Russian Banking Pioneers Betting on U.S. Cannabis Reforms

8/24/2017

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Two Russian banking pioneers are envisioning sweeping cannabis reforms in the U.S. and are bringing the same attitude to the industry that they had during the fall of the Soviet Union and its transition to capitalism.

In an interview with Bloomberg, Boris Jordan, who co-founded Renaissance Capital more than 20 years ago, equated the cannabis industry to “Russia in the 1990s.”

“We’re talking about an industry in its infancy that needs to be built up from scratch, legislation and all,” he said in the report. Jordan and his private equity firm, Sputnik Capital, have spent more than $100 million to position PalliaTech Inc., which Sputnik acquired in 2015, to become a national dispensary chain. Jordan indicated he was on track to raise another $200 million for a new fund to invest in other industry opportunities.

“Our dispensaries look like Walgreens,” Jordan explained in the interview. “They’re filled with oils, pills, and creams.”

PalliaTech was one of five companies recently awarded a medical cannabis license in New York.

Bernie Sucher, who co-founded Troika Dialog and now serves as co-owner and CEO of Tikun Olam USA – which currently operates in Washington, Nevada, and Delaware – said the only qualification he has to act as CEO is his “Russian experience of taking an idea and building it into a real business in volatile, even anarchistic conditions.”

“It’s a modern-day gold rush,” Sucher said in the interview. “It makes me nostalgic for what it was like starting Troika 25 years ago. But this time nobody’s getting hurt.”

Tikun Olam’s Israeli arm is the country’s largest supplier of medical cannabis and the U.S. firm has invested $9.3 million in its efforts to market its propriety cannabis strains to cultivators.

The cannabis industry risks and rewards in the U.S. do mirror Russia’s 1990s capital markets – which were devastated by the nation’s domestic debt default in 1998. If the federal government were to clamp down on the industry investments would be lost.

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Massachusetts Gov. Appoints Cannabis Legalization Opponent to Control Commission

8/24/2017

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Massachusetts Gov. Charlie Baker has appointed state Sen. Jen Flanagan to the state’s Cannabis Control Commission, the Boston Globe reports, his second appointment of a cannabis legalization opponent to oversee the industry. Earlier this month Baker appointed Walpole Police Chief John Carmichael Jr. to the Cannabis Advisory Board; Carmichael has said that medical cannabis dispensaries would be fronts for “illegal distribution and money laundering.”

Flanagan, a Democrat, was one of 119 state lawmakers that opposed Question 4, calling cannabis legalization “the wrong path for the state” as the country is mired in the so-called opioid epidemic. In a statement from Baker’s office, however, she said she was “honored” to receive the appointment. She is the first of five commissioners to be appointed to the CCC.

Baker called Flanagan “a champion and important partner with us on bipartisan efforts to enact comprehensive legislation around substance use prevention, treatment and recovery.”

“Her experience and service will be invaluable . . . as [officials], educators, and public health and safety professionals work together to ensure the effective, responsible and safe implementation of the adult use of marijuana,” the governor said in a statement.

Jim Borghesani, the communications director for the legalization campaign, said advocates “hope that Sen. Flanagan will put her personal position aside in order to advance the will of Massachusetts voters.”

According to the Globe, Flanagan is expected to resign from her state Senate seat by Aug. 31.

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Looking up the walls of a glass office building.

MassRoots Acquires CannaRegs in $12M Stock Deal

8/24/2017

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MassRoots Inc. is continuing to expand its scope, announcing that they have struck a deal to purchase CannaRegs, a technology platform that tracks federal, state, and municipal cannabis regulations, for $12 million in stock. The deal follows MassRoots’ July acquisition of regulatory compliance firm Odava Inc., and a December 2016 transaction that saw the company procure DDDigital, the firm behind online canna-business ordering platform Whaxy, and custom application developer Cannabuild.

CannaRegs was founded in 2014 by former Federal Reserve regulator Amanda Ostrowitz, and has more than $450,000 in contractually-obligated annual revenue.

Isaac Dietrich, MassRoots CEO, said the deal “expands MassRoots’ compliance offerings, consolidating the most important operations for cannabis businesses into one central platform.”

“We expect with MassRoots’ resources and relationships, we can grow the number of businesses utilizing CannaRegs and significantly increase MassRoots’ contractually-obligated monthly recurring revenue,” he said in a press release.

Amanda Ostrowitz, CannaRegs founder and CEO, said the acquisition will allow CannaRegs to “be able to realize strong synergies” in the platform’s development and distribution.

“The cannabis industry is increasingly becoming compliance-centric and even minor changes in municipal regulations can have a significant impact on day-to-day operations,” she said in a statement. “CannaRegs has made it easy for businesses, regulators and attorneys to track regulatory changes in real-time, often for less than the cost of one billable hour.”

CannaRegs currently provides comprehensive cannabis laws for California, Colorado, Florida, and Nevada and plans to expand to other states with legal medical or recreational cannabis programs.

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Sponsors and Speakers Dropping from CWCBExpo Due to Roger Stone Keynote

8/23/2017

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A Minority Cannabis Business Association boycott of Roger Stone has led to an exodus of exhibitors and speakers from the Cannabis World Congress and Business Expo set for Sept. 13-15 in Los Angeles, California. Stone, a former campaign strategist for President Donald Trump, was invited to speak at the event after launching the bi-partisan United States Cannabis Coalition in June.

A Change.org petition has also been launched urging the expo to “Disown Roger Stone.” According to an LA Weekly report, Bonita “Bo” Money, a co-signer of the petition, indicated that 30 speakers and exhibitors have dropped out, calling Stone’s inclusion “horrible timing” following the events in Charlottesville, Virginia.

“Stone’s position on cannabis is positive but does not excuse his hateful statements and actions taken against women, people of color, Jewish people and other vulnerable populations,” the petition, which has reached half its signature goal as of 8 a.m., states. “Inviting Mr. Stone to speak to the crowd, especially as we see the rise of overt racism and anti-Semitism, is an affront to the very movement you purport to promote, the industry and all who are involved.”

The petition, which lists some of Stone’s “hateful statements,” is signed by several major players in the industry, including New Frontier Data, the Marijuana Business Association, and Students for Sensible Drug Policy.

Jesce Horton, co-founder and chairman of the MCBA, said Stone should be automatically disqualified from speaking at the event due to his work on the campaign of President Richard Nixon, who launched the so-called War on Drugs. Furthermore, Rev. Al Sharpton is scheduled to speak at the event and Stone once referred to Sharpton as a “professional Negro.”

“If we’re going to make this a better industry, we have to be careful about the compromises that we make,” Horton said in an email to LA Weekly, “To prop up someone with such a history of racist and misogynist rhetoric as a keynote speaker at this event makes it impossible for MCBA to be involved.”

The Drug Policy Alliance, who announced they were withdrawing their sponsorship from the event due to Stone’s inclusion, said they made the decision “to stand in solidarity” with their “allies and community partners.”

In an open response to the petition, organizers at the CWCB Expo defended Stone’s inclusion, writing:

From its inception four years ago, the Cannabis World Congress & Business Exposition’s mission has been to provide an open forum for the advancement and growth of this industry. To achieve this goal we always have been inclusionary and have provided an open and unbiased, educational and business platform for the diverse voices and opinions in this industry to be heard.

Roger Stone is a proponent of cannabis legalization. He has created a non-profit, bi-partisan organization to advance the legalization of cannabis. Roger Stone has assured us that his Los Angeles Keynote Address will be on point with our stated mission, as it was this past June when he delivered his Keynote at CWCBExpo in New York. Mr. Stone will be present at CWCBExpo in Los Angeles, before and after his keynote, to have an open dialogue with our attendees.

Not everyone is on board with the Expo’s “inclusionary” stance, however. In a post on Facebook, David Murét of Viridian Staffing wrote: “CWCBE is more than free to make terrible business decisions and reveal to the industry and movement where they’re willing to stand when the chips are down. Likewise, it is totally legitimate and in-keeping with respect for free speech for current and future speakers, exhibitors and sponsors to vote with their wallets and feet by choosing to have no part of it.”

The calls for Stone’s removal from the CWCB Expo’s lineup have highlighted a growing rift in the cannabis industry: the clash between white collar capitalists and the civil rights activists who created the opportunity for this industry to exist in the first place.

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Ohio Awards MMJ Seed-to-Sale and Licensing Contracts

8/23/2017

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The Ohio Department of Commerce has awarded contracts to two firms as the state rolls out its medical cannabis program – one to a seed-to-sale software and tracking system company, and another to handle “the design, development, and implementation” of cannabis cultivation, processing, and laboratory licenses, Columbus CEO reports. The two contracts total $1.75 million.

Metrc, based in Lakeland, Florida, was awarded the nearly $1.2 million seed-to-sale contract, beating out four other companies vying for the contract. The $573,600 licensing contract was awarded to Persistent Systems Inc, which has an office in Dublin, Ohio. Three other companies submitted bids for the contract.

A third contract for an “open video management system,” which will see more than 1,000 cameras located in cannabis growing, processing, and distribution facilities, is expected soon. The system will allow the camera feeds to be monitored from a single location.

In all, the Office of Budget and Management has authorized a $9.8 million operating budget for the medical cannabis program from loans and the bi-annual state budget. Officials expect $2.3 million in income from the program through employee licenses and application fees. The program does not allow smokeable products, opting instead for edibles, vapor-products, tinctures, topicals, and patches.

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Larimer Square in downtown Denver at twilight.

Denver, Colorado Set to Accept Public-Use Applications by the End of the Month

8/23/2017

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Denver, Colorado officials are expected to begin accepting public-use license applications by the end of the month; however the pilot program might not take off due to restrictions on what kinds of businesses can qualify for the licenses and where they can be located, according to an Associated Press report. The regulations do not permit establishments to sell cannabis products but allow customers to bring their own.

Under the rules, any business with a liquor license cannot apply for a public-use permit, and dispensaries are prohibited from allowing consumption on store premises. Would-be cannabis clubs or businesses wishing to obtain a license must be located twice the distance from schools – or places where children congregate, such as playgrounds – as liquor stores. Neighborhood groups must also agree to allow the club or license before it is opened or issued. Applying for a license costs $1,000 and another $1,000 annually to maintain.

Kayvan Khalatbari, a Denver cannabis consultant who helped campaign for the social-use initiative, has sued the state’s liquor authorities over the ban on allowing cannabis and alcohol at the same place. He pointed to the fact that people are allowed to get “hammered in public” on “moronic bike bars” that are permitted to ride past schools and churches but cannabis consumers don’t have “a safer choice” despite the will of the voters who passed the initiative.

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A photographer crosses the street in front of the Michigan State Capitol building in Lansing, Michigan.

Michigan MMJ Regulators Seeking Individuals to Help Devise Rules

8/23/2017

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The Michigan Department of Licensing and Regulatory Affairs is seeking individuals to make suggestions to the agency on potential rules for cannabis industry operators, Detroit News reports. Those interested do not necessarily need to be an activist or current or prospective canna-business operator – but they must submit a 150-word explanation to the department about why they are qualified to participate in the process by 9 a.m. on Sept. 5.

“Regardless of participation in the work groups, all interested members of the public will be able to participate in the permanent rule-making process that includes public comment, hearing notices and draft rules that will be published for review and comment,” the department said in the report.

Jason Moon, spokesman for the agency, said LARA is “interested in finding a group that represents diverse perspectives” in their efforts to “gain insight into core issues” regarding implementing the state’s new medical cannabis regime.

“We will analyze the potential participants with the intent to capture feedback from all these perspectives,” he told the News.

The department is searching for people to suggest rules for growers, processors, transporters, testers, and dispensaries.

The announcement comes a day after the state Medical Marijuana Licensing Chairman Donald Baily suggested that dispensaries currently operating in the state would need to shut down prior to Sept. 15 if they wanted to be considered for a new dispensary license.

Interested parties can email LARA-MedicalMarihuana@michigan.gov with “WORK GROUP” in the subject line, and include their name, mailing and email addresses, a phone number, which work group they want to participate in, the person’s job, and their employer or organization.

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Did Instagram Just Approve Cannabis Advertising?

8/23/2017

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In the ever-complex cannabis industry, we face the ongoing challenges of trying to reach consumers in a highly regulated and restrictive world of advertising policies. To adapt, companies have turned primarily to free social media platforms to create meaningful brands and connect with customers, with the caveat of not being allowed to talk about cannabis consumption/use or sales.

Every social media channel has their own policy dictating how you can and cannot advertise on their channel and these policies are especially restrictive towards cannabis. It leaves an enormous gray area where businesses aren’t quite certain what is and isn’t allowed, so most err on the side of caution by avoiding anything that would be questionable. Facebook is the most well-known for this because it’s so widely used and, since they own Instagram, both channels take a unified approach, completely restricting cannabis-related advertising.

However, a recent statement sent out by Instagram indicates they could be coming around to the idea of a more progressive approach to cannabis advertising. Considering Instagram/Facebook have approached the issue uniformly in the past, it’s could be assumed that if Instagram is following these new guidelines, it’s supported by their parent company Facebook.

Cannabis companies have been relying on — and fearing the loss of — their social media accounts since the industry’s inception. Photo Credit: Sarah Climaco

According to a recent Leafly report, the Instagram account of the popular California-based edibles company Kiva Confections was the victim of an ongoing impersonation where a false Instagram account under their brand name was interacting with users in an abusive and disrespectful manner. Kiva has since taken steps to eliminate the false account and successfully contacted Instagram to get the account removed.

Through their efforts to get the account removed, Kiva received a full statement directly from Instagram, one that seemingly delivers an updated policy as it relates to cannabis advertising on the platform — one that is not outlined in their existing policies:

Instagram does not allow people or organizations to use the platform to advertise or sell marijuana, regardless of the seller’s state or country. This is primarily because most federal laws, including those of the United States, treat marijuana as either an illegal substance or highly regulated good. Our policy prohibits any marijuana seller, including dispensaries, from promoting their business by providing contact information like phone numbers, street addresses, or by using the “contact us” tab in Instagram Business Accounts. We do however allow marijuana advocacy content as long as it is not promoting the sale of the drug. Dispensaries can promote the use and federal legalization of marijuana provided that they do not also promote its sale or provide contact information to their store.

The emphasis above has been added and it highlights one big element they left off that short-list: your website. So, without listing your location’s contact info, you can drive customers to your website where your contact info, daily deals, and updated menus are all prominently displayed. 

What if they just forgot to list websites? That’s a valid concern, but this is one of the largest digital platforms in the world, so it would be hard to believe that they would accidentally omit the listing of websites from that very specific list.

In summary, as long as you don’t advertise or promote the sale of cannabis, you should be safe. You can promote the use and all around legalization — which means strain reviews, advocacy, product reviews, and anything else you can come up with while avoiding a sales pitch or direct contact info. At the end of the day, getting customers to your website will be your most powerful avenue. Promote “online-only” deals, implement coupons that must be printed from the website — there are all kinds of creative ways to get people on your website and Facebook/Instagram just provided a ton of clarity as to how you can do it without getting your account deleted.

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Nighttime in New York City.

NYC Cannabis Arrests on the Decline, Still Disproportionally Target Minorities

8/22/2017

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According to data from the Legal Aid Society, New York City’s primary public defender organization, cannabis arrests in the five boroughs are down 3.9 percent since the beginning of 2016; however the law enforcement tactic of broken windows policing is resulting in those that are arrested coming predominantly from minority communities, the Gothamist reports. New York City Mayor Bill de Blasio has pushed for low-level cannabis crimes to be handled with violations and tickets, rather than misdemeanor or felonies and arrests.

In the first year following the policy shift, low-level cannabis arrests actually increased by 30 percent, according to figures from the New York Division of Criminal Justice Services – and white people made up less than 10 percent of those arrests.

The Legal Aid Society has handled 5,934 misdemeanor and violation-level cannabis cases since Jan 1., compared to 6,180 during the same period last year.

Harry Levine, a Queens College professor and one of the co-authors of a Drug Policy Alliance report titled “Unjust and Unconstitutional: 60,000 Jim Crow Marijuana Arrests in Mayor de Blasio’s New York” said their research found there is “one set of laws for white people, one set of laws for people of color.”

The DPA report found among the 60,000 people arrested for cannabis possession in New York City from 2014 to 2016 86 percent, or 52,730, were black and Latino, while 14 percent, 8,260, were “whites and all others.” New York City’s population is 51 percent black and Latino, and 49 percent white and all others.

Austin Finan, a spokesman for the mayor, said that the Legal Aid Society figures show that the administration’s decriminalization plans are, in fact, working.

“Just as we said we would, this administration has led a dramatic shift away from unnecessary arrests for low-level marijuana offenses in favor of summonses,” Finan said in the report. “As a result, arrests for marijuana possession are down 37 [percent] — from almost 29,000 in 2013 to approximately 18,000 in 2016.”

Finan said that the contrast in arrests among minorities and whites was because the “NYPD enforces against quality of life offenses where and when they observed, many of which are reported to police by members of the public” but he did not comment on whether de Blasio sees the consequences of this type of enforcement as an issue.

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Tall-backed leather chairs sitting at a conference room table.

Pennsylvania Law Firms Creating Cannabis Divisions

8/22/2017

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Despite the threat of arrest, imprisonment, and disbarment, attorneys in Pennsylvania are setting up cannabis-centric practices to serve the state’s medical cannabis operators, Philly.com reports. Four of Philadelphia’s largest firms – Duane Morris, Cozen O’Connor, Pepper Hamilton, and Fox Rothschild – have created cannabis divisions as the state prepares to launch its medical cannabis program.

Despite the Trump administration being “a big ball of uncertainty,” Joseph C. Bedwick, a partner at Cozen O’Connor, said the firm saw the industry as a “growth opportunity.”

Joshua Horn, co-chair of Fox Rothschild’s cannabis practice, said a federal crackdown was unlikely because the government doesn’t have the manpower or budget “and the popular will is strongly against it.”

“More than 90 percent of the people in the Commonwealth support the medical marijuana program, and Pennsylvania isn’t the most liberal state,” he said in the report.

Yet, in May, Jessica McElfresh, a California attorney, was arrested and charged by the San Diego district attorney with multiple felonies connected to her alleged role in helping her clients hide evidence of an oil extraction facility. In that case, attorney-client privilege was revoked and authorities seized her client files, calendar, address book, and internet searches. They also demanded her cellphone location data for the past three years.

Steven Schain of Hoban Law Group said McElfersh’s case “represents a landmine” in the paths of attorney’s operating in the space.

“Sizzle aside, marijuana remains 100 percent illegal under federal law,” he said. “Any real cannabis lawyer is exposed to massive federal and civil prosecution. But we’re willing to take the risk.”

The Pennsylvania Supreme Court Disciplinary Board has made it clear that attorneys in the state can counsel clients; however, they must inform their clients that they are violating federal law.

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Rows upon rows of bottles inside of a micro brewery.

Lagunitas Brewing Company Releases One Batch of Cannabis Terpene-Infused Beer

8/22/2017

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Lagunitas Brewing Company has unveiled Supercritical IPA – a brew infused with cannabis terpenes from CannaCraft, the California-based producers of vape cartridges called AbsoluteXtracts, the Washington Post  reports. The terpenes used are extracted from cannabis plants but the brew is not infused with THC or CBD.

Kial Long, vice president of marketing for AbsoluteXtracts, said the terpene blends were prepared “with the Lagunitas-style taste in mind” using a blend of “dozens” of terpenes. The mix of Blue Dream and Girl Scout Cookies was chosen by Lagunitas brewer Jeremy Marshall and is paired with six different types of hops to create the flavor.

Karen Hamilton, Lagunitas director of communications, indicated that the beer is tested in the brewery’s lab to ensure it does not contain THC and said in an email with the Post that “lots of people have had the beer, at this point, and NO ONE has experienced any psychotropic effects (to the dismay of some!)”

The brewery has produced just 120 kegs, or one batch, of the 6.8 percent alcohol by volume Supercritical, which were distributed only to California bars, primarily throughout San Francisco, although Hamilton said more “may be” released in the future “to other areas in the U.S.”

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A collection of cannabis clones in the back room of a medical marijuana dispensary.

Michigan MMJ Licensing Board May Shutter Dispensaries Starting Sept. 15

8/22/2017

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At the second meeting of the Michigan Medical Marijuana Licensing Board, Chairman Donald Bailey suggested that all dispensaries currently operating in the state would need to shut down by Sept. 15 if they wanted to be eligible for the new dispensary licenses, which are expected after Dec. 15, according to a report from MLive. The board did not pass the measure during the meeting.

“Every dispensary that’s out there right now is open in violation of the Michigan Medical Marihuana Act,” Bailey, a retired State Police sergeant, said in the report, pointing to a 2013 Michigan Supreme Court decision as evidence of his claim.

Medical cannabis patients who attended the meeting strongly opposed the chairman’s suggestion and Tim Beck, who was instrumental in passing the voter-backed medical cannabis laws, called the recommendation “an unprecedented action.” He said he had heard rumors that the board wanted to shutter current operators and start over but he had dismissed them.

Bailey had made the same claims during the first meeting of the board in June.

“Right now, none of the extracts are legal; none of the dispensaries are legal under state law. It’s black and white,” Bailey said during the initial meeting. “With the Supreme Court making its ruling two weeks ago, that’s a done deal. So anything that’s open right now isn’t legal. Going forward there’s going to be a new law – they are going to be legal. But if you’ve demonstrated in the past that you’re not going to abide by the law that we did have why do we think – and it’s a rhetorical question – going forward you would abide by the new law.”

Jason Moon, a spokesman for the Department of Licensing and Regulatory Affairs, which oversees that Bureau of Medical Marihuana Regulation, said the agency would “thoroughly review” the board’s recommendations and would “consult with the Attorney General’s office before any action is taken.”

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Banks in Uruguay Closing Accounts of Pharmacies Selling Cannabis

8/21/2017

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International anti-money laundering laws are forcing banks to abandon Uruguayan pharmacies legally selling cannabis, according to a Business Times report. Jorge Polgar, president of the state-run Banco Republica, said keeping the accounts open would prevent the institution “from carrying out any kind of operation with an international counterpart” and “cause [the bank] and its clients to be financially isolated.”

Danilo Astori, Uruguay Economy Minister, said officials didn’t know the banking issue would be a side-effect of legalizing cannabis in the nation but that they are looking for a solution.

A source within Santander of Spain, which operates in Uruguay, indicated they would also close any accounts with ties to the legal cannabis trade.

“As a global bank with clients in various countries, we have to observe the various norms in force in those places,” the source said in the report.

Julio Calzada, one of the architects of the law with former President Jose Mujica, said he would reach out to banks in U.S. states with legalized cannabis to figure out ways around the restrictions of international law.

“There are alternatives,” Calzada said. “But not in Uruguay.”

Adolfo Garce, a political scientist at the University of the Republic, called the setback “a major blow” to the government and the Broad Front, which is led by Mujica, who now serves as a senator.

“Having made so much progress, having planted and harvested the marijuana and delivered it to the pharmacies … not being able to sell it due to an unforeseen problem is a very hard blow,” he said.

More than 10,000 individuals have registered with the government to purchase cannabis from 16 pharmacies throughout Uruguay.

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CBD Store Opens in West Virginia

8/21/2017

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The Appalachian Cannabis Company, which specializes in CBD products, has opened in West Virginia – the first store of its kind in the state, WCHS/WVAH reports. The shop is owned by Chris Yeager, who spent a few years in Colorado learning about CBD and the cannabis industry.

“We wanted to bring the knowledge, we wanted to bring the experience and we want to spearhead this industry for the state of West Virginia,” Yeager said in the report. “We want to be able to provide a non-psycho[active], non-addictive product, and we’re able to do that with CBD.”

In April, the legislature passed, and Gov. Jim Justice signed, HB.2526 which included language to legalize the sale of hemp-derived CBD products in the state and the measure took effect on July 7. Justice also approved in April a bill expanding the eligibility for West Virginia hemp cultivation licenses.

West Virginia officials only just began developing the rules and regulations for the comprehensive medical cannabis program in May, and the CBD shop does not fall under the jurisdiction of the medical cannabis program.

The Appalachian Cannabis Company is offering a wide-variety of company-branded CBD products, including capsules, gummies, liquids and lotions.

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Vermont Lawsuit Challenges Search and Seizure When Officer Claims Cannabis Odor

8/21/2017

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A lawsuit over a vehicle search after a traffic stop based on the alleged odor of cannabis is headed to the Vermont Supreme Court after being thrown out by a lower court in May, according to a VT Digger report. The lawsuit by the American Civil Liberties Union on behalf of Gregory Zullo alleges that the Rutland resident was improperly pulled over and searched, and his vehicle illegally seized.

According to court documents outlined by the Digger, Zullo, an African-American state resident, was stopped in March 2014 by Trooper Lewis Hatch – who has since been fired – and ordered to exit his vehicle “based on the alleged odor of burnt marijuana.”

“Hatch seized Mr. Zullo unnecessarily for an hour and had Mr. Zullo’s car towed to the barracks for a search, which revealed no contraband,” the ACLU’s docketing statement states. “To retrieve his car, Mr. Zullo walked and hitch-hiked eight miles home through sub-freezing temperatures, waited several hours at the barracks, and was forced to pay a $150 fee.”

Criminal charges were never filed against Zullo. Hatch was fired for his pattern of conducting illegal searches, which usually targeted black men, Seven Days reported in May 2016, five months after he was terminated. Hatch has subsequently appealed that decision to the Vermont Labor Relations Board.

Hatch claimed that the reason for stopping Zullo was because the registration sticker affixed to his license plate was obscured by snow; however Zullo’s attorney, Lia Ernst, contends that racial profiling is to blame.

“When the alleged reason for the stop is something that nearly every vehicle driving in Vermont in winter would be in the same condition, we have to ask why stop this vehicle and not some other vehicle,” she said in the report.

The lawsuit also challenges whether Vermont police should continue to use the “sniff test” as justification for searches as possession of 1 ounce or less of cannabis has been decriminalized in the state since 2013.

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Nevada Court Rules Against Liquor Wholesalers in Cannabis Distribution Case

8/18/2017

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A Nevada District Court judge has denied a preliminary injunction sought by liquor distributors to prevent the state Tax Department from licensing cannabis businesses to distribute recreational products from cultivators and manufacturers to retailers, the Las Vegas Review-Journal reports. Carson City District Judge James Todd Russell ruled that alcohol wholesalers were unable to satisfy the demand for deliveries; however the liquor distributors do have the right to appeal to the tax commission, he said.

Russell also determined that the Tax Department could move forward with plans for emergency regulations to license cannabis businesses to distribute products. Dispensaries selling adult-use cannabis have seen a 20 percent to 30 percent drop in sales since the launch of recreational sales due to distribution problems.

Attorney Kevin Benson, who represents the Independent Alcohol Distributors of Nevada, indicated he would appeal to the Tax Commission and has “already requested a stay” from the Tax Department, who oversees the state’s adult-use cannabis industry. He argued that if cannabis businesses are granted distribution licenses before a stay is approved, the exclusivity provided to liquor wholesalers under the voter-approved adult-use cannabis measure would be moot.

Senior Deputy Attorney Michelle Briggs said that of the 61 liquor distributors in the state, just seven applied to distribute cannabis, likely due to the risk of losing their federal alcohol licenses by working with the cannabis industry. Two medical cannabis companies have applied for alcohol distribution licenses which would allow them to distribute cannabis products under the law.

The Tax Department has not commented on how they would move forward on the licensing issue.

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German Doctor Enters Hunger Strike in Protest of Nation’s ‘Bureaucratic’ MMJ Laws

8/18/2017

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The chairman of the German Association for Cannabis as Medicine, Dr. Franjo Grotenherman, has entered an “indefinite” hunger strike until Germany “decriminalize all citizens who need cannabis to treat their serious diseases,” according to a press release from Grotenherman published by MarijuanaPolitics.com.

In the release, the long-time cannabis activist called Germany’s medical cannabis law “too bureaucratic” and said it makes treatment with medical cannabis “unattractive for doctors who in principle support such therapy.”

“The legislature has taken a great step into the right direction,” Grotenhermen said in a statement. “However, many patients are still dependent on a still as illegal regarded treatment. They face criminal sanctions. This is no longer acceptable. Therefore a basic clarification in the narcotics law must be established. The prosecution of patients to whom a doctor has certified the need for a therapy with cannabis must end.”

Further, Grotenherman argues that “the need for cannabis therapy should not be judged by the judiciary, a government agency or a health insurance company,” rather the decision should be between a patient and their physician.

“I am not aware of a convincing argument by which patients’ prosecution can be maintained,” Grotenhermen said. “A corresponding amendment to the Narcotics Act is, therefore, logical and unavoidable.”

Grotenherman has launched a website that includes background on the German laws and further explanation of his hunger strike.

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A cluster of buildings in downtown Detroit, Michigan.

Competing Cannabis Legalization Ballot Measure Unveiled in Michigan

8/18/2017

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Michigan’s Board of Canvassers has approved a second potential 2018 ballot measure to legalize cannabis use in the state, which the sponsor, Timothy Locke, calls “the Second Amendment of cannabis,” the Detroit Free Press reports. The measure would nullify all of the state’s cannabis laws and permit its use without taxes, fines, or penalties.

Additionally, the measure would release anyone imprisoned for state cannabis crimes since 1970 and expunge certain state-level criminal charges related to cannabis possession and use. It would have no effect on federal sentences.

Because the Abrogate Prohibition Michigan proposal would amend the state constitution, it would require 315,654 valid signatures from registered voters to appear on 2018 midterm election ballots.

Josh Hovey, spokesman for the Coalition to Regulate Marijuana Like Alcohol – who has collected more than 100,000 signatures for their ballot initiative to tax-and-regulate adult-use cannabis in the state – said he couldn’t “imagine Michigan voters supporting” the now-competing proposal.

“The public expects responsible marijuana regulation that includes licensing, quality control and assurances that minors will not be able to access it,” Hovey said in the report.

Locke indicated to the Free Press that his proposal would be an economic boon because cannabis can be used to manufacture 50,000 products.

He expects to begin collecting signatures next week.

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Cannabis plants inside of a licensed cultivation center in Washington state.

Survey Finds Marketers Lukewarm to Enter Cannabis Space

8/18/2017

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According to a survey by Emerging Insider, a content relations firm, marketers throughout North America are split on whether or not they would be open to working with the cannabis industry. The survey of 600 marketers found 43 percent of respondents were willing to take on cannabis industry clients, while 32 percent said they would not be open to taking on clientele in the space. The remaining respondents indicated they would need to check with their company executives.

Of the companies who said they would work with cannabis industry operators, 52 percent said they would be so inclined due to the potential revenue derived from the space; 29 percent indicated “it would be an interesting or fun area to conceptualize campaigns”; and 19 percent felt it would “provide a novel challenge.”

Of the respondents indicating they would not be willing to market cannabis products, 38 percent believed doing business with the industry would “lead to a negative perception of their firm”; 26 percent indicated they do not possess the necessary expertise to be involved in the industry; 20 percent said they had “no interest” in the cannabis space; and 16 percent believed the industry is “not yet robust enough to make it worthwhile.”

One of the most prevalent issues marketers faced in considering the space was the legality of cannabis, and 85 percent of respondents said the “first step” to industry involvement would be to hire counsel, while 68 percent admitted they “have little knowledge” about cannabis marketing laws on a state or national level. Fifty-seven percent of those surveyed believed that public relations would be the “strongest marketing integration” due to cannabis advertising laws, while 24 percent indicated search engine optimization marketing would be the best way to enter the space and avoid regulatory issues.

The vast majority of respondents, 80 percent, indicated traditional advertising platforms are “years away” from being able to properly handle legal and regulatory challenges associated with the cannabis space; and respondents were divided about where the greater opportunities for marketing-related growth in the space lies – 53 percent said the consumer-based products and services sector provided a greater growth opportunity, while 47 percent believed business-to-business would scale more rapidly.

Just 6 percent of respondents claimed they did not see venture capital funding becoming robust in the space during the next five years, while 70 percent indicated venture capital would “increase substantially” over the next year.

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Photo of downtown Los Angeles from the Hollywood Hills.

Los Angeles, California Cannabis Regulators Approved

8/17/2017

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The former California coordinator for the Drug Policy Alliance has been tabbed to run the Los Angeles Department of Cannabis Regulation, the Los Angeles Times reports. Cat Packer, 26, was the choice of Mayor Eric Garcetti to run the agency and was unanimously approved by the City Council.

The council also approved the mayor’s Cannabis Commission nominees, who will provide input to the Department of Cannabis Regulation on the city’s rules. Philip D. Mercado, Southern California Permanente regional chief of general surgery; Rita Villa, a certified public accountant; Robert Ahn, a former member of the planning commission; Victor Narro, a former member of the Police Permit Review Panel; and attorney Misty Wilks will comprise the five-member commission.

Los Angeles budget officials have earmarked $789,800 this fiscal year for the department. City Comptroller Ron Galperin has estimated the city could see $50 million in taxes derived from $700 million in sales in the city.

Under the city’s cannabis industry draft rules, which are still being finalized, businesses must have a plan to hire local residents and if a company has 10 employees they must have a labor peace agreement. The rules propose three licensing phases; the first round allows current medical operators to apply for a license, the second for social-equity applicants, and the third will be the general application period.

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Distribution Woes Cause Decline in Nevada Adult-Use Sales

8/17/2017

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Nevada dispensaries selling adult-use cannabis are struggling to meet demand, causing a 20 to 30 percent drop in sales since the program’s launch, according to Department of Taxation figures outlined by the Reno Gazette-Journal. Distribution problems continue to plague the market, which has led to product selections being reduced by more than half.

“These (retail marijuana) businesses are struggling without a robust distribution system,” wrote Deonne Contine, director of the Tax Department, in the report. “Cultivators and producers have product sitting for days waiting to be delivered to stores while the quality of the product degrades. Retailers do not have the products their customers desire, products that are legal and should be available to them.”

The dispensaries say they need at least nine to 11 deliveries per week, but they are waiting up to two weeks for new product deliveries. More than five dozen dispensaries and more than 12 alcohol distributors, who are tasked with delivering cannabis products, were surveyed for the report.

Just one distributor, Crooked Wine, is currently operating in the state with Blackbird Logistics Corporation doing all of the operations for the company. Blackbird is servicing 99 wholesalers and making 100 to 150 deliveries per day.

Chad Strand, Blackbird COO, said the company is delivering to “every dispensary in the state,” covering 10,000 miles in the few weeks it has been licensed to make cannabis deliveries.

The adult-use law approved by voters in November includes language that only permits alcohol distributors to distribute cannabis throughout the state. After dispensaries started running out of products, the Tax Department devised emergency rules that allowed cannabis companies to apply for distribution licenses, but that measure was challenged in court by the state’s liquor distributors.

The issue could be resolved today as Carson City District Court Judge James Russell will consider the case and could use the Tax Department report in his decision.

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The U.S. Capitol Building in Washington DC, where DCMJ protesters staged a smoke-in rally on 4/20.

Possession Charges from 4/20 Capitol Rally Dropped Against DCMJ Founder

8/17/2017

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The co-founder of D.C. Marijuana Justice, Adam Eidinger, had possession charges that were levied against him following his arrest during an Apr. 20 demonstration in Washington, D.C. dropped after the Drug Enforcement Agency determined that the 78 joints found in his possession were less than the 2 ounces allowed under the District’s adult-use laws, the Washington Post reports.

Eidinger was one of eight protesters arrested while handing out joints to congressional staffers as part of the demonstration. He had spent one night in jail and made multiple court appearances related to the case.

“To me, this means that they don’t understand that people have a right to give cannabis away in the District and they don’t have a very good legal argument to prosecute them,” Eidinger said in the report.

Eva Malecki, a spokesperson for Capitol Police, said that federal law had applied to the case; however Bill Miller, spokesperson for the U.S. attorney’s office, said that local charges were pursued but did not comment on why they were applied instead of the federal charges. Under federal law, it is illegal to possess any amount of cannabis.

If convicted of the charges, Eidinger could have been sentenced to six months in prison.

Another protester, Jessica Laycock, also had her possession charges dropped but is seeking to have the cannabis and paraphernalia returned. Capitol police have said they will not return the property because cannabis is a controlled substance under federal law.

Eidinger and other protesters still face charges from an Apr. 24 rally for allegedly consuming cannabis on federal grounds.

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Large plastic bags of trimmed cannabis product.

Cannabis Transportation: Developing a New Market

8/17/2017

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Where does all the cannabis industry’s cash go, and how does it get there? Someone is moving all that cash and product around the state, but it’s not your usual delivery people doing it: there is a whole new industry in cannabis transportation that has developed following the reform of cannabis laws. But this industry demands professionalism, forethought, and compliance.

In California, for example, highway patrol has done a fantastic job in recognizing how quickly this market is evolving and has been quick to teach officers the need for up-to-date documentation whenever cannabis product is in transit. Without the right papers, how would an officer know the product you have is not stolen or produced illegally? What if your company had a truck stolen — how would you lock it down and make sure your product and/or cash is safe? Staying compliant with remote management software and solid road management/inventory systems, as well as the use of instant-on or always-on video systems, enables cannabis transporters to be confident in any and all interactions with law enforcement during their journey.

However, there are also areas where state officials may have dragged their feet. For example, existing California laws require that the product is locked in a box in the back of a vehicle. This minimum state regulation keeps product safe, but not the people carrying or delivering it.

Planning for the worst and expecting the best

Numerous electronic measures now exist for auto-interrupt and/or climate control remotely on rigs running in this space. One thing to consider adding would be climate control alerts so that you’re always aware of the product temperature where your cargo is riding. Also important may be a battery backup cord should your truck run out of power and your cargo starts getting hot in the middle of the desert — then it becomes critical until your rescue vehicle comes to swap things out. Most importantly, GPS alone will not solve all of your issues.

This part of the business is expensive, so do your research! Whatever you do, surround yourself with professionals who understand how to keep procedures in place and compliance at the front of everything you do. Then, hire a great legal team to make sure you have all of the licenses and applications in place.

Have a comprehensive plan of action:

  • Route planning to avoid large areas without escape routes;
  • Scheduled maintenance done in advance to not take a truck or vehicle out of rotation;
  • Daily inspection of all vehicles to ensure the technology is in working order;
  • Route mapping software and delivery information systems like roadnet.com, Geotab, and others;
  • Create a technology plan to understand your customer need. Ask questions of the customer – do they need refrigeration? Do they need RFID tracking? Will the upcoming 2018 track and trace protocols be an issue to existing infrastructure?
  • Maintain supply chain best practices, including documentation of all anomalies;
  • Safety and security training to ensure risks of high-value deliveries are minimized.

Overall, even with the most solid standard operating procedures you still will have things pop up in the cannabis space that you might not expect, like the occasional request to move product to another state (a HUGE NO under federal and state laws) or the Russian mobster who meets you at 2 am outside of a shady building and says, “we will do big business together.”

Our space has challenges like no other that can be helped by security professionals. So, if you have a consulting business in security, a plumbing or A/C group, electricians that know green houses, or an alarm company — now is the time to start looking at this space and working towards your first customers.

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Nation’s First Hempcrete Public-Use Building Opens in Idaho

8/17/2017

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The first public-use building constructed from hempcrete has opened in Ketchum, Idaho, according to a KOMO News report. The Borah Basin Building was designed by Hempitecture who partnered with non-profit Idaho BaseCamp for the project.

The construction took three years to complete, financed largely by $27,000 raised through Kickstarter.

Hempitecture founder Mattie Mead said he discovered the building material his senior year in college while looking for natural building materials to “create more insulating, more efficient, and less energy-intensive homes.”

“And through that study hempcrete stood out to me as above and beyond one of the greatest options for creating a building that is not just energy efficient but is also healthy.” He said in the report. “So in essence our building and our walls are carbon sinks – they take carbon dioxide out of the atmosphere. Whereas most other building products are carbon positive – they put out more carbon dioxide than they absorb.”

Mead called the building experience “really special” because he worked with community members who were “instrumental” in the project.

“There’s something that’s remarkably inspiring about being 45 minutes from the nearest town and being able to be sheltered, warm, comfortable, have facilities to use, and to have a space to connect with themselves and the natural environment around them,”  he said.

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