Mark Kuhn: Cannabis System Automation and Dispensary Signage Solutions

4/27/2021

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You may not know them by name, but you’ve likely seen their work in that trendy coffee shop, that modern hotel, or that cool craft brewery everyone is talking about. Rarely does a sign make you smile, but Oat Foundry’s mechanical Split Flap message board has been pleasing spectators around the world since its launch.

In this Q&A, we learn from Mark Kuhn, CEO of Oat Foundry, about why their acclaimed creative engineering team is anything but a sign company and how their experience building systems has earned them a reputation as a Swiss Army Knife for manufacturing and production automation. This interview covers the growing use of Split Flaps for dispensary signage, Oat Foundry’s entry to the cannabis space, and the team’s vision for cannabis manufacturing solutions.

Read the full interview below!

Ganjapreneur: What drew Oat Foundry to the cannabis industry?

Mark Kuhn: Serendipity of the best kind! We had come off of a project designing and building a 220-gallon automated cold brew coffee reactor and were beginning to release project photos and videos. In the ultimate small world story, Ashish Joseph, CEO of SC Botanicals (a South Carolina-based hemp processor) happened to be my roommate in college and has been an avid Oat Foundry fan since the beginning. A late afternoon chat happened to time up perfectly with their team’s desire to turn their proprietary system into a fully fledged shippable product. The SC team had devised a novel remediation method to extract THC from hemp without the use of solvents, and were producing incredible results, but their system was in the lab stage.

We were DM’ing back and forth about product design and what goes into PLC cabinets and industrial automation and that led to a working meeting with both teams – all of us sitting around our conference room and sketching out the future. Ash wanted our engineering design, system design, and automation design brains to help SC Botanicals go from where they were, to full scale ship-a-machine-across-the-country-and-have-it-just-work territory.

We learned quickly that our experience in building both software and hardware to create automated systems for food and beverage were hyper-relevant to the cannabis space. When you take a knowledge expert like Ashish and multiply it by our engineering team at Oat Foundry, we’re able to create some really cool stuff.

Speaking of Cool Stuff — Oat Foundry’s mission is literally to Build Cool Stuff. What is the coolest thing Oat Foundry has built?

Such a tough question to answer! As we speak, I can hear the team in the back working with liquid nitrogen. We once sent a can of La Colombe into space. We’ve helped the Philadelphia Eagles save eight seconds off the play clock by building a carbon fiber play-calling tool called Fast Box. That cold brew machine I mentioned produces cold brew 100 times faster using less coffee. It’s non-stop candyland here

We’re also unique in that we have our own products in Split Flap (a modern, connected take on the iconic mechanical airport departure boards) and Picture Flap (Split Flap’s sister product based on moving images).

We’ve found this sets us apart as an engineering firm because we have a deeper understanding of the bottom line. We run our own P&Ls for our products. We built the marketing and sales teams from scratch. We support our customers in places as far as Azerbaijan and Hong Kong. So, it’s not just about building something cool — it’s about building something that creates an impact for our partners. Something that they can scale and open new lines of business.

Why do you think the Split Flap is becoming so popular for dispensaries?

Years back, we were given a brief: We want to share information with our customers from our point of sale system, but we cant under any circumstances use TV screens. Oat Foundry set out to create something that could be evergreen in its ability to update content as quickly and seamlessly as a screen, but that could elicit a visceral yet positive response.

Our love for all-things analog led us to developing the Split Flap, and since that time we’ve been privileged to build displays for clients like Google, Starbucks, American Airlines, Nike, and more. There’s really nothing like the feeling you get when you see the letters flip and hear that iconic clack clack clack noise as the flaps rotate to reveal the next message.

What is exciting about the dispensary space is we’re seeing the level of care and dedication groups like Jushi, Rise, Airfield and many, many others are putting into their in-store experiences. They’re cultivating their spaces to represent not only their brand, but to also be an extension of the relief and benefit customers are feeling from their products. Dispensaries are truly one of the only ‘trips to the store’ that people are genuinely excited to make – for some it’s self-love – and we delight in adding to that excitement with Split Flap and Picture Flap.

We didn’t set out to build these products specifically for dispensaries, but we’re hearing from our customers that it is the perfect way to welcome guests into their experience. First you hear it, and then you can’t take your eyes off it. That’s great to highlight products and specials, but the real magic is that it creates a moment of surprise and delight in an otherwise static location.

We’re really proud of Split Flap because it’s become perfect example of our team’s ability to take a challenge and turn it into an opportunity.

What other challenges in cannabis has the Oat Foundry team identified?

I think we’re witnessing a really interesting moment in history where the rapid legalization and newly-cemented essential status of cannabis is creating an incubator for innovation. Using a standard candy depositor for edibles may have worked when you were fulfilling state-level orders, but when you’re manufacturing for the nation, you’re going to want to be sure your machine has an agitator. We heard recently that RAW rolling papers make their pre-rolled cones by hand because no one has been able to build a machine that is delicate enough to automate the process. I don’t know if that is true, but that is exactly the type of challenge that excites our team.

As these pain points become further elucidated through legalization, we want to be a trusted partner you can reach out to to develop solutions that rise to the occasion.

How can cannabis companies get in touch with Oat Foundry?

For all things Split Flap or Picture Flap, you can reach out to Kristy@OatFoundry.com and for anything System or Product Related, email Josh@OatFoundry.com. You can find our latest projects any time at oatfoundry.com or on instagram @oatfoundrybuilds

Thanks, Mark, for answering these questions! Learn more at OatFoundry.com.

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Canopy Growth Signs Deal with U.S. Alcohol Distributor for CBD Beverages

4/27/2021

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Canopy Growth last week agreed to a distribution deal with Southern Glazer’s Wine & Spirits, one of the largest alcohol distributors in the U.S., for its line of CBD beverages. The announcement comes on the heels of the Canadian company’s launch of Quatreau – its first line of CBD-infused drinks.

David Chaplin, Chief Growth Officer for Southern Glazer’s, said the agreement reinforces the company’s “consumer-focused approach to identifying emerging growth areas” where it can add value for its customers.

“There is strong consumer interest in the CBD-infused beverage category and our distribution network is uniquely positioned to deliver the most efficient and effective route-to-market for CBD suppliers and retail customers. We’re proud to align with Canopy Growth, a company well-positioned to lead this product category with a portfolio of premium, highly desirable consumer brands.” – Chaplin in a press release

Notably, alcohol distributor Constellation Brands Inc., owns a 38.6% stake in Canopy and, according to a Drinks Business report, the firm recently tabbed Southern Glazer’s to handle about 70% of its wines and spirits.

Julious Grant, Chief Commercial Officer for Canopy Growth, described the deal as “groundbreaking.”

“The leadership team at Southern Glazer’s shares our values, priorities, and future-forward view of the category,” he said in a statement. “Together, we are committed to creating an immediate strategic route to market for Canopy’s premium CBD beverages.”

Initially, Southern Glazer’s will distribute the Quatreau line – a sparkling water beverage – in seven states.

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New Mexico Legalization Could Disrupt Colorado’s Cannabis Economy

4/27/2021

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New Mexico’s adoption of adult-use cannabis is expected to disrupt the Southern Colorado cannabis economy, according to the Albuquerque Journal.

The report highlights Trinidad, Colorado as a “boom and bust” town that saw an exodus of professional workers in the early 2000s after the local coal and natural gas industries closed down. But Trinidad, located 15 miles from the New Mexico border, saw an economic resurgence after Colorado legalized cannabis, with eager investors from Denver and beyond filling the town’s vacant buildings with cannabis-related businesses.

“We’ve had a bunch of people migrate here from Denver … and bring a whole new culture and a whole new age group to Trinidad,” Kim Schultz, co-owner of Trinidad’s Higher Calling U, told the Journal.

Today, Trinidad — a mountain town with only 9,000 residents — has nearly 30 dispensaries, the Journal reports, and they are heavily frequented by New Mexico residents who have crossed the border to purchase regulated cannabis products.

“We are concerned,” said Dustin Sisneros, a worker at a dispensary in Antonito, Colorado, who acknowledged that roughly 60 percent of the dispensary’s customers travel from New Mexico.

Ironically, as New Mexico moves into a regulated cannabis marketplace, some entrepreneurs are looking to mimic the success of Colorado border towns by appealing to out-of-staters who are still living in prohibition states like Texas and Oklahoma.

“Things are going as planned,” said Duke Rodriguez, CEO of the New Mexico licensee Ultra Health. Rodriguez estimates that Texans will eventually make up about 40 percent of New Mexico’s adult-use cannabis sales.

“It’s more than a hope – we fully intend to impact the need for New Mexico residents to cross into Colorado,” he said.

Towns on the Texas and Oklahoma borders like Clayton, New Mexico have already started looking at re-zoning options to accommodate the expected cannabis boom, according to the report.

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Missouri Gov. Holds Fundraiser with Medical Cannabis Licensees He Approved

4/27/2021

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Missouri Gov. Mike Parson (R) is attending a fundraiser hosted by medical cannabis licensees, “raising some eyebrows,” according to a Missouri Independent report.

Invites for the event — scheduled for Tuesday, April 27 — were sent by the Missouri Medical Cannabis Trade Association’s Executive Director Andrew Mullins and the event is occurring at the home of Hamid Hamrah, who is associated with medical cannabis licensee Green Farms, the report reveals.

Additionally, while Gov. Parson has said he will not seek further political office and is in fact barred from running for governor again due to term limits, the money raised at the event will go to his PAC, Uniting Missouri. According to state disclosure forms, Uniting Missouri — which was formed in 2018 to help Parson run for a full term — has raised $100,000 and spent $110,000 this year alone, mostly going toward consultant fees, the Independent reports.

However, the amount of money the governor is raising is not what has concerned some observers; rather, it is the influence such fundraisers provide for the donors. Missouri’s medical cannabis program has been under intense scrutiny by the Missouri House of Representatives for improperly scoring license applications, and by the FBI, who is investigating a pair of utility contracts connected to the state’s medical cannabis industry.

Gov. Parson’s long-time friend and advisor Steve Tilley, who is also a lobbyist for the Missouri Medical Cannabis Trade Association and who has previously lobbied for Green Farms, has so far been connected to each of the FBI investigations, according to the report.

“When someone sees industry leaders are able to, not even have a seat at the table but actually pay for the table, that doesn’t speak well for how policy decisions are going to be made.” — Beth Rotman, Common Cause’s Director of Money in Politics and Ethics, via the Missouri Independent

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Reimagining Cannabis Hardware: How Ispire Is Reshaping Consumers’ Favorite Devices

4/27/2021

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Venice, California-based Ispire is redefining vape hardware innovation. The first-of-its-kind cannabis hardware and technology firm launched in mid-2020, and their sleek designs and never-before-seen technology have caused quite a buzz.

Ispire holds over 1,000 patents globally and is responsible for inventing the bottom-fed coil technology used in most modern vaping hardware. Choosing not to rest on their laurels, Ispire took it a step further with their patented Ducore, or dual-core, technology, which offers a larger surface area for more even heating and improved flavor profile delivery. Additionally, Ispire offers adjustable airflow control options, putting the power back in the user’s hands to control each hit’s breathability or intensity.

Ispire’s cartridges, batteries, and disposables are also fully customizable, from colors and finishes to custom molds and packaging (and so much more). Cannabis brands choose Ispire time and time again for their vape hardware, and consumers have also shown increased demand, now being able to purchase from brands directly through sites like VPM.com. Ispire cartridges work with oils of different viscosity, which has caught the interest of partners in the regulated THC market and the CBD, Delta 8, Delta 9, and other cannabinoid spaces.

The Wand, Ispire’s latest innovation, just launched in March 2021 and has already changed the future of dabbing. The only tool of its kind, The Wand replaces messy and dangerous dab tools like blowtorches or other e-nails, which have the potential for faulty wiring and have you putting your concentrates on plastic or metal (gross).

Instead, the Wand uses induction heating and food-grade quartz glass to seemingly “magic” heat into the banger, doing away with the need for a blowtorch or butane. The Wand heats a small cup insert that the user places inside the banger before heating. This process allows for precision temperature control in 5-degree intervals from 450-800 degrees, so you control how hot or cold your dab is. The Wand also includes cup inserts with holes in the bottom to be used with flower and, because this device is fire-less, The Wand heats and vaporizes the flower rather than combusting it, producing the most flavorful hit you’ve ever taken. And to answer your question — yes, it rips.

Because of this innovation in portable e-nails, Ispire has already received the John MacKay Best Scientific Advancement Award for advancing the cannabis industry.

Ispire imagines a day when we’ll all look back and think about how wild it was to have blowtorches and butane lying around our houses as casually as you see today. Their first direct-to-consumer product is available directly on their website at www.getispire.com for $169.99.

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Bill Proposed to Protect Gun Rights of Cannabis Users

4/26/2021

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A bill introduced last week in the House aims to protect the gun rights of cannabis consumers in states with legal cannabis. Under current federal law, registered medical cannabis patients and those in states with adult-use laws can be disqualified from purchasing a firearm due to a question on Department of Justice Form 4473 that asks about cannabis use.

If the cannabis-using buyer answers the question in the affirmative, they can be disqualified from purchasing a firearm or they risk perjuring themselves. The question requires the buyer to attest that they are “not an unlawful user of, or addicted to, marijuana or any depressant, stimulant, narcotic drug, or any other controlled substance.” The form further clarifies that, “The use or possession of marijuana remains unlawful under Federal law regardless of whether it has been legalized or decriminalized.”

The bill – the Gun Rights and Marijuana (GRAM) Act – is sponsored by Republican Reps. Don Young (AK), Brian Mast (FL), and Rodney Davis (IL). Young and Davis represent states that allow adult cannabis use, while Mast represents Florida, which allows medical cannabis use.

Young, who co-chairs the Congressional Cannabis Caucus, said the proposal has “two main pillars” that make it important: protecting the Second Amendment for individuals seeking to exercise their Constitutional rights to own firearms and defending the Tenth Amendment right of states to determine their own cannabis laws.

“The federal government has no business unduly restricting responsible citizens from exercising their rights or restricting states from listening to their constituents and reforming marijuana laws. The GRAM Act bridges this gap. Given that it deals with both gun and marijuana rights, there really is something for those on both sides of the aisle to support.” – Young in a press release

Davis said that legal cannabis use “should not be used as a pretext to bar individuals from purchasing or possessing firearms,” which he described as “a clear and well-defined Constitutional right.”

“With more and more states legalizing marijuana each year, we have to make sure that we are protecting the Second Amendment rights of Americans who reside in those states and use marijuana legally based on their state’s laws,” he said in a statement.

The proposal was referred to the House Committee on the Judiciary.

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Study: Cannabis Use Has Little Impact on Long-Term Cognitive Abilities

4/26/2021

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A recently-published University of Minnesota study following sets of twins from age 11 to adulthood suggests that cannabis use has little impact on long-term cognitive abilities, according to an Associated Press report on the research. The 20-year study followed 2,410 sets of identical twins from Minnesota but only 364 had differing cannabis use, making them eligible for the study.

The study, which remains ongoing, observes cognitive, mental health, and socioeconomic outcomes of cannabis use. The twins have been given a baseline assessment every two years which includes an electroencephalogram and asks the sets of twins to self-report on topics such as the frequency of their cannabis use and the physical effects.

Dr. Jonathan Schaefer, an Institute for Child Development (ICD) postdoctoral researcher at the University of Minnesota, told the AP that the researchers have so far concluded that “there’s very little evidence that cannabis has dramatic effects on cognitive ability, at least from adolescence into adulthood.”

Dr. Steve Malone, the study co-author, said that while the twins who use more cannabis are meeting criteria for more mental health problems, are doing worse in terms of socioeconomic status, and scoring slightly lower on vocabulary tests, those results are not directly linked to cannabis use. Rather the results suggest that adolescent cannabis use may cause educational or motivational difficulties that may affect a person’s academic and occupational status later in life.

The researchers found 76% of the twins that were heavier cannabis users continued education beyond high school, compared to 82% of the lighter-use or sober twins. The grade point average between the siblings differed by an average of about 0.2 points, the study found.

Malone noted that “the sample of twins is representative of the population of the whole state of Minnesota.

“But I think it’s a really important feature of the design, that these samples are representative of the population of us as a whole.” – Malone to the AP

Researchers at the University of Colorado Boulder have also been conducting a complementary study that can be used to compare the results in both states which would help researchers observe the impact of legalization on substance abuse.

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Montana Senate Passes Bill to Implement Adult-Use Cannabis Program

4/26/2021

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The Montana Senate last Friday approved a bill to implement the voter-approved recreational cannabis program, the Associated Press reports. The bill was approved by the House earlier this month but because it does not follow the voter-approved revenue plan, it was not supported by the chamber’s Democrats.

The version passed by the Senate included amendments more closely aligned to the ballot initiative language and did include Democratic support. The House must re-vote on the Senate-amended version of the bill, which now includes cannabis-derived sales revenues earmarked for addiction treatment and nature conservation.

Under the Senate-approved version of the legislation, recreational cannabis sales would include a 20% tax. Of the cannabis-generated revenues, $6 million per year would go towards addiction treatment; 20% for conservation; 4% – up to $650,000 each – would go to state parks, trails, recreational facilities, and wildlife protection; up to $200,000 would go to veterans services and improving veterans’ cemeteries; $300,000 would go toward a one-time purchase of drug detection dogs; $150,000 would fund a one-time police training; and the remaining funds would be directed to the state’s general fund.

The voter-approved ballot initiative language directed 10.5% of revenue towards the general fund, with the remaining set aside for conservation, substance abuse treatment, veterans’ services, health care costs associated with legalization, and localities where cannabis is sold. Under the proposal approved by lawmakers, counties that approved the initiative would be automatically opted-in to legalized sales, while those where the majority opposed the reforms would need to separately opt-in. The bill also allows the state’s Native American tribes to sell cannabis within 150 miles of their reservations. Earlier this month, the Crow Tribe approved its own cannabis ordinance.

The legislation also includes language nullifying the law if the measure is found to be illegal. The initiative currently faces opposition in court from the anti-legalization group Wrong for Montana.

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Legal Marijuana Now Becomes Official Political Party in Nebraska

4/26/2021

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Nebraska’s Secretary of State Bob Evnen has given final go-ahead to Legal Marijuana Now (LMN) to begin activities as a political party in the state, the Associated Press reports. Evnen said the party can now register candidates for the 2022 election, voters can register as party members, and elected officials can nominate candidates for office.

In order to qualify, activists Mark Elworth Jr. and Krystal Gabel needed to collect at least one percent of the total number of votes in the latest governor’s race in Nebraska’s three Congressional Districts. They gathered over 10,000 valid signatures over a four-year period, which far exceeded the estimated 6,800 needed for approval.

“The Legal Marijuana Now Party is a political party organized in the United States to oppose drug prohibition. Legal Marijuana Now was established in 1998 in St. Paul, MN. It is a progression from the Grassroots party.” — LMN party website

Originally founded in Minnesota, LMN endorsed Senate candidate Kevin O’Connor, House District 2 candidate Adam Charles Weeks, and a host of others running for state office in 2020. The party’s platform includes the legalization of cannabis homegrows, the erasure of marijuana convictions, an end to employee drug testing, abolishing the Drug Enforcement Agency, and combating pollution with hemp agriculture.

“The voters of Nebraska have experienced many failed referendum petitions in the past and are currently witnessing a gridlocked Unicameral,” said Krystal Gabel, Legal Marijuana NOW’s National Party Chair. “The process of obtaining ballot access with the LMN petition breaks a decades-long political stalemate with the State of Nebraska on the issue of cannabis.”

After submitting the necessary signatures last year, Elworth stated his goal for the party in Nebraska was to discourage young people from leaving the state, saying that young Nebraskans feel “hopeless” when it comes to the state’s future and are leaving in droves.

Editor’s note: This article was updated to include the statement by Krystal Gabel of the LMN.

 

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Florida Supreme Court Blocks Cannabis Legalization Bid

4/23/2021

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The Florida Supreme Court on Thursday ruled 5-2 that the proposed recreational cannabis legalization ballot initiative would run afoul of federal law and that constitutional amendments “cannot unequivocally ‘permit’ or authorize conduct that is criminalized under federal law,” the Miami Herald reports.

The court described the ballot initiative by Make it Legal Florida as “affirmatively misleading” in that it did not to enough to inform voters that cannabis would remain federally prohibited despite state legalization.

The case was brought to the court by Attorney General Ashley Moody, who had asked the justices to advise whether the initiative would be suitable for a future ballot. In a statement following the decision, Moody’s office thanked the court for “their time and attention” to the issue and that the office respects the decision.

“Floridians must fully understand what they are voting on when they go to the ballot box,” the statement said.

Juan-Carlos “J.C.” Planas, an attorney who specializes in state law dealing with constitutional ballot language, explained to the Herald that the court essentially argued that activists should have found a way to explain how the proposal would run in opposition to federal law – along with all of the other legalization details – in the summary of the question, which is limited to just 75 words.

“I almost gagged reading [the opinion]. I don’t care about the marijuana, per se. My issue is, how the hell do you craft a constitutional amendment now?” – Planas to the Herald

Ben Pollara, who ran the successful 2016 medical cannabis campaign, told the Herald that the decision represented the court’s shift to the right as Republican Gov. Ron DeSantis has appointed three of court’s justices; all of which were in the majority on the decision. The state House and Senate also filed briefs opposing the reforms.

“Floridians would legalize marijuana tomorrow if given the opportunity to do so, but that’s clearly not what Tallahassee wants,” Pollara said to the Herald.

Make it Legal Florida, supported by the Florida medical cannabis industry, had raised $8.2 million for the initiative and gathered more than 556,000 signatures out of the 891,589 needed for the measure to make the 2022 ballot. It would have required 60% of voter approval to be added to the state constitution.

The campaign would have to redraft the proposal from scratch in order to have a chance at making a future ballot.

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Court Rejects Harborside Appeal in 208E Legal Challenge

4/23/2021

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The U.S. Circuit Court of Appeals on Thursday rejected the 280E appeal from Oakland, California-based Patients Mutual Assistance Collective Corp – or Harborside Health Center – ruling that federal cannabis prohibition prevents legal cannabusiness from excluding or deducting taxable income as business expenses, Reuters reports.

The company had argued previously that 280E is unconstitutional, running afoul of the 16th Amendment, which allows for income taxes. Attorney James Mann, of Greenspoon Marder, said in June that the tax code – which is used by the federal government to tax proceeds from illicit drug sales – “results in a tax that’s not on income, it’s not an income tax, so therefore it’s unconstitutional.”

All of the courts so far have disagreed with Mann’s assessment.

In 2018, the U.S. Tax Court ruled against Harborside, describing the firm as “a giant drug trafficker, unentitled to the usual deductions that legitimate businesses can claim” because cannabis remains federally illegal.

Earlier this year, the Tax Court ruled that medical cannabis operator San Jose Wellness, a subsidiary of Harborside, is liable for $4.2 million in taxes because federal law prohibits cannabis companies from claiming depreciation and charitable contribution deductions. Judge Emin Toro cited the Patients Mutual Assistance case in his decision. Additionally, Toro said that just because San Jose Wellness sold other, non-cannabis goods, such as t-shirts, and services, such as acupuncture, it does not qualify for any tax breaks.

In Thursday’s unanimous decision, Circuit Judge Daniel Bress also determined that Patients Mutual Assistance had failed to preserve for appeal its constitutional challenge to the tax law and its claim that it was entitled to exclude business costs under a U.S. Treasury regulation.

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Montana’s Crow Tribe Approves Adult-Use Cannabis Rules

4/23/2021

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The Montana-based Crow Tribe last week approved an ordinance to oversee its own cannabis cultivation and sales, and allow the tribe to benefit from the proceeds, the Associated Press reports. The ordinance – approved on April 16 – will allow the tribal government to sell cannabis products and sets the sales tax at 7%.

Crow Tribe Chairman Frank White Clay told the Billings Gazette that while “coal was the name of the game for the tribe for a while,” the tribe is diversifying its economy “for good business.”

“We’ve had medical marijuana for quite some time, and the Crow Tribe is not isolated … The reservation itself is more accepting (of it), and we’re just moving with the times.” – Clay to the AP

Following the legalization of medical cannabis in Montana, the state’s tribes have taken independent approaches to the reforms. In 2018, the Blackfeet Nation decriminalized possession of medical cannabis, while the Fort Peck Tribal Council completely banned cannabis possession of any kind by its members.

Thor Hoyte, legal counsel for the Crow Tribe indicated that the tribe would run its cannabis program parallel to the state, despite its sovereignty and not needing state permission.

“Not only are we paralleling the state in terms of carry and transaction limits. The Crow Tribe is going further … in terms of the labeling, testing and that sort of rubric,” he said to the Independent Record.

Hoyt also noted that the industry would be a potential jobs driver in the Nation, which has a 75% unemployment rate.

During the 2020 General Election, Montana voters approved legalization 58%-42%; however, the reforms have been met with resistance by lawmakers who in January rejected a $1.35 million budget proposal for implementing the program. In February, Republican Rep. Bill Mercer introduced legislation to delay adult-use cannabis sales in the state until 2023, citing a “massive expansion of government” in just nine months.

Anti-legalization group Wrong for Montana has filed a lawsuit challenging the measure claiming the financial allocation provisions in the measure violate the state constitution.

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Virginia Civil Rights Groups Skip Legalization Bill Signing Ceremony

4/23/2021

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In a show of solidarity with Chelsea Higgs Wise and her advocacy group Marijuana Justice, a host of Virginia civil rights groups skipped Gov. Ralph Northam’s (D) adult-use cannabis bill signing ceremony on Wednesday, the Richmond Times-Dispatch reports.

The action was taken by the ACLU of Virginia, Justice Forward Virginia, and RISE for Youth in response to Higgs Wise’s group — which was a key influencer in the effort to pass the historic legislation — not being invited to the event.

“From the beginning, Marijuana Justice has been instrumental in expanding our coalition’s ability to center the voices of directly impacted people in the policymaking process. One of our key values is to create an inclusive space around marijuana legalization, where many communities have a seat at the table. In defense of that principle, none of us attended the signing.” — Statement by Virginia ACLU and RISE for Youth, via the Richmond Times-Dispatch

In an interview, Higgs Wise told the Dispatch that Marijuana Justice had advocated for a study into legalization by the Joint Legislative and Joint Legislative Audit and Review Commission. The administration met with Marijuana Justice while the bill was being drafted and included some of the group’s suggestions; additionally, the governor’s office cited data presented by Marijuana Justice showing that, even through cannabis decriminalization, Black Virginians were continuing to be drawn into the criminal justice system over simple possession.

“I just would have been excited to be part of the event because we worked really hard,” Higgs Wise said of the snub.

“We are worried about a continued fight to be involved in the legalization process and the creation of the new market,” she told the Dispatch.

Alena Yarmosky, a spokesperson for the governor, said, “So much work went into this bill. Unfortunately we weren’t able to include many of the people we would have liked to be there — including multiple activists and legislators. We hope folks were able to participate virtually via livestream, as we’ve been doing throughout this pandemic.”

Virginia was the first state in the South to pass adult-use cannabis legalization. The new rules take effect this July, with a regulated marketplace expected by 2023.

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Biden’s Cannabis Reform Plan Still Involves Schedule 2 Status

4/22/2021

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White House Press Secretary Jen Psaki fielded many cannabis-related questions this week while the nation — including top congressional lawmakers — celebrated the April 20 cannabis holiday on Tuesday.

While a staggering majority of Americans now support the descheduling and federal legalization of cannabis, and nearly half the country’s population is living in states with legal cannabis access, Psaki’s comments revealed that the White House appears obstinate in its wary approach to federal reforms.

“The president supports leaving decisions regarding legalization for recreational use up to the states, rescheduling cannabis as a Schedule II drug so researchers can study its positive and negative impacts and, at the federal level, he supports decriminalizing marijuana use and automatically expunging any prior criminal records. He also supports legalizing medicinal marijuana….” — White House Press Sec. Psaki, to reporters on Tuesday

When asked specifically whether Biden would sign a federal legalization bill if it were to reach his desk, Psaki would not answer directly and replied, “I just have outlined what his position is, which isn’t the same as what the House and Senate have proposed, but they have not yet passed a bill.”

Psaki also called the legalization/expungement query a “legal question” and said she defers to the Department of Justice.

Revisiting the issue on Wednesday, New York Post reporter Steven Nelson noted to Psaki that rescheduling to Schedule II would not honor President Biden’s Democratic Primary promise to expunge convictions and release prisoners who are currently locked up — some with life sentences — on cannabis charges.

“That’s right,” she said, “but it addresses things moving forward, though, which is important and important to many advocates.” However, the cannabis industry and countless cannabis advocates have suggested for years that a Schedule II rescheduling would be improper because this would actually push control over cannabis manufacturing and product development to the pharmaceutical sector, which would only stand to exacerbate the injustices of cannabis prohibition.

In a nation that is grappling with the ongoing issues of racial justice and the over-policing of Black and Brown communities spurred largely by the “war on drugs,” and where there are still thousands of people serving harsh prison sentences for nonviolent cannabis-related convictions, President Biden’s apparent steadfast commitment to a “modest” approach to cannabis reform is painfully out-of-touch for an administration that presents itself as progressive.

 

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Cova Finds 4/20 Cannabis Holiday Retail Traffic Up 10% In 2021

4/22/2021

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DENVER, CO / APRIL 21, 2021 — Cannabis retail traffic was up 9.5%, and sales rebounded 8.4% year-over-year on 4/20, according to Cova Software, the largest Cannabis Point of Sale (POS) company in North America. While major outages plagued several big POS systems, Cova reported its 4th straight year of perfect uptime (100%) and benchmark transaction speeds (1.4 seconds). During peak hours on 4/20, Cova was processing 380 cannabis transactions per minute, and handled over 180,000 transactions for the day across 1,200+ dispensaries.

April 20th, the “Cannabis Holiday” has historically marked the marijuana industry’s biggest sales day of the year. However, when looking at the past 3 years, 4/20 fell on distinctively different climates. 2019 was a normal (non-COVID) year in which dispensaries in Canada and legal US States fought hard to be open by 4/20, and to procure the maximum amount of inventory to meet the surge in demand. They were rewarded with the biggest cannabis sales day ever.

Cannabis Retail Sales Bounce Back Despite Ongoing Pandemic

Last year saw a COVID shutdown of all retail businesses in March, followed by various re-openings of dispensaries by state or province in April. There were also restrictions on how cannabis stores could sell: via online order and curbside pickup, delivery only, and/or limited visitors into the dispensary. 4/20 2020 proved to be a better than average day but didn’t set any sales records.

4/20/21 was nowhere near a return to normalcy, as some municipalities were locked down for non-essential travel, while others were open for business but with 6-foot restrictions in place. Nevertheless, the industry saw an 8.4% increase in sales over 4/20/20, despite several US POS systems crashing amid the higher volume. This forced nearly 2,000 dispensaries to turn customers away for hours.

Cova CEO Gary Cohen, summarized 4/20/21, saying “Preparations for 4/20 last year were tentative, as our industry was just being recognized as essential. The supply of cannabis products was plentiful, but demand was a big question. It turned out there was huge demand from consumers and patients, and because of COVID relief checks in April, they had money to spend in dispensaries. This year, the relief was not timed around 4/20, but employment is higher, and access to stores easier. Overall, 2021 was a great 4/20.”

Based on Cova data, the daily lift in sales on 4/20 over average March daily sales has been: 2019 +240%, 2020 +78% and 2021 +89%.
The average invoice per transaction in the US was $76.26 USD, an increase of 9% over 2020. For Canada the average invoice was $52.48 CAD, a decrease of 2% from a year earlier. Dispensaries across North America saw 9.5% more traffic through their store this year, which is attributable to this April’s greater freedom to visit retailers in the US. In Canada, a surge in COVID cases, lag in vaccines, and more lockdowns by provinces created challenges for retailers. Despite that, Canadian cannabis stores processed 5% more transactions on 4/20.

A Thousand New Stores Celebrate their First 420

Year over year, approximately 1,000 new dispensaries opened (+20%) in North America. Several geographies greatly expanded dispensary counts and access to cannabis in the past 12 months, namely Ontario, California, Oklahoma, and Missouri (a new medicinal cannabis state in 2021). The better climate this year, and impact of these markets, helped to significantly propel overall sales for the cannabis holiday.

About Cova

Cova designs retail software solutions specifically for the cannabis industry and has rapidly become the #1 dispensary Point-of-Sale and Inventory Management solution in North America. Cova’s award-winning platform helps cannabis retailers simplify compliance, streamline dispensary operations, and increase profits through sophisticated inventory management, mobile dashboards, and seamless integrations with the most valued tech solutions in cannabis retail. Cova currently powers 1,200+ dispensaries and counting and is projected to process $3B in cannabis sales in 2021.

www.covasoftware.com.

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CBD Brand Sues FedEx Over Confiscated Hemp Shipment

4/22/2021

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New York City-based Green Angel CBD is suing the city and FedEx after police intercepted a hemp shipment destined for the company in 2019, LLNow reports. In addition to the City of New York and the shipping company, the lawsuit names one of FedEx’s drivers and two NYPD officers, claiming that they are all responsible for the missing shipment which was valued at $17,000.

Oren Levy, the owner of Green Angel, had ordered 106 pounds of hemp products from Vermont-based Fox Holler Farms. In the lawsuit, Oren, along with his brother Ronen, said they expected to make a $60,000 to $100,000 profit through sales derived from the shipment.

Oren Levy had redirected the FedEx shipment redirected to his brother’s residence in Brooklyn because he was hospitalized when it was due to arrive at Green Angel. However, Oren received a notification that the shipment was seized by the Vermont Police Department after FedEx and its truck driver notified authorities of packages containing an illegal substance. Vermont police subsequently cleared the shipment, deeming the paperwork lawful and apologizing for the inconvenience, according to the lawsuit outlined by LLNow.

Ronen was arrested and held for 24 hours. In December 2019, the Brooklyn District Attorney’s Office dropped all of the charges against Ronen.

Green Angel is suing FedEx for negligence in making a false claim and giving up the packages to the police. It is also claiming negligence on the part of the city for “creating a media spectacle of the confiscation” and publicizing “the incident on a variety of public platforms including but not limited to Facebook, Twitter, and Instagram,” the lawsuit states. Additionally, the lawsuit claims that the city was negligent in the hiring, training, and retaining of the officers involved in the bust, describing the city’s hiring practices as one that leads to officers “lacking the intellectual capacity and moral fortitude to discharge their duties.” The lawsuit said the officer’s conduct in the seizure was “inappropriate, unlawful and improper.”

The city and FedEx have both denied wrongdoing.

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Dama Financial, Leading Provider of Cannabis Banking & Financial Solutions, Finishes $12.6 Million Growth Equity Raise

4/22/2021

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Dama will leverage the new round of investment to accelerate its already impressive growth, continue to address the lack of financial service products being offered to the cannabis industry, recruit top talent, and scale the business with the backing and support of its investors.

South San Francisco, CA, April 21, 2021 — Dama Financial (“Dama”) the premier provider of access to banking and payment solutions through its FDIC-insured banking partners for the rapidly growing legal cannabis industry, today announced the completion of its $12.6 million Series B funding round, bringing Dama’s total funding to approximately $24 million to date. The round was led by a group of strategic new investors. Currently serving over 7% of the legal cannabis businesses in California, operational in 12 states and with over 50,000 consumers with digital wallets in the United States, Dama has processed over $2 billion in transaction value since inception.

“In one of the fastest-growing industries in the world, Dama is bringing desperately needed financial services to businesses and consumers alike that are safe, secure, compliant and efficient,” said Anh Hatzopoulos, CEO and Co-founder at Dama. “We have spent four years building a platform to enable safe, compliant financial services for cannabis businesses and now is the time to take Dama to the next level.”

“Dama has brought together the right team and technology that will position them as a clear payment solutions leader in the cannabis industry for years to come,” said Dan Englander, of Ursula Investors. “Dama continues to innovate solutions for the serious payments problems faced by the industry and we are excited to see that accelerate. ”

Since November 2020, six new states have passed legalization measures for cannabis and a record-high percentage of Americans now support legalization. The cannabis industry is one of the fastest-growing in the world with the global cannabis market expected to hit $47 billion and U.S. sales of legal cannabis expected to quintuple by 2025. According to Arcview Research, legal cannabis sales in 2019 grew by 46% to $14.8 billion, which represents the highest annual rate of growth to date. Dama’s payment solutions solve complicated banking problems for cannabis dispensaries and facilitate seamless consumer transaction at mobile points of sale.

Advisors

Waller Helms Advisors acted as exclusive financial advisor to Dama Financial in this round of funding

To learn more, visit: https://www.damafinancial.com/index.html.

About Dama
Based in South San Francisco, California, Dama is the cannabis industry’s leading provider of access to banking and financial services, powering safe and secure depository solutions for top licensed cannabis operators throughout the United States as well as electronic consumer payment solutions. The Company was founded in 2017 by a team of world class FinTech and Payments executives to provide high risk industries with critical access to fundamental financial solutions.  Dama has leveraged its experience in other unbanked categories to develop solutions, driven by its proprietary technology platform, capable of navigating a complex web of regulatory and compliance requirements.  The Company’s expansive product set, including Premier Business Banking, Paytender and CashToTax, fueled 350% top line growth in 2020.

To learn more, visit https://www.damafinancial.com/index.html.

Contact Information
info@damafinancial.com
877-401-3262

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Court Upholds Firing of USPS Employee Accused of On-Duty Cannabis Purchase

4/22/2021

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The U.S. Court of Appeals for the Federal Circuit has upheld the removal from federal service of a Postal Service (USPS) employee who in 2017 appeared to have purchased cannabis from the postal truck of a co-worker while on duty, according to an SHRM report.

The employee, a city carrier at Chicago, Illinois’ Dearborn Station was removed following a Postal Service Office of Inspector General (OIG) investigation that found that a co-worker, another letter carrier, was selling cannabis from a Postal Service vehicle. The employee and six other letter carriers admitted that the deals took place, but the removed employee denied the allegations. Five of the seven other employees who had been removed over the accusations appealed their terminations through grievance arbitration and the arbitrators settled from removal to long-term suspensions, and the employees were permitted to return to work without back pay, the report says.

Following appeals to the U.S. Merit Systems Protection Board and an administrative judge, the employee appealed to the Federal Circuit appeals court, argued that USPS had failed to prove that he had bought cannabis while on duty and in uniform, and that his removal was inconsistent with the arbitrators’ decisions to reduce the penalties imposed on his co-workers.

The Federal Circuit found the evidence, which included video, sufficient to uphold the penalty, as the standard was not proof beyond a reasonable doubt but rather a preponderance of the evidence. The court decided that the arbitration decisions were not binding on the court and noted that his colleagues took responsibility for their actions, which supported their lesser punishment.

The removed employee had worked for USPS since 1989. Cannabis was legalized in Illinois in 2019.

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National Cannabis Risk Management Association Launches New Insurance Brand

4/22/2021

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The National Cannabis Risk Management Association (NCRMA) is offering property, general premises liability, and product liability coverage to cannabis businesses through its captive-owned insurance brand Trichome.

Rocco Petrilli, chairman of the NCRMA, said the launch of the Trichome is “a direct response” to its members expressing “need for fairly priced and risk management-based insurance coverage to a rapidly emerging and evolving industry.”

“We believe that effective risk management practices are essential for moving the cannabis industry forward in a sustainable way. The NCRMA is 100% focused on risk management because risk management without insurance is incomplete and insurance without risk management is illogical. Trichome is the first cannabis-centric insurance solution of its kind, and it’s going to change the future of this industry.” – Petrilli in a press release

In 2019, the organization announced the creation of a casualty insurance program.

The NCRMA said that “only a few” insurance providers are currently offering products to the cannabis industry because of federal prohibition – and the products that are offered carry high premiums and “inadequate coverages and services.”

The organization said its insurance products will include “accurately priced” premiums and other advantages including a “holistic approach to underwriting,” appointed brokers vetted by criteria established by NCRMA members, products birthed by cannabis risk management, and short-term profit-taking replaced by long-term stability and reward.

The non-profit NCRMA was founded in 2018.

A bipartisan federal bill introduced last year would have ensured the industry had access to insurance products. The proposal was not taken up by either chamber of Congress.

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Cannabis Lounges & Delivery Coming to Denver

4/21/2021

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The Denver City Council this week gave final approval to new cannabis delivery and consumption lounge regulations, Westword reports.

The rules were approved unanimously after two years of deliberating the new regulations with industry stakeholders and Denver community representatives (Colorado lawmakers approved statewide delivery and social use rules in 2019 but that law requires local municipalities to opt in to such a program).

The programs are expected to be fully implemented by July.

“You know cannabis has arrived when marijuana bills pass through Denver City Council with literally no comment. That never would have happened in the old days.” —  Truman Bradley, director of the Marijuana Industry Group, via Westword

Under the new delivery rules, licensed businesses will be allowed to conduct deliveries until the dispensary closing time of 10 pm but orders can only be received at residential addresses. People placing the orders will have to show ID and deliveries will be limited to just one ounce of flower, eight grams of concentrate, or edibles containing up to 800 milligrams of THC.

The city’s new social use regulations will allow more types of businesses to apply to become a cannabis lounge and will legalize indoor smoking, micro-sales, and mobile lounges, although the businesses will still require a 1,000-foot buffer between themselves and any daycare, drug treatment center, park or other city-owned recreation venues.

Additionally, the rules reserve all of Denver’s new cannabis business licenses for applicants who qualify under a social equity designation until 2027, according to the report.

The shift represents Denver’s most significant overhaul of cannabis regulations since the 2014 opening of Colorado‘s first-of-its-kind adult-use cannabis marketplace.

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Poll: 1/4 of U.S. Adults Are Current Cannabis Consumers

4/21/2021

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A new poll by YouGov and Sunnyside, the national retail dispensary brand of Cresco Labs, found 25% of respondents indicated they had used cannabis within the last year, with another 23% saying they had used cannabis for the first time over the previous 365 days.

A 2018 survey by the National Institutes of Health found 16% of U.S. adults were current cannabis consumers.

Additionally, the survey found 44% of cannabis-consuming parents with children under 18-years-old tried cannabis for the first time over the past year, along with 43% of respondents 65-and-older.

Cris Rivera, senior vice president of customer experience at Cresco Labs, said the poll was designed to “learn how current conditions have impacted consumer attitudes and cannabis consumption behaviors” ahead of 4/20.

“Whether it’s the stressors of a global pandemic, quality of life enhancement, or increased accessibility due to expanded state legalization, the industry is ready to meet these new consumers to introduce them to its precisely dosed lab-tested products, safe and professional packaging, and welcoming retail locations.” – Rivera in a press release

The poll also found some interesting regional cannabis attitudes and trends.

The majority of Northeast respondents surveyed, 64%, said they were most likely to use cannabis for anxiety or stress relief, while 74% of Midwestern cannabis consumers said if more people embraced cannabis the world would be a better place, with 32% of respondents in the South were more likely to use cannabis for intimacy.

Overall, 64% of cannabis consumers said that the world would be a better place were more people to embrace cannabis.

The YouGov/Cresco poll was conducted last month and included nearly 5,000 Americans.

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Birmingham, Alabama Pardoning Misdemeanor Cannabis Convictions

4/21/2021

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Birmingham, Alabama Mayor Randall Woodfin on Tuesday announced the city will issue blanket pardons for more than 15,000 misdemeanor cannabis convictions dating back to 1990. The action will cover closed convictions for second-degree unlawful possession of marijuana adjudicated in Birmingham Municipal Court but does not include open nor future cases.

“Here’s why we’re doing this – no one should be held up by a single past mistake. No one should be denied job opportunities or freedoms due to missteps from the past. No longer will these residents be bound to their past. They deserve a chance to be part of our work force, to provide for their families and to achieve success on their own. That new life starts rights here, today, with forgiveness and redemption.” – Woodfin in a press release

The announcement comes as the state Democratic Party said it would support medical and adult-use cannabis reforms in the state.

State Rep. Chris England, the state Democratic Party chair, said that legalization would not only serve the state “in producing hundreds of millions of dollars in revenues but is an important step in reducing arrests and expunging records.”

“Nearly 100 years of marijuana prohibition and criminalization has trapped thousands of Alabamians, mostly Black, in our broken criminal justice system,” he said in a statement. “Nobody should be sitting in jail for carrying a little bit of weed.”

England said the bill to legalize medical cannabis in the state – which has already passed the Senate – is “a good first step” but urged lawmakers to legalize cannabis for adult use before other Deep South states, such as Georgia and Mississippi.

“We can’t afford to let this opportunity go to another state in our region,” he said in an interview with AL.com.

The medical cannabis bill is expected to get a vote by the full House this session.

Last month, Virginia became the first southern state to approve broad cannabis reforms.

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Iowa Gov. Sued for Medical Cannabis Delays In Long-Term Care

4/21/2021

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A cannabis advocate in Iowa is suing Republican Gov. Kim Reynolds over the state’s delays in implementing a measure approved last year to allow medical cannabis use at long-term care facilities, KWWL reports. The bill requires an exemption from the Drug Enforcement Administration (DEA) but the state has not sought it, Carl Olsen alleges in the lawsuit.

“One of the answers that I got was that the governor was holding it up, and then later it became well we think the Biden administration – we want to wait to see what the Biden administration is going to do – so none of these answers gave me a definite explanation of what was going on.” – Olsen to KWWL

Reynolds signed the bill on June 29, 2020.

In 2019, Reynolds vetoed a bill that would have expanded the state’s medical cannabis program, citing concerns over the efficacy of cannabis and the “health and safety of Iowans.” The measure had passed through both legislative chambers with sweeping approval — 96-3 in the House and 40-7 in the Senate.

According to KWWL, Reynolds has indicated that the back and forth between the state and federal governments is a “threat to public safety.”

In February, state regulators said they were still evaluating the best way to proceed with the reforms.

A Des Moines Register/Mediacom Iowa poll published last month found 78% of Iowans support expanding the state’s medical cannabis program and 54% of adults supported legalization for recreational use.

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SAFE Banking Act Advances to Senate

4/20/2021

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The U.S. House of Representatives overwhelmingly approved the SAFE Banking Act on Monday afternoon, sending the landmark cannabis banking legislation to the Senate for consideration.

The House voted 321-101 in favor of the legislation, which was introduced by Rep. Ed Perlmutter (D-CO) last month and is co-sponsored by dozens of lawmakers. The proposal seeks to normalize the relationship between the cannabis and banking industries by removing federal penalties for banks that serve state-legal cannabis clients.

The vote also represents a significant bipartisan victory: all of the Democrats and about half of the Republicans who chose to cast a vote supported the legislation.

Steven Hawkins — founding member and Interim President of the U.S. Cannabis Council, a strategic alliance of top cannabis advocacy groups, businesses, and individuals working to legalize cannabis — applauded the bill’s passage in a statement:

“This is the first step on the road to achieving comprehensive reform on cannabis regulation, and the bipartisan support reflects support from voters across the nation. The SAFE Banking Act provides small businesses, including many minority and women-owned businesses — and their 321,000 employees — with urgently-needed banking services. It enhances public safety and economic growth. We thank Speaker Pelosi for bringing this measure to a vote and the bipartisan group of leaders behind this bill, including Representatives Ed Perlmutter, Steve Stivers, Nydia Velázquez, and Warren Davidson. The Senate should also immediately pass the bill.”

The bill moves next to the Senate, where Sen. Majority Leader Chuck Schumer (D) is expected to bring the legislation to the floor for consideration — a significant step that was never taken under former Senate Majority Leader Mitch McConnell (R), despite the bill’s bipartisan popularity.

Schumer, however, has hinted for months at an upcoming federal cannabis legalization proposal and it’s possible he could choose to prioritize that legislation over the House-approved banking bill.  In a Marijuana Moment interview after Monday’s vote, Schumer suggested that emphasizing banking reforms could undermine the broader legalization push.

President Joe Biden (D) — who supports cannabis decriminalization but not legalization — has not yet signaled whether he would sign the SAFE Banking Act into law, although Sen. Schumer has stated that congressional Democrats are aiming to move forward on the cannabis issue this year, with or without the president’s support. 

 

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