Catalyst Conversations | 2.21.23 | Gain an Edge and Make an Impact – Community Benefit Agreements
NCIA’s #IndustryEssentials webinar series is our premier digital educational series featuring a variety of interactive programs allowing us to provide you timely, engaging and essential education when you need it most.
NCIA’s Catalyst Conversations series is an advanced webinar series curated to give enrollees in our Social Equity Scholarship program the opportunity to network and gain access to valuable knowledge that will help them excel in the cannabis industry.
In this edition of our Catalyst Conversations series originally aired on Tuesday, February 21, we hosted a dynamic and practical conversation with members of NCIA’s Retail Committee, alongside cannabis industry leaders based in Chicago – Doug and Gary – surrounding the importance of businesses collaborating with community members, and how to create mutually beneficial partnerships between communities & businesses through community benefit agreements.
Going through the licensing or permitting process? Trying to figure out how to launch your business model in a municipality that isn’t set up for it yet? Are you operating already, and looking for insights as to how to keep your license or strengthen your business model?
You’re in luck as you’ll leave this conversation with a better understanding of what Community Benefit Agreements (CBA) are, and how they are a necessary component of the licensing and license retention process.
On top of gaining insights into how to develop a CBA that works for your business’ bottom line while also creating community impact you’ll also learn about existing CBA’s and the success we’ve already seen in these early stages.
Panelists:
Mike Lomuto
Diversity, Equity, and Inclusion Manager
NCIA
Committee Blog: Everything You Wanted to Know About Cannabis Facilities but Were Afraid to Ask Field Guide – Part 4 – Retail
by NCIA’s Facilities Design Committee Jacques Santucci, Brian Anderson, David Vaillencourt, and David Dixon
Continuing our five-part series on the behind-the-scenes workings of the legal cannabis industry. This series focuses on all of the inner dealings and industry advice from established professionals to craft this unlimited How-to-Guide to assist you in setting up your own facility. These articles cover cultivation, extraction, infused products, and retail facilities as well as support activities. In general, remember to be compliant with all local rules and regulations and contact a licensed contractor and industry expert.
Part Four, Retail & Dispensaries: Top Things to Consider When Planning Your Cannabis Dispensary and Retail Operations
Retail and dispensary design presents challenges that are distinct from the other areas of cannabis production and manufacturing. The biggest difference is that the design must now account for customers as well as employees. Listed below are a number of issues that an operator should consider as they are in the process of designing their retail or dispensary operations. Always remember to be compliant with all local rules and regulations.
Security Camera: Minimum Area of Coverage
Most states require a hundred percent minimum security coverage in any area where marijuana products are stored, displayed, or sold. Designing a camera system and placements to avoid “dead spots’ ‘ (i.e. areas with no camera coverage) can be challenging, especially if the operation is taking over an existing space, as opposed to building a new facility from scratch.
Bonus Consideration: Think about having an HVAC system specially dedicated to your security room. Security rooms for video monitoring and storage can sometimes be an afterthought. But these locations should be treated more like computer server rooms as opposed to standard office space. And with the amount of technology placed in a (typically) small space, things can overheat rather quickly. This can lead to damage to the system and ultimately, you could be out of compliance for video storage and retention.
Another Bonus Consideration: do not forget about placing security cameras to cover the entrance and exit points to the parking lot. Think about the field of view around doors, especially if the door is near the corner of the building or if there are other obstructions that can block the camera’s view of the area. Multiple cameras may be needed for this critical function. Contact a licensed professional.
Security Camera: Minimum Data Storage
Video storage and retention requirements for cannabis facilities are fairly stringent. Typical requirements include 90-days of on-site storage and up to five years of off-site storage. Off-site data storage is required for future legal needs. Many states require a minimum video resolution of 1080p. The video storage needs for even a moderately sized facility can amount to petabytes of data. For this reason, many facilities outsource this function at least in some measure. If you do decide to handle this all yourself, you should be sure that you have the technical expertise on your staff to handle this potentially complex technical issue.
Security Alarm: Monitoring
Like it or not, retail cannabis facilities will probably always be targets for crime. Having a security system probably seems like a no-brainer. But simply having an alarm system isn’t typically enough. You will need a system that is actively monitored. This allows the company to initiate actions on your behalf depending on the alarm status (e.g., call the police or fire department in response to a remote alarm). Your alarm should be monitored by at least one reputable company. Redundancy might not be needed, but check to be sure that you are in compliance with local rules and regulations. Talk to your licensed professional.
Security: Line of Sight
Customers should only see the public retail area of the location. Customers should not see the back-of-house operations. There is no need for them to see how business is conducted other than at the sales counter. Similarly, there is no need for customers to be able to view the offices, inventory areas, working areas, employee break room, etc. Keeping these areas private helps to avoid bad actors from learning operational routines that might make it easier for them to exploit.
Safety and Injury Handling
This is an easily overlooked area but can definitely get your dinged upon inspection. Be sure you have the appropriate amount of first aid kits and burn kits onsite as reunited by local regulations. Pay particular attention to the regulations about the placement of these kits as they are sometimes required to be within visual distance of specific rooms within your facility. It can be a hard pill to swallow to not be able to get your operation certificate for forgetting such a simple item, but it happens all too frequently.
Employee Access
Having a non-customer door or access point is a best practice. Non-customer access points are where employees and products are brought into the facility without customer line-of-sight. In some states, this is a requirement so check to be sure your facility is in compliance with laws and regulations.
Product Delivery
Getting cannabis products into a retail facility is a critical part of the merchandise flow and one of the most vulnerable points for theft. For maximum safety and control, consider the use of an air-lock/man trap/sally port door arrangement. If not possible due to location or architecture, planning for business hours separation and process can keep customers separated from deliveries.
Employee and Counter Safety
The counters where transactions occur in a cannabis retail setting can pose some risks especially since most facilities are cash-based operations. An open style counter can open up opportunities for theft. Consider a security barrier counter. The idea is to attempt to prevent customers from having access to products, cash, or employees where possible.
Security: Egress
Customer flow can be somewhat challenging, especially in facilities that have a registration lobby that is physically separated from the retail sales floor. Having separate entry and exit doors for customers can help with the flow of customers. Not a requirement but potentially a good customer experience design.
Customer Environment
Dispensaries and retail locations can be busy places at times. In COVID times, this can be a big issue. But even under non-pandemic circumstances, there may be a need to control the number and spacing of customers for both safety and privacy. Social distancing- the process of limiting the number of customers for the available space within the building- can be enhanced through various design elements. These can range from the use of rope and stanchion barriers, to signage and floor stickers.
Lobby design for restricted access – if access to the sales floor is restricted to registered customers, a secure lobby space should be provided with a separated check-in space and access-controlled doors both for customer entrance and egress.
And do not forget bathroom access for customers. You can have a single facility that is unisex but it should also be ADA compliant.
Environmental Consciousness
Unfortunately, like most other retail spaces, cannabis retail still generates a significant amount of waste. And much of it may be recyclable. Business recycling bins should be provided.
Energy-saving considerations can also be important for retail facilities. Motion detecting light systems can reduce energy consumption in non-occupied spaces. At the very least, interior lighting switches should be located in the same area for easy use upon space exit. HVAC systems should have an occupied and unoccupied night setback capability.
Parking Lot
Depending on the total number of employees and customers you anticipate visiting your business at its peak times, you will need to design a minimum number of accessible parking spots.
If curbside pickup is legally allowed in your area, be sure to map out and reserve spaces exclusively for this activity. It should be close to the exit door where the product will be delivered to the customer. Remember to keep parking spaces for handicapped people and even maybe for motorcycles.
The state of Nevada has always been a unique place to do business. Not only is its economy fueled almost entirely by tourism, but its population is located almost exclusively within a few key urban centers. These factors influence nearly every type of business opportunity in Nevada – including cannabis.
While Nevada’s economic and geographic constraints are unique in themselves, the type of tourist industry found here is one of a kind. Las Vegas is famously known as “Sin City.” It is a place where people flock from around the globe to indulge their vices, such as gambling and clubbing.
As a microcosm of Nevada itself, the Nevada cannabis industry has its own set of challenges and opportunities.
Overview of the Nevada Cannabis Industry
Nevada boasts both medical and adult-use cannabis markets. The state voted to legalize medical cannabis back in 2000, although their first medical dispensary did not open until 2015. While the medical cannabis space in Nevada began with a crawl, the adult-use industry has been quite different.
Nevada voted to legalize adult-use cannabis in late 2016, with the first adult-use dispensary opening mid-2017. Nevada has both medical and recreational dispensaries, although certain stores service both customer bases.
One of the more exciting facets of the Nevada cannabis market has to do with home cultivation. Its unique program allows people 21+ years old to grow at home if they live more than 25 miles from a dispensary. Nevada put these rules in place to accommodate citizens living in rural areas who cannot access dispensaries.
Since Nevada’s legalization, cannabis has become a big business. Here are some statistics for the 2019-2020 fiscal year in the Nevada cannabis industry:
Total Sales: $684,959,149.00
Cannabis Taxes: $105,180,947.00
Licensing & Application Fees: $5,212,557
Nevada sales are ahead of other new adult-use recreational markets such as Illinois and Massachusetts to put these numbers in perspective. Nevada falls short compared to more established industries such as Colorado and Washington, but it holds promise for massive growth.
What is Unique About the Las Vegas Cannabis Market?
The tourism industry in Las Vegas makes for a unique market. Adult-use market regulations coupled with the global renown of the city lead to an environment where out-of-state visitors greatly influence cannabis sales.
The structure of a cannabis market directly influences business opportunities. In medical cannabis, qualifying conditions and patient counts dictate potential market growth. Conversely, adult-use markets are only limited by people’s age.
The interesting thing about the Las Vegas market is that anyone over 21-years can legally purchase cannabis – this includes out-of-state visitors. According to the Las Vegas Conventions and Visitors Authority website, the city saw 42,523,700 visitors in 2019 alone. These people spent over $10 billion in Las Vegas that year. Within these billions of dollars in tourist money lies an excellent opportunity for adult-use operators in Nevada.
Another fact worth noting is that people flock to “Sin City” to partake in activities inaccessible in other U.S. states. Cannabis fits nicely into this package of taboo activities that can only be done in Las Vegas, NV.
Is it Hard to Open a Cannabis Business in Las Vegas?
While the tourist money in Las Vegas makes for a very intriguing adult-use market, it is not easy to acquire a cannabis business license. Unfortunately, Nevada has put a cap on the number of licenses available in the state, making it much more difficult to enter than other adult-use states like Colorado.
There are five types of business licenses in the Nevada cannabis industry:
Cultivation Facility
Distributor
Product Manufacturing Facility
Testing Facility/Laboratory
Retail Store
It’s worth noting that both the medical and adult-use markets offer these same business licenses. Similarly, the licensing cap in the state includes both verticals.
As of early 2021, the state of Nevada awarded 132 dispensary licenses. However, these licenses did not go to 132 different operators. Certain businesses acquired multiple licenses, with some able to open as many as seven retail stores. While Nevada has issued 132 retail licenses, there are only 80 dispensaries operational at this point.
The licensing situation in Nevada is frustrating for local investors and outside interests alike. Namely, because studies show that the Nevada economy could support as many as 1,283 more dispensaries than it has issued licenses for. Aggravation mounts with a lack of expansion opportunities in the area.
The state of Nevada only accepts additional cannabis business license requests during “application periods.” These short windows are scheduled by the Nevada Cannabis Compliance Board and stay open for just ten days. However, there has not been an application opportunity since 2018, and it doesn’t appear there will be one anytime soon. As such, it appears that plant-touching opportunities in Nevada are limited to current license holders.
Where is the Most Opportunity in Nevada Cannabis?
While many believe there is ample room for new players in the Nevada cannabis market, the state does not agree at this point. As a result, if you are looking to get involved in the Nevada industry, you are well-advised to look into ancillary business models instead of plant-touching businesses.
With such promise in the Nevada market, you can rest assured that those cannabis companies that have won licenses will be extremely busy. Ancillary operators can take advantage of this climate by developing models that operate in the business-to-business (B2B) vertical. To help plant-touching companies in Nevada, both product-based and service-based ancillary businesses could prove profitable. Examples of product-based companies include business management software and cultivation technology, while service-based businesses work in marketing, staffing, and consulting.
Opening an ancillary cannabis company in Nevada gives you the ability to enter the market by circumventing the licensing process. Even more, you don’t have to worry about application fees, compliance mandates, and other stressors faced by plant-touching companies. You also have the option to operate across state and national borders if you so desire.
Summary
There is no doubt that the Nevada cannabis industry is one-of-a-kind. While there is a good deal of excitement surrounding the market, many feel it hasn’t even come close to reaching its potential. To this end, the adult-use market in Nevada was only 1.5 years old when the COVID-19 pandemic struck. The financial blow of the pandemic was cataclysmic in Las Vegas, as the tourism industry dropped to 50% below average in 2020.
With the pandemic on the downswing in 2021, there is an unmistakable air of excitement across the globe. Some economists feel that we are about to enter a new “roaring 20’s” period, where people celebrate by spending travel money that was unusable during COVID-19. With this celebratory outlook on the near feature, there is no doubt Sin City will see its share of visitors. With the casinos and hotels full again, maybe we will finally see what the Nevada cannabis market can really do.
Dr. Monaco is the Director of Laboratory Operations for CLS Holdings’ newly opened approximately $4 million laboratory, and is responsible for all day-to-day operations inside the North Las Vegas facility. Dr. Monaco brings over 8 years of licensed & regulated cannabis experience, starting back in 2012 when medical marijuana first opened in Arizona, he has held numerous positions, with escalating responsibilities year over year. He graduated from the University of Arizona College of Pharmacy, in Tucson, Arizona, with a Doctor of Pharmacy in 2010.
Member Blog: Top 8 IT Concerns for the Cannabis Industry
by Sean Dawson, Director of IT Solutions at Office1
Integrating and measuring innovation for cannabis businesses can be daunting, mostly because cannabis has been considered illegal for decades. Luckily for the cannabis industry, the laws prohibiting the use of marijuana and marijuana products are tumbling down, and windows of opportunities are opening for people to integrate information technology with their cannabis businesses. As in other industries, information technology is shaping the cannabis industry as a frontier of opportunities for professionals in many exciting ways.
Despite being stereotyped and demonized for close to a century, the marijuana industry is swiftly reconstructing itself, thanks to cutting-edge technology that’s ensuring inventions, innovations, and progress. IT remains the ultimate lever for changing how people view and relate to the cannabis industry. Over the last few years, IT revamped the cannabis industry and transformed how marijuana is grown, processed, distributed, purchased, branded, and consumed.
Despite the remarkable progress, there are a few IT concerns for the cannabis industry. Here are the top 8 IT concerns for the emerging cannabis industry:
Automated Cultivation
Marijuana grow-boxes with fully automated grow technology for high-quality yields are a potential game-changer for the cannabis industry. A perfect example is a home-grow technology that allows people to discreetly plant a seedling or two in every corner of their houses. Every bit of the home-grow technology is highly guided and fully automated. This gives growers a deep personal satisfaction of growing their own marijuana without having to go through the taxing learning curve that other farmers have to endure to get the best quality yields. With this technology, you don’t even need an outdoor garden.
On a larger scale, there are tech-driven innovations in seed genetics and breeding as crucial aspects of cannabis cultivation. This technology modifies the DNA of cannabis to develop a cultivar with rich taste and more resistant to pests, diseases, and harsh elements of weather.
On the applications frontier, cannabis farmers now have access to customizable apps that allow them to configure cannabis cultivation to their geographical locations, soil texture, climate, and desired outcomes, among other considerations.
Automated cultivation is a growing concern for the cannabis industry as IT companies are striving to improve the cultivation technology even further, and growers are looking to leverage the best technology to gain more control over the quality and quantity of their yields.
Access Control
Cannabis dispensaries face the need to ramp up security within their premises. These dispensaries mostly deal with large cash transactions, which expose them to crime. These businesses are vulnerable to burglary, forgery, and robbery, necessitating advanced security options.
The need for improved security has led these dispensaries to incorporate stringent security options that effectively prevent malicious activity. For instance, to protect their crucial product, processing plants and growers utilize remote and cloud-based access control to the facilities.
Cannabis dispensaries normally take advantage of the flexibility that comes with current security systems to ensure that only authorized persons can access various areas within their facilities. To enhance security and access, these systems combine various security applications within one package, making them robust and efficient.
For instance, an access control system that grants keyless entry also combines with surveillance cameras, alarms, and the check-in systems to store a proper record of all personnel who visit specific areas within their premises. This ensures a safe work environment where the company maintains trust with their staff while simultaneously reducing liability. Remote access control also triggers rapid growth since it facilitates the management of many branches from a single point.
Automated Vending and Online Recommendation
With advances in computing and robotics, various companies have been experimenting with non-human point of sale vending technologies. The cannabis industry has not been left behind. Artificial intelligence has allowed companies to aggregate HIPAA compliant data thus allowing for the creation of platforms where doctors and patients to better predict treatment outcomes as well as managing analytic data points from seed to consumption. Enter, opportunity. Companies have now been utilizing this to innovate the way cannabis is being purchased. Through the creation of search engines designed off the AI data aggregation, consumers are now able to find the best available strains for their desired use case in both a medical and recreational use case.
Such technologies revolutionize the supply and delivery of the product as they help users make informed decisions regarding consumption methods and available strains, and therefore pivotal IT concerns for the cannabis industry.
Artificial Intelligence
Artificial intelligence (AI) has significantly transformed the way every industry does business, and the cannabis industry is not lagging far behind on this. The grade and strain of cannabis produced majorly depend on the environment in which it was grown. Artificial intelligence helps growers to enhance the plants’ genetic makeup and CBD/THC concentration to produce popular strains.
AI also helps in optimizing the supply chain, ensuring efficient and fast delivery of marijuana products. Companies are diligently exploring ways in which AI can help improve how quickly and efficiently the product can be moved, from the growers to the processors and, finally, the consumer.
For example, a California-based startup, Eaze, collects consumer data relating to consumption and delivery. The data is then processed, analyzed, and leveraged to help dispensaries keep track of demand and update their stock.
Other companies use artificial intelligence to forecast price changes, fluctuations in product supply, and to analyze trends within the cannabis Industry.
AI is, therefore, a critical concern for the cannabis Industry.
Retail, eCommerce, and Delivery
Retail, too, has benefited from advances in delivery technology. Today, you can order a product or service with the click of a button, pay for it remotely, and have it delivered at your doorstep. The cannabis industry is already in on these advances. In states where marijuana consumption is legal, there are apps you can use to order a marijuana product and expect a home delivery in minutes.
Marijuana dispensaries have also turned to technology to help educate the public on cannabis production and consumption. For instance, some dispensaries are adopting the use of augmented reality to guide consumers through the available strains and their effects on the human body. There are also tons of education programs that cover everything from how cannabis functions in the body, growing options, and the best strains for different types of consumers.
Customized Consumption
Technology has revolutionized how we consume the product. Unlike the previous years, when smoking was the most popular means of consumption, modern consumers have a wide range of options. These include skin patches, e-cigs, and dosed inhalers. These technologies have disrupted the cannabis industry, and are paving the way for even safer options.
No doubt, modern technology has led to the invention and discovery of safe practices in the consumption of marijuana. For instance, it is known that different consumers react differently to various methods of marijuana delivery. Today, it is not uncommon for a doctor to take a swab of saliva to determine the best strain and delivery method for a particular user.
Electricity Storage and Consumption Monitoring
Marijuana growers attest that one of the highest costs of marijuana production arises from the use of electricity. The use of LED lights and climate control are responsible for these power costs. One way to reduce these costs involves the use of storage batteries. Growers can buy electricity during off-peak times when power is cheaper, store it batteries and use it during peak times. This also calls for the use of energy monitoring solutions to determine power consumption trends within the cannabis farms.
Seed-To-Sale Technology
With the growth of the marijuana industry, producers and growers seek ways to improve efficiency in the cannabis production process, following the laid-out regulations and maximizing profit. Seed-to-sale technologies equip producers with all knowledge regarding their product supply chain. This way, marijuana growers function the same way as any legitimate pharmaceutical or distribution chain.
Seed-to-sale software allows for vertical integration, which means the grower can track the product through various phases of distribution (manufacturing, supply, and dispensing). Point of sale software can combine with the company accounting software to create a fully-fledged Enterprise Resource Planning system, making it easy to manage the product like any other business.
Seed-to-sale software also helps with the documentation of cannabis transactions, which helps with compliance management, inventory management, and analysis of consumption trends.
The Bottom Line with Cannabis and Technology
With the increased decriminalization of cannabis comes unprecedented growth, which attracts investors. This growth has brought with it some industry shifts, especially in technology. This article has explored various IT concerns that have spurred growth in the marijuana industry. Legalization has also helped debunk myths formerly associated with the cannabis industry, which has encouraged IT startups to create solutions for the marijuana supply chain. This way, growers and suppliers can focus on developing high-end products, while technology helps with compliance, bookkeeping, and product improvement.
The relationship between IT and marijuana growth will spur developments that propel it into a multi-billion-dollar industry in the coming decades.
Sean Dawson is the Director of IT Solutions at Office1. Office1’s mission is to innovate and progressively modernize the inefficient business landscape by providing a proactive, personalized, and eco-friendly office technology solution from planning to implementation and optimization. One solution from one company – Office1. Sean seeks to understand the heart of a challenge and then focuses on creating practical and timely solutions. He is an avid DIYer, gardener, and master house re-doer who loves spending his free time with his wife, four children, and six chickens.
Webinar: NCIA Committee Insights – Cannabis Retail Success and Strategies
NCIA’s #IndustryEssentials webinars are our new weekly educational series featuring a variety of programs allowing us to provide you timely, engaging and essential education when you need it most.
The NCIA Committee Insights series showcases content produced in partnership with one of our 15 member-led committees.
According to a recent Gallup poll, 66% of Americans support the federal legalization of recreational marijuana and with that comes an ever-expanding retail footprint. This session is designed to address the unique challenges faced by cannabis retail leaders and entrepreneurs in planning their operations for success in a modern retail environment. The panel will take a look at Talent, Brand, and Compliance strategies with real-life case studies to help provide valuable take-aways for the implementation of a Retail 2.0 strategy.
Register now to join us on Monday, June 1 at 1:00 PM MT.
Ryan Rapaport
Managing Partner
Digital Venture Partners
Melissa Stapley
Founder
MJ Hybrid Solutions
Larina Scofield
Director of Operations
Lucy Sky Cannabis Boutique
NCIA Committees: Spring 2020 Update On Achievements And Projects
NCIA’s member-driven committees are an opportunity for individuals from NCIA member companies to get directly involved in specific industry issues and sectors. These volunteer-driven efforts engage members’ expertise and passion to drill down in those areas to effect change, provide professional development opportunities, and develop best practices and guidelines that will shape the future of our industry.
We recently checked in with these various committees to learn more about what they’re up to and what projects they’re working on this term. Get updated on their activities below.
Risk Management & Insurance Committee (RMIC)
The RMIC has recently contributed to several NCIA white papers and educational webinars. They are currently working on an insurance manual. The committee has divided into sub-committees responsible for managing white papers, webinars, and the manual.
Scientific Advisory Committee (SAC)
SAC’s vision is to disseminate educational materials to NCIA members on scientific topics in the cannabis industry and to advise on other NCIA initiatives, ensuring that any formal recommendations produced are scientifically sound, sustainable, and legitimate. This term, SAC published a blog discussing why everyone should know about the endocannabinoid system.
SAC is working on other pieces addressing topics such as the recent vape illnesses from a physician’s perspective, indica versus sativa designation, how cannabis can help the opioid crisis, common scientific myths confusing the industry, and budtender and consumer education about the endocannabinoid system.
SAC is also developing a webinar that discusses what should be on a label, how to read a label, and how to associate what’s on a label with either statements on efficacy or marketing/branding.
Cannabis Cultivation Committee (CCC)
The committee has recorded two podcast episodes for NCIA’s Cannabis Industry Voice Podcast. The first was a Cultivation Best Practices Roundtable, hosted by Noni Goldman of the CCC. In that episode, Cody Hitchcock of Smokey’s 420 and James Cunningham of Fog City Farms were interviewed to shed light on their different growing styles and techniques, focusing on the ways that they implement sustainability in their operations.
The second soon-to-be-released interview was with High Times’ new CEO Stormy Simon, and was hosted by CCC Chair Mo Phenix and member Noni Goldman. This interview explored Stormy’s history and how she got to where she is today, as well as what High Times is up to, and where Stormy sees the industry going.
More podcasts to come in the next couple of months from the CCC! Keep an eye out for an episode or two on regenerative agriculture.
Packaging & Labeling Committee (PLC)
The PLC sub-committees have each contributed to a blog or presentation up to this date. The Sustainability sub-committee has worked with Kaitlin Urso and team in regards to their White Paper. A panel discussion proposal has been submitted for future NCIA conferences.
NCIA’s Northeast Cannabis Business Conference in Boston (February 2020) Panel Discussion on the Future of Cannabis Packaging went great!
State Regulations Committee (SRC)
NCIA’s State Regulations Committee has continued to produce content to help educate and inform members on the latest developments in the world of state regulation of cannabis. As the industry’s law and regulations change quickly across the country, the SRC members stay ahead of the curve and share their insight in a variety of forms. These projects include panel presentations at NCIA conventions, published blogs, and interactive webinars. In this quarter, they published three blogs, produced one webinar, presented on two panels, and participated in an NCIA summit.
As the committee strives to keep everyone updated on burgeoning legal topics, the SRC committee presented a webinar on Michigan, a newly regulated market. The webinar provided information on this key Midwestern state, “Michigan’s Adult-Use Market – What Comes Next?”
Conferences:
SRC members also traveled from across the country to share their expertise on panel sessions at NCIA’s Northeast Cannabis Business Summit in February 2020 in Boston.
The Social Equity Sub-Committee leaders, Erin Fay, Chris Jackson, and Margeaux Bruner provided helpful insight during their session, “What You Need To Know For Winning Applications and Successful Operations That Promote Diversity and Inclusion.”
Sean Donahoe and Gabriel Cross of the SRC’s Interstate Commerce Sub-Committee presented on the issues surrounding interstate commerce and strategies for preparing for this anticipated change in the cannabis industry.
Also, SRC members participated in the NCIA’s summit about tackling the illicit market.
The State Regulations Committee is excited about its work and continues to stay knowledgeable about the ever-changing legal and regulatory landscape. Their projected work includes a webinar on the Illinois adult-use market and a wide range of written projects. Stay tuned!
Banking & Financial Services Committee (BFSC)
The committee’s vision is to provide the NCIA member base with current and actionable information related to Banking and Financial Services in the State legal cannabis industry.
They have implemented monthly newsletters for the member base and have been extremely active in response to the proposed federal legislation regarding banking and the cannabis industry.
Human Resources Committee (HRC)
The Committee’s vision is to provide best practices in all disciplines of Human Resources to NCIA members. They have worked on a couple of blogs this year around the recent reduction in force trend and will be releasing a few blogs providing some recommendations for how cannabis employers can navigate CV-19 when it comes to their workforces.
The HR Committee is working on a very exciting case study. They are looking forward to releasing the first few modules of it this summer!
Marketing & Advertising Committee (MAC)
The MAC coalesces the talents of 20 of the industry’s top-tier marketing and communications professionals around three focus areas: Education, Advertising Access and 2020 political goals. The committee uses their personal, professional and business skills and networks to help build a responsible, legal cannabis industry. The committee is producing best practices, webinars, workshops and social media campaigns to aggregate and generate support from NCIA members, the public, media, government and business leaders.
The MAC Education Subcommittee has focused its energies on developing a Speakers/Expert Directory with a goal to launch by year-end.
The 2020 Subcommittee has created its first infographic covering Oklahoma’s 2020 ballot initiatives; infographics for additional states with legalization initiatives on the ballot this year will follow soon.
The Advertising Access Subcommittee is adding more states (as they come online) to their overarching list of “Do’s and Don’ts” for compliant cannabis advertising. Those are pending editing and legal review and will be published on the NCIA website soon thereafter.
The committee is also working on upcoming webinars including “Advertising Best Practices.”
Cannabis Manufacturing Committee (CMC)
The Cannabis Manufacturing Committee is focusing on reviewing existing business practices and state regulations of concentrates, topicals, vaporizers, and edibles ensuring the manufacturing sector is helping shape its destiny.
They are also working on their second publication, “Facts About Current Good Manufacturing Practices (cGMPs) And Their Role In The Cannabis Industry” which will be a resource for essential businesses.
In addition to the work the CMC is carrying out, they are collaborating with other committees to help create an NCIA resource library.
The CMC Testing sub-committee is working on writing blogs about “Positives of Testing” (from the operator’s view), and “Nomenclature: Cannabis Nomenclature Register” for publication.
Retail Committee (RC)
Members of the Retail Committee attended NCIA’s Northeast Cannabis Business Conference in Boston in February 2020 to participate in an educational panel on Retail 101. The committee has an upcoming webinar in April: “Retail: Tips and Best Practices” which will include 4 panelists that are currently license holders or working in licensed dispensaries in 3 different states (CO, CA, WA), and will also address some tips and best practices for the current CV-19 climate.
Facilities Design Committee (FDC)
Committee member David Vaillancourt of The GMP Collective appeared on NCIA’s weekly podcast, NCIA’s Cannabis Industry Voice, in February 2020 to discuss GMPs (Good Manufacturing Practices) in an episode titled “Revolutionizing How Cannabis Producers Achieve Success.”
Member Blog: Protecting Your Cannabis Dispensary During The Coronavirus Outbreak
Amidst the coronavirus outbreak, cannabis dispensaries across the U.S. are posting record sales numbers. Many people are stocking up on what they consider to be the essentials. While we are always excited when our clients see increased sales, we need to emphasize the following:
Do not trade a short-term jump in revenue for the long-term damage you can do to your customers, employees, and community by continuing to operate your business as usual. It is NOT business as usual for most Americans right now, and precautions need to be taken by dispensaries that are continuing to operate.
Be ahead of the curve. Be proactive with the measures we outline below rather than just responding to coronavirus restrictions when you are required to. It shows that you put your customers and staff’s health ahead of profit… Which you should be doing anyway. Being the first in your market to voluntarily adopt these precautions is newsworthy, and you may be rewarded with some media coverage if you spin it right.
Cannabis is a medical necessity for many of your customers, whether they do their actual shopping on the rec or medical side. And your employees are depending on their jobs to continue to support their families during this very difficult time. That’s why we encourage dispensaries to continue to serve their customers and staff but to do everything in their power to reduce the risk of spreading COVID-19. And while there is no way to eliminate the risk entirely while continuing to operate, there are many things you can do to reduce the risk of spreading the virus amongst your staff and customers.
Encourage online ordering
If your dispensary is in a market that offers online ordering, offer incentives to encourage customers to do this. Make sure you send e-blasts and text messages advertising the incentive, and include a pop up on your website promoting it.
Offer curbside pickup or delivery
If you’re in a state that allows it, like Michigan, offer curbside pickup. Many places already offer delivery. Either of these are far better options than allowing people into your store, and should be encouraged with an incentive. If you need to beef up your delivery staff, remember that there are many, many folks in the service industry that are now desperately looking for work as restaurants and bars are closed down. If you’re in a market that allows curbside pickup, delivery, and/or order ahead, then considering shutting down in-store purchases completely.
Limit the number of people in your waiting room and/or store
Social distancing is the mandate across the entire country, so reducing the number of people physically in your dispensary at any one time is critical. Consider a “call-back” service, similar to how many restaurants operate their seating. Customers give you their name and phone number and are added to a list. They can then go wait in their car until you call them to come into the store to make their purchase. It slows down the customer flow but will drastically reduce the number of people in close proximity.
Require hand-sanitizing before entering the store
This one is simple! In most states, dispensaries have the right to refuse service to anyone for any reason. Have an employee stationed at the door and require customers to apply hand-sanitizer before entering the premises. Refuse service to anyone that won’t use the hand-sanitizer.
Rotate staff on “round-the-clock” cleaning
Every business that remains open should be conducting a deep cleaning multiple times per day. Critical to that is sterilizing the “problem spots” that are most commonly touched by customers and staff inside your store. Light switches, door handles, credit card terminals, ATM buttons, and computer keyboards. If you have a location and staff large enough to support it, then consider round-the-clock cleaning of the interior.
Shut down your store
Drastic times call for drastic measures.Pro-actively closing down your cannabis dispensary even before it’s required by law may be the best option for some business owners. In certain markets, it may be the only responsible choice. Consider the fallout and permanent damage to your business if a customer or employee is infected, gets seriously ill, or dies because of an interaction they had in your store.
It’s important to keep in mind that this jump in sales and/or complete closure are only temporary. Regardless of what you do with your dispensary, consider the long-term implications of your business choices.
When things do return to normal, how will your stakeholders view your actions or inactions?
If you must close your dispensary, keep your community close and engaged. Consider offering formal and informal virtual events, merch giveaways, contests, or educational webinars. There are lots of streaming and collaboration tools available, including many that are free or nearly free.
Johnathan McFarlane is the Director of Strategy at Hybrid Marketing Co. Hybrid Marketing Co is a Denver-based branding and marketing agency that specializes in building custom strategies that supercharge growth and drive revenue. Working with brands and businesses across the U.S. and Canada, Hybrid’s partners run the full-spectrum of the cannabis world including dispensaries, manufacturers, cultivators, and ancillary businesses. Visithybridmarketingco.comto learn more about theHybridapproach.
We have plans in place with several of our clients to maintain their brand visibility if a total shutdown is necessary. We are offering completely free continuity-planning sessions for any cannabis business that is worried about their future.
Member Blog: How Much Does it Actually Cost to Open a Dispensary?
Reading headlines about the cannabis industry, one might get the impression that cannabis business owners are all cashing out big. And while there are many success stories, high startup costs, ranging between $250,000 to $750,000, make the financial reality of opening a dispensary difficult for a lot of budding entrepreneurs.
But the growing demand for cannabis allows for great opportunity, even in the most saturated markets. Retailers who want to compete with big-box stores should work smart, focus on creating a great store experience, and invest in cannabis tech that streamlines operations to reduce cost.
Step 1: Licensing
The first step in opening a dispensary is getting a license. The licensing process, which varies based on location, is extensive and expensive. Expect to undergo thorough background checks and spend at least $5,000 on licensing fees.
In places like Washington, the number of licenses granted by the state are capped and only available by purchasing one off of a current licensee. This can run upwards of $25,000 plus legal fees.
Capital Requirements Preclude Many
Besides the licensing and possible legal fees, there’s another thing that precludes many from the industry: capital requirements. Before licensing, some states require proof that you can financially weather the true cost of operating a cannabis business. Depending on where you apply for a license, a local government may require proof that you have enough liquid assets to keep your business afloat in rough times.
Location, Location, Location
Finding a location for a cannabis dispensary isn’t impossible, but can be expensive. City and state regulations define the legal proximity dispensaries can be to a school, church, park, arcade, and/or anywhere else children might be likely to gather.
Finding a permissible location with foot traffic and parking might cost up to $100,000 per year. To keep customers coming back, it’s important to invest additional money to make the store friendly, welcoming, and modern.
The Cost of Cannabis-Friendly Banking
The legal ambiguity of cannabis creates a tenuous relationship with state-legal businesses. When banks work with U.S. cannabis businesses, they take on the risk, however unlikely, that federal enforcement priorities could change and cannabis-friendly banks could be targeted.
Most banks refuse to take on the risk. Others, like local credit unions, upcharge for their services and the risk incurred. Some banks charge up to $2,000 in holding fees every month for cannabis businesses!
Day-to-Day Costs & Smart Investments
You can’t run a dispensary without product, customers, and staff. In a state that allows for vertical integration, it can cost more than $500 per pound to grow your own cannabis; plus the inventory costs for edibles, topicals, and other products. To attract customers, you’ll need to invest $10,000 to $25,000 on marketing. The payroll costs for a staff of budtenders, store manager, and a master grower can total more than $250,000 annually. Finally, consider costly insurance policies, license renewal fees, taxes, legal retainers, and trademark protections.
Those day-to-day costs really rack up fast. A smart cannabis retail owner can save time and money elsewhere by investing early in technology that will optimize their operation. Investing $25,000 on hardware and software, including computers, an integrated point of sale system, and a full security system, can be a large upfront cost but could save your business in the end.
There are countless cannabis retail success stories. It’s challenging and expensive, but for a smart and informed entrepreneur, the upside is enormous. If you’re ready, download this free e-book to learn about how to open a dispensary.
Gary Cohen, CEO, leads Cova’s charge into the legal cannabis space by guiding the vision, strategic development, ‘go to market’ plans and culture.
Before joining Cova, Gary was a principal in over a dozen tech start-ups in the mobile communications industry ranging from small VC funded companies to Fortune 100 firms, including Onavo, which was later acquired by Facebook. In those companies he led sales, marketing, business analytics and market expansions. He has also held a multitude of leadership roles with Verizon and AT&T.
Gary holds a degree in finance with a master’s in marketing from the University of Colorado.
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.
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.
This month, we checked in with award-winning designer Megan Stone, founder of The High Road Design Studio, to hear more about her interior design company. Megan specializes in creating a forward-thinking retail dispensary experience for cannabis consumers and patients. Her company was founded in 2013 and is currently based in Phoenix, Arizona.
Cannabis Industry Sector:
Consulting
NCIA Member Member Since: March 2017
Megan, tell me a bit about your background and why you launched The High Road Design Studio?
I am a Midwestern-grown, West-Coast-processed female millennial business owner who is passionate about elevating the cannabis industry. From a cannabis patient to working in an Orange County dispensary as a budtender and general manager, to a design school student who was switching careers in the midst of my 20’s during the Great Recession, I now design cannabis retail spaces across the U.S. I launched my design company, The High Road Design Studio, as a result of my first-hand experience with cannabis, love for good design, and desire to help reframe people’s perceptions of a plant that saves lives.
I launched The High Road Design Studio to change the way people think, perceive, interact, and experience cannabis.
What unique value does The High Road Design Studio offer to the cannabis industry?
Founded in 2013, The High Road Design Studio aims tochange peoples’ perceptions of cannabis and cannabis users through strategic design thinking. The High Road Design Studio’s work is inspired by my personal experiences in all roles of the cannabis retail experience—customer, employee, and retailer.
The High Road Design Studio has worked with cannabis-focused businesses in more than thirteen states to design unique and profitable retail stores and brands.
Applying the understanding of both the cannabis and retail design industries with personal and professional experience has resulted in The High Road Design Studio’s proven track record of designing industry-leading, award-winning dispensaries. The High Road has earned national and international recognition for its cannabis retail store designs, working with passionate cannabis business owners and thought leaders to evolve the cannabis experience including:
2017 Shop! Design Award – Level Up Dispensary 2016 Shop! Design Award for Store Fixture – TruMed Concentrate Bar Design:retail Magazine’s 40 Under 40 Award, 2016 Marijuana Venture Magazine’s 40 Under 40 Award, 2016 VMSD Magazine’s Designer Dozen Award, 2015 International Retail Design Conference speaker, 2014, 2015, and 2016 National Marijuana Business Conference speaker, 2015 and 2016 GlobalShop speaker, 2017 Shop!X Summit speaker, 2016 Contributing editor on design for MG Magazine
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 The High Road Design Studio help work toward that goal for the greater good of the cannabis industry?
The cannabis industry is booming – and it needs a makeover. After decades of its sales being relegated to the black market and its users being labeled as criminals, cannabis is now a mainstay in society, and people everywhere are trying to make sense of this new retail experience. Its retail stores are the public face of the industry and are where the vast majority of interactions with the cannabis industry happen. Design and design thinking applied to the cannabis retail experience are the keys that will unlock the new world of legal cannabis and provide the solutions and creativity needed to attract, educate and satisfy twenty-first century cannabis users.
What kind of challenges do you face in the industry and what solutions would you like to see?
Real estate presents unique challenges in the cannabis industry; cannabis retailers don’t have the luxury of choosing prime retail properties when selecting their locations, so I am often faced with the challenge of creating a shopper-friendly environment out of the complete opposite of a shopper-friendly environment. To tackle this challenge, I use my first-hand experience from shopping in, working in, and designing dispensaries, combined with well-studied retail design principles to bridge the gap between the architectural challenges and the opportunity for a memorable experience.
Why did you join NCIA? What’s the best part about being a member?
NCIA fosters a community that connects passionate industry leaders, influencers, thought leaders and business owners, providing invaluable support. NCIA helps our community work together to change perceptions and elevate the cannabis industry.
Dr. Monaco is the Director of Laboratory Operations for 
Retail, too, has benefited from advances in delivery technology. Today, you can order a product or service with the click of a button, pay for it remotely, and have it delivered at your doorstep. The cannabis industry is already in on these advances. In states where marijuana consumption is legal, there are apps you can use to order a marijuana product and expect a home delivery in minutes. 
Sean Dawson is the Director of IT Solutions at Office1. Office1’s 
Johnathan McFarlane is the Director of Strategy at Hybrid Marketing Co. 
Gary Cohen, CEO, leads Cova’s charge into the legal cannabis space by guiding the vision, strategic development, ‘go to market’ plans and culture.
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.
Baker Technologies
