Check out the first episode of NCIA’s new monthly video newsletter, NCIA Today! In this episode, we cover NCIA’s first Industry Socials and Trade Show of the year, Sen. Mike Crapo’s comments on cannabis legalization, and what NCIA’s Allied Associations Program is!
by Brian Chaplin, Chief Brand Officer at Medicine Box
Not even a month into the new year, and some of the biggest players in the cannabis industry have already been hit with several crippling blows. While we’re thankfully a long way away from the federal raids of yore, we’re seeing cutbacks, layoffs and corporate “realignments” in California across the board, some of them by the biggest names in the industry. When the big boys like this are struggling, what does that say for the OGs?
First off, speaking as a California cannabis entrepreneur who has survived both the post-64 aftermath, an armed robbery, AND subsequent charges by the Nevada County Sheriff’s Department, I can assure all of you that NONE of this can crush you if you are determined enough to survive and make the proper sacrifices at the right time. Not too soon ago, I posted some observations for a more inclusive, impactful and interconnected cannabis industry which went viral on Instagram, and I decided to expand upon them for the benefit of the NCIA’s members. There’s going to be a lot thrown at us this year, and I’ve found that I’ve raised my chances for survival by determining what to focus on and what to ignore.
This being 2020, we’re looking at an election and possibly a few more states coming online with legalization. While California is unique, it’s still a market everyone wants to crack sooner or later, and it’s made a few mistakes everyone is learning from. While the future is far from certain, I expect to be at this point next year looking back, regardless of the changes I’ve made, being thankful I executed on the priorities I’ve made over time. Will you?
Brian Chaplin started the cannabis/hemp-infused herbal wellness brand Medicine Box in 2016. Beginning his trade as an underground cannabis cultivator in 2009, Brian has released a series of award-winning edibles, snacks and tinctures, including Equanimity, which won second place for Best Tincture at the 2019 Emerald Cup. He lives, works, skis and meditates on the shores of North Lake Tahoe.
by Fred Whittlesey, Cannabis Compensation Consultants
Central to most discussions about executive compensation – not unlike any business discussion – is the question “what are other companies doing?” In compensation analyses, this guides the selection of data, typically for companies of a similar size in the same industry. Inherent in this approach is that a list of companies defines the landscape of business competitors, including competition for talent. Boards of Directors want to know – and are required to know – marketplace norms, trends, and practices as elements of their approving executive compensation.
Executive compensation in peer companies provides a guideline for determining appropriate pay levels and program design – what the other companies are doing. But these groups are typically determined by business-based characteristics – revenue, market cap, industry code, etc. In the rapidly evolving cannabis sector, these criteria may not yield a meaningful comparison group.
Most importantly, no data from a talent competitor aspect is typically included as a metric, though companies mention “talent competitors” as a criterion for inclusion in their “peer group” as we call it.
Proxy advisory firms (e.g., ISS, Glass Lewis) encourage and provide specific guidelines for the development of peer groups for executive compensation comparisons among public companies. In fact, they not only prefer but expect this process and disclosure. But their process may not make sense for every company as it focuses on market cap, revenue size, and industry code.
The problem for cannabis companies is:
And, none of this peer selection process gets to the root of the purpose: Identifying talent competitors to help guide the design of compensation programs to attract valuable employees from those competitors and keep employees from defecting to those competitors.
Some of the largest cannabis companies are issuing proxy statements that parallel the norms for large mature companies in the U.S. For a cannabis company, constructing a peer group is a challenge given the characteristics of vertical integration of the business, merger and acquisition activity, and – most importantly – the breadth of occupational categories represented by these firms’ employees.
Here, for example, is the peer group disclosed by Canopy Growth – two sets of companies from four industry sectors – cannabis, fast moving consumer goods, specialized pharmaceuticals, and technology:
This is the most complex peer group structure I have seen among the hundreds and hundreds of companies’ disclosures I have reviewed.
The cannabis sector poses this challenge: Covering some or all of the subspecialties that are under one roof with a group of similar companies, when there may be no similar companies
“High Times… hires President”
“Cannabis producer Tilray taps ex-Molson, Revlon employees for Executive roles”
When Tilray or High Times recruits for executive positions, who are their “talent competitors” as recruiting targets? Tilray does not disclose a peer group in its latest SEC filing that would require disclosure of such.
Interestingly, Molson Coors, Pharmaca, Revlon, Goldman Sachs, GE, and Apple have never included a cannabis company as one of their peers. That is likely because Tilray (drug manufacturers – specialty and generic) and High Times (not a public company) would not fit the criteria for those companies’ peer groups.
Yet Molson Coors, Revlon, and other non-cannabis companies are rapidly losing executives to cannabis companies – the definition of talent competitors.
Maybe the current process is backwards. As cannabis companies face a limited supply of talent with cannabis experience, they will find the talent from diverse industries and then, perhaps, compile a list the companies from where those new executives came. That would indeed be a talent competitor peer group.
What would that look like? Based on publicly-available information about the previous employer of the executives in these cannabis companies, we can “peer backwards” into what their cannabis-relevant talent pool looks like.
Your company – in the cannabis sector – is hiring a new C-level executive, maybe even a CEO. Your company did not disclose a peer group because it has not thought about a peer group. Your company is vertically integrated – cultivation, extraction, distribution, branding, retail – so it is simply a matter of finding a candidate with experience in all of those, or some of those…or one of those?
Let’s continue “peering backwards” – looking at where executives have come from and having a compensation program that keeps our company off of the next company’s “from” list.
What would that look like? Based on publicly-available information about the previous employer of the executives in these cannabis companies, we can “peer backwards” into what their cannabis-relevant talent pool looks like:
| Company | CEO | CFO |
| Tilray | Silicon Valley Bank (SVB) | Primo Water Corporation |
| Canopy Growth | Constellation Brands
Montana Mills |
Gallo Winery
Pepsico |
| Charlotte’s Web | Kellogg Company | Crocs
Orbitz |
Financial services, water dispensers, consumer products, bakeries, wine, soda and snacks, cereal, shoes, travel – not the usual mix of talent sources.
One will hear that the cannabis sector is in the “Wild West” phase, which is sort of like saying that a 14-year old is in the Wild West phase of adulthood. The only norms appearing are those carried over by the large consulting firms accustomed to consulting to mature companies. The entrepreneurial companies in the cannabis sector need not worry about self-appointed third-party opinions of their executive compensation practices – until they grow up. They can pursue practices that make sense for their business strategy, talent sourcing strategy, dispersion of locations, and other business-driven factors.
As we research executive compensation in the cannabis sector, we find a blend of compensation practices from these diverse industries, defying the notion that there is a “norm” or a “median” in the cannabis sector. Understanding executive pay in cannabis companies, for now, requires understanding executive pay in perhaps dozens of industries.
As cannabis companies grow, they will face the need for some additional structure and processes around executive compensation. But many of these companies are, and will continue to be, Smaller Reporting Companies, Emerging Growth Companies, Controlled Companies, TSX-V listed, or in another category with lesser disclosure requirements and lesser pressure from proxy advisers and institutional shareholders. With more of a grassroots shareholder base, they will have more maneuvering room in compensation design, less concern about the “optics” of a given executive compensation action or program, and more opportunities for the compensation program to fit the business, not fit a third-party’s unsolicited opinion of compensation. This is already leading to greater creativity and innovation in compensation design among cannabis companies.
Fred Whittlesey is the founder and President of Compensation Venture Group, SPC (CVG) – a Washington Social Purpose Corporation – operates as Cannabis Compensation ConsultantsTM and maintains a database of cannabis companies’ peer groups, executive pay levels, and executive hire sources. Fred Whittlesey is the founder and President of CVG, and with more than 35 years of experience in compensation, has worked for hundreds or companies across the industries that collectively comprise the cannabis sector – agriculture, biopharma, retail, distribution, manufacturing, marketing, branding, REITs, financial services, and technology.
The National Cannabis Industry Association, which currently represents nearly 2,000 member businesses, turns 10 years old in 2020!
NCIA was founded in 2010 at a time after the release of the Ogden Memo by Justice Department directing prosecutors not to prioritize the use of federal resources to prosecute patients with serious illnesses or their caregivers who are complying with state laws on medical marijuana, laying the groundwork for a new national industry.
It’s been a long, wild ride representing the next great American industry. Hear from our Executive Director Aaron Smith about what it’s been like to advocate for the responsible cannabis industry and grow the association for over a decade!
By Patrick Chown, president, Seed To Sale Security
In 2018, Sacramento CBS reported crooks stole $80,000 worth of cash and cannabis products from TotalLeaf Inc. after circumventing the facility’s alarm system and video surveillance technology.
Christopher Cohen, owner of the Sacramento-based cannabis manufacturing and distribution company, told the news outlet his security plan passed muster with state and local authorities, but noted the company upgraded its security after being robbed. The edibles-to-oils manufacturer has added steel doors, additional security cameras, alarm systems, fences and bolted-down safes. The firm also hired a private security company to watch over the property 24 hours a day, seven days a week.
Commercial cannabis businesses, like TotalLeaf, are prime targets for burglary, robbery and internal theft. This is not surprising in a cash-based industry with a flourishing black market. Commercial cannabis business operators must maintain stringent and customized security strategies that go beyond state and local minimums to fully protect their businesses from crime.
In states where cannabis is legal, the first step toward acquiring a commercial cannabis license is meeting state standards. However, a growing number of local communities are expanding on these bare minimums and applying a wide-ranging set of additional security requirements for commercial cannabis businesses. Emerging local regulations incorporate specific design elements, lighting standards, manpower requirements, and heightened camera and alarm standards.
Regulations vary by municipality. Regarding design elements, local entities typically require the use of door-redundant screening areas, internal/secure loading areas, and reinforced product storage rooms. A minimum exterior lighting standard of 1.5-foot candles of LED, white luminance, and prohibitions against up-lighting and light trespass are also common. Some localities even demand one or more armed, or unarmed, security guards on the premises, during business hours and sometimes around the clock.
Gaps remain though local regulations are more stringent, says Matt Carroll, President of Carroll Consulting and Director of Compliance for Seed to Sale Security. Carroll, who develops security plans for cannabis operations, finds, “There is little value in meeting state (and local) standards just to check a box for compliance. Operators seeking to enjoy peace of mind and asset protection will approach security planning from two different perspectives: technical compliance and actual security. Existing regulations do nothing substantive to deter burglary, robbery, or to protect the safety of those working within or visiting a commercial cannabis business.”
But what does going beyond security requirements actually look like? This article investigates how cannabis operations can better harden their security by voluntarily meeting additional requirements for security cameras, access control and alarms.
State-level cannabis regulatory bodies typically demand a basic level of surveillance coverage for access points and limited access areas, which are spaces where operations process, store or transfer cannabis goods. Most local authorities expand this requirement to include security camera coverage on all sides of the building, adjacent thoroughfares, and more thoroughly throughout the interior.
States also set a minimum resolution for security cameras. For instance, California requires a minimum resolution of 1280×720 pixels (e.g. 1 megapixel). Herein lies the problem: Any minimum megapixel standard predisposes operators to meet the minimum standard and little else. But, doing so may not achieve the goal of “certain identification” as expressed in the regulations.
Security camera megapixel ratings mean virtually nothing. For certain identification to take place, companies must also factor in the distance of the targeted viewing area from the camera placement, and the camera angle, lens quality and compression rates.
For positive identification in idyllic lighting conditions, security cameras must meet a minimum standard of 60 pixels. For night mode, positive identification demands up to 90 pixels per foot. This is what matters: pixels per foot (PPF) at the target, not the camera resolution. IPVM, an independent research group, has developed a great video to drive these points home.
Regulatory agencies hoping to get footage of value from crimes in cannabis settings would be wise to adopt a PPF standard over an overly simplistic megapixel standard.
With access control, state regulations typically require walls, doors and commercial-grade locks. They also expect operators to maintain a log of visitors and those accessing video surveillance systems. More stringent access control regulations are few and far between.
Though reasonably priced biometric and electronic key systems are readily available, hand-written logs meet most state and local regulations. However, manual logging is unreliable. Using a manual system, coupled with PPF-ignorant video standards, puts access control on the honor system.
Responsible operators fill the gaps regulations ignore. These business owners reinforce storefronts and roll-ups with K4 or better rated bollards to deter vehicular intrusion. They install solid-core doors at all exterior access points and at internal doors leading to limited access areas. They equip doors with pry-resistant latch covers and automatic closing devices. They reinforce shared walls to prevent tunneling and they fortify product/currency storage rooms.
They also use electronic access controllers that limit staff to areas of relevant roles and to the days and hours when employees work. They reduce opportunities for human complacency to override their access control strategies from initial design, to technology, to supporting and enforcing policies.
Short of mandating that operators install an alarm system that is operational after hours, most states establish no standards for monitored intrusion alarms at commercial cannabis businesses. This is another area where applicants can fill in the gaps.
Some jurisdictions mandate a specific Underwriter’s Laboratory (UL) standard for intrusion detection and robbery alarms.
Beyond meeting UL standards, it’s also important to extend the focus of an intrusion alarm system beyond exterior access points. Offenders can come in the form of stowaways concealing themselves inside until closing. They may be employees accessing areas they shouldn’t or third parties who find less expected ways to access the premises, such as tunneling through walls or ceilings and misappropriating ventilation shafts.
A properly designed alarm strategy protects against these situations by establishing various partitions, allowing for “home” and “away” modes, and setting aside areas for management-only access. Even while occupied by workers, certain areas of the premises, such as product or currency storage areas, should remain under alarm monitoring.
Finally, a thorough alarm system abides by UL Standard 681, incorporating contact points at every door; sufficient motion detectors to detect movement in any direction, in any area of any room; glass break sensors; ventilation protection; and panic alarms at vulnerable positions, such as the entrance, loading areas, product/currency storage areas and the management office.
Responsible cannabis operations also seek to elevate the safety and security of the entire industry.
This includes lobbying at the state level for severe criminal penalties against those engaged in the black-market trade. Public acceptance of cannabis often leads prosecutions to fall flat as jurors shrug about black-market activities. Black-market operators also view the limited penalties as a cost of doing business. But, as long as the government handles black-market cannabis retailing with kid gloves, criminals will target legitimate operators for their stockpiles of Grade-A product.
It also includes lobbying at the local level for more stringent security standards. Offenders who reap the rewards time after time an area will continue to target that area. But if cannabis business owners’ partner with local authorities to tighten up safety and security standards, their businesses become an environment where the juice is not worth the squeeze for offenders, ultimately driving their crimes to regions with less formidable targets.
Finally, it includes teaming with proven security experts who work in the cannabis space; following their best practices, developed based on real-world experiences; and teaching others in the industry to do the same.
Patrick Chown, is the Founder and President of Seed To Sale Security, a national cannabis security company offering security consulting, security plans, and security system installation to customer’s in 30 states. With cannabis-specific technology and a proficiency with regulatory compliance state by state, Seed To Sale Security makes sure your cannabis business stays safe, secure, and compliant.
In an effort to create a more diverse and inclusive industry, we are thrilled to announce that NCIA in conjunction with the Diversity, Equity and Inclusion Committee has opened applications for its scholarship fund for qualified cannabis executives.
NCIA is excited to have the opportunity to offer 30 applicants a complimentary pass to join us at the Northeast Cannabis Business Conference this February 19-20 in Boston, MA. If you are a minority in an executive cannabis position, please take a moment to fill out the application. We look forward to seeing you in Boston!
The scholarship application period closes on December 1, so get your application in today!
Applications are due by Midnight PST, December 1, 2019. Awardees will be notified on December 16, 2019. Scholarship recipients will receive complimentary passes to the conference. Scholarship recipients will need to cover & arrange their own travel and lodging needed to attend the event.
Have questions? Please reach out to kaliko@thecannabisindustry.org
by Andrew Kline, NCIA’s Director of Public Policy
With uncertainty about the proximate cause of the vaping crisis continuing to roil state regulators, and state governors trying to determine the right short-term solution to protect the public health, the former Commissioner of the FDA has a longer-term plan. Former Commissioner Scott Gottlieb is rightly calling for descheduling and federal regulation in an op-ed in the Wall Street Journal. NCIA made the same argument in our Policy Council’s recent white paper on regulating cannabis post-legalization and in our public responses to the vaping crisis.
While no one yet knows for certain what has been causing these injuries and deaths, it is readily apparent that unregulated and untested products are extremely dangerous and continue to infiltrate the market. Just last week, a mother and her two sons were arrested for allegedly illegally filling over 30,000 vape cartridges in Wisconsin from their home. That burgeoning illicit and untested market poses real risks to American consumers. And the best way to eliminate the illicit market is to create opportunities for consumers to purchase products from legal dispensaries and market awareness of the benefits of purchasing from those regulated markets.
For example, if consumers know that legal dispensaries are selling regulated products that have been tested to improve consumer safety, then they will be more inclined to stop purchasing from the illicit market. People already know that when they step foot into a grocery store, the foods they eat and the drugs and dietary supplements they take are part of a supply chain designed to improve safety. That is because they have placed trust in the USDA and FDA. And no better way to build consumer confidence, than to make sure that trusted federal agencies are in charge of promoting public health in the cannabis industry.
We can’t continue to leave the cannabis industry in a state of uncertainty. It’s time to deschedule, regulate at the federal level, and require mandatory lab testing. We must displace the illegal, unregulated and untested illicit market. There is no plan B.
Andrew Kline is Director of Public Policy for NCIA and Chair of NCIA’s Safe Vaping Task Force
by Andrew Kline, NCIA’s Director of Public Policy
NCIA could not be more proud of the collective efforts of the cannabis industry in passing SAFE Banking legislation in the House. Last week was a truly historic moment for the industry. Now, on to the Senate!
While we always relish in victories, we can’t lose momentum, and we need to start thinking about what comes next. As luck (and a bit of hard work) would have it, NCIA has a plan. While NCIA has been fully supportive of incremental steps like SAFE Banking, we believe that the only long-term viable path forward for this industry is descheduling. It’s the only way to solve social equity, it’s the best way to fix 280E, it’s the way that we start looking at cannabis through a public health lens (instead of a criminal enforcement lens), it fixes issues around interstate commerce, and it’s the only way to end the unsustainable federalism clash.
In addition to de-scheduling, our plan calls for cannabis products, like other highly regulated consumables, to be regulated by the government agencies that currently regulate most food and drugs, primarily the Food and Drug Administration (FDA) and the Alcohol and Tobacco Tax and Trade Bureau (TTB) within the U.S. Department of the Treasury.
Under our plan, cannabis products would be divided into four categories, based on chemical components, safety, intended use, and consumption method. Each of these groups would be regulated through a separate regulatory “lane” tailored to the public policy issues raised by that particular classification. The four lanes are:
(Regulated Like Prescription/OTC Drugs; Lead Federal Regulator: FDA)
(Regulated Like Alcohol; Lead Federal Regulator: TTB)
(Regulated Like Food/Dietary Supplements; Lead Regulator: FDA)
(Regulated Like Cosmetics; Lead Federal Regulator: FDA)
We firmly believe that our plan sets the stage for the weeks and months ahead. We hope that lawmakers will heed our call for de-scheduling and federal regulation. There is no other viable option for the burgeoning cannabis industry. As always, NCIA stands ready to provide technical assistance to lawmakers and to the Executive Branch as we forge ahead. There is no stopping us now.
If you’re interested in working on public policy issues like this one, please reach out to me to inquire about the Policy Council. We are the think tank for cannabis and we’re just getting started.
By Stephen J. Gongaware, Sr. Vice President of Business Development at Management Science Associates, Inc. (MSA)
Hemp CBD became the fastest growing CPG product in 2019, following its legalization in the Farm Bill of December 2018. Consumers show great interest in its use for wellness, health & beauty applications and for pets. Its many distribution channels require integrating convenience store and shipment data not required for most dispensary products.
In U.S. Convenience Stores, total sales of CBD have increased 168% in the first half of 2019 while average weekly dollar sales increased by 235%.
The higher revenue growth accompanied CBD content per package increasing from 100mg on January 5, 2019 steadily to over 350mg on July 20, 2019, after having peaked briefly in June 2019 near 450mg per unit. See graph below.
Pain relief is the major reason cited as a medical condition for cannabis use, followed by nausea, PTSD, muscle spasms, IBD and opioid addiction as seen in the following table:
Of particular note is the growing number of consumers using Cannabis to treat Opioid Use Disorder (OUD). As of August 2019, seven states have approved medical cannabis for treating OUD: PA, NY, NJ, NM, MO, IL & CO. Twenty-one studies (2009-19) show the effect of cannabis on helping opioid users to reduce or eliminate the use of opioids to treat pain. NFL professional athletes have withdrawn from using opioids after they retire, with the aid of CBD and/or adult cannabis.
The top consumer drivers of OTC Hemp CBD are pain relief, reducing anxiety and helping sleep, as shown in the following graph.
Over the past several years, advances in technology have greatly enhanced the prospects for cannabis growers, processors, and dispensaries to provide medical cannabis products to patients that efficaciously treat the medical conditions and alleviate the incapacitating symptoms that they suffer.
Pre-clinical scientific research is determining the physiological effects of individual cannabinoids and terpenes on specific medical conditions and symptoms. Mobile apps are enabling the systematic querying of patients about the efficacy of specific cannabis strains and products in alleviating symptoms and conditions.
Collectively, these advances and other medical research are creating volumes of evidence to which human and artificial intelligence will be applied to develop insights for use by patients and medical researchers, growers, and processors in formulating products creating newer therapeutic options. Patients are already making informed decisions that improve individualized treatment of medical conditions progressively over time due to CBD being an approved over-the-counter consumer product.
Consumer attitudes, perceptions, and usage in local markets create richer, more actionable insights from customer segments, creating advanced quality scores and indices for scoring first-party internal data.
Cannabis consumer data is used for strategic and tactical product development, applications including:
Multiple correspondence analysis of hundreds of consumer survey category questions is used to understand dimensional distinctions and differences between clusters. These key spatial dimensions for segmentation illuminate key differentiators, for use in innovation/new products, brand strategy, marketing execution, and digital media tactics.
Merging cannabis consumer data with general consumer data such as Financial, Healthcare, Restaurants, Grocery/Drug Stores, and Media usage & exposure for each respondent facilitates creation of new consumer segments.
Using zip code identified respondent level data, the above Target Profile clusters can be integrated with other market and first–party data to prioritize personalization, enhance brand positioning, inform messaging, new customer marketing & acquisition efforts, and multi-touch attribution databases.
Mr. Stephen J. Gongaware is Sr. Vice President of Business Development at MSA (Management Science Associates, Inc.), a privately held diverse information technology development and service firm that for over 50 years has provided innovative solutions within its three core competencies of analysis, technology and data management. He has played a major role in developing and managing several MSA businesses in addition to his focus since 2014 on the medical value of cannabis for prospective patients, beginning with CBD and 20 other nonpsychedelic cannabinoids then measured by leading edge test labs. Other businesses he’s created and managed at MSA in the last 20 years includes services to develop/market pharma “rare disease” solutions, and MSA Casino Gaming solutions improving operation of slot floors, player satisfaction and also lead smart phone and sports book innovative projects with 6 of the Top 10 global casino operators and with several major gaming equipment manufacturers.
Prior to joining MSA, Mr. Gongaware was CEO of NetworkNext, an innovative national advertising firm; R&D Director at Cellomics, Inc. where he was awarded US Patent #US6365367; and an Electrical Engineer at Westinghouse Electric Corp. He received his BSEE degree from University of Pittsburgh in 1992 and his MBA from its Katz School of Business in 1995.
MSA is an Analytics firm with Big Data integration capability incorporated in 1963 to focus on improving government and management decisions. MSA has 800+ professionals with expertise in data science & AI, software development, test marketing, data management and management consulting and many of its innovations have become industry-standard solutions. MSA has served over 70 Fortune 500 Customers/Clients in the CPG, Media, Metals, Life Sciences & Pharma, and Casino Gaming & Sports Betting industries. It has been engaged in cannabis research since 2013 with the goal of providing the cannabis industry similar services to what has been now provided to the CPG, Steel, Tobacco, Casino Gaming, and Pharma industries for more than 50 years.
NCIA is accepting applications for eligible candidates to apply for its board of directors now through Friday, September 27, 2019.
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.
To ensure that the board makeup best reflects our membership, NCIA no longer requires board candidates to be Sustaining Members; all current NCIA members, at any level, 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 September 27 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.
To be considered for a seat on the board, a candidate must be a fiduciary (e.g. owner, president, CEO) of a current dues-paying Member business at any level of membership and must submit an application online by September 27.
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 nearly 2,000 member businesses. In general, the NCIA board meets in person twice and conducts 2-3 video conferences per year.
The new process allows any fiduciary (e.g. owner, president CEO) of a member business to apply to serve a two-year term on the Board of Directors.
The selection process will now be overseen by a Nominations Committee and a slate of candidates will be chosen. Candidates not chosen during the selection process may seek an independent nomination to go before a vote of the NCIA membership.
Once the application period closes, NCIA’s nominating committee will convene to carefully review and score all applications. The committee will ultimately select a slate of nominees to fill eight 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 13 member committees as well as a select number of current board members whose terms are not expiring this year.
NCIA Members will then be notified of the slate and provided instructions for obtaining an independent nomination. Independent candidates must get the signatures (electronic) of 5% of the membership in order to qualify for the ballot.
If no qualified independent candidates are received by November 27, the slate of nominees recommended by the Board of Directors shall be declared members of the Board of Directors and shall commence their term in January 2020.
If one or more qualified independent candidates qualify, all candidates will be presented to the membership for an election which will take place during the month of December.
The hemp community has seen a surge of growth since the signing of the U.S. Farm Bill in December of 2018. Currently hemp leaders and entrepreneurs are laying the groundwork for the future of hemp. They’re building industry supply chains, educating newcomers to the hemp industry, or leveraging their relationships to secure reasonable access to banking, crop insurance and social networks like Facebook and LinkedIn. Make sure you don’t miss meeting these prominent industry leaders creating the future of hemp at this year’s 6th Annual Cannabis Business Summit & Expo.
1. Steven Turetsky
Managing Director, SHI Farms
Speaker: NCIA’s Hemp Business Conference “Hemp Cultivation, Lessons Learned from 3 Years of Farming in Two Different Climates.”
Steven manages Shi Farms, a 300-acre operation in Pueblo, Colorado, that offers extraction and wholesale CBD ingredients to marijuana and hemp manufacturing companies. Presently, the company is creating a line of retail products that will be available online and through Colorado dispensaries. Steven has consulted on international hemp projects in Central Asia and Israel. Prior to Shi Farms, he worked at Dixie Brands for four years, eventually assuming the role of national operations manager and serving as the liaison between corporate executives and franchises.
2. Ian Terry
CEO, Cannaissance Creative
Speaker: NCIA’s Hemp Biz Conference “The Future of Cannabidiol Product Manufacturing: Trends and Technology to Watch”
Ian Terry is the CEO of Cannaissance Creative, a cannabis data and IP company that provides operational support and consulting services across sectors with a mission of penetrating untapped markets and disrupting existing ones. He is also the co-founder of Crafts Unbranded, a product formulation and manufacturing firm rooted in innovation that provides wholesale support to retail cannabis businesses. Prior to his leap into the startup community, Terry was the laboratory manager at Elixinol. As head of production, Terry was instrumental in pushing its parent company, Elixinol Global, through consolidation in the lead up to an IPO on the Australian Stock Exchange in 2018. The bulk of Elixinol Global’s value and market growth is in the Colorado-based Elixinol brand, which Terry cultivated.
3. Christie Lunsford
CEO, The Hemp Biz Conference
Speaker and Moderator: NCIA’s Hemp Biz Conference, a full-day hemp industry workshop
Christie Lunsford is the creator of The Hemp Biz Conference, an endeavor focused on the development of a sustainable hemp industry through education. In 2012, Christie was part of the team to formulate and launch the first wholesale channel of CBD (Cannabidiol) nutraceutical products derived from industrial hemp in the U.S. Christie utilized her knowledge of cannabis therapeutics to educate naturopathic doctors and consumers laying the foundation for the hemp-derived CBD industry internationally. She was awarded the 2015 Cannabis Woman of the Year award at the Cannabis Business Awards and is the hemp historian at Hemp Connoisseur Magazine and writes about the hemp industry for Entrepreneur Magazine.
4. Andrew Kline
Director of Public Policy, National Cannabis Industry Association
Speaker: NCIA’s Hemp Biz Conference Panel: Future of Hemp
Speaker: A Look Into the Future: A FDA Regulatory Framework for Hemp CBD
Andrew Kline is NCIA’s Director of Public Policy. In this new role for NCIA, Andrew leads NCIA’s substantive public policy efforts, striving to prepare and protect the state-legal cannabis industry. He will also lead NCIA’s Policy Council, a group of NCIA members focused on influencing federal and state public policy.
Kline most recently served as President of the National Association of Cannabis Businesses (NACB), the first self-regulatory organization for the high-growth cannabis industry. At the NACB, Andrew led the creation of national standards for the state-legal cannabis industry, oversaw its standards governance board, and led day to day operations and strategic planning.
Kline has a deep and celebrated background in public policy, law enforcement, and coalition creation/management. He is renowned for his ability to create solutions to complex domestic and global public policy issues that appeal to both private and public constituencies.
Prior to joining the NACB, Kline was Special Counsel for the Federal Communications Commission’s (FCC) Enforcement Bureau where he was responsible for high profile investigations and public policy negotiations affecting the telecommunications, internet, cable and satellite industries. He also served as Chief of Staff and Senior Advisor for Intellectual Property Enforcement in the Executive Office of the President [Obama] where he led public-private partnership and public policy efforts to address online trademark theft, copyright infringement, consumer safety, national security, and the protection of domestic business interests globally.
Kline previously worked an Executive in Residence at American University’s School of Public Affairs where he taught graduate-level courses in public policy and law. He also served as senior policy advisor to then-Senator Biden and Vice President Biden, and spent fourteen years as a federal prosecutor.
Mr. Kline is admitted to the California, Colorado and District of Columbia Bars, and holds a Masters in Public Administration from Harvard University’s Kennedy School of Government.
5. Claire Kaufmann
Director of Client Services at Brightfield Group
Speaker: NCIA’s Hemp Biz Conference “Understanding the Hemp CBD Consumer”
Claire Grusin Kaufman, MBA is a nationally known CBD and cannabis business and marketing strategist. She currently works as the Director of Client Services at the Brightfield Group – an industry-leading CBD and Cannabis market research firm. Claire has worked in the CBD and cannabis space for the past seven years. She has worked in house for vertically integrated cannabis companies and formally as the Northwest Regional Director for BDS Analytics. Claire has also recently served on the OLCC Recreational Marijuana Business Council. Her take on the future trends of the cannabis industry, and the questions facing marketers and entrepreneurs are sought by national and international media, cannabis industry leaders, and key players in the traditional marketing world. Claire holds a Master’s in Business Administration from the Graziadio School of Management at Pepperdine University, where she focused on brand marketing and development.
6. David Wunderlich
Senior Attorney, McAllister Garfield
Speaker: NCIA’s Hemp Biz Conference, “Key Factors to Consider Before Creating your Hemp Business.”
David Wunderlich is a Senior Attorney and a chair of McAllister Garfield’s hemp and CBD practice group. David’s clients include state-licensed marijuana businesses, hemp farmers and processors, CBD businesses, lenders, and ancillary businesses in the cannabis space. David focuses his practice on business formation, regulatory compliance, real estate, and intellectual property. David earned his J.D. from the University of Denver Sturm College of Law in 2007 and B.A. with honors from Tulane University in 2003.
7. Eileen Konieczny RN, BCPA
Author, Healing with CBD: How Cannabidiol Can Transform Your Health
Speaker: NCIA’s Hemp Biz Conference “Consumer Health, Hazards and Efficacy, A Deep Dive Into CBD and Other Constituents”
Eileen Konieczny is a medical cannabis expert, US Navy Veteran and author of Healing with CBD: How Cannabidiol Can Transform Your Health Without the High (Ulysses Press, Sept. 2018). Eileen has fought for medical cannabis legalization nationally and was a recognized leader in the passing of New York’s medical cannabis bill. Eileen has served on the board of directors for the Children’s Health and Research Foundation and currently serves on the board of directors for the Association of Cannabis Specialists. She is Past President of the American Cannabis Nurses Association, a clinical associate in the Society for Cannabis Clinicians and has been involved in licensed medical cannabis operations in New York and Connecticut.
8. Afzal Hasan
President and General Counsel, Origin House
Speaker: The Globalization of Cannabis, CBD, and Hemp: Opportunities and Challenges for Creating International Brands
Mr. Hasan obtained a Juris Doctor (J.D.) and a Bachelor of Science (B. Sc.), Commerce and Human Biology, from the University of Toronto, Canada. Prior to joining Origin House, Mr. Hasan worked as a securities lawyer at Cassels Brock & Blackwell LLP, where he developed a broad spectrum of experience providing advice to both public and private companies on transactions in diverse industry sectors.
Mr. Hasan’s experience prior to his career in the private legal practice includes a secondment at the Mergers and Acquisitions Group in the Corporate Finance Branch of the Ontario Securities Commission, working with the United Nations and the wholesale banking division of a major multi-national bank in Thailand and completing independent research in microbial genetics at the University of Toronto.
HIGHLIGHTS
9. Vanessa Marquez
Founder and CEO, CBD Care Garden
Speaker: A Look Into the Future: An FDA Framework For Hemp CBD
Vanessa Marquez is the Co-Founder and CEO of CBD Care Garden, a Hemp-based Wellness & Beauty Company. Vanessa recognized the scientific evidence and therapeutic benefits of CBD almost four years ago, along with her Co-Founder Chris Elawar. Her vision became the company’s mission, to bring the benefits of CBD and cannabinoids to the industry of wellness, making CBD products clean, fresh, and sought-after luxurious wellness experience. Today she leads the company in top named spas, massage chains and destination resorts nationwide pioneering the industry education for professional providers and consumers. She is a former Licensed Massage Therapist, with a background at CSU in Bio-Med, and attended the BA program for Business Management and Entrepreneurship at DeVry University.
10. Cindy Sovine
President and CEO, Sovine Consulting
Speaker: “Is Your Jurisdiction Ready for Social Consumption?”
A Colorado native, Cindy has helped international clients such as Xerox and Blue Cross Blue Shield procure government contracts as well as helping start-up companies successfully navigate government hurdles along the way. Cindy began her career in the Office of Legislative Council, the Colorado General Assembly’s non-partisan staff, where she learned the rules and legislative process inside and out. She worked with staff on the health and human services committees and coordinated the state’s ballot initiative process before switching to lobbying in 2003. Cindy’s current lobbying platform includes hemp, medical and retail marijuana, technology, and alternative energy. Former clients include Microsoft, HP, and nearly every industry within the health care delivery system including hospitals, insurance companies, pharmaceuticals, providers and more.
This week, the House of Representatives will vote on protecting adult-use cannabis businesses, consumers, and state programs from the federal government and we need your help now.
The Blumenauer-Norton-McClintock amendment states that no funds from the Department of Justice may be used to prevent any adult-use cannabis states from implementing their own laws that authorize the use, distribution, possession, or cultivation of cannabis.
Today, we need you to call your Representative and tell them to VOTE YES on the Blumenauer-Norton-McClintock amendment (#17) to the Commerce, Science, and Justice appropriations bill.
Find your Representative by clicking here and check our Congressional Scorecard to see where your Representative stands on our industry’s issues!
Here are some talking points to use on your call:
Our industry supports hundreds of thousands of jobs, tens of millions in tax revenue, and billions in economic activity – so please, call and help us protect it.
Did you miss this recent webinar? You can still watch the recording of the demo of BDS Analytics GreenEdge Retail Sales Tracking Data Platform and learn more about how it will help your business:
In this month’s video spotlight, get to know Debby Goldsberry, Executive Director of Magnolia Wellness, and her team based in Oakland, California. Debby is a community leader who is active in the campaign to reform the California state cannabis laws and to protect patients’ rights. Learn more about how the team at Magnolia Wellness creates a healing environment for their patients, including the East Bay’s only vapor lounge and dab bar, and how they give back to the community through various social programs.
Be sure to join us in San Jose, California for NCIA’s 6th Annual Cannabis Business Summit & Expo on July 22-24, 2019!
Just two short weeks ago, NCIA hosted our 9th Annual Cannabis Industry Lobby Days. This impactful event brought over 250 NCIA members to our nation’s capital to advocate and lobby on important issues facing our industry like access to financial services, amending IRC Section 280E, and addressing social equity.
Over the course of 48 hours, attendees met with nearly 300 congressional offices to share their stories and experiences, and dropped off informational materials to 200 offices that we did not schedule meetings with. In addition to these meetings, we had two briefings, held a PAC fundraiser, and hosted our first-ever VIP Day for members of our Leadership Circle. Let’s take a look at some of the highlights from this important event:
To kick off our first-ever VIP Day, we held a briefing at the House of Representatives entitled “SAFE Banking: Where We Are, and Where We’re Going,” where Congressman Ed Perlmutter (D-CO), the lead sponsor of HR 1595, the Secure and Fair Enforcement (SAFE) Banking Act, kicked off the day. On the panel was Tanner Daniel of the American Bankers Association, Becky Dansky of SARBA, and Gail Rand of ForwardGro, while attendees included NCIA members, congressional staff, and members of the press.
Following the briefing on banking, VIP Day attendees were shuttled to a luncheon featuring Reps. Joe Neguse (D-CO), Katie Porter (D-CA), Gil Cisneros (D-CA), and Steven Horsford (D-NV). All of these members of Congress are freshman who support cannabis reform, and talked about the importance of advocacy and the use of political action committees like the NCIA-PAC that they rely on.
After lunch, VIP Day attendees were shuttled back to Capitol Hill, where teams met personally with members of Congress, committees of jurisdiction, and congressional leadership.
Our first ever VIP Day was a huge success, and we thank the members of NCIA’s PAC Leadership Circle for their dedication to advocacy.
Lobby Days then officially started with a Welcome Reception attended by other advocates in Washington, D.C., NCIA members, and even congressional staff!
The following day, the work really began at our breakfast training. There, attendees met with the groups that they would be in for the day, were taught talking points on various bills and issues, and learned about how to use the app that housed all of their meeting information.
Washington, D.C. is full of great photo ops, so after our breakfast training, all of our attendees shuttled over to the Capitol… and snapped a few selfies, of course!
Meetings on Capitol Hill went from 12pm to 4pm. Each of NCIA’s 54 lobbying teams had at least four meetings over that course of time. Some groups were even lucky enough to sit down with members of Congress to talk about the issues that affect them and their businesses the most.
The day concluded with a fundraiser for the NCIA-PAC. This year’s event was wildly successful, as we had 15 members of the House of Representatives (Reps. Porter (D-CA), Charlie Crist (D-FL), Josh Harder (D-CA), Earl Blumenauer (D-OR), Ruben Gallego (D-AZ), Salud Carbajal (D-CA), Jared Huffman (D-CA), Jason Crow (D-CO), Brendan Boyle (D-PA), Diana DeGette (D-CO), Denny Heck (D-WA), Barbara Lee (D-CA), Dina Titus (D-NV), Susie Lee (D-NV), Matt Gaetz (R-FL)) attend and speak, as well as Sen. Jeff Merkley (D-OR).
The final day of Lobby Days began with a standing-room-only briefing that focused on NCIA’s new white paper titled “Increasing Equity in the Cannabis Industry” that our Policy Council worked on with the Minority Cannabis Business Association (MCBA). Opening remarks were given by MCBA’s President, Shanita Penny along with the Principal of Greenbridge Corporate Counsel, Board Vice-Chair of the National Cannabis Industry Association, and Co-Chair of the Minority Cannabis Business Association Policy Committee, Khurshid Khoja. We were also joined by two members of the Congressional Hispanic Caucus, Rep. Lou Correa (D-CA), and Rep. Ruben Gallego (D-AZ).
Lobby Days wrapped up with small groups dropping off folders with informational materials to congressional offices that we were unable to schedule meetings with. While some may think these drop-ins are ineffective, they actually prove to be incredibly helpful long after our attendees go home.
The dates for NCIA’s 10th Annual Cannabis Industry Lobby Days have already been chosen, so mark your calendars for our biggest year yet, happening May 19-21, 2020!
Be sure to check out the full photo album from this year’s Lobby Days!
NCIA leadership and its Board of Directors are thrilled to be celebrating the transition of one of our very own cannabis industry leaders into a prominent public policy role for the state of Colorado. Please join us in congratulating Ean Seeb for his new role as Governor Jared Polis’ Special Advisor on Cannabis.
Throughout his career, Ean has been a tireless advocate for replacing criminal marijuana markets with a socially responsible and well-regulated cannabis industry and now he’s bringing that experience into the public sector.
Ean has served the cannabis community and industry for more than a decade, and now moves on from his role as co-owner and founder of Denver Relief and Denver Relief Consulting, as well as other endeavors including Manna Molecular which he represented on the NCIA board of directors. Ean was an active member of the NCIA board of directors for nearly seven years and chairman of the board for two of those years.
“I can’t think of a better person to advise Governor Polis on cannabis policy. During his tenure in the private sector, Ean has always demonstrated a commitment to justice, personal liberty, and corporate social responsibility,” said NCIA executive director Aaron Smith. “The people of Colorado are very lucky to now have him now putting his talents and passion to work for them.”
“Ean is a leader in the cannabis industry and we are thrilled to have him on our team. We welcome his incredible expertise and know he will help us continue Colorado’s leadership in this growing industry,” said Chief of Staff Lisa Kauffman.
“I’m incredibly grateful to have had the opportunity to work with NCIA over the years to help promote the interests and best practices of the cannabis industry as a board member and citizen lobbyist. I entered the cannabis industry because I wanted to help people suffering under marijuana prohibition, and NCIA made it possible to that on a larger scale,” said newly-hired Ean Seeb.
It was through NCIA that I met then-Congressman Polis – at the very first NCIA event in Colorado in 2011, which eventually led to my new role in the Governor’s office. Now I have the chance to help even more people throughout the great state of Colorado and beyond in the coming years.”
Congratulations and best wishes, Ean!
Despite the many struggles our industry faces due to federal prohibition, there’s strong optimism for the direction we are going into the future.
Hear more from these NCIA Members about the amazing industry we are building together:
For even more inspiration, download this NCIA Policy Council Report – “The New Politics of Marijuana: A Winning Opportunity For Either Party” – to learn more about the significant voter support for marijuana policy reform and the legal cannabis industry through thoughtful examination of recent public opinion polling and electoral wins.
Be in the know! Be sure to download our Industry Reports, listen to our weekly podcast, and read up on the latest blogs.
Plus, check out our event calendar and get your team registered!
Not yet a member of NCIA?
Stay up to date about the rapidly evolving landscape by networking with nearly 2,000 member companies who are part of a movement to build a responsible industry.
If you’re interested in learning more about becoming a member of NCIA, fill out this interest form or email JJ@TheCannabisIndustry.org.
Over the past five years, cannabis industry professionals, policy makers, advocates, and entrepreneurs have convened to network, learn, and discover at the NCIA’s Cannabis Business Summit & Expo. As the industry continues to rapidly evolve, getting accurate and relevant information from experts in the field becomes increasingly important for the success of your business.
Fortunately, as the cannabis industry’s largest national trade association, NCIA is able to convene the industry’s leading experts to share their knowledge about issues from cultivation best practices to technology breakthroughs. Don’t miss these 10 noteworthy speakers at this year’s 6th Annual #CannaBizSummit!
President, Minority Cannabis Business Association
Panel: Cannabis Reform Stops Short: Why We Can’t Let Social Justice Get Lost
Shanita Penny, M.B.A. is an internationally recognized cannabis advocate, management consultant, and entrepreneur with extensive experience helping Fortune 500 companies and startups solve complex issues and improve business performance. In 2015, she founded Budding Solutions to change the perception of cannabis on a global scale. Shanita has supported and coached cannabis advocates, business professionals, entrepreneurs, and policy-makers throughout the country to get results. She works with clients to create and grow compliant, successful cannabis businesses and empower them to positively impact the burgeoning cannabis industry and communities.
Co-Founder, Solstice
Panel: How to Improve Quality Control in Your Cultivation Operations
Alex Cooley is the co-founder of Solstice, through his diligent efforts they created first ever fully permitted cannabis production facility in Washington State. From inception, Solstice’s goal has been to cultivate the highest quality, most beneficial varieties, including the award winning, CBD-rich Sour Tsunami #3. In addition to this he has helped to author the “collective garden model” of safe, legal access for medical cannabis patients in 2011. As part of Alex/Solstice’s mission to be a positive catalyst in the cannabis industry and offer a new message about cannabis, Alex uses environmentally responsible practices, serves as an adviser to Washington State, and continues to advocate for patients’ rights.
Co-Founder and Director of Operations, The Cannabis Conservancy
Panel: Are You Ready for 3rd Party Certification of Cannabis and Hemp?
Brittny, a co-founder and Director of Operations of The Cannabis Conservancy, grew up in Canada’s cannabis capital, Nelson BC. In 2018, she was elected to serve as a Councilor for the City of Nelson. She has had a lifelong interest in the cultivation and legalization of Cannabis. Her interest in corporate environmental practices was reinforced while working in Canada’s oil sands with a small contractor at Suncor, the first company to develop the oil sands, which inspired her to pursue an internship on Vandana Shiva’s seed saving farm in India and an M.Sc. in Environmental Science and Policy. Brittny has led teams in product development, service procurement (multi-million-dollar service contracts), sales, and communications.
Vice President of Marketing & PR, Simplifya
Panel: Social Media + Digital Marketing: The Secret Sauce
Prior to joining Simplifya, Amy served as the VP of Marketing for COHN, and led its dedicated cannabis division, COHNNABIS, which she helped to launch in 2016 and grow into one of the most respected marketing agencies in the industry. During that time, she worked closely with clients across multiple cannabis verticals from infused products and dispensaries to B2B ancillary service companies including Surna, Seed & Smith, Canna Advisors, Papa & Barkley, Next Frontier BioSciences, Verra, General Cannabis and more.
Read More About Amy Larson Here
Director of Government Affairs, Berkeley Patients Group
Panel: Understanding Vertical vs. Horizontal Integration in a Changing Legal Landscape
Sabrina Fendrick is the Director of Government Affairs for Berkeley Patients Group (BPG), the nation’s oldest, continuously operating dispensary in the country. She has over ten years of political, industry and advocacy experience as a cannabis professional and currently works to engage political and industry stakeholders in California regarding cannabis policy on both a state and municipal level. Sabrina works on the development of local ordinances, legislation, and regulations, and in early January 2018, led the notably successful effort to cut Berkeley’s local adult-use cannabis tax rate in half. Before her arrival at BPG in 2015, she spent seven years at the Washington D.C.-based National Organization for the Reform of Marijuana Laws (NORML).
Chairwoman & CEO, National Holistic Healing Center
Panel: How to Develop Hemp Products that Appeal to Mainstream Consumers
Chanda Macias, PhD, MBA is the CEO and owner of National Holistic Healing Center (NHHC), the leading medical marijuana dispensary in Washington DC. Dr. Macias has spent 15+ years developing knowledge of medical marijuana impact on patients. Under her leadership, NHHC has earned $6.5M in annual revenues in 3 years with 98% retention, and adding 100+ new patients/month. Dr. Macias contributes growth to the market through education on ailment strain alignment, aligning a medical marijuana strain with a specific condition or ailment.
Founder and CEO, Green Bits
Panel: How to Thrive in a Changing Retail Market
Ben Curren is the CEO and founder of Green Bits, the nation’s leading compliance and retail management platform for the legal cannabis industry. Green Bits helps legal cannabis retailers run compliant, operationally efficient and growing stores. The platform serves approximately 1,000 cannabis retailers across 12 states and processes over $2.5 billion in sales annually through its point-of-sale platform. Before Green Bits, Ben co-founded Outright in 2008, an accounting program for freelancers and consultants. Four years later, he sold Outright to GoDaddy, the giant web-hosting company. Ben believes that you must understand why things are the way they are before you can successfully change them.
Partner, Wilson Elser
Panel: The Globalization of Cannabis, CBD, and Hemp: Opportunities and Challenges for Creating International Brands
Ian Stewart is a partner and co-chair of Wilson Elser’s national Cannabis Law practice. Leveraging his 20 years of legal experience, Ian helps clients navigate the challenging new risk management, business practices and insurance landscape presented by the rapidly developing area of Cannabis Law. Ian helps traditional and new organizations prepare for regulatory changes and liability trends whether dealing with regulatory compliance, product liability risks, defense of false advertising and unfair competition claims, professional liability risks, brand protection and obstacles to protecting intellectual property, assisting startups with novel risk management methods, or insurance coverage problems created by conflicting state and federal laws.
Co-Founder, Madison Jay Solutions
Panel: Today’s Key State Regulation Trends & Issues Across the Nation
Michael Cooper is the Co-Founder and Managing Member of MadisonJay Solutions LLC, a leading regulatory advisor to the adult-use cannabis industry that helps businesses understand the latest rules and build effective compliance infrastructure to address risk. Michael draws on his time as General Counsel of MHW, Ltd. and prior regulatory law practice where he designed compliance programs, advised on regulatory risks for mergers and financings, and defended companies before regulators. He is a graduate of Harvard College and Harvard Law School, clerked on the U.S. Court of Appeals for the Fifth Circuit, and practiced at Cravath, Swaine & Moore LLP.
Director of Public Policy, National Cannabis Industry Association
Panel: A Look Into the Future of FDA Regulations on Hemp and CBD
Andrew Kline joined NCIA as Director of Public Policy in early 2019 to lead substantive public policy efforts, striving to prepare and protect the state-legal cannabis industry. Kline also served as Chief of Staff and Senior Advisor for Intellectual Property Enforcement in the Executive Office of the President [Obama] where he led public-private partnership and public policy efforts.
Don’t miss your opportunity to network and learn from the industry’s leading experts at the most influential, award-winning cannabis trade show in the U.S. – NCIA’s #CannaBizSummit. See you in San Jose!
Hear what’s most important about being a member of NCIA from:
NCIA members lead the industry’s efforts to change national policy while enjoying benefits that provide a competitive advantage over isolated cannabis business operators.
Benefits include:
Be sure to download our Industry Reports, listen to our weekly podcast, and read up on the latest blogs.
Plus, check out our event calendar and get your team registered!
If you’re interested in learning more about becoming a member of NCIA, fill out this interest form or email JJ@TheCannabisIndustry.org.
by Albert Marks, Cannabis Facility Construction
As more investors consider the cannabis industry as a growth market, the need for cannabis cultivation facilities, processing centers and dispensaries is projected to rise to keep pace with demand.
A report from New Frontier Data projects that by 2020 the legal cannabis market will create more than a quarter-of-a-million jobs. These are more than the jobs expected to be created from manufacturing, utilities or even the U.S. government, according to the Bureau of Labor Statistics.
Forbes magazine estimates that medical marijuana sales are projected to grow to $13.3 billion by 2020. With this growth will be the need for quicker, cost effective construction with investors likely to consider the remodeling option.
There is value in remodeling the interior design of existing abandoned or non-productive buildings into state-of-the-art cannabis facilities that can be brought to life quickly and on-budget so that the facility becomes a new source of jobs and tax revenue for the area. This is a popular option for investors looking to tap into the burgeoning cannabis market.
Cannabis businesses have to keep track of many moving pieces in the name of compliance, growth and sustainability. Industry experts are seeing value in integrating processing and cultivation at the same site, which can open the door for better quality control. A well-designed cannabis process goes far beyond just extraction; it overlaps heavily with cultivation on the front-end and product development on the back-end.
Security is a growing issue for cannabis dispensaries, cultivation and processing facilities. According to Security Sales & Integration magazine: “Once the products reach the warehouse or dispensary shelves cannabis companies rely on advanced security systems including visual and audio surveillance to protect their valuables and even their license. In order to prevent diversion of product, most state cannabis regulations require growers, storage facilities, processors and dispensaries to have advanced video security systems.”
Cannabis facility building contractors are charged with integrating top level security measures into their renovation. This is not only relevant to cultivation facilities, but also processing facilities and dispensaries. This builds confidence with clients and investors.
When building a cannabis cultivation facility, it is critical to understand that local codes are constantly changing as local building and fire departments try to keep pace with the rapid rate of changes in the industry. Rather than try to wade through these regulations, it is important to consult with a contractor who is experienced in the industry and is current with the latest changes.
Here are a few examples of buildings remodeled into high end cannabis facilities:
According to Mitch Kahn, CEO and founder of Grassroots, a national leader in medicinal cannabis, “It really is just a neat building with character that we wanted to keep, from the tin ceiling to the bar that’s over 100 years old, and retrofit it to our purposes. We saw the promise of remodeling an old building and turning it into a modern facility.”
Investors looking to build cultivation, processing and dispensary facilities, particularly in controlling construction costs, should:
Albert Marks is Client Relations Manager for Cannabis Facility Construction based in Northbrook, Illinois. Albert currently works with clients in three states, including Illinois, Wisconsin, and Massachusetts. Marks draws on his extensive knowledge of social media and digital marketing. He oversees the company’s blog, LinkedIn, Facebook, Instagram, and Twitter profiles. Marks is trained in using the SalesNexus CRM software, which he has used to make connections while working with clients, industry partners and trade partners in the residential, commercial, retail, restaurant, exterior and cannabis verticals.
By Andrew Myers, President & CEO of ProGrowTech
As the cannabis industry continues to expand, commercial growers are looking for new and cost-effective ways to get a competitive edge in an increasingly crowded market.
The persistent and ever-growing demand for cannabis products has industry professionals wondering how they can increase their production levels and maintain quality while remaining profitable. Simultaneously, the price of cannabis continues to drop yet operational costs facing growers remain the same — this combination undoubtedly limits the ability to make much-needed investments or updates to their facilities. While the answer may be different for each grower, evaluating a few key areas may lead to increased production without the skyrocketing expenses.
What are some of the best ways to cut down on costs without inhibiting quality? Start by asking the right questions.
It can’t be emphasized enough that lighting plays an integral role in the success of any harvest. When growing indoors, agriculturalists lose exactly what plants need to survive: the sun. LED lights that produce the appropriate light spectrum and intensity can be a (sometimes superior) replacement for the sun.
When used effectively, LEDs can mimic the changing of the seasons — thereby allowing horticulturalists to hasten flowering or encourage dormancy. They’re able to change the appearance, potency and size of the plant. Spectral tuning gives cultivators control over the timing of the plant’s natural life cycle and the resulting harvest, supporting the conclusion that LEDs are the optimal lighting choice for growers seeking higher production levels in a shorter amount of time.
LEDs deliver numerous other time- and money-saving benefits to commercial growers, including:
Energy efficiency – LEDs are an environmentally friendly and sustainable choice for horticulturalists looking to cut down on energy costs — easily surpassing other lighting technologies in this realm.
Cooler running temperature – They runs at a much cooler temperatures than most other options. This means that, even with several LED fixtures delivering bright, intense light, horticulturalists don’t have to worry about burning their plants.
Durability – Lights need to survive a high-demand, busy and ever-changing commercial grow environment. Some lights include especially durable features, such as tempered glass LED chip covers and industrial-grade aluminum — they’ll last for years while also giving growers peace-of-mind.
Vertical farming has revolutionized the way we think about indoor agriculture. With the advancement of vertical racking, growers can amplify their harvests — sometimes multiplying their crops ten-fold — without having to invest in more square footage.
While this layout certainly isn’t a new idea in agriculture, it was more recently adopted by cannabis growers as some LED grow lights are now capable of being vertically racked. Many growers’ facilities have square footage limitations, whether due to budget or state law; building up, rather than out, offers the opportunity to drastically expand growing capabilities even in smaller spaces.
To keep your vertical cannabis garden in excellent condition:
This combination of technology and intelligent design expands the realm of possibility for cannabis cultivators who want to use their space more efficiently.
It’s also important to explore what the individual cultivator can do to improve harvests and offset costs. After all, they’re the ones who handle the plants on a day-to-day basis, and best understand what they need to prosper. Their approach plays a central role in crop health.
Commercial cultivators are able to implement advanced growing strategies to produce healthier and more profitable plants:
Tissue culture cultivation – This innovative technique is relatively new to the cannabis industry, although it has been used since the 1950s to aid in orchid reproduction. The process involves immersing cuttings from a healthy, mature plant in different hormone solutions. Tissue culture cultivation allows growers to quickly develop several — up to hundreds — of genetically identical plants.
Consolidate veg and bloom rooms – Adjustable LEDs offer an easy solution for growers who want to use the time-saving “flower-in-place” approach.LEDs start by delivering gentle springtime light, and growers gradually ramp up the intensity to replicate the height of summer. This method prevents plants from being shocked when they’re moved from room to room, encouraging resiliency — and reducing the required square footage to get a healthy harvest.
Critics of indoor agriculture argue it’s too expensive. And in some cases, skeptics have a point — when approached incorrectly, indoor cultivators are indeed faced with expensive operational costs that may slash their profits.
But this doesn’t always have to be the case. Advancements in technology and design, catalyzed by the creative minds leading the industry, are making indoor agriculture more realistic than ever — for any type of grower. Furthermore, indoor agriculture gives the individual grower ultimate control over the environment. One day, variables like unpredictable weather or changing seasons can be left behind. Traditional industrial agriculture results in soil degradation and pollution — moving indoors can help mitigate this negative impact on our environment. In addition, cultivators no longer have to use harmful pesticides, resulting in a healthier product for both the earth and the eventual consumer.
Andrew Myers is President and CEO of ProGrowTech, which helps commercial horticulture operations increase profitability, yield and energy efficiency with industry-leading LED lighting systems. For more information, visit progrowtech.com.
By Gary Paulin, Lightning Labels
Now you see it. Now you don’t. What’s in compliance today may run afoul tomorrow. And federal government wishes and whims continue to cast a pall over state operations.
In this topsy-turvy environment, cannabis purveyors need to be able to pivot on a dime. Everything from labeling requirements to product track-and-trace regulations can change quickly.
Recent events in Utah illustrate topsy-turvy in action. First, the electorate approved medical marijuana on the ballot last fall. Then, the state legislature stepped in and passed a bill that overhauls the provisions in an effort to tighten up controls. On Valentine’s Day, Fox 31 in Salt Lake City reported that all of Utah’s major health care organizations will show some love, allowing physicians to recommend medical cannabis. This report follows an announcement of another bill being introduced that would tweak the provisions of the just-passed law.
Still with me? OK, there’s more. In late February, Utah’s Daily Herald reported, “The Utah County Planning Commission decided Tuesday to delay a potential recommendation to amend land use ordinances to allow for cannabis production… The delay came at the request of Robert Moore, deputy county attorney, who asked for a decision to be delayed by three months in order to see if additional legislation on medical marijuana comes before the state this legislative session and to give time for the Utah Supreme Court to review a case questioning if the Utah Medical Cannabis Act passed in a special legislative session in 2018 or if the voter-approved Proposition 2 should be current law.”
The same day, Fox 31 reported, “An attorney representing a pair of groups suing the state over the new medical cannabis law is warning cities and counties that Utah is essentially creating a state-run drug cartel.”
Obviously, Utah has a lot of sorting out to do before anything gets solidified. However, this roller-coaster sequence of events can serve to educate (and warn) purveyors in other states where cannabis has been legalized to get and stay on top of all the latest twists and turns. Failure to do so can easily catch someone in a compliance shortfall that can threaten or even close down their business.
Gary Paulin is Director of Sales and Client Services for Lightning Labels, a Denver-based label printer that has been offering state-of-the-art affordable, full-color custom labels and custom stickers of all shapes and sizes to cannabis purveyors for more than a decade. They offer many options for materials and laminates and special effects to achieve digital short-run requirements (50 minimum) on up to 15 million labels, plus Lightning fast delivery. For more information and to place orders online, visit LightningLabels.com. For the latest in packaging news and labeling promotional offers, find Lightning Labels on, Facebook, Instagram, Twitter (@LightningLabels), Pinterest, Google+ and LinkedIn.
by Martha Ostergar, Content Marketing Manager of RizePoint
Advice from RizePoint, a leader in the quality assurance and regulatory compliance space for over 20 years.
As more states legalize medicinal and recreational marijuana, more companies are getting into the business of cannabis infused food products (CIFPs), more commonly known as edibles. These food products can take many different forms such as baked goods, sweets, oils, capsules, and tablets. As an alternative to smoking or vaping, cannabis-infused products are already on track to become a 5.3 billion-dollar industry over the next five years.
But if cannabusinesses want to get into the edibles production industry, their products need to comply with new cannabis-related city, state, and federal regulations, as well as established regulations for food and pharmaceutical products. The cannabis edibles industry is still in its infancy, and many states are still deciding how to best regulate these new products for public health and safety. This means navigating regulations can be tricky, but there are a few things to keep in mind to stay above board in this developing market.
Cannabis is considered a Schedule 1 controlled substance according to the U.S. Drug Enforcement Administration (DEA), and an “adulterated food product” under the U.S. Food and Drug Administration (FDA). However, the cannabis edibles industry as a whole lacks systematic federal oversight. At this stage, this means that states must decide on how to best regulate these products once voters and legislators have agreed to legalize recreational or medicinal marijuana in each respective state.
This lack of federal oversight can lead to a great deal of confusion in the industry. Nearly 100,000 packages of CIFPs have been recalled over the last few years due to inaccurate labeling, the use of banned pesticides, and other regulatory hiccups. In fact, a recent study of edible label accuracy revealed that 83% of CIFP labels differed from the actual contents of the product by over 10%, and only 17% were labeled correctly.
If cannabusiness owners want to avoid similar quality and compliance issues, they need to make sure they are following their state’s laws and regulations regarding CIFPs. That being said, some states have yet to decide how they will regulate this industry, which can leave businesses on unsure footing or without a viable quality management plan. However, the cannabis industry isn’t totally in the dark — they can look to other industries and resources to create quality-related processes that will help them protect their products, their customers, and their bottom line.
For example, cannabusinesses can look to the National Environmental Health Association (NEHA) for guidance. The NEHA has established a list of regulatory guidelines that states and other regulatory bodies can use as a reference point when drafting legislation.
Here are some examples of regulatory guidelines from NEHA’s list:
Additionally, looking to established federal and state regulations in the food and pharmaceutical industries can help businesses proactively understand and set important quality standards until cannabis regulations become more consistent and clear.
With these regulatory concerns in mind, cannabis companies can start adjusting their business operations. Proactively creating a quality management plan with high standards and consumer safety in mind is the most important step businesses can take to prepare for official regulations.
The next step is to focus on the supplier quality management process. Whether suppliers or vendors are supplying cannabis ingredients or raw agricultural ingredients, suppliers also need to meet outside regulations as well as internal brand standards that reflect a company’s specific business goals. An edibles business will need to make a plan that includes auditing suppliers at least once a year, collecting relevant and current certifications, and tracking supplier performance.
After that, quality assurance falls to the production process. As mentioned above, government regulations are only part of the quality management process. Each company will have different internal standards they wish to meet that reflect their goals as a brand, including how to produce each product consistently for a better customer experience. This process involves collecting data from yearly or quarterly audits and daily checks as well as taking corrective action when those audit questions or daily checks fail. Best practice includes reviewing and analyzing quality data to proactively understand and improve any failings in the process.
That brief overview may sound like a lot, and frankly, it is. The good news is there are already tools and resources available to help the cannabis industry create and manage quality and compliance processes.
Technology is key. It’s tempting for new CIFP companies to manage everything with pen and paper and spreadsheets as a cost-saving measure. But if you look at the food industry (among many others), it becomes quickly apparent that tech and software are needed to keep up with ever-changing regulations and to properly scale a growing business. Quality management software (QMS) helps businesses gather data efficiently to create a single source of truth. But the right QMS can also help you easily analyze that data so you can spot trends, gain actionable insights, and proactively fix issues before they become bigger problems.
These types of software have helped many other industries with regulatory compliance as well as quality consistency and brand standards. However, not every QMS is created equal, so it’s important to take your time in finding a digital solution that is right for your compliance and quality needs as well as your budget.
Consultants can help. Several cannabis consultancies already exist to help new and seasoned business owners set up and maintain internal programs for regulatory compliance and quality management. Most consultancies will be able to assess and advise cannabusinesses in cultivation, manufacturing, or dispensary management, and some have resources to do all three.
Consultants are not there to set goals for you, but the right consultant can help you achieve your goals. Before contacting a consultant, it’s crucial to think about your specific needs based on your business goals so each party can manage expectations about responsibilities and deliverables. Choose a consultant that gives you a plan upfront that includes a clear timeline as well as the detailed steps you will each take in your partnership to achieve success. It’s also a good idea to be wary of consultants in any industry that ask for payment with equity.
No matter how much rules and regulations change, you can keep a competitive edge with little disruption to you business. If you model your quality management system on other regulated industries — such as food safety and pharmaceuticals — you’ll proactively create a robust, government-friendly plan. Additionally, when you have a comprehensive plan in place, it’s easier to pivot when there are changes, to train new employees to meet the required standards, and to scale your efforts as your business grows.
Martha Ostergar is the marketing content manager at RizePoint, a quality management software company that has helped top brands to digitally manage compliance, quality assurance, corporate social responsibility, and supplier quality management for over 20 years. Visit RizePoint.com for more information.
by Gary Cohen, Cova Software
As cannabis reform barrels ahead like a freight train, entrepreneurs everywhere are eyeing ways to get in on the green rush. And for those without the background or interest in cultivation or manufacturing, cannabis retail can be a very alluring — and lucrative — prospect.
Of course, that’s not to say there won’t be work involved. Just like any other business, opening a cannabis dispensary requires a lot of planning, paperwork, and, of course, capital. It also requires a lot of additional compliance hurdles not often encountered in other industries.
Today, we’re looking at the seven essential steps you’ll need to address as you seek to launch your own cannabis retail venture.
Find a suitable location.
While it might seem counterintuitive to talk about location before licensing, the fact is that in most jurisdictions, you’ll be required to have a prospective retail location identified before you can even begin filling out the licensing paperwork.
Naturally, your dispensary location will have to align with all applicable regulations, including local zoning ordinances and state-level mandates. Researching your state’s guidelines shouldn’t be too difficult, as most maintain a checklist on their official government websites.
Obtain a cannabis retail license.
This step is easier said than done — but in the end, no license means no dispensary. Each state has their own cannabis retail licensing and application structure, so once you’ve locked down a potential location, you’ll want to begin researching the requirements and getting all the paperwork in order.
Obtaining a license may take up to a few months, so you’ll be able to work on the other components of your dispensary as you work through the licensing process. But you definitely want to know exactly what you’re up against as early as possible.
Estimate your costs.
The total cost of opening a cannabis dispensary varies greatly by state and local jurisdiction. Application and licensing fees alone can range between a couple thousand dollars up to $20k. Again, you’ll need to research your state and local permitting guides to find out exactly what you’re looking at in terms of licensing fees.
Other major cost considerations will include:
Write your business plan.
No serious investor is going to consider bankrolling your operation without seeing a solid cannabis retail business plan. Financiers want to know that you’ve covered all your bases, and your plan should address the following key areas:
Of course, detailed information about your planned location will need to be addressed as well.
Secure your capital.
As quickly as the industry is progressing, federal cannabis banking reform could be here sooner than later. But until then, cannabis-friendly financial services are still very hard to come by. That means your primary source of funding will likely be private investors, friends, family, or yourself. There are also some well-established cannabis-specific investment groups out there that are worth looking into.
Consider your dispensary technology needs.
As a cannabis dispensary owner, you’re going to need a technology solution that not only keeps up with the typical retail performance burdens but also satisfies your state’s compliance requirements — in other words, seed-to-sale reporting.
When it comes to a cannabis retail point-of-sale system, you’ll want to consider the following:
Determine your product sourcing procedures.
Finally, you’ll need to determine how you’ll source your products. This is another area that you’ll need to reference your particular state’s rules and regulations on; some states prohibit dispensaries from being involved in cultivation, and others highly encourage it. Either way, you’ll likely have to obtain a separate license if you want to get into cultivation.
Start by identifying and interviewing local cannabis producers. This is also a good opportunity to determine the types of products you’ll want to offer and ways you can incorporate them into your marketing.
Want to Learn More about Opening Your Dispensary?
Get a more in-depth look at everything involved with launching your own cannabis dispensary by downloading our How To Open A Cannabis Dispensary e-book — it’s absolutely free.
Gary leads Cova’s charge into the legal cannabis space by guiding the vision, strategic development, ‘go to market’ plans and culture.
Before joining Cova, Gary was a principal in over a dozen tech start-ups in the mobile communications industry ranging from small VC funded companies to Fortune 100 firms, including Onavo, which was later acquired by Facebook. In those companies he led sales, marketing, business analytics and market expansions. He has also held a multitude of leadership roles with Verizon and AT&T.
Gary holds a degree in finance with a master’s in marketing from the University of Colorado.
by James Schwartz, CEO of Cascade High Organics
The challenges facing companies pioneering a new industry where each state deals with its own issues are numerous. The importance of strategic business planning and the ability to predict future problems are essential to survival. Colorado, Washington, and Oregon have each dealt with their unique issues and challenges but there are also common problems that every cannabis business experiences: burdensome regulation, unfair taxation, and banking prohibition to name a few. Building your company and brand is dependent on your ability to maneuver your company through the obstacles that will arise in your state market while also planning for a future of legal interstate commerce through a change in federal policy. To place your company in a position to be successful, you should understand the past to predict the future.
The history of cannabis is long and distorted, however a few basic points of what brought us to the current state of federal prohibition and individual state markets should be noted for context.
Cannabis use as medicine dates back to 2700 BC in China, and has been used throughout history. In 1850, it was added to the U.S. Pharmacopeia. Prior to state and then Federal prohibition, cannabis was an elixir/tincture used in many common household cough/cold syrups and other medications for stomach-aches, asthma, depression, and many others. In the 1930s, cannabis was regulated as a drug in all states, and in 1937, the passing of the Marihuana Tax Act regulated it federally. Then in 1970, the Controlled Substances Act determined cannabis to be a Schedule 1 drug meaning it has no medical benefit and a high risk for abuse. From 1970 to 1996 the manufacture, use, or possession of cannabis was illegal in all fifty states.
In 1996, California became the first state to legalize the medical use of cannabis through Proposition 215. California was the first domino to fall and further background of the early days of California medical cannabis will be addressed in later blogs in this series focusing on California. Over the next twenty years, 37 states have joined California with medically legal cannabis, and nine states have passed and implemented legal “recreational” (now referred to as “adult use”) cannabis programs.
Oregon was the second state to pass medical cannabis in 1998 and that was the start of this author’s journey through the cannabis industry. Prior to 1998, Oregon had been a bastion of black market cannabis cultivation due to its climate and wide open spaces especially in rural southern and eastern Oregon. After 1998, the state “protections” offered by medical cannabis state law allowed the cultivation industry to flourish. However, as opposed to California the state was more focused on growing weed and selling it around the country rather than setting up a distribution system to the medical patients of Oregon. This led to some of the early challenges of the medical cannabis program in Oregon. At this time, the Oregon population was relatively small compared to the state’s cannabis production. Oregon was on its way to being one of the largest cannabis producers in the country. But because cannabis was so easily accessible there was little effort put into a healthy distribution system to Oregon patients. Most patients either grew for themselves or had a designated “grower” and that is where I started in the industry.
As a nurse who had self medicated with cannabis for ADHD, I began growing for patients because I wanted to provide others with access to the amazing health benefits of cannabis. This was the common way most patients accessed their cannabis. There were no dispensaries when the program started and patients who didn’t have a grower were relegated to barter trade types of acquisition. In 2005, the Oregon Legislature allowed growers to be reimbursed for the cost of production and in 2010, the first dispensaries began to pop up. However, it wasn’t until 2012 that legal retail entities were allowed. This lack of a retail access point for patients was one of the first impediments to the program and allowed states like Colorado and California to take the mantel on progress of a robust program of medical cannabis distribution.
In 2000, Colorado became the sixth state to allow medical cannabis with Amendment 20. Its medical program remained low key until 2010 when the Colorado Medical Marijuana Code was created, which provided for licensing of production and retail establishments. This change was a giant step to the progress of cannabis legalization.
Colorado followed the early model presented in California and began implementing licensed retail establishments for card carrying medical cannabis patients. Retails stores began to flourish and this laid the groundwork for the establishment of the Adult Use program. In 2012, Colorado became the first state to legalize what was originally referred to as recreational cannabis now called “Adult Use” cannabis, which allowed the sales of cannabis to all adults aged twenty-one and older and the boom began. Colorado’s medical program developed into a rapidly growing Adult Use system and with the new federal guidance of the Cole Memo in 2013 canna-businesses began growing rapidly.
The primary language of the Cole Memo highlights a “robust tracking system” of all products produced and sold. The Cole Memo did not provide protections for cannabis businesses but provided guidance that helped assure businesses of some safety from federal interference. With the advent and implementation of a tracking system we could now be assured of where products came from and be able to track them back to their origin.
Once tracking was in place, lab testing for the safety of the consumer came to the forefront of industry progress. This was one of the first problems Colorado realized it had with its blossoming industry. As opposed to Oregon which required all products sold through its immature dispensary system since 2012, Colorado had not required lab testing of all its products until 2016 after several large quarantines and destruction of unsafe contaminated products. Many Colorado producers struggled with new pesticide regulations and was an early sticking point to growth of the industry. Over the first years of Adult Use cannabis program, Colorado struggled with the infancy of a brand new industry and how to regulate it and consequently, businesses suffered.
Other early challenges that the first legal state dealt with were allowable dosages and changes to dosing, as well packaging changes and the look of products, specifically how or if the products were attractive or marketed to children. The obstacles of a new industry most directly affect the businesses and their bottom lines. These are important points to consider when strategizing your business model and planning for inevitable changes to regulations. The time spent preparing for a system that will change will go a long way to ensuring for success.
Now let’s talk about Washington.
Washington was the third state to approve medical cannabis but had problems with implementation due to legislative issues. As multiple pieces of legislation were offered, adopted, and repealed, the lack of clarity prevented the medical cannabis industry from launching. Washington passed its adult use cannabis program at the same time as Colorado in 2012. In Washington, the two major obstacles the industry faced were licensing issues and taxes. A previously existing strong medical program in Colorado allowed for a seamless transition to an adult use program, but that was not present in Washington and this added to difficulties with implementing an adult use program.
Because the industry was just getting off the ground, both states relied on their medical programs as a foundation to the adult use. However, Washington’s medical program was murky and disorganized which lead to complications, Washington also limited licenses and put unfair taxes on the industry. These two factors aided in keeping the black market as the primary driver of the industry, rather than pulling people or businesses into a controlled, tracked, and regulated system.
This provides a nice segue to one of the challenges all cannabis business face: unfair taxes in the 280E tax code. Internal Revenue Code section 280E specifically denies a deduction or credit for any expense in a business consisting of trafficking in illegal drugs “prohibited by Federal law or the law of any State in which such trade or business is conducted” which translates to only “Cost of Goods Sold” as the only deductible expenses. This means administrative costs, executive salaries, marketing and advertising, banking fees, etc., are non-deductible expenses for any cannabis business and subjects them to much higher taxes as most normal business deductions are prohibited. This challenge is one all cannabis businesses deal with and must be factored into financial modeling.
While we are on the the subject of taxes and non-allowable deductions, banking is the other major challenge all cannabis businesses face. Due to federal policy around an illegal substance, FDIC insured institutions force canna-businesses to operate in all cash for fear of prosecution under racketeering and money laundering laws. There are a handful of financial institutions, credit unions, or state banks that offer “Enhanced Monitoring Accounts” for cannabis companies. However, they are highly priced and rare. The average cannabis bank account is likely to run $1,000.00 a month, just to have access to banking services, not including additional fees. This $12,000 a year budget line item, while not only expensive, is not a tax write-off per 280E tax code.
One can quickly see from just these two major hurdles or challenges to the industry, normal operations can be difficult. These obstacles are not to be taken lightly; they can be addressed but it must be factored into operating procedures, financial planning/budgeting, and strategic vision.
As Washington and Colorado dealt with its issues, Oregon voted to approve “Adult Use” cannabis in 2014. Using Colorado and Washington as a guide, Oregon implemented their system with more deliberation and vision based on what had been experienced in the first two states. But as was seen with the unique challenges in the first two states, Oregon encountered an entirely different set of problems. Oregon currently faces a massive oversupply problem which has affected all facets of business across the industry. In normal business and supply and demand economics, if an area is oversupplied, business move their products to where the demand is higher or the supply is lower. However, cannabis remains a federally illegal product and therefore interstate commerce remains illegal.
Oregon’s unique problem originated from two main issues:
This lack of license caps has allowed the number of licensees to explode and thereby allowed the oversupply issue to occur and continue to grow. As stated, this is not a problem exclusive to cultivator/producers. Because of a 75% drop in value, cannabis attorneys, electricians, HVAC, security companies and other ancillary businesses are not getting paid. The oversupplied market and decreased revenue has reverberated across the industry and driven otherwise thriving companies into bankruptcy.
As you can see, each state deals with its unique challenges when implementing its Adult Use cannabis program, while we all deal with some issues that affect us all. The key to thriving… or surviving is to prepare your company to deal with the current challenges shared by us all and predict the challenges that your business will face in your state while preparation is taken for a national and international market.
James Schwartz RN, BSN, LNC, is an experienced medical legal consultant and CEO of CascadeHigh Organics with 20 years experience cultivating legal cannabis. James is a self-described organic minimalist cultivating in the most sustainable manner. James believes in clean cannabis and its use as a wellness drug. His Oregon licensed cultivation, Cascade High, has been featured in Dope Magazine and on the cover of Oregon Leaf’s Sustainability issue (March ‘18). James was featured as the Inaugural Stoner Owner by OR Leaf in Dec 2018. He has articles published by Dope Magazine about Cannabusiness and the Pharmaceutical Industry (May 2017), as well as a medical cannabis article in the Jan. 2019 Healthcare issue of OR Leaf. James is currently on the NCIA Cannabis Cultivation Committee and has presented Cannabis topics to multiple audiences at conferences including Cannabis Science Conference, PDX Hempfest, Cannabiz Convention, CBD Expo and Webinar series, Cannabis Collaborative Conference(CCC), Cannabis Nurse Conference, NCIA and educational industry mixers. His business, legal, medical, and agricultural knowledge provides a unique perspective on the industry. James has lobbied for Cannabis on both the national and state level with Oregon Cannabis Association and is a fierce advocate for the plant and all who use it.
by Michelle Rutter, NCIA’s Government Relations Manager
The 116th Congress just began, but there’s already been a flurry of new cannabis bills filed. Let’s take a look at some of the first pieces of legislation to be filed in the House of Representatives on the topic:
Bill: H.R. 420: Regulate Marijuana Like Alcohol Act
Introduced by: Congressman Earl Blumenauer (D-OR)
What It Does: This bill was introduced in the 115th Congress by now-Governor Jared Polis (D-CO). Filed in the 116th Congress by Rep. Blumenauer, this bill would remove cannabis from the Controlled Substances Act entirely. It would also transfer cannabis enforcement authority from Drug Enforcement Administration to a renamed Bureau of Alcohol, Tobacco, Marijuana, Firearms and Explosives. Both shipping or transporting cannabis into states that have not legalized it would continue to be prohibited. Last year, the bill garnered 26 cosponsors.
Bill: H.R. 493: Sensible Enforcement of Cannabis Act
Introduced by: Rep. Lou Correa (D-CA)
Additional cosponsors: Reps. Steve Cohen (D-TN), Don Young (R-AK), Dina Titus (D-NV), Matt Gaetz (R-FL), Eleanor Holmes Norton (D-DC), Salud Carbajal (D-CA), Peter DeFazio (D-OR), Katie Hill (D-CA)
What it does: This bipartisan bill seeks to enshrine the now-rescinded Cole Memo into federal law. The legislation directs the Attorney General, in enforcing the provisions of the Controlled Substances Act relating to cannabis, to focus on certain enforcement priorities that were outlined in the Cole Memo, such as:
This bill was previously introduced at the very end of the 115th Congress. NCIA is proud to have endorsed this legislation.
Bill: H.R. 127: Compassionate Access, Research Expansion, and Respect States (CARERS) Act of 2019
Introduced by: Rep. Steve Cohen (D-TN)
Additional cosponsors: Reps. Don Young (R-AK) and Matt Gaetz (R-FL)
What it does: This bill would amend the Controlled Substances Act to state that regulatory controls and administrative, civil, and criminal penalties do not apply to a person who produces, possesses, distributes, dispenses, administers, tests, recommends, or delivers medical marijuana in compliance with state law. The bill also excludes “cannabidiol” (CBD) from the definition of “marijuana” and limits the concentration of delta-9-tetrahydrocannabinol (THC) in CBD to 0.3 percent on a dry weight basis. The bill also directs the Department of Health and Human Services (HHS) to terminate the Public Health Service’s interdisciplinary review process that is used to evaluate applications for medical marijuana research, opening up a multitude of research opportunities. The bill requires the DEA to license manufacturers and distributors of marijuana for medical research;, for HHS to register practitioners to conduct research, and for the Department of Veterans Affairs (VA) to authorize VA health care providers to provide recommendations and opinions to veterans regarding participation in their states’ cannabis programs.
Many more (possibly dozens!) of cannabis bills are expected to be filed in the next few months. NCIA will continue to track these pieces of legislation and endorse critical cannabis reforms on Capitol Hill.
by NCIA’s State Regulations Committee
authored by Juli Crockett, MMLG
As 2018 came to an end, the FINAL proposed text of the permanent regulations for California cannabis were submitted to the Office of Administrative Law (OAL) by the three regulatory agencies – the California Department of Food and Agriculture (CDFA), California Department of Public Health (CDPH), and the Bureau of Cannabis Control (BCC). The cannabis regulations submitted to the OAL are currently undergoing a 30-day administrative review to ensure alignment with MAUCRSA and statutory requirements. These “final’ regulations shall become effective immediately upon approval/adoption which should be on/before January 16th 2019.
What “final” means in this evolutionary process of California cannabis regulations is debatable, as there are already several Assembly and Senate bills queued up to be put through the legislative tango and all three of the regulatory agencies have indicated that there will be further clean-ups and clarifications of the “permanent” regulations. Although there will assuredly be changes ahead, this is a highlight reel of where California Cannabis stands now.
For those that dug into the October redrafts, much of the substantial changes that occurred in that version carried over into the final proposed text. Here we will highlight the top eight changes impacting cannabis businesses in California.
The Final Statement of Reasons from the BCC, which also included responses to pertinent comments received during the previous 15- and 45-day comment periods, is where some greater clarity about the regulatory changes and intents can be found. It is by spelunking into these deeper caverns of reasoning where the sweet ore of further clarity can sometimes be extracted.
Here are 8 highlights for anyone interested in California cannabis.
In October we saw the expansion of the definition of ownership and financially interested parties that clearly sought to capture the identification of any and all warm bodies that stand to direct, control, or financially benefit from commercial cannabis. While there were some changes in sections §5003 and §5004 between the previous and current version, the scope and intent remained the same. One particularly vague line §5003.b.6.D “Any individual who assumes responsibility for the license.” was removed from the BCC’s definition of owner, this very line turned up over the in the CDPH’s update in §40102.a.4.D.
The Ownership and Financially Interested Parties disclosures dovetail into the White Labeling issues (See #2) in that “Brand Owners” that may be licensing IP to contract manufacturers have been impacted by the prohibition on non-licensees conducting commercial cannabis business with licensees. In the response to comments in the FSOR was this gem of insight, “In response to commenter’s questions, if a licensee includes as one of their owners a brand-owner, the licensee can produce the branded products because in this case the licensee is not engaged in commercial cannabis activity on behalf of an unlicensed person. Because the owner of the brand is an owner of the licensee, there is no unlicensed person involved.” Of course, before everyone runs off and adds brand-owners as owners of their contract manufacturing business, let’s take a moment to reflect on the value and critical importance of a well-drafted contract.
From the BCC’s FSOR: “Initially, the Bureau determined that it was necessary to assist licensees with determining what types of activities may or may not be allowed under the Act and its implementing regulations. The initial proposed change identified certain transactions that would generally be considered commercial cannabis activities under the Act. However, the Bureau has determined that inclusion of the clarifying example transactions is causing more confusion. Accordingly, the Bureau has decided not to move forward with the proposed changes which identify examples of specific commercial cannabis transactions.” The definition of “commercial cannabis activities,” therefore, is an important one, and we can refresh ourselves on that one (Business and Professions Code §26001.k) “‘Commercial cannabis activity’ includes the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery or sale of cannabis and cannabis products as provided for in this division.”
This has been a hot, hot topic, and there have been some great analysis articles of this provision that dig further into solutions and scenarios related to this section. Get thee to Google and find out more!
This was a big win for the industry! A substantial percentage of testing failures for “label claims” are due to products, previously required to be labeled with THC/CBD content prior to final testing (the one test that counts!) not falling within the 10% allowable variance threshold. It’s common knowledge that the science of cannabinoid testing is still getting dialed in, and the labs have some serious challenges in hitting the same tiny target twice. Especially when they are dealing with the vast array of cannabis product matrices, and an industry that it still learning about important things such as homogenization. The good news is, the CDPH now allows products to be labeled for THC/CBD content after that all-important final test, which should eliminate well-upwards of 50% of the product failures in California and ensure a steadier supply chain.
The cannabis industry has always been a place of innovation and loophole-finding. These regulations are an attempt to close some of those loopholes that seem to have created a situation where unlicensed tech platforms were enjoying the privileges of licensed commercial cannabis without undergoing the slings and arrows of local/state licensure and regulation. Seeing themselves outside of the regulatory purview, certain business claimed that agencies such as the BCC had no dominion over their activities. Well, they may have wanted to wait until the ink dried on the final regs before making such an assertion, as now it seems the BCC has expanded its reach to embrace all kinds of advertising, facilitating, and delivery platforms.
This was (potentially) a huge win for patient access, however, it remains to be seen how this truly shakes out. When the BCC added the line that “a delivery employee may deliver to any jurisdiction within the State of California” it caused some serious outrage from municipalities that have banned commercial cannabis activity, the League of Cities, law enforcement, and others that saw this as a huge overstepping of the local authority ensured by Prop 64 and MAUCRSA. The LOC even launched a “wandering weed” campaign, in response to which it seems that a subsection that includes “a restriction on delivering cannabis goods to a school providing instruction in kindergarten or any grades 1 through 12, day care center, or youth center” was added to the regulations, for clarity. Whether the OAL will approve as is, and how this interacts with local bans, tax requirements, and law enforcement, and lawsuits… stay tuned! While the BPC (§26090.e & 26080.b) explicitly prohibits a local jurisdiction from preventing delivery, and transportation, of cannabis goods on public roads, it does not prevent localities that have banned commercial cannabis in their area from adopting ludicrous tax rates for deliveries that would in effect ban via taxation delivery in their area.
While the seeming victory of the Farm Bill has folks leaping with joy for the future of hemp, statements from the FDA and other agencies have certainly rained on the parade of many a CBD vendor. Add to that the collections of California cannabis regulations that in effect eliminate hemp-derived CBD from cannabis dispensaries and products.
“In addition to cannabis goods, a licensed retailer may sell only cannabis accessories and any licensee’s branded merchandise.” (BCC §5407)
This limitation for retail (and retail delivery) is further clarified in the BCC’s FSOR in their responses to comments:
“Cannabis retailers are licensed to sell cannabis goods. The definition of cannabis within the Act explicitly excludes industrial hemp products. Industrial hemp is regulated by the California Industrial Hemp Program under the California Industrial Hemp Farming Act.”
“A retail license from the Bureau authorizes the retailer to sell cannabis goods and cannabis accessories. A retail license from the Bureau does not authorize licensees to sell items that are unrelated to cannabis.”
Combined with the retail prohibition on non-cannabis products, this trifecta from the CDPH extends that prohibition to manufacturers:
For now, it seems, non-cannabis derived CBD is DOA in CA.
Heads continue to spin (and cannabis business’ cash to hemorrhage) in response to the changes in the packaging requirements. As of July 1, 2018, all cannabis products were to be in child-resistant packaging, and retailers had converted back to the statutory requirement that all exit packaging was to be “opaque,” allowing them to use reusable totes and paper bags to satisfy this requirement. In the October regs, we saw a pivot that allowed for a seeming “grace period” for the child-resistant requirement to return to being able to be satisfied by the retail via CR exit bag. Some confusion remained as to whether products that were already IN child-resistant packaging would have to be put INSIDE of child-resistant packaging for the next year. The addition of the statement from the CDPH, “Until the date specified [1/1/20] the child-resistant package requirement [§26120] may be met through the use of a child-resistant exit package at retail sale.” (CDPH §40417.d) suggests that the significant ecological impact of CR packaging within CR packaging MAY be avoided, however, most legal counsel will probably be advising retail clients to use the CR exit bag to avoid potential liabilities. Viva Kafka!
In the CDPH’s Statement of Reasons, they said “This is necessary to comply with the packaging requirements in Business and Professions Code section 26120 while providing licensees with time to comply with packaging requirements.” Compliant operators were left somewhat confused, as they had been required to comply with these packaging requirements since July!
All three regulatory agencies added the following requirement for OSHA training:
“For an applicant with more than one employee, the applicant shall attest that the applicant employs, or will employ within one year of receiving a license, one supervisor and one employee who have successfully completed a Cal-OSHA 30-hour general industry outreach course offered by a training provider that is authorized by an OSHA Training Institute Education Center to provide the course.”
This will be an additional training requirement, on top of existing state and local training requirements for cannabis operators. And remember, all that training documentation must be kept, like all other records, for seven years!
As with everything in life, more will be revealed as we get deeper into 2019.
Juli Crockett is a member of the NCIA’s State Regulations Committee and is Director of Compliance at MMLG. Slides from Juli’s recent Workshop on this topic are available for download here. You can also watch the workshop video in its entirety on MMLG’s Facebook page.
by Robyn Ranke, Eskaton Law
California Bureau of Cannabis Control (BCC) Proposed Final Regulations:
There are some quirky cannabis regulations seldom discussed by industry professionals which have a hidden impact on your business operations. Most business owners are, as they should be, preoccupied with the more prevalent draconian-styled regulations, like license fees, taxation, and testing.
Obviously the state has public safety concerns with the legalization of marijuana, but has the state overreached in its mission to craft “robust regulations” for the industry. Upon review of 142 pages of proposed regulations, we opted to shine light on what we consider to be quirky cannabis provisions that have gone unnoticed by cannabis business owners. Some are laughable, others insulting; and as to the remainder, the state’s regulation of your cannabis business simply never ends.
The California Bureau of Cannabis Control BCC proposed final cannabis regulations are currently under review of California Office of Administrative Law AOL to complete the rulemaking process. After considering the following, one might ask, what exactly were the rule-makers thinking when they wrote these provisions?
California Quirky Cannabis Regulations
No. 1 No Naked Employees
No licensee shall employ or use the services of any “host or other person to mingle with the patrons” … “in the sale or service of cannabis goods in or upon the licensed premises while such person is unclothed or in such attire, costume, or clothing as to expose to view any portion of the male or female breast below the top of the areola or of any portion of the pubic hair, anus, cleft of the buttocks, vulva, or genitals.” Nor shall the licensee encourage or permit any person “to touch, caress, or fondle the breasts, buttocks, anus, or genitals of any other person.”
– Cannabis Strip Club?
No. 2 Beware Of Fake Buyers
“Peace officers may use a person under 21 years of age to attempt to purchase cannabis goods, for the purposes of enforcing the Act, and to apprehend licensees, employees, or agents of licensees who sell cannabis goods to minors.”
– Entrapment?
No. 3 Your Coffee Cup Is Regulated
If a licensed distributor, retailer, or microbusiness “wishes to sell branded merchandise” – goods other than cannabis such as clothing, hats, pencils, pens, keychains, mugs, water bottles, beverage glasses, notepads, lanyards, cannabis accessories – “the licensee must receive written approval from the Bureau.”
To obtain a approval, the licensee must submit a written request and provide a photograph to the Bureau. Notably, there appears a discrepancy in the language of the regulation 5041.1 as to whether or not approval is required for all items listed in §5000(b) definition of “branded merchandise.”
No. 4 $500 State Fee To Modify Your Reception Area
An application and licensing fee of $500 is charged for “Physical Modification of Premises.”
Alterations or modifications to the premises include, but are not limited to: “the removal, creation, or relocation of a wall or barrier; or changing the activities conducted in or the use of an area identified in the last premises diagram provided to the Bureau.”
No. 5 Cannabis Goods Intended For Disposal Must First Be Destroyed On The Premises Except Vape Cartridges Filled With Cannabis Oil
Cannabis goods intended for disposal must remain on the licensed premises until destroyed into cannabis waste. The licensee must restrict access to the cannabis goods intended for disposal, store the disposal goods separate from the other goods, and first destroy the goods “on the licensed premises.” This includes separating the cannabis goods from any packaging, or container rendering it “unrecognizable and unusable.”
However, the licensee is not required to empty vape cartridges of cannabis oil prior to disposal, “provided that the vape cartridge itself is unrecognizable and unusable at the time of disposal.”
No. 6 You Get One Chance, With One Lab, To Test Your Cannabis
Once a cannabis sample has been obtained for testing by the laboratory employee – which sampling must be “video recorded with the batch number stated verbally or in writing on the video at the beginning of the video and a visible time and date indication on the video recording footage” (§5305) – a licensed distributor may not have another licensed testing laboratory sample or re-sample the same batch for regulatory compliance testing without the Bureau’s blessings, e.g. you must first making a written request to, and obtain, the Bureau’s written approval to re-sample the same batch (§5705(g).)
No. 7 Unfettered Discretion To Audit Your Business 24/7 Without Notice
Licensees shall keep and maintain all business records related to commercial cannabis activity for at least 7 years to and including (a)(9) “all other documents prepared or executed by an owner or their employees or assignees in connection with the licensed commercial cannabis business.”
(d) All records are subject to review by the Bureau anytime . . . . Prior notice by the Bureau to review records is not necessary. The Bureau may review records outside of the licensee’s standard daily business hours.”
– Something Unconstitutional About This, Right?
No. 8 Ultimate Veto Power Over Renewal Of Your Retail License
Even if you satisfy all licensing regulatory requirements on both the local and state levels – the Bureau maintains the exclusive discretion to deny you a license and/or deny renewal of your license if the Bureau determines that (a) “an excessive concentration exists in the [geographical] area” where you operate.
Excessive concentration applies when either of the following conditions exist: “(1) the ratio of licensees to population within the census tract or census division in which the applicant premises is located exceeds the ratio of licensees to population in the county in which the applicant premises is located . . . . (2) The ratio of retail licenses or microbusiness licenses to the population within the census tract, census division, or jurisdiction exceeds that allowable by local ordinance . . . .”
Should the Bureau deny your license on this basis, the burden is on the you, the applicant licensee, to (f) “provide reliable evidence establishing, to the satisfaction of the Bureau, that a denial of a license would unduly limit the development of the legal market so as to perpetuate the illegal market for cannabis goods.”
The list goes on. While the California BCC has clearly satisfied its commitment to promulgate “robust state regulations” for the industry, one wonders about the state’s definition of robust.
An experienced corporate litigator having worked in both the private and government sectors, Attorney Robyn Ranke has taken a modern business approach to the cannabis industry and in working with cannabis business startups. Throughout her legal career, Robyn has represented a diverse base of business clientele in a variety of industries involving both complex and novel legal matters. Her diverse experience as a business litigator provides a valuable legal platform from which she is uniquely postured to address the regulatory hurdles, costly pitfalls, unique business transactions, and business litigation risks that confront California cannabis business owners today and into the future as state regulations continue to evolve.
As 2018 comes to a close, it’s a great time to sit down and reflect on the successes and challenges of 2018 for cannabis reform. We’re excited to present to you the first installment of our new quarterly Policy Webinar Series with NCIA’s Director of Government Relations Michael Correia, and Policy Council Chair Steve Fox. Watch the webinar and learn more about the successes our industry has had on Capitol Hill this year, the challenges that may be in store in 2019, and what you can do to take action.
by Jeremy DePasquale, NCIA Membership Director
This Thanksgiving holiday, we wish to simply say THANK YOU for being a part of the next great American industry, and for taking this journey with us as we all create a responsible, legitimate cannabis industry together.
As the NCIA staff begins to wrap up the year 2018 and look ahead into 2019, not only is there so much to be thankful for in this year alone, but also in the last eight years since NCIA’s founding in 2010. Our membership has grown to over 1,700 member companies strong, and we’ve seen the industry evolve and mature at an impressive pace during this time.
NCIA’s executive director and co-founder Aaron Smith is “…deeply grateful for the hundreds of responsible cannabis businesses that have invested in the vital work needed to advance our industry through their membership with NCIA. Our members have made it possible to gain real traction and support in Congress over the last year and those who donated to our PAC have helped us elect an even better Congress going into 2019.”
The NCIA staff, now a vibrant team of twenty passionate and driven individuals, are focused on providing the best service and support to our ever-growing membership in the form of helpful member benefits, opportunities to get involved, and valuable networking opportunities for you and your business.
This year and every year I’m thankful for you, our members. I’m constantly amazed and inspired by your passion to continue making our industry the gold standard. NCIA is as strong as it is because of the support and engagement of our members, and we are working on new and exciting ways to keep you engaged. Here’s to 2019!
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