California Governor Signs Bill Fining Cannabis Use in Vehicles, Vetoes Packaging Measure

9/12/2017

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Under a California bill signed by Gov. Jerry Brown on Monday, drivers and passengers in a vehicle caught consuming cannabis will be fined $70, the Los Angeles Times reports. The law includes smoking, vaping, or consuming cannabis-infused edibles, and is similar to the state’s open container law for alcohol.

Sen. Jerry Hill, a Democrat, said the law was necessary because a 2012 California Office of Traffic Safety found that more weekend nighttime drivers in the state tested positive for cannabis than alcohol. Under the adult-use regime, it is illegal to possess an open bag of cannabis in a vehicle and to drive while under the influence.

Gov. Brown vetoed another bill that would have prohibited cannabis packaging that might appeal to children. According to the report, he said the administration is drafting its own rules to keep cannabis away from kids.

California’s Bureau of Cannabis Control released their draft rules on Sept. 6, which include packaging requirements. According to the proposals, all cannabis products would feature a label that includes the phrase “Keep out of reach of children.” The BCC indicates that the most common symptoms associated with cannabis ingestion by children are “lethargy, coma, inability to walk, and vomiting.”

The draft rules are subject to 30-day public comment. The law signed by Brown takes effect immediately.

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Smoke drifts upwards inside of a dark room.

Nevada Legislative Counsel Bureau Opinion Could Set Stage for Cannabis Social-Use

9/12/2017

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In an opinion issued on Monday, Nevada’s Legislative Counsel Bureau said that nothing in the state’s recreational cannabis law prevents local governments from permitting cannabis consumption at businesses, the Las Vegas Review-Journal reports. The opinion effectively allows municipalities to create social-use licenses that could be granted to cannabis-friendly lounges, coffee shops, and special events such as festivals.

State Sen. Tick Seagerblom, the Democrat who sponsored the state’s medical cannabis regime and has long supported the adult-use program, said the decision adds to the state’s toolbox in becoming “the marijuana capital of the world.”

“This is what we’ve been waiting for,” Segerblom said in the report. “It’s fantastic.”

Andrew Jolley, CEO of The+Source dispensaries and president of the Nevada Dispensary Association, said the LCB opinion is “a step in the right direction” for allowing Nevada‘s tourists to consume cannabis, who need an option “rather than a blanket statement that it’s just not allowed on the Strip.” He added that businesses and regulators alike “will be surprised at how many locals find value in these lounges.”

“Think about how many bars we have or wine tasting facilities and events,” he said in the report. “It’s crazy to think that marijuana is somehow different than that. It’s really not.”

Clark County Commission Chairman Steve Sisloak indicated that the county’s marijuana advisory panel has discussed permitting retail dispensaries to host lounges, at least on a pilot basis and that the panel would likely discuss the topic during their meeting next month, and the commission would take up the issue at their meeting next week.

“I do feel it is very important for the people who are coming from out of town, the tourists, which are a big contributor to the industry’s business, I’m told, to have a place where they can legally and safely consume the product,” he said in an interview with the Review-Journal.

Seagerblon said he was optimistic Las Vegas could see cannabis lounges in 2018.

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The Pennsylvania Capitol Building lit up with green lights to celebrate the House passage of the state's medical cannabis law in 2016.

Lawsuit Threatens to Delay MMJ Rollout in Pennsylvania

9/12/2017

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A lawsuit by one of the Pennsylvania companies not chosen for a medical cannabis license could shut down the program before it’s implemented, the Philadelphia Inquirer reports. Keystone ReLeaf LLC is seeking an injunction against the state Department of Health, alleging that the licensing awards process was “arbitrary, capricious, and unreasonable.”

The company applied for one of 12 cultivation licenses and one of 27 dispensary licenses and was not chosen for either. According to the report, court documents indicate that the company missed the state application deadline by two days. The lawsuit was filed on behalf of Keystone by Seth Tipton, a partner in the law firm Florio, Perrucci, Steinhardt & Fader. Christian M. Perrucci is also a partner at the firm in addition to serving as a managing member of the rejected medical cannabis company. Further, the plaintiffs argue that the selection process was “infected by bias and favoritism” and that the Health Department panelists were kept secret and the state Office of Open Records has ruled that the panelists must be named.

In response to the lawsuit, state Sen. Daylin Leach, the prime sponsor of the state’s medical cannabis law, said if the suit moves forward it could results in the deaths of “hundreds” of citizens, citing a National Institute on Drug Abuse study with the RAND Corporation that found states with comprehensive and active medical cannabis programs see a 25 percent reduction in opioid-related deaths.

Steve Schain of Hoban Law Group, a cannabis-focused law firm in Colorado, told the Inquirer that while the suit raises “many factual points,” Keystone “has fallen short of establishing they’ve been irreparably harmed.”

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Lines of commercial-grade cannabis plants in pots inside of an indoor grow site.

Survey: Majority of Nevada County, California Growers Would Get Compliant if Allowed Transition Period

9/12/2017

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According to a survey by the Nevada County (California) Cannabis Alliance, the majority of current county cannabis industry operators, both licensed and unlicensed, are interested in cultivation sites of at least 5,000 square feet and 95 percent of respondents said they would be able to comply with the state’s adult-use cannabis rules if given a three-year transition period.

If the transition period were reduced to just one year, the confidence level drops to 19 percent.

The survey found that 38 percent indicated they would seek a Type 2 and 2B outdoor or mixed light cultivation license for up to 10,000 square feet, while another 38 percent said they would be interested in Type 1 or Specialty Outdoor license that allows up to 5,000 square feet of total canopy. Twenty-four percent said they would pursue a Type 1C or Special Cottage license that would allow a 2,500-square-foot, mixed light grow.

Diana Gamzon, director of the county alliance, said the survey was an attempt to “get a snapshot of the cannabis community in order to inform the cannabis cultivation ordinance process.”

“Nevada County cannabis farmers seek to transition into legitimate businesses as state regulations come into effect. However, the absence of a local ordinance that allows them to seek state licensing has put them in a perilous situation,” Gamzon said in the press release published by the Union. “Many want to begin complying with local building codes, but fear that beginning that process would mean outing themselves to county officials and law enforcement.”

Seventy-seven percent of respondents said they would work toward compliance if allowed a transition period.

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Red and blue lights on top of a police Crown Victoria cruiser.

Budtender Reportedly Kidnapped from Dispensary Parking Lot in Washington

9/11/2017

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Cameron Smith, a 46-year-old budtender who works at the Lucid Cannabis store in Cheney, Washington, was abducted from his place of work on Sunday afternoon at gunpoint, according to a Spokesman-Review report on the unfolding events.

Lucid co-owner Michael Schoefield said that before the kidnapping took place, a man and woman tried to enter the store but were turned away for not having valid identification — the male suspect said he had left his ID in Yakima, while the female suspect, who had an ID, was turned away for being only 18 years old. Schoefield said that after being turned away, the male suspect verbally berated store employees before eventually leaving.

Police say the kidnapping took place at about 12:45 pm on Sunday in Lucid’s parking lot. Surveillance footage shows Smith sitting in his car, a 2008 Acura SUV, on a break from work when the alleged kidnapper approaches the car, pulls out a gun, and fires two shots into the driver’s side window. The footage then shows the suspect getting into Smith’s car and driving away with Smith still inside of the vehicle.

The female suspect returned to a white Ford F-250 pickup truck (which was recently reported stolen) and also left the scene. Police say a third woman waiting inside of the truck may also have been involved. The truck drove away after the shots were fired.

Both cars went north out of Cheney on Washington State Route 904; Smith’s cell phone was last pinged just outside of Medical Lake.

This is a surveillance footage still of the alleged kidnapper, released by the Cheney Police Department in hopes of identifying him.

Cheney Police Captain Richard Beghtol said that investigators have received many calls from people who claim to know the suspect’s identity. While they are not currently releasing the suspects’ names, Beghtol said Monday morning that officers were “tracking down several leads right now.”

Smith is 46 years old and is a well-loved barber-turned-budtender from Toledo, Ohio.

“This is all just a bad place, bad time,” said Schoefield, Smith’s employer. “This is 100 percent a terrible tragedy.”

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A freshly trimmed cannabis nug lying on its side on a wooden table.

California Regulators Release Retail Industry Draft Rules

9/11/2017

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California’s Bureau of Cannabis Control (BCC) has published the initial version of rules that would govern the state’s retail cannabis market, which includes a ban on using drones to transport cannabis products from cultivator to dispensary. The rules also prohibit transportation “by aircraft, watercraft, rail … human powered vehicles, or unmanned vehicles.” However, the regulations seem to allow for businesses to make deliveries to customers via bicycle or on foot.

“Some existing medicinal cannabis dispensaries offer delivery of cannabis and cannabis products to qualified patients,” the report says. “Deliveries are typically made by automobile, although some delivery personnel may use bicycles or make deliveries on foot, particularly in urban areas.”

The report also includes language that indicates “smoking and vaping lounges” would be allowed under the regime, but retailers “must apply for and receive a conditional use permit” from the city or town they seek to open the business. The report notes that while local jurisdictions could issue the permits, “on-site consumption is outside the scope” of the agency’s discretion and they would not issue such licenses.

Moreover, the proposals include testing, retail location, and other operational requirements. The testing requirements include a list of banned pesticides and molds and fungus that would result in a test failure. The BCC proposal includes heavy metals, such as arsenic, cadmium, lead, and mercury among them but they do not offer a threshold for failure.

The draft rules are subject to a 30-day public comment period before taking effect.

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Iowa Attorney General Stops Plan to Import MMJ from Bordering States

9/11/2017

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Iowa’s Attorney General’s office has advised the state Department of Health to halt a plan to license two out-of-state dispensaries to import cannabis oil into Iowa, the Associated Press reports. The directive was due to concerns that the plan would bring unwanted federal scrutiny to the state’s medical cannabis program.

The proposal is, of course, illegal under federal law, but was included in the legislature-approved bill because some Republican leaders in the Legislature hoped it would allow for the state to partner with bordering state with medical cannabis programs, such as Minnesota.

The move by the attorney general is not expected to impact other portions of the law and in-state production of cannabis oil is still expected by the end of next year. Some lawmakers were frustrated with the development because it would have seen more people able to access cannabis oils while the state was setting up its own infrastructure.

Justin Strekal, political director for NORML, told the AP the plan was “just another example of lawmakers overcomplicating something for the sake of overcomplicating it” rather than setting up a comprehensive medical cannabis regime.

House Speaker Linda Upmeyer, a Republican, said that no matter what the Legislature had done it was in violation of federal law.

“As I’ve said before, the federal government needs to act on this issue or let the states do their work,” she said in the report. “The out-of-state distributors are the quickest way to supply sick Iowans with a product that doctors say could be beneficial. If that provision doesn’t work out, then people will have to wait another year, and that’s disappointing.”

A spokesman for the Attorney General’s office said Iowa shouldn’t move forward with the import plan “until the federal government provides further guidance regarding state medical marijuana programs.”

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Inaugural Vermont Hemp Fest Hosts Thriving Industry Entrepreneurs

9/11/2017

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Some of Vermont’s finest hemp-derived products were on display at the state’s inaugural Hemp Fest – and the event surpassed the expectations of attendees, exhibitors, and the organizers alike. Featured were more than 20 exhibitors, from hemp cultivators to CBD producers to ancillary businesses — including the usual, such as web designers, and the not-so-usual, such as a hemp-fiber fashionista.

The latter was one of five finalists for the event’s business pitch competition, sponsored by Purple Fox Engineering, an Essex Junction prototype production shop, which featured a $1,000 cash and a $1,000 in-kind services prize for the winner.

A handmade and hemp-based wedding dress on display at the Tara Lynn Bridal booth during the inaugural Vermont Hemp Fest.

Tara Lynn Scheidet, 38, the proprietor of Tara Lynn Bridal whose handmade custom clothing is a mix of hemp and silk, started her business in 1999 – moving it to Vermont in 2005 – and said now that the state’s industry is maturing she believes it’s the perfect time to secure financing for the bridal line. She discovered hemp fiber at a shop in Hell’s Kitchen while attending the Fashion Institute of New York City.

“I wanted to take what I love doing – I love making clothes, I love fashion – and make it … more environmentally conscious,” she said in an interview on the exhibitor floor, adding that after starting to work with hemp she became an activist in addition to designer.

“Everything I do is made to order. I design my own patterns, cut and sew everything, and I don’t do production at this time,” she explained. “I’ve been pitching the business to a lot of investors just trying to find a way to grow and get more economical.”

Hempcrete — an efficient and environmentally friendly construction material made from industrial hemp — on display at the Hempfully Green House Healing booth, organized by Emily Peyton.

Emily Peyton, another longtime hemp-centric entrepreneur and former Vermont gubernatorial candidate, was pitching not just her business, Hempfully Green Healing House, but was also hoping to garner interest for a CBD co-op, which would be constructed from hempcrete. She said the “biggest challenge” for her long-term co-op vision has been “a financial hurdle” but in the meantime she has been growing hemp and making “foodie items” including hemp shortbread cookies, hemp pesto, and Zemp cider — which contains living hemp leaves, kale, mint, aloe, lemon, and black cherry juice — with hemp seed and oil. She envisions the co-op being constructed in a populous area, such as Burlington, and eventually being franchised to other entrepreneurs throughout the nation.

“I’m a mom. I have no degrees, I’m self-taught,” she said describing her background with hempcrete, which she traces back to 2010. Since then she has been invited to speak at International Hemp Building Symposium twice. “It feels like there’s this gigantic green wave and we’re on a surf board. This has been a grassroots movement.”

Rachel Collier, creator of The Simmering Bone, introduced her CBD-infused bone broth at the event and ultimately won the event’s business pitch competition.

The big winner of the evening, though, was Rachel Collier, whose bone broth company pitch wooed the competition judges. Bone broth is produced by slowly simmering animal bones, joints, and connective tissues with herbs and vegetables and the concoction is purported to provide immune system support and help healing processes. At Hemp Fest, her company, The Simmering Bone, introduced a CBD-infused broth, which offers similar therapeutic benefits to broth, she said. Her process involves extracting as much of the collegian as possible “because that seems to be where most of the health benefits lie.” Collier explained that fall was prime “broth season” as farmers have begun to slaughter, and bone broth makers help farmers put the whole animal to use. She indicated she would use the cash prize to purchase bones for broth production.

Following her competition win, which Collier said would “give her a leg-up this broth-making season,” she noticeably held back tears and said simply she was “so excited” while hugging each of the three judges.

Collier wasn’t the only vendor who unveiled a product at the event, as Green Empire Brewing gave away free samples of their hemp-infused Chill Session IPA brew to attendees throughout the day.

“It’s been a great response from everyone,” said Evan Vacarr, co-owner of the nano-brewery while pouring beer into plastic cups during Hempy Hour. “People are very stoked. As soon as the nose hits the glass everyone is stoked.”

Evan Vacarr serves a cup of hemp-infused beer to a Vermont Hemp Fest attendee.

As of 7:00 pm, he admitted he still hadn’t kicked the 15-gallon keg, but he anticipated serving at least 1,500 pours throughout the evening. “Good launch, really good launch,” he said.

For state Sen. John Rodgers, who represents Vermont’s Essex-Orleans district and believes he is the only state lawmaker to hold a hemp cultivation license, hemp represents a way for small-scale farmers in the state to make some money from their land. Rodgers said he was surprised at not only the “fountain of knowledge” on display at Vermont Hemp Fest, but also the overall interest as evidenced by the constant stream of attendees.

“Quite frankly, I’ve been looking for a way to get back to farming for years,” Rodgers, who grew up on a dairy farm, explained. “If there is a way I can grow CBD hemp, and I’m looking at several other go-along plants, and I could stay home and farm more I think it would greatly improve the quality of my life.”

Presently, the senator is seeding his plants, hoping that he can up his grow to about three acres next season. Although he’s not entirely sure what his end-product will be, he said he is considering CBD extraction, which was “one of his main interests” for attending the event.

“Eventually, I would hope to be part of some co-op that has an extractor or get one myself so I start making some products,” he said. “But I guess in the beginning I would prefer to just grow, dry, and pass the product on to somebody else to do the business part.”

Monica Donovan, co-founder of Heady Vermont and co-organizer of Hemp Fest, said the inaugural event — held at Burke Mountain Hotel & Conference Center in East Burke, a region known as the state’s Northeast Kingdom — “exceeded her expectations, vastly.”

“People didn’t know what to expect because we have never done anything like this before, Vermont has never done anything like this before,” she said, adding that while she and co-organizer Eli Harrington has a “loose” idea what they were getting themselves into, they were both thrilled with the number and diversity of the attendees.

Donovan said that following the success of this year’s event she is already planning to host the second installment next year, but declined to offer where it might be in the state, only that it would maintain “the retreat vibe.”

 

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Cars on a downtown street in Athens,, Ohio.

Ballot Initiative to Depenalize Misdemeanor Cannabis Crimes Approved in Athens, Ohio

9/11/2017

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A ballot initiative in Athens, Ohio has been accepted which, if approved, would reduce penalties for misdemeanor cannabis offenses to the lowest penalty allowed by state law, the Athens Post reports. The Athens Cannabis Ordinance (TACO) seeks to remove the 30-day jail sentence and $250 fine associated with low-level cannabis crimes.

The ballot approval comes on the second attempt by advocates, who fell less than 100 signatures short on their 2016 bid.

Caleb Brown, one of the leaders of the TACO initiative, said the ordinance uses parts of the state constitution which allow localities to alter misdemeanor penalties within city limits. TACO would see penalties for cannabis use reduced to zero days in jail and zero fines.

Saraquoia, another TACO campaign leader, called the measure “a no-brainer” to reduce penalties and “denounce the stigma attached to cannabis.”

“It’s not dangerous,” she said in a previous interview with the Post. “We know that our jails are sometimes occupied by people with low-level cannabis offenses and that law enforcement hours are being wasted.”

Athens is home to Ohio University, and students attending the college will have the opportunity to vote on the issue in November so long as they are registered to vote by October 10 at an address within city limits.

Editor’s note: This article has been updated to correctly indicate the voting requirements for students and citizens in Athens, Ohio. A previous version of the article incorrectly indicated that only proof of residence was required to participate in local elections.

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Vermont Governor Creates Marijuana Advisory Commission After May Legalization Veto

9/11/2017

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Vermont Gov. Phil Scott last week announced the creation of the Governor’s Marijuana Advisory Commission which was conceived following Scott’s May veto of the first cannabis legalization bill ever passed by a state Legislature. Scott originally created the commission with an executive order following his veto action.

“As I’ve said before, I’m not philosophically opposed to eliminating the prohibition on recreational use by adults. However, I believe we have an obligation to learn from the experiences of other states, and have comprehensive education and highway safety protocols in place before moving to a fully taxed and regulated recreational-use marketplace,” Scott said in a press release. “We must ensure that any approach we take prioritizes public health and safety, particularly the health implications for our children, and the need to ensure safety on our roadways.”

The commission will consist of three subcommittees that will evaluate legalization, including one on road safety, a second on education and youth prevention, and a third to explore the options for a taxed and regulated market, including insurance, banking, and local zoning issues.

The commission will be chaired by former chairman of Vermont Democrats Jake Perkinson, and Burlington-based attorney Tom Little and will include two members appointed by the Senate Committee on Committees; two members appointed by the House Speaker; the Secretary of Agriculture or a designee; the Commissioner of Health or a designee; the Secretary of Commerce and Community Development or designee; the Commissioner of Taxes or designee; the state Attorney General or designee; and the Executive Director of the States’ Attorneys and Sheriffs, or designee.

The first meeting is set for Oct. 1, and the governor expects an initial report by Jan 15, 2018.

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National Survey on Drug Use and Health: Adolescent Cannabis Use at Lowest Point Since 1994

9/08/2017

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Monthly cannabis use among American adolescents aged 12-to-17-years-old is at its lowest point since 1994, according to a federal National Survey on Drug Use and Health report outlined by the Washington Post, as researchers found 6.5 percent of adolescents used cannabis on a monthly basis. Monthly cannabis use among adults among aged 18-to-25, 20.8 percent, and adults 26-to-34, 14.5 percent, are at their highest levels since 1985.

The data seems to prove the opposite of prohibitionist claims that legal cannabis leads to increased use among youths; and according to the survey, 24 million Americans currently use cannabis.

“The increase in marijuana use reflects increases in marijuana use among adults aged 26 or older and, to a lesser extent, among young adults aged 18 to 25,” the researchers conclude. “Marijuana use among adolescents aged 12 to 17 was lower in 2016 than in most years from 2009 to 2014.”

Both Washington state and Colorado voted to legalize cannabis in 2012.

Alcohol use among those 18-and-older fell 1 percent to 55 percent in 2016; however 65.3 million reported binge drinking, having five or more drinks on the same occasion at least once, within the last month.

Prescription pills were the second most used illicit drug by Americans, with 3.3 million admitting to misusing the drugs. Another 2 million said they misused prescription tranquilizers, and 1.7 million indicated they misused prescription stimulants, such as Adderall.

Earlier this week, the Washington State Institute for Public Policy reported that cannabis use rates among teenagers in the state is not up since legalization, and 90 percent of sixth graders, 85 percent of eighth graders, and 55 percent of tenth graders indicated cannabis was “very hard” to obtain.

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Dusk photograph of buildings under construction in Toronto, Ontario, Canada.

Ontario Officials Begin Crafting Retail Cannabis Regulations

9/08/2017

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Ontario, Canada officials have indicated that they will shut down all illegally operating cannabis dispensaries in the province over the next year, but will license 30 to 60 for retail sales, according to a report from CBC News. The provincial government will also create a cannabis control board to regulate the industry.

According to the report, Ontario will set the legal age to purchase cannabis at 19, a year older than the age recommended by the federal government task force. Retail sales will not occur inside existing Liquor Control Board of Ontario stores as previously suggested by Premier Kathleen Wynne.

Wynne was one of several premiers who called for an extension of the legalization timeline in July, concerned that public safety issues had not been addressed.

“The starting point is, have we met the public safety concerns, are we sure we have the provisions in place to protect youth, do we understand what the highway traffic implications are?” Wynne told CBC News. “It’s those issues that we have to resolve because we have to keep people safe.”

Prime Minister Justin Trudeau said federal officials plan to stick to the original, July 2018 deadline despite the concerns of premiers.    

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A television antennae for live broadcasting on a major network.

Hoban Law Firm Runs First National TV Spot Using ‘Cannabis’

9/08/2017

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Hoban Law Group, a Colorado-based cannabis-focused law firm, has been running a commercial on CNN, Fox News, Fox Business, MSNBC, Headline News, and Viceland, since Aug. 21 – the first time a national TV spot has been aired that uses the word “cannabis.”

While the firm does not offer a tangible product, they offer legal and businesses consulting services for cannabis businesses.

“As the first ‘cannabusiness’ law firm, we’ve seen firsthand how the industry has significantly evolved in the last nine years,” said Bob Hoban, founder and managing partner of the firm, in a press release. “We’re excited to once again make waves in the legal side of the cannabis industry, starting a new trend of legal advertising.”

Hoban, who is featured in the spot, is the former president of the Cannabis Business Alliance and a member of the National Hemp Association, the National Cannabis Industry Association, and the Colorado Chamber of Commerce.

The 30-second ad, which outlines the law firm’s specialties and reach, notes that they have attorneys in nearly every state where legalization has occurred and will continue to air in primetime slots through mid-September.

Last year, two cannabis companies, Avitas Agriculture and Mirth Provisions, released commercials for their respective products online but neither company attempted to run them on television.

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Massachusetts Cannabis Commission Chair Says Prohibition has Failed

9/08/2017

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In his first public comments since being tabbed to chair the Massachusetts Cannabis Control Commission, Steven Hoffman admitted that he believes prohibition has failed – and that he smoked a joint while visiting Breckenridge, Colorado, the Boston Globe reports. Moreover, he indicated he was committed to supporting the retail program approved by voters last November.

“Addiction to, and misuse of, harder drugs than marijuana is a big problem,” Hoffman, the former Bain & Co. partner said in the report. “But clearly what we’ve been doing as a country for the past 40 years hasn’t helped. I’m not sure I have a magic solution, but there’s a logic that, if you prohibit something that’s desired by people and is relatively harmless, all it does is create illicit trade.”

During the Globe interview, he admitted he had voted against the ballot initiative because he “thought a slower and more studious approach would be better” but stopped short of promising that the industry would be in place by July. He did pledge to run the commission in an “open and honest” fashion.

“I’m a realist, and if the reality is it can’t be done, it can’t be done,” he said, adding that while in Colorado he noticed that the cannabis businesses there are “professionally run, profitable…(and) an asset to communities.”

Valerio Romano, an attorney who represents cannabis businesses, said Hoffman “does not seem like the guy he did when [advocates] got his resume.”

“He’s not one of these ‘Reefer Madness’ people,” Romano told the Globe. “He seems like a far more progressive, thoughtful person — like somebody I could work with.”

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The House of Representatives end of the U.S. Capitol Building in Washington D.C.

House Committee Blocks All Cannabis-Related Budget Amendment Votes

9/07/2017

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The Republican-controlled House Rules Committee has blocked multiple cannabis-related amendments from receiving consideration by the full chamber, effectively preventing the House from offering the industry protection from the Justice Department.

The quashed amendments include: protections for state-approved hemp programs and banks choosing to do business with the cannabis industry; the Rohrabacher-Blumenauer amendment, which prevents the feds from using federal dollars to interfere with state-legal medical cannabis programs; a funding reduction for the Drug Enforcement Agency’s cannabis eradication program; expanded access for cannabis research; ending the federal incentive to revoke drivers licenses from individuals charged with cannabis crimes; allowing Washington D.C. to move forward with implementing a tax-and-regulate program; and an amendment that would provide protections for state-approved adult-use programs similar to the protections provided by Rohrabacher-Blumenauer.

The Senate Appropriations Committee approved Rohrabacher-Farr in July, which means that the language, authorized in every budget since 2014, will be considered in a conference committee to determine the amendments included in the final budget.

Representatives Earl Blumenauer and Dana Rohrabacher said the move by the House “is putting at risk millions of patients who rely on medical marijuana for treatment, as well as the clinics and businesses that support them.”

“This decision goes against the will of the American people, who overwhelmingly oppose federal interference with state marijuana laws,” the statement says. “These critical protections are supported by a majority of our colleagues on both sides of the aisle. There’s no question: If a vote were allowed, our amendment would pass on the House floor, as it has several times before.”

Aaron Smith, executive director of the National Cannabis Industry Association, said the House decision “attempts to move the country backward at a time when the vast majority of voters are looking to Congress” for cannabis law reform.

“Voters of all political persuasions generally agree the federal government should not be using limited resources to interfere in state medical cannabis laws,” he said in a statement. “Shutting down regulated medical cannabis businesses will result in licensed patients resorting to the criminal market to obtain their medicine.”

While Rohrabacher-Blumenauer is still on the table, the other amendments will not be considered in the final budget.

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An empty auditorium with red folding cushioned chairs.

Roger Stone Out at Cannabis World Congress & Business Expositions

9/07/2017

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Amid a boycott by the Minority Cannabis Business Association, a Change.org petition, and the loss of sponsors, and participants, Roger Stone will no longer be featured as the keynote speaker at either the Los Angeles, California or Boston, Massachusetts Cannabis World Congress & Business Expositions.

“The forums created by CWCBExpo are crucial to the growth and legalization of the cannabis industry and they supersede the distractions that have surrounded the events,” organizers said in a press release. “CWCBExpo is wholly committed to promoting diverse business and economic opportunities in the cannabis industry by providing a united and welcoming environment for its exhibitors, sponsors, attendees and speakers.”

Stone, the former campaign strategist for President Donald Trump, was invited to deliver the keynote after launching the bi-partisan United States Cannabis Coalition in June. However, his inclusion at the event was met with resistance due to previous “hateful” statements, including calling Rev. Al Sharpton, who is now the scheduled keynote speaker at the Los Angeles event, a “professional Negro.” Stone also served on the campaign of President Richard Nixon who famously launched the War on Drugs.

Stone has called the boycott an “agitprop astro-turf…smear campaign” levied by “the usual trolls and bots” including the founder of Media Matters for America Davis Brock “and his minions.”

Organizers have not announced who would replace Stone as the keynote speaker in Boston.

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A stack of $100 bills on a flat, white surface.

Dirty Green Dollars: Cannabis Taxes and the Banking Predicament

9/07/2017

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In the U.S., legal cannabis — medical and recreational — is a multi billion dollar industry which deals almost exclusively in cash. In 2016, the industry generated approximately 7.9 billion dollars in revenue and is on pace to exceed that amount in 2017 — and that is not including the thousands of black market operators who don’t report their income.

The disconnect between states and the Fed regarding cannabis has made financial institutions trepidatious about serving cannabis-related businesses (“CRBs”). Their trepidation is fueled by fear of federal sanctions, the high of costs of due diligence, and the stigma of being a financial institution that works with CRBs. This legal disconnect affects how CRBs are taxed at the federal level, as well. CRBs are forced to pay a higher tax rate than most other small businesses because they are taxed on gross revenue rather than profit, and are forced to pay these taxes in cash. As long as Congress remains entrenched in its refusal to declassify cannabis, the taxation and banking issues affecting the cannabis industry will only continue to fester.

Banks operating on a patchwork of federal memoranda

Roughly 368 U.S. financial institutions, comprised of both credit unions, commercial banks and traditional payment processors, are currently serving CRBs. Compare this to 15 banking institutions who were the only ones serving CRBs nationwide in the beginning of 2014. This number represents approximately 35% of the total number of financial institutions nationwide – proving that it is possible to cut through the red tape.

But how can a federally-insured financial institution service a federally illegal industry? In 2013, the Department of Justice issued a memorandum (the “Cole Memo”), which offered guidance to federal prosecutors regarding cannabis enforcement priorities. Specifically, the Cole Memo created a policy that permitted CRBs to operate largely without federal interference.

In response to the Cole Memo, in 2014 the Financial Crimes Enforcement Network (“FinCEN”), a division of the Department of Treasury, published a written guidance saying that they would not charge a bank with federal crimes for accepting money from the cannabis industry if the financial institution first made sure that the business was obeying state laws. The FinCEN guidelines were intended to encourage banks to make financial services more available to CRBs and promote financial transparency within the cannabis industry. The guidelines also encouraged banks to conduct thorough investigations on any customer believed to be operating as a CRB. Another part of the FinCEN rules requires banks to file regular reports tracking activity with cannabis-related businesses. These reports are called suspicious activity reports and provide a clear picture of the industry’s banking activity.

This is interesting because it forces banks to be responsible for their clients’ compliance, which is unlike how banks would deal with say, breweries, where they would simply rely on normal state laws and regulators to ensure the brewery is compliant. In the state of Washington, there are about 12 known financial institutions that are working with CRBs and FinCEN has been working to encourage them to take cannabis cash. In Spokane alone, Numerica Credit Union has over 200 cannabis business accounts, with the board of directors citing ‘safety’ as a key issue according to spokesperson Kelli Hawkins.

Carmella Houston, spokesperson for Salal Credit Union, said they have opened over 300 cannabis business accounts since June of 2014, making up about 80 percent of the credit union’s net worth.

These credit unions have to monitor federal policy carefully and be prepared to cancel CRB accounts, releasing those assets if the ‘attitude’ behind Cole Memo were to change.

The canopy of cannabis plants inside of a licensed, commercial grow operation in Washington state. Photo Credit: Rory Savatgy

Death by taxes?

CRBs are subject to extremely high taxes at the federal level. Yes, the Fed still wants to collect the cannabis industry’s dirty, dirty “drug money.” The Fed will collect these taxes in cash at coordinated drop off points, mimicking the choreography of a black market drug deal. In the state of Washington, 95 percent of marijuana-excise-tax payments paid to the state come in a form other than cash, according to WSLCB., totaling roughly $20M in taxes each month since July of last year.

In cities like Denver and Seattle, the IRS has been so inundated with cash that it was forced to invest in resources that would allow it to process and store all of the excess cash. The federal tax code does not differentiate between income derived from legal or illegal sources, Uncle Sam just wants your money.

To determine how much illegal income is taxable, the Fed applies Section 280E of the tax code. Most businesses are taxed using a fairly simple formula: subtract the business expenses from gross income to calculate taxable income. CRBs pay taxes on gross income, and are prohibited from taking standard business deductions such as rent, payroll and advertising. Under 280E, CRBs are permitted to limited deductions for the cost of good sold (“COGS”) and, ironically, the cost of growing cannabis (the very commodity the Fed vilifies) is a permissible COGS deduction.

The only reason “illegal” businesses are permitted to take deductions for COGS is because of the founding fathers and the 16th Amendment, not the goodwill of Congress. Practically speaking, these limited deductions translate to a tax rate that can be as high as 90% for CRBs. This significant tax bill is a deterrent for those who seek to enter the legal cannabis industry.  

Working for change

Cannabis policy is primed for a change and the proliferation, wealth, and power of the industry has made its voice of reason hard to ignore. This influence has prompted the creation of a bipartisan Cannabis Caucus (the “Caucus”) comprised of House members from California, Oregon, Alaska and Colorado. The legislative agenda of the Caucus includes passing equitable banking and taxation laws for CRBs and prevent the federal government from interfering with CRBs if they are in compliance with state law. In addition, the aim to ensure that federal laws do not impede cannabis research and allow veterans to access products that they need.

This infectious Caucus has also drummed up support in the Senate, which introduced the Secure and Fair Enforcement (“SAFE”) Banking Act in Spring 2017 — a reintroduction of the Marijuana Businesses Access to Banking Act which was first introduced in 2013 and again in 2015. If enacted, SAFE would prevent federal banking regulators from prohibiting, penalizing or discouraging a financial institution from providing services to CRBs and from terminating or limiting a financial institution’s FDIC protections on the basis of the provision of these services. SAFE would be the first decisive step to wean the industry off of cash. 

In the House, the Caucus introduced two tax bills: 1) The Marijuana Revenue and Regulation Act which would amend the tax code by imposing a federal excise tax on all CRBs and an occupational tax on cultivation facilities and export warehouses, and also require CRBs to obtain a permit and bond to cover federal tax liability; and 2) The Small Tax Equity Act, which would create an exception to 280E and allow CRBs to take standard business tax deductions. The House also introduced the States’ Medical Marijuana Property Protection Act, which would exempt real property from civil forfeiture due to medical cannabis-related conduct authorized by state law.

Unfortunately, Republican lawmakers in the House Rules Committee this week blocked several cannabis-related amendments from receiving consideration by the full chamber, effectively pushing the chance of federal guidance and protections for the legal cannabis industry further out of reach — for now.

A bank teller counts out cash before handing it over to a customer. Photo Credit: MyFuture.com

Courts cannot aid and abet criminals

The federal judiciary has also been forced to confront the banking and taxation issues associated with CRBs. Earlier this year, the Court of Appeals for the 10th Circuit (which includes Colorado) considered whether it could grant a Colorado credit union an injunction to force the Federal Reserve Bank of Kansas City to issue the credit union a “master account.” A master account is essentially a bank account for financial institutions and is necessary for a depository institution to operate.

In its lengthy June 27, 2017 decision, the three judge panel opined that because the credit union would admittedly serve state legal CRBs, a request for an injunction is tantamount to asking the court to grant relief that would facilitate illegal activity, i.e. providing banking services to drug traffickers.

There is also a legal battle raging over 280E. In 2010, the IRS began annually auditing the Harborside Health dispensary, ultimately slapping it with a bill for back taxes, fees and penalties totaling $15 million. In response, Harborside filed suit against the IRS in 2016, claiming that 280E did not apply to its business because its revenue was not derived solely from medical cannabis and, as such, it should be allowed to take standard business deductions related to these other revenue streams. Unsurprisingly, in its court filings, the IRS argued that 280E is applicable to Harborside because its business consists of trafficking cannabis, which is illegal under federal law, and revenue from separate streams does nothing to change that fact. A decision in the case is expected in late 2017, and will surely have an impact on the industry.  

“Outlaw” banks

Local banks serving CRBs in states with a medical cannabis market are slowly becoming more prolific, but these brave bastions of cannabis cash do so at a significant cost.

A bank that serves the cannabis industry can expect to increase operational costs across the board in order to satisfy the due diligence requirements imposed by FinCEN. Banks conduct due diligence through reasonable investigation of a business’ account activity and by reviewing publicly available information about the business. These due diligence obligations often force a bank to hire additional labor and implement new software, in an effort to track the integrity of its CRB customer. Increased costs further deter local banks from participating in the industry.

Ohio, however, is trying to implement a new blueprint for CRB banking. Ohio will be the first state to offer safe harbors for financial institutions that work with CRBs, and the first state to implement a state-run “closed-loop” payment processing system for patients and CRBs. Ohio is rolling out its medical cannabis program this year, and industry watchers are eager to see whether the state’s novel banking solutions will create an efficient, cash-free system.

Plants under the LED glow of an indoor cannabis grow operation in Washington state. Photo Credit: Rory Savatgy

Looking forward

By 2020, legal cannabis is expected to be a $21 billion industry employing more people in the United States than the manufacturing industry. It is high time for the Fed to address the banking and taxation inequities at the state and federal level. The federal judiciary’s hands are tied by the illegal status of cannabis, so it is up to Congress to take steps to enact substantive laws that protect the industry.

If members of Congress do not want their seats foreclosed on in the 2018 midterm election, they should be mindful that legal cannabis has far more support and goodwill among constituents in both blue and red states than Congress itself.  

Note: This article was co-authored by Meredith Kinner and John McGowan, founding partners of Kinner & McGowan, PLLC — a boutique law firm in Washington D.C. with a cannabis-focused practice.

End

Crystal-coated cannabis colas lying on their side in a licensed grow facility.

New Jersey CannaBusiness Association Partnering with Athletes for CARE for Advocacy Event

9/07/2017

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Three former professional athletes and a former Drug Enforcement Agency special agent are set to speak at the upcoming New Jersey CannaBusiness Association “Presents” event. The trade association has partnered with Athletes for CARE for the latest installment, set for Sept. 27 at Galloping Hill Golf Club in Kenilworth.

Scott Rudder, a former New Jersey legislator and president of the NJCBA, called the partnership with Athletes for CARE “a natural fit” as both organizations “share the same objective of a responsible approach towards medical treatment and, when appropriate, utilizing medical cannabis as a healthier alternative to opioids.”

“We are extremely excited about where this industry is heading,” Rudder said in a press release.  “The scientific breakthroughs in cannabis, coupled with the statistics coming from other states showing how a responsible cannabis industry benefits the community, is something lawmakers are taking seriously.”

Riley Cote, co-founder of Athletes for CARE and former enforcer for the National Hockey League’s Philadelphia Flyers will speak at the event along with former National Football League defense ends Marvin Washington and Leonard Marshall. Both Washington and Marshall are current athlete ambassadors for the organization.

Additionally, former DEA Supervisory Special Agent and current CEO of TITAN Group Jack Teitelman is set to address the attendees.

“I can tell you from firsthand experience, the opioid crisis that exists today was not there a decade ago,” Teitelman said in a statement. “This crisis was created by a lack of education and limited alternatives. By adding medical cannabis into the solution mix for pain management, we can significantly reduce the need for highly addictive opioids.”

Other speakers include: New Jersey Sen. Nick Scutari, a Democrat and lead sponsor of a cannabis tax-and-regulate bill in the legislature; Lindy Snider, chair of Athletes for Care and CEO of LindiSkin; George Schidlovsky, executive director of Compassionate Sciences Alternative Treatment Center; Aaron Epstein, Esq., general manager and counsel for Garden State Dispensary; Dr. Andrew Medvedovsky, founder and director at New Jersey Alternative Medicine; and Michael Figler, CEO for Intra Capital Holdings, LLC.

End

Young cannabis plants with skinny leaves reach up for more light.

Tilray Plans Major Expansion in Portugal

9/07/2017

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Canadian medical cannabis producer Tilray plans to invest 20 million euros (about C$29.5 million, US$24 million) in their operation in Portugal, where they recently won a license to import seeds and clones and cultivate them, the Canadian Press reports. The Cantanhede site will grow, process, and package medical cannabis products that will be distributed throughout the European Union.

Tilray CEO Brendon Kennedy estimates the EU market could be worth up to 40 billion euros annually, with as many as 10 million patients, and Portugal “seemed like the ideal location to grow plants.”

“We’re seeing massive demand from Germany so we needed to build a large facility to meet that demand and we needed to get it up and running very quickly,” he said, noting that the site will have outdoor crops, 108,000-square-feet of greenhouses, 1,600-square-feet of processing space, a genetics band, and an on-site laboratory.

The Portugal facility is the company’s first outside of Canada, and is expected to create 100 local jobs.

Tilray is owned by Seattle, Washington-based Privateer Holdings and based in Nanaimo, British Columbia. It has subsidiaries in Australia, New Zealand, and Germany and currently offers products in six countries, with plans to expand to five more by the end of the year.

The Portugal facility is expected to be completed by next spring.

End

Hazel Fruitman: Mobile Marketing Strategies for Cannabis Businesses

9/06/2017

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Hazel Fruitman is the CEO of Cannabis Wallet, a company that specializes in unique mobile marketing strategies and customer engagement for companies operating in the cannabis space. Cannabis Wallet offers a mobile wallet pass that can be added to a mobile device and gives companies the ability to interact with their customers in a more tangible and personal way.

In this interview, Hazel joins our podcast host TG Branfalt to discuss the latest developments in marketing technology, how mobile marketing creates unique opportunities for engaging customers and building a loyal brand, Canada’s path toward nationwide adult-use legalization, and more!

Listen to the interview below, or keep scrolling down to read a full 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, 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 Hazel Fruitman, she is the CEO of Cannabis Wallet. How are you doing today Hazel?

Hazel Fruitman: I’m well, thanks for having me here Tim.

TG Branfalt: Super stoked to have you. Lot to talk about. Especially about the Cannabis Wallet and what you guys do over there. But before we get into that I want to hear about you. What’s your background, and how’d you end up in the cannabis space?

Hazel Fruitman: We’re going to get right into it, aren’t we Tim?

TG Branfalt: Right into it.

Hazel Fruitman: Yeah, well you know I’ve been marketing tech for many years. Way before Facebook was around. Before Twitter. It’s important to stay on top of the trends. It goes from social media, to having more of a mobile presence these days when it comes to technology. That’s where our mobile platform comes in. We have much success in our other verticals and their marketplaces. I found that we could have the same success in the cannabis space. We started using this for advocates to rally support. Remind friendlies of local events in the area for these advocates and just it just seemed like a natural fit for us. They used our mobile platform as an educational tool around that. We found advocates had very little success in getting their name, getting their promotion, whatever they were doing out there. So we really did feel a need with that.

TG Branfalt: So why don’t you tell us what Cannabis Wallet offers, the product, the services, just give us an overview.

Hazel Fruitman: Sure. So what Cannabis Wallet is, it’s a mobile wallet pass that sits inside an iPhone’s Apple Wallet, or if you have an Android phone it sits inside a third party app, inside Android. It engages and communicates messages to a mobile device. And that’s important for business of all kinds. Specially in the cannabis space where there’s does not seem to be a lot ways that you can promote yourself openly.

This mobile wallet pass has a front and a back to it. The front will have a company name, your company logo, and a tag line. The back of the pass has many features, this is where the magic happens as I like to say. There are social media links. Share features, all in one tap. If you have a podcast like this one, you can have a listen link go right to your latest episode. That’s also true for any YouTube or Facebook Live that you’re doing. As well as any call to action links that you might have. Any email or phone numbers, which is great if you’re a dispensary. As well as a navigation in one tap.

So if you are a dispensary and you’re located at 123 Main Street. With one tap you can go right into Google Maps and navi right there to the dispensary.

TG Branfalt: So you really, you’re covering every possible platform. You mentioned Twitter, Facebook, Google Maps all in that little tidbit.

Hazel Fruitman: Absolutely. That’s technology. That’s how you market technology.

TG Branfalt: So is there any other emerging technologies that you’re thinking about looking towards to integrate into this system?

Hazel Fruitman: Well, really anything, like an app could be integrated into it as well. Again, it sits inside Apple Wallet, so whatever Apple technologies are out there, that work within your iPhone, will work with this pass.

TG Branfalt: When you were developing this, because you do have cannabis in your name, did you get any push back from the various, you know the Apple, the Play store, or whatever the Apple marketplace is? I use Android. Did you have any push back or issues getting that listed?

Hazel Fruitman: Again, it’s not an app, a stand alone app. It’s part of Apple Wallet, which is a native app that’s already sitting in everyone’s iPhone. As soon as you get it out of the box Apple Wallet’s in that iPhone.

So these are just passes that are sitting inside. There hasn’t been any push back at all from Apple about this. We use this as a marketing tool, a message tool. And that’s what this platform provides.

TG Branfalt: So, traditional marketing issues, this is something that is very prevalent in this space. It’s requiring businesses to think outside the box in terms of marketing and advertising. Can you explain, you’ve explained what it does, but how does the Cannabis Wallet help fill that void of traditional marketing sort of being blacked out to cannabis businesses.

Hazel Fruitman: Yeah for sure. You know I was just talking to a friend the other day about this because he’s also worked in the digital space, marketing space for years, he does a lot of ad buys and paid search. And he’s also finding it difficult to promote his CBD product just right there on Facebook for example. Really, this is like building your email list. You would build this list, you build this pass, you add the pass from mobile user to mobile user. It’s a great way to have your targeted audience. So these people that want to hear from you. If you’re a dispensary, you want your patients to have this pass because now you have a way of marketing right to them. So you’re bypassing everything else.

TG Branfalt: That’s the emerging way right now for cannabis industries, is this targeted advertising because a lot of state laws are requiring that you have to be 21 or older to even view ads on a web page. So, is that, when you were developing this, were these laws something that you were taking into consideration? Or were you sort of preparing in advance, kind of seeing into the future that this might be the case?

Hazel Fruitman: As I mentioned, we are right on the marketing trends. We know what’s going on and I have educated myself in all the ways we can advertise in each state. In fact there’s a couple of states where this mobile wallet pass can not really be used. Because they just do not allow mobile devices to be used for advertising. So we avoid those states. The other states, you can promote within your four walls of your dispensary lets say. You can use the latest technology, a proximity marketing strategy to use with an iBeacon, that will ping you right as soon as you’re in a dispensary, that you know of your next promotion. Or any demos that an edible company may be doing that day. Inside the dispensary.

Also, if you’re an adult, you have a phone, you’re responsible enough to lock your phone. Your children should not be seeing your phone. My kids don’t know my, they can’t unlock my phone. So they’re not going to see it.

TG Branfalt: So there’s almost built in security with this.

Hazel Fruitman: Yeah. Yeah. If you’re responsible enough, of course.

TG Branfalt: So you offer this service to, you had said advocates at first, when did it become, how quickly did it become apparent to you that it would be useful for more than advocates?

Hazel Fruitman: Well we also promote this on different verticals as well. And we’ve seen how it works. And it just seemed like a natural fit. It’s a real great fit for events, local events, especially that dispensaries have. They can put on, like I was at 420 Vancouver, we had three booths running our passes. Telling them we’re at booth 150, just follow us and you’ll get pinged when you’re at your booth. So they get more foot traffic that way. That can also be applied to when we were at NCIA just a few weeks ago. The same kind of thing happened there.

TG Branfalt: So are you able to, or are the people, the business, the advocates that sign up with the platform, are they able to track the engagement?

Hazel Fruitman: Yes, you’re able to track the engagement by … Well first of all you can do number of installs, you know, how many people have installed. This pass gets saved in your phone nine out of ten times. People are not uninstalling this pass. And this pass, once you have a promotion on there, it can be changed right to a next promotion quite easily, just by filling out a form. So it’s very fluid in the way can jump from one campaign to the next. Lets say at NCIA, you could use this … They had a promotion on their flat screens of $99 special for their next event. I’m not sure how many attendees really signed up for that, I’m sure the conversion was pretty low. Now if they had used an event ticket, a mobile event ticket that we offer, the sign up conversion would have been higher because there is a call to action link. With a link right, you tap right on it and that would have the attendees sign up on the spot.

TG Branfalt: And so this is a very user-friendly app for businesses and consumers?

Hazel Fruitman: Absolutely it is. There’s nothing else out there. This really is a game changer and I’m so happy that I can bring this to the cannabis space.

TG Branfalt: You’ve been talking a bit about the NCIA cannabis business summit. I want to talk to you about your experience there. But before we do that we’ve got to take a short 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, here with Hazel Fruitman, CEO of Cannabis Wallet. Before the break you had mentioned NCIA, the cannabis business summit and I want to talk to you a bit about that. I haven’t had the pleasure of going to one of those, but I’ve heard from a lot of guests on this show, and a lot of the ganjapreneurs that I talk to, about the importance of this. And their opinion.

Why do you think, as a business owner and for the industry in general, that this event is so important to the industry?

Hazel Fruitman: Why this event is important to the industry?

TG Branfalt: The NCIA cannabis business summit.

Hazel Fruitman: Well there was a, there were some great key notes. There was a speaker there, the keynote was Vincente Fox. He was the Mexican president. And he had a lot to say, maybe not all clear because it was with a very thick accent, but he had a lot to say of how to bring this out of the black market. That’s the kind of quality you want from an event. Some of these events are not quite like that. And we’re just maturing as an industry so it was great that he was keynote for NCIA.

TG Branfalt: What were your take aways from your experience there? How was the interaction with the attendees, but also the vendor?

Hazel Fruitman: Everyone was great. Everyone was, they want to tell you about their product. They wanted to talk about it with you. They’re very excited about bringing this to the forefront. They never thought that it would happen so quickly that it’s happened. Even though it’s been, ’70s and ’80s advocates have been saying, promote the great stuff about cannabis.

Now we’re actually seeing it from a marketplace. So this show was actually very big on dirt and packaging. People were joking around that it was dirt and packaging show. They had soil from Humboldt. Which is great that they were selling. There’s light of lighting booths there. Humidifiers for your flower. A lot of CBD products, from edibles to health products. There was a lot going on.

It’s actually funny, there’s a … We were waiting in line for coffee, to get coffee and the people in front of us, they were saying, “Where’s the app for this? I don’t know what’s going on next. I lost the show guide.”

And we started laughing, I was with my business partner Kim, we started laughing because we’re like yes, we do know that there was a lack of communication throughout the show, attendees did not necessarily know where to go next. And a mobile wallet pass could actually solve that.

TG Branfalt: Explain how it would solve that issue. To me, I go to a lot of shows and for example I went to Riot Fest in Chicago last year and there was an app that told you when the next band was going on, what stage, and that was really helpful in a huge event, which obviously is different than a business summit. So how would the Cannabis Wallet fix that problem?

Hazel Fruitman: Sure. So an app costs money. An app has to be created, developed, figure out what you’re going to put on the app. And a lot of the canna-businesses coming up, even these events for cannabis, they don’t have the bank role for that. It’s costly. And that is just the start. There’s app discovery. It’s going within the policy of what Apple will put in their App store. You might not cut it. And you don’t know, it takes a lot of time and energy. And frankly, you’re not in the App business.

So mobile wallet pass does solve this issue because once the pass is put in your Apple Wallet you don’t have to see it again. And now and then producers can use it to lure sponsorships. It’s a value add for them. So if you’re, I don’t know, a cannabis dispensary, and you want to be really well known at NCIA, you could have had a lock screen mobile update, letting them know where you’re going to be. Letting them know what you’re promoting. Like, “Come out to the after party that night.”

Also, at the event, as an event producer, you can use it to, if there’s any speakers that have to change rooms for one reason or another, lets say Room A has a panel of speakers but Room A is being closed off for one reason. You can tell them to go to Room B instead. That will also be seen right on the lock screen of any mobile device.

The next, exactly like you said when you went to go see your bands, you can have the bands show up, you can have the speaker show up, or the next panel that’s coming on. Whatever the track is, these passes can also, you can have more than one. So you can have one for track A panel. Have one for track B. No matter what your attendees want to see, and they can be updated.

TG Branfalt: You had mentioned earlier that the App, the Cannabis Wallet can stream Facebook live. Would this theoretically be able to allow people who weren’t able to attend the show, or are too far away, or in other countries, because the cannabis business in Canada is enormous, would it allow them to get a glimpse into these events?

Hazel Fruitman: Right. So the URL for the Facebook Live, it’s a URL, it’s a link. That will be put on the back of the pass. Now, with one tap, you could click that on, whether you’re at the event or not, and it would take you right to Facebook Live.

TG Branfalt: There’s a lot of integration here. To have all that in one place, even for a guy whose admittedly very low tech, this seems like something that you would want to have, not just for something like a summit, but as your shopping, as you’re wandering around any city with recreational or medical dispensary’s.

Hazel Fruitman: Absolutely. It works for in the edible space, it works for delivery services as well. That work in conjunction with dispensary’s. Can let them know what products are available. Or where they’re going to be in the area.

TG Branfalt: Even delivery services. I mean you’ve really covered basically every facet. What states, the states that you’ve rolled this out, which cities are the most popular, using the most right now?

Hazel Fruitman: We’re finding in California, in Washington and Oregon. I’m actually up in BC, Canada. And dispensarys are using it up there. So we opened up an office there and it’s been working really great for us.

TG Branfalt: That’s incredible. You’ve opened up, you’ve rolled this out in Canada. So you’ve gone international with this already?

Hazel Fruitman: Absolutely. I’m Canadian. I was living down in California and I decided that it’s best for our business to move up here and get this done.

TG Branfalt: I want to talk to you a bit more about Canada, and your advice for entrepreneurs. But before we get into that, we’ll our last break. This is Ganjapreneur.com podcast, I’m TG Branfalt.

At Ganjapreneur, we have heard from dozens of cannabis business owners who have encountered the issue of “canna-bias”. Which is when a mainstream business, whether a landlord, bank or some other provider of vital business services, refuses to do business with them simply because of their association with cannabis.

We have even heard stories of businesses being unable to provide health and life insurance for their employees because the insurance providers were too afraid to work with them. We believe that this fear is totally unreasonable, and that cannabis business owners deserve access to the same services and resources that other business are afforded. That they should be able to hire consultation to help them follow the letter of the law in their business endeavors. And that they should be able to provide employee benefits without needing to compromise on the quality of coverage they can offer.

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If you are a business service provider who wants to work with cannabis clients you may be a good fit for our service directory. Go to Ganjapreneur.com/businesses to create your profile and start connecting with cannabis entrepreneurs today.

TG Branfalt: Welcome back to the Ganjapreneur.com podcast, I’m your host TG Branfalt here with Hazel Fruitman, CEO of Cannabis Wallet.

Tell me about what’s going on in Canada. We know that the broad, federal, recreational adult use, what have you, is currently being debated. This was a big campaign promise of the Prime Minister, Justin Trudeau, what are you seeing up there in Canada? What are you anticipating in terms of regulations. Just kind of give us the dirt on what’s going on in Canada.

Hazel Fruitman: We’ll be here a while. But yeah, I’ll start off. Now, we are going recreational in Canada, starting July 1st of next year. There’s not a lot that government has come out with. They did come out with a report several months ago on what we should expect. And that should be harsh penalties for those who are under the influence and are driving. For youths, they don’t know if it’s going to be 19 or under or 21 or under yet. They’re still deciding that. What would happen if adults were to provide cannabis to youths, you’ll go to jail. Things like that.

No advertising. Plain packaging. You can advertise within the walls of the dispensary but that’s about it. They don’t want to be like the way the alcohol industry went. Where they’re advertising towards children. They want to avoid that from the get go.

They’re also talking about growing in your own domicile. So you can grow four plants, a meter high. Now, that’s also some cause for concern because they’re not, so they’re talking about a meter high. But how wide? You don’t know how wide that could be.

Also, another point with that is landlords do not necessarily want people growing in their homes. So, there’s that as well.

What else, this is all from the top of my head. I’m just trying to think.

TG Branfalt: Is it going to be similar to the medical set up in terms of mail order? Is it going to be that stringently regulated?

Hazel Fruitman: I believe it will be. Right now you can’t do mail order. Technically, you can get caught and it is a federal crime. What I do know is that it does happen. There is mail order. Lots of online dispensary are popping up through that.

It’s also very different from province to province. I’m actually from Ontario, I’m in Ontario right now. But I’m living out in BC at the moment. And in BC they have dispensary that are open within the city of Vancouver. That are actually running and operating. But if you try to do that in Toronto, or the Toronto area, you are going to get shut down pretty quick. There’s a different mentality here.

There’s also, we also have these licensed producers. There’s 36, 38 licensed producers in Canada. And they’re allowed to grow medical marijuana. And now, we’re seeing these being run by former MPP’s, people in government who might have the ear of Trudeau. But then there’s these cannabis advocates, like Mark Emery who runs Cannabis Culture, and they’re getting arrested for having dispensary’s open.

And these are advocates from, that have been here for 30, 40 years now. That want to see cannabis legalized in a way that could be for everyone. And they’re the ones getting arrested still. So there’s this duplicity right now with the government.

TG Branfalt: Are Canadian citizens on the whole, are they supportive of legalization? Or is it sort of like it is in the US where you have a contingent of citizens who really do, they don’t even want medical. And then you have what is the majority, according to several polls, that want full rec. Is there still that kind of disconnect among Canadian citizens?

Hazel Fruitman: It does happen. There is a disconnect. But I think we’re a little bit more relaxed about it. People are finding that’s the way to go. When they have their pharmaceutical medicines aren’t working. I know at this doctor in Victoria, and he’s seeing these elderly people who come to them because they’re like, I don’t want to use these pharmaceuticals anymore. I need something for the pain, but I don’t like the way it makes me feel. They’re using these CBD products and they love it. And they’re not going back to any pharmaceuticals. So, there is starting to be a change, yes.

TG Branfalt: You had mentioned earlier that the government plan, one of the proposals allows no advertising. So, is it going to, is the whole advertising sector of the industry going to rely, in your opinion, on technology? And direct marketing?

Hazel Fruitman: I believe so. That is the way that it’s going to go. Just due to the policies that are going to be in place. What they haven’t said, actually, in all this, is how really they’re going to stop any pesticides or chemicals on plants. They haven’t really discussed those things. And unlike Washington, they haven’t discussed what happens when you have grown the plant, and you have to keep track of it from, they call it seed to sale. There’s no comment on that yet from the government. So those are things I’m interested in seeing as well. What they’re going to do.

TG Branfalt: We’ll all be, the entire US industry is going to be watching as this rolls out with bated breath. The success of some of the Canadian companies who are already working out in Europe and exporting cannabis, that’s really … One of the things when I talk to growers here, they say we would love to get involved with the European markets. Are you sort of looking at those markets as well? For your, for Cannabis Wallet? Is that a consideration that you’re making as Canadian cannabis companies are reaching out overseas?

Hazel Fruitman: Yes, absolutely. I’m speaking to a lot of companies that are in Israel actually. They seem to be a little bit ahead of the market. They like what opportunities we can provide with our mobile ad platform. So, yeah, we’ve been in talks with them for a while.

TG Branfalt: Last thing I want to talk to you a bit about is some advice for entrepreneurs, both as an entrepreneur yourself and somebody who is a marketing guru. First lets start with, what is your advice to cannabis companies who are sort of stuck without marketing options? What advice do you have for them?

Hazel Fruitman: First, not to give up. Keep hustling. And, network. You find good people. You work with good people. You build relationships. Now that we know each other Tim, I’m going to tell everybody how great you are. You’re going to tell everybody how great I am. This is how you network. So you’re going to do that with other businesses. If I have a brownie edible that’s amazing, and I want it to work with, I don’t know, another product, you put them together.

Our mobile wallet pass will let you do that as well. Because you can go fluid from one pass to another. And promote each other that way.

TG Branfalt: That’s a very interesting concept. You don’t really, in a lot of industries you don’t hear you gotta work with what could be your competitors in a way.

Hazel Fruitman: Well I don’t see why not. We actually have these passes being used by these three stores in New Jersey. One is a wine shop. One’s a cheese shop and one is a, I think it’s a deli, I can’t remember. But they all work with one another. Like when you go to the cheese shop they say come to the deli and we match your tastings. Or go to the wine shop and you’ll get 20% off if you go to the cheese shop across the street. So they work in promotion of each other, using these passes. This is an actual example that’s happening. There’s no reason why we can’t take that, and use it in the cannabis space.

TG Branfalt: That’s something that you’re probably going to see a lot more of as states start considering social use initiatives or programs. There’s already reports of tastings and pairings and that sort of thing in Colorado, which has a much more mature market than the rest of the country.

As an entrepreneur yourself, what is your advice to other entrepreneurs, not just those that are wanting to get into the cannabis space, but also those wanting to get into the tech space?

Hazel Fruitman: I stay up on trends. I’m constantly reading tech news. Also, I’m trying different things. I’m trying different ways of getting traffic. I’m trying different ways to promote ourselves, so there’s a lot of trial and error when you deal with marketing tech.

TG Branfalt: Finally, where can listeners find out more about Cannabis Wallet?

Hazel Fruitman: Absolutely, so they can, we actually have an E-Book. It’s called Grow your Business. It’s on our site, cannabiswallet.net. They can just sign up and we’ll download it to you and you can find out more details of how to use Cannabis Wallet.

TG Branfalt: Well Hazel I want to thank you so much for taking the time to come on this show. It’s been very enlightening, especially for a Luddite such as myself. Definitely stay in touch with regard to Canada. Because I’d love to get your insight as that market rolls out.

Hazel Fruitman: Absolutely, yes. Of course we’ll stay in touch about that. It’s been a pleasure Tim, thank you so much for having me.

TG Branfalt: Thank you.

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

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Tax paperwork — cannabis companies must pay federal and state taxes without taking any of the normal business write-offs.

Lawsuit Claims Feds Using IRS as Investigation Arm of DEA, DoJ in Colorado

9/06/2017

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Lawyers for Silt, Colorado’s Rifle Remedies are claiming in a lawsuit that the Internal Revenue Service is using audits to conduct investigations of legal medical cannabis businesses at the behest of the Department of Justice, the Denver Post reports. The IRS calls the claim illogical and baseless, saying his requests for information from the Marijuana Enforcement Division are in an effort to determine if businesses owe more taxes.

“The IRS is working jointly with the Department of Justice to investigate purported criminal activity of the taxpayers,” lawyers for Rifle Remedies, James Thorburn and Richard Walker wrote in a recent U.S. District Court filing. “To this end, the IRS has converged on Colorado and is conducting mass audits of those it has determined to be unlawfully trafficking in controlled substances … dishing out summonses like candy.”

The attorneys say the IRS is doing the dirty work of both the Justice Department and the Drug Enforcement Agency, who are unable to conduct their own investigation or crackdown due to federal budget amendments which prevent the federal agencies from using federal funds to enforce federal laws in states with legal medical cannabis programs.

In the filing, the IRS says that if federal prosecution was “truly the goal” the DEA could simply send a plainclothes officer to the dispensary to make a purchase because Rifle sells recreational cannabis products.

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An outdoor-grown hemp plant.

Nebraska Attorney General: CBD Sales Illegal

9/06/2017

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The Nebraska Attorney General’s Office and Nebraska State Patrol has sent a letter to county attorneys and law enforcement advising them that CBD products are not legal in the state, less than two weeks after some retailers began selling the products, according to a KETV report.

“To date no drug products containing cannabidiol have received FDA approval,” the memo states. “Therefore cannabidiol or any product containing cannabidiol, obtained by any means other than the authorized UNMC study, remains illegal to possess, manufacture, distribute.”

Donald Anderson, owner of CBD American Shaman on Omaha, argued that the products sold at his shop contain less than 0.3 percent THC – the allowable limit for industrial hemp classification – and that if his products are illegal then so are a host of other cosmetic and food items being sold freely throughout the U.S.

“They’re classifying what I’m selling as a marijuana product, which it is not,” Anderson said in the report. “It is an industrial hemp product.”

However, Douglas County Chief Deputy Attorney Brenda Beadle said she disagrees with Anderson, and sides with the opinion of the attorney general’s office – who claim that the only authorized entity to possess, manufacture, or distribute CBD is the University of Nebraska Medical Center.

“We agree that the statute would include CBDs, so technically it would be under a violation of possession of marijuana,” she said.

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Palm trees silhouetted before a California sunset.

Millennials Drive On-Demand MMJ Sales in California

9/06/2017

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According to a report from New Frontier Data and greenRush.com, millennials account for 80 percent of online cannabis purchases, which the analysts suggest reflect the 18 to 34-year-olds’ higher rates of cannabis use and online interaction. The report, “Cannabis On Demand: Evolving Trends in California’s Medical Market” includes market growth forecasts for the state, consumer demographics, and product and transaction trends.

The researchers found that flower represents 70 percent of all cannabis products purchased through the greenRush platform, and 60 percent of those are one-eighth orders. Concentrates represent 22 percent of greenRush purchases.

According to the report, California medical cannabis sales are expected to reach $2.8 billion this year and as much as $6.6 billion by 2025, representing a compound annual growth rate of 12 percent.

“Significant changes are already underway in California for medical cannabis and adult use laws, which we see will have major implications for the cannabis industry, including e-commerce and delivery services in the state,” said Giadha Aguirre de Carcer, New Frontier Data CEO in a press release. “As the largest state in the country – and the largest potential market for cannabis products – the implications for the growth of the industry because of California’s adult use market cannot be overstated.”

According to the report’s executive summary, Fridays and Saturdays account for a third of all order through the on-demand platform, and men spent $71.27 per transaction on average while women spent $69.15. On average, customers spent $70.67 per transaction.

The data covers greenRush sales from January 2016 through April 2017.

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Medical cannabis plants being grown commercially inside of a licensed grow site in Washington state.

Research Review: Does Cannabis Kill Leukemia Cells?

9/06/2017

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Recently, an article was published covering the use of cannabis in the treatment leukemia, which caused quite a stir within the medical cannabis community. And although the results of this study are indeed promising, the researchers are certainly not the first to show the potential leukemia-fighting power of cannabis.

The history of research on cannabis and leukemia stretches far back and encompasses a wide array of studies using different types of cannabis compounds — so let’s rewind for a moment.

What is leukemia and how is it treated?

Leukemia is a type of cancer where there is an imbalance of red and white cells in the blood and bone marrow. There are several different types of leukemia but they all progress quickly.

Chemotherapy is recommended as first-line treatment for leukemia, an effective cocktail of chemicals that also causes significant side effects like immune suppression, hair loss, and flu-like symptoms. Chemotherapy targets all blood cells, not just cancer cells, so it can end up leaving the body pretty damaged while fighting the disease.

Over the course of chemotherapy, some cancer cells develop strategies to evade the effects of treatment, such as developing protective genetic mutations that make them treatment-resistant. This is often the reason why cancer may come back even after rounds and rounds of treatment and why it’s difficult for patients to respond to additional therapies.

Although chemotherapy is still considered the mainstay of leukemia treatment, the development of more tailored treatments, including immunotherapies that use the body’s natural defenses to target the cancer, has resulted in a substantial improvement in survival rates within the last decade.

However, there is still significant room for improvement in leukemia treatment protocols. And that’s where cannabis comes in.

What does research say about cannabis and leukemia?

Since cancer patients have used cannabis for quite a while to treat chemotherapy side effects, it was natural for researchers to start exploring the effects of cannabis on the disease itself.

Research in cellular models has revealed that cannabis has some promising effects on leukemia. In 2005, a study by Powles et al. demonstrated that THC, the active metabolite of cannabis, induces apoptosis (programmed cell death) in leukemia cell lines as early as six hours following THC administration. They also found that these effects were mediated through the cannabis receptors CB1-R and CB2-R.

Additional research also indicated that cannabidiol (CBD)/THC-mediated apoptosis works by targeting mitochondria (powerhouses of the cell) (Jia et al., 2006; McKallip et al., 2006). And another recent study showed that CBD reduced the size of leukemia cells and affected their viability (Kalenderoglou et al., 2017).

Thus, researchers have been able to establish that THC can both target leukemia cells and prevent new growth (Kampa-Schittenhelm et al., 2016).

So, isn’t that enough proof that cannabis kills leukemia cells?

Well, not exactly. This research was carried out in leukemia cell lines or in non-human animals, not tested in humans – so, we still don’t have direct evidence that cannabis can effectively treat leukemia patients.

Medical cannabis plants grown professionally inside of a licensed cannabis cultivation facility. Photo credit: Sarah Climaco

The most recent study — published just months ago by Scott et al. (2017) — showed that phytocannabinoids, related compounds extracted from cannabis, can be used in combination with current therapies to enhance their effect on leukemic cells. In addition, superior results were obtained when the phytocannabinoids were administered following chemotherapy, not the other way around.

While these findings are indeed promising, these experiments were also conducted in leukemia cell lines, not in humans. So, we still can’t make can’t make scientific conclusions about the direct effects of cannabis on leukemia.

However, the finding that sequencing plays an important role in the cannabis/chemotherapy treatment effect may help with the design of cannabis clinical trials, perhaps even informing leukemia treatment protocols in the future (Shah & Schwartz, 2001; Scott et al., 2013). And that’s pretty great news.

What do we know about the effects of cannabis on leukemia patients?

A few preliminary studies have shown some direct evidence of a beneficial role for cannabis in leukemia patients, in addition to the anecdotal evidence reported in the media.

A case study published in 2013 by Singh & Bali reported the effects of a cannabinoid extract on a 14-year-old patient with acute lymphoblastic leukemia (ALL). This form of leukemia is rare and aggressive, and, in this case, the patient had Philadelphia chromosome mutation-positive ALL — the most difficult form to treat.

Following 34 months of treatment, including bone marrow transplants, chemotherapy, and radiation, the patient failed to achieve remission, at which time cannabinoids were administered. The cannabinoid treatment resulted in a dose-dependent decrease in leukemia cells across 78 days; unfortunately, the complications caused by prior treatments, as well as the course of the disease, resulted in non-survival.

However, another study revealed the potential use of CBD for the prevention of graft-versus-host-disease (GVHD) following bone marrow transplants (Yeshurun et al., 2015). Bone marrow transplants have the potential to bring leukemia patients into remission if they are able to receive treatment – but GVHD presents a significant barrier to remission. A Phase II clinical trial showed that CBD is a promising strategy for preventing GVHD, laying the groundwork for future clinical trials.

Although it may seem like there is a long way to go until we know for sure if cannabis can be used to treat leukemia, we are getting closer to that goal. At the end of July, a medical cannabis company called Medicanja Limited received orphan drug designation from the FDA for its cannabis-based treatment called chrysoeriol. This therapy is being evaluated in patients with acute myeloid leukemia. The company hopes to continue their research with the aim of getting this therapy to market within the next three years.

Stay tuned for additional coverage of medical cannabis and leukemia as new research becomes available.

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