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Member Blog: How Technology Can Ensure An Equitable Cannabis Industry

by Walter Moore, Cognitive Harmony Technologies CEO

The multi-billion dollar cannabis industry is coming to a town near you. With new states passing adult-use legislation every day, it’s only a matter of time before businesses begin opening their doors nationwide. 

In states such as New York, the first cannabis business licenses (CBLs) are being given to people who were impacted by the war on drugs and hemp farmers. The effort is a first-of-its-kind approach that is admirable in theory – a positive step toward righting the wrongs that have persistently and unfairly affected people of color – but still leave the door open for challenges in practice.

Simply put, the barrier for entry is too high for most individuals due to the complex and convoluted CBL application process. Between sifting through and submitting thousand-plus page documents and potentially spending hundreds of thousands of dollars to create a perfect, compliant application, new business owners are fighting an uphill battle against multi-state operators (MSOs) who have moved across the country as legalization opens state by state and have the process (and hundreds of thousands dollars needed to afford a dedicated application consulting firm) down to a science.

Legislators may have noble intentions in offering a head-start to people affected by the war on drugs in an effort to correct past wrongdoings and create a distribution of ownership that looks like the people most affected, but if the necessary regulatory framework of the application process is encumbered with more compliance to receive equity benefits, it will be even harder to complete a competitive application – leaving many potential new business owners without a license and the well-oiled machines known as MSOs first in line.

Not to mention the fact that the application process often plays out over years. States will frequently take half a year to review an application and only provide roughly 10 days to fix any deficiencies.

Technology is The Way

While the odds may seem stacked, the technology to close the gap exists and many CBL applicants are finding out how to compete against large MSOs and established players in the market. As someone who experienced everything that goes into the application process, and what is wrong with it, first-hand when I began my career in cannabis, I’ve realized that the only way to effectively compete is by working smarter. Through technology we can create greater access and a level playing field. 

There are several key areas where technology (i.e. “working smarter”) is already paving the way for true social equity while applicants embark on submitting a cannabis business license. Document generation, telepresence, language processing, machine learning, artificial intelligence and augmented reality are among areas of interest that savvy CBL applicants can implement into their strategy. By normalizing standard operating procedures (SOPs) across verticals and jurisdictions, companies can provide contextual SOPs directly in front of a user with a simple QR code. Imagine a world where a dispensary employee can access SOPs directly from each piece of equipment or area of a facility with minimal effort simply by scanning a QR code with their tablet.

A Cannabis Industry for All

Laws that benefit a more equitable industry surely help, but in a new industry where the gap between the have and have-nots is already wide and growing rapidly, more steps need to be taken by regulators to eliminate the pay-to-play mistakes that have infested other state cannabis policies such as in my home state of Illinois. In Illinois, there wasn’t a fair cap on the number of CBL submissions for a company, leaving businesses with the most money with an opportunity to submit over 40 times and flood the application pool.

Thankfully, I’m pleased that regulators in New York and New Jersey are doing a better job in this regard, avoiding these unfair situations, but I foresee a highly political zoning situation in New York. Historically, companies that can afford to pay lobbyists and other influential people to get the deals and contracts done, are more successful. I’m not sure what short-term regulatory solution exists for this age-old, persistent issue. 

It’s encouraging to see the cannabis legalization movements around the country paired with well-meaning equity and restorative justice initiatives. However, there is still a high barrier to entry presented by the extensive and convoluted cannabis business license application process. Only through advances in technology will this barrier be taken down.

Walter Moore Cognitive Harmony Technologies CEO & CTO, is an accomplished software architect, financial engineer, and entrepreneur residing in the south suburbs of Illinois. He specializes in architecting elegant, compliant, and scalable solutions to complex regulatory environments in the AdTech, FinTech, Digital Assets, and Cannabis industries. He has a Masters of Science in Financial Engineering and undergraduate degrees in Theoretical Physics and Applied Mathematics.

Walter started Cognitive Harmony Technologies in order to support social equity teams and bring change to an industry which has historically whitewashed the past injustices served in its former prohibition, something which he has experienced firsthand in prior decades. As a cannabis business license owner, Walter knows just how difficult it is to put together a competitive application. He developed the CHT platform in order to help lower the barrier of entry for others willing to put in the hard work of assembling an application, but who would otherwise be priced out of the competition.

About Cognitive Harmony Technologies

At Cognitive Harmony Technologies, our proprietary CHT Accelerator platform is paving the way for true social equity in the CBL application process by developing a meticulous roadmap to create a complete and competitive automated application much like tax preparation software generates tax returns, providing live-support, and offering access to a helpful network of architects, realtors and a range of connections.  Additionally, we offer this for a fraction of the cost of what the hundred-thousand-dollar consulting firms that multi-state operators employ, and in some cases it is completely free.  Cutting-edge technology is the best tool that an everyday, aspiring entrepreneur can leverage to break into the industry, and make the cannabis sector’s leadership as representative and diverse as the consumers. 

Our mission is to open the doors for equitable cannabis business ownership by making the application process easy as filing personal income taxes online. The CHT Accelerator streamlines the entire application process into one easy-to-use software platform so you can create a complete and competitive application. Follow us on LinkedIn or visit our website.

Member Blog: How Can Hemp Businesses Better Self-Regulate?

by Lee Johnson, CBD Oracle

The hemp industry is still in its early stages, especially when it comes to emerging products like delta-8 THC. While there is some regulation for hemp products, it’s much less than for legal cannabis, and this gives companies some freedom in terms of how they operate and what they do. For the most part, this is a good thing, but there is a downside too. Our report into the industry found that 76% of delta-8 THC products contained illegal quantities of delta-9 THC. This is terrible for consumers, but it also poses a risk to the industry: if you keep raising red flags, the government will eventually swoop in and take action. This is why self-regulation is a crucial concept for hemp businesses going forward.

Why Self-Regulate?

Self-regulation is crucial for hemp businesses because of the scrutiny the industry faces and to improve consumer confidence. Although CBD is generally accepted, this is especially important for companies selling something like delta-8 THC, which attracts more scrutiny because of its psychoactive nature. With states like Texas attempting bans on the substance and the findings of our report showing that the vast majority of products break legal limits for delta-9, the industry is in serious danger of attracting the attention of more lawmakers who may opt for an outright ban. In fact, there are already 18 states with some form of ban or restriction on the substance.

Jayneil Kamdar, PhD from InfiniteCAL Labs commented to us that: “The current delta-8 THC products on the market are very concerning because there is no regulatory body monitoring the safety of these products.”

In our report, we also found that companies tend to undercut customers on delta-8, that only 14% of companies perform substantial age verification checks and that two-thirds of companies don’t test their products for impurities.

It isn’t that self-regulation would be a cure-all, but if companies opt to act responsibly, it is much less likely that they will attract attention from lawmakers. In addition to this, though, self-regulation sends a strong message to consumers that you care about them and that they will get what they wanted when they buy your products. When this doesn’t happen, people will tell others about it.

The more the industry can mirror the regulations of regulated cannabis companies, the better things will go in the long run.

How Can Companies Better Self-Regulate?

However, “self-regulation” can’t just become a vague, catch-all term for generally responsible business practices: clear recommendations are essential in making this goal a reality. Luckily, our in-depth investigation of the delta-8 industry and other similar investigations into the CBD industry have revealed some key areas companies can focus on.

Provide Transparent Lab Reports with QR Codes

Lab reports are a vital part of building consumer trust, and you should ensure there is a QR code on the report so it’s easy for consumers to verify the report on the lab’s website. 90% of CBD companies already do this, based on our industry analysis.

Offer a Lab Report for Every SKU

Many companies, however, only offer a COA for the base distillate, rather than every specific type of product it produces. If you sell vape cartridges, for instance, you should have a report available for each variation in flavor, strain, and potency.

Choose Credible Labs for Your Report 

Not all labs are equal. If you get a report from a questionable or unknown lab, savvy consumers will still be wary of your product, and in some cases, the results may be unreliable. It’s best to choose a lab with a strong reputation, such as ProVerde, Anresco, SC Labs, InfiniteCAL, and CannaSafe.

Test for Impurities 

With two-thirds of delta-8 companies not lab testing their products for impurities, this is a good way to stand out in the marketplace as well as good practice in general.

Verify Customer’s Ages

With most CBD companies not performing robust age verification checks, using a credible age verification system such as AgeChecker is a great step towards self-regulation. They stay up to date with FDA requirements, state laws, and merchant account policies, so you can set it up and then continue basically as normal. This is especially important for delta-8, but it’s also crucial for higher-strength CBD products too.

Label Your Products Accurately 

What you claim on the label should be what’s in the product. Lab reports help you verify that this is the case.

Warning and Caution Labels  

Only about 55% of hemp delta-8 companies use a warning label, but this is another key part of self-regulation. Suggested verbiage includes:

  • This product should be used with caution when driving motor vehicles or operating heavy machinery.
  • Use this product under the guidance of a physician if you have a medical condition, are pregnant or lactating.
  • Keep out of the reach of children.
  • This product was manufactured from hemp material that meets federal requirements for hemp products; however, consumption may be flagged by some drug tests.
  • Use with caution if subject to urinalysis.

Use Child-Proof Packaging

The CDC recently raised an alert about children accidentally consuming delta-8 products. Using child-proof packaging is an easy way to prevent this from happening.

Avoid Child-Attractive Packaging

This goes hand-in-hand with the above, but also, having your products that look like a bag of Cheetos or anything along these lines is not a good look.

Avoid Medical Claims 

Although many people opt to use delta-8 and CBD for medical purposes, if you’re selling the products, making medical claims that might not meet official organizations’ standards of proof is simply a terrible idea. Leave it to your consumers to determine.

Get Industry Certifications

Getting certified by an organization like the U.S. Hemp Authority is a great way to show your customers that you’re one of the responsible companies.

Conclusion

Self-regulation really just means taking a few basic steps to establish to both customers and politicians that you’re running a legitimate business which does what it claims to and is socially responsible. It might increase costs in the short-term, but over time and especially as consumer knowledge increases, it will pay off many times over. And the next time there’s a situation like what happened recently in Texas, the industry will have a much easier time defending its practices.

Lee Johnson is a writer at CBD Oracle who has been covering science, vaping, and cannabis for over a decade. He focuses on research-driven deep dives into topics ranging from medical uses for CBD to industry and user statistics, as well as general guides and explainers for consumers. He is a passionate advocate of both CBD and cannabis, and a strong believer in informed choice for consumers.

CBD Oracle is a consumer research company working to improve the safety and transparency of cannabis products, producing in-depth statistics on CBD and cannabis, detailed research pieces and analysis of social and legal issues.

 

It’s Time to Spark the Vote! Calling On All Retailers to Mobilize Customers for the 2020 Election

by Etienne Fontan, Owner, Berkeley Patients Group, Founding Board Member, NCIA 

Despite having been marginalized and underrepresented in the political process for as long as prohibition has been policy, cannabis consumers are quickly emerging as an incredibly diverse and effective voting bloc in American politics. The impact of the cannabis consumer vote on state and local elections is palpable in these unprecedented times. As a beneficiary of this constituency base, we as an industry need to appreciate not just what elections have done to enable our businesses to exist today, but, critically how by lifting the voices of our patrons we are ensuring our own sustainability tomorrow. In fact, the backbone of the cannabis industry is our consumer base. Without consumers, there would be no local reform and, in most cases, no legal state market.

Today, we have hundreds of licensed retail stores across the country, and our industry is finally in a place where we can mobilize our customers nationally for the 2020 election. As retailers, it is now absolutely essential that we ensure cannabis consumers are effectively engaged, which is why we, at Berkeley Patients Group, are proud to join the Spark the Vote Retail Partnership Program. We are calling on every retailer out there to join us. 

Spark The Vote‘s Retail Partnership Program is a COVID-safe, cannabis consumer voter registration and mobilization drive. The goal is to leverage the growing number of public-facing cannabis retail networks, and allied businesses to promote the effort through in-store and online customer engagement. The campaign is bringing together hundreds of socially responsible operators from across the country that are committed to supporting public participation in the electoral process. This is an excellent opportunity for our industry to stand out as good corporate citizens by lifting the voices of the communities we serve, and by empowering our employees to support positive social change.  

There is no fee to participate as an official retail partner, and his campaign was designed specifically to minimize any staff or operational disruption. The only requirement is to promote get out the vote by displaying a QR code sign (graphic is provided) in a high-traffic, high-visibility location in the store, and highlight content on social media when necessary (language templates are provided). The sign acts as a COVID-safe, contactless voter registration station where a customer can use their phone to scan the code and quickly find out about their registration status, early voting, and other resources on how to participate and promote the democratic process.

In the words of Thomas Jefferson, “We do not have government by the majority. We have government by the majority who participate.”

For more information on Spark the Vote, how your organization can participate in the Retailer Partnership Program, or other partnership opportunities, please contact ben@sparkthevote.org or go to www.sparkthevote.org. 

 

[Sabrina Fendrick, Chief Public Affairs Officer, Berkeley Patients Group; Spark the Vote Advisory Board Member, contributed to this post.]

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