Skyline view of downtown San Francisco.

California Communities Create Cannabis Offices to Handle Recreational Rollout

7/19/2017

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California communities have begun laying the groundwork for the rollout of the recreational cannabis industry as San Francisco and Sonoma County take steps to create cannabis advisory panels within the government.

The San Francisco Board of Supervisors voted on Tuesday to create an Office of Cannabis to oversee the permit process in the city, while Sonoma County’s Board of Supervisors appointed 20 people to advise the board on rules to govern the program.

The members of the Sonoma County Cannabis Advisory Group come from the cannabis and real estate industries, schools, law enforcement, and rural neighborhoods, according to a Press Democrat report. They will serve two-year terms.

County Supervisor Susan Gorin said the board “could have used the advisory group a year ago,” as seven months ago the county passed its initial rules for the industry. Sonoma County towns will have to evolve their rules to marry the county and state regulations.

San Francisco May Ed Lee included $700,000 in his budget to fund the city’s Office of Cannabis, which will have a staff of three for public outreach. One of the tasks of the office will be how to handle the anticipated demand. Supervisor Ahsha Safai suggested the current operators get priority for recreational permits.

“They have been vetted, they’ve gone through the process, they’ve been authorized by the planning department,” he said in an ABC-7 report. “The operators have had their backgrounds vetted.”

The San Francisco Office has not yet been staffed, but the goals for both agencies are similar – to have a single point of contact for the public and businesses as California migrates to a recreational market.

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Canadian Premiers Want Extension for Cannabis Legalization Deadline

7/19/2017

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Some Canadian premiers are seeking to delay the implementation of the federal legalization of cannabis due to concerns over health impacts, public and traffic safety, and a want to avoid different provincial regulations, according to a report from The Star. The call is led by Manitoba Premier Brian Pallister who wants to avoid a “hodge-podge” of rules throughout the nation as is the case with alcohol.

“I would hope we could learn from that and not re-create that for cannabis,” he said in the report. “There are too many unanswered questions, too many issues that have not been addressed for us to rush into what is an historic change.”

Saskatchewan Premier Brad Wall said he wouldn’t mind an extension, but he was moving forward with the July 1, 2018 deadline.

“Could we have greater continuity in this?” he asked. “It would be desirable but hard to pull off in a short period of time.”

Nova Scotia Premier Stephen McNeil also said his administration believes they can meet the deadline, but in “Atlantic Canada, there needs to be a uniform age.”

“…There needs to be uniform regulations across our respective provinces,” he said. “I believe that could potentially lead to, perhaps, across the country.”

Quebec Premier Phillipe Couillard said he would welcome a delay but “the prime minister…was very firm on July 1.”

“…We’re working under the assumption that this will be the date,” he said. “A lot of work needs to be done.”

Ontario Premier Kathleen Wynne said that questions about public health and safety “have not yet been answered” and “that’s the work that we have to do now in conjunction with the federal government.”

Pallister said one of the key issues that needed to be addressed is driving under the influence, which he said needs to become as socially unacceptable as drinking and driving has. He supports pushing the program roll-out back one year.

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England's Parliament and Big Ben clock tower in London.

British MP Calls for Civil Disobedience Over ‘Barbaric’ MMJ Laws

7/19/2017

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A member of Britain’s House of Parliament has called on citizens to use cannabis at the Palace of Westminster, according to a Sky News report. MP Paul Flynn, of the Labor Party, said the act of civil disobedience is the “only way we can get through the common mind of the government.”

“I would call on people, and I know we’re not supposed to do this as members, to break the law,” Flynn said in the report. “That’s the only way we can get through the common mind of the Government, which is set in concrete and the whole laws are evidence free and prejudice rich – let’s see them do that.”

Flynn also admitted to committing a “terrible crime” by drinking cannabis tea on the House of Commons Terrace with medical cannabis activist Elizabeth Brice, a multiple sclerosis patient, before her death in 2011. He did not admit to drinking the tea himself, but rather he supplied her with a cup of hot water for her tea – an act that could have sent Brice and Flynn to prison for seven years if caught.

“I think we have to say to those who put up with the barbaric stupidity and cruelty of Government policy that denies seriously ill people their medicine of choice we’ve got to call on those who are in this position to act in a way of civil disobedience,” he said.

Cannabis remains restricted as a Class B substance in England.

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A dispensary worker at the National Holistic Center in Washington D.C. shows off a handful of nugs.

Massachusetts Supreme Court Rules in Favor of Fired MMJ Patient

7/18/2017

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The Massachusetts Supreme Judicial Court has ruled that a registered medical cannabis patient who tested positive for cannabis could sue her former employer for handicap discrimination, according to a report from Reuters. Her employer had successfully argued in lower courts that they had the right to fire her because cannabis is illegal under federal law.

An attorney for Christina Barbuto, the ex-employee of Advantage Sales and Marketing who suffers from Crohn’s disease, called the ruling “a ground-breaking decision” for employees in Massachusetts.

“This is the highest court in Massachusetts recognizing that the use of medically prescribed marijuana is just as lawful as the use of any prescribed medication,” he said in the report.

Barbuto was fired following her first day on the job after failing the drug screening.

In the decision, Chief Justice Ralph Grants opined that if cannabis is prescribed by a physician, “an exception to an employer’s drug policy to permit its use is a facially reasonable accommodation.”

The six-judge panel said that the employee, not the employer, could have been federally prosecuted for Barbuto’s cannabis use, therefore allowing her to continue using cannabis therapies is not “per se unreasonable as an accommodation.”

The decision sets a legal precedent in the state and could have impacts in other states with medical cannabis programs.

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Party flags on a string hang outside in sunny, summer weather.

Undercover Denver Police Crash Private Cannabis Party, Issue Public-Use Citations

7/18/2017

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The Denver Police Department used undercover officers to infiltrate the International Church of Cannabis’ inaugural 4/20 event, leading to public consumption citations for three of the church’s founders, according to an ABC-7 report. None of the parishioners attending the opening day ceremony were cited.

The 4:20 pm ceremony on 4/20 was an invite-only, private event, at which guests had to show identification to attend. According to Steve Burke, one of the church’s founders, two officers had managed to get on the list ahead of time and a third was able to sneak into the event when the door was guarded only by Berke’s 72-year-old mother. Burke said the two officers who made the list had used aliases and other officers had detained the private security guards for the event because one of them didn’t have identification.

Burke said the founders did not receive the citations until several days after the event, noting that none of the party guests were cited for public consumption. He called the citations “horse shit” and accused the police department of “selectively enforcing the law.”

“If you go to a wedding, that doesn’t make the wedding a public event, it makes you a wedding crasher,” Burke said in the report, adding that it seems “like the city attorney has a vendetta.”

Marley Bordovsky, the city attorney, argued that if someone could just walk into the party – as one of the officers did – the event is not considered truly private.

“Whether a venue is public or private is a case-by-case analysis of whether it’s private or not,” she said. “It clearly wasn’t a truly-private event – that was the test.”

There is no religious exemption to bypass the public consumption law under the state’s adult-use regime.

Burke said he and the other founders are “considering legal options.” They are due in court next week.

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Skyline view of Boston, Massachusetts on a cloudy day.

Massachusetts Marijuana Conference Bill Would Nearly Double Rec. Market Taxes

7/18/2017

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The Massachusetts Marijuana Conference Committee is seeking to raise the tax rate on the voter-approved recreational cannabis industry to 20 percent – a compromise with their colleagues who want the rate to remain at the 12 percent called for in November’s initiative, according to a report from Boston Business Journal. The committee’s proposal also keeps the ability to ban the industry from municipalities in the hands of voters.

State Sen. Patricia Jehlen, a member of the committee, said the measure “removes the barriers to the development of a legal market” while protecting the “right of adults to grow, possess, and use” cannabis.

“It protects the rights of medical marijuana patients, and gives opportunity to farmers and to people who have been harmed by the War on Drugs,” she said in the report. “The tax rate remains among the lowest in the country, and the same as in Oregon, often seen as successful.”

Under previous legislative proposals, the House had pushed for a 21.75 percent rate, while the Senate wanted to keep the rate at 12 percent. The measure, which requires the approvals of both chambers, pushes the excise tax provided under the initiative from 3.75 percent to 10.75 percent. It includes a 1 percent increase on the local option excise tax – from 2 percent to 3 percent. State taxes will also apply to recreational cannabis sales. Medical sales would remain untaxed.

Additionally, the bill would allow some cannabis convictions to be expunged; specifies that funds generated from the market will be used for “restorative justice, jail diversion, workforce development, and technical business assistance for people in communities that have been disproportionately impacted by the War on Drugs;” legalize hemp production in the state; and gives directives to the Cannabis Control Commission regarding product marketing, labeling, and safety.

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The purple glow of LED lights inside of a licensed Washington cannabis cultivation site.

Canadian Company Approved to Sell Cannabis Products in Uruguay

7/18/2017

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The International Cannabis Corporation — based in Vancouver, British Columbia, Canada — has been approved to sell cannabis in Uruguay under the country’s nationwide cannabis legalization rules. Cannabis sales through pharmacies are set to begin on Wednesday, according to the Institute of Regulation and Cannabis Control.

Under federal law, the price and packaging of cannabis products are set by the government – allowing 5-gram packages of cannabis to be sold to permanent residents 19-and-older at $6.50 per package.

“The ICC team has worked diligently with the government agencies and regulatory bodies to establish high-quality standards and a transparent framework for legal non-medical cannabis sales,” said Alejandro Antalich, ICC CEO, in a press release. “Uruguay has quickly established itself as a leader in the cannabis and CBD industries in South America and globally.”

The company is also constructing the first CBD extraction laboratory in South America, built in Uruguay’s Science Park Free Trade Zone. The facility, slated for an April 2018 launch, will use supercritical CO2 extraction techniques.

“ICC continues to innovate and execute on its strategy of becoming the trusted producer and distributor medical and non-medical cannabis and CBD,” Antalich said.

Under the rules, approved four years ago, cannabis customers can purchase up to 40 grams per month, but must also sign up with a national registry. Home growers and cooperative clubs are allowed to grow up to 99 plants.

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A Facebook user checks out a photo gallery using the Facebook phone app.

Is My Cannabis Company Allowed on Facebook?

7/18/2017

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Considering cannabis is still a federally illegal, Schedule I drug, licensed operators in state-legal medical and adult-use markets have to navigate a particularly complex maze of red tape when it comes to advertising and marketing.

In most cannabis markets, public-facing advertising is limited in many ways and in other markets, it’s completely restricted. This puts business owners in a peculiar situation where they’re operating in one of the most competitive industries in the world, but they have no avenues to market or advertise, making it extremely difficult to set yourself apart from the competition. As a result, businesses have turned to the free marketing channels such as social media, where they can advertise and reach their audience easily and affordably.

However, Facebook just recently took it upon themselves to shut down a number of business pages for Alaskan dispensaries that have been in operation for years, and their pages had been live for just as long. So, why the sudden crackdown on these businesses?

It’s actually not that sudden: Facebook has always had a strict policy against cannabis and cannabis-related companies participating on their site and they’ve shut down cannabis-related pages in the past. Facebook oversees hundreds of thousands — even millions — of different pages and business pages. To deactivate a live business page, it has to be identified, then manually screened and deleted, which is not an easy process to uphold when you’re overseeing such a significant number of pages.

In this particular situation, it seems they identified a small market of Alaska dispensaries that were not adhering to Facebook’s policies and did a big sweep of them all at once. This might scare business owners in other states, but keep in mind that Alaska’s regulated cannabis market is much smaller than the likes of Colorado, Washington, Oregon or California. For the larger markets, Facebook simply doesn’t have the manpower to pursue a crackdown on every single cannabis-related business page — but that doesn’t mean they won’t pick out your cannabiz page and shut it down.

How can I make sure my company’s page is safe?

That’s simple: follow Facebook’s guidelines and policies.

A screenshot of Facebook’s official policy regarding advertisements for drugs and controlled substances.

In short, Facebook’s policies can be summed up as, “businesses are not allowed to advertise the use, consumption or sale of illegal/recreational drugs.” Cannabis would fall into the category of both recreational and illegal drugs because Facebook operates on federal guidelines — but even for the medical industry, needing a doctor’s recommendation or prescription would also rule out medical cannabis advertisements.

My company has personally experienced this on both Facebook and Instagram, where we’ve had non-cannabis related ads rejected or deleted because we’re a “cannabis company,” even though we don’t touch the final product or even directly sell cannabis. Granted, these were attempts at paid ads — all of which get manually screened before being approved — but the precedent is the same. Unfortunately, it makes your advertising and marketing strategy much more complicated as it forces businesses to get very creative in their approach.

How can I advertise my company without advertising cannabis?

You need to get creative. Marketing and advertising are about striking a chord with your audience and finding something that they can personally relate to that makes them feel good about patronizing your business vs. your competitors.

Many businesses use cause-oriented strategies to show their customers they care about the community, environment and the industry. They get involved in local events and make their presence known.

You can also focus your efforts on finding ways to drive people to your company’s website, where you can theoretically advertise and market however you’d like.

Facebook isn’t a one-stop-shop destination for companies looking to engage their audience over social media — there are many other platforms to consider.

What about other social media channels?

Without going too in depth, here’s a little overview:

  • Instagram is owned by Facebook, so they follow the exact same policies and guidelines as Facebook.
  • Twitter has a pretty loose approach to cannabis. There was a time not long ago when Twitter simply censored any marijuana/cannabis-related search, but a quick search using those terms today reveals they are far more relaxed in their approach.
  • LinkedIn and Google+ don’t seem to have any restrictions for marijuana businesses. Neither channel is widely used by cannabis companies, but there are some who use these avenues and each platform has active groups of cannabis entrepreneurs and advocates with thousands of members — so, for now, they don’t seem too concerned about it.

Social media is an excellent — and, in many cases, the only — option for cannabis businesses who want to market their products or services to their target audience. However, it’s important to know the rules in advance about what you can or can’t do on each platform so that the hard work you put into growing your audience doesn’t all go to waste.

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Indoor medical cannabis plants pictured with the LED grow lights above momentarily switched off.

Medical Cannabis Prices Rise Following Nevada’s Adult-Use Market Launch

7/17/2017

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Medical cannabis prices for Nevada’s patients have seen an increase since the rollout of the recreational market – in some cases doubling – which has forced some patients back into the illicit market, according to a report from Fox 6.

Emily Wilson, a registered patient interviewed in the report, said many patients she had spoken to admitted they were returning to street dealers because they could not afford “the price gouging” at dispensaries. She had used medical cannabis following a surgery that had left her “pretty much bedridden,” but was able to wean off her medication after “six to eight months” of medical cannabis therapies.

Lissa LaWatsch, general manager of ReLeaf Dispensary, admitted that the prices have gone up due to increased demand, but the dispensary is discouraging people from returning to the illegal market because “when you’re on the street and you’re buying something, you don’t really know what you’re getting.”

She said that while the dispensary has seen a decrease in medical patients, the shop is offering some incentive to medical cannabis cardholders, such as allowing them to jump to the front of the dispensary lines.

Nevada’s adult-use market went online earlier this month and dispensaries were reportedly running out of products a week after its launch — this was partly due to high demand and partly due to there being no distributors licensed to serve the recreational market. Last week, the Tax Commission approved at least one business, which currently holds a medical cannabis delivery license, to deliver to the recreational sector.      

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The official headquarters for both the DEA and TSA in Arlington County, Virginia.

CBD Laws Are Convoluted Enough Without DEA Interjections

7/17/2017

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In a recent interview with the Cannabist, the DEA took aim at CBD production, specifically naming Charlotte’s Web – a low-THC cannabis strain produced and trademarked by CW Hemp oft used to treat children with epilepsy. In the statement, the federal law enforcement agency contends that the product, along with all other CBD products, is “being illegally produced and marketed in the [U.S.] in violation of two federal laws: the Controlled Substances Act and the Federal Food, Drug, and Cosmetics Act.”

“As with all controlled substances, it is illegal under the CSA to produce or distribute ‘Charlotte’s Web’/CBD oil (or any other marijuana derivative) except by persons who are registered with DEA to do so,” the statement says.

DEA breaking the law?

The agency contends that the 2014 Federal Farm Bill offers no protections for CBD manufacturers because it only permits colleges, universities, and state Departments of Agriculture to cultivate industrial hemp (cannabis plants containing 0.3 percent or less THC content) for “agricultural research purposes” in states with legal hemp programs. Further, they assert that the federal statute “does not permit such entities, or anyone else, to produce non-FDA-approved drug products made from cannabis.”

Joel Stanley, CEO of Stanley Brothers, creators of Charlotte’s Web, rebuked the DEA in his own Cannabist op-ed. He didn’t mince his terms, calling the DEA statement “reckless” and “illegal.” Stanley points out that even though the Farm Bill doesn’t offer protections for CBD production, Section 773 of the Appropriations Act of 2017 does.

“The language…explicitly states that federal funds may not be used to: ‘…prohibit the transportation, processing, sale, or use of industrial hemp that is grown or cultivated in accordance with section 7606 of the Agricultural Act of 2014, within or outside the State in which the industrial hemp is grown or cultivated,’” he wrote.

A DEA agent wears a black jacket and badge outside the location of an ongoing narcotics raid. Photo Credit: Ryan Lackey

Stanley also contends that, since “the CSA does not contain the terms ‘cannabidiol,’ ‘cannabinoids,’ or ‘hemp,’ the DEA has no jurisdiction over the products.

“In order for these terms to be included in the CSA and officially become law, it would take an act of Congress, passed by the House and Senate, and signed by the President,” the op-ed states.

Hemp industry lawsuits

The issue is even more complicated when considering the 2014 Hemp Industries Association v. DEA case; wherein the Ninth U.S. Circuit Court of Appeals ruled that the agency does not have authority under the CSA to prohibit otherwise legal products because they contain traces of THC.

That case was brought over a proposed DEA rule change to give CBD a unique drug code number (7372). The DEA did not challenge that ruling but last year, finalized the rule change anyway; which has subsequently led to another HIA lawsuit filed in February claiming the agency is failing to comply with the Ninth Circuit injunction.

And, despite all of this, the DEA Form-225 — “Application for Registration Under the [CSA],” last updated in 2012 — lists CBD as a “Schedule 1 narcotic & non-narcotic.”

CBD companies respond

Joel Bedard, a Vermont agricultural consultant who signed Form-225 in order to register his hemp research with the DEA, said there are disconnects not just between state and federal hemp laws, but conflicts with U.S. statutes and the policies of the DEA, FDA, and USDA. He points out that the DEA statement comes at a convenient time – when pharmaceutical drug companies are completing FDA-recognized trials and getting synthetic THC medications approved for Schedule II status under the CSA.

“Based on what I’ve seen, a lot of this is coming from the fact the feds have 6630507 as a patent on the neuroprotectant characteristics of [CBD] and they spun that off to GW Pharma/Greenwich Biosciences,” Bedard said in an interview with Ganjapreneur. “So, as soon as GW started working on it and submitted a [New Drug Investigation], it made it such that anyone who tried to claim any sort of therapeutic or medicinal value on [CBD] was breaking FDA law.”

Bedard called the situation a “wagging-of-the-dog,” wherein pharmaceutical firms are utilizing the FDA, who are utilizing the DEA to “try and create obfuscation” be it by “confusion” or “fear.”

“You know, the old tricks,” he said.

The leaf fan of a young hemp plant. Photo Credit: Gounsil

Bedard agreed that the DEA statement “is probably illegal” because the language of the Appropriations Act is designed to prevent the DEA from interfering in state-approved hemp programs – and issuing the statement is an attempt to interfere, just like when DEA agents visit his home because his research is in their files. “They tried to talk me out of [growing hemp]; and that’s interference.”

Ten CBD-centric companies throughout the U.S. were contacted for this piece and, while declining to comment directly on the DEA statement, none of the respondents indicated they had plans to cease or shrink their operations.

“The phytocannabinoid rich oil (PCR) – which includes cannabidiol – used in our products is extracted from whole-plant medicinal grade hemp grown in the USA,” said Julianna Carella, CEO of Treatibles, which specializes in hemp wellness chews for animals. “The THC levels are consistently less than .3 [percent] so it remains legal to sell in and ship to all 50 states. This industry has many moving parts. We always strive to follow the guidelines of the law.”

The Treatibles website includes a disclaimer that the product is not FDA approved.

But the law is so convoluted that in February regulators in Alaska – a state with adult-use laws – raided licensed dispensaries and seized their CBD products.

One licensed Vermont hemp farmer (who wishes to remain unidentified due to fear of reprisal) said he believes that because the hemp for his products is grown from certified seed, and processed and independently tested in the state, they can be – and are – legally sold in the state. He did admit he was hesitant about sending it over state lines, which could be construed as a federal offense depending on its destination. But at the end of the day, he feels protected by the state law.

In all, CBD producers don’t seem overly concerned by the DEA diatribe. However, at some point, Congress is going to have to draw a line in the sand. Currently, there are three bills (HR.715, S.1374, HR.2273,) introduced in Congress that would either deschedule or reschedule CBD under the CSA, but only one – the aptly titled “Charlotte’s Web Medical Access Act” – carries a bipartisan cohort of cosponsors.

 

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The Guam and U.S. flags pictured at Ritidian Point in the Guam National Wildlife Refuge.

Guam Gov. Signs Bill to Create MMJ Industry

7/17/2017

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Guam Gov. Eddie Calvo has signed a bill directing the Department of Revenue and Taxation to begin issuing business licenses to medical cannabis cultivators, processors, laboratories, and dispensaries – bringing patients in the U.S. territory one stop close to receiving medical cannabis therapies, the Guam Daily Post reports.

Medical cannabis was legalized by Joaquin “KC” Conception II in 2014; however, the measure left government agencies without direction, leaving patients who may qualify for access to the program without a way to obtain the products.

The law, which passed the legislature unanimously, requires the Revenue and Taxation Department to begin issuing business licenses for the industry and collect fees for administration of the industry.

According to the bill text, owners of medical cannabis businesses in Guam must be residents of the island for at least three years and the majority of the business must be owned by a legal resident. Three types of cultivation licenses are available – a Type 1, which allows a 2,500 square foot canopy on a single location, a Type 2, which allows between 2,501 and 5,000 square feet of canopy, and a Type 3, which allows 5,001 to 10,000 square feet of canopy per premises. Application fees for all businesses run $1,000.

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A wall of tobacco products inside of a smoke shop selling cigarettes, cigars, and rolling tobacco.

Campaign Funding for Michigan Legalization Led by Tobacco Store Chain

7/17/2017

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Top donors to the campaign to legalize recreational cannabis in Michigan include a tobacco store chain and the Marijuana Policy Project, the Detroit Free Press reports. The Troy-based Smokers Outlet Management is the leading money donor, pumping $150,000 into the campaign according to the report. The company owns 68 Wild Bill’s Tobacco shops throughout the state, with plans to open a chain of legal cannabis shops called Oasis Wellness Center.

While the MPP has donated $58,161, much of their donations to the Coalition to Regulation Marijuana like Alcohol have come in the form of staff and technical assistance to the campaign. According to the report, the organization has donated staff time, legal research, airline tickets, and hotel expenses to the campaign.

In all, the campaign has raised $368,320 in cash.

Josh Hovey, spokesperson for the Coalition, said much of those funds will be used to combat the prohibition campaigns they expect to emerge that will combat legalization.

“We’re fully expecting there to be an opposition campaign — and one that is equally well-funded,” Hovey said in the report.

Hovey indicated that, based on their latest report, 44 percent of the campaign’s contributions were for $250 or less. He anticipates the campaign will have to raise “a million and a half dollars just to get on the ballot,” and estimates the campaign will cost a total of $8 million.

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A police dog named Titan, trained by the FBI.

Colorado Court of Appeals Rules Police K-9 Alert Not Grounds for Search

7/17/2017

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The Colorado Court of Appeals has ruled that an alert by a police K-9 trained to smell cannabis and other drugs is not enough to trigger a vehicle search, according to a report from the Grand Junction Sentinel. The three-judge panel ruled that because cannabis is legal in the state, users have “a legitimate expectation of privacy.”

Because the dogs are trained to sense cannabis along with other drugs, they could simply be alerting officers to the presence of a legal substance.

“Because Amendment 64 legalized possession for personal use of one ounce or less of marijuana by persons 21 years of age or older in Colorado, it is no longer accurate to say, at least as a matter of state law, that an alert by a dog which can detect marijuana — but not specific amounts — can reveal only the presence of ‘contraband,’” Judge Daniel Dailey wrote in the unanimous ruling.

The decision stems from a February 2015 case in which a Craig Police officer pulled over a driver, Kevin McKnight, for allegedly making a turn without using his turn signal. McKnight had been leaving a home that had been searched for drugs two months prior. The officer called in a Moffat Country Sheriff officer and his drug-sniffing dog, Kilo, who is trained to detect cannabis, methamphetamine, heroin, ecstasy, and cocaine.

Kilo alerted the officers to the presence of drugs, and officers found a glass pipe commonly used to smoke meth, according to the report. McKnight’s attorney attempted to suppress that search, but it was ultimately allowed by the court and McKnight was convicted of possession of a controlled substance and drug paraphernalia.

The appeals court, however, said that the evidence should not have been permitted because the dog could not tell the officers what substance it had detected. The ruling could force law enforcement throughout the state to stop training K-9’s to detect cannabis.

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Eric Gomez: Overseeing a Cannabis Startup Incubator

7/14/2017

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Eric Gomez is the CEO of Canopy San Diego, a San Diego-based startup incubator for tech companies who are focused on serving the cannabis space.

Eric recently joined our podcast host TG Branfalt to discuss the current climate for investors who are looking to get started in the cannabis industry, understanding the difference between making safe vs. disruptive investments, international investment opportunities as new medical and adult-use markets pop up around the globe, and much, much more!

You can listen to the interview through the media player below or keep scrolling down to read a full transcript of this week’s Ganjapreneur.com podcast episode.

Listen to the interview:

Read the transcript:

TG Branfalt: Hey there, I’m your host TG Branfalt and you are 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 Eric Gomez who’s the CEO and founder of Canopy San Diego. How you doing today, Mr. Gomez?

Eric Gomez: I’m doing well. Thank you, Tim.

TG Branfalt: Excellent. I want to thank you for joining me and congratulations on your spring accelerator program. I’m sure you got a lot going on with that, right?

Eric Gomez: Thank you. Yeah. This is our second cohort so it’s pretty cool to have eight new companies in here. We’ve got about 16, 20, got about 22 new entrepeneurs in here so you can imagine the amount of energy that’s in the building.

TG Branfalt: I’m sure it’s absolutely incredible. We’ll talk about that, the energy, the accelerator program a bit more, but before we get into that I want to know about you. What did you do before getting into the cannabis industry and how did you end up there?

Eric Gomez: I came here in somewhat circular fashion. I graduated UCLA with an engineering degree and went into data com, so that was in the late nineties. I basically got into really the dot com and the data bubble right near its peak and near the end of that. When that ended I went back to school, got an MBA in real estate finance and went into the real estate world. This was in the late 2000’s, so again right at the peak of the real estate bubble and obviously the crash on a global basis this time, that that caused.

I got in on two of our lifetimes biggest bubbles right at the end and so now that I’ve had a few years to make some money and become an investor myself I started looking around at what was the next big industry. After an analyst brought some information to me and I made a trip to Denver I realized that cannabis was the right place to be. I came in really as an investor and looking to, if the opportunity came about, to be an operator. This time at the beginning of what is this decade’s great industry.

TG Branfalt: I got to ask. You’re probably the third or fourth or maybe even fifth person that I’ve interviewed on this podcast that has worked previously in the real estate sector. Can you maybe offer some insight as to why so many people who were in real estate end up in this space?

Eric Gomez: I would say if they’re currently operating and investing then there’s clearly a reason for elevated values. My experience has led me to be very, very wary of real estate investments at this point in time in cannabis because they are elevated. We all know that right now margins and pricing is higher than they will be tomorrow and we’ve seen that data prove that out in Colorado and Washington and now Canada’s starting to see the same thing. I think that that’s probably why real estate guys say, “Wow, this is great because now my property that was useless out in the desert is worth four times as much as it was six months ago.” I would say that’s reason number one.

Reason number two might be because, let’s face it, real estate is a bit, it’s a bit boring. When you have a little bit of cash, again, from previous investments and now you look at a new and upcoming thing that is slightly tied to something you’re familiar with, which is real estate, I think a lot of guys are jumping in and saying, “Hey, let’s build a portfolio.”

TG Branfalt: Can you draw any similarities between the emerging cannabis industry and what you noticed while working in the tech sector during the dot com boom?

Eric Gomez: Yeah. I would say there’s a lot of similarities. Number one is venturing into the unknown. I know we’ll get into the investment landscape in a bit here but a lot of investors are really, really taking a big risk and they’re saying, “Hey, I don’t know where this is going to go but I know it’s going somewhere, I know it’s growing very rapidly, and I know if I get in with the right teams and in the right sectors and protect myself well enough that I’m going to have a decent investment.” There’s that similarity.

There’s also clearly a bubble effect. A true bubble happens not because there’s organic growth that is deserving. It’s when that growth starts pulling funds from other industries that are also equally deserving. I think cannabis is not quite there yet but I’m starting to see signs of people throwing money at cannabis simply because they have the money. That’s a bit scary. Warning to all investors. Really do your due diligence as you normally would. Really think through all the possible scenarios. Protect yourself on a legal side. Make sure you’re getting the right teams and research everything two, three times over because a lot of the information that’s out there today is largely hyped.

TG Branfalt: We’re definitely going to talk more about the investment stuff in the second part of the show, but I want to move back a little bit. You guys over in Canopy San Diego, you’re the first cannabis industry accelerator in southern California. Why do you think that took so long?

Eric Gomez: That’s a great question. We’ve asked ourselves that exact same question many, many times. The startup scene here is a bit disjointed. It doesn’t have the organization that Silicon Valley has, that Austin, Boulder, Boston, New York has. And I think it might be just because there’s so many different industries at play here in southern California and I think a lot of the VC firms, wherever they put down roots, that tends to flow down and then create those other groups that start building accelerators and other sort of startup structures. It’s a great question. I honestly don’t have a certain answer for you. I can only kind of guess at the different reasons.

As far as cannabis, SoCal is the biggest probably consumer region in all the United States in terms of consumption. Obviously it’s a huge population base. The manner in which it’s developed has been largely gray market. There are thousands of dispensaries in Los Angeles. Thousands of dispensaries in the rest of SoCal, but only, what? 20-30 are operating legally. I think maybe there’s a larger gray market here than in other markets and I think that’s because of the slow roll through the regulations and also because we do have such a disperse population.

TG Branfalt: You did a lot of your overview, I don’t really want to call it training, with the guys over at Canopy Boulder. What are some lessons that you learned from that experience that you brought with you to SoCal?

Eric Gomez: Yeah. Those guys, they’re the reason we duplicated the model, because when I went out to Denver as an investor I found a couple of companies, one of which is BDS, which is still doing quite well and just closed, I believe, a two million dollar round. It was that investment philosophy that made sense to me and I understood that due to the stage of this industry, basically being brand new, that an accelerator model made sense. Because you really need to have a safe place for people to come together for mentors, for entrepreneurs, and for investors to come together, share ideas, and really build value in these new companies in a very strategic manner. Due to the legal risks and the banking risks, it’s just not as easy to just sort of create startups and invite entrepeneurs in and develop enough of a critical mass of companies that you can produce enough investible companies.

The accelerator model that Canopy adopted, which is essentially a copy of Tech Stars, Y Combinator, the big guys out there, made sense to me at this particular point in time. Because as I just mentioned the gray market feeling out here in SoCal for cannabis just doesn’t lead to any platform where you can access information and invite entrepeneurs, mentors, and investors in and have them sort of feel safe.

TG Branfalt: That makes a ton of sense. I’ve spoken to a lot of investors who simply won’t invest in any sort of gray market system such as … I’m in Michigan. No one will invest in Michigan because of all the questions. Mark Twain, he had said during the gold rush, “It’s a good time to be in the pick and shovel business.” Over at Canopy San Diego you guys have embraced this philosophy. You’re only investing in ancillary businesses, none of the startups that you’re working with touch the plant. What sort of growth are you seeing right now in California’s ancillary industry in the lead up to the recreational regime?

Eric Gomez: It’s exciting because I think the way it rolled out was almost perfect. You had legalization in Colorado in 2014 and that led … And kudos to all the regulators in Colorado that really kind of let it take its own form. Now that that small market, relative to California, has fully developed or not fully developed but is getting the are, they were able to really give us an example of what to do out here. Because we just passed the vote in November and now in 2018 we’re waiting for the actual licenses to be handed out we’ve got plenty of runway to develop software, develop hardware, develop solutions, put those all in place, put them through the accelerator, make sure they ramp up with the licensed dispensaries for medical marijuana here in San Diego and SoCal. Then once everything comes onboard in 2018 we’re ready to really go and have all of our ducks in a row ready to go.

The timing was really great and we’ve already seen, I mentioned BDS earlier. That was an early Canopy company. They just closed a two million round. Werk is also an early Canopy company. I think they were the cohort following BDS. They just closed a two million dollar round. Tradiv, which is also a Canopy company, actually has had an office out here in Serrano Beach. They raised a decent amount of money.

Those guys are our role models and they’re all looking at California as the next market that they want to go into. Now that they’ve got a foothold, they’ve got investors behind them, and those investors include California investors, Florida investors, Chicago investors. A nice geographic differentiation that’s really focusing on these companies and really that’s the growth potential for them, is California. We’ve got two-three billion dollar business today and that’s expected to double in 2018 when rec comes online. The growth is all ahead of us.

TG Branfalt: Are there any kind of internal discussions to get involved with businesses that touch the plant eventually?

Eric Gomez: In terms of our accelerator?

TG Branfalt: Yes sir.

Eric Gomez: Discussions, yes. The exact pathway to that is yet to be determined. You’ve got to, number one, align with your investors and so one of the big pitches for being the picks and shovels is that we are highly de-risking cannabis investments. That’s the best way to take advantage of all the upside of the industry without assuming the full risk profile of touching a plant. That would be the first task, would be to go to the investors and say, “What is your appetite for this? Are you willing to basically take two times the risk here, right?” You’re touching the plant and you’re talking about startup companies and we all know that the percentile of startup companies that actually make it big is very small.

I think that risk appetite might be trough to swallow. If we can find people that are willing to do it then by all means we could set up a separate fund and put investors into that vehicle that are now dealing with those kinds of companies. I don’t know that we’re ready for it here yet. There’s certainly a lot of science that’s being developed but speaking to various scientists that are starting to look at cannabis, including our managing director Jack Scatizzi who is a PhD in immunology, the viewpoint is you’re not looking at tech startup scalability, right? You’re not talking about building a company in three months, producing revenue in six months, and potentially scaling up to an exit in three years. You’re talking about doing research for a number of months if not years and then the actual commercialization of that research may not even be possible. It may just end up being something that’s shared with the community in general. There’s a lot to think about there and we haven’t committed to that yet.

TG Branfalt: I want to talk to you a bit about the projects that you are working on and you have worked on but before we get into that we got to take a short break. This is the Ganjapreneur podcast. I’m TG Branfalt.

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TG Branfalt: Welcome back to the Ganjapreneur.com podcast. I’m your host TG Branfalt here with Eric Gomez, CEO and founder of Canopy San Diego. Before the break, we were talking about being in the pick and shovel business and not in any sort of way touching the plant with your accelerator program. With regard to that program what types of projects get you excited? How long into a pitch or a proposal before you know whether or not you are going to accept a company into your program?

Eric Gomez: What gets us excited is the things that aren’t exciting. We want the boring, basic, already done before solutions that we can apply in the cannabis space, simply because A, it’s not exciting, and B, because the big companies that provide these services are willing to get in. We’ve got a programmatic ad company in here. We’ve got a point of sales system company in here. We’ve got an asset tracking system in here. We’ve got an event management company. Real basic stuff. And you can probably name off the top of your head two major players in each one of those industries I just mentioned in the global mainstream, but those companies aren’t coming in. They are not coming in because they can’t have a national solution because their banks won’t allow them, because their shareholders won’t allow them, etc. That’s left us with a huge gap and we’re filling that gap. We’re taking advantage of this two to seven year gap, whatever it is, before all the states come online. Before there’s some sort of federal easing on the banking regulations. That gives us the opportunity.

If an entrepreneur comes in and pitches me on some brand new idea that’s going to disrupt the entire world, that’s not for us. That might be for Y Combinator or one of these guys that is unicorn hunting. We want the real basic software business services solutions that these guys have done before. Maybe they’ve done it in the mainstream retail business and now they’re just applying it to cannabis. That’s what we want. We want singles, doubles. We’re not looking for those home runs because that’s the opportunity we’ve been handed and that’s the perfect storm that we’re playing in.

TG Branfalt: What do you look for in company leadership?

Eric Gomez: It’s passion for the product and for their solution and it’s also that they’ve done it before. We all know that entrepreneurs, founders of companies and our companies in the accelerator have between one and three people in them. These are the founders and we know that they’re not going to be the CEOs that are going to take them to a series B. The percentage of founders that end up being the CEO at that stage are tiny and we’re very clear with them about that. But we do want them to be passionate and have the technical knowledge and the market knowledge to take those companies, get them out of the seed stage, get them that initial funding, and make them attractive to a VC which can then add that additional layer of expertise and corporate management. It really comes down to passion and knowledge of the product that they’re building.

TG Branfalt: You had mentioned earlier that if somebody comes and pitches to you, you don’t have the appetite for disruptive ideas, but what sectors in your opinion as an investor, might be ripe for disruption?

Eric Gomez: I would say that because we’re looking at a plant that is traditionally, that’s been farmed for centuries, in the gray market here in the United States for a century, they’ve developed a lot of art in their farming. Now we’re looking at turning this into a raw material that produces for a number of different industries ranging from lifestyle artisan products to FDA-regulated pharmaceuticals. You now have to apply real science to getting the most out of a plant. From clone, all the way to oil extraction, there are a number of ways you can improve on what’s been done in the past because now you’re going to attract PhDs from all over the world and they’re going to start working on these challenges. That, I believe, is where the disruptive solutions are going to come from.

I do not have a lot of optimism that those solutions are going to necessarily come out of the United States. I think because we’re so slow to regulate this and legalize it that a lot of the medicinal research and a lot of the PhDs that are required to work on this stuff are going to be, they’re going to be doing this in Israel or Canada or Colombia. One of these countries that is going to be a lot faster to realize the medical benefits of Cannabis and accelerate those programs and support them.

TG Branfalt: We’re just about the get into the investment stuff and I’m really happy that you briefly touched on some other legal markets. But before we get into that we have to take our last break. This is the Ganjapreneur.com podcast. I’m TG Branfalt.

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TG Branfalt: Welcome back to the Ganjapreneur.com podcast. I’m your host TG Branfalt here with Eric Gomez, CEO and founder of Canopy San Diego. Before the break, we were talking about investments and you had mentioned some of these other countries, Canada, Israel, Colombia. Two countries that … Australia and Canada have, they have very strong cannabis, publicly traded cannabis industry. My question to you is what’s your advice to US-based investors when dealing with non-US markets?

Eric Gomez: Wow. Great question. First of all I guess we’d have to determine their access. Their level of access to those markets. Let’s assume they have open access. It’s so hard investing in any international entity simply because you can’t touch and feel it and unless you’ve got a local contact there it’s really tough to fully understand what you’re dealing with. I would say that right now in the cannabis industry looking at public markets I think you just need to understand and create an analogy of what is cannabis and what is a similar industry that we’ve seen and how have those companies and how have those stocks reacted over time. We’ve already seen, Canada is about the size of California so it’s relatively similar in terms of size. We’ve seen already the value of Canopy growth and a couple of other Canadian cultivators really skyrocket to levels where if you do some basic metric analysis you realize that they’re quite overvalued. Then you look at the size of the market and you realize, wow, even if they do extraordinarily well they can’t support these valuations.

I think it comes down to basic market analysis and your ability as an investor to do some real basic reasoning on how big is the market? How much can it possibly grow? Where are these companies going to look for growth? Canada and Australia are good examples because naturally their exporters by nature, simply because they’re small countries. Where are those international markets going to be? What kind of contracts do they have? You really have to dig in to the growth projections of these companies. I would say that Canadian stocks are probably the one place where the value may have already been realized. Understanding that whoever the leaders are today, unless they go on a very aggressive acquisition strategy or really lower their cost of production, like I think it is Aphria if I’m not mistaken, I could be mistaking that with Aurora. But I think they have a lower cost of production than, for example, Canopy Growth. You’ve got to start looking at fundamentals of these companies and see who’s doing the right thing to grow in the next year, two years.

TG Branfalt: Since the election of Donald Trump here in the US have you seen any … What’s been your experience in terms of … What have you seen on the investment front? Have they slowed down? Or not investment, yeah, investment’s probably the right word. Have you seen any slowdown in investments since Donald Trump’s election?

Eric Gomez: That’s another good question. I would say that sort of macro influence, headline influence, if you will, affects public markets much more than private markets. We can have the conversation with our LPs. We can have the conversation directly with our entrepeneurs and directly with the operators in the industry here in SoCal to kind of work through whatever rhetoric comes out of DC and really figure out if it’s going to really affect us and what would that look like downstream, right? What would a raid or a shutdown look like in our local economy with local operators? Is it actually possible? How far away is it? What have we done to protect ourselves? Public markets, which are much more fluid and move on headlines, certainly I would imagine are subject to that. But for what we’re doing, which is more localized, more private, we really haven’t seen a slowdown. It might have required a few more conversations and a little bit more in-depth analysis of our protection. But I think the people that are interested in this industry already have the understanding that this industry is going to grow and keep growing.

We’ve seen it already for the last few years and no matter what rhetoric comes out of DC you’re not going to … You can’t deny the fact that the consumer base is there and that people will buy it, whether it’s on the black market or on the white market or somewhere in between, which is where we’ve been operating for the last couple of years. Sorry for the long-winded answer there but I guess the answer really is, for what we’re doing, no. We haven’t seen the Trump presidency have a huge effect.

TG Branfalt: But I’m sure that you’ve had a lot more conversations with investors in this space than I have. What’s the feeling? What’s the weather like in the investment, for investors, what are your conversations like?

Eric Gomez: Again I think once we get past the fact that the things coming out of DC are not really feasible in terms of slowing down the markets.

TG Branfalt: That’s the sense? That’s the sense?

Eric Gomez: Yeah. Then it comes back down to, again, fundamentals. What are we developing. Why did we choose to go into tech as opposed to a dispensary licensing financing or something like that? That’s because we don’t want to be affected by what Trump or Sessions or anybody else says in DC. We want to be insulated from that initial reaction. If for some reason there were police or legal action in our community, who would be the first to be affected? It definitely wouldn’t be us? They’re not going to come after a business tech accelerator. Those are things we’ve already thought through. I never got into this wanting to be subject to regulatory changes and that’s why we chose the vehicle that we did and that’s why we’re choosing the companies that we are.

Sure, it’s we’re all in this together and that rhetoric does cause a certain amount of waves throughout the entire industry but we feel we’re pretty well insulated.

TG Branfalt: What’s your broader advice for investors, both the ones who are comfortable in this space but maybe others who are treading lightly right now? Kind of dragging their feet whether or not they’re going to get into the industry?

Eric Gomez: I would say it’s the same for investment in any industry, right? Understand what you’re getting into. If you have A, the money to invest and B, the appropriate amount of knowledge of what you’re investing in, then go for it. Then jump in. If you don’t have the money, if you don’t have the knowledge. If you have these doubts and you’re counting on other people telling you things in order to make you feel comfortable, then don’t do it. I certainly understand that there are people across that entire spectrum when it comes to cannabis and we don’t try to change people’s minds if they are dead-set that the federal government is going to come crashing down on this industry.

If they can’t sort of come to that conclusion based on a real quick conversation with us then we know that they’re probably going to need to wait for another two or three years, or they might have to wait until it gets descheduled. We sort of put certain investors into certain buckets of these guys are interested, we’ve got them, we’ve shared as much knowledge as they need to get past that concern and now it’s a business decision. Then we’ve got a bucket of guys who just simply, we just won’t be able to convince. They don’t have that risk appetite.

TG Branfalt: Finally, what’s your advice for entrepreneurs looking to get into this space?

Eric Gomez: My advice is to really pick one thing, one thing that you know how to do, and do it well. One thing we’ve seen is there’s so much white space in this industry. There’s so much opportunity because big companies aren’t coming in. Because a lot of entrepeneurs aren’t coming in. Because institutional investors aren’t backing traditional startups, that it’s really quite tempting to come in and try and solve all the problems at once. To be an enterprise solution to all cultivators and dispensaries at the same time. We all know that that’s a recipe for disaster. Pick one thing you know how to do, do it well. Once you establish some market share and some revenue then start looking at M and A. Then start looking at tacking on more technical expertise or looking at partners in the arena. That’s going to fuel all the M and A activity that’s going to become pretty active here in the next couple of years.

We’ve seen a number of companies start off with pretty lofty aspirations and then once they realized that they couldn’t get funding because nobody got behind them because their ideas were too grandiose, now they’ve sort of dialed it down and realized, “Okay, hey. This is what we really do well.” Now they’re getting funded. Now they’re moving forward in the industry. That’s my primary advice is just to know what you do well and stick to it. Start small and let the growth happen organically.

TG Branfalt: Before we go would you mind telling us a bit about who you have in your spring accelerator program?

Eric Gomez: Sure, absolutely. We’ve got eight teams. We had eight teams in our fall cohort and eight teams in the spring cohort. One company is a lab-in-the-box company. We all know that lab testing of cannabis is now required at a number of different levels. We’ve got a company that’s figured out how to scale and create a lab testing solution that can actually scale across borders, state borders. We’ve also got a company that is going to be focused on corporate training, so they’re going to be training budtenders. They’re going to be training people in cultivators for safety, for sales, to really make these institutions more professional in the way their employees interact with the outside world and internally. We’ve got a company that’s going to do consumer experience management. Really working on getting feedback from consumers as they interact with different retailers in the industry and making sure those retailers have that knowledge to understand how to make … better.

We’ve got an event management company that’s really tying in the three stakeholders in event management, which is the attendee, the sponsors, and the exhibitors. Sorry, the event sponsors. And making sure they’re all getting what they need out of the events. We’ve got a company doing travel and experience connecting. Kind of an Airbnb meets Meetup if you will, for 420. We’ve got a company that’s doing vertical grow hardware design. So maximizing the square footage in a growing facility. We’ve got a company doing online or app-based, I should say, ordering. They’re going to be focusing on the Canadian market which is coming online in 2018 as well. I think I covered all of them.

TG Branfalt: I mean, it’s exciting stuff. The idea that you guys have a Canadian company, is that unique to your guys’ program compared to the other accelerators?

Eric Gomez: I believe so. It’s a luxury afforded to us by the industry and by the fact that Canada is moving forward with federal legalization. Being in San Diego, we had a definite intention to go south and to encourage Latin entrepeneurs to come into our accelerator and to encourage Latin investors who know this industry is going to grow to invest in US companies. We’ve got that outreach going south and obviously Canada developing as rapidly as they are, they saw the opportunity to join our accelerator and use Canada as their primary market, but obviously they’ve got an eye on the US, being the size that it is.

I don’t know if any other Canadian companies that have gone through the other accelerators. I know Canopy Boulder has a Brazilian company in there.

TG Branfalt: As I said, this is all really exciting stuff coming through the pike, seeing all these companies get all the startup money and the fact that there’s options for them out there thanks to accelerators such as yourself. Before we go would you mind telling us where they can find out more about those companies and about Canopy San Diego?

Eric Gomez: Sure. They can go to CanopySD.com. Canopy spelled as it normally is and then S-D, for San Diego, dot com. They can visit our portfolio page and check out the companies in our previous cohort. Also look at some videos from our demo day. They can contact me, Eric, E-R-I-C, @canopysd.com. They can also visit our facility out here in Serrano Valley. If you’re local come on by. We have lots of networking events, happy hours, and we do speaking engagements. We have some tutorials through one of our partners at Alko Labs to get people more educated on cannabis and a lot of the science behind it. That’s one of our primary functions as an accelerator is to create a community which invites in mentors, invites in entrepeneurs, invites investors and people generally looking to get involved in the cannabis industry.

TG Branfalt: Well, Eric. I want to thank you again for taking the time to appear on our show and definitely keep us posted on the upcoming programs and the status of your graduates.

Eric Gomez: I sure will. I appreciate it and yeah, let me know how I can help.

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

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Senate Appropriations Committee Approves Veterans Equal Access Amendment

7/14/2017

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The Senate Appropriations Committee has approved an amendment as part of the 2018 Military Construction, Veterans Affairs and Related Agencies Appropriations bill that would allow Veterans Administration doctors to recommend cannabis to their patients in states where it is legal.

The Veterans Equal Access Amendment reads:

None of the funds appropriated or otherwise made available to the Department of Veterans Affairs in this Act may be used in a manner that would — (1) interfere with the ability of a veteran to participate in a medicinal marijuana program approved by a State; (2) deny any services from the Department to a veteran who is participating in such a program; or (3) limit or interfere with the ability of a healthcare provider of the Department to make appropriate recommendations, fill out forms, or take steps to comply with such a program.

Congress approved the amendment 20-10 during last year’s appropriations spending; however it was ultimately removed by Republicans on the House Appropriations Committee. This year, the amendment passed 24-7 – three Senators who voted “no” on the measure last year switched their vote, and the two new members of the committee voted “aye.”

An identical amendment is expected to be included in House budgets this year.

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Nevada Adopts Emergency Rec. Distribution Rules to Avoid Product Drought

7/14/2017

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Nevada regulators have licensed the state’s first recreational cannabis distributor in an effort to prevent the newly-launched industry from running out of products, CNN Money reports.  The license was granted to Blackbird Logistics Corporation, which currently distributes medical cannabis in the state but needed to obtain a liquor distribution license to serve the recreational industry.

Blackbird CEO Tim Conder said that his company will begin deliveries immediately and plans to double its 30-employee workforce by the end of the month to keep up with the dramatic increase in business.

The state Tax Commission also approved emergency regulations to try and fill the distribution void, which will allow non-alcohol companies to distribute cannabis until liquor wholesalers are ready to enter the market. Those regulations were approved by Gov. Brian Sandoval.

The state is still entrenched in a legal battle with alcohol distributors, who claim that the industry has exclusive recreational cannabis distribution rights for the first 18 months of the program. A judge agreed with the plaintiffs, but following the strong start – with sales almost double what the state anticipated – the Tax Department needed to act, and having appealed the court’s decision, were able to set up the emergency rules.

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Well-Known Utah Philanthropist Backs MMJ

7/14/2017

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As advocates in Utah have begun their bid to put a medical cannabis ballot initiative to voters in 2018, well-known philanthropist Jon Huntsman Sr. has come out in support of medical cannabis therapies, the Salt Lake Tribune reports. His son, Jon Huntsman Jr. is the former governor of Utah and recently accepted a position in the federal government as the ambassador to Russia.

Huntsman, a four-time cancer survivor who suffers from polymyalgia rheumatic – a condition that causes severe pain in the hip and shoulder joints – admitted that “he won’t take opioids” but he’d “love to” try medical cannabis.

“If medical marijuana was known by another name, it would have been utilized as a pain medication many years ago,” he said in the report. “From national research and understanding, the side effects of medical marijuana are considerably less than virtually all opioids and therefore less destructive to the body.”

In a statement, the Utah Patient Coalition called Huntsman, the founder of the Huntsman Cancer Institute, “a pioneer in advocacy and philanthropy for patient care.”

“Like so many other patients, he recognizes the dangers of opiates and wants an alternative,” the statement said. “We appreciate his public support and look forward to giving Utah voters a chance to decide in 2018.”

Petitioners need to collect 113,143 signatures to put the question to voters. The measure would legalize medical cannabis in the form of topicals, edibles, oils, and vapeable products but does not permit smoking as a delivery method.

If the language of the measure is approved, the proposal will be sent to the governor’s Office of Management and Budget who will estimate the fiscal impact of the bill. After the estimate, organizers must hold seven public hearings on the measure throughout the state before collecting the signatures.

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Wisconsin State Sen. Says Cannabis Industry is Answer to Budget Woes

7/14/2017

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Amid a billion-dollar budget deficit, Wisconsin state Rep. Melissa Sargent is urging her colleagues to at least consider her bill to legalize cannabis use for adults, saying in a Cap Times op-ed that “It’s not just about legalizing marijuana, it’s about legalizing opportunity.”

Sargent points out that 59 percent of Wisconsinites support a taxed and regulated cannabis market, while 81 percent “believe taxpayer dollars being put to better use than being spent arresting and incarcerating marijuana-related offenders is a compelling argument for legalization.”

The Democrat laid out Colorado’s cannabis industry success – $2.4 billion in “economic impacts to the state” and 18,000 new jobs – calling it “a powerful economic engine generating more per dollar in economic output and employment than 90 percent of other industries.”

“By 2020, the marijuana industry in Colorado is expected to surpass all other industries as the state’s largest excise revenue source,” she wrote.

Instead of raising gas taxes, implementing toll roads, collecting fees for heavy trucks, or borrowing $341 million from the federal government – all suggestions by Republican lawmakers – Sargent argues that taxing and regulating cannabis could be the “economic bounty” the state needs to replenish its coffers.

“The most dangerous thing about marijuana is that it’s illegal, and the more our budget crisis worsens and we continue to see new evidence of legalization’s economic benefits, the more unjustifiable — and even foolish — it becomes to put off legalizing marijuana in Wisconsin,” she opined.

This is Sargent’s third attempt to sway her fellow lawmakers since introducing the legislation four years ago.

End

New York Gov. Andrew Cuomo answers reporters' questions during a 2014 emergency question session.

NY Gov. Signs Hemp Expansions into Law; State Earmarks $10M for Industry Investments

7/13/2017

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During a ceremony at Cornell University, New York Gov. Andrew Cuomo signed an expanded hemp bill into law, categorizing the crop as an agricultural commodity, giving it the same protections as any other crop grown in the state, the Ithaca Journal reports. The measure will permit industrial hemp research and hemp companies access to the state’s economic development arm.

During the bill signing, Cuomo said he believed that “hemp production has tremendous economic advantages for whatever state is the first to really grow that market” and he was eager for the New York “to be the first to grow that market.”

“One of our main focuses is to continue to grow the economy, drive the economy and create jobs; and one of the main economic engines of this state is agriculture, and we want to be at the cutting edge of agricultural development for the economy,” the Democratic governor said.

At a press conference following the signing, Agriculture and Markets Commissioner Richard Ball announced that the state will invest $10 million into the new industry, earmarking half for research and half for processing and commercialization. Ball indicated that the state is importing 53,000 pounds of industrial hemp, which will cover 1,700 acres of land. State officials hope to have 20,000 acres of hemp growing in the state by 2022.

The bill creates a hemp seed certification program to ensure the products are compliant under the 2014 Federal Farm Bill – which defines hemp plants as containing 0.3 percent THC – and to ensure intellectual property rights are protected.

End

Irish Health Committee Rejects MMJ Bill

7/13/2017

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An Irish Parliamentary committee has rejected a bill to legalize medical cannabis on the grounds that the measure was “too loose to effectively guard against leakage of supply to recreational users, [and] overuse by patients,” and that if cannabis were removed from the Misuse of Drugs Act, as proposed, it could decriminalize cannabis use for everyone, the Irish Times reports.

The Health Committee said removing cannabis from the Misuse of Drugs Act “seems in conflict with the intention of the bill which is to make cannabis available specifically for medicinal use as expressed in the title of the bill.”

“It is the view of the committee that this is not a safe course of action,” the lawmakers said in the denial.

Last year, Ireland’s lower house of Parliament approved the measure, proposed by People Before Profit MP Gino Kenny, and at that time many expected the measure to be law by Easter. In February, a Health Products Regulatory Agency working group released a report outlining its recommendations for a medical cannabis program that would allow patients with just three qualifying conditions access to cannabis products. The following month, the body proposed a five-year medical cannabis pilot program, which would cover those conditions.

Kenny told the Times that he heard about the rejection on the radio, which he called “completely unacceptable,” adding that “there was bias against” the bill from members of the committee. He said that the committee members “have to live with themselves for what they’ve done.”

“What happened yesterday is a shambles,” he said.

End

A cannabis plant tilted sideways from the weight of its heavy cola, pictured inside of a licensed cultivation center in Washington.

High-Powered Lobbying Firms Hired for Cannabis Policy Advocacy in D.C.

7/13/2017

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The New Federalism Fund, a Denver-based nonprofit dedicated to state’s rights issues, has hired consulting firm Trimpa Group to lobby Congress on issues related to the legal cannabis industry, including banking, taxes, appropriations, and law enforcement issues, according to a report from O’Dwyer’s.

Members of the NFF include Scotts Miracle-Gro Company, Arizona-based medical cannabis provider Tryke Companies, Seattle-based cannabis private equity firm Privateer Holdings, Colorado-based dispensaries Medicine Man and LivWell Enlightened Health, and cannabis product manufacturers Native Roots and Dixie Elixirs & Edibles.

Trimpa Group was founded by Ted Trimpa, a Democratic strategist who The Atlantic called “Colorado’s answer to Karl Rove.” Trimpa, who will personally oversee the NFF account, has been credited as a key architect of the Democratic takeover of Colorado’s legislature in 2004 and 2006.

Earlier this year the NFF also retained lobbying firm Brownstein Hyatt Farber Schreck for cannabis advocacy on Capitol Hill. The NFF’s spending on lobbyists comes as Congress prepares to decide the fate of the Rohrabacher-Blumenauer (formally Rohrabacher-Farr) amendment in the Fiscal Year 2018 Appropriations Bill. The amendment prohibits the Department of Justice from using federal funds to crack down on state-approved medical cannabis operations and is the only barrier between medical cannabis programs and Attorney General Jeff Sessions.

Last month, Sessions sent a letter to legislative leaders asking them to oppose the amendment and allow the Justice Department to enforce federal drug laws in legal states.

End

The back of a billboard found on the side of a road.

Weedmaps Billboard Removed in South Boston

7/13/2017

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A pro-cannabis billboard advertisement from Weedmaps has been removed in South Boston following complaints about its content and its location near schools and places of worship, according to a Boston Globe report. The ad, which read “States that legalized marijuana had 25% fewer opioid-related deaths,” was placed in a neighborhood hit hard by opioid abuse.

Sheila Greene, one of the residents who contacted Clear Channel over the billboard, said the ad’s placement violated the company’s own “exclusionary zone” policy. According to Clear Channel’s website, “advertisements of all products illegal for sale to minors that are intended to be read from places of worship, primary and secondary schools or playgrounds” are barred from those zones.

“The ad was placed in error at a location not meant for the content displayed,” said Clear Channel spokesperson Jason King in the report.

Similar billboards are reportedly displayed in Lynn and Quincy – which both have high opioid-related death rates. Lynn had 47 deaths in 2016, up two from the previous year, while Quincy reported 42 deaths in 2016, two fewer than 2015.

Greene called those billboard placements “insensitive.”

“I’d like to say moronic, but advertisers are smart; they know exactly who they’re marketing their products to,” she said.

Chris Beals, president of Weedmaps, denied the allegation that the ads are targeting certain neighborhoods or demographics.

“We basically take billboards on a space-available basis,” he said. “We have little to no say in terms of the [location of the] billboards,” adding that the ads are designed to “promote dialogue.”

“We want to be sensitive about the way we present those facts. . . . But I think it’s also important to talk about the benefits and research coming out of marijuana,” Beals said. “There should be an open discussion. We’re not putting up giant pot leaves or photos of people consuming marijuana.”

Billboards have emerged as one of the few advertising vehicles available to cannabis companies. Last week, six licensed cannabis companies had their company pages removed by Facebook; while lawmakers in Michigan are mulling a ban on billboard advertisements for the cannabis industry. A bill introduced last month in California seeks to outlaw cannabis companies from advertising on clothing, websites, and traditional publications.

End

Stephen Gold & Andy Yashar: Pioneers in Cannabis Tech

7/12/2017

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Stephen Gold and Andy Yashar are co-founders of The Daily Leaf, a technology company that has partnered with dispensaries to find and list the best cannabis deals throughout Oregon cities — with plans to expand to Seattle, Las Vegas, and beyond.

In this episode of the Ganjapreneur.com podcast, Stephen and Andy join host TG Branfalt to talk about the technology aspect of the cannabis space, launching a tech startup on a minimal budget, the importance of creating and maintaining a company image, and how — by focusing the efforts of a small, dedicated team — they have been able to create a truly effective service that benefits cannabis companies and consumers around their state.

Listen to the interview through the player below, or scroll 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, and you’re listening to the Ganjapreneur.com podcast, where we try to bring you actionable information and normalize cannabis through the stories of Ganjapreneurs, activists and industry stakeholders. Today I’m joined by Stephen Gold and Andy Yashar, founders of The Daily Leaf, winners of the Best Tech Product at the 2016 Dope Magazine Industry Awards. Welcome to the show guys, and congratulations on that.

Stephen Gold: Oh, thank you very much. An honor to be here, thanks for having us on. Steve Gold here. We actually won 2016 and 2017, Best Tech Product at the Dope Industry Awards. So here in Oregon we’re definitely making strides to become a buzz, to help people around town find information about what’s going on with deals, and all that other good stuff.

TG Branfalt: I didn’t know about the 2017, so double congratulations guys, that’s really, really good stuff, that’s incredible. Before we get into the product though, I want to talk to you guys about what you did before you got into the cannabis industry, so if you guys each want to tell me what you did, and how’d you end up here?

Andy Yashar: This is Andy. I was in web development, and really helping dispensaries back in the day, before recreational was even a thought, of doing internet marketing and getting out there. Building a web presence, and showing people what they had in stock, where they could find them, and a little bit about the background of each person that worked there.

Stephen Gold: Myself, I came from the fashion industry. I was working in New York City, and I saw the opportunity for the recreational market to explode. I had always had ailments that lent itself to marijuana, even though I wasn’t a medical marijuana patient. So I came out to Oregon to get involved in the scene, to see what was going on, to get my medical marijuana card, and to really engulf myself in what was a blossoming industry, it still is. About two and a half years ago along the way, I met Andy and we joined forces to bring The Daily Leaf to life.

TG Branfalt: That’s one of the most interesting career jumps that I’ve gotten, is from the fashion industry to the cannabis industry. Could you briefly tell me some of the similarities between the two, how you brought over that experience to this space?

Stephen Gold: Sure, so I’d say the personnel, both industries are absolutely crazy. The people that work in it, we all work in the fashion industry, everything was last minute. I was getting called literally five minutes, the day before something had to go into production, “Steven, we need you.” Here in marijuana it’s kind of similar, we’re all working and we’re all trying to catch up, and work these extremely busy schedules, and work in different things. So in that essence things are the same with the personnel, it’s always crazy. And then also I’d say that one of the things that helped us in getting our name and getting ourself in the foot was my sense for design aesthetic.

Working in the fashion industry, we had attention to detail, wanting to make sure things were beautifully presented, because the end product was putting them on garments to go out for the world to buy, so you couldn’t have any mishaps. And just my eye for that has helped us craft this into something that Andy and I have been able to build into something much larger than we even thought when we first met each other.

TG Branfalt: So now, why don’t you tell me more about The Daily Leaf? If you look at the website, it is really nicely designed. It’s very use friendly, and so I’m assuming that that’s really an amalgamation of both of yours backgrounds kind of meeting and developing this, right?

Andy Yashar: Yeah, this is Andy, I would say that Steven and I work really good as a team. I tend to work heavily on the back end, making sure that people can find us when they search for certain products and certain search phrases on the internet, and Steven really brings a good eye for colors and the way that things should be presented, so it was a good marriage. Essentially, Steven really works on the front end, and I really work on the back end.

TG Branfalt: Describe to me what your service provides, and how dispensaries benefit from working with you guys.

Stephen Gold: Sure, so what we really set out to do when we first started The Daily Leaf, was to create a platform that helped dispensaries advertise deals, specifically one focal point in getting information out about what the best products are out there, and how cheap you can get them. Not necessarily saying that everything on The Daily Leaf has to be a $5 gram, and a $15-$20 eighth, but we found that people are always looking for deals. Furthermore, people are looking to find out what a product looks like before they get into the store. So by simply advertising deals and offering the consumer a way to see that flower before they actually drive 20, 30 minutes to a store, we’re finding that we’re able to drive people from all across town to a dispensary.

So while dispensaries will use other marketing/advertising platforms to help them advertise and have people find out where they are, and are location-based, The Daily Leaf is strictly product-driven. So it allows each dispenser an equal playing field to kind of say, “Hey, we have this product, are you interested in it? This is what it looks like,” and we’re able to drive people from … If you live 30 minutes away from a town, we’re getting people that are driving to those areas to go purchase it, simply based on the product and the image. Furthermore, we’ve really built a niche for ourselves through our newsletter. We’re currently reaching about 10,000 people in Oregon and surrounding areas that are looking for deals, emailed to them.

So what we do, a couple times a week we’ll curate all of our deals that come onto our platform, and we’ll push them out. People can literally go on there, the easiest way to sign up for that newsletter is to just go to our website, Dailyleafdeals.com, and then literally a popup will come up and say, “Hey, do you want to get all the latest deals?” You put your email in there, and you get the information. We found that that, directly to people, and essentially just in their inboxes is the best way for us to differentiate ourselves, and to get information out quickly and easily.

TG Branfalt: You started as this Groupon for cannabis, and the current product, now you guys provide information on, among other things, product launches, events. Can you guys explain to me when you decided to evolve your service to these other aspects?

Andy Yashar: This is Andy. I used to do huge promotional events for larger corporations. Maxim Magazine, Red Bull, Coors Light, back when I was just getting out of college, so I have a lot of event experience. When we actually launched The Daily Leaf, we threw a huge event, and we gave away probably five to six thousand dollars worth of marijuana products. Not stuff containing marijuana, but accessories, essentially, and we had a huge response from it. So fast-forward six months later, we did a huge 4/20 party where we had over 1000 people show up. It’s something that’s not foreign to us, to do events, but it’s a great way for us to showcase what The Daily Leaf is, and what we do on a day to day basis, and present that to the customers directly without … Essentially making them go to the internet and finding us, we can present that to them face to face, and show it to them live.

Stephen Gold: And then beyond that, as we were building our reputation in town, and as dispensaries were using our platform, consumers were using it, we found that there was a lot more people out there. A lot more brands, producers, processors, wholesalers that started reaching out to us and saying, “Hey, your platform’s amazing, how do we work with you, what do we do?” So we had to integrate it beyond on the web, where first we had just the deals, and just the abilities for the dispensaries to log in, and all of their specials. Then we decided, since we had a bunch of brands wanting to get involved, we developed these micro-sites through The Daily Leaf. We already had a name that was building a presence, and a lot of brands don’t necessarily have that footing online.

Us being a credible source allows these brands to get a foothold on the internet. So by allowing brands to 1) just advertise on The Daily Leaf, and to have their own dedicated page, it gives them an area to further push and get information online, and also gives our consumers a way to learn the back end of what these brands are all about. So just giving people content about, “If you’re a Co2 company, how do you make your oil?” There’s so many different techniques out there, and the elementary user who’s maybe just going to a dispensary the first time doesn’t even know the different methods. They don’t know the difference between shatter or oil, or BHO over Co2 vs. RSO, all these different terms that, being in the cannabis community you know, but the entry level user doesn’t. We wanted to give them a back end into, so if you like the brand, Truly Pure, a CO2 company here in Oregon, if you like these guys you can see a back end video about their process to making their oil, from the trim down to when it gets into a cartridge, and into your hand.

So we found that that information was 1) valuable for the brand, but also valuable for the consumer, to learn and educate themselves about what’s really going on.

TG Branfalt: How important has the multimedia been for your engagement? Not just with the YouTube videos, but also the images that are used to promote a product on your website?

Andy Yashar: This is Andy. I think that being as interactive as possible in this day and age is necessary for any business to survive. I think that a lot of people that are in the 24 to 35 year old rage spend a good time on their cell phones each and every day, so the more content that we can produce, is another customer that we have the potential to land as a lifelong user. So I think as much content as we can push out, the better it’s going to be for us.

Stephen Gold: I think it’s everything. Going back to my first point, we created The Daily Leaf because we wanted a place to find out what something looked like, seeing the picture before you even went to the store. So defining that, in order to drive a customer to go to a shop, you need to show them what they want to purchase before getting there. So that media is definitely very important, it drives our sales. That’s one of the things where we coach our dispensaries that we work with, because you can tell if a dispensary puts up a product on The Daily Leaf, then they don’t really take much time. Maybe they don’t take the best picture, you can’t really make out any detail, and it kind of looks sketchy. More than likely, the customer’s not going to want to click on that ad and see what that deal’s about.

But then if you have a dispensary that takes a few minutes to take a nice picture, curates a deal really nicely, you’ll see that that deal gets a lot more play. So yeah, it means everything to have great media.

TG Branfalt: So I want to talk to you guys a bit about the experience as a startup. 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: Welcome back to the Ganjapreneur.com podcast, I’m your host TG Branfalt here with Stephen Gold and Andy Yashar, founders of The Daily Leaf. So tell me about the startup experience in the cannabis space, specifically for your tech product. How’d you find funding?

Andy Yashar: Well, I had some money saved up, so I spent … I wouldn’t say a large amount of money, because I already knew what I was doing, but I think that we spent, I’ll say a few thousand dollars getting business going, and really working, and trying to save as much money along the way as possible.

Stephen Gold: Yeah, we actually haven’t raised any money to date yet, we have done this all just through ourselves, and working lean. That’s been real important to us. Having a team that’s very dedicated, Andy and myself both wearing many hats, working many hours to just nail this down and build a product that actually has traction. Because for us it’s everything, so we don’t want to go and get funding too soon and give away too much booty, we want to make sure that we’re able to keep our … There are partners out there for us, and we’re starting to get down that line where we’re about to get funding to push ourselves into new markets.

But it’s been very hard the last year and a half, two years, working towards this so that we can be in this position where we now have a product that is somewhat successful here in Oregon, we have built traction, and we have been able to do this really on a shoestring budget, I’m telling you.

TG Branfalt: What about the initial reviews and reaction? You start with three grand, you have this idea … So what was the initial response, and what has your growth been like thus far?

Andy Yashar: Starting out was tough, because I say that the tech part of marijuana is getting flooded with more and more people trying to join every single day. So essentially what we wanted to do, is we set out to create something different. We wanted to be really separated from everybody else and really be for the people. I think that that’s one our biggest advantages, is that people really know that we’re looking out for them, as far as presenting the product, making sure that they know what they’re buying before they get to the store, finding them the best deals. Not only do we encourage dispensaries to post deals, but we’re going out, we’re negotiating deals for our users. We’re meeting with brands and meeting with dispensaries, and we’re actually negotiating deals between the two so we can actually have a really good value for people that visit our site.

Stephen Gold: To get started, what we really did to build our traction was just utilize our core skill set. So Andy with SEO and being able to get the website to be where we’re searchable online. Myself with building a buzz on social media, and getting people to think, again going back to the design aesthetic of the fashion industry. Our Instagram account and what we put out, it looked like we might have had a staff of ten to 15 people, when there was just two of us sitting in the office. So by portraying an image that we were bigger than what we are, allowed people to really gravitate and really get behind it. Furthermore, we had those events that we did that Andy touched on, where we brought the industry together, and we were able to piggyback off of other situations where we can build a crowd.

Our first event, we weren’t even launched yet, because we launched on Green Friday in 2015, November 25th, and this event was in October, and we had people lined up around the block to get in to get that free swag that Andy was talking about, where we were giving away five, $6000 worth of products. I’d say it was a combination of getting into the industry at the right time where there wasn’t anyone like us. There wasn’t anything going on, no-one was able to capture that buzz and be in town, and be able to show face, and really ignite the industry and get people behind them. It was just by stance of luck that we were able to do this at that current time. Because right now, if we’re looking at the industry right now and how it looks, it’s completely different. Those events that we had are somewhat in Oregon not maybe so legal anymore.

The rules had changed when the regulations came in, and a lot of things changed up. Because we entered the market before the recreational market hit yet, it was still just medical. So we got in right at the right time.

TG Branfalt: What’s your growth been like with the migration to recreational?

Andy Yashar: We’re gaining 20% new users every single month, so this last 4/20, we did triple the amount of traffic that we did they year prior, because of the fact that our website’s really ranking really well, and we had probably 2-300 different types of deals on our website for 4/20. We got picked up by a lot of media outlets, and we had a huge buzz going into 4/20, so it was really beneficial to capitalize on the market and make sure that we had everything, and we were the one-stop source for everything 4/20 in Portland.

TG Branfalt: Moving forward, do you guys have plans to expand into other existing or newly legal markets?

Andy Yashar: Yeah, so we are formalizing a plan right now to where we’re going to be going into Las Vegas, which I think our deals platform is really what people look for when they visit Las Vegas, is to save as much money as possible. So Las Vegas is a huge market for us, we plan on going to LA, San Francisco. I think that Arizona, as soon as they are a little bit more open to recreational marijuana, is going to be another huge market for us. I have clients that I do website work for down there currently, and they’re telling me that they’re ripe for The Daily Leaf, that people would drive 45 minutes just to save $15 on some shatter. So I really believe that our expansion is going to be something that’s going to be very popular throughout different cities, even though there is current existing tech in those markets.

We plan on rolling out an app that’s going to be all deal-based. We’re also going to have featured brands on there, so people can read about all of their favorite products, find out where they can buy them at, and how they can save money on it.

TG Branfalt: So why the decision to focus on cities instead of the state as a whole?

Andy Yashar: We really believe that really dense markets are really beneficial for us, and word spreads. So when we go to a huge metropolitan area and we do really well there, the outer lying cities really pick up on it, and we start to expand slowly to those areas. If we started a huge reach and we focused on an entire state instead of a city, we would be overwhelmed with what to write about, who to cover, what video content to generate first. If we focus on the cities and really build that network in, then the smaller cities are a lot easier to penetrate.

TG Branfalt: So far, what are some of the barriers to entry in some of these markets for your product specifically?

Stephen Gold: Barriers to entry,

Andy Yashar: I would say manpower right now. If we had a larger staff, which we’re hiring very, very slowly, and we’re being very meticulous on who we pick, I think that as we grow our staff it’ll be easier to actually go into these markets and have a very good presence.

Stephen Gold: Yeah, it’s say it’s a double edged sword. We touched on not wanting to get funding too soon, which we strongly stand behind, but then again you don’t have the large marketing dollars that some of our competitors would have, and do have. So when you go into new markets and you have a small staff, being able to show value to people who don’t know you from anybody … Because you talk to a dispensary owner, and they’re probably getting 50, 70 calls a day from people trying to sell them something. So that’s why building a buzz was and is so important for us. Because if we have a buzz, if we win those awards and people are talking about us, and we’re doing things differently, then that word will spread out. For example, we’re based in Portland, surrounding towns of Salem, of Eugene, of Bend. Those towns are starting to hear about The Daily Leaf, we’re working more and more into those towns and building a presence in the whole state of Oregon from the buzz we’re able to build just in Portland.

Andy Yashar: I’d say right about now, 20% of the dispensaries in Oregon are our clients. So we really want to build that up to the 50% mark, and then we’re going to move into Washington and really build a huge presence down there. I think that if we really conquer our home territory first, and really make sure that we have a very, very good network of people, then going into say, a Las Vegas and bringing testimonials with us, and letting them know that, “This is what our clients are saying,” that’s going to give us a little bit more credibility when we go and we actually ask for money.

TG Branfalt: I want to discuss some of these events that you guys have hosted in the last couple of years, but before we do that, we’ve got to take our last break, this is the 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 businesses 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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TG Branfalt: Welcome back to the Ganjapreneur.com podcast, I’m your host TG Branfalt, here with Stephen Gold and Andy Yashar, founders of The Daily Leaf. So why don’t you tell me about some of the outreach events that you guys have had? You’ve had a gold tournament, a bowling. How did you come up with these things, and how’d you reach out to sponsors and businesses?

Andy Yashar: So we have a partner in the event space, and his name is Matt Enos. And Matt Enos approached us with a gold tournament. He has a huge passion for golf, he was a caddy for 15 years of his life at a country club down in California. He really wanted to grow this company really bad, but he just didn’t have the right people and place to make that happen, so he approached us and really, really wanted to build his brand. So we started doing the 4/20 golf tournament, and essentially it’s pretty much a mixer for all of the brands, dispensaries. A lot of the people that are in the network in Oregon, to kind of meet on a sunny day during the summer and play golf. It’s been a very successful event for us, so what we did was, is we came up with a bowling tournament called Canna Bowl.

Canna Bowl was something that I had the idea of one day when some of our clients and us, we went bowling one night and we said, “There should be a cannabis bowling tournament.” So we launched it a few months later, and High Times came down and really loved it, and did a huge write up about it, and it’s been very, very successful. We have another tournament coming up on June 29th, as far as golf goes. We’re praying for a sunny day there, but it’s been raining almost every day here in Oregon, but we’re really praying for a sunny day so we can get together and network a little bit more.

TG Branfalt: When you decide to hold these events, do you get any pushback from the venues at all?

Stephen Gold: With cannabis events, in each state there’s different rules or different regulations. When we first launched, I think I was touching on this a little bit earlier, when we first launched and we had some of these events, consumption was open and allowed. It was something where we can have sponsors come in, and if you’re an oil company you can dab out people that come by and let them try your product. This is a great way to interact with consumers, and it’s a great way for us to position ourselves, to bring those consumers and bring those brands out of the dark and have everyone meet. So those events were great. Just recently in Oregon, the rules changed a little bit. So the act of consumption is not necessarily allowed, so it’s moreso I’d say on us, as being responsible hosts, to know the rules and regulations, to make sure that we speak with our lawyers to know exactly what we can do, so that we’re not putting anyone in a situation where they’re opening themselves up to not following the rules and not having the regulations.

When it comes to these events, with Canna Bowl, we didn’t have people smoking inside the event, because that’s not allowed. We didn’t’ have any smoking anywhere near the event, because you can’t mix alcohol and marijuana. But what we did was we had a additional component that was separate from it, where we had people go and if they wanted to smoke, it was a safe and it was a legal place for people to smoke and try different products. So we’re able to continually understand the laws, and be able to then further make sure that the events we put on are fun. There is some sort of component of consumption because everyone likes that, but if it’s not allowed obviously we’re not going to go down that route. One other thing to touch on with the events is, we always try and work in some sort of component where we can give back, because that’s important to us as well.

Being able to build a name is important. Building a presence and brand is very important for us, with 4/20 Sports and The Daily Leaf, but also we want to make sure that we’re giving back to the community, giving back to people that will benefit from it. So our 4/20 event last year, we gave 10% of the proceeds to Grow For Vets. With the golf tournaments last year, we were able to do Mulligans for the MS Society. So that’s really important to us, to make sure that we work in that component. Not every time, but where it affords itself, where we could, we like to work a charity effort into the equation.

Andy Yashar: Yeah, even though we’re broke there’s people out there that are more needy than we are, so I really think that helping others out is a huge component to 4/20, and we want to continue that with each event that we do.

TG Branfalt: I think that that’s one of the most overlooked parts about this sector, is the type of charitable acts that a lot of the businesses do. Unfortunately, some of them, I don’t know if you guys have had any trouble doing this, but they sometimes get donations actually sent back, because the foundation or the charity can’t accept drug money, essentially.

Stephen Gold: Interesting. We’re in an interesting place where we do not touch the product at all. We never put our hands on it. While we do advertisements for it, we’re just a media marketing company, so for us we luckily haven’t had that issue, but I can see, I mean banking is a huge issue, and I know there’s tons of barriers for our clients. It’s a struggle. Being a small team, think about this, we’re a small team and we do take credit card payments, but we’re going around collecting cash every month from clients and making sure we make the rounds, and catching people the right day and making sure the owner is there, I mean it’s …

Andy Yashar: Someone actually Western Union-ed us $100 yesterday. For me, I’ve been in this industry for a long time and I’ve never had anybody Western Union us $100 before, so every day it’s something new, right?

TG Branfalt: So what in your opinion is the most pressing issue facing the industry? Is it banking, it is the threat of federal interference?

Andy Yashar: I honestly think that Jeff Sessions is a lot more talk than he is bite. There’s something that came out yesterday that said that they’re giving him no money to fight medical marijuana.

TG Branfalt: Yeah, the Roebuck farm and Hickenlooper said he had a meeting with them last week in which he came away not believing that any sort of crackdown was forthcoming.

Andy Yashar: I really think that Trump, whatever your thoughts are about him, he really wants to leave state regulations up to state leaders. I really think that after the Trump administration is gone, I think that there’s going to be somebody that comes in with an actual good head on their shoulders, and is going to know that cannabis is going to become legal whether the federal government wants it to or not, and the first thing to do would be to put regulations in place so everybody can benefit from recreational marijuana, not just states.

Stephen Gold: Yeah, and I think the biggest issue right now is probably the whole banking issue. The idea that because it’s federally illegal that there’s that whole 280e situation where you can’t write anything off, it’s hurting a lot of businesses and it’s making it very hard for people to do regular business. Even where we are you can’t even do regular marketing and advertising, whereas a regular business can take ads out on Facebook or Google, and that’s just worked into your marketing course because that’s what you need to do as a business. Where in marijuana, it’s illegal. You do advertisement, you get shut down, so people need to … The federal law is a big problem but there’s nothing that’s going to change in the next year, in the next two years, but maybe in the next five years we’ll be looking at something different.

TG Branfalt: So finally guys, what advice do you have for entrepreneurs, specifically those interested in entering the tech sector of the cannabis space?

Andy Yashar: Do your homework. Really get out in the market and meet people, and ask people what their needs are. Good ideas are great, but what’s actually functional and what the industry needs, that’s the homework that needs to be done in this market.

Stephen Gold: Yeah, and for people who think that they could probably enter the space without having knowledge of marijuana, without being involved in the actual city or the state that you want to do business in, because it’s very grassroots. Everyone’s very connected. Here in Oregon, even sections of Oregon, Portland has it’s own market where we all stay very close. Then there’s Southern Oregon where there’s a lot of growers that have a close-knit relationship. So you’re not necessarily just welcomed because you have a good idea, you’re welcomed because you’re a part of the movement. So if you want to get involved, you might have a great idea, you might be the most amazing developer or the most influential person, but if you’re not really engulfed in marijuana, you don’t understand how it works, then it’s going to be very hard for you to get any traction.

Andy Yashar: And save your money. Definitely save your money, because you can run though money really fast in this industry, so be careful.

Stephen Gold: Yeah, and not to say that, but today it could be all nice, we’re all smiling, we’re all having a good time. Tomorrow something might come out and the whole world turns to shit, you know what I mean? So it’s very volatile, so it’s not for the weak-hearted, or however you want to say.

TG Branfalt: Well, I want to thank you guys for coming on the show and turning $3000 into a great product, especially for people in Oregon who are looking for the best deals around.

Stephen Gold: Thank you, thank you.

TG Branfalt: Before we go, could you just tell us where they can find out more?

Stephen Gold: Yeah, the best place to get information is through our newsletter, so you can go to Dailyleafdeals.com. Down at the bottom there you can enter your email address, or a pop-up will probably come up there. Enter it in, we send out updates, once, twice a week with whatever is going on around town, whether it be deals, whether it be brands doing parties, events and things like that. So whatever is going on in Oregon, currently only in Oregon, whatever is going on in Oregon, you can find out through The Daily Leaf at Dailyleafdeals.com.

TG Branfalt: Thanks again guys, for coming on the show.

Andy Yashar: Thank you.

Stephen Gold: Thank you, have a good day you guys.

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

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A pile of painkiller medication sitting on a clean, white surface.

Opioid Sales Manager Accused of Drug-Pushing is Denied MMJ Access for Opioid Addiction

7/12/2017

by

A former employee of Insys Therapeutics – the makers of opiate sub-lingual spray Subsys who donated $500,000 to the campaign to defeat recreational cannabis legalization in Arizona – has lost a bid to use medical cannabis while on bail to kick his opioid addiction, according to a report from Reuters.

Jeffery Pearlman, a former Insys district sales manager, had sought to modify his bail conditions so he could continue using cannabis as recommended by a New Jersey doctor. Pearlman is one of several former Insys employees accused of paying kickbacks to physicians to prescribe Subsys.

Pearlman’s lawyers argued that if he was forced to give up his medical cannabis regime, which he uses to treat pain from a spine injury, he would have to return to opioids which would impair his constitutional rights to fully participate in his defense and to due process.

In the denial, U.S. Magistrate Judge Sarah Merriam said the argument that Pearlman would have to go back to using opioids was “a faulty assumption,” adding that defendants out on bail are required to follow federal law and that cannabis possession – even for medical purposes – is federally illegal.

“Other reasonable treatments exist; indeed, in states with no medical marijuana law or more restrictive laws, patients with defendant’s condition must use other forms of treatment,” she wrote in the ruling.

Pearlman is one of six former Insys executives and managers accused of paying doctors, physicians assistants, and advance practice registered nurses to prescribe the spray through a sham “speaker program” where the company paid fees ranging from $1,000 to several thousand dollars.

Last month in an interview with NBC News, former Insys sales rep Patty Nixon said she was instructed to get Subsys to patients who should not have had access to it. She said her responsibilities included lying to insurance companies in order to get them to believe the drug was “medically necessary” by making up false oncology records and providing the insurance company with specific diagnosis codes, whether or not the patient had the condition.

Pearlman has pleaded not guilty to the charges.       

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