Cannabis Brands Accuse New Mexico of Copy-Pasting Rules From Other States

Four more New Mexico cannabis businesses and a patient licensed to grow their own have filed legal complaints in state district court asking a judge to throw out the industry rules adopted by the state Department of Health earlier this month, according to New Mexico Political Report. The two producers, manufacturer, and testing laboratory join Ultra Health in the bid to have the new testing, labeling, and safety rules annulled.

Like Ultra Health’s petition, the businesses and patient are calling the rules “arbitrary and capricious.”

Former Public Regulation Commission Jason Marks is representing Scepter Labs – one of just two cannabis testing labs in the state – and medical cannabis manufacturer Vitality Extracts in their case. The plaintiffs argue that the testing language included in the reforms used rules from other states and that out of more than 15,000 tests conducted in New Mexico since the rule was implemented, none of the medical cannabis tested was positive for mycotoxins. Marks argues that the relatively small number of positives for mycotoxins in cannabis are from “climates more likely to lead to mycotoxin production than New Mexico’s.”

Marks also argues that the new rules increasing the sample size required for testing wind up “wasting medicine and increasing costs” for patients and that sample sizes should be left up to labs doing the testing.

Jacob Candelaria, a Democratic state senator representing G&G Genetics who joined the initial petition with Ultra Health, argued in the new filing that the Health Department “did not adequately or sufficiently evaluate the effect that its new testing regime will have on the price of medical cannabis to qualified patients.”

Heath Grider, who is represented by former Libertarian attorney general candidate Blair Dunn and Jared Vander Dussen, contends that the new rule prohibiting cannabis and hemp from being grown at the same facility prevents him from making money from hemp and growing his own medical cannabis. Grider is a patient licensed to grow his own but also grows and sells industrial hemp to supplement his income.

“Depriving patients of the benefits of a personal production license unless they forego their statutory right to engage in hemp production pursuant to a permit from the Department of Agriculture is not just arbitrary and capricious; it is completely unmoored from logic and fairness.” – Dunn and Vander Dussen in the petition via the Political Report

The petitioners also argue that the Health Department has no jurisdiction over hemp cultivation and, therefore, the rule is invalid.

Medical cannabis producer Pecos Valley Production is also named as a plaintiff in the initial suit filed against the Health Department last week. Ultra and Pecos gave the DOH 30 days to respond to the filing. The agency has neither commented on the suit nor filed a response in court.

End


Jake Bullock: Redefining ‘Social Drinking’ With Cannabis

Cannabis beverages are becoming more and more common as the industry takes shape. As a self-made expert in cannabis beverage infusions, Jake recently joined our podcast host TG Branfalt to discuss Cann‘s company history, explain how his background in mainstream finance influenced his decision to enter the cannabis space, and describe cannabis consumers’ rapidly changing preferences, which have placed a new emphasis on low-dose and microdose cannabis products.

Tune in via the player below, or scroll down to check out a full transcript of this week’s Ganjapreneur.com podcast episode!


Listen to the podcast:


Read the transcript:

Commercial: This episode of The Ganjapreneur Podcast is brought to you by CannaPlanners. CannaPlanners is on a mission to normalize the emerging cannabis industry through beautiful design and professional web and marketing solutions. Whether you’re looking to create a new cannabis brand, improve your packaging design, or get your company online, CannaPlanners has the perfect solution. Your website is the window into your cannabis company. Make sure that you look awesome, that your messaging is on point, and that traffic converts to customers through SEO. From CBD companies to dispensaries and everything in between, CannaPlanners has you covered. Visit them online today at cannaplanners.com for a free web demo. That’s cannaplanners.com.

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 Jacob Bullock. He’s one of the co-founders of Los Angeles, California-based Cann. They’re the makers of Cann social tonics, a low dose cannabis-infused beverage. How are you doing this afternoon, Jake?

Jake Bullock: Doing all right. How are you TG?

TG Branfalt: I’m great, man. I’m great. I’m really excited to talk about this. So, as many of the listeners on this show know, I actually don’t consume any alcohol. I don’t live in a legal state. I’ve actually never lived in a legal state, but through the underground markets, I’ve obtained many different sort of beverages, from the syrups… When I went to Michigan, I bought a bunch of root beer. I went to a Cannabis Cup there. When I go to Massachusetts, I try to find drinks. They’re not often available there, which is really frustrating. So talking about drinks in particular is something I’m very excited about.

So before we get into the culture and the products, tell me about yourself, man. How’d you end up in the cannabis space?

Jake Bullock: It’s kind of an interesting story. So I had grown up in Colorado and that kind of was the foundation for me. I’d followed the legal industry there as they sort of went recreational legal as the first state. And have been prior to starting Cann, worked with consumer brands. I’d done stuff in finance, banking, investing, consulting. Actually met my co-founder, Luke, as a management consultant in San Francisco. And the common thread there was really working with consumer brands.

And I always knew that I wanted to start a consumer brand. And it was right as I got to business school in California that California went through its Legalization process for the rec market. And it kind of was like this perfect storm of timing, where I had these two years of business school where you wake up every day and go to class to sort of think about these ideas and this new industry that was sort of transitioning into a legal industry in California right at the same time.

And so I got really excited about spending those two years thinking about, what would you do in the space and what would that look like? And for me, having followed what happened to Colorado and thinking as a consumer or sort of what products would resonate, a beverage was the most obvious thing. We have thousands of years of human history socializing around beverage. If you think about how most folks consume mild intoxicants, whether that’s caffeine or alcohol, we’re doing it in a beverage and we’re doing it in a micro dose in a beverage. And so the idea was, what happens? What does that look like in the cannabis industry? Can you create a product that sort of looks and feels like an alcoholic beverage, but with maybe not a lot of the downsides and a lot of the really positive sort of social buzz. And so that was the idea.

TG Branfalt: So you end up at some point during your career at Bain Capital, correct?

Jake Bullock: Correct.

TG Branfalt: And a lot of people associate Bain Capital with Mitt Romney Republicanism, right? And this sort of vulture atmosphere, right? And that’s not to say that that’s true or false, that’s just sort of the social conscious sort of way that they think about it. So how do you go from Bain Capital to the cannabis space? I mean, it seems like such a jump.

Jake Bullock: Yeah, it’s interesting. I mean, in some ways it is, right? I spent a lot of time at Bain Capital, before that at Bain & Company, before that, investment banking. Works in sort of a traditional mindset, right? Whether it’s client services or whether it’s investing. Waking up, having a very clear path about what you’re supposed to do, you’re working on a team, often with a lot of really smart people, but you sort of do the same thing over and over again. And in some ways there’s differences, but for the most part, it is sort of a corporate grind. And you think about that path and the politics and how do you move to the next level? And what does that require? And do you even like what you’re doing every day, right?

All those questions were ones that in more ways or not hit me while I took this two years to go to business school. And I think personally about my career in life up until this point, have always been really rewarded by taking risks that felt really uncomfortable and really different than what was expected of me. Even though in those moments there was a lot of short term anxiety and fear, potentially that things would go wrong and it would be terrible mistake. Leaning into those experiences in my life has actually served me really well. And so I kind of approached this problem similarly, which was, wow, are you really going to give up a career in investing and start brewing a cannabis beverage in your basement or garage? Which is where we started.

And you kind of approach it the way that I think smart people do, which is you talk to consumers. You ask them like, am I crazy? What do you think of this product? Would you use this? And you try to convince yourself that it makes sense. But that doesn’t take away how big of a risk it felt at the time and how scary it is in the moment.

But like I said, I think that to really break out of that grind, out of those expectations, and do something that you really love and that you’re excited about. We first started testing some of these beverage products and some of them were terrible, but some of them were really good, and the good ones were exciting. I mean, you would see people’s eyes light up and they would be like, you have to do this. You’re telling me that you’re going to do this. This needs to exist. And those are really cool moments where you’re like, okay, maybe there’s something here.

TG Branfalt: So what about your peers in the investment industry? What was their response when you told them that that’s what you are passionate about and that’s what you were going to do next?

Jake Bullock: Yeah, it’s interesting. So one of the things you learn while investing, and I learned, was how to describe an opportunity, particularly a financial one, right? I think I did a good job of selling them on the opportunity. I had no idea how hard and how crazy it was going to be, and in hindsight, I probably wouldn’t have done it if I knew.

But the interesting people were actually not my investing peers. It was friends and family, people really close to you that are sort of saying, what are you thinking? This is crazy. And one of the hardest things I think about starting any company, let alone something in the cannabis industry where there still is a little bit of a stigma, particularly in certain parts of the country, is the people closest to you are often the ones that are the least supportive, are the ones who have relationships that are sort of founded in fear and want you to sort of be the least risky as you can possibly be. And that’s really hard, because in those moments when you’re thinking, do I do this or not? They’re really lonely moments.

TG Branfalt: You had mentioned the challenges that you had. Can you describe to me some of those challenges that you faced when launching this company? I mean, you say you started it from your garage. I mean, that alone, to build something from your garage is a testament, right? So can you just sort of tell me about the journey, of the challenge?

Jake Bullock: Yeah, definitely. So we started kegging prototypes of this product in our garage, force carbonating it. We got a little pony keg and a little CO2 tank. Juicing ginger in a blender to try get that extract flavor. Playing around with all sorts of different formulations, dosage levels. And then bottling them in these brown bottles and sending them off. At the time I was in business school so I was sending these off with classmates basically, in six packs, and having them come back and say, okay, how many did you have? Did you share them? What was the effect? What did you like? What didn’t you like?

TG Branfalt: You had to do your own marketing research.

Jake Bullock: Yeah. A hundred percent.

TG Branfalt: Wow.

Jake Bullock: And did it face to face with consumers. And I think that was such a powerful point in the early development of the product, because you learned a ton. This is when we sort of settled on two milligrams as being the right amount of THC in a product. And that still to this day is somewhat controversial, but we saw it. We saw it in people’s eyes and in the data, in their feedback when they talked about this product. And that was the sweet spot. That was what allowed people that were first time, never to cannabis consumers, to consume one or two. And it allowed people that were more casual consumers of the product to do three, four, five. And that felt right, that’s sort of like how you might drink alcoholic beverages. And so, those types of learnings were huge.

I think the hard stuff… There’s so much, there’s so many things that were hard. For me personally, moving to my parent’s basement and living out of there for six months while we tried to formulate and fundraise and do all that stuff, was quite the experience.

And something that I wasn’t really expecting, if you would have asked me maybe five years ago where my career would have led me, me and Luke trapped in a room for six months, just the two of us, trying to figure out what this brand really stands for and what it says about people and what the voice and the culture and what matters in the company is. Convincing first people to come work for us was really, really hard. I mean, why would anyone do that? That seems like a crazy idea. And having to sell them on the vision and why this product matters and then actually having them join was this incredible experience.

And then thinking about how this job more from developing a product to then making that into a company and how does that fit strategically into this industry that has a whole host of challenges? In some ways we started out getting really excited about developing a consumer brand, right? That was our energy. That’s where our backgrounds were. And we probably spend 10% of our time talking about brand. We’d love it to be a hundred. The other 90% we’re spending on regulatory compliance, operations, all this stuff that’s just not very fun or exciting and only has downsides. But you have to do it because that’s what we signed up for. And so, I could go on and on about all the crazy hard things we’ve had to go through, but-

TG Branfalt: It’s sort of wild because you don’t have this background in brewing. You don’t really have this background in market research. But you do have this background in investment and money. And in January, you guys closed a $5 million financing round, which congratulations.

Jake Bullock: Thank you.

TG Branfalt: And then since then, I’ve read several reports that indicate financing in the space has been drying up lately due to first low company valuations and now the coronavirus. What’s been your experience either trying to find maybe additional financing or conversations with others in the space about financing right now in the industry?

Jake Bullock: Yeah. It’s really hard. And it’s been hard, really, since the fall. I think there are sort of two things that you identified there that are important. The first was, the cannabis industry, before even COVID-19 really, we started talking about that in a serious way, cannabis industry was having some issues. And I think it was primarily driven by the public market, the really big cannabis companies underperforming expectations, which had sort of an effect all the way down the entire market, just even to small folks like us. And I think primarily that’s been because in the early days of states legalizing recreational cannabis, there was a lot of energy behind oh, the entire industry in the state that wasn’t the black market is now going to the legal market and that just hasn’t happened. It’s been much slower. The implementation of regulations have real impacts. There are tons and tons of taxes which can often protect a black market.

And the biggest thing that we think is really slowing the transition in a lot of these states is the product mix. That you still have a lot of products that make sense for really, really heavy cannabis users, folks with high tolerances. We know cannabis tolerances are exponential, so they’re folks that over time, and particularly daily cannabis users, that need those products. But there’s so many more that don’t, and they come into a dispensary for the first time, say when you open up in Illinois or California, in these big cities, and they have no idea what to do. Or they’re recommended a product and they have a budtender tell them, oh, this is 10 milligrams, maybe take half of it and they take the whole thing. Or they even take half of it and that’s too much, right? So we think the product mix needs to evolve.

And the products at Cann are two milligrams. We’re the lowest dose on the market in California for THC, and that’s a perfect entry point for somebody that is looking to have a good cannabis experience and never have that scary, anxious, “I was too high,” or paranoid feeling. So we think that needs to transition.

The other big thing that you pointed out was COVID. And so that’s creating a lot of issues now as well. And I think it’s one of those things where it’s very much a wait and see. I know that for us, the retail side has been really challenged with shelter in place and curbside pickup only. A lot of dispensaries either didn’t have that in place or had to very quickly spin it up, which has been challenging. They’re seeing traffic way, way down. Where on the delivery side, it’s the complete opposite, right? Delivery platforms are adding thousands of customers every week. And there’s a real sense that folks that maybe weren’t interested in trying cannabis products are trying them for the first time, maybe after spending six weeks quarantine drinking alcohol every night, it’s driving them crazy.

So, all those things are creating a really, really challenging fundraising environment. Our view has been, in one way, we’ve been really lucky, which is we’ve been able to access capital outside of traditional cannabis investors. We’ve got both cannabis investors and non-cannabis investors in our portfolio. So the round that you mentioned, the five million that we recently closed, was led by Imaginary Ventures out of New York city, who this is their first investment in cannabis. And they think of us as a social beverage, right? THC happens to be our functional ingredient. Just like a lot of other social beverages may use caffeine or other adaptogens as their functional ingredient in their beverages, ours is THC.

And really what we’re trying to do is get people to drink 10, 20, 30% less alcohol and drink Cann instead. That story is a really interesting one that sort of transcends what’s happening in cannabis, into what’s happening in traditional consumer CPG. If you think about all these better for you products that take sort of an existing product, like for us it’s alcohol, but for others it may be meat, or it may be pasta, and they swap out the negative ingredient with an alternative. It’s kind of what we’re doing in some ways. And so, there’s a real opportunity for that.

We also had Global Founders Capital come in. It was their first cannabis investment. And that round was also led by …, which is a great cannabis investor. And so you have a little bit of both. We’ve taken the approach of, for us to really be successful we need to have one foot in the cannabis industry and one foot out of it because we’re constantly taking learnings from both places and bringing them together in this company.

TG Branfalt: So in your opinion, why did these institutions, these capital institutions, take that shot on you guys and your company for the first time, for their first investment?

Jake Bullock: Right. Yeah. I think there’s a lot of things we have going, and the first thing is the product. You have to try the product. I mean, every meeting we have with folks we’re like, have you tried the product? How do we get you to try the product? Because there’s really something special about the flavor. I mean, this is something we designed to be an innovative product in and of itself. This is not sort of, oh, it’s X, but we added cannabis. We were like, what is that new category of cannabis beverages that function a lot like light beer in that they have the same potency, but no hangover, low calorie, but not like zero calorie. We don’t need fake sugar or sugar substitutes. And so we spent a ton of time formulating this product to be that. People love it. They fall in love with it. They try it, they’re like, wow, this is incredible.

And then you have, I think, the moment, the timing, which is… When we first started this company, people were like, this is way too early. You should wait. Wait another two years. It’s too early for cannabis beverage. And then everything came out about Constellation and Canopy and they’re saying, oh, it’s too late. You missed the boat. And it’s like, okay, well maybe if people are saying it’s too late and too early, we’re probably somewhere in the right zone there from a timing standpoint. If you think about broad consumer trends, a lot of people are frustrated with their alcohol consumption. 21 out of 25 adults want to moderate or reduce their alcohol consumption. We’re seeing it even grow further with quarantine.

And a lot of folks are saying, oh, I’m not going to a bar or a restaurant. How do I socialize? What does that mean? What does socializing look like where I can’t drink a handful of alcoholic drinks at a bar? And that’s really cool. We’re taking advantage of that in some ways, by trying to get people to swap out Canns for their alcohol. And so the timing I think is also pretty good, which helps get an investor like that over the hump.

And then I think the third thing is, we have an awesome team and they’ve done an incredible job of executing in a really tough environment. I mean, the California cannabis market is hard. We’re selling a product we often say, which is like selling light beer in speakeasies at the end of prohibition, right? No one in a speakeasy wants light beer. They’re looking for liquor, and they’re totally fine with the liquor. And liquor is going to continue on and be a huge market. But so was light beer. And then that opportunity is what’s being missed, and it’s primarily because of the distribution sort of restrictions that we have in place. But we think that will change. Now it may take a while, but waking up every day and trying to convince folks that, hey, cannabis is not that scary. It’s better than alcohol. Alcohol is the worst thing you do to your body. We feel good about our ability to do that.

TG Branfalt: So, as I said at the top, I love cannabis beverages. I also love low dose beverages. I regularly will take five milligrams and it makes me feel great. I’m also a heavy consumer. I mean, I smoke quite a bit. So for me, I sort of bridge both, right? Because I don’t drink, I do use low dose cannabis in social situations, so I’m not eating everybody’s meals. What’s the pitch or what’s the appeal for Cann tonics for daily heavy cannabis consumers? Is that a demographic that’s included in your marketing, your longterm vision?

Jake Bullock: Yeah, it’s a great question. So the way I would try to sell you if you came into a dispensary and they were sampling Cann wouldn’t actually be, this is the perfect product for you. It would be something little bit different, which is, have you ever been in a situation where you have a bunch of friends that aren’t huge cannabis consumers, but you are? You don’t really want to drink alcohol, they tend to drink alcohol. And how do you sort of introduce them to cannabis? Your friends, people that you want to spend time with, but maybe choose to drink alcohol as their mild intoxicant of choice. And so what a cool way, if you’re hosting a party, if you’re going to a party, to bring a six pack of Cann and sort of introduce your friends that aren’t as into cannabis as you, to cannabis. It’s such a safe product for them, they are guaranteed to have a good experience. And it’s controllable, right? So they can have one, two, three, four, depending on what they want to feel and the timing that they’re thinking about spending.

And so that’s kind of how we think about it for folks that are maybe daily cannabis users. Now we hear interesting stories of people that are saying, oh, I love drinking Cann while smoking, because I get high and then it’s this nice sort of like THC/CBD blend that helps me through that. Or folks that say, yeah, I can’t always smoke everywhere I go, so crushing a couple of Canns is great. But again, that’s going to be a really, really mild buzz for them, but we hear it, so…

TG Branfalt: So is it sort of your thought that the industry is… Or are you seeing the industry in California… Said that your product is the lowest THC on the market. Do you think that it’s trending towards low dose and microdosing?

Jake Bullock: We’re definitely seeing that. I think one of the things that’s slowly happening, but it’s definitely happening, is you’re seeing folks that had a bad experience with cannabis in the past. Maybe this was like a brownie in college that they’ll never forget, or maybe recently in sort of the early days of the rec market in California were eager to get in and had a bad experience, that were sort of lapsed cannabis consumers that are coming back. And when they come back they know to say, I do not want to get too high. I had this horrible experience. What is the lowest thing? And there’s some great products on the market. And I think some of the really interesting ones that we see that aren’t beverages that are also low dose are growing really well. The mints that often can be really low dose seem to do really well as well. And so you’re starting to see that.

I think the other thing is beverage as a whole as a category is getting a little bit more traction, both low dose and some of the more moderate and higher dose beverages as people start thinking about… One of the biggest change has happened is emulsion technology has improved a lot. And so you don’t have those like really oily mouthfeel, sediment, particulates coming out of the beverage. They tend to be much stronger than maybe they would have been two years ago. And so you’re starting seeing people going to the one you’re seeing dispensaries putting in refrigerators and then the bud tenders and folks going to those refrigerator and being oh, this is interesting. I never thought of a cannabis beverage.

And we’re shocked the amount of times people say, I didn’t even know there were cannabis beverages. And we’re like, oh, this is what we do every day. But it’s still so new. I mean, I think it’s one or two percent of the market today in California. But of all the products that you look at in a dispensary today or on a delivery platform, I think it’s the category that has the potential to take the most share going forward. It would not surprise me in 10 years if you look back and 50% of the cannabis industry is beverage. It would kind of make sense. And you’d be like, oh yeah, that makes sense. Like, alcohol is in a beverage, so is cannabis.

TG Branfalt: Yeah. And something I’ve noticed about cannabis beverages in my experience with them is that, with alcohol, a beer tastes like a beer, right? I mean, your light beer tastes like a light beer. And that the cannabis beverages that I’ve generally tasted have always been very flavorful. And this goes to the root beer and the other stuff that I’ve tried. So just sort of a question, so in Massachusetts, for example, the dosing is capped at five milligrams. You cannot get an edible that’s a dose more than five milligrams singular dose. Are you guys sort of banking on these low dose sort of regs to keep passing? Was that something that was integral in your thinking? Is going, hey, they’re going to cap these at five or ten milligrams, so if we’re at two, we’re already well under. Are you sort of positioning yourself for future markets with that milligram?

Jake Bullock: Yeah, it’s interesting. So it was never a thought process of ours that the regulations would force us to be low. We actually kind of thought about it as, what is the right number of Canns you can have in any given setting? We think about sessionability a lot, which is like, okay, how do you think about dosing? Well, who’s your consumer and how many can they have? And we believe very strongly that that number was more than one. And a lot of the products on the market were definitely one or under that. And so, that was the foundation for thinking about where we should be from a dosing standpoint.

I think when we look at the bigger picture, having been in it for a couple of years, the way that we think this really takes off our product specifically, is that you have a bifurcation in the cannabis industry where products under a certain milligram of THC are treated differently. So if you think about some states where you have alcohol laws and essentially liquor can only be sold in one type of store, a liquor store, a state run liquor store, whereas beer and wine, you can get in the grocery store. It’s kind of that model. So we don’t know where those thresholds will ultimately land. Maybe it’s five, maybe it’s under five. But they’re just different products. And the risk in the safety level around a two milligram edible or beverage is so different than what you might find on the higher end, and so they should be treated differently from a regulatory standpoint. If we’re ever going to have consumption of cannabis and alcohol alongside each other, if we’re ever going to have cannabis sales in traditional retail, it’s going to have to be the lower dose stuff.

And that’s kind of the path that we think we have forward to ever being in a bar, for example, or ever being available in a grocery store. It’s probably a ways away. But I think one of the things that will be interesting to observe is, as more states continue to legalize recreational programs, and you start to see a lot of the really positive benefits from that, I don’t know a bar or restaurant owner that wouldn’t rather have a mix of their cannabis consumption. Just tends to be better for all of the negative outcomes that they’re worried about. Liability issues, people getting sick, people fighting, consumption of food. So there’s all sorts of really good, positive things, I think, over time that we’ll start to see. And I think you’ll see some of the folks that are opposed to those regulations will start softening.

TG Branfalt: I can definitely tell you, I know a couple of bartenders who wish that they never saw me drunk in my life. Wished they just saw me years later when I would just come in ripped.

Jake Bullock: Right, right.

TG Branfalt: Do you think that the future that you envision, where alcohol is sold alongside of cannabis or alongside cannabis beverages, do you think that that would require sort of a mass shift towards social use laws as programs go online? Because right now you just have basically California, they allow it city by city, Alaska allows it statewide, Denver, Colorado allows it, but that’s really about it. Do you think that would really sort of move the industry, especially the beverage industry, the canna beverage industry in the direction that you sort of foretold?

Jake Bullock: Yes. I think a hundred percent it will. I mean, one of the big challenges we have is around trials. If you think about, we sell our product in six packs. We think that’s the right amount to purchase at one time, similar to how you might buy a six pack of light beer. But the reality is, you probably tried that light beer in a bar and you just got one. And then you’re like, oh wow, I really like this brand, I’m going to go find it in the store. We don’t really have that ability in cannabis beverage. And so, how do you get people to try that first product and then want to come back and purchase more? And there’s something special about trying it in a social setting.

Now what’s interesting. And what we think a lot about at Cann is, what are the right social settings and spaces for our product? And maybe it’s not a loud bar dark with a lot of music and bar stools. It could be a totally different environment. We have fun as a team thinking about, if we could design one of those spaces, how it might be different than what’s optimized for our current alcohol consumption. And I think we’re starting to see that. You have a few in California, consumption lounges popping up. If those experiments go well and are successful and they manage the model and the risk really well, I think it provides a great example for other states looking to safely sort of expand their cannabis industry into social consumption.

TG Branfalt: So, you had said earlier that right now the canna-beverage space is about a one to two percent in California. Like I said, in Massachusetts, I’ve been to three dispensaries there and could not find a beverage in any of them. It’s something that just weren’t on any of the menus. Why do you think A, that right now, it’s still such a small percentage of the California market and B, why aren’t we seeing them sort of more ubiquitous on dispensary menus?

Jake Bullock: So we think, I mean, at a very high level, there are two things that are probably causing this. The first is, we talked about the dosing. When you do see beverages, they’re often way, way too strong for somebody to consume the entire thing. And that just doesn’t really make sense. The value of a beverage, the reason we drink beverages, is that you can kind of have this over time sipping, whether it’s a tea or coffee or an alcoholic beverage. It takes up time. It takes up space. It’s sort of an event in and of itself. You might sit down and do it with a friend or a handful of friends. That doesn’t really work in the context of a hundred milligram, 50 milligram beverage. And so it’s like you almost lose the social benefit of the form factor.

And then the other big thing is, this is not an easy product to manufacture. It requires expensive capital equipment, for sure. The processing is tricky, the emulsion science, stability, depending on your formulation. There are all these really tough sort of food, manufacturing, food science, questions that have been sort of slow to be adopted in the industry, primarily because there just hasn’t been the demand. It’s like one of these things, if it’s 1% of the market, why would you go invest in really expensive equipment and food scientists to help you go do this, when you can just start cranking out all these tried and true products. That’s going to change. I think it will take some time, but it takes products like Cann that are low dose that still tastes delicious for people to really come around and be like, oh, I see the potential. I see the future.

And these products are popping up. I mean, we probably follow it more closely than others, but we’re really excited to see more beverages like ours, because we think that you need that category to really exist. And you need dispensaries, like you say in Massachusetts, to put in big refrigerators and add a bunch of beverage brands, whether they’re like us at two milligrams on the low end of the spectrum, or even all the way up to a hundred. Just making this a category where people think about beverage and what use cases are right for what type of beverage, is going to be a great improvement over what we have now, which is in some cases, nothing and in others, very limited selection.

TG Branfalt: This, Jake, has been a really, really super insightful conversation about a space that I think is overlooked because I love it. When I go to dispensaries, I’m heartbroken when there is not a beverage, because I’m there with my friends. My friends, they end up going to the bar and what am I to do? So I really want to thank you for just being so forthcoming and really sort of peeling back some of the layers, because there’s so few opportunities for me to have this discussion. Before we get to further information about how to contact you, what advice would you have for entrepreneurs either in the cannabis space at large or those who are thinking about the cannabis beverage space?

Jake Bullock: Yeah. So I would say the most important thing and some of the best advice that we got early on, when you’re thinking about entering, developing a product, does it make sense? Is it worth committing to this career? Is really approach the prototyping process like you’re right. And approach the testing process, the listening process to your consumers, like you’re wrong. And so we would say prototype like you’re right and listen like you’re wrong. You will learn so much from consumers. And I think that the real success behind Cann was doing that early human centric design that set us up for success.

TG Branfalt: So finally, where can people… That’s great advice, by the way. I mean, that’s something I’ve never heard on the show before and I’ve asked this question literally hundreds of times. So, it just sort of goes to show, the insight that you have is really sort of different than a lot of people that I do have on the show. So, where can people find out more about you, find out more about Cann, and find out more about Cann social tonics?

Jake Bullock: Yeah, definitely. So we are www.drinkcann.com, and also on Instagram at @drinkcann. And if you’re in California, you can order our 24 packs from our shop.drinkcann.com site, which is the best price for Cann out there.

TG Branfalt: That’s Jake Bullock. He’s one of the co-founders of Los Angeles, California based Cann. They make Cann social tonics, a low dose cannabis infused beverage. Thank you so much, Jake, for taking the time to come on the show. And I may one day make it back to California if I ever get out of my house, and I will definitely be on the lookout for the Cann social tonics. Thank you so much.

Jake Bullock: Yeah. Thank you, TG.

TG Branfalt: You can find more episodes of the ganjapreneur.com podcast in the podcast section of ganjapreneur.com and in the Apple iTunes store. On the ganjapreneur.com website you’ll find the latest cannabis news and cannabis jobs updated daily, along with transcripts of this podcast. You can also download the ganjapreneur.com app in iTunes and Google play. Oh yeah. We’re also on Spotify. This episode was engineered by Trim Media House. I’ve been your host TG Branfalt.

End


Study: CBD and Terpene Formulation Effective Against COVID-19 Symptoms

A study led by Israeli research and development firms Eybna and CannaSoul Analytics suggests that a combination of CBD with terpenes is three times more effective at preventing cytokine activity than corticosteroid dexamethasone, Forbes reports. So-called cytokine storms are one of the symptoms of COVID-19, causing inflammation, swelling, pain, loss of organ function, and can cause the immune system to kill the body’s own cells.

The study investigates Eybna’s NT-VRL – a proprietary terpene formulation which aims to treat inflammatory conditions such as the cytokine storm syndrome experienced by some COVID-19 patients. The product contains 30 individual terpenes that may be anti-inflammatory agents and are generally considered safe for consumption, the report says. Dexamethasone was found in a recent United Kingdom study to reduce mortality by one-third in COVID-19 patients on ventilators.

Researchers used a “Cytokine Storm Assay” from Cannasoul, whose founder Dr. David Meiri indicated is well-established and allows for evaluation of cytokine storm syndrome. Using human blood cells, the assay helps researchers assess the effect of different treatments on cytokine secretion, which drives the storm in severe COVID-19 patients.

CBD alone inhibited around an average of 75 percent of the cytokines, while the terpenes alone inhibited around 80 percent, while NT-VRL inhibited around 90 percent. Dexamethasone inhibited around 30 percent, the report says.

Eybna Co-founder and CEO Nadav Eyal called the preliminary results “highly positive” and said that the compound demonstrates “significant anti-inflammatory activity of terpenes.” He says the findings break “the perception that terpenes are just flavorings and fragrances compounds with a placebo effect.”

“This is opening a new world for synergistically-effective natural formulations – holding therapeutic capabilities in which single Active Pharmaceutical Ingredients will have difficulties to match.” — Eyal, in a statement

The study has neither been peer-reviewed nor published.

Another study published last month – which also has not been peer-reviewed – purports that certain cannabis strains have the potential to quell an immune system in the midst of a cytokine storm.

The Food and Drug Administration has also approved a bid by FSD Pharma to submit an Investigational New Drug Application for a clinical trial using a synthetic cannabinoid drug called ultramicronized palmitoylethanolamide (micro PEA) to treat COVID-19.

End


Nevada Cannabis Brand Fined $1.2M for Selling Untested Products, Destroying Evidence

Nevada’s Cannabis Compliance Board has issued $1.25 million in penalties and revoked some licenses of CW Nevada following a slew of violations, including selling cannabis off-the-books, destroying evidence, and selling untested products, the Nevada Independent reports.

The penalty is the largest in state history against a cannabis company.

CW had 14 licenses for “Canopi”-branded dispensaries, cultivation facilities, and other operations. The state began investigating the company in 2018 after it fell behind on its taxes, the report says. As of March, the firm owes $1.5 million in back taxes.

In 2019, CW sold 1,793 products in less than three months that were not laboratory-tested along with another unregistered 4,100 plants. Regulators have destroyed all of the “untagged” products.

Additionally, the company was accused of illegally moving products, failing to maintain video surveillance, and inaccuracies in METRC, the state’s seed-to-sale tracking system.

Regulators revoked six of CW’s licenses and its eight remaining active licenses will be sold within the next six months to help pay the company’s debts. In a public comment, court-appointed receiver Dotan Melech estimated the revoked licenses are worth a total amount of $4.5 to $6.75 million.

In addition to its tax burden, the company owes more than $1 million to its employees, and has claims against it totaling $207 million; however, Melech determined that about $32 million of those claims are allowable.

The agreement allows the state to continue to pursue civil penalties and fines against owner and manager Brian Padgett individually. The state will also revoke his marijuana agent card.

Editor’s note: A previous version of this article incorrectly reported that the revoked CW licenses were worth $4.5 to $6.75 million each. That range actually represents the revoked licenses’ total, not individual, value.

End


Anti-Cannabis Group Sues to Keep Legalization Off Arizona Ballot

Anti-cannabis activists in Arizona have filed a lawsuit against the legalization ballot initiative arguing the 100-word summary of the petition did not tell voters the reforms would allow more potent forms of cannabis – such as concentrates – changes state driving under the influence laws, and doesn’t specifically say that the proposed 16 percent tax on sales can’t be increased by the Legislature, the Associated Press reports.

The lawsuit was filed by Arizonans for Health and Public Safety, which is backed by Center for Arizona Policy – a conservative group that promotes religious freedom and anti-abortion legislation. Lisa James, the group’s chair, said in a statement that the initiatives are “virtually impossible to fix or update … after the fact when there are unintended consequences.”

Former Arizona Rep. John Shadegg, one of the lead attorneys for law firm Polsinelli who is representing the group, called the summary language “confusing and deceptive in numerous ways, beginning with the very definition of marijuana.”

Chad Campbell, chair of the pro-legalization group, Smart and Safe Arizona that backed the campaign, called the lawsuit “frivolous and ridiculous.”

“There’s no legal or technical merit to it – their arguments are campaign arguments. This is just a desperate attempt by very small group of people funded by the Center for Arizona Policy to try to keep the voters of Arizona from having their say in the matter.” – Campbell to the AP

Earlier this month the initiative campaign submitted 420,000 petition signatures to put the issue to voters in November.

If approved, individuals 21-and-older would be allowed to make legal purchases and possess up to 1 ounce. The 16 percent excise tax would be implemented, along with regular sales taxes. Industry-derived taxes would be mostly directed toward public safety and community colleges. Edibles would be permitted but THC in edible products would be capped at 10 milligrams.

End


Feds Investigating Multiple Maine Cannabis Companies

At least two Maine cannabusinesses are the target of a law enforcement investigation but officials have not yet indicated what the charges against the companies are, News Center Maine reports. The investigation is being conducted by the Maine State Police, the Federal Bureau of Investigation, and the Drug Enforcement Agency.

The court-approved investigation into Narrow Gauge Distributors and Homegrown Connection is part of an ongoing federal inquiry, officials told NSM, adding that there is no threat to the public.

Narrow Gauge is a cannabis and CBD cultivation and distribution company with a 60,000-square-foot facility in Farmingham. It bills itself as “the largest cannabis distribution company” in Maine.

Homegrown Connection is a hydroponics grow shop also in Farmingham.

Neither company has addressed Tuesday’s law enforcement action.

According to a Sun Journal report, law enforcement agents were filling U-Haul trailers with boxes marked “DEA Evidence” and filling a shipping container with plants confiscated from the facilities.

U.S. Assistant Attorney Craig Wolff did not provide a comment to either of the news organizations, saying it is an ongoing investigation.

Maine voters legalized cannabis for adult use in 2016; however, implementation of a taxed and regulated regime has been slow to materialize. First, the implementation bills were blocked by then-Gov. Paul LePage (R) and, more recently, by the coronavirus pandemic.

In May, the federal government said it would withhold $3.3 million in funding from the state for mental health programs for children because the state allows students to use medical cannabis.

End


California Cannabis Arrests Predominately Target Black and Latinx People

Felony cannabis arrests in California have dropped 27 percent since recreational cannabis legalization in the state in 2018; however, Hispanics represented 42 percent of those arrests, while Black people comprised 22 percent, and whites at 21 percent, according to state Department of Justice data outlined by the Associated Press.

Misdemeanor arrests in the state fell from 3,835 in 2018 – the first year of California’s legalization – to 3,769 last year, according to NORML. The advocacy organization pointed out that last year Blacks were 4.47 times more likely than whites to be arrested for a cannabis-related crime in California, compared to 4.05 times as often in 2018, when weighted for population. Latinx people were about twice as likely as whites to be arrested, also up from 2018, the organization said.

Ellen Komp, deputy director of California NORML, called the percentage of minorities arrested for cannabis-related drug crimes “troubling” especially in the wake of broad legalization.

“It’s legal if you have the venture capital to open up on Main Street.” – Komp to the AP

Nationwide, Black people are 3.6 times more likely than whites to be arrested for cannabis, despite similar usage rates, according to data from the American Civil Liberties Union.

A recent ACLU report found that in Maricopa County in neighboring Arizona, Latinx people charged with simple cannabis possession are sentenced to significantly longer jail and prison terms than their white and Black counterparts and that Black people convicted of personal possession of drug paraphernalia receive longer sentences than whites and Hispanics.

End


FDA Accepting Comments on Guidance for Cannabis Pharmaceutical Research

In preliminary U.S. Food and Drug Administration guidance on cannabis research released Tuesday, clinical researchers would be allowed to use any cannabis from any source in studies so long as it’s classified as industrial hemp (contains less than 0.3 percent THC). Researchers seeking cannabis over the hemp threshold would still need to obtain it from the National Institute on Drug Abuse Drug Supply Program grown at the University of Mississippi at the National Center for Natural Products Research.

The proposed rules hold cannabis “to the same regulatory standards as any other botanical raw material, botanical drug substance, or botanical drug product” and researchers are expected to “provide quantitative data regarding phytochemicals that are present in their proposed product, including but not limited to, cannabinoids, terpenes, and flavonoids.”

FDA Principal Deputy Commissioner Amy Abernethy said it is “critical” that the agency does what it can “to support the science needed to develop new drugs from cannabis.”

“The FDA believes the drug approval process represents the best way to ensure that safe and effective new medicines, including any drugs that contain cannabis or cannabis-derived compounds, are available to patients in need of appropriate medical therapy. The agency is committed to supporting the development of these new drugs through the investigational new drug, drug review and drug approval processes – and one key element of this support involves development of guidance, like this one.” – Abernathy in a statement

The guidance doesn’t provide any clarification on the FDA’s CBD policies or proposals but warns that the compound is “expressed disproportionately in humans compared to animals.”

“While disproportionate metabolism is not limited to botanical products, FDA would like to make stakeholders aware that this is a known issue with certain cannabinoids,” the guidance states.

The non-binding document also outlines processes for using liquids, capsules, and other delivery systems in drug trials, which mirror the agency’s already existing policies for other botanical drugs.

The FDA is currently sourcing public comments for the proposed regulations.

End


Colombia Unveils Cocaine Decriminalization Proposal

New legislation proposed by Colombia’s leftist opposition party takes aim at the disruptive war on drugs by decriminalizing and regulating cocaine in the country. According to Colombia Reports, the bill is sponsored by Senators Feliciano Valencia and Ivan Marulanda and contains regulations based on cannabis legalization efforts in the U.S.

The bill coincides with the opposition party’s goals of ending the drug war, part of which involves wresting control of the country’s coca production from international drug cartels and other illegal groups.

“This bill is part of the fight against drug trafficking because it is about getting rid of those mafias that profit from it, destroying the Colombian people along the way.” — Senator Ivan Marulanda, via Colombia Reports

The bill would allow for regulated cocaine sales: adults would have to register as a consumer and receive permission from a physician, which would allow them to buy up to a gram of cocaine per week from licensed distributors. The bill does not rule out the legal export of cocaine for scientific purposes.

The policy of drugs decriminalization has become increasingly attractive around the world as governments transition to treating addiction as a health and wellness issue instead of a criminal issue. The bill, however, is likely to draw international ire as it would go against drug treaties that have been ratified by most countries.

End


California Considers Fines for Landlords and Companies Serving Unlicensed Dispensaries

The California Assembly has approved a measure that would levy civil fines up to $30,000 per day to those who provide building space, advertising platforms, and other aid to unlicensed operators, the Los Angeles Times reports.

The bill was introduced by Assemblywoman Blanca Rubio (D) who said that as much as 80 percent of the cannabis sold in the state comes from illegal operators. The language of the proposed law would require it to be known that a cannabis business is illegal and there to be an obvious intent to help it.

“Despite some success during the first two years of legalized cannabis sales, the illicit market has flourished. In addition to dwindling tax revenues, the underground market presents public safety and health threats to California.” – Rubio in a statement via the Times

The proposal is backed by the United Cannabis Business Association who, in a letter to lawmakers, said illegal sales “must be shut down to ensure that legal operators can see an increase of patients and consumers which creates union jobs while we contribute to local and the State of California’s tax revenues.”

Ellen Komp, deputy director of California NORML, on the other hand, argues that the bill is heavy-handed and the advocacy organization “would rather see ‘carrots’ to assist people in securing commercial licenses by lowering the barriers to entry, rather than ‘sticks,’ be they criminal or civil.” NORML said they do support an existing law requiring cannabis industry advertising platforms to include a state license number but cautioned that illegal operators display fake licenses.

In 2018, cannabis industry oversight officials sent a cease-and-desist letter to Weedmaps over their advertising of unlicensed businesses on the platform. Last August the company said they would no longer allow such businesses to advertise on the site.

The measure still requires approval from the state Senate.

End


ACLU Reveals Racial Disparities in Maricopa County Cannabis Enforcement

The American Civil Liberties Union has found that Hispanic people in Maricopa County, Arizona charged with simple cannabis possession are sentenced to significantly longer jail and prison terms than their white and Black counterparts, and that Black people convicted of personal possession of drug paraphernalia receive longer sentences than whites and Hispanics.

The report points out that Arizona has the fifth highest incarceration rate in the nation. In 2017, Latinx people comprised 31 percent of the state’s population but comprised 37 percent of those in prison. Black people comprise 13 percent of the state’s prison admissions but are just 5 percent of the state’s population.

Hispanic people, the report says, spend 298 days in jail for a simple cannabis possession conviction, while Black people spend 246 days behind bars for the crime. White people are sentenced, on average, to 242 days in jail or prison.

For paraphernalia possession, Black people are sentenced on average to 844 days in jail or prison, Hispanics serve an average of 758 days, while white people are sentenced to an average of 679 days.

“White people are significantly more likely to have cases that are ultimately not filed compared to Hispanic, Black, and all other individuals. Among white people, 10.5 percent in the dataset ultimately did not have cases filed against them. Among Black people, 9.6 percent in the dataset ultimately did not have cases filed against them. Among Hispanic people, 9.4% in the dataset ultimately did not have cases filed against them. These differences are statistically significant.” – ACLU, The Racial Divide of Prosecutions in the Maricopa County Attorney’s Office

Hispanic people are also ordered to pay fines hundreds of dollars more than their Black or white counterparts. Those fines – even when controlling for offense severity – average $2,348.98, while Black people pay an average of $1,771.92, white people pay 1,701.45, and Asian, indigenous, and other populations pay $1,478.13.

The ACLU says that in order to remedy the disparities of prosecutorial practices in the county, officials must implement policies using a racial justice lens, increase transparency – the ACLU had to sue the county attorney’s office for violating public law records to obtain access to the data analyzed for the report – and work with law enforcement to reduce disparities.

Maricopa County earned a name for itself as a hub for institutional racism under the direction of former Sheriff Joe Arpaio, who was convicted of criminal contempt of court after refusing to stop racially profiling people when detaining “individuals suspected of being in the U.S. illegally.” Arpaio was pardoned of that crime by President Donald Trump in 2017.

End


Cannabis-Friendly Campground in Michigan Shut Down as ‘Safety Threat’

Norman Township, Michigan officials have halted plans for a cannabis-friendly campground, claiming the project is “an immediate threat to the health, safety, and general welfare of the community,” because there are “no known sanitary or potable water facilities on-site,” the Detroit Metro Times reports.

The 20-acre campground – Camp Happy Trees – was planned by Debi Bair who said that campers would get shower passes to use at nearby campgrounds that have the facilities. She was issued a stop-work order by zoning officials on June 30. Zoning officials said the campground would need approval from the town’s planning commission; however, due to the coronavirus, the zoning and planning offices have been closed for three months.

Officials say she needs to present the proposal to the planning commission, hold a public hearing to inform people living 300 feet from the property about the intent and business plan. The camp would also need a campground operating license, which is issued by the state Department of Environment, Great Lakes, and Energy.

“With 420 allowed, there’s only two KOA’s in the state of Michigan that allow 420 usage and they want you to stay in your tent or in your camper. You can’t walk around freely. I’m somebody that’s camped a lot. … Smoking in tents is not a good idea, it’s very dangerous. … I don’t want the shame with it. This is medication, it’s legal, and I want people to be able to not feel awkward or weird. I want them to be safe.” — Bair in an interview with the Big Rapids Pioneer

Bair indicated she is working with an attorney to meet the local requirements but that there is a “99 percent chance of change in business plans.” She added that she was searching for another property to establish the campground.

End


Study: Cannabis Shows Promise As Sickle Cell Pain Treatment

New research suggests that cannabis is a safe and potentially effective treatment for the chronic pain accompanying sickle cell disease – the clinical trial is the first-of-its-kind to test cannabis as a treatment for sickle cell using gold-standard methods.

The study was co-led by University of California, Irvine researcher Kalpna Gupta and Dr. Donald Abrams of UC San Francisco. It involved 23 patients using vaporized cannabis or a vaporized placebo during two five-day inpatient sessions that were separated by at least 30 days, allowing them to act as their own control group.

Gupta said the “trial results show that vaporized cannabis appears to be generally safe” for sickle cell patients. The cannabis used in the trials was obtained from the National Institute on Drug Abuse – part of the National Institutes of Health – and contained equal parts of THC and CBD.

“They also suggest that sickle cell patients may be able to mitigate their pain with cannabis – and that cannabis might help society address the public health crisis related to opioids. Of course, we still need larger studies with more participants to give us a better picture of how cannabis could benefit people with chronic pain.” – Gupta, in a statement

Currently, opioids are the primary treatment for the chronic and acute pain caused by the disease.

Gupta added that “pain causes many people to turn to cannabis” and is cited as “the top reason” people use it.

“We don’t know if all forms of cannabis products will have a similar effect on chronic pain. Vaporized cannabis, which we employed, may be safer than other forms because lower amounts reach the body’s circulation,” she said in a statement. “This trial opens the door for testing different forms of medical cannabis to treat chronic pain.”

As the five-day study period progressed, patients reported that pain interfered less with activities, including walking and sleeping, and there was a statistically significant drop in how much pain affected their mood. Pain levels were generally lower in patients given cannabis than in those given the placebo, but the difference was not statistically significant.

The study was funded by an Excellence in Hemoglobinopathies Research Award from the NIH’s National Heart, Lung and Blood Institute and was published in JAMA Network Open.

End


USDA Approves Minnesota Hemp Program

The U.S. Department of Agriculture has approved Minnesota’s hemp cultivation program, which has expanded from just six licensed growers and processors in the state in 2016 to 511.

The approved program is the same as the state’s pilot program enacted in 2016.

Minnesota Agriculture Commissioner Thom Petersen called the approval “a major step forward” but said, “there are still concerns over some of the regulations imposed on states and tribal governments, such as testing requirements.”

“We thank USDA for their work on this new federal hemp program, and we are grateful they have approved Minnesota’s plan. … We look forward to continuing our dialog with USDA so we can ensure Minnesota’s hemp growers and processors are successful in this fledging industry.” – Peterson in a press release

Licensed hemp growers and processors in Minnesota have registered 8,605 acres of hemp this year, along with 4.66 million square feet of indoor cultivation space, the Minnesota Agriculture Department said.

The USDA has now approved 19 state hemp program plans, while 23 other states will continue to operate under their 2014 pilot programs. Three other states are still listed as drafting plans for USDA review, while Arizona’s plan is listed as “pending resubmission,” Idaho’s plan is “pending state legislation,” and Nevada’s is “under review.” Two more states are operating with a USDA Hemp Producer License.

Additionally, the agency has approved hemp cultivation plans for Puerto Rico and the U.S. Virgin Islands, while the Northern Marinas Island has pending legislation.

The USDA has also approved 32 tribal plans. Two more tribal proposals are currently under review, with three more drafting plans and one pending resubmission.

End


Hemp Oil Brand Inks 4-Year Sponsorship Deal with United Soccer League

Synchronicity, a full-spectrum hemp oil brand by Functional Remedies, has entered a sponsorship partnership with the United Soccer League.

The USL has 47 professional clubs in the U.S. and Canada, more than 180 amateur and youth clubs, and its championship and League One are broadcast by ESPN. The four-year partnership will see the products featured on USL stadium signage, social media channels, website, and app network.

Josh Keller, USL senior vice president of corporate development and partnerships, said the partnership made sense since both the USL and Functional Remedies “are at the forefront of growth in [their] respective industries.”

“This partnership is not only pioneering in the space, but also takes into consideration the wellness and recovery of our athletes and fans. We look forward to accomplishing great things together and believe the future is very bright.” – Keller in a statement

Andrew Campbell, CEO at Functional Remedies, said the sponsorship “literally puts [the company] in the major leagues.”

“Athletes – young and young at heart – are looking for natural and organic remedies and supplements to improve performance, and professional athletes specifically are adopting these types of products into their regimen,” he said in a statement. “This is beyond a sponsorship for us, it’s an opportunity to continue to educate consumers on the incredible benefits of full-spectrum hemp oil and spread the message of wellness through oneness.”

The deal was negotiated by USL’s exclusive sales agency Premier Partnerships.

End


Jamaica Planning for Global Medical Cannabis Exports

Cannabis regulators in Jamaica unveiled a new plan on Wednesday to revise the country’s medical cannabis cultivation and processing rules, Cannabis Wire reports.

The new rules emphasize quality control, consistency, and compliance for the medical and scientific use of cannabis. The rules are an effort to align Jamaica‘s cannabis industry with international best practices, which in turn should boost the attractiveness of its medical cannabis exports. Officials say they followed guidelines from ASTM International, a global standards organization, in crafting the regulations.

“While we are a locally-based industry, we are globally focused,” said Floyd Green, Minister of State in the Ministry of Industry, Commerce, Agriculture and Fisheries.

“We are focused on exporting our cannabis flower and cannabis products to the entire world. We are quite clear that for us to have a seamless system of exports, people must be assured that the cannabis that is grown here and the products produced here are safe and are of the highest standards.” — Green, during a presentation

Jamaica’s cannabis regiment has drawn criticism from small farmers who say the industry is poorly positioned to help low and middle-income Jamaicans. The Ganja Growers and Producers Association called the regulatory framework “unworkable, restrictive, bureaucratic, and draconian,” according to the report.

The new rules announcement follows the recent departure from the island of at least two major Canadian cannabis entities who left due to financial concerns.

Minister Green also described upcoming plans to boost cannabis tourism opportunities in Jamaica.

End


Report: Cannabis M&A Deals Fall 80% Amid Coronavirus Pandemic

Cannabis industry merger and acquisition deals have fallen 80 percent from the first quarter of 2019 compared to the first quarter of this year, according to a Viridian Capital Partner analysis outlined by the National Law Review. In Q1 2020, there were just 19 such deals, down from 94 in Q1 last year. The massive drop in M&A deals in the space is largely driven by the coronavirus pandemic, the report suggests.

In March 2020, there were just five M&A deals, compared to 25 in the same month last year, the report says. In all, Viridian tracked just 27 M&A transactions by the end of March, while there were 110 such deals by the end of March last year.

Total value of these deals has also taken a massive hit, adding up to $325 million by the end of March 2020, compared to a whopping $9.2 billion last year. Even if the number of M&A transactions were to rebound over the next six months, it’s unlikely they would reach 2019 marks.

Adam Pope, an associate in the Business Development department of venture capital cannabis firm Canopy Rivers, noted in a May blog post that the pandemic has shifted business pitches to the company from consumer products, production, retail, and distribution to software and technology, noting that 37 percent of pitches to Canopy Rivers have been in the tech sector of the space.

“Broadly, software companies have fared relatively well during the economic downturn, and many ‘pick and shovel’ companies—like Shopify in e-commerce—are helping businesses pivot by offloading cost centers to specialists which can help grow their business. Cannabis software opportunities could potentially be more pervasive post-COVID as they are less capital intensive and could draw more significant investor interest during global macroeconomic uncertainty.” – Pope, How Cannabis Venture Capital is Evolving with COVID-19, May 21

In the U.S., adult-use and medical cannabis businesses – including cannabis adjacent companies like tech – were not eligible for federal aid related to the pandemic, although most hemp businesses were.

End


Survey: Most Australian Medical Cannabis Patients Use Illicit Market

Just 3.9 percent of Australians who used cannabis medically last year obtained it legally via prescription and about half of those medical-only consumers were chronic pain patients, according to the nation’s National Drug Strategy Household Survey. In all, about 2.5 million Australians 14-and-older – 11.7 percent – reported using cannabis over the previous year, while 6.8 percent of users said they were using it only for medical purposes, with 16.3 percent saying they used it “sometimes” for medical reasons and “sometimes for other reasons.”

Among cannabis users surveyed, support for legalization was overwhelming as 97 percent of recreational users (those that did not use for medical purposes) supported the reforms, along with 89 percent of respondents who used cannabis only for medical reasons, and 87 percent of users who used cannabis medically “sometimes.” In all, 41 percent of Australians backed legalization, while 44 percent said they approved “increased penalties” for cannabis sales.

The survey also found just 20 percent of Australians approved of “regular” cannabis use by adults, compared to 82 percent of non-medical users, 72 percent of medical-only users, and 65 percent of those that used cannabis medically sometimes.

Older folks were also more likely to use cannabis only for medical purposes, as 43 percent of medical-only users were 50-or-older; 14.4 percent were aged 40-49, 16.1 percent were 30-39, and 26 percent were 14-29.

The majority of non-medical users – 69 percent – were younger than 40, while 15.4 percent of recreational consumers were 40-49, 10.5 percent were 50-59, while 5.5 percent were 60-plus. The same sub-40 demographic was also more likely to “sometimes” use cannabis medically at 66 percent, along with 27 percent of 30-39-year-olds, 15.8 percent of those 40-49, 14 percent aged 50-59, and 4.9 percent aged 60-and-older.

Overall, the survey saw small increases in lifetime and recent cannabis use from 2018 to 2019, from 35 percent to 36 percent and 10.4 percent to 11.6 percent, respectively.

Australia legalized medical cannabis nationally in 2016. According to the Australian Department of Health, 15,566 patients are estimated to have accessed medical cannabis last year, a massive increase from the 2,526 estimated to have accessed the program in 2018.

A Prohibition Partners analysis in April suggested that a legal Oceania cannabis market – which includes Australia, New Zealand, Guam, and the surrounding islands – could be worth $1.55 billion by 2024, with 40 percent of the market comprised of medical cannabis sales.

End


Long Beach Community College Offering Cannabis Industry Course

California’s Long Beach City College is set to offer its first class focused solely on the cannabis industry, the Long Beach Business Journal reports. The eight-week class will cover cultivation, retail, the history of cannabis in California, and an overview of the state’s seed-to-sale system.

Joe Rogoway, a cannabis industry attorney and the course’s lead instructor, called the course students’ “portal” to the industry and called it “an important first step” for students “interested in engaging with the cannabis industry on a professional level.”

The curriculum was designed with members of the Long Beach Cannabis Association.

Nate Winokur, an LBCA member and founder and owner of BelCosta Labs who will be teaching a class in the fall, said collaborators “decided to introduce something that, at its heart, would introduce different businesses and license types to each other.”

“I, for one, am hoping for cannabis to be treated a lot more seriously as things go on and I think that proper education surrounding that has a lot to do with it.” – Winkour to the Business Journal

The course is part of the community college’s workforce development program and the first class is expected to admit 30-35 students. Kathy Scott, LBCC executive vice president of academic affairs, said the class mirrors others in the workforce development program, in that it’s “industry-driven, industry-requested, and it’s taught by the industry.”

Throughout the U.S., colleges and universities with both medical and adult-use cannabis programs have started offering industry-centric degree and certificate programs. The LBCC course will cost $395.

End


Argentina to Give Some Patients Free Access to Medical Cannabis

Officials in Argentina are moving forward with plans to give medical cannabis to patients for free, allow for personal cultivation to anyone who registers with the government, and authorize production of cannabis topicals, oils, and creams, according to a Bezinga report citing Argentinian news organizations. The new regime prioritizes cannabis research and development by laboratories, universities, and other institutions.

The reforms will also eventually allow nationwide cannabis production.

Personal cultivators will be allowed to grow individually or as part of a group and while cannabis growers will have to register with the government, they will remain anonymous. Plant counts have not yet been defined.

While Argentina legalized medical cannabis in 2017, the program has been criticized for lack of clarity which has left most patients to rely on illegal sellers or be without treatment. The nation’s current qualifying condition list for medical cannabis access only includes refractory epilepsy in children; however, the new rules will likely expand that list.

Facundo Garreton, a former lawmaker in Argentina and director of YVY Life Sciences, a medical cannabis company from the neighboring country of Uruguay, which has legalized recreational cannabis use, said he hopes the reforms are “the start of a path towards regulation of the entire supply chain.”

“Knowing that cannabis can alleviate many people’s suffering and not do anything about it, that’s the true crime. … Good regulation will help to know the needs of every person, what to buy, where to buy it, while at the same time controlling the product’s quality.” – Garreton via Bezinga

Argentinian health officials met with key lawmakers on Wednesday to finalize details on the cannabis reform and medical cannabis expansion bill. The country has a population of 44 million making it one of the region’s most intriguing markets for cannabis.

End


Ivan Suslov: Improving Inventory Management for Cannabis Retailers

Software services have been an important facet of the legal cannabis industry since its inception. Over the years, tech companies have worked to solve the myriad problems faced by cannabis entrepreneurs. According to Ivan Suslov, COO of the point-of-sale software firm IndicaOnline, one of the greatest pain points for cannabis retailers has been inventory management. This prompted the company’s latest focus on RFID technology, which tags and categorizes items for easy sorting through the use of radio frequencies.

This Q&A covers the company background, how they identified the need for RFID inventory solutions, developing the appropriate systems, how their platform streamlines the work of cannabis retailers, and more! Scroll down for the full interview.


Ganjapreneur: The cannabis industry has been struggling with problems like inventory management while other retail sectors have access to tools and technology to solve these problems. What industry-specific factors might create this divide?

Ivan Suslov: I think there are a few reasons why the cannabis industry has had limited access to these technological tools that help manage inventory. First and foremost, the inventory itself can be difficult to maintain. Cannabis flower can lose weight when it dries which can quickly cause issues in your inventory. This is why prepackaged cannabis flower has become more prevalent in recent years. Cannabis retailers have also been shut out of traditional financing opportunities to invest in newer and more expensive technology to manage inventory.

How does Indica Online solve problems for cannabis retailers, and what markets are you currently able to serve?

IndicaOnline solves several problems for cannabis retailers, from automated compliance reporting, to loyalty, to marketing, and even product loss prevention. We will be releasing an update soon that will have features to support the ice cream truck model of delivery in addition to the hub-based model. This will allow drivers to fulfill orders on the go rather than return to the dispensary or hub to pick up a new set of orders. The goal is to reduce the delivery time for consumers while in turn cutting expenses for retailers.

We currently serve all states that use Metrc for their seed-to-sale tracking system and any states that have yet to select a seed-to-sale software, such as Oklahoma. We also currently have clients in Canada, Puerto Rico, and Jamaica who have been very successful using our software to streamline their storefront.

Where did Indica Online identify a need for RFID technology in cannabis retail? How can the adoption of this tech optimize logistics in a retail dispensary model?

Inventory management and loss prevention would be the two pieces of retail that would benefit the most from RFID technology. Once RFID technology is implemented, the dispensary operator will know exactly how much inventory they have and where it is located basically without leaving their office. The technology not only improves the accuracy of counting but also will streamline inventory receiving and transferring between the back stock, sorting and the sales floor.

What goes into the process of developing RFID inventory management solutions for the cannabis industry? How long did it take to bring the product to market?

We’ve been in contact with many dispensaries since the very beginning that evolved from being small mom and pop shops to large multi-state enterprises. During our conversations we started to notice that inventory management and loss prevention were becoming the two most problematic areas in dispensary operations. Many times, dispensary operators found themselves spending days and nights counting endless products in their inventory and ended up with missing units or inaccurate counts. This not only wasted a lot of time but also resulted in thousands of dollars of added payroll. By analyzing this and looking at other industries, we came to a conclusion that the implementation of RFID technology will solve most, if not all of these problems. It took us about a year of development and testing to come up with a working RFID solution for our retailers.

How did the company test this new technology before going live with the update? What bugs was the team able to work out in this process?

We are working with several different size retailers that are willing to adopt and test the technology and provide us with valuable feedback. Working with both smaller and larger dispensaries who test the technology prior to release has given us insight into how each can benefit from RFID. We understand that some things that must be implemented in an enterprise size dispensary might not be needed in a smaller store and trying to optimize the technology so that it will fit in perfectly in any size retail operation.

What is the biggest challenge that dispensary owners have in onboarding RFID inventory management systems with retailers?

One of the main goals when we built IndicaOnline is for it to be user friendly and from what we’ve learned so far, the implementation of RFID won’t be very difficult. Like with anything new, it’s a matter of adapting to a new flow but the biggest difference with RFID is that when you are counting your inventory, now you won’t need to count or look for every single piece. Instead, the manager will point the RFID scanner at the shelves and immediately will get a count of all the products there. It’s really revolutionary in the amount of time that will be saved versus manually auditing your inventory.

An added bonus is that the reader can double as a honing beacon for specific products and help reduce product loss. This is ideal when searching for products that will expire soon, so they can be discounted and sold as opposed to being destroyed after they expire.


Thank you, Ivan, for answering all of our questions! Learn more about IndicaOnline and its RFID inventory management tools at IndicaOnline.com.

End


iAnthus Recapitalization Plan Could Leave Shareholders With Nothing

Multi-state cannabis industry company iAnthus Capital Holdings, Inc. announced on Monday a recapitalization transaction that will leave current shareholders with 2.75 percent of the company or zero percent.

In one scenario of the transaction, the company will enter “arrangement proceedings” under British Columbia, Canada’s Business Corporations Act. The other option is for recapitalization under the Companies Creditor Arrangement Act (CCAA), which would see the company file for creditor protection.

The company said the transaction “is expected to significantly reduce [its] outstanding indebtedness and annual interest costs, improve its capital structure and liquidity, and result in an enhanced financial foundation.”

“Assuming completion of the Recapitalization Transaction, the Company’s pro forma outstanding indebtedness will be reduced from $168.7 million (excluding fees and accrued and unpaid interest thereon) as at June 30, 2020 to $101.4 million (excluding $20 million of Preferred Equity).” – iAnthus in a July 13 press release

If the recapitalization transaction occurs through the Business Corporation Act, the firm’s secured lenders and unsecured debt holders will be issued an equal amount of common shares of iAnthus and each will own 48.625 percent of the company. This would leave current shareholders owning a total of 2.75 percent of iAnthus upon completion of the transaction.

If performed under CCAA, the secured lenders and unsecured debenture holders will each receive 50 percent of the common shares of the company and shareholders would get nothing.

Additionally, outstanding secured debentures will be cut from $97.5 million to $85 million and the interest rate will be reduced by 5 percent per annum. The original maturity date will be extended over four years, interest will no longer be “cash pay,” and the conversion feature will be removed. Another $60 million in unsecured debentures will be traded for equity.

Preferred equity of $5 million will be issued to the secured lenders, while $15 million will be issued to unsecured debenture holders, with the equity having a five-year maturity and no cash pay dividends.

Some of the company’s secured lenders have also agreed to lend iAnthus another $14 million on the same terms of the restructured debt, funded within three days of the support agreement.

All holders of secured debt owed to the company and 91 percent of iAnthus unsecured debenture holders have agreed to vote in favor of the plan of arrangement that is to be filed by the company. That plan is subject to stakeholder approval.

iAnthus operates in Arizona, California, Colorado, Florida, Maryland, Massachusetts, Nevada, New Mexico, New York, and Vermont.

End


Massachusetts Regulators Issue $800K in Fines to Cannabis Companies

The Massachusetts Cannabis Control Commission has fined three companies a total of $800,000 for pesticide and regulatory infractions, the Telegram & Gazette reports. The fines were levied against Garden Remedies Inc., 4Front Holdings-owned Healthy Farms, also known as Mission, and The Botanist, which is owned by Acreage Holdings, Inc.

Healthy Farms was fined $350,000 for pesticide use dating back to February 2019 and the CCC said the company failed to immediately report test results showing pesticide use, unintentionally submitted false information, and incorrectly entered information into Metrc, the state’s seed-to-sale tracking software.

Leo Gontmakher, CEO of 4Front Ventures, said that “no one was harmed” by the company’s actions and that “once the company understood the violations,” it “worked quickly to correct them and have implemented procedures to prevent them from happening again.”

Garden Remedies was fined $200,000 for using the banned pesticide Wood’s Rooting Hormone at its Fitchburg facility and covering it by saying on invoices that it had purchased Environmental Protection Agency-approved pesticide Clonex. The falsified invoices were brought to regulators’ attention by an anonymous tipster, the report says. In a statement, Garden Remedies said the falsifying of documents was unknown to the company’s executive team and the employees involved in the scheme had been fired.

Garden Remedies CEO Dr. Karen Munkacy said the “situation was mishandled.”

“The company and I will continue to strive to ensure that ethical and regulatory violations never again occur … We want to be a model of what a well-run cannabis company can be, and I personally will not stop working to continuously improve our company. We are very sorry this happened, but we have come out of this experience a better company.” – Munkacy in a statement via the Telegram & Gazette

The Botanist was fined $250,000 for moving forward with licensing applications while trying to own or having a controlling interest in more than the allowed maximum of three stores.

Last year, Acreage came under scrutiny by regulators for allegedly flouting state rules on cannabis company ownership after reports emerged that the firm bragged to investors about holding more licenses than permitted.

The Botanist’s February 2019 applications for its Worcester and Shrewsbury retail dispensaries showed that Acreage had “consulting services and capital funds” contracts with two other provisional license holders. Acreage denied having any direct or indirect control over those businesses, but regulators raised concerns about those contracts and asked the Botanist whether it wanted to proceed or resubmit the application, the report says.

End


Report: Indoor Cannabis Cultivation Has Major Environmental Impact

Evan Mills, Ph.D. of the Lawrence Berkeley National Laboratory, and Scott Zeramby have revealed a new chapter in the upcoming “Routledge Handbook of Interdisciplinary Cannabis Research,” entitled “Energy Use by the Indoor Cannabis Industry: Inconvenient Truths for Producers, Consumers, and Policymakers.” The report takes a critical look at indoor cannabis cultivation in the age of climate change.

According to its authors, the work, “pinpoints blind spots in regulation, outlines research and analysis needs, argues for consumer information and protections against greenwashing and industry capture of regulatory and green-certification processes, and offers recommendations for incorporating energy considerations into the broader tapestry of cannabis policy.”

Cannabis and the Climate

Expanding on a 2012 investigation by Mills, the authors blame the lack of research into indoor cannabis production’s carbon footprint squarely on its status as a controlled substance and the subsequent need to produce, process, and distribute cannabis “in the shadows.” The authors, however, are quick to point out that legalization hasn’t increased transparency into the energy use of indoor cannabis production. 

“Although the impacts of outdoor cultivation on ecosystems have received considerable attention …, those associated with far more energy-intensive indoor cultivation have only rarely been evaluated and integrated into policy-making, even in the post-prohibition era. Indeed, cannabis cultivators continue to be passed over by almost every energy policy instrument developed since the first modern energy crisis of nearly half a century ago.” — Excerpt from ‘Energy Use by the Indoor Cannabis Industry: Inconvenient Truths for Producers, Consumers, and Policymakers’

Mill’s 2012 work found that indoor cannabis production was using 20 billion kilowatt-hours (k/h), producing up to 15 million metric tons of CO2, and ran a monetary expenditure of six billion dollars annually. At the time, these rates of consumption penciled out to nine percent of California’s household energy consumption, three percent of state-wide energy use, and one percent of all electricity used in the United States. According to the report, indoor cannabis production’s very nature contributes to its astronomical strain on energy grids, requiring year-round lighting, constant simulation of tropical environments, humidity controls, CO2 injections, and other miscellaneous energy uses.

To put it in terms of consumer carbon consumption, the study found that producing one gram of indoor cannabis in California — a state known for its high energy-efficiency standards — is equal to ten pounds of carbon, running ten ten-watt LEDs for 76 hours, or the energy equivalent of 70 gallons of oil. The authors cite more recent studies showing similar results with indoor cannabis production in Colorado using 0.6% of statewide energy and Denver growers hoarding four percent of that city’s power.

Untold externalities like building damage due to mold, power outages, adverse effects on worker health, outdoor carbon emissions due to land-use changes, hazardous waste associated with indoor growing from mercury-laden light bulbs to chemical-ridden mineral wool destined for landfills and finally extra energy costs for technologies such as UV lighting to remove mold and water filtration drive up the environmental impact of indoor production. Other processes the work cites as adding to cannabis’s carbon footprint include excessive transportation, cold storage due to overproduction and water evaporation from reservoirs, producing power for indoor production, energy used in soil production, pesticide synthesis, and building construction.

Current Energy Efficiency Efforts Aren’t Working

Large scale greenhouses have been touted as less carbon-intensive growing facilities, but a recent look into the practice in Canada showed that — due to the need for extra lighting, heating, cooling, and dehumidification wherever natural gas was used for heating — cannabis greenhouses can use up to a third of the energy as similar sized indoor grow sites. Cannabis production also puts a strain on renewable energy availability, siphoning off renewable energy originally designed to serve homes and less intensive commercial applications.

Indoor Hydroponic/greenhouse hybrid in Oregon grows marijuana for recreational use

In the name of security and economic growth, local well-intended regulations have led to extra energy consumption, the authors say. It doesn’t help that some localities such as the state of Illinois and Nevada County, California have completely banned outdoor cultivation. Seeking to attract a larger tax base, some geographies like the Coachella Valley in California — where conditions are optimal for outdoor growing — have put large, counterproductive minimum square footage requirements on indoor facilities. Other cities have put surcharges on electricity to de-incentivize indoor growing, especially for the unregulated market, but this simply drives growers to more energy-intensive practices like using diesel generators. The authors contend that even well-thought-out incentives like tax rebates and credits for energy efficiency have the undesired effect of keeping cultivators indoors rather than moving them to the outdoors.   

Compounding the issue are market forces where the perception is indoor cannabis is of a higher quality than outdoor cannabis and consumers are unaware of the environmental impact of indoor cannabis cultivation.

“It is notable,” the authors write, “that the ‘ethical purchasing’ movement (consumers seeking to vote with their dollar, e.g., to promote sustainable products) has barely emerged in the cannabis marketplace and, perhaps fearing stigmatization, environmental organizations have conspicuously sidestepped the issue.”

Difficult Solutions

Mills and Zeramby support legalization but do not believe that action alone is enough to address the environmental impact of indoor cultivation. They say before best solutions can be developed, more “representative and useful” data is needed from producers and utilities. Additionally, they argue that greater transparency in energy use practices must come forward, better consumer information is needed, anti-competitive market distortions like efficiency incentives should be removed, externalities must be considered, improve testing protocols developed, and more public R and D should emerge.

Even if all these goals are met, their primary recommendation is to move the vast majority of cannabis cultivation outdoors, a practice the authors argue sufficed for much of human history.

The chapter concludes with a cautionary warning from the authors:

“Those citing climate pollution as a reason not to legalize cannabis are missing the point: legalization is necessary—but not sufficient—for addressing the problem. Yet, if done poorly, legalization can make the problem worse. Indeed, history may judge today’s cannabis policymakers as betraying the public trust by enabling an industry with such a large carbon footprint. ” — Study excerpt

End