Massachusetts House Speaker Pulls Rec. Bill for ‘Clean Up’

6/16/2017

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Massachusetts House Speaker Robert DeLeo pulled the recreational cannabis bill from consideration yesterday, following pushback from advocates that the proposal would, in fact, raise cannabis taxes 56 percent, according to a MassLive report. On the surface, the bill appeared to double taxes on recreational cannabis products from 12 percent to 28 percent; however the measure adds a 21.75 tax from wholesaler to retailer, and 28 percent from retailer to customer – totaling 56 percent including state sales taxes.

In an interview with reporters following his decision, DeLeo said the bill needed a “clean up” but did not specify that it was being pulled over the tax concerns of advocates. He said the legislation, which he called “terrific,” would be taken up next week.

“I think it’s important that with a bill of this magnitude that we try to get it right, or as close as right the first time,” De Leo said. “So I’d rather do that than…try to rush it.”

Jim Borghesani, spokesman for the Yes on 4 campaign, which backed the ballot initiative in the state, said the bill was written in a “rapid and sloppy” manner and only “encourages the illicit market.”

The legislation was crafted behind closed doors by the House Marijuana Policy Committee.

“The House bill, they set out to improve what was passed in November – they did the exact opposite. This is a much weaker regulatory system that they put forward,” he said, adding that he believes the compounding tax structure was a mistake. “It’s the worst example of Massachusetts lawmaking. What we’ve seen is a bill that was written in the dark, behind closed doors. Not even the members of the committee knew what was in the bill.”

Rep. Mark Cusack, who is credited with authoring the legislation, defended the measure, saying that his goal was “to get this right for the commonwealth, and the people, and the industry.”

The Senate could decide to write their own version of the legislation and work with the House on a compromise measure to send to Gov. Charlie Baker. The July 1, 2018 target date for adult-use sales remains intact.

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Governor Tom Wolf of Pennsylvania addresses a group during his 2017-2018 budget address.

Pennsylvania Gov. Threatens Legal Action if Feds Attempt MMJ Crackdown

6/16/2017

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In a letter to Attorney General Jeff Sessions, Pennsylvania Gov. Tom Wolf warned that if the federal government interferes with the state’s medical cannabis program he would ask the state attorney general “to take legal action to protect [Pennsylvania] residents and state sovereignty.”

“We do not need the federal government getting in the way of Pennsylvania’s right to deliver [patients] relief through our new medical marijuana program,” the Democrat wrote in the letter dated June, 15. “Your action to undo the protections of the Rohrabacher-Farr amendment, which prevents the use of federal funds to disrupt states’ efforts to implement ‘their own state laws that authorize the use distribution, possession or cultivation of medical marijuana,’ is misguided.”

Sven Hosford, the spokesman for the Pennsylvania Medical Cannabis Society, applauded the governor taking action, calling him an “exemplary leader.”

“Every level of state government, in fact, has been in favor of medical cannabis,” Hosford said in a KDKA report. “There is full-throated support in the legislature.”

In March, the state’s Auditor General Eugene DePasquale, recommended legalizing cannabis for adult use in the state to “help address revenue and spending issue[s].”

Pennsylvania became the 24th state to legalize medical cannabis in April 2016 and regulators have been crafting rules and regulations to govern the program ever since. The program is expected to launch in 2018.

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A heaping pile of pharmaceutical medications.

New Mexico Health Secretary Rejects Adding ‘Opioid Use Disorder’ to MMJ List

6/15/2017

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New Mexico Health Secretary Lynn Gallagher has rejected several recommendations by the state Medical Cannabis Program advisory board, including their proposal to add “opioid use disorder” to the list of medical cannabis qualifying conditions, the Santa Fe New Mexican reports.

The board had approved the measure 5-1 last November, which drew wide bipartisan support among lawmakers, who also passed legislation to add the disorder — but that was vetoed by Gov. Susana Martinez in April.

Gallagher struck down every recommendation proposed by the board, including adding Alzheimer’s disease to the condition list, allowing telemedicine as a means to enroll new patients, and increasing plant counts for nonprofit caregivers.

In her decision, Gallagher wrote that while there are anecdotal reports of patients addicted to opioids finding relief from medical cannabis, there “appears to be little if any medical literature that actually addresses the effect of cannabis usage on persons with a diagnosed opiate use disorder.”

The National Institute on Drug Abuse would disagree, however, concluding in May after two studies that “the reduction in [opioid] deaths was present only in states with dispensaries (not just medical marijuana laws) and was greater in states with active dispensaries.”

“I am concerned that utilizing one addictive substance to treat dependence on another without reliable medical evidence and human research studies is problematic at best considering our current opiate epidemic,” Gallagher wrote, echoing language included in Gov. Martinez’s veto message.

In April, the advisory board also recommended adding attention deficit hyperactivity disorder; autism; anxiety; depression; chronic headaches, including migraines; sleep disorders; and dystonia, a neurological condition that causes muscle spasms, tremors and other problems with movement. Gallagher has not yet decided on those recommendations.

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Rhode Island Gov. Proposes Huge MMJ Expansions & Increased Licensing Costs

6/15/2017

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Rhode Island Gov. Gina Raimondo submitted a budget amendment which, if approved, would allow six more medical cannabis dispensaries in the state – bringing the total to nine – while increasing dispensary application fees from $250 to $5,000 and the annual licensing fees from $5,000 to $25,000, the Providence Journal reports. The plan, an effort to raise $1.5 million in general revenue, is being opposed by the three existing dispensaries in the state who argue there is no need to increase operations.

Under the proposal, the three existing centers, which operate in Providence, Warwick, and Portsmouth, would be allowed to operate a second location. It also removes the requirement that dispensaries must operate as a nonprofit.

Norman Birenbaun, the state’s medical cannabis regulator, said the administration moved to increase the number of dispensaries because of dispensary-to-patient ratios. Rhode Island has the highest number of patients per allowed number of dispensaries of any state.

Additionally, lawmakers approved a measure creating a cannabis study commission that will explore to what effect adult-use legalization would have in the state. The House approved a 19-member panel that is expected to make recommendations to the General Assembly by March 2018. Although the measure easily passed the House, 67-2, cannabis proponents called the move “a flawed delay tactic.”

Of the $1.5 million increasing dispensary counts and fees is expected to bring, $603,000 would be used to support medical cannabis program operations.

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MediPen Launches UK Research Facility, Welcomes Other Cannabis Researchers

6/15/2017

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The United Kingdom’s first publicly available cannabis research facility is launching this summer as MediPen Ltd. is opening an 1,800-square-foot facility which will provide a platform for individuals and companies to conduct their own medical cannabis research, the Independent reports.

The UK’s Medicines and Healthcare products Regulatory Agency approved national CBD use in Oct. 2016 after studying the health benefits of MediPen’s CBD vaporizer.

MediPen is currently working to secure a license from the Home Office that would allow them to research controlled compounds in cannabis, namely THC, with regard to cancer patients with the goal of minimizing the negative effects of existing chemotherapy–based treatments, such as nausea and vomiting. The firm will also study whether the compounds suppress metastasis by inhibiting cancer cell proliferation.

“As it stands there is a significant amount of scientific data available detailing the powerful effects of cannabinoids within cell culture systems and in vivo,” a MediPen representative said in the report. “However, we plan to be amongst the first in the world to begin clinical trials on humans.”

The company will encourage those who use their facilities to take advantage of their established research and development network, in-house testing laboratory, and its board for legal and business advice.

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Cova Software Aims to Elevate the Cannabis Dispensary Experience

6/15/2017

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As Cova settles down from a recent launch party at the NCIA Business Summit & Expo in Oakland, California, the software startup is officially moving forward on its primary goal: to redefine and streamline the experience of shoppers, employees, and business operators in the modern cannabis dispensary.

While calling Cova a “startup” is technically accurate — it’s a new company with a new product making a splash in the cannabis space — this may slightly misrepresent the brand. Cova is actually a splinter company from the established enterprise iQmetrix, which offers integrated point-of-sale (POS) software that is used in more than 19,000 locations across a wide variety of industries.

However, because of the industry’s unique regulatory environment — and because startups are typically more maneuverable and responsive to rapid changes than established companies, who are often entrenched in their strategies — the larger enterprise decided to dedicate an entirely new company to the cannabis space with some of their best designers at the helm.

In fact, iQmetrix designers eyed the cannabis space for several years, considering and identifying the issues that plague many canna-specific POS providers.

The Cova point-of-sale system displayed on a tablet inside the Vancity Weed dispensary in Vancouver, B.C.

“We did a lot of research and worked closely with dispensary owners, managers, budtenders and industry experts,” said Faai Steuer, Senior Marketing Strategist for Cova. “Our goal is to make sure that we build the right product that really relieves their pain points and creates great experiences for everyone.”

According to Steuer, market research unveiled a trend of cannabis operators who were unhappy with their POS software. Some business owners complained that software was either confusing or not user-friendly, others complained about a lack of support services from their current provider, and some have experienced system downtime due to their provider’s security issues — which, in an industry so heavily focused on regulatory compliance, can lead down a slippery slope of non-compliance.

“We know that soon dispensaries in California and other states will have to deal with compliance. Our POS is geared to help dispensaries simplify their compliance process and run their store efficiently,” Steuer said.

Cova software is designed to limit budtender errors and includes helpful information in the POS itself, so even inexperienced budtenders have all the information they need to provide patients a helpful and informative shopping experience.

“Dispensaries are in a unique and complex retail environment that requires an advanced software solution. Cova brings 18 years of retail and technology expertise into this emerging industry,” said Gary Cohen, CEO of Cova. “Our POS is designed to make the complex simple, so we can elevate the dispensary experience.”

A dispensary worker and a patient discuss options using the Cova POS display.

In addition to new point-of-sale options, Cova also offers touchscreen menu technology and digital signage to help patients and shoppers find and learn about the products they want. With Cova’s tech, dispensaries can even customize their menus individually so that customers who are unfamiliar with cannabis can be given a soft exposure to the world of choices offered in most dispensaries, while experienced consumers can dig a bit deeper into a retailer’s inventory and various cultivars.

“Our philosophy is to simplify your life, not create more work,” Steuer said. “Our purpose is to create a great experience for people who use the software and for consumers.”

To learn more about Cova’s exciting new software suite, visit www.CovaSoft.com, schedule a demo, or contact a company representative at hello@covasoft.com.

 

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A judge's gavel rests on a desk inside of a U.S. court room.

Lawsuit Filed Challenging Kentucky MMJ Ban

6/15/2017

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A lawsuit has been filed in Kentucky challenging the state’s criminal ban on medical cannabis, claiming that it violates privacy protections set forth by the state constitution and that the government cannot arbitrarily restrict the ability of patients to use effective medicines, the Associated Press reports. Three plaintiffs are named in the suit including Dan Seum Jr., the son of a Republican state senator.

Another plaintiff, Amy Stalker, was able to access medical cannabis in Colorado and Washington to treat symptoms of bipolar disorder and irritable bowel syndrome but maintains her health has deteriorated after she moved back to Kentucky to be with her sick mother.

“She comes back to her home state and she’s treated as a criminal for this same conduct,” said plaintiffs’ attorney Daniel Canon in the report. “That’s absurd, it’s irrational and it’s unconstitutional.”

The suit also touts cannabis’ role in stemming the opioid epidemic in states with legal cannabis access. Kentucky ranked third in the nation in opioid-related deaths in 2015.

Seum, the son of state Sen. Dan Seum Sr., admitted that he has struggled with opioid addiction after being prescribed OxyContin for chronic back pain and began using cannabis to manage withdrawal symptoms. Once he began using cannabis, no pain management doctor would treat him, he said.

The suit says that left Seum with “an impossible choice.”

“Should he stop using cannabis and experience excruciating pain in order to explore the chance that another pain management option might be more effective? Or should he continue using cannabis, preventing him from receiving medical care from Kentucky doctors for the rest of his life?” the suit contends.

Gov. Matt Bevin and Attorney General Andy Beshear are named as defendants in the lawsuit. Bevin has said he is “not opposed to the idea” of medical cannabis but would prefer to see it administered like other pharmaceutical drugs – which is impossible due to the plant’s federal Schedule I status.

In 2014, Kentucky lawmakers did approve a measure allowing limited use of CBD products, but attempts at a comprehensive program have been consistently thwarted by the legislature.

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A student reads her notebook at a classroom desk.

Study: Cannabis Laws Do Not Lead to Increased Teen Use

6/14/2017

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According to a June 10 study published in the journal Addiction, the enactment of medical cannabis laws is not associated with so-called cannabis use disorder. The researchers did conclude that while recreational cannabis laws are associated with increased cannabis consumption, it occurs primarily in adults 26 and older and not teenagers or children.

“Our findings do not show increases in prevalence of marijuana use among adults in states with medicalized [cannabis] programs,” the authors state. “Additionally, there were no increases in adolescent or young adult marijuana outcomes following [medical cannabis] passage, irrespective of program type.”

The study, led by researchers from Columbia University, contradict a recent, widely circulated paper published this month in JAMA Psychiatry which concludes that “the risk for cannabis use and cannabis use disorders increased at a significantly greater rate in states that passed medical marijuana laws than in states that did not.”

There have been at least six additional studies dating back to 2012 that have concluded that medical cannabis laws have neither given rise to adolescent cannabis use nor problematic use by adults. One such study, from February 2016, found that while adult cannabis use increased 19 percent between 2002 and 2013, the researchers “didn’t notice any increase in marijuana-related problems.” That study was also published in JAMA Psychiatry.

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The Massachusetts Statehouse in Boston, Massachusetts — the state's largest and capital city.

Massachusetts Lawmakers to Vote on Changes to Voter-Backed Cannabis Law

6/14/2017

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Massachusetts lawmakers are expected to vote Thursday on a bill that would more than double the total tax on adult-use cannabis sales and give municipal officials the power to ban cannabis business operations rather than local voters, according to a Boston Globe report. The bill would raise the tax from 12 percent – as approved by voters – to 28 percent.

The core of the measure would remain intact. Adults 21 and older would still be permitted to possess, purchase, and consume cannabis, and grow up to 12 plants per household. However, the voter-approved bill had called for a 3.75 percent state tax and a 2 percent local-option tax on top of the state’s 6.25 percent sales tax. The proposal by Rep. Mark Cusack, a Democrat, raises the state-imposed cannabis tax rate to a whopping 16.25 percent, paired with a mandatory 5 percent local tax and the 6.25 percent sales tax. Medical cannabis sales would remain untaxed.

“The voters voted to allow people 21 years of age and above to be able to access a regulated and safe marketplace. That is exactly what this bill does,” Cusack said in the report. “The ballot question is fundamentally flawed.”

Additionally, the legislation would strip Treasurer Deborah Goldberg of her cannabis industry oversight, restrict some edible products, and set limits on cannabis advertising.

The proposal drew the ire of advocates and state Sen. Patricia Jehlen, co-chair of the marijuana committee, who said the tax rate and the changes to how municipalities can ban cannabis operations undermine the will of the voters.

“Both will preserve the illicit market,” she said.

The measure moves to remove Goldberg’s power over a three-person Cannabis Control Commission and instead would add two chairs to the commission appointed by public officials. The treasurer, the governor, and the attorney general would each appoint a commissioner. The other two would be appointed by a majority vote of the three.

The House will likely vote on the bill tomorrow, and if approved it will head to the Senate. Legal sales are still expected to begin July 2018.

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Freshly cut cannabis plants inside of a licensed grow facility in Washington state.

Green Party in Racine, Wisconsin Launches Petition Drive for Cannabis Reforms

6/14/2017

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Members of the Green Party in Racine, Wisconsin have launched a petition campaign for direct legislation to reduce cannabis possession fines in the city to $1, Gary Storck of the Cannabadger reports. The proposed ordinance also specifies that possession of up to 25 grams on private property would be subject to only forfeiture rather than any criminal penalty.

The campaign has to collect a minimum of 3,870 signatures, and as of June 9 activists have already collected more than 1,000 after beginning the drive on June 2.

In an interview with Cannabadger, Green Party co-chairs Fabi Maldonado and Sondra Plunkett explained that under current Racine law, first-time offenders are subject to a $250 fine; however local police are encouraged to enforce the state statute which calls for a $1,000 fine and a misdemeanor charge. Second offenses can lead to felony charges, $10,000 fines, and jail time. Under the Green Party proposal, first offenses would be prohibited from being recorded and “virtually all arrests will be treated as a first offense,” the co-chairs said.

“The real and much more serious costs are the social and economic obstacles that result from prosecution,” they said in the interview. “Families are broken and further impoverished by incarceration and fines, and once a felon is released from incarceration, securing gainful employment is nearly impossible.”

If activists are successful, the city would join Dane County, and the municipalities of Milwaukee, Monona, Fitchburg, and Stevens Point in reducing fines for cannabis possession in Wisconsin.

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Deputy Attorney General Rod Rosenstein speaking at a memorial service hosted by the U.S. Marshals in May, 2017.

Deputy Attorney General Toes Anti-Cannabis Line During Senate Hearing

6/14/2017

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Deputy Attorney General Rod Rosenstein doubled down on the anti-cannabis stance of the Trump Administration during testimony in front of the Senate Appropriations Committee Tuesday, testifying that cannabis is, “from a legal and scientific perspective…an unlawful drug” adding that cannabis policy would be “a high priority” as new U.S. attorneys are appointed, the Alaska Dispatch News reports.

“We do have a conflict between federal law and the law in some states.” Rosenstein said during a line of questioning from Sen. Lisa Murkowski (R-Alaska). “It’s a difficult issue for parents like me, who have to provide guidance to our kids… I’ve talked to Chuck Rosenberg, the administrator of the DEA and we follow the law and the science.”

Rosenstein’s remarks come just one day after a May 1 letter from Attorney General Jeff Sessions to members of Congress urging them to restore Justice Department funding for cannabis enforcement was published by Massroots’ Tom Angell.

In April, Sessions had indicated the 2013 Cole Memo – which directed the department to maintain a hands-off approach on legal cannabis programs – was “not too far from good policy.”

The Cole Memo, which Sessions has also called “valid,” remains in effect, and in April governors from four states with legal adult-use regimes sent a letter to Sessions and Secretary of Treasury Steven Mnuchin explaining that overhauling the policy would “produce unintended and harmful consequences.”

“Changes that hurt the regulated market would divert existing marijuana product into the black market and increase dangerous activity in both our states and our neighboring states,” the governors wrote.

A supermajority – 90 percent – of Americans support medical cannabis laws, while 60 percent support broader legalization, according to an April 20 Quinnipiac poll.

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Attorney General Jeff Sessions waving his right hand to a crowd of people.

Sessions Urges Congress to Restore Funding for Cannabis Enforcement

6/13/2017

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Attorney General Jeff Sessions last month sent a letter to Senators Mitch McConnell (R), Chuck Schumer (D), House Speaker Paul Ryan (R), and Representative Nancy Pelosi (D), asking them to allow the Justice Department to crackdown on state-legal cannabis programs, according to a letter acquired by Massroots’ Tom Angell. Specifically, Sessions asked the lawmakers to oppose the language of the Rohrabacher-Farr amendment which prohibits the Department from interfering in state-approved regimes.

“I believe it would be unwise for Congress to restrict the discretion of the Department to fund particular prosecutions, particularly in the midst of an historic drug epidemic and potentially long-term uptick in violent crime,” Sessions writes in the letter. “The Department must be in a position to use all laws available to combat the transnational drug organizations and dangerous drug traffickers who threaten American lives.”

Furthermore, Sessions claims that “Cuban, Asian, Caucasian, and Eurasian criminal organizations have established marijuana operations in state-approved marijuana markets.”

The Justice Department under the Obama Administration also attempted to undermine the amendment. According to a Washington Post report, that regime circulated misleading talking points among members of Congress in order to influence the debate. Subsequently, a federal judge ruled that the agency has attempted to enforce the amendment in a way that “defies language and logic,” “tortures the plain meaning of the statute” and is “at odds with fundamental notions of the rule of law.”

“Mr. Sessions stands athwart an overwhelming majority of Americans and even, sadly, against veterans and other suffering Americans who we now know conclusively are helped dramatically by medical marijuana,” said a spokesperson for Rep. Dana Rohrabacher to the Washington Post.

In May, the National Institute on Drug Abuse, a division of the National Institutes of Health, updated their website to reflect recent NIDA research on the effects of cannabis legalization on prescription opioid use. Sessions’ trope is out-of-touch with the NIDA research, which concluded that “reduction in [opioid] deaths was present only in states with dispensaries (not just medical marijuana laws) and was greater in states with active dispensaries.”

According to an April 20 Quinnipiac poll, 94 percent of Americans support medical cannabis laws, while another 60 percent support outright legalization.

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The golden dome on top of the Vermont Statehouse in Montpelier, Vermont.

Vermont Lawmakers Send Cannabis Legalization Compromise to Gov.

6/13/2017

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Vermont lawmakers have sent a cannabis legalization compromise proposal to Gov. Phil Scott after the Republican vetoed a measure last month that would have allowed small home-grows and allowed adults 21-and-older to possess up to 1 ounce of cannabis, according to a Vermont Press Bureau report. In his veto message, Scott said there would be a “path forward” to an agreement if legislators addressed his concerns over the measure before the June 21 veto session.

According to the Senate proposal, sent to the governor on June 8, the new measure includes changes to the language defining “public place,” new language allowing seizure if an individual is caught possessing more than the law allows, or in a place where cannabis is explicitly not permitted, such as a child care center, or in a car or public space. The seizure language was approved by the American Civil Liberties Union, the Defender General, and the Attorney General.

Additionally, $200 civil penalties are included for passenger consumption of cannabis in a car, and $500 for consumption in a car with a child present. The measure imposes a fine of $500 and a misdemeanor charge for cultivation in a child care center or after-school program.

Sen. Dick Sears said it was the first attempt to negotiate with the Republican executive on the bill and the lawmakers key in crafting the legislation have gone “a long way to meeting what [Scott] wanted.”

“If, in fact, he gets on board with this I think it’s up to the House Republicans to decide if they want to go against their governor,” Sears said in the report. “That’s the hold-up.”

Rebecca Kelley, spokeswoman for Scott, said the executive’s office is “encouraged to get a good counterproposal to what the governor put forward.”

“All of our conversations on this have been productive,” she said. “We think we’re working towards an agreement and appreciate everyone putting forward a good-faith effort.”

If approved and signed into law, Vermont’s legislature would be the first to pass laws allowing adult possession and consumption. The proposal includes provisions to create a commission to explore setting up a more comprehensive taxed and regulated system.

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Leaf hanging off the side of a large cannabis plant in an indoor grow environment.

Nevada Gov. Signs Rec. Rules Bills, Vetoes Measure Vacating Some Convictions

6/13/2017

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Nevada Gov. Brian Sandoval has signed three bills related to the state’s forthcoming recreational cannabis industry, but also vetoed a measure that would have allowed the vacating and sealing of some cannabis-related crimes, the Nevada Independent reports.

The rejected bill (AB.259) would have allowed misdemeanor cannabis convictions related to possession of 1 ounce or less to be vacated and sealed while allowing judges to diverge from mandatory minimum sentences on some drug-related crimes. In his veto message, the Republican governor said there was “much to commend” in the legislation but said it went a bit too far because other bills passed during the session made it easier to seal some criminal records. He also expressed concerns that the bill might have unintended consequences.

“Presumably this provision would permit vacated judgments and record sealing for all marijuana conduct that is now lawful, potentially including marijuana trafficking and possession of large quantities of marijuana, since such activity is now allowed in Nevada, although limited and subject to significant regulation,” he wrote, adding that departing from mandatory sentences “is an incomplete solution, and one that opens the door for potential inequities depending on the preferences and practices of each individual judge.”

The cannabis-related bills signed by Sandoval include a measure aiming to limit labeling, packaging, and advertising of cannabis products (SB.344) in ways that appeal to children, a measure (AB.422) to keep the state’s medical cannabis program relevant with the introduction of a recreational market, and a measure (AB.487) to add a 10 percent tax on adult-use sales.

The labeling measure outlaws edibles appearing “to be a lollipop” and “bears the likeness…or a real or fictional person, animal or fruit, including…caricature [or] cartoon.” It also prohibits shapes such as balloons and toys and bars concentrated cannabis from being applied to commercially-available candies.

The bill to keep the medical program intact imposes limitations on the taxes and fees a municipality can impose on the medical cannabis market. The 10 percent tax is expected to bring $64 million per biennium to the state’s “rainy day” fund.

Adult-use cannabis sales are expected to begin under Early Start provisions on July 1.

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The Statue of Liberty, pictured in front of New York City's Manhattan Island.

Venture Capital Firm Agrees to Acquire New York MMJ Licensee

6/13/2017

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Toronto, Ontario, Canada-based iAnthus Capital Holdings has agreed to acquire Valley Agriceuticals LLC, which holds a conditional medical cannabis license in New York, for $17.3 million, in what is the venture capital firm’s largest transaction to date. The deal, once completed, will expand iAnthus’ portfolio into five states.

Randy Maslow, president of iAnthus, said the proposal, coupled with their holdings in Massachusetts, “sets the stage” for the company to be a “key player” in the northeastern United States.

“With a population of nearly 20 million residents, a rapidly growing patient base, and only 10 medical cannabis licenses, New York is an ideal market for iAnthus to enter,” Maslow said in a press release. “The state’s move to eliminate some of the Program’s initial limitations has created an incredibly potent opportunity for accelerating patient growth.”

The deal includes $2.3 million payable in cash and $15 million payable in common shares of iAnthus priced at $2 per share. The proposal includes Valley Ag’s cultivation campus which consists of about 136 acres of real estate currently zoned for cannabis cultivation and a 6,500-square-foot cultivation and processing facility.

Philip Green, CFO of Valley Ag, said New York could “potentially be one of the largest medical marijuana markets in the U.S.,” having removed some of the initial program roadblocks by expanding the qualifying condition list and allowing nurse practitioners and physician assistants to certify patients for the program. There are currently 21,009 patients registered under the program, which does not allow whole-plant or smokeable cannabis.

The deal is subject to final approval from the New York State Department of Health and the Canadian Securities Exchange. It is expected to close in the third quarter of this year.

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A view of the North Coast Growers cannabis canopy in their Anacortes, Washington grow facility.

North Coast Growers: Competitive Cannabis Cultivation in Washington State

6/13/2017

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North Coast Growers is a Tier 2 licensed cannabis producer/processor in Washington state with 22 employees. State law allows Tier 2 producer/processors to dedicate between 2,000 sq. feet and 10,000 sq. feet to plant canopy — and we recently got a tour of their grow facility to take some pictures and learn about the history and goals of North Coast Growers.

Their operation in Anacortes, Washington focuses on flower production, but the company’s start began with selling clones. North Coast Growers takes pride in cultivating their own flower genetics while also distributing flower and pre-rolls on the adult use market.

A close look at the North Coast Growers’ clone selection.

This year has been big for NCG since finding huge success in the flower section of the 2017 Washington Dope Cup Awards. NCG came home with two Dope Cup Awards: “Best Nose” for Fruity Pebbles and “Best Hybrid Flower” for Gorilla Glue #4. They also were named runner-up for “Most Potent Flower” with Gorilla Glue #4, “Best CDB Flower” with Sour Tsunami, and “Best Indica Dominant Flower” with Strawberry Banana; in fact, North Coast Growers placed or won in all but one category.

The North Coast Growers’ Dope Cup awards pictured among the company’s prize-winning cannabis crops. Photo credit: North Coast Growers

North Coast Growers began their journey in the cannabis industry for a few different reasons — but everyone involved brought a genuine love for growing superior cannabis. Matt Sampson, owner and CEO of NCG, decided to ditch his suit-and-tie job working for an investment bank in Palo Alto, California in 2005 in order to follow the Green Rush to Washington. It started with two licenses — one for the grow store and one selling clones.

Sampson saw a need for the business because there were no grow stores around. “Selling clones and grow gear was our first approach,” he said. “You know, the ‘selling picks and shovels’ approach by selling tools that growers need.”

An insider’s look at the North Coast Growers’ clone room.

Now, they have shifted their focus. Although they still are very proud of the quality and variety of clones they produce, they are focusing on the flower side of the business. Right now, they sell flower, pre-rolls, and rosin to about 15 stores in Washington.

Their approach is to find success in the markets that they can, rather than trying to sell to as many stores as possible.

The company provides clones, flower, and pre-rolls for participants in the Washington I-502 marketplace.

Sampson doesn’t compare NCG to companies with large, million-dollar budgets that have spread throughout 100+ stores — he wants their company to feel more personal than that. Their focus is based around providing a positive experience from label to the flower, and letting their product do the convincing. The killer, iconic labels that set NCG apart on crowded dispensary shelves are designed by Slow Loris Studios, while their screen printing style captures fun, visual spinoffs of strain names.

Rolls upon rolls of North Coast Growers product labels on a shelf inside the grow site.
From clones to the yellow-lit grow room in the back, NCG dedicates a lot of time and patience to producing top-quality cannabis.

Although the attitude at NCG is extremely positive towards the ever-changing cannabis industry, they have had to overcome some hardships during their journey. Their first concern is always trying to find good people to employ that bring a positive outlook and energy to the industry. Their team now is stacked with individuals they are proud of, but it’s a fact that managing and maintaining staff can be a struggle when focusing on a garden.

“I feel very lucky that we’re surrounded with good and positive people,” said Sampson.

Looking down from above the cannabis canopy in the North Coast Growers grow site in Anacortes, Washington.

Additionally, with the rules and regulations constantly changing in the cannabis industry, they have had to shift their business model a few times.

“The hardest part is adapting to last-second changes,” said Sampson. “And that completely changes the game for us.”

Shifts in policies regulated by the Washington State Liquor and Cannabis Control Board could happen at any point, which has been the source of many issues for NCG — especially when they are left with minimal time to comply and make the necessary structural changes to their business.

A closer look at the vibrant green plants produced by North Coast Growers, a premium cannabis producer licensed under Washington state’s I-502 adult-use cannabis regulations.
Nearly mature cannabis plants reaching for the ceiling in NCG’s indoor grow site.

Their next project is exciting (and I personally can’t wait). The company plans to release a killer collaboration sometime in June with the local Skagit County brewery Farmstrong Brewing. As part of the collaboration, North Coast Growers will be releasing a Farmstrong strain and Farmstrong will be working on a brew named after the garden.

A canopy of relatively young cannabis plants in the North Coast Growers indoor cultivation site.
A closer look at some of the products being grown in NCG’s cultivation facility in Anacortes, Washington.

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A cannabis worker inspects a fresh batch of concentrate as it cools on a sheet of wax paper.

Study: Legal California Cannabis Market Estimated at $5B

6/12/2017

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According to a study by the University of California Agricultural Issues Center, California’s recreational cannabis market could be worth more than $5 billion; however, the benchmark will only be achieved once cannabis consumers fully embrace the state’s legal market, the Los Angeles Times reports.

According to the study, about 29 percent of cannabis consumers may, at first, stay in the illicit market to avoid the costs of new regulations, which will add 15 percent to retail values. The new regulations include taxes and testing and tracking requirements, which Lori Ajax, director of the state Bureau of Marijuana Control, said might prevent consumers from entering the legal market on day one because of the price increases.

“It’s going to take some time,” Ajax said in the report. “While it’s unlikely that everyone will come into the regulated market on day one, we plan to continue working with stakeholders as we move forward to increase participation over time.”

The researchers estimated that, as of November, aggregate annual medical cannabis sales reached $2 billion a year, representing about 25 percent of total California cannabis sales. Illegal sales were $5.7 billion, 75 percent of all cannabis sales in the state. The study estimates that the voter-approved taxed and regulated model could bring in $1 billion in tax revenues and more than 1,200 jobs will be created for testing and handling cannabis under the new regime.

According to the study, medical cannabis sales are expected to decline tremendously from $2 billion to $600 million as people migrate toward the adult-use market to avoid medical cannabis ID fees. The researchers anticipate that in the early days of the program, medical cannabis will comprise 9 percent of the overall market, which recreational sales will make up 61.5 percent of the overall market, and illicit sales will make up the remaining 29.5 percent.

Legal sales are expected to begin in California on Jan. 1, 2018.

End

Commercial-grade cannabis plants being grown in an indoor grow environment.

Vermont Gov. Signs MMJ Expansion Bill

6/12/2017

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Vermont Gov. Phil Scott has signed legislation expanding the state’s medical cannabis program, adding three qualifying conditions, one dispensary license, and allowing dispensaries to have two locations, according to a Vermont Digger report. The expansion comes less than a month after the Republican governor vetoed a bill that would have legalized adult cannabis use and possession in Vermont, but did not create an industry.

The measure adds post-traumatic stress disorder, Parkinson’s disease, and Crohn’s disease, as of July 1. PTSD patients are also required to receive regular psychiatric and therapeutic care to qualify for medical cannabis.

The new law, adding one dispensary license, brings the total permitted to operate in the state to five, each now allowed two locations. Another license will be created when the number of registered patients reaches 7,000. Right now there are about 4,000 people enrolled in the state program.

Sen. Dick Sears, who voted in favor of the expansion package, said the measure will “help an awful lot of people to relieve symptoms of various ailments” and adding dispensaries will improve access for patients.

Sears also indicated that lawmakers have drafted a new legalization bill, which was sent to the governor’s office last week for his opinion. The legislature could take up that bill during a veto session which is set to begin June 21.

End

The Florida State Capitol building in Tallahassee, Florida.

Florida Lawmakers Pass MMJ Compromise, Lawsuit Likely Over No Smoking Provision

6/12/2017

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Florida’s legislature has passed a medical cannabis compromise measure, increasing the number of dispensaries and opening up the program for an estimated hundreds of thousands of Floridians, WLRN reports. However, the law does not allow smoking, which John Morgan, an Orlando-based attorney who bankrolled the Amendment 2 campaign, said will lead to a lawsuit.

“I do care about smoke, and I will sue them because of that,” Morgan said in the report. “It clearly was called for in the amendment, and so what they’ve done for me is allowed me to step back up on my soapbox and go get what the people of Florida wanted when they passed this bill with 71 percent.”

The new rules limit operators to 25 dispensaries – a compromise between the Senate and House, who wanted 15 and 99 per operator, respectively. Ten new cultivation licenses will also be made available; however, they will only be available to companies that were previously denied operation in the state. Currently, there are just seven licensed operators in Florida.

The constitutional amendment expands the qualifying condition list to include HIV, AIDS, post-traumatic stress disorder, ALS, Crohn’s disease, Parkinson’s disease, multiple sclerosis or other, similar conditions. Lawmakers included terminally ill patients, regardless of condition, as well as chronic pain caused by one of the conditions included in the amendment. Chronic pain on its own is not included in the legislative deal.

Gov. Rick Scott is expected to sign the measure into law.

End

Kentucky Home Becomes First to Use Hempcrete Insulation

6/12/2017

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For the first time in Kentucky, a home is being insulated with hempcrete. According to an ABC36 report, the Lexington home, on York St., is being designed by the North Limestone Community Development Corporation.

“Basically what we are doing here is demonstrating how hemp can be used as a building material, specifically as an insulation,” said Kris Konn, director of design and construction for the development company said in the report. “So we are taking the ground up hemp stems, which aren’t good for anything else, and we are mixing them with lime and water and making this lightweight concrete mix. We are packing it into the forms up there, and that’s going to be the insulation for this house.”

Travis Robinson, a member of the North Limestone Community Development Corporation board, said that hemp doesn’t require as many pesticides as other crops and that hempcrete is eco-friendly, hypoallergenic, and fire and insect resistant. The product also allows moisture to move through it, allowing it to stay cooler in the summer.

“Hemp has had a history here in Kentucky and we haven’t been able to do it sooner,” Robinson said.

According to the report, lawmakers are considering reintroducing a bill that would allow large-scale hemp farming in the state.

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A nighttime time lapse of Highway 110 in downtown Los Angeles, California.

Los Angeles Releases Rec. Industry Draft Rules

6/09/2017

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The city of Los Angeles, California has released the draft rules to regulate the forthcoming recreational cannabis industry, imposing restrictions on where cannabis businesses can operate, outlining application requirements, and prohibiting cannabis from being consumed on site, according to a Los Angeles Times analysis of the proposal.

The draft rules limit cannabis companies to operating in most commercial and industrial zones, and bars them from operating within 800 feet of one another. Dispensaries would be banned from operating within 800 feet from parks, schools, public libraries, and drug and alcohol treatment facilities. All businesses would be required to have security and video surveillance, and undergo audits and inspections.

The rules stipulate that businesses must have a plan for hiring local residents and if they have at least 10 employees they must employ a “labor peace agreements” which prohibits employers from interfering with labor organizing by employees.

According to a Canna Law Blog analysis, existing dispensaries that are compliant under the current medical cannabis regime would be the only permitted retail outlets until the general application process opens in Phase 3 – after non-retail and social equity program applicants are approved. Social equity programs are aimed at providing members of communities disproportionately policed for cannabis crimes preferential licensing under legal cannabis regimes.

Rubin Honig, executive director of the Los Angeles Cannabis Task Force, called the draft regulations “a good step forward” but warned that “many existing and new businesses in L.A. will face long delays before they can apply for a city permit and legally operate.”

City Comptroller Ron Galperin estimates that the city could collect at least $50 million in cannabis tax revenues next year and citywide sales could approach $700 million. The draft rules will be available for public review and comment for 60 days before officials take any action.

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A large quantity of hundred dollar bills splayed out on a table.

Oregon Economist Finds First-Year Cannabis Sales On Pace with Colorado’s

6/09/2017

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The Oregon Office of Economic Analysis has released its forecast for the state’s recreational cannabis revenue, projecting $156 million in cannabis industry taxes over the next two years, according to a Willamette Week report. State economist Josh Lehner’s report indicates that Oregon’s first-year sales closely track Colorado’s first year but “outpaces Washington’s.”

Lehner suggests that Oregon’s strong first year over their northern neighbor is due to four factors: Oregonians simply consume more cannabis than Washington citizens, the state imposes fewer taxes on cannabis products, which leads to Washington residents buying from Oregon shops, and the state has large concentrations of dispensaries in the biggest cities.

Lehner does not anticipate Oregon’s second and third years keeping pace with Colorado.

“On the downside, supply constraints that keep products and inventory low will result in fewer sales, and tax collections,” Lehner writes in the report. “Another downside risk for tax collections are prices, given Oregon levies the tax based on the sales price. To date in Colorado and Washington, prices have fallen around 20 percent per year. Marijuana is a commodity and eventually will be commoditized.”

Lehner also wrote that a federal crackdown on legal cannabis markets is unlikely.

“While there has been no clear warning or action taken,” he writes, “there is a non-zero chance the federal government could step in and eliminate, or severely restrict recreational marijuana sales. In this event, taxes collected would be considerably less than forecasted.”

The next forecast is due out in August, which will include updated figures if the legislature passed any cannabis-related legislation.

End

Kristi Knoblich Palmer: Navigating New Regulations in California

6/09/2017

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Kristi Knoblich Palmer is the COO of Kiva Confections, a pioneering force in California’s cannabis edibles marketplace, and is a founding member of the California Cannabis Manufacturers Association (CCMA).

In the following episode, Ganjapreneur.com podcast host TG Branfalt speaks with Kristi about the founding of Kiva Confections, training to become an expert chocolatier, and California’s medical (and soon-to-be recreational) cannabis industry’s scramble towards a regulatory structure. The two also discuss the growing trend of micro-dosing cannabis, the founding and current goals of the CCMA, and much more.

Listen to the podcast interview below, or continue 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’re listening to the Ganjapreneur.com podcast where we try to bring you actionable information and normalize cannabis through the stories of ganjapreneurs, activists, and industry stakeholders. Today I’m joined by Kristi Knoblich Palmer. She is the chief operating officer of Kiva Confections and the founder of the California Cannabis Manufacturers Association.

How are you doing this morning, Kristi?

Kristi Knoblich Palmer: I’m great. How are you?

TG Branfalt: I’m well. I’m well. Sort of celebrating West Virginia’s success yesterday. They’re knocking on the door of medicinal. It just needs to be signed by the governor so you know, the 26th state. Looking good today, huh?

Kristi Knoblich Palmer: Looking good. We have a lot to celebrate this week. We really do.

TG Branfalt: Excellent. So I want to get right into it. Tell me a little bit about yourself, your background, and how you got started in the cannabis space.

Kristi Knoblich Palmer: Certainly. Yeah, so my partner, Scott, and I, we’re now partners in business and partners in life. We started off in 2010, starting Kiva as a business out of our home, in our home kitchen in the Bay Area here, California. Really we saw an opportunity for a better cannabis edible.

There wasn’t anything out there that was packaged professionally or labeled, nothing that we would want to bring home or, I always put things through the mother-in-law filter. There were no products out there that I would give to my mother-in-law.

Yeah, we got started with the testing labs. I’m developing formulas, and a brand, and a design for our company. We’ve grown it from there.

I don’t have a background in food science, or I’m not a baker, anything like that. Scott and I actually met in photography school in Santa Barbara. I guess we are just opportunists, I would say.

TG Branfalt: I had read that you were actually mentored by an Ohio chocolatier at a 100-year-old factory?

Kristi Knoblich Palmer: Yeah. Yeah. Yeah, so we started our company with the chocolate bars and we got feedback. People use their hands. Of course, you can’t see but they were indicating little pieces. They’d hold one hand in a cup and then they’d use the other one and indicate, “Oh, we want little pieces for your next product.”

We took that feedback and started looking at a chocolate-covered center. Scott loves chocolate-covered espresso beans so we thought we’d start there.

TG Branfalt: As do I.

Kristi Knoblich Palmer: Yeah, right? Who doesn’t? So that would allow us to, for the first time, really breakdown the dose. Get just a small amount of THC so that people could pop off the lid, eat just one, and go from there.

That product is particularly difficult to make so we went out and learned from who we dub “the panning guru” out of this really old chocolate manufacturing facility, which I think at that time we were in 2,500 square feet. They were in like 100,000 square feet.

So when we got to the facility we couldn’t believe our eyes but we spent a couple days out there. Actually, it wasn’t a couple days; it was one day. The apprentice for the guy who was teaching us, the apprentice, he laughed when we got there. He said, “There’s just no way you are going to learn to pan in a day.”

But we took studious notes and we brought the knowledge, what little knowledge we had adsorbed, and then made our period back to the Bay Area and started practicing, and eventually got it down to an art as well.

TG Branfalt: So did you tell them that you were going to introduce, that you were making a cannabis-infused chocolate?

Kristi Knoblich Palmer: We did, yes.

TG Branfalt: And what was the response?

Kristi Knoblich Palmer: Well, Kevin was really excited. Kevin was the panning guru, kind of a hippy sort of guy, and a little rough around the edges, great personality. He thought it was awesome and he was particularly excited when we invited him out to our facility to continue to train our team and to work with us on our equipment. It paid off for him in a few ways.

TG Branfalt: I want to kind of go back a little bit. I love that story. That’s why I kind of wanted to get to that early but when you started out in 2010, you know you said you don’t have a background in food science, you’re not a baker. How did you overcome some of the early challenges, not just with building the business but also with complying with regulations and that sort of thing out in California?

Kristi Knoblich Palmer: Complying with regulations was very simple because there weren’t any. That was a pretty low bar to cross.

You know, back in 2010, cottage and home-based businesses were the way to do it. We were fortunate. I grew up in the Bay Area so Scott … in a house that I grew up in. It was 2010; we were young and we didn’t have lot to lose.

We didn’t own homes, no kids. We weren’t married or anything so we didn’t have very, we couldn’t really go much further down. There was only up to go.

So with lots of roommates and family support, we put our family to work for us and paid them in chocolate and pizza.

We got going from there. Some of the hurdles, I would say a lot of the hurdles that exist today absolutely did not exist back then. That’s part of what motivates me and motivates us and I think the other members of our association as well, is because we all got to get started in an environment that was basically unregulated.

It encourages mom-and-pop, small businesses, home kitchen entrepreneurs who are looking for something different and have a lot of passion but maybe not a lot of expertise or money to become compliant.

TG Branfalt: How did you adapt? Like how did you adapt to the regulations?

Kristi Knoblich Palmer: Well, in California we really still don’t have regulations, which when I say that out loud it sounds crazy because we have medical laws that were signed by the governor. And then now we have recreational laws that were voted in.

Now we have a bill that it’s going to bridge the gap between the two but we still really don’t have anything that’s telling. We still don’t have that playbook.

We don’t have guidance on how many milligrams of THC should be in a product. We don’t have guidance on what kind of testing we should do and at what point in time. So there’s still a lot of gray area.

How have we been able to “become compliant”? You know, we’ve created our own standards along the way and basically it’s what you would do in the food world, right?

So Lay’s potato chips cannot brag about their food safety program because that’s just what consumers come to expect. Cannabis is not that way so we still can talk about and use in our sales pitch, essentially, that our products are safe for consumption, which is mind-boggling when you think about it.

You think about how many products just our company makes, and the numbers of the association, and throughout the state. So the businesses here are hungry for regulation and a playbook that we’ve been lacking for so long.

TG Branfalt: I want to talk to you a little bit about the edibles scene. In a Fast Company report, you had said that the edible market is 30 to 50 percent parents with full-time jobs and kids. Yet opponents say infused edibles, infused candies put children at risk.

Are you confronted often by parents about these sort of fears? And what do you tell them to alleviate those concerns?

Kristi Knoblich Palmer: You know what? You hit on a great question. As you know, in California, as I just explained, we do not have regulations for packaging and for marketing, right? So our company’s approach has been to really scale that back and create products that are very professional, and communicate with the intended consumer.

We don’t need friendly animals and things like that to convey a message to the consumer about responsibility. I use this as an argument for sensible regulation because the number of phone calls that we have received in our six years about children getting into cannabis: I can think of only one instance in six years.

So to me, the problem? I think it’s absolutely we need to protect children from edibles. I don’t think anyone can argue that we don’t need to do that because edibles are very potent and for all the sensible and logical reasons, we don’t want children getting into edibles.

But I actually don’t think that the problem is with our zero to five-year-olds. I think the problem exists more with teenagers. Childproof packaging and these kind of skull-and-crossbones on very onerous regulations don’t really speak to that crowd.

When parents come to us with their concerns, usually the majority of the feedback that we get are concerns around dosing, from parents who are using cannabis to treat children with autism or epilepsy. The stories and the feedback that we hear from parents often bring you to tears because their kids are developing into adolescents and young adults in a way that they haven’t been able to with traditional ways of treating the illnesses that they have.

TG Branfalt: And with those cases are you recommending more of a micro-dose or is it case-by-case sort of thing? And then kind of on the same thing is are you seeing trends towards micro-dosing?

Kristi Knoblich Palmer: Yes. Of course, I’m not a doctor so I can’t exactly make a recommendation. But what we do with our products and where edibles are going to be headed in the future is they will be uniform in content.

Once somebody figures out what works for them, and we always recommend people start very small with five milligrams or less, learn their dose, learn their body, and understand what feels comfortable and what’s working for them before they scale up and take anymore.

Yes, I think the trend towards micro-dosing is something that we saw back when prohibition was lifted. When you’re in a prohibition there is a natural desire for products that are very high in potency. They’re hard to get so you might as well get as much bang for your buck as you can and as much value as possible.

I don’t know about you but I don’t shop that way in my normal life. When I buy a bottle of wine I’m not looking at alcohol content and dollars per alcohol content. We buy brands, we buy Appalachians, we buy labels, whatever it is that speaks and works for you.

So yes, I think the trend towards micro-dosing and lower, more responsible cannabis consumption is alive and well out there in the industry and it’s just going to continue to pickup even more speed.

TG Branfalt: Micro-dosing, is that part of the drive behind that 30 to 50 percent market that you had said made up the edibles market?

Kristi Knoblich Palmer: Yeah, I think that segment of the market is looking for reliability. They’re parents. They’re employed. They need to go to bed at ten PM and wake up at six AM.

If you’re experimenting with edibles there’s a chance that you could not be able to fulfill the responsibilities that you have as a busy, responsible individual. We’ve tried to just, with our company and I think the industry is moving this way as well, just provide a reliable experience for people so that they can get done what they need to get done and they have a positive experience with cannabis.

TG Branfalt: I’m a huge proponent of micro-dosing. I just want to say that. I have said this in a couple of interviews now but I didn’t realize that that’s something I was doing, kind of on my own. It would be like, “Oh, I’m going to have this five-milligram gummy and it’s going to make me feel great, especially when I have to like go out in an anxiety-inducing situation.”

So I really commend the manufacturers who are recognizing that there is a population that really, really doesn’t want the 120-milligram bars and does want that 5-milligram, I really do commend you guys.

Kristi Knoblich Palmer: Thank you. Yeah, absolutely. We just are experimenting still here, really. So yeah, the feedback seems to be really, really positive around micro-dose products right now.

TG Branfalt: I want to talk to you a little bit about your role at the California Cannabis Manufacturers Association but before we get to that we’ve got to take a short break. This is the Ganjapreneur.com podcast, I’m TG Branfalt.

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TG Branfalt: Welcome back to the Ganjapreneur.com podcast. I’m your host TG Branfalt here with Kristi Knoblich Palmer, Chief Operating Officer of Kiva Confections and Founder of the California Cannabis Manufacturers Association.

Before the break, we were talking just a bit about the products that you make and the trend of micro-dosing in confections and edibles but I want to talk to you about your role at the California Cannabis Manufacturers Association. Why don’t you tell us what the CCMA does and why it’s important?

Kristi Knoblich Palmer: We formed this group so that we could specifically target the regulations, or the MRSA regulations, our medical system, that basically was going to force manufacturers to not be allowed to hold a distribution license. That was shocking and alarming that that was going to be allowed because that’s just not the way that the industry has worked in California up to this point.

That was really the genesis of the association, was to tackle that specific issue. There’s been some positive energy around that and things look like they are coming out in our favor.

Of course, it’s not over until it’s over so we’re going to continue to work on that issue but we will also pivot and work on other issues that are equally as important as regulations are implemented.

TG Branfalt: When you mention not being able to hold a distribution license you’re referring to vertical integration. Am I correct?

Kristi Knoblich Palmer: Correct.

TG Branfalt: Under Prop. 64 vertical integration is allowed, meaning that cultivators and manufacturers can distribute their products. That’s something that’s been supported by the governor as recently as this week but not law enforcement. Obviously you support the plan but why do you support this plan as opposed to the competing proposal that would require third parties to transport cannabis products?

Kristi Knoblich Palmer: Back in 2010 and really up until about the last 2 years, the only way for a manufacturer to get its products to market was to distribute it. You couldn’t call a cannabis distribution company and start a relationship. Basically there were no distributors to hire.

That was the model that was established by, really, most manufacturers that have been in existence longer than two or three years. So over the years, these manufacturers, myself included and the other members of the association, have developed their own distribution networks.

History has told us in the past that distribution is a very important element of the growth of any industry. Speed to market, and allowing for innovation, and a clear path to accessing your customer in forming those relationships really helps manufacturers sell their products.

We were having a really hard time understanding why we should not be allowed to continue to run and grow the businesses that we established and that have really been able to see the cannabis industry in California grow to the level that it is today.

TG Branfalt: What’s your response to the claims by members of law enforcement that allowing companies to distribute their own products opens the door to “criminal elements”?

Kristi Knoblich Palmer: You know, I try not get personally offended when I hear that.

Right? Set the emotions aside. I just think that there’s been little bit of fear-mongering going around at the capital. Special interest groups want to reach in and carve out a piece of the pie for themselves and protect a segment of the industry so that they can jump right in and preserve their margins for their other businesses.

Our reaction to that has been, “You know, if you have a great distribution company and you offer a really great service then people will want to hire you to do distribution.” I guess what we wanted to see was a level playing field.

We weren’t asking to keep those people out. We believe in healthy competition and if the other distribution company is better than mine then so be it. Dispensaries should be allowed to shop at those distributors as well.

We just feel that, as manufacturers, we also just deserve the right to do our own distribution and offer a competitive service to the dispensary customers.

TG Branfalt: I want to talk to you a bit more about what to expect as California migrates into a recreational system but before we do that we’ve got to take our last break. This is Ganjapreneur.com podcast. I’m TG Branfalt.

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TG Branfalt: Welcome back to Ganjapreneur.com podcast. I’m your host TG Branfalt here with Kristi Knoblich Palmer, Chief Operating Officer of Kiva Confections, Founder of California Cannabis Manufacturers Association.

Before the break we were talking a bit about vertical integration, which is just one of the things that is going to be determined in the coming months as California gears up for the rollout of the adult use regime. What are the CCMA members expecting as California legalizes, as far as regulations goes, staffing issues, expansion, and real estate?

These are all things that are obviously going to be impacted so what are you guys kind of expecting and preparing for as that happens?

Kristi Knoblich Palmer: I think right now our minds are on the testing labs. I think right now in California, since we’re still unregulated, we don’t have laws implemented just yet, there’s probably, a shot in the dark would be 25 percent of the testing that will need to be happening when we have our new laws is happening now.

On the day that we’re supposed to be mandating testing what happens to the volume at the labs when their volumes go up times-four? Having those strict testing regulations, we’re excited about.

We want to see pesticide-free cannabis. We want to see clean edibles on the shelves. That’s really, having trustworthy and reliable products on the shelves, is really what’s going to allow the industry in California to flourish.

In order to get our clean products to the shelves we need comprehensive testing labs. We need the ability, they need the ability to scale. So we either need more labs, we need maybe more equipment, whatever the labs need, whatever resources they need and expertise that they need to bring on to see and serve the demand that they’re about to encounter in 2018. That’s our next focus: how can we get the labs ready for 2018?

TG Branfalt: That seems to be an issue that’s coming up in Massachusetts, Maine, is that there’s this lack of testing facilities. Is there any way to bridge this gap or is it, I mean, is there any light at the end of the tunnel for manufacturers and producers in this regard?

Kristi Knoblich Palmer: Sure. I think sun’s setting in the new regulations, phasing in, in some fashion, testing regulations. We really can’t go from 0 to 60 overnight without encountering some serious choke points. It just could, it really could destroy and stifle the industry.

I think a phase-in of testing regulations would really help. Maybe incentivizing companies to test at the level that we really, at the goal basically. So some types of incentives that would help to do that or allowing, encouraging companies to bring testing onsite as well.

There are some, I think, techniques and things that can be done to try and tackle that. Maybe it’s even incentivizing labs, as well, to open up their services and begin to expand and bring on more people.

TG Branfalt: That’s another issue is staffing issues. Are you guys, are California manufacturers concerned that they’re not going to be able to find staffing and not be able to meet demand? Because demand’s definitely going to go up, you know, when this rolls out.

Is staffing a concern right now or … ?

Kristi Knoblich Palmer: I would say everything’s a concern right now.

Staffing is one of many but certainly, yes. When you start thinking, when you’ve heard from the guys in Colorado, businesses there talking about when they made their flip from medical to recreational that they had to be, they should have been prepared for five to seven times growth.

That’s what I’ve heard from other manufacturers there and some are only ready for double or triple. When you think about how do you scale your current operation to, say, times-four, that becomes a really difficult problem to try to wrap your mind around, right?

To try to scale to times-four when you don’t have volume already coming in the door times-four, means okay, you’re going to have to buy some stuff. You’re going to have to invest in some people and buy some equipment and increase the size of your facility.

How do you do that is with money. How do you get money is with a loan or taking on some investments. And you know, then we have our banking issues. So how are you going to get four-times the pay checks written, or pay checks involves the word “check.” How are you going to make payroll when everything is in cash? And you’re going to have four times the amount of volume in cash.

So there’s waterfall of issues coming down the line for us. I think ways that we can mitigate that, again, is phase-in of the regulations because what we know for sure is we have no idea what’s coming at us.

I think it’s going to take a lot of patience from everybody: from the operators, and from regulators and lawmakers alike.

TG Branfalt: Finally, I want to ask you, you’ve been so successful thus far and you’re very forward-thinking, and it’s very rare that you hear any business person say, “We want regulations.” That’s almost crazy, right?

Kristi Knoblich Palmer: Mm-hmm (affirmative).

TG Branfalt: So what advice do you have for entrepreneurs looking to get into the space? And what advice would you have them especially, if they were decided to come into California?

Kristi Knoblich Palmer: Sure. Advice for entrepreneurs: man, I could go on for hours with advice but if I had to just pick one, I would say, “Do your best to stay focused. Practice saying ‘no’ because in this industry there is so much opportunity that you can get caught up doing everything.” Right?

You can grow your own crops. You can do your own extraction. You can do your own manufacturing, distribution. You could do everything if you want it, right?

So staying in your lane, finding an expertise, and just doing what you’re most passionate about, and what you think. Listen to your gut. Listen to your heart and do what you think is best and I think you’ll be successful.

TG Branfalt: That’s really great advice, especially “doing what you love”. The cannabis industry obviously started from compassionate people who were there to help patients.

Now that it’s migrating into this legal regime of adult use I think that it’s really important, I’m not a manufacturer myself but I think that it’s really important for operators to remember where they came from and not get blinded by the dollars that are definitely about to start flowing in.

Kristi Knoblich Palmer: Yes. Yeah, absolutely. If you’re entering the cannabis space because of the money you’re in for a rude awakening. Because I think people think of the cannabis industry, and they think that there’s plants everywhere and there’s just money falling from the sky.

But those are two very common misconceptions and couldn’t be further from the truth because there’s a lot of experimentation and there’s no one telling you what to do. There’s a lot trial and error, and a lot of problem solving and Googling.

That couldn’t be further from the truth, at least in my experience but maybe we’re doing something wrong. I don’t know.

TG Branfalt: Finally, can you tell the listeners where they can find out more about the confections and more about the CCMA?

Kristi Knoblich Palmer: Absolutely. The CCMA has a website, the California Cannabis Manufacturers Association. Kiva Confections has a website as well where you can learn about the Kiva products.

The industry is growing so we always encourage people to participate and get to know each other, network, join the trade organizations. Tell people your perspective. Give your feedback because as the industry grows if you don’t speak up and stand up, and tell people how new regulations are going to affect you and your livelihood, and your business, they just won’t know.

Trade organizations are a really, really great way to do that and to meet other people in the industry and network. Highly encourage everybody to get involved in any capacity.

TG Branfalt: Well, I want to thank you very much, Kristi, for taking the opportunity to spend some time with us. I’m really happy that I got to speak to somebody who’s right on the cusp of this and working with micro-dosing and edibles, and also working in a trade organization.

This has been really a eye-opening sort of interview for me.

Kristi Knoblich Palmer: Great. Well, I’m so happy to be here. And like I said, really exciting time for the cannabis industry. We haven’t even hit the starting line here, in California. That’s the part that is just really exciting and thrilling.

I’m very happy to be here. Thank you for the opportunity.

TG Branfalt: You’re absolutely welcome.

You can find more episodes of the Ganjapreneur.com podcast in the podcast section at Ganjapreneur.com and in the Apple iTunes Store. On the Ganjapreneur.com website you will find the latest cannabis news and cannabis jobs updated daily along with transcripts of this podcast.

You can also download the Ganjapreneur.com app in iTunes and Google Play. This episode was engineered by Jeremy Sebastiano. I’ve been your host, TG Branfalt.

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A lone potted cannabis clone sits on the floor with a long shadow extended behind it.

Minnesota Company Launches Campaign to Remove MMJ Stigma

6/09/2017

by

A Minnesota company has launched a statewide campaign aimed at normalizing and removing the stigma surrounding medical cannabis. The “More Firsts” campaign by LeafLine Labs, a licensed medical cannabis business, is meant to humanize patient stories and represent “firsts” for the company’s patients after starting medical cannabis treatment.

Dr. Andrew Bachman, co-founder and CEO of LeafLine, said he hopes the campaign helps others “realize the documented success and safety” of medical cannabis treatments.

“We are humbled every day by the patient triumphs in which we are privileged to share – compelling stories involving chronic pain, opiate dependence, intractable seizures, terminal cancer and more,” Bachman said in a statement. “Through innovative formulation, consistent medication and compassionate care delivery, we are dedicated to promoting health, alleviating suffering and restoring quality in the lives of our patients.”

The campaign includes advertising in Minneapolis and Saint Paul light rail and bus stations and videos featuring actual LeafLine patients.

“It’s increasingly important that we educate, advocate, and communicate with scientific data and documented patient results to demonstrate that cannabis is medicine,” Bachman said. “Our hope is that these stories will remove stigma, replace doubt, provide hope, and encourage anyone suffering from an approved condition to consider our safe and effective medicine and care as a therapeutic option.”

Minnesota’s medical cannabis program was launched two years ago but so far just 6,000 patients are registered. The company estimates that there are more than 15,000 Minnesotans eligible under the state’s qualifying conditions list to participate in the program.

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