Former New York state Sen. Alfonse D’Amato, a Republican who served in the chamber from 1981 to 1999, has been hired as a senior adviser for the Marijuana Policy Project as they expand into the state, the New York Daily Newsreports. The advocacy organization also hired attorney and community organizer Landon Dais to serve as its New York political director.
D’Amato, who never voted on cannabis policies during his tenure as a legislator, was described by the News as against the use of cannabis for much of his life, but that his position began to evolve following an interview with Howard Stern in 2009. In the interview with the News, D’Amato called Attorney General Jeff Sessions’ position on cannabis policy “ridiculous.”
“I say how can you on the one hand be for states’ rights and on the other hand say the states that have legalized the use of marijuana, that you’re not going to recognize that,” he said. “You can’t be a states’ rights person only when you like what the states are doing and not what the feds are doing. It’s one or the other.”
New York Conservative Party chairman Michael Long, an ally of D’Amato during his state Senate tenure, said he hopes the former lawmaker “doesn’t partake in a move that would open the door for legalization of marijuana.”
D’Amato said that while recreational legalization is “not something [the MPP] are promoting” the conversation is taking place in New York as well as the rest of the nation.
“There is no doubt that that is something that will come more and more to the forefront as time goes on,” he said.
After leaving the legislature, D’Amato founded Park Strategies LLC, a lobbying firm, serving as its managing director.
Lawmakers in Maine are seeking to add a 10 percent excise tax on retail cannabis sales, bringing the total rate on adult-use cannabis products to 20 percent when paired with the 10 percent sales tax, according to a Sept. 11 letter from legislative leaders. The draft bill was unveiled in the letter from Sen. Roger Katz, Senate chair, and Rep. Teresa Pierce, House chair, to the members of the Joint Select Committee on Marijuana Legalization Implementation.
In the letter, officials said the decision was a consensus made by the committee over the “past number of months” and that leaving the determination of the excise tax rate to Maine Revenue Services or the Department of Administrative and Financial Services could implicate Article IX, section 9 of the state constitution which states, “The Legislature shall never, in any manner, suspend or surrender the power of taxation.”
The officials also expressed concern over allowing dispensaries currently operating as not-for-profits to convert to for-profit corporations. The authors conclude that Part B of the proposal will allow for the conversion, as desired by current operators, but that the “merits of the proposal is outside the jurisdiction” of the committee.
“Although this language is included in the bill draft, we intend to advocate for its removal during the work session,” the letter states.
A public hearing on the proposal is set for Sept. 26, with work sessions planned the two following days.
Michigan Department of Licensing and Regulation officials have indicated they will not shut down current medical cannabis dispensaries operating in the state, but if they are shuttered by police it will damage their chances of being granted a license when the state begins issuing them later this year, according to a Detroit Free Pressreport.
“The department will not shut down dispensaries, but it will be a business risk for them to continue to operate because they could be shut down by law enforcement and it could be an impediment to getting a license,” said Andrew Brisbo, director of the Bureau of Medical Marijuana Regulation.
In a statement to the Free Press, representatives from LARA said that the approach allows existing operators to “wind down while giving adequate time for patients to establish connections to caregivers to help ensure continuity of access.”
The agency will issue emergency rules in place in the interim, after consulting with the state Attorney General’s Office, and will begin issuing licenses on Dec. 15. Any dispensary operating at that time will jeopardize its chances at obtaining a license.
Previously, Donald Bailey, chairman of the Michigan Medical Marijuana Licensing Board, said that he wanted to see dispensaries close their doors by Sept. 15 if they wanted to be considered for a license in December.
All eight of Hawaii’s medical cannabis dispensaries will go cashless as of Oct 1., opting instead to use the CanPay system, according to a KOHN2report. In addition to allowing the dispensaries to forgo cash transactions, the debit payment mobile application system will allow them to direct deposit employee payroll, collect and remit taxes, and make vendor payments.
Gov. David Ige, said the system will allow the state to focus on product and public safety and “makes dispensary transactions transparent.”
“These dispensaries accumulate a lot of cash, which creates challenges for state employees who have to interact with dispensaries as well as with the general public,” Ige said in the report. We’ve been looking for innovative solutions to this challenge.”
The system will be provided by Colorado-based Safe Harbor Private Banking, and Maui Grown Therapeutics and Aloha Green, the two dispensaries currently operating in the state, have already set up accounts with the credit union. The other six companies approved to dispense medical cannabis products are still at varying stages of the approval process and development.
Customers and business owners will download the app to a smartphone, which links up to a checking account, and receive a QR code, which masks the account number of the patient, said state Financial Commissioner Iris Ikeda.
“This QR code is pretty safe,” Ikeda told KOHN. “There’s no personal, non-public information going through this QR code. It will expire after 30 minutes, so you want to be sure that if you want to use this, you get to the medical cannabis dispensary in time.”
Financial services for the cannabis industry are not available in Hawaii because of cannabis’ Schedule I designation under the federal Controlled Substances Act.
As we close the summer and head back to our fall routines in business and life, I began thinking of how much building your cannabis brand mirrors heading back to school. You often hear CEO’s say “my brand is my baby,” and in many ways it’s true.
Many business owners make the mistake of believing that once you have a product or service and a logo, that you’ve built your brand. This couldn’t be further from the truth. I often speak about how your brand is alive. Like a child, a brand must be built, be educated, be tested, evolve, and graduate. How are you checking in and helping your brand grow? How as a “parent” are you making sure your cannabis brand has the foundation for success?
In “kindergarten” — or the initial launching your brand — it’s essential to build consistency and repetition. You’re protective, delicate, deliberate. What does that look like in a business?
Develop the rules of your brand. Repetition of your branding rules is critical. Develop your style guide and stick to it. “Get back to the basics.” What are your colors? Your fonts? Where is your logo placement? Training your eye and reinforcing your brand basics is essential to establish a strong brand identity.
Test your ideas. I cannot say this enough about building a business: VALIDATE YOUR IDEAS. Like a toddler looking for reassurance from a parent, it’s critical that you are consistently checking with your audience and a trusted group of advisors to strengthen your identity. Feedback at this stage is critical and will save you thousands of dollars and hours of energy if you focus on using proper feedback to refine your brand and product. On that note…
Find your tribe. “It takes a village to raise a child,” and the same is true for your brand. The trusted people you choose as influencers and sounding boards for your business will have a lasting impact on your success, so choose wisely. Look for honest, articulate team members who are focused on problem-solving and who share your vision. Work with them to reinforce a strong identity protection.
You’ve found your tribe and built your foundation, what’s next? It’s “middle school,” or the time in your business when you really begin to see your company grow. It’s awkward, it’s painful, but it’s essential. At this stage, your brand is connecting to its own growth cycle and beginning to expand. How can you facilitate healthy brand growth that increases your brand’s value and worth?
Form beneficial partnerships. Making new friends can be tough in a new space, but forming alliances with other like-minded business leaders can offer insight into your business, help you develop creative strategies, and move your entire industry forward.
Put your brand in new situations. You’ve got your foundation and brand personality, it’s time to test new waters. Are there new conferences you can attend? New vending opportunities? There may be a target market you haven’t considered. Now would be a great time to reach out to a branding expert and get their advice on potential opportunities to carefully grow.
Grade your brand. This is the time to sit down and evaluate where you are. Is your brand adapting to every opportunity or is it struggling with visual and verbal execution? Put yourself in a teacher role and grade yourself. Your grading needs to include evaluations on:
Visual — How do we look? How does your brand look in its execution?
Verbal — How do you sound? Does your messaging come across to your audience as intended?
Internal — Is your brand working within your organization?
Environmental — How does your brand fill out a room?
Social — How does your brand perform on multiple social channels?
The back-to-school season is an excellent time in the year for brand reflection and strategizing for the months ahead.
The goal in your brand’s “high school” years is to develop your self-expression and strengthen your relationships with your consumers. This is the most creative yet most challenging place for your brand. Here, your culture thrives and sets the tone for lasting success. How can your brand help take your company to the next level? How can your brand differentiate you from your competitors? How can your brand build an identity that resonates with your customers for the long haul?
Add secondary visual and verbal elements to your brand. What other visual and verbal elements can you add to your branding palette and incorporate in your style guide that would elevate the experience for your consumer?
Open yourself to opportunity. Develop the nuances that make you an intriguing brand. Look at this as an opportunity to grow your most creative ideas and team members.
Change vending setups. Again, we want to expand our opportunities for growth. Find opportunities to continue to develop and promote your brand in new spaces and new markets.
Build Recognition. Continue to develop your space and build relationships in your market. Brand awareness is essential for healthy growth.
As we look at the back to school season, it’s important to remember these lessons of growth and opportunity — they cover the baby steps to running full speed ahead, and it’s critical you’re touching base with your team and connecting with your consumer all along the way.
As your brand “grows up,” you will look back on how the discipline and effort you instilled from its inception plays an essential role in your success. When you invest your time into a proper education, your brand will work for you in dividends. And remember: go as far as you can see, and when you get there you’ll be able to see further.
Vermont House Speaker Mitzi Johnson, a Democrat, has appointed Rep. Ann Pugh and Rep. Maxine Grad to the governor’s Marijuana Advisory Commission. The appointments by Johnson are required under the executive order creating the commission.
Pugh, a Democrat, serves as the chair of both the House Committee on Human Services, and the Joint Legislative Child Protection Oversight Committee. Pugh voted against the measure to legalize cannabis possession, up to 1 ounce, by adults 21-and-older in the state, which was ultimately passed by the legislature, but vetoed by the governor.
Grad, also a Democrat, chairs the House Committee on Judiciary and sits on the Joint Legislative Justice Oversight Committee. Grad voted in favor of the legalization proposal.
Grad and Pugh are the latest commissioners to be named; earlier this week Republican Gov. Phil Scott announced that the commission would be headed up by the former chairman of the Vermont Democrats Jake Perkinson and Burlington-based attorney Tom Little.
The Senate Committee on Committees will also make two appointments along with 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 of the commission is set for Oct. 1; Gov. Scott has indicated he wants an initial report by Jan. 15, 2018.
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 Timesreports. 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.
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-Journalreports. 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.
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 Inquirerreports. 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.”
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.
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.”
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.
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 Pressreports. 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.”
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.”
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 Postreports. 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.
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.
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.”
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.
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.
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.
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 Globereports. 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.”
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.
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.
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.
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.
