. These events have provided the opportunity to forge important and lasting connections with other industry stakeholders that have made all the difference for us. Without question, we would not be enjoying such forward progression without the genuine efforts of the NCIA.
A Full Plate For Congress – Status Update for SAFE Banking, MORE Act, CAOA, and Veterans
Photo By CannabisCamera.com
by Michelle Rutter Friberg, NCIA’s Deputy Director of Government Relations
I’m not sure if you’ve seen the news, but Congress has had a lot on its plate recently: negotiations over infrastructure, the budget, the debt ceiling, reconciliation, not to mention the ongoing COVID-19 pandemic! And while the path to cannabis reform has been slightly overshadowed by some of these larger issues, for the time being, the NCIA team is continuing to work tirelessly and incessantly on your behalf to enact legislation that would help you and your business. Let’s take a look at some of the more recent developments from Washington, D.C:
SAFE Banking:
Last month, the House passed the language of the SAFE Banking Act for the fifth time via the must-pass National Defense Authorization Act (NDAA). NCIA and our allies on Capitol Hill are always trying to be creative and come up with new, different avenues to advance our policy priorities, and the NDAA was a great opportunity that we were able to take advantage of! NCIA will continue to work with members of the Senate Armed Services Committeeand other stakeholders to push for the SAFE Banking Act to be included in the final bill language. Stay tuned as the NDAA process unfolds throughout the remainder of autumn.
The MORE Act:
Also last month, the House Judiciary Committee passed the MORE Act out of committee by a vote of 26-15 but the bill still has a long journey ahead of it. It’s unlikely that committees like Ways and Means and Energy and Commerce will waive their jurisdiction again, and it’s critical to remember that the chamber actually became slightly more conservative following the 2020 election. Committee schedules are jam-packed right now, however, we continue to meet with those with jurisdiction over the MORE Act and encourage them to take up this important piece of legislation.
CAOA:
The discussion draft of the Cannabis Administration and Opportunity Act (CAOA) was unveiled back in July by Senate Majority Leader Schumer (D-NY), Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ). In the following month, NCIA worked diligently with our Evergreen Roundtable, board, committees, social equity scholarship members, and others to provide detailed feedback on various topics as requested by the Senators. NCIA continues to be a resource for the Sponsoring Offices and committees of jurisdiction, however, official bill introduction likely won’t happen until early-2022.
Veterans:
Last week, the House Veterans Affairs Committee: Subcommittee on Health held a hearing on a number of bills; among them H.R. 2916, the VA Cannabis Research Act of 2021. While this bill is not a piece of NCIA priority legislation, we applaud the committee, longtime sponsor and ally Congressman Correa (D-CA), and their teams for discussing this important topic. Of note is testimony from Dr. David Carroll, Executive Director at the Office of Mental Health and Suicide Prevention at the Department of Veterans Affairs (VA). His testimony is only about a page long, but the gist is that the VA does not support this bill. I’d also like to highlight the statement Rep. Correa submitted for the record, which you can find here.
Even though Capitol Hill’s bandwidth is stretched, NCIA will continue our work in Washington, D.C. to get these (and other) cannabis provisions enacted into law. Have questions or thoughts? Find me over on NCIA Connect!
Take A Survey: U.S. Cannabis Industry Sentiment and Business Conditions
NCIA chief economist and his cannabis economics firm, Whitney Economics, are collaborating with NCIA to conduct a national survey of businesses and stakeholders in the U.S. cannabis industry. Below, please find a link to the Survey of U.S. Cannabis Industry Sentiment and Business Conditions. It examines the key issues facing the industry including what you are experiencing when doing business in the industry. The survey seeks to investigate what is working and what can be improved from the perspective of businesses and stakeholders in the cannabis industry.
The goal of the survey is to tabulate ancillary business and cannabis operator opinions on the state of the U.S. cannabis market. Responses are confidential and will be kept anonymous.
Your participation and insights will help policymakers understand the issues that face the industry from your perspective. The survey takes between 4–5 minutes to complete. Please complete the survey by Sunday, October 31.
The initial analysis will be made available to all participants later this fall.
If you have any questions regarding the survey, please contact Beau Whitney from Whitney Economics at Beau@whitneyeconomics.com
Thank you for supporting this survey.
Video: NCIA Today – Friday, October 8, 2021
NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every Friday here on Facebook for NCIA Today Live.
Equity Member Spotlight: Endo Industries – Nancy Do
This month, NCIA’s editorial department continues the monthly Member Spotlight series by highlighting our Social Equity Scholarship Recipients as part of our Diversity, Equity, and Inclusion Program. Participants are gaining first-hand access to regulators in key markets to get insight on the industry, tips for raising capital, and advice on how to access and utilize data to ensure success in their businesses, along with all the other benefits available to NCIA members.
Tell us a bit about you, your background, and why you launched your company.
Endo Industries CEO & Co-founder, Nancy Do
I was raised in Eastside San Jose by parents who are Vietnam War refugees and moved to San Francisco 12 years ago where my cannabis entrepreneurship journey began. I started off as a grower in my garage in San Francisco and started to expand into grow houses, greenhouses, and warehouses to build what is now Endo Industries.
I built Endo Industries because despite living through some of the lowest times of my life such as getting raided, going to jail, and going through years of emotional roller coasters with the criminal justice system, I know my experience, passion, and background is what cannabis needs. Endo is grounded in science, elevated by culture. Endo represents equity, diversity, the hustle, and the grind and we are building something in cannabis that is exceptional and collaborative. I love this plant and everything plant medicine can represent. I’m not going to let this industry become one-dimensional.
What unique value does your company offer to the cannabis industry?
Endo is a queer female, legacy, and social equity-owned and operated parent company, which is a mouthful but also a unique value proposition in itself. I’ve seen legacy and equity cannabis companies come up with great ideas, passion, experience, and drive but are lacking in organization, upper management, high-level strategy for the long game, and key resources such as genetics, a reliable supply chain, and capital (including in Endo’s own experiences!). As a team, we deeply understand this plant and the creativity of what cannabis culture is and can be. We bring something different and fresh.
Endo provides a few unique things in our model:
Plants from tissue culture free of pests and diseases to our growers and tissue culture services to elevate and protect our brands and breeders
A strong stance of direct and real support for equity and legacy operators through our partnership with Locals Equity Distro to provide distribution services for over 25 equity, legacy, queer and women-owned brands in CA
Workforce and economic opportunity for the Re-Entry Community who have been formerly incarcerated
A tech, blockchain component to collect and share data
What is your goal for the greater good of cannabis?
Virus-free tissue culture plants at Endo’s lab in San Francisco
My greater goal is to create a platform and community that enables the normalization of safe, affordable access to cannabis while uplifting communities that have been affected by the war on drugs. I want to build a world in which we can celebrate art, culture, diversity, and cannabis all in one. And no, it’s not the idealist in me; I know this is the way the world needs to reconnect, compassionately with each other in spite of our differences. We’d certainly find that we have more in common than meets the eye if we let our walls down.
What kind of challenges do you face in the industry and what solutions would you like to see?
Being a queer women of color while also building a business that serves the greater good of our communities is no walk in the park. I would like to see investors and potential partnerships trust, respect, and invest in leaders like me. We need access to real capital and partnerships without undervaluing or controlling our businesses. We can build profitable, thriving businesses if we are just given the chance and there is no better place than the cannabis industry to start.
Why did you join NCIA? What’s the best or most important part about being a member through the Social Equity Scholarship Program?
I’ve always wanted to join NCIA but the membership fee was a barrier to entry. I’m grateful for the opportunity to be a part of an organization giving a voice and making space for equity and under-represented founders both on the legislative level and through NCIA’s channels.
Anything else: What is Endo’s growth plan for the next year?
We just launched a smaller raise of $1M and will be going for a larger round of $4M shortly thereafter. These funds will be used to expand our plant genetics offerings into new territories in the US and globally, which will allow us to foundationally launch the Endo model in every new territory. No doubt, Endo is going to make big waves this coming year to set ourselves up for the many years to come.
Equity Member Spotlight: Next Level Edibles – Anthony Jenkins Jr.
This month, NCIA’s editorial department continues the monthly Member Spotlight series by highlighting our Social Equity Scholarship Recipients as part of our Diversity, Equity, and Inclusion Program. Participants are gaining first-hand access to regulators in key markets to get insight on the industry, tips for raising capital, and advice on how to access and utilize data to ensure success in their businesses, along with all the other benefits available to NCIA members.
Tell me a bit about your background and why you launched your company?
I was born in Hayward, California and spent most of my childhood in Mesa, Arizona, and in the Bay Area, in Northern California. After high school, I spent some time at The Farm (Stanford) and graduated from The House (Morehouse College).
Next Level was started almost 10 years ago. During a particularly trying part of my life, a medical professional recommended antidepressants and anti-anxiety medicine for symptoms I was experiencing. Taking these drugs made me feel slightly better, but came with a host of other problems; twitching, irritability, weight gain. I needed another solution.
In college, I experimented with cannabis and as an adult, I found that it alleviated my symptoms without the side effects. Unfortunately, the halflife for cannabis is only 90 minutes which wasn’t nearly long enough to cover my full workday. I learned about edibles and how they can last for 4 to 6 hours and I was really attracted to their lack of smell. As a business professional, a deal could be broken if I smelled like cannabis. Edibles did not have a negative connotation and were perfectly discreet for my work environment.
Unfortunately, edibles only came in two different types at this time period: tasty, but completely lacking on potency, or absolutely disgusting and potent. No one should ever need a chaser for their edibles. The industry was ripe for a company with absolutely delicious products that could also provide a strong dosage.
What unique value does your company offer to the cannabis industry?
Next Level empowers people to infuse any food or beverage and accurately dose it for higher tolerances. With our products, the home cook can imbue any dish her heart desires and the morning warrior can add a kick to his favorite hot beverages.
Cannabis companies have a unique responsibility to shape this growing industry to be socially responsible and advocate for it to be treated fairly. How does your company help work toward that goal for the greater good of the cannabis industry?
When we started this venture, there was not much information out there about equity cannabis companies. Realizing there are probably many other minority entrepreneurs trying to start a cannabis business, I started a Facebook group called CES (Cannabis Equity Success) to help disseminate information about equity programs across America and to raise the profile of equity companies to support. In addition, I’ve been assisting new entrepreneurs to get connected with resources to see their vision come to light. As a minority-owned business, it is very important that we celebrate and support other businesses owned and operated by women, veterans, those with disabilities, and people of color.
It is Next Level’s vision to support these minority-owned businesses. Partnering with women-owned businesses, like Changemaker Creative, not only makes good business sense as they are local leaders in the industry, but also allows us to gain key insights into our target market. The owner and head creator, Lilli Keinaenen, is able to provide details and cater designs that appeal directly to her demographic. Other awesome women-led companies that are our strategic partners include our copacker, the Galley, and Supernova women.
In our distribution chain, we work with BIPOC owned companies like Local Equity Distribution and Breeze which provide jobs and revenue to the people and communities negatively impacted by cannabis arrests.
What kind of challenges do you face in the industry and what solutions would you like to see?
The biggest challenge we face in the industry is getting dispensaries to buy small company products. We are a small “mom and pop” owned by family members from Oakland, CA. It’s more challenging to get dispensary buyers to sit down with us because they prefer to save their time and shelf space for the larger established brands. One possible solution for this problem is to have each dispensary dedicate a certain portion of its stock to legacy brands/small mom and pops/equity companies.
The other challenge we face is getting access to capital. This is a bootstrapped venture, and issues in cannabis take a lot more time and money to solve than other industries. Unfortunately, there are not a lot of angel investors or investment companies putting money in cannabis and even less in minority entrepreneurs. The solution for this is to make the investment world much more equitable and inclusive.
Why did you join NCIA through the DEI Scholarship Proogram? What’s the best part about being a member?
I joined NCIA through the DEI Scholarship Program for an opportunity to learn best practices for my industry and to network with the finest minds in cannabis.
Video: NCIA Today – September 3, 2021
NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every Friday here on Facebook for NCIA Today Live.
Member Blog: We’re Out of the Weeds – CRC Releases Initial Rules & Regs for New Jersey’s Adult-Use Marketplace
New Jersey recently passed the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (“CREAMMA”). Among other things, CREAMMA permits adults 21 years and older to consume cannabis and allows New Jersey residents to operate six types of cannabis businesses within the state. The new adult-use marketplace, as well as the already established medicinal marketplace, will be administered by the Cannabis Regulatory Commission (“the CRC”). The CRC is a panel of five appointed members who will oversee the development, regulation, and enforcement of the use and sale of all legal cannabis in New Jersey.
The CRC recently approved its first set of rules and regulations on August 19, 2021. This will enable the start of the licensing process for personal adult-use cannabis operations in New Jersey. Here are the 15 takeaways from the initial rules and regulations:
What type of license can I apply for?
There are six different license types:
Class 1 – Cannabis Cultivator License
Class 2 – Cannabis Manufacturer License
Class 3 – Cannabis Wholesaler License
Class 4 – Cannabis Distributor License
Class 5 – Cannabis Retailer License (also includes consumption lounges)
Class 6 – Cannabis Delivery License
Businesses may also apply for a license to operate a cannabis testing facility or medical cannabis testing laboratory. License-holders may hold multiple licenses concurrently; however, there are limitations on the number and type of licenses that may be held concurrently.
Are there any caps on the number of licenses that may be awarded?
The State only placed a cap on Class 1 licenses for cultivators. In particular, there will be a statewide cap of a total of 37 cultivators until February 22, 2023. Keep in mind that state limits aren’t the end of the inquiry; municipalities may set restrictions on the number of businesses in their jurisdiction.
What are the fees to apply for one of the adult-use licenses?
In an effort to make the application fee reasonable, the CRC will require applicants to only pay 20% of the application fee at the time of application, and the remaining 80% will only be collected at the time the license is approved. The initial application cost may be as low as $100 but successful applicants should be prepared to pay additional fees ranging from a total cost of $500 – $2,000.
Are there any fees other than the initial application fee?
Yes. There are annual licensing fees, which can range from $1,000 for a microbusiness to $50,000 for a cultivator, with up to 150,000 square feet of cultivation capacity. This fee range only applies to the adult use marketplace. There is a different licensing fee schedule for the medicinal use marketplace.
Will anyone be given priority in the application process for a cannabis license?
Yes. The CRC will prioritize applicants who live in specifically definedeconomically disadvantaged areas of New Jersey or who have past convictions for cannabis offenses (“Social Equity Applicants”). It will also prioritize applications from minority-owned, woman-owned, or disabled veteran-owned businesses that are certified by the New Jersey Department of the Treasury (“Diversely Owned Businesses”). Businesses in impact zones will also take priority (“Impact Zone Businesses”).
What do you mean by “priority review?”
Applicants meeting the criteria described above will have their applications reviewed before other applications, regardless of when they apply. Remember, however, that priority review doesn’t guarantee selection.
When will the CRC begin to review applications?
No date has been announced, but the CRC promises that it will be soon. The CRC will publish notice in the New Jersey Register announcing its intent to review applications and submissions will be reviewed, scored, and approved on a rolling basis (pun intended), subject to the required priority review for certain applicants.
What should I expect from the application?
Applicants will be expected to submit a detailed application that includes specific details for the proposed site for the business (which must be owned or leased), municipal approval, and zoning approval. Applicants must also submit an operating summary plan detailing the applicants’ experience, history, and knowledge of operating a cannabis business. The scoring of applicants and awarding of licenses will be based entirely on the application materials.
What if I don’t have all of the materials to submit a complete application?
Don’t worry, you can apply for a “Conditional License.” A Conditional License is a provisional award that gives the holder 120 days to become fully licensed by satisfying all the requirements for full licensure, includingfinding an appropriate site, securing municipal approval and applying for conversion to an annual license.
What are the requirements to be considered for a Conditional License?
Conditional License applicants mustsubmit a separate application for each cannabis business license requested, along with a background disclosure, a business plan and a regulatory compliance plan to the CRC. At the time of the application, all owners with decision-making authority of the conditional license applicant will need to prove that they made less than $200,000 in the preceding tax year, or $400,000 if filing jointly.
Are there any advantages in being awarded a Conditional License?
Conditional License holders that convert to an annual license will not have to submit the sections of the application that, under statute, require applicants to demonstrate experience in a regulated cannabis industry. This flexible option offers an opportunity for newcomers to get into the cannabis industry.
What is a Microbusiness License?
Microbusiness licenses are for applicants who want to run a relatively small operation. Applicants may apply for a microbusiness license for any of the six license types. A microbusiness license limits the business to 10 employees; a facility of no more than 2,500 square feet; possession of no more than 1,000 plants per month; and/or a limit of 1,000 pounds of usable cannabis per month.
Can I rely solely on my local municipality for a license?
No. The state must award the cannabis license. Municipalities play a critical role, however, in the licensing process. For example, applicants will only be licensed by the CRC if the applicant has demonstrated support from the municipality, zoning approval, and has been verified to operate in compliance with any other local licensing requirement.
Can municipalities ban cannabis businesses from operating within their jurisdiction?
Yes. Municipalities may ban certain businesses from operating within their borders if they enact an ordinance regulating or banning cannabis businesses by August 21, 2021. Municipalities may update their ordinances at any time to remove any restrictions that they previously placed.
What happens if I don’t follow the CRC’s rules and regulations?
The CRC is authorized to inspect cannabis businesses and testing laboratories, issue notices of violations for infractions and issue fines. Standard fines can be no higher than $50,000, while fines for infractions implicating issues of public safety or betrayal of public trust can be as high as $500,000. Licenses may also be suspended or revoked. Don’t take the risk!
These 15 key points present only a quick summary of the CRC’s initial set of rules and regulations. We anticipate there will be a second set of rules released later this year, which will likely resolve issues that weren’t addressed in the initial set of rules and regulations, or CREAMMA. We expect the second set of rules and regulations to focus mainly on the needs of distribution and delivery service, and preparing for the acceptance of applications, before the Garden State is in full bloom…
Charles J. Messina is a Partner at Genova Burns LLC and Co-Chairs the Franchise & Distribution, Agriculture and Cannabis Industry Groups. He teaches one of the region’s first cannabis law school courses and devotes much of his practice to advising canna-businesses as well as litigating various types of matters including complex contract and commercial disputes, insurance and employment defense matters, trademark and franchise issues and professional liability, TCPA and shareholder derivative actions.
Jennifer Roselle is a Partner at Genova Burns LLC and Co-Chair of Genova Burns’ Cannabis Practice Group. She has unique experience with labor compliance planning and labor peace agreements in the cannabis marketplace. In addition to her work in the cannabis industry, Jennifer devotes much of her practice to traditional labor matters, human resources compliance and employer counseling.
Daniel Pierre is an Associate at Genova Burns and a member of the Cannabis and Labor Law Practice Groups. In addition to labor work, he likewise assists clients in the cannabis industry, from analyzing federal and state laws to ensure regulatory compliance for existing businesses to counseling entrepreneurs on licensing issues.
For over 30 years, Genova Burns has partnered with companies, businesses, trade associations, and government entities, from around the globe, on matters in New Jersey and the greater northeast corridor between New York City and Washington, D.C. We distinguish ourselves with unparalleled responsiveness and provide an array of exceptional legal services across multiple practice areas with the quality expected of big law, but absent the big law economics by embracing technology and offering out of the box problem-solving advice and pragmatic solutions.
Given Genova Burns’ significant experience representing clients in the cannabis, hemp and CBD industries from the earliest stages of development in the region, the firm is uniquely qualified to advise investors, cultivators, processors, distributors, retailers and ancillary businesses.
Committee Blog: What Retailers Can Do To Support Social Equity
Social equity can be boiled down to a way of seeking remedy for the harms caused by the racist war on drugs and to help individuals, families, and communities that have been disproportionately impacted by prohibition. A big part of this is making sure that no one is left behind by the economic developments created by making cannabis legal. As local, state, and federal governments continue to grapple with implementing policies that effectively address this issue, there is a lot the industry can – and should – do to help make sure that the opportunities in regulated cannabis markets are inclusive and equitable, and to help support businesses owned by members of marginalized communities.
As many as 70% of consumers want brands to take a stand on social and political issues. That’s a 66% increase from 2017, according to Sprout Social’s 2019 #BrandsGetReal survey. Customers are more likely to purchase from companies that take a stand on causes aligning with their values and more importantly, companies hold the power to make a difference; even if it’s encouraging people to take baby steps towards a larger solution. Data shows they might already be doing that, because 67% of consumers say brands are raising awareness around just causes, and 62% believe brands are educating them on important topics.
Here are just a few ways that cannabis retailers can help be a part of the social equity solution to economic unfairness created by the failed war on drugs:
Partner with Job Programs
Cannabis arrests or convictions can erect barriers in someone’s life. More specifically, they can affect housing, education, and career prospects. Consider partnering with city, state, and national programs and organizations that are creating pathways to cannabis ownership and employment – including the formerly incarcerated – to create job opportunities for underserved communities.
Expungement Days
Reach out to a local law firm or social justice organization and talk about hosting “expungement days.” Your efforts will help provide free legal measures for expunging low-level cannabis-related convictions. The Last Prisoner Project is a cannabis reformation project seeking to release prisoners currently convicted for cannabis-related crimes and help them assimilate back into society. However, local organizations may often have direct experience with this work in your communities and have well-established relationships with them to help better connect with the people who need these services the most.
Reach out to them and see what they recommend before planning your expungement day. You can also find out more information about expungement efforts nationally at the Collateral Consequences Resource Center.
Create shelf space
Socially conscious companies should show equity and racial justice on your stores’ shelves. Whether it is making a “social equity section” or finding ways to educate budtenders on the merits and stories behind the products, you will be moving sales in the right direction and promoting socially conscious consumer patterns. You can also provide tabling space for brand ambassadors to help promote social equity company products that you carry. This not only helps the brands but also creates greater loyalty to your store.
Find products that are both socially equitable and fit your dispensary’s needs. That way, you push the product because you love the product, not just because it’s trendy. But in doing so, you are contributing to positive social change and acceptance, and driving commerce toward BIPOC-owned companies. Remember, the goal is equity.
Form equitable partnerships for ownership
Are you a retailer, cultivator, or production company? Maybe you’re a vertically integrated, multi-state operation. You might not even touch the cannabis plant at all, but provide services to those who do. No matter who you are in cannabis, find ways to partner with social equity companies and help increase their recognition. Maybe it’s mutually beneficial joint venture projects on brands or another arrangement, but find ways to form fair and collaborative relationships.
Above all, keep it real
In the end, authenticity is key, and to take a stand in a way that inspires customers: your message can’t be filled with empty words. If you’re a company that’s looking for causes to rally behind, keep it in your wheelhouse and make sure your audience will resonate with the partnerships you’re creating.
Retail businesses have the power to become change agents and inspire customers to take action in their own backyards. Seek out opportunities like the ones we mentioned and provide opportunities for wealth generation, education, and social restoration in marginalized communities.
According to statistics, you’ll make a lasting impression on your audience, increase sales, and you’ll be a force for positive social change as you impact lives in your community and beyond. What’s better than that?
Video: NCIA Today – August 6, 2021
NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every Friday on Facebook for NCIA Today Live.
Committee Blog: ‘Corporate to Cannabis Crossover’ – An Interview with Portland’s Cannabis Czar, Dasheeda Dawson
by Elise Serbaroli of Strimo, interview conducted May 2021
Elise Serbaroli is a member of the NCIA’s State Regulations Committee, “Informing Local Governments” subcommittee, which aims to bridge knowledge gaps between operators and regulators in the cannabis industry. This is done through interviews with current cannabis regulators in various U.S. states, sharing best practices and lessons learned.
Dasheeda Dawson is a cannabis regulator in Oregon and co-founder of the Cannabis Regulators of Color Coalition (CRCC). As cannabis czar for the City of Portland, she is the highest government official overseeing and advising on cannabis regulation for the municipality. Ms. Dawson brings an incredible breadth of experience to the cannabis space. A self-proclaimed “corporate to cannabis crossover”, she is perfectly positioned to navigate and lead the complexity that is the legal cannabis industry. Before becoming a best-selling author (“How to Succeed in the Cannabis Industry”), she held leadership roles at Victoria’s Secret and Target. Her career is built off of a solid educational foundation, including a Princeton degree (Molecular Biology & African-American studies) and an MBA from Rutgers.
Can you tell us how you got into the cannabis industry?
For the five years prior to formally getting into the industry, I was what you would call a “closeted cannabis consumer/patient.” I have early signs of MS and my mom was actually the one that insisted I give it a try. At the time, I was working at Target in Minnesota. Cannabis was my saving grace for maintaining productivity and overall capabilities. My mom passed away unexpectedly in 2016 and it jolted me out of the standard corporate trajectory I had been on. I ended up moving to Arizona and became a medical cannabis patient there, jumping into the advocacy side of the industry. Arizona legalized adult-use this past November!
From Target to Cannabis Czar! Did you always plan on becoming a regulator?
Certainly not! Straight out of the gate, I got a lot of work as a consultant in the industry, using everything that I had done in my corporate career, including business strategy and supply chain management. I had owned everything for my categories at Target and when you’re the business owner, you lead and oversee the entire cross-functional team. I applied that to the cannabis space as quickly as I could, working for a lot of clients and gaining an entrepreneurial education from working with large cannabis enterprise clients, small operators, multi-state operators, Native American tribes, even government. I gained the truest sense of how NOT to do it. In a corporate role, you usually write a report about what you have learned, insights, etc., and then you move forward. My workbook, now in its 3rd edition, was really built off of those lessons learned.
When COVID hit, my book tour was abruptly stopped overnight! At the same time, I was selected to become the Cannabis Program Supervisor for the City of Portland. I was only the third Black woman at the time to be selected to oversee a cannabis regulatory office. I believe that now there are more, but women and people of color are scarce in these positions. Most of the regulators are white men, many of whom come from another regulatory agency, like liquor or law enforcement. In order to assure that cannabis regulation is equity-centered, you need people at the table that will center equity. This last year has been amazing. I have a lot of runway and support to be exactly who I am, which is the Weed Head (TM). I refuse to be anything else and I’m in a bureau that allows me to do that.
What exactly is a cannabis czar?
On the state level, the Oregon Liquor Control Commission is currently passing legislation to become the Oregon Liquor AND CANNABIS Commission (OLCC), primarily because cannabis is providing substantial revenue for the state. Most of those people are liquor regulators, and they have organized a sub-group, focused only on cannabis. It started off with four people and now there are 50!
As Portland’s cannabis czar, I am a municipality leader, similar to Cat Packer in Los Angeles, and operate independently of the OLCC. Portland represents approximately 40% of the total cannabis revenue for the state and I oversee the entire cannabis program, including regulatory, licensing, compliance, community impact, and equity initiatives for Portland’s medical and adult-use programs.
In the city of Portland, cannabis regulation and oversight was placed in the Office of Community and Civic Life, as opposed to in the Office of Finance and Revenue or the Office of Business Development Services, which is where they license other businesses. This placement is partly due to the idea at the time that the cannabis industry was going to be disruptive to the community. Many individuals were worried about safety for communities. Our office has been trying to decrease the stigma and canna-phobia around the plant, offering education and equity initiatives. We were the first city to have community reinvestment grants tied to our cannabis tax revenue. These grants are administered through the SEED (Social Equity and Educational Development) Initiatives and grant fund.
CRCC and CannRa are two independent organizations, which happened to both launch at the same time. This caused some confusion in the industry. They are not mutually exclusive memberships! In fact, two of our founding members are also founding members of CannRa. The regulators roundtable was the predecessor of CannRa and that association aggregates insights and learnings state by state. The Oregon Liquor Control Commission (state-level) is a member of CannRa.
CRCC centers equity and support of legalization, while also aggregating insights and learnings state by state. If you are a regulator of color, at the state or local level, it makes sense to join the Cannabis Regulators of Color Coalition. We know that legalization is a requirement to start to undo the harm done through the war on drugs.
Centering equity involves re-thinking how we regulate this industry. One challenge is getting people to realize that this is a regulatory agency, like any other government regulatory agency. The Department of Motor Vehicles (DMV), a regulatory agency, gives out licenses and adjusts to assure that no group is precluded from access (adjusting for wheelchairs, visual and hearing impairments, etc.). Yet, in cannabis, we are regulating the industry without dealing with the inequities in the industry. Some of these inequities are directly linked to the historical prohibition of cannabis and the war on drugs, which we define as the racially-biased enforcement of cannabis prohibition.
Supporting equity also includes gender inequities, economic inequities, and disability inequities, to mention a few, that will positively impact everyone in the industry, including and especially patients themselves. Exclusionary practices would not be tolerated if it was an agency like the DMV. With cannabis, we are over-regulating the industry and excluding many people from participating, which is to the detriment of the market and the community. CRCC is focused on equity-centered regulation for the cannabis industry.
What is one thing that you would like to see in the legislation for cannabis businesses at the federal level?
Well, there’s a misconception about the size of companies in this industry. As an industry, we have to be careful about supporting legislation that only benefits large corporations. More than 75% of cannabis businesses have annual revenue of $2 million or less. Compared to small businesses in other industries, for example, in agriculture ($6 million or less) and retail ($14 million or less), cannabis businesses are very small, so everyone needs to push for legislation to benefit these small businesses in whatever regulatory framework is set up on a federal level. This is one step in leading the industry towards a more equitable path.
One aspect of inequity is how cannabis businesses of different sizes are treated. On average, very small cannabis companies have an after-tax rate of 70%, so when you’re going to the table for the regulatory framework, push back on the tax structure, push back on mechanisms that are inherently disadvantageous to small businesses. Surprisingly or not, most Black, Indigenous, or Latinx businesses are also small businesses, so you are positively impacting racial equity.
If you, as a cannabis business, think you’re a big fish, trust me, Big Tobacco, Big Alcohol, Big Pharma, Big CPG (“consumer packaged goods”) – Target has $70 billion in annual revenue – are coming, so a big fish in this cannabis pond is setting itself up to be eaten by much bigger fish and bigger sharks. If we leave back doors open for the larger cannabis businesses, we’re leaving that same back door open for a Walmart or an Amazon. Large corporations are already investigating and supporting cannabis. They plan years in advance for large takeovers and once it starts, it’s a stampede of well-financed, organized strategic efforts.
At a state level, the industry and those who want to support the industry, need to be careful to not overtax the small businesses and to vote to provide a framework of support mechanisms for small cannabis businesses.
What are some examples of frameworks that support or negatively impact small cannabis businesses?
Some of the early legalization efforts required vertical integration. Because of the way the state and local jurisdictions are regulating and taxing, forcing vertical integration is not a small-business-friendly approach to licensing. This was the case in some earlier states, but we’re also seeing newer states like Georgia taking this approach.
By breaking up the licensing into different parts of the supply chain (like California), you open up possibilities for smaller businesses to operate. If the state is giving out micro-business licenses, there should also be a track to grow into a larger size so that there is no ceiling on those businesses’ growth prospects. For example, in New Jersey, advocates fought to amend provisions that failed to create a way to sell out of a micro-license for a growth event.
Everybody has a different opinion depending on which economist you talk to about how you tax up and down the supply chain. I’d like to see states have tiered tax by production weight. Once you start doing it by the percentage of THC, you’re negatively impacting businesses and patients. It’s meant to be a deterrent and is an example of the government intending to overregulate in an area that it doesn’t fully understand. But usually, those penalties wind up impacting the smaller craft businesses. Too many people are assuming that consumption in the adult-use market is just for recreational purposes, but there are plenty of small niche operators aimed at a specific medical community and they are producing small batches, for example, with high THC, but their clientele may be negatively impacted, simply as a function of the way the tax law was written.
Thanks, Dasheeda, for taking the time to speak with us! If readers want to get involved in changing legislation and connecting with regulators, where should they start?
It’s certainly a long and hard process when dealing with big issues and change. For operators, NCIA is a good place to start. There is also the M4MM and the MCBA. Folks should really try to connect with the local- and state-relevant organizations. Building and operating in coalitions can be very powerful. On a national level, be sure that any group you are part of is actually going to D.C. and is having conversations with the legislators, because at the end of the day, whether it’s cannabis or any other business, you need to be involved with influencing the policies that impact your industry. Everything starts with the law and civic engagement.
Elise Serbaroli leads Global Business Development at Strimo, where she provides cannabis businesses with software solutions around inventory management, cost accounting, QA, and compliance. She’s back in the USA after over a decade of experience in Spain, Germany, Switzerland and Ecuador.
Understanding the importance of efficiency, scalability, and profitability, Elise created solutions to financial and legal processes for the R&D team at CPW, a joint venture of two of the world’s largest food companies, Nestlé & General Mills. As a systems coordinator, she gained a deep appreciation for food safety, GMPs and regulatory compliance. Her supply chain software experience builds off of her Business Development role at Tradeshift, the world’s largest network for digital B2B payments.
Equity Member Spotlight: iFlyWellness – David Rodrigues, CEO
This month, NCIA’s editorial department is reviving the monthly Member Spotlight series by highlighting our Social Equity Scholarship Recipients as part of our Diversity, Equity, and Inclusion Program. Participants are gaining first-hand access to regulators in key markets to get insight on the industry, tips for raising capital, and advice on how to access and utilize data to ensure success in their businesses, along with all the other benefits available to NCIA members.
Tell us a bit about you, your background, and why you launched your company?
I have been using cannabis for 20 years, and got into the industry in 2011, before METRC was implemented, and before adult-use legalization. I was working in cultivation, budtending, purchasing, and managing. At the time, I was seeing firsthand the products dispensaries were providing, and began developing a vision of what the San Jose community needed versus what was out there. Stepping back from my position at a successful dispensary, I made a choice to go all in on my visions and build a delivery service and lifestyle brand in San Jose. I created iFlyWellness for the people.
iFlyWellness delivery service will connect the legendary Humboldt County to the Bay Area. Offering a unique flower menu from Humboldt County to Indoor exotic flower, iFlyWellness will cater to the everyday smoker/user, specifically the people of San Jose. There are over 1.1 million people in San Jose, with a high percentage of cannabis users. Connecting the “farm to blunt” is the method behind iFlyWellness. Patients are currently buying jars at ninety dollars an eighth. The everyday consumer has struggles affording such medicine. The logic is to figure out a way for patients to consume top-tier flower at an affordable price.
What unique value does your company offer to the cannabis industry?
I know quite a few cannabis growers and will go straight to the source. This is the “farm to blunt” experience. The indoor cultivation side and the Humboldt side both make a supply chain connection from the Emerald triangle all the way to the Bay Area. This is really good medicine for the people.
What is your goal for the greater good of cannabis?
It’s about getting on the ground. Talking directly to the people in the community that you want to make a social impact with. I am working with Daniel Montero and Javier Armas of BALCA (Bay Area Latino Cannabis Alliance), and I am connected directly with Humboldt farmers and legacy growers.
Our vision is for the patient to feel a direct connection with the flower they are smoking. Big corporations in this industry fail to recognize that this industry has been here for over 100 years. They are looking at the industry as a money grab. You can make it as a small business owner, but it comes with many more challenges. Forming alliances among us and going directly to the people helps us face these challenges.
What kind of challenges do you face in the industry and what solutions would you like to see?
Capital is big and can dominate the industry. I am working right now with Javier Armas of BALCA to acquire a building and license in Oakland, CA. With the minimal amount of licenses the city of San Jose has to offer, if you don’t have deep pockets, it can be challenging applying for the same license that a multi-million dollar corporation is applying for.
Why did you join NCIA? What’s the best or most important part about being a member?
I joined NCIA through the DEI Scholarship Program to learn and network, as the cannabis industry is constantly changing and I need to stay up to date. When I was working for dispensaries in San Jose, I was networking a lot but representing someone else’s company, not representing my vision and dreams of connecting and catering to the everyday cannabis consumers. It’s time now to build my vision and with the strength of great associations like NCIA and BALCA, I’m confident it will happen.
Video: NCIA Today – July 23, 2021
NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every Friday here on Facebook for NCIA Today Live.
Crazy for Cannabis Administration and Opportunity Act (CAOA)
Photo By CannabisCamera.com
By Michelle Rutter Friberg, NCIA’s Deputy Director of Government Relations
Last week was undoubtedly one of the most exciting weeks in federal cannabis policy ever! On July 14, Senate Majority Leader Chuck Schumer (D-NY), along with Sen. Cory Booker (D-NJ) and Senate Finance Committee Chair Ron Wyden (D-OR), unveiled long-awaited draft legislation that would remove cannabis from the schedule of controlled substances while allowing states to determine their own cannabis policies. Let’s take a look at what we know:
What is it?
You’ll recall that back in February, the trio of Senators announced that they were working on a comprehensive cannabis bill. Since then, NCIA and other advocates have (im)patiently been waiting to see what shape that would take – I was calling it the best-kept secret in Washington! However, at long last, the discussion draft of the Cannabis Administration and Opportunity Act (CAOA) was released.
A discussion draft is exactly what it sounds like – prior to introducing this language as formal legislation, the Senators have shared it in this form, allowing stakeholders, the public, and others the opportunity to weigh in and provide their expertise and feedback.
What’s in it?
As I mentioned above, the CAOA removes cannabis from the list of controlled substances, effectively legalizing it at the federal level while still allowing states to set their own policies. According to the bill’s detailed summary, it has a few goals:
“… [it will] Ensure that Americans – especially Black and Brown Americans – no longer have to fear arrest or be barred from public housing or federal financial aid for higher education for using cannabis in states where it’s legal. State-compliant cannabis businesses will finally be treated like other businesses and allowed access to essential financial services, like bank accounts and loans. Medical research will no longer be stifled.”
The bill also includes:
Restorative measures for people and communities who were unfairly targeted in the war on drugs.
Automatic expungements for federal non-violent marijuana crimes and allows an individual currently serving time in federal prison for nonviolent marijuana crimes to petition a court for resentencing.
An “Opportunity Trust Fund” funded by federal cannabis tax revenue to reinvest in the communities most impacted by the failed war on drugs, as well as helping to level the playing field for entrepreneurs of color who continue to face barriers of access to the industry.
An end to discrimination in federal public benefits for medical marijuana patients and adult-use consumers.
Respect for state cannabis laws and a path for responsible federal regulation of the cannabis industry. Like with federal regulations on alcohol, under CAOA, states can determine their own cannabis laws, but federal prohibition will no longer be an obstacle. Regulatory responsibility will be moved from the U.S. Drug Enforcement Agency (DEA) to the Alcohol and Tobacco Tax and Trade Bureau (TTB), the Bureau of Alcohol Tobacco Firearms and Explosives (ATF), as well as the Food and Drug Administration (FDA) to protect public health.
A federal tax structure – CAOA would impose an excise tax on cannabis products in a manner similar to the tax imposed on alcohol and tobacco. The general rate of tax would be 10 percent for the year of enactment and the first full calendar year after enactment. The tax rate would increase annually to 15 percent, 20 percent, and 25 percent in the following years.
What’s next?
The discussion draft comment and feedback process will be ongoing until September 1. Until then, NCIA will be working with our board, Policy Council, committees, and our members (particularly our Evergreen members!) to solicit their expert input on some of the areas the Senators have expressed interest in. After that deadline, the Senators will take their time to review submissions and subsequently formally introduce the revised language later this year. Stay tuned via our newsletter, blog, and upcoming events to learn the latest on this and how you can actually submit your thoughts to us!
Video: NCIA Today – July 16, 2021
NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. This week Bethany is joined by NCIA’s GR team in Washington D.C. to discuss the Cannabis Administration and Opportunity Act discussion draft introduced by Senate Majority Leader Chuck Schumer. Join us every Friday on Facebook for NCIA Today Live. Registration to our Midwest Cannabis Business Conference in Detroit is now open with special limited-time super early bird pricing on tickets available, head to www.MidwestCannabisBusinessConference.com today.
Senate Opens Doors to Federal Legalization
At long last, the day we’ve been waiting for all year has finally come! Early Wednesday morning, Senate Majority Leader Chuck Schumer (D-NY) and Sens. Cory Booker (D-NJ) and Ron Wyden (D-OR) released the discussion draft language for a comprehensive bill that would effectively make cannabis legal at the federal level while allowing states to continue to determine their own cannabis policies and work to repair the harms caused by prohibition.
While it has yet to be formally introduced in the Senate (stay tuned!), this draft legislation is designed to jumpstart bipartisan negotiations that have been building momentum in Congress since the first states chose to regulate cannabis for adults, and which came to the forefront in the wake of last year’s renewed focus on criminal justice reform and the House passage of the MORE Act at the end of the last congressional session.
You can find a summary of the language here and the full draft here.
NCIA will be carefully reviewing the details of this proposed legislation in the coming days and will be actively eliciting feedback from our members, allies, and especially our Evergreen members, Policy Council, and committees to determine what – if any – changes need to be made before the bill is introduced. Our dedicated in-house government relations team will also be working closely with lawmakers to find an effective path forward for comprehensive cannabis policy reform that helps to undo the disastrous impacts of our current federal laws in the immediate future.
Senate leadership will be taking comments and suggestions until September 1. If you would like to add your input, please contact Deputy Director of Government Relations Michelle Rutter Friberg at Michelle@TheCannabisIndustry.org.
Video: NCIA Today – June 18, 2021
NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every Friday here on Facebook for NCIA Today Live.
Hurry Up And Wait: Descheduling, DEA Licenses, And Other Reform Legislation to Watch
By Morgan Fox, NCIA’s Director of Media Relations
The cannabis world is still eagerly awaiting the introduction of Senate Majority Leader Chuck Schumer’s comprehensive descheduling legislation, but that doesn’t mean things haven’t been moving on the policy front in recent weeks!
First up, the DEA announced that it was finally moving forward with approving applications to cultivate cannabis for research purposes, which would effectively end the federal government’s stranglehold on research production. The agency spent years fending off lawsuits from applicants, who correctly asserted that not only was the monopoly limiting research, but the cannabis being grown at the single licensed facility at the University of Mississippi was basically unusable for research purposes anyway. This announcement comes several years after the DEA publicly stated that it would begin the licensing process. Better late than never.
Next, Sen. Ron Wyden, who is also working closely with Majority Leader Schumer on descheduling along with Sen. Cory Booker, introduced S. 1698 last week. While text of this bill is currently not publicly available, the name suggests that this legislation would direct the FDA to allow hemp-derived CBD, made legal under the 2018 Farm Bill, to be used as a dietary supplement or in food. Some perceive this bill as necessary to get some regulatory clarity from the FDA, which has been dragging its feet and missed several deadlines for CBD regulations. Many in the industry blame this lack of regulation for larger retailers staying out of the CBD market, which has led to massive supply gluts of the substance and has been hypothesized to be a leading cause for the recent boom in Delta 8 THC production.
And earlier this month, Rep. David Joyce, an Ohio Republican who co-chairs the Congressional Cannabis Caucus, introduced a narrowly tailored bill to remove cannabis from the schedule of controlled substances. The bill assigns regulatory responsibilities to the FDA and the Alcohol and Tobacco Tax and Trade Bureau and gives them a one-year deadline to come up with a regulatory structure similar to alcohol. It also contains provisions similar to the protections that exist in the House-approved SAFE Banking Act, calls for studies on how cannabis impacts pain and driving, and improves access for veterans. Notably, this bill does not contain any social equity or restorative justice language.
While the chances of such legislation passing in the Democrat-controlled House are slim, it could serve as a doorway to get fence-sitting Republicans into the debate. It could also be a tool to identify those members of the GOP who are steadfastly opposed to any legalization bill and out of touch with their constituents, many of whom would directly benefit from cannabis policy reforms and who are increasingly in support of ending federal prohibition.
We’re also getting word that the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act is getting reintroduced in the House this week (and may have already been at the time of this publication). This legislation made history last December when it became the first descheduling bill to receive a floor vote – and pass – in either chamber of Congress. We are hopeful that there will be some revisions from the previous bill, including the removal of a provision that would allow federal licensors to deny applications for cannabis business licenses based on prior state or federal felony convictions, and the inclusion of a more sensible and robust regulatory framework.
We are less than halfway through the calendar year, and it is shaping up to be a momentous one for cannabis advocacy! Stay tuned for more updates from Capitol Hill.
P.S. On the state side, Alabama became the latest state to approve an effective medical cannabis law. Yes, Alabama. That brings the count of medical states to 36, after unfortunately losing Mississippi to a shameful court decision. So far in 2021, four states have approved adult-use or medical cannabis legislation, and more are expected to do so in the coming weeks and months.
Member Blog: How Cannabis Legalization In Minnesota Can Further Equality
Medical cannabis hasn’t always had a smooth go in the United States. Thankfully, as time has slowly started to change and viewpoints have shifted, cannabis legalization is finally gaining traction state-wide. While this is an incredible feat for so many different reasons, many states see long-term benefits of cannabis legalization much further reaching than anyone could have imagined.
Today, we’re talking about how cannabis legalization in Minnesota may actually help further equality and break down barriers that have long been deeply rooted. Let’s get started.
FIRST GLANCE:
Cannabis has a rocky history in the United States, with most negative stigma being racially charged.
This ideology lasted for decades until some states started decriminalizing and legalizing medical cannabis in the 80s and 90s.
Now, as cannabis legalization spreads, the divide between white Americans and POC in the industry is more prominent than ever.
Legalization can help further equality in states like Minnesota, but it requires holistic change from within communities.
With legalization may come fewer victimless crimes, resulting in lessened police presence, effectively leaving targeted communities feeling safer and more comfortable.
By supporting local Black or minority-owned dispensaries and working with local organizations, cannabis equality may progress in the ways that community members need — but the change will start with you!
Cannabis’s Rocky History
Quickly, it’s essential to understand the tumultuous history behind marijuana and just how far we’ve come as a society. However, seeing this rocky past also helps illuminate how much further we still have to go.
The cannabis plant has existed for millennia on planet Earth. Its therapeutic benefits have supported civilizations in spiritual, religious, and medicinal ceremonies across the globe. As this idea spread to Western societies, the plant was, at first, welcomed with open arms. At the start of the 20th century, all of this changed entirely in the United States.
During the Mexican Revolution from 1910-1920, many Mexican citizens fled their war-torn home country in search of a safer, more promising future. With this, the U.S. saw an influx of Mexican immigrants.
Throughout Mexico, enjoying cannabis for its recreational effects wasn’t a new idea. So, when citizens began migrating North, they also brought more normalized recreational cannabis use. At first, for those in the U.S. who already adored cannabis, this was incredibly exciting. But, for many in positions of power, class, and wealth, this type of cannabis use wasn’t going to fly. Thus came the Reefer Madness film and decades-long racially charged cannabis persecutions.
The Impact of Legalization and Equality
It took way too long, but the United States finally started getting on board with cannabis decriminalization and legalization back in the 80s and 90s. With this, the exposure to cannabis science became more extensive, and it was easier to see that the plant did (and still does) have some serious medicinal benefit. Seeing these facts caused a lot of opinions to change, resulting in an almost domino-like effect of cannabis legalization across the country.
Now, 36 states have legalized medical cannabis, allowing more people than ever access to the precious plant they love. But has this legalization impacted the people most disproportionately punished? Not really.
Still today, we see Black men arrested for cannabis crimes at disproportionately high rates, even though cannabis is legal in most states across the U.S. If anything, these legal changes have made the divide all the more evident, allowing the country to see just how horrific the cannabis industry can be for people of color. At the same time, it simultaneously celebrates white American consumers. This may help boost PR for big business, but it doesn’t help local (black-owned or otherwise) businesses on the ground. Legally or economically.
So, what can we do to change this? How can cannabis legalization help to further the progress we’ve made?
Legalization in Minnesota: How To Further Equality
I know, it sounds like we’re a bit cynical, but it’s crucial to bring up these divides before discussing how we can move further. The country often loves to praise all the beauty that the cannabis industry brings, forgetting the intense harm it has caused so many communities.
Let’s talk about Minnesota, for example. In May, it looks as though the state is going to vote to pass adult-use cannabis use. If this happens, here’s what could potentially occur in terms of furthering equality — but, at the end of the day, this change is up to you.
Realistically, the legalization of cannabis should help reduce the number of victimless crimes in the area, helping the community feel more at ease. With this, you would also expect a lowered number of consistent police presence in areas where cannabis use was a previous “problem.” Often, when communities of color experience increased and frequent police presence, this does not provide a sense of safety. Typically, it provides the opposite. Thus, legalizing cannabis in places like Minnesota may be able to create an environment that not only feels safer but feels more accepting of all residents. Feeling safe is great for business, big and small – but especially small. Reduction of victimless crimes and less police presence could really boost the state economy, and additionally enhance everyone’s sense of community and unity.
Furthering equality through the legalization of cannabis can be done, but the work goes much deeper than just on a legal level. As we’ve seen, just because the law says one thing, that doesn’t mean it applies to all groups of people. So, once legalization happens in Minnesota — or your state — the next steps are in your hands.
What’s Still Left To Do
Take the time to research Black and minority-owned dispensaries in your area and support these shops.
See if you have any local cannabis equality organizations that specialize in helping those who have been wrongly affected.
Educate others on the history of cannabis and why the subject can still be painful for POC.
With this, you’ll also understand how legalization is not an end-all-be-all solution. If we want to erase cannabis’s racially charged stigma, the answer is holistic: it starts with a community.
Mell Green is a content creator who believes that cannabis can help anyone achieve a life-enhancing experience. Her participation in the advocacy of the plant for the last several years has not only allowed her to create solid relationships with the world’s leading cannabis companies, but it has also helped her to educate and spread awareness on the power of alternative medicine.
CBD Oracle is a California-based online magazine dedicated to cannabis and CBD education. The company has made it its mission to provide specialized, expert advice to those who need it, publishing detailed, informative, and entertaining articles, guides, and reviews, all backed by the latest scientific studies and research.
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My name is Dr. Donise Floyd and I am the founder and managing member of Legacy Greens, a vertically integrated cannabis company. I was born and reared in Detroit, Michigan and I am a product of the public school system. I have a BS and MS from U of Detroit Mercy. I also have a Ph.D. in Leadership. Throughout my career, I have been instrumental in developing teams, building sustainable programs, formulating compliance models, and have been instrumental mentoring and impacting the community. I have been an administrator, educator, professor, mentor, business owner, and advocate for the community. 
Legacy Greens is a minority female and social equity-owned and operated company. We are committed to connecting the community to resources. Our desire is to build a network and partnerships with other minorities, BIPOC, women, LGBTQ+ and veteran-owned companies both in the cannabis and ancillary space. The goal is to build relationships that would build wealth, opportunity, community, and lasting relationships. 
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Mell Green is a content creator who believes that cannabis can help anyone achieve a life-enhancing experience. Her participation in the advocacy of the plant for the last several years has not only allowed her to create solid relationships with the world’s leading cannabis companies, but it has also helped her to educate and spread awareness on the power of alternative medicine.