A television antennae for live broadcasting on a major network.

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

9/08/2017

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

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

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

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

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

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

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Massachusetts Cannabis Commission Chair Says Prohibition has Failed

9/08/2017

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

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

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

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

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

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

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

House Committee Blocks All Cannabis-Related Budget Amendment Votes

9/07/2017

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

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

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

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

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

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

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

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

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An empty auditorium with red folding cushioned chairs.

Roger Stone Out at Cannabis World Congress & Business Expositions

9/07/2017

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

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

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

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

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

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

Dirty Green Dollars: Cannabis Taxes and the Banking Predicament

9/07/2017

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

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

Banks operating on a patchwork of federal memoranda

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

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

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

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

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

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

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

Death by taxes?

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

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

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

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

Working for change

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

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

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

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

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

Courts cannot aid and abet criminals

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

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

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

“Outlaw” banks

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

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

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

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

Looking forward

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

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

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

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

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

9/07/2017

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

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

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

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

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

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

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

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

Tilray Plans Major Expansion in Portugal

9/07/2017

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

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

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

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

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

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

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Hazel Fruitman: Mobile Marketing Strategies for Cannabis Businesses

9/06/2017

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

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

Listen to the interview below, or keep scrolling down to read a full transcript of this week’s Ganjapreneur.com podcast episode.

Listen to the podcast:

Read the transcript:

TG Branfalt: Hey there. I’m your host TG Branfalt, you’re listening to the Ganjapreneur.com podcast where we try to bring you actionable information and normalize cannabis through the stories of Ganjapreneurs, activists and industry stakeholders. Today I’m joined by Hazel Fruitman, she is the CEO of Cannabis Wallet. How are you doing today Hazel?

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

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

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

TG Branfalt: Right into it.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

TG Branfalt: You’ve been talking a bit about the NCIA cannabis business summit. I want to talk to you about your experience there. But before we do that we’ve got to take a short break, this is the Ganjapreneur.com podcast. I’m TG Branfalt.

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TG Branfalt: Hey, welcome back to the Ganjapreneur.com podcast. I’m your host TG Branfalt, here with Hazel Fruitman, CEO of Cannabis Wallet. Before the break you had mentioned NCIA, the cannabis business summit and I want to talk to you a bit about that. I haven’t had the pleasure of going to one of those, but I’ve heard from a lot of guests on this show, and a lot of the ganjapreneurs that I talk to, about the importance of this. And their opinion.

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

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

TG Branfalt: The NCIA cannabis business summit.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

This is why we created the Ganjapreneur.com business directory. A resource for cannabis professionals to find and connect with service providers who are cannabis friendly, and who are actively seeking cannabis industry clients.

If you are considering hiring a business consultant, lawyer, accountant, web designer or any other ancillary service for your business, go to Ganjapreneur.com/businesses to browse hundreds of agencies, firms and organizations who support cannabis legalization and who want to help you grow your business.

With so many options to choose from in each service category, you will be able to browse company profiles and do research on multiple companies in advance. So you can find the provider who is the best fit for your particular need. Our business service directory is intended to be a useful and well-maintained resource. Which is why we individually vet each listing that is submitted.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

TG Branfalt: Thank you.

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

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

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

9/06/2017

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

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

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

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

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An outdoor-grown hemp plant.

Nebraska Attorney General: CBD Sales Illegal

9/06/2017

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

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

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

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

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

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

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Palm trees silhouetted before a California sunset.

Millennials Drive On-Demand MMJ Sales in California

9/06/2017

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

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

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

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

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

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

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

Research Review: Does Cannabis Kill Leukemia Cells?

9/06/2017

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

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

What is leukemia and how is it treated?

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

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

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

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

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

What does research say about cannabis and leukemia?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Legal texts sitting open on a dark wood table.

Benton County, Arkansas Judge Tells Colleagues They Have No Right to ‘Relitigate’ MMJ Law

9/06/2017

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Benton County Judge Barry Moehring has told county officials that it is not their jobs to “relitigate a matter people voted for,” referring to the 2016 ballot initiative to legalize medical cannabis, rather it is a planning board matter.

According to the Northwest Arkansas Democrat-Gazette, Moehring made the statement during a Quorum Court meeting after Justice of the Peace Brent Meyers asked him for clarification on the matter, concerned that the county would be approving an illegal business due to conflicting federal law.

Under the constitutional amendment, the only way a city or county can prohibit cannabis industry operations is via a local referendum.

“The state is setting up regulations for it,” Moehring told Meyers, according to the report. “The Planning Department has those. Our job is, within our planning regulations, to follow the law.”

In a memo to Moehring, George Spence, county attorney, said that while the Justice Department could choose to shut down state-approved medical cannabis facilities, “the state is going about providing regulations as provided for in the amendment.”

However, while officials are moving forward, cannabis industry operator licenses have been slow to materialize in the state. As of Aug. 31, just two dispensaries had applied, and one was rejected by the Russellville Planning Commission. Some officials are expecting an influx of applications as the Sept. 18 deadline draws closer.

The Benton County Planning Board is set to hear the medical cannabis cultivation proposal today.

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The large cola of a commercially grown cannabis plant.

Hocking College to Apply for Ohio MMJ Testing License, Launch Cannabis Lab Major

9/05/2017

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Hocking College, a two-year technical school in Nelsonville, Ohio, announced that they intend to serve as a cannabis testing facility as required by the state’s medical cannabis law – and are, so far, the only institute of higher education in the state to make public their interest in the sector.

Under state law, cannabis testing labs must be owned and operated by an institute of higher education. During a press conference, Hocking President Dr. Betty Young indicated the college has submitted the appropriate documents to the Ohio Department of High Education to launch a laboratory science program beginning in the Fall, 2018 semester. Hocking is currently in the process of developing a comprehensive laboratory science curriculum, including tracks in medical laboratory technician, forensics, chemical and cannabis laboratory science. The curriculum will be designed to meet the accreditation standards of the National Accrediting Agency for Clinical Laboratory Science.

If the program is approved, Hocking’s cannabis lab tech major would be the first in the nation.

“We recognize that this is a bold leadership decision; and one we have not taken lightly,” Young said during the press conference. “With months of exploration, we are proud to lead the way as Ohio’s institute of higher education willing and able to commit to being Ohio’s center for research and development of this new industry.”

The college is partnering with Dr. Jonathan Cachat on the laboratory science and cannabis testing project. Cachat will develop the undergraduate curricula, undergraduate research, and serve as the director of the lab. Cachat previously served as the director of a psychopharmacology lab at New Orleans’ Tulane University, which held a license from the Drug Enforcement Agency to research compounds scheduled under the Controlled Substances Act.

“Education is the answer to many public issues we face, from job opportunities to opiate abuse,” Cachat said during his remarks. “Cannabis is a plant, not a pill.”

Cachat indicated that, if approved, the lab will test for pesticides, molds, and fungus in addition to THC and CBD content and ratios. The data will be collected by the college and Cachat applauded the decision by the legislature to put testing in the hands of institutes of higher education because it ensures “the translational exchange from data, information, and knowledge will be complete.”

Cachat called the college administrators “courageous” for moving forward with the program and pointed out that that there are more than 230 medical and clinical lab technician job openings annually with a median salary between $40,000 and $60,000.

“Not only will there be opportunities for hands-on training of lab technicians, we will be able to assist and further biomedical research by connecting the dots between analytical profiles and disease symptomology,” Cachat explained, suggesting that the data would be shared with the medical community. “This is not a privately-owned, privately-controlled analytics lab. We intend to create opportunities for discovery, rather than destroy them by hoarding the data to ourselves.”

Neither Cachat nor Young knew of any other Ohio college or university that has applied, or plans to apply, to participate in the state’s medical cannabis program. Cachat said that the team anticipates submitting their application on time – before Sept. 22 – and the state is expected to make their decision within 90 days; less if Hocking’s is the only application the state receives.

Tim Brunicardi, executive director of marketing, public and community relations for Hocking College, indicated that school officials had consulted with legal counsel before deciding the launch the program to ensure that the school would not be at risk to lose any federal funding due to their participation in the state’s medical cannabis industry.

“We’re supporting the Ohio legislation and … we don’t anticipate having any potential issues with the federal government,” he said in a phone interview.

Young indicated that in the short-term the college would seek $5 million in public and private support for the project, which would immediately create 12 new jobs in conjunction with the lab’s opening. Brunicardi explained that there “is potential” for the lab to, eventually, become a source of revenue for the college.

“Yes, there are potential revenue streams there,” Cachat added. “But it’s more about creating opportunities for education and improving the economic viability of the region, as well as the health of all Ohioans – all that’s over profits.”

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California Assembly Appropriations Committee Rejects Ban on Cannabis Clothing Ads

9/05/2017

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California’s Assembly Appropriations Committee has put the bill to outlaw cannabis advertising on clothing on hold, effectively killing the proposal that industry stakeholders argued would have deprived them of legitimate profits, the Los Angeles Times reports.

State Sen. Ben Allen, who had proposed the legislation, claimed it “was a commonsense measure” aimed at preventing cannabis use by teens. The bill had garnered the support of the California Police Chiefs Association and the American Academy of Pediatrics.

“The Legislature in the past has wisely prohibited advertising with branded merchandise by tobacco companies, expressly because items like hats and t-shirts are known to entice kids to smoke,” he said in the report.

In addition to potentially depriving them of profits, opponents of the measure, including the California Cannabis Manufacturers Association, argued that the bill violated their free speech rights.

The legislation would have restricted medical and recreational cannabis businesses from advertising products “through the use of branded merchandise, including, but not limited to, clothing, hats, or other merchandise with the name or logo of the product.” Non-commercial speech, such as nonprofits, would have been excluded under the law.

The bill had previously been approved by the state Senate.

There are advertising restrictions on the cannabis industry under California’s voter-approved legalization law, but those are primarily zoning restrictions focused on where ads can be placed.

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Cannabis clones inside of a sterile, commercial grow room.

Advocates Claim Texas MMJ Law Dysfunctional and ‘Broken’

9/05/2017

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Advocates in Texas say the state’s medical cannabis program may not serve any patients due to the limited product offerings and language in the law requiring physicians to “prescribe” cannabis that may prevent doctors from certifying patients out of fear of violating federal law, the Houston Press reports. The measure was signed by Gov. Greg Abbot in 2015 and as of Sept. 1, three companies had been licensed to grow and produce cannabis and cannabis oils in the state.

Last month, the Texas Cannabis Industry Association sent a letter to the governor’s office and the Department of Public Safety, accusing officials of enacting a broken law that makes the program unworkable, claiming that it requires state agencies to act in good faith in order to work.

And while physicians in states with medical cannabis programs are permitted to “recommend” cannabis, which is codified by a 2002 Ninth Circuit Court of Appeals ruling, they are not allowed under federal law to “prescribe” cannabis – a requirement of the Texas program.

Heather Fazio, spokeswoman for the Texas Marijuana Policy Project, said the group is concerned the language will prevent doctors from registering with the program.

However, state Rep. Stephanie Klick, who introduced the House version of the law, said the language was what physicians “felt comfortable with.” While Rusty Payne, a Drug Enforcement Administration spokesman was adamant that physicians could not prescribe a Schedule I substance.

“If a medicine could be prescribed, it would not be Schedule I,” he said in the report. “Does that make sense?”

The only way to change the language is via the Legislature.

Advocates also argue that since the law limits THC content in the oils at 0.5 percent, patients can obtain similar products, derived from industrial hemp with 0.3 percent THC, on the Internet, making Texas’ law relatively moot.

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A teacher gives a lecture while one student is on their phone during class.

Washington State Think Tank Finds Legalization Has Not Increased Teen Cannabis Use

9/05/2017

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The Washington State Institute for Public Policy has released their second round of reports required under the state’s cannabis legalization law, finding that adolescent cannabis use is not up since legalization and the industry has employed nearly 10,900 people.

The Evaluation and Cost-Benefit Analysis indicates that while legalization has not led to a spike in cannabis use among teenagers, consumption has increased among adults aged 26-and-older. Moreover, the think tank found that since legalization, students in sixth through twelfth grades report that cannabis is harder to obtain, with 90 percent of sixth graders indicating cannabis is “very hard to get,” while the sentiment is shared by about 85 percent of eighth graders, 55 percent of tenth graders, and 40 percent of twelfth graders.

Among adults, binge drinking rates are also down about 2 percent since legalization, although 30-day heavy drinking and heavy cannabis use rates, defined as 20-plus days, have remained stable around 5 percent and 4 percent, respectively.

The researchers said the findings “represent a snapshot” of their progress to date and “are an intermediate step toward the ultimate benefit-cost analysis” of the legalization initiative.

The Employment and Wage Earnings in Licensed Marijuana Businesses analysis reported that the 10,894 cannabis industry employees are equivalent to 6,227 full-time employees, and the industry has paid $53,250,843 in wages since the launch of legal sales. On average, licensed cannabis companies employed an equivalent of 8.99 full-time employees in the final quarter of 2016, but over one-third of those businesses had fewer than four full-time employees. The average wage for a cannabis industry employee was $16.45 per hour, with a median wage of $13.44 per hour.

“The average wage is higher than the median wage because a few highly paid workers lifted the average above the median,” the report states.

As of April 11, there were 2,020 licensed cannabis businesses in Washington state, the bulk of which, 1,438, were producers or processors. Another 572 licenses were for retail dispensaries, with seven transportation licenses and three tribal compacts.

The researchers note on the employment report that there are “several limitations” to the research and they have “taken a conservative approach to estimation wherever possible.”

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An empty university lecture room.

Sonoma State University Expanding Cannabis Industry Seminar Program

9/05/2017

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Rohnert Park, California’s Sonoma State University is expanding their extended education cannabis industry classes, which are focused on a variety of subjects including direct-to-consumer marketing and medicinal uses of cannabis, the Press-Democrat reports. The university’s School of Extended and International education held its first seminar in March, called “Medical Cannabis: a Clinical Focus,” which was attended by 100 students.

The college’s June seminar, which cost $99 and offered students certificates and extended learning credits, focused on emerging local and state regulations. The next seminar, planned for October, focuses on finance and investing and will be led by investment firms CannaAngels and Poseidon Asset Management LLC. The class is the first internally developed by the college.

Robert Eyler, School of Extended and International Education dean, said that the college is unable to run classes “explicitly about the supply chain” due to cannabis’ federal status as a Schedule I substance, and doing so could put the school at risk of losing federal funding.

“We can’t do classes on entrepreneurship, distribution, growing or selling,” he said in the report. “What we can do are seminars on all the topics around those topics.”

The university is currently discussing a 16-week course focused on cannabis use for elderly patients that they are hoping to develop with Dr. Jeffrey Hergenrather, founding member of the Society of Cannabis Clinicians. That course would require science prerequisites to enroll.

Several higher education institutions in the U.S. have rolled out cannabis-centric course offerings, including The University of California at Davis, and the University of Maryland School of Pharmacy. The City College of San Francisco announced earlier this year that they plan on adding a cannabis industry course to their curriculum.

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Cannabis clones inside of a commercial grow operation.

FDA Requests Public Comments on Therapeutic Value of CBD

9/04/2017

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The U.S. Food and Drug Administration (FDA) has put out a call for public comments regarding the therapeutic values and potential for abuse of several substances, including cannabidiol or CBD.

According to a document released by the FDA, the agency will consider any submitted statements while preparing their response to the World Health Organization (WHO) regarding the “abuse liability and diversion of these drugs” — WHO will then use this information to consider whether certain international restrictions should be placed on the substances.

The public comment period is open until September 13, 2017. Statements can be made online or via mail — electronic comments must be submitted on or before the due date using the agency’s electronic filing system available at www.regulations.gov. Comments by mail or hand delivery must be delivered or postmarked on or before September 13 and can be mailed to:

Dockets Management Staff (HFA-305)
Food and Drug Administration
5630 Fishers Lane, Rm. 1061
Rockville, MD 20852.

The Drug Enforcement Agency (DEA) currently defines CBD as an illegal, Schedule 1 substance despite a swath of research and anecdotal information that speaks to the cannabinoid’s relative harmlessness and therapeutic value.

Other substances for which the FDA is accepting public comments include Furanylfentanyl and Acryloylfentanyl (two extremely powerful new opioid analgesics), Ketamine, Tramadol, and about a dozen other substances.

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A commercial air plane flies in front of the glowing orange sky of sun down.

Las Vegas Dispensary Secures In-Flight Advertisements with Airline

9/04/2017

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Acres Cannabis — a cannabis retailer in Las Vegas, Nevada — has secured an advertising deal to appear in corporate airline Allegiant Air’s in-flight magazine, according to a press release from the company.

This announcement comes following a broad Clark County Commission proposal that would ban cannabis advertisements throughout Las Vegas’ McCarren International Airport properties and potentially even in taxi cabs and other transport options for traveling to and from the airport.

Acres’ 20,000 square-foot medical and adult-use cannabis dispensary is located just off the Strip in Las Vegas. The company’s retail location also sports a large, in-house cultivation and processing operation with an open view kitchen so customers and patients can see first-hand the infusion of cannabis products.

“Acres’ recent Airline campaign creates another first for the marijuana industry and helps propel all of us towards mainstream acceptance,” said Acres founder and CEO John Mueller. “Acres plans to continue to lead the industry by cultivating one of a kind cannabis experiences.”

There are currently 55 dispensaries licensed to serve the adult-use cannabis industry in Las Vegas — the industry, however, has experienced growing pains since the recreational market opened. Cannabis sales throughout the state have fallen dramatically as the state’s legalization law prevents anyone but alcohol wholesalers from distributing cannabis products.

A recent Nevada Tax Commission ruling found that existing liquor distributors cannot fully handle the industry’s distribution needs and called for the licensing of additional companies to move products around in the cannabis space.

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A bank teller counts out cash for their customer.

One Bank Serving Six of Florida’s Seven MMJ Companies

9/01/2017

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Six of Florida’s seven licensed medical cannabis companies are doing business at First Green Bank, an Orlando-area financial institution founded in 2009, the Tampa Bay Times reports. The small firm has just six branches throughout Central Florida, managing about $622 million in assets.

Lex Ford, a senior vice president at First Green, said the institution was started down the path of working with the cannabis industry because founder Ken LaRoe’s wife was changed when she began using cannabis for seizures. LaRoe founded the bank with social responsibility and environmental principles in mind, offering low-interest rate loans and discounts on “green” initiatives.

Ford indicated that the bank employs a team who work exclusively with cannabis business clients and they have very strict policies and security procedures in place because “cash is still king” in the cannabis space due to federal law.

“We presented our plan to the FCC, FDIC and every regulatory group out there possible,” Ford said in the report, noting that they use armored cars to pick up the cash, which is deposited directly into an account in the Federal Reserve. “It’s possible to do this. We just have to do it right. So we’re being as transparent as possible.”

Florida will grant ten more licenses to medical cannabis producers this year following a massively popular vote to expand the state’s medical cannabis regime last November.

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Fresno, California City Council Moves to Ban Adult-Use Industry

9/01/2017

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The Fresno, California City Council has voted 4-3 to ban adult-use business operations in the city, but the code amendment still faces a second reading before taking effect, the Fresno Bee reports. The ban would apply to “any cultivation, manufacture, processing, storing, laboratory testing, labeling, transportation, distribution, delivery or sale of marijuana” for recreational use; however testing labs would be permitted in the city’s industrial areas if cannabis testing represents 20 percent or less of their business.

City Council President Clint Oliver, who voted against the proposal, called the ban “flawed.”

“I believe it’s a rush to judgement, a knee-jerk reaction,” he said in the report.

Previously, councilors had approved a measure by Oliver that would see the city hire a consultant to analyze how other California cities are approaching recreational sales and potential revenues derived from cannabis taxes.

Mayor Lee Brand supported both the ban and Oliver’s proposal – which would allow Brand to appoint a three-member council subcommittee to find a consultant.

“This is a huge issue across the state, billions of dollars are being spent,” Brand said during the city council meeting. “We need to at least take a look and see what the implications are.”

In June, the City Council voted to cap the number of cannabis plants individuals could cultivate in their homes to six; however, that ordinance has not yet taken effect as the councilors have been so far unable to bring it to the table for a second vote.

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A Canadian flag using a cannabis leaf instead of a maple leaf.

Canadian Franchise Association Accepts First Cannabis Company

9/01/2017

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Canadian cannabis company Spirit Leaf Inc. has become a member of the Canadian Franchise Association – the first cannabis company to be granted membership into the association. The company, a wholly-owned subsidiary of Inner Spirit Holdings Ltd., already has granted four individual franchises – three in Calgary, Alberta, and one in Peterborough, Ontario – and has approved a 10-store development agreement in the Greater Toronto area.

“We are very proud to be a member of the CFA and to introduce our new retail concept to the franchise community,” said Darren Bonder, CEO of Spirit Leaf, in a press release. “This is another positive step forward for our company and I believe it also sets a high benchmark for the industry when the sale of recreational cannabis in Canada becomes legalized on or before July 1, 2018.”

The company plans on launching a national advertising campaign this fall, including ads in both franchise and cannabis-centric publications, and will be included on a national franchise show tour. Spirit Leaf is partnering with Search Kings for their digital ad campaign.

According to Spirit Leaf’s profile on BeTheBoss, a website featuring Canadian franchise opportunities, the franchise would require an investment between $200,001(US$160,561) and $300,000 (US$240,840), and a 5 percent royalty fee.

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Massachusetts Treasurer Picks Legalization Opponent to Head Cannabis Control Commission

9/01/2017

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Yet another cannabis legalization opponent has been named to the Massachusetts Cannabis Control Commission, as Steven Hoffman has been tabbed to lead the agency by Treasurer Deborah Goldberg. Hoffman, a former partner at the management consulting firm Bain & Company, joins other legalization adversaries in state Sen. Jen Flanagan and Walpole Police Chief John Carmichael Jr., who were appointed by Gov. Charlie Baker.

According to WBUR, Hoffman voted “no” on the legalization ballot question.

“I hope to guide this Commission thoughtfully and responsibly as we implement the legalization of recreational marijuana in Massachusetts,” Hoffman said in a statement. “We have a lot to do, I am excited to get to work.”

Under the legislature’s version of the voter-approved law, the treasurer’s appointee was required to have finance, securities, or corporate management experience. In addition to his work running Bain’s 600-person Boston office, Hoffman has served as the executive vice-president and chief strategy officer at Sapient, and senior vice president at CSC Index – both corporate management consulting firms.

“Steven brings a wealth of invaluable experience from a long and distinguished career in business development, corporate strategy and senior management,” Goldberg said in the release. “I am confident that he will serve the Commonwealth well and steer this brand-new industry in the right direction.”

Hoffman, 64, will serve a five-year term.

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