Indoor cannabis plants grown commercially under a Washington I-502 cultivation license.

Distressed Asset Deals: What Happens When a Cannabis Start-Up Fails

3/02/2017

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It’s simple economics – supply and demand; as the wholesale price of cannabis falls some operators will be edged out of the space. Some will become so-called distressed assets with only three choices: declare bankruptcy (which is tricky), cut their losses, or sell.

In Colorado, wholesale cannabis prices are down 25 percent from 2016, and 73 percent from 2015, which has led to an increase in these types of assets – struggling businesses on the verge of collapse or already non-operational. However, it’s near impossible to tell how many of these assets exist due to the private nature of the industry.

Distressed asset deals create opportunities

Jason Thomas, CEO of Denver-based Avalon Realty Advisors, said he has handled more than 20 distressed asset real estate deals, and about 15 distressed asset business and license transactions in Colorado since January 2014; ranging from $180,000 short lease deals, to $2 million property sales, to $3 million business sales. Thomas explained that his firm has seen a “marginal” albeit “identifiable” increase in these assets in Colorado over the “last couple of months” from both new and long-standing operators. “Primarily the reason for these distressed sales is typically they run out of cash, or run out of patience, or both.”

“A lot of people tend to underestimate the time and cost involved for ramp up time or opening a new facility or acquiring an existing business,” he said in a phone interview with Ganjapreneur. “It’s unlike most any other industry because you’re creating a manufacture and distribution industry. People don’t understand that until they delve in.”

The distressed asset deals are “complicated,” Thomas said, for a variety of reasons; among them, the federal illegality of cannabis and the lack of defined sales prices – “but deals get done.” He called the deals “the toughest” he has ever worked on, explaining that they can take up to a year to close from the day the contract is signed. Most often, Thomas said, new market entrants have trouble qualifying for licensing or meeting the capital requirements under Colorado’s law.

Thomas said these assets, which he sees more in Denver than anywhere else, provide opportunities for both existing and new business owners, although they are not easy to find. Often, these deals require “a lot of confidentiality” and most are not publicly listed; employers don’t want their employees to know, they don’t want their competition to know. Thomas sends his listings to about 1,000 potential buyers two or three times per week.

Trimmed cannabis nugs on curing racks in a Washington grow facility. Photo Credit: Sarah Climaco

Proper preparations are needed

Chris Ganan, chief strategy officer for MedMen and general partner of their Opportunity Fund, argues that distressed assets aren’t for everyone. MedMen operates in California, Nevada, New York and Canada, and Ganan estimates that the firm had completed roughly $75 million worth of transactions dealing “in some way, shape, or form” with distressed assets in the last 18 months – including the acquisition of New York licensed operator Bloomfield Industries in January.

“The only folks that I think distressed assets are suited for are groups that have three legs to the stool, so to speak: one is a key understanding of the regulatory environment today, and more importantly how that’s going to realistically evolve in the future; two you need institutional operational expertise – you need the ability to go execute cultivation, production, and retail to run those businesses…three, you need the capital,” Ganan said in an interview. “You need the institutional background and expertise in understanding the nuances of corporate structure real estate finance, private equity, and restructuring to go in and effectively transact on one of these deals.”

What’s interesting, Ganan noted, is that while the cannabis space is “an emerging, high-growth industry,” it’s very operationally intensive and tied to varying state-by-state regulations. What makes Colorado unique, Ganan contends, is the sheer number of licenses available – 2,500 for four or five million people – which limits “supply constraints from a licensing perspective” and has an impact on margin compression thus creating a highly competitive market.

“On the one hand you have a huge adjustable market that is rapidly expanding – hockey stick growth – but…it all comes back to the regulatory environment; how it affects these businesses and also the fact that marijuana as an industry is a very operationally intensive asset class,” he said. “Because of those areas, despite the fact you have such a large market that is evolving quickly, you are starting to see these distressed asset opportunities start to pop up to those that are poised to execute from a capital and operational perspective.”

As California migrates to a regulated, adult-use market, Ganan anticipates that there will be an increase in distressed assets because new capital will “flood” the market as it evolves.

“The dichotomy that exists in the marijuana space is that it’s a large market opportunity from a financial perspective, and you’re going to see a bunch of new capital in the space, but it’s an asset class that takes a high operating skillset to actually execute on and there is a lack of institutional operators in the industry right now,” he explained. “So you’re going to see the new capital that’s flooding in that has to go through a learning curve from an operational perspective – some will figure it out, those that don’t will get gobbled up…and those will be the distressed asset opportunities for those that [have the three legs of the stool].”

An indoor commercial grow op under the glow of purple LED grow lights. Photo Credit: Sarah Climaco

No federal bankruptcy relief

Although Thomas and Ganan disagree on who should get into distressed operations, both concluded that due to owners being unable to file bankruptcy in federal courts, selling the asset is probably the best course of action.

Mette H. Kurth, a partner at California law firm Fox Rothschild and member of their bankruptcy and finance group, explained that while cannabis businesses cannot get relief at the federal level, there are avenues for struggling companies at the state level.

“So what the companies are doing if they need some kind of insolvency relief, they can turn to a state court receivership,” she said in a phone interview. “They have a receiver appointed over the business, not a bankruptcy trustee. That’s the distinction.”

Kurth described these receiverships as “a lender’s tool,” utilized when the creditor is seizing on assets in order to bring down the debt on the loan, or “when there is a complete management breakdown.” However, she indicated that “most receivers aren’t comfortable” getting involved in cannabis cases.

“There are a number of state court receiverships going on [in California] but I wouldn’t say it’s a large number relative to the industry because the industry is, by and large, in a growth phase,” she said. “The stories I hear have more to do with companies with a complete management breakdown…you sometimes have relatively unsophisticated, unorganized people running those businesses and they run into problems…and they end up in bankruptcy for that reason.”

She described the distressed asset cases that land on her desk as “unique,” but could understand why operators would seek to sell their failing assets before considering receiverships or shuttering the business entirely.

“It’s a growth industry and there is a lot of appetite from people interested in investing,” she said.

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A dispensary worker at the National Holistic Center in Washington D.C. shows off a handful of nugs.

Health Experts in England Suggest Regulating Cannabis Potency

3/02/2017

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British health experts are urging policymakers to regulate the potency of cannabis due to concerns that high-potency products increase the risk of psychosis, according to a report from Reuters. The cohort is concerned that as legalization proliferates there are not yet enough studies on the possible risks associated with high-test products.

“Worldwide there is a trend towards liberalization and increasing consumption,” Robin Murray, a professor at King College’s London’s the Institute of Psychiatry, Psychology and Neuroscience, said in the report. “More people are going to be smoking cannabis, whether we like it or not, so we want to explore whether there are safer varieties.”

Murray co-authored “Can Cannabis be Safer?” with Amir Englund, a cannabis scientist at the Institute, which appeared in the Lancet Psychiatry journal.

“It is vital, especially now that cannabis is becoming increasingly liberalized, that we explore alternative and innovative ways by which we can reduce and mitigate cannabis related harms,” Englund said, suggesting that it might be wise to increase CBD levels, which some studies show can offset possible detrimental effects of THC, such as memory loss or paranoia, without compromising some of the compound’s more pleasurable effects such as relaxation.

In the U.S. cannabis products can contain as much as 75 percent THC; and some officials in Uruguay and the Netherlands – which have either legal or extremely lax cannabis laws – have suggested capping THC content there to 15 percent.

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A large, commercial greenhouse.

State-of-the-Art Greenhouse Facility Wraps Up Construction in British Columbia

3/02/2017

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Tantalus Labs, dubbed the “Tesla of cannabis,” has completed construction on its state-of-the-art greenhouse facility in British Columbia and could begin selling its products in Canada as early as 2018, Business Insider reports. The company earned the nickname due to its sustainable cultivation technologies.

The facility, which took over two years to complete, relies on sunlight instead of electric lighting, incorporating other green technologies, such as a rain capture system used to irrigate the crops.

Dan Sutton, founder and managing director of Tantalus Labs, said that while cannabis grows well outdoors the industry was driven into indoor facilities so growers could hide their farms.

“It’s a lot easier to hide plants in basements and in bunkers than to cultivate it in the light, because it is federally illegal,” he said in the report.

The company worked with designers, scientists, and engineers to create and build the facility, looking to the agriculture industry for best practices.

“We take those core concepts and we iterate on them so we can provide consistency, not only in product output, but in [meeting] a pharmacological standard,” Sutton said. “Nature has done an excellent job of cultivating plants for the last billions of years. The closest we get to a natural strategy, the more effective we are.”

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Medical Cannabis Home Growing Legalized in Zambia

3/02/2017

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Zambia Home Affairs Minister Steven Kampyongo has signed a ministerial statement legalizing personal cannabis cultivation for medicinal use, according to a Lusaka Times report. The rules require patients to obtain a license from Minister of Health Chitalu Chilufya before commencing any home grows.

Kampyongo indicated that the licenses would be subject to certain conditions and possible fees; however patients could be permitted to sell or distribute cannabis to others registered in the program if permitted by the Health Minister. Any individual caught growing cannabis without permission from the minister would still be subject to prosecution, even if they can make the claim they are growing it for medical purposes.

Under Zambian’s Narcotic Drugs and Psychotropic Substances Act, the Home Affairs Minister may regulate illegal drugs via ministerial statement, which can be used to bypass Parliament, according to the report.

Dr. Aaron Mukakati, president of the Zambia Medical Association, had previously announced his support for legalizing medical cannabis.

“Medicinal marijuana works,” he said in a Feb. 10 interview with All Africa. “[I] am not an economist so I can’t speak intelligently on the economic benefits. The risks can be managed, legalize medicinal marijuana.”

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The capitol building of Wisconsin located in Madison, Wisconsin.

Wisconsin Bill to Allow CBD for ‘Any’ Medical Condition Heads to Assembly

3/02/2017

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Wisconsin is on the verge of expanding the state’s medical cannabis regime; however the proposal still does not allow products with any THC.

According to a report from the Journal Sentinel, Senate Bill 10 is set to be taken up by the Assembly on Tuesday after passing the Senate 31-1 last month. A companion bill was already passed unanimously by the Assembly Committee on Children and Families. The bill is sponsored by 35 of the state’s 99 representatives.

The measure would allow patients with any medical condition to use CBD therapies so long as they have been certified by a doctor. Patients would need to be recertified annually. Under current law, only patients suffering from seizure disorders are allowed to possess CBD products. Advocates have called Lydia’s Law, approved in 2014, too restrictive, making it difficult for families and physicians to access the program.

Similar legislation passed the Assembly two years ago but was blocked in the Senate by three Republican members.

Sen. Van Wanggaard, a Republican and one of the bill’s lead sponsors, indicated that the bill is not legalization of medical cannabis. The former police officer believes that enacting a more comprehensive medical cannabis program would lead to recreational use.

“It’ll be a while before we get to anything like medical marijuana,” he said in the report.

The measure doesn’t include provisions to cultivate or manufacture cannabis for medical products in the state, and patients will still need to make their purchases online.

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Cannabis prohibition has disrupted countless communities and split up hundreds of thousands of American families.

Sessions Continues Prohibitionist Rhetoric at Attorneys General Conference

3/01/2017

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During his remarks at the National Association of Attorneys General Winter Meeting, Attorney General Jeff Sessions kept up his calls to reign in the legal cannabis industry, saying he is “dubious about marijuana.”

“States can pass whatever laws they choose but I’m not sure we’re going to be a better, healthier nation if we have marijuana being sold in every corner grocery store,” he said. “I just don’t think that’s going to be good for us.”

Sessions also criticized a Washington Post column published Tuesday by Sam Kamin, a University of Denver marijuana law and policy professor, who argues that the national opioid crisis is “a reason to expand access to marijuana rather than to contract it.”

“Give me a break,” Sessions said. “This is the kind of argument that has been made out there that’s almost a desperate attempt to defend the harmlessness of marijuana or even its benefits. I doubt that’s true – maybe science will prove I’m wrong… My best view is we don’t need to be legalizing marijuana.”

Democratic Rep. Earl Blumenauer, a member of the Congressional Cannabis Caucus, shot back at the both Sessions and White House Press Secretary Sean Spicer, who, last week, said he expected “greater enforcement” of federal laws. Earlier this week, Sessions said that “violence around marijuana” warranted a federal crackdown.

“It’s clear that Mr. Spicer has not engaged in the research or talked to the industry or people directly involved with direct experience,” Blumenauer said in an NBC26 report. “This is not something that people have to speculate, there is actual evidence. In Oregon and Colorado, there hasn’t been any violent upheaval and public support continues to grow.”

He added that there is “no evidence” that prohibition has prevented people from consuming cannabis. Blumenauer also suggested that the administration has too much on their plate to worry about the legal cannabis industry.

“There’s a lot of stuff going on here: repeal of Obamacare, the budget dance, what’s happening with immigration, there are issues of greater urgency and intensity for the administration and most Americans,” Blumenauer explained. “But we aren’t going to allow this to get lost in the shuffle. That’s why we have the Cannabis Caucus, that’s why we are developing legislation, that’s why we are working with the industry.”

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Safety Vision Cameras Help Keep Cannabis Inventory Secure During Transportation

3/01/2017

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There is a lot of innate risk for entrepreneurs and business owners in the cannabis industry. Not only is it a cash-based industry, but bulk cannabis products make an ideal target for thieves. And while cannabis companies regularly utilize video monitoring technology for their grow site, manufacturing, and/or retail locations, video surveillance of cannabis inventory while it is being transported is often overlooked.

Enter Safety Vision, a company that specializes in mobile video technology and has worked for 25 years to provide quality transport surveillance.

Safety Vision’s refined mobile camera technology satisfies the constant and precise surveillance that has become necessary, whether from security concerns or in pursuing regulatory compliance, to operate safely in the cannabis industry.

“We’ve found that people in the cannabis industry are often using stationary cameras inside of their grow facilities and inside of their dispensary, but nowhere on their delivery vehicles do they have any kind of recording surveillance,” said Jamie Hawkins, Safety Vision’s Marketing Manager. “And that’s what we’ve been providing to all of the industries that we serve, from law enforcement to pupil transportation, mass transportation, trucking, towing — and now, cannabis.”

Safety Vision offers more than just cameras you mount in the company van. Safety Vision’s mobile surveillance comes with software and a host of services for the concerned cannabis courier, including the ability to schedule automatic wireless video downloads and tracking/automatic status reports for both products and vehicles.

Clients are given access to configurable alarms and notifications for specific events, such as unexpected idling, a collision, if/when a specific door on the vehicle is opened, or when a delivery is approaching its final destination. And, if at any point a client has concerns about their inventory’s safety, they have the capacity to live-view their inventory through the cameras using a computer, tablet, or smartphone.

Safety Vision’s high definition cameras, which are also fully audio capable, are made available in highly customizable transport surveillance packages, ensuring clients will be confident that their inventory and courier are secure throughout their entire journey.

“It’s completely up to what they want and need for their business,” Hawkins explained. Safety Vision specialists work with their clients to make sure they are fully satisfied with their video surveillance options — which could be a setup with only a single camera on the inventory, or a whole host of cameras watching the doors, front and back windows, and even a body camera on the driver.

“The customer shouldn’t have to adapt to our systems,” Hawkins said. “We listen first to understand their exact needs, and then we recommend solutions that perfectly fit with their expectations.”

Go to SafetyVision.com/cannabis to learn more about how Safety Vision is helping to keep cannabis inventory secure throughout any and all stages of its transportation.

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Star Leaf branded cannabis arrives March 1 at participating locations in Tacoma, Washington.

Film-Inspired ‘Star Leaf’ Cannabis Brand Launches in Washington

3/01/2017

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The creators of ‘Star Leaf,’ a sci-fi cannabis horror/comedy film released in 2015, have launched a cannabis brand of the same name on Washington’s I-502 recreational marketplace.

Starting today, March 1, Star Leaf Enterprises, LLC is offering Star Leaf-branded cannabis strains cultivated in partnership with I-502 licensee Phoenix Cannabis Company.  The new products include sativa, indica, and hybrid Star Leaf strains and are currently available at the Clear Choice Cannabis location in Lakewood, Washington.

While it’s not uncommon for cannabis strains to be named after or inspired by films (i.e. Pineapple Express, Skywalker, etc.), Star Leaf’s launch is unique because the film and the cannabis products — or at least the idea behind them both — were born about the same time.

“At the end of the day, I just thought they went together,” filmmaker Richard Cranor told Ganjapreneur. “To me, weed is the poster child for a lot of things about our world that are good — and yet, for some reason, it often gets vilified,” Cranor said.

The movie, which was filmed and takes place in Washington, follows the journey of an Afghanistan War veteran who suffers from PTSD as he and others pursue an extraterrestrial cannabis strain somewhere deep in the Olympic National Forest. The movie repeatedly brings up the topic of cannabis as a PTSD treatment and has been hailed for raising awareness for the struggles faced by many U.S. war veterans.

Star Leaf cannabis is in a unique position considering its exposure and recognition among fans of the movie. Considering this, Cranor and his partners have turned away from traditional marketing strategies for their product launch, choosing instead to lead the Star Leaf launch with a series of short webisodes called ‘Star Leaf is Coming,’ which feature characters from the film reacting to the Star Leaf strain’s impending arrival on store shelves.

 

 

 

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Young cannabis clones growing under the grow lights in a WA cultivation site.

Italy Publishes MMJ Guide for Physicians and Pharmacists

3/01/2017

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Italy’s Health Ministry has published its guide to medical cannabis targeted at physicians who can prescribe it and pharmacists who can sell it, according to West, a newspaper in Brussels, Belgium. The guidelines outline administration, warnings, precise dosing, possible drug interactions and side effects.

Under Italy’s program, medical cannabis is approved for patients suffering from severe conditions including chronic pain; spasms associated with pain, such as those suffering from spinal cord lesions or multiple sclerosis; patients undergoing chemotherapy, radiotherapy, and HIV therapies; drug-resistant glaucoma; and Tourette’s syndrome. Additionally, medical cannabis use is permitted in cases that require appetite stimulation, such as cachexia and anorexia. The guidelines allow for medical cannabis use when all other conventional treatments fail.

Nearly two years ago it was reported by the BBC that the Italian army was growing medicinal cannabis in a pharmaceutical plant in Florence hoping to help meet the national demand. Colonel Antonio Medica, who is in charge of the Florence base where the grow is located, said the project could get medical cannabis costs down to 8 euros per gram. According to the guide, the cannabis grown at the base is between 5 and 8 percent THC and 7 to 12 percent CBD.

“My mission is to produce the best-quality cannabis on an industrial scale at a low price,” Medica said in an Independent report.

Italy legalized medical cannabis in 2013; however, the cost has remained prohibitively high at about 38 euros per gram.

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The Capitol Building of Iowa, located in Des Moines

Iowa Lawmakers Considering New MMJ, Possession Reforms

3/01/2017

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Iowa’s medical cannabis law is set to expire July 1, and lawmakers have already shot down one bill this session that would have enacted a more comprehensive regime in the state; however two more pieces of medical cannabis legislation have been introduced that would prevent the sunset provisions in the current law from taking effect.

The Senate bill, introduced by Republican state Sen. Brad Zaun, would allow for in-state medical cannabis cultivation and production, and add to the list of qualifying conditions in the state. In Iowa, lawmakers have until this Friday to pass any non-funding measures or else they will be moved to the next session. However, Zaun indicated that he has been told by Senate leadership that the proposal would be duplicated as a funding bill, allowing it to be introduced and debated after the deadline, according to a report from the Waterloo-Cedar Falls Courier.

The other measure, introduced in the House, would extend the current regime and would allow CBD to be reclassified as a medicinal product in the state but only if the federal government were to do so first.

Additionally, a bill that would lessen the penalties for cannabis possession cleared a Senate subcommittee yesterday. The proposal would reduce the penalties for first-time cannabis possession of 5 grams or less from a serious misdemeanor to a simple misdemeanor, reduce the possible jail time from 6 months to 30 days, and lower the associated fines from no more than $1,000 to between $65 and $625. It does not reduce the penalties for subsequent possession charges.

Both House bills would need to be voted on before Friday in order to keep them alive this session.

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Acoma Pueblo tribal land in New Mexico.

Massive Greenhouse on New Mexico Tribal Land to Grow Medicinal Plants, Including Cannabis

3/01/2017

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Tribal land in New Mexico could soon be the site of a $160 million, 6 million-square-foot greenhouse that will cultivate and research medicinal plants including pennywort, Indian ginseng, and cannabis, the Associated Press reports. The project is a partnership between the Acoma Pueblo tribe and Delaware-based Bright Green Group of Companies.

According to the report, while cannabis is expected to take up a significant portion of the operation, the greenhouse can hold as many as 40 million plants, and supporters of the project explained that the original business plan was designed to sustain itself by manufacturing oils already popular in the homeopathic medicine world.

“We’re just in the process of building our facilities so we’ll be customizing our crops to what the market is most receptive to, but [cannabis is] definitely an important part of this,” Clarity Patton, COO of Bright Green said in the report.

The project is not subject to New Mexico law because it is located on tribal land; although it is still subject to federal law, and the agreement between Green Bright and the tribe mandates that any plants grown at the site need to be in line with federal regulations.

Bright Green Chief Executive John Stockwell said the team plans of working with the FDA to approve their “novel prescription drugs.”

“We’re not in the smoke business; we’re in the oil business,” he said. “To spend this much money and to integrate this much technology, we’re looking to abide by the federal rules. We want to be part of the solution, not part of the problem.”

Construction of the site could begin as soon as Tuesday and is expected to take about two years.

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Wonderland Nursery to Host Top California Breeders on Live Facebook Stream

3/01/2017

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Even though our industry is young and growing fast, there are a lot of events that get repeated over and over. Award ceremonies, cannabis cups, and advocacy gatherings seem to be commonplace. In view of that, it is incredibly refreshing to see Wonderland Nursery in Humboldt County hosting a series of events unlike any other we have seen to date.

Starting Friday this week on March 3rd, Wonderland Nursery will host some of the top cannabis breeders in the country for informal meet and greets at their location in Garberville, California. Each Friday from noon until 4:00 pm PST, three to four breeders will be on-site answering questions and hanging out with growers and other friends. For most of us, Garberville is a long way to drive so they are also going to live Facebook stream the event for 30 minutes at the bottom of each hour! That means you can tune in and participate in conversations with some of your favorite breeders several times during every Friday afternoon in March.

This event is the invention of Wonderland Nursery founder Kevin Jodrey and creates an opportunity for passionate breeders across the country to hear other top breeders and ask live questions via the Facebook stream. Sponsors include both the Shaping Fire podcast and Ganjier Solutions.

The schedule is a veritable ‘who’s who’ of Northern California breeding masters.

 March 3rd will have Equilibrium Seeds, Bohdi Seeds, Coastal Seed Co. and Dos Perros Seeds.

  • EQUILIBRIUM GENETICS – Jason
  • FB Live session at 12:30PM
  • BOHDI SEEDS – Brett McKay
  • FB Live session at 1:30PM
  • COASTAL SEED CO. – Bamboo
  • FB Live session at 2:30PM
  • DOS PERROS SEEDS – Brett McKay
  • FB Live session at 3:30PM

Each guest will speak about their own specific genetic stock as found at Wonderland Nursery. This is an incredible opportunity to ask your questions either in person or online.

Bamboo from Coastal Seeds has appeared on the Ganjapreneur podcast and you can hear that episode here.

The upcoming breeders for the rest of the Fridays in March include:

  • Rebel Grown
  • MTG Seeds
  • South Fork Seeds
  • Emerald Mountain Seeds
  • Dragon with Matches
  • CSI Humboldt
  • HBK Farms
  • Boneyard Genetics
  • Biovortex
  • Humboldt Seed Company
  • Aficionado – Mean Gene
  • SoHum Seeds
  • The Soil King

Check out www.wonderlandnursery.com/events/ to see the other upcoming vendors’ schedules!

Be sure to put a reminder on your calendar for every Friday in March and check out the full schedule of breeders at Wonderland Nursery.

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Commercial-grown cannabis, grown legally under the Washington state cannabis business infrastructure.

Bill to Remove Cannabis from Federal Schedule Introduced in House

2/28/2017

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Republican Congressman Tom Garrett has introduced a bill that would remove cannabis from the federal list of controlled substances, allowing it to join other industries such as alcohol and tobacco. According to a press release, the Virginia lawmaker says the proposal “fulfills a responsibility to create a level playing field across the country.”

“I have long believed justice that isn’t blind, isn’t justice. Statistics indicate that minor narcotics crimes disproportionately hurt areas of lower socio-economic status and what I find most troubling is that we continue to keep laws on the books that we do not enforce,” he said in the release. “Virginia is more than capable of handling its own marijuana policy, as are states such as Colorado or California.”

He added that the measure (HR.1227) “allows states to determine this step appropriate medicinal use and allows for industrial hemp growth.” Garrett indicated that he would also be introducing legislation this session aimed at growing the hemp industry, specifically in Virginia.

Garrett is joined by Democratic Congresswoman Tulsi Gabbard (HI) in sponsoring the bill, which was first introduced by Vermont Independent Bernie Sanders in 2015. The proposal has been sent to the House Judiciary, and House Energy and Commerce committees.

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Julianna Carella: Brightening Lives with CBD-Infused Pet Treats

2/28/2017

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Julianna Carella is the founder and CEO of two companies that create cannabinoid infusions. Her first company, Auntie Dolores, is an infused gourmet edibles producer that offers medical cannabis concoctions; her second company, Treatibles, has quickly become a national sensation for providing nutritious and wellness-focused CBD treats that have been enjoyed by animals of all shapes and sizes throughout the U.S.

In the following interview, our host TG Branfalt talks with Julianna about the founding of her two companies, the importance of providing a consistent dosage in any product with infused cannabinoids, lessons she picked up when making the swap from providing products meant for human consumption to products meant for animals, and much more!

Tune in and listen to the episode below, or keep scrolling down for a full transcript of this podcast.

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 try to do my best to bring you actionable information to help you plan, grow and manage your cannabis business.

Today I am joined by Julianna Carella CEO of Treatibles and Auntie D’s. How are you doing today, Julianna.

J. Carella: Great, thank you. How are you?

TG Branfalt: I am well. I am well. I’m very excited to talk with you today about your Treatibles product. I own pets. All of my friends own pets. I actually work in a bat conservatory once a week. So the idea of using CBD to treat animals is really really exciting for me to discuss. So but before we get into all that I want to start with your background. What did you do before getting involved in the cannabis industry?

J. Carella: Well, I’ve been a dancer and yogini for over 30 years so I always taught yoga and dance and Pilates and that kind of thing. I also have a business, a bookkeeping business so I had various clients that have a number of different types of business so I did their business bookkeeping and I did that for 15 years until I started Auntie Dolores in 2008.

TG Branfalt: And when did you decide to create a product for animals? What information were you armed with at that time?

J. Carella: So, when we started Auntie Dolores in 2008 nobody even knew what CBD was at that time. It wasn’t until about 2011 that we started to become more familiar with it. We asked some of our growers to start growing those strains and then after I realized that they started giving this cannabinoid to children and had great success I thought it would just be an excellent remedy for animals.

And knowing that animals have sensitivity to these cannabinoids because I had seen numerous dogs accidentally ingest THC products so I thought if they’re getting high off THC maybe they’ll also experience the amazing benefits of CBD and maybe we need to make a product for these animals so that they’re not getting high but they’re actually getting well.

And that’s how it all started. In 2012 we started with the product development. It took over a year to develop a product actually because we had absolutely no data to look at. There’s no research. All we know is what we see before us when we were giving CBD to different animals that we knew and the results were all good so that really inspired us to develop the best product we possibly could but also to start selling the product and then relying heavily on the feedback from the customers that started to purchase the product so that we could start to compile some data around what conditions can be successfully addressed. What ages of dogs, what breeds of dogs. I mean you name it, we ask all these questions and our customers give us a ton of great information.

TG Branfalt: So what was that testing process like? How did you figure out the dosage? Did you notice any side effects during the trials?

J. Carella: Yeah. Yeah so, the side effects because when we first started making the product we were using cannabis infused oil as opposed to the hemp infusion and with the cannabis CBD strains, although they were really amazing strains there was just a little bit too much THC in them.

So the first year of our product development we were using this cannabis infused product and some of the animals were getting high from it and that was obviously not the result we were looking for. And then it was a couple years later that we realized we just needed to switch to the hemp to eliminate the accidental psychoactivity that was happening with the cannabis oil.

But in terms of dosage, the way that we figured that out was we started off with a really low dose because it seemed to us, and now this is before it was confirmed years later, that dogs actually have more receptors in their brain than any other animal on Earth including humans. We could tell this because we had seen some animals accidentally ingest one or two milligrams of THC and become completely high from it. So in my mind, dogs have always been much more sensitive to all of these compounds. So we decided let’s just start low, see if a one or two milligrams is enough for a 10 pound dog and it just seemed to have such amazing results even in the low doses.

So what we did is we put together a feedback postcard. And we attached it to the bag and the first 2,500 bags were sold back in 2013, that feedback postcard was completed by the customer and returned to us. And that’s when we really figured out that one milligram for every ten pounds seemed to be across the board a good dose to start with. Of course, some animals have much more advanced pathology or maybe they have extreme anxiety and they might need double that but nonetheless we’ve seen that numerous animals respond to one milligram per every ten pounds of body weight. And that’s just been a real consistent thing that we’ve seen in our last three and a half years.

TG Branfalt: How do you keep up with that consistency?

J. Carella: Well the consistency is something that we learned when we started making the TCH infused human products. It’s something that we’ve been diligently working at for almost 10 years now and probably beyond that if you consider all of the experimentation that I did before I started the business. But it really is taking the time and the proper steps to make a consistent batter for the product and that just entails infusing the oil in another oil that’s gonna be completely uniform and mixed before any of the dry ingredients get mixed in. Obviously, there’s a lot more steps involved but the end result is just a very consistent product.

What we do is we randomly test various dog chews that come off the production line so that we can check for potency and we’ll take some from one tray and then we’ll take some from a completely different tray in a completely different part of the batter that’s being run through the machine. We do that all the time. We also test the oil that we use in the products and that has to be a certain percentage for our formula to come out where we want it. Its a lot of math. A lot of trial and error and a lot of lab testing.

TG Branfalt: So, aside from the CBD there’s also in your products CBN and CBG. What are the benefits of those cannabinoids for pets?

J. Carella: You know, that is a good question and we don’t have a ton of research on those compounds. We know that there’s non-psychoactive like CBD. CBN tends to be more of a sedative. It has that quality for all the animals so in some cases some of these animals have a hard time sleeping because they’re in pain. The CBN sort of promotes a better night sleep. The amount of CBN and CBG that is in product is nominal compared to the CBD content.

So we don’t really call those out too much because of that. It’s a nominal amount which we think helps provide more of an effective entourage effect because these compounds all do work better when there’s multiple compounds in the picture. So, we believe it’s adding some benefit. We don’t know exactly what though and in particular with CBG theres not many studies at all with CBG and animals. But they are non-toxic and they’re safe. We know that nobody’s dying from these compounds but there definitely needs to be more research.

TG Branfalt: What was the initial demand like when you launched the Treatibles and what trends have you seen emerge in the last several years?

J. Carella: Well, I think the first people that tried this product were people that had already been buying our human products and they were patients that go to dispensaries in California. So those were our first wholesale customers were the dispensaries that we were already working with. Many people that are cannabis patients, they were giving their animals some of our human products just because they were desperate to try anything for their animal.

So, part of why developed Treatibles is so that people would have something to give their animal that wasn’t high in THC. The response in the beginning was really phenomenal and obviously working with cannabis patients, they’re already very educated. They just needed more education about how to treat their animal because it is quite different than treating a human with cannabis.

But then when we started to work with pet stores and general stores and hardware stores and there’s just a host of different types of stores that are carrying the product now and that’s a different education process. We want to start from the beginning with those folks because they may not have the same depth of knowledge around cannabinoid science. We’re really big on education. We know that there’s a lot of misconceptions out there about cannabinoids and using them with animals and just their use in general, there’s a lot of misinformation and we’re really big on trying to cut through that misinformation and provide real information that’s based on true science and based on what we know to be true. We don’t make claims about the product.

We believe you can’t make any claims about the product but we certainly can’t deny the feedback and the reviews and the testimonials that come in on a daily basis from pet owners all over the world. So, this has been a huge learning process, not only for our customers but for us as well.

TG Branfalt: What are some of the most prevalent barriers do you think between those of us in the industry and the general public and specifically when it comes to dealing with pet health in this way, in this kind of natural way?

J. Carella: The biggest barriers to that would be, Big Pharma. Unfortunately if cannabis was placed on the CSA list, the controlled substance act list, it was placed on that list before CBD was discovered. Unfortunately what’s happened is that CBD is by default now also a schedule one narcotic and it was already asinine enough that THC sits on that list but it’s even more asinine that CBD could even be considered a schedule one narcotic in the same class as the other drugs that sit in that category. So, that would be probably the biggest barrier because that in and of itself is going to prevent a lot of the research that should be happening, in fact, in my opinion should have already happened had cannabis not been a schedule one narcotic.

So we’re dealing with something that is just on a fundamental level completely wrong and not based in science. And it’s purely political so having that obstacle before us, that is probably the biggest barrier.

TG Branfalt: So, this kind of goes hand in hand what you’re saying with the DEA and they recently released a rule that changed how they internally classify CBD oil. When that was announced there was a lot of brow beating about what this means for CBD. Specifically, CBD derived from hemp. So when that rule was released, I think it was about a month ago, was there any concern that there was gonna be a crackdown on CBD and that Treatibles might not be able to be produced anymore?

J. Carella: Well there’s always concerns about that for various reasons but I just do want to clarify something that seems to … You know this is not the first conversation I’ve had where this clarification needed to be made. But the classification was not specifically about CBD, it was specifically about cannabis extracts.

And this new ruling was simply and administrative code that was created so that cannabis extracts can be classified more successfully. What didn’t happen which seems to be something that the general public right now believes happened but didn’t actually happen was that the DEA decided to classify CBD as a schedule one narcotic. Actually it was already considered a schedule one narcotic by the DEA. But, it also should be noted, this takes an act of congress to actually classify something as a schedule one narcotic and as I stated before, cannabis or more specifically because they never use the term cannabis, marijuana is a schedule one narcotic.

But the CBD that’s in our products does not come from marijuana, it comes from hemp and it’s exempt from these rules because of the Farm Bill. So, this is a classic example similar in any kind of marijuana law. You’ve got branches of the government that have different opinions and different laws and these laws are in conflict with one another. So, unfortunately for a company like us it would actually be impossible to be completely compliant because of all these laws that conflict with one another.

And because we have attorneys that just filed a lawsuit against the DEA for this very reason because we feel that they are violating the Farm Bill. So it’s once again, a lot of misinformation out there, a lot of media hype and a lot of fear. And sadly, really what needs to happen is the DEA should be focusing on the opiod epidemic or maybe even all of the black market drug activity that still exists.

Obviously CBD products for them to actually regulate it in that way would be a very expensive endeavor and it would be a big waste of time when apparently they’ve just got their hands full with true problems like the opiod epidemic and how many people are actually dying from opioid addiction and abuse. No one’s died from cannabis addiction or abuse. They just maybe got fat and laughed too much. They ate too much food when they had the munchies or maybe they had a psychotic episode that lasted 24 hours because they ate too many edibles but nobody’s ever died from weed.

TG Branfalt: So, I wanted to kind of switch gears a little bit and go back to talking about the CBD. According to all the anecdotal evidence, as we both know there’s not a whole lot of research on any of this but CBD products, they’ve been shown to reduce and eliminate seizures, combat anxiety, treat arthritis and pain, increase appetite. These are both similar in humans and animals so although humans use it not exclusively CBD in many cases. Are there or have you seen or heard of any benefits that are exclusively for pets such as coat when they use CBD?

J. Carella: Hmm. I wish I could answer that with more certainty. But like I said we’re learning so much every day ourselves. We often have pet owners calling in saying, “I bought this medicine for my dog’s anxiety but I notice that she’s walking better too. It seems to be helping hip dysplasia.” Oh okay, great. Good to know. We didn’t know until we started hearing from numerous pet owners that their animal’s hip dysplasia was subsiding. As far as anything specific just to animals I have not come across anything as of yet but I wouldn’t be surprised if these things reveal themselves in the coming months and years.

TG Branfalt: And that’s something I hear a lot in my interviews is that more research is needed. On that note, we’re gonna take a short break this is the Ganjapreneur.com podcast. I’m TG Branfalt.

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TG Branfalt: Welcome back to the Ganjapreneur.com podcast. I’m you host TG Branfalt here with Julianna Carella, CEO of Treatibles and Auntie D’s. So Julianna, why don’t you tell our listeners where your hemp comes from.

J. Carella: We started using Colorado ground hemp probably about 6 mounts ago. We did make the switch. We wanted to be able to say our product was 100% made in the USA and unfortunately a lot of the CBD that is coming through Europe actually is cultivated and extracted in China where we really want to stay away from any Chinese hemp, due to the soil being contaminated with heavy metals and bio-contaminants and all kinds of stuff. So, we are very excited to be working with Colorado cultivators now.

TG Branfalt: Were there any hurdles when you did eventually make the switch over?

J. Carella: Um, yeah. There are certainly hurdles with all of this. You know, I wouldn’t say there was any necessarily hurdles with regard to switching from a European to a domestic supplier but as with all of our suppliers there’s a due diligence period there so that we can make sure. Unfortunately, this is not a regulated industry so we can’t just take the cultivator’s word for it. We have to make sure that we’re looking at the certificate of analysis and that we do our own third party testing on the material before we use it. And that every batch that we get from them is reading the same lab results and all of that kind of thing. It’s a constant due diligence process that doesn’t really end because we need to make sure that they understand what type of quality our customers expect.

And consistency is a huge part of it. These products only work when they are consistently made and our whole business is resting on the fact that the product actually works and it works well so we want to make sure we don’t mess up a good thing by making changes that might deteriorate the quality of the product.

TG Branfalt: So, vets, they’re not allowed to prescribe or recommend cannabis products for pets, is that correct? Even in medically legal states?

J. Carella: Are you talking about veterinarians?

TG Branfalt: Yes.

J. Carella: Yeah, as of now, it is considered illegal for them to prescribe cannabinoids. I think that’s partly because of all of the hysteria around the DEA statement recently. And unfortunately the system in this country is such that a product needs to go through a very strict research before it can become FDA approved but as we know the FDA approval process for something like a cannabinoid is a long convoluted road. Before we’re gonna see any resolution there. So unfortunately it doesn’t look like the FDA would approve cannabinoids any time soon but who knows, maybe I’m wrong about that. I hope I’m wrong.

TG Branfalt: Is this something that maybe lawmakers in legal states should take up, specifically allowing vets to prescribe cannabinoids to pets?

J. Carella: I think given the way that CBD is classified now and given what we know about it being safe and non-toxic and perfectly good for animals of all kinds, absolutely some exceptions should be made and there should be a clear path to researching this, developing products from it and getting the products out to the market where its desperately needed. Let’s not forget that these types of products are completely fueled by a true demand. We didn’t have to go and try to convince a bunch of pet owners to try this.

This is something that they sought out on their own because there is a real dissatisfaction with a lot of the pharmaceutical options available to animals. And we hear it time and again that the side effects often create more problems than the original problems that they’re trying to address. So, yeah we really do need some exceptions to be made so that a clear path to research is available.

TG Branfalt: So, according to pet food industry report, the pet market’s worth about 15 billion. Arcview market research suggested the cannabis industry will reach 20.2 billion by 2021. Crest Hill Pharma company traded on the Australian securities exchange, they just received EU approval to sell products aims at pets although they have to deal with some import/export stuff before that actually happens. Can you peer in your crystal ball for me? What might you anticipate the cannabis product for pets market to reach by say 2020?

J. Carella: Wow, that’s a good question. Depending on all the legal issues that are very murky and how they may or may not get resolved, I think the potential is huge. I think it can certainly be a multi-billion dollar industry. Especially when you take into account how many conditions CBD and cannabinoids actually successfully address and so there’s just in my opinion, no other substance on Earth that has been discovered yet that actually treats cancer, epilepsy, anxiety, arthritis and all these other conditions. So that in and of itself I think creates a lot more product development opportunities and obviously more business.

And sadly, there’s just so many damn sick animals out there. Which I can’t help but wonder how all these animals are getting so sick. When I was a kid, dogs weren’t getting cancer and epilepsy and we love helping animals with these kind of advanced pathology and horrible illnesses especially when the pet owners have exhausted all other resources that have been pharmaceutical options offered by their veterinarians. There’s a huge, huge need for these types of products sadly because of how many sick animals exist out there. But I do think it’s a huge market potential. No doubt.

TG Branfalt: Are you seeing more people who aren’t cannabis users look at your products for their pets despite them not using cannabis themselves?

J. Carella: Absolutely. One of the really interesting things that happened is we’ll get orders from areas of the country where there are no cannabis laws. And they’re orders from people that would never think to even consume a cannabis product themselves but like many other pet owners they’ve exhausted all their other resources and no other medicine was working for their epileptic animal or their arthritic dog. So they try the product for their animal, they see the results because there’s no placebo effect going on here. Its very, very evident when an animal that’s in pain is feeling better and if they’ve just been given a dose of Treatibles and 15 to 30 minutes later they’re not limping anymore, it’s indisputable.

What ends up happening is we get a phone call from the pet owner saying, “I can’t believe how well this works. Can I eat the dog biscuits?” “I’ve got a sore back will it help?” Or “I don’t sleep at night my arthritis is killing me, can I try the dog biscuits?” And that’s when we point them to our human edibles line because of this phenomenon with CBD, we’ve developed more CBD edibles for humans now because of that demand. And so, now we’ve been able to provide products to the pet owners as well as the pets.

TG Branfalt: All right. We gotta take one more short break. When we come back we’re gonna find out if you’ve ever eaten one of your own Treatibles. This is TG Branfalt at the Ganjapreneur.com podcast. We’ll be right back.

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TG Branfalt: Hey, welcome back to the Ganjapreneur.com podcast. I’m TJ Branfalt here with Julianna Carella, CEO of Treatibles and Auntie D’s.
So have you ever tried a Treatible?

J. Carella: Absolutely! When we were developing the product there was a lot of taste-testing that happened and you know, they’re human grade ingredients so you can definitely enjoy them. They actually taste like graham crackers. They’re delicious!

TG Branfalt: And then, what about using these for cats which a lot of them aren’t 10 pounds so how do you figure out the dosing and will they even eat this sort of thing because cats are picky and jerks.

J. Carella: Yeah, I mean we’ve got quite a lot of cats using the product before we released the new tincture bottle that we have which is really suitable for small animals and cats, we actually were selling the dog bones to many cats. And what the pet owners were doing was breaking up the treat into the food and mixing it around with the wet food. But now that we have the tincture bottle with a cat you just have to give them a few drops. And yeah. It works really well.

TG Branfalt: Are there any prevailing rumors about cannabis for pets that you would like to debunk?

J. Carella: Where there’s the prevailing rumor that folks that understand the meaning of entourage effect, they know that humans often need a little THC along with CBD and a combination of various cannabinoids does provide a superior result. But a lot of people think that animals also need THC but the fact is that THC can actually be toxic to many animals especially dogs being that dogs have more receptors in their brain than any other animal and they can actually develop static ataxia. So, when people become interested in giving a cannabis product to their dog in particular they should note that THC can actually be toxic.

So, if people tell you, “you need to have THC in your cannabis product if it’s for a dog,” that is actually a myth.

TG Branfalt: Okay. Is there any animal that … any common pet that you wouldn’t recommend this product for? You know, I’ve learned not to let my snake in contact with any sort of THC smoke or anything like that because he could eat himself. So, this is true. They get confused because they have tiny brains so they actually could eat themselves but you know, is there any animal that you would say, “Eh, you probably shouldn’t give this to that creature.”?

J. Carella: Yeah. I have not come across any animal that didn’t benefit from CBD. We’ve seen numerous animals ordering our product and using it including horses and cows and pigs and birds and rabbits and hamsters. All animals have an endo-cannabinoid system but we definitely need to learn more about how their endo-cannabinoid system works, which cannabinoids that have not been determined to be safe, what is it about THC and why can it be toxic? How is it toxic?

There’s just so much more that we still need to learn and research.

TG Branfalt: So finally, I like to end these interviews by asking the question, “What advice might you have for people aspiring to get into the cannabis industry?”, those looking to get jobs in it, those looking to invest in it, those looking to open up their own businesses?

J. Carella: There’s no end to the opportunities that exist right now but where I think entrepreneurs really do well is to take a look at their local market. A lot of cannabis businesses are gonna be confined to their medical cannabis state. And there’s just a myriad of different laws in different states and they’re all very different.

So you have to model your business after what you can achieve and still be in compliance with those state regulations. And so, that could be very different in California than in Oregon or even in Illinois or any of these states. So it’s really good to look at what the local regulations dictate and make sure that your business model is going to be able to comply with those regulations.

TG Branfalt: And, could you tell the listeners how they could go about getting Treatibles, what states they might be able to buy them in person?

J. Carella: Well we sell Treatibles in pet stores across the country. We do have a store locator on our website. The website is treatibles.com, T-R-E-A-T-I-B-L-E-S .com. And people can also order directly from our website. We ship all over the world. And feel free to send us an email at info@treatibles.com. We’re happy to answer any questions you might have. You can also call us. Our number is listed on the website. We actually pick up the phone when people call and we’re happy to talk to anybody if you’d like to know more.

TG Branfalt: And nobody has to worry about the Feds knocking on their door by ordering Treatibles?

J. Carella: No, they don’t have to worry about that.

TG Branfalt: Alright, well I wanna thank you so much for this opportunity to chat with you. Thank you so much for kind of being on the front lines of helping sick animals get well. That’s really incredible.

J. Carella: Thank you so much and I’d love to send you some of the tincture for your cat if you like. Feel free to send me your address.

TG Branfalt: Oh she’s mean, she could use it. Alright, thank you so much Julianna.

J. Carella: Thank you.

TG Branfalt: All right, you can find more episodes of the Ganjapreneur.com podcast at the podcast section of the Ganjapreneur.com and in the Apple iTunes store. On the Ganjapreneur.com website you will find the latest cannabis news and cannabis jobs updated daily along with transcripts of this podcast. You can also download the Ganjapreneur.com app in iTunes and Google Play. I’ve been your host, TG Branfalt.

End

Former Alabama Senator Jeff Sessions, current Attorney General, is notoriously anti-cannabis.

AG Sessions Claims Cannabis Industry ‘Violence’ is Cause for Crackdown

2/28/2017

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Citing “violence around marijuana,” Attorney General Jeff Sessions has confirmed that the Obama Administration-era Cole memo, which directed U.S. attorneys to consider local laws with regard to cannabis enforcement, is under review, according to a Politico report.

“We’re seeing real violence around that,” Sessions said to reporters at the Justice Department. “Experts are telling me there’s more violence around marijuana than one would think and there’s big money involved.”

Sessions added that people in legal states are “violating [the] limits” set forth by the laws dictating the legal industry, and the Justice Department would “look at it…and try to adopt responsible policies.”

“Most of you probably know I don’t think America is going to be a better place when more people of all ages and particularly young people start smoking pot,” Sessions said in the report. “I believe it’s an unhealthy practice and current levels of THC in marijuana are very high compared to what they were a few years ago.”

Sessions said that while states can pass any laws they choose “it does remain a violation of federal law to distribute marijuana throughout any place in the United States, whether a state legalizes it or not.”

The Attorney General’s comments come on the heels of White House Press Secretary Sean Spicer saying he expected “greater enforcement” of federal cannabis laws. In response to Spicer’s remarks, officials in legal states – including Colorado Gov. John Hickenlooper, and Attorney Generals Bob Ferguson and Xavier Becerra, from Washington and California respectively – indicated that they would fight the federal government if they attempt to crackdown on the industry.

Erik Altieri, executive director for NORML, described Sessions’ comments as a “reality that only exists in the world of alternative facts.”

“Marijuana legalization has not lead to increased crime or violence, but rather is associated with lowered youth use rates and access, increased tax revenue, and fewer arrests of otherwise law abiding American citizens,” he wrote in a blog post. “The truth is that legalization is working as voters have intended and that the new U.S. Attorney General’s opinions are reckless, irresponsible, and outright false.”

End

Indoor cannabis plants being grown in a Washington cultivation facility.

Nevada Tribe Warned by U.S. Attorney About Hosting Cannabis Cup

2/28/2017

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Las Vegas-based U.S. Attorney Daniel Bogden has sent a letter to the Moapa Paiute Tribe warning them that the High Times Cannabis Cup, planned for this weekend on their land, is a violation of federal law, according to a Reno Gazette-Journal report.

“I am informed that the tribal council is moving forward with the planned marijuana event referred to as the 2017 High Times Cannabis Cup because it is under the impression that the so-called ‘Cole Memorandum’ and subsequent memoranda from the Department of Justice permit marijuana use, possession and distribution on tribal lands when the state law also permits it,” Bogden wrote in the letter dated Feb. 16. “Unfortunately, this is an incorrect interpretation of the Department’s position on this issue.”

In the letter, Bogden argues that “nothing in the Guidance Memorandum or Cole Memorandum alters the authority or jurisdiction of the Unites States to enforce federal law in Indian Country or elsewhere.”

The Guidance Memo dictates that tribal governments and U.S. attorneys should seek government-to-government consulting as issues arise, while the Cole memo directs U.S. attorneys to consider local laws regarding cannabis enforcement.

Tribal Chairman Darren Daboda said he was working with the U.S. Attorney’s Office in Nevada to resolve potential conflicts. He said the tribe is promoting the event as a “vendors’ crafts, food, and concert event” and they are not promoting the sale or distribution of cannabis.

“To us, we’re looking at it as utilizing our sovereignty,” Daboda said in the report. “As long as (cannabis) is not visible, we’re told it will be OK.”

Democratic state Sen. Tick Segerblom, said the event “could be a huge boost for the tourism industry,” noting that he plans on proposing a bill this session to address adult-use cannabis policies for Nevada’s tribes.

End

More U.S. citizens are killed by opiate overdose each yeah than have ever died from the use of cannabis.

Study: Patients Using MMJ as Opioid Substitute

2/28/2017

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A new University of British Columbia and University of Victoria study suggests that patients in Canada are using medical cannabis as a substitute for prescription drugs, particularly opioids.

In the study, published in the International Journal of Drug Policy, 63 percent of patients self-reported that they were using cannabis as a substitute for prescription drugs, with 30 percent of those indicating they were using cannabis in lieu of opioid-based pharmaceuticals. Sixteen percent reported their cannabis use was a substitute for benzodiazepines – often prescribed to treat anxiety – and 12 percent reported using cannabis as a substitute for anti-depressants.

Additionally, some of the 250 patients enrolled in the study reported using cannabis as a substitute for alcohol (25 percent), tobacco (12 percent), and illicit drugs (3 percent).

Zach Walsh, a co-author of the study and UCB associate professor, said while the study might show cannabis may have a role in addressing opioid addiction, more research is required.

“Further research into how well cannabis works compared to the accepted front-line treatments is warranted,” Walsh said in a Global News report.  “Additionally, long-term research into the potential impact of the cannabis substitution on the quality of patients’ lives is ongoing.”

The study was funded by Tilray, a Canadian licensed medical cannabis and research firm.

End

A purple-colored cannabis cola pictured under the glow of LED growlights.

Officials in Legalized States Vow to Fight Feds Over ‘Greater Enforcement’ of Cannabis Laws

2/27/2017

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Lawmakers and officials in states with adult-use cannabis laws are speaking out against the enforcement of federal drug laws following comments last week by White House Press Secretary Sean Spicer hinting at “greater enforcement” of federal law in those states.

During an appearance on “Meet the Press,” Colorado Gov. John Hickenlooper indicated he doesn’t think it’s a clear-cut case – it’s an issue of sovereignty – and that he has a responsibility to uphold the state’s constitution. He said that while he didn’t support the legalization initiative in the state he “is getting close” to supporting the legal regime, although he is “not quite there yet.”

“We have made a lot of progress. We didn’t see a spike in teenage use, if anything it’s come down in the last year and we’re getting anecdotal reports of less drug dealers,” he said in the interview. “If you get rid of that black market you’ve got tax revenues to deal with, addictions and some of the unintended consequences of legalized marijuana, maybe this system is better than what was, admittedly, a pretty bad system to begin with.”

Washington state Attorney General Bob Ferguson said in a Seattle Times interview he would “resist any efforts by the Trump administration to undermine the voters of Washington state.”

“When he talks about ‘greater enforcement,’ I take that seriously,” he said, noting that his lawyers are “quite prepared” to take on the federal government regarding the legal cannabis industry in the state.

Earlier this month Ferguson, along with Gov. Jay Inslee, sent a letter to Attorney General Jeff Sessions laying out the state’s program.

“Given the limited resources available for marijuana law enforcement, a return to ‘full’ prohibition’ is highly unlikely to end the illicit production, trafficking and consumption of marijuana,” Inslee and Ferguson wrote in the Feb. 15 letter, adding that the state is projecting to see $272 million in taxes derived from the industry this fiscal year.

California Lt. Gov. Gavin Newsom also sent a letter to President Donald Trump and Sessions urging them “not to strip the legal and publically supported industry of its business and hand it back to drug cartels and criminals.”

“Dealers don’t card kids. I urge you and your administration to work in partnership with California and the other eight states that have legalized recreational marijuana for adult use in a way that will let us enforce our state laws that protect the public and our children, while targeting the bad actors,” he wrote in the letter, outlined by the Los Angeles Times.

California Attorney General Xavier Becerra said he would fight the administration on any crackdown attempts.

“I took an oath to enforce the laws that California has passed,” Becerra said in a Daily Republic report. “If there is action from the federal government on this subject, I will respond in an appropriate way to protect the interests of California.”

End

A hemp plant located on a pilot hemp plot.

Wisconsin Lawmakers Considering Bill to Legalize Hemp Farming

2/27/2017

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Republican lawmakers in Wisconsin are circulating a bill to legalize industrial hemp production in the state, according to an Associated Press report. During World War II, Wisconsin produced three-quarters of the nation’s hemp, and the lawmakers are hoping to bring the industry back.

The bill, sponsored in the Senate by Sen. Patrick Testin and by Rep. Jesse Kramer in the House, would allow farmers to obtain licenses to grow the crop from the Department of Agriculture, Trade and Consumer Protection. Individuals with drug convictions would not be eligible for the program, which requires testing to ensure the plants do not contain more than 1 percent THC. Farmers would be able to use seeds that have been certified as hemp, and procure them from out-of-state if necessary.

“It’s an opportunity to bring an industry back to the state of Wisconsin,” Testin said in the report.

At least 30 states have passed hemp legalization measures under provisions outlined in the 2014 federal Farm Bill. Irwin Goldman, a University of Wisconsin-Madison professor and horticulturist, said that hemp crops are well-suited for Wisconsin’s climate due to its sturdy and low-maintenance qualities.

The measure has not yet been introduced in their body of the state legislature.

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The city skyline of Detroit, Michigan.

Michigan MMJ Patient Has Charges Dismissed in Conservative County Court

2/27/2017

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A medical cannabis patient in Oakland County, Michigan has won his legal battle against the county after a judge ruled to dismiss the charges on the grounds that law enforcement officials failed to establish probable cause for raiding the patient’s home, the Detroit Free Press reports.

Police raided Donny Barnes, 41, of Orion Township, two years ago, charging him with possessing more than 100 pounds of cannabis and intent to distribute. The raid was conducted by OAKNET, the county’s Narcotics Enforcement Team, and the victory is one of very few that comes out of Oakland’s Circuit Court, the report says.

David Moffitt, Barnes’ attorney, said the ruling “sends a strong message that inappropriate procedures on the part of police and prosecutors will result in dismissal.”

“To have an Oakland County judge dismiss search warrants for faulty procedures is a game-changer in the state because everyone looks at Oakland County for their legal leadership on key issues,” Moffitt said in the report. “What this judge said was that you can’t just kick down doors and seize people’s property without having good reason to do so.”

Judge Denise Langford Morris also allowed Barnes to continue using medical cannabis while out on bond “for a very demonstrable medical need.”

Oakland County officials indicated they plan on appealing the ruling.

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Cannabis Industry Reacts to Spicer’s “Greater Enforcement” Comments

2/24/2017

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Yesterday, White House Press Secretary Sean Spicer seemed to put the legal cannabis industry on notice. Following a month of ‘will they, or won’t they,’ it appears the Trump Administration may plan on breaking from its states’ rights platform, with Spicer drawing a line between the medical and recreational markets; echoing Attorney General Jeff Sessions, who made the same distinction between the two markets during his confirmation process.

Spicer, though, would take the War on Drugs rhetoric even further – linking recreational cannabis to the “opioid addiction crisis”; which drew an “unproven” rating from the fact-checking website Snopes.

“While the concept of marijuana as a ‘gateway drug’ remains controversial, there is a near-universal agreement that the opioid crisis was caused by an influx of legal prescription painkillers and is thus unrelated to marijuana use,” the researchers concluded.

In an interview with Denver7, Isaac Dietrich, CEO of MassRoots, pointed to the decline in opioid deaths in Colorado as a sign that legalizing cannabis would be a tool to stem the epidemic – “it’s not a coincidence.”

“Cannabis is a healthy alternative to pain pills and heroin, not a gateway to it,” he said in the report.

Scott Rudder, president of the New Jersey Cannabusiness Association also took aim at Spicer linking cannabis to heroin and opioid addiction.

“I’m never sure if it’s ignorance or purposeful distraction when a person in the position of authority intermingles heroin and cannabis when talking about opioid addiction,” Rudder said in an emailed statement. “Cannabis is not an opioid. Period.”

Rudder also noted the recent report showing that the cannabis industry would create more jobs than government, manufacturing, and utilities sectors.

“When you couple together the facts on what cannabis is and is not, with the amount of jobs and revenue that is generated from a well-regulated industry, it would be foolish to turn back the clock on the progress being made,” he said.

In his response to Spicer’s comments, Erik Altieri, executive director of NORML, said any actions to crack down on the legal cannabis industry would “lead to swift backlash from the 71 percent of Americas who think marijuana policy should be dictated by the states and is a foolish and reckless decision to take our country.”

“If the Trump administration goes through with a crackdown on states that have legalized marijuana they will be taking billions of dollars away from state-sanctioned businesses and putting that money back into the hands of drug cartels,” he said in a statement.

Justin Strekal, NORML political director, said both President Donald Trump’s and Sessions’ views on cannabis are “out of step with mainstream America” and “in conflict” with the cannabis laws in “over half the states in this country.”

“The fact that President Trump would allow his Attorney General to pursue a path that is so politically unpopular and contrary to the will of numerous states is absurd,” he said.

In a press release, the Congressional Cannabis Caucus, comprised of bipartisan federal lawmakers from legal states, said Spicer’s comments “reaffirmed the need” for the elected advocates in Washington, D.C.

“As co-chairs of the Congressional Cannabis Caucus, we stand ready to educate this administration on the need for more sensible marijuana policies and share the many experiences states have had with the legalization of cannabis,” the statement said. “Together, we will continue to work in a bipartisan manner to reform our failed marijuana policies and provide a voice for Americans who have overwhelmingly voted for a more sensible drug policy.”

Oregon Representative Earl Blumenauer, a member of the caucus, said he was “deeply disappointed” by Spicer’s remarks.

“The national prohibition of cannabis has been a failure, and millions of voters across the country have demanded a more sensible approach,” he said in a press release. “I’m looking forward to working with the leadership of our newly formed cannabis caucus to ensure that Oregonian’s wishes are protected and that we end the failed prohibition on marijuana.”

Annie Skinner, director of communications for the Colorado Attorney General’s Office, indicated that Spicer’s comments “were so general in nature that it’s impossible to discern what action the Administration actually will take on legalized recreational marijuana.”

“Until the Department of Justice issues an official position, we won’t be able to chart a legal course of action for Colorado,” she said in a CBS Denver report.

The Executive Director of the Cannabis Business Alliance, Mark Malone, said that targeting the industry “would be a direct affront to the overwhelming numbers of Americans who have voted time after time to approve legal cannabis.”

“The legal cannabis industry takes power and money out of the hands of drug cartels and puts funds into state coffers and has the real potential to help offset the Federal Government’s budget shortfalls,” he said in a statement. “President Trump has said that this is a state issue so we expect him to be true to his word and continue to let states regulate cannabis.”

Earlier this week, the administration rejected Obama Administration protections for transgender students that allowed them to use bathrooms corresponding with their gender identity on the grounds that it violated states’ rights – begging the question, “which is it?” Either states have the right of self-determination or they don’t – it can’t be both.

Spicer has had to walk back statements before, and perhaps he will have to, eventually, do the same here. However, with Sessions lording over law enforcement policies, along with a recent slew of executive orders enhancing policing powers – including reversing an Obama-era order phasing out the use of private prisons – it’s entirely possible that crackdowns, and subsequent lawsuits from legal states, could be on the horizon.

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A marijuana enthusiast shows his support.

Poll: Majority of Americans Support Cannabis Reforms

2/24/2017

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According to a February 23 Quinnipiac poll, support for legalized cannabis is at an all-time high. An eye-popping 93 percent of respondents indicated support for medical cannabis programs, while 59 percent supported legalizing cannabis for adult use nationally, with another 71 percent opposed to the federal government enforcing federal law in states with either medicinal or recreational regimes.

In a blog post, NORML Deputy Director Paul Armentano pointed out that the 59 percent total is consistent with a 2016 Gallup poll that found 60 percent support for cannabis legalization.

Respondents aged 18 to 34-years-old supported national legalization overwhelmingly, 76 percent to 24 percent; and those aged 35 to 49-years-old followed suit, with 71 percent indicating support compared to 25 percent opposed. Fifty to 64 year olds surveyed also supported legalization but by a much narrower margin – 53 percent to 40 percent; while those 65 and older were opposed, 51 percent to 42 percent.

Support for medical cannabis was strong among all age groups and political affiliations, reaching more than 90 percent support among all respondents except for Republicans, who still indicated tremendous support with 85 percent in favor and just 12 percent opposed.

Not a single demographic supported federal government interference in states where legal cannabis measures have been approved; however, support was highest among Republicans – 36 percent to 55 percent.

Armentano suggested that the “rising support” could provide a boost for HR.975 – federal legislation that would prevent the federal government from prosecuting individuals operating in state-sanctioned cannabis activities.

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A top-down view of a cannabis clone in a professional grow operation located in Washington state.

Pharmaceutical Lobbyists Pushing Bills That Would Create CBD Monopoly

2/24/2017

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A Leafly News report last week uncovered some troubling developments related to CBD products: the British company GW Pharmaceuticals and its U.S.-based subsidiary Greenwich Biosciences have been quietly moving CBD-related bills through the legislatures of both South Dakota and Nebraska.

GW Pharmaceuticals has been developing a CBD-based drug called Epidiolex for years and, now that the drug is in Phase III trials, it’s predicted to receive FDA approval soon.

Presumably in anticipation of its approval, Greenwich Biosciences has worked to introduce bills in South Dakota and Nebraska that would essentially require all CBD products sold in the state to have been approved by the FDA. This would lead to an immediate GW monopoly on the CBD marketplace in those states, as Epidiolex will be the only such product with FDA approval.

Perhaps importantly, neither South Dakota or Nebraska have any infrastructure to legally access medical cannabis — though hemp-derived CBD products remain accessible anywhere in the U.S.

“SB 95 will block all current and readily-available CBD options for South Dakota’s children,” Melissa Mentele, chairperson for New Approach South Dakota, told Leafly’s Bruce Barcott. “It will make Epidiolex the only option. As we know, one medicine does not work for all patients. We can’t take away options for these catastrophically ill children and their families.”

However, not only has the pharmaceutical group sought monopolizing measures in South Dakota and Nebraska, but Greenwich Biosciences has also been hiring lobbyists in nearly two dozen other states — including non-medical states such as Wisconsin and Idaho, as well as already legalized states like Florida, Washington, Arizona, and others — presumably to lay groundwork for similar bills in other states.

In a response to Barcott’s investigation, GW/Greenwich Biosciences released statements this week saying that the company was not pursuing a monopoly but was laying groundwork for future CBD companies to bring their own FDA-approved products to market. “It is important to stress that none of GW’s work involves opposing ‘medical marijuana’ or ‘CBD access,'” the company wrote. “GW’s sole focus is on creating a pathway for our medicine, once approved by FDA.”

In a follow-up piece to the company’s reaction, Barcott writes that Epidiolex, if approved, is likely to be the only CBD-based product with FDA approval for some time. This would at least create a temporary monopoly for GW/Greenwich in any state where they are able to successfully pass legislation, meaning that patients in those areas would be limited to only one CBD product, which likely won’t be the most efficient or effective option for every patient.

Cannabis attorney Craig Brand believes these are early signs of a long-planned foray by pharmaceutical companies into cannabinoid medicine. Brand, the owner and founder of international cannabis firm Ganja Law, wrote:

“Upon the FDA’s approval of Epidiolex, the FDA could issue cease and desist orders to anyone selling products containing CBD for health, wellness, or medical purposes. This would include companies … that are selling products containing CBD in states where such sales are currently permissible. If the FDA is not enough, GW could take legal action against any company or person infringing on its patents or selling any product containing CBD.”

Brand said this is only the beginning of what is likely to become a drawn-out battle with pharmaceutical interests. Earlier this month, he warned that CBD companies and hemp CBD enthusiasts should be worried more about regulatory actions from the FDA than enforcement actions by the DEA.

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The West Virginia Capitol Building in Huntington, West Virginia.

Comprehensive MMJ Legislation Introduced in West Virginia

2/24/2017

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A bipartisan coalition of West Virginia lawmakers has introduced SB386: The West Virginia Medical Cannabis Act, which would develop a comprehensive medical cannabis program in the state, the Logan Banner reports. The measure would set forth “policies, procedures, guidelines and regulations to implement programs to make medical cannabis available to qualifying patients in a safe and effective manner,” according to the bill text.

The proposal is sponsored by Democratic state Senators Richard Ojeda, Douglas Facemire, Robert Beach, Ronald Miller, Mike Romano, Corey Palumbo, Mike Woelfel, and Ron Stollings, along with Republican state Senators Patricia Rucker, Chandler Swope, and Greg Boso.

The legislation would see the creation of a 16-member West Virginia Medical Cannabis Commissions that would oversee the program, comprised of officials from the state Department of Health and Human Resources, the Department of Agriculture, the Treasurer’s office, and 13 non-government members appointed by the governor. Commissionerships would not be paid.

Under the law, patients suffering from wasting syndrome, chronic pain, seizures, severe muscle spasms, severe nausea, or those in hospice would have access to medical cannabis in the state. The commission would have the power to approve applications “that include any other condition that is severe and for which other medical treatments have been ineffective if the symptoms reasonably can be expected to be relieved by the medical use of cannabis.”

If approved, the commission would be expected to begin issuing all licenses for patients and operators by June 1, 2019. The bill has been sent to the Health and Human Resources Committee, and if approved, will be moved to the Judiciary Committee.

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