Appeals Court: Butane Extraction by Individuals is Manufacturing a Controlled Substance

11/03/2020

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The Michigan Court of Appeals last week ruled that using butane to create hash oil is illegal for individuals, concluding that the practice constitutes the manufacturing of a controlled substance. The ruling comes in the case of Alexan Korkigian who was charged with manufacturing a controlled substance in 2018 after authorities were called to his residence after an explosion caused by butane extraction.

Korkigian’s case reached the court of appeals after his attorneys sought to have the charge dismissed or be able to use personal-use affirmative defense under the state’s adult-use legalization law in the circuit court. Korkigian argued that he could not be charged because state law allows some cannabis manufacturing for personal use and the definition of “manufacturing” under state laws “excludes preparing or compounding” cannabis for personal use, according to court documents.

According to court documents, Alex Goodnough, a chemist at Precision Extraction Solutions and expert witness in the hearing, testified that Korkigian was “isolat[ing] the cannabinoids away from [the] carbon” in the cannabis plant “to increase THC concentration and make smoking healthier.” Further, Goodnough testified that both the primary extraction material and final product were “marijuana.”

Prosecutors argued that preparation and compounding of cannabis “involve simple activities” such as “rolling a joint or making ‘special’ brownies,” but “more complex activities, like converting powder cocaine into crack cocaine or ‘cooking’ methamphetamines, are manufacturing acts outside the scope of the personal-use exemption.”

“The open blasting used in this case was more akin to the second category, in the prosecutor’s estimation,” the ruling states.

The circuit court had previously agreed that while Korkigian’s extraction process both began and ended with the same substance – cannabis – he had engaged in “manufacturing” because the cannabis changed its form as a result of Korkigian’s manipulation.

And, the circuit court said, Korkigian “engaged in a significantly higher degree of activity involving the controlled substance beyond merely preparing or compounding it for use.” Rather, Korkigian’s extraction process constituted “conversion” or “processing” under the statute, precluding dismissal of the charge or reliance on the personal-use affirmative defense.

The Appeals Court determined that the butane extraction method makes cannabis “‘ready for use’ through multiple steps, none of which are easy or uncomplicated.”

“We reject the notion that the open-blasting technique merely “makes ready” marijuana plant material for personal use,” the court ruled, affirming the circuit court’s decision.

The ruling does not outlaw butane extraction by licensed cannabis companies.

In 2017, then-Gov. Rick Snyder signed into law a bill amending the state’s medical cannabis law specifically prohibiting butane and “open blasting” forms of extraction for registered patients.

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CBD Flower Banned Under New York Hemp Industry Draft Regulations

11/02/2020

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New hemp regulations proposed in New York would ban the sale of CBD flower while requiring licensing for all segments of the supply chain regulated by the health and agriculture departments.

The proposal includes seed-to-sale tracking requirements, potency and safety standards, random testing at all stages of production, and regulations for CBD food and drink infusions. The regulations would not allow CBD-infused alcohol or transdermal patches.

The rules, authored by the Health Department, would impose application fees between $500 and $1,000 for processors along with license fees between $2,000 to $4,500 depending on whether the licensee will extract CBD in addition to product manufacturing. Retailers would have to pay a $300 license fee for each location, according to the draft rules.

In the proposal, the Health Department says state regulations are needed since the Food and Drug Administration “is just beginning the rulemaking process” and “therefore, there are currently no federal standards for cannabinoid hemp processors or cannabinoid hemp retailers.” The rules would require cannabinoid processors in the state meet third-party good manufacturing practices within six months of application approval.

“Due to the confusion of the regulatory status of cannabinoid hemp products at the federal level, products have been left in an unregulated status. These regulations are intended to bring cannabinoid hemp products on par with other standards already developed in similar industries and is not meant to disadvantage small businesses. Many operators in the hemp industry are looking for regulations to legitimatize and standardize the neophyte industry.” – New York State Health Department in the draft rules

The Health Department indicates in the document that the proposed regulations include recommendations from the New York Cannabis Grower and Processor Association and other, unnamed, industry stakeholders.

Allan Gandelman, president of the association, told the Observer-Dispatch that he shares “in the frustration of [NYCGPA] members and the hundreds of growers throughout the state who have spent significant resources in harvesting their crop…that hemp flower will not be allowed for sale.”

The rules, which have yet to be adopted, come just about two months after state Agriculture Commissioner Richard Ball said the state would not submit an industrial hemp plan to the U.S. Department of Agriculture for the 2021 growing season due to “unrealistic” federal regulations.

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New Jersey to Consider Forcing Some Insurers to Cover Medical Cannabis

11/02/2020

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The New Jersey Assembly Appropriations Committee last week advanced a bill that would require workers’ compensation and personal injury protection auto insurance benefits to cover medical cannabis under certain circumstances, NJ.com reports. The measure would cover individuals enrolled in the state’s medical cannabis program.

Alison Cooper, vice president for state affairs for the American Property Casualty Insurance Association, said during last Monday’s hearing that the “biggest concern” stemming from the proposal for the insurance industry “is that it puts insurers in a very difficult position by potentially forcing them to violate federal law.” She said that lawmakers should delay advancing the bill until Congress resolves conflicts between federal and state law concerning cannabis.

New Jersey courts have ruled on three separate cases in favor of workers’ comp covering medical cannabis for an injured worker. In 2018, Workers’ Compensation Judge Lionel Simon ruled that Freehold Township must pay for medical cannabis treatment for an injured worker. In that case, Simon said the plaintiff was at risk of getting addicted to opioids if the insurer was not forced to cover medical cannabis, which the judge called “safer,” “less addictive,” and “a better treatment for pain.” In 2017, Administrative Law Judge Ingrid L. French ruled that a private business’ workers’ compensation insurance must pay for an injured worker’s medical cannabis because it is “reasonable and necessary” to treat the worker’s ongoing pain, according to a review of the case by law firm Scarinci Hollenbeck.

The bill still requires approval by both legislative chambers and the governor.

New Jersey voters will decide during the General Election whether to legalize cannabis use for adults.

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Gwyneth Paltrow Invests in Cannabis Beverage Company Cann

11/02/2020

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Gwyneth Paltrow, actress and founder and CEO of wellness brand Goop, has invested in cannabis beverage company, Cann, CNBC reports. Cann founder Luke Anderson called her endorsement “a sign that Cann (and microdose beverages more broadly) are a viable answer to that very common consumer pain point.”

He added that when people think of Paltrow, “they don’t think of ‘weed’ – they think of cutting-edge solutions for today’s health and wellness needs.”

Cann is not the first cannabis company Paltrow has invested in but financial terms of the deal were not disclosed. The fundraising round also included investments from former National Basketball Association player Baron Davis and singer Tove Lo.

“There’s a whole sober-curious movement that’s going on and the cannabis-curious movement that’s going on, this is kind of at the intersection of those things in a way. … We’re very clearly and definitively moving in the direction of cannabis being legalized, and I think it should be. I’m actually not a big personal user of it. But I do think that there are amazing medicinal qualities to it and it is really helpful for a lot of people.” – Paltrow to CNBC

Cann products are currently available in California and Nevada and the company said it would use the funds – along with $5 million it raised in January – to expand into four more legal states within the next six months.

Paltrow’s Goop has come under fire in the past for making false and misleading health claims about its products, most recently in February from nonprofit advertising watchdog Truth in Advertising Inc. In 2018, the company reached a settlement with 10 California District Attorneys barring it from making such claims, Ars Technica reports.

Analytics firm Headset estimates the U.S. cannabinoid-infused drinks market in legal states doubled over the last two years from $4.2 million in September 2018 to $8.3 million last September.

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Robert Soler: Creating Biologically-Tuned LED Grow Lights

10/30/2020

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Before his work at BIOS, Robert Soler acquired a Master of Science degree from the Lighting Research Center at Rensselaer Polytechnic Institute and a PhD in Behavioral Neuroscience from the University of California, San Diego. Robert also helped design and build the lighting system on the International Space Station (ISS) — he collaborated with scientists to use LED lighting for photobiological purposes in space, which included designing a circadian lighting system to synchronize circadian rhythms of astronauts aboard the ISS. Through this experience, he gained insight into how LEDs could be utilized to develop valuable technology for the cannabis industry.

This interview covers how BIOS uses biology to understand and create optimized lighting systems, the benefits of growing cannabis under LEDs, and more!

Ganjapreneur: What is the origin story behind BIOS, and what led to the decision to create energy-efficient grow lights for indoor cultivation?

Robert Soler: I’d say BIOS started at NASA’s Space Life Sciences Lab, where I was an engineer designing lighting technologies for all types of life. There I learned about how LED lighting could be used to change plant morphology, provide unique seasonal cues and drive the most efficient photosynthetic growth.

On the BIOS website it states that your products are “designed by nature.” How does BIOS use plant biology to direct product development?

Rather than taking a technology and trying to shoehorn it into a biological application, BIOS is looking at the biological mechanisms, photobiology and biochemistry and develops technology based on that fundamental science.

What are some of the benefits of cultivating cannabis indoors with LED lighting?

The main benefit is consistency. Indoor lighting as a whole is more consistent day-to-day. When comparing to HPS indoors, LED provides the most uniformity. This bodes well for the crop, ensuring no portions of the plant is getting too much light and no portions are getting too little. This will lead to more consistent yields and higher yields harvest after harvest.

Research suggests that LED lighting can increase biosynthesis of flavonoids in fruits and some plant species. Could these results translate to the elaborate system of secondary compounds found in cannabis flowers?

Absolutely! Spectrum is the key to these secondary compounds. A couple of tweaks to say the near UV can help boost some things while far reds can boost others. We haven’t testing everything yet, but we can help you get there with some basics.

How does BIOS lighting differ from other LED lighting options on the market?

BIOS is dedicated to the grower. We think about things from the perspective of the plant, and operators when we design our products. An example of this is our optimized white light spectrum, providing the optimal photosynthetic yield without compromising the comfort of the workers inside the facility. Another example is our industrial grade fixtures, designed to take all the dirt and water you can throw at it, and wipe clean to keep you producing. A final example that we’re really proud of is our upcoming rapid rack system designed to get these lights up in record time.

What scale of indoor cultivation project is a good fit for a BIOS system?

I haven’t seen a bad scale of a project. Small ones are good for R&D. Tweaking spectrums and learning about your product.

What are the most common mistakes that cannabis cultivators make when switching over to LED lights after using other indoor cultivation lighting systems?

The most common one is temperature. The leaf temperature is much cooler when grown under LED lights compared to Sodium (HPS) lamps. This means you need to run your HVAC a few degrees warmer to obtain the best benefits. The other major one is measuring light. Light intensity is so important to the plant growth, yet few people measure it correctly. You measure in umol/m2, not lux, at the canopy level.

How does BIOS continue to support cultivators who are using your products?

BIOS is committed to helping our customers throughout the life of our products. We provide our customers with tips on maintenance and troubleshooting (even if it has nothing to do with the lights). We also work hand in hand with those growers who are looking at tweaking spectrum and once that spectrum is finalized, we help them cost effectively scale that unique spectrum to a full scale grow facility.

Thank you, Robert, for answering our questions! You can learn more about Robert Soler and BIOS’s offerings at BIOSlighting.com.

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Study: Medical Cannabis Helps Patients Reduce Harmful Drinking Habits

10/30/2020

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A study by Canadian researchers suggests that 43.5 percent of patients who began using medical cannabis to mitigate harmful alcohol habits were able to reduce the frequency of their alcohol use or quit entirely. The researchers found that median drinking days from study participants went from 10.5 to eight.

The study included information from the Canadian Cannabis Patient Survey 2019 from patients registered with Tilray. Of the 2,102 surveyed, 973 participants reported past or current alcohol use and 44 percent of those (419) reported decreasing alcohol-use frequency over the last 30 days, 34 percent (323) decreased the number of drinks per week, while 8 percent (76) reported using no alcohol over the 30 days prior to the survey.

Philippe Lucas, a study co-author, graduate researcher at the University of Victoria, and vice president of global patient research and access for Tilray, said the survey feedback adds “to a growing body of evidence that medical cannabis use is often associated with reductions in the use of other substances, including alcohol, opioids, tobacco and illicit drugs.”

“Since alcohol is the most prevalent recreational substance in the world, and its use results in significant rates of criminality, morbidity and mortality, these findings may result in improved health outcomes for medical cannabis patients, as well as overall improvements in public health and safety.” – Lucas in a statement

Other studies have purposed links between cannabis use and alcohol use reduction. An Oregon State University study published in January found that binge drinking rates among college students were reduced in states with legalized cannabis. A study published last year found binge drinking rates 9 percent below the national average in those states.

The University of Victoria study included researchers from the University of British Columbia. It was published in the International Journal of Drug Policy.

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New Zealand Rejects Cannabis Legalization

10/30/2020

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New Zealanders have rejected legalizing cannabis by a 53 percent to 46 percent margin, according to preliminary results by the nation’s Electoral Commission. However, the result could change once special votes are counted as the outcome is based on 83 percent of counted votes.

Green Party lawmaker Chloe Swarbrick told Global News that the nation had “record numbers of special votes” and that she remains optimistic the result could flip as those ballots are counted.

Conservative lawmaker Nick Smith, from National Party, called the initial results “a victory for common sense.”

“New Zealanders have rightly concluded that legalizing recreational cannabis would normalize it, make it more available, increase its use and cause more harm.” – Smith to Global News

Prime Minister Jacinda Ardern revealed after the results were released that she had voted in favor of the reforms.

The proposal, a non-binding vote which would have to have been implemented by the legislature if approved, would have allowed individuals 20-and-older to purchase up to 14 grams daily and grow two plants. The proposal included social use provisions, allowing for so-called cannabis cafés.

Polling for the legalization measure had been trending toward a ‘no’ vote in the lead-up to the referendum. A Horizon Poll in September found an even 49.5 percent split for the policy change – the firm’s polls had previously found consistent support for legalization going back to November 2019. Meanwhile, 1 News/Colmar Brunton polling never found support above 50 percent and in a poll released October 1 found 35 percent support with 53 percent opposed.

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Feds Say Cannabis Employees are ‘Agricultural Laborers,’ May Unionize Under State Law

10/30/2020

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The Regional Director of the National Labor Relations Board (NLRB) for Region 1 – which covers most of New England – has found that the majority of employees at a cannabis cultivation and processing facility are “agricultural laborers” under the federal National Labor Relations Act (NLRA) and, therefore, not subject to federal labor laws related to unionizing, according to a JD Supra report.

The decision allows labor unions to organize workers under Massachusetts law rather than federal law. Under Massachusetts law, union recognition uses a simple card check. Agricultural workers are exempt from federal labor laws but some states – including Massachusetts – cover farmworkers, while other states deny unionization rights altogether to such employees.

The decision stems from the United Food and Commercial Workers Union, Local 1445’s, push to organize the cannabis cultivation and processing facility at New England Treatment Access’s (NETA) Franklin, Massachusetts facility. The union sought to unionize the employees under Massachusetts labor laws through the “card-check” method of organization instead of the secret ballot process required by the NLRA. NETA argued that the cultivation and processing employees were not agricultural laborers and were subject to the NLRA.

Following a review of the company’s processes, the regional director determined that workers involved in cultivation, growing, and harvesting – “primary agriculture” – and those employees working in roles closely related to primary agriculture – “secondary agriculture” – were exempt from federal labor law under the NLRA.

The director also determined that workers involved in research and development, and data analysis, were non-agricultural employees.

The decision allows a union to obtain agricultural worker recognition once it has obtained authorization cards signed by a majority of workers in a bargaining unit. Card signing often happens without employer knowledge and employers might not be aware of the effort until they are presented with the demand for union recognition.

The NLRB decision could influence cannabis-related decisions in other regions if petitions are brought to the board.

Just this year, workers at NETA, Sira Naturals, Mayflower Medicinals, Cultivate Holdings, and Curaleaf, have either voted to join a labor union or ratified a union contract. UFCW Local 1445 – which brought the petition to the NLRB – have organized workers at Mayflower, Cultivate, NETA, and Sira.

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Study: Teen Boys More Likely to Believe Cannabis Will Improve Their Sex Life

10/30/2020

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A recent study by the Washington State University (WSU) found that after viewing cannabis advertising and social media content, teenage boys frequently expected to be “less inhibited” and to “enjoy” sex more, and they were more likely to express an interest in using cannabis in the future. The study — titled Social Media, Marijuana and Sex: An Exploratory Study of Adolescents’ Intentions to Use and College Students’ Use of Marijuana — found that after viewing the same ads, adolescent girls, college-age women, and college-age men did not draw the same conclusions about sex and cannabis as teenage boys, although pro-cannabis ads still had an impact on their perceptions of cannabis.

The study looked at surveys from two groups made up of 315 seventeen-year-olds and nearly 1,000 college-age young adults. The survey asked about their social media habits, how much pro-cannabis content they were exposed to (whether ads or user-generated), their attitudes toward sex and cannabis, and their intentions of using cannabis in the future. Young adults were asked an additional question about their cannabis use as adult-use cannabis is legal in Washington.

The study found that, regardless of age or gender, viewing pro-cannabis content on social media increased participants’ intentions to use cannabis. However, only teenage boys expressed an increased propensity to use cannabis based on their perception of cannabis and sex.

Jessica Fitts Willoughby, the study’s lead author and an associate professor with the Murrow College of Communication, told WSU News, “The messages adolescents and young adults are seeing are part of what is having an impact, the type of appeal and the content, not just the fact that young people are seeing these messages on social media.”

The authors say parents and teens should consider having conversations about cannabis and sex. They also suggest that more critical viewing of such content may help curb any unrealistic associations or expectations. Additionally, despite Washington already having strict rules around cannabis advertising, the authors suggest the industry consider regulations similar to alcohol that prohibit ads explicitly linking cannabis products to sex.

In a related story, Washington is in the midst of a statewide fight to repeal an early sex education program passed in the 2020 legislative session.

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Teddy Scott: The Complex World of Multi-State Cannabis Operations

10/29/2020

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After co-founding and leading Illinois’ PharmaCann for several years, Teddy Scott departed to found Ethos Cannabis, a multistate cannabis operator based in the U.S. Mid-Atlantic and East Coast regions.

Teddy recently spoke with our podcast host TG Branfalt about his experience and the complexities of founding and operating a multi-state cannabis company. Their conversation also explores the co-existence of corporate and craft cannabis, the rapid growth of cannabis business in the Midwest and East Coast regions of the U.S., the importance of effective social equity provisions, Teddy’s advice for industry newcomers and entrepreneurs, and more!

Tune in to this episode of the Ganjapreneur.com Podcast below or through your favorite podcast platform, or scroll down to read a full transcript of the interview.

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Read the transcript:

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TG Branfalt: Hey there, I’m your host TG Branfalt and thank you for listening to the Ganjapreneur.com Podcast where we try to bring you actionable information and normalize cannabis through the stories of ganjapreneurs, activists and industry stakeholders. Today I’m joined by Teddy Scott, who is the CEO of Ethos Cannabis, a multi-state operator developing a vertically integrated retail-focused platform in the Mid-Atlantic and East Coast markets of the US. Teddy holds a PhD in molecular biophysics from the University of Texas, and a JD degree from the Northwestern University School of Law. He’s also worked in pharmaceutical research and practiced intellectual property law. He’s also an advisor to the University of Chicago’s Innovation Fund. That’s one hell of an intro. Lots of stuff going on there, Teddy, how you doing?

Teddy Scott: I’m doing great. Thanks, sir. How you doing?

TG Branfalt: I’m doing well, man. It’s great to have you on. You’re a really interesting cat just from your intro alone. And I did some research on you and I’m real excited to pick your brain a bit. But before I get the opportunity to do that, tell me about yourself, man. How did you end up in the cannabis space?

Teddy Scott: It’s an interesting story. It was one of those things you can’t script out. If you’d asked me 10 years ago, hell, even seven years ago, if I were where I am now doing what I’m doing I would have said you were crazy. I had a background in medical research, went to law school and was a corner office equity partner at a big national law firm, I was located in downtown Chicago. Knew virtually nothing about cannabis.

TG Branfalt: What did you know about cannabis then?

Teddy Scott: What I knew about cannabis was the same stuff that all the other people in this country that are ignorant to it, because of what they’ve been told and led to believe the misinformation for so long. That’s pretty much all I knew. I knew nothing about it. And what happened was it was an interesting time period. It’s really critical to remember, and it was January 2014. I’ll never forget it. I was at a point in my life that it was probably the right time for me. I had reinvented myself a number of times. But I’d gotten to a point as like, “What am I going to do next?” I had four relatively young children, “Gosh, I can’t really go off and do anything new. I need to just hunker down and just continue being a lawyer. And just once my kids are in college, I’ll look at doing something else.”

And what happened was, it was January 2014, a friend reached out to me. It was an email. I remember laying in my bed on a Thursday night, and an email came in. It was a physician friend of mine and said, “Hey, I know some people that are from Arizona, that are coming to Illinois to apply for medical cannabis licenses. And they’re looking to raise money, do you want to invest?” And it was just boom, it was an immediate thought of “No, I don’t want to invest. I want to look at this.” And I like to say all the time, if Google had not been around, I would not be where I am.

The power of the amount of information that is out there, podcasts that are out there that I started listening to. And the reason I did was, as I tell the story to people to remember. It was very fortuitous for me because that was January of ’14. And what had happened only a couple of weeks earlier, January 1, 2014. That was when rec sales started in Colorado. And I don’t know if you remember, but it was on the news everywhere.

TG Branfalt: Yeah.

Teddy Scott: And I think what happened was by being a lawyer I had a sense of the way laws are made, how they’re interpreted the way they evolve. They’re a measure of society. And I just had this sense that things were changing, you couldn’t help but see what was happening in Colorado a couple of weeks beforehand. And it just made me start looking. And that’s what you do as a researcher, I happen to have a PhD, it’s what you do you research, you dig in, you see a question you want to understand it. As a lawyer, that’s what you do.

And I just started digging and what happened within, it was probably a couple of days, it was very quickly after that, that I got that email. What I realized is, I was digging into what was known at the time about the science of cannabis. I was like, “Oh, my gosh.” Because I know very well what drug companies do, the types of discoveries they make. With my PhD, I very much understood how receptors work, how drugs work, interacting with them, and the effects that happen. And as I was looking at this, I was like, “Wow, there’s really something here. I don’t know the answer.” And quite frankly, I don’t think anybody does with specificity. But it looks like there’s something here.

TG Branfalt: What was the thing for you? You said that you didn’t really know much you start googling, you start researching. Once you noticed that there’s some interest there for you. What was the thing for you that the light bulb went off?

Teddy Scott: Yeah, there were a couple of light bulbs. And they happened really quickly, really, within just the first couple of weeks, I was looking at it. The one was, I’ll call it my passions, because at first it was intellectual. I was thinking of it as a technical lawyer, I was thinking of it as maybe a scientist, that’s very technical in nature.

The first was, as I was looking at it, and I was looking at just the science of it. One of the things that was interesting for me, or has made an impact on me is one of my clients, as a lawyer was an opiate manufacturer. They’re one of the good ones. There’s a lot of bad press out there, and well deserved, by the way, for certain companies out there. The one I was working with was ethical. They were spending tons of money, trying to find new opiates that weren’t addictive. Ones that could provide pain relief, but were not addictive.

And I knew very well, in a way that people in the country at the time. The opiate epidemic only became pop… No, I don’t want to say popular, I’ll say really well known in the last few years. But I was well aware of it going back quite a while. And so when I was looking at the science of it, what was known and just I was like, “Oh my God, this could be…” That was I was saying … I was like, “Wow, this could be an alternative, one of the solutions to fill in that gap for true chronic pain.” I mean, there’s hundreds of millions of people that are suffering from chronic pain and you have a choice of Advil, or Fentanyl. I mean, there’s a huge gap.

TG Branfalt: And it’s hard, right, to compartmentalize. Patients can’t tell doctors how they’re feeling pain oftentimes.

Teddy Scott: Well that’s a pain is a weird thing. The same thing might happen to you, to somebody else, you might think, “Eh, I’m okay. I can get by with a couple aspirin.” Like Jeff Sessions said a couple years ago, “Just take a couple aspirin.” But for somebody else they might be in agony. And what are you supposed to do? Are you supposed to say, “Screw you, deal with it?” Are you supposed to honor them and respect them and go, “You know what, you’re in agony, I need to try to help you.”

And what it helped that, that was one of two things. But what that did for me was it made it no longer technical in nature, intellectual in nature, it really personified it. And the sad thing for me personally, was very shortly after I started, it was before the company had got going, it was before we’d won any licenses. We were still in this planning stage. My father was diagnosed with his first of two primary cancers. He passed away a couple of years ago.

TG Branfalt: I’m sorry.

Teddy Scott: And it became really personal as I saw him, I’m from Texas, that’s where he was. And I saw him living in a state where it was illegal. And I mean, he was dying. He was in agony. And he was a physician. He was a physician. And he almost overdosed on opiates, just as he was trying to deal with the pain of the radiation therapy and just the pain of cancer. And he’s like to me, “Son, can you get me some cannabis?” I’m like, “Sorry, dad I can’t. Down here… I’m up there. You don’t live up there, where it’s legal or available.” And actually he was able to get some through sources, it was totally illegal down there. And it helped him, it helped him. It helped us reduce his opiates.

TG Branfalt: Had he done research, or it was a last-ditch effort for him?

Teddy Scott: It was a… Yeah, it was purely… He’s palliative care. He knows he’s dying, he’s just in agony. And it was purely just a last ditch effort for him. So that was one thing that made it… I mean, one thing I’ve said before, and it’s one of the things I’m very thankful for. And I’ve had a lot of… I’m very thankful in my life for my family, my education, I’ve had a lot of opportunities. But the one thing that was missing, I didn’t realize until I got into cannabis, I never had a cause. Something I really believed in. And this has really provided it for me.

And so that was one thing that… It’s easy enough, okay, people might chase money, or fame, or success, whatever it might be. It’s really powerful when you’re doing something beyond that, bigger than that. And cannabis has been that for me. And it became that, so that was one of those ah-ha moments really quickly. To be totally frank, when I first started looking at it, one of the first things I did was a spreadsheet model of a business model. And you could see big numbers and the dollar signs, that’s kind of that technical thing. But it quickly switched into this personal mission driven trying to do something. And so that was one thing, but I still didn’t know anything about cannabis. I just saw the potential for it.

TG Branfalt: Well, so let’s talk a bit about that your first roles, your first experiences with the company and where you are now. You started, or at least worked for a time as executive at PharmaCann, which is very well known. And now you’ve founded your own company, Ethos Cannabis. So what was the impetus or imperative, behind the founding of your own firm? Meanwhile, you’re at, or had been at one of the largest in the country? And how did the experiences differ?

Teddy Scott: Well, I actually founded PharmaCann, Ethos is my second company to really start. PharmaCann was the first one. So that January of ’14, what led to it, is me and a couple of co-founders, we founded PharmaCann. And so I was the CEO and one of the co-founders of PharmaCann. And so that was in 2014. We formed the company, we won our licenses in February of ’15. Myself and one of my co founders, it was a partner and me at my law firm, we quit and went to go work in the cannabis business.

TG Branfalt: You just quit.

Teddy Scott: We just quit. And I’ll just go back real fast, because it’s relevant to the transition, is that what happened in the beginning, I’m starting to think about getting into this. And I don’t know anything about cannabis. Well, that doesn’t make any sense. How are you going to start a business and you don’t know the actual… You don’t know the product. You don’t know the market. You don’t know anything about it. And there were two things. One was as I was saying Google and listening to podcasts. There’s a great podcast, Free Weed. I’m not sure if you’re familiar with it but I learned a lot from Danny Danko. The host of that, Free Weed. I learned a lot about cannabis from Danny Danko.

TG Branfalt: I learned about Danko from High Times Magazine. So when I was younger, and I would read High Times, and then he has a podcast much later anyway, it’s interesting.

Teddy Scott: Yeah. But the thing was, I went out to start to see operators in Colorado, California, wherever it might be. Just, I was like, “I got to find a partner because I don’t…” I’d never seen a cannabis plant.

TG Branfalt: Really?

Teddy Scott: Yeah, they’re unbelievable. It’s one of the craziest things. And as I went out there, that was the other ah-ha moment. There’s a thread of it all the way through today. As I was out there, I was touring, I won’t mention their name, but they were one of, if not the biggest operator in Colorado. I mean, they had tons of dispensaries and very well regarded. Very successful. But as I was watching their operations, how they were growing their grow facilities and the way they were doing things. As I was watching it, I went into that thinking, “I’m at a competitive disadvantage, because I don’t know cannabis.” But as I was watching them, I was like, “Wow, I actually have an advantage. They know cannabis right now. But they don’t know technology. And they don’t know how to run a business. They don’t know how to scale a business, huh, I know how to do that.”

And so that became really the big ah-ha moment. Beforehand, I had been thinking “Oh, I’m just going to start a small business.” But then I saw the opportunity to grow a big business. That I could see, or I thought what I saw and I’ve been right so far, is I thought I saw where cannabis was headed, that it was going to go from underground to a legal respected opportunity in business. Yeah, but at the same time, as that happened, look at any business. They start off manual, non-automated, unspecialized with technology. And what happens? They get more and more specialized, higher and higher technical, higher and higher quality, more and more reproducibility, innovation, iteration. That’s the way any business is. And I saw that.

TG Branfalt: Or they get pushed out for not doing those things.

Teddy Scott: Exactly. That’s the way it works. I’s an unfortunate thing. That’s why societies, you have to always have education, you have to have job training, you have to have advancement, because if you just keep doing the same old thing you’re going to get passed by. That’s just the nature of everything. And I saw that. And so that was really one of the key things that led to the founding of PharmaCann. And PharmaCann is not the only company that did it. We were in Illinois at the time, at that in 2014. And there’s tons of other companies that did the same thing.

Back in, I think it was ’15. I was talking to a very high up elected official in Illinois. And I was talking to him. And this was in early ’15. And I was like, “Do you know where the leaders of cannabis are going to be?” And he’s like, “I don’t know, Colorado, California?” And I’m like “I understand that you’re saying that, because that’s what everybody would say.” I was like, “That’s not it. It’s going to come here to Illinois.” He’s like, “What are you talking about? We don’t have anything, we don’t…” And I was like, “Where this industry is headed it’s no longer going to be these artisanal family, small business, it’s going to be big. It’s going to be sophisticated. It’s going to be corporate. That’s where it’s headed.”

And look at all these companies here in Illinois. GTI, Cresco, Verano, PharmaCann, Grassroots, I mean, those are big leading companies now. And go back to, I think it was 2015, I remember was like on the MJBizDaily, or one or maybe High Times what are the first billion dollar companies in cannabis going to be? And there wasn’t a single company from Illinois on there, now look at all those big companies. And there’s ones that are outside of Illinois but Illinois, I think it’s one of if not the highest concentration of big, well capitalized operating companies. And it’s all because of that Illinois was really at the precipice of when the wave changed from West smaller companies to these highly regulated sophisticated companies on the East Coast.

And so PharmaCann got started. And we started and as a basic strategy that I had at the time, and it’s not it’s not the same today, but it was back then is I would rather have hired someone that didn’t have cannabis experience, because what I was looking for is, do you know how to manufacture consistently? I’d rather you know how to grow acres and acres of poinsettias then to grow five marijuana plants? Okay the horticulturist that knows how to safely organically prevent pest and have a high degree of production and quality and consistency. That’s what I was looking for. Not someone that knew how to grow marijuana, and with the theory being, it may take some time. But the horticulturist can learn how to apply their experience to growing cannabis. But I can’t teach a master grower that can grow really good weed in their basement or in a small grow room. I can’t teach them how to grow hundreds of thousands of square feet in controlled environmental conditions, if that makes sense.

That was the basic and we as a company, myself and the other leaders we hired at PharmaCann, it took us a couple of years to figure stuff out, we didn’t know what the hell we were doing. I mean, the people that built our facilities when we built our first production facility we brought in all these engineers, and these architects and these horticulturist, and they’re doing their best to build this facility. But it’s never been done before the size, the people doing it have never done it before, you’re taking your best guess. But guess what, it’s a guess. You need to have some practice to learn and iterate. And so those first few years were spent just learning. People that had these skill sets to learn how to apply it to cannabis. And so, at PharmaCann like I said, the first few years were really spent learning and we thought that was okay, because the market in Illinois at the time was so small. And when we expanded to New York, once again, the market was so small.

The thought at the time was, “That’s okay, we got time. Yeah, we’re not going to go compete on the West Coast yet, because we’ll get killed if we go out there, because we don’t know what we’re doing yet. But give us a couple of years, and we’re going to pass them by, they know how to do it now. But they’re stuck. They’re plateaued. They don’t have the capabilities of getting better, but we do.” And that’s what happened. And we’re not the only one. That’s what the other big companies have done as well. They’ve had a long term view they’ve invested in themselves and their people, their systems, and they’ve learned.

TG Branfalt: So while we’re talking about the bigger companies and as you said a lot of those billion-dollar companies, they’re all multi-state operators who operate in the strict regulatory environments. And Colorado, California is a little more wild west, but what’s your response to those that criticize corporate cannabis, when I read the comments on the Facebook page on my story, which I don’t often, a lot of them anytime I write about sort about someone they consider corporate cannabis. I mean, it’s a call to arms.

But obviously as you said you put in however much money to build this state-of-the-art facility that’s never been done before. Which if you don’t have that financial backing is impossible to do. And not only what’s your response to those that criticize corporate cannabis, but what’s your take on the push to drive out or prevent such operators such as what’s playing out currently in Maine?

Teddy Scott: I’m not I’m not familiar with what’s going on in Maine. But I totally understand that criticism of corporate cannabis. I understand it, it’s deserved. But I think what people don’t understand is, number one, it’s a natural reality, okay? Everything, everything in life, whether you’re an athlete, you’re in business, no matter what it is, things get better. You have a choice, you can stay what you’re doing, or you can continue to grow. And anyone that was in this in the beginning, there were numerous cannabis entrepreneurs before I got into it, they knew much more about it than I did. they had a head start.

The question is, what do you do with your head start? Do you continue to grow and get better? Or do you stay where you are? It’s a lesson in life. It’s not just cannabis, it’s anything. And so that’s one thing. But the other thing I’ll say is, it’s unfortunate for those people that perhaps feel like they’ve gotten passed by, they were the ones that opened up the market. I mean, my myself and my other companies like us we’re standing on their shoulders, and we have to honor that, respect that. I mean, those men and women that were in this when I was in it, starting to look at it, in ’14 and ’15, they knew so much more than I did. I’ve learned so much from them. And I certainly honor them and respect that. And that I’m one of those corporate people, I would expect them to respect me for what I’ve done, and for we’ve done as well.

But then here’s the last piece. I don’t think they’re done. I think there’s always going to be a place for them. Yeah, they may not be CEO of a multi state operator, but do they really want to be? They still have an opportunity to continue doing what they’re doing and be successful. And I like to use analogies. But I think the alcohol, beer industry is a great example of you’ve got big corporate alcohol and beer. But guess what, there’s tons and tons of very successful popular micro brews. And I’ll bet you, if you ask anyone, I bet 95% of those business owners that have a microbrew or a brew pub I’ll bet you as 95% of them, would you give up what you’re doing to go work at InBev and be reporting to some bullshit corporate bureaucracy? They’d go, “Hell no, I’ll keep doing what I’m doing.”

And so there yeah, there’s that corporate world out there. But there’s always a place for people that are doing things on a smaller scale. And why? Because they’re able to establish a more one on one direct connection with their consumers. They’re able to pivot more quickly, they’re able to innovate in ways and do things that big corporate behemoths can’t. And so, I think there’s a place for both I understand the concern and the criticism that is out there with corporate cannabis, but here’s the problem. If you are not corporate cannabis, how in the world can you satisfy the safety standards, the accuracy standards of labeling to protect consumers? How can you ensure that you know the mold is not there? How can you ensure that the excipients that are going into your vape carts aren’t problematic? I mean, look at the vape crisis?

TG Branfalt: Yeah.

Teddy Scott: Okay. That right there is the perfect example of why you want corporate cannabis. Because these products, cannabis, rightfully so is talked about as a very safe product. Okay, and rightfully so. But there’s a big difference between bud and highly concentrated hydrocarbon extraction reformulated with all these chemicals. What is that shit coming from? How do you know the safety of that stuff? Yeah, you might see the raw cannabis and the safety profile for that is very different but oh, wait a second, there’s tons of examples of immunocompromised individuals burning cannabis inhaling-

TG Branfalt: Mold.

Teddy Scott: Mold and it killing them. Okay, how you protect that from happening? You have corporate cannabis. And so there’s a place for it. I’m not sure if that makes sense. I totally understand where they’re coming from and the criticism, but there’s a place for corporate cannabis and for the protection of the consumers that are out there. You want those protections in place, and it’s only corporate cannabis that’s going to be able to really meet those safety standards.

TG Branfalt: Well, especially on that scale. To your point, if you’re a mom and pop shop you might be making one-tenth of the product that a massive company does, and that’s to your scale. So you’re so they’re able to make sure that it’s safe by and large.

Teddy Scott: Yeah, it’s a little bit off topic, but it’s irrelevant. Like you can look at CBD right now. Everybody can tell CBD has a huge opportunity. But when you go into-

TG Branfalt: Gas stations.

Teddy Scott: You go into a gas station or a Bed Bath and Beyond Where the hell did that come from? Nobody knows.

TG Branfalt: And that’s a really wild thing, is it’s so much different from state to state that you can’t guarantee that the same label even is the same from state to state.

Teddy Scott: Yeah, I don’t know what’s going to happen. No one knows. But where it should happen is raw cannabis is closer to maybe produce there’s been intoxicants and that needs to be regulated. But when you start getting into the extracted products, man, the risk profile of extracted products, they’re log units, I mean, multiple, multiple higher factors of risk for the individual consumer with those extracted products.

TG Branfalt: I do want to backtrack a little bit you had said, when we first started talking about corporate cannabis that you’re aware that the industry is on the backs of those that came before and we have to talk about the entire industry is also based on a drug that is still predominantly illegal, illegal at the federal level. People still arrested for it, I think something like 85% of arrests in 2014 were nonviolent, nonproperty arrests, many of them for drug possession. And so and the industry is predominantly white, and male, for that matter. And in you with Ethos, working with social equity applicants in Illinois for those are not familiar social equity applicants, programs, different states have different rules, but by and large, it’s for communities that were most affected by the war on drugs.

You’re really the first quote, unquote, corporate cannabis CBD CEO, that I’ve had the opportunity to talk to that actually has one of the social equity applicants partnerships. Can you tell me about that? What does it look like in Illinois? Is it coming as quickly as people had hoped? I mean, the Coronavirus I know, set it back. And specifically, I’m more concerned about what your partnership looks like, and what is the hopeful outcome?

Teddy Scott: Yeah, I got into it. I was going to do it, regardless. One of the things I’ve been involved with for a while is mentoring people. And I mean, I think as being an entrepreneur is one of the greatest experiences I’ve ever had. And it’s a thing that not many people get a chance to do. And so really trying to help people, encourage them because it’s scary to become an entrepreneur. And I started helping, I get asked to talk to people a lot, and I usually do those things. And there was a Black lady that reached out to me wanting some further coaching. And I was like, sure. And as I was talking to her, it was back little more than a year ago. And it was back when Illinois was looking at putting the thing in place.

And as I was talking to her as I was like she was looking at doing a… Essentially, she wanted to help out. She had a business it was essentially job training and she wanted to job train African Americans to help them get into the cannabis industry as it was coming to Illinois, and I was talking to her and I was like, “Why don’t you start a dispensary instead, go to where the money is. And on top of that, if Illinois passes this law, it’s if it happens, social equity is going to be a big part of it’s going to be for people like you.” I mean, she grew up on the south side of Chicago. “And it’s going to be for people like you it’s like, go to where the money is, instead of being a staffing or training agency. Wouldn’t you rather be in the business?” She’s like that’s a great idea.

And I started meeting with her, just as a pure mentor. And it gave me the idea of wow, I could really help more, this could be scalable. This could be bigger impact, not just this one person, but bigger. And I went to my company, my new company, and I was like, “Hey, I’m going to help this person and maybe some others. But I think we should do it as a company. And it’s the right thing to do. It’ll be good for us as a company, it’s certainly not the best use of our capital, it’s not the best use of our time. But I’m a big believer in pay it forward, you do the right thing. It may be hard in the beginning, but it will be recognized, you’ll get rewarded for it later.

And that’s one of the reasons we went into it. But I also felt like, as I was talking to her at the time, reparations is a bad word to use, or it has been in the past, it’s being talked about in a different way now, but I was like cannabis, really, perhaps could be that driver, whether you call it reparations or not. It has an opportunity to be that. And as I was talking to her at the time, she had some relationships with the legislators and the Black Caucus here in Illinois. And I was like, “Hey, you should go and lobby, do your best. Go, go talk to your representative. And make sure they set this thing up. So it benefits people like you.” Because that’s the way politics works,  and it’s like to get this thing passed, it’s going to require the Black Caucus, well make sure the Black Caucus doesn’t vote for it until their community gets a piece of this, is able to get the upside on it.

And so back to your thing. Yeah. And in most of cannabis, just like most any other industry in this country, it’s dominated by white males. Unfortunately, that’s the systemic systems that have been set up, it’s going to take, my God, there’s no telling how long it will take to fix those problems. But hey, I think cannabis is really one of the first things that was and I think it’s just because we’re creating it from scratch, it’s like, “Okay, how we’re going to set up the rules of the game. So everybody wins?” Not just, I think I’m entitled to have some degree of winnings. I’ve worked hard. I’ve done a good job. I’ve put a lot of time and effort into it. But maybe we can set this thing up that more people than me can win it, if that makes sense. And so I think cannabis really has that opportunity. Yeah, could it be better? Could it be faster? Sure. But that’s the way it always is. As a lawyer, one of those things you learn is if you’re ever having a settlement, and two people walk out of there, and neither one of them is happy you had a good result. Because that’s just the way it works. It’s like if everybody gets what they want, that means somebody didn’t get what they deserve. And so you’re trying to find that middle ground to do as much good as possible.

And so we ended up working with five groups, where we’re putting all the capital to them, we did all the work, myself and my team [inaudible 00:35:37]. We do a good job of doing the applications. And we’re going to commit to funding them if they win these dispensary licenses. And we’re going to win in it as well. I mean, we’re a minority owner, but it’s still going to be their business, I talked to them all the time. And they’re looking to me to do stuff, I was like, “Hey, this is your fucking business. Come on. I’m here to help and help point but your business. Come on, where are we going to do it?”

TG Branfalt: A little bit tough love there.

Teddy Scott: Yeah, that’s the way it is. The goal is, we want them to build a successful business. Because they’ll get something out of it from a skill set, their pride, the people around them, and they’re creating these businesses. It’s not just a handout or a check, let’s build wealth, let’s build an industry that is inclusive of everybody of society. And so it’s a really good opportunity.

It’s unfortunate. I think the Illinois system, they did a really good job with it. No system is perfect. What I’m referring to is as a loophole, we’ll see what happens when those awards come out. I’ve actually tried to help them draw some attention to it. I hope it doesn’t work out this way, the craziness of it is the way those licenses work, you essentially get bonus points if you’re a social equity applicant, and everybody assumes those bonus points are so many that you probably need to be a social equity applicant to win. And the crazy thing about it is there’s three ways you can qualify. Two of those three you would look at and go yep, that’s social equity. Well, one of them, and I’m kidding you not. If I wanted to, if my company wanted to, we could have qualified, all we would have had to have done is go find 10 people from one of these areas, hire them, pay them minimum wage for a few months, we would have qualified. I don’t think that-

TG Branfalt: Seriously?

Teddy Scott: Yeah. And it’ll be interesting to see how the winners work. I’m hopeful that none of those people win. Because if they do, I think it’s taking away the opportunity from the people like what we have in our groups. And there’s tons of other groups that are like ours. These are the people that were on the wrong end, not only the war on drugs, but more problematically just the systemic racism in the country in general.

TG Branfalt: Yeah, one of the things we talked about New York briefly, but one of the things that was happening in New York for years and years was the stop and frisk, which basically the cops would say, pull whatever you have out of your pockets. And if you had a dime bag, now you have marijuana in public view, which is a crime. So we have a few minutes left here, what advice would you have for entrepreneurs? What’s your response to, I guess, the most common question that people who seek your counsel is?

Teddy Scott: The thing I always… To an entrepreneur. And it’s the one of the things I learned that was one of the most valuable lessons, and there’s a number of them, but from to an entrepreneur is, man, just start. The first time you start something, it’s really scary, anything you haven’t done before, you’re going into a new area for you, yourself. I mean, that’s really intimidating. Especially when you’re putting money on the line, maybe reputation, risk, whatever it might be. And it’s one of the reasons I try to mentor people so much is to help them, I think one of the most important things I do for them is help paint the picture to de risk it for them to make it not so scary, because at least for myself, anyway. I’m not saying it’s easy, being an entrepreneur is hard. It’s really hard, but it’s so rewarding, to see what you put into something. See the results of it. But also, once you get started, what I realized is the biggest battle is just fucking trying.

I mean, most people sit on the sidelines, and don’t try out of fear. I mean, naturally as people, we’re afraid of the unknown. And if you just try, you might fail, but you will learn so much in the failure, that the second time you do it, or the third time you do it, you’ll no longer be scared, you’re just continuing to do it. And eventually, I think it pops for them. And it may be not on the scale of maybe some other people, but in a scale that is rewarding, and is beneficial and what they were looking for all along.

And so that’s number one, the other one that I cannot say enough as well, is it is so important, people talk about it in culture, culture is so important. I did not realize how important it was. I thought mission, vision, values, all that stuff. I thought it was just hype, or not even hype, just it was just words on the wall. But what ends up happening is when you’re doing a business, I mean, you can’t do it yourself. Well there’s some businesses that are solo entrepreneurs or solo service providers. But most businesses are not that way. You have a collection of people and they have to work together. Well, how are they going to work together, If they’re being assholes to each other or treating each other badly? They’re being selfish. They’re being demeaning. Well, guess what? That business is not going to perform well.

And so when you’re starting the business, the mistake I made in the beginning was I looked for skill sets. I was talking about that earlier. I was looking for the horticulturist, I was looking for the scientist. What I did not appreciate his who were they as a person, because I’m going to be in the foxhole with them for years as we’re building this. And if we don’t get along and it’s not like we have to get along and be best friends.

TG Branfalt: Yeah.

Teddy Scott: But we have to have the same values because if they’re different, you’re going to have problems. And so those are the two things I tell entrepreneurs, try, don’t be afraid, just try, get going. Try it on one thing and chances are, it may not work, that’s fine, because you’re going to learn from it and the next time, the likelihood it works goes way up. But then that other one is, when you’re picking your co founders, when you’re picking those first people, look more than just their skills, look at them as people look at what’s important to you, what’s necessary for the business. And that’s more important than their skill set, you have to have the people all on the same page from a culture standpoint.

TG Branfalt: So this has been one of the most candid interviews that I’ve had with a CEO of your stature and I really appreciate how forthcoming you’ve been, super fascinating just story that I would love to sit here and learn more about for the next 40 minutes but we can’t do that. But I would love to have you on again and keep this conversation going. Where can people find out more about you and Ethos Cannabis in the meantime?

Teddy Scott: Sure, great and I would love to be back on, this has been fun. The company I’m CEO of is Ethos Cannabis, that’s the website ethoscannabis.com, we are in Pennsylvania and Massachusetts, a couple of sites open today in Pennsylvania, but there’ll be a large number of them open in the next six months and Massachusetts we should have four sites open in the next few months. We have an acquisition that’s pending regulatory review should happen in maybe a month for four dispensaries in Maryland. So that’s where we are right now — the DC area, the Baltimore area, Philadelphia area, soon to be Pittsburgh, the Boston area and have these licenses in application with our partners here in the Chicago area and also a license waiting on review in New Jersey. So there’s a lot happening.

TG Branfalt: You’ll be in my neck of the woods soon enough. I frequent dispensaries in Massachusetts and-

Teddy Scott: Oh okay yeah, great.

TG Branfalt: Yeah. I’m close enough to Massachusetts.

Teddy Scott: Yeah, first will be in Fitchburg should be open there relatively soon.

TG Branfalt: I’ll definitely have to head down there once it’s open.

Teddy Scott: Well, great. Well, let me know when you’re going to be there. I get up there and decent amount. I’ll make sure to try to get there to arrange that time to get to meet in person.

TG Branfalt: It’d be great to meet in person. This is been the Ganjapreneur.com Podcast podcast with Teddy Scott, he’s the CEO of Ethos Cannabis, a multi state operator. He’s got a PhD in molecular biophysics from the University of Texas, JD from the Northwestern University School of Law. Really great to have you on the show, Teddy, thank you so much.

Teddy Scott: No, thank you, sir. Thank you.

TG Branfalt: You can find more episodes at the Ganjapreneur.com podcast in the podcast section of Ganjapreneur.com on Spotify and in the Apple iTunes Store. On the go Ganjapreneur.com website you’ll find the latest cannabis news and cannabis jobs updated daily along with transcripts of this and other podcasts. You can also download the Ganjapreneur.com app in iTunes and Google Play. This episode was engineered by Trim Media House, I’ve been your host TG Branfalt.

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Police Break Up Interstate Cannabis Smuggling Group In Washington

10/29/2020

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State and federal law enforcement agents conducted a massive raid on an illicit cannabis operation last week in Washington state. Working together, the United States Postal Inspection Service, other federal agencies, and the King County Sherriff raided 27 homes in Skyway, Renton, Kent, Maple Valley, SeaTac, and other Puget Sound communities, according to KIRO 7 News. 

Agents found and removed processed cannabis, thousands of plants, and related documents from the homes. According to agents, the group’s illicit cannabis products were being mailed to nine states around the country including Illinois, New York, New Jersey, Pennsylvania, Kentucky, Massachusetts, Connecticut, Georgia, and Missouri. Of those states, adult-use cannabis has only been legalized in Illinois and Massachusetts.

“This is a particularly egregious ring. You’re talking about over the course of this investigation there are probably tens of millions of dollars of product that have been shipped to multiple states nationally.” — Tony Galetti, Inspector in Charge with the U.S. Postal Inspection Service, via KIRO 7 News 

Due to its designation as a Schedule I narcotic, cannabis remains federally illegal and cannot be shipped across state lines, even between states where adult-use cannabis has been legalized.

In 2019, Oregon passed legislation to allow for interstate cannabis commerce between states. The bill, which was approved last June, would allow Oregon-grown cannabis products to be shipped to neighboring states that have also legalized cannabis — Washington, California, and Nevada. Oregon-legal cannabis would not be allowed to cross into (nor fly over) states that have not legalized cannabis. The law, however, also requires the federal government to approve such transactions and there is currently no precedent or plan for doing so.

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MedMen Files Lawsuit Against Pasadena, California

10/29/2020

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MedMen has filed a lawsuit against the city of Pasadena, California asking officials to stop the cannabis business licensing process until the company is reinstated, Pasadena Now reports. MedMed, which applied to do business as MME Pasadena, was removed from the process after a material change in ownership and management was revealed.

In a letter to MedMen, City Manager Steve Mermell said that nine-out-of-10 applicants listed as owners on the company’s applications had changed since the firm was chosen to move forward with the process. The letter points out that former CEO Adam Bierman, former Chief Operating Officer Ben Cook, and former President Andrew Modlin are no longer with the company but are listed on application documents.

Bierman and Modlin stepped down from their leadership roles and left the firm last June. The departures followed reports that the company offered its vendors shares in the company in an attempt to reduce its overhead and conserve cash. In April, Milestone Investments, an early angel investor in the company, filed an official complaint against Modlin and Bierman along with Christopher Ganan, who still serves as chief strategy officer, over unpaid debts.

Under the city’s rules, “A change of ownership and/or management is not allowed and is considered material where it constitutes a change of control,” according to Pasadena Now. The lawsuit argues that those rule changes came on June 18, 2020, more than two years after the city’s regulations were adopted.

“The June 18 regulation, which was not even hinted at when applications were originally solicited by the city and submitted, retroactively defines what operational and/or managerial changes constitute a ‘change of control,’ and invalidates any application [after review and scoring of that application is complete] where a ‘change in control’ has occurred that ‘would have impacted the substantive scoring of the application such that a different outcome would have been likely.’” – MedMen in court documents, via Pasadena Now

In the letter to MedMen, Mermell argues that the company “provided little to no evidence of cannabis experience of its current management team and Board of Directors,” noting that the new executives “have primarily retail and food and beverage experience at retailers such as Frederick’s of Hollywood, David’s Bridal, Guess, Coffee Bean & Tea Leaf, and Whole Foods.”

“No evidence was provided that any of the current management team have comparable cannabis permit experience, such as that provided by Bierman, Modlin and Cook,” Mermell said in the letter.

According to the lawsuit, MedMen signed a $659,833.00 10-year lease in and has already spent $700,000 on licensing, professional fees, costs, and lease-related payments.

MME Pasadena, Harvest Pasadena, Integral LLC, Tony Fong, Atrium, and Sweetflower were the companies awarded the right to apply for the necessary cannabis permits. So far, the report says, only Integral and Tony Fong have received the permits.

MedMen argues that it “will suffer irreparable harm because other cannabis license holders within the City will be given a head start in developing and capturing valuable market share for the sale of adult-use cannabis” within Pasadena while the case is in court.

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Missouri Lawsuit Argues Medical Cannabis License Caps Are Illegal

10/29/2020

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A lawsuit challenging Missouri’s medical cannabis rules seeks to invalidate the state-imposed license caps arguing that the regulations violate Missourians’ right to farm, the Springfield News-Leader reports. The lawsuit also objects to the “blind scoring” used in the state that included bonus points for applicants located in economically distressed ZIP codes.

The lawsuit, filed by the Callicoat family of Sarcoxie who had planned to turn an old plant nursery into a cannabis cultivation operation, claims that “large corporations” were awarded the “lion’s share” of the 60 cannabis cultivation licenses approved last year.

The plaintiffs argue that state Attorney General Eric Schmitt engaged in “egregious” behavior while the state was creating the program rules. The lawsuit claims that Schmitt sought to hide state government documents that recorded health officials’ actions in setting program parameters. In a deposition, Department of Health and Senior Services (DHSS) Director Dr. Randall Williams indicated that Schmitt had used his cell phone to conduct state business – a violation under the state’s Sunshine Law as officials’ text messages are considered public record.

Dan Viets, a cannabis attorney who served as chair of the pro-legalization campaign New Approach, said that while he hasn’t seen “evidence of any sort of corruption” related to the cannabis licensing process, he believes there is “tremendous evidence of an element of capriciousness.”

“The so-called scoring system just doesn’t make sense. I don’t think it’s defensible. It’s the Achilles’ heel of the whole licensing process.” – Viets to the News-Leader

Last May, a whistleblower complaint accused DHSS officials of lying about program changes during public testimony earlier in the year. House Democrats later claimed that DHSS officials obstructed an oversight committee’s investigation of the program.

The Callicoat’s have asked the judge to simply enter a judgement in their favor without a trial, which Viets said was “kind of extreme.” He added that the court is unlikely “to do that off hand.”

DHSS Spokesperson Lisa Cox told the News-Leader that the voters approved the licensing caps and argued that the state’s caps “are much higher than comparable states” and meet the demands of patients. The state has issued 192 dispensary licenses.

If the judge sides with the plaintiffs, the DHSS caps would be invalidated. Earlier this year, the state House approved legislation to eliminate the caps; however, the measure stalled in the Senate.

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Massachusetts Supreme Court Rules Out Workers Comp for Medical Cannabis

10/29/2020

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The Massachusetts Supreme Judicial Court on Tuesday ruled that employees using medical cannabis for a work-related injury cannot get reimbursed for it through worker’s compensation, Courthouse News reports. In the unanimous decision, the justices ruled that workers’ comp insurers could, theoretically, still be charged with a federal crime for aiding and abetting someone in using cannabis.

“First, unlike the patients and doctors covered by the act, insurance companies would not be participating in the patient’s use of a federally proscribed substance voluntarily. It is one thing to voluntarily assume a risk of federal prosecution; it is another to involuntarily have such a risk imposed upon you.” – Justice Scott Kafker in the decision

The plaintiff’s attorney, Katherine Lamondia-Wrinkle of the Law Office of Thomas Libbos, argued that workers’ comp insurers and boards limit access to opioids for chronic pain due to the epidemic that has gripped the nation for years. As medical cannabis has been legalized in 33 states, more injured workers are turning to it for relief.

“We have an anti-opioid movement,” Lamondia-Wrinkle said to Courthouse News, “but the court is now taking away the alternative.”

Daniel Wright, a cable installer who injured his knee stepping off a ladder said that with cannabis he was able to wean himself off opioids and other medications, but in the process spent $24,267.86 on legal cannabis from February 2016 to August 2017.

Under the state’s 2012 medical cannabis law “any health insurance provider, or any government agency or authority, to reimburse any person for the expenses of the medical use of marijuana.” The court affirmed that the workers’ comp insurer is a health insurer.

According to the Insurance Information Institute, Connecticut, Minnesota, New Hampshire, New Jersey, New Mexico and New York have allowed, to some extent, workers’ comp reimbursement for medical cannabis.

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Jerry Garcia’s Family Launches ‘Garcia Hand Picked’ Cannabis Line

10/29/2020

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The family of the late iconic Grateful Dead frontman Jerry Garcia has teamed up with Holistic Industries, a multi-state private cannabis firm, to offer Garcia Hand Picked (GHP), Rolling Stone reports.

Done in true Grateful Dead, larger-than-life fashion, the brand will include three flower strains, pre-rolls, and guitar-shaped edibles, packaged with a watercolor print of Jerry wearing his signature sunglasses. The Indica, Sativa, and Hybrid strains come complete with a “curated playlist” of Garcia’s music that was specially-selected to correspond with each strain.

The family wanted to create a “spontaneous” and “harmonious” experience with GHP and “bring people together in the way only Jerry could,” Trixie Garcia, Jerry’s daughter, told Rolling Stone.

Although he was known as a strong advocate for cannabis legalization, Garcia said Jerry would rarely smoke cannabis by himself, instead choosing to consume socially after gigs, on the tour bus, or in the studio. “A joint became a bridge between him and those around him,” she said.

After being delayed by the coronavirus, the brand plans to tour up and down the California coast this November in a tricked-out airstream bus called Bertha, named after the Grateful Dead’s 1971 hit “Bertha.”

Fans who don’t live in California can get in on the groovy vibes with apparel and posters from GarciaHandPicked.com.

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USDA Approves Indiana Hemp Plan

10/28/2020

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The US Department of Agriculture (USDA) on Thursday approved Indiana’s hemp plan – its third approved plan over the last week. The plan will take the state’s Office of Indiana State Chemist’s pilot program and transition it to a full-scale commercial system.

Under the pilot program, hemp cultivators needed a research proposal and had to be linked with a university to apply for a license. Under the USDA-approved plan, farmers will be able to apply for independent licenses starting next month for the 2021 season.

Don Robison, seed administrator for the Office of the Indiana State Chemist, said in a statement that the “plan approval is a huge accomplishment for both farmers and our team.”

“We are looking forward to growing this program and offering more efficient licensing for Hoosier farmers and processing companies.” – Robinson in a press release

Indiana State Department of Agriculture Director Bruce Kettler, who also serves as co-chair of the Hemp Advisory Committee, said the USDA approval “will allow the Office of the Indiana State Chemist regulatory authority and clearly define the rules and regulations around hemp production and processing in Indiana.”

Indiana’s pilot hemp program was signed into law by then-Gov. Mike Pence (R) – now vice president – in 2014.

The USDA has now approved 30 state hemp proposals, including Illinois, Michigan, New Mexico, Oklahoma, and South Dakota just this month. The agency has also approved plans for Puerto Rico and the U.S. Virgin Islands and 37 Native American tribes.

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Monogram Runs Billboards on Borders of Legal Cannabis States

10/28/2020

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Sean “Jay-Z” Carter’s cannabis brand Monogram is setting up billboards on the borders of states with disparate cannabis laws, Ad Age reports. The message, “Here, Cannabis is Legal. Enjoy responsibly” will be on the ads when heading into legal states. When heading into states where cannabis remains prohibited, the billboards will read “Here, Cannabis is Illegal. Avoid the Bookings,” referring to arrests.

For two weeks the billboards, a combination of LED and truck, will be on the borderlines of Colorado/Wyoming, Colorado/Kansas, Illinois/Wisconsin, Michigan/Wisconsin, Nevada/Idaho, Oregon/Idaho, and Washington/Idaho.

A Monogram spokesperson told Ad Age that the borders were chosen because the two neighboring states have “the most starkly opposing regulations.”

“So the least progressive states bordering the most progressive – in order to best illustrate that a single state line can make a world of difference,” the representative said.

The campaign is tied in with the 50th anniversary of the Controlled Substances Act which outlawed cannabis federally, placing it in the Schedule I category claiming it has a “high potential for abuse” and “no currently accepted medical use.”

John Ehrlichman, a policy advisor to President Richard Nixon, admitted that cannabis was criminalized to “disrupt” the anti-war movement and the Black and “hippie” communities.

“The lasting effects of this law have reverberated through the past half-century, leading to injustices including mass incarceration for cannabis-related offenses. Progress has been made recently with states’ individual legalization efforts, but cannabis continues to be stigmatized by political agendas and the arbitrary borders that still demarcate who can benefit from it, whether that’s through entrepreneurship or the positive effects of its use.” – Monogram in a statement via Ad Age

Jay-Z, who joined cannabis company Caliva last year as a chief brand strategist, said that “cannabis culture has been marred by the effects of the [CSA] and stigmatized by political agendas.”

“While there has been progress, as we launch Monogram, we felt it was imperative that we call out the arbitrary borders that still demarcate who can benefit from cannabis, whether that’s through business or the positive effects of its use,” he said in a statement.

Jay-Z announced the launch of Monogram just last week, unveiling the brand’s website and Instagram page.

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Poll: 65% of Ukrainians Support Medical Cannabis Legalization

10/28/2020

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A poll conducted alongside Ukraine’s October 26 local elections found 65 percent support medical cannabis access for severely ill patients, Kyiv Post reports. Cannabis possession remains a criminal offence in the nation.

Despite the poll being initiated by President Volodymyr Zelensky, it has no legal ramifications. Some experts say the poll doesn’t accurately reflect public opinion as it was only conducted at 55 percent of polling stations mostly in the south. Polling company Rating Group also claimed that most of the people who participated in the poll were supporters of the president’s Servant of the People Party.

Last year, Zelensky delayed the legalization of medical cannabis, saying the country had higher priorities. Although, he told the Post that “many people want to do [cannabis] business in Ukraine.”

“But we can discuss this only when we know that we are really talking about medical marijuana,” he said at that time. Prior to his election, in an interview with Unian, Zelensky expressed support for medical cannabis “droplets.”

In a statement outlined by Barron’s, the Zelensky administration estimated “at least 2 million Ukrainians need” medical cannabis.

The question appeared on ballots as, “Do you support the legalization of medical cannabis in Ukraine to reduce pain for seriously ill patients?”

Zelensky, a former actor who played the Ukrainian president on the television show “Servant of the People” has also expressed support for other liberal policies, including legalizing prostitution and Las Vegas-style gambling.

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Study: Women Prefer Cannabis Over Hormone Therapy for Menopause Symptoms

10/27/2020

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A study presented at the annual North American Menopause Society last month found 27 percent of women had used, or are currently using, cannabis to manage symptoms of menopause – more than the number (19 percent) who had tried a more traditional hormone therapy, according to an Atlanta Journal-Constitution report.

Another 10 percent of survey respondents said they would be interested in trying cannabis to ease their menopause-related symptoms.

The Midlife Women Veterans Health Survey included 232 women with a median age of 55.95. More than half (54 percent) of the participants reported hot flashes and night sweats, 69 percent reported genitourinary symptoms, and 27 percent reported insomnia. 

Carolyn Gibson, a psychologist and health services researcher at San Francisco Veterans Affairs Health Care System and lead author of the study, said the “findings suggest that cannabis use to manage menopause symptoms may be relatively common.”

“However, we do not know whether cannabis use is safe or effective for menopause symptom management or whether women are discussing these decisions with their healthcare providers – particularly in the VA, where cannabis is considered an illegal substance under federal guidelines. This information is important for healthcare providers, and more research in this area is needed.” – Gibson to the Journal-Constitution

A study published earlier this month in the Journal of the American Geriatrics Society found that 78 percent of seniors were turning to cannabis for more common medical ailments, such as pain and arthritis, sleep disturbance, anxiety, and depression. That survey found 61 percent of participants started using cannabis after age 60.

A study published February in JAMA Internal Medicine found cannabis use among adults over 65-years-old increased from 2.4 percent in 2015 to 4.2 percent in 2018, a 75 percent increase.

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European Union Will Raise THC Limits on Hemp

10/27/2020

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The European Parliament voted last week to raise industrial hemp THC limits from 0.2 percent to 0.3 percent, aligning them with most other programs including the U.S., Hemp Industry Daily reports. The parliament does not have final say in the reforms, but the votes establish the body’s stance on proposed Common Agricultural Policy reforms.

The parliament also approved an amendment to add hemp to sectors covered by European Union marketing standards which would eventually establish a criterion for grading hemp products and allow restrictions regarding the use of certain substances and marketing practices.”

In a statement, the European Industrial Hemp Association called the vote “a major achievement for the European hemp sector.” The organization said raising the THC limits “would allow new varieties to enter the market and to be bred, resulting in a better adaptation of the crops to the climatic conditions of the different EU territories.” While marketing standards for the industry “would translate into a significant increase of quality and standardization of hemp products,” the group said.

Daniel Kruse, EIHA President, noted that “For decades, hemp has been considered as a minor crop, while, for centuries, it has been a key asset for our economies.”

“The vote of the Parliament reflects a renewed approach of our society to this wonderful plant that has the potential of decarbonizing many different manufacturing sectors and provide farmers with a consistent and green source of revenues.” – Kruse in a statement

According to the report, the European Parliament shares the authority to adopt and amend legislation with the Council of the European Union and European Commission. European Parliament Press Officer Jan Jakubov told Hemp Industry Daily that talks on European Union farm policy are likely to commence next month.

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DEA Seeking Contractor Who Can Incinerate 8,000 Pounds of Cannabis Per Day

10/27/2020

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The Drug Enforcement Administration (DEA) Phoenix Division is seeking an Arizona-based contractor capable of incinerating up to 1,000 pounds of cannabis and other federally prohibited substances per hour, for up to eight hours per day, Marijuana Moment reports. The potential contract was revealed in a DEA posting earlier this month.

According to those documents, a contract winner would be expected to burn cannabis and other drugs confiscated by law enforcement and would need access to an incinerator “with the capability of destroying marijuana to a point where there are no detectable levels … of byproduct from the destruction process.”

According to the work description, the incinerator must be capable of incinerating up to 1,000 pounds of material and operating up to 8 hours per day. Additionally, DEA says the contractor would be responsible for burning cardboard boxes, plastic, and many other types of packaging used to transport and sometimes conceal illegal substances.

An armed DEA agent would also be present during all scheduled burns, employees of the potential contract winner would require drug testing, and the DEA would require security camera footage of the entire process. The contractor would also be held to secrecy regarding the activities: “All information obtained shall be used only for performing this contract and shall not be divulged nor made known in any manner except as necessary to perform this contract,” the agency writes.

The agency clarified that the announcement was not a job listing, noting that “this is not a request for proposals and does not obligate the Government to award a contract.” Rather, the agency “is conducting market research, and is encouraging all businesses, including small businesses, to respond to this notice.”

The contract would begin January 1, 2021, and would expire in 2026.

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West Virginia Cannabis Regulators Called Out for “All White and Male Led” License Approvals

10/27/2020

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In a letter to West Virginia’s top cannabis regulator, the Democratic Women’s Caucus of the House of Delegates said they are concerned that forthcoming processor and dispensary licensees will follow the same trend as the grower permits – “all white and male led businesses.”

The letter to Jason Frame, director of the Department of Health and Human Services Office of Medical Cannabis, notes that none of the owners of the 10 businesses approved to cultivate cannabis for the program are female, minority, or BIPOC.

The signatories call for more “transparency on who is making these decisions and if diversity in ownership is part of the conversation.”

“We believe that it is vital as this burgeoning industry takes off in West Virginia to ensure that women, minorities and people of color also see the impact of these economic opportunities. We, as a state, should also be doing all we can to promote and support West Virginia owned businesses. We are not sure that the selection of these 10 applicants shows that either of these priorities were taken into account.” – Democratic Women’s Caucus of the West Virginia House of Delegates’ letter to Jason Frame, Oct. 22, 2020

The permits were issued earlier this month and, at that time, Frame said the Scoring Review Team used by the state to make license recommendations were not required to give preference to businesses headquartered in the state. Frame indicated that just 4 of the 10 approved firms are “majority-owned” by West Virginians.

Frame said the scoring team considered operational and security plans, plans to prevent product diversion, and the background and education of applicants.

Of the 32 businesses denied medical cannabis cultivation permits, 13 had principal offices in the state with residents as managers and directors, and five included a mix of West Virginians and out-of-state interests.

The women’s caucus is chaired by Del. Cindy Lavender-Bowe, and includes Del. Sammi Brown, Del. Amanda Estep-Burton, Del. Barbara Fleischauer, Del. Linda Longstreth, Del. Margaret Staggers, Del. Danielle Walker, and Del. Lisa Zukoff.

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Nebraska Medical Cannabis Advocates Launch Initiative Signature Drive for 2022

10/27/2020

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Nebraskans for Medical Marijuana (NMM) has launched a new medical cannabis ballot initiative after the Nebraska Supreme Court rejected the group’s 2020 initiative in September. Having been rejected over claims that the initiative covered more than one issue, the new initiative is only one sentence: “Persons in the State of Nebraska shall have the right to cannabis in all its forms for medical purposes.”

Taking inspiration from the legal casino gambling initiative passed in Nebraska, the group plans on following up their effort with statutory initiatives to build out a “safe and secure” medical cannabis system in the state.

State Senator Anna Wishart, Co-Chair of Nebraskans for Medical Marijuana, said in a press release:

“Families with loved ones suffering from conditions like epilepsy, PTSD, Parkinson’s, and cancer have fought for years to make medical cannabis safely accessible in our state as it is in 33 other states. This year over 190,000 Nebraskans successfully petitioned our government during a pandemic for that right, and despite receiving qualification from the Secretary of State, our initiative was removed from the ballot by a 5-2 vote from Nebraska’s Supreme Court. We will not give up and intend to bring this fight to the legislature in January with a bill that I will introduce and to the ballot in 2022.” — Sen. Anna Wishart, in press release

Despite an internal analysis showing their initiative had an equal number of registered Republicans, Democrats and independents, people from all age groups and signees from all 93 of Nebraska’s counties, NMM’s 2020 initiative was struck down in September after a challenge by Lancaster County Sherriff Terry Wagner. Wagner later said he was asked by ex-Nebraska Republican Party chair attorney Mark Fahleson if his name could be used for the legal challenge; the sheriff said he did not know who paid for the effort.

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Jay-Z Launches Cannabis Brand ‘Monogram’

10/26/2020

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Hip-hop superstar Shawn “Jay-Z” Carter announced on Friday his cannabis line Monogram with the debut of its website and Instagram. The line is a partnership with California-based cannabis company Caliva, with whom Carter has served as chief brand strategist since July 2019.

“Monogram seeks to redefine what cannabis means to consumers today. In an effort to provide a more tailored customer experience, the brand will also launch through a best in class e-commerce platform dedicated exclusively to its singular product line.” — Company statement, in a press release

As part of his role with Caliva, Carter advocates for social justice issues surrounding legalization and assists the firm with creative decisions, including outreach efforts and strategy, the company said at the time. Carter said the company’s “expertise and ethos” made them the best partners for the endeavor.

Jay-Z is the latest rapper to enter the cannabis space. Calvin “Snoop Dogg” Brodus launched his own brand – Leafs by Snoop – in 2015. A Green Horizons analysis in June found the brand to be the most recognizable cannabis brand, but the report found no brands were recognized by more than 23 percent of consumers.

Last year, Tauheed “2 Chains” Epps launched The Gas Cannabis Co. with Green Street Agency and Mazel Management Group. Wiz Khalifa, Freddie Gibbs, and Juicy J have also developed their own strains, while B-Real of Cypress Hill opened a California dispensary, called Dr. Greenthumb’s in 2018.

Jay-Z also has investments in liquor and real estate. In 2019, he was the first hip-hop artist to reach billionaire status.

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