Watch The Webinar: Michigan’s Adult-Use Market – What Comes Next?
In case you missed the December 3 webinar: The Midwest is becoming a major player in the cannabis industry and Michigan is now accepting applications for its adult-use cannabis licenses with the launch date fast approaching. Join our expert panel as we provide insights into the Michigan adult-use market: an update on what has transpired so far, what potential operators need to know about this key market, and how Michigan’s market will compare to others around the country. It’s an exciting time for our industry with the Midwest on the verge of launching adult-use sales. Watch this webinar from NCIA’s State Regulations Committee as they explain what you need to know.
NCIA Committees: Quarterly Update And A Look Ahead
NCIA committees are an opportunity for members to get directly involved in specific industry issues and sectors. These volunteer-driven efforts engage members’ expertise and passion to drill down in areas of expertise and passion to effect change, provide professional development opportunities, and develop best practices and guidelines that will shape the future of our industry.
We recently checked in with these various committees to learn more about what they’re up to and what projects they’re working on this term. Get updated on their activities below.
Scientific Advisory Committee (SAC)
SAC is comprised of practicing scientists, physicians, and other scientific field professionals. SAC’s vision is to disseminate educational materials to NCIA members on scientific topics in the cannabis industry and to advise other NCIA committees as they work to develop standards and guidelines, ensuring that any formal recommendations produced are scientifically sound, sustainable, and legitimate.
SAC is currently working on five projects, all of which are in the outline or first draft phase:
1) Blog on the science behind why ‘sativa’ and ‘indica’ are no longer the best way to classify cultivars.
2) White paper on how cannabis may help the opioid crisis with a review of scientific studies that show how cannabis can be an alternative for pain management.
3) Blog calling doctors to action in the cannabis industry and why it is important for doctors to get involved.
4) Blog on the vaping crisis from a physician’s point of view. 5) General audience and technical white papers on the Endocannabinoid System.
Marketing & Advertising Committee (MAC)
The MAC coalesces the talents of 20 of the industry’s top-tier marketing and communications professionals around three focus areas: Education, Advertising Access and 2020 political goals. We use our personal, professional and business skills and networks to help build a responsible, legal cannabis industry. The committee is producing best practices, webinars, workshops and social media campaigns to aggregate and generate support from NCIA members, the public, media, government and business leaders.
In our first quarter, our Education Sub-Committee began creating a Speakers Bureau to provide qualified experts for conference organizers and media who will address topics of interest and concern in the industry.
Our Advertising Access Sub-Committee is completing best practices for advertising, making presentations to media groups and expanding Advertising/Labeling Do’s and Don’ts from five states to all legalized states.
Our 2020 Sub-Committee is driving awareness around policy change through panel presentations, preparing a campaign supporting pro-cannabis candidates and is encouraging professionals from the cannabis industry to run for office.
Cannabis Cultivation Committee (CCC)
We are working on producing our first podcast episode, which will feature top-notch farmers who are doing great work employing sustainable practices in indoor facilities.
There will be more podcast episodes to come on other hot cultivation topics.
State Regulations Committee (SRC)
The State Regulations Committee has been hard at work on a number of exciting pieces of work-product that should be available soon. For example, we hosted a webinar on December 3, 2019, in which the expert members of the Committee break down what operators need to know about Michigan’s adult-use market’s rules before it launches in 2020.
The State Regulations Committee has work-product in the pipeline on a number of topics of great importance to members. That includes a recurring guidance series on social consumption in markets across the nation, posts analyzing challenges in local/municipal regulation, a focus on the crucial questions of promoting social equity, and much more.
Cannabis Manufacturing Committee (CMC)
The Cannabis Manufacturing Committee is focusing on reviewing existing business practices and state regulations of concentrates, topicals, vaporizers and, edibles ensuring the manufacturing sector is helping shape its destiny. In this approach, we have published our first blog using lessons learned from the e-cig sector. We are also engaging with NCIA’s Safe Vaping Task Force.
CMC has created three sub-committees; GMP (Good Manufacturing Practices), Testing (from the operator’s view), and Nomenclature (providing clarity to industry language). GMP has its first draft complete and will be ready for publication in November. Nomenclature has a concrete draft to review for publishing its first part of a multi-piece series.
Packaging & Labeling Committee (PLC)
The PLC has 4 subcommittees: Honesty & Labeling, Sustainability, Security, Next Generation Packaging. Each subcommittee has set a goal of producing 3 or more blogs and 1 webinar. We have a very motivated and strong group this year. Our biggest vision for the year is to use our data, blogs, white papers, webinars, and PLC members’ knowledge to create a document reflecting the industry views on what federal policy should be around packaging and labeling.
The Retail Committee is working on a compilation of SOPs for retail compliance to turn into a white paper and webinar series, combining efforts from various retailers in several states/markets in order to be most useful to the national audience.
Facilities Design Committee (FDC)
As a new committee, we have established a mission statement: To provide access to resources for the NCIA community and regulators that will inform the design and use of GMP-driven, sustainable and operationally efficient facilities to position our industry to compete in the global marketplace.
We have established two sub-committees: Standards and Sustainability. The Standards Sub-Committee is linked through membership to ASTM’s D37 committee on cannabis.
Banking & Financial Services Committee (BFSC)
Our vision is to provide reliable, actionable and current information to NCIA’s members via committee member videos and a monthly newsletter. The committee will also be coordinating “NCIA Panels” at Bank and Credit Union conferences throughout the country to spread awareness to the issue and bring these institutions closer to the industry.
Lastly, the committee will be contributing language to the Policy Council for revision of the current version of the SAFE Act.
We will keep the NCIA updated as the Bank and Credit Union panels are confirmed. The committee will continue to pair any operator with the best banking option based on a myriad of factors, free of charge.
Looking Back On Ten Years Of Cannabis Reform – The Road Behind, The Struggle Ahead
By Morgan Fox, NCIA Media Relations Director
NCIA’s Media Relations Director, Morgan Fox
August in Washington D.C. means heat, which is probably a big reason why lawmakers take the month off and return to their home states before coming back to confront the issues of the day. With this Congress – which has been more supportive of cannabis policy reform than any in history – out on recess, it seems like a good time to reflect on how far we’ve come as a movement and as an industry, we well as to recognize how much farther we still need to go.
I’ve been working exclusively on cannabis issues for more than a decade, and when I started my first job in the field at the Marijuana Policy Project all those years ago, the landscape looked much different. At the time, there were only a handful of states with effective medical cannabis laws, and no states where it was legal for adults. Opponents would consistently claim that cannabis has no medical value with a straight face, and people would believe them. The nonsensical argument that providing medicine to sick people would somehow lead all teenagers to become addicted to hard drugs often ruled the day and frequently delayed reform efforts. Access to cannabis, even in states with good laws, was limited and hard fought. Cannabis consumption by anyone except the most seriously, visibly ill people was largely portrayed as criminal and immoral.
Now, cannabis is legal for adults in 11 states, D.C., and two territories; 33 states and several territories have comprehensive medical cannabis laws; and nearly every state allows cannabis in some form. Tens of millions of people can now safely access cannabis without fear of arrest. Dozens of states are looking at cannabis policy reform legislation every year, and we can expect to see several ballot initiative campaigns taking place next year.
As more and more states have regulated cannabis in some way, new legal markets have emerged, allowing the industry to grow and thrive in many ways. At the start of my involvement, there were a shockingly small number of cannabis businesses, and the problems they faced were quite different than what we tend to deal with today. Non-existent access to banking was of trivial concern when the threat of raids by armed federal agents was a daily concern. Videos of jack-booted thugs pointing rifles at disabled patients and dragging dozens of plants out of smashed windows were commonplace. Long prison sentences for cultivators and providers were the norm.
New state laws and increasing public acceptance helped to ease the crackdown on the cannabis industry, but the real game changer came in the form of an unexpected federal policy directive. In 2013, Deputy Attorney General James Cole issued a directive to federal prosecutors, telling them not to target businesses or individuals who were in compliance with state cannabis laws. Known as the Cole Memo, this directive did not carry the force of law and did not prevent the enforcement of federal prohibition. Some Department of Justice employees took it more seriously than others. However, it did drastically reduce the number of prosecutions of state-legal cannabis businesses, and gave people enough confidence to really pull out all the stops. Since then, the industry has grown and professionalized by leaps and bounds. Huge trade shows, once unheard-of, are now commonplace and attracting people from a wide range of professions. Businesses no longer hide in the shadows, but are actively competing for exposure. There are now more than ten thousand licensed plant-touching businesses in the U.S., and many thousands more ancillary businesses working in the cannabis space. According to a recent report by Leafly, more than 200,000 jobs have been created by the legal cannabis industry.
One of the most important changes to happen over the years is the increased and deeper focus on justice in the cannabis reform movement, including equity in the cannabis industry. Legalization has always been about freedom and justice, but it has largely been talked about in the general sense of the injustice of criminalizing people for consuming a substance that is objectively safer than alcohol. The disproportionate harms inflicted on people of color and the destructive impact that prohibition has had on entire communities for generations were well known to many, but it wasn’t until the ACLU released its groundbreaking report that these facts started gaining more attention in the public sphere. It has still taken far too long for this issue to come to the forefront of the cannabis policy debate, but things are moving in the right direction. Most modern legalization legislation now contains provisions related to expungement, community reinvestment, and equity in the emerging cannabis industry, and indeed these are now required in order to be taken seriously by voters, activists, and policymakers. But it wasn’t always so.
During the ballot initiative campaign for Amendment 64, which would go on to pass in November 2012 and make Colorado the first state in the nation to regulate cannabis for adults, polling showed that including even a limited provision to expunge minor cannabis convictions would have killed the chances of victory. Fast forward to this year, where legislation to make cannabis legal in New Jersey stalled because it did not go far enough to address the disparate harms caused by the war on cannabis. Illinois, the first state to regulate cannabis through its legislature, included language in its legalization bill which passed earlier this year that will expunge the vast majority of marijuana convictions and will help to ensure that people of color can take advantage of the opportunities being created by the legal cannabis market. And even Congress is starting to come around, with multiple active bills containing restorative justice provisions being considered and a House subcommittee holding a groundbreaking hearing on the issue this summer.
Speaking of Congress, the differences between now and then could not be more stark. Until somewhat recently, there was little appetite for addressing cannabis policy reform, and tremendous opposition from both sides of the aisle. While states continued to pass cannabis legislation, most federal lawmakers wouldn’t go near the subject except to shut it down. Even those whose own states had passed good laws were actively undermining their constituents. In 2014, an amendment was added to the annual spending bill that codified the protections outlined in the Cole Memo, but only for medical cannabis programs. Despite this provision being included in all subsequent budgets, it was never extended to adult use programs. Progress on stand-alone bills related to cannabis was generally slow and did not receive serious consideration in either chamber.
This Congress has been extremely different. Dozens of cannabis bills addressing all sorts of issues have been introduced, often with bipartisan support. Hearings have actually been held and taken seriously in the House and Senate, often with mostly supportive testimony. The SAFE Banking Act, which would provide safe harbor for financial institutions to work with cannabis businesses and increase access to capital for small businesses and disenfranchised communities, has seen unprecedented movement and support this year. In the House, it has 206 cosponsors and was approved with a bipartisan vote in the Financial Services Committee. It now waits to be called for a vote, which it will likely win. In the Senate, despite some lingering opposition, key committee heads and Republican leaders are softening their stances and held an informational hearing on the bill last month. More comprehensive bills such as the Marijuana Justice Act, the FAIR Act and the MORE Act are being given more attention than we’ve ever seen for legislation that would deschedule cannabis. It seems that politicians are finally catching up to public opinion and are more comfortable with supporting reform in the open.
Some of the credit for this can be given to the media. When discussing this topic, I always like to relate a story told to me by my first boss in cannabis policy reform. In the late 2000’s, he called CNN’s newsroom to pitch a story about a new positive cannabis study. He identified himself and his organization at the beginning of the call, which prompted the person on the other end to start laughing so hard they had to put my boss on hold. When they finally returned, they greeted him by saying “OK, Mr. Marijuana. How can we help you?” Needless to say, the story did not get picked up.
For years, we’ve had to deal with a media environment where cannabis policy reform was treated as a joke at best, and as a horrible scourge at worst. Stories were riddled with bad puns (I can’t count the number of times I’ve seen the phrases “blunt truth” or “clearing the smoke” or “hazy proposition” in headlines), or only referred to cannabis as “pot” or something equally stigmatizing. Many of them took prohibitionists at their word as they spewed falsehoods and fear, while giving limited or no space to reformers. Most major media outlets were not even interested in looking at the issue to begin with.
All that has changed. Cannabis is finally being taken seriously, and news organizations are devoting massive resources to covering it and even creating cannabis beats for dedicated journalists. Dozens, if not hundreds, of cannabis-specific publications are now available, with advertisers clambering for space in them. The coverage is much more fair, and the puns are (mostly) gone. Changes in the way the media talks about cannabis have certainly had a positive impact on how the public, and by extension lawmakers, thinks about this issue.
It can be tempting to look at all this progress and pat ourselves on the back for a job well done, and in some senses it is deserved. Tens of thousands of otherwise law-abiding individuals around the country will no longer be saddled with the disastrous consequences of having a criminal record every year. Hundreds of thousands are gainfully employed in an industry that is steadily displacing the illicit market while making cannabis safer and less stigmatized. The federal government is getting closer and closer to making real progress on cannabis issues. Support for legalization is a ubiquitous topic in the 2020 presidential field and has become almost a prerequisite for being considered as a serious candidate. Two-thirds of Americans think cannabis should be legal for adults. All of this is a world away from where we were a decade ago, and the benefits being reaped because of the hard work of advocates are significant.
But we have a long way yet to go.
There are still roughly half a million cannabis arrests in the U.S. annually, mostly at the state level. The majority of states have yet to regulate cannabis for adults, and support for doing so in many of them is still very weak. Advocates and industry leaders need to redouble their efforts to reach out to lawmakers, voters, stakeholders and communities, and work with them to pass sensible cannabis legislation. Even states with relatively good laws still need help: home cultivation is still illegal in Washington state, for example, and Vermont and D.C. do not yet have regulated cannabis markets or legal sales.
State and local restorative justice efforts have had limited success, to put it generously. Funds intended for community reinvestment have been diverted or delayed, and equity programs are sometimes being exploited by predatory operators. High application fees, arbitrary license caps, criminal record bans and other unnecessary barriers of entry are preventing marginalized people from becoming a part of this industry. Decreasing arrests, while vitally important, cannot be the only gain made by disproportionately impacted communities as we continue to reform our cannabis laws.
Despite growing support for change in Congress, cannabis is still a relatively low priority for most federal lawmakers. Without constant pressure on them, reform will come slowly or not at all. NCIA’s in-house federal lobbying team, as well as outreach efforts like our annual Cannabis Industry Lobby Days, help keep this conversation going at the Capitol and sway legislators to our side. Federal legalization is far from inevitable, and we are committed to maintaining and increasing our efforts to make sure it happens.
But we need your help. Now is the time to get involved, get active, and help end prohibition once and for all while we build a responsible, competitive, and inclusive cannabis industry. We still have much work to do, but if the accomplishments of the last decade tell us anything, it’s that we can do this together.
VIDEO: June Policy Update With Aaron Smith, NCIA’s Executive Director
There’s been so much progress on cannabis industry issues so far this year. Hear more about the forward movement and victories we’ve seen in Congress on issues like the SAFE Banking Act, which has passed through the House of Representatives and is now in the Senate, and the House also voted to include protections for adult-use cannabis businesses in legal states through the Department of Justice budget vote process. Plus, Illinois becomes the 11th state to enact adult-use cannabis laws. NCIA’s Co-Founder and Executive Director Aaron Smith joins us to review this positive momentum.
The history of cannabis and the United States in a tenuous one. The most horrific parts of that history are the injustices that the racist war on drugs and cannabis prohibition has caused, as well as the millions of lives both have destroyed. However, the dichotomy of history, cannabis, marijuana, and hemp have been an integral part of American life for centuries. This week, to honor Independence Day, we wanted to talk about that legacy.
It All Began with Hemp
It begins in Colonial Virginia with hemp. In 1606, King James I granted the Virginia Company a charter for Jamestown, however, by 1619, England needed financial help from the colony. As a result, the Virginia Company required Jamestown’s land owners to grow and export 100 hemp plants to help their motherland. Over a century later, George Washington even famously noted in his diary about the sowing of hemp seeds each day until mid-April and later recounted that he grew 27 bushels of the crop that year. Throughout colonial America, you can find examples of hemp being used to make fabric, rope, and sails, among other items, and this continued throughout most of the 18th and 19th centuries.
The use of industrial hemp continued, however, in 1906, Congress passed the Pure Food and Drug Act, which affected the availability of medicinal cannabis. This legislation aimed to revamp poison laws– ironically, the first state to label cannabis as a poison was California.
Cannabis Prohibition
In 1937, the Marihuana Tax Act was passed in the United States, which levied a tax on anyone who dealt commercially in cannabis, hemp, or marijuana, effectively making all three illegal. However, after the Philippines fell to Japanese forces in 1942, the U.S. Department of Agriculture and the U.S. Army urged farmers to grow hemp and even issued tax stamps for its cultivation to farmers. Without any change in the Marihuana Tax Act, over 400,000 acres of hemp were cultivated between 1942 and 1945. The last commercial hemp fields were planted in Wisconsin in 1957.
In the decades following World War II, cannabis, hemp, and marijuana remained illegal, though attempts were made to reconsider those policies. After a 1969 Supreme Court case rendered the Marihuana Tax Act unconstitutional, the Nixon Administration decided, based on racist and unscientific terms, to create the Controlled Substances Act and place cannabis in Schedule I — where it remains to this day.
In the decades since cannabis was criminalized in 1970 (and even before), millions of predominantly black and brown individuals have gone to jail. In fact, presidential hopeful Sen. Cory Booker (D-NJ) recently noted that there are more African Americans under criminal supervision in America today than there were slaves in 1850.
Cannabis Legalization & Reformation
To date, more than 30 states have enacted medical cannabis laws, and 11 now permit the adult-use of cannabis for those over 21. The cannabis industry is being called the new “green rush” and while it presents unlimited opportunity and potential, we must make sure that it is inclusive, diverse, and equitable.
So, while we look back at cannabis and its history in the United States on the Fourth of July, it is imperative that we also recognize the great injustices that have come along in the centuries since the country’s inception. Here in D.C., we’re proud to try and do our part by building broad coalitions, supporting diverse candidates, and lobbying on legislation that would right some of these wrongs, and really — isn’t that the most patriotic thing we can do?
Member Blog: Legal Cannabis in Illinois – Expanded Possibilities For All
Today, Governor Jim Pritzker of Illinois signed the historicHouse Bill 1438, The Cannabis Regulation and Tax Act, into law, ending prohibition for recreational cannabis usage across the state, and making it the 11th state where cannabis is legal. I, along with so many others in Illinois, and around the United States, am just as excited as the Governor.
“The state of Illinois just made history, legalizing adult-use cannabis with the most equity-centric approach in the nation. This will have a transformational impact on our state, creating opportunity in the communities that need it most and giving so many a second chance.” – Governor Pritzker, IL
This is a game-changer for the state of Illinois and its constituents. Public health, education, and tourism are just a few of the areas that are expected to emerge victoriously by being some of the beneficiaries of the $170 million dollars in expected tax revenue in early years.
But to me, what’s even more extraordinary is the fact that within IL’s legalization law is a visionary plan that will serve as inspiration to advance the nation’s social equity movement in this industry.
With the end of cannabis prohibition, we see the beginning of the end to the “war on drugs” as we know it, one that shrouded lower-income and traditionally Latinx and African-American communities in an unjust and unfair light.
The ACLU states that people in the United States use and sell marijuana at roughly the same rate regardless of their race, yet a black person is almost four times more likely than a white person to be arrested for marijuana possession nationwide. In addition, roughly 13,000 people were deported or separated from their communities and families in 2013 alone for drug-related offenses.
Even the word marijuana itself can be considered negative and racist, based on a longstanding theory that narcotics agents in the 1930s chose a word of Mexican-Spanish origin over the more scientific word cannabis when crafting drug laws, making it sound more sinister and associated with a certain community.
The equitable measures put into place in Illinois’ cannabis legalization law are unprecedented when it comes to making sure the end of cannabis prohibition will result in brighter days for the masses, not just a select few.
A FAIR SHOT FOR ALL
New processing and cultivation licenses will be issued in mid-2020, with growers from communities negatively impacted the most by cannabis prohibition getting priority within the application process.
A SECOND CHANCE
Up to 770,000 people in Illinoisqualify to have their marijuana convictions expunged from their criminal record, healing past wounds and providing access to new opportunities that weren’t available in the past because of past marijuana laws.
OPPORTUNITY FOR GROWTH
One quarter of cannabis taxes collected willfund a grant program that will invest in minority communities impacted most negatively by cannabis prohibition, driving cannabis business opportunities, by offering assistance and mentorship.
Even 2020 candidate Senator Kirsten Gillibrand shared her comprehensiveplan to legalize marijuana on a Federal level immediately if she becomes president. In that plan, social equity is also the primary focus on the path to legalization.
“The unfair enforcement of our current marijuana laws is a continuation of the institutional racism that has defined our criminal justice system for decades… We’re talking about entire lives, families, and communities being derailed: felony convictions make it much harder to get and keep jobs, access financial loans, exercise the right to vote, travel abroad, and receive social and housing benefits.” – Senator Kirsten Gillibrand
And just recently, Chicago-based Cresco Labs launched its Social Equity & Educational Department (SEED), an initiative aimed at promoting inclusion, equality and community engagement, through community outreach, educational support and incubators for veteran, minority and women-owned businesses.
“Our SEED initiative is designed to ensure that all members of our society have the skills, knowledge and opportunity to work in and own businesses in this industry….the SEED initiative consists of impactful programs and actionable solutions-based approaches that we believe will help make the cannabis industry a highly inclusive force for job creation.” – Charlie Bachtell, CEO, Cresco Lab
I also believe in a fair and equitable cannabis industry that unites as one to fix the damage done within certain communities as a direct result of cannabis prohibition. The National Cannabis Industry Association, along with theMinority Cannabis Business Association, are helping to shape laws and create a roadmap for local governments to address social equity issues right from the start of legalization.
“It is fitting that the Land of Lincoln is moving forward with such extensive measures to reverse the damage done to people of color and low-income communities by the government’s senseless war on cannabis consumers. We cannot continue to pursue legalization without considering restorative justice, and Illinois is definitely starting on the right foot in this regard,” said Aaron Smith, executive director of the National Cannabis Industry Association (NCIA).
And as further fuel to ignite the social equity movement,with the end of prohibition in sight, we’re also seeing exponential growth in all sectors of cannabis business. And with that growth comes a highly qualified talent boom in cannabis, with executives from all industries making the move to join and imagine an exciting new space together, from all perspectives.One exciting space that cannabis businesses can look to Corporate America for inspiration is within Corporate Social Responsibility programs.
Corporate Social Responsibility programs, or CSR, is a way for companies to conduct their business in a manner that is ethical, while taking their social, economic and environmental impact, along with the consideration of human rights, into account. It can be a win-win situation for all parties involved – through CSR programs, businesses can benefit society while boosting their own brands. Most have probably heard of Tom’s Shoes, and their popular “One for One” CSR program, which donates a pair of shoes for every pair bought. General Electrics donated over $38 million to community and education programs in 2016. Disney has a “VoluntEARs” program, which allows all of their employees to use a portion of their hours towards volunteer efforts.
With so many new brands coming into the market following legalization, it’s important that they find a way to stand apart and above the competition, while delivering a relevant brand experience. In order to do that successfully, brands need to stand for something, something that matters to people. And what we’re hearing from legislators and constituents alike is that social equity in the cannabis industry matters a lot. It’s a space for us, as responsible cannabis business owners paving a path forward, to come together and share not only the secrets of their success, but also to share the gains with the entire cannabis community, in order to lift everyone up – to right the wrongs of the failed war on drugs.
The possibilities are limitless, just like the new frontier of cannabis. I look forward to seeing how we all grow together.
Payal Shah is founder and CEO of the Cannabis Insight Collective. She’s spent the last two decades in strategic planning, working in leadership roles within global advertising agencies, on blue-chip clients including Proctor & Gamble, Microsoft, Walmart, Kelloggs, and Porsche.
Her experience is focused on understanding how cultural paradigm shifts and trends impact and influence people, their behaviors and brand choices. Her knowledge is grounded in creating and cultivating online panels, or Collectives, of all sizes and shapes, to address a variety of challenges for various clients. This background, along with a compassion and conviction for the cannabis industry, inspire her to be an advocate to drive the cannabis industry forward.
Cannabis Insight Collective is aliving, breathing online community of people across the United States, brought together by their connection to the cannabis industry. We exist to uncover cultural, category and consumer trends and insights within the category by tapping into our proprietary Collective, and working with people directly to answer questions that brands are struggling to answer.
At Cannabis Insight Collective, we are committed to supporting social equity in the cannabis market, and treating everyone fairly and respectively, through a number of Corporate Social Responsibility business initiatives:
The Cannabis Insight Collective panel will be representative of the entire United States population to ensure a representative voice is heard.
A percentage of CIC’s revenue will be donated to the advancement and mentorship of minority-owned cannabis businesses.
CIC will continue to advocate to establish new and existing laws that make sure the cannabis industry is fair and equitable.
Member Blog: My Journey Through The Intersection of the LGBTQ Community and Cannabis Movement
By Erich Pearson, SPARC
NCIA Board and Founding Member
Reflecting on the decades-long fight to end prohibition of marijuana, one person comes to mind this month as we look at the similar and interconnected decades-long Gay Pride movement and what it means for the LGBTQ community today. One activist largely credited for legalizing medical cannabis in California is the original “cannabis influencer” Dennis Peron. We have much to be grateful for as we remember his legacy advocating for AIDS patients in California to have access to medical cannabis.
As for my role in both of these these important causes, I arrived in San Francisco in 2000 after graduating college in Indiana. I was happy to find San Francisco to be not only accepting of me as a gay man, but also accepting of me as someone interested in the cannabis movement. In the 1990s, there were a handful of medical cannabis dispensaries operating, un-permitted and un-regulated. It wasn’t until 2006 that Americans For Safe Access (ASA), Drug Policy Alliance (DPA), and Marijuana Policy Project (MPP) along with a handful of local advocates led the charge to regulate dispensaries.
A few of the most vocal advocates were veterans from the political days of Dennis Peron. Dennis was not involved in the regulatory process of 2006. It was widely known that Dennis didn’t like regulations (he repeated this during the Prop 64 campaign years later). Dennis thought cannabis should be grown and sold freely, outside of an alcohol-type regulatory environment. He was right, but unrealistic – hence his waning interest in the politics of it.
Dennis did have a few friends who wanted to see cannabis regulated in San Francisco, and one was Wayne Justmann, a gay man that used to work the door at Dennis’ cannabis club at 1444 Market Street. Wayne is a friend of mine today, and we worked closely together to advocate for a dispensary program that respected the existing operators, despite their “inappropriate” locations in many cases. We ultimately won this battle, as San Francisco has a healthy respect for social pioneers.
San Francisco was also the first city to regulate on-site consumption. This was allowed in order to provide AIDS patients a safe place to medicate, outside of government housing. This has proven to be a successful program, with little public resistance even today as we permit more of these lounges, primarily designed for adult-use consumption.
I started a free compassion program in San Francisco in the early 2000’s at Maitri AIDS Hospice. We still deliver twice a month to patients there. This has been an incredibly successful program and a very rewarding experience for myself and the staff who carry it out.
Today, I don’t see a lot of synergies anymore between gay progress and cannabis progress despite its intertwined history, but we at SPARC honor that history with a t-shirt claiming victory: “Legalized Gay Pot.” Of course, the fight for fair treatment and equality for both cannabis and LGBTQ right is far from over, but in San Francisco, I’d say we’ve come a long way on both fronts. And as cannabis legalization sweep through other states across the country, we can see studies that show gay, lesbian and bisexual people being the highest level of consumers among other select demographics, showing that our communities continue to overlap.
In looking back on all of this history and progress, I am thankful for all of the advocates who put themselves forward to fight for cannabis AND LGBTQ rights – we wouldn’t be here without their hard work, dedication, and selflessness. I now look forward to a future where everyone, in every state, can access the cannabis plant and be treated with respect and fairness.
Photo By CannabisCamera.com
Erich Pearson is a recognized leader in the cannabis industry – a long-time advocate, legislative consultant, dispensary operator, cultivation expert, and NCIA board member.
A proponent of medical cannabis regulation, cultivation, and best practices since 2000, Erich served on the San Francisco District Attorney’s Medical Marijuana Advisory Group and consults on state and local medical cannabis policy and legislation.
Erich was instrumental in the passage of both San Francisco’s Medical Cannabis Dispensary Act and the law enforcement “lowest priority” resolution of the San Francisco Board of Supervisors. As a result of Erich’s work he was appointed in 2007 by Supervisor David Campos to sit on San Francisco’s Medical Cannabis Working Group.
In 2010 Erich launched SPARC, a nonprofit medical cannabis dispensary providing safe, consistent and affordable medical cannabis to patients in San Francisco. SPARC provides high quality, lab-tested cannabis to qualified patients, and collaborates with local hospices, residential care facilities, and dispensaries to successfully supply medical marijuana at no cost to seriously ill patients.
How does SPARC do it? By growing cannabis more efficiently. Erich’s expertise is constructing and managing large indoor cultivation facilities. With a robust Research & Development team, Erich is meticulously focused on developing the optimal environmental recipe for high-yield cultivations using unique systems of lighting, ventilation and design.
SPARC is a Founding & Supporting Member of NCIA. Erich holds a BS in Construction and Project Management from Purdue University.
NCIA’s 9th Annual Lobby Days – Strength in Numbers, Power in Progress
Just two short weeks ago, NCIA hosted our 9th Annual Cannabis Industry Lobby Days. This impactful event brought over 250 NCIA members to our nation’s capital to advocate and lobby on important issues facing our industry like access to financial services, amending IRC Section 280E, and addressing social equity.
Over the course of 48 hours, attendees met with nearly 300 congressional offices to share their stories and experiences, and dropped off informational materials to 200 offices that we did not schedule meetings with. In addition to these meetings, we had two briefings, held a PAC fundraiser, and hosted our first-ever VIP Day for members of our Leadership Circle. Let’s take a look at some of the highlights from this important event:
To kick off our first-ever VIP Day, we held a briefing at the House of Representatives entitled “SAFE Banking: Where We Are, and Where We’re Going,” where Congressman Ed Perlmutter (D-CO), the lead sponsor of HR 1595, the Secure and Fair Enforcement (SAFE) Banking Act, kicked off the day. On the panel was Tanner Daniel of the American Bankers Association, Becky Dansky of SARBA, and Gail Rand of ForwardGro, while attendees included NCIA members, congressional staff, and members of the press.
Following the briefing on banking, VIP Day attendees were shuttled to a luncheon featuring Reps. Joe Neguse (D-CO), Katie Porter (D-CA), Gil Cisneros (D-CA), and Steven Horsford (D-NV). All of these members of Congress are freshman who support cannabis reform, and talked about the importance of advocacy and the use of political action committees like the NCIA-PAC that they rely on.
After lunch, VIP Day attendees were shuttled back to Capitol Hill, where teams met personally with members of Congress, committees of jurisdiction, and congressional leadership.
Our first ever VIP Day was a huge success, and we thank the members of NCIA’s PAC Leadership Circle for their dedication to advocacy.
Lobby Days then officially started with a Welcome Reception attended by other advocates in Washington, D.C., NCIA members, and even congressional staff!
The following day, the work really began at our breakfast training. There, attendees met with the groups that they would be in for the day, were taught talking points on various bills and issues, and learned about how to use the app that housed all of their meeting information.
Washington, D.C. is full of great photo ops, so after our breakfast training, all of our attendees shuttled over to the Capitol… and snapped a few selfies, of course!
Meetings on Capitol Hill went from 12pm to 4pm. Each of NCIA’s 54 lobbying teams had at least four meetings over that course of time. Some groups were even lucky enough to sit down with members of Congress to talk about the issues that affect them and their businesses the most.
The day concluded with a fundraiser for the NCIA-PAC. This year’s event was wildly successful, as we had 15 members of the House of Representatives (Reps. Porter (D-CA), Charlie Crist (D-FL), Josh Harder (D-CA), Earl Blumenauer (D-OR), Ruben Gallego (D-AZ), Salud Carbajal (D-CA), Jared Huffman (D-CA), Jason Crow (D-CO), Brendan Boyle (D-PA), Diana DeGette (D-CO), Denny Heck (D-WA), Barbara Lee (D-CA), Dina Titus (D-NV), Susie Lee (D-NV), Matt Gaetz (R-FL)) attend and speak, as well as Sen. Jeff Merkley (D-OR).
The final day of Lobby Days began with a standing-room-only briefing that focused on NCIA’s new white paper titled “Increasing Equity in the Cannabis Industry” that our Policy Council worked on with the Minority Cannabis Business Association (MCBA). Opening remarks were given by MCBA’s President, Shanita Penny along with the Principal of Greenbridge Corporate Counsel, Board Vice-Chair of the National Cannabis Industry Association, and Co-Chair of the Minority Cannabis Business Association Policy Committee, Khurshid Khoja. We were also joined by two members of the Congressional Hispanic Caucus, Rep. Lou Correa (D-CA), and Rep. Ruben Gallego (D-AZ).
Lobby Days wrapped up with small groups dropping off folders with informational materials to congressional offices that we were unable to schedule meetings with. While some may think these drop-ins are ineffective, they actually prove to be incredibly helpful long after our attendees go home.
The dates for NCIA’s 10th Annual Cannabis Industry Lobby Days have already been chosen, so mark your calendars for our biggest year yet, happening May 19-21, 2020!
Be sure to check out the full photo album from this year’s Lobby Days!
Top 5 Reasons You Should Attend Lobby Days This Year
Will you join us as a united front in Washington, D.C. this year?
Hundreds of cannabis industry professionals from all over the country will descend on Capitol Hill this month for the 9th year in a row for NCIA’s Annual Lobby Days. It’s more important than ever before to make your voice heard and advocate for the federal reforms our industry needs to truly thrive.
Whether it’s access to banking for your business, much-needed federal tax reforms, or some of the many other struggles faced by our industry that could be remedied by congressional action, we need you to tell your stories on Capitol Hill with us on May 21-23.
Here’s our top five reasons for you to register today to join us for this exciting and impactful event this year:
Progress made on SAFE Banking Act
Earlier this spring, we saw historic movement on one of our key pieces of legislation: banking. The SAFE Banking Act of 2019 was introduced in the House of Representatives by some of our champions in Congress – Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA). Following an historic hearing, the bill received a markup by the House Financial Services Committee and passed out of the House Financial Services Committee in a vote of 45-15. This is important because it is the first time in history that a cannabis banking bill has made its way this far through the legislative process. NCIA vigilantly jumped in to collect and submit the testimonies of dozens of cannabis industry leaders for the hearing.
The momentum continues to grow as the bill now has more than 160 co-sponsors and will likely be debated again in the House soon. Now is the time to strike while the iron is hot. Join us at Lobby Days to educate and inform even more members of Congress about the struggles our industry faces to get and keep access to financial institutions!
New Attorney General is receptive to state’s rights issues
As the saying goes: out with the old and in with the new! Attorney General Jeff Sessions, who is known for his anti-cannabis stance, resigned from the Department of Justice earlier this year, and was replaced by William Bar. During his Senate confirmation hearing in January, Barr expressed his respect for the policies laid out in the Cole Memorandum, issued in 2014, which cannabis companies have relied on to continue doing business in a state-legal, regulated environment. Additionally, he wrote to the committee, “I still believe that the legislative process, rather than administrative guidance, is ultimately the right way to resolve whether and how to legalize marijuana.”
These statements hint at a more reasonable approach to cannabis reform, and the need for NCIA members to make their voices heard in the halls of Congress, particularly those in Congress with influence on the Senate Judiciary Committee and at the Department of Justice.
New members of Congress
Last November, we saw midterm elections bring in a new class of freshman members of Congress. Many of these new faces replaced the old guard of those with long-standing prohibitionist views toward cannabis. Many of them lean more progressive, which means they are more likely to be friendly toward our issues. This infusion of new blood, new minds, and new perspectives in the halls of Congress can work in our favor.
NCIA’s Lobby Days is the best way to get direct access to some of these offices so we can get off on the right foot with them on our issues. Joining us in D.C. means you will inform and educate these new members of Congress on the struggles we face like tax reform, veteran’s medical access, social equity, and of course, the SAFE Banking Act specifically. How many new co-signers can we get on this bill? Let’s find out together.
Meeting 200+ other politically active industry professionals
It’s not a conference — It’s different. There’s no expo floor or panel discussions, just people. And it happens to be some of the most politically engaged leaders of our industry who attend Lobby Days. You’ll rub shoulders and team up with cannabis industry pioneers who have been in the game for years. You’ll learn the “ins and outs” of the Beltway from lobby day veterans who join us every year to advocate for our industry. Hear about it for yourself by watching this re-cap video from last year’s 8th Annual Lobby Days:
Learn how to lobby and take those lessons home
This isn’t our first rodeo, but it might be yours, and that’s okay. Even if you’ve never done citizen lobbying before, NCIA’s government relations team makes it easy by offering trainings before the event, as well as on-site. We’ll give you materials to help you tell your stories including descriptions of our priority legislation, and background information on the offices you’ll be speaking with. And you won’t have to go it alone! We will team you up with a small group of your fellow cannabis industry peers to navigate the halls of Congress together.
Lobby Days with NCIA will empower you to go back to your home state to advocate on the industry’s behalf. You’ll know what to say, how to say it, and what to expect.
Together, we can make a real difference and push our industry past the tipping point. Hundreds of NCIA members have already registered for this event, so what are you waiting for? Register today, schedule your flight, and book your hotel. We can’t wait to see you there.
Get to know the team at Berkeley Patients Group, a founding member of NCIA, based in the Bay Area of California. Established in 1999, Berkeley Patients Group is the nation’s longest-running dispensary. Etienne Fontan and Sabrina Fendrick talk about the importance of establishing banking services for our industry, as well as other struggles related to federal prohibition. Etienne Fontan also currently serves on NCIA’s Board of Directors.
Why March Was a Monumental Month for Our Industry
Over the past nine years, NCIA has advocated for the fair and equal treatment of the legal cannabis industry by pushing for federal policy reforms around critical issues that threaten our industry’s growth. While we have had steady success over the years, this March was monumental for a variety of reasons.
Most notably, we celebrated the historic passage of the SAFE Banking Act out of the House Financial Services Committee, a landmark step closer to resolving our industry’s ongoing banking crisis. On a micro-level, we also saw record-breaking attendance at our March Cannabis Caucus events.
Here’s a recap of what went down and why we think these are critical indicators of a tipping point for our industry.
The passage of the SAFE Banking Act out of Committee
On March 27, H.R. 1595, the Secure and Fair Enforcement (SAFE) Banking Act of 2019, received a markup by the House Financial Services Committee and passed in a vote of 45-15, including 11 Republicans who voted in favor.
This is the first time in history that a cannabis banking bill has reached this point in the legislative process. As a reminder, a markup is the process by which a congressional committee debates, amends, and rewrites proposed legislation.
Now that the bill has passed out of the House Financial Services Committee, it will continue in the legislative process and be sent to the House Judiciary Committee. It is unclear whether or not the Judiciary Committee will waive its rights to the legislation. But, since Rep. Doug Collins, the ranking member of the House Judiciary Committee sent a letter in favor of a hearing for the STATES Act, it seems like the prospect is positive. If the Committee does waive its rights, the SAFE Banking Act will then be referred to the powerful House Rules Committee before receiving a floor vote from the full House.
As a reminder, Secure and Fair Enforcement (SAFE) Banking Act was introduced in the House of Representatives by Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA), Warren Davidson (R-OH) and Steve Stivers (R-OH) less than three weeks ago. In a stunning, historic showing, the legislation was introduced with a whopping 108 original cosponsors, and that number has already risen to 158 – more than a third of the entire House.
Record-breaking attendance at Cannabis Caucus events
Over the past three years, we have hosted nearly 120 Cannabis Caucus events nationwide. What sets Cannabis Caucuses apart from our other regional events is their focus on federal policy news and ways that attendees can take action.
While these events are always well-attended, with a noteworthy lineup of speakers, our recent March Cannabis Caucuses were extraordinary.
For one, the events in San Francisco, Los Angeles, Denver, Lansing and Philadelphia saw a whopping 1,200 total attendees – more than any other Cannabis Caucus event series in our history.
Equally as notable was the turnout in what is expected to be the largest cannabis market in the world – Michigan. In Lansing, we partnered with the Michigan Cannabis Industry Association and hosted more than 400 industry professionals and advocates with an impressive lineup of guest speakers.
Not only were the guest speakers in Michigan tremendous, but across all events, we had noteworthy guest speakers discussing the importance of citizen lobbying. In Northern California: Jose Herndandez, Deputy Director, Rep. Barbara Lee’s Office; in Southern California: Nicolas Rodridguez, District Director, Rep. Ted Lieu’s Office; in Colorado: Rep. Diana DeGette (CO-1st District); in Michigan: Dana Nessel, Attorney General, Michigan and lastly in the Northeast: Shanita Penny, Executive Director of Minority Cannabis Business Association.
Despite the fact that visible progress on the Hill has been slow over the years, it is obvious that the passage of the SAFE Banking Act has transpired into a feeling of unity and strength for industry professionals and advocates alike. The outstanding attendance at our most policy-focused regional events aptly demonstrates this and continues to be a positive indicator of our industry’s momentum.
Were you at the March Cannabis Caucus events? Tag yourself in the Facebook photo album!
STATES Act reintroduced in Congress
While this didn’t happen in March, it deserves a note anyway. On April 4, the STATES Act to end cannabis prohibition was reintroduced by Sens. Cory Gardner (R-CO) and Elizabeth Warren (D-MA) in the Senate and Reps. Earl Blumenauer (D-OR) and Dave Joyce (R-OH) in the House. This would allow states to determine their own cannabis policies without fear of federal interference.
The timing of the reintroduction of the STATES Act is crucial because bipartisan support for cannabis policy reform is at historic levels in Congress and the general public. This legislation would allow the growing number of state licensed cannabis businesses to simply exist in peace, without fear of federal interference.
What’s next?
Overall, the course of events in the past month has proven that we are living through historic times for our industry. With that, we have every reason to believe that we’re getting close to a tipping point for our industry’s continued expansion at the federal level. As we continue this journey to achieve the fair and equal treatment our industry deserves, it is important to stop and celebrate our macro and microcosmic victories that denote extraordinary progress.
If you want to take the next step in supporting the legal cannabis industry, consider joining the nearly 2,000 business-members that make up NCIA’s membership base. By joining NCIA, you also get exclusive access to the industry’s most impactful advocacy event of the year – NCIA’s 9th Annual Cannabis Industry Lobby Days on May 21-23 in Washington, D.C.
For nine years, Lobby Days has been our industry’s opportunity to form a unified front on the Hill in advocating for the fair and equal treatment of our industry. This year – more than ever – we believe that telling our representatives why the SAFE Banking Act and the STATES Act need to be passed might be the final push our industry needs.
VIDEO: Capitol Hill Update On Cannabis Banking Hearing In Congressional Committee
Every day, our Government Relations team is keeping our finger on the pulse of what’s happening on the Hill and how it affects our industry. In this case, we have important news from D.C. about movement to fix the banking crisis faced by cannabis industry operators.
Watch this video to learn more about the historic hearing that took place on February 13 in the Subcommittee on Consumer Protection and Financial Institutions. They held the first ever hearing on marijuana and financial services, entitled: Challenges and Solutions: Access to Banking Services for Cannabis-Related Businesses. Up for discussion was a new version of the Secure and Fair Enforcement (SAFE) Banking Act.
There’s no better way to stay informed and connected with what’s happening in federal policy than by being a member of NCIA – the largest and most influential national trade association representing the legal cannabis industry. We fight on your behalf year-round in the halls of Congress for our industry to be treated fairly like any other legitimate industry in this country.
Be sure to register in advance for our popular Cannabis Caucus event series – tickets are complimentary for NCIA members, and a limited number of non-member tickets are available. Join us throughout the month of March in Los Angeles, San Francisco, Denver, Lansing, and Philadelphia. For more information, visit our website.
And now is the time to start planning your trip to Washington, D.C. to join us on Capitol Hill! For the 9th year in a row, we’re hosting our Annual Cannabis Industry Lobby Days on May 21-23. This is your chance to walk the halls of Congress and make your voice heard about the unfair tax and banking policies that cripple our industry. This event is exclusively for current NCIA members, so if you’d like to join us for what NCIA members say is “the most important and exciting NCIA event of the year,” then now is the time to join NCIA at one of our three levels of membership, and then join us in May in our nation’s capitol.
If you’re already planning to join us, now is a perfect time to read up on our latest Policy Council report to learn more about priorities for our industry in the 116th Congress.
WEBINAR: Michigan Voted to Legalize Adult-Use Cannabis – What You Need To Know Now
On Election Day, Michigan voters resoundingly approved Prop 1 to legalize and regulate adult-use marijuana under state law. It’s an exciting time with great possibilities, but what does this mean for the future state of Michigan’s legal cannabis landscape?
Watch this recording of the webinar from NCIA’s State Regulations Committee, presenting its first-ever interactive webinar designed to help you answer the pressing questions about Michigan’s new adult-use market.
Join NCIA’s State Regulations Committee members, including Chair Maureen McNamaraof Cannabis Trainers, Committee Vice Chair Michael Cooperof MadisonJay Solutions, and Barton Morris of Cannabis Legal Group, as they help us fill in the blanks for adult-use regulations in the state of Michigan. The webinar helps answer what we currently know about the laws, any key open questions that remain, and what potential market entrants should be doing now to get ready.
Watch the webinar “Michigan Voted to Legalize Adult-Use Cannabis: What You Need To Know Now” hosted by members of NCIA’s State Regulations Committee.
Member Blog: Tackling Oregon’s Cannabis Oversupply Problem
When Oregon’s recreational marijuana program launched in 2016, the state chose not to limit the number of cultivation licenses that would be awarded. It also opted not to limit the amount of cannabis that each licensed cultivator could grow. Over the first 12 months of adult-use sales, the state issued licenses and expanded the industry.
Things were going fairly smoothly until the 2017 cannabis harvest brought in more than 1 million pounds of cannabis. For a state with just 4.1 million residents who purchased one-third of that amount in 2016, it became clear quite quickly that Oregon’s cultivators had grown more cannabis than the state’s retailers could sell. As a result, prices for legal marijuana dropped.
Unfortunately, the state didn’t learn from its mistake and the 2018 harvest brought 5% more cannabis than what was harvested in 2017. An even bigger surplus caused prices to plummet further, and many licensed growers were forced to go out of business or sell their licenses to larger companies with deeper pockets at extremely deep discounts. Those big companies could withstand price drops while smaller licensees cannot.
One of the biggest problems Oregon faces as a result of its cannabis oversupply problem is exactly the opposite of what its lawmakers wanted to happen when the recreational marijuana program was developed – many growers returned to the black market where they could still sell cannabis for a profit.
Possible Solutions to Cannabis Oversupply
As prices continued to fall and the cannabis oversupply problem continued to grow, suggested solutions came from multiple sources. Three options rose to the top as the most commonly cited. First, Oregon could cap the number of cultivation licenses it granted. With a large number of applications waiting to be reviewed and licenses to be granted, the problem with growing too much marijuana was poised to get even worse.
Both Washington and Colorado had some success solving their cannabis oversupply problems when they stopped awarding new licenses. In 2017, Washington had a 60% larger supply of cannabis than it did in 2017, which caused marijuana prices to fall in 2018. Business owners were very vocal about the need for changes to the state’s canopy limits and cultivation facility sizes. The state decided to stop issuing new cultivator licenses to solve the problem.
As the graph from the Cannabiz Media License Database shows, the number of active cultivation licenses in both Washington and Colorado varied by only 1% between January 1, 2018 and December 31, 2018. Contrast that to Oregon where the number of licenses grew by more than 26% during the same time period.
The Oregon Liquor Control Commission (OLCC) argues that only the state’s legislature can create a cap on the number of licenses issued in Oregon, but it did stop reviewing applications and issuing licenses in June 2018. While the OLCC claims the reason is because it had a large backlog of applications, it can also be assumed that the moratorium on issuing new licenses would help to quell the surging supply of cannabis in the state.
The second possible solution to the cannabis oversupply problem in Oregon is to reduce the canopy size for each license. In April 2018, Oregon modified cultivation licensing rules so new cultivators would have more limited canopy space for immature plants than existing cultivators.
The third suggested solution is to do nothing and let the market adjust and correct itself. For the most part, this appears to be the approach that Oregon is taking. While it did implement a rule in 2018 that required cultivators to notify the state of their harvests, which could bring an inspector to verify that the cultivator is adhering to cultivation rules, the state’s cultivators are still in a wait-and-see situation.
What’s Next in Oregon?
The OLCC has been doing research related to its oversupply problem and is expected to present its findings to the Oregon legislature this year. Many people assume placing caps on cultivation licenses will be on the table during those discussions.
In the near future, Oregon’s lawmakers will need to develop a strategy to deal with the oversupply problem, and it will likely include a combination of the suggested solutions. For example, a license or canopy cap and improving accessibility to marijuana products combined with allowing some consolidation to happen in the market should help to curb the oversupply problem.
Susan Gunelius, Lead Analyst for Cannabiz Media and author of Marijuana Licensing Reference Guide: 2017 Edition, is also President & CEO of KeySplash Creative, Inc., a marketing communications company offering, copywriting, content marketing, email marketing, social media marketing, and strategic branding services. She spent the first half of her 25-year career directing marketing programs for AT&T and HSBC. Today, her clients include household brands like Citigroup, Cox Communications, Intuit, and more as well as small businesses around the world. Susan has written 11 marketing-related books, including the highly popular Content Marketing for Dummies, 30-Minute Social Media Marketing, Kick-ass Copywriting in 10 Easy Steps, The Ultimate Guide to Email Marketing, and she is a popular marketing and branding keynote speaker. She is also a Certified Career Coach and Founder and Editor in Chief of Women on Business, an award-winning blog for business women. Susan holds a B.S. in marketing and an M.B.A in management and strategy.
As 2018 came to an end, the FINAL proposed text of the permanent regulations for California cannabis were submitted to the Office of Administrative Law (OAL) by the three regulatory agencies – the California Department of Food and Agriculture (CDFA), California Department of Public Health (CDPH), and the Bureau of Cannabis Control (BCC). The cannabis regulations submitted to the OAL are currently undergoing a 30-day administrative review to ensure alignment with MAUCRSA and statutory requirements. These “final’ regulations shall become effective immediately upon approval/adoption which should be on/before January 16th 2019.
What “final” means in this evolutionary process of California cannabis regulations is debatable, as there are already several Assembly and Senate bills queued up to be put through the legislative tango and all three of the regulatory agencies have indicated that there will be further clean-ups and clarifications of the “permanent” regulations. Although there will assuredly be changes ahead, this is a highlight reel of where California Cannabis stands now.
For those that dug into the October redrafts, much of the substantial changes that occurred in that version carried over into the final proposed text. Here we will highlight the top eight changes impacting cannabis businesses in California.
The Final Statement of Reasons from the BCC, which also included responses to pertinent comments received during the previous 15- and 45-day comment periods, is where some greater clarity about the regulatory changes and intents can be found. It is by spelunking into these deeper caverns of reasoning where the sweet ore of further clarity can sometimes be extracted.
Here are 8 highlights for anyone interested in California cannabis.
1. Ownership and Financially Interested Parties
In October we saw the expansion of the definition of ownership and financially interested parties that clearly sought to capture the identification of any and all warm bodies that stand to direct, control, or financially benefit from commercial cannabis. While there were some changes in sections §5003 and §5004 between the previous and current version, the scope and intent remained the same. One particularly vague line §5003.b.6.D “Any individual who assumes responsibility for the license.” was removed from the BCC’s definition of owner, this very line turned up over the in the CDPH’s update in §40102.a.4.D.
The Ownership and Financially Interested Parties disclosures dovetail into the White Labeling issues (See #2) in that “Brand Owners” that may be licensing IP to contract manufacturers have been impacted by the prohibition on non-licensees conducting commercial cannabis business with licensees. In the response to comments in the FSOR was this gem of insight, “In response to commenter’s questions, if a licensee includes as one of their owners a brand-owner, the licensee can produce the branded products because in this case the licensee is not engaged in commercial cannabis activity on behalf of an unlicensed person. Because the owner of the brand is an owner of the licensee, there is no unlicensed person involved.” Of course, before everyone runs off and adds brand-owners as owners of their contract manufacturing business, let’s take a moment to reflect on the value and critical importance of a well-drafted contract.
2. §5032 (b) The So-Called “White Label Prohibition”
5032.b shall go down in infamy as one of the more talked-about sections of the BCC’s regulations. This simple sentence, “Licensees shall not conduct commercial cannabis activities on behalf of, at the request of, or pursuant to a contract with any person that is not licensed under the Act,” brought with it a level of confusion and white-hot panic regarding the inferred white label prohibition contained therein. October’s version had more explanatory examples for the types of “on behalf of, at the request of, or pursuant to” activities that the BCC was talking about, such as, “procuring or purchasing cannabis goods from a licensed cultivator or licensed manufacturer. Manufacturing cannabis goods according to the specifications of a non-licensee, Packaging and labeling cannabis goods under a non-licensee’s brand or according to the specifications of a non-licensee, Distributing cannabis goods for a non-licensee.” This language was removed in the final version submitted to the OAL and is one of the examples of where the FSOR is enlightening.
From the BCC’s FSOR: “Initially, the Bureau determined that it was necessary to assist licensees with determining what types of activities may or may not be allowed under the Act and its implementing regulations. The initial proposed change identified certain transactions that would generally be considered commercial cannabis activities under the Act. However, the Bureau has determined that inclusion of the clarifying example transactions is causing more confusion. Accordingly, the Bureau has decided not to move forward with the proposed changes which identify examples of specific commercial cannabis transactions.” The definition of “commercial cannabis activities,” therefore, is an important one, and we can refresh ourselves on that one (Business and Professions Code §26001.k) “‘Commercial cannabis activity’ includes the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery or sale of cannabis and cannabis products as provided for in this division.”
This has been a hot, hot topic, and there have been some great analysis articles of this provision that dig further into solutions and scenarios related to this section. Get thee to Google and find out more!
3. Option to label THC/CBD post-final testing by Distributor
This was a big win for the industry! A substantial percentage of testing failures for “label claims” are due to products, previously required to be labeled with THC/CBD content prior to final testing (the one test that counts!) not falling within the 10% allowable variance threshold. It’s common knowledge that the science of cannabinoid testing is still getting dialed in, and the labs have some serious challenges in hitting the same tiny target twice. Especially when they are dealing with the vast array of cannabis product matrices, and an industry that it still learning about important things such as homogenization. The good news is, the CDPH now allows products to be labeled for THC/CBD content after that all-important final test, which should eliminate well-upwards of 50% of the product failures in California and ensure a steadier supply chain.
4.Regulation of Technology Platforms
The cannabis industry has always been a place of innovation and loophole-finding. These regulations are an attempt to close some of those loopholes that seem to have created a situation where unlicensed tech platforms were enjoying the privileges of licensed commercial cannabis without undergoing the slings and arrows of local/state licensure and regulation. Seeing themselves outside of the regulatory purview, certain business claimed that agencies such as the BCC had no dominion over their activities. Well, they may have wanted to wait until the ink dried on the final regs before making such an assertion, as now it seems the BCC has expanded its reach to embrace all kinds of advertising, facilitating, and delivery platforms.
5. Delivery to a Physical Address
This was (potentially) a huge win for patient access, however, it remains to be seen how this truly shakes out. When the BCC added the line that “a delivery employee may deliver to any jurisdiction within the State of California” it caused some serious outrage from municipalities that have banned commercial cannabis activity, the League of Cities, law enforcement, and others that saw this as a huge overstepping of the local authority ensured by Prop 64 and MAUCRSA. The LOC even launched a “wandering weed” campaign, in response to which it seems that a subsection that includes “a restriction on delivering cannabis goods to a school providing instruction in kindergarten or any grades 1 through 12, day care center, or youth center” was added to the regulations, for clarity. Whether the OAL will approve as is, and how this interacts with local bans, tax requirements, and law enforcement, and lawsuits… stay tuned! While the BPC (§26090.e & 26080.b) explicitly prohibits a local jurisdiction from preventing delivery, and transportation, of cannabis goods on public roads, it does not prevent localities that have banned commercial cannabis in their area from adopting ludicrous tax rates for deliveries that would in effect ban via taxation delivery in their area.
6. Sale of Non-Cannabis Goods (aka No Hemp)
While the seeming victory of the Farm Bill has folks leaping with joy for the future of hemp, statements from the FDA and other agencies have certainly rained on the parade of many a CBD vendor. Add to that the collections of California cannabis regulations that in effect eliminate hemp-derived CBD from cannabis dispensaries and products.
“In addition to cannabis goods, a licensed retailer may sell only cannabis accessories and any licensee’s branded merchandise.” (BCC §5407)
This limitation for retail (and retail delivery) is further clarified in the BCC’s FSOR in their responses to comments:
“Cannabis retailers are licensed to sell cannabis goods. The definition of cannabis within the Act explicitly excludes industrial hemp products. Industrial hemp is regulated by the California Industrial Hemp Program under the California Industrial Hemp Farming Act.”
“A retail license from the Bureau authorizes the retailer to sell cannabis goods and cannabis accessories. A retail license from the Bureau does not authorize licensees to sell items that are unrelated to cannabis.”
Combined with the retail prohibition on non-cannabis products, this trifecta from the CDPH extends that prohibition to manufacturers:
“A manufacturer licensee shall only use cannabinoid concentrates and extracts that are manufactured or processed from cannabis obtained from a licensed cannabis cultivator.” (CDPH §40175.c)
“Except for cannabis, cannabis concentrate, or terpenes, no product ingredient or component shall be used in the manufacture of an edible cannabis product unless that ingredient or component is permitted by the United States Food and Drug Administration for use in food or food manufacturing, as specified in Everything Added to Food in the United States, or is Generally Recognized as Safe (GRAS) under sections 201(s) and 409 of the Federal Food, Drug, and Cosmetic Act.” (CDPH §40305.a)iii. “Except for cannabis, cannabis concentrate, or terpenes, topical cannabis products shall only contain ingredients permitted for cosmetic manufacturing in accordance with Title 21, Code of Federal Regulations, Part 700, subpart B (section 700.11 et seq.) (Rev. March 2016), which is hereby incorporated by reference.” (CDPH §40306.a)
For now, it seems, non-cannabis derived CBD is DOA in CA.
7. Child Resistant Packaging (CRP) Requirement
Heads continue to spin (and cannabis business’ cash to hemorrhage) in response to the changes in the packaging requirements. As of July 1, 2018, all cannabis products were to be in child-resistant packaging, and retailers had converted back to the statutory requirement that all exit packaging was to be “opaque,” allowing them to use reusable totes and paper bags to satisfy this requirement. In the October regs, we saw a pivot that allowed for a seeming “grace period” for the child-resistant requirement to return to being able to be satisfied by the retail via CR exit bag. Some confusion remained as to whether products that were already IN child-resistant packaging would have to be put INSIDE of child-resistant packaging for the next year. The addition of the statement from the CDPH, “Until the date specified [1/1/20] the child-resistant package requirement [§26120] may be met through the use of a child-resistant exit package at retail sale.” (CDPH §40417.d) suggests that the significant ecological impact of CR packaging within CR packaging MAY be avoided, however, most legal counsel will probably be advising retail clients to use the CR exit bag to avoid potential liabilities. Viva Kafka!
In the CDPH’s Statement of Reasons, they said “This is necessary to comply with the packaging requirements in Business and Professions Code section 26120 while providing licensees with time to comply with packaging requirements.” Compliant operators were left somewhat confused, as they had been required to comply with these packaging requirements since July!
8. OSHA Training for Everyone!
All three regulatory agencies added the following requirement for OSHA training:
“For an applicant with more than one employee, the applicant shall attest that the applicant employs, or will employ within one year of receiving a license, one supervisor and one employee who have successfully completed a Cal-OSHA 30-hour general industry outreach course offered by a training provider that is authorized by an OSHA Training Institute Education Center to provide the course.”
This will be an additional training requirement, on top of existing state and local training requirements for cannabis operators. And remember, all that training documentation must be kept, like all other records, for seven years!
As with everything in life, more will be revealed as we get deeper into 2019.
Juli Crockett is a member of the NCIA’s State Regulations Committee and is Director of Compliance at MMLG. Slides from Juli’s recent Workshop on this topic are available for download here. You can also watch the workshop video in its entirety on MMLG’s Facebook page.
Top Five Memorable Marijuana Moments In 2018
by Michelle Rutter, NCIA Government Relations Manager
As 2018 draws to a close, our Government Relations team in Washington, D.C. is feeling especially thankful this year – both for all of our members, and for all of the strides forward that cannabis policy made this year! Before 2019 begins, let’s take a look back on marijuana’s top five most memorable moments of 2018:
Cannabis wins big at the ballot box
There’s no doubt about it: America experienced a green wave on election night as voters all over the country cast their votes in favor of reforming cannabis laws and electing candidates that share those values. Voters in Michigan cast their votes for the legalization of adult-use cannabis, increasing momentum of our movement. At the same time, voters in Missouri and Utah were successful in legalizing medical cannabis, becoming the 32nd and 33rd states to do so, and despite significant hurdles. In addition to the ballot initiatives that were passed, Democrats took control of the House of Representatives, while Republicans maintained their control of the Senate. While this development surely means that cannabis policy will progress further than ever in the House in 2019, it also means that anything passed through that chamber will face significant hurdles in the more conservative Senate.
Shake-up at the Department of Justice and the rescission of the Cole Memo
On January 4, then-Attorney General Jeff Sessions announced the Department of Justice’s decision to rescind the “Cole Memo” and two additional memos related to marijuana enforcement policy. These memos, issued in 2013 and 2014, helped to clarify the Department’s response to state-legal cannabis activity. The rescission of the memo has not resulted in any major change in enforcement policy, rather, this continues to be a matter of prosecutorial discretion. On November 6, the day after the midterm election, Jeff Sessions resigned as Attorney General at the President’s request.
Congressional banking and 280E bills gain record co-sponsorship
As the momentum for cannabis reform grows, so has the number of cosponsors on marijuana bills in Congress. Most notable is legislation that would provide safe harbor to financial institutions that choose to service the cannabis industry. At the end of the 114th Congress in 2016, the House’s Marijuana Businesses Access to Banking Act had 39 cosponsors, while the Senate version had just 10. As we finish the 115th Congress, the House’s SAFE Banking Act (H.R. 2215) has 95 cosponsors, while the Senate version (S. 1152) has 20. That’s nearly a quarter of the House of Representatives and a fifth of the entire Senate! Bills to reform IRC Section 280E have seen a similar spike. At the end of 2016, the House’s Small Business Tax Equity Act had a mere 18 cosponsors, while the Senate version had four. Today, the Small Business Tax Equity Act (H.R. 1810) has 46 cosponsors, while the Senate’s version (S. 777) has six.
Canada implements adult-use cannabis laws
In October, Canada’s laws making marijuana legal for adults went into effect and licensed retail stores opened throughout the country. This move made Canada the second country in the world, after Uruguay, to formally legalize the recreational use of the plant. Canada is the first G7 and G20 nation to do so. Federal prohibition has effectively locked American cannabis companies out of legitimate financial markets and, in doing so, has provided a significant advantage to publicly traded Canadian firms. Changes to federal law are needed to enable American small businesses to compete on the emerging multi-billion-dollar global cannabis market. Without legislative action, U.S. cannabis entrepreneurs will miss out on opportunities to develop innovative new products, attract global investment funding, and expand their reach to capitalize on expanding international business opportunities.
NCIA’s 8th Annual Cannabis Industry Lobby Days
This year, 225 cannabis industry professionals descended on Washington, D.C. to lobby congressional offices on some of the issues they and their businesses are facing. In total, NCIA members met with nearly 300 offices on Capitol Hill! The cannabis industry has seen exponential growth in the mainstream support for regulated cannabis markets from both sides of the political aisle. This progress is a direct result of the uncountable number of personal stories told by our members each year at our annual Lobby Days events in Washington, D.C., so don’t forget to mark your calendars for May 21-23, 2019, so that you can join us for our largest event yet!
The 116th Congress will arrive in Washington, D.C. in January. With the change in leadership in the House of Representatives and the momentum at our backs, 2019 is shaping up to be one of the cannabis industry’s best years yet. Our Government Relations team looks forward to all of the opportunities we will be faced with in the new year, and we wish you a very happy holiday season!
Allied Association Blog: Nevada County Cannabis Alliance Update
The Nevada County Cannabis Alliance is a trade association in California whose mission is to Advocate, Educate, and Connect. The Alliance advocates for reasonable local policies and a fair county ordinance. We believe in empowering community success through education, and connecting stakeholders with opportunities to participate and collaborate in the industry.
Nevada County has a renowned history of heritage cannabis cultivation that has played a crucial role in the community and economy over the past decades. Our community is well known for high quality, craft cannabis farming as well as for our unique quality of homesteading life. The Alliance seeks collaborations with organizations that value high quality, craft, California cannabis, grown by farmers with a unique history and story.
What issues are we working on?
Completing the comprehensive Environmental Impact Report necessary prior to the final completion of our local cannabis ordinance.
Providing essential education to the farmers throughout the regulatory transitions to assist with permitting and licensing.
Developing relationships with distributors and partners to bring our farmers to market.
Challenges
One challenge we face as a member based organization is maintaining and continuing to grow our membership numbers. The quintessential financial sustainability quagmire. Ever changing regulations and market uncertainty has caused reluctance from many small farmers. The Alliance works hard to reinvigorate and provide hope throughout the local cannabis community, but the reality is that there has been a decline in membership. Maintaining and continuing to grow our membership numbers, business sponsorships and financial stability is a constant need in order to continue working for a thriving cannabis industry for our region.
Another challenge is connecting our small- batch (10,000 sq ft farmers) into the supply chain with distributors who are interested in craft product.
What’s happening that’s important?
Ensuring that permitted local farms have access to the market via various distribution channels.
Decreasing barriers to entry for farmers within our local policy and ordinances. For example, local farmers are restricted to holding only 3 cultivation permits and local farmers also MUST have a permitted residence on the land to which they farm cannabis.
What advice or education do you have for others?
To counties that may still have complete cultivation bans, hang in there. Policy work is thankless, not pretty, and not why anyone began farming and living off of the land. Celebrate each and every small victory and step in the right direction, they truly add up. It is crucial for the greater community to support those that are willing to do the policy work and for there to be consistent representation with local officials. These relationships are everything, so continue to build bridges and nurture every community relationship. Nevada County worked its way out of a 2016 ban and we will be home to a thriving cannabis community and industry. It is important to organize and show strength in numbers.
VIDEO: The Benefits of Legalizing Cannabis
In this third installment of NCIA’s animated educational video series, we explore the benefits of legalizing cannabis nationwide and beyond. Learn how ending federal prohibition can improve public safety and add economic opportunities to our communities, and how you can help.
Massachusetts Officially Joins The Legal Cannabis Market
Legal cannabis sales for adults 21 and over launched on Tuesday in Massachusetts, marking the first legal adult-use dispensaries to open on the East Coast! The first customers to purchase cannabis were two U.S. military veterans, including Northampton Mayor David Narkewicz.
Residents in the Bay State voted to legalize cannabis in 2016. While only two dispensaries are currently licensed and open for business, a slow rollout of additional licenses are expected to be fully realized over the coming years. The market in Massachusetts is expected to grow to over $1 billion by the year 2022, according to Arcview Market Research.
“Congratulations to Massachusetts for taking this important step toward implementing the rational cannabis policies supported by voters across the commonwealth,” stated NCIA executive director Aaron Smith in response to the launch of regulated sales. “It’s been a long time coming but we look forward to the development of a prosperous cannabis industry in the Bay State, as criminal markets are replaced by licensed businesses that create jobs and tax revenue while responsibly serving adult consumers safe cannabis products.”
In the densely populated Northeast region of the U.S., Massachusetts is setting the stage for nearby states to adopt similar cannabis policies.
Over 3,000 industry leaders looking to tap into the emerging East Coast markets will be attending NCIA’s 3rd Annual Seed to Sale Show coming up February 12-13, 2019 in Boston. Register before December 6 to save $400!
Wrapping Up 2018 Cannabis Caucus Events, Introducing New 2019 Events!
October marked the last NCIA events of the year with Cannabis Caucus events in eight regions nationwide and an outstanding 2nd Annual California Cannabis Business Conference in Anaheim, California. As this year’s events comes to a close, we have so much to reflect on and exciting new events to announce!
During this quarter’s Cannabis Caucus events, more than 400 NCIA members, representing 250 member companies, totaling in more than 750 attendees turned out for our eight events nationwide. This means that although these events are growing increasingly popular, they are still small enough to make meaningful connections with other industry leaders in your region. Instead of just making small talk with someone in passing, you’ll get to to have real conversations with some of the most influential leaders in the industry. Year after year, we hear about people striking business partnerships, friendships and impactful connections at these events because they offer the time, space and opportunity to do so.
In the industry’s largest markets, Northern California, Southern California, and Colorado, more than 100 industry professionals turned out at each event. But, perhaps most impressive was the 75 plus attendance in the Midwest, maybe a harbinger of the positive momentum garnered by statewide reform initiatives in this year’s midterm elections!
Cannabis Caucus Highlights
A the Northeast event, attendees heard the latest news surrounding medical cannabis in Maine from State Sen. Eric Brakey (R-District 20), as well as Maine’s adult-use cannabis laws from David Boyer, Maine Political Director at Marijuana Policy Project.
The event in Northern California featured special guest speaker Heidi Mattos, a payroll tax specialist from the State of California Employment & Development Department, who shared critical insights into state payroll tax regulations. In Southern California, we heard a special presentation on “Understanding California Agricultural Labor Laws As It Relates to Cannabis Cultivators” from guest speaker Eduardo Blanco, Special legal Advisor from the CA Agricultural Labor Relations Board.
The Southwest event featured Ryan Black, Campaign Co-Chair for Anita Malik, Candidate for Arizona’s Congressional District 6, discussing federal cannabis reform. Lastly, in the Pacific Northwest, Lara Kaminsky, Executive Director of The Cannabis Alliance (an NCIA Allied Association), spoke about the latest developments in Washington state’s cannabis industry, including the current status of the edibles product ban.
As the largest national trade association in the U.S. and the only organization representing more than 1,700 cannabis-related businesses at the national level, we have pretty deep connections. We know that 70 percent of the individuals who attend our regional events have executive level decision-making authority and 30 percent have heavy decision-making influence. All of this is to say that the caliber of the meaningful connections you will make have the potential to benefit your business in very real ways and quickly.
We also know that these boutique events are frequently attended by industry pioneers and dedicated policy reform advocates, the movers and shakers of the industry, who have helped support the movement for decades. Repeatedly, we hear from event attendees that these events are their favorite because of the quality of the event, the attendees and the sense of community and camaraderie they foster.
What’s Next? NCIA’s New 2019 Regional Event Series Announced
NCIA’s Industry Socialsare about cultivating regional communities of industry professionals, so that they can connect and learn from each other. Cultivating community is the most effective way to strengthen our industry and your business. Touring five cities in the West Coast, East Coast and Heartland regions, NCIA’s Industry Socials are the premier opportunity for cannabis professionals to harness NCIA’s extensive national network by creating meaningful connections with each other and with NCIA staff in a relaxed cocktail setting. Join us to expand your network and cultivate our community! Tickets to Industry Socials are complimentary to NCIA members and only $25 to non-members. Registration opens for the West Coast Tour on November 27!
NCIA’s Harvest Celebrations will be hosted in five cities in October to honor the cannabis harvesting season and celebrate the continued growth of our industry! Proceeds from NCIA’s inaugural Harvest Celebration events will foster support for NCIA’s federal lobbying work on behalf of businesses serving the industry and the industry at-large.
In light of these new 2019 NCIA events, we also have exciting new sponsorship opportunities to offer! Download the 2019 Event Sponsorship Deck or contact us for more information. Consider this your opportunity to get your brand in front of thousands of new businesses in diverse regions nationwide.
NCIA’s 2018 Post-Election Webinar
Watch this webinar recorded on Thursday, November 8, for NCIA’s recap of the midterm elections and what they mean for cannabis policy reform nationally.
Hear from representatives of the statewide cannabis campaigns in Michigan, Missouri, North Dakota, and Utah to find out what went right, what went wrong, and what happens next for regulators, businesses, and consumers. NCIA and the Marijuana Policy Project discussed the next states to watch and key federal legislation to follow in 2019.
VIDEO: NCIA Election Night Watch Party
The NCIA team gathered last night for an Election Night Watch Party! Watch this short video to join the fun and hear from NCIA’s Executive Director, Aaron Smith, to learn more about the victories we gained through the power of democracy. Thanks to everyone who cast their ballots, and special congratulations to Michigan, Utah, and Missouri!
From The Ballot Box: Post-Midterm Election Analysis
by Michelle Rutter, NCIA Government Relations Manager
Last night, Americans all over the country let their voices be heard at the ballot box. Voters in Michigan cast their votes for the legalization of adult-use cannabis, increasing momentum of our movement. At the same time, voters in Missouri and Utah were successful in legalizing medical cannabis, becoming the 32nd and 33rd states to do so, and despite significant hurdles.
MICHIGAN
Appearing on the ballot as Proposal 1, this initiative passed by a whopping 55% and made Michigan the first state in the Midwest to legalize adult-use cannabis for those over the age of 21. The proposal outlined an excise sales tax of 10%, which will be levied on sales at retailers and micro-businesses, and then be allocated to local governments, K-12 education, and road and bridge maintenance. In the future, municipalities will be given the authority to to ban or limit cannabis businesses and establishments within their boundaries. Michigan’s prominent Midwest location, as well as the size of the projected adult-use market, make it a game-changing initiative to watch for cannabis reform. Michigan is the only adult-use state that also gave it’s electoral votes to President Trump in the 2016 election.
NORTH DAKOTA
In North Dakota, Measure 3, or the Marijuana Legalization and Automatic Expungement Initiative, appeared on the ballot and failed by only receiving 40% of the vote. This measure would have made cannabis legal in the state of North Dakota for people 21 years of age or older and, unlike other initiatives, also created an automatic expungement process for individuals with convictions for a controlled substance that has been legalized. Advocates and policy organizations were initially stunned when the campaign submitted enough signatures to appear on the ballot, and immediately recognized the importance of a staunchly, dependably conservative state choosing to legalize the adult-use of cannabis. Both of the candidates who ran for Senate in the state, Rep. Kevin Cramer (R) and Sen. Heidi Heitkamp (D) stated that they opposed the measure.
UTAH
In Utah, the Medical Marijuana Initiative (Proposition 2) appeared on the 2018 ballot and passed with 53% of the vote. This initiative legalized the medical use of marijuana for individuals with qualifying medical illnesses such as epilepsy, HIV, and and multiple sclerosis, among others. In October, the proponents and opponents of the measure, Mormon church leaders, and elected officials met to discuss the possibility of passing a medical cannabis law through the state legislature– regardless of the result for Proposition 2, which it was determined, would remain on the ballot. State lawmakers plan to hold a special session to work out details for how to make Utah the next medical cannabis state. Utah is a perfect example of a traditionally conservative state choosing to reform their cannabis laws to be more compassionate — Utah has given its electoral votes to Republican presidents in every election since 1968.
MISSOURI
In Missouri, three separate medical cannabis initiatives appeared on the ballot last night– including two proposed constitutional amendments and one statutory measure– with Amendment 2 triumphing with 65% of the vote. The other two medical cannabis initiatives failed. The winning Amendment 2, backed by New Approach Missouri, was favored by national advocacy groups such as NCIA, MPP, and NORML. The initiative legalized cannabis for medical purposes, creates a licensing system for cultivation, testing, and dispensing of medical cannabis and sets up a 4% tax on cannabis sales. State tax revenue garnered will be spent on healthcare services for veterans. Voters in Missouri also elected Josh Hawley (R) to replace sitting Sen. Claire McCaskill (D). Interestingly, Amendment 2 received over 300,000 more votes than Senator-elect Hawley — proving that cannabis is a winning issue across partisan lines.
OUTLOOK: 2019 AND THE 116TH CONGRESS
These stunning victories have implications in Washington, D.C. and set the stage for federal reform in the 116th Congress. In addition to the ballot initiatives that were passed last night, Democrats took control of the House of Representatives, while Republicans maintained their control of the Senate. While this development surely means that cannabis policy will progress further than ever in the House, it also means that anything passed through that chamber will face significant hurdles in the more conservative Senate.
HOUSE
This year’s midterm election was one of the most highly anticipated in modern American history.
Last night, the House of Representatives switched from a Republican majority to a Democratic majority: as of Wednesday morning, Democrats held 220 seats, while Republicans held 194.
Republican leadership in the House of Representatives over the last two years has blocked even popular reforms such as banking access from receiving hearings or votes. With a Democratic majority in the House of Representatives, cannabis legislation will likely move at an unprecedented rate. Because Democrats have traditionally been more friendly to cannabis reforms, there is the possibility that hearings will be held, bills will move through committees, and even possibly be voted on and passed on to the Senate.
Most, if not all, of last night’s House races will have implications for cannabis policy in the 116th Congress. Notable cannabis opponent and chairman of the powerful Rules Committee Pete Sessions was defeated in a stunning victory by Colin Allred, who has stated his clear support for medical cannabis. At the same time, cannabis advocates saw the loss of longtime cannabis champion Rep. Dana Rohrabacher (R-CA), marking the end of an era. While the loss of Rep. Rohrabacher will be felt by many, his challenger Harley Rouda has stated his unequivocal support for adult-use cannabis.
SENATE
As polls indicated prior to Election Day, Republicans maintained their control of the Senate, and in fact strengthened their majority. As of Wednesday morning, Republicans had gained two members in the Senate, holding a total of 51 seats, with three races still in play. While the Democrat-controlled House of Representatives may be able to move pro-cannabis amendments and legislation through that chamber, anything that moves on to the more conservative Senate will face significant hurdles.
One of the most closely watched Senate races in the country was in Nevada, where sitting Sen. Dean Heller (R) faced Rep. Jacky Rosen (D). While Sen. Heller has signaled his support for cannabis reform in the past, he currently does not co-sponsor any pro-cannabis legislation in the Senate. Rep. Rosen, however, is a co-sponsor of multiple bills in the House, including the SAFE Banking Act (H.R. 2215), the Small Business Tax Equity Act (H.R. 1810), and the STATES Act (H.R. 6043), among others. In addition, Rep. Rosen replied to an NCIA candidate survey and stated, “I was proud to support Nevada’s marijuana ballot initiative in 2016 and our state has already seen the positive impacts of this industry, including thousands of jobs and millions of dollars in tax revenue.”
With more on the line than ever before, political donations and investments in our industry are vital. NCIA’s political action committee (NCIA-PAC) is proud to have donated to 41 of the winning candidates on election night.
The 116th Congress will arrive in Washington, D.C. in January. With the change in leadership in the House of Representatives, cannabis policy and reforms will be able to advance in a way never seen before. At the same time, any pro-cannabis bills or amendments sent to the Senate will still face challenges, but as recent elections have proved, anything is possible.
Committee Blog: “Cannabis Reform” Stops Short
by Lisa Jordan, VP of Marketing, Canna Advisors NCIA’s Marketing and Advertising Committee, Social Justice Subcommittee
As support for legalization continues to climb and speculation of “cannabis reform” at the federal level continues to swirl, one critical opportunity stands to be lost in the fray of voices and messages: Social Justice.
Cannabis reform, alone, stops short. The deeper work is addressing convictions, providing opportunities, and reinvesting in poor and minority communities that have been battered for decades by the “war on drugs.”
With focused attention, we can shape policies and legislation that expunge records, provide employment opportunities, and further offset the disproportionate effects on people and communities of color. Expungement of misdemeanor charges, alone, can mean the difference in getting a job or housing for residents of poor and minority communities across the country.
The objective of the Social Justice Subcommittee of NCIA’s Marketing and Advertising Committee is to make sure this opportunity maintains visibility and action and that cannabis reform doesn’t stop short.
#StartsAtThePolls
This level of policy change starts at the polls.
The November 6 elections are pivotal to voting in candidates who are not only in favor of cannabis reform, overall, but will also push forward with social justice initiatives.
3 Actions for Everyone
In these final days before the election, each person can take a few, mindful actions to make sure that social justice doesn’t get lost:
1. Register to Vote:
Some states allow voter registration until election day. Check your state’s deadlines here: https://www.headcount.org/deadlines-dates/
If you missed your state’s deadline for this year, go ahead and register now so you’ll be ready next time.
2. Know Your Candidates
Do your research to know where your state and federal level candidates stand on cannabis reform, overall, and on social justice issues.
It’s up to us to make sure this opportunity maintains visibility and action and that cannabis reform doesn’t stop short.
#StartsAtThePolls
Lisa Jordan leads the brand development and marketing strategy for Canna Advisors and provides expert guidance in these areas to clients. With proven success in emerging industries, Lisa’s work has won numerous awards including a Bronze Lion at the Cannes Lions International Festival of Creativity, national awards for predictive analytics, and local ADDYs. Lisa has spoken at cannabis industry conferences and was selected to serve on the NCIA’s Marketing and Advertising Committee and serves as Chair of the Social Justice Subcommittee.
Over time, Lisa hopes to make cannabis brands as mainstream and iconic as familiar, big brands. In her downtime, you will find Lisa on a hiking trail with her husband and four big mutts or finding any excuse to spend time at Red Rocks.
Campaign Update From Michigan’s Coalition To Regulate Marijuana Like Alcohol
NCIA recently spoke with two key figures in the state of Michigan to get an update from the boots on the ground about the efforts to legalize cannabis for adults this year. Mark Passerini is the founder of a medical dispensary based in Ann Arbor, Om of Medicine, and was also recently elected to serve on NCIA’s Board of Directors. Josh Hovey is the spokesperson for Michigan’s Coalition to Regulate Marijuana Like Alcohol.
Mark, how will adult-use legalization in Michigan affect your business and your community?
For the past eight years, we attempted to make all our decisions from the experience and perspective of a new patient that has never used cannabis previously. This translates to individual consultation rooms so patients may feel free to discuss their medical conditions, symptoms, and concerns in a private space rather than standing shoulder to shoulder at a retail counter.
We believe that when legalization is passed there will be many adults that may want to try cannabis but won’t know where to start, may be afraid, or unsure of the options and our unique consultation process may help them as much as it has helped our medical patients make the best choices for their health and their life. When cannabis is legalized, we plan to continue serving as a resource and education hub with a focus on scientific research.
What are the positive impacts of legalization in Michigan?
Positive change starts with one individual who shares with another who in turn shares with another and so on. Our communities have garnered a better understanding of cannabis, its history, medicinal use, and are actively rejecting the failed policies surrounding its use.
Locking people up for growing or consuming a plant is simply not the best use of critical and limited tax dollars. Many municipalities and states across the country have recognized this fact and passed decriminalization ordinances in order to use law enforcement resources on serious crimes. Communities and states that embraced legalization have also witnessed economic development through the creation of new jobs and much needed tax revenues.
Our research with the University of Michigan showed a 64% decrease in opioid use amongst patient participants. Continued research into the medical efficacy of cannabis will benefit not only the existing patient base, but the community at large.
By creating a whole new type of industry that operates in a responsible way and holds itself accountable to its community, everyone benefits.
Josh, how have you achieved success so far in the Coalition’s Michigan campaign?
True success will come when we pass legalization in November, but we’ve achieved some significant milestones. The first was creating a unified coalition of cannabis reform and social justice advocates to develop ballot language that borrows from the best practices used by the states that have legalized before us as well as Michigan’s medical marijuana licensing law. We also collected more than 360,000 signatures to place the issue on the November ballot. We’re proud of what we achieved so far, but the “vote yes” campaign has only just begun and there a lot more to do to make sure our initiative passes.
What do the prospects look like for the initiative passing this November?
Multiple opinion polls have shown that 60 percent of Michigan voters want to end cannabis prohibition and create a legalized and regulated system, so that’s a very strong starting position as we head into the campaign season. However, we know we can’t just rely on polls and we know the prohibitionists will continue to spread “Reefer Madness” era misinformation about the initiative.
That’s why we’re working hard to raise every dollar we can to make sure we can get the facts to voters across the state. We want to make sure voters know Michigan is wasting millions of taxpayer dollars on the failed policy of prohibition and that creating a legal and well-regulated marijuana market can raise hundreds of millions for three of our state’s most underfunded areas: roads, schools, and local governments.
Anything specific we should know about the program?
Full details of the proposal are available on our website at www.RegulateMI.org. But in short, our initiative learns from the best practices from other states that have gone before us while also borrowing licensing language established under Michigan’s Medical Marijuana Facilities Licensing Act. That law was passed with bipartisan support in 2016 and the first medical marijuana businesses are just starting to be licensed under that program. We believe our very reasonable and well-thought out business regulations combined with sensible personal possession limits will make Michigan’s adult-use law the new model for the country.
What is needed to ensure Michigan passes adult-use legalization?
We need people to get out and vote, plain and simple. Beyond that, there are a few other things people can do to support the campaign:
Make sure your friends and family are registered to vote and, of course, make sure they VOTE YES in November.
Share the facts about the initiative and about the need for legalization on your personable social media pages. You can find the campaign has pages set up on Facebook, Twitter and Instagram.
Don’t allow prohibitionist misinformation to spread. Correct your friends and family (politely) by giving them the facts on the issue.
Donate to the campaign at RegulateMI.org/donate. We need to get our message out every way possible, including television, mail and social media. All of those things costs money and we can’t win without your support.
The Michigan Coalition to Regulate Marijuana Like Alcohol will host a fundraiser on October 17, 2018 in Ann Arbor, MI. For more information, please contact Robin Schneider, Finance Director.
Phone: 517-974-2265
Email: Robin@RegulateMI.org
Committee Blog: California Regulations Public Comment Period Nears Close – Act Now!
Do you have views on the regulations that will govern California’s cannabis industry? If so, California’s window for the public to make comments on the proposed permanent industry regulations is about to draw to a close. But you don’t need to be an expert on arcane administrative procedure or even a lawyer to participate in the comment period. Keep reading to learn more about what is at stake and how to make sure your voice is heard.
Overview and Introduction to the Regulatory Process
On Friday, July 13, 2018, California’s three cannabis licensing agencies (the Bureau of Cannabis Control, or “BCC”; the Department of Food and Agriculture, or “CDFA”; and the Department of Public Health, or “CDPH”) released their much-anticipated proposed permanent regulations for cannabis businesses pursuant to the Medicinal and Adult Use Cannabis Regulation and Safety Act. This began the 45-day public comment period of the regular rule-making process. During this time, the public has a chance to review and comment on the proposed regulations, and the agencies must consider these comments and may make changes based on this feedback.
Below are links to the proposed regulations and the summary sheets released by the agencies:
Currently, cannabis businesses in California are operating under emergency regulations that were originally adopted in December 2017 and re-adopted (with a few changes) in June 2018. The emergency regulations will stay in effect until the regular rule-making process is complete and the final regulations have been formally adopted at the end of this year.
In addition to publishing the proposed regulations, the agencies also each published a Notice of Proposed Rulemaking Action (NPRM), which contains various information about the proposed rules such as a summary of existing law and who to contact with questions and comments. The agencies were also each required to publish an Initial Statement of Reasons (ISOR), which contains the agencies’ reasoning and basis behind why they crafted a rule the way they did.
These regulations will have a number of impacts on how the cannabis industry operates in California. For example, new advertising regulations would go into effect; packaging and labeling requirements would change; certain edible products could contain up to 500mg THC per package (versus the current limit of 100mg THC per package); and outdoor licensees would be prohibited from using light deprivation.
Those are just a few of the key proposed changes. Please refer to the summary sheets published by the agencies, listed above, for a more comprehensive list.
What Makes an Effective Public Comment?
There are six standards in the Administrative Procedures Act (APA) that agencies including the BCC, CDPH and CDFA must follow when conducting rulemaking actions. They are:
Authority – The agency must be permitted or obligated by law to craft a particular regulation. (Gov. Code § 11349(b))
Reference – The agency must refer to the provision of law that the agency is implementing or interpreting via the regulation. (Gov. Code § 11349(e))
Consistency – The regulation cannot be inconsistent with other laws and/or regulations, and needs to be harmonious with existing provisions of law. (Gov. Code § 11349(d))
Clarity – The regulation must be easily displayed or written so that it will be easily understood by the people affected. (Gov. Code § 11349(c))
Nonduplication – The regulation cannot serve the same purpose as another existing state or federal law or regulation. (Gov. Code § 11349(f))
Necessity – There must be substantial evidence in the record for needing the regulation in order to fulfil the purpose of the statute or other provision of law that the regulation implements or interprets. (Gov. Code § 11349(a))
Since the BCC, CDFA and CDPH have to comply with the standards above, it’s a good idea to focus your comments around one or more of those specific areas, as opposed to just making a comment that you dislike a particular proposed regulation without giving any reason why. That way, it is more likely that the agency will respond to your comment by making an adjustment to the proposed regulation(s) in question.
How to Submit Your Comments
Comments on the proposed regulations can be submitted to the agencies by mail or email, or offered in-person at one of the agencies’ scheduled public hearings. Your comment must include the following: (1) the subject title of the proposed regulation; and (2) specific concerns regarding the proposed regulation, which the agencies deem most helpful if they identify the section number in question, discuss the issue, suggest changes to the text, and explain why any desired modifications address the issue.
Please note that all comments received during the public comment process become part of the official record which is public information. Thus, you may not want to include any confidential or identifying information in your comments.
All comments must be submitted to the respective agencies by 5:00pm on August 27, 2018 or provided at one of the scheduled public hearings. Below are the locations of the public hearings, which will take place throughout the state during the months of July and August. (This information is subject to change; please check for updates on the California Cannabis Portal.)
Bureau of Cannabis Control Hearing Dates and Locations
The first two BCC public hearings have passed. There will be a final public hearing on August 27, 2018 from 10:00 a.m. to 12:00 p.m. at the Tsakopoulos Library Galleria, 828 I Street, Sacramento, CA, 95814.
California Department of Public Health Hearing Dates and Locations
The first two CDPH public hearings have passed. There will be a final public hearing on August 27, 2018 at 10:00 a.m. at 8400 Edes Avenue, Oakland, CA, 94621.
California Department of Food & Agriculture Hearing Dates and Locations
The first three CDFA public hearings have passed. There will be a final public hearing on August 28, 2018 from 1:00 p.m. to 3:00 p.m. at the California Department of Food & Agriculture Auditorium, 1220 N Street, Sacramento, CA, 95814.
Some Final Words
Collaborate. Join with other groups, trade associations, brain trusts, friends. Have reading groups. Get together and consider problems and solutions from multiple points along the supply chain, so that the solutions you offer can be relevant, functional, and comprehensive. There are many smart people working on this right now, so if you don’t have the time to this by yourself, link up with a trusted group that is commenting in accordance with your interest. Comment letters signed on by many stakeholders are very powerful.
Most importantly, “Keep Calm and Carry On!” Even though operators may see major changes being contemplated in these regulations, these are NOT YET IN EFFECT. Operators still need to remain compliant with the EMERGENCY regulations that are currently in effect, until the final regulations – post comment period – are officially adopted. This draft can and will change, so folks shouldn’t be making major business decisions based on the draft, as elements may either fall away, shift, or be added. (Think about the 24-hour security guard requirement in the Readopted Emergency Regs – it came and went within a 5-day comment period.) There are items in this draft that are sure to receive a LOT of comments and suggestions, so keep calm and carry on following the emergency regulations during this comment period.
Finally, even for operators outside of California, this process is nevertheless important to watch as the path that California takes will impact how the rest of the country chooses to regulate the cannabis industry, and it is also important to participate in if you plan to expand into the Golden State.
NCIA’s member-led State Regulations Committee (SRC) examines and reviews the varying cannabis industry-specific statewide regulations and works to establish best practices or guidelines for states and municipalities to facilitate the development of regulations and compliance procedures.
Oklahoma O-Kays Medical Cannabis Ballot Initiative
On Tuesday, voters in Oklahoma approved a measure that will make medical cannabis legal in the state with over 56% popular support.
The referendum, known as SQ 788, will allow patients 18 and older to use medical cannabis to treat their conditions with a recommendation from their doctor, and individual under the age of 18 would need the signatures of two physicians and his or her parent or legal guardian. Physicians can recommend cannabis for any condition for which they think cannabis would be a helpful treatment.
With the addition of Oklahoma, there are now effective medical cannabis laws in 30 states, as well as the District of Columbia, Guam, and Puerto Rico. A total of 46 states allow for the medical use of cannabis in some form.
“In spite of a well-financed and misleading opposition campaign, Oklahoma voters proved that medical cannabis is no longer a controversial issue by enacting a sensible law at the ballot box tonight.” said Aaron Smith, executive director of the National Cannabis Industry Association (NCIA). “The passage of this law is not only a great victory for some of the Sooner State’s most vulnerable citizens – it will also create new business opportunities as the state’s underground market for medical cannabis is replaced by licensed businesses with the potential to create thousands of jobs and millions in new tax revenue,” continued Smith.
About SQ 788:
Oklahoma state will establish rules governing the licensing and regulation of facilities to cultivate, process, and dispense medical cannabis, and allows patients to cultivate limited amounts of medical cannabis at home.
The passage of SQ 788 marks the first time that a state medical cannabis ballot initiative has been approved by voters in an electoral primary. Observers were skeptical of the initiative passing in an unprecedented election cycle, particularly given strong and well-funded efforts from opponents to the referendum in the months before the vote.
VIDEO: Aaron Smith invites you to #NCIALobbyDays this May 21-23
Over the last several years the cannabis industry has experienced unparalleled economic growth. But, as business owners in the industry, we know first hand that this success also comes with persistent challenges. As long as we still experience the crippling effects of federal policies like 280E and unfair banking regulations, our success is merely potential.
This is why it is essential that cannabis business owners are also industry advocates. With the challenges posed by the current administration and the uncertain federal policies governing our industry, it is critical that we make our voices heard on Capitol Hill.
Join 300+ cannabis industry professionals at NCIA’s 8th Annual Cannabis Industry Lobby Days on May 21-23 in Washington, D.C. to advocate for our industry and forge a unified front with the industry’s most politically engaged leaders. Register before April 30 for a chance to win tickets and travel for two to #CannaBizSummit July 25-27.
Watch this video to hear more from NCIA’s Co-founder and Executive Director Aaron Smith.
For more information about NCIA’s 8th Annual Cannabis Industry Lobby Days,
The End of Prohibition in California: An Interview with Berkeley Patients Group
At the conclusion of the first week of adult-use cannabis sales in California, we spoke to Sabrina Fendrick, Director of Government Affairs of Berkeley Patients Group, to get a picture of their recent launch into the adult-use cannabis market. Berkeley Patients Group has been serving patients in the Greater East Bay Area of Northern California since 1999 and is a founding member of NCIA.
Sabrina, what was the process like for Berkeley Patients Group to apply for an adult-use cannabis license in California?
What we got was actually a temporary license, so the process for that is not as onerous or complicated as the annual process. We submitted our local authorization, site plan, and landlord approval. We did this three times, one for adult-use sales, one for medical sales, and one for distribution.
We had to work very closely with the city of Berkeley to make sure we had all of our ducks in a row, which was a little bit complicated because Berkeley had a ban on adult-use commercial cannabis activity. We engaged with the mayor and city council to get a “carve out” for us since we are a Berkeley institution as the nation’s oldest medical cannabis dispensary. We were intensely involved in conversations with regulators like the Berkeley Cannabis Inspector Mark Sproat throughout the whole process. We had it a little easy actually since we’ve been around for many years, as we were established in 1999.
When did you learn you had been awarded the license and how did your team react?
We learned on December 15th that we had received all of our licenses at about 4pm on a Friday, and the whole team was elated. There was perhaps even a little anxiety in wanting to make sure we had everything ready to roll out on January 1 to start offering cannabis to adults in California.
The first few days have been generally pretty smooth. There are a few questions surrounding process and operations to figure out as we go, but the whole roll out process has been smooth. Not a whole lot has changed except we’re getting longer lines, and we’re making sure that our systems are in place to be fully compliant with state law and all of the staff training required to go with that.
What is your reaction to the recent news of AG Jeff Sessions announcing on January 4th to rescind the Cole Memo?
We fully intend to keep serving the Berkeley community and the surrounding area as a state-licensed locally-operated compliant business. Further action on behalf of the Attorney General and the Department of Justice remains to be seen, but we do have support from local politicians and regulators.
We’re confident that public opinion and federal protections will continue to support the will of the voters and states’ rights. The DOJ should be using law enforcement resources to go after real criminals committing real crimes, and not enforcing an outdated, archaic policy that has almost no support from the general public.
As is traditional on the first day of adult-use sales, did Berkeley Patients Group make its first sale of cannabis to anyone noteworthy?
Yes, longtime California cannabis activists Mikki Norris and Chris Conrad were sold the first cannabis purchase in our dispensary. They were both spokespeople for Proposition 64 all the way back to Proposition 215, so it was an honor to make the first sale to people who were actively involved in reforming these laws in California.
Policy Council: The Little-Known – And Critical – Exception To Federal Paraphernalia Laws
This paper was generated by NCIA’s Policy Council. Steve Fox, Policy Council Director, says “the mission of NCIA’s Policy Council is to inform lawmakers and other stakeholders about policy-related matter affecting the cannabis industry. This short paper is an excellent example of that type of work. It is important that we raise awareness about the critical exception to federal paraphernalia laws, under which state-authorized activity is exempt from the provisions of the law. We can debate how that exemption should be interpreted, but we must acknowledge that it exists. This paper furthers that goal.”