Disadvantages The U.S. Has In Cannabis Legalization

In this episode, we discuss disadvantages the U.S. has in cannabis legalization with Oscar Velasco-Schmitz of Dockside Cannabis. Aaron Varney, Maria Moses, & Oscar Velasco-Schmitz are the heart and soul of Dockside Cannabis, and the reason the company exists. All of them stem from backgrounds in either business, technology, or both- and their unique stories are what brought Dockside to life. In 2009, Oscar had been advocating for cannabis rights for years and was able to establish lasting relationships with people and policymakers like city attorney Pete Holmes, which helped to shape bits of the conversation around what cannabis policy for Washington could look like.

He later connected Maria with someone who ran a medical collective, and the two of them agreed to move forward with their own cannabis shop. The U.S. is basically falling behind in the global market now with other countries legalizing cannabis for adults or at least medical use, and of course, they’re not subject to U.S. tax laws. They discuss if the U.S. is at a disadvantage due to these restrictions, as well as the fact that we’re seeing cosponsors on our legislation from BOTH sides of the aisle, both democrat and republican. That’s due to our industry getting out there and educating them about our issues and putting a personal face on it. They speak about what kind of anecdotes or research we need to be sharing with those who are not yet supporters of our issues.

Transcription:

Get informed get inspired and get connected. 

Hello, thanks for tuning in to another episode of NCIS cannabis industry voice from your host Bethany Moore. I’m the Communications Manager at the National cannabis industry association today, I’m happy to introduce my guest based in Washington State Oscar Velasco of Dockside Cannabis, welcome to the show, Oscar.

Good morning, Bethany, I’m very happy to be here, thanks for having me, absolutely great to connect with you. 

So for our listeners, let’s get to know you a bit more, let’s talk about your background and any experiences you had before finding yourself serving the cannabis industry, running Dockside cannabis.

Yeah, sure, well thanks for this opportunity to share a bit about myself. I’m a native of the beautiful cosmopolitan city, known as Mexico City. And my mother and I immigrated to the United States when I was two-years-old and so I’ve been privileged to be raised by culturally, and bilingual my entire life, and certainly that’s had influences on my thinking and just knowing that there are other cultures and other modes of communication and understanding besides the dominant paradigm. 

Leaving Mexico City, we moved to California and it was it the contrast because I was raised in an agriculturally rich and very rural region, of the SAN Laine, a Valley in California, so very, very stark contrast to a busy metropolitan city and one of the advantages of… Of being raised in this agricultural region was the access to the politics that were happening at the time. 

My step-father was very involved in the United Farm Workers at a very… When I was very young, and I was exposed to political movements, and thinking and strategies and tactics and so at a very young age, I understood that to be able to make a significant impact, you needed to organize and mobilize resources and so that was great. I very quickly learned that farm living, was not necessarily something I wanted to do my entire life so I pursue education and I really took to, I really took to traditional school and that found me at the University of California, Santa Cruz, and here in California, in general, has a very, very long and rich history of Cannabis culture and cannabis exposure, both production. And how do I say, that’s just like the sight of cannabis has definitely been inculcated throughout many, many decades in California.

Sure, the culture. And specifically in San acres California. And for me, that was the first place that cannabis use was really normalized and where I was made aware that Okay, it’s, “this is not, this is not the devil’s weed.

Growing up in the Central Valley in the sand Working Valley. There was definitely a very conservative political mindset, and the dominant paradigm was to teach children that drugs were bad, that was there was no other narrative there.

Just drugs are bad. While the DARE rallies were fine and everybody had a good time and it was an opportunity to take a field trip with your classmates. It was a bit of an indoctrination.

And so for me, having been exposed to the culture of Cannabis in Santa Cruz not all of Santa Cruz is this way, but a lot of the folks that I hung out with, that were responsible and respectful cannabis users, really, really helped to form my ideas about that. And just a bit about the background of my studies in Santa Cruz, I was lucky enough to study theoretical linguistics and education and philosophy and history of human consciousness anthropology, psychology, sociology a number of different topics. But what I ended up majoring in and doing research work in theoretical linguistics.

C is what ended up bringing me to Washington State. I worked on a project and somebody at the Natural Language group at Microsoft took interest in my work and I had my first interview for the Microsoft Corporation in Atari, in half Moby California. 

I… It was kind of an interesting set of circumstances, but little did I know, going to Santa Cruz, I went there to study math and then dear friend said, Oh yeah, think you’d really like linguistics, you should check out a couple of classes. And I did and I fell in love and loan. Behold, University of California, Santa Cruz has one of the top Linguistics departments in the world. So I was exposed to a very sophisticated level of thought technique and really just the scientific method with regard to, with regard to language, and so that led that led to that led to my career in software here in Seattle.

Yeah, when nothing I’ve been exposed to cultures and politics and travel and art. And while at Microsoft, I studied business and economics, through mentorships and I’ve always been interested in civic structures, and so naturally with all of the culmination of all of those things, I started researching cannabis, law, and I began writing white papers, presenting, them to friends that were policy makers here in Seattle and LA, and behold all of them said “Well this subset, what? You’re kind of crazy, but this is logical, this makes sense. And so a group of other very brave and folks that had the courage of their convictions to speak truth to convention we began forming a commercial model for medical cannabis here in Washington State. 

Okay, when was that, what year was that? 

That was in the year 2000… Late 2010, early 2001, got it right, yeah, and… And even before Washington State, I had medical cannabis laws. Thanks to then Senator Gene Colwell, in 1998, just three years after Prop 215 in California, and just to circle back, while I was in Santa Cruz, I ended up meeting the grandfather of a good friend and the gentleman was… You must have been in his late 80s, maybe early 90s and I was very well for himself. He was an executive at the Safeway corporation, kind of a conservative guy, at least from appearance, but his attitude in 95 was… Oh yeah, yeah. marijuana should be should be absolutely legal.

So that was also a paradigm shift to me is seeing an elderly person who was well-educated and very successful in their career, not necessarily dread lock working at Aalto Creamery exposing that the cannabis was the source for good.

So anyway, to say that the cannabis movement in Washington State has been strong for a long time, even before medical cannabis, we all know that the husband parallel markets reconciling demand-supply paradigms for cannabis for a very, very long time right, so having medical cannabis statutes in whatever jurisdiction allowed for a vehicle to have patient advocacy and to speak up and to say, “Hey we really we want to use this for medical purposes, and we should be allowed to do so and you can see there’s been a lot of… There’s been a lot of movement in that space it is. And now with the adult use initiatives that have passed through multiple jurisdictions in the US and across the globe right right, and now there’s adult use cannabis for adults over 21 in Washington and you run the dispensary called Dockside cannabis.

I’m honored to I’m honored to serve as a founder of Dockside cannabis. Yeah, this is true. And we have four stores in the Seattle Metropolitan area, and I don’t know, great where honored to serve patients and adult use consumers.

Fantastic, great thanks for telling us more about your background there. We’re gonna take a quick commercial break and then we’ll be right back to chat more with Oscar from Dockside cannabis. So stay tuned in NCIA’s cannabis industry. 

Alright, we’re back on NCIA’s cannabis industry voice weekly podcast on cannabis Radio, I’m your host Bethany and we’re talking with Oscar from Dockside cannabis based in the State of Washington, Oscar. So tell me more about what you’re doing these days, today in the Seattle Metro area. You mentioned, of course, the operation of your four shops of Dockside cannabis. What else is going on up there? And how else are you involved?

Yeah, so at… At this point, we’re now starting to see not just normalization of attitudes towards cannabis, but normalization of business practices and normalization of infrastructure within the state of Washington. And so, to that end, we’ve had to really build a lot of the institutions that provide the foundation for such things to happen.

One of those institutions is the cannabis Alliance, which I’m privileged to sit at this point, an adjunct board member of the organization we started off through Americans for Safe Access first doing patient advocacy that then morphed into an industry group called the Coalition for cannabis standards and ethics, and then, that organization merged, with different groups throughout the state.

CS Collier canes centers and ethics was founded in Seattle and one of the… One of the demerits of only being a Seattle-based organization, was that we weren’t really getting a lot of the voices from different parts of the States.

We put together an outreach initiative to contact other folks that had interest and had opinions and had experiences throughout the state, and we found that there were other organizing bodies, and we decided to meld those organizations into the Coalition for cannabis into the cannabis. So it’s a bigger part in… And through that organization, we represent a constituency of about 250 members throughout the state, and these are folks that are producers, processors, retailers folks in ancillary businesses such as HR consultants accountants bookkeepers soon and so forth. Any aspect that would feed into the cannabis supply chain, both directly and at an ancillary level so procurement of packaging, so on and so forth. And so that’s something that’s keeping me busy. I’ve also been privileged to be invited to sit on a couple of advisory boards both for the city of Seattle to the Washington State Senate and to provide just to provide input to our regulatory body which is the Washington State Liquor and Cannabis Board. And they need to hear from you. 

They certainly do they really do, they really do and I… So for as much black as they take on, I think people have to understand that this is a nascent industry and cultural shift of being able to normalize a good, in a good market that has already existed that has been reconciled in parallel markets before and so transitioning that and creating the infrastructure of the regulatory the regulatory underpinnings.

It’s a significant undertaking and so takes work to get it right is work to get it right. And so I think really patients gathering communication, it’s all fundamental to making the system work. So that’s the work that I’m doing on the policy side of things, on the regulatory side of things, on the business side of things, like I mentioned, we and my two partners operate four stores here in the Seattle area and now that that has normalized as well and as we’ve established our business rules and protocols and systems and so on, and so forth, this is allowed me to present a different things like continuing legal education seminars. And I was approached by somebody afterwards from the audience who said I need to write your brain, and so immediately.

Wow, no, thank you, and I said, “Well let me talk to my group and see what we can put together. And so now I’ve now have stepped into an executive consultant role, where I serve it as advisor to private entities to institutional entities, as well, as a tribal entity here in Washington State.

Yeah, and it’s not a privilege to be able to work with all of the… Just different groups. So that’s what’s keeping me busy and the one to… Yeah, no, it’s great to get involved in all of those things and make sure that the opinions and the information and the facts are available, so yeah, thanks for staying busy. I know it’s probably a lot to take on, but… Oh yeah, absolutely, absolutely.

And another thing I forgot to mention is that, I’m just talking about the work that I’ve been doing here in Washington state, a lot of the foundational work that I very happily did has transitioned into folks outside of the state of Washington reaching out to me for guidance, for information just for feedback and to learn about the experiences that we’ve had here in Washington, what we’ve implemented so I’ve been able to help folks talk about these topics in Arkansas and Missouri, in Tennessee and a broad in exchanges in Germany, in Israel, in France, in Italy, in Mexico and just essentially creating, creating this web of support to or what does a global shift in cannabis regulation, and statute.

Yeah, we’ve only got a couple minutes left in this segment and I did wanna talk a bit about global markets, but first quickly banking and taxes are two huge issues for the cannabis industry and you are subject to those pretty awful federal tax code section 280E of the tax code, meaning, you can’t deduct most normal business expenses. Can you quickly just talk about that and how it’s impacting you and the need for reform?

Yeah, okay, so, well your listeners must know the history of  280E. so I’m not gonna get into that, right?

It’s an interesting story as it’s a very interesting story. But effectively what this does is the businesses that operate within the cannabis space that are actually touching the plant, as the code specifically says, Cannot take standard business deductions. Right, ’cause it’s a “cisalpine exactly for trafficking of Schedule one or Schedule two narcotics. Okay, well they’re very, very interesting. You can read the code, you can read a very narrow scope interpretation or very broad scope interpretation of that code.

Consider the fact, consider the fact that the businesses that are state-licensed and regulated by jurisdictions are in concessionary relationships with the jurisdiction that oversees their business existence.

Okay, without giving too much away, about our thinking about this, there are approaches that businesses can take to minimize the impact of this very, what I believe is not a lot that is unjustly applied to state licensed businesses. This is not trafficking.

So clearly we need to update the law, we need to absolutely yeah, NCIA’s approach is to amend that section of the code to exempt state legal cannabis businesses. So, while getting that kind of amendment is a process in and of itself, of course, and we work through the various channels that we have with our GR team in DC. So yeah, obviously it needs to change, it’s out of date, it doesn’t make sense. We’re in a whole new paradigm now, so it’s just gotta change another thing Ethan, if I make the Congressional delegations, in Washington DC, from the different states need to know that those tax dollars that are what I believe are unjustly and perhaps illegally being pilford from these businesses are not staying in the state of those businesses, they’re in fact they’re being extracted by the federal government, and so the constituency of these representatives are being negatively impacted by an antiquated code that desperately needs to be updated, yeah. So this is something very important to note, and for some of your listeners that want to exchange if I may selfish selfishly say Please feel free, too. I don’t know if you’ll give my contact but feel free to send an email to info at doings dot com. 

Cool, great, yeah, let’s take our last commercial break here and we’ll be right back to chat more with Oscar. stay tuned.

We’re back on NCIA’s’s cannabis industry voice on cannabis radio, and we’re chatting with Oscar from do side cannabis about all things cannabis. We’ve covered some deeper issues related to Section 28 of the tax code and how that’s impacting the cannabis industry. Also banking, banking is a big deal in NCIA is extra excited about banking right now because we’ve had movement on the safe Banking Act the secure and fair enforcement Banking Act, which provides safe harbor for cannabis companies, however, it is only out of committee at this point, which is still a very big deal, but it still has its journey as a bill sitting on Capitol Hill making its way. 

So, Oscar, talking about the banking crisis what’s interesting is Washington State has actually made some progress on its own on this front for cannabis companies. Can you tell me more about what’s going on in the things for that? 

Absolutely, thanks Bethany.

So, credit unions have really stepped up to serve the industry and Washington State, cool and while not all capital market products are available yet. Through these institutions, the primary operating functions that allow for businesses to operate day-to-day are in place, and they are under strict compliance rules around using these services, and again, it’s up to the sole discretion of these private credit unions as to which business entities the bank, so there’s a rigorous vetting process that goes on to be able to gain access so we do have a limited amount of banking services, albeit without the use of credit cards yet, because that’s a completely separate set of protocols, right? Yeah, absolutely, well, that’s great to hear. And while we’re working on the bigger banking crisis nationally hopefully more credit unions in other states will step up and follow suit for the friendly credit unions we’re finding in Washington State. That’s great, a son and a… So yeah, let’s jump to another topic real quick. Obviously in the US we’re saying co-sponsors on our legislation that supports our industry on both sides of the isle Democrats and Republicans and we, the industry are getting out there and educating them. And putting our personal face on it. So, there’s anecdotes and research that we’re able to bring in and show these regulators and lawmakers to tell them what’s holding us back.

What has your experience been around some of that really important information, or maybe research that we still need absolutely, yeah. 

So we still need to fund basic research around the plant, we need to fund basic research to really investigate at the molecular level. What are the benefits, specifically to different indications for medical purposes, what are health externalities, that we should be considering? This all requires basic research. These are a lot of the questions that I get from really big picture thinkers from institutions. What are the risks that are involved, what are people thinking? And unfortunately, because of the stigma and the statutes in the US, a lot of this research has not happened here a lot of it is happening in Israel now that medical cannabis is legal in, Europe. You’re gonna start to see a lot more research happening there. And so really, the US is really, we’re cutting ourselves at the knees by not doing this. And in fact, there’s a vehicle here at the University of Washington in putting together a cannabinoid Research Center, which we deal with the pharmacology, psychopharmacology the plant biology, all aspects, and not just you do But also Washington State University to do the research on agronomy, the agricultural research as well and so a lot of efforts are underway, and the different jurisdictional legislature legislative bodies need to fund these efforts as does the federal government of America, truly… 

Yeah, so before we wrap up the show here, yeah I’d like to mention one of our policy council papers about how the US is falling behind in the Global cannabis market, which is actually the name of the Policy Council paper we published. It can be found in two spots on NCIA’s website, it’s in the industry reports section under the news and resources, and it’s also in the policy council area, which is under the About Us so I highly recommend checking out that report how the US is falling behind in the global cannabis market.

Okay, so before we head out, I wanna say thank you so much for being involved in “ncia you’ve been a member for many years, and I appreciate your involvement in the community, local and national, and I do hope to see you at lobby days this year in May, if you can make it, the game at one.

Yeah, May 21st through 23rd, for more information about that, go to the cannabis industry, or lobby days 2019 and you must be a member of NCIA and you must register in advance to participate. So friendly reminder to those listening.

So yeah, thank you again, Oscar it’s always a pleasure to connect with you and thank you again for being a member of NCIA.

Of course, yeah, I just wanna say NCIA was at the forefront of this effort, and it’s really provided the megaphone and the platform for our voices to ring in the ears of our elected officials. So thank you for that NCIA mutual gratitude.

 Alright, okay, thanks everyone for tuning in to this episode of NCIA’s Cannabis Industry Voice, until next time.