Vireo Sells Pennsylvania Facilities to Jushi for $37M

6/23/2020

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Jushi Inc., a Florida-based, multi-state, cannabis company, is set to acquire Vireo Health International’s cultivation-processor facilities in Pennsylvania for $37 million. The company, Pennsylvania Medical Solutions, holds cultivation and processor licenses in Pennsylvania which would be included in the deal pending regulator approval.

Vireo founder and CEO Dr. Kyle Kingsley said the deal “secures Vireo’s capital position for the foreseeable future” and will enable the company to “comfortably execute” its fiscal year 2020 strategy, “and begin generating positive cash flow in the first half of next year without requiring any additional capital infusions.”

“We’re especially pleased to achieve this milestone for shareholders without the dilutive impacts of other forms of financing, and we’re also very excited about the opportunities in front of us to re-invest a portion of these proceeds to increase scale in select markets where we see significant opportunities to improve revenue growth and future cash flow generation.” – Kingsley in a statement

The company indicated a portion of the proceeds of the transaction would be used “for capital expenditures that will increase scale in its core markets of New York, Minnesota, Maryland, Arizona, and New Mexico.”

Of the $37 million, $16.3 million is in cash, while $3.8 million is in the form of a four-year note with an 8 percent coupon rate payable quarterly, and $17 million is in right of use liabilities associated with long-term lease obligations. The deal also includes an 18-month option for Jushi to purchase equity in Pennsylvania Dispensary Solutions, LLC – another Vireo subsidiary – for an additional $5 million in cash.

Jushi secured $15.25 million in debt financing for the purchase, led by insiders and existing shareholders, the company said in a press release.

While based in Florida, Jushi does not have any operations in the state. It lists its active and in-progress operations in California, Nevada, Illinois, Ohio, Virginia, and New York.

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7-Eleven Buys Buildings Housing Dispensaries, Kicks Them Out

6/22/2020

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Four Oklahoma dispensaries are being forced from their locations by convenience store chain 7-Eleven Incorporated after the company bought buildings rented by the dispensary owners and have declined to renew their leases, KFOR reports. Starla Norwood, a registered nurse that runs Nurses Station dispensary, said the company told her she needed to be out of her current location by the end of the month, giving her just 14 days’ notice.

“What we’re hearing from 7-Eleven is they consider this a criminal activity and money laundering, and there are 300,000 Oklahomans with medical cards, and they seem to think their business is not important.” – Norwood to KFOR

Gayle’s Dispensary owner Christian Oliver said he received no written notice and 7-Eleven didn’t make any “attempt at dialogue.” He said that the company “does not want to lease to the cannabis industry.

“There wasn’t any kind of approach to investigate it. It was just like ‘nope, we’re not doing it, get out’,” he said in the report, noting that he was given until July 31 to vacate the premises.

7-Eleven Inc., which is based in Dallas, Texas, reportedly bought the real estate – an independent 7-Eleven franchise in Oklahoma – in January. That same month, the property manager had indicated in an email to the tenants that “on day one nothing changes.”

John Koumbis, owner of JKJ Processing Inc., called 7-Eleven’s decision to force the dispensaries out with little notice “utterly ridiculous.” He told the Oklahoma Chronic that company representatives said, “they’re not for marijuana” and “they don’t believe in it” and would not be renewing any cannabis industry leases in buildings they own.

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Israeli Lawmakers Advance Cannabis Legalization Bills

6/22/2020

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Members of Israel’s ruling party coalition have advanced two cannabis legalization bills, guaranteeing their support of the reforms in the Knesset, the Jerusalem Post reports. The bills were submitted by Likud MK Sharren Haskel and Blue and White MK Ram Shefa and were advanced by the Ministerial Committee on Legislation on Sunday.

Haskel, who has supported the reforms in the Knesset for five years, called the move “a big step toward full legalization.”

The bills are expected to pass a preliminary reading in the Knesset plenum on Wednesday and then will be combined in committee, the Post says. After making it through the committee, they will be brought back through the legislative process as a government-sponsored bill and will then have to pass three more times each in the plenum and committee to become law.

Community Development Minister Orly Levy-Abecassis, whose ministry is in charge of the Anti-Drug and Alcohol Authority, supports the reforms on the condition that they will be coordinated with her ministry and others further in the legislative process as it becomes a government-sponsored bill, the report says.

The bills would allow adults to possess up to 50 grams and up to two cannabis plants grown under natural light in a private place for personal use. Possessing more than allowed would still be subject to large fines and using cannabis in public would remain illegal. Those who have been convicted of low-level cannabis use could also seek to expunge the charges.

Cannabis use and possession would be permitted to Israelis 21-and-older, with the exception of those working in security positions. Additionally, the measure prohibits driving while using cannabis, sets up a fund to educate people in schools about the dangers of using cannabis and to prevent addictions. All advertising restrictions relating to tobacco in the country would also apply to cannabis products.

The joint government is led by Prime Minister Benjamin Netanyahu (Likud) and Defense Minister Benny Gantz (Blue and White). The coalition announced earlier this month that they would advance legislation “to resolve the issue of decriminalization and legalization” of cannabis.

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Halo Labs Reports 49% Q1 Revenue Drop Compared to 2019

6/22/2020

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Toronto, Ontario, Canada-based cannabis company Halo Labs reported a 49 percent decrease in revenue during the first quarter of the year compared with the same period last year. In all, the company saw revenues of $4.5 million in quarter one, down from $8.7 million in the three months that ended March 31, 2019, the company said.

The most significant driver of the revenue decline was the shutdown of Halo’s bulk distillate operations in Cathedral City, California, which the firm called “a conscious decision … to curtail manufacturing to preserve working capital amidst challenging market conditions due to the vape crisis.” The company also pointed to the coronavirus response in Nevada, which closed in-person dispensary sales and relied on home delivery, resulting in a 36.7 percent decline in cannabis sales in the state, according to BDS Analytics figures outlined by Halo.

The company reports that, compared to quarter four 2019, they experienced a 63.9 percent increase in grams of flower sold – perhaps due to the pulmonary disease linked to tainted vape products last year – along with a 4.7 percent increase in the average price per gram to $3.16.

In Oregon, Halo reported an 11 percent decline in grams of shatter sold from Q4 2019 to Q1 2020 and a 33 percent decline in grams of oil sold due to a decline in vape sales, the company said. However, the firm also experienced a 497 percent increase in grams of live resin sold, a 2,111 percent increase in grams of flower sold, a 109 percent increase in grams of oil sold in tincture and gummy forms, and 69,689 grams equivalent of pre-rolls.

As of March 31, Halo said it has a working capital surplus of $8.8 million and $3.8 million in cash. The company said it plans to control costs and preserve cash by paying senior management in stock. On Saturday, the company said it had issued share-based payments to contractors and suppliers in lieu of cash.

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Nevada to Pardon All Low-Level Cannabis Offenses

6/19/2020

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The Nevada State Board of Pardons has approved a resolution pardoning people convicted of low-level cannabis offenses that are now legal under state law. The resolution was introduced by Democratic Gov. Steve Sisolak who also serves as a member on the board.

“Today is an historic day for those who were convicted of what has long been considered a trivial crime, and is now legal under Nevada law. Since the passage of Question 2 in 2016 and the decriminalization of possession for small amounts of marijuana, many Nevadans have had these minor offenses remain on their records, in some cases as a felony. This resolution aims to correct that and fully restore any rights lost as a result of these convictions.” – Sisolak in a statement

Prior to the broad cannabis reforms approved by voters, possession of one ounce or less of cannabis was a criminal act that could be charged as a misdemeanor, gross misdemeanor, or felony depending on additional factors. The reforms included in the resolution apply to those who were previously convicted for possession of one ounce or less, and to those convicted multiple times for the crime.

The resolution marks the first time the Nevada Pardon Board has approved a resolution to pardon “thousands” of individuals. The secretary of the board will create an expedited process for individuals seeking pardon documents, which will be free of charge and available online.

State Attorney General Aaron D. Ford called the move “another step toward justice” which will make it easier for those affected by the reforms to access financial aid for college and get jobs and housing.

The board notes that the action does not include records sealing, which is outside of its scope; however, Sisolak signed a bill during the most recent session providing a streamlined and free process for sealing past convictions.

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Embattled MedMen Co-Founders Leave Company

6/19/2020

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The co-founders of MedMen Enterprises Inc, Andrew Modlin and Adam Bierman, have stepped down from their roles on the company’s board of directors, the firm announced on Wednesday. The company indicated that Modlin’s employment agreement with MedMen expired last month and he had been serving as an observer to the board.

Bierman had stepped down from his duties as CEO on February 1 but no further details were offered regarding his departure from the board. Bierman’s decision to end his tenure as CEO came after reports that the company offered its vendors shares in the company in an attempt to reduce its overhead and conserve cash. Three months prior to his exit as CEO, MedMen called off its deal to acquire PharmaCann, in what Bierman described as “in the best interest” of the company’s shareholders.

Both Bierman and Modlin had surrendered their super-voting shares in January to the board and Executive Chairman Ben Rose, respectively, leaving them with just a 5 percent stake in the company.

Bierman had hosted a Reddit “AMA” the week prior to stepping down as CEO, where he was peppered with poignant questions, which he deflected and ultimately ended the session after about an hour and left many questions unaddressed.

Additionally, in April, Milestone Investments LLP, an early angel investor in MedMen, filed an official complaint against the co-founders and Chief Strategy Officer Christopher Ganan over unpaid loans to the company. The trio has reportedly used their Los Angeles, California mansions as collateral on a $10.2 million loan and Milestone sent notices of default in March and asking a court to force the men to surrender the deeds, sell off the shares they had purchased, and pay back the $2 million loan they used to acquire them.

In the July 17 announcement, MedMen also announced a settlement in a separate case between MMMG-MC Inc. (BVI), Brent Cox, Omar Mangalji, and others in which the firm issued 1.5 million Class B Subordinate Voting Shares to MMMG-MC as a part of the overall 24 million share settlement.

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Green Party Candidates Call for Decriminalizing All Drugs

6/19/2020

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The leading candidates for the Green Party’s presidential ticket Howie Hawkins and Angela Walker are calling for “radical changes” to policing, including decriminalization of all drugs. The plan also includes community control of police and using federal funds in police budgets specifically to “pay for the services and economic development that working-class communities of color need.”

The candidates point out that in the U.S., “drug law offenses account for 16 percent of all arrests and are the single biggest category of arrests.”

“Drug offenses account for about 1 in 5 people in jail or prison, including 46 percent of federal prisoners. Drug abuse is a health problem, not a criminal problem. Instead of a criminal offense, we must make drug use and possession a violation that refers drug users to medical and social services.” – Hawkins and Walker, “Reimagining Public Safety: Community Control, Social Investment, and Decriminalizing Drugs”

The community control plan proposes police commissions are “publicly-elected or randomly-selected like juries” with the power to hire and fire the police chief, independently investigate and discipline police misconduct, formulate and review police budgets and practices, and negotiate police union contracts.

Hawkins and Walker appear to support the reforms proposed by Congressional Democrats’ Justice in Policing Act, which includes revising qualified immunity, which shields officers from liability for excessive use of force, a ban on no-knock raids and chokeholds, mandating racial bias training, making lynching a federal crime, and ending the transfer of military equipment to state and local law enforcement agencies, among other reforms.

Senate Republicans also have pending police reform legislation which includes incentives for police departments to ban chokeholds – but not an outright ban – more disclosure requirements about the use of force and no-knock warrants, and penalties for false reports. The measure also includes emergency grant programs for body cameras, makes lynching a federal hate crime, and would create a commission to study the conditions facing black men and boys.

The Green Party proposal includes additional provisions, including mandating de-escalation tactics, requiring a warning before discharging a firearm, require officers to intervene when another officer is using excessive force, a ban on shooting at moving vehicles, and residency requirements for police.

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Survey: 70% of Cannabis Consumers Haven’t Heard of Terpenes

6/18/2020

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A survey examining the profile of the “modern cannabis consumer” by Oasis Intelligence found that 70 percent of respondents were unfamiliar with the terms “terpenes” and “entourage effect” despite a recent industry push to market the terms as points of differentiation.

Oasis Intelligence co-founder Laura Albers told The Fresh Toast that people in the industry “have a real advantage when it comes to understanding the plant from a scientific, regulation and usage perspective that is generally a requirement for those in the space.”

“However, when it comes to the average consumer, we see the needs for education are not about more advanced topics that the industry may prioritize—think terpenes, minor cannabinoids gaining popularity or even the endocannabinoid system.” – Albers to the Fresh Toast

Additionally, the cannabis consumer insight firm found half of consumers use cannabis for medical and wellness reasons, while one in five made no distinction between using cannabis for health and wellness and recreationally.

Nearly half of consumers – 48 percent – last used cannabis with someone else, a partner or a friend, and those bonds seem to drive how consumers get their information as 43 percent of respondents said friends were their “number one” source for getting cannabis information. Moreover, one in four surveyed said their last cannabis purchase was through a family member – which was more than those who purchased via a delivery service; another 22 percent said the recommendation of friends is their “primary driver” to trying a new product.

The company notes that brands and companies “can’t overlook the power of this network effect” and suggested that referral program “could have a significant impact” on harnessing the trust people have in close friends and family. Oasis notes that the study took place right before the coronavirus pandemic and at that time friends and family “were a more likely source for purchasing cannabis than delivery services.”

Slightly more than half of the respondents (51 percent) said they looked to cannabis to treat anxiety, while 44 percent use it to help with depression and another 31 percent for insomnia. Oasis notes that making health or wellness claims about cannabis products runs afoul of federal laws “but the reward will be high” for companies who can both operate within the parameters of Food and Drug Administration guidance, specifically on CBD, “while conveying that they can be trusted for wellness benefits.”

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Louisiana Bans Smoking Hemp In All Forms Except Rolling Papers

6/18/2020

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Louisiana Gov. John Bel Edwards (D) signed a bill into law on Wednesday containing regulations for the state’s industrial hemp and CBD industry. The bill, ACT 344/HB 843, includes language that bans all smokeable hemp products — except for rolling papers.

The legislation gives a distinct outline of the industry including licensing requirements, application/permit fees, regulations for the labeling and testing of CBD products, as well as regulations for other industrial hemp-based products. The ban on inhalable hemp products is likely a preemptive crutch for law enforcement agencies, which often have trouble discerning between illicit, THC-rich cannabis products and federally legal, CBD-rich hemp flower.

The legislation sets penalties for violating the new policies at a maximum fine of $300 for the first offense and a maximum fine of $1,000 for the second offense; third and subsequent convictions can result in fines of up to $5,000.

According to a KATC News report, the bill also grants the Department of Agriculture and Forestry the power to issue stop orders to businesses and allows for the state commissioner of alcohol and tobacco control to issue civil fines for violations.

The Louisiana Alcohol and Tobacco Control Board in February approved some 1,500 businesses to sell CBD products.

Louisiana recently expanded its medical cannabis laws to allow doctors to recommend patients for the program for “any condition … that a physician, in his medical opinion, considers debilitating to an individual patient and is qualified through his medical education and training to treat.”

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Colorado Cannabis Consumers Think Stoned Driving Policies Are ‘Out-of-Touch’

6/18/2020

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A two-year study by Colorado Department of Transportation found that cannabis consumers consider driving under the influence of the drug to be less dangerous and are skeptical of laws and policies against stoned driving. The statewide study focused on Coloradans’ attitudes, beliefs, and behaviors on driving and cannabis.

Despite consumer opinions that driving under the influence of cannabis is less dangerous than driving under the influence of other drugs and alcohol, most surveyed still consider the travel conditions, their personal alertness, and how recently they consumed cannabis before driving, the report says.

Additionally, those skeptical of driving-while-stoned enforcement expressed a desire for more research on detection methods, dosage-based legal limits, a self-assessment of impairment and how long they should wait before driving. Most consumers were sensitive to ads that addressed the dangers of stoned driving but also said the messages overstated the dangers of driving high, stereotyped cannabis users, or were overall unrealistic.

Specifically, on the enforcement issue, the primary critiques were that the current legal limit of THC in the bloodstream – 5 nanograms – is “not based on sufficient evidence” and the benchmarks are “an inaccurate measure of impairment because tolerance varies widely based on individual characteristics.”

By-and-large, cannabis consumers and supporters saw government policies on the issue as “out-of-touch.”

The key to reaching some skeptics, CDOT found, is to lead with feelings and follow with facts. Cannabis consuming respondents said they enjoyed the honest tone and straightforward approach of safety campaign materials, like PSA ads, and felt like they were being talked to by a friend and not an authority figure.

“Cannabis users liked ads that focused on providing information or a different perspective but didn’t feel heavy-handed or condescending.” – CDOT, “The Cannabis Conversation”

Cannabis users also didn’t like terms like “weed” or “pot” and preferred “cannabis” and “marijuana.”

The agency connected with more than 18,000 Coloradans via surveys, focus groups, and public meetings. Sam Cole, CDOT traffic safety communications manager, said the effort found “no typical” cannabis consumer.

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Excelsior College Offering Graduate Certificate in Cannabis Control

6/18/2020

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Excelsior College is launching a three-course, nine-credit graduate certificate in a cannabis control program. The course can be taken alone or applied toward the online college’s master’s degree programs.

Dr. James N. Baldwin, Excelsior president, said a variety of organizations in both public and private sectors “will require a deeper understanding of the emerging regulatory environment” as more states move toward broad legalization.

“Excelsior College’s graduate certificate will provide strong credentials and knowledge to enhance the skillset of those working or intending to work in this industry. Our interdisciplinary approach with a focus on regulations and compliance makes our program unique. We will bring together professionals from various aspects of the industry to discuss the impact of cannabis legalization on our communities, states, and nation to provide students with subject matter expertise so they can keep pace in the fast-changing industry.” — Baldwin, in a statement to Ganjapreneur

The three courses include: Risk Assessment in Cannabis Control; Interstate/International Commerce: Policy and Regulatory Environment; and Implications of Legalization of Cannabis: Policy and Compliance.

Scott Dolan, dean of graduate studies at Excelsior College, told Bezinga that the program “naturally aligned” with the college’s “disciplinary expertise in business, public health, criminal justice, and public administration,” noting that other regionally-accredited universities and colleges “have been relatively slow to respond with educational offerings” to meet the cannabis industry’s growing demand.

Excelsior College is based in New York, where medical cannabis is legal, but lawmakers have been unable to reach broad legalization agreements over the last two years. The state’s University of Buffalo School of Law earlier this year offered “The Green Rush” – a course aimed at compliance and other legal issues in the cannabis space.

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Jeremy O’Keefe: The Importance of Information Security in the Cannabis Industry

6/17/2020

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Jeremy and our podcast host TG Branfalt recently connected for a conversation about cannabis software, where many technology companies in the space have gone wrong, the importance of information security in the digital age, the advantages of using Yobi‘s software suite, and more!

Tune in via the media player below or you can scroll down to find 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 made possible by Evergreen Gateway, a provider of cannabis friendly financial services. As many cannabis entrepreneurs have experienced firsthand, it can be very difficult to get approval for essential financial services once your bank finds out what industry you’re in. Evergreen Gateway makes it easy for cannabis entrepreneurs to access the financial resources that you need to operate your business. From merchant accounts to cash advances, virtual checking and depository banking, Evergreen Gateway has established solutions that cater to the specific needs of the cannabis industry. Get in touch today at evergreengateway.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 Jeremy O’Keefe, he’s the CEO of Yobi Software, a seed to sale point of sale system designed to simplify the cannabis business ecosystem. Jeremy specializes in cybersecurity and has developed retail and operational software for global brands, such as Amazon and Zappos. How are you doing this afternoon, Jeremy?

Jeremy O’Keefe: I can’t complain. How about yourself?

TG Branfalt: I’m all right, man. It’s great to have you on, especially to really pick your brain about the cybersecurity aspect. But before we get into any of that, tell me about yourself, man. How’d you end up working in the tech aspect of the cannabis space?

Jeremy O’Keefe: Oh man, it was a long and windy road, really. So, I started off right out of high school joining the Air Force and served the better part of a decade as an electronic worker technician. From there, I went and got my computer science degree from UNOV and cut my teeth building a retail operation software for one of Tony Shay’s startups in downtown Las Vegas that was funded through Amazon and Zappos, kind of a skunk works programs.

TG Branfalt: And I mean, that’s wild. So, you go from the Air Force, you end up in sort of traditional retail. How do you end up coming across cannabis as sort of an industry that you wanted to serve?

Jeremy O’Keefe: I’ve always wanted to be a part of the cannabis industry and always kept a really close eye on the market. Mainly just personal skin in the game, hated the negative stigma that was attached to the cannabis and to its users, and saw the opportunity to kind of leverage my experience in the retail technology space. Well, because right before, when I had switched over to start Yobi, I was the lead engineer on a customer facing point of sale system that was the kind of central hub for managing all the inventory and sales for these frictionless commerce stores. I saw the other cannabis software companies kind of falling on their face with just basic operational tasks, securing their databases, uptime, data bleeding, just all the kind of basic fundamental tasks. And thought that I can build something better. So, I quit my job and got started. I got permission from the wife first and then quit my job got started.

TG Branfalt: So I mean, a lot of people, they compare the tech space, the early sort of Silicon Valley days to sort of the green rush now, that the cannabis and the tech space is in that way. You’ve sort of straddled both. What do you make of that comparison and the analysis that people make when they say that?

Jeremy O’Keefe: I think it’s accurate in some aspects and it completely misses the mark in others. So, the fact is what we’re building for cannabis is not something magical or something new. It’s basic retail operations, ins and outs with your margins. So, it has the wow factor because it is cannabis, and the additional complexity with being the state APIs you have to report to and all that, and that’s definitely in the wild West still with regulated commerce. But in terms of just day to day operational tasks, it’s nothing new and it’s fairly straightforward.

TG Branfalt: Is that compliance aspect of it, is that sort of the biggest difference between sort of a traditional retail system and a cannabis retail system?

Jeremy O’Keefe: Oh, absolutely. I mean, that’s the largest kind of differentiator is the fact not only do we have to track the entire chain of custody and the lifecycle of the product, but that every state does it differently. So, that’s obviously been a large order for most operators just to kind of make sure, especially multi-state operators, to make sure each state is in compliance when you have potentially 33 different state regulations to worry about.

TG Branfalt: So, tell me about Yobi Software. I’ve had several seed to sale sort of companies on the podcast and they all give me sort of the elevator pitch. What sets Yobi Software apart from these other point of sale, seed to sale platforms?

Jeremy O’Keefe: Well, quite a bit. So, the initial kind of point of sale, seed to sale platforms, were more or less white labeled systems leveraged from the different ERPS and the cannabis leaf slapped on top of them. I mean, you could tell by the structure a lot of these. And I think that really speaks to how important experience is in developing software and developing quality software that actually brings value to clients. And that takes time and it takes a deep knowledge of building these kind of platforms before for other markets. And we’re the only team that’s actually done this successfully in a different market before, and have interest in our current platform for supply chain management to build some proof of concepts for some large scale breweries to track their chain of custody for kegs and for other items. So, I think that points to our versatility in the stability of our platform, the fact that non-cannabis operators are looking to use our technology to track their own internal, I guess, activities.

TG Branfalt: So, in terms of what does Yobi offer that say, I’m not going to really mention some of the competitors, but that the other services just don’t have? Why would a regulator choose to implement your software as opposed to all of the other sort of files that are on their desk?

Jeremy O’Keefe: Okay. Gotcha, gotcha. So, the biggest two differentiators obviously is going to be the RFID leverage. The majority of cannabis operators are already required to use RFID tags to track the life cycle of a plant, all of its movements, and as well as all the packages once they’re created and how they’re broken down. The difference is that no one is leveraging this technology that’s already in people’s operations, their staff is already trained to use them. So, we just leveraged the RFID side instead of the barcode side of the tag, which allows you to capture hundreds of plants in seconds instead of have to manually locate and scan each barcode individually.

So, you can actually audit a room of 2,500 plants in less than 20 minutes versus, I think, our last test was around six hours of labor time. Our second one is their compliance aspects. So, these APIs are still the Wild West. They’re unreliable. They don’t always kind of tell you when things were passed or failed. So, we developed a separate queue system. So, you could potentially create a plant, move a plant, change its phase and harvest that plant all with metric being down. And then once it comes back up, it will automatically sync all those actions in the correct chronological order for you.

TG Branfalt: And so, that speaks to sort of the uptime differences that you had mentioned at the top?

Jeremy O’Keefe: Exactly. So, we manage our uptime, but we know external dependencies we have no power over, so we just made sure that it had a good fall tolerance tendencies and would actually spin back up as soon as the other systems were available.

TG Branfalt: You had mentioned sort of security and just sort of running down. In 2018, you there was a breach of MJ Freeway in Washington, Move dispenser in Florida, the VPN mentor analysis that found 30,000 patient records earlier this year were leaked from … how do these happen? And how often do breaches like this happen, both on sort of a traditional retail space where you have experience and sort of the cannabis space?

Jeremy O’Keefe: I mean, the most common reason these breaches happen is just a lack of technical background with the founding team or the lack of focus on the actual product to make sure it is secure and scalable. There’s too much of a focus on sales and not enough on product. And I think when your product is faulty and you build a scalable, repeatable sales model, you’re just doing nothing but producing upset customers and more opportunities for vulnerability and for attacks. The reason these attacks happen so much in the cannabis industry is because a lot of these operators are learning as they go. So, they haven’t really got over the pitfalls or training you learn from the people above them on what to avoid in terms of best practices for your data security and retention procedures and things like that.

For example, with the ones you mentioned there, also don’t forget to mention the crash and leak in Nevada, I believe it was in 2017, from MJ Freeway’s Leaf platform that actually exposed both mine and my wife’s data to the public and the state actually had to sponsor a credit reporting tracking for the year for both of us was affected. Yeah, it was huge. So, it was definitely pretty wild to see. If that happened in real time I’d be directly affected by it, so I knew we had made the right choice by kind of coming into this market and making a difference. The other aspect, I think the reason these are vulnerable is a basic functionality. I mean, you don’t see Netflix or Amazon crashing. You don’t see their data getting breached, is because they follow the best practices for software and for data retention, especially with someone’s personal, identifying information on it.

With MJ Freeway, I remember reading that they had an exposed port to their production database. And what happens is you have crawlers that go through and just pretty much check every active IP address, check every single port, and if anything is publicly accessible when they get logged, and will actually get reviewed or hit with further testing. So, a port is like similar to, almost like a garage door on a storage unit. So, if any of these are unlocked, it’s not like people come through every night and check the locks on these storage units to see if anything’s available, but what the crawlers do is they go through and mark the ones that are unlocked and someone will come behind them and pull the data down and see what’s available.

So, even when these things are password protected, there are so many publicly accessible scripts out there that you could just run against a database and it will just brute force by using combinations of user names and passwords until it eventually cracks it. A lot of them will be cracked within about three days, depending on the password complexity, using the most commonly used passwords.

TG Branfalt: So, you had mentioned that there’s a training issue potentially that happens and allows these to happen. Is that something that is, I guess, sort of a hole when people are brought into a dispensary? Like do people not think sort of about this technical aspect and train their employees properly? Is that sort of the assertion?

Jeremy O’Keefe: It’s not even the operator’s fault, it’s the software developer’s fault for just not securing the platform when they’re being paid and entrusted to do just that. I mean, that’s pretty much your entire, your job is to store and make sure their data is accurate and it’s actionable and it hasn’t been modified by third parties. And at the end of the day, that’s our core responsibility. It’s a basic lack of knowledge. For example, the S3 bucket that was exposed, which is similar to a port but for like a directory on your computer that anyone can grab anything from it. There’s a big blue button right there on these S3 buckets that says make private, encrypted, and you just have to push that button and it’s completely protected. So, it just highlights the lack of experience in this space and how people are just trying to capitalize on what they think is a quick and easy market with tech.

TG Branfalt: So, what are the ramifications of these breaches, A, for the businesses that are breached, B, for patients, and C, for just your everyday recreational user?

Jeremy O’Keefe: Oh man, so ramifications are anywhere from losing your state contract, which Nevada bailed on after the breach in 2017 with MJ Leaf, to obviously, huge amounts of lost revenue, a lack of consumer trust and confidence in the market. It kind of sets us back as a legitimate industry and a legitimate market. We’re trying to remove these stigmas of the do nothing, know nothing stoner. And having these tech platforms kind of fall on their face only really gives into that stereotype of no one knows what they’re doing here. In terms of the customers getting their data leaked, I mean, I was a government contractor at the time one of our stuff was leaked and I could’ve potentially lost my job because if you’re a cannabis patient you automatically lose or you can automatically be fired for almost no reason in the majority of states. So, both recreational users and medicinal users have to be careful who they give their data to, because there’s no guarantee that it’s going to be stored securely like it would be with a larger third party service.

TG Branfalt: Is there less concern, do you think, because cannabis is mostly a cash business, sort of the breaches that would… what we worry about when something happens with Amazon, right, credit cards, that sort of stuff?

Jeremy O’Keefe: Yeah, I think so. I just think there’s a lack of kind of a longterm thinking with this market. It’s brand new, people are excited, they’re trying to capture as much market share as they can, as quick as they can, which isn’t a bad thing but you have to make sure that your foundation is covered. Your fundamentals are solid before you try to scale anything because otherwise we’re building on something that’s not scalable.

TG Branfalt: When you talk to regulators, do they actually understand sort of the tech aspect of it? Do they understand sort of the ramifications of just sort of hastily choosing or choosing sort of maybe the best bid? What happens there?

Jeremy O’Keefe: It’s the old joke about the astronauts saying they were sitting on this huge rocket that was built by the lowest bidder, and it hasn’t changed for the cannabis industry either. So yeah, I mean, a lot of times it’s with whoever the buzziest words are, or whoever knows the person in the legislative body to get something kind of pushed through is how it still works.

TG Branfalt: Do you anticipate with all these breaches that states that go online, that they will take this more seriously and maybe take a closer look at the platforms? Are you getting that sense?

Jeremy O’Keefe: Sometimes, I mean, I do notice people are preferring to use a METRC as the compliance platform, which has proven to be the most scalable and most secure end to that. They are focused on that one aspect and not trying to boil the ocean in terms of offering that plus a myriad of other tech solutions, which allows them to focus on that and really build a solid product there. And I think stretching yourself too thin is where things start to get a little out of whack, I guess.

TG Branfalt: So, how should these point of sale companies respond when these incidents occur? I studied communications and crisis communications was something I was particularly interested in. And so, I’m just wondering, sort of from your point of view is if there were a breach by your software, how would you respond as a company, or how would you direct your company to respond?

Jeremy O’Keefe: We would automatically get in front of it. Let anybody that was, information that was compromised, know ahead of time so they could take proactive measures to prevent any damage from occurring. Obviously take responsibility and make sure that we covering any negative effects to their credit report and offering protection there. But not just that, but showing the solution that we implemented to make sure that it never happened again. And focusing on really just repairing our brand and then overcompensating for that aspect if that was to happen. But to prevent it out of the gate, we should just, I mean, you should follow the best practices. Your database should never be publicly accessible. It should be accessible to a single entity that you have total control over, that you have to pass through even with your own applications, as a reverse proxy kind of a validator.

This helps with security. It helps with DDOS attacks, which is where someone will just spam your… pretty much like hitting the refresh button a bunch of times on your browser to the point where you have thousands of people doing it at once to where it crashes your server. So, handling things like that, that kind of every other large scale enterprise company needs to have, is something that the cannabis industry should be looking at now as well, especially with how big everything’s getting so quickly.

TG Branfalt: Is the industry behind the more traditional services in this regard, even though it’s so reliant on the seed to sale technology?

Jeremy O’Keefe: Oh, absolutely. It’s pretty far behind and the fact that there’s just the basic fundamental KPIs aren’t being tracked in terms of sell through rates or turnover, inventory aging, just breaking apart real actual analytics. A lot of people will just throw some values onto a chart and kind of let it go with no real “What am I supposed to do with this?” kind of mentality. And that’s really where it falls behind the most. It is ahead of the game in terms of using RFID for smaller to midsize operations, which is great, but just getting them over that hump of the stigma that’s with RFID, that a lot of our competitors have put in people’s heads to say that it doesn’t work or whatever the story is this time because they don’t support it.

It really just boils down to not understanding how to use it and no background in it. If it didn’t work, it wouldn’t be used by our department of defense to track all of our equipment. It wouldn’t be used by NASA to track everything that goes on rockets. So, I’m going to trust what NASA uses and try to use the same processes as they do.

TG Branfalt: Is there any way really to build a perfect system though? I mean, with the rate at which hackers get more brazen, they get more savvy, tech is constantly changing. Is there any way to build a perfect system here?

Jeremy O’Keefe: Absolutely not, honestly. It’s always going to be a moving target. There’s always a new vulnerability, a new update, a new way to do things. So, staying ahead of it and knowing that your software is a living, breathing project and it’s going to always be updating, changing, iterating to match the needs of the industry and to stay up to date with security best practices. One of the biggest concerns with the large scale enterprises that kind of rushed to market and were built on things like Drupal or Vue.js, or some of these other kind of plug and play systems, they don’t scale well.

They’re quick to build small prototypes for personal webpages or apps like that, but once you get to a large scale multi-state operator and they start to really slow down, become non-responsive and just the technical debt kind of comes home to roost, which will require a complete retooling of the system. So, a lot of the competitors are just throwing money at the solution in terms of server space and computational speed to kind of make it work faster instead of just having a more lean and scalable solution.

TG Branfalt: So, while we’re talking about adapting, what was it like for you to adapt to sort of the needs of the cannabis industry, both professionally and personally?

Jeremy O’Keefe: Oh, it was great personally. I mean, when we first started the samples were a lot more common five years ago, so that was the best part. But in terms of professionally, I mean, I was always into retail and the big data sets. I know it doesn’t seem exciting, but I just like to see where things go and how they got there and just the whole kind of life cycle and chain of events that happened. And with me already building that solution for retail kind of apparel, this and that, which is really kind of boring for me, I got to kind of jump into a market that really interests me and I’m passionate about. I mean, I’ve been growing myself, off and on, not very well for about six years. And it’s just a great to be a part of something you really care about. And this is a turning point in our civilization where modern day prohibition is ending, and it’s exciting to be a part of this.

TG Branfalt: Are you tracking your own plants using your software?

Jeremy O’Keefe: Oh no, I can’t even get one … out of it. I’m just … for awhile.

TG Branfalt: When states required the seed to sale tracking stuff, I mean and every state requires the seed to sale tracking, do the laws ever include any consequences for the firms who actually leaked this data?

Jeremy O’Keefe: In the language there, there are consequences stated, and you also have to carry a certain liability insurance for exposing customers’ PII, but in terms of that ever being leveraged or used against the people that do it, I haven’t seen any real cases that any states have followed through with that.

TG Branfalt: Is that insurance? I know that insurance is hard to get for industries, for companies that touch the plant. Is insurance something that the tech industry, the cannabis tech industry has trouble with as well?

Jeremy O’Keefe: Yes and no. It depends on who you’re talking to and kind of the questions they ask. So, most people just say they’re retail tracking or supply chain tracking, but if there are a lot of cannabis specialized insurance agencies that have popped up now that really make it a lot easier to kind of lay everything out and get a decent and fair rate on what you’re doing, because they realize at the end of the day you’re just ones and zeros. You don’t have any type of physical connectivity to the plant or any type of activities that way. You’re just tracking ins and outs through your system.

TG Branfalt: So, let me ask you, a lot of people have sort of, they talk about sort of blockchain as being sort of this magic potion to stop breaches and this sort of perfect software to protect data and this sort of thing. Again, I’m not a tech guy, I’ve said this a hundred thousand times on the show, but is blockchain tech something that could be used and should be used to help prevent sort of breaches for seed to sale tech?

Jeremy O’Keefe: No, I mean the blockchains, it gets thrown around a lot by everybody, but at the end of the day, blockchain actually exposes more data than it hides it. It’s usually used for shared parties will create a blockchain and what that will do is it puts a block of data onto a chain in one direction only. So, there’s always a historical record and no previous ones can be changed. So, this is great for tracking a supply chain, product breakdowns into new products, transactions. So, it’s an immutable ledger, which means it can’t be edited after everything’s been created. So, it’s a true source of truth for any historical action that was taken inside this blockchain.

And blockchains can be anything. They’re not just cryptocurrency or anything like that. They’re utilized by a lot of large scale operations like IBM and Google obviously. I think our Google sheets and Google docs are tracked using a certain kind of blockchain technology that just links your previous versions to your next versions so you can go back or go forward depending on what you want to do and start new chains that way. So, it’s really just almost like a data management system, more than some kind of super problem-solver tech at the end of the day.

TG Branfalt: What advice would you have for entrepreneurs who are worried about potential data breaches, or what advice would you have for them best practices wise, to prevent these breaches? Is there anything sort of the retailer can do?

Jeremy O’Keefe: Due diligence on your provider. Asking what their SOPs are, their standard operating procedures for security, for who has access to their systems and what are their catastrophic recovery procedures? So, worst case scenario what happens? They should have an answer for those questions if they want to be able to reliably support and store your data. For example, we do snapshots of our database every 15 minutes and we do full backups of it every single hour. And we keep a 30 day block of backups as a rolling replacement. So I mean, just things like that to make sure that it’s not if but when, as worst case scenario. Like motorcycle wrecks, you plan for the slide not for the ride.

So, you want to make sure that you’ve got everything covered in the worst case that something does happen, but you obviously plan to make sure it doesn’t. But yeah, just retailers asking their operators how they do stuff, what their background is. I mean, if you look at the background of most cannabis tech founders, I mean, none of them have done anything like this before in their lives. So, there’s a pretty steep learning curve when it comes to that and they need to build a really smart team around them to help guide this product development and make sure that it’s brought in house and that they have full ownership of it, because third parties and outsource contractors are never going to give it the attention and the passion that the core of your company really deserves.

TG Branfalt: I mean, you’re definitely a lot more passionate than a lot of the type people that I have come in contact with. I guess because you have this opportunity, how much is that driving you? I mean, because you can definitely tell that this is sort of a culmination for you.

Jeremy O’Keefe: Oh, absolutely. This is a dream come true. I went to college with a major in computer science and a minor in graphic design because I wanted to build something from nothing and make a difference and I just so happen to be in one of the best industries out there as it gets legal so I have no complaints.

TG Branfalt: Where could people find out more about the software, more about you? How can they get in touch with you?

Jeremy O’Keefe: Oh yeah, definitely. Getyobi.com is our site. G-E-T-Y-O-B-I. Finding out more about us, you can follow us on Twitter at YobiSays, or if you’re in Latin America, YobiDice. So, we’re pretty proactive on there. We respond to requests and comments. We try to be out there and listening to people that are in the trenches and seeing what they’ve got going on.

TG Branfalt: Well, I really want to thank you, man, for coming on the show. This has been really sort of enlightening for somebody who’s not a tech guy to just sort of be able to break this down. We’ve covered as many of the breaches as we’re able, and so this is the first time that I’ve actually had someone on the show that has expertise in this sort of realm. So, I really appreciate you taking the time and joining me today.

Jeremy O’Keefe: Of course, I appreciate you listening to the explanations. That’s not often I get to do that living and working at home.

TG Branfalt: Well, hopefully we’ll get out of the house soon, man.

Jeremy O’Keefe: Oh, yeah. One way or another.

TG Branfalt: Thanks so much.

Jeremy O’Keefe: Thanks, man, thanks.

TG Branfalt: That’s Jeremy O’Keefe, he’s the CEO of Yobi Software, a seed to sale point of sale system designed to simplify the cannabis business ecosystem. 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 will 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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Colorado Lawmakers Approve Social Equity, Expungement Bill

6/17/2020

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Colorado lawmakers have approved a bill for social equity licensing in the cannabis industry and allows the governor to pardon low-level cannabis convictions that were levied in the state prior to 2012’s legalization, Westword reports.

The bill enables the industry to move forward on an accelerator licensing program passed last year by Coloradans last year. The accelerator program provides mentorship opportunities and financial investments for would-be industry entrepreneurs. The measure would also enable the city of Denver to move forward with its social equity goals. Last year, Coloradans also passed social consumption and delivery bills and the bill passed June 15 will allow for social equity licensees to also apply.

A spokesperson for Gov. Jared Polis (D) called the bill “a product of effective stakeholder work that created a path forward on important social equity policies.”

Cannabis activist and entrepreneur, Larisa Bolivar, who is executive director of the Cannabis Consumers Coalition and CEO of Bolivar Hemp Company, called the bill’s passage “a double win.”

“I know we can have a successful social equity program and the state can now make rules around grant and loan money from marijuana tax revenues. … “And, I can help along the way from outreach, to training, to internship and placed into management positions or successfully open up their own licensed cannabis shop.” – Bolivar in a press release

A study released earlier this month found 75 percent of Denver’s cannabusiness owners were white, along with 13 percent Hispanic, Latino, or Spanish. Another 12 percent of the industry’s employees identified as Hispanic, Latino, or Spanish. Just 6 percent of both cannabis business owners and employees were Black, according to the report outlined by MJBizDaily.

If the bill is approved by Polis – which is expected – Colorado’s social equity licenses should be available starting next year.

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Portland, Oregon Pulls Cannabis Tax Funding From Police

6/17/2020

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Portland, Oregon officials will no longer use cannabis-derived tax funds for the city’s police budget, the Chicago Tribune reports. Last week Mayor Ted Wheeler announced they city would redirect $12 million from the police department budget toward communities of color – at least $2 million of which comes from cannabis taxes and fees.

In an open letter to the mayor on June 10, the Oregon Cannabis Association called on city officials to use cannabis-derived funds for social programs and services that help minority communities. The letter notes that the organization had reached such an agreement with the city when the new, 3 percent, tax was implemented. The OCA notes that over the past two years just 14.5 percent of those funds were used for social equity.

“After giving the police $410,00 in the first year for a ‘service coordination team for access to drug/alcohol treatment,’ there were no cannabis tax dollars spent on drug and alcohol treatment in year two. Last year, police received an increase of well over $1 million dollars, taking in more than $2 million in cannabis tax revenues. This is simply unacceptable.” – Oregon Cannabis Association in a June 10 letter

The announcement by Wheeler – who also serves as police commissioner – is part of a broader police reform plan in the city that will defund three police units, including the gun violence reduction team, and ban officers from using chokeholds, the Oregonian reports.

“My privilege as a white man, my privilege as the mayor and the leader of the institutions of power in this community I believe shielded me from time to time from the many difficult and uncomfortable truths about our history and about our society,” Wheeler said during the announcement.

Portland Public Schools said last week that they would no longer assign police to the district’s nine high schools or the two other school districts inside Portland city limits, the Oregonian report notes.

Of the $12 million that Wheeler said would be invested into communities of color, $7 million would come from the police bureau while $5 million would be disbursed from other, not yet identified, city funds. The $7 million is less than 3 percent of the current estimated budget for the police bureau.

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Minnesota Republicans Recruited for Cannabis Tickets to Pull Democrat Votes

6/17/2020

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Several Minnesota Republicans vying for the state legislature have been recruited by party operatives to run on the Legal Marijuana Now Party or the Grassroots-Legalize Cannabis Party, the Minnesota Reformer reports. The candidates running under the legalization party would likely siphon votes from their Democratic challengers due to the progressive party line.

State Senate candidate Robyn Smith, who is running on the Legal Marijuana Now Party ticket – which garnered 5 percent of statewide votes in 2018, pushing it to major party status in the state – said that while she believes cannabis should be legalized, her social media campaign focuses on supporting Republican President Donald Trump and other right-wing causes, the report says.

Jason Hoschette is carrying the Grassroots-Legalize Cannabis Party banner in the Northfield area district election, which is currently represented by a Republican. Hoschette is reportedly close to Republican Senate aide Pat Kaluza who is also chair of his local GOP Senate district organization.

Tyler Becvar, another Legal Marijuana Now Party candidate running for a seat held by Democrat Sen. Dan Sparks, is also a Trump supporter and his Facebook page contains posts attacking Democrats and spreading conspiracies about George Soros, a longtime donor to Democrats and the party, according to the report.

Adam Charles Weeks, the Legal Marijuana Now Party candidate vying for the 2nd Congressional District, had posted pro-Trump, anti-Democrat posts on his Facebook page in both the 2016 and 2018 election cycles and as recently as last month targeted “liberals” for “framing” the president in “the shame of the Russia probe,” the report says. In an interview with the Reformer, Weeks walked back his comments, saying he was “wrong” about Trump and that he is a regular cannabis user and advocate for its legalization in the state. Recent social media posts show him protesting the killing of George Floyd.

Rae Hart Anderson is seeking to unseat Democratic U.S. Rep. Collin Peterson on the Grassroots-Legalize Cannabis Party ticket – her Twitter background features Trump and First Lady Melania Trump and features nothing about cannabis legalization. She will face off against Grassroots-Legalize Cannabis Party hopeful Kevin Shores – an authentic party candidate – in a primary.

Marty Super, outgoing chair of Legal Marijuana Now Party, said that the fledgling party was concerned about it being coopted once it achieved major-party status because anyone can file for candidacy under the banner without having to collect signatures to get on the ballot.

Chris Wright, a leader of the Grassroots-Legalize Cannabis Party, said he doesn’t sympathize with Democrats who lose the election because of the cannabis parties because both Republican and Democratic parties, “are rotten on both sides.”

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Hawaii Mayors Declare ‘Medical Cannabis Day’ Official Holiday

6/16/2020

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Multiple Hawaii mayors have proclaimed June 14 officially ‘Medical Cannabis Day,’ commemorating the 20th anniversary of the state becoming the first to pass medical cannabis reforms via the legislative process.

Mayor Kawakami of the County of Kauai, Mayor Kim of the County of Hawaii, Mayor Caldwell of the City and County of Honolulu, and Mayor Victorino of Maui County all signed proclamations recognizing this year’s holiday after Hawaii Gov. David Ige (D) failed to issue a statewide proclamation, according to Cannabis Healthcare Hawaii.

Hawaii’s medical cannabis bill was signed by then-governor Ben Cayetano on June 14, 2000.

Maui County, Hawaii Mayor Michael Victorino made his announcement on June 13 at Maui Grown Therapies, the first licensed dispensary in Kahului. Maui Grown Therapies was also the first dispensary in the state to sell to a patient on August 8, 2017, Victorino said during the announcement. Medical cannabis dispensaries weren’t legalized in the state until 2015 and, previously, the state relied on caregivers to supply medicine to patients.

Victorino noted that there are some 6,000 medical cannabis patients in Maui County.

“This new, growing, industry supports patients’ choice for holistic, integrative, healthcare options and expands the high value, eco-friendly, agriculture, and well-paid career options for citizens of Maui County. … Medical cannabis day is an opportunity to thank and acknowledge the Hawaii state and Maui County leadership, physicians, RPRNS, and researchers, medical professionals, cultivators, dispensary professionals, patients, and caregivers.” – Mayor’s Proclamation, June 13, 2020

Victornio presented the proclamation to Dr. Gregory Park, Maui Grown Therapies co-founder and chief compliance officer.

Park, who has practiced medicine in the county for 40 years, said he has found medical cannabis to be effective at symptom management and improving patients’ quality of life.

“I’d like to thank the county of Maui for their support of our industry and to help us provide high quality agricultural and retail jobs and help us diversify versus tourist jobs,” Park said.

Editor’s note: This article has been updated from an earlier version that incorrectly stated that Maui’s was the first officially recognized ‘Medical Cannabis Day’ in the country. We regret the error. 

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Illinois Social Equity Cannabis Licensing Could Begin Next Month

6/16/2020

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Social equity cannabis licenses in Illinois could be awarded as soon as next month after Gov. J.B. Pritzker (D) suspended moving forward with the licenses in late April indefinitely amid the coronavirus pandemic, according to Block Club Chicago. The report notes that some businesses may have to wait as long as August to receive one of the 75 licenses.

Toi Hutchinson, a former state senator who oversees the cannabis program, told the Cook County Cannabis Commission that the delay is necessary to make sure licenses are issued correctly and in an effort to avoid lawsuits that may arise from applicants that lose out.

To qualify for social equity status, at least 51 percent of an ownership group applying for the license must live in an area most impacted by the war on drugs, been arrested or had a family member arrested for a cannabis-related crime; or have 10 or more full-time employees of which at least 51 percent would otherwise qualify for social equity status.

Hutchinson said that in addition to the pandemic, the company in charge of grading the applications – K.P.M.G – prohibited its employees from travelling, “which really slowed down everything on the dispensary side,” he said.

Regulators also had to find a fix for the tiebreaker system, which expired on June 6. Hutchinson filed permanent tie-breaker rules on June 5, requiring a 45-day public comment period starting on June 15, and another 45-day period for state officials to respond to the comments.

Charity Greene, a spokeswoman for Pritzker, said the first licenses would likely be awarded to businesses whose score didn’t tie with any other application.

In April, amid the coronavirus pandemic, Illinois recorded $37.3 million in cannabis sales, falling about $3 million short of the state’s cannabis sales record in January.

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Florida Cannabis Company Lists on Canadian Securities Exchange

6/16/2020

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Florida medical cannabis company Bluma Wellness Inc. has started trading on the Canadian Securities Exchange under the BWEL.U symbol. The approval comes after regulators approved the company’s reverse takeover of CannCure Investments Inc., a portfolio company of Sol Global Investments.

The common shares of Bluma – headquartered in Toronto, Ontario, Canada – had been previously listed on the CSE as Goldstream Minerals Inc. Bluma operates in Florida as One Plant and has a new 54,000-square-foot Nexus greenhouse facility in Indiantown and a 24,000-square-foot greenhouse in Ruskin. It operates three dispensaries in Boynton Beach, Jacksonville Beach, and St. Petersburg and said it’s planning an additional seven dispensaries and delivery hubs by November 2020, pending approvals.

The company’s next dispensary is set for June 30 in Port St. Lucie.

CEO Brady Cobb said in a statement last week following the completion of the reverse takeover that its first harvest from the Indiantown facility is expected to reach One Plant dispensaries by next month. He added that the Nexus facility will boost its cultivation capacity from 300 pounds of flower per month to 1,300 pounds per month.

As per the CSE new listing bulletin, Bluma is set to have 82,780,962 common shares outstanding at the time of its go public, in addition to 60,721,500 common shares reserved for issuance. In total, SOL will own 19.41 percent of the issued and outstanding shares, totaling 16,067,269 shares. The public issuer also owns a further 6.45 million warrants, however the firm is restricted from exercising warrants to increase its position beyond 20 percent ownership.

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Method Man’s New Cannabis Brand Supports Minority-Owned Businesses

6/15/2020

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Method Man, the rapper hip-hop star from the Wu-Tang Clan, announced last week he is launching a cannabis business that will prioritize working with and elevating Black and other minority business owners in the cannabis space, Bloomberg News reports.

The new business TICAL — which is named after Method Man’s 1994 solo debut album and stands for “Taking Into Consideration All Lives” — has raised $300,000 in partnership with New York-based JLS Fund for its launch. Method Man owns a 20% stake in the company, which hopes to raise $3 million ahead of its nationwide roll-out.

The business intends to cultivate high-grade cannabis and prioritize distributing it via family- and minority-owned dispensaries.

“Personally, it is essential that we use our brand to help bring awareness to the social, systemic and economic injustice in communities that have struggled with oppressive mass incarceration and racially biased policing policies.” — Method Man, in a statement

Method Man’s announcement comes amid an unprecedented wave of attention to racial inequality in the U.S. prompted by international protests against the police murder of George Floyd and countless others. The issue is especially sensitive in the cannabis space, as people of color are far more likely to be arrested for cannabis use than white people despite similar rates of use. Additionally, the vast majority of cannabis business owners and investors are white males despite the high price being paid by minority communities during prohibition.

In a move echoing Method Man’s business goals, activists at Cannaclusive have recently unveiled InclusiveBase, a database listing U.S. cannabis businesses owned by people of color as a resource for socially conscious cannabis consumers.

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Al Harrington Launches Cannabis Incubator for Black Entrepreneurs

6/15/2020

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Former National Basketball Association player turned cannabis entrepreneur Al Harrington is launching an incubator program for 100 Black individuals to enter the industry, CNBC reports. Harrington, CEO of Viola Brands, said he wanted to turn black market brands into legitimate businesses.

“A lot of brands that are on the black market that has a lot of credibility and unbelievable following, have market share, but they just don’t know how to get into the legal market.” – Harrington to CNBC

Harrington has advocated for diversity in the industry and recently said he would donate 20,000 CBD topical creams to protestors suffering from chronic pain at the request of Stephen Jackson, who is also a former NBA player. Jackson has emerged as a key figure during the protests seeking justice for the killing of his friend George Floyd at the hands of a Minneapolis police officer.

“That is something I will continue to harp on; continue to bring awareness to because once again, I feel like the war on drugs was aimed towards our community, and they used cannabis as pretty much the main drug to continue to lock us up,” Harrington said in the interview. “All this money being made now, we’re not represented; we’re not there. I feel like we pioneered this industry.”

It’s well known that the leadership of U.S. cannabis companies are predominately white and – while not representative of the industry at-large – a recent study focused on Maryland’s industry found just 10 percent of investors in the state’s cannabis companies are people of color. The Maryland Medical Cannabis Commission report found that there was no sector of the state’s cannabis industry where women of color comprise more than 5 percent of investors.

White men comprise two-thirds of all cannabis investors in Maryland, followed by white women, men of color, and women of color. Of the 26 Maryland companies licensed to cultivate or process cannabis, just four – HMS Health, Seven Points Agro, Kind Therapeutics, and Chesapeake Alternatives – are majority-owned by women or people of color, according to state data. Only Seven Points and HMS Health are entirely owned by people of color. Pro Green Medical is the only other company in the state where more than 30 percent ownership is held by people of color.

Harrington’s Viola closed a $16 million Series A funding round last October.

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Commonwealth of Northern Mariana Islands Legalizes Hemp

6/15/2020

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The Commonwealth of the Northern Mariana Islands Gov. Ralph Torres has signed a bill legalizing hemp in the island U.S. territory, Marianas Variety reports. The measure removes hemp as a Schedule I controlled substance in the territory and allows CNMI states to regulate the industry.

Like U.S. states that approve hemp legislation, CNMI states will also have to submit hemp regulation plans to the U.S. Department of Agriculture for final approval. The law specifically allows hemp to be processed into paper, clothing, textiles, biodegradable plastics, biofuel, oil, food, and health supplements.

The measure includes provisions that would prevent hemp producers who violate the law three times within five years from getting any hemp license for the next five years, according to the Saipan Tribune. The legislation, however, does not criminalize these so-called “negligent” hemp producers, which are defined for low-level violations of the law such as failing to provide a legal description of the land on which the producer produces hemp, failing to obtain a license or other required authorization from the Division of Agriculture, or unknowingly producing plants that exceed the 0.3 percent THC threshold.

Negligent hemp producers would have to file a corrective action plan with regulators, requiring that the producer corrects the negligent violation by a reasonable date, and to submit periodic reports to the Division of Agriculture on the compliance of the producer with the regulations over the last two years.

Producers who “willfully” violate the law can face imprisonment up to one year, a $2,500 fine, or both.

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Ohio Adds Cachexia to Cannabis Program, Rejects Anxiety and Autism

6/15/2020

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An Ohio State Medical Board committee last week added cachexia, or wasting syndrome, to its medical cannabis qualifying conditions list, but rejected including anxiety and autism spectrum disorder, the Cincinnati Enquirer reports. Last year the committee had recommended that autism and anxiety be added to the program but walked the recommendation back after hearing getting feedback from children’s hospitals.

In public comments on the proposals, Ohio Children’s Hospital Association representative Sarah Kincaid said that adding autism and anxiety to the qualifying conditions list “has the potential to negatively impact the health and well being of thousands of children in Ohio.”

“There is little rigorous evidence that marijuana or its derivatives is of benefit for patients with autism and anxiety, but there is a substantial association between cannabis use and the onset or worsening of several psychiatric conditions.” – Kincaid in public comments to the Medical Board via the Enquirer

The majority of the 136 public comments actually supported adding the conditions and the Medical Board did not elaborate as to why the conditions were rejected.

Cachexia, which causes severe weight loss, can be associated with cancer, HIV or AIDS, or other chronic conditions – some of which are already included as qualifying conditions under the state’s medical cannabis regime. The condition is included in nearly all medical cannabis programs in the U.S.

Final approval by the full State Medical Board is still required before patients can access the program.

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NBA Now Allows Cannabis Use By Players

6/12/2020

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The National Basketball Association and its players union have agreed that players will be tested for performance-enhancing drugs when the league restarts at Disney World, but not recreational drugs, CBS Sports reports. The NBA suspended its season amid the coronavirus pandemic and the league and union are finalizing details for a shortened, “bubble” season to finish to the year.

The proposal was first reported by Shams Charania of The Athletic.

On Monday, the league also reinstated Charlotte Hornets guard Malik Monk who was suspended indefinitely at the start of the season for violating the league’s substance-abuse policy, according to the Charlotte Observer. The Hornets are not included in the 22-team restart plan set for late July.

The NBA’s relaxed drug policy for the league’s resumption coincides with Cresco Labs announcing that it added NBPA Executive Director Michele Roberts to its board, although it’s unlikely the NBA’s drug testing decision is related to her appointment. Roberts has served as executive director of the union since 2014.

In 2018, Roberts said the league was “exploring” medical exemptions for NBA players to use medical cannabis but said federal law stood in the way. At that time, anti-cannabis zealot Jeff Sessions was still serving as attorney general of the U.S. and Roberts said she was concerned about players being arrested at airports at the behest of “a crazed” AG.

Under the league’s collective bargaining agreement between the NBA and NBPA, players who test positive for performance-enhancing drugs will be suspended for 25 games for a first violation, 55 games for a second violation, and are banned from the league for a minimum of two years for a third violation.

Under normal rules, players can be drug tested up to four times per season and twice in the offseason.

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Louisville, Kentucky Bans No-Knock Raids

6/12/2020

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The Louisville, Kentucky Metro Council has unanimously banned the use of no-knock raids, the Courier-Journal reports. The ordinance is called “Breonna’s Law,” after Breonna Taylor, the 26-year-old unarmed woman shot and killed by the city’s police during a no-knock raid as part of a narcotics investigation earlier this year.

The move comes the same day Kentucky Sen. Rand Paul (R) introduced a bill that would prohibit federal law enforcement and local police that receive federal funding from using such warrants. Paul’s bill also memorializes Taylor’s killing, called the “Justice for Breonna Taylor Act,” according to an Axios report.

“After talking with Breonna Taylor’s family, I’ve come to the conclusion that it’s long past time to get rid of no-knock warrants. This bill will effectively end no-knock raids in the United States.” – Paul to Axios

Louisville Mayor Greg Fischer, who indefinitely suspended the use of no-knock raids last month, said he would sign the law as soon as it hits his desk. The ordinance also requires that all officers serving warrants activate their body cameras at least five minutes before they execute a warrant and they must remain on until at least five minutes after its conclusion.

Metro Council President David James also declared June 11 as “Breonna’s Law Day.” Taylor was shot at least eight times by police during the raid, during which no drugs were found. The police report about the raid listed her injuries as “none.”

Earlier this week, congressional Democrats introduced bills to address systemic racial discrimination by police including a ban on no-knock warrants in drug cases, among other reforms. Senate Republicans are also crafting their own legislation that would require states to provide data on the use of no-knock warrants but does not include a ban on the practice like Paul’s proposal.

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