Child Resistant requirements for cannabis products is part of the regulatory structure for almost every state that has legalized marijuana for both medical and adult use. These requirements pose challenges to the entire supply chain from growers, manufacturers, dispensaries and customers.
Child resistant packaging is defined by the CPSC on a federal level. Most states refer to the CPSC guidelines for testing and certification of packages. There is no such thing as a child proof package. There is only a child resistant package as defined by the CPSC or other state cannabis regulators.
No one likes child resistant packaging – that’s a given. It is used because regulations require it. The cannabis industry is one of only a few that have to use this type of special packaging.
Start your search early in your development process to find the right package solution. Customization takes time with your manufacturer to design, develop and engineer to meet your branding and production needs. There are both single use and multi use child resistant packages. Ask your regulatory advisors which type of child resistant feature you need to use for each type of product.
Make sure your child resistant packaging has been tested and certified by an approved ASTM third party testing agency. Your packaging manufacturer should have the certificates from these outside agencies for you to have on file to support your regulatory compliance.
Costs for these certified child resistant packages are going to be more expensive than non child resistant options. Build these costs early into your total spend.
Our industry is going to push the design and engineering solutions for child resistant packaging to support the branding and marketing of all these great new products. Other issues such as sustainability and use of recycled materials will also be demanded by the cannabis industry. Manufacturers and suppliers of child resistant packaging will have to step up their game to support this new and exciting industry.
VIDEO: How Section 280E of the IRS Tax Code Burdens the Cannabis Industry
As tax season officially concludes, many cannabis businesses are feeling the burden of Section 280E, which can have the effect of taxing direct-to-plant businesses at a rate up to 3.5 times higher than other businesses. This unfair provision in the federal tax code affects the entire industry’s growth potential.
Watch this video below to learn more about Section 280E. Find out more about the solution: The Small Business Tax Equity Act which would allow for the fair and equal treatment of cannabis businesses.
In order to run a successful PR campaign or build your own PR department you will need a set of tools that you can pull from again and again. Here are key strategies you need to tackle in order to build a successful toolkit.
Define your story. Story telling is at the heart of every PR campaign and will drive everything you do. As you know, cannabis is on fire wth new products introduced everyday. The ones who tell their story in a compelling way are the ones that will stand out. Ask yourself: how is your company, product, or service better or different than any other on the market? Is your product the first of its kind? Are you a bootstrap entrepreneur? Have you been a cannabis activist since the 90s? Does your company help people in need? Your story will be the DNA that is weaved throughout your toolkit, from your elevator speech to speaking to media.
Develop a media list. This list should have the following components: reporters’ names, titles, contact information, what they cover on their “beat,” —and this one is important—what you have pitched them and when you have pitched them. This is your guide to keeping organized and remembering who you’ve contacted. Cannabis beats are starting to fragment now into silos like “business,” “products,” and “lifestyles.” Don’t make the mistake of sending a business-focused press release to a lifestyle reporter. It’ll be ignored. There are companies like Meltwaterthat provide a comprehensive and constantly updated media data base. While there is a yearly subscription, it will help save an immense amount of time since pulling together a media list is time intensive.
Develop a media kit. When sending out a press release or pitching media, you should provide them with everything they need to run your news. Include facts about company executives and leaders as well as their headshots, a company overview, press releases, and compelling photos and images of your product or service. The goal of a media kit is to make it easy for reporters to understand the who, what, why, when and how of your company and its unique story. If reporters are provided with all this information (most importantly high-quality images and photography) at their fingertips, your chances of coverage increase. Your media kit should be online, digital, and easy to access.
Develop a press release. This could be its own blog but for now here are the key steps. Keep it simple. Stick to the who, what, where, when and how. Write a compelling headline that helps your news stand out and write the body of the release in the inverted pyramid style, meaning, have your most important information in the lead paragraph then include less important news below. (Industry secret: Most reporters will stop reading after the first paragraph. Make it a good one!) Write your press release in Associated Press (AP) style. This is the language that reporters understand and will recognize when they see it. Be upfront and transparent, clear and concise. Reporters are too busy to dig for the news in your release so keeping it simple will help you get more coverage.
Distributing your press release. Using your media list, send one email at a time (never do a mass, BCC: pitch), customize your email and make it personal. The goal here is to build relationships with reporters, not spam them. It’s important to follow up after sending your release but don’t make yourself a pest as reporters are overworked, cover myriad beats, and are always under deadline. Always. If you want a broader approach distribute your press release through a wire service. The huge advantage here is the breadth of media outlets your press release will get in front of, however, you won’t get that personal touch point. Wire services can be expensive but depending on the scope of your news, entirely worth it.
Leverage social media. Again, this could be its own post, but the short take is: use your social media channels (Facebook, Twitter, Instagram, LinkedIn) to announce your news. Since a press release is written in a specific style for reporters, feel free to re-craft for your social audience in a friendlier, accessible voice. Reach out to reporters on Twitter with your news (with a big caveat: some do and some do not like to be pitched on social media and in public; do your research before tweeting a pitch). Lastly, when and if you get any coverage, you must post it on your social media pages. It’s a powerful way to increase your visibility, build credibility, and connect with new followers.
Carol Ruiz is co-founder and Partner of Higher Ground PR and Marketing. Janitor, construction crew clean up, waitress, documentary filmmaker, adjunct professor… just a few of the paths Carol Ruiz walked before finally finding what she would do for the rest of her life.
At these former gigs, as founder of NewGround PR & Marketing (a highly regarded agency in the real estate space), at Higher Ground, and at dinner tables the world over, Carol is a storyteller. Storytelling being the heart and soul of public relations, it’s no surprise that Carol was drawn to the world of PR.
2018 NATIONAL CANNABIS INDUSTRY FORECAST
Michelle Rutter, NCIA
by Michelle Rutter, NCIA Government Relations Manager
With the beginning of 2018, we start another election year. Multiple states in the midwest are running medical cannabis ballot initiatives, while Vermont is set to become the first state to legalize adult-use cannabis through the state legislature. In Washington, D.C., policy moves at a slower pace, but with Attorney General Jeff Sessions in office, it’s important to remain vigilant. Let’s take a look at what may happen in cannabis policy across the country:
MEDICAL CANNABIS POLICY
UTAH
The Utah Patients Coalition (UPC) is leading a 2018 ballot campaign to establish a medical cannabis program. The initiative seeks to protect terminally and seriously ill patients with specific debilitating medical conditions, including HIV/AIDS, PTSD, and chronic pain, among others. In addition, the initiative allows for caretakers to administer medical cannabis and would issue four types of licenses if passed: cultivation facilities, processing facilities, independent testing laboratories, and dispensaries.
The Chairman of the Senate Finance Committee, Orrin Hatch (R-UT) has introduced a medical cannabis research bill, and has even said on the Senate floor that medical cannabis can be an alternative to opioids. Passing the 2018 ballot initiative in his home state of Utah will be critical to furthering advocates’ work at the federal level.
A recent poll done by the Salt Lake Tribune found that 3 in 4 Utahns support legalizing medical cannabis. The campaign must collect 113,143 signatures from registered voters in order to qualify for the ballot. As of October 2017, the coalition had already garnered 20,000 signatures.
MISSOURI
A group called New Approach Missouri has formed and is in the process of collecting signatures for a proposed constitutional amendment to their state constitution that would legalize medical cannabis. The initiative would create a statewide system for production and sale of medical cannabis and provides for limited and regulated patient cultivation. Interestingly, the initiative levies a four percent retail tax, but all revenue in excess of the cost of regulating the medical cannabis program will go towards Missouri’s veterans.
New Approach Missouri must to collect 160,199 valid signatures from registered voters in order to be placed on the ballot. As of December 2017, the campaign had collected roughly 100,000 signatures. A poll done in 2015 showed that 85% of Missourians support implementing a medical cannabis program.
OKLAHOMA
Oklahomans for Health is the proponent of the upcoming state question SQ788, which would create a medical cannabis program. Obtaining a state-issued medical marijuana card would require a board-certified physician’s signature, though there are no specific qualifying conditions. The measure would enact a seven percent tax on marijuana sales, with revenue financing regulatory costs. Any surplus would be distributed: 75% to the General Fund to be used for education, and 25% to the Oklahoma State Department of Health to be used for drug and alcohol rehabilitation.
The initiative has already qualified, and will appear on the ballot in November 2018. Polling data is scarce, however, a 2013 poll showed that 71% of Oklahomans supported legalizing medical cannabis.
SOUTH DAKOTA
A group known as New Approach South Dakota is behind an effort to legalize medical cannabis in 2018. The group was also hoping to submit signatures to legalize adult-use cannabis, but was unsuccessful. The measure would set an excise tax on marijuana that would include a $50 per ounce tax on cannabis flower for buyers, and would have other taxes apply to buying immature plants and other parts of the cannabis plant.
In November 2017, New Approach South Dakota submitted roughly 15,000 signatures to qualify for the ballot- that’s just 1,000 more than required. The state hopes to review submitted ballot initiatives in the coming months.
ADULT-USE CANNABIS POLICY
MICHIGAN
The Coalition to Regulate Marijuana Like Alcohol has officially submitted ballot language to the State of Michigan that would legalize consumption and possession of marijuana for adults 21 and over in Michigan. The proposal enacts an excise tax on marijuana at the retail level in addition to the standard state sales tax and provides for state regulators to grant business licenses for cultivators, processors, testing facilities, secure transporters, retail stores and microbusinesses.
In November 2017, the Coalition to Regulate Marijuana Like Alcohol turned in more than 360,000 signatures to qualify for the ballot– that’s 100,000 signatures beyond the 252,000 required by the state. Polling done in early 2017 showed that 57% of Michiganders would support legalizing cannabis.
VERMONT
Vermont is poised to make history and become the first state to legalize adult-use cannabis through the state legislature in early 2018. In December 2017, Vermont House Speaker Mitzi Johnson (D) said, “It will be up for a vote in early January. I expect that it likely will pass in early January.”
The state came incredibly close to passing language that would have legalized adult-use cannabis back in 2017, however, the legislature was unable to make changes Governor Phil Scott (R) requested before the session ended. The Governor has since stated that he is “comfortable” with signing legalization legislation.
OHIO
The group that unsuccessfully ran a ballot initiative in 2015 to legalize cannabis in Ohio is making a comeback in 2018. In December 2017, a team announced that they will work to place a cannabis legalization measure on the ballot in 2018. Known as the Regulate Marijuana Like Alcohol Amendment, the measure would allow people over the age of 21 to purchase and use cannabis legally. The amendment would also create a taxed and regulated cultivation, processing, and sales system.
Valid signatures from 305,592 registered voters are required before July 4, 2018, in order to qualify the measure for the ballot.
NEW JERSEY
Unlike New Jersey’s Governor Chris Christie (R) , Governor-Elect Phil Murphy (D) is setting a positive tone on cannabis in the state. Murphy has advocated for legalization multiple times, and even made one of his campaign promises to legalize adult-use cannabis in his first 100 days in office.
Democrats in the state legislature have already introduced multiple bills to tax and regulate adult-use cannabis, predicted to be worth more than $1 billion in the state. The full legalization bill currently being considered is S3195, sponsored by state Senator Nicholas Scutari (D). Sen. Stephen Sweeney (D), the state senate’s president, has already promised to pass the bill within the first three months of Murphy’s administration.
Recent polling shows that over 60% of New Jersey residents support legalizing cannabis.
CANNABIS DECRIMINALIZATION
VIRGINIA
In November 2017, voters in Virginia elected Ralph Northam (D) as their next Governor. Northam made cannabis decriminalization a centerpiece of his gubernatorial campaign, and has even spoken about the hemp cultivation and the medical benefits of cannabis.
Virginia lawmakers considered but did not act on decriminalization legislation during the 2017 session. However, with the State Crime Commission conducting a study on the effects of decriminalization in the state at the request of the Republican Senate majority leader, advocates remain hopeful in 2018.
FEDERAL CANNABIS POLICY
While 2018 is shaping up to be a busy year for cannabis policy at the state level, things will likely move slowly in Washington, D.C. NCIA will be working to ensure language protecting medical cannabis patients (the Rohrabacher-Blumenauer amendment, formerly known as the Rohrabacher-Farr amendment) remains in federal law. NCIA will also be lobbying to expand that language to apply to adult use states (McClintock-Polis amendment) and to include a banking amendment that would allow cannabis businesses access to financial services (Heck amendment).
As leadership in both houses of Congress continue to negotiate the final version of the tax reform bill, there will be opportunities next year for Congress to make additions and changes on future individual tax legislation. NCIA will be looking at any possible avenues to have 280E legislation be included in future bills if the opportunity arises. Action on the cannabis banking bill is unlikely in 2018, however, NCIA will continue to advocate for a committee hearing, gather more cosponsors on HR 2215: The SAFE (Secure and Fair Enforcement) Banking Act, and work to identify a Republican lead sponsor for the bill in 2019.
NCIA will also be working to ensure that the Cole Memo remains in place. Attorney General Jeff Sessions has recently said that the Department of Justice will be reviewing current memos, and that “Guidance documents can be used to explain existing law… but they should not be used to change the law or to impose new standards to determine compliance with the law… This Department of Justice will not use guidance documents to circumvent the rule-making process, and we will proactively work to rescind existing guidance documents that go too far.” While Attorney General Sessions is very clearly personally opposed to cannabis, it’s important to note that personal feelings are not official Justice Department policy.
In addition, NCIA is working behind the scenes to educate the Trump Administration on cannabis policy, maintain the Cole Memo, protect cannabis patients and consumers, and make positive remarks regarding medical cannabis in 2018.
Partner Blog: Ohio’s Medical Marijuana Program Begins Taking Shape
by Thomas Rosenberger, Executive Director of NCIAO
More than a year after Ohio legalized medical marijuana, the first licenses have finally been awarded. The Ohio Department of Commerce ended months of speculation by announcing 12 level II cultivator license winners on November 3rd, and 12 level I cultivator license winners on November 30th.
These 24 winners are now responsible for growing the supply of medical marijuana Ohio’s patients will use, a population estimated to be in the hundreds of thousands. The medical marijuana market in Ohio is expected to be worth $300-400 million once it matures, making the limited number of licenses available immensely valuable.
While we now know who the 24 cultivators will be, Ohio’s medical marijuana program is still nine months away from its September 8th, 2018 deadline to be operational. Processing, dispensary and testing licenses have all yet to be awarded, and already controversy and lawsuits are threatening to derail and delay the program.
It’s a scenario we’ve seen repeatedly in other states such as Maryland, and a scenario for which the industry must work together to prevent in Ohio. The National Cannabis Industry Association of Ohio was formed in July to foster collaboration between members, promote best practices and to serve as the voice of the industry in Ohio.
We’ve spent the past 5 months advocating for the industry and working to provide feedback to state regulators on various aspects of the program. Moving forward, our priority will be on ensuring Ohio’s program meets its statutory deadlines and licensed cannabis businesses are able to begin serving Ohio’s patients by September 8th, 2018.
Now more than ever, it’s crucial the industry come together to ensure Ohio’s medical cannabis program is not delayed. Ohio’s patients have waited long enough for relief, and the industry has a responsibility to ensure they wait no longer.
NCIAO is the Ohio affiliate of the National Cannabis Industry Association, the nations only industry-led organization engaging in legislative efforts to expand and further legitimize the legal cannabis market in the U.S.
Member Blog: Customer Privacy – Keeping Personal Information Secure and Compliant
Despite the national trend toward legalization and a growing consensus of acceptance among Americans, privacy is still a chief concern among many legal cannabis consumers. And across the industry, no one bears the burden of these concerns more than cannabis retailers.
As a cannabis retailer, you’re pulled in several directions. First and foremost, you’re beholden to state reporting requirements; on the medical side, this means validating recommendation letters and patient identification and storing this information securely.
On the adult-use side, you’re torn between the need to collect certain customer information for marketing and sales purposes and the overwhelming fear and distrust from customers concerning their personal privacy.
It’s a delicate balancing act—and as requirements continue to evolve, retailers need a system in place that’s both functional and flexible.
Determining Your Dispensary’s Needs
As a cannabis retail owner, your number one priority is compliance. And when it comes to patient and customer privacy, you need to determine exactly what your state’s requirements are per your particular operation.
If you’re a medical dispensary, your data security needs are going to be much different from that of an adult-use retailer, and vice-versa. If you run a joint medical and adult-use operation, you’re going to have to find a solution that caters to both.
Legal states have widely disparate laws concerning patient/customer privacy and data collection. For example, Oregon passed legislation earlier this year making it illegal for recreational retailers to keep customer information—such as names, addresses and birthdates—on file for longer than 48 hours.
On the other hand, medical dispensaries need some sort of system for identifying patients and their doctor-certified cannabis recommendations, while both adult-use and medical operations need to be able to track sales to individuals to ensure transaction limits aren’t exceeded.
Finding a Solution That’s Right for You—and Your Customers
Even though state laws mandate cannabis sales tracking and reporting, state agencies are not providing dispensary owners the tools needed to perform these functions in the most efficient manner.
Some statewide reporting solutions offer point-of-sale software that retailers can choose to use. But, as we’ve seen with the ongoing kerfuffle that some states are experiencing with their chosen systems, these technologies are not always the most reliable.
In these instances of statewide system failures and security breaches, what becomes of your customers’ personal information?
Cannabis retailers need a solution that can be tailored to their particular operation—be it medical, adult-use or both—and that is flexible enough to keep up with constantly-changing privacy and information collecting requirements.
Additionally, dispensary owners need to know that in the event the state’s system crashes or is breached, they can record sales using excel spreadsheets or continue ringing sales if their retail software permits all while maintaining their customers’ privacy.
Gary Cohen leads Cova’s charge into the legal cannabis space by guiding the vision, strategic development, ‘go to market’ plans and culture. A Denver native, he recently moved back to establish Cova’s HQ there. While he joined Cova only a year ago, he was a successful business partner to Cova’s parent company since 2011.
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 lead Sales, Marketing, Business Analytics and Market Expansions. He has also held a multitude of leadership roles with Verizon and AT&T for the first 15 years of the wireless industry.
Gary holds a Degree in Finance with a Masters in Marketing from the University of Colorado.
Member Blog: The Future of Michigan’s Cannabis Industry
In 2008, Michigan voters voted to legalize marijuana for medicinal use. Since 2008, dispensaries have been regulated for operation on a city or township level, and the city of Detroit was more welcoming to the cannabis industry than any other city in Michigan. On the busy street of 8 Mile in Detroit it seems like the neon green cross is on every other building for miles. The dispensaries have not been allowed to apply for a business license and so were not paying state taxes. This put the dispensaries in a gray area with the state. Legal or not, the cannabis industry in Michigan and especially in Detroit has been very lucrative.
In September of 2016 a bill was passed to grant licenses to dispensaries, cultivators, labs, extractors and transporters. Due to this bill, the Licensing and Regulatory Affairs (LARA) is accepting applications on December 15, 2017 for business licenses. The state passing a bill to accept licenses is great news for both the dispensaries and the state. The dispensaries will no longer have to look over their shoulder in fear of being shut down due to operating without a license and the state will receive tax revenue from the industry. However, the honeymoon came to an end when LARA also required dispensaries to shut down their operations effective on that same date of December 15, 2017 or risk being denied a business license. Even still with this plan the licenses will not be granted until the first quarter of 2018. This leaves a potential 3 month gap where the dispensaries will not be generating any revenue and more importantly patients can’t get their medication.
A number of dispensaries have shut their doors already in an attempt to curry favor with the state. Most dispensaries are remaining open to try and make as much revenue as they can before being out of business for an undetermined amount of time. While being out of commission for a few months will temporarily hurt Michigan’s cannabis industry, it is very important that if you are looking to re-open or start a cannabis operation that you fully understand the regulations. Unfortunately many cannabis operations may not be granted licenses and for some dispensaries December 15th will be their last day in business.
On September 21, 2017 the state did answer a big question that many in Michigan’s cannabis industry has been asking since 2016 when the state passed the bill to grant licenses: can one location have multiple licenses?
LARA made the decision that a location is allowed to operate multiple licenses if it meets the following criteria;
The Department authorizes the licenses to operate at the same location
The facility must have separate working areas, entrances, exits, point of sale operations and record keeping systems in place for each license.
The co-location is in keeping with local ordinance or zoning regulations.
The licensees comply with all local and state regulations for building inspection, fire safety and public health standards.
This is great news for Michigan’s cannabis businesses. This means a business can buy just one building and as long as it fits the above requirements their whole operation with multiple licenses can be ran out of one location instead of multiple locations. This will reduce cost and increase profits making the industry more attractive to businesses and investors.
As the December 15th deadline approaches, it is slowly being revealed and realized how the future of Michigan’s cannabis industry will look. As chaotic and uncertain Michigan’s cannabis industry is presently, I am excited about the direction it is headed and the possibilities and opportunities it can provide to my home state.
Please be prepared and don’t wait until the last minute to enter into this exciting new chapter of Michigan’s cannabis industry!
If you are to apply to any of the five licenses, please make sure you review House Bill 4209.
Kefentse Mandisa is a broker at Mandisa Risk Advisors.MRA is an insurance agency and risk management consulting group that provides superior service and products to their clients.
As a specialized insurance agency they provide services to the cannabis industry. This includes dispensaries, cultivators, processors, landlords and physicians to name a few.
MRA being narrowly focused on the industries they have a strong expertise, allows them to better serve their clients.
Cannabis Industry Sector: Information Technology and Software
NCIA Member Since: July 2016
Tell me a bit about your background and why you launched your company?
My name is Joel Milton and I am the co-founder and CEO of Baker. I’ve spent the last 8 years in the software industry, and have been working with my co-founder and Chief Product Officer, David Champion, for that entire time. Our third co-founder and CTO, Roger Obando, has been a developer for the past 20 years.
The three of us got interested in the cannabis industry in 2014 as adult use was rolling out in Colorado. We saw an opportunity to bring our years of software expertise to the industry as it was coming out of prohibition. We knew there would be a lot of issues specific to the industry, and we saw there were few entrepreneurs with technical backgrounds trying to tackle them.
What unique value does your company offer to the cannabis industry?
We proudly boast that we are on the dispensary’s team.
The Baker team at Representative Jared Polis’s fundraiser. Glenn McElfresh (Business Development) David Champion (Co-founder and CPO) and Roger Obando (Co-founder and CTO)
When we first started, we saw vendors come to the industry to take advantage of dispensaries. They had a misconstrued image of cannabis businesses: safes full of cash, lines out the door, and that businesses couldn’t stock shelves quickly enough. As a company that only serves the industry, we understand real issues like 280e, marketing restrictions, and constantly changing regulations. Due to these misconceptions, many of the early players were charging outrageous fees for basic services (like 10 cents for a text message vs. 1 cent for ours) because few companies were willing to work with dispensaries to begin with.
Additionally, everyone in this space was competing for the same end customer – trying to get them to their dispensary, download their app, go to their website, etc. We saw a dangerous “race to the bottom” on price, and realized there was an opportunity to help dispensaries engage with their customers directly.
Today, we help more than 500 dispensaries in 14 states build their brand, connect with customers, and generate more revenue. We are on the dispensary’s team and our goal is to make them have more successful businesses. We are a true business to business cannabis tech company, and we take pride in showing our clients the ROI they see by using our platform.
Cannabis companies have a unique responsibility to shape this growing industry to be socially responsible and advocate for it to be treated fairly. How does your company help work toward that goal for the greater good of the cannabis industry?
We have been NCIA members for over a year now, and have made sure to contribute not just money but time as well. We send our regional reps to quarterly NCIA caucuses all over the country to keep a pulse on local and national initiatives to see where we can help. We also try to attend and sponsor cannabis events in the regions where we operate and beyond.
In the next month we will be attending events on both coasts, and at a few cities in between. We will also have a booth at the California Cannabis Business Conference (booth 204) if you will be there please swing by our booth or send us an email (marketing@trybaker.com) to set up a time!
We take pride in the professionalism we bring to the industry, and are constantly bringing a mainstream approach to the way we operate – from hiring people out of Fortune 100 firms into the industry, to building quality software products that’s on par with anything coming out of Silicon Valley. Our toolset is uniquely specific to help cannabis brands and retailers run better businesses. We have been approached by retailers in other industries, but our entire focus is on cannabis.
We also work with mainstream investors – many of whom are getting their first exposure to cannabis. It has been such a rewarding experience to promote the industry to influencers who can propel the industry forward with investment and leadership.
Lastly, we also are proud to have brought a lot of public and positive press to the industry. In the past year we have been featured in publications like Business Insider, Forbes, Fast Co, and dozens of others. We position ourselves as a professional company, creating jobs in our headquarters of Denver. We have 35 full-time employees and counting!
Our exposure in the mainstream media has helped millions of readers from around the country learn about cannabis in a more positive light. They can see that there is a large degree of professionalism in the industry and that it would not be a bad thing if it came to their backyard.
How do recent advances in technology, and how we use it, impact the growth and direction of the cannabis industry?
We believe this is a big industry and we have a responsibility to enhance the cannabis ecosystem – when companies cooperate, the sum is greater than its parts.
We are proud of the integrations we have with fellow members of NCIA. We work with POS companies like MJ Freeway, Green Bits, Treez, and Flowhub, as well as data companies like New Frontier (we contributed to their Report earlier this year).
Additionally, retailers across all industries have invested a lot in bringing their shopping experience into the digital age. Cannabis retail should be on par with other shopping experiences, and by providing beautiful, easy to use products, we can help make cannabis more accessible to a larger audience.
We are proud to bring retailers a modern experience that has been called the “shopify of cannabis.” We enjoy hearing stories from our clients about how our products have helped customers see that the stigmas around cannabis shopping are dissipating.
Baker at NCIA Lobby Days. Eli Sklarin (Director of Marketing) Carter Davidson (VP of Sales) Joel Milton (Co-founder and CEO) and Geoff Hamm (COO).
Why did you join NCIA? What’s the best part about being a member?
We are big believers in NCIA, it is an important group with a fantastic mission. I went to Lobby Days along with our COO, VP of Sales, and Director of Marketing. We were all impressed with how organized the experience was.
There is something special about getting the cannabis conversation started with influencers. Most staffers would be hesitant to bring it up, but if you go in-person and inspire confidence in the industry, you can watch the ball start rolling and it was very rewarding to be a part of that.
Highlights From NCIA’s 4th Annual Cannabis Business Summit & Expo
by Brooke Gilbert, NCIA Director of Events and Education
NCIA’s biggest and most influential event, the Cannabis Business Summit & Expo, wrapped up a few of weeks ago in Oakland, CA. We hope you had as much fun as we did! Did you miss out on attending, or would you like to relive your experience? Check out these event highlights below to get a glimpse into this year’s edition of the Cannabis Business Summit & Expo:
• Our largest event to date with 5000+ attendees.
• Keynote address from President Vicente Fox, the former president of Mexico, who spoke about the social injustices created by the war on drugs and the positive effects of global cannabis legalization. Listen to his full keynote here.
• Eighty thousand square feet of sold-out exhibit space featuring 250+ exhibitors, and 33 media and industry partners.
• Twenty hours of educational content over three days, featuring six workshops and 30 breakout sessions spread across five educational tracks and led by 150+ industry experts.
• Two plenary sessions, one featuring a discussion of the strategies to reform Internal Revenue Code Section 280E, and the second featuring a discussion of the results of a 16-month stakeholder-driven process that resulted in a comprehensive white paper detailing regulatory recommendations for packaging and labeling of cannabis products.
• On-site bookstore and book signings from current cannabis industry authors including John Hudak, Ewe Blesching, Chris Conrad, Steve DeAngelo, Jorge Cervantes, and Donna Shields.
• One hundred seventy-three press personnel from 65 outlets joined us for the three days, generating 1.4 billion impressions worldwide.
View the entire official photo album from the 4th Annual Cannabis Business Summit & Expo online here: TheCannabisIndustry.org/CBS17Blog
A big THANK YOU to all our attendees, volunteers, speakers, sponsors, exhibitors, and partners for contributing to another successful year at our Cannabis Business Summit & Expo.
Partner Spotlight: Minority Cannabis Business Association
NCIA recently launched a partnership with the Minority Cannabis Business Association in order to address the gap in racial and ethnic diversity within the cannabis industry. We caught up with MCBA founder Jesce Horton from Oregon to talk about MCBA’s mission, which exists “to create equal access and economic empowerment for cannabis businesses, their patients, and the communities most affected by the war on drugs.”
Cannabis Industry Sector:
Non-Profit Association
Jesce, tell us a bit about your background and why you launched MCBA?
After I received my degree in industrial engineering, I started working for a large corporate firm right out of college. There, I began my work of reducing energy usage and environmental footprint at industrial facilities in the Americas. Shortly after moving to Portland from Munich, Germany, I started growing medical cannabis for two elderly patients that were suffering from cancer and from that, Panacea Valley Gardens was born. I got really involved in the industry and started attending conferences and networking events. I started realizing that not many people in the industry looked like me and the issues plaguing the communities of people of color didn’t seem to be on anyone’s radar.
I collaborated with some other industry professionals and we formed the Minority Cannabis Business Association. We soon realized that the issues wasn’t just about morality or doing the right thing, but more about the health and sustainability of the entire industry.
What unique value does MCBA offer to the cannabis industry?
MCBA firmly believes that not including communities of color in the industry or ensuring that these communities benefit from its prosperity is a major mistake!
Cannabis businesses across the country are missing out on a huge segment of consumers. By being so slow to utilize this opportunity to provide economic opportunity, social justice, and patient awareness in communities that have been targeted by cannabis prohibition, the people who live there are becoming bitter towards the burgeoning industry. Just like in any market, diversity is a major benefit. This is true even more so in the cannabis industry where preferences and perspectives on our primary product can be very culturally specific.
On the flip side, minority communities can benefit greatly from the cannabis industry, in multiple ways. Health issues that affect minorities disproportionately (Minority Health Disparity Gap: Cardiovascular disease, diabetes, cancer, mental health, etc.) can be greatly relieved and even reversed through informed and measured use of safe and tested cannabis products. Also, many would find that their cannabis expenses can be reduced through information and access to the right cannabinoid profiles, application methods, and dosages. Not to mention there is a huge pool of jobs and entrepreneurship opportunities that can be available given the right policies and regulations. These things simply aren’t available at nearly the same capacity in the traditional, illegal market.
MCBA is uniquely positioned to serve as a bridge between the industry and communities that have been targeted by cannabis prohibition and the war on drugs. Our board of directors is made of up cannabis business owners, activists and legislators from across multiple cannabis markets in the country. Our programs are directly focused on
Policy improvements that lower barriers to entry and uplift targets communities
Educational experiences that increase access to information for people of color
Connection with successful businesses and people who understand that this is an important issue for the sustainability of our industry
Cannabis companies have a unique responsibility to shape this growing industry to be responsible and treated equally as any other industry. How does MCBA help work toward that goal for the greater good of the cannabis industry?
At MCBA, our belief is that this industry is stronger and more sustainable when the barriers of entry are low and support small business development, not special interests. This should be the goal of any industry, especially new industries that thrive with innovation, problem solving, and community support. The policies for which we advocate and programs we execute represent equal access, responsibility, and fair taxation, not reparations or special privilege. It’s important that we work to reconcile the harms done by cannabis prohibition, but these efforts won’t be effective without a strong, dynamic, and thriving industry. They go hand-in-hand.
What kind of challenges do you face in the industry and what solutions would you like to see?
The challenges that affect communities of color from benefiting from the cannabis industry are mainly fair policies, lack of education about the industry, and limited networks to assist with raising capital and business development. We would like to see the industry stand as one to push for lower barriers to entry, tax allocation for communities targeted by the war on drugs, and community outreach regarding health education and employment opportunities.
Tell us about the partnership between MCBA and NCIA?
The partnership between MCBA and NCIA will assist us in working closer and more effectively on programs that complement each organization’s mission. Both organizations strongly believe that diversity and inclusion are principles that will guide our industry to sustainable and responsible growth. We are very excited to work closely with NCIA to ensure that this becomes a reality.
There are many wonderful things about the cannabis industry – creation of new jobs, legal access to medicine, and reduction of drug war harms, to name a few. Every rose has its thorn though, and the cannabis industry is no exception. Like any industry pushed into the shadows, in this case by a misguided prohibitionist policy, unsavory individuals have found an opportunity to prey upon those without full access to the legal system or to legitimate sources of capital. All cannabis entrepreneurs need to be on the watch out for the tell-tale signs the person or business they are talking to is a scam artist. Below are ten common signs that something might not be legitimate in your business transaction. Not all these signs indicate something is foul, but they should be a red flag that the business dealings bear further investigation.
Extremely Tight Timeframe:
You’re given twenty-four hours to make a key business decision and you may have only just received the legal documentation formalizing the proposed deal.
There are many legitimate reasons why business decisions must often be made on short notice. And providing an opposing party with legal documents at the last moment is a time-honored negotiating tactic. However, the less scrupulous will often tell business owners (often in dire straits) that they need to decide in twenty-four hours, or in an even shorter time frame. This frequently means there’s no time for proper due diligence or legal review – exactly what someone with something to hide (e.g., they are trying to run a scam) wants.
Vague Website:
A website contains a lot of bold claims about a service or financing source, but is short on physical addresses, names of principals, or legal company names.
A lot of websites are vague. But scam artists like to leave out key information – which means it will be hard for you to report them to the investigators or sue them. Most legitimate companies will list a real street address that is associated with a business, not a residence. Why would a scam artist want to hide their real address? Well, think about trying to sue someone. You need to serve documents on them – not an easy feat when you have no idea as to their real name or address.
Pump and Dump:
Someone tells you they have a hot (marijuana) stock tip – it’s guaranteed to go up.
There are many problems with this scenario. If someone does have material insider information about a publicly traded company, they cannot legally trade on that knowledge. Nor can they tell someone else the information and have them buy or sell stock. Both persons are in violation of securities laws and subject to civil and criminal penalties. A common way this plays out is through a “pump and dump” scheme. This scam involves convincing the marketplace that an OTC stock (also known as a penny stock – a public stock that does not trade on a major exchange like the NYSE or NASDAQ) is a surefire win. As people buy into the hype, the stock price of the company soars (the pump part of the scam). Once the price climbs high enough, insiders of the company sell all their shares, making a tidy profit (the dump part of the scam). Everyone who bought shares of the company is then left with worthless penny stock as the share price tumbles after the major sell-off. Even people who don’t buy the stock can become accomplices to the scheme. Just by repeating rumors regarding the potential success of the company, they can help create the atmosphere necessary for the artificial inflation of the stock price. When it comes to OTC stocks, if it sounds too good to be true, it probably is.
Wire Money First:
An investor or other potential business partner has a great opportunity for you. The only catch is that you must first wire them money as a down payment for the process to get started.
This scam is a favorite of “Nigerian royalty” and now is making its way to the cannabis industry. Legitimate lenders do not require a prepayment prior to underwriting a loan. They will charge you fees for the work they do, and the work their lawyers do, but this is typically taken directly from the loan amount when funding occurs (this is called funding net). Except in exceptional circumstances that have been vetted by counsel, you should not wire money to someone on the promise they will help you raise money.
As a side note, many law firms and other businesses, will require a deposit before starting work. The difference is that these deposits are legitimate, and are refundable if no work is performed (always ask about refundability). Scam artists, on the other hand, are highly unlikely to return a deposit, even if a deal falls apart.
Refusal to Interact with Attorneys:
You’ve got a great source of financing lined up. The financier is telling you what you want to hear and you’re ready to sign on the dotted line. The only catch is she won’t speak to your attorneys (which may not necessarily take the form of outright refusal – it could also be a deliberate refusal to return or schedule calls), only directly with you.
Scam artists are understandably loathe to subject themselves to questioning from a skeptical lawyer. Sunlight is the best disinfectant and most scams will not stand up to a thorough vetting. Legitimate business professionals, however, while not always happy about it, accept that dealing with lawyers is the price to be paid to get deals done.
Multiple Company Names:
Every time you interact with a potential business partner you discover a new business name or web portal.
This is one of the harder red flags to interpret and on its own it may not mean there is something nefarious occurring. Almost every company of any size contains multiple legal entities. These legal entities often legitimately serve to contain liabilities (e.g., holding different real estate properties in separate LLCs so that a slip and fall claim on one property doesn’t result in a lawsuit against an entire portfolio of real estate assets). What most legitimate companies are not doing, however, is playing a shell game – setting up and shutting down companies to stay one step ahead of the law and angry creditors and customers. If you think this might be occurring, you should discuss your concerns with counsel before proceeding.
Unsubstantiated Claims:
You’re being told buying into a certain grow method will triple your yields, guaranteed, or someone claims they underwrite a tremendous dollar value of loans annually, but can’t give you names of past deals.
Beware unconditional guarantees. Sure, everyone knows the “best” grower and no one wins business by saying they are the worst in their field. When it comes to bold claims, trust but verify. Ask for concrete examples of a product’s or advisor’s success. Ask to speak directly to existing or previous customers. If they are offering payment processing solutions, ask which banks they work with and which credit card companies. Fate is fickle and the future is uncertain. No one can predict it with absolute certainty, especially not when it comes to the cannabis industry.
Ignorance of Basic Cannabis Laws:
When asked about the impact of certain laws or policies like the Cole memo priorities, the FinCen memo, or 280E on proposed business plans, someone responds these are not significant issues or, worse yet, they do not appear to have a strong grasp on what these items are.
It’s one thing to state that these obstacles can be overcome. Business are succeeding despite them every day. To cavalierly suggest they are not issues, or to somehow remain ignorant of their existence, however, is a major red flag. It may not always be a sign of fraud – it could also be the sign of rank amateurism. Either way, you should be hesitant to go into business with someone who does not fully appreciate the federal legal risks inherent in the cannabis industry, especially considering the current political environment.
Deliberately Opaque Documentation:
The definitive documentation for a deal is extremely poorly drafted and it’s not clear what business deal is being documented or the business deal you thought you had struck is not clearly reflected.
Legal documentation is, admittedly, frequently long, dense, and filled with antiquated terms. And for a non-lawyer, legal agreements can be hard to understand. Some of this is a consequence of the fact that complicated concepts are being addressed, and part of this is because lawyers adhere religiously to previously drafted documents, which results in the survival of Latin terms, clumsy turns of phrase, and other habits that make agreements hard to read for the layperson. With a scam, however, an agreement may be drafted to be deliberately obscure. Even unreadable documents could have a legitimate provenance – the cannabis industry is full of poorly trained transactional lawyers (or criminal lawyers moonlighting as transactional lawyers) and principals that don’t understand basic business concepts. What you need to be concerned about is a document that someone doesn’t want you to understand because they intend to fleece you.
Unclear Background of Principals:
The principal of a business claims he or she has 20 years of business experience and deep industry ties. However, when pressed, he or she cannot name an actual business they have worked for and no one in the industry has heard of them or their organization.
The cannabis industry certainly contains many successful people with eclectic backgrounds, but beware the individual with an unclear past. They may elude to successful enterprises, but never give specific names. They claim to be involved in other businesses, but never give enough information for you to track these down. The cannabis industry is still small and many of the pioneers of the industry have known each other for years. If someone claims to have been deeply involved in the industry, but can’t point to any specific businesses or individuals who they know, it’s a red flag.
If they come from the traditional business world, but don’t have a clear history (e.g., before they worked in cannabis, they were at X company for five years), be extra vigilant. There are often legitimate reasons not to name current or former employers (e.g., perhaps their employer doesn’t approve of the cannabis industry and it could put someone’s employment status at risk), but there are also many illegitimate reasons to obscure your past.
Final Thoughts
If you think you’re being scammed, step back and reevaluate the situation before proceeding. Do not sign anything or wire any money. Ask for items in writing and save relevant emails. Consider reaching out to an attorney. Better to spend time and money evaluating a deal upfront than to experience the heartache and headache that comes with trying to mitigate the damage of a scam. Remember, in the cannabis industry, the old expression caveat emptor remains as true as ever.
Charlie Alovisetti, Vicente Sederberg LLC
Charles Alovisetti is a senior associate and co-chair of the corporate department at Vicente Sederberg LLC. Prior to joining Vicente Sederberg, Mr. Alovisetti worked as an associate in the New York offices of Latham & Watkins and Goodwin where his practice focused on representing private equity sponsors and their portfolio companies, as well as public companies, in a range of corporate transactions, including mergers, stock and asset acquisitions and divestitures, growth equity investments, venture capital investments, and debt financings. In addition, Mr. Alovisetti has experience counseling portfolio and emerging growth companies with respect to general corporate and commercial matters and all aspects of compensation arrangements, including executive employment and consulting agreements, stock option plans, restricted stock plans, bonus plans, and other management incentive arrangements. Mr. Alovisetti has experience in both U.S. and cross-border transactions, and has advised clients across a range of industries including cannabis, technology, manufacturing, software, digital media, energy and clean tech, healthcare, and biotech. In addition to his corporate work, Mr. Alovisetti has worked with clients on multiple competitive licensing applications, including in Maryland, Hawaii, Pennsylvania, and Texas. He holds a Bachelor of Arts, with honors, from McGill University and a law degree from Columbia Law School, where he was a Harlan Fiske Stone Scholar. Mr. Alovisetti is admitted to practice in both Colorado and New York and is a Level One Interprener. He can be reached at charlie@vicentesederberg.com. Follow him on Twitter @CAlovisetti.
Jessica Scardina, Vicente Sederberg LLC
Jessica Scardina is an associate at Vicente Sederberg, LLC’s Denver office. Prior to joining Vicente Sederberg, Jessica worked at a small Denver law firm specializing in corporate law, business planning, and taxation. Jessica currently focuses her practice on corporate, licensing, and regulatory matters. Jessica is a graduate of the University of Denver Sturm College of Law, where she served as a staff editor for the University of Denver Law Review. Prior to moving to Denver in 2004, Jessica lived in Santa Cruz, California, where she received her Bachelor of Arts, cum laude, from the University of California at Santa Cruz.
Madeline Currie is a marketing professional working at Vicente Sederberg’s Denver office. Prior to joining the firm, she was a Senior Marketing Associate at Crystal & Company in their New York office. She has also worked with several other organizations to define and execute their brand strategy. Madeline has a Bachelor of Arts in Sociology & Policy Studies from Rice University.
VOTING NOW OPEN: 2017 Board of Directors Election
NCIA’s annual board of directors election is now open for all members looking to help select the leadership of the cannabis industry’s only national trade association!
If you are a member of NCIA, we hope that you will take some time to consider the great candidates vying for a seat on the board and cast a vote between now and May 22, when the online election closes.
For NCIA members:
In order to cast a vote, you will need to log into NCIA’s secure member ballot using your member company login. Only ONE ballot can be submitted per member company.
If you do not remember your password or are having trouble logging in, please contact us at info@thecannabisindustry.org or (303) 223-4530.
Please be sure to download and review our complete Voter Guide (PDF) before casting your vote.
Not yet a member of NCIA? If you are not a member of NCIA but want to participate in the election, join today and we’ll provide you access to the online ballot. Your membership will also support the industry’s only unified and coordinated effort to reform federal marijuana laws as well as provide other member benefits enjoyed by the more than 1,200 responsible cannabis businesses that make up NCIA’s community.
A few other important items about the board election:
Each member business can only vote once and votes cannot be changed once submitted online.
Members can vote for up to 11 of the 33 nominated candidates.
Votes are weighted according to membership status. If you are a member and would like to upgrade your membership to increase your influence in the board election, please contact us at (888) 683-5650 to process the upgrade before completing your online ballot.
There are eleven open board of directors seats and 33 nominated candidates (including eight current board members seeking reelection). Please refer to your voter guide for information on all the candidates and for more information on board election logistics before casting your vote online.
2017 Board Candidates:
Mitch Baruchowitz – Merida Capital Partners LP
Cody Bass (incumbent) – Tahoe Wellness Cooperative
Ken Berke – PayQwick, LLC
Jessica Billingsley (incumbent) – MJ Freeway
Caela Bintner – Faces Human Capital Management
AC Braddock (incumbent) – Eden Labs
Andy Brassington – Evergreen Herbal
Brian Caldwell – Triple C Collective
Jan Cole – Zol Solutions
Alex Cooley (incumbent) – Solstice
Ben Curren – Green Bits
Dasheeda Dawson – MaryJane Marketing LLC
Steve DeAngelo (incumbent) – Harborside Health Center
Shannon Fender – Native Roots
Hector Fernandez – G FarmaLabs
Bob Hoban – Hoban Law Group
Matt Hoffman – Hand Grown
Rob Kampia (incumbent) – Marijuana Policy Project Foundation
Kayvan Khalatbari (incumbent) – Denver Relief Consulting
Khurshid Khoja (incumbent) – Greenbridge Corporate Counsel
Steve Levine – Husch Blackwell LLC
Christie Lunsford – Pro MAX Grow
Marion Mariathasan – Simplifya
Randy Maslow – iAnthus
Sean McAllister – McAllister Garfield, P.C.
Norris Monson – Cultivated Industries
Ralph Morgan – Organa Brands
Brad Nattrass – urban-gro Inc.
Sal Pace – SMP LLC (Pueblo County Commissioner)
Keegan Peterson – wurk
Adrian Sedlin – Canndescent
Gregg Steinberg – Growcentia
Richard Walker – Thorburn Walker LLC
Participation in NCIA’s board election is one of the most important ways to engage as a member of your trade association, as it ensures that your values are represented within NCIA’s leadership. NCIA’s elected board is responsible for approving the organization’s budget and strategic plan as well as contributing to the organization financially and through developing membership.
Thank you for your membership and commitment to working together to build the responsible, legitimate, and sustainable industry that we envisioned at the founding of NCIA.
Member Blog: Cannabis Branding Faces Uncertain Future
When it comes to cannabis labels and cannabis packaging, and for that matter everything branding-related, the marijuana industry is a many-splendored riddle. On one hand, the industry’s avant-garde nature and offerings lend themselves to eclectic and eccentric designs. On the other hand, a demand-heavy marketplace, lack of branding sophistication, and fears about sinking too much branding money into federally illegal enterprises have stifled forward progress.
At the same time, states with the longest track record of legal use have evolved in many cases to higher levels of professionalism and panache on such important elements as marijuana labels and packaging.
An August 2016 article in HighTimes.com assesses the state of the struggle: “A lot of goofy business names, awkward brand identities, poor design execution and amateur packaging solutions have been the norm…for cannabis companies up until recently, when increasing sophistication among those investing and working in this nascent industry resulted in more slick presentations, upscale appeal and mass market sales. After all, research suggests that 33 percent of all sales are influenced by branding and packaging.”
An article published on Entrepreneur.com in January points to hiccups across the board, noting that, “Businesses traditionally developed strong brands in logos, typography, color and composition. The idea was to become as ubiquitous and familiar as Hershey, Band-Aids or Scotch Tape. Left to web designers, cannabis businesses have yet to produce that attention grabber.”
Federal illegality creates consternation, conservative strategies
All along, marijuana has remained illegal under federal law, creating lots of confusion as well as a conservative approach to spending money on such branded items as marijuana labels and marijuana packaging. Illegality has impacted a wide swath of practices in such sectors as taxation and banking.
Cannabis companies have been reticent to sink too much money into endeavors that can’t be federally trademarked or patented for fear of being copied. Notes the Sacramento Record-Bee in a January article, “Branded pot products gained footing in recent years as California sanctioned medical use of marijuana, and other states began permitting recreational use. Now that California voters have approved a ballot measure allowing all adults to use the drug, cannabis businesses want more authority to brand their products…But officially trademarking marijuana is a tricky legal task. The federal government still considers it an illegal drug, and won’t grant patents or trademarks for pot or anything made from it. Cannabis brands fear they are at risk of being copied. So marijuana businesses in California—eyeing what could become a $6.4 billion industry—have turned to the state government for help.”
Given the uncertain direction that federal enforcement will take under the new administration and anti-marijuana attorney general, it’s anyone’s guess about if, how, when, and where cannabis branding will move forward.
Following are tips for cannabis companies addressing or reviewing their branding currently:
Look at purveyors/competitors in “pioneering” states that have the longest track record–to see how they have evolved their branding. Typically, Colorado and Washington are at the top of states where both recreational and medicinal are legal; California is a strong state for medicinal. After seeing what’s out there, decide on a path for yourself;
Match the design sophistication to the appropriate graphics team. In most cases, this means finding a branding specialist—not a one-size-fits-all web developer whose shingle includes the word “design;”
Protect the intellectual property through state and other non-federal regulations/laws where possible.
Given the omnipresent threat of federal intrusion in the overall operation, figure out what you can stand to lose upfront, spend accordingly, and keep your fingers crossed.
Lightning Labels uses state-of-the-art printing technology to provide affordable, full-color custom labels and stickers of all shapes and sizes. From small orders for individuals, to the bulk needs of big businesses, Lightning Labels is equipped to handle and fulfill custom label and sticker projects of all types. Lightning Labels was established in 2002 and based in Denver, Colorado. Mark Lusky is a marketing specialist who has worked with Lightning Labels since 2008.
Member Blog: Cannabis and the Canadian Public Markets
While the American cannabis industry ponders the strange twist of fate that was the 2016 election, our cannabis neighbors to the north are experiencing unprecedented levels of capital markets activity. There are now over thirty publicly listed cannabis companies in Canada trading on three different exchanges. As a group, cannabis companies in Canada have a combined market cap of over four billion dollars; nine of these companies have market caps of over one hundred million Canadian and one, Canopy Growth, has recently become the first Canadian cannabis company with a market cap of over one billion Canadian dollars. Unlike in the United States, where most publicly traded cannabis companies are listed on the OTC markets with a few exceptions (mostly pharmaceutical companies that have limited exposure to cannabis), the publicly listed cannabis companies in Canada trade on exchanges with significant listing and reporting requirements.
If you’re a Canadian, or have experience dealing with the Canadian markets, this article likely won’t cover new ground. If you, however, like many Americans, have only a passing awareness of the Canadian economy, this article will provide the basics for understanding the current rash of fundraising in Canada. The securities law issues related to cross-border fundraising are complex and beyond the scope of this article.
2016 was a very active year for the cannabis capital markets in Canada, with the total amount raised by publicly traded cannabis companies exceeding $500 million Canadian (around $381 million U.S. at today’s exchange rate). Most of this activity took place after the April 20th statement by the Canadian government stating that legislation to legalize adult use of cannabis would be forthcoming in the spring of 2017. Unlike in the U.S., where investment banking services are generally not available to public cannabis companies, Canadian investment banks have been active in raising capital for Canadian Licensed Producers (LPs – described in further detail below). Also in contrast to the U.S. market, these firms have begun to publish research on the public companies.
There are several Canadian stock exchanges, the most significant of which is the Toronto Stock Exchange (TSX most commonly, but sometimes referred to as TSE), but almost all Canadian cannabis stocks trade on one of three exchanges: the TSX, the TSX Venture Exchange (TSXV), and the Canadian Securities Exchange (CSE). Below are the basics with respect to each exchange:
Toronto Stock Exchange (TSX): The TSX is Canada’s largest and most important stock exchange and the eighth largest in the world by market capitalization. An American-centric way to describe it would be as the Canadian version of the New York Stock Exchange. Reflecting the natural resource focus of the Canadian economy, the TSX is heavily populated by mining and energy companies, though financial services companies also make up a significant proportion of the exchange’s market capitalization. Many large Canadian companies have a dual listing on both the TSX and the NYSE. Currently only two cannabis stocks trade on the TSX: CanniMed Therapeutics and Canopy Growth Corp. (CGC), which is the holding company for Tweed Inc., Tweed Farms Inc., and Bedrocan Canada Inc.
Toronto Venture Exchange (TSXV): The TSXV is analogous to the NASDAQ Capital Market or the OTC markets. It serves as a public venture capital marketplace for emerging companies. Before 2001, this exchange was known as the Canadian Venture Exchange (abbreviated CDNX), but was renamed when the TSX Group purchased the exchange. Over sixteen hundred companies list on the TSXV, and the mining and energy sectors predominate.
Canadian Securities Exchange (CSE): Formerly known as the Canadian National Stock Exchange and dating back only to 2003, the CSE has lower listing and reporting requirements than the TSX and the TSXV. Over three hundred issuers list on the CSE. It is the most common exchange for Canadian cannabis companies.
Aequitas Neo (Neo Exchange): Canada’s newest exchange.The Neo Exchange was established with an aim for fairness, and has measures in place to eliminate what is perceived to be predatory high-frequency trading. As of the date of publication, the authors are not aware of any cannabis stocks that trade on this exchange.
George Bernard Shaw once said that “England and America are two countries divided by a common language.” Similarly, investors need to be careful not to confuse the Canadian and American public markets, which, while they have a great deal in common, also diverge in several key aspects. The full scope of these differences is beyond the scope of this article, but below are several important Canadian terms that highlight key differences:
Reverse Take-Over (RTO): This is the Canadian equivalent of a reverse merger. Like a reverse merger, it allows a company to gain access to the public markets without undergoing an IPO, but does not raise any additional funds.
Initial Public Offering (IPO): A Canadian IPO is quite similar to its U.S. equivalent, but is usually a less expensive and time-intensive process.
Amalgamation:An amalgamation is comparable to a U.S. merger, but lacks the concept of a surviving corporation. Instead, in an amalgamation, the amalgamated corporation takes on the identity (along with the rights and obligations) of each predecessor corporation.
Listing Requirements: Unlike in the U.S., listing requirements on a Canadian exchange can vary based on the industry of the issuer. For example, mining companies on the TSXV have their own listing requirements.
Ontario Securities Commission: Canada does not have a federal securities regulator like the SEC; instead, each province (there are ten provinces and three territories) has its own securities regulator. Ontario, as the home of the TSX, functions as the equivalent of the SEC.
Capital Pool Company (CPC): A CPC is a public shell company trading on the TSXV that has no commercial operations and no assets except for cash. A CPC uses its cash holdings to evaluate potential acquisitions, which it must complete within 24 months of listing – this is referred to as a “Qualifying Transaction.” Companies trading as a CPC have a “P” after their ticker symbol. Once the CPC completes a Qualifying Transaction, its shares continue to be traded on the TSXV.
LPs: Short for licensed producers, which hold a license issued by Health Canada under the Access to Cannabis for Medical Purposes Regulations (ACMPR). This license authorizes them to produce and sell to the public dried cannabis, fresh cannabis, cannabis oil, or starting materials to eligible persons. (The overall structure of the Canadian medical cannabis system will be addressed in a separate article.)
A publicly listed Canadian cannabis company (like any other publicly traded Canadian company) need not restrict its operations or its shareholders to Canada. Many have significant U.S. operations, which is only natural given the considerably larger size of the U.S. market. But U.S. expansion is not without its complications. It remains unclear how Canadian regulators, and the Ontario Securities Commission in particular, will treat publicly traded cannabis companies with U.S. operations if crackdowns occur under the Trump administration.
Compliance with securities law more broadly can also be an issue. To raise capital from U.S. investors, a Canadian public company will generally need to undergo a private offering for U.S.-based investors in addition to the public offering in Canada. The legal issues surrounding a cross-border fundraise are complex, but the payoff is the ability to tap investors in the U.S.
2017 promises to be another year of major fundraising, particularly with the anticipated introduction of legislation to fully legalize cannabis in Canada this spring, following which it would not be surprising to see further inflows of capital into the Canadian capital markets. It’s also not clear what effect Trump’s administration will have on the Canadian markets. While it is possible that investors will flee U.S. markets for the greater safety of Canadian markets, particularly if any crackdowns occur under a Department of Justice led by Attorney General Jeff Sessions, it is also possible that crackdowns could have significantly negative effects on the numerous Canadian public companies with substantial U.S. operations. However, the continued legalization of medical cannabis in other countries, such as Germany, will open additional opportunities for Canadian companies to trade with, and to offer their expertise to emerging cannabis markets. U.S. investors would be wise to continue paying close attention to developments north of the border.
As a reference, below is a list of the Canadian public cannabis companies and the exchanges on which they list as of February 23, 2017 (which does not include companies which are not currently actively trading). Many are LPs, but others are primarily engaged in a range of other cannabis-focused activities, including investing in U.S. operations, developing or researching cannabinoid therapies, developing infused cannabis products, and several other business lines. If any have been omitted, please let me know. I can be reached at charlie@vicentesederberg.com or on Twitter @CAlovisetti.
This information is educational only and shall not be construed as legal advice. Please consult your attorney prior to relying on any information in this article.
Charles Alovisetti is a senior associate and co-chair of the corporate department at Vicente Sederberg LLC. Prior to joining Vicente Sederberg, Mr. Alovisetti worked as an associate in the New York offices of Latham & Watkins and Goodwin where his practice focused on representing private equity sponsors and their portfolio companies, as well as public companies, in a range of corporate transactions, including mergers, stock and asset acquisitions and divestitures, growth equity investments, venture capital investments, and debt financings. In addition, Mr. Alovisetti has experience counseling portfolio and emerging growth companies with respect to general corporate and commercial matters and all aspects of compensation arrangements, including executive employment and consulting agreements, stock option plans, restricted stock plans, bonus plans, and other management incentive arrangements. Mr. Alovisetti has experience in both U.S. and cross-border transactions, and has advised clients across a range of industries including cannabis, technology, manufacturing, software, digital media, energy and clean tech, healthcare, and biotech. He holds a Bachelor of Arts, with honors, from McGill University and a law degree from Columbia Law School, where he was a Harlan Fiske Stone Scholar. Mr. Alovisetti is admitted to practice in both Colorado and New York and is a Level One Interprener. He can be reached at charlie@vicentesederberg.com. Follow him on Twitter @CAlovisetti.
Brett Williams is a law clerk at Vicente Sederberg LLC as well as a third-year law student at the University of Denver Sturm College of Law. During his law school experience Mr. Williams worked at United States Attorney’s Office – District of Colorado in the Criminal and Civil Division. Mr. Williams also clerked at Vicente Sederberg LLC working in their Corporate and Policy Departments. At Sturm College of Law Mr. Williams serves as the President of the Honor Board and as Executive Director of Students for Sensible Drug Policy DU Law Chapter. Additionally, Mr. Williams holds a Bachelor of Science in Economics from Arizona State University. He can be reached at bwillia7@outlook.com.
Highlights From NCIA’s Seed To Sale Show
by Brooke Gilbert, Director of Events and Education
NCIA’s inaugural Seed To Sale Show was a smashing success! Take a look at some of the highlights below, which made this a must-attend event for those in the cannabis industry:
More than 2,200 attendees.
The first ever Cannavation and Cannatech Awards, which recognized trailblazing individuals and companies driving the growth and elevation of the cannabis industry. You can see a full list of the winners here in our official press release.
An in-depth informational keynote from Mowgli Holmes, co-founder and chief scientific officer at Phylos Bioscience, on the evolving genetic understanding of the cannabis plant and what that means for further transparency within the cannabis supply chain.
Eight hours and 15 minutes of educational content over two days, featuring breakout sessions, committee-guided roundtables, and open Q&A sessions led by more than 40 industry experts.
More than 50 media personnel from more than 30 media companies joined us throughout the two days, generating more than 4.5 million impressions worldwide.
NCIA Seeking Government Relations Coordinator (D.C.)
NCIA is now hiring to expand our 12-person national team!
We’re seeking a Government Relations Coordinator. The application process is detailed below. (Do not call NCIA’s office to apply or follow up.)
Government Relations Coordinator:
The National Cannabis Industry Association seeks a dynamic self-starter to excel as Government Relations Coordinator in a fast-paced, lean, and rapidly growing nonprofit environment.
Qualifications
Candidates must be highly organized, outgoing, possess strong analytical and research abilities, and be able to manage several projects concurrently.
Bachelors Degree in Political Science or related field preferred.
Candidates with at least two years work experience as legislative staff or in a government affairs position will be given priority, especially those with contacts on Capitol Hill.
Knowledge of politics and Capitol Hill processes and understanding of administrative processes and procedures related to Congress and Federal Agencies. Knowledge of marijuana policy preferred.
Advanced communication (verbal, written, social media) and computer skills (Word, Excel, and PowerPoint at a minimum) required.
Candidates must demonstrate the ability to act as an assistant to the Director of Government Relations and the Government Relations Manager and use independent judgment in evaluating situations.
The Government Relations Coordinator is responsible for
Maintaining and managing the schedules, meetings, travel, and interview requests for NCIA’s two staff lobbyists.
Monitoring, tracking, and analyzing federal and state legislative and regulatory developments.
Conducting background research on assigned topics, as needed.
Drafting correspondence emails, scheduling requests, letters, briefing papers, and communications to key personnel.
Attending and taking notes at meetings, briefings, and Congressional hearings.
Assisting NCIA’s in-house and contracted lobbying team on issue advocacy, campaign strategy and various projects as needed.
Salary & Benefits
The Government Relations Coordinator reports to the Director of Government Relations. Starting annual salary is $40,000 to $45,000 commensurate with experience. Success in the position will lead to salary increases as the organization grows.
As a regular, full-time employee, the Government Relations Coordinator is eligible to participate in NCIA’s benefit plans which include an employer-matched 401K program, full health, dental, and life insurance coverage as well as a generous PTO policy.
Work location
The Government Relations Coordinator will be based in NCIA’s Capitol Hill office in Washington, DC.
How to apply
Follow all of the instructions below to e-mail a one-page cover letter and resume to jobs@thecannabisindustry.org.
Please include the job title, “Government Relations Coordinator” in the subject line of your email.
In your cover letter, please specify how you learned about the job opening, your stance on marijuana law and the industry’s role in reform, and why you think you would be an excellent fit for the position sought. Feel free to include any other information you deem relevant, as long as your cover letter is limited to one page.
Your cover letter and resume must be sent as one single PDF document that includes your first initial and last name in the file name.
When your application is received, you should receive an automatic email confirmation. Do not call NCIA’s office to follow up. If we are interested in more information or an interview, we will contact you within about a week.
About NCIA
The National Cannabis Industry Association (NCIA) is the largest cannabis trade association in the U.S. and the only organization representing state-legal marijuana businesses at the national level. NCIA promotes the growth of a responsible and legitimate cannabis industry and works toward a favorable social, economic, and legal environment for that industry in the United States.
Register today! NCIA’s Cannabis Industry Lobby Days – May 16-17, 2017
Eager to get more involved in cannabis politics and make your voice heard? Wondering how you can help secure the future of our industry in a time of uncertainty? Good news! NCIA’s annual Cannabis Industry Lobby Days in Washington, D.C. are coming in May.
It’s one of the most important ways you can stand up for cannabis reform and your business, and we don’t want you to miss it.
So CLICK HERE TO REGISTER TODAY and join us on May 16 and 17 for NCIA’s 2017 Cannabis Industry Lobby Days. NCIA’s Lobby Days provide the best opportunity to show our nation’s decision-makers what a responsible and legitimate cannabis industry looks like.
NCIA’s 2016 Cannabis Industry Lobby Days. Photo: Kim Sidwell, Cannabis Camera
NCIA members from across the country descend on Capitol Hill to tell their stories and urge their representatives to fix the unfair tax and banking policies crippling our industry.
With victories in eight states across the country during the 2016 presidential election, as well as the challenges ahead of us as we see a new administration come in to the White House, fixing federal policies is more critical than ever. Our team in Washington, D.C., works every day to make the industry’s voice heard, but nothing matches the power of a personal story personally told.
We’re excited that this year’s Lobby Days are being held in conjunction with the Spring 2017 Marijuana Business Conference & Expo, May 17-19 in Washington, D.C. MJBizCon is generously extending a $100 discount on full conference registration for Lobby Days attendees so be sure to register for Lobby Days and we’ll send the discount code in your confirmation e-mail.
We look forward to seeing you in D.C.!
Thank you to the co-chairs of NCIA’s Policy Council for their premier sponsorship of our 2017 Cannabis Industry Lobby Days:
Are you interested in sponsorship opportunities for your company at NCIA’s most important policy event of the year? Contact us at sponsorship@thecannabisindustry.org to find out more!
New Report: “Cannabis: A Promising Option for the Opioid Crisis”
Jack Stiegelman returned from a 2004 deployment in Afghanistan with a debilitating back injury, for which doctors prescribed daunting amounts of morphine and muscle relaxants. But the medications never felt right.
“It wasn’t making my back better,” he says. “I was just numb for hours.”
Nor did the pills help with the PTSD that caused him to wake up screaming in the middle of the night and physically threaten his squad leader. Eventually, doctors cut off his pharmaceuticals, causing him to buy pain meds on the black market for years.
Relief only came when Jack began using medical cannabis, which allowed him to kick his opioid habit.
“The rage wasn’t there anymore,” he says. “It helped with the stabbing pains and relaxed my back spasms, and it helped me think clearly and stay in tune with my body.”
The opioid epidemic continues to ravage the country, with prescription painkiller and heroin overdoses now killing more Americans annually than car crashes. As state and federal policy makers grapple with the crisis, a new report details how increasing legal access to marijuana could be a potent weapon in the fight — saving lives and millions of dollars in health care and treatment costs.
A decade-long survey showed that medical cannabis states had 25% fewer opioid deaths over that period than other states.
Medical cannabis states report a 28-35% reduction in opioid addiction treatment admissions.
The average doctor in a medical cannabis state prescribes 1,826 fewer prescription painkiller doses per year than doctors in non-cannabis states.
State medical cannabis programs were responsible for $165.2 million in Medicare prescription savings in 2013 and $178.5 million in Medicaid prescription savings in 2014.
Additional research indicates that cannabis is not only effective as an alternative to opioid use. It may also be an effective treatment for opioid addiction. One study of heroin-addicted rats found those that were treated with a cannabis extract were markedly less likely to seek out heroin again.
“The mounting evidence for cannabis as a tool in managing the opioid crisis is too important to ignore,” said NCIA executive director Aaron Smith. “Anyone who cares about saving lives and lessening the damage opioid abuse is wreaking across our country needs to read this report and consider what the research is telling us.”
The report also debunks the widespread but discredited “gateway theory” that cannabis use leads to hard drug use and makes recommendations for policy makers battling the opioid epidemic, including how to make cannabis access safer and more effective at the state level and how to resolve the current crippling conflicts between state and federal marijuana laws.
In this month’s video newsletter, NCIA Membership Manager Jeremy DePasquale introduces you to our valuable data analytics member benefit, provided in partnership with BDS Analytics.
If you’re not yet a member of NCIA, join today to access this benefit!
Q4 #CannabisCaucus Dates & Locations!
By Brooke Gilbert, Director of Events & Education
Wow, does the time fly! It seems like just yesterdaywe were debuting the Quarterly Cannabis Caucus event series and now here we are – 8 months and 36 events later – getting ready to kick off the final round this October across the country.
Registration is now open for the fourth installment of our regionally based Cannabis Caucus series. Join an ever-growingcommunity of cannabis industry professionals coming together quarterly to make meaningful connections, share the latest developing trends, and take action on pressing issues, all while receiving crucial national and state-specific policy updates affecting their businesses day-to-day.
We invite you to join us in a city near you this October for the final Cannabis Caucuses of 2016:
Tuesday, October 11 – Portland, OR – ecotrust – Register!
Thursday, October 13 – Boston, MA – Hyatt Regency Cambridge – Register!
Thursday, October 13 – Miami, FL – Marseilles Hotel – Register! Tuesday, October 17 – Baltimore, MD – The Grand – Register! — ***Rescheduled, please note updated date***
Tuesday, October 18 – Chicago, IL – The Chop Shop – Register!
Tuesday, October 18 – New York, NY – Newman Ferrara LLP – Register!
Thursday, October 20 – Boulder, CO – The Riverside – Register!
Thursday, October 20 – Phoenix, AZ – mod – Register!
Tuesday, October 25 – Las Vegas, NV – Place on 7th – Register!
Tuesday, October 25 – Santa Rosa, CA – (TBD) – Register!
Thursday, October 27 – Long Beach, CA – The Grand – Register!
Thursday, October 27 – Seattle, WA – Sole Repair Shop – Register!
During July, we were able to update more than 200 member businesses on our federal advocacy efforts and provided them with the information and tools needed to engage with their elected officials during August recess. We also encouraged our members to participate in our on-site social media campaign to help put a face to our growing industry and bring visibility to the most pressing issues affecting us on a daily basis. You can help us keep the conversation going by using the #WeAreTheCannabisIndustry, #IAmTheCannabisIndustry, #CannaBanking, #DeScheduleNow, and #Reform280E hashtags on social media. Huge thanks to all those who have already participated!
Haven’t been to one of NCIA’s Quarterly Cannabis Caucuses before? Check out these photo highlights from our Q3 Northern California edition which took place at Gateway Cannabis Accelerator in Oakland, CA to see what you’ve been missing!
As always, a huge thanks to the support of our sponsoring member businesses and hosts who contributed to our efforts to foster cannabis community across the country!
Want to download the information we provided during the third quarter of our Cannabis Caucuses? Check out our Cannabis Caucus Resources page.
Have any feedback from a Caucus you attended in July? Fill out our short attendee survey to provide us with valuable feedback we’ll use to improve future events.
Interested in sponsoring an upcoming Cannabis Caucus in your area or a series of events across the country? Check out our Cannabis Caucus sponsorship guide which outlines pricing and benefits.
See you at the next Caucus in October!
Ten Highlights (with Photos!) from #CannaBizSummit 2016
by Brooke Gilbert, Director of Events and Education
The 3rd Annual Cannabis Business Summit & Expo was NCIA’s biggest and most influential event to date! Check out these top ten event highlights which made this year’s Summit one to remember:
1. More than 3,200 inspired attendees:
2. An exciting keynote from California Lieutenant Governor Gavin Newsom, who spoke about the need to end the prohibition of cannabis from a social justice perspective:
3. Moving remarks from Oakland Mayor Libby Schaaf, who spoke about being the proud leader of a city whose economy is fueled by cannabusinesses:
4. An inspiring presentation from Ahmed Rahim, founder and CEO of world renowned B-corporation Numi Organic Tea, who shared insights into establishing a conscious culture for your company which takes people, planet, product, and profits into account to work for a better tomorrow:
5. Fifteen hours and 45 minutes of educational content over three days, featuring 30 breakout sessions and seven workshops, and led by more than 160 industry experts:
6. Fifteen tours at five locations, including retail marijuanafacilities, cultivation facilities, and analytical testing laboratories:
7. A sold-out expo hall buzzing with activity for 20hours, where more than 140 sponsors and exhibitors spread out over more than 37,000 square feet of expo hall space:
8. More than 100media personnel from more than 80 media companies, generating worldwide coverage, including in dozens of mainstream news outlets:
9. Attendees from 47U.S. states (including the District of Columbia and Puerto Rico) and 16 countries:
10. Thirty-one media and organizational partnersinvolved in the success of the Summit – thank you!
We look forward to seeing you at a future event! Register today for the Seed to Sale Show, taking place January 31 – February 1 in Denver, Colorado. Find out more at SeedtoSaleShow.com!
Member Spotlight: Cannabis Consumers Coalition
In the cannabis industry, the life cycle of growers, retailers, extractors, and infused product manufacturers would not exist were it not for the consumers. As we move toward self-regulating our industry from the inside out, it’s important to consider all views and perspectives in those decision-making processes. This month, we check in with Larisa Bolivar of Cannabis Consumers Coalition to talk about the work she’s doing to protect the interests and concerns of cannabis consumers.
I have been in the cannabis industry/movement since 2001 when I moved to Colorado as a medical cannabis refugee, and I have been a cannabis consumer for 25 years. I helped to establish safe access for Colorado patients through my organization called Caregivers for Safe Access, which became the Colorado Compassion Club and the first dispensary in Colorado prior to 2009. After several years on hiatus from the front lines of the movement, and spending time consulting on policy, business and communications in the emerging industry, I saw a need for more consumer-focused advocacy and that what was missing was a consumer protection agency. Much of the conversation had been focused on the needs of the industry, and that continues to play out today. It is my mission to change that. I believe that consumers are who drive the economy.
I believe my background is perfect for the task of playing watchdog for the industry. I have worked in startup and corporate environments in multiple emerging markets, including software, dot-coms, clean tech, and cannabis. My work in clean tech and software really prepared me for working in a tightly regulated environment. The clean tech company that I worked at, GridPoint, a billion-dollar-valuated startup with successful launch and exit is a smart grid company focused on energy management in the utility space, one of the most regulated industries in our country. When working in software, I worked as a technical recruiter staffing sensitive, high-level technical contracts mostly in defense, which is also highly regulated. I understand highly regulated environments really well, and it is easy to forget the consumer when trying to jump through so many regulatory hoops. I believe that with a strong consumer voice, we will eventually have fewer regulations.
Larisa Bolivar, Executive Director of Cannabis Consumers Coalition.
How does CCC provide unique value to the cannabis industry and movement?
The mission of the Cannabis Consumers Coalition is to provide cannabis consumers with a voice in the growing cannabis industry, and to ensure consumer rights and ethical behavior on behalf of cannabis-related businesses. The biggest value we provide is giving consumers a powerful voice and helping them to realize the purchasing power they have with their dollar in helping to hold the industry accountable to operating in an ethical, consumer-centric model. We provide consumers with a powerful voice, and have been very effective in changing laws to protect consumers. This occurred recently when we obtained and released the names of pesticide violators in Colorado. We quickly made a lot of enemies, and good friends, in the industry. Some business owners have called us anti-industry, which is quite the contrary. I risked my life trailblazing medical marijuana and laying the foundation for the launch of a billion-dollar industry in Colorado. This was pre-regulation, prior to when moneyed interests got into the game and created the framework for regulations. The industry began with blazing the path to create that possibility, breaking ground for the foundation to be laid. As such, I feel personally accountable for it, along with many of my peers and supporters who were also trailblazers and pioneers.
Consumers deserve the right to know that the cannabis they are purchasing is indeed the quality that is being marketed. They also need a strong voice to fight for their rights, and that is what I myself provide, especially with my history of activism, along with the support of our legal team at Fox Rothschild LLP. An Am Law 100 law firm, they have nearly 750 attorneys spanning multiple practice areas and across multiple industries, and have a reputation for working with nonprofit organizations and community groups.
Another value we provide is in helping businesses strive to provide the best consumer experience and high quality products. Quality end products in the cannabis industry are multi-faceted, starting with how a plant is grown, how it’s positioned in the market, to the consumer experience at retail outlets. All of it is so interrelated.
Here in Colorado, the issue of public consumption is hot and there are a couple of initiatives in the works this year to address that need. Can you tell me more about that and how you’re involved in this effort?
Indeed this is probably the hottest issue Colorado. Voters voted for the right to use cannabis legally, yet there are no places to consume. This also poses issues for cannabis consumers visiting the state. There are bed and breakfasts and some hotels that allow for consumption, but there are no places to consume and socialize. There are two initiatives in consideration.
There is the Responsible Use initiative put forth by Denver NORML, which is a private club designated license that requires people to become members, bring their own cannabis and allows for permitted events. The other initiative, The Neighborhood Approved Cannabis Consumption Pilot Program Initiative, will give permission to businesses, including bars, to allow cannabis consumption. Either one will be good for consumers. One is more exclusive, and by requiring membership it keeps things manageable and accountable by limiting the amount of people who can join, it does alienate neighborhood groups and businesses. My concern with the initiative permitting businesses to allow consumption, including bars, is that tourists new to cannabis consumption and consuming alcohol, can easily over-consume the two if they are not “seasoned” cannabis consumers.
Why did you join NCIA?
We joined NCIA after careful research into industry trade groups and selected the one that was the most diverse, influential, and had an ethical and inclusive industry. It is our desire to see a successful multi-billion dollar industry built on a foundation of integrity and inclusiveness, and NCIA offers that. While we may not align with the philosophies of all members, the organization pushes integrity in all that is does, and what I like the most is that it has organized councils that are really committed to creating an exemplary foundation for the entire industry, not just its members. You can see this in their Minority Business Council, where the discussions are always industry and community focused. I also like the networking available, especially meeting other passionate cannabis business owners across the country and having dynamic and energizing conversations.
Sneak Peek – A Photo Preview of #CannaBizSummit
More than 3,000 people converged in Oakland, CA last week for the National Cannabis Industry Association’s 3rd Annual #CannaBizSummit. Take a sneak peek into the cannabis industry’s most influential event of the year, and stay tuned for more coverage.
Interested in attending another upcoming NCIA event? Register for our Quarterly Cannabis Caucus series taking place in July nationwide -> http://thecannabisindustry.org/events
July Quarterly Cannabis Caucuses Are Coming!
By Brooke Gilbert, Director of Events & Education
Registration is now open for the third quarter of our Quarterly Cannabis Caucus events series! Join more than 600 cannabis industry professionals this July in networking and sharing best business practices, as well as the latest national and local policy updates.
Tuesday, July 12 – Portland, OR – Opal 28 – Register!
Tuesday, July 12 – Washington, D.C. – The National Press Club – Register!
Thursday, July 14 – Boston, MA – Hyatt Regency Cambridge – Register!
Thursday, July 14 – Miami, FL – Biltmore Hotel – Register!
Tuesday, July 19 – Chicago, IL – The Chop Shop – Register!
Tuesday, July 19 – New York, NY – LMHQ – Register!
Thursday, July 21 – Denver, CO – Jane HQ – Register!
Thursday, July 21 – Phoenix, AZ – mod – Register!
Tuesday, July 26 – Las Vegas, NV – Place on 7th – Register!
Tuesday, July 26 – Santa Monica, CA – Real Office Centers – Register!
Thursday, July 28 – San Francisco, CA – Gateway Cannabis Accelerator – Register!
Thursday, July 28 – Seattle, WA – Sole Repair Shop – Register!
The second round of NCIA’s new quarterly educational and networking series took place this April and they were a success by every measure. Thank you to the 235 member companies and 650+ supporters who joined us over the course of three weeks in 12 different states around the country.
Haven’t been to one of NCIA’s Quarterly Cannabis Caucuses before? Check out these photo highlights from the second quarter:
NCIA’s Colorado Quarterly Cannabis Caucus with Dana Rohrabacher
We could not have held these events without the support of our sponsoring member businesses and hosts so huge thanks to all those listed below!
Want to download the information we provided during the second quarter of our Cannabis Caucuses? Check out our Cannabis Caucus Resources page.
Have any feedback from a Caucus you attended in April? Fill out our short attendee survey to provide us with valuable feedback we’ll use to improve future events.
Interested in sponsoring an upcoming Cannabis Caucus in your area or a series of events across the country? Check out our Cannabis Caucus sponsorship guide which outlines pricing and benefits.
See you at the next Caucus!
2016 Board of Directors Election Results
NCIA members have voted in the association’s annual board of directors election and 11 candidates have been elected to serve on the board for the 2016-18 term. Congratulations to the winners, and thank you to all of the candidates for their commitment to NCIA!
NCIA is proud of its open and transparent process for selecting board members. The board has oversight over the association’s strategic direction and budget, so it’s important that they represent the membership’s interest. The new board members-elect will join the NCIA executive director and the 11 other elected members at the next board meeting.
This will be the 3rd NCIA Lobby Days I’ve organized, and each year has gotten bigger and better. In my first year, we had about 60 attendees and about 60 congressional meetings. A year later, we had 100 attendees and 100 meetings. This year, we aim to keep that growth going, with a goal of 150 attendees and 200 congressional meetings. Think about it – having 200 meetings would be such a powerful image for our movement and show Congress the strides we have made over the past few years.
When you attend Lobby Days, you work together with like-minded industry leaders from around the country to make your voice heard. The power of numbers is enormous. Even more importantly, you protect your interests. I don’t have to remind you that cannabis is still illegal at the federal level and people’s businesses are still being shut down, assets seized, and lives ruined. This will never change until Congress addresses this injustice and changes federal law, and they won’t change the laws if the American public is silent on this matter. If you don’t take the time to lobby on these issues and make your voice heard, who will? If you don’t care enough about protecting your business interests, why should Congress care?
NCIA is fighting every day for your interests, but we can’t do it alone. We need you to amplify what we are doing, and be the positive public face of the industry we talk about every day.
For those of you who think, “What difference does it make?” check out Ean Seeb’s recent blog post. Ean visited Washington, D.C., in January and educated members of the Hawaii delegation on the latest in our industry. Soon after, Senator Brian Schatz (D-HI) co-sponsored our banking bill (S. 1726). Constantly reminding offices about our issues keeps it on their radar and hearing it from constituents is so important.
Finally, if you’ve been following NCIA, you know we’ve had a lot of success passing pro-cannabis amendments on appropriations bills. It is looking like the House of Representatives will be debating an amendment soon after our Lobby Days that would allow Veterans Affairs doctors to discuss cannabis with their patients. The timeliness is great and gives our members a chance to remind offices why they need to support ALL cannabis reform legislation. With your help, we can have another cannabis victory!
I am excited to see old friends and meet new members next week. I am looking forward to hitting our Lobby Days goals and need your help to make it happen. Remember, if you don’t fight, who will? Please join me.
See you next week!
NCIA Accepting Nominations for Board of Directors Candidates
NCIA prides itself on the democratic system we employ to select our Board of Directors, who are tasked with overseeing the organization’s budget and strategic plan, as well as acting as ambassadors for the association. Board members also support NCIA and the NCIA-PAC through financial contributions and member recruitment.
NCIA’s Board of Directors is made up of 22 elected positions and the executive director, who reports to the entire board. Elected members serve two-year terms and elections are staggered with 11 of the 22 seats open this year. A list of current board members is available online.
The online ballot will open to all NCIA members on Saturday, April 30, and online voting will be open until until 11:59 p.m. Eastern Time on Monday, May 16.
NCIA utilizes a weighted voting system. Each member business can cast one ballot, voting for up to 11 candidates. Each ballot is then weighted according to membership status. A Sponsoring Member’s vote carries twice the weight of a Basic member’s vote and a Sustaining Member is weighted at five times that of a Basic member.
If you are not yet a member of your industry’s trade association but want to participate in the election as either a voter or a candidate, contact NCIA’s Laurence Gration at laurence@thecannabisindustry.org or (303) 223-4247. We are also happy to answer any questions you have about the election or upgrade your membership so your vote will carry more influence.
**NOTE: Board candidates may not nominate themselves or have someone else from the same member business nominate them. If you or someone at your company would like to run for the board, please contact a colleague at another NCIA member business to request a nomination. **
More information about the board election, including a voter guide with candidate information, will be made available to our membership by e-mail in the weeks ahead.
VIDEO: 1 minute, 12 cities, a million reasons to join NCIA’s Cannabis Caucuses
NCIA’s first round of Quarterly Cannabis Caucuses were a powerful example of how we can build a successful industry together. But don’t take our word for it! Check out the video above to hear from attendees themselves.
Don’t miss out on your next opportunity to be a part of NCIA’s influential, information-packed quarterly event series. Cannabis Caucuses are FREE for NCIA members, and just $50 for non-members.
Register today for the Q2 Cannabis Caucuses, coming to a city near you in April!
Oregon – Portland, OR – Tuesday, April 12 – REGISTER NOW Mid-Atlantic – Washington, D.C. – Tuesday, April 12 – REGISTER NOW Northeast – Boston, MA – Thursday, April 14 – REGISTER NOW Florida – Miami, FL – Thursday, April 14 – REGISTER NOW Midwest – Chicago, IL – Tuesday, April 19 – REGISTER NOW Tri-State – New York, NY – Tuesday, April 19 – REGISTER NOW Colorado – Denver, CO – Thursday, April 21 – REGISTER NOW Southwest – Phoenix, AZ – Thursday, April 21 – REGISTER NOW Nevada– Las Vegas, NV – Tuesday, April 26 – REGISTER NOW So. California – Newport Beach, CA – Tuesday, April 26 – REGISTER NOW No. California – San Francisco, CA – Thursday, April 28 – REGISTER NOW Washington – Seattle, WA – Thursday, April 28 – REGISTER NOW
NCIA Councils: Focusing on the Issues That Mean Most to You
by Laurence Gration, Director of Development
There is no question all NCIA members and staff work for the overall good of the industry. With an industry as complex as ours, it can be more effective to segment and specialize in order to achieve the goals of both the many and of the few.
Just as the Government Relations team at NCIA concentrate their efforts on lobbying and advocacy in D.C., with the goal of attaining federal policy change for the industry, several member-driven councils have been formed to engage the expertise and passion of those particular individuals and organizations for the overall good of NCIA and the industry.
These NCIA Councils work to gain or retain benefits for members, or to make general changes for the public good. Councils work through advocacy, public campaigns, and even lobbying to make changes in our industry. There are a wide variety of interest groups representing a variety of constituencies.
As the name suggests, these are groups that focus their energy on a single defining issue. The members of the Council are often quite devoted to the issue, and motivated by personal experiences or participation in ongoing social movements. There are a growing number of single-issue interest groups in NCIA.
The first NCIA-Council formed was the Minority Business Council (NCIA-MBC), which has the interest at heart of driving inclusion. Moreover, we resolve to maintain a business-based community that is respectful of all persons despite differences in age, citizenship, disability, ethnicity, gender identity or expression, geographic origin, language, marital status, nationality, philosophical beliefs, race, religion, sexual orientation, military service, socioeconomic status, or previous incarceration (for unjust marijuana offenses).
The Infused Products Council (NCIA-IPC) is focusing in on the edible and topical area of the industry, looking at what can be learned from the existing businesses and regulations, to be shared across the country for the benefit of the consumer and the manufacturer. There is no limitation on the issues here, with the thought that as we progress and delve deeper into the needs of this sector, it may split into differing groups with even more specialized interests. Regulation is the initial key focus, but that will continue to be pushed within the Council to ensure the infused product sector is helping shape its destiny, rather than being driven by irregular regulations from jurisdiction to jurisdiction..
Equally irregular in the industry is the human resources aspect. Whether we talk training, education, recruitment, or pay and benefits, the field is wide open and the rules are, too. The Human Resource Council (NCIA-HRC) has set up shop with the interests of both employees and employers in mind.
Proposed goals of this council are as follows:
Establish best practices for HR, Talent Management, and Learning & Development in the cannabis industry
Develop a job board for NCIA members
Utilize SHRM and other HR/recruiting organizations to help define HR/recruiting expertise
Share best practices among members of the HR Council
Providing educational materials to help NCIA member businesses better understand how to be compliant with federal and state employment laws
Provide guidelines to NCIA members around recruiting and employment practices
We have also been in discussion with members that are interested in councils on cultivation, marketing and advertising, and retail.
Let us know of your interests, and we will make it happen.
For more information, please reach out to NCIA’s Director of Development, Laurence Gration.
Help Economists Determine the Cost of the Banking Crisis
Editor’s Note: From time to time, NCIA hears from researchers looking into an issue related to the cannabis industry. Recently, two Northwestern University economics Ph.D. candidates contacted us because they are studying the economic impact of the cannabis industry’s lack of banking access. In order to complete their research, they need real-world data from cannabis businesses like yours.
This blog post explains their research. We encourage our members to take part in their research, as the results can help support our case for an immediate banking solution. To get involved, contact them at bornstein@u.northwestern.edu or gaby@u.northwestern.edu.
A large number of banks in this country are not willing to work with businesses in the cannabis industry, even when those sales are legal under state law. This is causing major difficulties for thousands of business owners that are forced to operate on a cash-basis. But are they the only ones to suffer? Using straightforward economic analysis we ask who is losing due to these restrictions. The short answer is – almost everyone. Not only businesses are being hurt, but also consumers. In addition, such restrictions also decrease the revenues of the government.
While it is not difficult to argue, as we do below, why restricted access to banking services is bad for the economy, quantifying the different costs is a complicated task. It requires rich data on the costs incurred by businesses together with modern econometric techniques. In the next few months, we plan on collecting the required data to tackle such task. We believe that quantifying these costs is both of scientific interest and of that of the legal cannabis industry. If you are in the legal cannabis industry and would like to get more information about our study, we encourage you to contact us! Our contact information is listed at the top of the page.
In economics, when we want to analyze the effects of a government policy on market participants (consumers and producers) a first and simple approach is to look at the changes in consumer surplus (CS) and producer surplus (PS). These two measures represent what consumers and producers win by participating in the market.
FIGURE 1
As reference, Figure 1 shows what market equilibrium, CS and PS would be in the market for marijuana products if everyone had access to banking. If we think of the market demand function as representing how much consumers benefit from each transacted quantity, CS can be computed as the shadowed area in Figure 1 below the demand curve. Similarly, if we think of the market supply function as representing how much it costs to sellers to produce each transacted quantity, PS is the shadowed area in Figure 1 above the supply function.
FIGURE 2
What is the effect of banking restrictions on market equilibrium, CS and PS? Not having access to banking implies that producers have to take additional measures in order to be able to sell: install ATMs, hire security companies, allocate extra time to counting and moving cash, etc. This means that for each quantity transacted, the cost of doing so is higher than before. For the sake of simplicity, let’s think that these extra costs can be measured in dollars and correspond to a linear cost of $T per unit. In this case, such increase would shift the market supply curve as shown in Figure 2. Market equilibrium would feature a higher price and lower quantity.
We can decompose the effect on CS and PS as shown in Figure 3. There are two factors that reduce both CS and PS. First, consumers and producers share the burden of the extra cost generated by the lack of access to banking, this is represented by area X in Figure 3 that reduces both surpluses. Second, since the quantity transacted is now lower than before, there is an irrecoverable loss for both consumers and producers represented by area D in figure 3.
FIGURE 3
What is the difference between areas X and D? Well, area X is not entirely a loss to society as a whole: it includes payments to security companies, so it is a transfer from one sector to another, but it also includes the cost of the extra time needed to process cash payments, which could be better allocated to leisure or working in something else. Area D, on the other hand, is entirely a loss to society: if the market had access to banking, costs would be lower and quantity transacted would be greater and at a lower equilibrium price. New consumers would be incorporated into the market, and existing consumers would pay less.
Gideon Bornstein and Gabriela Cugat are two economics PhD candidates from Northwestern University in Evanston, Illinois, who are studying the costs incurred by businesses transacting only with cash.
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Child Resistant requirements for cannabis products is part of the regulatory structure for almost every state that has legalized marijuana for both medical and adult use. These requirements pose challenges to the entire supply chain from growers, manufacturers, dispensaries and customers.
These 24 winners are now responsible for growing the supply of medical marijuana Ohio’s patients will use, a population estimated to be in the hundreds of thousands. The medical marijuana market in Ohio is expected to be worth $300-400 million once it matures, making the limited number of licenses available immensely valuable.
As a cannabis retail owner, your number one priority is compliance. And when it comes to patient and customer privacy, you need to determine exactly what your state’s requirements are per your particular operation.
Kefentse Mandisa is a broker at 
Baker Technologies
Scam artists are understandably loathe to subject themselves to questioning from a skeptical lawyer. Sunlight is the best disinfectant and most scams will not stand up to a thorough vetting. Legitimate business professionals, however, while not always happy about it, accept that dealing with lawyers is the price to be paid to get deals done.
2016 was a very active year for the cannabis capital markets in Canada, with the total amount raised by publicly traded cannabis companies exceeding $500 million Canadian (around $381 million U.S. at today’s exchange rate). Most of this activity took place after the April 20th statement by the Canadian government stating that legislation to legalize adult use of cannabis would be forthcoming in the spring of 2017. Unlike in the U.S., where investment banking services are generally not available to public cannabis companies, Canadian investment banks have been active in raising capital for Canadian Licensed Producers (LPs – described in further detail below). Also in contrast to the U.S. market, these firms have begun to publish research on the public companies.
3. Moving remarks
4. An inspiring
5. Fifteen
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By Michael Correia, NCIA Director of Government Relations
