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High Times to Acquire California Cannabis Delivery Company

7/01/2020

Hightimes Holding Corp. has agreed to acquire California-based delivery service Mountain High Recreation Inc., the latest move by the owners of the High Times brand as they move from decades of publishing into the retail market.

Hightimes Holding President Paul Henderson noted that the company is currently in the process of transferring ownership of five currently operating stores and seven new stores across California and “wouldn’t think of servicing that audience without a superb delivery solution in the equation.”

“Delivery has always been part of our plan for how you will shop our stores. Customers are agnostic about where they complete the transaction.” – Henderson in a statement

Earlier this month, the company announced plans to rebrand 18 Red, White, & Bloom dispensaries as High Times stores and develop products in Michigan, Illinois, and Florida. The High Times branded products will include vape, tincture, topical, and edible products within both owned and third-party outlets.

Last month, Hightimes Holding reached an agreement to acquire 13 planned and operational California dispensaries from Harvest Health & Recreation Inc.

In March, the company said it had signed a letter of intent to buy California-based Humboldt Heritage Inc. and its subsidiaries Humboldt Sun Growers Guild and Grateful Eight LLC., but that deal was terminated in May.

The flurry of activity into the retail cannabis space comes after the company said last December that it had “substantial doubt” about the magazine’s future. The following month, former Overstock.com president Stormy Simon would take the role as CEO of Hightimes Holding and announce that the company would pivot to the retail and distribution business. Simon would ultimately resign in May and Peter Horvath, former chief commercialization officer of American Eagle Outfitters and former chief operating officer at Victoria’s Secret, would take over as the third CEO for the company in just over a calendar year.

Simon is currently running for a seat in the Utah State House of Representatives and recently launched a podcast.

In February, Hightimes received a trading symbol from the Financial Industry Regulatory Authority (FINRA) and plans to list on public markets by next year. The financial terms of the Mountain High Recreation deal were not disclosed.

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Former NBA Star John Salley Launching Cannabis Insurance Plan

7/01/2020

Former National Basketball Association player turned cannabis entrepreneur John Salley, along with insurance industry veteran Daron Philips, has launched The Cannabis Plan with National Insurance Partners – an insurance plan specifically designed for the cannabis industry, Bezinga reports.

The plan not only covers cultivators, laboratories, and both the THC and CBD industries but also individuals who self-medicate with THC who could be punished for their use by their current insurance brokers. Philips said cannabusinesses in the country with two or more employees can apply to receive insurance, depending on state requirements, and that the plan is 20 percent cheaper than other insurance solutions offered in the industry. California, though, has special regulations that would require businesses to have at least 25 employees to qualify for the insurance. The healthcare portion of the plan can cover up to 200,000 employees and is administered by third-party healthcare company Medova Healthcare.

The venture is still building out coverage of individuals who don’t work for a cannabis company.

“Individuals that are worried about their health insurance going up or not even covering them because they use THC, we’re going to eliminate that. … We just don’t want people to feel like they have to give up on their insurance because they choose to medicinally treat themselves.” – Phillips to Bezinga

Salley, a four-time NBA champion, first-round pick, and the first player to win championships with three different teams, owns cannabis brand Deuces22 and a stake in GreenSpace Labs. In an interview with Bezinga, Salley indicated he is interested in entering the South American and Jamaican industries

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Border Patrol Seizing Cash and Cannabis From Legal California Operators

6/30/2020

Legal cannabis business owners in California are accusing Border Patrol of confiscating legal products and cash at border checkpoints throughout the state, the Voice of San Diego reports. The business owners often have to pass through the federally-controlled checkpoints when taking the products to testing facilities or distributing products from wholesalers to retailers.

Angel Fernandez, director of Movocan Inc., which operates a dispensary in Imperial County and has a distribution permit, told the Voice of San Diego that in November, border agents confiscated 10.36 pounds of flower worth about $35,000. Fernandez estimates that Border Patrol checkpoints have cost him between $3 million and $4 million and that he’s lost customers due to the seizures.

“It’s unfair to the development of this market. This is the only place in California where you cannot leave without having to go through a federal checkpoint.” – Fernandez to Voice of San Diego

Under U.S. law, Customs and Border Protection agents have the authority to operate within 100 miles of any U.S. “external boundary,” according to the American Civil Liberties Union. Imperial County, California straddles the U.S.-Mexico border. Max Mikalonis, a cannabis consultant and lobbyist at K Street Consulting, noted that “all of San Diego is technically under [CPB] watch” and that he often advises clients to reconsider setting up a cannabusiness in the county.

Josh Swider, CEO of InfiniteCAL, a testing lab in San Diego, said that Border Patrol agents confiscated 14 samples of hemp in late May – despite hemp’s legal status under federal law. Earlier this month, Swider sent a letter to the California Bureau of Cannabis Control about the issues with federal agents.

“[InfiniteCAL] has upheld California laws and regulations in order to operate in this nascent industry,” he writes in the letter. “However, the barrier the agents at the checkpoints have raised is impeding our state rights and prohibiting our lab from conducting the analyses required by the state agencies overseeing the cannabis industry.”

In their response, a BCC staff member said they understood the issue “creates challenges for those legally conducting commercial cannabis activity pursuant to state law” but it does “not have the authority to change the federal law or border patrol checkpoint operations to allow licensees to transport cannabis goods through these checkpoints.”

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Ousted Testing Lab CEO Accuses New Leadership of Fraud

6/30/2020

Brian Lannon, co-founder and former CEO of California cannabis testing lab Cannalysis, has filed suit against the company he founded and its new leadership over allegations of breached fiduciary duties, wrongful termination, and fraud.

First reported by Beard Bros Pharms, the lawsuit names Bedford Acquisition Partners Ltd. — an investment firm dealing under the name CanLabs — and Cannalysis Labs as defendants, as well as numerous individuals employed by Cannalysis including Gary Hopkinson, Billy Hagstrom, Tyler Autera, Tom Autera, Eric Weinstein, and Chris Hetherington.

In their April 20 court filing, plaintiffs Brian Lannon and Peter Lannon — Brian’s father, who was an early investor in Cannalysis — allege that Lannon’s ouster as CEO last November was unlawful, having resulted from a secret meeting of company shareholders during which Lannon (who was not present) was removed from the company’s board of directors and then subsequently terminated from his role as CEO. The plaintiffs say the company has even refused to honor their requests for corporate records despite the Lannons’ continued role as company shareholders.

Other complaints in the 32-page suit — which ultimately demands a jury trial — include accusations of slander, claims that the company made purchases using Lannon’s personal credit card, and allegations that the newcomers in 2019 almost immediately started working to recoup their costs by falsifying company records in hopes of wooing additional investment dollars.

Cannalysis made headlines in 2019 for a $22.6 million fundraising round headed by CanLabs; Lannon was removed from his post about two months later.

Lannon declined to provide a comment for this article. A request for comment was also submitted to Cannalysis but there was no response at the time of this publishing; this article may be updated in the future if that request is answered.

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San Diego Creates Cannabis Permitting Bureau

6/30/2020

San Diego, California is creating a Cannabis Permitting Bureau that will centralize the permitting processes while also enforcing the city’s industry regulations, the San Diego Union-Tribune reports. The agency is set to have a near-$1 million annual budget and nine full-time employees.

P.J. Fitzgerald, an assistant deputy director in the Development Services Department, said the bureau would be doing “proactive code enforcement when necessary” and would revoke permits for “bad actors” if necessary.

Currently, the city only takes enforcement measures when it receives a complaint, the report says. To fund the bureau, the city is considering raising industry-associated fees.

During the coronavirus pandemic, the number of dispensaries in San Diego reached 20 and five more have received city approvals. Of the 20, 13 of those dispensaries were approved in 2015 and are operating under conditional-use permits which expire the year, according to Fitzgerald, and seven of those have begun the renewal process. Production facilities – which include indoor cultivation and edible-making facilities – weren’t allowed in the city until 2017; currently there are 11 operational production facilities, five of which are brand new, he said. In all, city officials have approved 40 such businesses but 29 are in the approval process.

In March, the city Economic Development Committee heard proposals on social-use lounges but the full city council has not voted on whether to allow on-site cannabis consumption licenses.

Los Angles, San Francisco, and Sacramento also have city-specific agencies to regulate the cannabis industry.

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Curaleaf Expanding Select Brand Into 4 States

6/30/2020

Curaleaf is expanding its recently acquired Select brand into four new state markets between now and August, the company announced on Monday. The expansion includes Maine, Massachusetts, Ohio, and Florida and, once complete, Select will be available in 13 states.

Curaleaf announced the acquisition plan of Select parent Cura Partners Inc. in May 2019 for nearly $1 billion in stock. However, by February 2020, the deal was finalized for less than $400 million after cannabis industry stocks experienced sharp declines and led to lower overall company valuations in the space. In 2018, Cura recorded $118 million in sales and was Oregon’s largest cannabusiness.

Joe Bayern, president of Curaleaf, said the brand has since “performed tremendously well” in its current markets.

Select Elite and Select Nano Gummies will launch in Curaleaf’s home state of Massachusetts on July 3 along with company-branded Nano Gummies which will be exclusive to the firm’s dispensaries. In late-July, the company’s Select Elite oil cartridges and Nano Gummies will be available in Maine medical dispensaries. Nano Gummies are also expected to be available to Florida and Ohio medical cannabis patients by mid-August.

Currently, Select products are available in Oregon, California, Nevada, Arizona, Colorado, Michigan, Maryland, Oklahoma, and Connecticut.

Curaleaf is also in the works of closing their deal to acquire Grassroots. Once complete the deal is expected to expand Curaleaf’s presence from 18 states to 23, with over 135 dispensary licenses, 88 operational dispensary locations, more than 30 processing facilities, and 22 cultivation sites with 1.6 million square feet of cultivation capacity.

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U.S. Hemp Acreage Declines Despite Increase In Licensing

6/29/2020

Hemp cultivation acreage in the U.S. has fallen 9 percent since 2019 but the number of entities and individuals licensed in their state to grow the crop rose 27 percent, according to a Hemp Industry Daily report. As of June 18, there were 465,787 total licensed hemp acres for the 2020 season, compared to 511,442 last year.

According to the report, Colorado has licensed 62,208 acres of hemp for this year – the most of any state – followed by Tennessee (51,000), Arizona (34,035), Kentucky (32,106), and New York (29,985) rounding out the top five.

Last year, the 34 states that allowed hemp cultivation issued 16,877 licenses while this year, states have licensed 21,496 growers, according to Vote Hemp data outlined in the report. Compared to 2018, states issued 476 percent more licenses in 2019. Not all states require processor licenses, but 4,485 such licenses have been issued in states that require them.

Vote Hemp President Eric Steenstra warned, though, that while “licensing is a good indicator to show intent,” it doesn’t always equate to more cultivated plants or end-products.

“We know from previous years that significantly less hemp is planted than what is licensed due to a variety of factors, including access to seed and clones, a lack of financing as well as inexperience.” – Steenstra to Hemp Industry Daily

Most of the hemp grown in the U.S. is cultivated in a greenhouse, according to the report citing Greenhouse Grower figures estimating the largest 100 greenhouse hemp producers in the U.S. account for nearly 220 million square feet of hemp cultivation, compared to 93,666,091 square feet of outdoor cultivated hemp.

According to U.S. Department of Agriculture data, the agency has approved hemp plans for 17 states – as required under the 2018 federal hemp legalization law – and the U.S. Virgin Islands. Another 24 states are operating under their 2014 pilot program rules. The agency has also approved hemp production plans for 32 Native American tribes.

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Sonoma County, California Expunging 2,700 Cannabis Convictions

6/29/2020

Sonoma County, California is clearing 2,735 low-level cannabis convictions for more than 2,000 people, county District Attorney Jill Ravitch announced on Friday. The convictions were identified by the county using the state-wide software application “Clear My Record.”

With the passage of Proposition 64 in California in 2016, some crimes that had previously been categorized as felonies was re-designated misdemeanors, while crimes that had previously been characterized as misdemeanors were re-designated as either punishable as an infraction or no longer illegal. The ballot initiative included provisions giving individuals with prior cannabis convictions the right to petition courts to re-classify their convictions or to have their convictions dismissed altogether if the underlying charge is no longer considered a crime.

In 2018, the California legislature passed a law requiring the state Department of Justice to review state criminal history and identify those charged with now-legal cannabis-related crimes after few filed petitions to clear the charges from their record.

Using the Clear My Record software, the Sonoma County District Attorney’s Office identified 2,110 individuals eligible for relief. Of those, 427 had misdemeanor convictions eligible for complete dismissal, and 1,713 had felony convictions eligible for reduction to misdemeanors.

However, Ravitch said she is going to dismiss all of the cases, rather than reduce the felonies and dismiss the misdemeanors. She said her office “has been very committed to working with those individuals seeking relief from marijuana convictions” but that “the process has often been slow, and the reach has been narrow.”

“As a result, we have undertaken a thorough review of all cases identified by Code for America’s software program Clear My Record and determined that the only way to truly provide justice for these individuals is to go beyond the requirements of the statute and provide complete dismissal in each of the cases. We understand the burden that has been placed on individuals, families, and communities as a result of cannabis convictions. I do not believe this is consistent with the values of the overwhelming number of people of Sonoma County, and therefore, we are taking aggressive steps to assist those affected.” – Ravitch in a statement

San Francisco officials expunged 9,362 felony and misdemeanor cannabis convictions dating from as far back as 1975in 2019. Los Angeles, in February, expunged 62,000 felony convictions and 4,000 misdemeanor convictions dating back to 1961. Both cities used the Code for America software to identify the cases.

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Dr. Lester Grinspoon, Cannabis Advocate & Author, Dead at 92

6/29/2020

Dr. Lester Grinspoon, a cannabis advocate, author, and Harvard Medical School psychiatrist, died on June 25. He was 92. Grinspoon authored 12 books during his lifetime, including Marihuana Reconsidered and Marihuana, The Forbidden Medicine. He also maintained the website Marijuana-Uses.com, which featured stories of individuals who have had positive, non-medical experiences with cannabis.

Grinspoon began his career believing that cannabis was a dangerous drug, but his position was challenged by famed astronomer Carl Sagan, who was a close friend of Grinspoon and a Harvard astronomer.

Grinspoon and his wife Betsy lost their son, Danny, to cancer when he was a teenager and during his final year of treatment, the family saw how cannabis was effective at helping Danny cope with the side effects of chemotherapy. The experience led Grinspoon to author The Forbidden Medicine in 1993.

In 1990 he received the Alfred R. Lindesmith Award for Achievement in the Field of Scholarship and Writing from the Drug Policy Foundation. In 1999, the National Organization for the Reform of Marijuana Laws (NORML) board of directors established the Lester Grinspoon Award for Outstanding Achievement in the Field of Marijuana Law Reform, and Grinspoon was the first recipient. He was also a long-serving member of NORML’s Board of Directors, including many years as board chair, NORML said, and he served as a member of the NORML Advisory Board until his death.

NORML founder Keith Stroup told L.A. Weekly that Grinspoon “made it possible for us to have an informed public policy debate leading to the growing list of states legalizing the responsible use of marijuana.”

“While there have been other medical and public health experts who have taken an active role to advance full legalization of marijuana, it is Dr. Lester Grinspoon who first led the way to insist that our marijuana policies be based on legitimate science.” – Stroup to L.A. Weekly

Peter Grinspoon, his surviving son, said states legalizing cannabis was “gratifying” for his father but “would have been more gratifying if hundreds of thousands weren’t still getting arrested for minor marijuana crimes.”

He noted that when his father wrote Marihuana Reconsidered, support for cannabis legalization was in the teens. A Gallup poll last year found 66 percent support the reforms.

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Brent & Barry Walker: Growing a Multi-State Cannabis Business

6/26/2020

The Walker brothers were recent guests on the Ganjapreneur podcast. Their conversation with host TG Branfalt covers Dub Bros‘ early entrance to the space, the business strategies that have driven their success so far, transitioning out of the gray market as regulations come online, their push into new and burgeoning state markets, and more!

Check out the interview in full via the media player below, or scroll further down to read a full transcript of this week’s Ganjapreneur.com podcast episode.

Listen to the podcast:

Ganjapreneur · Brent & Barry Walker: Growing a Multi-State Cannabis Business

Read the transcript:

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TG Branfalt: Hey there, I’m your host TG Branfalt. Thank you for listening to the ganjapreneur.com podcast, where we try to bring you actionable information and normalize cannabis through the stories of entrepreneurs, activists, and industry stakeholders. Today I’m joined by Barry and Brent Walker. They’re the founders of California based at Dub Brothers, one of the state’s largest licensed holders, which also operates in Oklahoma. The company’s brands include Tradecraft Farms, Stick.E.Vapes, and Cali Roots dispensaries, and they also spearhead charitable efforts, including the Gobble Gobble Give, and Skid Row Xmas.
How are you guys doing this afternoon?

Brent Walker: Great.

Barry Walker: Good.

TG Branfalt: Stoked to have you guys on, we have a lot to talk about. Before we get into the history of Cali Roots and all the work that you guys do. Tell me about yourselves. How did you end up in the cannabis space?

Barry Walker: Brent?

Brent Walker: Go ahead Barry. Oh yeah, I can take it. I started about 11, 12 years ago actually growing in a shipping container in San Diego. I saw that the medical industry was starting to boom, so I tried to jump in a little early. From there I did a delivery service and then eventually partnered with Barry, my brother. We moved to LA together and started opening up a larger cultivation, we opened up dispensary’s. This was all back in the day. Then we’ve just, recently obtained licensing in the last year and a half.

TG Branfalt: How about you Barry? How’d you end up working with your brother?

Barry Walker: I’ll say, we’ve told this story a few times, but Brent… I had a lot of retail businesses through the Silver Lake area, the East Hollywood, back when it was booming. I was doing a lot of businesses when Brent approached me. One of my businesses is health and wellness. I was in spas, yoga, we had different lifestyle type businesses that they catered towards the health and wellness. I don’t know if I was a perfect fit or not. But Brent is very good at his craft. He had a very big vision and approached me to try help manage what we both realized would be much bigger down the road. I think it was a battle for him at first, because I was like, “No, no, no, I’m 20 years sober.” I was doing that inner struggle like, “Okay, what are we doing here? Is it real? Does it really help?”

Brent really guided me on the medicinal benefits of cannabis. I started doing a lot of my own research and after a while I was hooked and I jumped in 100%. But I think together we really round each other up. We’re we’re brothers. Having business partners, it’s tough, having business partners with your brother, we’re always looking at different sides of the coin and trying to figure things out, but we really compliment each other. It was a great move.

TG Branfalt: What was it like for you going from being successful in traditional businesses to moving to something as nascent and new as cannabis.

Barry Walker: Yeah, again, I think because I was in health and wellness, there was already a conversation about that for me. Brent coming in so strong and such an activist and already being a grower and seeing the vision and understanding where medical was going. It was an eyeopener for me. But it’s been interesting because it is a different business. I mean, when me and Brent started Dub Brothers, we literally had to look outside our door before we move product into a vehicle, it was a different time and it was legal, then it was illegal, then it was legal, but it wasn’t totally legal. But it was okay, then it wasn’t all that okay. There was this weird space. I would have to turn back to Brent all the time and he’d be like, “It’s okay, man, trust me, it’s okay.” I’d be like, “Oh, this isn’t like running a yoga studio.”

TG Branfalt: Brent, maybe this question is more up your alley. Tell me about the history of Cali Roots, because as I said, I haven’t spent much time in California and it’s a brand that I’m very familiar with.

Brent Walker: Yeah. Actually, our dad, one of his best friends, they grew up in Kansas, so just one state over and his friend, John, reached out to us and said, “Hey, it’s going legal and there’s no merit based system. You can just apply and get in.” So my first thought was like, well, I’m pretty confident in what we do, and I know we can do it well. So this is kind of a cool kind of test to see if we can compete on an open market. So, that was the thought of it. Then we just started going out there and finding locations. We actually got in really early, right in the very beginning. So it helped us lock down spaces for a lot cheaper, because landlords out here in California just rip you, it’s like $3 a square foot sometimes. Out there, they had no clue because it had never existed before, so we were able to get in at just like a low market rate for our cultivation and our retail. That helped a lot. Also, just being the first out there helped a lot.

We went out there and found a cultivation spot first, locked that down. We actually got it right next to the airport there in Oklahoma City. So it was kind of easy if I fly in and fly out. So we did that and then we started opening stores. This has been going on for about a year and a half I think. We just opened our fifth store about a month ago and Edmond. We have five locations, we have one in OKC. We have the one in Edmond that just opened. We have one in Stillwater that’s right next to the State College, which just crushes it. Then we have one by the university in Norman.

What else do we have Barry? We got one in… in the nicer part of town. I don’t know. But anyways, that’s kind of the approach that we took to it. We’ve seen that-

Barry Walker: Nichols Hills.

Brent Walker: Nichols Hills. Out of the gate, we did really well. Our whole concept is Cali. We’re bringing Cali strains to Oklahoma because we know everyone loves the Cali stuff. We do a lot of in-house breeding. We work closely with Seed Junky’s, which are like the breeders of wedding cake and Cushman’s, a lot of famous strains. We’ll be bringing all that out there to, soon. But yeah that’s kind of where we took off.

Then, I’d say last four months have been a little difficult because there were so many mom-and-pops that were opening up. There was thousands of them. So we think we hit that plateau a few months ago and a lot of them are falling off now. So you’re starting to see just some of the larger companies that are able to stick around through the storm. But I think we’re still in the end of that storm. I think, in the next three to four months, we’re going to look pretty good out there. Then when it goes recreational, we’re set up for it.

TG Branfalt: We’ll talk about the Oklahoma and that sort of thing. But I got to ask you, I had read that you guys describe yourselves as downtown Los Angeles, Skid Row farmer. What is downtown Los Angeles, Skid Row farmer?

Brent Walker: Go ahead, Barry.

Barry Walker: Well, okay. Yeah, this is a good one for me. We’ll get into philanthropy. Every year we host a large feed the homeless events through the holiday season. Thanksgiving to Christmas, we’re feeding homeless, we’ll do 35,000 meals a year. I started at 20 years ago in Silver Lake. But we’ve really with the strength and stability of the company, we’ve been able to really expand it. We’re in about 25 cities throughout the country now. We do a lot of work with Skid Row. That’s kind of what I’m coming back to, is we are not afraid of Skid Row, because we deal with it on a regular basis. Constantly, we do things, we’ll hand out food, clothing. Our Skid Row Christmas event is a big musical event with some top name acts and it’s a black and white affair and we hand out free… Santa Claus shows up, that the Los Angeles car club shows up so all the low riders and … come with their cars, we take presents down to Skid Row and drop them off.

People get sleeping bags, canned food, just all that stuff up. It’s rechargeable solar lighting, which is really a big get. So we’re not afraid of Skid Row. So we built our headquarters down, right smack down in the center of Skid Row.

TG Branfalt: Wow

Barry Walker: Whenever we invite people over, we have to have that little meeting with them and we go, “Okay, so here’s the deal, all right, it’s going to be a little scary at first, but once you get in behind the gates, it’s beautiful. But as you’re parking your car, you might get a little freaked out.” We have people come from all over the country sometimes from out of the country and honestly, they’ve never seen anything like it. I always wonder, when people are exposed to that for the first time, they leave there a little different. They understand that this is a pretty huge problem. Through our cannabis company, we do what we can, but it’s good for us to be able to leave our headquarters and to now know that it exists and they’re free to do what they want.

So we’re downtown, we’re local, downtown Los Angeles, Skid Row farmers. We have multiple facilities. Downtown LA, Brent has designed each one of those. We have quite a footprint downtown.

TG Branfalt: Does it have a different meaning for you Brent?

Brent Walker: No. I mean, the idea to move to LA from San Diego is, that when it was medical and kind of in that gray area, I couldn’t do it anywhere else. The epicenter was downtown LA. That’s where we were the safest. I mean, we’ve been through multiple raids over the years, but downtown LA was safer than North Hollywood, Orange County, San Diego. That’s the concept. We have so many locations now and the reason being is because we’ve always had seed to sell, we’ve always sold retail, is that when one location was raided, we would be able to have a backup. So that’s the reason why we had multiple, they’re not small, they’re like, 10, 20, 30,000 square foot facilities, about five or six of them between downtown LA. But that was kind of the concept for that.

You got other brands like Jungle Boys that were our neighbors coming up over the last 10 years. So there is that following of that urban grower, that downtown LA grower. A lot of the strains, a lot of the popular stuff is coming out of LA, which is really cool. But yeah, that’s kind of where we’re at.

TG Branfalt: Tell me about your brand’s, Tradecraft Farm, Sticky.E.Vapes, for you what are you thinking about when you’re trying to name a brand and design a product for that brand?

Brent Walker: Well, the name Tradecraft was a strong name, issues in government kind of, I don’t want to say… I don’t know. It’s what terrorists are good at their trade. So it’s called a trade craft. The government uses it. I heard it one time and I was like, that’s a cool name. It was strong. Our logo is a honey badger. So you got honey, honey oil, cannabis oil. Also, that the Badger is very resilient, it’s a strong animal. I just thought it was kind of cool. So we went with that as our mascot. That’s the concept behind Tradecraft Farms. Like I said, it’s all grown in downtown LA, so we really marketed around the in-LA growers. Then Sticky.E.Vape, was something that we started years ago and we only had in house. So like we came up with the name, we came up with the logo years ago and never really used it.

We had all the big brands like O.pen, back in the day and all these big vape brands that we were carrying in our stores. We kept our stuff in there like a white label cartridge just to see if we can compete with the big dogs. Eventually we launched it and we’ve done very well. So those are our two big brands. The Sticky.E.Vape is also like our SoCal Surfer. We’re kind of trying to go after kind of the Red Bull marketing idea. We sponsor snowboarders and pro-surfers and pro-skaters, graffiti artists. We work with RISk, RISK is a big graffiti artist here in LA. That’s kind of the SoCal beach life cannabis vape line that we have.

TG Branfalt: What’s it like for you Barry coming from a traditional background and now having to design, working in this aspect of cannabis, coming up with brands?

Barry Walker: Yeah. One thing we left out, we’re launching Better Days Bakery, which is a gluten free vegan bake line, which we’re really excited about. We were actually supposed to launch it at the hall of Flower Show about four days ago, but of course that was called off due to the coronavirus fears. We all have a really incredible incubator program where we’re launching a few brands that we’re really excited about and stay tuned for all of that stuff.

But again, there’s another story that I tell, it’s like when Brent asked me to partner up with him and join him on this crusade, as it was at the time, there was a bit of a learning, right?

Brent Walker: Yeah.

Barry Walker: He was teaching me how to grow and we were just in the very first part of what would become a very complex puzzle to become a seed to sale company. Now we cultivate, we manufacture, we distribute and we retail, all under multiple roofs, under the depths. But in all fairness, we started out as just pot farmers. Now, I just had a two hour meeting with our lobbyists and politicians. We’re working with them. We’ve reached so far out, we’re purchasing property all over the country. It’s really developed into quite a company. It’s exciting because in honesty, cannabis has delivered to me something that I would have expected a traditional company to deliver, but it’s delivered it at such a faster rate and such a faster pace. It’s literally been on steroids since day one. We’ve just been moving 180 miles an hour from the moment we wake up to the moment we pass out from exhaustion. It’s really exciting.

TG Branfalt: For both of you guys, is this where you expected this to go? I mean, most people would say, “Yeah, of course, I’m a brilliant businessman. This is exactly where I expected to be.” But I mean, it sounds like, just as you’re telling me the story, that you’re almost surprised.

Barry Walker: I’ll jump in. I think we both have different answers on that one, but I think I’ll let Brent answer. But, I think he had this vision long ago, about how big it could be. I think maybe me coming in from traditional, having so much experience in traditional business, I was maybe a bit more skeptical. I was like, “Wow, that’s a lot of hard work and boy, it takes a lot of time.” He was always like, “You’ll see, you’ll see.” Sure enough, I think it surprised me. But I’d love for Brent to answer too.

Brent Walker: Yeah. No, I mean, I kind of saw that this was going to happen and unfold the way it has. I don’t know why I say that, something in my gut told me that, I just knew that, that’s where I needed to be. 12 years ago, I could see the power it had medically, with the people coming through our stores with their hair wrapped up because they’re going through chemo. It was just very powerful. I knew this was going to be big. I mean, because you got alcohol, cannabis has been around forever.

TG Branfalt: Literally.

Brent Walker: Yeah. I knew at some point it could probably even be bigger than alcohol and we’re not even there yet. Because it’s on a broad level, it works for almost everybody. But there’s just so many people that haven’t tried it yet. People are being introduced to CBD and CBG and stuff like that. But yeah, I mean, I’m not surprised where we’re at, right now. I guess I’m a little more confused now than I was back then, of where it’s going, just because there’s so much going on right now. We’re all over the place, we do everything. We’re not just an extraction company or just a retail store, we do everything. Eventually, we’ll probably get bought out at some point, but I’m not going anywhere, this is what I love to do, this is my passion, so I’m going to be in the street for years. I’m not young, but I’m 41. So ideally we’re just at the tip of the iceberg right now.

TG Branfalt: I mean, speaking of tips of icebergs and talk about what’s happening with legalization, but I want to ask about Oklahoma. You guys were the first guests I’ve had on that have any experience in that state. So I’m wondering first, why did you decide to get into the Oklahoma market? Then second, what’s your take on the early success of Oklahoma’s industry? They have 220,000+ patients, that’s 5% of the state population. They expect $350 million in sales this year. So why Oklahoma and what’s driving these good numbers?

Brent Walker: I mean, like I said before, we do what we do very well. If you bring it all the way back to the plant where it starts, I feel like we can compete on that level. There could be 5,000 stores and I know we can still compete. It might not be as good as an area where they cap licensing like in California, but if you have stores in the right regions, you’re going to do very well. When I say it goes back to the plant, it goes back to the way I design our cultivation facility. We still use our traditional grill lights, which are a 1000 Watt HBS, but recently we’ve transitioned into a full spectrum LEDs in rack systems. We use rolling rack systems in Oklahoma. We have three levels high in our fleet. We have eight rooms, about 100 lights in each room.

So we can produce flower, that’s very beautiful at a very low cost. That’s kind of the concept behind the cultivation. Then we build the energy and the culture within our retail and people see it. Like I said before, people they want those Cali strains, because it’s not in all the stores out there. Every state is different. That’s the concept.

TG Branfalt: Do you have anything to add Barry about why you guys chose Oklahoma and what may be driving the early success of Oklahoma’s medical cannabis industry?

Barry Walker: Sure. Well, I mean, Oklahoma did it much differently, they made it more of a registration process, as opposed to an application process. So we were the first to rush out there. You’re seeing a lot of the bigger boys are coming out now and setting up shop. To answer the question, I mean, really it’s a timing thing. We’ll look at any city that’s friendly and we have for the last few years, like any city in California or outside of California. Any city that’s got an initiative or a majority voting block in the city council that says, “Hey, no, we get it, we understand it, we like it. We’d like to make some money from it.” We would like to be there. We love Oklahoma.

I mean, we’re Kansas boys. I was born in Wichita, Brent wasn’t, but our family is from Kansas. I got out of Kansas when I was young, but that’s our family roots out there. So we get the Midwest and the Midwest is a great place to set up a distribution hub for other States, once it starts to become a bit more federally legal, or you could start to cross State lines. So Oklahoma makes sense, But we’re in love with Missouri, of course. We’re in love with Michigan. We’re in love with Illinois and New Jersey. These are all States that are starting to move in that direction. Becoming that bigger company that I was talking about where we’re not just pot farmers anymore, we’re not just guys growing cannabis, we’re starting to put together action plans for nationwide, and multiple state operations. It’s tricky.

TG Branfalt: Yeah. Just recently Oklahoma advocates had been trying to get signatures. I’m wondering it was effectively shut down by the coronavirus rules, they had to stop, it was shut down by the Secretary of State. You said that, you obviously are watching what’s going on in Oklahoma. What was the trajectory of that legalization position? Was it positioned to be approved before it was shut down?

Barry Walker: Yes. Which one are you talking about? Are you talking about for recreational?

TG Branfalt: Yeah.

Barry Walker: I mean, Brent knows this too. He can answer this too. But the obvious next step, anytime there’s medical, the next step is recreational. Every single city council, every single city that has sort of hemmed and hawed and dragged their feet and been like, “Wow, we don’t know, we don’t know. Okay, we’ll allow it medical and see what happens.” Six months later, they’re like, “Hey, this is great. Let’s do recreational.” I mean, very quickly they’re… Oklahoma is a conservative neighborhood, but they’re also anti-big government, they’re more just like, “Let’s just run it.” It’ll be interesting to see how it plays out. Obviously coronavirus, it’s changed the game for everything, on a short term basis, hopefully not long term. But, I see Oklahoma going recreational with, or without any sort of initiatives.

TG Branfalt: What was your feeling on what was going on with regard to the petition, Brent?

Brent Walker: I didn’t really look into it, so I can’t really say on that. I just know there’s a lot of religion in Oklahoma, so there’s going to still be a lot of backlash regarding that. If it stays medical, I think we’re still going to do well.

TG Branfalt: Yeah. I mean, there’s the patient numbers, 5% of the population. I mean, that’s incredible.

Brent Walker: Yeah. We have a store in San Diego, we did an initiative years ago and we wrote it before it was even recreational in California and we got it passed recently and we had to open up as medical. Everywhere else is San Diego there’s been recreational for the year. So what we had to do is we actually eat the doctor script, we give them store credit for whatever they spend on their doctor script. The essence is kind of recreational, but then there’s a lot of people that are still a little concerned because they’re gun holders, they’re nurses, they’re afraid they’re going to be flagged online somewhere. So I mean, we still have that everywhere. But at some point, like Barry said, it is going to go and we’ll be ready for it.

TG Branfalt: You mentioned that you guys are eyeing Missouri. What is the medical cannabis industry potential there and what are the rec use prospects there? Because, that petition process too was also shut down by coronavirus rules.

Barry Walker: I’ll answer that, this is Barry. There’s a very large appeal process actually going on in Missouri right now. I think that’s the part that’s really shut everything down. But we have good relations in Missouri. We’ve actually been feeding the homeless out there for five years out in Kansas city, so we’re actually sort of ingrained in the neighborhoods and in the community already. But we feel that Missouri’s… I mean, I think anywhere you have senior citizens, anywhere you have military veterans, anywhere you have people that are susceptible to cancer, rheumatoid arthritis, or any of the other ailments that cannabis can help, it’s a good town, it’s a good city. We love Missouri, we love Kansas city, we love St. Louis. We’ve made some really great friends out there. We’ve got our fingers crossed.

But, I see it being just as strong as any other. When you get into the metropolitan, you get into the cities, just as strong as any other city in California. I mean, people might yell at me for saying that it’s not California, but it’s still a big city and there’s a lot of people and it’s densely populated and the majority of people approve of cannabis, even in more conservative towns.

Go ahead.

Brent Walker: Yes. We’re the white brothers coming from California that are trying to go into your state, so there is some issue with that. We know most of these States you have to partner with a local resident. But, it’s tough. Missouri was tough, because it’s mostly African-American, so we always try and find ways to like… What was that thing Barry, we were going to do with what’s her name? We were going to teach. She had these classes where people can come in, because you can get your medical card and grow six plants or something like that, like California used to be. But I would actually go in and consult with these people so that they can grow their own medicine and sell it to dispensary’s if they want, just set up a four lighter in their garage.

But my point was just, it’s difficult going in to other States because they’re trying to keep it all within the State, they don’t want outsiders coming in.

Barry Walker: I think what Brent was alluding to, is like there’s a big social equity component to how we approach out of town. We are those guys from California, we are coming into sometimes densely populated African-American communities. The idea is that we’re going to come in and try to make a bunch of money. We want to make sure that we deliver the message that, that’s not exact. We understand the gravity of what we’re trying to do, and we want to lift the people up around us.

In Oklahoma, we have a 92% local hiring rate, that’s pretty darn good. That’s pretty good. I can’t wait to do that in cities like St. Louis, in cities like Kansas City, in cities like Detroit, where we can go in. Because a lot of this social equity programs are designed to just basically grab a straw person, put him as your 50% partner and then give him a bunch of money. I don’t believe that’s the best way to approach it. We already do a lot of community outreach. We already work with the downtrodden, the sick, the poor. We do that every day of our lives through Gobble Gobble Give and through Skid Row Xmas, where we do it every day, literally being on Skid Row every single day. So we understand what it means to lend a helping hand.

Our approaches is, let us teach you to fish so that you can eat every day. Let us teach you what we know. Let the two white guys from California come out and surround themselves with local people and teach you everything that you got so that you can carry that strength and that pride and that knowledge with you moving forward. So we’re just excited about it. Whether it works or not, we’ll see, we don’t know, we’re giving it our best. But you know-

TG Branfalt: You guys are both super insightful. I’m really excited to hear your answers to this question. What advice do you have for other entrepreneurs?

Barry Walker: Brent, I’ll let you…

Brent Walker: Yeah. I mean, it’s a lot of work. It’s a lot of work. There’s a lot of new people getting involved and I’m hearing a lot of horror stories. But then again, if you partner with the right people or if you have the right consulting, you could do pretty well. But our Instagram Tradecraft Farms has done very well, and the reason why is because we’ve shared all of our techniques over the years. A lot of these commercial growers would not share their techniques. So we have a lot of mom-and-pops, a lot of these kids that are growing at home and we’re teaching them how to grow on Instagram, which is super cool. We get a lot of respect because of that. I’m even seeing a lot of go emojis lately, Barry. I’m like, “Okay, that’s cool.”

Barry Walker: That’s funny.

Brent Walker: But again, it’s not as easy as you think it is. It’s very, very tough, it’s very, very competitive. But if this wasn’t my passion, I don’t think I could be doing this, at this level. That’s why I always tell young people-

Barry Walker: Yeah, that’s good.

Brent Walker: … make sure you have people on your team that are passionate either about cultivating or retail or just the cannabis plant in general. Because that’s a big part of success right there.

TG Branfalt: What about you, Barry?

Barry Walker: Yeah, I’ll add to that. Back when I was young, like Brent, because I’m the old dog in the room now. I did all of my self help tapes and I listened to all my Tony Robbins and Zig Ziglar and they all say the exact same thing and it’s what Brent just said. If you’re getting into the cannabis business to be rich, find a different business, just find a different business, because you will never be great at anything if it’s not something that you love. Brent truly loves what he does and that’s why I respect him so much. He really does love it. By bringing me in, I’ve really gotten to just love what I do. I really do enjoy it. We are playing monopoly now. We’re playing monopoly on a big level. It’s exciting. It really is exciting.

But if you’re just getting into the business now, if you’ve got this business plan to sell weed, to make a lot of money and be rich, you should maybe rethink it because you have to start from a place of total respect and from total love. You have to love what you do. That’s the first rule of any business. Anyone that is successful will tell you that.

TG Branfalt: It’s really, really great to have this opportunity to get to know you both, like at the same time. You play off each other really well. I can only imagine what the day-to-day business operations are like up. Where can people find out more about you, your social media, that sort of stuff?

Brent Walker: Our IG Handle is-

Barry Walker: Go for it Brent, you know that.

Brent Walker: Yeah. Out IG Handle tradecraft_farms. You just search Instagram Sticky.E.Vape, and either one of those. You can Google search Tradecraft, Sticky.E.Vape.

Dub Brothers, I’m not sure. I don’t know if I’ve ever even Googled that. But-

TG Branfalt: Would you-

Barry Walker: Dubbros.com.

TG Branfalt: Great guys. That’s-

Barry Walker: Thank you.

TG Branfalt: … Barry and Brent Walker, the founders of California based Dub Brothers. Really again, thank you guys for coming on the show. This has been great. I hope that we can have you on again as your expansion continues. I just thank you so much for taking the time to join me today.

Brent Walker: For sure, man. I appreciate it.

Barry Walker: Thank you TG. Yeah, bye.

Brent Walker: All right. Stay safe out there.

TG Branfalt: I’m working on it.

Barry Walker: Okay.

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. This episode was engineered by Trim Media House. I’ve been your host TG Branfalt.

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From the N-Word to Blackface, the Cannabis Industry Grapples with Overt Racism

6/26/2020

For anyone who still doesn’t know, the prohibition of cannabis was a racist policy enacted to control Black and Brown communities.

The “war on drugs” was set in full swing by the Nixon Administration in the 1970s, but its resulting trauma continues to be felt today. Nixon activated the American judicial system to systematically cite, arrest, and imprison people of color in the United States for the use of cannabis and other drugs. Many drug war victims were often in possession of only cannabis (frequently in small quantities), a product that is now being grown, manufactured, and sold legally in government-regulated markets across the country. This injustice disproportionately affects Black and Brown people, who have been and still are incarcerated at much higher rates for doing the same thing that now brings accolades and wealth to white executives in the legalized industry.

Some white cannabis business owners are sensitive to this quandary, and a few have been talking about it for years, but even more have remained silent in the wake of recent protests against police killings. In fact, some in the cannabis community have actively denied the existence of the problem, even when confronted with overt racist behavior within the industry’s ranks.

A white influencer who used the N-word

Dabbing Granny, real name Gail Olson, is a popular cannabis influencer who went live on Friday, May 22 to her 1.1 million Instagram followers — just days before the murder of George Floyd by Minneapolis police. During her live stream, Olson, who is white, told a story about her daughter’s experience while she was incarcerated. Her daughter said something that got her thrown in solitary confinement, she disclosed, and, as she chatted, followers asked Olson what was said to prompt the harsh punishment. Olson responded with the phrase, which included the N-word. Olson easily repeated the slur with a hard R and didn’t skip a beat.

In the days after her live stream, Olson faced some backlash from the Instagram users who follow her. Many called on her to apologize. Olson, who genenerates income via her Instagram content, never had to respond to comments from people who sought an apology or explanation, however, because many of her white followers were quick to do it for her. Droves of Olson’s fans wrote long excuses in the comments thread as to why her usage of the racist slur was OK in the context (which it wasn’t — it’s never OK in any context from a non-Black person), some even venturing onto other peoples’ pages to do the same.

Since the original post, “Granny” supporters continue to attack anyone who speaks ill of her. Olson herself posted and subsequently deleted a few non-apologies to her page that denied wrongdoing on her part and often further exposed her daughter’s experience rather than speak to her own. She has yet to admit she was wrong or to take part in any visible anti-racism work.

Chef Anna — prolific Black cultivator, online personality, and the Michigan area’s favorite cannabis gift-giver — reached out to Olson to give her an opportunity to explain the behavior. Instead, her followers started to attack him, going so far as reporting his page for use of the N-word because he reposted Olson’s own video. This flagging technique is commonly used against Black and Brown influencers, cannabis companies, and sex workers on Instagram that result in activist accounts being suspended or censored, while the original comments being referenced are frequently deemed to be ‘Not in Violation of Community Guidelines.’

Throughout it all, Olson has actually grown her following to 1.4 million and has lost just a few of her many sponsors.

A dispensary owner who wore blackface on Halloween

Another example of overt racist behavior within the industry can be credited to Shy Sadis, who owns The Joint dispensaries in Washington State. Sadis recently issued an apology in response to the online circulation of photos depicting the white entrepreneur dressed up in blackface to impersonate Kanye West for a Halloween costume contest. When asked for comment the business owner said, “I did make a mistake 10 years ago on Halloween and I wish I could take it back, please accept my apology.”

Blackface originated in minstrel shows in the mid-19th century — historically, white performers would darken their faces with shoe polish or burnt cork, wear tattered clothing, and make themselves into characters built to perpetuate a false narrative that Black people were hyper-sexual, lazy, and ignorant. These performances and the laws that were eventually named after famous minstrel character “Jump Jim Crow” were used to reinforce negative stereotypes for the purpose of the continued oppression of Black people. These formerly popular (among white people) performances were instrumental in desensitizing whites to the horrific realities faced by enslaved Black people.

The photo shows Sadis in blackface standing next to his wife dressed as Kim Kardashian who had stuffed the back of her skirt. The photo is featured in a screen-captured text thread with an employee where Sadis stated that he wasn’t worried about the costume being offensive because he “won the costume contest;” he also stated that he has Black employees. This non-apology, his public statement, and rhetoric show that he does not understand why this behavior was harmful.

Sadis is currently affiliated with seven cannabis dispensary locations in Washington. According to Pink Boots 420, three Bellevue employees have quit as a result of the owner’s behavior, but there has yet to be any greater public backlash within the industry. According to Sadis, this is false and the employees were actually fired.

Cannabis is a ‘progressive’ industry plagued by complacent whites

In an industry that is overcrowded with hippie-esque influencers, budtenders, and stoners who preach love and light, there is a deafening silence when it comes to accountability for racist behavior and investment in the ideals of social equity and social justice. As the Black Lives Matter movement inspires activism and racial equality endeavors worldwide, one has to wonder why so many cannabis industry operators have remained silent.

However disappointing, it may not be surprising due to the fact that the cannabis industry was built on the backs of victims of the war on drugs, often with little to no regard for their sacrifice.

Editor’s Note: Gail Olson, or Dabbing Granny, has not responded to our request for comment. This article may be updated if she does. This article was written by a white person, and Ganjapreneur is a white-owned entity. To learn about implementing social equity practices in cannabis, how to structure your business in a way that works against systemic racism, and how to deal with race-related HR issues, we recommend booking a consultation with Cannaclusive or another Black-owned consultancy that specializes in social justice issues.

Update: Shy Sadis reached out to Ganjapreneur for comment after publishing, this article was updated accordingly on 6/26/20 at 2:42 PM PST.

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Poll: 70% of Americans Believe Smoking Cannabis is ‘Morally Acceptable’

6/26/2020

A recent Gallup poll found 70 percent of Americans believe smoking cannabis is “morally acceptable” compared to 28 percent who believe it is “morally wrong,” and just 2 percent who had no opinion or said it’s “not a moral issue.”

Among the topics polled by Gallup, smoking cannabis ranked lower than only gambling (71 percent), sex out of wedlock between a man and woman (72 percent), divorce (77 percent), drinking alcohol (86 percent) and birth control (90 percent).

Among the topics found more morally unacceptable than smoking cannabis were stem cell research using human embryos (66 percent), having a baby out of wedlock (66 percent), gay or lesbian relations (66 percent), medical testing on animals (56 percent), the death penalty (54 percent), buying and wearing clothes made from animal fur (54 percent), physician-assisted suicide (51 percent), abortion (44 percent), sex between teenagers (38 percent), pornography (36 percent), animal cloning (34 percent), polygamy (20 percent), suicide (18 percent), cloning humans (12 percent), and extramarital affairs between men and women (9 percent).

Smoking was considered morally responsible by a vast majority – 83 percent – of self-described liberals, but by a slim margin – 51 percent – of self-identified conservatives. For all of their differences, eight of the issues, in addition to cannabis consumption, were deemed acceptable by majorities of both liberals and conservatives, including: birth control, divorce, sex between an unmarried man and woman, drinking alcohol, having a baby outside of marriage, medical testing on animals, and gambling.

An October 2019 Gallup poll found 66 percent of Americans support legalization. When the pollster first asked the cannabis question in 1969, support for the reforms were just 12 percent.

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New Jersey Allows Medical Cannabis Delivery

6/26/2020

Medical cannabis patients in New Jersey can now get home delivery after the Department of Health issued a waiver on Thursday. Health Commissioner Judith Persichilli linked the new rules to the coronavirus pandemic, noting that dispensaries will be allowed to deliver to patients across the state once they have submitted a plan to the agency and it is approved.

Delivery was included in the medical cannabis expansion law signed by Gov. Phil Murphy (D) last year but the service never launched.

Under the Health Department-approved rules, only dispensary employees are permitted to make the deliveries – meaning delivery companies will not be allowed to offer the service. The employee must undergo a background check and all delivery vehicles must be equipped with GPS tracking and a lockbox.

Amid the coronavirus pandemic, Health Department officials have made several tweaks to the medical cannabis program in order to ease patient barriers, including reducing caregiver fees to $20, allowing telephone consultations and curbside dispensing, and increasing options for discounts.

The agency also permitted the opening of two dispensaries during the pandemic, bringing the total to 11 statewide.

In December, the state legislature approved a measure to put broad cannabis legalization on general election ballots, putting the issue to voters rather than approving the reforms themselves. An April Monmouth University poll found 61 percent of New Jersey voters supported the reforms, suggesting cannabis will be legalized in the state in November.

There are currently 78,698 patients and 3,104 caregivers registered with the program.

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DOJ Official Defends Agency’s Cannabis Merger Investigations

6/26/2020

In a June 11 memo, the U.S. Department of Justice Office of Professional Responsibility Director and Chief Counsel Jeffrey Ragsdale defended the agency’s cannabis investigations by the Antitrust Division (ATR), saying the industry “provided a unique challenge to federal and state regulators alike.”

The memo is in response to the agency finding out that a whistleblower would be testifying about alleged politicization of the Justice Department under Attorney General Bill Barr and that the cannabis cases opened by the department would be under scrutiny.

On Wednesday, John Elias, a veteran employee at ATR, testified to the House Judiciary Committee that the merger investigations by the agency into cannabis companies didn’t “even come close to meeting established criteria” for such an inquiry. Elias claims that the investigations were only opened due to Barr’s personal distaste for legalized cannabis.

In the memo, Ragsdale categorically denies the claims included in the December 19, 2019 whistleblower complaint but contends that, even if they are true, “there would be no violation of any laws, regulations, rules, policies, or guidelines.”

“These mergers provided unique challenges for ATR because ATR lacked experience with the cannabis industry, that industry was rapidly expanding and consolidating, many cannabis companies are unsophisticated, and ATR was limited in its ability to collect information from the merging companies and third parties because cannabis is illegal under federal law. In contrast to the allegation that the mergers provided no competitive concerns, ATR stated that these challenges made it impossible for ATR to reach that conclusion within the statutory thirty-day period in which it can issue Second Requests.” – Ragsdale in the June 11 memo

Antitrust prosecutors issue a “second request” for additional information and documents when there are concerns about the potential impact of a merger. These in-depth reviews can lengthen the merger process by months or years.

During his testimony, Elias said he was just seeing the memo for the first time and called the conclusion “concerning … because it seems so self-evident that if your sole motivation is animosity, that is impermissible. If there is no rule or regulation, there is one missing because that’s obviously wrong,” according to a Politico report.

Elias testified that at least 10 investigations into cannabis industry mergers were opened since Barr’s nomination as attorney general.

OPR closed its investigation into potential wrongdoing upon the issuance of the memo.

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ABM Equipment Releases New Bulk Cannabis Drying System

6/25/2020

ABM Equipment of Vancouver, WA has developed a new system which dries up to 10,000 lbs. of cannabis per hour with minimal loss of cannabinoids. This is a significant improvement over last year’s larger & more expensive tumbler & belt dryers, which burned more CBD and energy respectively.

ABM’s process accepts fresh or baled whole plants, shreds and meters the hemp into fluid-bed dryers, then separates the stalk and premium material. The premium biomass is then packaged for extraction.

This method is able to retain more cannabinoids than tumble dryers because it uses heat as an accelerant rather than a primary driver of evaporation, thereby burning less CBD. Additionally, the majority of lost trichomes are captured and returned to each batch instead of accumulating on the wall of the dryer or being lost into the environment.

Fluid beds are also distinct from belt dryers in that they push air up through the product which is being constantly shifted by vibration. This fluidizes and maximizes the hemp’s exposure to air. Belt dryers pull air from above, creating concentrated air streams which need more time to remove the inevitable wet spots.

ABM Equipment Co. Inc. is a systems development and integration firm with 40 years’ experience in bulk processing and hundreds of proprietary solutions in place for large players in the food and pharma industries. ABM believes these technologies will help bring the cannabis industry up-to-speed with efficiencies being achieved in other sectors.

“Now that cannabis is being grown in the volume needed for large scale processing, leveraging the most controlled and efficient systems will be crucial,” said Jeff Walling, owner of ABM Equipment. Regarding their system, he went on to say, “We’re extremely confident that this approach will provide some of the best results in the industry.”

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If you would like more information about this topic, call John Hilgendorf at 503-347-8104 or email jhilgendorf@abmequipment.com. More information can also be found at abmequipment.com/hemp-dryers.

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U.S. Military Allocates $17M for Psychedelic Medicine Research

6/25/2020

The U.S. Defense Advanced Research Projects Agency (DARPA) is funding a University of North Carolina School of Medicine study on potentially using psychedelics such as ketamine and psilocybin for mental health medications.

The research is led by Dr. Bryan L. Roth, the Michael Hooker Distinguished Professor of Pharmacology, who pointed out that drugs “like ketamine and potentially psilocybin have rapid antidepressant actions” but their clinical use is limited due to their “hallucinogenic, addictive, and disorienting side effects.”

“Depression, anxiety, and substance abuse affect large segments of the population. Creating safe, rapidly acting and more effective medications would revolutionize the treatment of these disorders thereby diminishing death and disability. … Our team has developed innovative methods and technologies to overcome these limitations with the goal of creating better medications to treat these neuropsychiatric conditions.” – Roth in a statement

The four-year agreement between DARPA and the UNC School of Medicine is worth $26.9 million and features researchers from Stanford University, Icahn School of Medicine, the University of California-San Francisco, and Duke University.

Last September, psilocybin researcher Roland Griffiths announced the founding of the Center for Psychedelic and Consciousness Research at Johns Hopkins University. The center is funded by private donations of at least $17 million.

Griffiths said the center’s researchers would explore the drug as a potential treatment for alcoholism, nicotine dependence, post-traumatic stress disorder, anorexia, Alzheimer’s, and Lyme disease.

“Rapidly acting drugs with antidepressant, anti-anxiety, and anti-addictive potential devoid of disabling side effects do not exist, not even as experimental compounds for use in animals,” Roth said. “Creating such compounds would change the way we treat millions of people around the world suffering from these serious and life-threatening conditions.”

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MG Retailer Called Out for ‘Irresponsible’ Article on Cannabis Social Equity

6/25/2020

Cannabis industry social equity advocates are calling an article by MG Retailer “irresponsible” for including Cresco, HempStaff, Revolution, and Vangst “as leaders of social equity work.” In a response to the MG Retailer article published in full by Medium, the signees call out the “oblivious commentary” as “the exact behavior that has created systemic and institutionalized racism that exists in America today.”

The article is authored by Beyond Equity Founder Chaney Turner, Illinois Equity Staffing Co-Founder Shawnee Williams, and THC Staffing Group Co-Founder Danielle Schumacher.

“The vast majority of owners of the companies in this article are white. White-owned companies should not be deciding what kind of help impacted communities need. White-owned companies should not be leading the development of social equity legislation and programs. If they truly want to claim they run equitable businesses, they would have to surrender ownership to Black and Latinx formerly-incarcerated people.” – Schumacher, Turner, and Williams

The authors point out that Cresco and Revolution are “party of the white-owned monopoly in Illinois” and call out Cresco for not filling jobs related to their SEED program – a social equity incubator program announced in May 2019 – that have been posted since last year. The advocates also said it “remains to be seen” whether or not participants from that program end up with a state license at all.

Schumacher, Turner, and Williams argue that HempStaff and Vangst both existed for about five years “before making any attempt to invest resources in candidates who qualify for social equity.”

“Their social equity programs are set up to serve owners who do not personally qualify for social equity and are not invested enough in impacted communities to build partnerships on their own,” the open letter states. “Until Vangst launched their social equity program, their slogan was ‘Be a Vangster’ and the people featured on their site were almost 100 percent white.”

The authors also call out MG Retailer for including Feel State on the list – the company is asking for donations to NORML and the Last Prisoner Project. Turner, Schumacher, and Williams point out that both of those advocacy organizations and “white founded and led … whose work is not centered on Black, Latinx, and Indigenous communities.”

“How does this make Feel State a company working for social equity?” the authors ask.

MG Retailer did include The Hood Incubator on the list and the authors included their own list of local and national non-profit groups doing social equity work in the cannabis space, including:

Chicago NORML
Cannabis Equity IL Coalition
Drug Policy Alliance
Marijuana Matters
Minorities for Medical Marijuana
Minority Cannabis Business Association
Supernova Women
The Equity Organization
Women of Color in Cannabis

James Yagielo, founder and CEO of HempStaff — one of the companies that were highlighted in MG Retailer’s article — said, “There seems to have been some confusion around our 2019 announcement of a Social Equity Division.”

“HempStaff has been assisting social equity applicants get hired and assisting minority owners find employees since 2015,” Yagielo said. “When certain states announced larger social equity programs in 2019, we started to get a massive amount of requests for social equity applicants, leading to the creation of its own division. We did not start looking into social equity in 2019, we simply expanded it.”

On Wednesday, the National Cannabis Industry Association announced the launch of a Social Equity Scholarship program that gives “any social equity applicant or license-holder” one free year of NCIA membership.

Khurshid Khoja, chairperson of NCIA’s board of directors, board member of the Minority Cannabis Business Association, and principal at Greenbridge Corporate Counsel, called the program “one way” that the organization “can help empower black and brown communities that were (and are) disproportionately targeted by law enforcement for cannabis offenses.”

Amber Senter, co-founder of Supernova Women and chairperson of NCIA’s Diversity, Equity, & Inclusion Committee, called the scholarship program “a step in the right direction of inclusion.”

The NCIA program is a permanent offer to equity applicants in perpetuity.

Editor’s note: This article was updated to add the statement by Jamies Yagielo, who disputed some of the claims made in the article, “Cannabis equity advocates respond to MG Retailer’s ‘8 Cannabis Businesses Working for Social Equity.'”

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DOJ Whistleblower Calls AG Barr’s Anti-Cannabis Actions ‘Harassment’

6/25/2020

John Elias, a veteran employee at the U.S. Department of Justice Antitrust Division, testified on Wednesday that Attorney General William Barr opened antitrust investigations into 10 cannabis companies due to his personal dislike for the industry, which Elias agreed was tantamount to “harassment” and didn’t “even come close to meeting established criteria” for an investigation, according to an MJBizDaily report.

In the testimony, Elias only names one of the cases opened by Barr – the proposed 2018 merger of MedMen and PharmaCann, which was ultimately called off. Elias, who is testifying as a whistleblower in a House Committee on the Judiciary investigation seeking information on the alleged politicization of the Justice Department under Barr, said the attorney general ordered a full review of the deal despite it not coming close to meeting review thresholds by the anti-trust division. Barr’s request led to the production of 1.3 million documents and required 40 personnel to review, Elias testified.

In all, the nine cannabis cases reviewed last year accounted for nearly 30 percent of the antitrust division’s full-review or second-request review and at one point five of the agency’s eight active investigations were for cannabis firms.

In many of the cannabis industry investigations, staff calculated market shares far smaller than the double-digit shares that ordinarily trigger a full antitrust review, according to Elias, and in two instances, staff determined at the start of the investigation that the merging companies operated in different geographic locations and did not compete at all.

Elias indicated that the post-merger market share for one of the unnamed investigated deals would be just 0.35 percent.

“This rationale – standing alone, without reference to a competition problem – is not described in the Merger Guidelines as a basis for investigating a transaction.” — Elias, during testimony, via MarketWatch

In several instances, staff sought to make the investigation less burdensome on the parties by narrowing the subpoenas but “political leadership” at DOJ refused such requests, Elias said during his testimony.

In 2019, shortly after being confirmed by the Senate, Barr called the cannabis policies in the U.S. “intolerable” and said he would support policies outlined in the STATES Act, which would protect state-approved cannabis programs.

Last January, Barr said he would “not go after” legal cannabusinesses.

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Whistleblower: AG Barr Targeted Cannabis Industry Due to Personal Politics

6/24/2020

A Department of Justice whistleblower will testify today that nearly one-third of the agency’s Antitrust Division merger investigations targeted cannabis businesses due to Attorney General Bill Barr’s personal negative feelings about the industry, according to a CNN report.

John Elias, a career department employee, said in written testimony that Barr pushed for such an investigation last year, ordering Second Request subpoenas – the divisions most comprehensive type of merger probe – “against the analysis of career staff.”

“The rationale for doing so centered not on an antitrust analysis, but because he did not like the nature of their underlying business. … These mergers involve companies with low market shares in a fragmented industry; they do not meet established criteria for antitrust investigations.” – Elias in written testimony

Elias also claims that last year Assistant Attorney General Makan Delrahim, the head of the Antitrust Division, “acknowledged that the investigations were motivated by the fact that the cannabis industry is unpopular ‘on the fifth floor,’ a reference to Attorney General Barr’s offices in the DOJ headquarters building,” he wrote in his testimony. “Personal dislike of the industry is not a proper basis upon which to ground an antitrust investigation.”

The claims come in a probe by the House Committee on the Judiciary seeking information on the alleged politicization of the Justice Department under Barr. The investigation is primarily focused on the agency’s involvement in the sentencing of Roger Stone – an ally of and former advisor to President Donald Trump.

In 2017 Stone launched the now-defunct U.S. Cannabis Coalition and was invited to give the keynote at that year’s Cannabis World Congress and Business Expo but was removed from the role after at least 30 exhibitors and speakers, and the Minority Cannabis Business Association, threatened to boycott the event over Stone’s involvement.

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Unregulated Cannabis Outperforming Legal Market in British Columbia

6/24/2020

Unlicensed cannabis producers and sellers in British Columbia, Canada made about one-third more in revenues last year than the province’s licensed companies, according to Statistics Canada figures outlined by Global News. Unlicensed producers brought in $1.24 billion, while licensed B.C. companies earned $765 million.

The legal sales revenues represent $600 million more than 2018, the first year of legalization in Canada.

Michelle Mungall, minister of jobs and economic development, pointed to a government guide for black or grey market sellers and producers to help them transition to the legal market.

“What we all understood would happen is that there would be a transition. … “They want to make the transition to a legal market and of course we as a society and as a government want them to do that, but they need help,” – Mungall to Global News

A Statistics Canada report from August 2018 showed that 42 percent of Canadian cannabis consumers still relied on illegal sources for cannabis products; while an Ipsos poll three months later found that number decreased to 35 percent.

Statistics Canada reported in July 2019 that illegal cannabis products in the nation were, on average, $4.72 cheaper per gram than their legal counterparts. On average, the price of illegal cannabis was $5.93 per gram – down from $6.23 at the beginning of the year – while legal products cost $10.65 per gram, up from $10.23 at the start of the year.

Note: All dollar figures in this story are in Canadian currency.

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Oklahoma Medical Cannabis Companies Sue State Over Residency Requirements

6/24/2020

Several medical cannabis companies in Oklahoma are suing the state over its industry residency requirements and rules requiring the businesses be 1,000 feet from schools, the Oklahoman reports. The Oklahoma legislature passed a measure last session to resolve these issues, but Republican Gov. Kevin Stitt ultimately vetoed the bill saying it was “not fully scrutinized.”

The lawsuit, filed by Tulsa attorney Ron Durbin on behalf of the companies, asks a judge to block the Oklahoma Medical Marijuana Authority from enforcing the laws they say could prohibit some licensed cannabusinesses from continuing to operate. Specifically, the lawsuit is asking a judge to rule that OMMA cannot deny business license renewals if the owners do not meet the two-year residency requirements or if the dispensaries are located within 1,000 feet of a school or preschool. The lawsuit also asks the agency to immediately renew any licenses that were rejected on the residency or location grounds.

Durbin helped craft the medical cannabis industry reform bill vetoed by Stitt. That measure also included some delivery provisions, would have tweaked residency requirements, and permitted dispensaries to stay in their current location if a school is built within 1,000 feet after the business opens.

The lawsuit alleges that rules adopted by OMMA not included in the referendum left “hundreds, if not thousands” of licensed dispensaries within 1,000 feet of a school entrance. The plaintiffs argue that they should not have to move their business.

As of May 1, there were 282,511 registered patients in the state, according to state figures outlined by the Marijuana Policy Project. The state’s medical cannabis program is one of the fastest-growing in the country with sales topping $61.4 million in April and totaling $275 million so far this year. MJBizDaily estimates that medical cannabis sales in the state could hit $700 million by the end of the year, keeping pace with more populous states such as Arizona and Florida.

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Los Angeles Considers Cannabis Licensing & Social Equity Overhaul

6/23/2020

The Los Angeles City Council is considering new cannabis licensing and social equity proposals today from the Department of Cannabis Regulation (DCR) that stand to overhaul nearly the entire licensing system.

Firstly, DCR’s proposals would grant temporary approval to all social equity applicants in the city. The recommendations would also permit cannabis licensees and applicants to relocate within the city throughout the licensing process (which is currently not allowed) and would limit new cannabis retail and delivery licenses to only social equity applicants until 2025. Lastly, the proposals would make adjustments to counteract potentially “predatory practices” in the social equity program.

Marijuana Business Daily reports that the recommendations have drawn mixed reactions: some have lauded the plan as finally following through on the city’s social equity commitments, while critics argue the move would leave out legacy operators who are still awaiting licenses but don’t qualify as a social equity applicant.

“I think it’s fantastic,” said cannabis industry consultant Lynne Lyman.

“It’s like this big omnibus fix for the whole ordinance, and it really re-creates the social equity program to make it work, because it has not worked.” — Lyman, via MJBizDaily

Cannabis attorney Michael Chernis, however, said in the report that while he supports the social equity program, the plan would “cut off any chance for anyone but a social equity applicant to get a retail license, a non-storefront retail license or, as far as I can tell, any license for five years.”

Los Angeles is currently facing a lawsuit from the Social Equity and Workers Association over the city’s first run of social equity licensing last September, which plaintiffs argue was an unbalanced, first-come-first-served affair. The lawsuit alleges that some hopeful licensees were able to access the applications ahead of time, which gave them an unfair advantage.

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Cannabis Patients Referred by Fake Doctor in Missouri May Lose Certifications

6/23/2020

About 600 Missouri medical cannabis patients are at risk of losing their program licenses after state regulators found the applicants had submitted physician certification forms with an unauthorized signature. The Department of Health and Senior Services investigation found no evidence that the affected patients were aware the physician listed on the certification was not the physician who met with them.

DHSS spokesperson Lisa Cox told the Springfield News-Leader that the fraud was committed by “a person [or] people impersonating a doctor.”

Dr. Randall Williams, director of DHSS, said the agency is “working to minimize the impact on them while also holding accountable those who are responsible.”

“Through our many types of regulatory efforts, we remain watchful for any wrongdoing in order to protect Missourians. Our main concern is how this fraudulent activity negatively affects patients …” – Williams in a statement

The department indicated that affected patients will be notified and given 30 days to submit valid certification to DHSS and the case had been referred to the state Attorney General’s Office and the Missouri Board of Healing Arts.

Patients who ultimately have their licenses revoked will be refunded a prorated refund of the original registration fee for the amount of time left on the license.

While medical cannabis sales aren’t expected to begin until later this summer, the state’s industry has been marred with controversy about relationships between industry applicants and members of Republican Gov. Mike Parson’s administration.

Last month, a whistleblower claimed that Wise Heath Solutions, the private company hired to score applications, may have tainted the process and that there are conflicts of interest within DHSS. Wise Health is a joint venture of Nevada-based Veracious Investigative & Compliance Solutions and Oaksterdam University.

As of March 4, more than 800 appeals had been filed by companies that were denied licenses to operate a medical cannabis business in the state and many of the appeals argue that the scoring system used in the licensing process was flawed. A review by the St. Louis Post-Dispatch found that some two dozen groups, which each won five or more licenses, had ties to out-of-state cannabusinesses or the Missouri Medical Cannabis Trade Association – or MoCannTrade – whose lobbyist is Steve Tilley. Tilley is also an advisor to the governor.

The Missouri House Special Committee on Government Oversight is investigating the state’s handling of industry licensing and is seeking records from Parson’s deputy chief of staff, chief operating officer, and Tilley.

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Michigan Limits Cannabis Worker Protections with Industry Rules Update

6/23/2020

New cannabis industry rules take effect this week in Michigan, including updated labor rules that no longer require operators to maintain labor peace agreements, according to an MLive report. The new Marijuana Regulatory Agency rules also fail to include delivery-only business licenses and a clause that would have allowed the state to force sales between cultivators and retailers even though they might be competitors under the state’s vertical integration system.

The labor peace agreement rule would have required any cannabusiness to have a labor agreement in place with employees. Marijuana Regulatory Agency Director Andrew Brisbo explained that the proposed rules would have protected the industry and its workers.

“A labor peace agreement is an agreement between an operator and a recognized labor organization just to ensure that both sides come to the table, that the business owner won’t stand in the way of organization by the staff of the facility and that the labor organization wouldn’t push the labor force into a strike situation.” – Brisbo to MLive

Republican State Sen. Aric Nesbitt described the agreements as “a Mob-style shakedown of these new businesses that are growing.”

“At least the Mob lets you get going first. They won’t even issue a license unless you sign one of these labor peace agreements,” he said in an interview with MLive.

In a press release, the MRA said the rules “implement, administer and enforce appropriate standards for marijuana businesses and associated equipment and establish regulations ensuring the safety, security, and integrity of the operation of marijuana businesses and are intended to provide clarity and consistency to those working in both the medical and adult-use markets.”

The rules are largely final versions of emergency rules the state had been operating under; however, the labor peace agreement had been divisive. In January the Republican-controlled state legislature passed concurrent resolutions opposing the agreements.

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