Macro photograph of the bud of an outdoor hemp plant.

Wisconsin St. Croix Chippewa Suing State Attorney General Over CBD Policies

2/13/2018

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The St. Croix Chippewa Indians of Wisconsin are suing state Attorney General Brad Schimel over whether the tribe has the authority to grow hemp for CBD production – a move blocked by Schimel, Wisconsin Public Radio reports. The tribe argues that while the federal Public 280 federal law gives states authority over criminal matters on reservations, hemp and CBD productions are civil matters that fall under the jurisdiction of the tribe.

The CBD program was adopted by the tribe last September as a means to create jobs and industry in the northwestern Wisconsin county which has one of the highest unemployment rates in the state, Elmer J. Emery, member of the St. Croix Tribal Council wrote in the ordinance creating the program.

Jeff Cormell, the tribe’s general counsel told WPR that the tribe is “not proposing anything illegal” under state law. He indicated that the tribe has spent $3 million on the project so far, which officials expect would create 15 full-time jobs.

“On the one end, you’re going to be cultivating hemp, which is now legal under state law. On the other end, you’re going to have processing of CBD, which possession of is legal under state law.” – Cormell to WPR

Johnny Koremenos, a Wisconsin Department of Justice spokesman, told WPR that they believe “any jurisdictional challenge to the application of Wisconsin’s criminal code on tribal lands will fail” but declined to comment further on the lawsuit.

Wisconsin law allows individuals with a doctor’s approval to possess CBD; however, there is no clearly defined means to produce it.

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Massachusetts Public Safety Director Opposes Social Clubs in Letter to Cannabis Regulators

2/13/2018

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Massachusetts Secretary of Public Safety and Security Daniel Bennett is opposing the creation of cannabis clubs in the state, alleging that allowing social use will increase access to minors and drugged driving incidents, according to a MassLive report.

“We believe the difficulties of safely administering the adult use marijuana market in the near term will be multiplied by the proposed licensing of social consumption establishments, mixed-use social consumption establishments, and home delivery retail services.” – Bennett, in a letter to the Cannabis Control Commission, via MassLive

Bennett’s concerns are shared by Gov. Charlie Baker, whose budget and environmental agencies legal counsel have warned against allowing social use immediately.

“If these folks want to take up a lot of these second and third tier issues at some point after the program is up and running, I think that’s fine. What I do worry about is creating a situation and a dynamic given the relatively early stages for the commission generally, and for this industry in particular, to get off on the wrong foot straight out of the gate.” – Baker to MassLive

In his letter, Bennett said that if consumers are prohibited from taking cannabis from social clubs off-site, it could increase the number of people driving under the influence, and that delivery services couldn’t determine whether someone under 21 is in the house.

The Cannabis Commission is currently crafting the final regulations for the state’s cannabis industry, which is expected to come online July 1. The draft rules were submitted last December.

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Photo of a judge's gavel lying on its side on a wooden surface.

Federal Case Challenging Constitutionality of Cannabis Prohibition Heads Back to Court on Valentine’s Day

2/12/2018

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In case you missed it, there is a lawsuit against the Department of Justice, the Drug Enforcement Agency, and Attorney General Jeff Sessions – the text of which reveals the history of the 12,000-year relationship between humans and cannabis and how prohibition not only negatively affects the plaintiffs but potentially all humankind.

The suit is filed in the Southern District U.S. Court in New York on behalf of former NFL player Marvin Washington; disabled U.S. Military veteran Dean Bortell and his daughter Alexis, now 12-years-old, who suffers from intractable epilepsy; Sebastien Cotte, father of Jagger, a now 7-year-old boy suffering from Leigh’s Disease; Jose Belen, a 70 percent disabled Operation Iraqi Freedom veteran; and the Cannabis Cultural Association.

The Plaintiffs

Alexis, who resides with her family in Colorado as a “medical refugee,” is originally from Texas. She has received the most national attention for her role in the suit, catching headlines like “12-Year-Old Sues Attorney General Jeff Sessions to Legalize Medical Marijuana.” She’s also written a book called “Let’s Talk About Medical Cannabis: One of the Earliest Medical Communities Seen Through the Eyes of its Youngest Advocate.” Her father, Dean, is a 100 percent disabled Navy veteran.

Washington, another resident of Texas who in 1999 won a Super Bowl with the Denver Broncos, currently works with Swiss firm Isidiol that manufactures CBD products. According to the suit, Washington eyes expanding his business to include whole-plant cannabis products – and would like to receive federal funding through the Minority Business Enterprise Program to expand his business but is unable to do so due to cannabis’ Schedule I federal status.

Belen, 35 and from Florida, is an Operation Iraqi Freedom veteran who is diagnosed with post-traumatic stress disorder. According to the complaint, Belen is “unable to forget and/or otherwise cope with his memory of the horrors of war that he had witnessed in Iraq.”

Jagger, who lives in Georgia with the family, might not be alive if not for cannabis. Leigh’s Disease kills “approximately 95 percent of people afflicted with it” if diagnosed before age two by the time they are 4-years-old, the suit says. Jagger was diagnosed at age one. He is now seven.

The Cannabis Cultural Association is a New York-based non-profit which helps “marginalized communities engage in the legal cannabis industry, emphasizing criminal justice reform, access to medical cannabis, and adult use legalization.”

The Defendants

Jeffrey Beauregard Sessions III, former Alabama Senator and Attorney General of the United States since 2017. Sessions might be most infamous to the cannabis community for saying that “good people don’t smoke marijuana” and for rescinding federal protections for state-legal cannabis programs outlined in the Cole Memo.

The U.S. Department of Justice, the federal agency headed by Sessions responsible for enforcing U.S. law, including the crimes violating the Controlled Substances Act. Under the Barack Obama Administration, the Justice Department had taken a hands-off approach to state-approved cannabis programs with a directive known as the Cole Memo. Sessions rescinded that memo in January.

Charles “Chuck” Rosenberg and the Drug Enforcement Agency. The lawsuit contends that the DEAs “legal mechanism available to the public to file petitions to change the classifications of drugs and medications previously scheduled under the auspices of the CSA is illusory.”

The suit points to eight such attempts by governors, individuals, and organizations to de-schedule or reschedule cannabis under the CSA that were either denied or declined by the DEA. One, by the Hemp Industries Association and the Kentucky Hemp Industry Council, filed last June is still pending. However, in 1999 – after four years of consideration – the agency granted a request by UNIMED Pharmaceuticals Inc, manufacturers of Marinol, to reclassify the drug from Schedule II to Schedule III. Marinol, a synthetic cannabinoid, was approved by the Food and Drug Administration in 1985 to “treat nausea and vomiting associated with cancer chemotherapy in patients who have failed to respond adequately to conventional treatments” and to “treat appetite loss associated with weight loss in AIDS patients.”

Rosenberg once quipped that medical cannabis is “a joke.”

Under the glow of LED grow lights inside of a Washington cannabis cultivation center. Photo credit: Sarah Climaco

(Some of) the Claims

The lawsuit contends that the placement of cannabis on the federal drug schedule is unconstitutional, violating due process protections of the Fifth Amendment of the Constitution. The federal government, it says, “does not believe, and upon information and belief never has believed” cannabis meets the requirements for a Schedule I designation under the CSA.

“Indeed, the Federal Government has admitted repeatedly in writing, and implemented national policy reflecting, that cannabis does (sic), in fact, have medical uses and can be used and tested safely under medical supervision. On that basis, the Federal Government has exploited Cannabis economically for more than a decade by securing a medical cannabis patent and entering into license agreements with medical licensees,” the suit says.

It points out that the government has had a federal program since the 1970s which supplies patients with medical cannabis.

“The notion that the Federal Government genuinely believes that cannabis has no medical application and is so dangerous that, as with heroin, it cannot be tested even under strict medical supervision, is so absurd that it must be rejected as a matter of law. The Federal Government does not believe in the factual prerequisites underlying its own statute,” the lawsuit contends.

Secondly, the lawsuit argues that the federal Schedule I classification was implemented during the Nixon Administration’s “war” on African-Americans and “anti-war hippies” as a means to arrest and jail leaders of those communities.

The lawsuit claims that prohibition violates citizens’ right to travel due to the current state-by-state patchwork of laws and that the federal government’s cannabis classification violates the Tenth Amendment of the Constitution because the government is regulating intra-state commerce.

“While empowered by Article I to regulate interstate and international commerce, Congress does not have the authority to regulate purely intra-state activities which do not have any impact on the national economy,” the suit states. “Any use of medical Cannabis that is legalized and regulated entirely within an individual State’s borders does not have any appreciable impact on the national economy. And Congress, in enacting the CSA, never believed that the cultivation, distribution and sale of Cannabis, purely at the intra-state level, ever affected or will affect the national economy.”

The Government response

Obviously, the government is seeking to have the case tossed, arguing, primarily, that the “plaintiffs failed to exhaust an available administrative remedy – the statutory rescheduling process – before bringing the lawsuit,” and that previous cases have already rejected the lawsuit’s premises.

“There is no fundamental right to use marijuana, for medical purposes or otherwise,” the government’s Motion to Dismiss states. “Because such a right is not ‘implicit in the concept of ordered liberty’ or ‘deeply rooted in this Nation’s history,’ the Court should reject such a claim.”

The plaintiffs’ attorneys contend that the government’s response is “a regurgitation of prior claims, made by different litigants, who relied upon arguments and claims” their clients “do not make, under different circumstances, in many instances more than 20 years ago.”

“There is a substantive due-process violation because the government can’t possibly believe that cannabis should be Schedule I.”

Joseph Bondy, a CCA executive board member and life member of the National Organization for the Reform of Marijuana Laws’ National Legal Committee, is one of the attorneys fighting the government on behalf of the plaintiffs. The CCA is pursuing the claim that cannabis’ Schedule I status violates the Equal Protection Clause of the Constitution because the laws “are grounded in discrimination and applied in a discriminatory fashion,” Bondy said in an interview with Ganjapreneur.

“These laws continue to impact communities of color disparately and unfairly,” Bondy explained. “The proof is in the pudding, so to speak.”

Among those testifying on behalf of the plaintiffs is Roger Stone – a member of the Nixon Administration who can speak directly to Nixon’s former White House Counsel and Chief Domestic Policy Advisor John Ehrlichman’s bigoted reasoning for ensuring cannabis was, not only scheduled under the CSA, but branded “highly addictive” with “no medical use.”

Bondy said that the allegations raised in the complaint “have to be presumed as true” and that government lawyers are arguing that the team has “failed to state claims upon which relief can be granted.”

“We feel strongly we are going to win,” he said, conceding that while other cases challenging cannabis’ scheduling have been ruled in the government’s favor, this case challenges different facts and several factors add to the case’s strengths — public opinion, research, and “legislative opinion as far down the road on legalization” as it is now.

“If we win the claim that the controlled substances act is unconstitutional as it pertains to marijuana it means that marijuana would be de-scheduled,” Bondy stated, matter-of-factly, “until such time as there is some further Congressional enactment.”

The reality is, Bondy admits, that if the case survives this lower court – and the government’s motion to dismiss – the government will, of course, appeal the ruling and whoever loses that case would appeal that ruling to the U.S. Supreme Court. All of this could take years, but Bondy suggested that during that time Congress could take action on cannabis’ status, rendering the whole suit “moot.”

“We don’t care how we get to legalization – the fastest course is the best course – but this seems to be a track that is moving forward at a pretty rapid pace,” he explained, noting that the judge granted oral arguments the day after Sessions rescinded the Cole Memo.

Inside of an indoor, medical cannabis grow operation. Photo credit: Sarah Climaco

Unfortunately, Bondy explained, if the lawsuit were successful and cannabis was indeed de-scheduled, it would not release individuals being held on federal and state cannabis crimes but they would have standing to seek to have the convictions vacated and be released from jail under a “writ of habeas corpus.”

Bondy says the government “can’t have it both ways” – they cannot hold a patent for cannabis as a neuroprotectant, they cannot give patients medical cannabis, and cannot issue federal memos choosing not to crack down on violations of federal law while maintaining that cannabis “has no medical value” and “a high potential for abuse.”

“The notion that marijuana should remain a Schedule I is absolutely foolish,” Bondy said. “No one believes it. The Surgeon General doesn’t believe it, half of Congress doesn’t believe it, politicians don’t believe it, Jeff Sessions probably doesn’t even believe it.”

Oral arguments to determine whether the case will be thrown out are set for Wednesday.

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Rainy day on the streets of Manhattan, in New York City.

Poll: 56% of New York Voters Support Legalizing Adult-Use Cannabis

2/12/2018

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According to a Sienna College poll, 56 percent of New York voters support legalizing cannabis for adult use, with 40 percent opposed and 4 percent unsure. The reforms were supported by 66 percent of Democrats, 57 percent of Independents, and 41 percent of Republicans.

The results represent a 12 percent difference from a November poll, commissioned by the Marijuana Policy Project of New York and the Drug Policy Alliance and conducted by Emerson College, which found 68 percent support for recreational cannabis legalization, including a majority – 53 percent – of Republicans.

In the Sienna poll, 58 percent of men and 54 percent of women supported legalization, along with 76 percent of self-identified liberals, 56 percent moderates, and just 37 percent of conservatives.

The reforms were popular throughout the state’s regions – 60 percent of New York City residents supported legalization, along with 55 percent of suburban residents, and 52 percent of upstate residents; although that region is not defined by the pollsters. Adult cannabis use legalization was also supported by 72 percent of Latinos, 61 percent of black people, and 54 percent of white people.

As with the vast majority of legalization polls, the younger the respondent the more likely they are to support the reforms. Among respondents aged 18-34, 76 percent supported cannabis for recreational use, along with 57 percent of respondents aged 35-54. Just 46 percent of respondents 55-and-older supported legalization.

Gov. Andrew Cuomo called for a recreational feasibility study during his State of the State address last month. One of his potential Republican challengers, former Erie County Executive Joel Giambra has pitched legalization as a way to address the state’s infrastructure problems. The Sienna poll found a 53 percent favorable rating for Cuomo; while 84 percent indicated they didn’t know who Giambra was.    

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Michigan Anti-Cannabis Legalization Committee Nets $150K from National Prohibitionists

2/12/2018

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Smart Approaches to Marijuana of Virginia has donated $150,000 to the newly formed Healthy and Productive Michigan organization – a group fighting a potential ballot initiative to legalize cannabis in Michigan, the Detroit News reports. Kevin Sabet, SAM co-founder, indicated this is just the first donation to the prohibitionist group.

“Michigan is a priority because it’s been targeted by the pot industry. They see it as an opportunity to make a lot of money. We’re very concerned about what more marijuana use would mean for Michigan families, kids, the workplace and businesses.” Sabet to the Detroit News

Comparatively, however, the Coalition to Regulate Marijuana Like Alcohol has so far outraised its opponents, reporting $651,486 in direct contributions for 2017, the vast majority – $549,238 – coming from within the state. Washington, D.C.-based Marijuana Policy Project has contributed more than $174,000 in services and cash to the group.

Josh Hovey, the legalization campaign spokesman, pointed out that the prohibitionist groups have yet to report any donations from in-state sources.

“We’ll have to work hard to get the truth out there and make sure people have the facts. When the facts are out there, the only choice people will make is yes.” – Hovey to the News

A January Detroit News/WDIV poll found 56.6 percent support for cannabis legalization among Michigan voters.

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Photograph of an indoor cannabis grow in Colorado.

Illinois Health Department Appeals Court Decision to Add Intractable Pain to MMJ List

2/12/2018

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The Illinois Department of Public Health has officially appealed the court decision to add intractable pain to the state’s qualifying conditions list for medical cannabis, according to an Associated Press report. The appeal was expected as the judge allowed a stay on the program change in order to allow the state appeal to be heard.

Cook County Judge Raymond Mitchell had ruled that the state was “clearly erroneous” in rejecting the condition’s addition to the program. In January 2016 the now-defunct Medical Cannabis Advisory Board had voted 10-0 to add the condition, but it was rejected by Health Department Director Dr. Nirav Shah.

According to the AP report, Shah had denied the request alleging a “lack of high-quality data” from clinical trials; however, Mitchell cited 45 clinical studies that indicated medical cannabis had a positive effect as a chronic pain therapy.

“The record shows that individuals with intractable pain would benefit from the medical use of cannabis.” – Mitchell, in the Jan. 16 decision

In a Feb. 8 op-ed in the Chicago Sun-Times, Anne Mednick, an osteoarthritis patient who brought the suit against the department to add the condition, wrote that the “chronic suffering” from the condition “governs her life” and that all doctors have been able to provide her to relieve her suffering is opioids.

“Opioids have wreaked havoc on my life and I want nothing to do with them. On fentanyl, I became a prisoner — even more of one than I am now. I could not leave my house for fear of being more than a few steps from a bathroom. I lost 80 pounds. The drug made me horribly sick and worse, it clouded my mind. There were days where I didn’t know if I could get out of bed. Cannabis can ease pain without any of those side effects; it is not addictive.” – Mednick in the Sun-Times op-ed

In 2016, Cook County Judge Neil Cohen ordered Health officials to add post-operative chronic pain and post-traumatic stress disorder to the state’s medical cannabis qualifying conditions list.

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Review: Emerald Organics Chocolate Truffles

2/09/2018

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Edibles make up a huge category of cannabis products. We have come a long way since Brownie Mary made the cannabis brownie famous. Now, pretty much any food you can think of can be infused with cannabis. In the old days, any cannabis cookie was great simply because it had THC in it. But today we have so many choices in cannabis edibles that the food itself needs to be enjoyable, too. And this is why we were so delighted to sample the cannabis-infused chocolate truffles from Emerald Organics.

Efficient, tasteful packaging of the Emerald Organics chocolate truffles.

Even as I write this I am beginning to salivate remembering how enjoyable the tasting session for this review was. The retail package we received contained six chocolates, two each filled with peanut butter, ganache or caramel. Each truffle has a dark chocolate exterior shell and contains 8mg of THC. Some in the review group wished that we also had a separate unmedicated box because they felt comfortable sticking with the 8mg THC dose, yet their mouth wanted to eat the entire box. This is a common problem with exceptional cannabis edibles — they are so good that you’d eat them even if they didn’t have cannabis in them.

Dan Kulchin and Jen Aspuria produce these fine chocolates with cannabis grown organically and in living soil on their permitted (less than 10,000 sq ft) farm in Briceland, California — right in the heart of southern Humboldt County. They also run the cannabis-themed Emerald Camp Resort, an experience we are hoping to review this summer.

Dan and Jen control the entire process of making the truffles from growing the cannabis, putting it through their short path distillation, to the actual making of the chocolates. Many edibles companies just buy their cannabis oil inputs from others and thus have a bit less control of the final product. This control allows Emerald Organics to work more efficiently and keep costs down, and it rewards them with a very consistent and high-quality final product.

Since California is in market transition, you’ll want to visit the Emerald Organics website to confirm which retailers are selling their truffles. But for now, we know you can pick them up at Wonderland Nursery in Garberville, CA and directly from Emerald Organics by dropping them an email.

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Large cannabis colas inside of an indoor cultivation center in Washington state.

Washington’s Seed-to-Sale Traceability System Targeted in Cyber Attack

2/09/2018

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Already behind schedule, Washington state’s new seed-to-sale tracking system, known as Data Leaf Systems, opened on February 1 to immediate complaints. The database is reportedly filled with bugs — and now it has surfaced that the system was hacked in a cyber attack on Saturday, February 3.

Since November, when MJ Freeway announced the system would be ready by January 1, 2018, Washington has not had a government operated seed-to-sale tracking system. Shortly before the first deadline, MJ Freeway announced they would need another month to complete the project. Data Leaf Systems went live on February 1 and vendors were soon reporting they could not complete travel manifests. These manifests are required before any cannabis can be transferred in Washington, and are essential in keeping track of the flow of adult-use cannabis around the state.

A Washington State Liquor Control Board (LCB) spokesperson told Ganjapreneur the problems have been fixed and all indications show the manifest problem has been taken care of. He said the other problems are related to known bugs and are being addressed by a team working 24-hour shifts.

However, an email sent to licensees by LCB Deputy Director and Traceability Project Executive Sponsor Peter Antolin sheds more light on the manifest system issues, which may have been the result of the recent security breach. Antolin’s email detailed the incident:

The state’s vendor, MJ Freeway, became aware of the transfer abnormality on Saturday. The company immediately began a review and identified it as a potential security incident on
Monday. MJ Freeway immediately notified the WSLCB. The WSLCB then contacted the Washington State Office of CyberSecurity, (OCS), which examined the data taken to determine if it contained personally identifiable information …. The information captured by the intruder does not contain personally identifiable information, such as names and social security numbers.

The cyber attack was able to gean the route information of industry manifests filed between February 1-4 and transporter vehicle information, including VIN, license plate number, and vehicle type. The Data Leaf Systems database does not include driver or driver license information. In fact, the majority of the compromised information is already publicly available.

The LCB has alerted the Washington State Office of Cyber Security (OCS), who examined the data taken to determine if any personal info was compromised, and there is an ongoing security investigation into the hack. The LCB is advising all licensees to review their travel arrangements and take appropriate action to protect their businesses.

Antolin concluded his email:

The bottom line is that this incident is unfortunate. There will continue to be malicious cyberattacks on the system. This is true of any public or private system and is especially true of the traceability system. Know, however, that we will continue to take necessary steps to protect all traceability information.

 

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A police SUV from Providence, Rhode Island.

Study: Rhode Island Police Issuing Thousands of Cannabis Citations Despite Decriminalization

2/09/2018

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Despite cannabis decriminalization throughout the state in 2013, Rhode Island police issued about 5,000 citations for cannabis possession through 2017, according to a University of Rhode Island study. The study, conducted by journalism Professor Peter Phipps and students in his Media and Law course, analyzed police department data representing about 85 percent of the state’s population.

Each cannabis citation carries a minimum fine of $150.

“Before this survey by journalism students at URI, no one knew how police in Rhode Island were enforcing the 2013 marijuana possession law. The class found stark differences from community to community. Among the state’s largest cities, Warwick and Pawtucket aggressively wrote marijuana citations, while Providence and Woonsocket police were more laissez faire. In 2015, for example, Warwick wrote 10 times as many citations as Providence. Overall, the class found police write most citations at traffic stops and cite males six times as frequently as females.” – Phipps in a statement

The study also found that African-Americans were disproportionately cited for cannabis possession, comprising 39 percent of all citations, despite only comprising just 8 percent of the state’s population. A 2013 American Civil Liberties Union study found that cannabis use rates among Blacks and Whites are about the same. That report also indicated that between 2001 and 2010, African-Americans were three times more likely to be arrested in Rhode Island for cannabis possession.

The good news is: Cannabis law enforcement has dropped 50 percent since statewide decriminalization and several municipalities have seen citations plummet. Including:

  • Bristol, which had 84 citations in 2015 and just 19 in the fall of last year.
  • Cranston, where police arrested 132 for cannabis possession in 2012 but have written just 188 citations since then.
  • Cumberland, which arrested 46 for cannabis possession in 2012 and has written just 33 citations since.
  • Narragansett, where 99 citations were issued in 2015 and 2016 but only 9 in 2017.
  • Tiverton, which made 23 cannabis arrests in 2012. From 2013 to 2017 the total is less than 23.

The bad news is: Police are still issuing citations at all and some municipalities are still issuing them in bunches. Including:

  • East Greenwich, which issued just 12 citations from 2014 to 2016 but issued 19 last year.
  • Pawtucket, which issues between 100 and 150 citations per year
  • Warwick, which has issued 934 possession citations since decriminalization took effect.
  • Westerly, which has issued 352 citations since the reforms took effect.

Rhode Island is often in the discussion of the next state to legalize cannabis for adults. The legislature has made overtures to create a legalization committee and Gov. Gina Raimondo has indicated she supports legalization but said last March she was “not in a rush” due to public safety and regulatory concerns.

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Seattle sky line, photographed during the golden hour of sunrise.

Seattle Officials Seek to Vacate and Dismiss Cannabis Convictions

2/09/2018

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In an op-ed in The Stranger, Seattle, Washington’s alt-weekly, Mayor Jenny Durkan announced that she has directed City Attorney Pete Holmes to ask Seattle’s Municipal Court to vacate convictions and dismiss charges for misdemeanor cannabis possession.

“Here’s why this is necessary: While minor marijuana possession has been the lowest enforcement priority for the Seattle Police Department since Seattle voters passed Initiative 75 in 2003, the City continued to charge for possession until City Attorney Holmes took office in 2010.” – Durkan in The Stranger op-ed.

I-75 mandated that arrests of adult cannabis users would become the lowest priority for Seattle‘s law enforcement agencies.

Durkan pointed out that affected individuals would not have to take any action to get the convictions thrown out – much like the reforms underway in San Francisco, California.

“Addressing the wrongs that were caused by the failures of the war on drugs for many years in this country – and particularly the damage wrought on communities of color – won’t happen overnight. We must provide more effective alternatives to prosecution and incarceration through drug and mental health courts, restoring rights and supporting re-entry.” – Durkan in the op-ed

In her role as an attorney, Durkan worked with former King County prosecutor Norm Maleng to create one of the first drug courts in the nation. As a U.S. Attorney under former President Barack Obama she helped create one of the nation’s first federal drug courts.

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Michael Brubeck: How to Identify a Winning Cannabis Investment

2/09/2018

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Michael Brubeck is the founder and CEO of Centuria Foods and author of Tipping the Scales, a book about cannabis industry financing that helps canna-curious investors identify characteristics of a successful venture.

For this Ganjapreneur.com podcast episode, Michael joined our host TG Branfalt for an interview that covers his early time in the industry — where he encountered the very real threat of federal enforcement and a lengthy prison sentence — to today, where he has grown his company into a multinational and powerhouse provider of high-quality CBD hemp oil. The two also talk about Tipping the Scales, seeking to clarify some of the book’s more controversial points.

You can listen to the interview in full below or scroll further down to read a complete transcript of this week’s Ganjapreneur.com podcast episode.

Listen to the podcast:

Read the transcript:

TG Branfalt: Hey there. I’m your host, TG Branfalt, and you’re 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 Michael Brubeck, he’s the Founder of Centuria, and author of “Tipping The Scales.” A really, really great read. I had the opportunity, it was a quick read, too, which is great. You synthesize everything really well in that book. Congratulations, first of all, for actually publishing something. That’s an incredible accomplishment.

Michael Brubeck: Well, thank you, Tim.

TG Branfalt: Before we get into that book, though, I want to talk about you, get to know you a little bit, get our listeners to get to know you a little bit. What’s your background, my man? How’d you end up in this space?

Michael Brubeck: Well, I started actually in 2005. First walked in to a dispensary owned by a friend of mine in California. By 2006, I was helping him out with his own business, and a handful of other startups and turnarounds inside the industry, primarily retail locations.

By 2007 had spanned the entire state, and then fast forward to 2009 with the Ogden memo, which was when the Obama Administration stated they would not use federal funds to circumvent state laws, and made the pivot out of retail, and into manufacturing/cultivation.

TG Branfalt: So your first company was in the space, that was Delta Allied Growers?

Michael Brubeck: I think technically that was number 14 or 15.

TG Branfalt: When you’re talking 12 years, you get quite a few. But I want to talk to you about Delta Allied Growers. You go into detail about that company in the book. Why don’t you tell the listeners the story of Delta and how that transitioned into Centuria?

Michael Brubeck: Well, in 2009, as soon as the Ogden memo was released, that was the starting point for where I felt there was regulatory structure in which you could have an industrial scale cultivation facility in the United States. As the administration pointed out, as long as you were compliant with state law, then you are compliant with federal policy. So, I exited retail positions and really doubled down on a 44 acre nursery site in California.

TG Branfalt: What ultimately was the … What happened to that company?

Michael Brubeck: Well, it was the opinion of myself and my attorneys that we were clearly in compliance with state law. The Attorney General of California, Kamala Harris, came out in favor of our company, but the Department of Justice and the DEA didn’t quite feel the same way, so they sent us a cease and desist letter at the same time, in 2011, that about eight governors were passing cannabis legislation in their state were getting targeted.

TG Branfalt: At what point did you shut that down, and at what point did you transition to Centuria?

Michael Brubeck: Well, we shut that company down as soon as Ben Wagner, who’s the Regional Attorney General in California, told me that we were probably looking at … I was looking at 20 to life in prison for continuing operations. I met with my advisors shortly after and they said, “Michael, you can continue operating, but the only rule is that you cannot violate US federal law.” So, what we just naturally did was pivoted to outside the US and continued cultivating and operating where we had permits to do so.

TG Branfalt: How did you successfully turn the shutting down of Delta Allied Growers into a positive?

Michael Brubeck: I’m really glad you asked that question, ’cause I can tell you that April of 2011, that was hands down the worst day of my life. It was also the best day of my life. It was the worst day of my life, in that everything I’d worked for in my entire adult life was gone. Just vanished. Every plant that was grown was 35 feet underground, all the personnel that I’d hired were now out of a job. The capital I’d raised had gone also, so that was a pretty daunting moment in my life, but it was hands down the best day of my life, and without that closure, if all things happened perfectly over the last seven years, I’d still be stuck in that small town on 44 acres.

Whereas now, we’re in a handful of different countries, three different continents. We have access to over 13,000 acres in Europe, and over 100,000 acres in Canada, so much happier the way that things turned out this way.

TG Branfalt: And internationally, it’s a far better climate than here in the United States, especially right now. But I’ve got to talk to you about this book, man. Why’d you decide to write it and what’s been the feedback so far?

Michael Brubeck: I decided to write this book because I was getting three to five phone calls every single week from friends and friends of friends that were having questions about PPMs, private placement memorandums, or investment decks that they were getting. Every single person that called me was absolutely clueless.

I kept seeing the same features in every business model. That was that there was this common assumption that the consumer market is going to remain static and the current margins are sustainable, and those are simply not true.

TG Branfalt: What was the feedback when you sat down and you wrote it, and then you sent it off to publishers, and it gets published — did your friends all read it? Did you say, “I’m done answering your calls. Here’s the book, read it, and then we’ll talk?”

Michael Brubeck: That’s definitely something that I lead with now. I think everyone that was on my list of people to talk to about cannabis investments, I definitely gave them some chapters to read. I think the overall feedback has been very positive from investors, and very negative from people that are already operating in the industry for the most part.

TG Branfalt: So you bring up the negative. Let’s just start, let’s get it out of the way. Let’s talk about some of the more unpopular opinions in this book, the potential monopolies, and consolidation. There was one report out of Canada that you were going to see something like 70% consolidation in the nation within 10 years. You talk a lot about companies that are riding high on the hog now, but just can’t scale, potentially them going out of business because they can’t hit these price points.

So, what’s your first reaction when somebody comes to you and says, “Look, this isn’t what’s going to happen,” who challenges these unpopular opinions?

Michael Brubeck: My first thing that I say is some of these things in the book aren’t predictions. I’m not saying that companies are going to develop technology to manufacture cannabis for a penny a gram. Because my company broke that in 2016. Companies already have the technology to do it, and so I think that a lot of my economic predictions actually aren’t really an opinion at all, popular or unpopular.

But I think they’re very commonsensical for people that are outside of the echo chamber of the cannabis industry.

TG Branfalt: So you’re already seeing CannaRoyalty making some moves into California. You’re already starting to see these consolidations. What are you seeing on the ground as legalization‘s starting to make its way through the legislative process? Are you seeing more consolidations, deals, or are you seeing more companies pop up?

Michael Brubeck: We’re actually seeing both. Canada’s a great template for us to … We ask ourselves, “What’s going to happen in California? What’s Colorado going to be like in five years?” I think we look at a federalized market like Canada, the most recent RAND study came out, the potential 8.8 billion dollar market there, which is roughly the size of California.

It gives us a really great map on where this industry’s going. You have three companies that have raised over two and a half billion dollars in the last 24 months, and what are they doing with that money? They’re not investing it in R&D as much as I’d like to see. They’re actually using it to cannibalize smaller companies, and will we see that happen in the United States? Absolutely.

As soon as the chains are removed from Wall Street and the institutional investors, investing directly in cannabis cultivation/manufacturing, and sales, I think there’s going to be a massive consolidation happening very quickly.

TG Branfalt: So in your book, you talk a lot about the importance of research and development, and here in the United States, private companies are the only ones that really can do that in legal states. Federally, it’s almost impossible, and what they do do is ditch weed in Mississippi. So, why do you think that companies aren’t focusing as much on R&D?

Michael Brubeck: Well, the short answer to that is they don’t have to. You still have retail cannabis prices in California, Colorado, even Canada, astronomically high. 200, 300, $350 per ounce. So, at this point, there’s really no need for radical innovation. There’s no pressing need to identify how to first of all, increase your total output by 10x inside of six months, and there’s no need to bring your cost out by 10x or 100x inside any near term window. I think that it’s just invention’s the mother of necessity, I believe.

TG Branfalt: In your book, you also say that automation is king in this industry. You’re proving that with a penny a gram. That’s an insane figure, right? But at the same time, jobs are one of the side effects of legalization. Many activists tout this as one of the reasons that we need legalization, and in your book, you point to providing jobs to a job-starved region. So, what trends do you see in the industry with regard to jobs? What do these jobs become as automation becomes more prolific?

Michael Brubeck: I think a great example that we can look to is the agricultural revolution. You had 93% of the United States working in some form of agriculture, and now, it’s below 3%. I think if we look back at that movement happening, was that a good or a bad thing for the United States? It was absolutely a great thing. So, what does the cannabis revolution that we’re looking at in the next 5 or 10 years mean for this industry and for the consumer?

I think it’s a lot of positive things. I think for the consumer they’re looking at prices going down and quality going up. I think it’s a great thing, especially ’cause I feel that cannabis is far too expensive right now.

I think for cannabis businesses, you’re moving a lot of jobs that were currently done maybe South of the border, maybe somewhere around British Columbia if you know what I mean, and a lot of those jobs are now moving internally to taxable positions where people are getting benefits and pretty good quality of life. So, as this market increases state by state, inside the United States, I think it’s very positive for the industry as a whole.

TG Branfalt: I want to touch base with you a lot more about some of the points you make in your book. But before we do that, we’ve got to take a break. This is the Ganjapreneur.com Podcast, I’m TG Branfalt.

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TG Branfalt: Hey welcome back to the Ganjapreneur.com Podcast. I’m your host, TG Branfalt. I’m here with Michael Brubeck, Founder of Centuria, author of “Tipping The Scales.” We’re talking a lot about your book. Perhaps the boldest claim that I think that you make in the book is that 90% of investors are going to lose their cannabis industry investment, so in your opinion, where are those 10% of investments that won’t fail?

Michael Brubeck: The number one indicator that I look for is mechanization of processes. If you look at the average acre of canopy, how many hands do you have touching your plants? If someone comes back to me and says, “Hey, would you like to invest in a one acre, indoor nursery? We’re going to have 200 lights, and we’re going to have 135 employees,” I would consider that likely be a failure, simply due to being a top heavy organization with too much labor.

If someone says, “Well, we’ve developed a method of aquaponics that is highly automated and only requires four people an acre,” that’s something that I would love to get more into. I think it’s the companies that are doing things the old way that are very labor intensive, and they’re also not suitable for very large scale growth, that’s where the highest attrition rate is going to be.

Whereas, I think that people that are creating enterprises that are utilizing technology, using other areas of agriculture, or just new technology in general, inside this industry, are going to be the ones that can grow, grow rapidly, and they can be the easy companies to acquire market shares as interstate commerce opens up.

TG Branfalt: You also point out that small cottage producers, they’re going to have to change their business models due to their inability to scale, the presence of larger cultivators. Do you see a place for craft cannabis in a mature, legal cannabis market?

Michael Brubeck: Yeah, I think that’s like, I think we look at craft beer, we look at wine. We see a place where you’ve got these huge titans of manufacturing that are producing extremely large volumes of their products, and doing very well with their market segment. Then you have very small wineries or craft brewers that are also ultra successful based on their style of manufacturing. The same thing will exist in cannabis. You will see a polarization of I think large scale cultivation and small scale cultivation, but what small scale cultivators have to understand is that consumer pricing is going to be affected by those large scale cultivators.

TG Branfalt: So personally, right, I’m married to terpenes. I mean, my oil, my wax, my flower, that’s what I go for, right? The high is almost, the effect is almost secondary at this point. I’ve been consuming for 16 years or something like that. So, is that one of the ways that these smaller producers will be able to maintain a presence in this mature market?

Michael Brubeck: I think you pointed out a very great fact right there. The reason that you smoke cannabis is unique to you, and a lot of people have that same reason. A lot of different people have different reasons, and each market segment will gravitate to where they find the most value.

I think that the biggest advantage of small scale cultivators, or cottage cultivators, is they can pivot quickly. They understand the market better than any suit in a boardroom, three states away, can never understand. I think that’s going to be the major advantage moving forward for the next decade.

TG Branfalt: You mentioned a suit in a couple of states away. One of the things that you talk about in your book that I thought was really cool was how this industry has the ability to pull talent from non-cannabis industries. Can you tell me about your experience working with people from outside of the sector, and how you’ve built these relationships with these non-cannabis industry types?

Michael Brubeck: Well, ever since 2009 when I focused on manufacturing, the first person I hired was the Head of the Plant Science Department for UC Davis, which as you know, is the largest Plant Science Department in the United States. His specialty was in ornamental horticulture. Couldn’t have been a better fit. Getting that individual to sign on was very, very difficult. He was someone that felt he could be shunned academically for his participation with a marijuana company.

Whereas now, there’s probably monthly meetings at UC Davis about how that department is going to get involved in this industry, all inside of seven years.

TG Branfalt: What other industries are you seeing people coming from? On the podcast I see a lot of people coming from real estate, so what’s your experience as a CEO?

Michael Brubeck: I actually see people coming from every industry. I see people coming from pharmaceutical. I had a great conversation with someone from Genentech last week. I think one of the first California permits that were issued, that was issued to HERBL Distribution, a distributor in California. Well, the owner of that Michael Beaudry, he comes out of UNFI, which is a Fortune 500 company that he was the President of. You have a president of a company that did eight billion dollars last year, creating the same business model that UNFI has, which is about 27 distribution locations nationwide, and 36,000 skews.

His goal for next year is to have 5000 skews. Now, he’s going to be operating at roughly a 6% gross margin, and how does that affect the cannabis industry in California? Every middler that he is displacing, that’s used to maybe a 20% or a 30% margin for driving from the Emerald Circle down to Southern California now is getting edged out by some truck drivers that have a centralized processing facility in Northern California.

TG Branfalt: And so now you’re bringing up this idea that cannabis and you say this in the book, is going to, “Revolutionize every industry that it touches.” Man, what are some of those industries? We know that Scotts is buying up greenhouse and lighting companies, so big business is already recognizing some of the ancillary markets that are going to be revolutionized by the cannabis industry. What do you think some of these industries are going to be?

Michael Brubeck: Well, I think the big ones are intoxicants, so tobacco and alcohol are going to be adversely affected, as we saw in Colorado since we started collecting data after legalization in 2012, that yeah, alcohol consumption went down, nominally. I think if you look at the pharmaceutical industry, the moment that you reschedule cannabis from a Schedule 1 to a Schedule 3 substance, you’re going to see an explosion of new drugs hitting the market, roughly 7-10 years later.

I think that every cannabis consumer is very well aware of the myriad health benefits that each cannabinoid has, and the fact there’s so many cannabinoids that haven’t been isolated and even tested on the human body yet is mind blowing.

TG Branfalt: I want to talk to you about another big claim that you make in this book, but before you do that, we’ve got to take a break. This is Ganjapreneur.com Podcast.

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TG Branfalt: Hey welcome back to the Ganjapreneur.com Podcast. I’m your host, TG Branfalt. I’m here with Michael Brubeck, the Founder of Centuria, author of “Tipping The Scales.” So, in your book, you say when regulation falls, free market reigns. That statement assumes that in the US it will be descheduled, not rescheduled, which would likely put it in the hands, cannabis in the hands of Big Pharma and Big Ag. Even in Canada, we are seeing state control, provincial control. The liquor board’s going to be running everything from distribution to sales.

In Uruguay, they only allow two products, no marketing, strict controls, fingerprints. This isn’t a free market. The legal cannabis industry in the United States isn’t a free market, Canada’s proposal isn’t a free market. Do you think the industry will get to that free market status? And by then, won’t the market already be cornered by monopolies which again, impedes the free market? I mean, I know it’s a very loaded thought here, but how do we say that regulation falls, free market reigns, but then we regulate the hell of it?

Michael Brubeck: Well, I think we’re definitely dipping a toe in the water with regulations. I think you saw the infighting amongst canopy sites in California. In Canada, as legalization comes this summer, I think that’s going to be one of the biggest tipping points we’ve probably seen in the history of this industry. With one of the major industrialized nations in the world, member of the United Nations, going against the single convention on narcotics, and legalizing cannabis for recreational use, I think we’re going to see a lot of interesting business models pop up in that country.

Then, I think the next step that the US is going to see, and I think a lot of it has to do with what’s happening in Canada, is that we should see state’s rights be recognized regarding both medical and recreational cannabis. Now, the next step after that is potentially for interstate commerce, and then for international imports to be allowed under the commerce clause.

So, if we’re talking about that all happening in three to five years, now you have Canadian companies that are very well funded, that are extremely efficient large scale, being able to export to distributors in California and Colorado, and a handful of other states. I think that you’re going to see US regulators see that US market share is getting eroded by foreign imports. So, what will that prompt the United States to do? It’s my belief that we’ll see an opening or a loosening of regulations.

TG Branfalt: So you’ve said a couple of times, three to five years. We’re edging in on 2018, so you think that we’ll see a significant policy change in the United States by 2021 to 2023?

Michael Brubeck: I think when you look at something as simple as 280E, I think we’re less than a year away from seeing that fall. That to me is an extremely significant change at the federal level. To get the IRS to recognize that businesses in these legal states should be able to write off legitimate expenses for operating their cannabis business is a huge first step. So, going from that to rescheduling, I think yes we are inside of 3-5 years.

TG Branfalt: So one of my concerns, honestly, with the US, is that they’re not going to deschedule, that they’re going to reschedule. If they reschedule, it’s likely going to put cannabis in the hands of Big Pharma and Big Ag. Are you concerned about that as well? Or am I just being paranoid, big government, 1984, big brother is watching us?

Michael Brubeck: Well, the biggest advantage to a rescheduling of cannabis is it removes the federal government’s ability, like our Attorney General right now I think is a bit frightening to some people in the business, but it removes their ability to put … Cannabis operators are following state laws and regulations, in jail for 5 to 20 years, and I think removing that is massive. I think removing … penalties for possessions or for possession of cannabis in general needs to be eliminated.

TG Branfalt: Does it worry you as an operator, the potential of the US government playing crony capitalism with this industry? Because they’re allowing on one hand, they’re allowing companies to … The FDA is allowing synthesized THC products, fast-tracking them, but on the other side, they’re threatening crackdowns. Is there a concern from you, who seems to have a pretty good finger on the pulse, that the government could just play crony capitalism with this, license just a bunch of their friends, and not allow small producers or independent producers into this industry?

Michael Brubeck: I don’t think you can put the genie back in the bottle. I mean, that’s the one problem the federal government would have if they tried to play out that scenario. Can you close the 2800 businesses in Colorado because three pharmaceutical companies now have the patent on specific classifications of cannabis or cannabis processing? I just don’t ever see that happening.

Do I see that pharmaceutical industries are going to have a much larger footprint with cannabis based products? Absolutely. Is that a bad thing for the cannabis industry? I don’t think so. The reason I’ve remained sane in the last 12-13 years in this business, is I really don’t try and speculate. I definitely look at very near term happenings inside the industry, both regionally and nationally. Not just the United States, but other countries. And then strategize accordingly for those changes that are about to occur.

TG Branfalt: So with all this being said, what advice do you have for entrepreneurs considering entering this space?

Michael Brubeck: If you currently aren’t operating a business inside the cannabis space, do not try and recreate something that someone else is already doing really well. Yeah, you may be an incredible chocolatier, but for you to go out and purchase let’s say trim or a base ingredient in oil, from a wholesaler, and then use that ingredient in creating your chocolates. If THC or cannabinoids are 65% of your product costs, you’re competing against every other individual in the marketplace, so do you have a competitive edge in that space? Absolutely not. You’re playing catch up with companies that are more experienced, that are better capitalized than you, so just don’t do it.

Same thing when I hear about growers that are trying to raise six million dollars for a 10,000 square foot indoor nursery in California. I think it’s an absurd thing to do. If you’re spending money on electricity to create photosynthetic activity in your plants, you’re missing the bigger picture here.

So, focus your resources, both time and money, on things that are going to be valuable in three to five years, that you may not be able to be profitable inside of two or three years. So, business models could be people that start building greenhouses and collectivizing indoor nurseries to pivot into greenhouse spaces. I think that’s going to be one of the biggest areas of growth for investors and business owners.

By coordinating collectivization efforts, by getting 10 growers or 20 growers in the same place, if that pays your rent as a cultivator yourself, that’s a smarter way to approach I think, entering as a cultivator, as a product manufacturer.

TG Branfalt: That’s really interesting, the idea that collectives of sorts are the model that you see as attractive. So, when you sent me this book, in the front cover you write, “I hope you learn something.” I definitely did. I think that people who are turned off by the book, as you said, are probably going to be current operators, but as somebody who covers this industry … I really appreciate the honesty that’s in the book. You go through your own journey as well as the journey of your companies, so where can people find out more about you, buy the book?

Michael Brubeck: Well, you can find the book on Amazon, both in paperback and Kindle format.

TG Branfalt: And where can they learn more about you and Centuria?

Michael Brubeck: You can go on our website, CenturiaFoods.com, to learn more about myself and the company.

TG Branfalt: Well, I want to thank you for being on the show. I hope you write another book, honestly, because it’s very succinct. It’s very well written. It’s an easy read and I think that if people pick it up and they can immerse themselves in it and really get some expert opinion.

Michael Brubeck: Well, thank you, Tim. I’m actually already starting on it, and it’s actually focusing on historical market consolidation in other industries, and how they historically affected companies inside those industries, and then how that correlates to the cannabis industry moving forward.

TG Branfalt: Well, I reckon that after you’re done with that, we’ll have to have another conversation, huh?

Michael Brubeck: Yeah, looking forward to it.

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 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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Outdoor CBD-rich cannabis plants on a farm in Oregon.

Report: Cannabis Industry Stakeholders Not Fearing Crackdown Following Law Enforcement and Cannabis Industry Summit

2/09/2018

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According to a National Law Review report on the Feb. 2 summit held in Oregon for law enforcement officials and cannabis industry representatives to discuss federal cannabis policy following Attorney General Jeff Sessions’ recent policy changes, “none of the U.S. Attorneys in attendance expressed an interest in cracking down on the industry as a whole.”

However, law enforcement officials did blame industry overproduction for an increase in cannabis seizures, and Oregon U.S. Attorney Billy Williams indicated they were “prepared to do something.”

Williams had announced the summit in a Jan. 14 op-ed in the Oregonian, where he also laid out the case for the state’s “massive overproduction problem” that has resulted in 2,644 pounds of cannabis and $1.2 million in illicit cannabis cash seized by Oregon postal agents headed out-of-state.

“Attorney Williams has assured my team that lawful Oregon businesses remain valued stakeholders in this conversation and not targets of law enforcement.” – Oregon Gov. Kate Brown at the summit via the National Law Review

What were the takeaways for cannabis industry stakeholders?

“I did not get the feeling …from the United State attorneys that spoke or participated that any of them were intent on shutting down the regulated industries in their state.” – Oregon Cannabis Association Executive Director Amy Margolis to the Law Review

Although the rescinding of the Cole Memo has not led to any crackdowns on the legal cannabis industry yet, the door is open for federal attorneys to target legal businesses they suspect are diverting products into illicit markets both in and out-of-state.

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Nebraska MMJ Ballot Question Legislation Moves to Committee

2/09/2018

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Nebraska state Sen. Anna Wishart’s proposal to legalize medical cannabis via a ballot measure to add the reforms to the state constitution has moved to the Legislature Judiciary Committee, and, if approved by lawmakers, the measure could head to voters in November, the Associated Press reports.

The proposal has drawn the ire of Assistant Nebraska Attorney General Ryan Post, who said lawmakers “should not expose” Nebraska to a program illegal under federal law. Dr. Thomas Williams, the state’s chief medical officer, also does not support the reforms, saying that more research is needed.

Putting a constitutional amendment to voters requires support from 30 of the Legislature’s 49 Senators and any filibuster – which derailed a medical cannabis bill last year – would require 33 votes to overcome. Wishart has said that she doesn’t believe that the Legislature is “equipped to make medical decisions.”

A November survey by the Marijuana Policy Project found 77 percent of Nebraskans indicated they would support a medical cannabis ballot question, according to a World-Herald report.

“From my perspective, it was not a surprise. I hear from Nebraskans every day on the issue of legalizing medical cannabis.” – Wishart to the World-Herald

In 2016, medical cannabis legislation fell just three votes short in the Legislature from passing.

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Fox News Poll Finds 59% Support for Cannabis Legalization

2/08/2018

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A Fox News poll has found 59 percent support for recreational cannabis legalization, up from the news organization’s polls in 2013 and 2015 which found 51 percent and 46 percent support, respectively. The poll was conducted by Democratic polling firm Anderson Robbins Research and Republican firm Shaw & Company Research from Jan. 21-23.

Of the poll’s respondents, 43 percent identified as Democrats, 41 percent as Republicans, and 16 percent as independent or other. Cannabis legalization was most popular among Millennials (72 percent), followed by Gen Xers (60 percent), and Baby Boomers (52 percent).

Cannabis legalization, more popular than … President Donald Trump (45 percent approval), Congress (15 percent approval), Oprah Winfrey (56 percent favorable view), House Speaker Paul Ryan (40 percent favorable view), Senate Minority Leader Chuck Schumer and House Minority Leader Nancy Pelosi (both garnered a 31 percent favorable view), Senate Majority Leader Mitch McConnell (25 percent favorable view), and Sen. Kirsten Gillibrand (18 percent favorable view).

More respondents also favored cannabis legalization to the new federal tax law (38 percent) and the proposed U.S.-Mexico border wall (40 percent).

The results fall in line with other recent national polls on legalization. A January poll from NBC News and the Wall Street Journal found 60 percent support for legalization, while a Gallup poll in October found 64 percent, including, for the first time, a majority of Republicans (51 percent).

The Fox News poll did not find a Republican majority for legalization (split 46-46 percent), but it was very popular among Democrats (68 percent) and independents (67 percent).

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Colorado Gov. Considering Releasing 40 Nonviolent Cannabis Criminals

2/08/2018

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Colorado Gov. John Hickenlooper is considering releasing 40 inmates convicted of nonviolent cannabis crimes, the Denver Post reports. The pardons would follow 14 commutations by the governor last November. Those pardons, however, applied to have their crimes expunged, while the 40 being considered for release were identified by the administration.

“Right now, we have not enough room left in our prisons. So if what these people are serving serious time for wasn’t violent — is no longer illegal — maybe we should be looking at (whether) it’s safe to release them.” – Hickenlooper to the Post

The review will consider the details of the cases and the inmates’ prison conduct. If the administration is satisfied that those factors are conducive for release, the administration will invite those inmates to apply for clemency. Hickenlooper indicated those inmates identified would be told their application “will have favor.”

In June, the Democratic governor signed a law allowing offenders to petition the district court to seal misdemeanor use or possession criminal records which are no longer illegal under the new law.

Earlier this month, San Francisco District Attorney George Gascón said his office would retroactively apply criminal justice reforms in the state’s cannabis legalization law to misdemeanor and felony convictions dating back to 1975.

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A panorama view of the valley nestled around Aspen, Colorado.

Cannabis Retail Sales Outpace Alcohol Retail Sales in Aspen, Colorado

2/08/2018

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Last year’s retail cannabis sales in Aspen, Colorado outpaced retail alcohol sales by nearly a million dollars, according to Aspen Finance Department figures outlined by the Aspen Times. The city’s legal cannabis industry brought in $11.3 million, while booze revenues reached $10.5 million.

This marks the first time legal cannabis sales outpaced retail alcohol sales in the city. In 2016, Aspen’s cannabis sales were $9.7 million and the 2017 figures represent a 16 percent increase, marking the largest rate of growth of the city’s 12 retail sectors. Alcohol sales were flat. There are six retail dispensaries and five liquor stores within Aspen city limits. The data shows that despite the overall sales totals, the city’s cannabis industry is not hurting the city’s alcohol industry, as liquor sales topped cannabis sales in December $1.6 million to $1.2 million.

The retail alcohol figures do not represent alcohol served in Aspen’s restaurants and bars, which netted $130 million in sales.

All said, accounting for booze served in restaurants and bars, the retail cannabis industry is the least valuable retail sector in the city. Accommodations rank first, followed by: restaurants and bars; sports equipment and sports clothing; clothing; food and drug; liquor; miscellaneous; construction; luxury goods; utilities; and automobiles.

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Several elderly citizens riding bicycles by the water front.

Study: MMJ ‘Safe and Efficacious’ for Elderly, Reduced Opioid Use by 18 percent

2/08/2018

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In a study published in the European Journal of Internal Medicine, Israeli researchers, including Raphael Mechoulam, found that after six months of medical cannabis treatment, 18 percent of 2,736 patients over age 65 were able to stop or reduce their opioid use. Pain and cancer were the two most common indications for cannabis treatment in the study, and overall 93.7 percent of respondents “reported improvement in their condition” and their pain level reduced from a median of 8 to 4 on a 0-10 scale.

“Our study finds that the therapeutic use of cannabis is safe and efficacious in the elderly population. Cannabis use may decrease the use of other prescription medicines, including opioids,” the authors surmised, adding that gathering more data on this “special population is imperative.”

The study, published Feb. 1, found that the most common side effects were dizziness, reported by 9.7 percent of respondents, and dry mouth, reported by 7 percent of respondents.

The study is the latest in a growing body of evidence purporting cannabis can help stem the U.S. opioid epidemic. A University of New Mexico study published in November found a 47 percent reduction in daily opioid dosage in enrollees who also used cannabis. A study published in the American Journal of Public Health in October found that cannabis legalization in Colorado led to a 6.5 decrease in opioid-related deaths. A HelloMD and University of Berkeley study surveyed nearly 3,000 HelloMD patients and found 97 percent “agreed” or “strongly agreed” they could decrease their opioid medication use when using cannabis.

Last May, the federal National Institute on Drug Abuse updated their website to reflect two NIDA-funded research that found an association between cannabis legalization and a reduction in opioid-related deaths due to painkillers and another that shows states with a comprehensive medical cannabis program see lower rates of opioid prescribing, non-medical prescription opioid use, and less opioid-associated hospital admissions.

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The Canadian flag flying on a windy day in front of evergreen trees.

Report: Canadian Cannabis Legalization Could be Stalled Past July

2/07/2018

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Some Canadian lawmakers suggest that federal cannabis legalization could be delayed past July as the legislation to implement the reforms must be approved by May in order for the industry to be fully prepared for the new regime, according to a CBC report. Health Minister Ginette Petitpas Taylor said that officials from lower levels of government indicated they need eight to 12 weeks after federal approval to prepare for the rollout.

“Before legislation comes into force and Canadians can legally buy cannabis, Health Canada continues to engage national and community partners to share information related to implementation and ensure all levels of government are prepared for the prospective coming into force of bill.” – Taylor to the Senate via the CBC

Currently, the legalization bill is in its second reading in the Senate and still needs to be studied at committee – which could be time-consuming – before being sent back to the chamber for a third reading and debate. If amendments are added to the measure it would head back to the House of Commons and be approved by that chamber, which could take weeks, according to the report. Some Conservative senators have indicated they would use procedural measures to stall the bill’s passage. Conservative Sen. Claude Carignan has suggested the legislation could be pushed back to the end of the year.

“We’ve made it very clear that our goal is this summer. Our goal is this summer in an orderly fashion with all the pieces sequenced in the right order so that they are effective.” – Public Safety Minister Ralph Goodale to the CBC

In a December interview with TVA, Prime Minister Justin Trudeau said there was no firm date on legalization, saying he wasn’t sure where the July 1 date came from.

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Treasury Secretary Steven Mnuchin, accompanied by U.S. Ambassador to Israel David Friedman and Acting Consul General Michael Hankey, toured the Old City of Jerusalem, making stops at the Church of the Holy Sepulcher and the Western Wall.

Treasury Secretary Tells Committee He Supports Canna-Business Banking Access

2/07/2018

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In testimony to the House Financial Services Committee, Treasury Secretary Steven Mnuchin said he supports allowing canna-businesses access to banks, according to a Forbes report, adding that the department is “reviewing the existing guidance” and doesn’t want to rescind it without having a new policy in place.

“I assure you that we don’t want bags of cash. We want to make sure that we can collect our necessary taxes and other things.” – Mnuchin to the House Financial Services Committee via Forbes

The pressure is on federal regulators to address the cannabis industry banking issue. Last Month, Attorney General Jeff Sessions rescinded the Cole Memo, which provided protections from federal interference for state-approved cannabis businesses; however, regulators at the Financial Crimes Enforcement Network (FinCEN) subsequently said they were not informed prior to the policy change and indicated that the agency’s 2014 guidance was still in place. Later that month, attorney generals from 17 states, Washington, D.C., and Guam sent a letter to Congress urging them to advance legislation allowing legal canna-businesses “to bring that commerce into the banking system.” A bi-partisan group of senators also sent a letter to the agency asking them to explicitly allow banks to serve the industry.

According to Sept 2017 data from FinCEN, more than 300 banks and nearly 100 credit unions are currently providing services to legal cannabis operators.

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A field of CBD-rich cannabis plants at a farm outside of Portland, Oregon.

Adult-Use Cannabis Bill Introduced in Georgia

2/07/2018

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Georgia Democratic state Sen. Curt Thompson has introduced a measure to legalize cannabis for recreational use in the state, WSB-TV2 reports. Thompson estimates that a taxed-and-regulated cannabis economy could bring in $340 million a year in tax revenues.

This isn’t the first time that Thompson has introduced adult-use legislation; however, he indicated that this is the first time he has gained any co-sponsors to the measure, which would amend the state’s constitution to allow for cannabis legalization.

“When I first started this, I was the only sponsor. There’s now six sponsors on the retail bill. There’s about 17 or 18 on the medicinal marijuana statute.” – Thompson to WSB-TV2

Thompson acknowledges that legalization is an uphill battle in the deep south, but that “historical” and national “political trends” are on the side of cannabis reforms.

The chances of legalization in Georgia are slim. The Legislature is controlled by conservative Republicans and it’s an election year, which will likely prevent most lawmakers from supporting what is viewed as controversial legislation. Moreover, all of the bill’s co-sponsors are Democrats, which will make it harder to gain traction in either legislative chamber.

The measure has been moved to the Senate Health and Human Services Committee.

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Marketing Decisions: The Value of Casting a Wide Net for Your Cannabis Brand

2/07/2018

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When it comes to marketing your cannabis brand, you need to cast the widest net you possibly can — but what does that mean? How do you navigate an ocean of marketing choices without drowning in the clutter?

As a cannabis business, there are so many ways to get discovered, collaborate, advertise, and associate yourself, but it can quickly become overwhelming. Many options are expensive and not feasible for a small business owner. They say it takes seven times for a product to be seen before it’s noticed by a consumer, so how do you get there without breaking the bank? These are the things you need to know to keep your boat afloat.

Be open to possibility

We are a progressive industry, and the creative possibilities are endless. Many business owners are quick to advertise with traditional media options, but those can be costly and not the right option for you. So where do you go? Look at every connection you make and find the opportunity. Our industry is abundant with pioneers committed to helping other business owners succeed. 

Do you need photography for a product? Reach out to photographers who are talented and looking to break into the cannabis industry. Look at the local college creative departments. There are thousands of people who are looking for an opportunity in the cannabis space. Help them find one. This dynamic creates a symbiotic relationship that can ultimately benefit you both.

Need packaging recommendations? Work with local firms who are interested in gaining cannabis clients. Many firms will offer a lower rate to a company who is equally committed to promoting them in the cannabis industry. Find the creative opportunity to partner with people who are also navigating the cannabis landscape.

Add some variety

I’m a huge fan of non-traditional advertising and it happens to be great for our industry. Since traditional advertising dollars add up quickly and can carry multiple legal restrictions, I suggest you try some non-traditional approaches to get noticed. Look closely at your surroundings and find the hidden gems right under your nose.

For example, consider Comic-Con: I’ve had the opportunity to work this iconic event for a few entertainment companies in the past, and advertising costs there can be outrageous so we chose a more creative path. We decorated a few coffee shops near the venue rather than pay the huge venue advertising fees. We brought flash dancers in costume to perform to the thousands of people waiting in line to get in, and we brought in 20 Harley’s with bearded riders wearing our branded merchandise to drive up and down the streets promoting our client’s new project. Just the sound alone will make you turn your head to look! We knocked out several touch points before consumers even walked into Comic-Con at a fraction of the cost.

Widen your target market

I have worked hard to get noticed in the cannabis industry. Like many of you, I have attended cannabis trade shows either as a vendor or an attendee or as part of a collaboration. These shows are great and amazing opportunities surround them — but if you ask yourself what you might you be missing, and look beyond your obvious customer, you may find yourself pleasantly surprised.

Here’s another great example: last summer, I attended our local Pride festival as a vendor. I went in with few expectations and high hopes for some positive feedback on my new line of vases. We were a huge hit! I think the LGBTQ community deals with stigmas so often that they relate to our industry completely. Realizing this potential target market has benefitted our company beyond the event and now the LGBTQ community is one of our top target markets. I’m planning a Pride vending tour this summer and so many fabulous new followers are having a blast with my product.

What other industries connect to your product or service? Cast that net beyond just cannabis! Reel in the canna-curious customers!

Don’t be afraid to try something different

We are creatures of habit and often limit ourselves as a result — it surprises me how many people talk about their one or two channels of marketing. Our industry has many restrictions, and they’re all the more reason to try something innovative and fresh.

One of the fears many have about trying new opportunities is the fear of failure. We become so consumed with fear that we find ourselves not doing anything. So let me be clear… there are going to be moments when you fail. When this happens, remember this:

EVERYTHING IS AN OPPORTUNITY, NOT AN OBSTACLE.

What did you learn from your experience? How can you create an opportunity out of it? Who can you collaborate with at the event you attended? There will always be unexpected connections who wind up in your net.  Your job is to figure out how to find the opportunity for your business when reviewing them.

It is our role as leaders in the cannabis industry to help others explore opportunities while moving our own agendas forward. Some of your choices aren’t going to be successful at first glance, and that is where you must take a breath and search for the opportunity you aren’t seeing. Think about who you want to connect with; what do THEY need? How can you present your product or service as a way to solve their problem? What’s “floating their boat”?

When casting a wide net in the cannabis industry, you don’t always know what you’ll “catch” each day, but you’ll never catch anything if you stop fishing. Approach each challenge as an opportunity to grow and find a creative solution.

And remember — go as far as you can see, and when you get there, you’ll see further.

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Israeli PM Netanyahu Blocks MMJ Export Plan Pending Review

2/07/2018

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Israeli Prime Minister Benjamin Netanyahu is preventing medical cannabis companies from exporting products – a move that was approved in August by Finance and Health Ministers – pending a policy review by the Health Ministry and the National Economic Council chairman, according to a Haaretz report. The program suspension comes after the Public Security Ministry released data suggesting “spillover” of medical cannabis products into the illicit market.

MK Tamar Zandberg, chair of the Knesset Committee on Drug Abuse, lamented the decision, saying officials would “live to regret the decision to stop important progress that Israel has already started making, which will erase the competitive advantage that Israel has developed in the marijuana market that is breaking ground worldwide.” She said she would convene the Drug Abuse Committee for an emergency hearing on the issue.

“Netanyahu’s decision to stop marijuana exports is a destructive one stemming from ignorance and fear. Israel merited being an agricultural power, and, yes, in the marijuana field, too. It’s good for the economy, it’s good for agriculture and it’s good for the sick” – Zandberg to Haaretz

The Finance and Health Ministries estimated that cannabis exports could bring in between NIS 1 billion ($279 million) to NIS 4 billion ($1.1 billion) in revenues.

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Seattle CannaCon to Feature Cannabis Career Fair Next Week

2/06/2018

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CannaCon, one of the cannabis industry’s premier networking and educational events, is coming to the Washington State Convention Center in Seattle next week on February 15-17.

The event promises hours upon hours of engagement with some of the industry’s brightest minds and most noteworthy pioneers, but this year — in addition to the regular lineup of expert speakers and educational panel discussions — tickets to CannaCon Seattle include entry to the first-ever CannaCon Career Fair, produced in partnership with Mac&Fulton Talent Partners.

Running from 10:20 am to 4:20 pm on Saturday, Feb. 17, the CannaCon Career Fair will offer everything a prospective cannabis worker might want to help get their foot in the door. The career fair will be a general mingling of cannabis employers and prospective employees. Company representatives will be there, searching the crowd for the right hire, and hopeful employees will have access to informational booths illuminating the many different cannabis career paths.

Career fair participants can expect to find:

  • Guidelines for job-searching in the cannabis industry
  • A resume writing workshop to help identify and beef up your qualifications for the cannabis space
  • The ability to hear from/speak with cannabis industry operators about their typical workdays
  • Information and presentations about pursuing a career in the cannabis industry
  • Explanation of ideal candidate traits and skills, complete with print-outs and questionnaire cards to help practice for the real deal.

All attendees to the CannaCon expo are invited to attend the career fair, which is conveniently timed for the final day of the three-day event so attendees won’t be missing the conference’s keynotes.

This year, keynote presentations will include Washington’s Governor Jay Inslee and Vincente Fox, the former President of Mexico. Gov. Inslee will speak on Thursday, Feb. 15 about Attorney General Jeff Sessions’ act of rescinding of the Cole Memo and how Washington state will continue to stand by and expand its voter-approved, regulated cannabis industry; President Fox will speak on Saturday, Feb. 16 to the perils and downsides of the Drug War and the many advantages of ending prohibition.

Attendees will also have access to one of the most extensive and all-inclusive exhibition floors in the cannabis industry. With more than 400 exhibitors from around the country coming to Seattle this year, the networking opportunities alone should be game-changing for entrepreneurs and investors alike.

CannaCon Seattle kicks off in just over a week, so don’t wait to buy tickets — purchase now using the promotion code CANNACON30 and you will receive a 30 percent discount off your ticket price.

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A sunset settling behind a row of small, toy American flags.

Republican Senator Says Cannabis Legalization Debate ‘Likely’ This Congress

2/06/2018

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In a letter from Republican Sen. Thom Tills to North Carolina attorney Rod Kight, who works with cannabis companies, Tills suggested that cannabis legalization “will likely be discussed this Congress.” The letter from the Senate Judiciary Committee member was obtained by Business Insider.

According to the report, the letter to Tills was to urge him to support the Ending Federal Marijuana Prohibition Act of 2017 and the Marijuana Justice Act which would both effectively legalize cannabis federally.

“Proposals to legalize marijuana should not be taken lightly. I understand that many individuals believe marijuana use is benign. The fact remains, however, that marijuana use can result in adverse health consequences, particularly among adolescents. It goes without saying that a product which has adverse psychological and physiological impacts on its user can ultimately harm third parties. For me, it is crucial that we continue to educate ourselves on all the short-term and long-term consequences of marijuana use before we consider unrestricted legalization of the drug. It is my goal to pursue policies that protect our nation’s youth from the dangerous consequences of illegal drug use and help produce productive and responsible members of society.” – Tills in the letter to Kight

Tills is a co-sponsor of the MEDS Act which would encourage cannabis research on a federal level.

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