Member Blog: Pre-Rolls are Poised to Become the #1 Category in Canada – Will the Same Trends Follow in the US?
Earlier this year, we predicted that pre-rolls were destined to be the top-selling cannabis product by the end of this decade, and a new deep dive into the Canadian market has only further convinced us that pre-rolls are not only a cornerstone of the current market, but a major driver for future growth not only North of the Border, but in a federally legalized U.S. cannabis market as well.
That’s because thanks in part to a staggering growth rate of 606% in infused pre-rolls from January 2022 to February 2023, pre-rolls are currently on the verge of overtaking flower as the top product category in Canada’s cannabis industry.
Using data from cannabis analytics firm Headset, our new White Paper, “Pre-Roll Growth in the Canadian Market,” details how pre-rolls in Canada have grown more than 50% over the past 18 months, from a 20.7% market share in early 2022 to a 31.5% total market share in May 2023, with total sales in the category topping CAD$1 billion in 2022. At the same time, flower sales in Canada continue to drop, falling to just 35% of sales in May 2023, compared to 31.5% for pre-rolls.
With federal legalization believed to be on the horizon for the United States, Canada’s data stands out as a national system and gives us some insight into how the American market could respond to a federal program, as opposed to one that is regulated state-by-state.
Growth in Every Market
Sales of pre-rolls in all four of the provinces tracked by Headset saw large increases. Pre-roll sales saw 33% and 37% growth in Saskatchewan and Alberta, respectively, a nearly 54% growth in British Columbia and a whopping 69% increase in Ontario, the country’s most-populous province. In the U.S., pre-roll sales also continue to surge, growing to a 12.1% market share in the States.
The sales growth has been fueled in part by the rise of infused, or “connoisseur” pre-rolls, which combine a cannabis concentrate and flower into a single pre-roll cone. The result is a more potent pre-roll, often at a higher price point, which has helped push revenue totals even higher since Health Canada clarified its rules in late 2021 to clear the way for the product.
Consumers have responded, with infused pre-rolls seeing an eye-popping 1,426% growth rate from 2021 to 2022. The segment grew from just under 3% of the market at CAD$12.7 million in 2021 to nearly 30% and CAD$47.9 million by mid-2023. That’s more growth than any other pre-roll category except single-strain hybrids.
Keeping Price Points High
The rising popularity of infused pre-rolls, with their higher price point, has been a significant factor contributing to the increase in the average price of Canadian pre-rolls. Infused pre-roll sales jumped from 6.2% of total sales in January 2022 to 29.8% of sales by February 2023. This trend has been instrumental in maintaining the overall price of pre-rolls even as prices for flower and concentrates have decreased.
According to Headset data, in 2022, pre-roll products accounted for 27% of the new items introduced in the Canadian market, demonstrating a remarkable growth rate of 48.2% compared to 2021, second only to beverages. In response to the increasing demand in this category, a total of 1,870 new pre-roll products were launched in the Canadian market during that year.
The resilience of pre-roll prices can also partially be attributed to their manufactured nature and the unique attributes of infused pre-rolls. The demand for stronger pre-rolls, coupled with declining prices for flower and concentrates, has created a favorable environment for launching infused pre-roll products.
Additionally, automated pre-roll machinery continues to evolve, including new automated infused pre-roll machines, making it easier for manufacturers to produce large quantities of infused pre-rolls at a slight premium over regular pre-rolls, leading to the category’s rapid expansion.
Multi-Packs and Cross-Generational Appeal
Other insights from our report include a surge in pre-roll multi-packs, with 2- and 5-gram packs seeing an almost 400% growth over the past two years, and that the pre-roll category shows less price compression than any other segment of the market, as it does in the U.S. as well.
Part of the strength of the pre-roll segment is its cross-generational appeal. For example, the Ontario market is the largest and fastest-growing of Canada’s provinces. With revenues reaching CAD$440 million in 2022, Ontario accounts for almost half of all sales in Canada. And within Ontario, the wallet share of pre-rolls grew within every generational group through 2021, with Gen X and Millennials seeing the largest growth, at around 45% each.
Within the fastest-growing group of consumers in the industry, Gen Z (which in Canada is a larger cohort than the U.S. due to a lower age restriction for cannabis purchases), pre-roll sales increased with both male and female consumers. The wallet share of pre-rolls among female buyers grew more than 4% to 20.4% in 2021. For males, the increase was even larger, growing from 14.6% of wallet share to 19.7%.
Final Thoughts on Pre-Roll Growth
The main factors driving the huge growth in pre-rolls are:
Increased pre-roll quality, as flower and concentrate prices drop, so companies can create a higher quality pre-roll at cheaper and cheaper prices.
Reduced labor costs, as advancements in pre-roll machinery help companies scale production and bring in automation.
Consumer buying patterns showing that customers want convenience and are consuming for recreational use, not health and wellness.
The next big trend in pre-rolls, which will push pre-rolls to the No. 1 sales category in the industry, is freshness. Competing in the future will mean better packaging and a better supply chain, so pre-rolls are always fresh at retail.
But with sales surging across both Canada and the U.S., now is the right time for producer/processors to launch or expand pre-roll lines, particularly infused pre-rolls and pre-roll multi-packs.
For more information on how you can capitalize on the latest trends in the pre-roll segment, contact the Pre-Roll Experts at Custom Cones USA.
Unlocking Social Equity in Legal Cannabis Delivery | 9.21.23 | NCIA #IndustryEssentials Webinar
Welcome to the National Cannabis Industry Association’s (NCIA) latest webinar recording, “Committee Insights: Balancing the Scales – Social Equity in Legal Cannabis Delivery.” NCIA’s #IndustryEssentials webinar series is your gateway to timely, engaging, and essential education in the dynamic world of cannabis. In this insightful session we partnered with NCIA’s Diversity, Equity & Inclusion Committee (one of our 14 member-led committees) to explore the pressing need to address historical inequities in the legal cannabis industry.
As the cannabis industry experiences exponential growth, it’s crucial to provide a platform for individuals adversely affected by past cannabis laws. Our esteemed panel of experts shed light on the importance of social equity in cannabis delivery regulations and offered actionable solutions for a more inclusive industry.
Learning Objectives:
• Understand the historical context of cannabis-related offenses and their disproportionate impacts.
• Recognize the crucial importance of social equity provisions in cannabis regulations.
• Identify best practices for implementing social equity in cannabis delivery.
• Engage stakeholders in constructive dialogues for industry-wide change.
Our target audience for this webinar included cannabis industry professionals and regulators, entrepreneurs interested in cannabis delivery services, social justice advocates, and policymakers, as well as legal professionals.
Whether you’re an industry insider or a passionate advocate, this webinar recording is a valuable resource to deepen your understanding of social equity in the cannabis industry. Join us as we work towards creating a more equitable and inclusive future.
NCIA Accepting Applications For 2024-2026 Board of Directors Term
NCIA is now accepting applications for eligible candidates to apply for the board through Friday, November 17, 2023.
The National Cannabis Industry Association is a nonprofit organization run for and by its membership, so we hope you’ll consider this opportunity to apply for a seat on the NCIA Board.
Serving on NCIA’s Board of Directors is no small task. Board members are responsible for overseeing the strategic direction of the largest and most influential cannabis industry organization in the country. Board Members are also responsible for building membership, fundraising, and ensuring that NCIA continues to be the strongest force advocating for the fair and equal treatment of the industry on Capitol Hill.
Current NCIA members in good standing are eligible to apply for a seat on the board. NCIA members who are interested and qualified to serve on our board are encouraged to submit an application for review by our nominating committee before the November 10 deadline.
Candidates may apply directly for a board position during the open application process. The application form asks for information about the candidate’s professional background, unique talents, skills, and viewpoints, and ability to contribute or raise financial resources for NCIA. Candidates must be fiduciaries of a NCIA member-business or be designated by a company fiduciary to serve on our board.
Who Qualifies To Run For A Board Position?
To be considered for a seat on the board, a candidate must be a fiduciary (e.g. owner, president, CEO) of a current member business at any level of membership or must be a representative of the business that has been appointed to serve by a fiduciary. Candidates must submit an application online by November 10.
What Are The Requirements For An NCIA Board Member?
Board members serve two-year terms and are responsible for overseeing the association’s overall strategy and budget, assisting in the development of strategic relationships, and serving as ambassadors of NCIA, which represents hundreds of member businesses. In general, the NCIA board meets in person twice and conducts 3-4 additional video conferences per year.
How Are The Board Positions Selected?
Once the application period closes, NCIA’s Nominations Committee will convene to carefully review and score all applications. The committee will ultimately select a slate of nominees to fill eight (8) available board seats that are best suited to bring additional talent, resources, and diversity to our growing organization, based on their qualifications.
Our Nominating Committee will comprise the chairs of our 14 member committees as well as a select number of current board members whose terms are not expiring this year. Once the Nominating Committee selects the slate of eight members will be notified at the end of this year.
Member Blog: Securing Your Cannabis Venture – Mastering Inspections with Comprehensive Cannabis Insurance
The cannabis industry continues to blaze a trail of growth and innovation, opening numerous opportunities for entrepreneurs and investors. However, this thriving landscape also exposes businesses to unique risks that demand proactive risk management solutions. Insurance plays a pivotal role in safeguarding cannabis ventures from potential losses, making it an essential aspect of responsible business operations. In this blog post, I will explore the critical role of inspections, the challenges they present, and how partnering with a reliable cannabis insurance broker can protect your business interests while mastering the art of inspections.
Understanding the Need for Inspections
The cannabis industry operates under stringent regulations, and inspections are an indispensable component of ensuring compliance. These routine evaluations, carried out by regulatory bodies or insurance carriers, are designed to assess product quality, safety standards, and adherence to legal requirements. While inspections are vital for maintaining high standards within the industry, they also expose businesses to potential vulnerabilities, particularly theft.
The Perils of Theft: Unraveling Insider Threats
As the cannabis industry expands, so does the risk of theft. A concerning issue arises from potential “inside jobs,” where employees or third-party trusted individuals gather sensitive information on-site, posing a significant threat to the operation’s stability. This situation often leads to confusion and concern for clients regarding third-party insurance inspectors who sometimes come on site without communication or vetting.
Clients frequently encounter uncertainty when dealing with these inspectors. They tend to reach out to operators to schedule appointments without confirming the inspector’s affiliation with the insurance carrier or broker. This results in delayed responses, as these calls are often mistaken for telemarketing and disregarded. Unfortunately, this miscommunication can lead to compliance issues with the insurance carrier.
To address this problem, transparent communication between the insurance broker, inspection company, and operator is essential. For example, many clients now ask me to verify the identity of those contacting them before scheduling appointments. I highly recommend this practice to protect clients’ sensitive information.
In this evolving landscape, ensuring security and effective communication is paramount. By taking proactive steps, we can enhance the industry’s growth while safeguarding its integrity.
Transparent Expectations: Building a Solid Foundation
Open and direct communication, coupled with well-defined expectations, serve as the cornerstone for effective inspections within the cannabis industry. My commitment lies in bridging the gap between clients and inspectors, enabling them to familiarize themselves with one another and streamline the scheduling process. A comprehensive comprehension of the inspection procedure, its aims, and the specific areas subject to scrutiny is imperative for businesses. Simultaneously, transparency on the part of insurance carriers regarding inspection protocols and their protective role is crucial for your business’s security.
Embracing a collaborative approach to inspections fosters a strong alliance between businesses and insurers. This synergy guarantees a seamless process that ultimately benefits all stakeholders involved.
Guarding Behind-the-Scenes Details: Protecting Business Operations
In the fiercely competitive cannabis landscape, certain aspects of business operations must be protected with utmost confidentiality. These behind-the-scenes details include proprietary cultivation techniques, security measures, and intricate supply chain arrangements. Recognizing the sensitivity of this information, leading cannabis insurance brokers take extraordinary measures to safeguard such details.
The integrity of inspection processes begins before any inspector sets foot on your cannabis business premises. Reputable cannabis insurance carriers undertake rigorous vetting of third-party inspection companies to verify their credentials and expertise. This stringent evaluation ensures that inspectors adhere to the highest standards and are committed to protecting your business. In cases where an inspector contacts you directly, it is essential to politely reschedule the inspection and promptly inform your insurance broker.
Aligning Real-Time Risks with Comprehensive Insurance Coverage
Beyond regulatory compliance, inspections serve another vital purpose: assessing real-time risks and aligning them with the insurance coverage outlined in your policy. This strategic alignment ensures that your cannabis business is adequately protected against potential losses. Collaborating with your insurance broker to comprehend the risks inspectors evaluate and their significance empowers you to optimize your risk management strategies. By proactively addressing any coverage gaps, your cannabis insurance policy becomes a reliable safety net, allowing you to navigate the dynamic cannabis industry with confidence.
Addressing Unique Industry Challenges: Tailored Cannabis Insurance Solutions
The cannabis industry operates in a state of constant flux, with evolving regulations and market dynamics presenting ever-changing challenges. These unique complexities demand specialized insurance solutions that cater to the specific needs of cannabis businesses. Leading cannabis insurance providers possess an in-depth understanding of industry intricacies, enabling them to craft policies that safeguard against cannabis-specific risks. From crop damage and product recalls to theft issues, these tailored insurance solutions provide comprehensive coverage, assuring businesses of their resilience in the face of adversity.
Overall, inspections and comprehensive cannabis insurance play instrumental roles in securing your cannabis venture against potential risks and losses. Transparent communication and clear expectations before, during and after inspections build trust and foster collaboration between all stakeholders.
Guarding behind-the-scenes details is of utmost importance, and trusted cannabis brokers go the extra mile to protect your business operations from potential breaches. Vetting inspectors diligently ensures the security of the inspection process, preventing unauthorized access to sensitive information.
By aligning real-time risks with comprehensive insurance coverage, cannabis entrepreneurs gain invaluable peace of mind and the ability to navigate the industry confidently. As you embark on your journey in the dynamic cannabis sector, choose a reputable cannabis insurance broker who understands the intricacies of the industry and can offer tailored solutions to safeguard your business interests.
Remember, mastering inspections and harnessing the power of comprehensive cannabis insurance will be your business’s most potent shield in an ever-changing and promising landscape. Embrace the future of the cannabis industry with confidence, knowing that your venture is secured and protected every step of the way.
You joined NCIA, explored the platform, now what? Time to add your co-workers to the company account!
There are two ways to add employees to your company account.
The company account manager (or primary contact) can log in to Community Hub, and scroll down to find the green “Company Profile” button next to your company’s name.
Once on the company snapshot page, choose the green “Manage Roster” button.
From there, you can hover above the “Actions” dropdown to choose “Add Individual.” You can either search by your employee’s last name to see if they have a profile already in the system or choose to “Create New Individual.”
Add in the contact information and click submit so your coworkers can take advantage of NCIA benefits as well!
Your employees can create their own profiles as well! Just send them these directions:
First, check to see if you already have an account. If you’re not sure, click “Forgot your password?” to find out.
If you need to create a new account, please follow these steps:
Click “Don’t Have An Account?” Fill-out the required information and click “Create Account” to be logged in and ready to complete your profile.
In order to be recognized as a member, you must affiliate yourself to your company. Find the “My Company’s Profile” on the left sidebar menu and click the “My Affiliation” button. Enter your company’s name with current membership in the “Account Name” field. (You can also enter the website associated with your business to help narrow the search!)
After clicking search, select the “Add Affiliation” button adjacent to your corresponding member business, and click “OK”.
Now you are ready to take advantage of your member benefits!
Member Blog: Wine is the Mentor Cannabis Needs – How The Industry Can Mimic Vino to Find Global Success
by Andrew Kaye, Sweet Leaf Madison Capital
Picking up an eighth of Blue Dream right next to where you buy a bottle of merlot used to mean meeting your dealer in the parking lot behind the liquor store, but now it’s as simple as going to the shop next door. The widespread legalization of recreational cannabis over the last 10 years in the United States and abroad has led to a rollercoaster ride of gains and losses for the industry, but the future is still looking as green as ever. Nevertheless, there’s still a lot to learn, specifically from other industries like wine, who continue to rake in billions of dollars each year.
Given that wine has a few thousand years on cannabis as a commodity, cannabis has an opportunity to make up for lost time over the next decade. Due in part to more countries either loosening laws and restrictions or legalizing cannabis all together, the global market will start to see significant growth as international demand increases. In the years to come, cannabis companies will not only have opportunities to expand notoriety and increase demand, but regional terroirs could hold the same esteem as wine-lovers’ favor bottles from Burgundy or Tuscany.
New Players, Same Game
Nearly 30 countries have either decriminalized possession or made cannabis medically legal, with others like Canada, Uruguay, and Malta legalizing recreational cannabis. Germany and Luxembourg are also following suit
Each change leads to a new open market, with new economic opportunities. If we take a look at how the wine industry evolved from 1990 to present day, countries like Bulgaria, Germany, Portugal and Moldova were amongst the top 10 exporters in the world, behind the big three, Italy, France, and Spain. But where there is growth, there is contraction, and in those 30 years, contenders such as Australia, New Zealand and Chile have seen massive growth and recognition for their wines and are now able to go head-to-head with the big three, while Bulgaria and Moldova do not crack the top ten today.
The same is true for cannabis. As Germany moves toward legalization, which is predicted for 2024, it must figure out how to create supply for the country’s increasing demand. For years the Germans have been importing Canadian cannabis for medical use, accounting for 38% of its cannabis imports since 2017 – bringing in nearly 12 tons of flower and extracts in the first six months of 2022 alone. So what is good news to a potentially burgeoning European market, is good news for Canada – at least for the time being. The most recent proposal out of Berlin seems to exclude imports in the future and instead lays out plans to cultivate and distribute all within its own borders. Therefore, companies like Aurora Cannabis have just under two years to get the most out of their relationship before it is time to split up and move on.
On the other hand, we see companies seizing opportunities to expand into the global market. For example, Cookies, a California-based cannabis retailer and product brand, has recently opened a recreational dispensary in Bangkok, Thailand. This is just months after the country moved to legalize cannabis and establishes Cookies’ fourth international store – they also have three medicinal locations in Israel.
Endless Possibilities
This is only the beginning. Global legal cannabis is still in its early days, and diversification of the market is going to be the future. We are going to start seeing countries promote both domestic consumption alongside international export to take advantage of opportunities abroad, while, much like wine, region-specific strains could become popular as cloning, hybridization and other advancements are finding their way into growing operations. Ultimately, specialized strains will become a cherished commodity amongst global cannabis aficionados. Boosting cannabis tourism, much like what we see in Amsterdam or Humboldt County, across the world.
As the industry grows, it will be important for businesses and brands to pull inspiration from those who paved the way, and wine seems to be the best place to start. Learning how to boost recognition to increase global demand will be essential, and big corporations will find this easier than small businesses, but that does not mean growth opportunities will dry up for those small players. Specialization and quality products will shine in a global market as well.
So, drink up, light up, and renew your passport. Cannabis, like wine, is circling the globe!
Andrew Kaye has been involved in all aspects of the financial services industry, as a fund portfolio investment manager, investment banker, family office investor and attorney. He has worked with start-ups on their first raise through global enterprises undertaking billion-dollar stock offerings, and has significant investment experience in the cannabis industry. Currently, Andrew works as Sweet Leaf Madison Capital’s Chief Commercial Officer. Lending his expertise toward the creation of middle market financing solutions for real estate and equipment financing needs in the cannabis space.”
“Sweet Leaf Madison Capital provides non-dilutive, asset-based lending solutions to the underserved middle market of the cannabis industry by originating real estate loans, equipment financing, securitized term loans, and more for entrepreneurs and businesses. The company is based in Denver, Colorado and has offices in New York City and West Palm Beach, Florida. To learn more or complete a loan application, visit Sweet Leaf Madison Capital online, or continue the conversation on LinkedIn, Twitter and Facebook.”
Andrew J. Kaye is Chief Commercial Officer of Sweet Leaf Madison Capital. He can be reached at akaye@sweetleafmadison.com.
Member Blog: Mutualistic Relationships in Cannabis – The Benefits of Coexistence
When it comes to growing healthy plants, it’s easy to focus on avoiding pests, diseases, and other harmful intruders that can wreak havoc on our crops. However, not all microorganisms are bad for our cultures. In fact, some microorganisms can actually benefit our plants in a big way, providing protection, enhancing nutrient uptake, and even increasing resistance to stress and adverse conditions. These microorganisms are called biostimulants, and the relationships they form with plants are known as mutualism.
But, what is mutualism?
All plants host communities of microorganisms that cause no harm to them, in fact, they benefit them. This relationship between one organism and another, where both seem to benefit from their coexistence, is called mutualism. Cannabis plants are no exception; they also create mutualistic relationships with other organisms. In this case, mutualism occurs between microorganisms like bacteria or fungi (or both) and cannabis plants, who lend their tissues to these organisms to inhabit and receive food. In return, microorganisms provide the plant with different benefits like phytohormone supplies, secondary metabolites, and enzyme production stimulation. They also help in the solubilization of minerals and the absorption of nutrients.
One of the most interesting things about mutualistic relationships in cannabis is that they occur all over the plant, but different microorganisms tend to prefer different parts of the plant. Endophyte organisms that live inside the plant can be found in the roots, stems, petioles, seeds, and buds of cannabis plants. Most plants host both bacteria and fungi, but studies show that stems host fungi exclusively. The bacteria and fungi that inhabit the roots are the most popular and are known as mycorrhizas and rhizobacteria. These are organic compounds that promote growth in plants and are mostly used as biostimulants in many cultures.
One of the most significant benefits of mutualism between microorganisms and cannabis is the production of secondary metabolites like CBD and THC. Four specific bacteria taxa, including Comamonas testosteroni, Citrobacter freundii, Enterobacter cloacae, and Pseudomonas putida, have been shown to enhance cannabis plant growth and secondary metabolite production. Evidence suggests that a combination of these four species of bacteria acts as a biostimulant.
Pseudomonas bacterial strains, in particular, benefit cannabis plants by producing diffusible antibiotics that act as pathogen biocontrollers. Bacillus strains also act as a defense barrier against pathogens by preventing them from generating resistance to secondary compounds that plants produce to eliminate them
In addition to bacteria, fungi that live in the roots, called mycorrhizae, help improve water and nutrient absorption in plants and stimulate crop growth by providing bioactive substances. Endophytic cannabis fungi of the genera Paecilomyces, Penicillium, Pantoea, and Trichothecium produce bioactive substances that act as fungicides, especially against the fungus Fusarium oxysporum. These substances not only promise to be a solution to serious problems in cannabis plants as biological control agents against aggressive pathogens but also a sustainable resource and a substitute for chemopesticides on the market. Using them reduces traces of pesticides in cannabis flowers and allows growers to adapt to government regulatory policies that have zero tolerance against pesticides.
So how can we encourage these mutualistic relationships to occur in our plants?
The mutualistic relationships between microorganisms and plants occur naturally without any type of artificial additive, depending on the environmental conditions, the cultivation area, the pH and salinity of the soil, and other characteristics. Some may exist naturally in the substrate or be accidentally transmitted in many ways.
However, cannabis growers can use various methods to introduce these microorganisms into their crops, either on the substrate or directly on the plant. Commercially, some companies sell products with inoculums that contain some strains of fungi and bacteria that encourage plant growth and help protect them from pathogens.
Other ways to acquire these strains are through organic matter such as compost, which is rich in sugars bacteria. Also, older compost that has grown moldy over time can contain beneficial fungal strains for cannabis plants.
In conclusion, mutualism is a beneficial relationship between microorganisms and cannabis plants that can improve crop growth, protect plants from pathogens, and reduce the need for pesticides. By understanding these relationships and encouraging them, growers can promote healthier cannabis plants and contribute to a more sustainable and eco-friendly cultivation process.
About MyFloraDNA: We are a genomic laboratory based in Woodland California, delivering modern genomics for the Cannabis Industry. \
Our services include Trait detection (cannabinoid profile and sex/gender ID), Pathogen Detection, and Genetic Validation Services. We offer breakthrough solutions using the inner power of your plants.
Angel Fernandez, author. CEO & Co-Founder at MyFloraDNA. Member of the NCIA’s Scientific Advisory Committee. “It is time to fill in the gap between DNA Sciences and Agriculture. MyFloraDNA is willing to show the huge opportunities that exist for modern genetics in agriculture. Now, it is time for another agricultural revolution”.
Joselyn Guadamuz, co-author. Scientific Researcher and Content Writer at MyFloraDNA.
Maria de Catarina, editor. Public Relations Specialist at MyFloraDNA.
Equity Member Spotlight: Checking in on NCIA’s Equity Scholarship Program
by Mike Lomuto, NCIA’s DEI Manager
Three years after the launch of NCIA’s DEI program, we are growing and going stronger than ever. One of last year’s highlights was our DEI delegation that took part in our 10th Annual Cannabis Industry Lobby Days in Washington, D.C., a story we told in this blog, along with many other great and important stories. Now, we are checking back in with a few members to hear about their current progress.
Why has being a member of NCIA been important to you personally?
Anthony Jenkins, Next Level, CEO:
Cannabis is an amazing plant, and I’m passionate about what it can do. NCIA’s members share that passion, which shows in their advocacy for themselves and the plant.
Michael Diaz-Rivera, Better Days Delivery, Owner/Operator:
I was a 5th-grade teacher before starting this business. Being a member of NCIA has allowed me to network with a diverse set of owners across the business spectrum, whether they are social equity operators, and/or novices like me, or established in the cannabis space for years. NCIA has helped springboard me into spaces where growth is guaranteed!
Helen Gomez Andrews, Co-Founder & CEO, The High End:
Building strong business networks is incredibly important in the cannabis industry – and of course, so is advocacy. With this industry and through communities like NCIA, we have an opportunity to reimagine and restructure how business gets done, what board rooms look like, how workers are treated, how to better respect our environment. Being a member has not only helped me strengthen those networks and provided new business opportunities, but it has provided me more channels towards the advocacy that is meaningful to me and my business’ core values.
Why is the Equity Scholarship Program at NCIA important?
Anthony Jenkins:
It is EXTREMELY important because most new entrepreneurs don’t have the money to “test” if a program is going to be beneficial for them. The scholarship gives future cannabis business owners a chance to see the true value that comes with being a member, and once they do, they will continue their membership.
Michael Diaz-Rivera:
Coming from a low-income background and already investing my limited savings 100% into my business, I wouldn’t have been able to participate in NCIA without the scholarship. Not being hindered by my lack of financial resources helped build my confidence in the industry.
Helen Gomez Andrews:
As the founder of a start-up in a regulatory and capital environment with tremendous constraints, the Equity Scholarship Program got me in the door at NCIA, where I otherwise wouldn’t have joined due to the standard price tag. I’ve had a chance to share in, and contribute to, the many different avenues of participation that NCIA offers, make a proper assessment of its impact and properly decide whether or not it makes sense to continue as a member beyond the scholarship period.
What has been your biggest highlight of being an NCIA member?
Anthony Jenkins:
My biggest highlight of being an NCIA member was attending the NCIA’s San Francisco conference in 2021. It was an amazing experience, and we had the opportunity to have a booth, hosted by the awesome team at The People’s Dispensary.
Michael Diaz-Rivera:
My biggest highlight has to be our weekly power hours. Whether learning from industry leaders or having real unapologetic conversations with other emerging business owners, I am walking away from these meetings with priceless jewels of wisdom.
Helen Gomez Andrews:
There are so many! But bringing my kids down to Washington, D.C. for Lobby Days in 2022 was such a highlight. My daughter, who has been a cannabis patient since she was 6 years old, watched as I took a team photo in front of the United States Capitol with a group of people that came together to fight not just for SAFE Banking, but for the federal legalization of a medicine that she uses daily – fighting for her rights and kids just like her – is a moment that our family will never forget.
Have you noticed a shift in Diversity, Equity, and Inclusion at the NCIA since you joined, and if so can you elaborate?
Michael Diaz-Rivera:
I don’t know if I’ve been in NCIA long enough to notice a shift in DEI, but I can say that it isn’t hard for me to find a BIPOC leader within NCIA who shares experiences similar to mine. That has made this a motivating and pleasurable experience.
Helen Gomez Andrews:
I haven’t been a member long enough to notice a shift, but the diversity of the community was noticeable and very appreciated from the onset, and it’s very tangibly not just a talking point.
What is on the horizon for your business in 2023?
Next Level Edibles
Anthony Jenkins:
Next Level has some great things on the horizon. We entered into a partnership with a team in Southern California that will help us increase the quality and efficacy of our infused brown sugar. We are growing our partnerships with dispensaries and delivery services throughout California to broaden our footprint. We are relaunching our website. We will be launching new infused ingredients, and partnering with some of our friends in the industry to bring you amazing infused ready-to-eat products.
Michael Diaz-Rivera:
There is much to be anticipated in the near future for Better Days Delivery and that is why we say, “Better Days Are On The Way.” Most immediately I am excited to announce that I am hiring my first delivery driver and adding more vehicles to my fleet. As I aim to be the best cannabis delivery service in Colorado, I am working to establish contracts with dispensaries throughout the state, nurture the stores I currently deliver for (Shoutout to Native Roots and L’Eagle Services), empower my drivers to be their best, all while serving the community!
Helen Gomez Andrews:
At long last, The High End is on track to introduce our clean-extracted and hand-crafted cannabis products to the Massachusetts market, partnering with independent sun-grown and living soil cultivators and processing in our solventless lab. Our indoor living soil gardens are finally in development too and will be ready to go closer to the end of this year.
Additional thoughts?
Michael Diaz-Rivera:
Thank you Tahir Johnson for starting this program and Mike Lomuto for taking it to the next level. Infinite gratitude to all of my fellow business owners that have helped me to get to this point in my business journey! The Marathon Continues! Better Days Are On The Way
Helen Gomez Andrews:
Immense gratitude to Mike Lomuto for understanding each of our goals in business and advocacy, and ensuring we can contribute to issues that matter to us beyond the obvious DEI work. Without question, DEI advocacy is vital, but we amongst the equity scholars have a diversity of other goals as well. In particular, I’d like to thank Mike for championing Sustainability and organizing a group of members from a working group into an influential body within NCIA that has an opportunity to make a meaningful impact.
Member Blog: Advance Cannabis Social Equity this Black History Month
by Chris Jackson Vice Chair, NCIA Board of Directors ForesTree CEO & Michigan Social Equity Advocate
Most anyone watching the cannabis space over the years knows NCIA is a leading industry advocate on the national stage. But what might be lesser known is NCIA’s work to advance diversity and inclusion within the cannabis industry.
For the last three years, our association has maintained a scholarship program providing peer-mentorship services as well as all the standard benefits of an NCIA membership to social equity license holders and applicants throughout the country, free of charge. About 250 social equity members have taken advantage of this program over the last three years, and that was only possible through the financial support of our members and supporters like you.
As we kick off Black History Month, I’m writing with a unique opportunity for you to help elevate the voices of social equity operators in our nation’s halls of power while highlighting your business’s support for diversity in cannabis.
This coming May 16-18, NCIA will be hosting our 11th Annual Cannabis Industry Lobby Days in Washington, D.C. which is the best opportunity for industry professionals to advocate and tell their stories to the policymakers who have the power to make or break our industry.
It’s vitally important that members of Congress and Capitol Hill staffers have the opportunity to meet with social equity operators to learn about our unique challenges but many of them cannot afford to travel to Washington without some financial assistance.
That’s where you come in. NCIA offers a variety of sponsorship packages that make this important event possible and also help offset travel costs for those in need.
During the month of February, the proceeds of every Lobby Days sponsorship package sold will go toward this social equity scholarship fund to ensure as many voices as possible are included in the industry’s premier advocacy event.
As the vice-chair of the NCIA board, I know our members and supporters care about inclusion and building a better industry, not just a new one. So, I hope you’ll join me in making a modest investment in these goals by securing a sponsorship today.
Last year, we raised enough money to help six members of our DEI delegation with travel to D.C. and we aim to at least double that number in 2023, with your help. Minority-owned and social equity cannabis professionals all over the country would be grateful for your support and the future of an inclusive federal cannabis policy depends on everyone’s voice being projected.
You can learn more about NCIA’s very affordable sponsorship packages online or just reply for more information. Thank you for your consideration and support for our community.
P.S. I encourage you to catch the latest episode of NCIA’s Minority Report Podcast covering the issues and people on the front lines of the cannabis social equity movement and where I am a regular guest. Be sure to subscribe here or wherever you listen to podcasts.
Member Blog: Dude, Where’s My Payments?
by Gary Strahle,
Cannabis industry merchant service providers get shut down. How has this impacted retailers and at what cost? Learn how operators are mitigating theft and working with the National Cannabis Industry Association to drive legislation.
In order to best understand what payment methods will suit you best, you must first understand the inherit risks that are associated.
Let’s put it bluntly; there is no such thing as a federally compliant payment in cannabis, not even cash. Given states have legalized the sale of medical adult-use cannabis, it is still very confusing and in some cases crippling when choosing your method of payments.
Cash is king.
Because federal banks legally can not do business with the cannabis industry, retailers have limited options for securing their resources. This makes dispensaries targets for theft. Criminals are coming after both product and cash which requires operators to make heavy investments in security systems. These include state-of-the-art video surveillance, 24/7 on-site security, steel doors, bulletproof glass, expensive safes, terrible insurance policies, and a lot of trips to your favorite credit union. State-chartered credit unions are the only banks accepting cash from cannabis businesses.
Although cash comes with some inherit benefits, coins don’t. Coin change is a big problem for retailers as there has been a national coin shortage. What are you supposed to do when your angry customer is complaining over the 75 cents you can’t return to them? Do you give them customer credit? Do you make an adjustment or a discount? Do you request your POS provider to create a “round up” feature that brings every cash-related transaction up to the nearest dollar?
Benefit:Tax Exposure.
Risk: Tax Exposure, Theft, Time, Money
So what about Cashless ATM?
A cashless ATM is where customers break out their debit card at the register to pay for their retail purchase. Just like any other ATM, you are drawing against an even $10 or $20 amount from your bank account. So if your purchase was for $17, a budtender would hand you back $3 cash in change for your purchase.
While there has been mixed results with cashless ATM’s there was a crackdown made by Visa and Mastercard to shutdown these types of transactions on their network. A significant number of retailers lost their capability to process all of a sudden and had to revert to cash-only payments. While a good chunk of the high risk payment providers were shut down, others continued processing without service interruption for reasons I will explain later.
Although cashless ATM payments can mitigate some of the risks involved with cash on hand, they are subjected to a number of costs that can factor into your daily management and or customer experience. First, if your payment terminals are not integrated with your retail POS, good luck reconciling your money at the end of the day. Budtenders will frequently miscode payments on the POS and assign card payments to cash transactions or vice versa. This makes it extremely tedious to reconcile your books. On the other hand, everyone hates ATM fees. Our colleagues have witnessed fees as high as $25 in places like Las Vegas. Typically you will see most cashless ATM fees between $3-3.50, however, it is common to see them even higher.
Benefit: Processed as an ATM transaction(not a Cannabis Transaction) Settlements are deposited directly into the bank.
Risk: Added fees to customer.
What is different about Pin Debit?
Pin debit allows charges to the penny. This is a cool way to allow customers to pay with their debit card without having to pay the ATM fees. It is relatively new and still unclear if these processors will get away with miscoding their RCC. If you looked at the customers bank statement you would see the charge from your dispensary just like a cashless ATM however the way it got there is much different. Processors are telling networks and banks that these are “pharmacy” transactions. When a customer calls the bank and discusses your transaction at a cannabis dispensary it would seem like things could start going down hill quick for both the payment provider and the merchant (dispensary). With all risk considered it remains as an option for many to process their payments. In conclusion what I’m about to share about credit payments would make you consider pin debit twice.
Benefit:To the penny charges, no ATM fees.
Risk:Miscoded RCC, Merchant Service Shut Down.
How about plain debit or credit?
Don’t do it. This from personal experience has impacted my life. A close family friend was indicted and served time in jail for fraudulently processing credit card payments for delivery giant Eaze. This was a get-rich-quick scheme that broke friendships, businesses, families, and a healthy portion of the retail cannabis industry. Just like pin debit, credit charges are miscoded but in this case purchases were being identified as “dog treats” or “flowers.” The charges would not show up on the customer bank statement as a purchase from a dispensary. Understanding the high risks associated with processing cards in such a way is explicitly fraudulent and has the highest likelihood of involving some form of trouble .
Benefit:Massive increase in Sales.
Risk:Non-payment, Chargebacks, Miscoded RCC, Merchant Service Shut Down.
In summary.
If you or your business are looking to service card payments for your customers, choose your options wisely. In my own personal opinion, you face the least amount of risk using an integrated cashless ATM solution, however if the customer is demanding a more traditional debit experience then it could be worth running a cost/benefit analysis.
The bottom line is that those who have the most dynamic and redundant integrated card payment solution will be the most continuous while mitigating the risks of cash. The payment providers getting shut down do not have redundancy in their network providers or payment methods and therefore non sustainable.
Some payment providers will eat the time in jail and or fines as they are or were able to make a significant amount of money greater than the cost of the punishment.
Until we can successfully make legislative changes being pushed forward by NCIA, those who care about making change should donate to their cause and participate in NCIA’s 11th Annual Cannabis Industry Lobby Days in 2023.
Author: Gary Strahle is a Technical Architect with over a decade worth of operational cannabis industry experience. 2023 NCIA Retail Committee Chairman. Avid surfer and golfer with a passion to help others.
Cannabis Cloud – Applications, Consulting & Payments. Founded in 2015, providing service to over 2,500 cannabis businesses. Specialized as a Salesforce Partner innovating industry standard solutions from seed to sale, Cannabis Cloud’s payments integrated Retail Point of Sale hosts a robust api for connecting Metrc as well as external menus such as Weedmaps or Leafly.
NCIA Board of Directors Results – 2023-2025 Term
National Cannabis Industry Association’s nominating committee has completed the association’s annual board of directors election and six candidates have been elected to serve on the board for the 2023-2025 term.
Congratulations to the winners, and thank you to all of the candidates for their commitment to NCIA!
“I am honored to have the opportunity to serve on the NCIA board of directors and to work alongside some of the most inspirational cannabis advocates in the industry. NCIA and its leadership have worked tirelessly for years to advance legalization and create an equitable, just, and inclusive cannabis community. I look forward to working closely with my fellow board members to help both NCIA and the cannabis industry pave an even more successful path forward.”
“I am deeply honored to be on the Board of Directors for the NCIA. It has been an incredible experience being a member for the past 5 years and to see comprehensive reform inch closer and closer with the relentless efforts of the NCIA team and other advocates/organizations. I am truly hoping that in working together with the industry, we will be able to see the descheduling of cannabis within the next few years. I vow to represent small businesses and want to ensure we have a significant place in the industry at the National level. Working with the rest of the board representing all aspects of the cannabis industry, I am hoping that we can see change happen! We’ve been through so much. Let’s do this!”
The new board members-elect will join the NCIA executive director and the 12 other elected members at the next board meeting.
Members can contact us any time for more information about the board election results or the election process.
If your business is not yet a part of the movement, please join NCIA today.
NCIA Committees: Now Accepting Applications For The 2023 Term!
If you want to take your industry involvement to the next level, now is the time to get involved with one of NCIA’s 14 member-driven committees! NCIA is excited to announce that from now until November 11, we are accepting applications for the 2023 term!
APPLICATION EXTENSION INFORMATION:
Committee applications for the 2023 committee term HAS BEEN EXTENDED and is now openthrough November 25th, 2022! All NCIA members are encouraged to apply! *Due to overwhelming interest we can not guarantee a committee assignment.
All NCIA annual members in good standing are invited to apply for an NCIA committee seat for the 2023 committee term.
NCIA Committees enable current NCIA members to engage their vast and varied areas of expertise and passion to:
Effect change and influence public opinion and policy;
Enhance leadership skills;
Expand professional and personal network; and
Develop best practices and guidelines to shape the future of our industry.
Cannabis industry companies face more and sometimes greater threats than non-cannabis companies because of the emerging nature of the market, a complex regulatory landscape, and investor relations.
Because of the challenging landscape, cannabis organizations have some unique risks they may face while running their businesses including:
High investor expectations and limited access to capital
The federal status of cannabis
Varying trade practices from state to state
Lack of bankruptcy protections
Increased merger & acquisition activity
State-by-state licensing requirements
Cannabis-specific local, state, and federal tax laws
Private companies in the cannabis market face threats from many directions, business leaders need to protect their assets and be able to attract top potential directors and officers to their company. The increased exposure to litigation includes disputes such as shareholder disagreement, allegations of mismanagement, and actions by regulatory agencies. Lawsuits can be levied against a cannabis company’s directors and officers and create risk for these individuals and the cannabis company. One way to help mitigate the risk of future losses is by getting Directors & Officers (D&O) insurance.
Directors & Officers Liability Insurance, or D&O, is a coverage designed to protect an organization and its directors and officers from being held financially responsible for legal action taken by an organization’s employees, vendors, customers, or shareholders. D&O insurance primarily covers the costs associated with an allegation and wrongful lawsuits including defense costs, legal fees, and settlements. D&O insurance does not cover illegal acts.
What is generally covered with D&O Insurance?
Coverage varies, but typically D&O policies encompass three main insuring agreements: Side A, Side B, and Side C. The structure of a policy depends on which of these three insuring agreements are included. Each insurance agreement can specify a distinct insured party.
Side A
When indemnification is either barred by law or an organization is insolvent and unable to indemnify, the individual director and/or officer can be at risk and responsible for losses. Side A offers protection for an individual’s personal assets in case of a non-indemnifiable loss.
This offers an extra layer of protection if a company is unable to pay for losses in cases like bankruptcy or regulatory investigations.
Side B
Side B provides reimbursement for the defense of a corporation for expenses incurred while defending its organization’s directors and officers. This protects a company’s corporate assets.
Side C
Side C, also known as entity coverage, protects a corporation’s interests if a corporation is named in a suit alongside directors and officers. This coverage provides entity asset protection for legal fees, settlements, or other related costs for covered claims, subject to a policy’s terms and conditions. Side C has a broader implication for private and non-profit companies, as Side C typically only protects public companies from securities claims.
When should you have conversations with your broker?
Buying the correct insurance coverage can be a confusing undertaking for Cannabis business owners. Insurance Agents/Brokers are critical in helping their clients navigate this process and serve as trusted advisors to find the best fit for their client’s businesses. This article aims to demonstrate the differences between admitted and non-admitted policies and their implication for your Cannabis clients.
Running a cannabis company can be challenging and often requires leveraging an insurance broker that understands the cannabis industry. Some questions to help decide when to have conversations about Directors’ & Officer’s coverage include:
Are you planning on taking on new investors during the next 12 months? As you take on investors, it increases your risk profile as shareholders can sue on their own behalf or in the name of the corporation. These suits may allege a breach of a director’s or officer’s fiduciary duties of care and loyalty to the company. This type of litigation can result in issues of conflict between the shareholders, the company, and the individual director and officer defendants.
Are you hoping to hire an executive or team of executives within the next 6-12 months? As the cannabis market begins to expand, cannabis companies are looking to attract top talent and at the executive level, D&O coverage is an advantage to many candidates.
What is an example of a recent lawsuit within the cannabis industry?
Private companies in the cannabis market face threats from many directions. Business leaders need to help protect their assets and be able to attract top potential directors and officers to their company. Below is a recent example of a lawsuit from the Cannabis industry:
PH Invesco LLC v. Pure Harvest Corporate Group Inc et al., case number 1:22-cv-00094, in the U.S. District Court for the District of Wyoming. Colorado-based cannabis farm Pure Harvest Corporate Group Inc. was hit with a suit by a lender that claims the farm and its CEO breached the terms of a $4,000,000 line of credit it took out. (2022)
This information is provided for general informational purposes only and is not intended to provide individualized business, insurance, or legal advice. All descriptions, summaries, or highlights of coverage are for general informational purposes only and do not amend, alter or modify the actual terms or conditions of any insurance policy. Coverage is governed only by the terms and conditions of the relevant policy.
Jon Spratt leads Greensite Insurance, a specialty MGU providing boutique insurance coverage to the rapidly expanding Cannabis industry. Greensite launched in 2021 and is partnering with agents/brokers to help better protect their clients. Jon also runs a business accelerator that develops and launches new programs on behalf of Aon programs.
Greensite Insurance Services is the brand name for the brokerage and program administration operations of Affinity Insurance Services, Inc. a licensed producer in all states (TX 13695); (AR 100106022); in CA & MN, AIS Affinity Insurance Agency, Inc. (CA 0795465); in OK, AIS Affinity Insurance Services Inc.; in CA, Aon Affinity Insurance Services, Inc., (CA 0G94493), Aon Direct Insurance Administrators and Berkely Insurance Agency and in NY, AIS Affinity Insurance Agency
Service Solutions | 9.27.22 | The Devil is in the Details: Claiming Your Employee Retention Credit as a Cannabis Business
NCIA’s Service Solutions series is our sponsored content webinar program which allows business owners the opportunity to learn more about premier products, services and industry solutions directly from our network of established suppliers, providers and thought leaders.
In this edition originally aired on Tuesday, September 27, 2022 we were joined by the experts from ERT Credit for an exclusive webinar outlining how cannabis businesses can take advantage of The Employee Tax Credit (or ERC) which has currently only been claimed by a small fraction of cannabis businesses, and most importantly, as a payroll tax credit is not subject to Section 280E.
Think your cannabis-related business does not qualify for COVID-19 relief funds worth up to $26,000 per employee.? You’ll leave the session with a roadmap for next steps to determine eligibility and maximize your claim so you don’t miss out on a potentially guaranteed refund worth hundreds of thousands of dollars and in some cases millions.
At the conclusion of the discussion our panel hosted a moderated Q&A session to provide NCIA members an opportunity to interact with leading minds from the cannabis accounting and technology space, join today to contribute to future conversations!
40:46 – Audience Q&A (If your business is still operating – what are the taxes due on the tax credit?)
42:04 – Audience Q&A (I was told that ERC money is not available for the cannabis industry due to 280e. How are you navigating that compared to others trying to provide the same services?)
44:31 – Audience Q&A (Does this apply to cultivation facilities also?)
46:42 – Audience Q&A (What if we apply and don’t receive our money or we are denied the credit?)
48:09 – Audience Q&A (What if my accountant/lawyer says I don’t qualify?)
49:41 – Audience Q&A (How can I find more details on how to navigate the 280e concerns?)
50:58 – Audience Q&A (So if you went out of business before or soon after getting the tax credit you would not have any (or minimal) tax impact from taking the tax credit?)
53:24 – Audience Q&A (Do I have to spend the money on my payroll? Or can I use it towards my other business expenses? Any other restrictions?) 54:26 – Audience Q&A (So is this a credit for my company towards next year or do I get an actual check like a refund?)
01:05:28 – NCIA Lobby Days 2023 Member Appreciation
Sponsored By:
NCIA Accepting Applications For 2023-2025 Board of Directors Term
NCIA has extended the application deadline for members seeking to apply for a seat on our board of directors. We are now accepting applications for eligible candidates to apply for the board through Friday, November 25, 2022.
The National Cannabis Industry Association is a nonprofit organization run for and by its membership, so we hope you’ll consider this opportunity to apply for a seat on the NCIA Board.
Serving on NCIA’s Board of Directors is no small task. Board members are responsible for overseeing the strategic direction of the largest and most influential cannabis industry organization in the country. Board Members are also responsible for building membership, fundraising, and ensuring that NCIA continues to be the strongest force advocating for the fair and equal treatment of the industry on Capitol Hill.
Current NCIA members in good standing are eligible to apply for a seat on the board. NCIA members who are interested and qualified to serve on our board are encouraged to submit an application for review by our nominating committee before the November 25 deadline.
Candidates may apply directly for a board position during the open application process. The application form asks for information about the candidate’s professional background, unique talents, skills, and viewpoints, and ability to contribute or raise financial resources for NCIA. Candidates must be fiduciaries of a NCIA member-business
Who Qualifies To Run For A Board Position?
To be considered for a seat on the board, a candidate must be a fiduciary (e.g. owner, president, CEO) of a current member business at any level of membership or must be a representative of the business that has been appointed to serve by a fiduciary. Candidates must submit an application online by November 25.
What Are The Requirements For An NCIA Board Member?
Board members serve two-year terms and are responsible for overseeing the association’s overall strategy and budget, assist in the development of strategic relationships, and as ambassadors of NCIA, they represent more than 1,000 member businesses. In general, the NCIA board meets in person twice and conducts 2-3 video conferences per year.
How Are The Board Positions Selected?
Once the application period closes, NCIA’s Nominations Committee will convene to carefully review and score all applications. The committee will ultimately select a slate of nominees to fill six (6) available board seats that are best suited to bring additional talent, resources, and diversity to our growing organization, based on their qualifications.
Our Nominating Committee will be comprised of the chairs of our 14 member committees as well as a select number of current board members whose terms are not expiring this year. Once the Nominating Committee selects the slate of six, members will be notified at the end of this year.
Last week, 100 NCIA members traveled to our nation’s capital to execute more than 100 Hill meetings in one day. We mingled with members of Congress, lobbied legislative staff, and rendezvoused at some fabulous receptions. Keep scrolling for some photos and highlights, and see why you don’t want to miss our 11th Annual Lobby Days in May 2023!
Many thanks to everyone who participated and made the event possible, including our sponsors and DEI Scholarship attendees.
Pre-event:
Planning and executing a fly-in is no small feat – especially with COVID restrictions! NCIA’s government relations team, Michael Correia, Michelle Rutter Friberg, and Maddy Grant worked diligently to ensure that our members had a number of impactful meetings. We prepped NCIA members with virtual training and connected lobbying teams ahead of time.
Welcome Reception:
After touching down, our attendees met at Player’s Club D.C. for a night of games, networking, and celebration! NCIA awarded Congressman Ed Perlmutter (D-CO) the Lifetime Legislator Achievement Award for his tireless work and advocacy on behalf of the cannabis industry, and in particular, his work on the SAFE Banking Act. Rep. Perlmutter is retiring so we were thrilled to be able to chat with him and celebrate the progress this topic has made.
Group Photo:
Attendees gathered in the morning at the Peace Circle to connect with fellow teammates and to pose for our annual “class photo!”
Hill Meetings:
Over the course of six hours, we were able to execute more than 100 congressional meetings! That includes priority Senate offices, committees of jurisdiction, and House offices.
Press Conference:
NCIA attendees, the media, and members of Congress gathered at the “Senate Swamp” (yes, seriously!) for a press conference on passing the SAFE Banking Act. Lead sponsor Sen. Jeff Merkley (D-OR) spoke on the need for reform, while his Republican counterpart Sen. Steve Daines (R-MT) sent a quote due to scheduling conflicts. Rep. Ed Perlmutter (D-CO) also joined us again to call on the Senate to pass SAFE.
Closing Reception:
After an incredibly productive day, NCIA members were joined by Rep. Earl Blumenauer (D-OR) and Rep. Nancy Mace (R-SC) for a reception just steps from Capitol Hill. Their message was clear: cannabis is a winning issue for both parties!
Committee Blog: The Importance of Feasibility Due Diligence Prior to Purchase of a Cannabis Facility
by Kathleen May, Sonny Antonio, Casey Rivero, David Vaillencourt NCIA’s Facilities Design Committee
In our previous blogs, the Facility Design Committee authors emphasized the importance ofdefining facility layout and design components during the planning phase of facility purchase, infrastructure, and operational flow of processes and materials. This blog dives further into the often overlooked variables that we have seen significantly impact operational timelines, and in some cases send business owners back to the drawing board at considerable cost. These critical areas are the capacity of your utilities – specifically a) Electrical Facilities, b) Gas Facilities, and c) Phone and Cable.
ELECTRIC FACILITIES
Do you know how much power your operation will require and whether the facility and utilities are capable of supporting your requirement? Facilities should be designed to meet the electrical demands of equipment operation, lighting, and accurate functionality of HVAC systems. Processes and procedures should be designed according to the requirements outlined in the National Electrical Code (NEC), Institute of Electrical and Electronics Engineers (IEEE), National Electrical Safety Code (NESC), International Building Code (IBC), International Energy Conservation Code (IECC), and any other relevant standards dictated by the Authority Having Jurisdiction (AHJ).
Key questions to ask:
Is the electric capacity adequate to support the operations planned in the facility?
Is primary (main) and secondary (meter) power installed?
Is there three (3) phase power?
If three (3) phase is required, is it available?
If it is not available, has the cost to supply the facility with three (3) phase been budgeted for?
Power Company Capacity
Does the local power company have the capacity to support the facility? Has there been discussion with the local power company to communicate capacity needs?
If the capacity is not supported, is there an opportunity that it will be?
Why does this matter?
Cannabis operations, especially growing plants require a significant amount of electrical capacity and existing buildings were rarely designed to handle these requirements. Further, just because you see power lines nearby, this does not mean that they can magically handle whatever power requirements you need. Our national power grid has many limitations, and depending on the jurisdiction and local power authority may not have the resources to meet your needs.
What can I do?
If you aren’t absolutely certain that you have sufficient power capacity, assess the proposed location with a Subject Matter Expert (SME) and a representative from the local Power Company.
Walking the site to confirm what has been verbally communicated is critical. Discrepancies are not uncommon.
GAS FACILITIES
The same types of questions that were asked for the Electrical Facilities should be asked when confirming gas facilities and capabilities. Key questions may include:
Is the existing gas service adequate for the operations planned for the facility? Just like with electrical power – confirming the presence of a gas meter does not guarantee that the gas capacity is adequate for the operation.
If upgrades are required or if a new gas line needs to be installed, have those costs been budgeted for?
Again, hiring a consultant with subject matter expertise in gas utilities, gas lines, and gas pressure would be beneficial when speaking with the local gas company.
PHONE and CABLE
While many across the country have ditched landlines in favor of cell phones, the same is far from true for new businesses, especially with the security requirements needed for a cannabis facility.
Are phone and cable required for the operation? If so, some key questions to consider are the following:
What size and speed are required to support specific needs (i.e., security)?
Is the existing wirelarge enough for my needs? If not, is it possible to get phone and cable to the site?
Is satellite an option if phone and cable are unavailable?
Have all costs been budgeted for?
Especially in rural or newly designated economic improvement zones, high-speed internet access may be limited. Service Level Agreements (SLAs) provide the assurance of minimum uptimes. A car crash into a nearby service line or other technical glitches can quickly put you out of compliance with 24/7 camera monitoring requirements, intrusion detection systems, and more. In many cases, it’s wise to consider redundancy from secondary providers where available.
In Conclusion…
Every site and facility is different and may or may not be sufficient for the overall operations planned. Site and facility capabilities should be assessed for each project and assumptions should not be made based on previous experience. Ask the critical questions upfront and invest in experts that understand these key components of facility layout and design. Proper planning will avoid project setbacks and unexpected obstacles, and will always save time and money.
The Facilities Design Committee focuses on providing NCIA members and regulators a framework and information about facilities design options through which legal producers can plan for GMP level production as the market transitions from a state to a federally regulated industry.
Committee Insights | 8.23.22 | Changing the Game for Women in Cannabis
In this edition of our NCIA Committee Insights series originally aired on Tuesday, August 23, 2022 members of NCIA’s Retail Committee convened an all-star panel of leading investors, entrepreneurs and C-Suite executives alongside retail and marketing experts to discuss how the time to “move the needle” for women in cannabis is gone… It’s time to change the game.
Female executive representation in cannabis has shrunk to 22% in 2021 from 36% in 2019 (below the average 30% in mainstream businesses). Learn how to advance women and tap into the single greatest market opportunity for legalization and sales. Tune in now to get actionable solutions to implement today and get your business and our industry back on track.
Learning Objectives:
• Discover the definition of a female-friendly cannabis retail experience
• Get a suite of actionable solutions to increase success and profitability
• Learn the best career paths in cannabis for female candidates
• Learn where male dispensary buyers are missing the mark
• Identify opportunities across the supply chain to attract women
Where are they now? This month, NCIA’s editorial department continues the monthly Member Spotlight series by following up with three of our Social Equity Scholarship Recipients as part of our Diversity, Equity, and Inclusion Program. Participants are gaining first-hand access to regulators in key markets to get insight on the industry, tips for raising capital, and advice on how to access and utilize data to ensure success in their businesses, along with all the other benefits available to NCIA members.
First off, we have rebranded. We are now Cannvas Events. The name change was part of our evolution and maturation as a startup. As we scaled, more resources became available for things like branding. We brought in Greg Hill of Brand Birth to deploy the science of branding and the end result was a new name, new logo, and new understanding of where we were situated in the regulated cannabis ecosystem. The transformation led to the planning and production of our signature Cannabis Event 2.0 offering, the inaugural Saturnalia Canna Carnival, taking place at the Trinity Health Arena in Muskegon, MI on August 2oth. We are powering a traditional indoor/outdoor carnival – rides and attractions included – with a hassle-free, normalizing consumption solution. If you’re in the Midwest, come join us as we celebrate the first year of an iconic, perennial cannabis festival. Tickets and info at cannvasevents.com and follow us @saturnaliacannacarnival
Would you like to share anything that came out of being in the Spotlight previously?
The Spotlight feature presented tremendous value. The first year of the cannabis startup journey is devoid of financial revenue. Unless you’re needle-in-the-haystack lucky, it’s not even a consideration. The money is flowing in the opposite direction. So, the only available revenue, or currency, are the relationships. If you’re fortunate, these become renewable resources upon which you can draw repeatedly, and managed properly, they have no expiration date. You can bank them like any currency and you have much more influence on their stability, than on fiat currency. For me, that one relationship was with Michael Schwamm, who leads the Duane Morris cannabis practice out of New York. Michael opened doors for me and got me into rooms that I was previously unaware existed. That access has made all of the difference for me, personally, and for Cannvas Events. And had it not been for the Spotlight, I would have never been in position to enjoy that access.
Endo Industries
Since the last spotlight, you’ve joined the DEI Committee and its Regulatory Subcommittee. Anything you’d like to share about that experience thus far?
I’m impressed by the brilliant folks on the committee, and their dedication to making cannabis equitable. It takes time out of our grueling work days to contribute time on these committees but the contribution to making the industry better is crucial during these developmental years of cannabis. Perhaps our current misguided, harmful CA cannabis policies could have been prevented with more early participation from stakeholders who are stewards of the plant. However, there were many factors involved with the way CA policies were created, including special interest money from those who don’t care or want to see the industry fail.
It’s been a painful journey living through the consequences of these challenging policies as a cannabis operator. It takes a long time to change once it’s been passed. However, companies who are willing to work together in these important processes will survive and write a new path to move forward. Most of us can’t wait anymore for things to change so we need everyone’s active participation now, whether it’s writing an email to your constituents or being a part of NCIA!
California cannabis seems to be going through terrible challenges. Is there anything you’d like to share about what you’re seeing, or about some of the solutions our members can support with?
Overburdensome taxes and high barriers to entry for licensing throughout the state are most obvious right now. The lack of diversity and equity, consumer education, state and federal funding for further research and development also play a huge role in CA’s struggles. I’m frustrated that the State doesn’t understand that those who have been dedicated to the industry, collaboration and this plant are the only ones who can truly guide this industry forward.
NCIA members can lend support by truly including legacy, equity, and other diverse teams into your conversations and partnerships, and opening our eyes to value brought to the table by different communities. I would also encourage members to think about ways we can create awareness to our consumers to make better buying decisions. We have left all the medical properties of cannabis while legalizing, and that’s also why the industry is failing. Lastly, we need to keep pushing for more consumption lounges and events!
At Endo Industries, we built our company on principles of collaboration, science, equity and inclusion. Most notably, we offer critical supply chain support through our tissue culture services, and certified virus-free clean clones for growers, breeders and brands. If you know good operators who could benefit from our support, please send them our way. I cannot stress enough that the work Endo is doing is crucial for the success of the supply chain right now.
Would you like to share anything that came out of being in the Spotlight previously?
We’ve gotten great exposure for being featured in Spotlight. Endo and myself are more internet searchable, which in this day in age means we are real people!
People started sharing the link to the Spotlight to use as an introduction to Endo and myself as a founder. We’ve been told by clients who decided to work with us because they came across the feature when researching Endo. It solidified their desire to pick us because we are bullish about our values because our business model is strategic and collaborative.
It’s great to be co-signed by a credible organization like NCIA, and it goes a long way for a small business that doesn’t have an abundance of marketing and PR resources. I’ve hid in the shadows for far too long. My journey and passion for cannabis needs to be told and celebrated. Endo as a company needs exposure so we can reach a larger audience. I’m grateful for NCIA and look forward to our continued relationship.
Next Level Edibles
What’s new in the world of Next Level Edibles?
There is a lot new in the world of Next Level since our Equity Spotlight in September of 2021. In December, we had a booth, sponsored by the awesome team at The People’s Ecosystem, in Moscone Center at NCIA San Francisco. It was our first time attending an expo, let alone having a booth, and it was a great opportunity to grow our brand while creating relationships for future business opportunities. In the second week of the new year we launched our 1000 mg full spectrum coconut oil in Ivy Hill Oakland. And, later that month, we were welcomed into the Third Cohort of Momentum, Eaze’s Cannabis Business Accelerator. Two weeks before classes began, in early April, we launched our infused fast-acting brown sugar in 7 Star Holistic Healing Center. And in May, we attended MJ Unpacked NYC with other graduates of Our Academy.
California cannabis seems to be going through terrible challenges. Is there anything you’d like to share about what you’re seeing, or about some of the solutions our members can support with?
California Cannabis is facing challenges on many fronts. Countless unnecessary hurdles to legal entry, political red tape, and excess packaging waste to name a few. But the biggest challenges are around security. Every week there is news of a new dispensary, farm, distributor, and friend being burglarized. High tech security systems, gates, and cameras are no match for organized thieves and slow police responses. Until we can get a portion of our excessive taxes dedicated to funding police divisions that specifically targets cannabis thieves, the best solution to combat this is to support your favorite brands by purchasing their products through legal cannabis retail sources.
Would you like to share anything that came out of being in the Spotlight previously?
Being in the Spotlight helped our company tremendously. It allowed us to grow our cannabis network as plant-touching and ancillary companies reached out from all over the country. In addition, the visibility it provided us helped connect with the team at The People’s Ecosystem which led to our booth at NCIA’s Cannabis Business Summit and our new supply chain partners. It provided the traction we needed to help us get to the next level.
Committee Blog: Announcing The NCIA Best of 420 Clio Cannabis Award
The Clio Cannabis Awards, September 29, 2022 in Las Vegas at the MGM Grand
During the winter of 2021, when vaccines were not yet widely available, and many people were still in lockdown, the NCIA Marketing and Advertising Committee was determined to shine a light on those in our community who were fueling opportunity and growth during a difficult time for many businesses.
MAC Chair Kary Radestock of Hippo Packaging assembled a subcommittee tasked to amplify top member marketing efforts and thus the Best of 420 Award program was born. The 2021 event received dozens of submissions from all over the U.S. across all business sectors and budget sizes and was conducted and presented virtually. See last year’s winners here.
For 2022, NCIA and the Marketing and Advertising Committee are bringing it back and this year, it’s going to hit differently.
Through the guidance of our subcommittee co-chaired by Melinda Adamec of Gabriel Marketing and myself, Tara Coomans of Avaans Media, we’ve also enlisted Michael Kauffman of the Clio Awards, Angela Wong of The People’s Ecosystem, and Vanessa Valdovinos of Hush Chicago to provide support to this year’s process and expand this award.
The winning honoree will be presented live at the 2022 Clio Cannabis Awards to be held on September 29th at the MGM Grand in Las Vegas.
What’s Staying The Same:
NCIA invites all cannabis companies and brands, both B2B and B2C to submit their 420 campaigns—NCIA membership is not required. Budgets of all sizes and companies of all types, B2B and B2C, are encouraged to apply.
It’s still FREE
A jury of NCIA members and peers who will evaluate submissions and recognize the top entry.
What’s Changing:
Winners: There will be one winner and this winner will be chosen based on three criteria.
Judging Criteria
Criteria: Judges will evaluate entrants in three ways: Community Impact, Creativity, and Results.
Community Impact: How did your campaign bring your community together? How did it highlight the best of the cannabis community to others? Did it support an advocacy campaign such as DEI, sustainability?
The cannabis industry is showing the world how an industry-aligned can create positive change. How does your campaign positively impact either the cannabis industry, your customers, the environment, underserved or unrecognized cannabis users, or businesses?
Creativity: How creative was your overall 420 campaign? How creative are you in getting out your message and implementing the campaign?
Results: Was it an effective campaign by your own goals and KPIs?
This category is one of the most important because our judges will judge the results based on your goals. Regardless of budget size or market size, show us your results. Results are those KPIs that are important to YOU. Make sure you grab those baselines so we can see your progress!
Judges:
Selected from a diverse slate of NCIA members, including past winners and NCIA committee members from a cross-section of perspectives, including the Sustainability Committee, the Diversity and Equity Committee and the Marketing and Advertising Committee.
Submission Process and Deadline
Submit your company’s campaign today by following the link below! Act fast as entries will be collected over the following six weeks, with a deadline to submit by Friday, Jul 22, 2022.
Good luck to everyone and have a fantastic 420! Submissions are being accepted now! We look forward to seeing your exceptional campaigns!
About Clio Clio is the premier international awards competition for the creative business. Founded in 1959 to celebrate creative excellence in advertising, Clio today honors the work and talent at the forefront of the industry in a variety of specialized fields, including: sports, fashion, music, entertainment, cannabis, and health. As a leading authority on the diverse and ever-changing creative landscape, Clio celebrates creativity 365-days-a-year via its global ad database Ads of The World and its content platform Muse by Clio. https://clios.com/ https://musebycl.io/ https://www.adsoftheworld.com/
About Clio Cannabis Expanding on Clio’s enduring reputation for establishing best-in-class programs honoring creative ideas in a variety of specialized verticals, Clio Cannabis celebrates the creators at the forefront of cannabis marketing and communications. Launched in 2019, Clio Cannabis sets the bar for creative work in a rapidly growing industry, builds a greater understanding of a developing category, and elevates creative contributions from top talent and agencies. https://www.cliocannabisawards.com/
Media Partner
For hints and tips on winning award programs, with hints and tips from the entire Marketing and Advertising Committee, listen to the replay of our recent webinar:
Committee Blog: Everything You Wanted to Know About Cannabis Facilities but Were Afraid to Ask Field Guide – Part 4 – Retail
by NCIA’s Facilities Design Committee Jacques Santucci, Brian Anderson, David Vaillencourt, and David Dixon
Continuing our five-part series on the behind-the-scenes workings of the legal cannabis industry. This series focuses on all of the inner dealings and industry advice from established professionals to craft this unlimited How-to-Guide to assist you in setting up your own facility. These articles cover cultivation, extraction, infused products, and retail facilities as well as support activities. In general, remember to be compliant with all local rules and regulations and contact a licensed contractor and industry expert.
Part Four, Retail & Dispensaries: Top Things to Consider When Planning Your Cannabis Dispensary and Retail Operations
Retail and dispensary design presents challenges that are distinct from the other areas of cannabis production and manufacturing. The biggest difference is that the design must now account for customers as well as employees. Listed below are a number of issues that an operator should consider as they are in the process of designing their retail or dispensary operations. Always remember to be compliant with all local rules and regulations.
Security Camera: Minimum Area of Coverage
Most states require a hundred percent minimum security coverage in any area where marijuana products are stored, displayed, or sold. Designing a camera system and placements to avoid “dead spots’ ‘ (i.e. areas with no camera coverage) can be challenging, especially if the operation is taking over an existing space, as opposed to building a new facility from scratch.
Bonus Consideration: Think about having an HVAC system specially dedicated to your security room. Security rooms for video monitoring and storage can sometimes be an afterthought. But these locations should be treated more like computer server rooms as opposed to standard office space. And with the amount of technology placed in a (typically) small space, things can overheat rather quickly. This can lead to damage to the system and ultimately, you could be out of compliance for video storage and retention.
Another Bonus Consideration: do not forget about placing security cameras to cover the entrance and exit points to the parking lot. Think about the field of view around doors, especially if the door is near the corner of the building or if there are other obstructions that can block the camera’s view of the area. Multiple cameras may be needed for this critical function. Contact a licensed professional.
Security Camera: Minimum Data Storage
Video storage and retention requirements for cannabis facilities are fairly stringent. Typical requirements include 90-days of on-site storage and up to five years of off-site storage. Off-site data storage is required for future legal needs. Many states require a minimum video resolution of 1080p. The video storage needs for even a moderately sized facility can amount to petabytes of data. For this reason, many facilities outsource this function at least in some measure. If you do decide to handle this all yourself, you should be sure that you have the technical expertise on your staff to handle this potentially complex technical issue.
Security Alarm: Monitoring
Like it or not, retail cannabis facilities will probably always be targets for crime. Having a security system probably seems like a no-brainer. But simply having an alarm system isn’t typically enough. You will need a system that is actively monitored. This allows the company to initiate actions on your behalf depending on the alarm status (e.g., call the police or fire department in response to a remote alarm). Your alarm should be monitored by at least one reputable company. Redundancy might not be needed, but check to be sure that you are in compliance with local rules and regulations. Talk to your licensed professional.
Security: Line of Sight
Customers should only see the public retail area of the location. Customers should not see the back-of-house operations. There is no need for them to see how business is conducted other than at the sales counter. Similarly, there is no need for customers to be able to view the offices, inventory areas, working areas, employee break room, etc. Keeping these areas private helps to avoid bad actors from learning operational routines that might make it easier for them to exploit.
Safety and Injury Handling
This is an easily overlooked area but can definitely get your dinged upon inspection. Be sure you have the appropriate amount of first aid kits and burn kits onsite as reunited by local regulations. Pay particular attention to the regulations about the placement of these kits as they are sometimes required to be within visual distance of specific rooms within your facility. It can be a hard pill to swallow to not be able to get your operation certificate for forgetting such a simple item, but it happens all too frequently.
Employee Access
Having a non-customer door or access point is a best practice. Non-customer access points are where employees and products are brought into the facility without customer line-of-sight. In some states, this is a requirement so check to be sure your facility is in compliance with laws and regulations.
Product Delivery
Getting cannabis products into a retail facility is a critical part of the merchandise flow and one of the most vulnerable points for theft. For maximum safety and control, consider the use of an air-lock/man trap/sally port door arrangement. If not possible due to location or architecture, planning for business hours separation and process can keep customers separated from deliveries.
Employee and Counter Safety
The counters where transactions occur in a cannabis retail setting can pose some risks especially since most facilities are cash-based operations. An open style counter can open up opportunities for theft. Consider a security barrier counter. The idea is to attempt to prevent customers from having access to products, cash, or employees where possible.
Security: Egress
Customer flow can be somewhat challenging, especially in facilities that have a registration lobby that is physically separated from the retail sales floor. Having separate entry and exit doors for customers can help with the flow of customers. Not a requirement but potentially a good customer experience design.
Customer Environment
Dispensaries and retail locations can be busy places at times. In COVID times, this can be a big issue. But even under non-pandemic circumstances, there may be a need to control the number and spacing of customers for both safety and privacy. Social distancing- the process of limiting the number of customers for the available space within the building- can be enhanced through various design elements. These can range from the use of rope and stanchion barriers, to signage and floor stickers.
Lobby design for restricted access – if access to the sales floor is restricted to registered customers, a secure lobby space should be provided with a separated check-in space and access-controlled doors both for customer entrance and egress.
And do not forget bathroom access for customers. You can have a single facility that is unisex but it should also be ADA compliant.
Environmental Consciousness
Unfortunately, like most other retail spaces, cannabis retail still generates a significant amount of waste. And much of it may be recyclable. Business recycling bins should be provided.
Energy-saving considerations can also be important for retail facilities. Motion detecting light systems can reduce energy consumption in non-occupied spaces. At the very least, interior lighting switches should be located in the same area for easy use upon space exit. HVAC systems should have an occupied and unoccupied night setback capability.
Parking Lot
Depending on the total number of employees and customers you anticipate visiting your business at its peak times, you will need to design a minimum number of accessible parking spots.
If curbside pickup is legally allowed in your area, be sure to map out and reserve spaces exclusively for this activity. It should be close to the exit door where the product will be delivered to the customer. Remember to keep parking spaces for handicapped people and even maybe for motorcycles.
Survey: NCIA Retail Committee Wants To Hear From Cannabis Retail Employees
NCIA’s Retail Committee is looking to gauge what educational material may be the most useful in order to better direct our efforts on content creation for all cannabis retail employees.
We would like to hear from those who are most affected by training and continued education, in hopes of being able to provide tools that will enable all retailers and retail staff to grow and develop.
On February 2, 2022, Mississippi Governor Tate Reeves signed the Mississippi Medical Cannabis Act (SB 2095) into law, making Mississippi the 37th state to authorize the medical use of cannabis. Passage came after the voter-approved ballot measure allowing a medical cannabis program was struck down by the Mississippi State Court. The Mississippi Department of Revenue (MDOR) has 150 days from enactment to begin the process of licensing dispensaries and is working with the Mississippi Department of Health (MDOH) to design the application process. The Alcoholic Beverage Control Enforcement Division of MDOR will be the division accepting the license application and will begin accepting applications no later than July 1, 2022. Thirty days after receiving a completed application, it will have to issue dispensary licenses to qualifying applicants.
Patient Qualification and Limitations
To qualify for the program, patients must have at least one qualifying medical condition and a certification issued by a healthcare practitioner with whom they have a bona fide relationship. A “bona fide practitioner-patient relationship” means the practitioner has a treatment relationship with the patient during which the practitioner has completed an in-person assessment of the patient’s medical history and current mental health and medical condition; has consulted in person with the patient about the patient’s debilitating medical condition; and the practitioner is available to or offers follow-up care and treatment to the patient. The practitioner must be a Mississippi-licensed physician, nurse practitioner, physician assistant, or optometrist. They must believe the patient “would likely have medical or palliative benefit” from medical cannabis to treat their qualifying condition. They also must have completed 8 hours of continuing medical education on medical cannabis and complete five hours every year thereafter.
The qualifying conditions are cancer, Parkinson’s, Huntington’s, muscular dystrophy, glaucoma, spastic quadriplegia, HIV, AIDS, hepatitis, amyotrophic lateral sclerosis (ALS), Crohn’s, ulcerative colitis, sickle cell anemia, Alzheimer’s, agitation of dementia, PTSD, autism, pain refractory to opioid management, diabetic/peripheral neuropathy, spinal cord disease, or severe injury. Patients can also qualify with a chronic medical condition (or its treatment) that produces either cachexia or wasting, severe nausea, seizures, severe and persistent muscle spasms, or chronic pain, narrowly defined as “a pain state in which the cause of the pain cannot be removed or otherwise treated, and which in the generally accepted course of medical practice, no relief or cure of the cause of the pain is possible, or none has been found after reasonable efforts by a practitioner.” There also will be a petition process for patients to seek coverage for other unspecified conditions.
The program limits possession and purchases to “Medical Cannabis Equivalency Units” (MCEUs) of 3.5 grams of flower, up to 100 mg of THC in infused products, or 1 gram of concentrate. Patients’ purchases are limited to 6 MCEUs in a week and 24 MCEUs in a month. They may not possess more than 28 MCEUs at one time. Flower is limited to 30% THC, with tinctures, oils, and concentrates not allowed to exceed 60% THC.
Regulation and Business Operations
The MDOH will be the primary regulator and coordinate with the MDOR for licensing and operations. MDOH will create the applicable regulations relating to seed-to-sale tracking, recordkeeping requirements, safe processing stands, transportation, health and safety, and security. It also will be responsible for monitoring and restricting advertising, signage, and displays. All products will contain a “notice of harm” regarding the use of medical cannabis products.
Licensing will be required for dispensaries, cultivation facilities, processing facilities, transportation entities, disposal entities, testing facilities, and research facilities. Cultivators will be tiered based on size, and the law does not include a numerical cap on business licenses. No individual or business may have more than 10% ownership interest in more than one cultivation license, one processing license, and up to four dispensaries. Application fees for cultivators will range from $1,500 to $60,000 depending on the size/tier of the particular cultivator, with annual fees similarly ranging from $2,000 to $100,000. Cannabis will be taxed at wholesale at 5% of the price, in addition to standard sales taxes.
Initially, dispensaries will not be able to provide delivery or curbside pickup for patients. Still, the law does provide that MDOH and MDOR are to implement rules that include “Protocol development for the safe delivery of medical cannabis from dispensaries to cardholders.” Dispensary staff will be required to complete an initial 8 hours of education on medical cannabis and 5 additional hours of continuing education every year. They also must be over 21 and obtain a work permit for $25. They also generally have been previously convicted of a violation crime or been convicted of a felony violation of a state or federal controlled substance law within five years. A disqualifying felony offense does not include a conviction for conduct that would not have been a felony but for the conduct occurring before the effective date of the Mississippi Medical Cannabis Act.
Medical cannabis businesses are not allowed to be located within 1,000 feet of the boundary of a school, church, or childcare facility, and dispensaries must be at least 1,500 feet from another dispensary. While localities can regulate the time, place, and manner of medical cannabis businesses, they can not ban them or “make their operation impracticable” unless they opt-out of the medical marijuana program by a vote of the localities governing body within 90 days of the law’s passage. If a locality opts out, 20% or 1,500 voters (whichever is fewer) can petition to put the question on the ballot, and an election must be held within 60 days.
Committee Blog: Everything You Wanted to Know About Cannabis Facilities But Were Afraid to Ask Field Guide – Part 2 – Extraction Facilities
by members of NCIA’s Facilities Design Committee Jacques Santucci, Brian Anderson, David Vaillencourt, and David Dixon
Continuing our five-part series on the behind-the-scenes workings of the legal cannabis industry. This series focuses on all of the inner dealings and industry advice from established professionals to craft this unlimited How-to-Guide to assist you in setting up your own facility. These articles cover cultivation, extraction, infused products, and retail facilities as well as support activities. In general, remember to be compliant with all local rules and regulations and contact a licensed contractor and industry expert.
Part Two, Extraction: Top Things to Consider When Planning Your Cannabis Extraction Operation
The extraction environment is akin to an industrial process and should be approached away from a safety and chemical handling standpoint. Here are some general considerations as you begin to plan your extraction operation that we often see assumed or overlooked resulting in major unanticipated barriers that significantly impact decision costs and timelines. Always remember to be compliant with all local rules and regulations.
Interior Building Materials
The walls and floors should be designed to be easily cleanable. In areas with solvent use, should have floors and walls made with the material, and ultimately the method for effective and ease of cleaning such FRP (Fiberglas Reinforced Panels).
Facility Specifications
There are many established standards from organizations like the NFPA and ICC-IFC which are commonly cited and required by Fire Marshalls with appropriate fire engineering controls, room interlocks, etc. Knowing which classifications are required based on the room type has a major impact on facility specifications (e.g. C1D1, C1D2, etc.) and the ultimate design. This requires knowing which solvents you will be using (and equally important, solvents you will not be using) as well as identifying all of the activities you will be doing in your extraction/processing facility (winterization, purification, bulk or final product packaging, and more) and whether the rooms will be wet and dry (how will you be cleaning these rooms?). How you answer those questions will help you and your team select the appropriate room materials and overall design.
Electrical Power Ideal Recommendations
Evaluate your utility power infrastructure, including street transformers and available power to your site when designing your facility. The power demand for a cannabis facility is significant and grid limitations can destroy or significantly delay the ability for a business to operate.
Losing power due to weather or events outside of your control are another major risk. When considering alternative power generation, consider a generator with auto-transfer switching and the appropriate fuel type, depending on location and local weather. Contact a local licensed professional. A generator can be an invaluable insurance policy as even a short duration power outage can destroy an entire crop and any products that must be maintained at critical temperatures.
Equipment Rooms and Maintenance Rooms
Appropriate space for equipment and dedicated rooms for maintenance is commonly needed. These all come with different combustion air requirements, venting requirements, air exchange rates, vacuum lines, and more. You may consider a room for spare parts and tools.
Appropriate Storage Area: Biomass, Volatiles, Raw Ingredients, and More
Separation of raw materials with appropriate and dedicated storage areas is needed for the various types of raw ingredients and materials utilized within a cannabis facility. Volatile solvents require extremely specific storage requirements, which will become part of your Chemical Hygiene Plan once you are operational. Refer to your local Fire Marshall for code considerations and from code organizations like the ICC and NFPA.
Cleaning and sanitation agents should be segregated from materials that are utilized in final product formulations (e.i food ingredients, oils, etc.) and raw materials ahead of the design is critical to ensure appropriate storage requirements are met whether indoor or outdoor. Biomass storage can vary based on whether wet or dry and often require controlled temperature and humidity. Finally, do not forget the dedicated space needed for finished good inventory.
Electrostatic Discharge (ESD) Safety
Do you know that shock you get when you are in your car in the winter or flipping on a light switch? Innocent in everyday life, but potentially lethal in an environment such as extraction rooms where highly flammable solvents could be present. Consider rated and non-rated clothing and other personal protection measures.
Food Grade Oil Considerations and Inspections
Extracted oils that will be used downstream in edibles and beverages are akin to ingredients that require Food Safety endorsements such as cGMP.
Equipment Ratings
Before selecting equipment for use, evaluation criteria should be established based on your business needs and compliance. Some authorities having jurisdiction require extraction equipment to come with stamps, certifications, or endorsements from organizations such as ASME, UL, and NFPA as relevant to ensure equipment safety and fit for use.
Room Environmental Controls
Grinding rooms often need separate dedicated ventilation and filtration to be checked against grinding method/equipment and concentration of particulate (typically measured in parts per million (ppm) in the air. Dust collection systems for grinding equipment are effective ways to keep dust levels at manageable levels, reducing the need for time consuming cleaning procedures. Extraction and final product rooms may require additional ventilation considerations and monitoring sensors depending on the extraction method or final product type. Example: Solvents will require sensors and air exchanges located near the ground level since most solvent fumes tend to be heavier than air.
HVACD Management
Designing your facility involves HVACD (Heating, Ventilation, Air Conditioning, and Dehumidification) management that considers airflow controls areas, airflow, and fire protection within control areas. Rooms may require positive and negative pressures with calibrated pressure indicators. You should aim at having a leveled constant environment.
Safety and Injury Handling
Facilities need to have sufficient accessible First Aid and Burn Kits on site. Safety and Emergency Showers are often determined by code and the type of extraction solvent in use at the locations. Eye wash stations may also be required.
Spill and Solvent Safety
In areas where solvents are or may be used, you will need to have barrier/spill kits specific to the solvents and extraction materials on hand. This barrier can be built in or hand delivered per emergency. Solvent storage locations, depending on the type of solvent and hazardous rating.
Having one or two dedicated people to run point on spills can be part of a comprehensive spill procedure that would include evacuation of the area, assessment of the spill and of the clean up technique, disposal method, etc. There are many materials that are not compatible or properties that make them volatile under certain circumstances so having dedicated people to evaluate the situation will save you time, money, and any possible mishaps.
Solvent Storage
Indoor and outdoor solvent storage are dictated by NFPA, ICC-IFC, and local regulations. Storage types and limits are essential to check before buying or building a facility. Fire professionals base these limits on several factors of flammability including class and volatility. You may also need to adhere to SARA Type III reporting depending on the solvent and storage amounts. Do not forget about solvent tank types, whether they need to be mounted or chained to walls, security access controls, and SDS requirements.
Solvent Enclosure
C1D1, C1D2 is needed for solvent use. The actual type of solvents (e.g. CO2, Ethanol, etc.), and volume of solvent will dictate the different requirements for enclosures. This section pertains to areas in which the solvent would be transferred, mixed, extracted, recovered, etc. The type of enclosure is dependent on the type and class of solvent. Most enclosures will have volume limits, containment, vapor detector, electrical and ventilation requirements.
Emergency Ventilation
Ensure wall switch and fast ventilation, automated ventilation when sensors are activated during spill of contaminate.Sensors to be located where appropriate for the substance in use. Coordinated with the fire marshall to meet local requirements through design with architect and mechanical teams.
Employee Access Control
Limiting door access, proper security labeling, and key sets for employees need to be part of your overall security plan. LThe idea is to prevent unauthorized personnel from accessing the extraction space compliant with the local regulatory body.
Equipment Regulatory Listing
There are requirements such as UL certifications/marks which are dependent on the actual device and intended use. Always contact your local code enforcement office and a licensed contractor.
Happy Earth Day! NCIA Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every other week on Facebook for NCIA Today Live.
This episode of NCIA Today is brought to you by Senseon.
Committee Blog: Poor Project Planning – A Costly Mistake for Cannabis Entrepreneurs
by NCIA’s Facilities Design Committee
Facility layout and design are important components of overall operations, both in terms of maximizing the effectiveness and efficiency of the process(s) executed in a facility, and in meeting the needs of personnel. Prior to the purchase of an existing building or investing in new construction, the activities and processes that will be conducted in a facility must be mapped out and evaluated to determine the appropriate infrastructure and flow of processes and materials. In cannabis markets where vertical integration is the required business model, multiple product and process flows must be incorporated into the design and construction. Materials of construction and critical utilities are essential considerations if there is the desire to meet Good Manufacturing Practice (GMP) compliance or to process in an ISO certified cleanroom.
All these activities require a well-thought-out and documented project plan. Unfortunately, many cannabis entrepreneurs that embark on the journey into the industry fail to properly plan, and furthermore fail to understand that proper project planning is the most critical stage of the entire project. Inadequate planning is the primary reason projects spin out of control, take longer to execute, cost more money, and ultimately fail. Proper and effective project planning involves comprehensive mapping and organizing of project objectives and goals, identifying tasks and deliverables, maintaining schedules, proper allocation of resources, and defining roles and responsibilities of team members before the project even gets off the ground. Most problems that lead to project failure can be avoided with proper project planning.
Why is project planning so important? The answer is simple. Proper project planning:
Ensures project performance and success.
When tasks, deadlines, deliverables, and responsibilities are defined upfront, there is a better chance the project will run smoothly, efficiently, and be successful.
Saves money (and keeps investors happy).
Failed projects are expensive. Rework and delays may lead to project scope creep which subsequently leads to going over budget and missing deadlines.
Improves team communication.
When everyone is on the same page and understands the objectives and expectations, projects are effective and timely. Routine team meetings to discuss potential roadblocks to deadlines are key to a project’s success.
Ensures resources are properly allocated.
Identifying team members with the appropriate skillsets to lead and manage the various aspects of a project is critical to the success of the project. Assigning an overall project manager is highly recommended.
Project status is tracked and documented.
Documenting target dates, deliverables, and metrics is critical for keeping a project on track. This allows everyone to be aligned and informed on tasks, timelines, expectations, and workflow.
There are several considerations when designing a cannabis operation, whether it is a grow room or a product manufacturing facility. Regardless of what type of facility is needed or desired, applicable local, federal, and international regulations and standards must be reviewed to ensure proper design, construction, and operation, as well as to guarantee the safety of employees.
Materials of Construction
The materials of construction for interior work surfaces, walls, floors, and ceilings should be fabricated of non-porous, smooth, and corrosive resistant surfaces that are easily cleanable to prevent harboring of microorganisms and damage from chemical residues. Flooring should also provide wear resistance, stain, and chemical resistance for high traffic applications. Interior and exterior (including the roof) materials of construction should meet the requirements of the International Building Code (IBC), the National Fire Protection Association (NFPA), Occupational Safety and Health Administration (OSHA), and other applicable building and safety standards, particularly when the use, storage, filling, and handling of hazardous materials occurs in the facility.
Utilities
Critical and non-critical utilities need to be considered in the initial planning phase of a facility build out. Critical utilities are the utilities that when used have the potential to impact product quality. These utilities include water systems, Heating Ventilation and Air Conditioning (HVAC), compressed air, and pure steam. Non-critical utilities may not present a direct risk to product quality, but are necessary to support the successful, compliant, and safe operations of a facility. These utilities include electrical infrastructure, lighting, fire detection and suppression systems, gas detection, and sewage.
Water
Water quality, both chemical and microbial, is a fundamental and often overlooked critical parameter in the design phase of cannabis operations. Water is used to irrigate plants, for personnel handwashing, potentially as a component in compounding/formulation of finished goods, and for cleaning activities. Water quality should be tested and monitored to ensure compliance to microbiological and chemical specifications based on the chosen water type, the intended use of the water, and the environment in which the water is used. Overall water usage must be considered during the facility design phase. In addition to utilizing water for irrigation, cleaning, product processing, and personal hygiene, water is used for heating and cooling of the HVAC system, fogging in pest control procedures, and in wastewater treatment procedures. A facility’s water system must be capable of managing the amount of water required for the entire operation. Water usage and drainage must meet environmental protection standards. State and local municipalities may have water usage limits, capture and reuse requirements, and regulations regarding runoff and erosion control that must also be considered as part of the water system design.
Lighting
Lighting considerations for a cultivation facility are a balance between energy efficiency and what is optimal for plant growth. The preferred lighting choice has typically been High Intensity Discharge (HID) lighting, which includes metal halide (MH), and high-pressure sodium (HPS) bulbs. However, as of late, light-emitting diodes (LED) systems are gaining popularity due to increased energy saving possibilities and innovative technologies. Adequate lighting is critical for ensuring employees can effectively and safely perform their job functions. Many tasks performed on the production floor or in the laboratory require great attention to detail. Therefore, proper lighting is a significant consideration when designing a facility.
HVAC
Environmental factors, such as temperature, relative humidity (RH), airflow, and air quality, play a significant role in maintaining and controlling cannabis operations. A facility’s HVAC system has a direct impact on cultivation and manufacturing environments, and HVAC performance may make or break the success of an operation. Sensible heat ratios (SHRs) may be impacted by lighting usage and RH levels may be impacted by the water usage/irrigation schedule in a cultivation facility. Dehumidification considerations are critical to support plant growth and vitality, minimize microbial proliferation in the work environment, and to sustain product shelf-life/stability. All of these factors must be evaluated when commissioning an HVAC system. HVAC systems with monitoring sensors (temperature, RH, and pressure) should be considered. Proper placement of sensors allows for real-time monitoring and a proactive approach to addressing excursions that could negatively impact the work environment.
Compressed Air
Compressed air is another, often overlooked, critical component in cannabis operations. Compressed air may be used for a number of applications, including blowing off and drying work surfaces and bottles/containers prior to filling operations, and providing air for pneumatically controlled valves and cylinders. Common contaminants in compressed air are nonviable particles, water, oil, and viable microorganisms. Contaminants should be controlled with the use appropriate in-line filtration. Compressed air application that could impact final product quality and safety requires routine monitoring and testing.
Electrical Infrastructure
Facilities should be designed to meet the electrical demands of equipment operation, lighting, and accurate functionality of HVAC systems. Processes and procedures should be designed according to the requirements outlined in the National Electrical Code (NEC), Institute of Electrical and Electronics Engineers (IEEE), National Electrical Safety Code (NESC), International Building Code (IBC), International Energy Conservation Code (IECC), and any other relevant standards dictated by the Authority Having Jurisdiction (AHJ).
Fire Detection and Suppression
Proper fire detection and suppression systems should be installed and maintained per the guidelines of the National Fire Protection Association (NFPA), International Building Code (IBC), International Fire Code (IFC), and any other relevant standards dictated by the Authority Having Jurisdiction (AHJ). Facilities should provide standard symbols to communicate fire safety, emergency, and associated hazards information as defined in NFPA 170, Standard for Fire Safety and Emergency Symbols.
Gas detection
Processes that utilize flammable gasses and solvents should have a continuous gas detection system as required per the IBC, Chapter 39, Section 3905. The gas detection should not be greater than 25 percent of the lower explosive limit/lower flammability limit (LEL/LFL) of the materials. Gas detection systems should be listed and labeled in accordance with UL 864, Standard for Control Units and Accessories for Fire Alarm Systems and/or UL 2017, Standard for General-Purpose Signaling Devices and Systems and UL 2075, Standard for Gas and Vapor Detectors and Sensors.
Product and Process Flow
Product and process flow considerations include flow of materials as well as personnel. The classic product and process flow of a facility is unidirectional where raw materials enter on one end and finished goods exit at the other. This design minimizes the risk of commingling unapproved and approved raw materials, components, and finished goods. Facility space utilization is optimized by providing a more streamlined, efficient, and effective process from batch production to final product release with minimal risk of errors. Additionally, efficient flow reduces safety risks to employees and an overall financial risk to the organization as a result of costly injuries. A continuous flow of raw materials and components ensures that supplies are available when needed and they are accessible with no obstructions that could present a potential safety hazard to employees. Proper training and education of personnel on general safety principles, defined work practices, equipment, and controls can help reduce workplace accidents involving the moving, handling, and storing of materials.
Facilities Management
Facilities management includes the processes and procedures required for the overall maintenance and security of a cannabis operation. Facilities management considerations during the design phase include pest control, preventative maintenance of critical utilities, and security.
A Pest Control Program (PCP) ensures that pest and vermin control is carried out to eliminate health risks from pests and vermin, and to maintain the standards of hygiene necessary for the operation. Shipping and receiving areas are common entryways for pests. The type of dock and dock lever used could be a welcome mat or a blockade for rodents, birds, insects, and other vermin. Standard Operating Procedures (SOPs) should define the procedure and responsibility for PCP planning, implementation, and monitoring.
Routine preventative maintenance (PM) on critical utilities should be conducted to maintain optimal performance and prevent microbial and/or particulate ingress into the work environment. Scheduled PMs may include filter replacement, leak and velocity testing, cleaning and sanitization, adjustment of airflow, the inspection of the air intake, fans, bearings, and belts, and the calibration of monitoring sensors.
In most medical cannabis markets an established security program is a requirement as part of the licensing process. Facilities should be equipped with security cameras. The number and location of the security cameras should be based on the size, design, and layout of the facility. Additional cameras may be required for larger facilities to ensure all “blind spots” are addressed. The facility security system should be monitored by an alarm system with 24/7 tracking. Retention of surveillance data should be defined in a Standard Operating Procedure (SOP) per the AHJ. Motion detectors, if utilized, should be linked to the alarm system, automatic lighting, and automatic notification reporting. The roof area should be monitored by motion sensors to prevent cut-and-drop intrusion. Daily and annual checks should be conducted on the alarm system to ensure proper operation. Physical barriers such as fencing, locked gates, secure doors, window protection, and automatic access systems should be used to prevent unauthorized access to the facility. Security barriers must comply with local security, fire safety, and zoning regulations. High security locks should be installed on all doors and gates. Facility access should be controlled via Radio Frequency Identification (RFID) access cards, biometric entry systems, keys, locks, or codes. All areas where cannabis raw material or cannabis-derived products are processed or stored should be controlled, locked and access restricted to authorized personnel. These areas should be properly designated “Restricted Area – Authorized Personnel Only.”
Future Expansion
The thought of expansion in the beginning stages of facility design is probably the last thing on the mind of the business owner(s) as they are trying to get the operation up and running, but it is likely the first thing on the mind of investors if they happen to be involved in the business venture. Facilities should be designed so that they can be easily expanded or adjusted to meet changing production and market needs. Thought must be given to how critical systems and product and process flows may be impacted if future expansion is anticipated. The goal should be to minimize downtime while maximizing space and production output. Therefore, proper up-front planning regarding future growth is imperative for the operation to be successful and maintain productivity while navigating through those changes.
4/20 and Policy: A Week to Remember
by Madeline Grant, Government Relations Manager
There is excitement in the air as we approach April 20; what we recognize as a national holiday for cannabis culture. The 2022 National Cannabis Festival will take place this Saturday, April 23 in Washington, D.C. Prior to a full day of music, vendors, and many more fun surprises, the National Cannabis Policy Summit will be held Friday, April 22 at the Ronald Reagan Building, also in D.C.
NCIA’s very own Deputy Director of Government Relations, Michelle Rutter Friberg, will give opening remarks to introduce the “Banking on Incrementalism: How and Should Congress Pass the SAFE Banking Act?” panel. Our long-time cannabis champion on Capitol Hill, Congressman Ed Perlmutter (D-CO), will present a special message to all attendees. If you want to tune in, please stay tuned for a link on one of NCIA’s social media platforms.
The panel will discuss the Secure and Fair Enforcement (SAFE) Banking Act and how it made history when it became the first stand-alone “pro-cannabis” bill to pass in a chamber of Congress in September 2019. Since that day, the House has passed the bill an additional five times, but the Senate, under both Republican and Democratic leadership, has refused to consider the legislation for various reasons. Support for SAFE Banking is evident through numerous allies, including dozens of Governors, states Attorneys General, Auditors, and Treasurers from both parties as well as bankers, unions, and advocates. Despite widespread bipartisan support, pro-reform critics of the SAFE Banking Act worry that its passage opens the floodgates for existing licensees to expand operations while not going far enough to ensure equity and meaningful criminal justice reform.
Additionally, with the recent news of the long-anticipated Senate bill to federally legalize marijuana, the Cannabis Administration & Opportunity Act (CAOA) not being introduced this month, frustration continues to grow among advocates. A discussion draft of CAOA was first unveiled last year; however, Senator Schumer said last week that he and colleagues were in the process of reaching out to Republican senators to “see what they want” included in the legislation. The extended time frame is intended to finalize the measure, helping the senators overcome what are currently significant odds stacked against them to reach a high vote threshold in the Senate chamber. The “official introduction” will take place sometime “before the August recess,” according to a press release from Senator Schumer’s office. Stay tuned for more updates from the NCIA Government Relations team.
As NCIA continues to work to get legislation to the finish line, it’s important to build support on incremental and comprehensive bills with the House and Senate offices. From our VIP Virtual Lobby Days with NCIA’s Evergreen members to providing congressional offices industry reports and data, we work as a resource to support and educate Capitol Hill. Furthermore, events centered around cannabis policy, such as the National Cannabis Policy Summit, help to illustrate the crucial importance of cannabis policy reform. Thanks to members of the National Cannabis Industry Association, we can continue to lobby on behalf of small cannabis businesses and move positive cannabis policy reforms in Congress. Although we can’t all be together this year for NCIA’s Annual Cannabis Business Lobby Days, stay tuned for updates for NCIA members to participate virtually. If you’re interested in learning how to get more involved in NCIA’s policy work please reach out to madeline@thecannabisindustry.org.
Committee Blog: The Road Ahead for Cannabis Payments in 2022
by Daniel Muller, Founder & CEO of AeroPay Member of NCIA’s Banking and Finance Committee
In many legal dispensaries around the U.S., customers have been given the option to pay with debit cards via “Cashless ATM” transactions, but the regulatory walls around these methods might be closing in. Last December, Visa explicitly called out the misuse of ATM cash disbursements by merchant dispensaries that are unable to obtain payment services due to Visa Rules or regulatory constraints. This compliance memo from the United States’ largest payment network put legal dispensaries on high alert, considering how roughly half of the country’s cannabis retailers handle payments through point-of-banking, or cashless ATM transactions.
While Visa did not clarify specific disciplinary measures, any perceptive retailer should view this as a courtesy warning before official crackdowns begin. Fortunately, eschewing cashless ATM transactions will not relegate dispensaries back to cash-only operations. In fact, there are now a number of compliant payment alternatives available to legal dispensaries that will enable them to operate like full-fledged mainstream retail businesses.
As cannabis business owners eye their next phase of growth, many should examine the long-term advantages of adopting modern and compliant payment solutions that ultimately benefit consumers, retailers, and the industry at large.
What should retailers look for in digital payment partners?
Although both credit cards and debit cards are currently off-limits for cannabis transactions, retailers can still offer digital payment options through bank-to-bank transfers, commonly referred to as ACH. In recent years, more mainstream FinTech platforms specializing in this field, like AeroPay, have started offering ACH bank-to-bank account solutions to regulated cannabis businesses. not only to mitigate the operational risks that come with cash-only and cashless ATM transactions but also enable dispensaries to provide seamless retail experiences. Nevertheless, it’s important to remember that not all ACH platforms are made equal. Retailers in search of a compliant and effective digital payment partner should be mindful of the following operating standards before signing on.
First and foremost, payment providers must require transparent and accurate reporting. Dispensaries that use an alternate store name or address on their transaction receipts are likely “masking” their identities in order to conceal cannabis sales from banks or regulators. Platforms that either facilitate or overlook this misconduct are not operating in accordance with state and federal laws.
Compliant platforms should be forthcoming about securing regulatory approvals in each operational state. A responsible payment platform will have rigorous due diligence processes and obtain the necessary local regulatory approvals and permits before working with clients. It is also equally important to work with providers that have an established relationship with trusted, cannabis-compliant financial institutions, such as Safe Harbor Financial, that follow all reporting guidelines outlined by the Financial Crimes Enforcement Network (FinCEN).
In this highly regulated space, it is especially valuable to partner with platforms that offer extensive fraud and anti-money laundering transaction monitoring. These are still prevalent issues within the regulated industry and compliant providers are serious about keeping both their internal operations and clients accountable. Platforms that thoroughly vet clients and routinely look into potential misconduct are mitigating payment risks for dispensaries and consumers while reinforcing the legitimacy of the regulated market.
Finally, dispensaries should seek out solutions that complement their overall tech stack. The industry’s open architecture leaders see the value in integration. Integrations of payment solutions with POS systems and e-commerce solutions can introduce sophisticated services such as cashless payments for deliveries or allowing prepayments online – features that are not feasible through point-of-banking. These seamless, integrated solutions also reduce the risk of human error.
What’s the upside to going cashless?
Running a profitable and streamlined cannabis operation requires business owners to mitigate potential risks. Unfortunately, relying on cash transactions may exacerbate safety concerns, especially in light of increasing dispensary burglary rates across the country. Transitioning to digital payments not only enhances dispensary security but also reduces the possibility of employee theft –which can range from cash skimming to giving away free products under the table.
From an operational and consumer experience standpoint, allowing cashless ATM transactions or cash payments can maximize internal redundancies and friction points at checkout. In fact, mainstream e-commerce studies have already identified extra costs, lengthy checkout processes and untrustworthy payment platforms as the leading drivers of cart abandonment. This is a serious issue that negatively impacts inventory management and new customer acquisitions.
Offering contactless, digital payments can increase basket sizes for both e-commerce and brick-and-mortar settings. While it is widely known that online cannabis orders often outperform in-store transactions, it is also worth noting that contactless payment options can boost total purchase value by 19 percent among mainstream retailers. Although this is an emerging technology within cannabis retail, dispensaries must proactively cater to customer preferences in this competitive environment, especially considering how roughly 60 percent of consumers are currently using digital wallets for mobile payments.
How are digital payment services creating a solid foundation for the regulated industry?
Over the past decade, the industry has adopted a number of makeshift solutions to overcome both expected and unexpected regulatory and consumer challenges. However, as cannabis evolves into a more established sector, it will be imperative for businesses to leverage battle-tested platforms and services to ensure compliant and reliable operations.
By integrating digital payments into a business’ best practices early on, cannabis retailers are positioned to operate seamlessly, thus bolstering their credibility among regulators, investors and future business partners. Additionally, working with a platform that diligently vets clients will ensure timely customer and vendor payments –thus eliminating a pervasive and frustrating retail bottleneck. Embracing digital solutions not only reduces opportunity costs associated with manually tracking cash flow but also optimizes tax collection, compliance monitoring and enforcement as well as consumer-facing cashback and loyalty programs. More importantly, optimizing these internal operations could allow the cannabis industry to establish new and efficient flow of funds standards that do not exist in mainstream sectors.
As the chasm between legal cannabis and established sectors narrows, industry stakeholders must make a concerted effort to adopt standard operating procedures that align with global business practices. It is time for cannabis retailers to finally utilize modern payment solutions for their increasingly mainstream businesses. Gaining access to legitimate payment and banking partners has been a perennial issue within the industry, but dispensaries now have the chance to use this inflection point as an opportunity to demonstrate the sector’s commitment to operating compliantly and fostering trust within the wider business community.
Equity Member Spotlight: LaTosque Adams – Speaking Into Existence, LLC
NCIA’s editorial department continues the Member Spotlight series by highlighting our Social Equity Scholarship Recipients as part of our Diversity, Equity, and Inclusion Program. Participants are gaining first-hand access to regulators in key markets to get insight on the industry, tips for raising capital, and advice on how to access and utilize data to ensure success in their businesses, along with all the other benefits available to NCIA members.
Tell me a bit about your background and why you launched your company?
Hello, I am La’Tosque Adams, an artist, and entrepreneur from East Saint Louis, Illinois, currently residing in Phoenix, Arizona. East Saint Louis is a place that taught me a lot about life and did so early on. It was a place that was full of potential but not a lot of opportunities. Life showed me how leaving your destiny in the hands of another could be dangerous. Growing up in the area helped teach me how to hustle and think outside the box. I was making music and selling candy bags with poems in them for Valentine’s Day in the sixth grade.
I have always had an entrepreneurial mindset and knew that I would have my own company one day. After consulting with a close friend from college I took the leap and moved to Phoenix at the beginning of 2016, and launched Speaking Into Existence summer of 2017. I am a creative artist through Speaking Into Existence, I have the freedom to distribute and publish art, books, merchandise, music, podcasts, and more. Forming my company was integral for my career as it allowed me to take ownership and start building blocks for something that could create generational wealth for my family. Through building a foundation that would help not only my company and family but other families and brands that I worked with along the way.
What unique value does your company offer to the cannabis industry?
I started podcasting a few months prior to the 2020 shutdowns. I was a performing artist and spent almost every week on a stage or performing at an event for two years straight. I started the journey as a way that I would bring on artists that I had performed with or booked for events in Phoenix and we would smoke, talk about the shows, performances, music projects, etc., as ManifestedThis Podcast. It wasn’t until the lockdowns that I started to pivot and rebrand to use my voice to help change the perception of this beautiful plant.
After being forced off of the stages on which I was performing almost every week since the conception of the company, I shifted focus to providing a different form of entertainment. That’s when I launched Cannabis and Coffee with LaTosque under Speaking Into Existence. I knew I wanted to offer a platform for artists, brands, entrepreneurs, and others alike to speak openly and freely about cannabis and their experience with it whether it be negative or positive. I realized how many people resonated with the message and how much misinformation about cannabis had been out there and needed to be debunked. The intention is to get the conversation started and to break down the stigmas surrounding this plant. Now, almost every Monday at 6 PM MST. I broadcast a new episode LIVE on Facebook, Twitch, Twitter, and Youtube. The Cannabis and Coffee with La’Tosque podcast is now streamed in over 15 countries with half of the demographics between the ages of 28 and 34, so it’s a mature audience and it really picked up over the past year and a half with the 60-year plus club.
Cannabis companies have a unique responsibility to shape this growing industry to be socially responsible and advocate for it to be treated fairly. How does your company help work toward that goal for the greater good of the cannabis industry?
Going back to what I said earlier, I want to help combat that image that cannabis has received due to the ignorance of some of our ancestors. I love bringing guests on to Cannabis and Coffee with LaTosque and having an amazing conversation about cannabis and/or teaching people how to infuse dishes. In order to change the world’s perception of cannabis and the people who choose to medicate with cannabis, we must first start with educating people about the plant and its properties. Secondly, we must show the history of cannabis use for medicinal purposes dating back thousands of years. Lastly, we must show how we got to where we are with the current laws. I know that through this platform we are able to reach the masses and provide an insight that will enlighten some folks on the matter and my hope is that they will then reach another and teach them.
What kind of challenges do you face in the industry and what solutions would you like to see?
Although the majority of the states have legalized cannabis for either medical or recreational use, there are still a ton of restrictions on advertising and those same restrictions apply to ancillary cannabis businesses. It’s virtually impossible to advertise on social media without getting your accounts shadowbanned or worse having your accounts taken away altogether because of how strict community guidelines are on platforms like Instagram, Facebook, and TikTok.
Why did you join NCIA through the DEI Scholarship Program? What’s the best part about being a member?
I joined the NCIA DEI Scholarship program after learning about a social equity bill that was set to pass in my state. I was attending a Marijuana Industry Trade Association (MITA-AZ) meeting in Arizona when I met Mike Lomuto, where he explained to me this amazing Social Equity program he was putting together that would connect business owners like myself with others around the country who were also impacted by the war on drugs and were pushing the envelope to force a change. I learned about all the support I could get from joining the NCIA specifically, the connections that would be made on the weekly social equity calls. I set out to support the end of the prohibition of cannabis on a federal level. This was my chance to have a bigger impact.
I am glad to be a part of the movement to end the current laws. This plant has helped me and it’s sickening to see that there are still laws surrounding such a wonderful healing component that is leading to incarcerating so many people for years and unfortunately in some cases, for life. I personally was affected by the war on drugs and being a part of history to help enlighten people on what true decriminalization looks like is an honor and has always been a goal of mine because I believe that cannabis should be treated like any other product that naturally grows on the planet.
Video: Voices of NCIA’s DEI Scholarship Recipients
Laws and regulations need to be designed and implemented with equity and fairness in mind. NCIA’s Diversity, Equity, Inclusion Committee is focused on recommendations that will create access to opportunity for those most adversely affected by cannabis prohibition.
A more diverse cannabis industry means a more prosperous one. We aim to foster a more equitable industry where participation and success are possible regardless of the numerous factors that have historically held many people, businesses, and communities back.
At the core of NCIA’s Diversity, Equity, and Inclusion Program is our Equity Scholarship Program, which provides our Equity Members one year of complimentary membership to NCIA. Hear from some of the business owners who became a part of NCIA’s DEI Scholarship Program in this video.
If you share our vision for a more inclusive and equitable cannabis industry, please support NCIA’s DEI program through sponsorship. DEI program sponsors not only help us continue to provide complimentary memberships to equity operators, but it also comes with benefits! Click here to learn more about the program.
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With federal legalization believed to be on the horizon for the United States, Canada’s data stands out as a national system and gives us some insight into how the American market could respond to a federal program, as opposed to one that is regulated state-by-state. 
The sales growth has been fueled in part by the rise of infused, or “connoisseur” pre-rolls, which combine a cannabis concentrate and flower into a single pre-roll cone. The result is a more potent pre-roll, often at a higher price point, which has helped push revenue totals even higher since Health Canada clarified its rules in late 2021 to clear the way for the product. 
Keeping Price Points High
Andrew Kaye has been involved in all aspects of the financial services industry, as a fund portfolio investment manager, investment banker, family office investor and attorney. He has worked with start-ups on their first raise through global enterprises undertaking billion-dollar stock offerings, and has significant investment experience in the cannabis industry. Currently, Andrew works as Sweet Leaf Madison Capital’s Chief Commercial Officer. Lending his expertise toward the creation of middle market financing solutions for real estate and equipment financing needs in the cannabis space.”
About 
by Mike Lomuto, NCIA’s DEI Manager
Helen Gomez Andrews: 
Author: Gary Strahle is a Technical Architect with over a decade worth of operational cannabis industry experience. 2023 NCIA Retail Committee Chairman. Avid surfer and golfer with a passion to help others.
Amy Larson of 
“I am deeply honored to be on the Board of Directors for the NCIA. It has been an incredible experience being a member for the past 5 years and to see comprehensive reform inch closer and closer with the relentless efforts of the NCIA team and other advocates/organizations. I am truly hoping that in working together with the industry, we will be able to see the descheduling of cannabis within the next few years. I vow to represent small businesses and want to ensure we have a significant place in the industry at the National level. Working with the rest of the board representing all aspects of the cannabis industry, I am hoping that we can see change happen! We’ve been through so much. Let’s do this!”
Jon Spratt leads Greensite Insurance, a specialty MGU providing boutique insurance coverage to the rapidly expanding Cannabis industry. Greensite launched in 2021 and is partnering with agents/brokers to help better protect their clients. Jon also runs a business accelerator that develops and launches new programs on behalf of Aon programs.
by Kathleen May, Sonny Antonio, Casey Rivero, David Vaillencourt
Where are they now? This month, NCIA’s editorial department continues the monthly Member Spotlight series by following up with three of our Social Equity Scholarship Recipients as part of our Diversity, Equity, and Inclusion Program. Participants are gaining first-hand access to regulators in key markets to get insight on the industry, tips for raising capital, and advice on how to access and utilize data to ensure success in their businesses, along with all the other benefits available to NCIA members.
First off, we have rebranded. We are now Cannvas Events. The name change was part of our evolution and maturation as a startup. As we scaled, more resources became available for things like branding. We brought in Greg Hill of Brand Birth to deploy the science of branding and the end result was a new name, new logo, and new understanding of where we were situated in the regulated cannabis ecosystem. The transformation led to the planning and production of our signature Cannabis Event 2.0 offering, the inaugural Saturnalia Canna Carnival, taking place at the Trinity Health Arena in Muskegon, MI on August 2oth. We are powering a traditional indoor/outdoor carnival – rides and attractions included – with a hassle-free, normalizing consumption solution. If you’re in the Midwest, come join us as we celebrate the first year of an iconic, perennial cannabis festival. Tickets and info at cannvasevents.com and follow us @saturnaliacannacarnival
The 
I’m impressed by the brilliant folks on the committee, and their dedication to making cannabis equitable. It takes time out of our grueling work days to contribute time on these committees but the contribution to making the industry better is crucial during these developmental years of cannabis. Perhaps our current misguided, harmful CA cannabis policies could have been prevented with more early participation from stakeholders who are stewards of the plant. However, there were many factors involved with the way CA policies were created, including special interest money from those who don’t care or want to see the industry fail. 
Overburdensome taxes and high barriers to entry for licensing throughout the state are most obvious right now. The lack of diversity and equity, consumer education, state and federal funding for further research and development also play a huge role in CA’s struggles. I’m frustrated that the State doesn’t understand that those who have been dedicated to the industry, collaboration and this plant are the only ones who can truly guide this industry forward.
There is a lot new in the world of Next Level since 
California Cannabis is facing challenges on many fronts. Countless unnecessary hurdles to legal entry, political red tape, and excess packaging waste to name a few. But the biggest challenges are around security. Every week there is news of a new dispensary, farm, distributor, and friend being burglarized. High tech security systems, gates, and cameras are no match for organized thieves and slow police responses. Until we can get a portion of our excessive taxes dedicated to funding police divisions that specifically targets cannabis thieves, the best solution to combat this is to support your favorite brands by purchasing their products through legal cannabis retail sources.
by Madeline Grant, Government Relations Manager
NCIA’s editorial department continues the Member Spotlight series by highlighting our 
Hello, I am La’Tosque Adams, an artist, and entrepreneur from East Saint Louis, Illinois, currently residing in Phoenix, Arizona. East Saint Louis is a place that taught me a lot about life and did so early on. It was a place that was full of potential but not a lot of opportunities. Life showed me how leaving your destiny in the hands of another could be dangerous. Growing up in the area helped teach me how to hustle and think outside the box. I was making music and selling candy bags with poems in them for Valentine’s Day in the sixth grade. 
Going back to what I said earlier, I want to help combat that image that cannabis has received due to the ignorance of some of our ancestors. I love bringing guests on to Cannabis and Coffee with LaTosque and having an amazing conversation about cannabis and/or teaching people how to infuse dishes. In order to change the world’s perception of cannabis and the people who choose to medicate with cannabis, we must first start with educating people about the plant and its properties. Secondly, we must show the history of cannabis use for medicinal purposes dating back thousands of years. Lastly, we must show how we got to where we are with the current laws. I know that through this platform we are able to reach the masses and provide an insight that will enlighten some folks on the matter and my hope is that they will then reach another and teach them. 
I joined the NCIA DEI Scholarship program after learning about a social equity bill that was set to pass in my state. I was attending a Marijuana Industry Trade Association (MITA-AZ) meeting in Arizona when I met Mike Lomuto, where he explained to me this amazing Social Equity program he was putting together that would connect business owners like myself with others around the country who were also impacted by the war on drugs and were pushing the envelope to force a change. I learned about all the support I could get from joining the NCIA specifically, the connections that would be made on the weekly social equity calls. I set out to support the end of the prohibition of cannabis on a federal level. This was my chance to have a bigger impact. 