Downtown Kansas City from the Sheraton Hotel.

Kansas City, Missouri Voting Tuesday on Cannabis Decriminalization

This Tuesday, voters in Kansas City, Missouri will weigh in on a cannabis decriminalization measure that, if approved, would reduce penalties for possession of up to 35 grams of cannabis by adults 21 and older from a criminal misdemeanor punishable by up to six months in jail or a $100 fine, to a civil offense carrying a $25 fine with no criminal record or arrest.

Jamie Kacz, executive director of Kansas City NORML, said the main objective of the initiative “is to eliminate jail time” while reducing current cannabis possession penalties levied in the state.

“We have received an outpouring of support from voters across Kansas City who are ready for change and no longer want to see their loved ones suffer for marijuana possession,” Kacz said in a statement.

A March 27 survey from the Remington Research Group found 56 percent of respondents supported Question 5, which according to a Kansas City Star report requires a simple majority to pass.

Jessica Kelly, a member of Kansas City NORML’s Board of Directors, called the Remington Research survey “promising” because it was conducted using landlines, meaning “it was likely an older demographic weighing in on the issue.”

“Typically, younger demographics tend to vote in favor of marijuana reform, so this shows a good chance of the initiative passing with the support of both older and younger demographics,” she said.

End


Spark the Conversation: Aaron Justis, Buds and Roses

Aaron Justis is CEO of Buds and Roses, a seasoned medical cannabis dispensary in the Studio City neighborhood of Los Angeles, California.

In this podcast episode, Aaron hosts Spark the Conversation‘s Bianca Green for a conversation inside of the Buds and Roses dispensary location. This interview was recorded during the Spark the Conversation bus tour last fall, before California had officially voted to end the prohibition of cannabis.

The interview covers the scope of Aaron’s cannabis career, which began with the leap of faith of uprooting from Illinois to move to California and join a technically illegal industry, as well as his many long-term activism efforts. Though this conversation technically took place during the Spark the Conversation bus tour last fall (before California voters approved Prop. 65 to legalize adult-use cannabis), we hear from Aaron about his predictions for the L.A. cannabis market and he offers his input on what qualities are most important for an entrepreneur entering the cannabis space.

Tune in below, or scroll further down to read a full transcript of the interview.

Subscribe to the Ganjapreneur podcast on iTunes, Stitcher, SoundCloud or Google Play.


Listen to the podcast:


Read the transcript:

Bianca Green: Welcome to the Spark the Conversation podcast, in partnership with Ganjapreneur.com. I’m your host, Bianca Green. Today, I get to sit down with my good friend, Aaron Justis, of Buds and Roses in Studio City, a dispensary that’s existed since I’ve been in the game, so over eight years. I’ve known Aaron for many years. He was always a participant in the Cannabis Cups so I got to know him and his family there.

Then I always saw Aaron in DC and Sacramento, so he was one of the very, only people, really, that I would always see at both places. You know, in advocacy and in the competitive side of the cups. I’ve always had a kin toward him because he participated in being a part of the change. He’s the CEO of Buds and Roses and has strains that they developed there. It’s one of the nicest dispensaries I’ve been in. It’s just a really upscaled, beautiful, really comfortable environment that a lot of clientele that’s in that area are very comfortable going to.

He really did a lot to change the stigma of how people get access to their medicine and I admire him for a lot of his work. I’m really excited to talk to him today about his entrepreneurialism and kind of see where he’s at. One of the things that I think that we’re looking at achieving with this podcast is getting information out there to people so they understand what’s going on. What some of the things people have been up against running businesses and how to be responsible through advocacy, as well as being an entrepreneur.

Hearing from him and some of our other guests that are going to be throughout this podcast I think are going to be really exciting because some of these people are the pioneers and it’s really good information so I’m glad to have everybody with us today.

Hi, Aaron. We’re here today with Aaron Justis of Buds and Roses. Good to have you. Thank you so much for being here.

Aaron Justis: Thank you for having me.

Bianca Green: Aaron and I have known each other for quite some time, right? I met you, I think the first time I met you was at a AC Unity Conference in DC when we went to lobby but one of the interesting things about you, Aaron, is that I always saw you at a time when it wasn’t really popular being at the cups as a vendor and then also as an advocate in DC and Sacramento.

There were very few people that I saw on a crossover and so I’ve always had a camaraderie with you based on that and just watching your business flourish. You going from your first location down the street and now being in this awesome location, I’m really proud of everything that you’ve done with Buds and Roses and the way that you’ve kind of branded yourself and put yourself out there as a leader in the community.

Aaron Justis: Wow, thank you.

Bianca Green: Yeah.

Aaron Justis: Thank you. That’s awesome.

Bianca Green: Yeah. I guess one of the things we should really start talking about is how did you get into the industry?

Aaron Justis: Let’s see. I can go really far back and, when I was probably 15 is when I first got in the industry, but I started really using cannabis when I was 17 for what I later found out to be medical purposes. I didn’t really know why I was using it at first but I knew I liked it. When I was about 19, I read Jack Herer’s book The Emperor Wears No Clothes and it just totally blew me away how cannabis, just the lies that we’re told to make cannabis illegal and then the effect that that has on so many people in so many communities and the damage that it does.

It put a fire in my belly and I went and attended my first NORML conference I think in 1998, actually met Jack Herer and spent a little time with him and, from there, just kind of got into it and did what I could legally in the cannabis business, which was started a hemp clothing company and just promoted cannabis and kind of like sparking the conversation back then by having shared such a set like marijuana medicine shop or save the planet but cross the E out so it’s like save the plant and kind of just did that and started going to High Times Cannabis Cups but they were only in Amsterdam then. Yeah, that’s kind of how I got in.

Bianca Green: You’ve been a huge winner at these cups. I mean, you showed me a cannabis cup medal that you guys won in what year? Were you filming your garage?

Aaron Justis: Yeah, in like a ’98, I had a booth selling my hemp clothing and we brought hemp sweaters and hemp gloves that year and it was so cold in Amsterdam, like everyone just bought them up and so I won a Cannabis Cup award for best new hemp product.

Bianca Green: That’s awesome.

Aaron Justis: Yeah, it was great. It was very motivating, for sure.

Bianca Green: Yeah, and then how did it evolve into becoming a club owner?

Aaron Justis: I always remained an activist. I did some lobbying with Illinois NORML for a while and then I just kind of stepped back a little bit. You couldn’t make a lot of money selling hemp clothes and going to these festivals but I met a lot of people and it was fun. But I have a family to focus on then and now and I did other retail businesses but I just wasn’t feeling it. You know, I wanted to do something more important. I wanted to do something that could change the world for the better.

I remember one day, about eight or nine years ago, watching Marijuana Inc. on CNBC and I remember I saw Richard Lee on there and I remember when he just said, the interviewer asked him, “So, do you feel like you’re illegal business?” He said, “Well, I paid over $500,000 in federal taxes last year so, you know, I feel like I’m legal. They’re taking my money and I pay state, you know, local taxes,” and just a light bulb went off and I was like, “Oh, my God. There’s a real cannabis industry in California and I have to go there and be a part of it.”

Bianca Green: Wow, so you like picked up your family from Chicago and moved out here? Tell me what that journey was like?

Aaron Justis: Yeah, so I remember I told my wife. I was like, “Hey, we’re moving to California and I’m getting in the cannabis industry.”

Bianca Green: Erica’s like, “What?”

Aaron Justis: Yeah, yeah. She said, “Okay.” Then, later that night, and she’s not very emotional. She doesn’t cry a lot, almost never, and I noticed she was crying and I said, “What’s going on?” She said, “Well, you said we’re going to move to California and I think you’re serious and I’m just like trying to process this,” and she said, “But you know what? You go out there and make it work and I will … We’ll, we’ll come out there afterwards.”

Jumped on a plane with my best friend Tyler Wadleigh who is still our head cultivator and we just flew out to California and we’re just like, “How are we going to get in this industry?” I started by going to Oaksterdam University. There was one in Beverly Hills at the time. I met Jeff Jones, Dale Sky Jones, and they gave me some good advice and then I started going to ASA, Americans’ for Safe Access events and I ran into Steve DeAngelo and Don Duncan and I just met all these great people.

Bianca Green: Who are great drug policy reform advocates. All of them.

Aaron Justis: Yeah, and they do it the right way, you know?

Bianca Green: Yeah.

Aaron Justis: I just said, “Hey, I have to get a dispensary here. What can we do?” I actually looked in Washington, DC where there were some opportunities and LA, but LA is where I wanted to be. It was where I wanted to live and grow a business and we ended up with Buds and Roses in about a year.

Bianca Green: The name. I love the name. How did the name come about?

Aaron Justis: I actually didn’t come up with the name. I took over Buds and Roses in 2010 and it was a very unknown dispensary. They didn’t have a lot of patients. I think the annual sales in 2009 were $40,000 for the year and there was only one employee, the lady who started it, and she just came up with the name and the thing is that I remember, when I first became the president and got on the board, I said, “You know, we can’t use this name because it’s not medical enough. We’re going to get raided. We need to be like Los Angeles Patient Center or Care Center.”

Bianca Green: Sure, yeah.

Aaron Justis: But the thing is people just kept coming in and they’re like, “I love this name. I love this name.”

Bianca Green: Yeah.

Aaron Justis: You know, things were good. We didn’t get raided the first year or two and we thought, “Okay, we have to start like promoting this.” I remember, even when we first started promoting it, we would put like Buds and Roses really little and then collective really big because we were trying to get people to focus on the word collective like, you know, because we are a state non-profit and we do operate as a collective. As we started growing the business and winning awards and things like that, we just kind of redesigned the logo and ran with it.

Bianca Green: Well, it’s worked for you. You know, one of the things that you guys did really well for your branding was you made … Erica made those great clothing lines, right? You would give those out at the cups and a lot of people wore those. I mean, we gave them to John Sally. Who else has worn them that’s gotten it out there?

Aaron Justis: Yeah, just a lot of good people. I’ve worn it and they loved just kind of the brand and it stands for something.

Bianca Green: Yeah, and you have a really big celebrity clientele out here. That is obviously really good for marketing and branding. The idea that you guys built the clothing line out as a separate entity, though, was a really smart move, especially to solidify your intellectual property, right?

Aaron Justis: Yeah.

Bianca Green: It gives you the opportunity to trademark in certain areas where you still can’t trademark strains and things like that. Why don’t you talk a little bit about that?

Aaron Justis: Yeah, like one of the only ways to kind of trademark your dispensary, or if you’re creating products for the industry, is you can’t trademark cannabis specific so you want to come up with different things that you can trademark, so it is the clothing, it’s smoking accessories. We’ve had ash trays and doob tubes and things like that. Lighters can even be trademarked. You can even turn your website, if it’s informational, into a trademark. You’re giving information on this site. You have to do a lot of workarounds to get the trademark going for when they do finally accept cannabis trademarks.

Bianca Green: That’s great. Good proactive ways to keep your intellectual property because now, even three years ago, when nobody was paying attention, there was a lot of opportunity but now people are coming in from all different angles and really just trying to suck up the IPs.

Aaron Justis: Yeah. I just saw a major lawsuit against one of like the world’s biggest corporations against somebody in the cannabis industry and they got almost half a million dollar judgment against this small cannabis company for using something with their logo. It’s these bigger corporations are also definitely starting to pay attention.

Bianca Green: And they’re creating laws. Like in Oregon, you’re not allowed to use Girl Scout Cookies. There’s been bans on using some of the other names, so it’s definitely growing up in how we look at it. I mean, I’ve always thought that if we sophisticated the way that we talk about cannabis, not only as a medicine but in the way that we brand it — you know, “AK47” — there’s just certain names that might intimidate a new consumer to kind of come on board and get with it.

Aaron Justis: Yeah, with the Girl Scout Cookies, I just have to say this. They actually sent me a cease and desist letter a few years ago.

Bianca Green: The Girl Scouts did?

Aaron Justis: Yeah, we had won in the US Cannabis Cup with Girl Scout Cookies and it wasn’t … We weren’t selling the seeds, we’re not the creator of it, we just grew it and won, and yeah, they sent me a letter and it just said like, “Stop using the name,” and I didn’t bring it up at the time. I’ve mentioned it since but the last thing I wanted was a fight with Girl Scouts of America.

Bianca Green: Girl Scout Cookies of America, oh, my God.

Aaron Justis: Just like that’s okay. It was actually the phenotype that we had is called Platinum Cookies so we actually had already changed it to that and we haven’t had any problems since.

Bianca Green: Do you do a lot of genetics here?

Aaron Justis: We have created some genetics in the past. It’s not something we’re working on so much now, but we have created strains like Joey’s Strain, which was created for Joey, who his mother started the Unconventional Foundation for Autism, Mieko Perez, and we have been donating medicine for Joey for a long time and then we just, we found a strain that we cultivated and bred that worked really well for him and that created Joey’s Strain.

Bianca Green: What’s that like? Like the pressure of literally creating a medicine for a child? That’s got to be an insurmountable amount of overtaking.

Aaron Justis: Yeah. You know, it wasn’t that we actually had bred a few different strains and then this one worked for him so we used to call it Alpha Dog and then it just worked so well for him we renamed it. Creating a strain for him would have been really difficult because everybody’s body is different and it wasn’t … It’s not CBD that works for him. It’s THC. Then it’s just I guess finding the terpenes and things like and the combination of cannabinoids in that strain just happens to work really well for him, so kind of lucked out, I guess.

Bianca Green: How does that even work? Like you become then a scientist, in a way.

Aaron Justis: Yeah, and you never know if it’s going to work for everybody like that or if they’re going to have different reactions, so there’s just certain strains that we were providing for him where … and this has happened recently, if we don’t have the Joey’s Strain where he could take something and then he’s up for days. Like literally almost a week and then Mieko is up for almost a week. You definitely want to get the right medicine for people.

Bianca Green: Consistency is important, so I’m sure, as a business owner, it stresses you out that like, God forbid, you get shut down. People rely on their medicine from you in particular.

Aaron Justis: Yeah.

Bianca Green: Like what’s that like?

Aaron Justis: This does happen. Even if we don’t get shut down, the other problem is our providers who get shut down. One of my biggest things right now is trying to keep consistent product on the shelf. You know, when somebody finds something that works for them, it’s like, we don’t want to run out of that. They might come every three weeks, every four weeks, and sometimes drivers still get arrested, manufacturing facilities, cultivators, get shut down, and there’s a big lapse in product. There’s already, even in a market where people aren’t getting shut down, they’re really not able to produce as much as they’d like or as much as the demand is out there. In this industry, we’re constantly running out of products and not having consistency like we’d like.

Bianca Green: What’s the LA market like?

Aaron Justis: Well, it’s big. Probably the biggest in the country, if not the world, and they’re fairly sophisticated and educated. There’s been medical cannabis providers here for 10 years plus, maybe 12 years, and they definitely have … There’s probably 1,000 dispensaries that are operating outside of the little regulation that we do have here. People have a wide experience of it but it also is really like amateur, or it’s not what it could be because the regulations don’t exist. You hear officials all over Southern California and in California say, “Oh, there’s a problem with all these dispensaries. They’re an eye sore. They’re not really providing medicine. They’re doing this and that,” and I just feel like you can’t judge a marketplace when it’s unregulated. Of course, if bars were not regulated, things would be out of control.

Los Angeles has yet to see what a truly regulated market looks like and that’s kind of how we tried to operate because my mentors were Steve DeAngelo of Harborside, Don Duncan of LAPCG and other dispensaries. He started I think the first one in the state almost 20 years ago. Or Robert Jacob from Peace and Medicine. Just these pioneers, so even though we’re not regulated where we have to label things properly or it doesn’t have to have the nutrition facts and all that, doesn’t have to be lab-tested, we just push for those and set our own regulations.

Bianca Green: Yeah, the state of marijuana. Betty Yee spoke the state controller and she spoke about how the government essentially is listening because we’re the only industry that’s begging for regulation.

Aaron Justis: Right, yeah.

Bianca Green: Yeah, which is really interesting. I’ve met a lot of really good people in this industry that came from the movement. Tell me about, for you as a business owner who’s been a business owner for a while, watching the movement go into a real industry and what that feels like. I know that your business is striving but, at the same time, you’re working with political issues. Bans, Prop 64 that’s coming. How’s that going to change, you know, the future for you? There must be just a lot of nuances to your business that wouldn’t exist if you had a shoe store.

Aaron Justis: Yeah. I think a lot of industries deal with their own issues. Some of the stuff that we deal with is somewhat normal, just for a struggling business owner, but then some of the things we deal with are way beyond normal. The fact that we’ve survived through bans. There was a complete ban on dispensaries in LA. At this time, I’m worried about my home being raided, my dog being shot in front of my kids and all these things, just for providing medical cannabis. We’ve had to deal with that. We’ve had to deal with several bank accounts being shut down. Truly unfair tax laws where we can’t write off any expenses and we get audited and we owe hundreds of thousands of dollars, even though we didn’t make any money those years.

It’s definitely been difficult and also, just in LA alone, LA hasn’t regulated so there’s tons of work at the local level, at the state level, and at the national level that I just … I feel like, if we can get through these really difficult times, we should be able to get through anything but it’d be nice to kind of get going normally.

Bianca Green: Yeah. You did a lot of work with GLACA for local ordinance issues, with local ordinance issues. Tell me a little bit about that experience.

Aaron Justis: Yeah. We’re the oldest trade association of its kind. We’d been around for almost 10 years in Los Angeles and we’ve always tried to work with the city and create regulations in LA and push that and be a positive force and self-regulate our dispensaries as well and set up our own rules and regulations for that. This year has just been … It’s been interesting. There’s a couple of different groups of operators here that are somewhat legal. There’s two trade associations and our trade association took the view that the city just held off on regulations because the state never regulated. It’s such a big city they didn’t want to take on that task.

Going forward, this year, GLACA felt like we could work with the city. They were going to regulate. We didn’t have to be so forceful like we had been in the past. Maybe the other trade association was little more worried about how the city would react. We kind of both took our own angles on it but, as we kind of merge today, the city council’s going forward with it but our city is very diverse so they want to make sure that there’s room for minorities which is a trend in the industry which I think is extremely important to not cut the people that have been most affected by the war on drugs out of the legal industry, so it’s very positive to see that.

We want to get licensed for the activities we’ve been doing for almost 10 years here and we want to open it up so that the people that have been providing our dispensaries have the right to continue to operate as well. It’s definitely feeling very positive lately but we have just a ton of work to do.

Bianca Green: What do you think some of the greatest challenges have been for you, building this business?

Aaron Justis: I mean, probably the biggest thing is just it being illegal still and, even though, like when I say we’re somewhat regulated in LA, it basically says that all dispensaries are illegal but about 100 of us have limited immunity. We’re still not fully accepted by the law so we have a constant struggle with that. Then it’s just all the things of trying to build a business in a market like this, where you can’t get loans, you can’t get finance, investors are weary of what’s happening here.

Plus, I mean, look, 90% of the dispensaries in LA are operating outside of those regulations and that’s just a big competitive advantage for them, so it’s been hard to survive, especially when you’re being transparent and you’re doing things the right way when so many people are not. Again, I think if we can survive through this, it’ll make the future easier.

Bianca Green: What do you think is going to happen to the black market, though? These people who aren’t regulated, do you think that they’re going to get regulated and, if prohibition ends, what do you think that’ll look like?

Aaron Justis: I think that, if they over-tax it, that the black market can definitely thrive and stay strong, so we need to keep the taxes low. We already pay high taxes to our city, to the state, with the federal interference, we pay a lot of tax so we want to keep that low. I think the best way to build the legitimate market is to offer services and things that the black market just can’t. I believe, over time, people will see the value in going to a legitimate place versus the black market.

Bianca Green: Yeah, because customer service is really important. I mean, I’ve given you feedback on your business many times because I think that the consumer experience is what’s really been changing the game for a lot of people. I remember the first time I went to a dispensary and listening to the bars close behind you and you’ve got to walk into, “Eeeeng!” There’s this massive, like fear a little bit and you really make a wonderful consumer experience.

Aaron Justis: Thank you, yeah.

Bianca Green: I know Erica was a part of really spearheading creating the atmosphere in Buds and Roses and it’s really beautiful and warm and friendly, especially as like a single woman. I feel very comfortable coming in. It’s a very good customer experience, you know? That’s really important to draw in a new clientele, I think, right?

Aaron Justis: Yeah.

Bianca Green: What do you see the future of Buds and Roses being if legalization happens on November 8th?

Aaron Justis: Yeah. I mean, Buds and Roses is already moving forward with these huge law changes in medical cannabis and I think that, with Prop 64, legalization definitely looks like it’s going to pass. I think that’ll just continue to move everything forward. I mean, our goal is to kind of max out the licensing that you can get in California, which is three stores, manufacturing license, and a grow, and that’ll be really our big steps in the next five years.

But truly beyond that, my heart lies in cannabis cafes. I really want those in like every neighborhood on the plant. Wherever you can get coffee and fast food and alcohol, you should be able to get cannabis. That’s where I was really inspired in Amsterdam when I walked into a cannabis café. I mean, I love doing the retail thing, having dispensaries, and if I could have those all over, I want to do that too, but the cannabis cafés I’m really excited about. Giving people a place to socialize.

Bianca Green: Yeah, I think that that’s like the next thing, right?

Aaron Justis: Yeah.

Bianca Green: I mean, we know at cups, even at advocacy, everybody smokes, so having an experience with your fellow man is pretty much the thing that brings us all together, right?

Aaron Justis: Yeah, I think so. Yeah.

Bianca Green: How do you feel about cannabis? Like, what is it about the plant that drives you?

Aaron Justis: I love it. I mean, it really … First of all, it just works amazingly well with the body to kind of regulate yourself. If your stomach hurts, if you have a headache, like there’s all these normal things it can do to balance you out, but then it truly like gives me motivation and energy to do the tasks that I need to accomplish. It also just, it gets people thinking deep and talking about deeper conversations where, you know, I like alcohol but it has the opposite effect, you know?

Alcohol is a completely different substance. It’s not going to necessarily most of the time lead to any really productive, deep conversations, and I think that, through that, cannabis really changes people and ultimately changes the world. It changes their thoughts, which influence their behavior which will influence the world. It’s a great thing.

Bianca Green: What’s it been like being able to supply the medicine to patients for as long as you have so far? What are the most profound things that have happened to you as a business owner being able to provide safe access to this plant?

Aaron Justis: Well, you know, the biggest thing is that when I, before I had the dispensary, people look at people in cannabis look down on them. You’re not being praised. You’re not being thanked, and I open Buds and Roses, patients come in and people are literally like, people have grabbed me and said like, “You saved my life. Thank you for everything you do. I was taking all these pills and doing all this stuff.

Then like the next day a mom comes in and she’s like, “Thank you so much. My kids, they’re on the spectrum. I’m not, at this point, providing them with cannabis but I have to deal with my children and it’s very stressful and the doctor was giving me pills for that and now I’m using cannabis. Thank you so much.” It’s just like every single day, there’s praise, there’s love. I mean, it just feels so good to have a business that can make so many people feel happy.

I mean, the stories we hear are just, every single day, the things are amazing, how much benefit cannabis has brought to people’s lives. It’s so rewarding. I couldn’t think of doing anything else.

Bianca Green: You would say that’s one of the biggest rewards of owning Buds and Roses.

Aaron Justis: Yeah.

Bianca Green: Going through all the shit that you go through to keep it alive, yeah.

Aaron Justis: Yeah.

Bianca Green: What’s the future look like in 2017 for Buds and Roses?

Aaron Justis: Well, I think that 2017 is a year for us and myself to be really involved in the rules that are made. Yes, we’ve passed the legislation but now we have to pass the regulation, so I want to be as involved as possible throughout the process so that our patients, so that the laws are written in a way that benefits our patients and everybody.

Bianca Green: Is there any advice you have for any entrepreneurs that are coming into the industry that might want to be a dispensary owner?

Aaron Justis: Yeah. I would say that the first advice is that money won’t just fall out of the sky. Everybody thinks, “Oh, I’m gonna sell cannabis and I’m gonna be super rich.” It’s a competitive place. It gets more and more competitive so you definitely … Do what you love. I just believe that, if you do anything just for the money, it’s not going to work out so just make sure that you really want to provide medicine. You want to have a retail operation. I mean, look. You’re open every day of the year. You’re open late at night. Just retail in general has its own negatives that people kind of stay away from in the real world. It’s different than if you’re manufacturing your product. You’re not dealing with the same hours.

Just make sure you love it and do it right. Do something positive that people can be proud of. That’s what made us, gave us our reputation, and get involved with policies and advocacy because if you’re outside of the loop, then you’re just reacting all the time and you can’t really be prepared.

Bianca Green: Well, thank you, Aaron, for having us here today.

Aaron Justis: Thank you.

Bianca Green: And having the Spark the Conversation bus come to the store. It means a lot to us to be able to continue to change the stigma and for you guys to be a part of that is really empowering. Tell our audience where we can find you.

Aaron Justis: Yeah. Well, you can find us, if you’re here in California, you can find us on Ventura Boulevard in Studio City. It’s actually a neighborhood of Los Angeles so 13047, or you can check us out online. Facebook, Buds and Roses. Instagram, Buds and Roses. Everywhere, Buds and Roses.

Bianca Green: Awesome. Buds and Roses clothing, is that still …

Aaron Justis: That’s right, yeah.

Bianca Green: Is that still active?

Aaron Justis: Yeah.

Bianca Green: Okay, good. Awesome. Well, Buds and Roses, Aaron Justis, thank you so much. Let’s spark the conversation because it’s a joint effort.

Aaron Justis: That’s right.

Bianca Green: Spark the Conversation is really excited to do this partnership with Ganjapreneur.com, creating these podcasts. It’s a resource for cannabis professionals, advocates, patients, business owners, anyone, really, who’s in favor of responsible growth. Visit Ganjapreneur.com for daily cannabis news, career openings, company profiles, and of course, more episodes of this podcast. We’re thankful to them and the partnership that we have with them and we appreciate the fact that they sparked the conversation and help ganjapreneurs grow.

End


Advocates Say Florida House MMJ Proposal ‘Undermines’ Voters

A proposal by Florida House Majority Leader Ray Rodrigues that would prohibit smoking medical cannabis, ban edibles and all but terminally ill patients from using vaporization as a delivery method, was approved by the House Health Quality Subcommittee, according to a News Chief report. Additionally, the House plan would see fewer additional cannabis licenses than a competing Senate proposal.

“I believe this is a measured approach,” Rodrigues, a Republican, said. “But I will caution you that it is not the final product.”

The House bill would require the Department of Health to award five more licenses once the medical cannabis patient population reaches 200,000, and three more licenses for every additional 100,000 registered patients. The Senate proposal would require the Health Department to issue five new licenses by the end of the year and 20 more by the time the patient count reaches 500,000.

Currently, there are only seven licensed medical cannabis operators registered with the state. A November 2015 report from the Florida of Office of Economic & Demographic Research estimated that patient counts in the state would reach anywhere between 1,586 and 440,522 this year; however that was prior to voters expanding the medical cannabis program via Amendment 2 last November. According to a Sun Sentinel report, the passage of the Amendment was estimated to add a possible 500,000 patients to the rolls.

The House measure would also keep a required three-month relationship between patients and physicians before a cannabis recommendation can be made.

Opponents of the voter-backed amendment applauded the potential changes; while Ben Pollara, campaign manager for the United for Care campaign, said the plan “was written for the less than 29 percent who voted ‘no’ and undermines and contradicts the constitution.”

End


Massachusetts Lawmakers Approve $300K for Adult-Use Rollout

The Massachusetts Legislature has approved $300,000 for the roll-out of the state’s adult-use cannabis program; however, according to the Springfield Republican report, the money was put in an executive fund run by the Executive Office of Administration and Finance, rather than under Treasurer Deborah Goldberg – who is tasked with creating and supervising the Cannabis Control Commission.

According one of Goldberg’s aides, she cannot spend the money until it is released from Administration and Finance, meaning the program’s implementation will be delayed until the treasurer’s office receives the funds.

“This funding is critical to the continued and timely implementation of Question 4,” Goldberg wrote in a letter to Secretary of Administration and Finance Kristen Lepore requesting the funds’ transfer to a reserve account in her office for the Cannabis Control Commission. “Without sufficient resources, I am concerned that the Commonwealth may not be able to meet the various extended deadlines required by (state law).”

Sarah Finlaw, a spokeswoman for the Executive Office for the Administration and Finance Department, said the agency is “going to work with the treasurer’s office and transfer the funds over to them.”

The funds were included in a supplemental budget signed by Gov. Charlie Baker yesterday.

On Monday, the Massachusetts Department of Revenue released an analysis estimating that the legal cannabis market in the state could reap $64 million in state tax revenues in its first year. Sales are expected to begin on July 1, 2018.

End


Johns Hopkins Drops Out of MMJ for PTSD Study

Johns Hopkins University has dropped out of a study exploring whether cannabis can help relieve post-traumatic stress disorder symptoms, according to a report from Reason.com. The study, funded by a $2.2 million grant to the Multidisciplinary Association for Psychedelic Studies (MAPS) from the Colorado Department of Public Health and Environment, will still be conducted by researchers at the University of Colorado, University of Pennsylvania, and the Scottsdale Research Institute in Phoenix, Arizona.

In a statement, a spokesperson for Johns Hopkins University indicated they had withdrawn from the study because “[their] goals for this study weren’t in alignment,” noting they had not yet enrolled any study participants.

“Johns Hopkins remains dedicated to helping military veterans, finding improved treatments for PTSD, and conducting innovative research to enhance our understanding of both the risks and benefits of cannabis/cannabinoids,” the statement said.

Brad Burge, communications director for MAPS, said that the university wanted to “remain focused on clinical research” while MAPS was not only interested in the science but also “the policy issues surrounding the science related to the [National Institutes on Drug Abuse] monopoly on marijuana for research.”

“We think the study will still succeed without Johns Hopkins’ involvement, that we’ll be able to enroll all the participants we need at the Phoenix site, and that the study will still have sufficient diversity of participant population,” Burge said in the report.

Researchers initially expected at least 76 military veterans to enroll in the study throughout the four sites, which is expected to take at least two years to complete.

End


Under the orange glow of an indoor cannabis grow house.

Ballot Initiative Petitions to Legalize MMJ & Adult-Use Filed in South Dakota

Petitions have been filed with South Dakota’s Secretary of State that would legalize both medical and adult cannabis use in the state if approved by the majority of voters in the state. In South Dakota, petitioners need to collect 13,871 signatures and have them certified by the Secretary of State by November 2017 in order to put the issues to voters during the following year’s election.

The “initiated measure to legalize marijuana for medical use” would allow registered patients with a physician’s recommendation to possess up to 3 ounces of cannabis and “a minimum (not maximum) of six marijuana plants if cultivation is permitted for that cardholder.” The measure provides for cannabis access to patients with 13 specific qualifying conditions, “chronic or debilitating” wasting, pain, muscle, and nausea diseases, or other conditions approved by the state Department of Health.

The “initiated measure to legalize certain amounts of marijuana, drugs made from marijuana, and drug paraphernalia, and to regulate and tax marijuana establishments” would allow adult residents 21-and-older to possess up to 1 ounce of flower, up to 5 grams of concentrates and cultivate five plants for personal use. Non-residents would be able to purchase and possess up to one-quarter ounce of cannabis and 1 gram of concentrates.

The measure would impose taxes of $200 per pound of flower, $50 per pound on parts other than flower, and $15 per immature plants for cultivators; additional sales taxes are not outlined under the measure.

In his statement on the adult-use measure, state Attorney General Marty Jackley said the measure “has numerous conflicts with other state laws and within the measure itself.”

“Because its full scope and effect is unclear, judicial or legislative clarification will likely be necessary,” he wrote. “A court may find portions of the measure unconstitutional.”

Jackley’s statement on the medical cannabis proposal does not include such a warning, but cautions that “marijuana possession, use, cultivation and distribution remain illegal under federal law.”

End


Gov. Gary R. Herbert, the Republican governor of Utah.

Utah Gov. Signs MMJ Research Bill

Utah Gov. Gary Herbert, a Republican, has signed a bill that allows research into the benefits and risks of medical cannabis after the legislature failed to pass comprehensive reforms during the session, the Associated Press reports. The proposal has the support of the Utah Medical Association, which has pushed for more research before the state broadens its limited medical cannabis regime – which currently only allows the use of CBD.

This is the third consecutive year that the Utah legislature has failed to pass medical cannabis reforms, and the inaction has already mobilized advocates in the state who are looking to put a ballot question to voters in 2018.

The bill signed by Herbert (HB.130) allows researchers to study cannabis for medical use without federal approval and will create the Cannabinoid Product Board to consider recommendations for future medical cannabis policy. The board will consist of four physicians, three medical research professionals, and three members of the Controlled Substances Advisory Committee.

The board will be tasked with reviewing medical cannabis research in order to evaluate the “safety and efficacy of cannabinoid products” including medical conditions that respond to cannabinoid products; cannabinoid dosage amounts and medical dosage forms; and interaction of cannabinoid products with other treatments. They will be expected to present their research annually.

End


Oklahoma Supreme Court Restores MMJ Ballot Initiative Title

The Oklahoma Supreme Court has thrown out a rewrite of the title of a ballot measure to legalize medical cannabis in the state, paving the way for State Question 788 to make its way to voters, according to a NewsOK.com report. The ballot measure has been on hold since September, when then-Attorney General Scott Pruitt decided to rewrite the title of the initiative; this led to a lawsuit between Pruitt, Oklahomans for Health, and the American Civil Liberties Union.

Ryan Kiesel, executive director of the ACLU of Oklahoma, said Pruitt’s rewrite was meant to mislead voters into believing they would be voting for legalizing adult cannabis use.

“Whether it’s the folks that signed this initiative petition or all of the voters who will ultimately have the chance to weigh in on whether or not Oklahoma will have medical marijuana, they should be able to do that without the attorney general injecting his personal political position into the ballot campaign by misrepresenting what the petitioners seek to accomplish,” Kiesel said in the report.

The state Supreme Court ruled that Pruitt’s title changes be stricken and the original title language restored, but did not offer an explanation for its decision.

Oklahoma Attorney General Mike Hunter, who succeeded Pruitt after he took the job as administrator of the Environmental Protection Agency in February, said he disagreed with the court’s decision.

“The ballot title was reviewed by the Oklahoma Supreme Court and the Court opted to substitute the original ballot title language,” he said. “We disagree with that result, but respect the decision of the state’s highest court.”

According to the report, the measure will likely be put to voters in November 2018 during the gubernatorial election; however Gov. Mary Fallin could schedule a special election.

End


A baby hemp plant that has only just recently sprouted.

Colorado Ag Dept. Could Begin Hemp-as-Feed Research if Gov. Signs Bill

The Colorado Department of Agriculture will soon begin researching the use of hemp in livestock feed if Gov. John Hickenlooper signs a bill that passed the state legislature unanimously, the Greeley Tribune reports. Using hemp in animal feed is barred by the Food and Drug Administration because it considers hemp to be an adulterating substance.

The study would be led by the state Commissioner of Agriculture, who would issue a recommendation at the conclusion of the year-long study. The original bill would have allowed hemp to be used in the feed without a study; however state Sen. Kerry Donovan, who authored and sponsored the measure, said the study would help avoid a conflict with the FDA.

“The study should figure out how to more effectively reach the goal of how we can use hemp without it being confiscated or the FDA sending letters of cease and desist,” she said in the report.

Mike Sullivan, owner of Hemp Farm Colorado, said that allowing hemp in livestock feed would help solve one of the most pressing issues for hemp farmers – finding buyers for raw materials.

“One of the real big problems with the hemp industry is there’s hardly any processors out there that are buying materials straight from the farmer,” he said. “This would be a great leap forward.”

Terry Fankhauser, executive vice president of the Colorado Cattleman’s Association, opposed the initial bill and indicated he would likely continue to oppose using hemp as cattle feed because hemp contains trace amounts of THC.

“I don’t think anybody that is buying a gallon of milk or a pound of beef would want to have that adulteration of that food product contain any level of THC … As a parent of three children, any level is unacceptable in their food,” he said. “I think the majority of consumers feel that way.”

End


Mature cannabis plants pictured shortly before harvest in a Washington grow facility.

Cannabis Taxes: The Challenges of Running an All-Cash Business

Editor’s note: This is the final installment of a three-part series about cannabis taxes and the intricacies/pitfalls of staying tax compliant in the marijuana industry. If you haven’t yet, check out Part 1 and Part 2 to get the full scoop.

Let’s take a moment to examine the “logic” of the Federal Government. We have a business that is legal in some states but has a history of being federally prohibited. As a result, cannabis retailers must conduct all their transactions in cash, which only makes them juicier targets for thieves and criminals — and furthers the potential for cannabis-related crimes.

The Feds, in their refusal to allow cannabis industries to use the Federal Banking System, have created a safety hazard for the owners and workers of cannabis dispensaries everywhere.

In this final part of my series, I am going to lay out some basic strategies and other ideas for operating within the realm of an all-cash business.

IRS audits in a cash-based industry

Cannabis certainly isn’t the only industry where cash is the main source of income — for instance, topless bars generally handle a lot of cash. To put a myth out there to rest, the IRS can actually trace cash. How, you ask? Let’s say that you are paid in all cash and you report $25,000 of income on your tax return. On that same tax return, you report that you paid $15,000 in mortgage interest and $3,000 in property taxes.

How did you eat? Unless you have some source of untaxable income, the IRS will indeed question the return.

Photo Credit: 401(K) 2012

The IRS will reconstruct your income. One method they use is a cash flow analysis. What they will do is ask you questions about your lifestyle. How much is your rent? What do your groceries cost? How much do you spend on clothing and utilities? You get the picture. They will multiply that out by the number of months in the year, and that is your income.

This method has been backed up by the United States Tax Court, but there are other methods that they can use as well.

Point of sale and other useful tools

If you are in the cannabis industry, you must keep track of your sales. This is done with a point of sale (POS) system, which tracks sales and inventory and enables you to run a daily Z-Tape that tells you what your sales were, how much tax you collected, how much cash should be in the drawer, and other information. A POS system is necessary to stay in compliance with the state tax regulations and also allows you to track your inventory so you know what to order and what your best-selling product is.

Dispensaries need to take precautions by systematically removing some cash from the cash register and placing it in a safe. This should be done periodically throughout the day. Other security measures available to you include installing security cameras, and some dispensaries have even gone so far as to have armed security on site.

Then there is theft. I can’t tell you how many times my practice is called into a business to audit cash. Employees steal. Counting a drawer before and after an employee’s shift is essential. Having only one person per register at a time is the best way to handle this, because if that drawer is short, then you have one person to go to. Note that humans do make mistakes. If the drawer is over or short by $20, that is normal. Discrepancies in the hundreds of dollars however, signifies theft. Not only do you have to worry about the theft of cash, but you also have the vexing problem of the potential loss of cannabis. Alarm systems that are set off by magnetic strips attached to the cannabis packaging can act as a deterrent to this kind of theft. Properly setting up your dispensary is key to minimizing this problem.

Electronic money solutions

Banks won’t touch cannabis money, but some dispensaries are turning to Bitcoin, which is a kind of digital currency that uses encryption techniques to regulate the generation of currency units. This cryptocurrency technology verifies the transfer of funds completely outside of the central bank’s domain. Dispensaries can take Bitcoin as payment, and make payments with the cryptocurrency.

Photo Credit: Fabian Figueredo

While Bitcoin can now be used and traded digitally in a similar way to more conventional forms of currency like euros or dollars, the main feature that sets it apart from standard currencies is the lack of centralization. There is no single authority controlling cryptocurrencies like Bitcoin, and some people are more comfortable with this type of money.

Bitcoin’s transactions are processed through a network of machines and their underlying transactions; again, there is no central regulatory agency involved. Theoretically, the system cannot be rigged to support any one monetary policy, such as what happened in Cyprus several years back. Even if one part of the network is offline, the currency still flows.

In summary, it is decentralized, meaning the Feds don’t control it.  

There are literally thousands of different cryptocurrencies out there, Bitcoin just happens to be the most popular. At one point in my career, I was tax consultant for the biggest cryptocurrency limited partnership at the time in the United States. What they did was mine cryptocurrency; they would exchange dollars or euros for Bitcoin, then exchange Bitcoin for Fatcom, and then Fatcom for BlackCoin. They made money via the exchange rate between the different cryptocurrencies — a strategy that could potentially open up a passive income stream for a struggling cannabis company.

End


Cannabis clones inside of a licensed I-502 facility in Washington state.

Illinois Health Department Reject Petitions Adding Intractable Pain, Autism, to MMJ List

The Illinois Department of Public Health has rejected petitions to add intractable pain and autism spectrum disorder to the list of qualifying conditions for medical use, the Associated Press reports. In both cases, Department of Public Health Director Nirav Shah said that neither petition contained information demonstrating that individuals with either diagnosis could benefit from medical cannabis.

Last year, Cook County Judge Neil Cohen forced public health officials to include post-operative chronic pain and post-traumatic stress disorder to the state’s qualifying conditions list after the Health Department rejected petitions for both conditions. His colleague, Cook County Associate Judge Rita Novak, also ruled that the state must reconsider adding migraines to the program; however the condition is not listed on the Health Department’s list of more than 30 qualifying conditions.

Under the state’s Compassionate Use of Medical Cannabis Pilot Program Act, patients are allowed to petition the Health Department to add “debilitating” conditions to the qualifying conditions list. The intractable pain petition was submitted in July 2015, while the autism petition was filed in October 2015.

It is possible that the petitioners could sue the department, forcing the matter to be adjudicated in the courts as with previous rejections.

End


Despite a raging opiate epidemic that has left countless Americans dead, pharmaceutical companies continue to rail against cannabis for being an unsafe and unproven medication.

DEA Approves Synthetic Cannabis Medication by Anti-Cannabis Pharmaceutical Giant

The Drug Enforcement Administration has approved Syndros, a cannabis-based medication developed by pharmaceutical company Insys Therapeutics, for Schedule II status under the Controlled Substances Act, according to a Chicago Tribune report.

Syndros is an oral remedy that uses THC to treat nausea and vomiting, two of the most common symptoms caused by chemotherapy. The drug was pre-approved by the FDA last summer as a treatment for nausea, vomiting, and weightloss in cancer and AIDS patients.

If that name Insys sounds familiar, it’s probably because this is the pharma group that donated $500,000 last September to help defeat Arizona’s cannabis legalization campaign; and now the company has received DEA approval for its own cannabis-based drug. During the campaign, the company said it opposed the legalization measure because, “it [would fail] to protect the safety of Arizona’s citizens, and particularly its children.” Now, non-medical cannabis users in Arizona must still face felony charges for possessing even small amounts of the plant.

However, if safety were truly Insys’ biggest concern, they might rethink their aggressive marketing strategies for Subsys — a medication containing fentanyl, a dangerously powerful and addictive opiate that can be 50-100 times more powerful than Morphine.

“It appears they are trying to kill a non-pharmaceutical market for marijuana in order to line their own pockets,” a spokesperson for Arizona’s legalization campaign said last year.

It’s clear that in a world where anyone and everyone would be allowed to cultivate their own medicine, giant pharma companies such as Insys would inevitably lose revenue. However, according to Kevin Gallagher of Craft Concentrates and the Cannabis Business Alliance, Big Pharma interests may ultimately be surprised by the zeal and persistence of cannabis patients and advocates.

“This is a completely unique substance that is so readily available, and it’s so easy to take advantage of its healing nature, … it’ll be very interesting to see how that plays out,” Gallagher said in an interview with Westword.

“These pharmaceutical companies still think they’re going to win the battle in creating essentially fake cannabis and having to even compete with the real cannabis industry, but they’re not looking at the effects of certain terpenes or certain cannabinoids,” Gallagher said.

More and more Americans succumb to prescription opiate overdoses each year, while there remain zero recorded deaths contributed to the over-consumption of cannabis.

End


The Canadian flag on a sunny, blue-skied day.

Canadian Legalization Plans Expected Next Month

Canada’s federal government is expected next month to announce nation-wide plans to legalize cannabis nationwide by July 1, 2018, according to a report from the CBC. Bill Blair, the parliamentary secretary to the Minister of Justice briefed the Liberal caucus on the plans, which sets the legal age to purchase, possess, and consume cannabis at 18, and includes provincial control on distribution and sales, including local ability to raise the legal age.

Canadians would also be able to grow up to four plants per household.

The announcement comes little more than two weeks after authorities in Toronto and Vancouver raided dispensaries in the provinces. In those raids, Marc and Jodie Emery, activists and owners of Cannabis Culture were arrested and charged with trafficking along three other dispensary operators.

Prime Minister Justin Trudeau said about a week prior to the raids that until the government has “a framework to control and regulate marijuana, the current laws apply.”

According to Health Canada statistics from February, the number of registered medical cannabis patients in the nation rose 32 percent from September to Dec. 31 last year. In 2016, a Canadian Federal Court ruled that grow-your-own cannabis bans violated a patient’s right to life, liberty, and security, forcing the government to allow those with a prescription to grow their own cannabis plants, which was capped at two indoor or five outdoor plants.

End


The Tennessee Capitol Building in Nashville, Tennessee.

Tenn. House Passes Bill That Would Derail City-Approved Cannabis Decriminalization

Tennessee’s House of Representatives has passed a bill that, if approved, would negate cannabis decriminalization policies enacted in Nashville and Memphis, the Memphis Daily News reports. The measure, which passed the body 65-28, aims to clarify that state law overrides local regulations involving Class B misdemeanors and above – which includes drug policies.

Last year Memphis’ City Council passed an ordinance that allows police officers to issue a $50 ticket for possessing less than 1 ounce of cannabis, rather than arrest the offender and charge them with a Class B misdemeanor. According to a Tennessean report, last year Nashville passed its own measure imposing a $50 fine and 10 hours of community service for possession of a half-ounce or less of cannabis.

Republican state Rep. William Lamberth, a former assistant district attorney from Sumner County and the bill’s sponsor, said the legislation creates equity in Tennessee‘s criminal justice system. Lamberth also noted that since Nashville’s decriminalization measure was passed just 37 people have been issued the civil infraction while 888 people had been charged with the misdemeanor.

“You can’t have rich people being held to a different standard than poor people. You can’t have people from the good part of town being held to a different standard than the people from the bad part of town,” he said in the report. “You can’t have people that look one way be treated differently than people who look another way. You just can’t have that, at least not in the country I love.”

Democratic state Rep Sherry Jones argued that the “legislation is not about cannabis” rather about whether lawmakers “support or don’t support local control.”

“If you want to take local control away from your governments, this is the bill to do that,” she said.

The Senate is expected to take up the bill today.

End


Looking down on the beach somewhere on the island of Guam.

Guam Pushing Forward with Cannabis Reforms

Legislation set to be introduced in Guam would force policymakers to implement the 2014 voter-approved medical cannabis laws, which stalled due to complications developing the rules and regulations, according to a Guam Daily Post report. The measure, introduced by Sen. Joe San Agustin, would set the license fees for manufacturers and cultivators at $1,000, while dispensaries and testing facilities would not be charged.

The legislation is necessary as the original medical cannabis bill did not include regulations allowing the Department of Revenue and Taxation to create business licenses, and an amendment last year to the law only pushed the Public Health Department to start the process of distributing license applications.

The move comes as Gov. Eddie Calvo considers legalizing adult cannabis use on the U.S. territory – however, due to unease regarding federal policies Calvo might pull legalization plans in favor of a home-grow measure, the Pacific Daily News reports. Under the legalization plan, sales would be taxed and the funds would be used to help sustain Guam’s medical cannabis regime.

“The governor’s bill is something that can work, but if it can’t because of the president’s crackdown, then we want to be able to allow home cultivation,” Troy Torres, Adelup special policy advisor said in the Daily News report.

Last term, Calvo vetoed a home-grow bill because he believed it was over-regulated.

End


Looking out from underneath a cannabis plant inside of a state-licensed grow op.

Golden Leaf Holdings Completes Grassroots Deal, Latest in March Flurry

Oregon-based Golden Leaf Holdings has struck a deal to acquire the Nevada cultivation and extraction licenses from NevWa, LLC – which operates as Grassroots in the state – for $1.925 million. The move comes just four months before state regulators anticipate the launch of the state’s adult-use market. The license allows the company to sell and distribute products throughout Nevada.

Don Robinson, CEO of Golden Leaf Holdings, said the state is “increasingly being recognized as one of the fastest growing cannabis markets in the U.S.”

“The level of tourism in the state combined with the reciprocity provision in the state’s [medical] cannabis laws, positions Nevada to become one of the largest and most dynamic markets in the country,” he said in a press release. “Cannabis brands that are on store shelves in Nevada can create brand loyalty throughout the North America.”

The deal is the third this month for Golden Leaf, who announced last week they had signed a letter of intent to acquire Oregon’s Chalice, LLC, which won “Cannabis Store of the Year” at the 2017 Dope Magazine Industry Awards. On Mar. 16, the company announced they were set to acquire the assets and business of JuJu Joints, which sells disposable cannabis oil “e-joint” products in Oregon, Nevada, California, Washington state, and Canada. Two days prior, Green Leaf announced plans to acquire Medical Marihuana Group Corporation – a licensed Canadian producer.

All of the deals still await final approval from the appropriate regulators.

End


Indoor cannabis plants inside of a licensed Washington state I-502 cultivation facility.

Report Suggests Cannabis Market Will Continue Growth Despite Federal Uncertainty

Despite uncertainty in the cannabis space fueled by recent comments from federal government officials, the legal cannabis market is expected to grow at a 27 percent compound annual rate through 2021, according to an Arcview Market Research report outlined by Bloomberg. In 2016 legal cannabis sales reached $6.7 billion – up 34 percent from the previous year.

Arcview CEO Troy Dayton said that not only would a crackdown on the legal cannabis trade be “so politically unpopular it would be silly,” but in 2014 Congress passed an amendment to an appropriations bill the prevents the Justice Department from using funds to interfere state medical cannabis programs. Although the measure does not protect adult-use markets, it is plausible that similar protections could be implemented this fall, Dayton said.

“We’ve got all these other countries that are passing more laws and also other states, and presumably the federal government could end marijuana prohibition as soon as 2021,” he said in the report. “There’s never been a market that’s grown at 20-plus percent growth each year for 10 years, right? But that’s possible here.”

The Arcview report indicates that North American total cannabis sales totaled $56.1 billion last year; however, 88 percent of those sales were illegal.

End


Inside of Delaware's Legislative Hall in Dover, Delaware.

Adult-Use Legislation Could Come This Session in Del.

An adult-use cannabis legalization bill in Delaware is near completion and will likely be introduced this session, according to a WDEL report. The bill’s sponsor, state Sen. Margaret Rose-Henry, indicated it has preliminary support of the state’s law enforcement community.

“Law enforcement wants this bill,” she said in the report. “I’m pleased to tell you that there are police officers who think this is a good thing that we are going to reduce their having to arrest people who don’t need to be arrested.”

Rose-Henry explained that she and several of her colleagues have been in contact with lawmakers in Colorado while crafting the legislation, hoping to learn from “the corrections that they’ve made.” The details of the bill are doubly important in Delaware, because Gov. John Carney has maintained that the state needs more time to develop its medical cannabis program before advancing into an adult-use market.

“We’re going to make sure we put the safeguards in, work with state and local law enforcement, to ensure that our people are protected,” Rose-Henry said. “I think our governor is being cautious. We had the same thing with the previous governor when I did medical marijuana it takes a while because of the federal laws, and I think that’s his concern.”

According to Cannabis Bureau of Delaware Co-Chair Zoe Patchell, 61 percent of Delawareans support a taxed and regulated adult cannabis market and suggested that public pressure could force Carney to sign the legislation if it were to pass.

So far no state has passed an adult-use measure via the legislative process.

End


The Phoenix Convention Center at night.

Imperious Expo 2017 Coming to Phoenix, Arizona on April 12-13

The first Imperious Expo of 2017 is coming to the Phoenix Convention Center in Phoenix, Arizona this April 12-13.

The Imperious Expo is one of the nation’s leading business-to-business cannabis conferences with an emphasis on the medical and industrial cannabis industries. Each conference boasts a unique array of cannabis industry speakers, and this year’s Phoenix, AZ location promises a blend of west coast, central, and east coast cannabis expertise. Furthermore, the extensive list of exhibitors who will be attending the Phoenix Imperious Expo includes industry representation from legalized markets around the U.S.

Expert speakers will give presentations on topics such as cultivation, extraction, insurance, legal issues, licensing, sustainability, water and more.

Arizona State Representative Mark Cardenas will deliver Wednesday’s keynote address and Shaping Fire podcast host Shango Los will be delivering Thursday’s keynote. Taylor West of the NCIA, Laura and Casey Rivero of Yerba Beuna Farms, Oregon and Nancy Whiteman of Wana Brands, Colorado will be speaking along with an array of national cannabis industry experts. You can view the full list here.

“Arizona cannabis entrepreneurs have a great opportunity. Not only do they have talented growers and extractors locally, but the state is so gorgeous that it is a great place to visit to get high and explore nature,” said Los. “I am excited to be speaking at the Imperious Expo event and have the opportunity to meet some of the state’s top cannabis players.”

David Murét, co-founder of Viridian Staffing, will take up the role of the event’s MC after playing a similar part at the inaugural Imperious Expo held last year in Tacoma, Washington.

“As with any enterprise, putting on a successful cannabis industry conference comes down to the quality of the team. And while relative newcomers to the cannabis industry, the team behind Imperious have been putting on successful tradeshows for years,” said Murét. “But, in an industry saturated with events, that isn’t enough. What ultimately won us over is their commitment to respecting the intelligence of their attendees and creating a valuable experience for all stakeholders. They aren’t just in it to turn a profit. We respect that.”

“We haven’t changed our focus or direction from last year,” said Imperious Expo founder Eric Norton. “We promote the legal medical and industrial benefits of cannabis, emphasizing the business sector, with a primary goal of connecting business to business (B2B).”

Norton says that Arizona’s thriving medical cannabis program is what originally caught his eye a few years back, but also that the state’s central location makes it more attractive to industry members who are further from the west coast. “Phoenix is only a few short hours by car to San Diego, LA, and Las Vegas — that makes it ideal for a trade show location in the cannabis industry,” he said.

Tickets are available online for the 2017 Phoenix Imperious Expo; two-day passes cost $148, a one-day pass costs $88.

If you are unable to attend the Imperious Expo in Phoenix, start planning now for their October Imperious Expo in Los Angeles.

End


David Barakett: Growing a Multi-State Dispensary Chain

David Barakett is the CEO of ShowGrow, a culture-focused dispensary chain with California locations in Los Angeles, Santa Ana, and Ramona. ShowGrow also runs a dispensary in Las Vegas, Nevada.

David recently joined our podcast host TG Branfalt for a chat about participating in the widening cannabis markets in California and Nevada. In this episode, David offers predictions for the new adult-use cannabis markets that will be opening after last November’s election, describes how he is able to make his dispensary brand stand out in the modern cannabis industry by understanding who cannabis consumers are and what they care about, and shares insight about his own management style, which he says can be summed up in one word: “positivity.”

Listen to the episode via the media player below, or continue scrolling to read a full transcript of the episode.

Subscribe to the Ganjapreneur podcast on iTunes, Stitcher, SoundCloud or Google Play.


Listen to the podcast:


Read the transcript:

TG Branfalt: Hey there. I’m TG Branfalt and you are listening to the Ganjapreneur.com podcast. The Ganjapreneur.com podcast gives us an opportunity to speak directly with entrepreneurs and experts who are working on the front lines of the industry to normalize cannabis through responsible business, education, and activism. As your host, I will do my best to try to bring you actionable information to help you plan, grow, and manage your cannabis business.

Today I’m joined by David Barakett. He’s the ShowGrow CEO. He’s got some dispensaries in Nevada and California. How are we doing today, David?

David Barakett: I’m doing great, doing great. How about you?

TG Branfalt: It’s a very strange day. Jeff Sessions was confirmed yesterday, so I’m still trying to wrap my head around that, and we might get to that a little bit later. But before we do, I want to talk about you. Let’s start with your background. What did you do before getting involved in the cannabis industry?

David Barakett: Early on, I got into real estate, that was kind of my first career, and built a mini real estate empire. It wasn’t very big but it was a Century 21 franchise. It was a good learning experience. That gave me the foundation for bringing some of the business acumen to the cannabis industry, and that was kind of my first taste of business and then I quickly moved into this shortly after.

TG Branfalt: Tell me about the experience opening your first dispensary. What was that like, and during that process, what were you looking for in partners and employees?

David Barakett: Yeah, it was crazy. It was a pretty interesting time and we actually partnered with somebody to manage this facility, and it was a great project at the time, and I was really excited. I didn’t know anything about the industry, really. I mean, I knew cannabis but not in the depths that you would have to know to be really great at retailing. We took over this facility and right out of the gate, we started doing pretty well. We kind of just developed it as we went and one of my partners did have some experience and he showed up a couple of days in and he was like, “You guys don’t have enough products on the shelves. What’s going on?” I was just like, “Man, I don’t know anything about this.” But from there, we just kind of learned.

I learned a lot early on from my employees because really they were the ones that were in tune with the industry. They are the boots on the ground and even today, that’s really where, that’s where we get our swagger from. That’s where all the knowledge is derived from, really, is from the folks that are in the store. A lot of those things we learned early on.

TG Branfalt: What state was your first dispensary in?

David Barakett: California.

TG Branfalt: How did you kind of evolve that business model and expand into Nevada? What did that entail? What’s that story?

David Barakett: When the Nevada market was going online, I think there was a lot of interest, right? The operators of the world descended on Nevada to find a home. We did the same thing. I started coming out here. If anything, it was just a good excuse to come to Vegas once a month. We met with a lot of people, talked to a lot of people about what we’re doing in California. We always felt like being from California, that we were better set up to succeed in Nevada. We kind of went through the process of meeting a lot of different owners, a lot of different personalities, and we landed on a group that are just really, really great guys, and they gave us the reins to do our thing.

We originally slow-played the market out here, and we didn’t end up doing cultivation and manufacturing because there just wasn’t a market to support it at the time. We built, we brought our California dispensary model. It was met with a lot of happy faces. People were coming in. They were like, “Man, it’s great to see a California dispensary.” In Nevada, a lot of people that live here are from California. A lot of people that they consume cannabis in Nevada, they’ve been to California. They’ve seen the shops. They’ve seen the product. There’s a lot of California influence out here. We just did our thing, put OGs on the board, put other California products that are just quintessential products that people would want, right? It just was a smooth transition.

TG Branfalt: With both of those markets opening up for recreational now, what are you guys doing to prepare for that and what is your kind of anticipation? What are you anticipating happening in both those states?

David Barakett: I anticipate these two states blowing up. I don’t think there’s any doubt that California is the largest market in the country. It’s poised to absolutely explode. I mean, we’ve had about a million patients in that market. What’s coming in California with rec, although it’s been relatively easy for people to get a rec and go to the shops, it’s still not something that everybody’s comfortable with. People think that you’re going to be on a registry somewhere. When you go to apply for a job sometime, somebody’s going to be able to dig out that you’re a cannabis consumer or whatever. Gun owners feel the same way.

There’s a lot of people that never entered the marketplace and there’s a lot more cannabis consumers out there that just aren’t in it. Yeah, my expectation is that the market could very well 10x. There’s no reason why it wouldn’t. We know that the million people that are cardholders now, they are your core business and they will be the core business after. You’re going to have always the people that are cannabis enthusiasts that will be your core business, and then there’s just going to open a market to a whole lot of people that will be occasional smokers, once a week or even once a month. But when you add up the numbers on that, you wind up with a pretty big market and the medicinal numbers should pale in comparison.

In Nevada, strategically, there’s no reason why we wouldn’t want to be here. We’re so close and this market, unlike California, it just, it doesn’t have the population, but when rec comes, the 42 million visitors a year could purchase. They’re flying into Las Vegas with the purpose of lowering inhibitions, so there’s no reason why this market isn’t going to just explode, too. My expectation is that these two markets will easily be the two largest in the country.

TG Branfalt: With the expansion happening, I mean, it’s happening all over the U.S. We’ve got eastern states now that are going full rec, so there’s a lot of opportunities to enter the market, but what are some of the barriers that you think exists as an entry to the market in the current business climate?

David Barakett: I mean, there’s a number of barriers to entry. It just, it depends how equipped you are to deal with them. We’ve built a business that’s comprised of people with a lot of different talents. Although we’re great at cannabis, we’re also great at business, and transitioning into this regulated market and every regulated market is different. It’s just, it’s imperative that you have somebody in-house that’s doing compliance. We happen to have somebody that’s phenomenal. It’s imperative that you understand the market that you’re getting into. Something that happened in Nevada was that nobody understood the market they were getting into. When locations were opening, there was 8,000 patients. That wasn’t going to support a bustling market. I still see a lot of that.

There’s this notion that you sell a gram of weed and your bank account automatically has a million dollars in it, and that’s just like so far from the truth. A lot of guys are jumping into the industry thinking that all you’ve got to do is get the license and open the doors, but it’s just not the case. There’s certainly some great markets out there that will be opening up. Massachusetts will be one of them. Everybody predicts that Florida will also be one of them. We’ll see how things kind of play out. But nevertheless, you’re talking about smaller states than where we’re working. They don’t have the same kind of tourism. When every prospectus that get sent to me is basically using black market numbers, it’s really hard to really understand what the value of these business are.

It’s experience. It’s just, it’s having done it that gives you the ability to really understand what you’re doing because, yeah, when you ask what are the barriers to entry, there’s a lot. There’s a lot. This is a heavily regulated space. Nobody is trying to legalize cannabis and have room for madness on their hands.

TG Branfalt: This is actually kind of leading into this quote that I’m going to read back to you that you had said, but before we do that, we’ve got to take a quick break. This is the Ganjapreneur.com podcast.


Commercial: This episode of the Ganjapreneur.com podcast is made possible by Name.com, a global provider of domain name, web hosting, and email services.

Every successful cannabis business needs an online presence, and every successful online presence begins with a domain. From your website to your email address, a good domain is easy for your customers to remember, it looks nice on a business card or billboard, and it reflects the true identity of the project it represents.

It’s important to reserve your domain early on when you are starting to your business, as you may find that the dot-com address for your preferred brand or concept has already been taken. If somebody has already purchased the ideal dot-com for your business, they might be willing to sell it, but if they aren’t, you may have to get creative with one of the new alternate domain extensions such as dot-co, dot-club, dot-shop, or even dot-farm. Reserve your domain name today at name.com/ganjapreneur.

If you are a domain name investor or venture capital firm interested in acquiring or advertising premium cannabis domains, go to the Ganjapreneur domain market to browse a wide variety of names including strains.com, cannabismedia.com, mj.com, and countless others. Discover branding opportunities for your next startup and learn about listing your premium domain names for sale at ganjapreneur.com/domains, sponsored by Name.com.


TG Branfalt: Hey, we’re back. This is the Ganjapreneur.com podcast. I’m TG Branfalt, your host. I’m here with David Barakett, the ShowGrow CEO. Before we took the break, we were talking about barriers to entry, the current market. You’ve said that legalization and regulation don’t create a market. They simply allow it to exist. Now, it’s my opinion that cannabis regulations are too onerous. They don’t actually allow for free markets. It’s often unbalanced and stuff. It says to regulate tobacco or cannabis like alcohol. There’s a bill to regulate it like tobacco in New Jersey that’s probably going to get killed.

For me, when I read that quote, that’s what I think, is that there’s too many regulations and it’s not regulated like alcohol is, whatsoever. Is that what people should take away from that quote or did you mean something entirely different?

David Barakett: Well, I could lie to you and tell you that I meant a whole lot of things, but what you’re saying I think is, I think there’s a lot of truth to it. To a degree, yes, I’m alluding to that, but what really I’m saying is just pretty simplistic. When a new territory goes online, and they are all the time, everybody goes bananas, and it’s like they just think that it’s guaranteed success and that’s not the case. There’s a lot of contributing factors and one of which is exactly what you just said. I mean, the fact that they can be over-regulated and overtaxed, those are reasons why that’s not really a great market.

Although we’re legalizing and we have a framework that’s going in place, there’s still a lot of crazy things that are going on out there. To a degree, I think there’s some really good regulators that are trying to figure it out so that they don’t tax us out of the markets. Forget about taxing outside of the market. The fact is is that creates, that doesn’t create the black market. It will let the black market continue to exist and thrive. Yeah, so simply putting an ordinance together isn’t a key component to a successful cannabis market.

What I meant by that, really, I mean, is that there’s more to evaluating markets viability than the mere fact that it’s been legalized in a town near you. There’s a lot of excitement over cannabis and it’s created this mentality that success is given, and that couldn’t be further from the truth. Every day I speak with investors looking to jump in. I try to get people to understand that this is a very serious, highly competitive industry, and it’s not to be just taken lightly.

That’s in essence what the quote means, but I do agree that we’re operating in an imperfect regulatory model that can be very difficult to navigate, and that’s due to the grassroots nature of this movement. Laws were typically enacted at the highest level and the framework is then passed down to smaller governments for them just to follow the rules in place, but due to the unwillingness to reverse prohibition, the onus has been put on local city councils and the city attorneys to enact complex marijuana law.

Like I said earlier, the fear of legalizing cannabis and winding up with reefer madness in your hometown is not something that a lot of them want, so they do regulate it heavily because they don’t want to be the city and they don’t want to be the people that cause something bad to happen in their town, so it’s understandable. We’ve also seen voter-backed initiatives that pass and leave everyone a little bit confused about how to operate or the city on how to regulate because they haven’t really been properly vetted to the degree that most laws would be.

TG Branfalt: It’s not something that regulators are used to dealing with until it’s implemented. I mean, in much of the same way that I’ve spoken to a lot of operators who say it’s really hard to find good people because you don’t have a whole lot of people with experience in the cannabis industry.

David Barakett: Yeah, that’s right. I mean, you don’t. You need to train people. A lot of times, the people with the experience, unless it’s somebody that’s really honed their craft, it’s not always the best choice. But for us, we like to train people. Cannabis knowledge is not a prerequisite. In fact, it’s sometimes, obviously, it’s different for every job. We have all kinds of different jobs in this industry and in our business, and of course if you’re getting a higher level job, then to get cultivation, you have to know about it and you have to be good at it.

But if you’re coming into a dispensary to get a job at ShowGrow, all you’ve got to do is have some personality and have some charisma, and that’s all it boils down to for us. I can teach you about cannabis but I can’t teach charisma. I can’t teach somebody how to smile and chat with people and make lifetime patients out of them. That’s something that a lot of people, they just inherently have.

TG Branfalt: Well, and you come from not the cannabis industry. You come from real estate. What other, with your employees and the people you work with, where else do you see them coming from?

David Barakett: Well, to be perfectly honest, I give a lot of people their first jobs (laughs). A lot of times, the food and beverage industry. It’s one of those things. Everybody kind of has their first jobs, and that’s why, looking at people’s resumes for positions like that is of very little importance to me, going through resumes to find out that you’ve had your first job at a fast food restaurant or on a golf course, wherever. It doesn’t matter really what it’s specific to because it’s not something that is going to have given you all the skills you need to be successful in cannabis.

On the retail side, it really just, it starts with personality. It’s all about personality. It’s all about, it’s how you connect with patients and how comfortable you make people. The cannabis knowledge comes. We build a culture in ShowGrow that is such that it’s a point of pride to know everything about cannabis. I don’t have to teach it in-depth because they want to learn it. They want to be good at their jobs. They want to be able to provide that best service because the girls and guys that work there are competitive with each other, and that’s always been a point of pride in our company and we’ve always really encouraged that.

TG Branfalt: What’s your management style like? You’re a CEO. How closely do you work as far as the day-to-day operations go?

David Barakett: I built the retail side to a large degree with a manager that managed all our facilities, and my partners, and I got out of it for sometime while I was really doing the branding, and actually just recently I got back into it. It’s been a lot of fun. The reason I got back into it was kind of because I missed it. It’s a grind but at the same time I have a lot of people now surrounding me. I have a lot of support. Although it is kind of all-consuming, it’s really like, it’s a really enjoyable experience to work with so many young people and to really see them enjoy what they do.

My management experience or my management style is basically positivity. In a nutshell, if I could use one word, it’s positivity. This is all about culture. Cannabis is all culture, and cannabis consumers are savvy. They’re cool, and they want that to be reflected in the stores they go to. What we’re building here is just this culture where everybody loves coming to work every day. I want you to love coming to work every day.

We have three major focuses and none of them have to do with making money. The first thing and the utmost importance is patients first. We are a customer service driven business. We are all about customer service. We want to give the best customer service. I want those value adds to separate us. That’s what I want people to say about us when they come into our facilities for the first time.

The second thing we do is employees. It’s all about the employees. We take care of the employees. We want them to love where they work. We also want the employees to take care of the employees. We want them to just build those relationships and enjoy themselves. When that happens, what I said earlier about not having to train them on cannabis, you don’t because when they love where they work, they learn it because they want to be there and they know that to be here, you have to, you’ve got to know your job. You’ve got to know your stuff. You’ve got to be good at it because your shift leads have you and your managers have them. They all know all their stuff. That’s the culture that I like to create so that everybody can kind of look around and see that everybody is working together. Everybody loves what they do and everybody thinks cannabis is great, and it should be. I mean, could you imagine working at a cannabis shop and hating what you do? That’s pretty sad. That’s really helped us separate ourselves from the pack.

Then the last thing we do is community. We do community outreach. We want to be a part of every community we’re in. We don’t do it to drive sales. We do it help familiarize people that would typically be familiar with cannabis. We want them to see what we’re all about and who we are, and we’re not bad guys. A lot of the bud tenders go and volunteer or they meet people that are from different charities that we’re working with. We’re changing minds and people see that and they’re like, “Wow, you guys are good people. Imagine that.” Those are our focuses. That’s what we focus on. That’s my management style. I try to really dig deep with all of our employees and give everybody the benefit and chance to succeed, and I have groomed a lot of young employees and I’ve given a lot of young people opportunity where they wouldn’t get it anywhere else, and I know they wouldn’t.

We have managers as young as 24 years old managing facilities that, these are extremely valuable assets that are being managed by young kids, but that’s what, they want it. They want it and they have what it takes to be successful in cannabis now. Does that mean we don’t give them the support system that they need on the back end to succeed? Yeah, of course we do. But on the front lines, boots on the ground, I want all these young kids to succeed and I want them to be a part of it, and I want them to buy in because we’re, this isn’t a company for me. It’s a company for everybody that works for us. They see the growth and they see the opportunity. The upward mobility in our business is massive, and they could see it.

In a lot of jobs in this day and age, you can’t see your opportunities. You can’t see where your job today that’s making you 12 bucks an hour can lead in a few short years if you just grind it out and work hard, keep your head down and in fact actually really like what you do instead of working on an assembly line or doing something but not this that seems to be not what kids today want to be doing anyway, I guess. But, yeah, so that’s it. We’re just trying to give people opportunities and be a part of the community and to take care of our patients.

TG Branfalt: I want to stay on this theme of culture and community, but before we do that, we’ve got to take our last break. I’m TG Branfalt. This is the Ganjapreneur.com podcast.


Commercial: 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 the provider who is the best fit for your particular need.

Our business service directory is intended to be a useful and well-maintained resource which is why we individually vet each listing that is submitted. If you are a business service provider who wants to work with cannabis clients, you may be a good fit for our service directory. Go to ganjapreneur.com/businesses to create your profile and start connecting with cannabis entrepreneurs today.


TG Branfalt: Hey, welcome back to Ganjapreneur.com podcast. I’m your host, TG Branfalt. I’m here with David Barakett, ShowGrow CEO. Before the break, we were talking about culture, and inevitably, well-funded big business is going to enter the space which a lot of grassroots people who were the fore founder, the founders of everything that exists now, so there’s a lot of fear about well-funded big business getting involved, and many states such as New York and Minnesota, they’re already there operating the medical programs there. What’s your take on this as an operator and how are smaller operators preparing for this inevitability?

David Barakett: Yeah, that’s something that I’ve given a lot of thought to, and I do get asked that question. I’m a pretty firm believer that the cannabis industry is not going to go the way of big business overnight, one, and I don’t really see it going to this kind of generic cannabis mass-produced, widely available model where your kind of boutique product and your craft product, if you will, ceases to exist.

I mean, I don’t know a cannabis consumer that isn’t like super into what it is they’re consuming. If cannabis is just something that kind of falls flat, it’s not that exciting, and I think like in part, consuming cannabis isn’t just about getting high. Even if you’re talking about medicinal, recreational, whatever, whoever it is, if you are, especially if you’re a recreational consumer and a habitual consumer, it’s the ritual. So much of it is the ritual, and it’s your peace. I mean, shit, 420, I mean, it’s just like it is what it is. I just don’t see that type of consumer.

Cannabis consumers are a very, very savvy consumer. That is something that is lost on a lot of people that are not from this space that don’t understand this space. They think that they’re just going to mass produce a bunch of weed and they’re going to thrown on the shelves, and weed is weed, right? It couldn’t be further from the truth. It’s a surefire way to not get anybody to come back.

TG Branfalt: You’ve said a couple of times that cannabis consumers are this real savvy consumer. Why do you think that this is?

David Barakett: Well, I think that kind of falls in to what we were just talking about. It’s that it’s something that they care about. It’s a ritual. It’s an interest. It’s a hobby. Cannabis, it makes people more conscientious. I think that, I don’t think that we need any real in-depth studies to find out that the consumers of cannabis are by and large a more caring people, a more thoughtful people. I think that the stoner stigma that’s associated with cannabis is in part true, but the same is true for everybody that consumes cannabis. Not everybody that is a stoner, stigmatized consumer, is going to not be the same as everybody in a sense that you’re going to have your professionals that consume, and you’re going to have your elderly folks that consume.

The one common thread here is not that they’re all kind of, that they’re straight off half-baked. It’s that they’re kind of just a lot more thoughtful and giving. I think that a lot of that comes with cannabis. When people ask me about the rec market, “Well, medicinal has value, and we know that so we should legalize medicinal, but rec, there’s no good in that. Why should we legalize rec?” I think that that’s so short-sighted because a world where cannabis is available to everybody all the time is going to be a better place. I can guarantee that.

TG Branfalt: You’ve got people too that are self-medicating and they’ve been doing it for years. I’ve said on this podcast several times, I use low dose cannabis products for my anxiety, and had these been available to me when I was much younger, I sometimes wonder, maybe I would have done a little better in college. Maybe I would have done this a little differently or done that a little differently. I think that, in my opinion, medical is great. I mean, all the pro, when I hear Governor LePage out in Maine saying, “Oh, well, we’ve got to get rid of medical marijuana now that we’re going to have a recreational market,” that’s absurd. That’s an absurd thing to me. But at the same time, you do have some people who don’t meet the state criteria who are using it for anxiety, using low doses. To your point that there is more to recreational than people who just want to go get stoned.

David Barakett: Oh, yeah. I mean, yeah, definitely, definitely. It’s a well-documented fact that cannabis abuse in youth, in the undeveloped brain, can cause harm. That’s something that has been studied and documented and proven because it can slow brain development. But there is zero negative impact that has been proven for adult use. I think the social benefits of it are just massive, especially if you’re comparing it to what the risks are because the risks are nil. It could only better, right? I mean, you’re not causing harm.

Of course, people have to be responsible. There’s no doubt that there’s a responsibility component to it, but that’s something that comes with the territory, too. I think that also, and this isn’t true for everyone but I see cannabis consumers that are responsible, and I think that has something to do with being thoughtful and kind of, and being more caring and all that kind of stuff that comes with getting high actually.

TG Branfalt: We’re running a bit long here, but I do want to get your opinion as an owner, as an operator, on the Trump administration and specifically the opinions of Jeff Sessions as they relate to cannabis. Are you guys worried?

David Barakett: I just, I try not to focus on the things I can’t control. I do everything that is inside of my control. The fact of the matter is, is that this is a very big business. It’s not going away. I don’t think that really it’s something that they’re going to spend their bandwidth on doing. It would be an incredibly unpopular thing to do. Typically, when public support is on the side of cannabis, that’s where it’ll ultimately land. I know in this day and age, people are questioning whether majorities matter, but in this particular case, I don’t know if this is necessarily on the forefront and at the top of the list of things they want to get to.

TG Branfalt: For you, the sky is not falling.

David Barakett: No, man. The sky is never falling. It’s all good. It’s all good. I know a lot of people are freaking out. Cool, they freak out, but for us, I’m just going to keep my head down and just keep working and doing the right thing. I’d be nervous too if I thought I was not doing the right thing. But I can open up the doors to my business any time and show anybody what it is we do and how we do it. If you could take a look at what we do at ShowGrow, we are proud of what we do. The reason that we built a model like that and the reason we do that is because we are breaking down barriers, we are changing minds.

I’ve been doing that as long as I’ve been in this industry and I’ve seen the most vehemently opposed change their minds when they come to our facilities because how could you hate this? It’s not doing anything to harm you and all of these young kids that are working here, they’re not monsters. We have beautiful, well-built out, well-lit, secure facilities. We pay our taxes. We participate in the community. We give back a lot.

Those are the things I can control. I can’t control anything else, so I guess I just, I don’t want to waste time worrying about stuff that I can’t control. I want to worry about just building a great business, and we’ll see. This isn’t the first time there’s been adversity in this industry.

TG Branfalt: It was built on adversity.

David Barakett: Exactly.

TG Branfalt: My final question is, what advice do you have for entrepreneurs looking to enter the cannabis space?

David Barakett: I guess what I would say is that you’ve got to work hard. It’s just like there is nothing given in this industry. It is all hard work. It’s unrelenting perseverance because you are going to get kicked, not once, probably two or three times. It is unrelenting. You will get knocked down. In cannabis, you get knocked down even in the best of situations, and that’s not to say that, that’s not like an ultra-negative thing, don’t get into the industry. It’s just that, again, I go back to this thing. We are breaking down barriers. We are changing minds. There are still a lot of foolish people that don’t want to believe their eyes when they see a product that cures people and they still rally against us.

That, to me, is really, that’s the biggest component to it. Now, honestly, that’s kind of the fun part too, though. You’ve got to understand that we’re educating people on a plant that’s truly amazing, and that’s rewarding, that’s rewarding for everybody that’s involved. The other bit of advice I would give people is if you’re getting in for monetary gain, and that’s your only motivation to enter, I’d tell you that don’t bother because if you’re not a true believer in what this plant can do, you have very little chance of succeeding right now.

It’s inevitable that at some point this industry will become such that it’s like every other industry, and like you said earlier, there will be that kind of mass-produced corporate weed that’s commoditized and fluctuates with the markets, and then there will be an opportunity if money is your only goal. But there’s more than enough to go around in this industry. If you’re really, if you’re touching people’s lives with cannabis and you’re affecting real social change in the community, to me, it’s inevitable that that leads to a great deal of success. That’s success, that’s happiness, and that’s in your business life and that’s in your personal life. Cannabis is great (laughs).

TG Branfalt: Well, I really want to thank you for coming on our show today. It’s rare that we get an opportunity to really speak to somebody who is in a management position, CEO of a dispensary. I talk to a lot of policy people and people of that nature, so this is, for me, this is one of the first conversations that I’ve been able to have on this show to cover the sort of topics that we discussed, so thank you so much for appearing on our show. Would you like to just tell everyone how they can find out more about your dispensaries, where they’re located, before we go?

David Barakett: Yeah, absolutely. You can just go to ShowGrow.com. We’ve got a location in downtown L.A., off San Pedro and the 10, or the 10 and San Pedro, I should say. We’re in Santa Ana. We’re on Saint Gertrude Street. You’ll find us on Weed Maps for all our locations. Go to ShowGrow.com, you can check out the shops and pictures to kind of see what we’re all about. Then we’re down in Ramona. Ramona is a San Diego county, just a cool little spot out in the countryside. It’s really awesome. We’re going with the small town, and it’s got a small town vibe, and all of the bud tenders that work there, they know everybody in town, everyone knows them, and it’s a trip, but it’s really cool. We’ve become a part of that community to a degree and everybody is loving it. That’s a cool project. Then Vegas. We’re up near the Summerlin area off of the 215 and Tropicana.

We aim to be the top customer service brand, the top value-added brand. We don’t want people to come into our stores to simply get the rock bottom basement product and price and then mass quantities. We’re an experience. We’re a store that when people come to us, we want them to think like, “Oh, cool. This is my kind of vibe. This is my kind of spot.” You get excited about coming back to see the girls and everybody knows you by name. That’s what we’re about. That’s how we built our business and that’s how we’ve enjoyed our success. Yeah, we’re just going to keep rocking. We have a number of new locations coming too, so stay tuned. We’ve got seven coming in 2017.

TG Branfalt: That’s exciting news. We’ll be in touch when they start rolling the map, but thanks again for joining us on today’s episode.

David Barakett: All right. Thank you very much.

TG Branfalt: You can find more episodes of the Ganjapreneur.com podcast in the podcast section of Ganjapreneur.com and 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.

End


Australia’s Cannabis Stocks Outperforming Peers Worldwide

Shares of companies involved in the cannabis space have gained more than 130 percent in Australia stock markets this year – six times higher than their peers in Canada and the U.S., according to a Bloomberg report. The boon comes after the Australian government announced they would begin implementing a medical cannabis importation system and access program.

In Australia, cannabis industry operators have an average market capitalization of A$80 million (~USD$61 million) – counting the 136 percent increase this year, according to a Bloomberg index. By comparison, that index shows the global cannabis market returns at about 20 percent.

Niv Dagan, an executive director as Peak Asset Management, said he has a fraction of his A$100 million (USD$76 million) fund invested in cannabis stocks.

“The market is excited by the potential upside it could bring,” Dagan said in the report. “The key risk we see is obviously regulatory risk.”

Currently, only Queensland allows medical specialists to prescribe cannabis to patients who do not respond to conventional therapies. Earlier this month the Department of Health’s Office of Drug Control granted its first license to grow and harvest medical cannabis to Victoria-based Cannoperations Pty Ltd.

According to the report, The Hydroponics Co. Ltd, an Australian lighting rig and greenhouse manufacturer specializing in cannabis plants, is raising money for its initial public offering next month. The A$8 million share sale is already three times oversubscribed.

End


Several cannabis plants shortly after being cut down for harvesting.

Ohio MMJ Requirements for University Testing Could Cause Delays

Ohio’s medical cannabis proposal requires public universities to conduct product tests, which could delay the program due to equipment costs, and application and operation fees, according to a Cincinnati Enquirer report. Under the plan, private laboratories are barred from testing medical cannabis for one year, the testing application fee is $2,000, and the operation fee is $18,000.

According to Jeffery Raber, CEO of The Werc Shop, which performs cannabis testing in Oregon, Washington, and California, equipment costs could reach as much as $1 million. At universities, budgets often rely on grants from government programs.

Rob Ryan, executive director of the Ohio Patient Network, said that without testing “there is no program.”

Spokespeople from the University of Cincinnati, Ohio State University, Cleveland State University, and Kent State University all told The Enquirer that they have no plans to conduct the testing. Advocates are concerned that with so little interest from state universities there would not be enough labs in the state to meet the demand.

“There are too many unknowns to rely exclusively on learning institutions,” Chris Lindsey, senior legislative counsel for the Marijuana Policy Project, said in the report. “Private labs are in better positions to respond.”

State Rep. Kirk Schuring, one of the authors of the medical cannabis law, said he believes the institutions “will step up.”

“If it becomes a problem, we’ll correct it, but I don’t think it will,” he said.

The rules for the program must be finalized by Sept. 8.

End


The state flag of Illinois flying on a clear day.

Adult-Use Bills Introduced in Illinois

Democratic lawmakers in Illinois have introduced legislation to legalize adult cannabis use, which would set up a taxed and regulated system. The measure (SB.316) is sponsored in the Senate by Appropriations Committee Chairwoman Heather Steans and in the House by Rep. Kelly Cassidy.

In a press release, Cassidy indicated that wholesale sales would be taxed $50 per-ounce under the proposal and there would be a 6.25 percent sales tax levied at the point of sale. The Marijuana Policy Project estimates that the revenues derived from the legal cannabis industry could generate between $349 million and $699 million annually for the state.

“Marijuana prohibition is a quagmire that creates far more problems than it prevents,” Cassidy said in a statement. “Several states have adopted sensible alternatives to prohibition, and it is time for Illinois to develop its own exit strategy. Regulating marijuana and removing the criminal element from marijuana production and sales will make our communities safer.”

Steans called cannabis prohibition “a financial hole in the ground” that the state “should stop throwing taxpayer dollars into.”

“Right now, all the money being spent on marijuana is going into the pockets of criminals and cartels,” she said. “In a regulated system, the money would go into the cash registers of licensed, taxpaying businesses. It would generate hundreds of millions of dollars per year in new revenue for our state.”

The House version has been assigned to the Appropriations-Public Safety Committee, which Cassidy chairs. It must pass through that committee before moving to the floor for a full vote.

End


Skyscrapers in downtown Los Angeles, California.

Los Angeles Creates Cannabis Licensing Commission

The City Council of Los Angeles, California has approved the creation of a Cannabis Licensing Commission which will be tasked with regulating the city’s legal adult-use cannabis industry, according to an LAist report. The approval comes after voters passed Measure M during the primary election earlier this month which gives the city the power to establish regulations for the medical and recreational cannabis markets.

The five-member commission will be comprised of Los Angeles residents, two appointed by the City Council and three by the mayor – one of which must be an elected neighborhood council member. No member is allowed to have been a registered lobbyist with the city for any cannabis-related activities in the year preceding the appointment.

According to the report, yesterday’s vote directs the City Attorney to draft an ordinance outlining the committee’s creation, which will need to be approved by the City Council.

“We’re really pleased that they’ve created the commission,” Sarah Armstrong, director of industry affairs for Americans for Safe Access, said in the report. “I think it will work better for the city to have this distinct commission, rather than tasking already overburdened agencies with a huge new program.”

The voter-approved initiative passed last November takes effect Jan. 1, 2018.      

End