California Lt. Gov. Filling Gubernatorial War Chest with Cannabis Industry Donations

7/27/2017

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California Lt. Gov. Gavin Newsom has raised $317,478 for his expected 2018 gubernatorial bid from cannabis companies in the state – far exceeding industry donations to other Democratic candidates Antonio Villaraigosa, the former mayor of Los Angeles, and state Treasurer John Chiang, who have raised $5,000 and $100, respectively, the Los Angeles Times reports.  The contributions from the industry, however, represent just a fraction of Newsom’s $14 million campaign war chest.

In February, following comments from White House officials indicating a potential crackdown on state-approved cannabis markets, Newsom wrote a letter to President Donald Trump and Attorney General Jeff Sessions, urging the administration “to work in partnership with California and the other eight states that have legalized recreational marijuana for adult use,” adding that enforcing federal law on the industry would “hand it back to drug cartels and criminals.”

According to the report, political donors with cannabis industry ties have, so far, donated more money to California’s gubernatorial candidates that all other farmers in the state’s agricultural industry combined.

On Mar. 3, Newsom attended a $5,000-a-plate fundraiser held by Indus Holding Company, a manufacturer of cannabis-infused confections. During the event, attendees and the lieutenant governor discussed banking options for the cannabis industry; however his spokesman, Dan Newman, said that Newsom “never” discusses specific or pending legislation with donors and there were “hundreds” of banking ideas discussed and his boss “had not endorsed any one concept.”

Newsom’s campaign committee reported $50,000 in cannabis industry-related donations after the fundraiser.

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Time lapse photo of traffic on the Las Vegas strip.

Nevada Laws Likely to Prevent Cannabis-Friendly Tour Buses

7/27/2017

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Entrepreneurs in Las Vegas hoping to launch a tour bus company which would allow guests to consume cannabis have hit a snag due to a Nevada law that makes it a misdemeanor to ingest cannabis inside a moving vehicle, the Las Vegas Review-Journal reports. The owners of the GreenRush Puff Bus argue that their plan complies with state laws; however, Clark County officials issued a warning last week that it was against the law to rent buses, limousines, or other vehicles as a way to consume cannabis.

“None of the casinos, hotels or bars will allow consuming marijuana for years, if ever,” said Nicholas Hogan, co-owner of GreenRush, in the report. “The bus solves that problem by providing a safe area to consume the product in a social environment,” adding that it would “draw tourists.”

One company, Cannabus, has been catering to medical cannabis cardholders in the state for a year but recently asked the Nevada Transportation Authority to put their charter bus application on hold “until the marijuana laws stabilized in Las Vegas,” said Cannabus President Dashan Ritter.

“We don’t allow smoking on our buses,” Ritter said. “But we do think it’s the best, safest and most organized format for tourists.”

Jennifer De Rose, deputy commissioner for the NTA, said “this type of application has not been heard” by the agency, and Clark County spokesman Erik Pappa said that the county is working with the NTA and Las Vegas Metropolitan Police Department in enforcing bans on cannabis use at casinos, McCarran International Airport, and in public.

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A man wearing a suit and walking across concrete while carrying a briefcase.

Australian MMJ Company Agrees to Purchase Canadian MMJ Applicant

7/27/2017

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Australian medical cannabis company Creso Pharma has agreed to acquire Canadian cannabis company Mernova Medicinal, who has applied to become the first licensed producer in Nova Scotia, for more than $8.1 million (A$10.2 million, C$10.18). Under current Canadian law, companies must prove they can cultivate cannabis crops before receiving a state license. Creso and Mernova will build a cultivation facility on 20,000-square-feet of land in Nova Scotia according to Good Manufacturing Practice guidelines.

Canadian producers are already permitted to export medical cannabis products to Australia in addition to other nations that accept medical cannabis imports.

Dr. Miri Halperin Wernli, Creso Pharma CEO and co-founder, said the deal allows the company “to rationalize and vertically integrate [their] supply and production chain” through the “100 percent owned GMP-quality cultivation and extraction facility.”

“This move gives Creso a number of strategic benefits, not only when it comes to expanding to overseas markets, but also when it comes to cultivating and manufacturing our own innovative medicinal cannabis products,” she said in a press release. “These will be standardized in dose and formulation, in innovative and proprietary delivery technologies, and will provide patients with new therapeutic choices beyond smoking or vaping.”

The company also produces nutraceuticals and hemp-based complimentary feed for companion and zoo animals.

The cultivation site could expand to 200,000 square feet and the company anticipates producing their first cannabis crop within 12 months of when the site goes online. Creso estimates revenue potential of the first crop between $12.7 million (A$15.9 million, C$15.8 million) and $25.4 million (A$31.8 million, C$31.7 million) per year.

The deal could also allow Creso to enter Canada’s federally-approved adult-use market, which is expected on July 1, 2018.

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The flag of the United States of America flying on a dock next to still water.

House Republicans Block Veterans Equal Access and Hemp Water Rights Budget Amendments

7/26/2017

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According to a report from MassRoots, The House Rules Committee is blocking two cannabis-related budget amendments from floor consideration, ruling the amendments are not in order. The affected amendments include the Veterans Equal Access Amendment, which would allow military veterans to access state-approved medical cannabis programs, and the Industrial Hemp Water Rights Act, which would allow hemp cultivators to use federally-controlled water.

Congressman Dan Newhouse, a Washington Republican and member of the Rules Committee, broke from his colleagues on the equal rights amendment, saying he’s seen “firsthand the benefit that people can derive from medical marijuana.”

“We’re not just talking smoking joints here. There’s a lot of different derivatives that can be used that help people alleviate pain,” he reportedly told the committee. “It seems to me that if that’s available and it works we should make it available to our veterans as well, as long as it’s in accordance with state law.”

The veteran’s access amendment could be revived via a conference committee which merges the House and Senate budget proposals into one bill. The amendment had received bipartisan support in the Senate and garnered more co-sponsors than any other amendment filed before the committee.

“All we want is equal treatment for our wounded warriors,” said Congressman Earl Blumenauer in a statement. “This provision overwhelmingly passed on the House floor last year – and bipartisan support has only grown. It’s outrageous that the Rules Committee won’t even allow a vote for our veterans. They deserve better. They deserve compassion.”

Last year, federal lawmakers blocked amendments that would have allowed legal cannabis businesses to access banking services and permit Washington D.C. to spend its own money to implement a taxed and regulated cannabis market.

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Cannabis infused chocolates on a baking tray inside of an edibles manufacturing site.

Breaking Down California’s Proposed Cannabis Manufacturing Rules

7/26/2017

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With the passage of SB94 (Senate Bill 94 or MAUCRSA), California has merged the oversight of the 2015 Medical Cannabis Regulation and Safety Act (MCRSA) and the 2016 Adult Use of Marijuana Act (AUMA) into a master regulatory system that will make it much more business friendly.

As part of this reconciliation, MAUCRSA is releasing rules that overhaul some of the rules originally proposed as part of MCRSA and continuing to evolve them in the coming months. This post highlights some of the proposed rules that entrepreneurs and existing operators should be mindful of as 2018 approaches.

Progressing from MCRSA to MAUCRSA

A few months ago, California’s Department of Health proposed a set of rules outlining what kind of products would be prohibited for manufacturers. This is also when MCRSA began to more properly define what ‘manufacturing’ means and spell out the differences between nonvolatile and volatile solvents, which would impact the type of manufacturing license you can get (Type 6 = nonvolatile, and Type 7 = volatile).

New license types were also introduced. One is the Type P license, which allows for packaging or repackaging medical cannabis products. This includes labeling or relabeling the cannabis product containers that go to retail — although if you package or label your own products as part of manufacturing, you do not need a separate Type P license. Another new option is the Type N license, which is for manufacturers looking to produce edibles or topicals using infusion processes or other products that do not require extraction. Both of these are subject to similar restrictions as a Type 6 license.

License application requirements are not changing too much; however the definition of “owner” is, hinting at increased scrutiny during the vetting process for both owners and non-owners. Anyone dealing with or interested in these license types is strongly advised to review what the proposed rules say regarding these license types and their restrictions.

Cannabis manufacturing workers pour an infused concoction onto a tray where it is separated into single-serving cubes. Photo Credit: Sarah Climaco

Restrictions facing manufacturers

Some matters that were released with MCRSA are most likely to remain with MAUCRSA, and cannabis entrepreneurs in California should keep these in mind moving forward.

Consider the following excerpt from Section 77 of SB94:

(a) The State Department of Public Health shall promulgate regulations governing the licensing of cannabis manufacturers and standards for the manufacturing, packaging, and labeling of all manufactured cannabis products. Licenses to be issued are as follows:

(1) “Manufacturing Level 1,” for sites that manufacture cannabis products using nonvolatile solvents, or no solvents. A Manufacturing Level 1 M-Type 6 licensee shall only manufacture cannabis products for sale by a retailer with an M-Type 10 license.
(2) “Manufacturing Level 2,” for sites that manufacture cannabis products using volatile solvents. A Manufacturing Level 2 M-Type 7 licensee shall only manufacture cannabis products for sale by a retailer with an M-Type 10 license.

(b) For purposes of this section, “volatile solvents” shall have the same meaning as in paragraph (3) of subdivision (d) of Section 11362.3 of the Health and Safety Code, unless otherwise provided by law or regulation.

(c) Edible cannabis products shall be:

(1) Not designed to be appealing to children or easily confused with commercially sold candy or foods that do not contain cannabis
(2) Produced and sold with a standardized concentration of cannabinoids not to exceed ten (10) milligrams tetrahydrocannabinol (THC) per serving.
(3) Delineated or scored into standardized serving sizes if the cannabis product contains more than one serving and is an edible cannabis product in solid form.
(4) Homogenized to ensure uniform disbursement of cannabinoids throughout the product.
(5) Manufactured and sold under sanitation standards established by the State Department of Public Health, in consultation with the bureau, that are similar to the standards for preparation, storage, handling, and sale of food products.
(6) Provided to customers with sufficient information to enable the informed consumption of the product, including the potential effects of the cannabis product and directions as to how to consume the cannabis product, as necessary.
(7) Marked with a universal symbol, as determined by the State Department of Public Health through regulation.

(d) Cannabis, including concentrated cannabis, included in a cannabis product manufactured in compliance with law is not considered an adulterant under state law.

The following list is made up of cannabis-related items from the first set of rules that could potentially change:

  • Cannabis-infused alcoholic beverage
  • Addition of non-cannabinoid additives that increase potency of cannabis products
  • Products that must be stored below 41˚F, including perishable bakery products (could contain cream or custard-filled pies /pastries, eggs, synthetic fillings, or meat-filled pies / pastries)
  • Vacuum packed
  • Canned products
  • Dairy products including butter
  • Meat products
  • Seafood products
  • Application of cannabinoid extracts to commercially available snacks or food items.

And, though we won’t be going in deeper detail in this post, here is a host of other issues that would-be cannabis manufacturers should also keep in mind for California’s future market:

  • Multi-tenant operations and co-location restrictions, but with abilities to share facilities
  • Responsibility of tax payment on distributors, and not cultivators
  • Requirement of Type P license (processor) to dry, cure and trim flower
  • Prohibition of trimming on cultivation site
  • Requirement of distributors to hold the entire lot of product on site
  • Transport to be conducted by distributors
  • The Isolation of extraction facilities entirely
  • Uncertainty around requirement of distribution license to self-distribute
  • Complexities around acquiring water from municipal water agency if you are in an urban area
  • The rise of cannabis cooperative associations that allow for small producers to band together, coordinate production and marketing ranging from what they plant, pricing, and process (though limited to 4 acres)
  • Implementation of standards (i.e. hand-crafted, cottage-grown) could be tangibly defined

The MAUCRSA is currently under review and industry participants are strongly encouraged to submit their thoughts regarding the proposed regulations. There is a lot for any organization or entrepreneur to swallow, but taking steps to ensure you’re in alignment and preparing for what’s coming will drastically increase your chances of success in California’s green rush.

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Maine Lawmakers Propose Doubling Adult-Use Tax Rate

7/26/2017

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Maine lawmakers have proposed raising the tax on adult-use cannabis sales to 20 percent, doubling the rate approved by voters in November, the Portland Press Herald reports. The proposal would see a 10 percent excise tax paid by the cultivator and a 10 percent sales tax added to cannabis products sold to recreational customers, which could equate to $21 million in state revenues during the first full year of market operations.

The committee also proposed distributing 5 percent of monies raised from retail cannabis taxes to the communities who house the businesses. Meaning municipalities would see $2 for every $40 in tax revenues from sales in their city or town.

David Boyer, Maine political director for the Marijuana Policy Project, said the proposed rate “is low enough to compete with the illicit market” and Massachusetts – where lawmakers are considering raising the legal cannabis tax rate from 12 percent to 20 percent.

“Municipalities should get a share of the tax revenue that comes with regulating legal marijuana businesses,” Boyer said.

The medical cannabis tax rates – 8 percent for edibles and 5.5 percent for everything else – would remain the same.

James Myall, a Maine Center for Economic Policy analyst, estimated that Maine’s taxed-and-regulated cannabis market could reap $18 million annually for the state after two or three years under the 10 percent rate approved by voters. According to the report, New Frontier estimates combined medical and retail cannabis sales in Maine could reach $321.4 million by 2020.

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San Francisco Creates Office of Cannabis

7/26/2017

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The new Office of Cannabis has been approved by the San Francisco Board of Supervisors who have already tasked the yet-to-be-hired director with preparing two reports by Nov. 1, according to a San Francisco Gate report. The reports will analyze the social disparities that could cause some social groups to be left out of the industry, and how to keep medical cannabis affordable in the city.

Board president London Reed suggested that the city follow the lead of Oakland, where officials created an equity program aimed and providing reparations to those who were disproportionately affected by cannabis prohibition in recent decades. The board also passed Supervisor Asha Safai’s request to limit the number of dispensaries in his district to three.

Supervisors Jane Kim and Sandra Lee Fewer opposed the decision, saying it sets a precedent allowing the supervisors to do the work of the Planning Department. The Planning Commission, which has passed its own resolution to ban new dispensaries in the city for two years, has final say in the issuance of dispensary licenses.

Supervisor Malia Cohen, who played an integral role in setting up the Cannabis Office, also supported the plan to temporarily limit the issuance of new dispensary licenses until the state develops regulations to govern California’s adult-use industry. Cohen seeks to implement the moratorium as early as September.

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The flag of Cyprus hangs on a line next to the flag of Greece during a day of celebration.

Cyprus Cabinet Pushes MMJ Plan to Attract International Investments

7/26/2017

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In an effort to attract international investors, federal officials in Cyprus have approved plans allowing cultivation of medical cannabis on the island, according to a Cyprus Mail report. The cabinet-backed plan, which would make two cultivation licenses available, still needs to be approved by Parliament.

Health Minister Giorgos Pamborides said officials hope to attract capital and start-ups in order to boost pharmaceutical research and development by allowing medical cannabis cultivation.

“I believe that Cyprus can be a pioneer in the region due to the favorable weather conditions,” he said in the report.

Cyprus Weekly reported in May that doctors had begun writing medical cannabis prescriptions for cancer patients which they could fill at pharmacies. Presently, medical cannabis products are imported into Cyprus. Tilray, a Canadian medical cannabis producer, announced on May 4 that they had received approval from the European Union to send Tilray Drops into Cyprus.

Cyprus’ Friends of Cannabis advocacy group has since called on Pamborides to expand access to the program beyond end-stage cancer patients, and urged lawmakers to support a comprehensive state-wide regime.

“By legalizing the cultivation process, in less than two years Cyprus could become the medicinal cannabis capital of a large part of Europe, producing enough for local needs and exports and adding a new branch to its medical tourism product,” said Petros Evdokas, a member of the advocacy group, in the Cyprus Weekly report. “[Pamborides] is not exercising his powers to the full, only to the tragic minimum.”

Pamborides indicated he hoped Parliament would approve the cultivation plans soon so officials could begin seeking potential investors.

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Dave Peck: Adapting Social Media Marketing Strategies to the Cannabis Space

7/25/2017

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Dave Peck is the Chief Marketing Officer for KIND Financial, a business offering seed-to-sale software technology to help cannabis companies stay compliant in the evolving marketplace.

In this episode of the Ganjapreneur.com podcast, TG Branfalt hosts Dave for an interview just two short weeks after he left an executive position with PayPal to join KIND’s pioneering journey in cannabis compliance. In the interview, the two discuss Dave’s early impressions of the cannabis industry, the historical evolution of social media, how cannabis companies should change their marketing strategies based on which platform they are using, the importance of data collection and self-reflection when running an online marketing campaign, and more.

Listen to the interview via the media player below, or keep scrolling down to read a full transcript of this week’s episode.

Listen to the podcast:

Read the transcript:

TG Branfalt: Hey there. I’m your host, TG Branfalt, and you are listening to the Ganjapreneur.com podcast, where we try to bring you actionable information and normalize cannabis through the stories of Ganjapreneurs, activists and industry stakeholders. Today, I’m joined by Dave Peck. He is the chief marketing officer of KIND Financial. How are you doing today, Dave?

Dave Peck: I’m doing good. How are you doing?

TG Branfalt: I’m all right, I’m all right. We were bantering a little bit before we jumped into this, and you’ve only been in the industry how long?

Dave Peck: Two weeks, at this point.

TG Branfalt: Two weeks?

Dave Peck: Maybe three. Yep, I’m new to this industry.

TG Branfalt: Tell me about life before the industry.

Dave Peck: Sure.

TG Branfalt: What did you do before, and how did you end up here?

Dave Peck: I’m one of those early adopter geeks, as I like to say. I’m always the guy to use something first, be it online, or social, or devices, Alexa, things like that. I found my way into digital social media about 10 years ago. We called it new media, we didn’t even know it was social media, and got involved with podcasting, like yourself. One thing led to another, and brands started rushing into social sites like Twitter and Facebook, trying to figure out, how do they use it? I got picked up for some consulting by Coca-Cola, ended up consulting for Wells Fargo, Sergio Rossi, Gucci, more reality stars than you can shake a stick at, because they all want to be famous.

And eventually, a little company called PayPal, about five years ago, made me an offer I could not refuse. I have five children, and my wife said, “They offer health insurance? You’re taking that job.” Joined PayPal back in 2012 to launch their social and digital strategy and campaigns, and then about a few months ago, ready for a change, and I’m now in the cannabis business working for KIND Financial.

TG Branfalt: So, you’re ready for the change. Tell me about how you discovered the position, and why did you decide to enter the space from something pretty mainstream?

Dave Peck: Yeah, I get that question often. Introduced to David, David is the CEO and founder. Got introed, and we had some back and forth for a while, talking about opportunities for KIND Financial. Ended up meeting, more back-and-forth, and talked to my family about it, especially my wife. I’m looking to be inspired, something new. Like I said earlier, I’m one of those, I keep saying it funny, but early adopter geeks. I’m one of those guys, I love being part of a team that’s solving for something, you know? Doing something better than anybody else.

PayPal does what they do better than anybody else, and it was great to be with them at a time when things were exciting, and moving forward. Talking to David, I was just inspired. Realizing the kind of team he’s brought together, and they’re solving for a problem in the cannabis industry around compliance and financial solutions, and to help businesses with government agencies, and just thrive, for lack of a better word, in this time of change. I knew I wanted to be part of it, and it got me excited. I really am excited. I think this is going to be a great ride, and I’m looking forward to it.

TG Branfalt: So, what for some of those things that drew you? What are some of those things that excite you?

Dave Peck: In regards to this industry?

TG Branfalt: Yes, sir.

Dave Peck: What excites me? Building the team. In a team of people that are made up of veterans, and regulators, I find that fascinating. I know that’s weird, but that’s just something exciting.

TG Branfalt: I’m a policy geek. I understand.

Dave Peck: I know. I’m getting to be a policy geek. I’m not quite there yet, but I am a lobbyist, and things like that. You asked me one reason I took it, and about a month prior to my first conversation with KIND Financial, I was talking to a former PayPal colleague who’s a lobbyist. I must have drilled that guy for three hours, Devin. I kid you not, asking questions like that is just fascinating. The timing with that conversation and KIND just really got me interested. What things excite me? Helping the industry grow. Being part of a team that’s, like I said, doing something that others aren’t doing. With KIND, it’s helping customers with compliance, rules, helping them with banking. There is that word, right? Just doing things better than anybody else.

TG Branfalt: Did you, is this something that you looked into when you were looking for a change? Did you say, “Hey, I want to go to the cannabis industry.”

Dave Peck: No, it was not, if I have to be completely honest. The other question I get is, am I a cannabis user? How do I feel about it? I’m neutral. The product does not necessarily have to be cannabis for me, in this example, right? It just happens to be, and I’m fine with that. I’m in California, what can I tell you?

TG Branfalt: So tell me about, what is your job description over there at KIND Financial? The CMO, what do you do?

Dave Peck: Fancy title, right? CMO, people are like, “What the heck’s a CMO?” I am in charge of marketing first and foremost. How are we marketing? How are we targeting our users? How are we getting the word out around what we’re doing here at KIND Financial? In addition, I pick up PR, so public relations in this company falls under there as well. Talking to, being a spokesperson. Talking to one of the best podcasters I know, things like that, who I’ve known for five minutes. Then it’s operations too, day to day. How can we do things better, faster, more efficient?

TG Branfalt: You came from PayPal, as you said. They’re well known, they’re publicly traded. Can you tell me about some of the reactions that you received when you made the jump to this industry?

Dave Peck: Yep. One of the questions I get a lot is, how do people react? Like you said, I’ve had nothing but welcoming and arms wide open. No one has said, “What are you thinking? Are you an idiot?” Or, “I don’t like cannabis,” things like that. The other thing that’s happened is, it happens every day when someone finds out. They all have friends that are in the business. It’s like one of those things that’s taboo, I’m starting to learn, that people don’t necessarily talk about, but then when they know, “Oh, you’re in the same industry? Let me introduce you to a friend.”

I mean, you can see right here I have about four business cards the people have given me that want to talk. It’s amazing. It’s like six degrees of Kevin Bacon, it’s one degree of cannabis. It’s all around me. It’s incredible.

TG Branfalt: Nobody called you a crazy person for entering an industry that is a little under fire right now?

Dave Peck: No, not at all. One of the best messages I have via Facebook messenger was from an ex-colleague named Christina who wrote, I told her I was getting into the cannabis industry. She wrote back, “You’re Dave Peck. Of course, you are.” It’s not shocked at all. That’s the kind of thing I do. I go for that soon-to-be new and up and coming thing. It’s just in my blood.

TG Branfalt: What have been some of the learning curves that you’ve had to endure in your short tenure thus far?

Dave Peck: What are the learning curves? Rules for cannabis are a little different when it comes to digital and social, so that’s the first one. Running ads on Facebook, you can’t use images, necessarily, or anything that encourages marijuana use, but yet, as a business, you can be there. How’s that for a yin and a yang, right? It’s okay to advertise on Facebook, or Instagram, or things like that, but you can’t use images of your product. I find that a little interesting, and I’m still trying to wrap my head around that.

The other one is compliance. I understand that KIND Financial is in the compliance business, I’m in the compliance business. Before I came on board, they walked me through the product, and these questions are blowing my mind. What did you do? I hope I use the right terminology, by the way. Nobody judge me here. “What do you do when you trim the cannabis plant, what did you do with the trimmings? Who took it? Where did it go?” I’m like, “What?” I go, “Isn’t that a lot of questions?” The team’s like, “Oh no, they have to have this information. If they get audited, they’ve got to have this logged.”

That’s why we built the product. It’s mind blowing to me, sorry. What time was it disposed of? Who bought the product? How did they pick it up? I mean I can go on, and on, and on. That is a huge learning curve. I thought it was a joke.

TG Branfalt: It’s no joke. It’s very serious business.

Dave Peck: Yeah, I’m getting that.

TG Branfalt: You had mentioned that on Facebook and Twitter, you can’t market a certain way. You can’t have these images. What changes are you going to have to make with your own marketing strategies to adapt to these rules?

Dave Peck: Historically, one of my main strategies has been images. Image first. People are looking at ads, and going on social networks on their phone first, right? It’s a mobile world we live in, and so it’s harder for people to read the content, the copy, versus the images. I have to adjust what the images I’m using, how I think about it. It’s really going to be something I’m going to have to dive into. Grabbing people’s attention on their mobile device, that’s a big one for me. Then tightening up who we target. Well, not who we target, but in my past, my demographics have been different, right?

I can go younger, I can go older, and in this industry, I am learning that it’s that 18 to 34, right in there, I believe. I know someone’s going to email me and go, “Hey, I’m 72.” You’re right. It’s for anybody, but I have to train myself a little bit different there.

TG Branfalt: I want to talk to you a bit more about the marketing strategies, but before we do that, I want to take a short break. This is the Ganjapreneur.com podcast. I’m TG Branfalt.

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TG Branfalt: Welcome back to the Ganjapreneur.com podcast. I’m your host, TG Branfalt, here with Dave Peck, the CMO of KIND Financial. Before the break, we were talking a bit about how you’re going to have to adapt your own marketing style to fit the space. As we know, you’re brand-new to the space so I want to talk to you a bit more broadly about marketing and social marketing. What are some common mistakes that you’ve seen from new companies throughout your career?

Dave Peck: A lot of them will launch social channels or a digital campaign, and they’re doing what I call shouting, right? It’s, “Look at me, here I am. Come check me out.” Then they wonder why no one is liking their content, or engaging with their content. I define engagement as a like, a share, a comment. Call it an action, right? Those companies will throw a lot of money into it and wonder, “Why is nobody talking back to me, or sharing my content?” It’s because you’re just shouting at them. You’re like, “Hey, we got a sale!”

I pick on Jamba Juice, but they’re like, “Buy three Jamba Juice, get one half off, only in Milwaukee on a Wednesday.” And they’re like, “Why is nobody going to Milwaukee on a Wednesday?” Well, first of all you’re using Twitter. Twitter, in my head, is an amplification tool that’s global. It doesn’t mean that people in Milwaukee are going to see your post, right? Anybody can see that. If you have that poor Jamba Juice example, that’s a Facebook play, right? You can use Facebook to target people, you know where they live. For $20 you can get a targeted ad, and get those people in Milwaukee on a Wednesday.

They don’t use the channels. They don’t think it through. They think all social channels are the same, for lack of a better term. That’s one of the biggest mistakes I see. Others? Influencer marketing. A lot of companies like to hire influencers, and then they’ll have a YouTuber make a video. Great, this is the best video. Then they put it on their channel, their being not the influencer. Well, time out. You just paid this influencer to create a video. You want to have them share it on their channel, because you want to target their audience. You want to get outside the bubble, for lack of a better term. That’s another one of my favorites.

Then lastly is measurement. My team has already learned this at KIND. How do you measure success? I’m all about metrics, right? If you come back and you hire a Snapchatter, and you come back with one million opens, you go, “Look, I spent $100,000, I know I got a million opens.” I’d be like, “So what? What’s the value of an open? Did anybody click on the link, did anybody buy the product? What happened?” Those kinds of things. That’s the other one, because the people get caught up in impressions, which is how many people saw the video. What’s the value of an impression? I have no idea. It doesn’t help me. I’m mean like that, by the way. Can you tell?

TG Branfalt: What might you tell a new company, who’s already made some of these mistakes, how could they rectify them? What advice would you have for them?

Dave Peck: Measure everything. Which sounds like a lot of work, but it’s not. Start backwards. You know, people say, when I worked with companies in the beginning, I’ll say, what does success look like for you? “We want everybody to share our social posts.” It’s like a shrink, right? You’re talking to your psychologist. As we work through it, no, you really don’t. You really want people to go to your landing page and buy your product, so start there. How can we get people to come to our landing page and buy our product? Okay, how do we measure that? Maybe it’s a Bitly, which is one of those links, if you’re not familiar with it. You can custom link, it’s free, by the way. Everything is free.

You go there, and it will tell you how many people clicked on your link, what time of day, where they came from. Take that data, and go, “Okay, I know people are clicking at 11, versus nine, and they really do it on Thursdays.” Okay. You know what I should do? I should post my content at 11 on Thursdays, and then watch them, and then see if the number of clicks go up, great. More people are coming to my landing page. That kind of data, I can go on for hours, I don’t want to bore everybody, but working in a new way, that way. You know what you’re doing wrong, make more educated decisions. A lot of it is all free.

TG Branfalt: When you came into this space and you started working with KIND Financial, what were their goals for you, as this social marketer?

Dave Peck: The goal for me is to increase awareness around KIND Financial’s products, get more people talking about what we’re doing, and make awareness of what problems KIND Financial solves, along the lines of education, compliance, banking, with our link to banking products. Yeah, and awareness, I would say is the high-level answer and measurement.

TG Branfalt: Moving forward to some of the strategies that you’re going to employ for KIND, are you going to take any sort of different approach because you’re in the cannabis space than you would in the outside space? I know that’s similar to previous questions, but what I mean is specifically, KIND doesn’t touch the plant, right? So you can obviously have a little more leeway than you do, as opposed to a company that would touch the plant. What sort of things are you planning on rolling out, or utilizing for KIND?

Dave Peck: I think it kind of goes back to my measurement point about, I want to be more educated in the actions we take. Because we’re in the cannabis industry, finding our audience could be a little bit harder than other, versus people that drink soda pop, or like to shop. I think we’ll be heavier on Facebook, if that makes sense, because with Facebook you can get a lot of data, and a lot of great analytics. I always tell people that for $20, my kid could get you a ton of coverage on Facebook, and he’s 11. He knows it better, it’s scary, than most adults I know.

My credit card shows these bills and I’m like, “What are you doing?” I think there’s a great data, back to my point again about the audience, and who they are, and where they’re located. I think we can make KIND, using my experience, to make really educated marketing campaigns, how about that? I guess that’s what I’m trying to say. I’m trying not to repeat myself from earlier, but that’s really what I think I bring to the table, and where we’ll be.

TG Branfalt: I want to talk to you a bit more again, about some were broader issues with the marketing and the cannabis space, but we’ll take our last break. This is the Ganjapreneur.com podcast with TG Branfalt.

At Ganjapreneur, we have heard from dozens of cannabis business owners who have encountered the issue of canna-bias, which is when a mainstream business, whether a landlord, bank, or some other provider of vital business services refuses to do business with them simply because of their association with cannabis. We have even heard stories of businesses being unable to provide health and life insurance for their employees, because the insurance providers were too afraid to work with them. We believe that this fear is totally unreasonable, and that cannabis business owners deserve access to the same services and resources that other businesses are afforded.

That they should be able to hire consultation to help them follow the letter of the law in their business endeavors, and that they should be able to provide employee benefits without needing to compromise on the quality of coverage they can offer. This is why we created the Ganjapreneur.com business service 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 a 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 Dave Peck, chief marketing officer of KIND Financial. I’m sure you guys over there collect a ton of data with your software. Can you tell me about how you plan on using portions of that data for marketing purposes?

Dave Peck: That’s a great question. That’s one of the first things I looked into when I started KIND. I reached out to one of the guys in the marketing team and had them look into, what is the data we can pull? What is it that we might want to pull later? Keeping in mind that we want to stay within our user agreement about using people, the data as well as within the legal rights. I said, “Make sure you talk to the lawyers first, and check the user agreement. What can we pull?” Or, what would we like to pull in the future? And not share anyone’s private data, obviously.

I’m interested, what are the biggest sales days for cannabis products? What are the cannabis products being sold most often? What’s the average purchase price? Where are they located? I would love to get my hands on all that data, within the rules and keeping our users safe, of course. That is something we’re absolutely looking into, but we’re not taking any action at this time. Just looking into it. I’m all about the rules.

TG Branfalt: And you would use that stuff, like you said, to target marketing. Maybe it would go out on a Tuesday instead of a Wednesday.

Dave Peck: Yeah, and also to give you a little of what it’s like behind the kimono, you see it happen all the time. Today, someone put out an article about the number one edible, I can’t remember the name, and it was gummy bears. That stuff gets media’s attention, gets PR, basically, so you can help tell your story. You can say, “Hey, we’ve got this great stat, and by the way, here we are, we’re rolling out a new product.” It kind of becomes part of a campaign, and companies that are sitting on that kind of data, I encourage them to look into it and see, again within the rules. I know I’m repeating myself, like the third time talking to one of my kids, but you want to stay legal. You don’t want to do anything that risks your client’s customer data or anything like that, so be really careful with that kind of stuff.

TG Branfalt: Again, coming from an outside industry, and you said that you’re sort of neutral on cannabis. What has this experience so far been like for you? You said that you were accepted with open arms, but what’s the culture been like, going from a PayPal to a KIND? Has there been sort of culture shock for you?

Dave Peck: Well, I look at it this way. Going from a big company to a startup, a new company, I should say, that’s different, but I knew that’s where I came from, so I’m actually happy to be back. Less cooks in the kitchen, able to get things done faster. I’ll answer the other part of your question this way. I’m blown away with how mature this industry is. I use the word professional. I just went to my first conference, and I mean there’s people in suits. Some guys are wearing vests. At the conference I went to, the product was not there at all. There were no plants, but there is people selling lights, and packaging, and vapors, and water with cannabis THC in it.

How well dressed they are, it is not what I expected from the TV shows and things like that. It was really, I’m smiling when I’m saying it to you. It was really fun, too, actually.

TG Branfalt: Which event did you attend?

Dave Peck: It was in DC last week. It was …

TG Branfalt: Ah, we crossed paths like ships in the night. I was in DC, and I was actually notified that that was going on, but I was doing some business down there. I heard that it was really an incredible event.

Dave Peck: It was amazing. It was just not what I expected at all.

TG Branfalt: Would you have any interest in working with, in the future, obviously, working with companies that touch the plant, or are
you more comfortable in an ancillary industry?

Dave Peck: I can’t speak for our CEO, but I would think that —

TG Branfalt: I’m talking about you, personally.

Dave Peck: Me, personally? I have no problem touching a plant, not at all. I’m just raised, I keep saying California, but I do think it has something to do with it. I’m like, “Whatever.” It’s almost a nonevent for me, personally. Don’t care. It’s your own business. I don’t think there’s anything wrong with it. I have no problem with it, you know? It’s just uneventful to me. I laugh at how much attention this gets.

TG Branfalt: Well, I mean speaking of the attention, when it was announced, we covered it, and actually that’s the most times that I’ve been retweeted in my entire life. The minute that you retweeted it, I was like, “Wait a minute, what’s going on here?” My followers were filling up. I was like, “Wait a minute, that’s right. It’s the Dave Peck story. That dude has followers.”

Dave Peck: Oh, you mean me joining a cannabis company, yes.

TG Branfalt: Were you surprised at the response?

Dave Peck: Yeah. Prior to, you nailed this one really well. Prior to the story going out, our CEO, David’s like, “Hey, you don’t understand much coverage we’re going to get.” Give me a break. He’s like, “No, this is a big deal.” I go, “Come on.” He goes, “You want to put some money down on it?” I’m like, “I’ll make a friendly wager, sure.” I lost. Please, I’m not bragging. I’m just saying, Forbes picked it up, Business Wire. It just goes on and on. Some pro-cannabis celebrities retweeted it. I’m like, “What the heck?” I must have had blinders on. I just did not get it. To me it was like, “Really?” And here I am talking to you almost two weeks later, still about it.

TG Branfalt: So you didn’t expect it to blow up the way it did.

Dave Peck: Not at all.

TG Branfalt: In your opinion, why do you think that the cannabis media, and even the mainstream media was like, “All right, we need to talk about this.” From your opinion?

Dave Peck: If I could be honest, I think it, not validates, but I’m trying to use the right word. Not professionalism, but shows that this is a real industry, maybe. These Silicon Valley types are moving to the cannabis industry. It validates it, I don’t know. Legitimizes it, maybe that’s the word I’m looking for. There’s some money to be made here. There is this thing that’s happening, people want cannabis, to be able to access it, and I think this kind of shows it, because along with some of the articles written about me, there are also articles about venture capitalists investing and pivoting their models, even in Silicon Valley, to invest in the cannabis industry. It’s crazy.

That’s the other thing that’s happened. Quite a few VCs have reached out to me to talk about, not necessarily, do I know people they can invest in? I’m like, “I’ve only been at this a week, guys.” This was a week. I haven’t even met anybody yet. “Well, as you meet people, if you think there are businesses you can invest in, please let us know.” I’m like, “Oh my God.” It’s crazy.

TG Branfalt: As someone who has an entrepreneurial background, does it surprise you at all that VC firms are getting in on the ground floor of this?

Dave Peck: No, not at all. This is what they do, right? They want to get in on that as early as possible, so they get a bigger return at the end. Back to, you asked me about my past. Getting in early is my thing, and that’s exactly what VCs do. Here’s another industry, you know? Enough self-driving cars, let’s get into something more practical, that we can get a return back faster.

TG Branfalt: So, the last question I really want to ask you is, what advice as an entrepreneur do you have for not only individuals considering getting into this space, but also people working in mainstream, with mainstream companies who are considering getting into this space?

Dave Peck: In my opinion, the cannabis industry is still pretty young. It’s growing really fast. It reminds me of the Internet boom in the ’90s, or the computers in the ’80s. With all that being said, you’re going to make mistakes as you race to find solutions quickly, and that’s okay. Everyone’s going to make mistakes, and things are going to move fast, but you need to be prepared. Being the first may not equal being the most successful. If you don’t take the time to do it right, you might not do it well. Take the time to do it right, I should say, and do it well. First doesn’t always been successful in this industry, or any industry. If I compare this to Silicon Valley, that’s my two cents. If that makes sense, I kind of rattled.

TG Branfalt: No, that’s great, man. I really appreciate you taking the time to come on the show. Congratulations on the new role. Welcome to the strange, strange world of the cannabis industry.

Dave Peck: I am excited.

TG Branfalt: I really appreciate you taking the time out to, two weeks in, you’ve got a lot of guts my friend. Thank you.

Dave Peck: No problem. You were gentle, so it was great.

TG Branfalt: You can find more episodes of the Ganjapreneur.com podcast on the podcast section Ganjapreneur.com and on 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 have been your host, TG Branfelt.

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A gavel, typically used by judges in a United States court of law.

Federal Lawsuit Filed Challenging Constitutionality of Cannabis Prohibition

7/25/2017

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Former New York Jets defensive end Marvin Washington is one of five plaintiffs in a federal lawsuit against the Department of Justice and Attorney General Jeff Sessions which challenges the constitutionality of cannabis’ Schedule I designation under the 1970 Controlled Substances Act, the New York Post reports. Other plaintiffs listed in the suit alongside Washington include 11-year-old Alexis Bortell, who uses medical cannabis to treat epilepsy, and Jose Belen, a military vet who uses medical cannabis therapies to control post-traumatic stress disorder symptoms.

“Classifying cannabis as a ‘Schedule I drug’ is so irrational that it violates the U.S. Constitution,” the suit contends.

Michael Hiller, the attorney representing the plaintiffs in the suit, said, “the record makes clear that the CSA doesn’t make any rational sense and the federal government knows it.”

Washington is suing the government because the CSA is preventing him from securing federal grants to open a business that would allow professional football players to use medical cannabis instead of opioid-based drugs for pain management.

The Justice Department Task Force on Crime Reduction and Public Safety is expected to release a report next week that many advocates fear will try to link cannabis with violent crime, according to a report from The Hill. Sessions has previously asked Congress to oppose language of the Rohrabacher-Blumenaur amendment, which prohibits the use of federal funds to interfere with state-approved cannabis programs.

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A tall and skinny cannabis plant sticks out of an indoor cultivation center's canopy.

Canadian MMJ Producers Need to Increase Production for National Adult-Use Market

7/25/2017

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In an interview with the CBC, the executive vice-president of Aurora Cannabis, a licensed producer in the Great White North, is confident current operators will be able to serve Canada’s recreational cannabis market but the companies need to ramp up production in preparation.

“We need to expand our capacity right away simply to meet the demands of the rapidly growing medical cannabis system,” said Cam Battley. “When the demand of the adult consumer system is layered on top of that, it’s a rush to build as much capacity as possible.”

Aurora is doing their part – currently constructing their second facility known as Aurora Sky, an 800,000-square-foot facility at Edmonton International Airport.

Jordan Sinclair, communications director for licensed producer Canopy Growth, said that the demand for medical cannabis in Canada “doesn’t seem to be slowing down…and then with recreation, obviously that’s a massive market opportunity.”

Both companies have found great success in the nation’s medical cannabis industry as both are traded on Canada’s flagship stock exchange, the TSX. Aurora graduated to the big exchange last week, and senior management, directors, key stakeholders, and company supporters rang the opening bell on Monday. Canopy began trading on the TSX in July 2016.

“This is a coming of age, not just for Aurora, but for the cannabis sector and what we’re seeing now is that Canada has established itself as the world leader in a brand new emerging industry that we are literally inventing in real time,” Battley said in the report.

There are more than 60 medical cannabis producers licensed by Health Canada.

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The Ohio state flag flapping on a windy day in the state's capital city.

Ohio Regulators Approved for Additional MMJ Program Funds

7/25/2017

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The Ohio Department of Commerce and State Board of Pharmacy received the greenlight to spend another $6 million over the next two years for costs related to the Ohio Medical Marijuana Control Program, including funds for legal costs related to potential lawsuits over the state’s licensing process, Cleveland.com reports. The agencies anticipate being able to both repay the state and operate using money derived from licensing fees – expected to reach $10.8 million annually – by next year.

The funding request by the Commerce Department includes $306,444 for legal expenses related to the administrative hearing process, $3.9 million to set up the required seed-to-sale database and the e-licensing system, and $180,000 to maintain both systems for the program’s first year.

The Board of Pharmacy’s request includes $1.6 million for a consultant to develop a scoring system, and to score, the state’s dispensary applications. The board has hired North Highland Company for the tasks at a rate of $729,000 through a competitive bid process; however, if the applications exceed 250 the rate could rise. The board has budgeted $1.3 million for the scoring work.

Additionally, the board has earmarked $62,500 for legal fees and $250,000 to set up a toll-free help line.

According to the report, Ohio has already collected more than $2.3 million in revenue from application fees. In all, 24 cultivator licenses will be issued – 12 for large grows and 12 for small grows – and licensees will pay $20,000 and $200,000, respectively, to renew those licenses.

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A Toronto police car blocks traffic on a busy city street at night.

Cannabis Offenses Down in Canada, 17K Still Arrested for Possession

7/25/2017

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According to Statistics Canada figures, the number of police-reported cannabis offenses is down for the fifth consecutive year, falling about 6,000 from 2015 to 2016, DurhamRegion.com reports. However, police in Canada still charged 17,733 people with cannabis possession in 2016.

Federal lawmakers announced plans to federally legalize cannabis use in 2016 and are currently debating regulations to govern a nationwide recreational market. The arrest rate represents a drop of about 3,600 from 2015, but simple possession still represents 76 percent of all cannabis-related charges in Canada.

In all, police reported 55,000 cannabis-related offenses in 2016. Even though federal leaders have unveiled broad legalization plans, they decided not to decriminalize simple cannabis possession in the interim.

The report showed a 7 percent increase in the number of police-reported offenses related to the illegal possession of prescription medication such as opioid-based pain-killers and “date-rape” drugs.

Statistics Canada also reported a rise in impaired driving violations of more than 10 percent, from 2,755 in 2015 to 3,098 in 2016, but police reported that 96 percent of those incidents involved alcohol.

Legal cannabis sales are expected to roll out in Canada on July 1, 2018, which will make them just the second nation – behind Uruguay – to federally permit cannabis sales to adults. According to Sept. 30 Health Canada figures, there are 98,460 registered medical cannabis patients throughout the nation.

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San Francisco Officials Move to Ban New Dispensaries Until Rec. Rules Developed

7/24/2017

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The San Francisco, California Planning Commission has passed a recommendation to ban the opening of new medical cannabis dispensaries for up to two years until the city enacts its regulations on the forthcoming recreational cannabis industry, according to a report from 48 Hills.

The resolution is not binding and would need to be approved by the Board of Supervisors in order to take effect; however the Planning Commission has to approve all new dispensary applications, so even without a vote from the Board of Supervisors, permits could be hard to come by.

There are currently 29 dispensary applications pending in the city.

Supervisor Ahsha Safai proposed a permanent cap on dispensaries in his district which prompted the discussion of a city-wide moratorium. Safai’s district currently has three dispensaries – the maximum number he wants operating in the district – and if the resolution is approved that would mean that no more dispensaries would be permitted in his district unless one of the current operators shuts down.

The Planning Department suggested that rather than create a patchwork of rules district-by-district, the city should stop issuing new permits right now.

The Small Business Commission opposed the plan, saying that it would create an oligopoly in the district and drive businesses into other parts of the city.

The Board of Supervisors Land Use Committee will consider Safai’s proposal today, and the full board will hear the measure tomorrow.

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The flag of Poland flying on a windy, cloudy day.

Poland President Signs MMJ Legalization Measure

7/24/2017

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Polish President Andrzej Duda has signed legislation legalizing medical cannabis use in the nation, allowing patients to register with pharmacies who will dispense medical cannabis products, according to a 112 International report. Initially, the measure would have allowed patients to grow their own cannabis; however, amendments to the bill removed that provision, allowing instead for pharmacies to prepare drugs from raw materials that will be imported into Poland.

The program will allow patients with severe illnesses, such as chronic pain, multiple sclerosis, treatment resistant epilepsy, and nausea and vomiting from chemotherapy, to access medical cannabis therapies if approved by a physician, but there is not presently a set qualifying condition list for program access.

The rules will allow patients to access raw cannabis, extracts, and tinctures. A cannabis institute will be created to educate pharmacists, physicians, and the public on the next steps.

“We sent [a to-do list] to the government to let them know what they need to prepare,” said MP Piotr Liroy-Marzec in a Marijuana.com report. “The Polish Institute of Cannabis will be starting right now. Education on cannabis is what Poland needs, for the doctors, judges, and pharmacists.”

The measure is set to take effect in October.

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A macro photograph of a long, trimmed cannabis bud.

Maine Dispensary Owner Gifts Cannabis to Volunteers Who Clean City’s Trash

7/24/2017

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A dispensary owner in Maine offered cannabis to volunteers who pitched in to help clean up trash throughout the community over the weekend, according to a WUMR-9 report. Dennis Meehan, owner of Summit Medical Marijuana in Gardiner, posted the call on Facebook, which was shared hundreds of times.

Meehan offered volunteers 21-and-older 2 grams of flower per trash bag they filled and, because of the support on Facebook, he wasn’t sure he would have enough product to meet the demand. While recreational sales are not expected in Maine for about another 11 months, gifting cannabis became legal on January 1.

“The night before I was up all night putting together the bags. I hardly slept,” Meehan said in the report. “We had people not just from Gardiner, but as far away as Bangor, Waterville, and across Southern Maine. It was incredible.”

Volunteers filled more than 100 bags with trash, which equates to hundreds of dollars of donated cannabis; however, Meehan said he didn’t track the exact amount because “gifting” cannabis is something his family “has been doing for years as caregivers.”

“A big part of Maine’s marijuana program is making medicine available to people who otherwise may not have been able to afford it,” he said. “At the end of the day it isn’t about money. It’s about the need. It’s about the community.”

According to a Facebook post, Meehan hopes to expand the program statewide “in [a] month or so.”

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Aerial view of the port on St. Thomas Island in the U.S. Virgin Islands.

MMJ Legislation Reintroduced in U.S. Virgin Islands

7/24/2017

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U.S. Virgin Islands Sen. Positive Nelson has reintroduced legislation to legalize medical cannabis in the U.S. territory, the St. Thomas Source reports. A similar measure died in the legislative Health Committee last year, which has led Nelson to request the bill be heard by the Committee of the Whole because he feels the chair of the Health Committee, Sen. Nereida Rivera-O’Reilly, has “exhibited an obvious bias against cannabis legalization in any form.”

“The overall goal of the Medical Cannabis Patient Care Act proposal is to allow patients access to the beneficial use of medical cannabis in a regulated system for alleviating symptoms caused by debilitating medical conditions and for their medical treatments,” Nelson said in a press release. “The new measure has been reviewed by policy advisors, industry leaders and others to ensure that we have a solid and comprehensive product.”

In 2014, Virgin Islands voters approved a referendum 57 percent to 43 percent asking the legislature to consider legalizing medical cannabis. Nelson said his proposal fulfills the obligation to the majority who voted ‘yes’ on the initiative.

“There should be enough support in the Senate, even if amended,” Nelson said in the report. “This is the people’s will.”

Nelson indicated this is just his first step to reforming cannabis laws on the island, saying he supports adults 21-and-older growing up to five cannabis plants “so long as they are properly enclosed and [the grower owns] the property or have landlord’s approval.”

“I also support commercial legalization for adult use, 420 zones, and cannabis festivals,” he said. “We’ll take it one step at a time.”

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A symbolic light bulb sits in the middle of a "thought cloud" drawn on a chalkboard.

Connecting With Customers Under California’s Strict Advertising Regulations

7/24/2017

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Californians planning to run cannabis businesses under MAUCRSA should pay special attention to the new advertising regulations if they want to connect with customers without attracting citations, fines, or worse. Due to the heavy restrictions, many traditional advertising channels might not be available, so creating a message that resonates with customers will require strategy and ingenuity.

26151. (a) (1) All advertisements and marketing shall accurately and legibly identify the licensee responsible for its content, by adding, at a minimum, the licensee’s license number.

Put simply, the above rule means that companies who market cannabis need to be transparent and accountable for the messaging they create. As the industry strives for legitimacy, promoting products professionally will not only help negate the stigma associated with the industry, but it will also provide an opportunity to educate community members that may not agree with ending prohibition. By requiring a legible license number, bad actors will be exposed and companies that play above board will be rewarded at best, and allowed to advertise at least. Marketers and designers should prepare to incorporate the license number on all branded collateral, as the range of items covered under the Business and Professions Code are broad.

26151. (b) Any advertising or marketing placed in broadcast, cable, radio, print, and digital communications shall only be displayed where at least 71.6 percent of the audience is reasonably expected to be 21 years of age or older.

71.6 percent seems excessive — even more so when considering that alcohol doesn’t have the same stipulation and is often advertised during times when much of the viewing audience is under 21, NFL Football being a prime example.

Although many station managers are still opposed to cannabis advertising, there have been more and more radio spots popping up throughout the country. The silver lining here is that media or entertainment companies that have focused on cannabis for years will be there with regular traffic and ideal readers/listeners for organizations who take advantage.

26151. (c) Publish or disseminate advertising or marketing containing any statement, design, device, or representation which tends to create the impression that the cannabis originated in a particular place or region, unless the label of the advertised product bears an appellation of origin.

There are several regions in California with iconic names that resonate throughout the industry: Humboldt, Mendocino, and Trinity — collectively, they are known as the Emerald Triangle. Anyone who’s anyone in this space has heard of the region and probably respect the history, culture, and quality of the people and products that originate there. For years, however, suspect characters have been trading in on the NorCal name to dupe unsuspecting folks into shady deals for a quick buck. The above regulation closes that door and positions the organizations with roots in the Big 3 for success — so long as the end product lives up to the region’s reputation.

So, what businesses can do to reach their ideal audience? Focus on a strategy that brings your customers to the channels you control — primarily your website, social media profiles, and email marketing programs. There have been recent reports of Facebook deleting cannabis business profiles, but further review shows that Facebook had found those companies to be violating specific terms of service. Above all else, make sure to play by the rules. It’s pretty clear that outspending your competition on advertising won’t work due to the restrictions — so it will take ingenuity, a strong brand, and consistent, quality products to thrive in California’s cannabis industry.

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A judge's gavel rests on top of a blue legal notebook.

Lawyers in Massachusetts MMJ-Employment Case Explain Significance of Ruling

7/21/2017

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Earlier this week, the Massachusetts Supreme Judicial Court ruled that a medical cannabis patient could sue her former employer for handicap discrimination after they fired her for testing positive for cannabis on a drug screening. According to her lawyers, the decision by the court was “very significant” but acts neither as a de facto protection for registered medical cannabis users in the state nor makes them “untouchable.”

“Before this ruling [medical cannabis patients] were the opposite of untouchable,” said Matthew Fogelman, an attorney for the plaintiff and owner of Massachusetts-based employment law firm Fogelman & Fogelman. “They were sort of without remedy because if they failed a drug test, they failed a drug test and that was the bottom line.”

Now, following the landmark ruling, Massachusetts employers will have to treat medical cannabis “like any other medication,” Fogelman said. “[The employee] may need some sort of accommodation, so the company now has to engage in interactive dialogue, an interactive process with the employee… They have to go through that analysis now.”

That analysis would include whether the accommodation sought by the employee was “reasonable” and whether it would create “an undue burden” for the employer.

A landmark victory for cannabis patients

In the case, Barbuto v. Advantage Sales & Marketing, LLC, the six-judge panel ruled that the medical cannabis use by the employee, Christina Barbuto, did not create such an undue burden for her employer, Advantage Sales & Marketing, because she used the medicine at home, after work, and “an employer would not be in joint possession of medical marijuana or aid and abet its possession simply by permitting an employee to continue his or her off-site use.”

Adam Fine, a partner at Vicente Sederberg who also worked on the case, said that the court ruling clarified “that there are protections for medical marijuana patients that are duly registered in the Commonwealth” but there “would have to be a similar fact scenario” to the Barbuto case.

That fact scenario, Fine explained, “is someone with a serious medical condition that has a medical marijuana card that uses marijuana outside of work and there is no impairment on the job, which is not a public safety position.”

Fogelman said that the decision is “one other states could look to” if and when similar cases are tried outside of Massachusetts. “Because the Massachusetts court went further than other courts have gone it’s certainly easier for another court in a different state to do the same thing because it can now rely on the Massachusetts decision,” he explained.

Discrimination case vs. employer can move forward

Fine, whose firm specializes in cannabis law, said that he had never dealt with a case such as Barbuto’s and applauded Fogelman for having the courage to take on a potentially controversial case, acknowledging that Barbuto had approached several firms before Fogelman accepted the task.

“[She] had encountered being turned away from other employment lawyers prior to finding Matt,” Fine said, adding that while he has fielded calls from medical cannabis patients who felt they were discriminated against at work, many didn’t want the publicity from the case and wanted to remain private rather than advance the legal process.

Effectively, the court ruling will allow Barbuto’s discrimination case against her former employer to move forward, which Fogelman said could take about two years to conclude. In that case, Barbuto is seeking damages related to her termination.

The Barbuto v. Advantage Sales & Marketing, LLC case marks the first court ruling in favor of a patient who was fired by their employer for using doctor-recommended cannabis medicine.

The case was one of first impression in Massachusetts but runs contrary to what courts in other states have decided. In the case of Coates v. Dish Network, the Colorado Supreme Court ruled that an employee could be fired for using medical cannabis off-duty. In that case, the plaintiff, Brandon Coats, had claimed he had been wrongfully terminated for failing a drug test for cannabis.

In Washington, which like Colorado allows recreational cannabis use, the U.S. Western District Court also ruled against the plaintiff in Swaw v. Safeway, Inc, affirming the company’s decision to fire an employee who was enrolled in the state’s medical cannabis program. In 2008, a federal judge in Michigan threw out a wrongful termination case brought against Walmart by a medical cannabis card holding employee who failed a post-accident drug test.

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Drug-Centric Federal Agencies and Colorado Springs Officials Hold Secret Meeting

7/21/2017

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Officials from the Department of Justice, the White House Office of National Drug Policy and the DEA held a secret meeting on Wednesday with Colorado Springs Mayor John Suthers, members of the Colorado Springs Police Department, and the resident agent with the DEA, KKTV-11 reports. A local physician and a school district’s disciplinary director were also invited to the meeting.

“The meetings are not open to the public because they include sensitive investigative information,” Suthers said in a statement. He later added during an interview with the station that “there’s nothing about this that would require it to be public. The folks that came out didn’t want it public; there’s no reason for it to be public.”

“I think they’re in Colorado to find out what law enforcement and other regulatory agencies’ view is toward marijuana regulation in Colorado,” Suthers said in the report. “They’re [local law enforcement] talking about what they’re finding in houses, what they’re finding and who is doing it, and where these people are coming from.”

Jason Warf, the executive director for the Southern Colorado Cannabis Council, called the secret meeting “extremely concerning” for the organization and asked that the content of the meeting “be made public, immediately.”

“If someone or a business is in conflict with current Colorado law, that is a matter that should be taken up in state court, not Federal court,” Warf said in a statement. “Our state statutes are more than sufficient to prosecute individuals in conflict with the law, without Federal assistance. Until Federal law is updated to meet the standard of cannabis law in Colorado and the majority of the country, no Federal agent should be involved in enforcement action in these states.”

Suthers said that much of the meeting “centered around the huge black market that exists” for cannabis in the state.

Warf said he was concerned that the meeting might have focused on civil asset forfeiture. He contends that since the passage of a state law reforming the practice “it is now far more lucrative for a municipality to work with the Federal government on drug arrests, rather than prosecuting individuals under state law.”

“Under Federal seizure laws, they receive a much larger percentage of assets seized. We have received word and believe that these meetings are about circumventing state law because of this revenue difference,” he said. “This is unacceptable and cannot move forward. This is direct conflict of the Constitutional Amendments passed by the voters of Colorado.”

Suthers has offered no additional details about the content of the meeting.

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A water reservoir, which stores water temporarily before it is used for agricultural purposes.

Bill Allowing Use of Federal Water for Hemp Cultivation Approved as Part of Spending Measure

7/21/2017

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The Senate Appropriations Committee has approved the fiscal year 2018 Energy and Water Development appropriations bill which includes the Industrial Hemp Water Rights Act. This measure would allow federally-controlled water to be used for hemp cultivation, according to a Westword report. Currently, the Bureau of Reclamation prohibits water under its jurisdiction from being used for hemp-growing purposes.

The measure was introduced by Colorado Senators Michael Bennet and Cory Gardner in an effort to clear up the water-use issue for legal hemp programs. The 2014 Farm Bill allows state departments of agriculture to license farmers to conduct research programs, along with institutes of higher education; however, it did not address the water issue.

“This is a step in the right direction to ensure that Colorado farmers will have the water they need to grow industrial hemp and the opportunity to innovate and strengthen our agricultural economy,” Bennet, a Democrat, said in the report.

Gardner, a Republican, said the legislation “recognizes our farmers’ right to access Colorado water and makes sure the federal government cannot interfere with their operations.”

The bill, like other appropriations legislation, must still be approved by the full House and Senate before the start of the fiscal year on Oct. 1.

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A commercial cannabis plant approaching maturity inside of a licensed cannabis cultivation center in Washington.

Maine Bill Would Pass Cannabis Testing Duties to Department of Agriculture

7/21/2017

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A bill that would require the Maine Department of Agriculture to test cannabis before it is sold to adults passed the House of Representatives 101-32, according to a Press Herald report. The vote follows a 17-0 vote by the special committee convened to hash out the state’s adult-use cannabis industry regulations.

The measure faces further votes in both the House and Senate and could be challenged by Gov. Paul LePage, who would rather put cannabis regulations in the hands of the Bureau of Alcoholic Beverages and Lottery Operations officials over the Agriculture Department, as required by the ballot measure approved by voters last November.

Opponents of the testing measure argued that the Department of Agriculture, which provides testing for dairy products and produce in the state, does not have the resources to also test cannabis. The fiscal note on the bill estimates cannabis testing would cost the state about $175,000 annually, but those costs would be covered by the taxes on recreational cannabis sales.

Portions of the voter-backed law have already taken effect, allowing adults 21-and-older to possess up to 2.5 ounces of flower and cultivate up to six plants. Lawmakers are still setting up commercial market regulations.

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A clipboard, commonly used by petitioners to hold the necessary information and documents related to a citizens petition.

Police in Wichita, Kansas Silence Cannabis Activists’ Signature Collecting Efforts

7/21/2017

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Activists in Wichita, Kansas collecting petition signatures to reduce cannabis possession penalties were thwarted by police at City Hall who cited court decisions that interior spaces in public buildings are not unlimited forums for First Amendment activity, according to a Wichita Eagle report.

The activists usually collect signatures on the sidewalk outside of the building, but had moved inside due to extreme heat. City Hall Security Supervisor Mark Ingram said that he was enforcing a building rule and, while he allowed the petitioners to hold clipboards in order to permit people to sign the petition, the activists were not allowed to verbally ask people to sign.

Ingram said he consulted with the city attorney before stopping the solicitations. The petitioners argued that signature gathering is constitutionally protected by the First Amendment.

The activists are attempting to collect enough signatures to add a question to 2018 ballots that would reduce cannabis possession penalties to $50. The campaign seeks to add the reforms to the City Charter, which would make it harder for future city councils to change.

According to the report, an earlier ballot initiative to reduce such penalties was approved by Wichita voters, but the Supreme Court nullified the result due to technical errors in the signature gathering process.

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A graphic of the Colorado flag overlaid onto a picture of a commercial cannabis canopy.

Colorado Cannabis Sales Top $100M for 12th Month; Total State Earnings Now Exceed $500M

7/20/2017

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For the twelfth month in a row, combined medical and recreational sales in Colorado have surpassed $100 million, as the state Department of Revenue reports sales for May topped $127.7 million, according to state figures outlined by Forbes. Since the beginning of this year, cannabis sales in Colorado have totaled $620 million, with $95 million paid to the state in taxes.

Separately, a VS Strategies report found that Colorado has reaped $506,143,635 in taxes and fees derived from the legal cannabis since legal sales began on Jan. 1, 2014. According to the report, 51.3 percent of those funds have been used for K-12 education, including $117.9 million for school construction projects, and $5.7 million for the Public School Fund.

Mason Tvert, former communication director for the Marijuana Policy Project who now serves as vice president of public relations and communications for VS Strategies, said that while the funds “might not fix every school or help every person who needs it, it is having a significant and positive impact on our community.”

“Legalizing, regulating, and taxing marijuana for adult use has generated hundreds of millions of dollars in new revenue for Colorado,” Tvert said in the report. “Marijuana tax money has been used to improve a wide range of programs and services. It is funding everything from school construction to substance abuse treatment to fighting homelessness.”

The Aurora City Council allocated $1.5 million for homeless services, while 14.2 percent of the revenue has been used for substance abuse treatment and prevention services throughout the state.      

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