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Kenny Wright: How Smoke Shops Adapt to Cannabis Reforms

For decades, public displays of appreciation for cannabis and cannabis culture were relegated mainly to smoke shops — the one-stop-shop for everything cannabis, except for the plant itself.

In this episode of the Ganjapreneur.com podcast, our host TG Branfalt catches up with Kenny Wright, who owns their local smoke shop in Saranac Lake, New York. Tune in to hear how the smoke shop industry has adapted to changing times, what cannabis business owners can do to maintain healthy relationships with local authorities, tips for building a helpful and friendly business environment, Kenny’s predictions for the smoke shop business model as cannabis prohibition continues to crumble, and more!

Listen to the full interview below or through your favorite podcast listening platform, or scroll down to read through a full transcript of this week’s Ganjapreneur.com podcast episode.


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Commercial: At Ganjapreneur, we have heard from dozens of cannabis 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 to 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’ll 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 director. Go to Ganjapreneur.com/businesses to create your profile and start connecting with cannabis entrepreneurs today.

TG Branfalt: Hey, there. I’m your host, TG Branfalt, and thank you for listening to the Ganjapreneur.com Podcast where we try to bring you actionable information and normalize cannabis through the stories of ganjapreneurs, activists, and industry stakeholders. Today, I’m joined by Kenny Wright. He’s the co-owner of High Peaks Glassworks, an independently owned smoke shop based in Saranac Lake, New York. Full disclosure, he is my local smoke shop, so I do have a previous relationship with him, obviously. I don’t just go in there and buy a couple of papers and leave. I really like his company. I want to introduce him to all of you. How are you doing this morning, Kenny?

Kenny Wright: I’m great. Thanks for having me, Tim.

TG Branfalt: Now, super, super excited to have someone local. We don’t have a whole lot of cannabis associated businesses up here. Before we talk about your business and that whole process and that experience, tell me about yourself, man. How did you end up in the cannabis space?

Kenny Wright: Well, I mean, I’ve always had more of an interest in cannabis and it’s just been the forbidden fruit throughout our lives, so I’ve always been more of an anti-authoritarian, which is ironic that I joined the military, but yeah.

TG Branfalt: How do you go from the military to starting a cannabis-based associated ancillary business? How does that process play out?

Kenny Wright: Well, I mean, society is changing. I’ve always wanted to be in the space, more on the grow aspect of things, and that’s why I moved to Colorado for snow because I’m a snow junkie. I love riding my snowboard, but Colorado was a progressive state when I moved there in 2009. I had gotten into that space. I had friends that were already doing it, so it was just a very easy transition for me. I had friends that were running grow stores, so I learned that aspect of the business. More ancillary, but still at that time I was able to legally grow cannabis, so I did so. It was very enjoyable and hopefully, at some point, New York can progress themselves into allowing us fine citizens to do something similar. Yeah. Then, all of my family is here, so I just… and I’ve always returned home in the summer because it’s gorgeous here. It was just a very easy thing for me to do and come home, so I came home.

TG Branfalt: Talk to me about opening up the shop. Was there any… we’re in a purple part, more red part of the state, but was there any pushback from local officials or individuals? Tell me about the culture at the time.

Kenny Wright: When we initially opened the store, I mean, I had reservations because it is a small town, and my family is all from here. Social perception wasn’t as it is today. Things have changed dramatically in the last five years, so there was, I don’t want to say pushback, but there wasn’t an open embrace. There was another gentleman who was running a store, which was another part of my reservation. I didn’t want to step on his toes, but after meeting him, he wasn’t providing the town a solid place. He was more of a predatory business.

TG Branfalt: There’s a lot of that in this… especially in the-

Kenny Wright: There is.

TG Branfalt: … smoke shop side of it.

Kenny Wright: Absolutely. Unfortunately, there’s unethical people everywhere, but yeah, in this business, it seems to collect them. He was down the street, so I had had some reservations and eventually I just decided to put those aside and we opened up. We originally had a partner who also was… we had a falling out and we went our separate ways last year actually. I mean, we’ve been doing this for five years, but yeah. We opened up, completely renovated our store. Initially, town was pretty receptive because we have a nice store, we present ourselves in more of a gallery aspect of things instead of having just product everywhere, which is, from a consumer aspect, from my point, very disorienting, so I like to focus on products and just highlight what I have and bring in whatever customers are asking me for. Yeah, I mean, the mayor said we had about a year. These types of business-

TG Branfalt: Really?

Kenny Wright: … typically fizzle out in about a year. That was fuel to the fire, which the other gentleman did fizzle out in about a year, but he was a predator and, yeah, town wasn’t very receptive of him over time because he ran people out of his store. He was kind of a cartoon character.

TG Branfalt: Since you opened your shop five years ago, how has your business grown? What products do you see moving more now than moved five years ago? Tell me about the evolution of apparatuses as the cultures change.

Kenny Wright: Well, I mean, the concentrate industry is definitely moving most of the industry, I feel. A lot of the technological aspect of things, various vaporizers, even dry herb vaporizers are coming along, are getting more affordable, and the New York medical program is definitely allowing people to become consumers on legal aspect and get medicine that they wouldn’t otherwise be privy to.

TG Branfalt: Did you notice post medical legalization an uptick in the population that you might perceive as medical cannabis users?

Kenny Wright: Yeah, absolutely. I mean, I think the notion, in all things, the medical aspect, the warm and fuzzy feeling that comes along with that brought a lot of people who were otherwise on the fence or demonized cannabis. The CBD movement as well has done a similar thing. It’s definitely brought people out and changed their minds and gotten them off of the pharmaceuticals which have a lot of other side effects that don’t come along with cannabis and CBD products. Obviously, there’s the THC aspect of cannabis, but there’s CBD, which doesn’t have that negative, “negative”, depends your take on it. Yeah, it’s definitely moving things forward nationally and locally statewide. It’s great.

TG Branfalt: Let me ask you about CBD. I mean, I personally get emails and press releases and sample offers from dozens of CBD businesses every single day, so how have you navigated those muddy waters of CBD to ensure that the products you’re getting are to your standards and not some snake oil?

Kenny Wright: Well, I mean, initially when CBD was first coming up and getting more popular, I was just relying on distributors and trying to discern from… and do my own research as much as I could, so I could provide a quality product and know what I was providing and not get tripped up by all of the buzz words that are out there on the industry. Since then, one of my good friends has started his own farm in the Asheville area, Asheville, North Carolina area, Otherside Hemp. They grow all of their plants organically. They harvest themselves. It’s a smaller batch thing, so I’ve pretty much just shifted to sourcing from him because I’ve known him for 20 years and if I have a question or if there’s any concerns at any point, I can get a hold of him at 10:00 at night. He’s very available and he’s very open and honest. It’s ethics. I’m a huge ethical individual in running my store and that’s how I feel the industry needs to be because that’s really the heart of the industry as I see it.

TG Branfalt: What are some of the challenges for you being an entrepreneur in a very, very small town, I mean, especially with the coronavirus, I mean, we shut down pretty quickly and pretty hard? Tell me about some of just the broad challenges and then we’ll get to the COVID stuff.

Kenny Wright: Well, yeah. I mean, obviously small town, less traffic. We live in a very tourist economy. It’s middle of the mountains, very beautiful, but there’s not a huge population. Pretty good spread from town to town. We have… yeah, so as far as that goes, it’s challenging, but people here are willing and very much do support local businesses, which we’re very grateful for and thankful for all of our locals. I mean, people travel for a long time, an hour away, hour and a half, because they like us. You know what I mean? They’ve been to other places and they just genuinely like us. We don’t-

TG Branfalt: You let people bring their dogs in, which is really important.

Kenny Wright: Yeah. We don’t want customers; we want friends. You know what I mean? We want people to feel welcome in our store, whether they’re purchasing things or not. Obviously, we’re there to sell stuff, but we aren’t the “FU, get out of our store, if you’re not buying a product.” We like conversation, as you know, we talk every time you come in for at length. We’re part of the community and that’s how we’ve… we’ve worked our way into that. Initially, the town was skeptical, and I guess understandably so, but we’ve had our local law enforcement tell us that they’re okay with us, we’ve been vetted. It’s just, it’s nice that-

TG Branfalt: What is your relationship like with them? I don’t think I’ve asked you that, you in person.

Kenny Wright: It’s a very positive relationship. I mean, we’re not doing anything criminal, illegal. We’re not selling anything that we feel is gray area or unethical and they very much appreciate that aspect because we’re not trying to contribute to a problem that already exists. We’re trying to just… we’re selling inanimate objects essentially and CBD products, which are legal. Yeah, it’s been a good thing.

TG Branfalt: How did COVID affect your business? Obviously, you were shut down for a little while and were you able to access or did you seek any federal or state funding? Tell me about that sort of experience as a one-shot business that relies on that day to day.

Kenny Wright: Yeah. We didn’t seek any federal or state aid. I mean, we closed for I believe two weeks or something like that. I mean, it wasn’t a very long time. Enough to digest the regulations and rules that were coming out at the time. Because we are an owner operated business and we… we’re essentially in a loophole for the state regulations, we did appointments only. We required masks and just tried to continue as best as we could helping people. Social media became very important. I forwarded all of our store calls to my cell phone, so my phone was ringing off the hook, setting up appointments every day, trying to be as available as possible, but not expose myself and have a life as well. You know?

TG Branfalt: Yeah, yeah.

Kenny Wright: As much of as one was happening at the time. Yeah, I mean, it’s-

TG Branfalt: How has this been since the lifting of the “lockdown”? I mean, I remember when you first opened non-appointment. I had to stand in a line in order to get in. Was that something that was temporary? Are you seeing more traffic?

Kenny Wright: I mean, initially, when the government was pumping out a lot of the $600 extra unemployment payments, people had money burning a hole in their pocket, so it was definitely a large uptick at that point, but at the same time, you have COVID, so there’s a lot of people that aren’t coming out. People were coming, getting what they needed. We were mitigating the amount of people we were allowing in the store at the time, and even still, it’s typically like a one or two people and people keep their distance anyways because people are generally respectful of others here. Yeah, it was definitely a huge shift, but I’m just really thankful that we are owner-operated and we were able to continue.

The Rotary Club gave us $1500 in-

TG Branfalt: Oh, wow.

Kenny Wright: … grant contributions, which they did for several other businesses, which was incredibly moving and really solidified our feeling of being a part of the community.

TG Branfalt: That’s fantastic.

Kenny Wright: Yeah. It brought a tear to my eye, literally, and it was just humbling and, honestly, I never would have expected it. It wasn’t … because we’re like the redhead stepchild, the black sheep.

TG Branfalt: I know. There’s that super nice clothing store across the street, or right across the street. It’s-

Kenny Wright: Yeah. I mean, it’s… well, I mean, being a tourist town, a lot of people will look in my window and clutch their pearls when they see some of the products that I carry. That’s fine, whatever, but at some point, they’re going to have to come to terms with reality and how society is changing. It gives me a chuckle every time.

TG Branfalt: I want to talk to you. You mentioned at the top that you had joined the Navy. Can you tell me about your military experience as it related to the culture of cannabis?

Kenny Wright: I mean, there is no cannabis culture really in the Navy. There’s zero tolerance, regular urinalysis.

TG Branfalt: Had you smoked prior to going into the Navy?

Kenny Wright: I had once.

TG Branfalt: Okay.

Kenny Wright: Which I had gotten a waiver for, so-

TG Branfalt: You had to get a waiver for smoking one marijuana.

Kenny Wright: Yep. I mean, the military is pretty strict with that. Yeah. That was it. You know what I mean? The typical teenager try it, whatever, and that was it because it was whatever. I continued on with my high school career, but yeah, I joined the Navy out of high school and sailed around the world and learned to work on radar and shoot five-inch guns and experience a lot of different cultures, which made me appreciate America a lot more for the ability to change.

TG Branfalt: When was it after your military experience that you started smoking more cannabis?

Kenny Wright: Oh, I mean, shortly thereafter. Yeah. I mean, I didn’t wait until… I mean, I was out of the Navy in 2007 and I have been a consumer… I mean, I don’t really smoke a ton, but yeah, it’s… yeah.

TG Branfalt: I’m just trying to figure out because I’ve had veterans on this show and many of them, a couple of them, are combat veterans who it was a direct correlation or experience in the military, PTSD, to cannabis. Is that the sort of correlation that you might make? Was it your military experience that led you to smoking more, becoming a consumer and really-

Kenny Wright: No. I mean, not… I am very thankful and grateful that my military experience didn’t result in any trauma or anything because I know there’s a lot of veterans that have trouble with that and cannabis is incredibly beneficial for them, but it was just a… I prefer that to alcohol. You know what I mean? I don’t… there’s no hangover, you don’t feel like trash the next day. Alcohol is just… and not to say that I don’t consume a beer here and there because I do like alcohol, but it’s definitely far, far less of an enjoyable thing. You know what I mean? There’s just… and you can’t function when you’re on alcohol like-

TG Branfalt: Correct.

Kenny Wright: … which is a huge detractor from it. You have two or three beers, your speech is off, your coordination’s off, like you know that-

TG Branfalt: Can’t drive.

Kenny Wright: Yeah, you can’t drive. You can’t do anything. Cannabis isn’t necessarily that way. CBD isn’t that way. CBD flower has become a huge aspect because you don’t have that THC, you don’t get that high, but you still have the relief. It’s like near beer, you know what I mean? Sure, you can drink 24 of them, you might get a little buzzed, but you’re going to be in the bathroom all night.

TG Branfalt: No, I get really excited for… most people who know me and listen to the show know that I’m not like pro-legalization in the sense that regulation and all these other things because it hasn’t harmed anybody in 200 years and even the black market or the illicit market. Right? I can’t wait for THC drinks. I only want legalization, so I can get a THC infused root beer.

Kenny Wright: Oh, they already have those, Tim.

TG Branfalt: No, I know. I know. I’ve had them in Michigan and stuff, but-

Kenny Wright: Yeah, yeah, yeah.

TG Branfalt: … we don’t have-

Kenny Wright: Widely available.

TG Branfalt: If we want something like that, we have to go to Massachusetts.

Kenny Wright: Right. No, yeah. See, I’m just all about the freedom aspect. You know what I mean? Freedom of choice. All of these regulations that are in our lives, in every aspect of our lives, just need to take a long walk off a short pier.

TG Branfalt: In your experience, what do the veterans that you know think about broad legalization?

Kenny Wright: I mean, we’re all for it. We’re a hundred percent for it. Again, it’s all about freedom. You know what I mean? Like, we can sign a contract to go die in a foreign country, but we can’t consume a product which is widely known to be less harmful than a bullet.

TG Branfalt: Well, I mean, to that end, the Navy’s banned hemp-derived personal care products.

Kenny Wright: Right, which is absolutely insane. That’s extreme zero tolerance. There’s so many hemp derived products, Dr. Bronner’s, for example. I use Dr. Bronner’s all the time, hemp derived soap. You know what I mean? All over that bottle is tattooed the benefits of help for the environment and everything. You know what I mean? We used to use hemp rope in the Navy. Hemp is such a historical product to me it blows my mind that the Richard Nixon administration managed to really clamp the jaws down on cannabis and just demonize the heck out of it. Even more so than prior administrations with the Stamp Act and all the Reefer Madness movie and all of those other things. It’s insane. Yeah, the Navy’s policy on anything hemp-related is just wild, dude, wild, but alcohol is pretty much all right. You can still pull into port and get absolutely shit-faced as long as you show up to the ship on time.

TG Branfalt: Relatively.

Kenny Wright: Relative… no, no, you need to be on time.

TG Branfalt: Yeah. Does it ever surprise you that there’s not more hemp activity out here? I mean, there’s farms everywhere, especially if you go up toward Malone, Massena, it’s all farmland. It looks like you’re in Ohio.

Kenny Wright: Yeah.

TG Branfalt: Does it ever surprise that we don’t see more hemp farms out here?

Kenny Wright: I mean, New York made it kind of hard to grow hemp. They have… I mean, at least initially. I’m not really up to speed on their most current-

TG Branfalt: Well, most recently, they actually said that they’re not going to put forward a plan for next season. Instead, they’re going to rely on FDA regulations and they basically said because the FDA regulations are too onerous for them to put forth the program, that they’re not going to put forth a program at all. Instead, you’re going to have to rely on the FDA, which seems really ass-backwards to me. The FDA regulations are too onerous, so you farmers deal with them.

Kenny Wright: Yeah. Yeah, that’s unfortunate that our state would be left holding the bag if we’re trying to grow hemp. Yeah, I mean, which New York went very typical there. Yeah, there-

TG Branfalt: I want to ask you another question. I’ve only been in Saranac Lake a couple of years. Your family is from here. When cannabis is legalized in New York, it’s an eventuality, it’s either next year, next session, or the session after that, do you think that Saranac Lake will allow industry operations? I mean, they were obviously sort of open-armed about your smoke shop, but that’s way different than selling cannabis or growing cannabis. What do you think about that?

Kenny Wright: Boy, I mean, I don’t honestly know, Tim. The Saranac Lake is a very progressive town socially and I would like to think that they would allow the economic stimulus that would come from that, and not just directly from cannabis sales, but all the ancillary businesses, HVAC, electric-

TG Branfalt: Laboratory.

Kenny Wright: Laboratory, all of these things that really surround the industry because science is definitely become an intricate part of the cannabis industry, thankfully. You know what I mean? It’s no longer like in the dark about what a lot of these cannabinoids are, what they’re doing. We’re finding more all the time, and that sort of thing needs to keep progressing. We have Trudeau Institute in Saranac Lake, there’s a couple other research facilities, so I mean, I feel like it would be a relatively natural thing to do.

TG Branfalt: Plus, the tourism.

Kenny Wright: Plus, the tourism… yeah, I mean, absolutely. I mean, the Bed and Breakfast aspect of things.

TG Branfalt: Oh, man.

Kenny Wright: That’s in Colorado, you know what I mean? To me and you, it’s really a no-brainer. You know what I mean? The economic boom that could happen really is unimaginable at a time when we need it.

TG Branfalt: I don’t imagine Lake Placid… I don’t imagine Lake Placid would actually allow-

Kenny Wright: No. I don’t… right. Lake Placid’s a different animal all together. They’re more pinkies in the air. They got the Olympics and holding onto that tight. They’re the super healthy town.

TG Branfalt: Well, there’s no zoning laws here in Bloomingdale so…

Kenny Wright: Right. Well, that’s it. I mean, there’s a lot of communities where there are none. You know what I mean? They’re not going to be able to keep it out regionally I don’t foresee, but at the same time, I don’t know why they would want to stem employment, why they would want to not allow an economic boom in our area. We have been struggling and relying on all of these state grants over the last several years to get our town out of its heyday from the… whatever that was. It’s a tuberculosis town, so that’s early 1900s, that’s a long time ago. All these grants are great and all that, but we need to be able to run on our own. We can only suck so many tax dollars. Our state’s already in the red pretty hard.

TG Branfalt: Corona didn’t help. I mean-

Kenny Wright: Corona didn’t help at all and it’s continuing to not help, so …

TG Branfalt: One of the beautiful things about living in this area during corona was the… say we rolled out the masks, but the fact that we were so struck by this idea, we need our businesses to stay open, so, therefore, we have to wear the masks. Regardless of what you thought about it, it at least enabled the small economic machine that we have here to keep running.

Kenny Wright: Mm-hmm (affirmative). Yeah, I mean… yeah, we opened as soon as we could, as… well, I forget what phase it was, but as soon as we could stop doing appointments, we did because… and people were still taken aback by that. I still have calls now of people like, “Hey, are you open? Can I come into your store,” because, I mean, there’s places that you can’t do that.

TG Branfalt: Yeah.

Kenny Wright: It’s just such a weird time that none of us have ever experienced and we’re just trying to be fluid and go with it, but yeah. I mean, overall masks, people put them on. It’s a very… you’re shopping for five to 10 minutes-

TG Branfalt: Does it concern you as a business owner about the… maybe the security aspect of this because I was just talking to some people the other day. I walk into a store now and I’ll have a hood up, sunglasses on, and a mask on. You can’t tell who I am.

Kenny Wright: Nah. I mean, my… I’m not the safety, security aspect, I’m more worried about the age, identification aspect-

TG Branfalt: Interesting.

Kenny Wright: … I mean, because during the-

TG Branfalt: How are you dealing with that?

Kenny Wright: Well, I mean, I still ID people, you know what I mean, and thankfully, most of my people are continue repeat customers, so I know them. I recognize them. I don’t have to look at their ID every single time I see them. Some people I don’t see all the time, so I do look at their ID more often, but some people I see every day, some people I see every other day. It’s… yeah, it’s challenging, but I mean, it’s not too hard, and a lot of my demographic is obviously over 21. They’re in their 40s or 50s. I have a lot of older folks coming in, which is really, honestly awesome and I love that aspect that I have people that aren’t concerned about social perception of things. It really makes my heart sing.

TG Branfalt: Let me ask you briefly about that, that switch from 18 to 21 that happened. How did that affect your business?

Kenny Wright: I mean, that was definitely a big cut for sure. 18-year-olds obviously-

TG Branfalt: Have a little more disposable income.

Kenny Wright: … like to buy all kinds of stuff. Yeah, you know what I mean, and they’re also breaking stuff. You know what I mean?

TG Branfalt: Yeah.

Kenny Wright: They’re definitely good for business, don’t get me wrong. Back to freedom, Tim, like if I can join the military at 18, I feel like you should be able to buy cigarettes and you should also be able to buy alcohol at 18. You can vote at 18. Until we make all of these things equal and decide when you’re an actual “adult,” there’s going to be those discrepancies and I’m not going to agree with it because it’s freedom. At what point are you old enough to make your own choices? Marketing is marketing. They should teach marketing in grade school as far as I’m concerned with the amount of colors and everything that’s projected onto all of us, psychological warfare. It’s like-

TG Branfalt: My last question for you is what advice do you have for people interested in entering this space, specifically the smoke shop industry?

Kenny Wright: Well, do your research. Figure out what area you’re trying to open up in. Figure out the type of people that live in the area, like is your store even going to be successful in that area because otherwise, you’re just going to be wasting your time and your money and both are incredibly valuable, first off. Second, once you find that, you want to establish a place that you don’t really want to leave. You want to make sure it’s something that’s going to be a long-term thing because I would imagine that’s the type of business you want to set up unless you’re flying by night, in which case I don’t really have much advice because that’s not me.

Yeah, and then it’s all about establishing relationships with artists. There’s so many talented artists out there melting glass and doing really amazing work. Some are, just depending on where you are, location will really dictate the type of product that you can carry. If you’re in the city where there’s obviously a lot more money, you can carry pieces that are thousands of dollars and sell that. Where here, I put a $500 piece, and people are going and doing mental gymnastics to figure out why it cost so much money. I try to convey why, you know what I mean, but at the same time, some things are just hard for me to even grasp because it’s art. You know what I mean?

TG Branfalt: Yeah.

Kenny Wright: It’s art, so if it doesn’t speak to you, then you’re not going to see the value in it. That’s very much how a lot of this industry is. That, and really just customer service. You know what I mean? Providing quality products is going to allow you to not have to do as much problem mitigation with customers because you’re not selling poorer quality products. You know what I mean? Obviously, things are mass produced and in very… like batteries, cart batteries, those things are made thousands… who knows how many are coming off the line, so there’s going to be failures, but most people are very understanding, as long as you are, as long as you’re not the FU, get out of my store, type, people are people. You talk to them like people, they respond like people. It’s all about giving people respect and, yeah, and you’ll go far especially if you’re in a small town. If you’re in a city, you could probably get away with being a little bit of a D-bag, but that’s still your prerogative. It’s not a successful business move.

TG Branfalt: It’s funny how far we’ve come that five years ago you couldn’t walk into your store, and that’s about the time when I stopped running shops, you couldn’t say bong. It was actually… I stopped running shops probably eight years ago, 10 years ago at this point anyway, but you couldn’t say bong and now, that culture’s changes so much that you’re able to not have to be as much of a dick because no one cares if you say bong anymore.

Kenny Wright: Right, yeah. I want to say Ohio set precedent on that establishing “paraphernalia” as art and eliminating the bong term, but bong was an issue in 2006 when John Ashcroft launched Operation Pipe Dreams and everybody that said bong or sold bongs got arrested and jammed up on trumped charges.

TG Branfalt: Put Tommy Chong’s head on a platter they did.

Kenny Wright: Yep, yep. Unfortunately.

TG Branfalt: Thank you-

Kenny Wright: He’s doing great now.

TG Branfalt: Yeah. Thank you for coming on the show, man. We’ve had these similar conversations in the shop, which is why I really wanted to bring them a little bit more public because I ran shops for a very long time and your shop is one of those shops that it reminds me of the stuff that I used to do. With the strange art you’ve got on the walls and your eye for quality products and American-made glass was always the big appeal to me. Why don’t you tell people where they can find out more about your shop and what you guys do over there?

Kenny Wright: Well, I mean, we’re brick and mortar. We don’t do any online sales. Yeah, it’s a dicey market out there. Not trying to touch toes in that, but we’re on 82 Main Street in Saranac Lake, New York. Phone number’s 518-354-5469 and if you’re ever in town, stop by and check us out. We’d love to have you.

TG Branfalt: Cool, man. Again, man, Kenny Wright, he’s the owner of High Peaks Glassworks, an independently owned smoke shop based in Saranac Lake, New York. Dude, thanks so much for coming on the show and I’ll see you when I need papers here in a couple of days for sure.

Kenny Wright: Sounds good, Tim. Thanks for having me, man. Peace.

TG Branfalt: You can find more episodes of the Ganjapreneur.com podcast in the podcast section of Ganjapreneur.com, on Spotify, and in the Apple iTunes Store. On the Ganjapreneur.com website, you’ll find the latest cannabis news and cannabis jobs updated daily, along with transcripts of this podcast. You can also download the Ganjapreneur.com app in iTunes and Google Play. This episode was engineered by Trim Media House. I’ve been your host, TG Branfalt.

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DEA Will Allow Researchers to Cultivate Cannabis

The Drug Enforcement Agency on Thursday published a final rule to make it easier for researchers to cultivate cannabis for research purposes. The plan includes provisions that allow the U.S. to comply with international drug treaties by requiring researchers to acquire cannabis from the DEA rather than from the National Institutes on Drug Abuse.

In a statement to the Wall Street Journal, the DEA said the “unprecedented action serves as a testament to the federal government’s support for scientific and medical research with marijuana and its chemical constituents” and could “ultimately result in the development of additional marijuana-derived medicines” for Food and Drug Administration Approval.

For decades, the federal government has only approved one cultivation site for research cannabis cultivation – the University of Mississippi – which has led to several lawsuits by would-be researchers and complaints about the low-quality end product. Most recently, the DEA, its Acting Administrator Timothy Shea, and outgoing Attorney General William Barr were sued by University of Massachusetts-Amherst researcher Dr. Lyle Craker over the government’s failure to process cannabis research applications.

Under the Obama Administration, the DEA began seeking applications for additional cultivators; but those applications were stalled under the Trump Administration by former Attorney General – and anti-cannabis zealot – Jeff Sessions.

The rule does not allow researchers to obtain cannabis from state-legal producers and dispensaries, citing treaty obligations and public safety concerns. A House bill passed last week to expand cannabis research would allow entities to obtain products from legal markets. This week, the Senate passed its own cannabis research measure which does not include such provisions.

Paul Armentano, deputy director of NORML, told Marijuana Moment that despite the rule change, “Congress needs to enact legislative reforms” because the DEA “has proven itself full of empty promises when it comes to the issue of facilitating clinical cannabis research in the United States.”

The change is expected to be published in the Federal Register today and the DEA says it could start processing applications starting 30 days from publication in the register. Democratic President-Elect Joe Biden is set to take office on January 20.

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Former City Official Pleads Guilty to Bribery, Extortion in Cannabis Licensing Probe

Genoveva Andrade, the third chief of staff to former Fall River, Massachusetts Mayor Jasiel Correia, on Monday pleaded guilty to charges of extortion, bribery, and making false statements in connection with Correia’s scheme to extort cannabis businesses.

Andrade, 49, admitted to conspiring with Correia to extort a cannabusiness for $150,000 in return for a letter of non-opposition from the then-mayor. Under Massachusetts law, non-opposition letters from the heads of local governments are required to obtain a cannabis industry license. According to the Justice Department, after the vendor agreed to pay Correia for the letter, Andrade said to him, “you’re family now.”

Andrade also admitted to conspiring with Correia to extort a Fall River business owner and obtain a variety of benefits, including cash and a Rolex watch valued between $7,500 to $12,000, in exchange for official action and favorable assistance to the business owner.

Andrade also admitted that as chief of staff she kicked back half of her salary, about $23,000, to Correia on a bi-weekly basis. She also kicked back nearly all of the $10,000 city-funded “snow stipend” that was approved by Correia.

The two extortion charges each carry a maximum sentence of 20 years in prison and a $250,000 fine.

Andrade said she made the false statements to federal agents in December 2018 in connection with the corruption investigation into Correia.

Correia is alleged to have generated some $600,000 in the non-opposition letters scheme and made arrangements for future cuts of the companies’ cannabis sales.

A sentencing hearing for Andrade is set for April 27, 2021. Correia is set to go to trial, facing 24 counts, on February 2, 2021.

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Antonio Frazier: How Consumer Safety Helps Destigmatize Cannabis

In any industry, consumer product testing is a key part of maintaining safe and trustworthy operations. While the cannabis industry is no different, there are often (and unfortunately) big differences between the testing labs that conduct consumer safety tests.

In this podcast interview, Antonio talks to our host TG Branfalt about the importance of laboratory accreditation — which is when a laboratory and its offerings are evaluated by a highly qualified third party — and what it means for the cannabis industry. Antonio also shares the story of how CannaSafe became the first lab in the country to link the vitamin E acetate compound to last year’s vape lung disease crisis, his experience as a Black executive in the predominantly white cannabis industry, and more!

Scroll down or visit your favorite podcast listening platform to hear this week’s episode of the Ganjapreneur podcast, or read along with the transcript posted under the media player below.


Listen to the podcast:


Read the transcript:

Commercial: At Ganjapreneur, we have heard from dozens of cannabis business owners who have encountered the issue of cannabias, 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 director. Go to Ganjapreneur.com/businesses to create your profile and start connecting with cannabis entrepreneurs today.

TG Branfalt: Hey there. I’m your host, TG Branfalt, and thank you for listening to the Ganjapreneur.com Podcast, where we try to bring you actionable information and normalize cannabis through the stories of Ganjapreneurs, activists and industry stakeholders. Today, I’m joined by Antonio Frazier. He’s the president of CannaSafe, a California-based ISO-accredited cannabis and hemp testing laboratory, the first cannabis-focused lab in the world to earn the ISO certification. Frazier holds a Bachelor of Science degree from Furman University and a Bachelor’s in materials engineering from Clemson. How are you doing this afternoon, Antonio?

Antonio Frazier: I’m doing well, TG. Thanks for having me. Excited to share some of the story and really get you to prod the information out of my head. I’m familiar with your work, so excited to see where we flow today.

TG Branfalt: Yeah, man. I love testing guys, too, because you guys have this wealth of knowledge based on what you do with chemistry that really excites me. Before we get into all that, man, tell me about yourself. How’d you end up in the cannabis space?

Antonio Frazier: Yeah. As you noted earlier, I’m a materials engineer. My focus is metallurgy, so I was working in aerospace engineering prior to this. I was running an internal compliance lab for a manufacturing facility, dealing with the foundry, heat tree department, planning department. Very technical stuff, but more mechanical. And obviously, when you’re going to war, you want your jet engines not to overheat or to be the most combustible. Yeah, really just nerdy stuff that really wasn’t very human. It really wasn’t very pleasing, it wasn’t very satisfying work.

My old college teammate, Aaron Riley, who’s our CEO, actually got arrested for cannabis early on in school. He was about three years, four years younger than me but left the same year I did, although I graduated and he got arrested. We like to do the Martha Stewart/Snoop Dogg thing. When you see us, we’re like, “Who do you think got arrested? Who do you think is the one?” I guess people that are listening can’t tell, but I’m a 6’5″ black guy, he’s a white guy. It just breaks the unfortunate stigmas that our country built.

Anyway, he was trying to get back into the space. He actually finished his degree at JU down in Florida, got an MBA as well. He was an entrepreneur, 23 or so, become a millionaire flipping cars and real estate, doing all these different things. And I was like, “Whoa,” really impressed with him. But he started reaching out to me like, “Hey, I’m interested in what you’re doing. I hear your lab is ISO-accredited. I’m looking at cannabis. I think I’m hearing that that’s going to be a thing. One other lab I’m talking to keeps talking about the ISO accredited and how important it is, and you do that. Can you help me?”

And I was like, “No, not really. I’m not a chemist. I’m an engineer. I blow things up more than I analyze them, so it’s not really my skillset.” He’s like, “No, I need a business partner to help me make sure one, I’m compliant, and two, to make sure that I’m dealing with the right people. You’ve dealt with this type of chemical background before.” I was like, “I guess that sounds cool. Yeah, I am cool.” He’d be talking me up, not really realizing him being an entrepreneur, he’s selling me on myself. He’s saying some things I’d understand.

Anyway, just over two visits, he visited D.C., where I was at the time with my then girlfriend, now wife. He visited us a few times. Made the trip one time driving a Lamborghini. If you just know Aaron, you just know how appropriate that detail is. Some people would probably be laughing right now. He just convinced us to come out, honestly. We eventually made the trip out to SoCal, and man, the weather just really… Me and my wife were like, “Whoa. What is this? This is really dope.” Opportunity to be a partner in a business that was growing. Right before that time, they came out saying cannabis was going to be the next internet. We were like, “Hey, we don’t want to be those guys that missed on Apple at one point in time, so let’s go out there and do it.” Sorry, long story there, but that’s really how I got out here.

TG Branfalt: And you mentioned you met Riley through football. I want to know about your experiences as a college athlete, specifically dealing with your views on cannabis at that time. As an athlete, were you sidestepping drug tests, or did you abstain?

Antonio Frazier: Good question. That’s something I never really talked about before. Certainly being an athlete on college campuses, it’s not allowed. It’s illegal. It wasn’t on the surface. I think the coaches knew. There was one crowd that everyone knew smoked, then there was the crowd that was around the crowd. I think there was some layers to it all. Obviously, Aaron becoming a weed man at some point was heavily involved with it all.

But yeah, you had code words for what you were doing after practice if you wanted to talk about it, seeing if someone had money to put in on it or no, making sure someone left weights quickly enough to go meet the guy that was going. We just had different code words to make sure that everything got done, cause you couldn’t talk about it.

But for the most part, the time, you don’t really realize it, but if you’re a college athlete and as much as we worked out, as long as you weren’t pretty idiotic, you could pretty much… If you had a day you could get away with a test, not a lot of fat on you, you drink enough water. You obviously can dilute your pee. That’s also a trick. You also cannot dilute in just pee water, because they’ll make you stay and pee again. Yeah, for the most part, everyone was pretty good, but there were a few guys that smoked enough to where they obviously could not, no matter what they did. They were in trouble. I actually think I got away with it, because I was the nerdy black kid. So it only happened like twice, maybe.

TG Branfalt: Really?

Antonio Frazier: Yeah. And then once I started going to Clemson, especially, because I actually took classes at Clemson when I played at Furman. I think by me not being enrolled in Furman, maybe I never was on their radar, because my last three years, I got none. I was pretty lucky there. I don’t know if they ever noticed that or not, but I assume it’s because I wasn’t enrolled at Furman at the time, so the academia, so I didn’t get put on their list of students to get tested. And I wasn’t going to ask the question, either, so I never understood why. But my last three years, I was drug test-free, so quite lucky there.

TG Branfalt: Being an athlete, do you still know other people who are maybe not in organized athletics, but are still doing athletic things that are relying on CBD?

Antonio Frazier: Oh, man. Absolutely. I don’t think I know people. It’s becoming a large segment of the people. The question that we get as a business, people are looking for safe products, because a lot of athletes are more concerned with what’s going in their body. Certainly, topicals are definitely a… Even myself, I’m a huge topical user. I wouldn’t call myself an athlete anymore, though certainly, I have embraced that. Three kids in, I certainly don’t take as much pride probably as I used to. I’m not sure.

But anyway, most certainly, I’ve seen that crowd ask more… They’re becoming influencers. Gronkowski has a CBD line. I think there’s a woman president of the NBA Players Union. She’s invested in a CBD company. The NHL is very open about it. I think the UFC even has some kind of CBD or Cannabinoid Center that they’re doing stuff with. Most certainly looking to get involved with all these same more athletic background, but we certainly see it as an opportunity. We deal with athletes already. We definitely have some of that. They’re curious about it. I think a lot of them look for brands, though, so everybody rather go the product consumer side. But a lot of them are starting to see the safety angle of it.

Honestly, if anyone’s listening, you can come on and knock on our door, and we’re looking for partnerships in different ways to promote this athletic, this health and safety-type lifestyle of what we do, because we want to de-stigmatize. You guys said normalizing in the intro, but we’re all about de-stigmatizing, because let’s keep it real. It’s the moms that are using this stuff, too. A lot of these legal sales aren’t the 20 to 25-year-olds, that they don’t give a shit about it to test it, nor can they afford the taxes for it all. A lot of the people supporting the legal market aren’t necessarily your traditional stoner type, because a lot of those people aren’t really participating in the legal market because of the expensiveness.

TG Branfalt: And to your point, the closest dispensaries to me are in Massachusetts. And when I go there, it’s predominantly folks my mother’s age.

Antonio Frazier: Yep. People don’t realize that.

TG Branfalt: Yeah. It’s really interesting. Let’s talk about the importance of testing beyond safety and compliance. One of the things that I really like about the legal market is the testing aspect, because I like knowing about the terpenes and the cannabinoid makeups. And I think that information helps us break that indica-sativa paradigm. Is that something that has become important to your work as well?

Antonio Frazier: Yeah. Obviously, the sativa versus indica is one of those things where eventually it’s going to go away. There’re so many hybrids. People realize it’s not as important as it once was. Obviously, some strains are heavier than others, but you can get the characteristics in both types of plant. But with the terpenes, there’s things that really do have an impact. The entourage effects from terpenes are clearly determined in your experience, so that information is clearly becoming to influence patients and users, and that’s what testing can do for you.

And safety is a big deal, because quite frankly, a lot of these people that are sick, they have vulnerable immune systems. And obviously, not everyone’s intending to do something dirty, but a lot of times, if you cut your plant down too soon, it’s a little too wet. You may dry it, some people may, but not everyone will, and if you package it too soon, it will grow microbials while it’s in the packaging. While you may have packaged it up, it looks good, two months later on somebody’s shelf, it could be growing mold. Colorado went through a bunch of recalls due to that, because they weren’t doing the testing the proper way, but they put better rules in now.

Another thing to your point, if you’re in a state that doesn’t have legal access, you don’t even understand some of this stuff, so you don’t even know what matters. Just because of your background and your mission, you’re obviously of what’s separating the legal versus the illicit market, and obviously, safety and testing is that barrier. And price is the unfortunate difference, too, that makes people lean towards the traditional market, but that testing is so important because of safety, but also to help us understand how to literally dose this, which is beyond important to the medicinal effect, because you can’t just flower… Unfortunately, the botanical drug is not the best format for this medicine, due to the fact that it’s not really dose-able.

As much as I enjoy it, I’m a flower guy, I will forever be a smoker, no matter how much people tell me it’s bad for my lungs, but I’ll keep it real. Some people are sick that shouldn’t be smoking. They shouldn’t be smoking flower. They should be smoking vape devices, which is much cleaner aerosol. It’s just about that education. The R&D part of testing, I think, is even more important to teach people how the mechanisms… And what’s important, I think, is even more. We saw with the vape crisis last year, people think, “Oh my god, these carts are $20 cheaper, and it’s all the same. What are you saying, my man?” And you get you what you pay for, and unfortunately, it cost some people their lives and some people some really down times, some really bad times in the hospital because of such.

TG Branfalt: We’re going to talk about… Your lab played a role in discovering this link between vitamin E acetate and the vape-related pulmonary illness. Before we get into that, I want to just make listeners aware of what ISO accreditation is and what it takes to get that accreditation.

Antonio Frazier: Yeah, let’s definitely back that up there, because we mentioned it earlier but didn’t go into it. It’s ISO 17025, which is the international spec that dictates how laboratories should operate. It’s not an end-all, be-all, but what it does, it says that this lab has gone under an audit, an accreditation process through a third party that has determined that not only do they have SOPs and instructions for how to do the work, but it’s traceable, so someone can come behind and see what happened. And then third, there’s some level of validation done to your method. They come in and make sure your methods can produce data to a certain level of accuracy and precision.

Obviously, the tricky part is, you can get accredited for cannabis, testing the plant, but testing a plant versus testing a… What is something crazy here? Or a drink or an edible is very different, so therefore, the ISO accreditation basically needs to be understood even more in depth to account for all the different matrices and things that we see. It’s just the beginning. Someone can be ISO for potency, and then they claim, “I’m ISO-accredited,” but they can’t test for heavy metals, and they don’t do it very well. You’re seeing it in Florida right now. A lot of these labs have been ISO-accredited for some time, but not for all the trickier tests that we’re used to doing, and then they struggle quite heavily with doing so, and they’re actually not able to do those tests the way that they claim they can.

TG Branfalt: Tell me about that role that your lab played in discovering that link between vitamin E acetate and vape-related pulmonary illness.

Antonio Frazier: With Vape Gate, the big thing for us is that, us being a lab obviously testing cannabis already, it was honestly, being in L.A., the access to the illicit market. We literally had illicit delivery service bring us these dirty carts, so it was pretty simple to have it. And we also test more than, of course, anyone else in the industry. We have all the legal carts in the world, and then we have access to the illicit carts pretty simply, which is where the CDC may not get all the carts. We got 20 carts delivered, where they may get the in use of one cart that a parent submitted after their child got sick, so they don’t really get enough material to test.

Therefore, just being in the industry, because let’s keep it real, it wasn’t that much of a secret. It wasn’t that much of a secret, so the industry knew exactly what was happening, and we just had to figure out how to get the data available for someone to take note of it. That’s why we use the ISO accreditation. We got ISO-accredited to test for vitamin E acetate to prove that we were doing it properly, and that obviously had been on NBC, because not only had we done the analysis, the data was something you could stand on. It wasn’t an opinion. It was something that we had actual physical carts, we compared the difference between all the things in legal versus the illicit, and it was clear vitamin E acetate was in there for more than 10% to 30%, and that stuff is not good for your lungs whatsoever.

Therefore, we were able to make a pretty quick determination, and CDC obviously confirmed it 20 or 30 days later, so it’s pretty cool to put something out and then the CDC agrees with you. It really did change the idea of a cannabis lab to being a forefront of consumer safety. We got billions of impressions from that, from the interview. It really did take us to the next level, from just a lab to a brand. And fighting for consumer safety, not making products. Totally different than most people are used to seeing. That’s what happened.

TG Branfalt: As a self-described nerd, how fascinating was this for you to participate in this?

Antonio Frazier: Oh my god, it was thrilling. It’s why you do it. It was the rush, it was the news, it was getting a new assay online, making sure it was validated. It was all those things. We had data, but then we decided to hold off on it, because we hadn’t validated our instrument yet. We were saying, “Well, let’s not put it out yet.” It was that concern of would someone else figure it out, because the word was getting around what we were doing. But just being able to put it together and having an awesome media department also being able to put a report out.

And honestly, we had 120 legal brands submit samples to us during that time, too. The industry just stepped up, and obviously it was good for us and our pockets as well, for getting to step up and want to be a part of this and prove that their carts did not have this in it. Brands that don’t test with us normally just suddenly started submitting samples, because they wanted to make sure they were on the right end of this. It was really a good movement. It was a feel-good. It was science, it was industry, it was community, it was health, it was patients. It just checked every single box of why you wake up, and then you can look at your bank account and see it grow, and you’re like, “Wow!” One of those euphoric moments of, “Holy shit, we just helped save legal cannabis.”

They were talking about banning vapes, so all these things were going on that we were able to shift the whole conversation nationwide from cannabis to illicit cannabis, and separate ourselves from e-cigarettes and all those things with the kids and the flavorings, because we didn’t have flavorings. That’s another thing people don’t realize, that we also determined that the flavoring was an issue as well.

TG Branfalt: You guys are celebrating National Expungement Week over there, so I want to talk to you about some social equity issues. I’ve had several different conversations where people have their own take on social equity and what that means. I just want you to tell me about the conversations you’ve had about social equity in this space, and whether or not there’s a consensus about whether or not states need to legislate social equity programs, or should that fall to the companies just having to do better?

Antonio Frazier: Oh, man. That’s a great question. To answer the direct last one, I think the answer is both. I think states have to mandate it. Unfortunately, people don’t normally do good work unless they’re made to, unless there’s some kind of tax incentive or something, so you have to make it to people’s advantage. I think that’s just business. I’m not going to declare business should lose money to help someone else. It’s never been a principle, so why make cannabis companies do something no one else ever has?

TG Branfalt: Interesting.

Antonio Frazier: And then two, I think some companies should do better, though. Honestly, we’re here off the backs of a lot of black and brown communities who’ve been pretty effed up generationally by the war on drugs. Cannabis is one of those drugs where the use is just as equal no matter what you look like, though the pleasure community is well ingrained, whether it be through a guy on a corner or whether it be through the mom with a G-Wagon. The cannabis is moving regardless, so I think cannabis companies therefore should be doing more to ensure these cannabis-related crimes, these possession… Even selling. No one should be in jail for weed, and now we got to make sure that the residual effects… That’s what people don’t realize. Just because you’re out of jail doesn’t mean you’re out of the clear, and there’re so many residual barriers that I’ve learned about from my personal family being afflicted, and now through the work the Social Impact Center does in L.A. Just learning how many other “F-yous” there are down the road that makes it so impossible to reenter.

I’m actually working with organizations. With one reentry program, just met their leader. She was formerly incarcerated as well, got her Bachelor’s and Master’s afterwards, kept her daughter, all these different things. But she was like, “I had so much support. You have no idea how many times I wanted to give up and how easy it was just to go back to the old life and just say screw it. If you don’t have that support, you most certainly will rescind,” as they call it or whatever. She’s like, “It’s not really an option. You don’t have a choice.” When you hear it from the actual stories, you just feel obligated to make sure that they have an opportunity. And what I know is if community supports you, you’re really going to be successful.

For us, it’s just about getting cannabis safe in the community, and really changing something as opposed to writing a check to an organization and smiling. How do we actually change lives? I’m not saying don’t write checks. Not insulting anyone who does, but I just don’t think it’s as needle-moving or as powerful as it is when you meet these people and you give them the opportunity to go to work.

Right now, one of the big issues is that the only opportunity for social equity is ownership, and not everyone’s an entrepreneur. Shit, even people that got arrested for drugs, maybe if they were a better entrepreneur, they might never have had to do it. This stupid catch-22 is, why make someone run a business when not everyone needs to run a business? Why not give their community opportunities to create centers, create these different things to allow them to overcome the damages? Invest in schools, use the taxes from this community. If you’re going to tax us so much, at least give it to the people that have been screwed over. Don’t just divert it to some other fund or give it to the police. It’s all screwed up. I think people would even more attracted to purchase legally if they knew the taxes were going somewhere besides just up somebody’s whatever. Yeah.

TG Branfalt: That’s a very interesting proposal. Almost if you market it that way, X amount of purchase from this product goes directly to fight-

Antonio Frazier: Simple. It’s simple. It’s not that crazy of an idea, and it’s not that hard to do. I’ll never forget when the New York City legislature… Actually, the Democrats, I forget the black lady’s name, but she said, “Listen, I’m all about cannabis, but I’m not voting for this if it doesn’t repair the communities. It may stop the ballot measure, because it wasn’t well structured for equity.” I was like, “Kudos to New York City.” And she’s like, “Yeah, I know we need to do this, but not the wrong way.” Kudos. I know you can call it politics or whatever, but it’s real. It was really powerful to hear them say that and say, “No, we’re not going to do this because it’s going to make us money. We’re going to make sure the money goes where it should.” New York’s one of those cities where it’s pretty clear to show what’s been done, how it works, and the gentrification of New York City in certain parts of it now. It’s just not right for people to have missed out on… I don’t know. It’s just not right.

TG Branfalt: Brooklyn’s no fun anymore.

Antonio Frazier: Let’s just keep it real. Now that these people are in this place, in this hole that they built, the Brooklyn that we all adored is now not… It’s just weird, man. And I started seeing some of it, because in D.C., would train to New York all the time for weekends. And man, to just really go into the places like you said, it went from being a secret people were infiltrating, and now they’re just there. You don’t just see those people anymore. It’s just not the same. And to your point, they were tormented in that same block for decades, and now someone else is going to get to put a legal stone. It’s just not right.

TG Branfalt: We could talk for hours about how gentrification has ripped out the soul of basically every great American city. I use “great American” loosely. Anyway, would you mind talking to me about your experience as a black man in a high-level position in the cannabis industry?

Antonio Frazier: Oh, man. Well, that experience is every day. CannaSafe, I guess, it’s interesting, I’ve always been a black man, so I’ve always been dealing with different ways of being seen in my community, whether it be as an athlete where it’s okay, to engineering school where it’s like, “What are you doing here?” To my first management job of, “How are you my boss,” kind of deal. I’ve definitely felt all flavors of it. I recently called myself an exec, simply because one, the title, but two, CannaSafe’s also not recognized as someone, where you start judging and you start having opinions about someone you haven’t met. I’m definitely dealing with a lot of that right now, and it’s certainly new.

But I’ll say one of the most important things is that I think it gives me a very genuine connection to the community, which is why some of the stuff that we’ve done, we’re the only cannabis company that’s hosting one of these six clinics throughout the city of L.A. that Felicia, the organization’s putting on. We’re the only one that few offered. The other people had churches. Their community centers are really pillars of their communities, and to me, that’s something no one’s been able to accomplish before.

I think a lot of that is simply because the execs in the companies of my size don’t want me to look like me, and they may not respect the same way, they may not approach the community the right way, and they don’t get inside the community. The community doesn’t want them there, because it’s not genuine. I think I really appreciate the fact that the community has accepted my company, although we’re not L.A. guys, which is a very real thing. If you’re not from L.A., you don’t normally get to navigate or move around L.A. It’s kind of like New York City.

And then beyond that, though, I’m really curious to see how the business is treated. Luckily, we do things right so people respect our brand, but I think personally, we’re going to start seeing, as I sit in bigger chairs and bigger meetings, and I’m already a part of these board chairs, I’m going to start seeing how it really gets done. I don’t really know quite yet. I know it’s not going to be clean. I know it’s going to be a challenge. I’m not declaring the whole world racist or anything. I’m just here realizing that shit’s different for me when I walk into a room with someone else.

A lot of times, in this industry… I’ll say this for this industry. I’ve felt it less than I ever have in my life, and I’m accepted more than I ever have been. But I would be an idiot to say that it’s not a thing. I would be nothing but an Uncle Tom, to be quite frank. I know it’s a strong word, but I feel like I would be if I didn’t say I feel it, but I don’t think this community is outright trying to make it a thing. I think when you get the traditional MBA cannabis executives that are from other industries, they make it a thing, but the industry itself, when you’re going to meet the OGs, when you’re up in Santa Rosa, when you’re in L.A., South Central. And nothing but love when you see the old people. When you’re in Oakland, nothing but love. Nothing but love in the Bay. It just depends on who you’re talking to.

I don’t know. That was a broad answer, but mainly, what I’m trying to say is that you have cannabis who embraces it, and then you have this new corporate cannabis who is a little more traditional. And clearly, that’s when I start feeling things like, “Oh, I got to start dancing and sliding, and I got to start doing those things to deescalate my presence.”

TG Branfalt: It’s crazy to me, because you have… You went to Clemson. You know what I’m saying? It’s regarded as one of the best schools in the country. For me, as somebody who does teach and who recognizes the value, it makes me personally just pissed off. This guy’s got the education to be where he is.

Antonio Frazier: I think that’s when people talk like… When I talk about privilege, that’s the things I talk about. It’s like, “Hey, I want to check the box that some people check a box and it just takes them everywhere.” “Oh, this guy went to Clemson,” like you said. But if I check that box, they find a new way to discredit. It’s not as simple. I don’t get the same benefit.

When you talk about the pressure and the burden of racism or stigmas, it’s those residuals. It’s like expungement, with the things where you work your ass off. You become a doctor, you do these things, and suddenly, you don’t get in the country club. Suddenly, you don’t get promoted as quickly or you find out someone doing the same job makes 20% more than you. And you’re like, “Well, how did that happen?” That really defeats people. That’s what makes people really give in and just slide back, as society wants to do “Black people, well, they’re more violent.” When you focus on crime in certain communities, that matters socioeconomically. Doesn’t matter what color you are. But the fact that there’s more black people in that situation, clearly, you’re going to get more violent statistics about interracial crime. When the numbers are rigged, as a data scientist, which I am now becoming, data can tell whatever numbers you want it to. Just depends on how you want to spin it. Those are the things that create these stigmas and stereotypes that we’re trying to normalize, like you said, or de-stigmatize and bring truth to it.

And you’re seeing our generation… Especially the younger kids, I don’t know what you even call them, but the TikTok kids are so unapologetic to go like, “F you, Granddad.” It’s kind of inspiring, because it’s who we thought we were. Then suddenly we go, “Oh, shit, they’re disrupting it like, ‘Go ahead.'” They’re just not about the BS, because they have friends that grew up in diverse communities. They’re like, “This is BS, Grandpa. What are you talking about? That’s my boy, and shut the fuck up.” When I was that age, just being mid-30s here, it wasn’t… I had friends like that, but it wasn’t the norm. It was still cool to be racist when I was coming up in the South, where I think now, you get some pockets of it and Trump is definitely exciting some of that, but as far as the younger generation, you got to get isolated to really be proud. You get the online BS, of course, these days. But yeah, I think things are changing. Not sure what the question was, or how we got where we were.

TG Branfalt: What I want to ask is, why, in your opinion, you being a black executive of the only testing lab with this ISO accreditation… From your perspective, why are there so few high-level cannabis industry executives that are minorities, people of color? There was a report that came out a few months ago from Maryland that said that something like 9% of Maryland’s medical cannabis industry was owned by black people, and then just another less than 1% of that was black women. What’s going on here, in your opinion?

Antonio Frazier: Yeah. I guess I think it mimics the rest of this country. Like you said lightly, you used the term great earlier. I think it’s the reality that we’re realizing some of the things that made us great were based on all these things that we don’t really stand for, we don’t really like. I think one, it’s good that we’re talking about those stacks. Now, we’re trying to say, “Hey, this doesn’t make a lot of sense.” Especially when we… I know Maryland is blickity-black. There’s a lot of black people in Maryland. D.C. is chocolate city. This is not one of those places where there’s not a lot of us there, so it doesn’t make a lot of sense when you really… Especially the affluent. That’s something I realize in Maryland. You got a lot of affluent black people in Maryland, a lot of people living in these nice homes and big jobs.

Anyway, that being said, I think it’s just seeing the reflection of the corporatization. I think those numbers are probably better than other industries, most likely. I’m sure they’re probably a lot better than people-

TG Branfalt: Banking.

Antonio Frazier: … who own water treatment or banking or real estate and such. Now, all these other industry people have made lots of money and won’t necessarily promote. But I think on top of that, I think there’s a big push not to encourage the equity, not to encourage people to enter, because there’s a big gap to close right now. This is the generational wealth opportunity, where in about two or three years, it’s going to be gobbled up. You’re not going to be able to… You maybe can get a business and a shop and be someone owning a convenience store and make some money, but you’re not going to be… There’s not going to be a lot of billionaires made in cannabis after a year or two, if that many come out of this to begin with, because the big companies are already gobbling them up. Not going to get that many new billionaires. You’re going to get a lot of billionaires getting bigger in there or whatever, but you’re not going to get a lot of true cannabis billionaires due to the fact of what you’re seeing.

Even you’re seeing the tech gobbled up already. You’re seeing these big tech companies buying up all the tech software. That will be really valuable once it’s legalized with all the data. They’ve already cashed out. That shows you that the people in cannabis probably won’t be the ones becoming the really rich because of such. And that’s why I think the equity programs suck, because if you get a lot of people right now that are really earning and getting their foot in, they have to get paid, and I think that’s something that this country isn’t a big fan of. It just makes too much sense when you break it down, that the opportunity is now. Some people are doing well, but if you have a whole community stand up and start cycling the money through its own community, that becomes a real problem. You’re talking about real deep-rooted political… You begin it with cannabis, but you’re actually going to fuck a lot of stuff up. It’s hard teaching people that.

I hate to say it, and I hope it becomes what we do, but if you start getting people doing stuff like that, then all of a sudden, you’re going to disrupt a lot of industries, a lot of different things. If people stop being consumers and start being owners, that’s what people don’t realize. The black and brown community is the biggest consumer power in the entire country, because we don’t own a lot of things, so everything that we make, we have to buy, we have to give someone something. That’s why you saw, as crazy as it was, some of the things like Jordans and things went up in the pandemic, some of the luxury retail, because people had money. They were getting checks, and they spent it on the things that they’re used to spending it on.

I don’t know if you’ve noticed, but I’ve noticed a lot of major retailers are going super urban right now. Even fricking Travis Scott Happy Meal, whatever the hell that shit is, at McDonald’s now. It’s nuts, because they realize, “Hey, the community that’s spending money are these hype beast teens and the black people, so we got to make sure we give them something they want.” I’m seeing a lot of major brands really push towards this, and maybe it’s good, because it could be equitable. People are getting opportunities to be brand representation they never were before. Whether it be a reaction to justice or whatever it may be, it’s an opportunity for us that wasn’t there before.

You got to be thankful for even the things that are there, although they may not be based in the right things, but it’s tilting somewhat how we see consumers and marketing and who can quote-unquote vet a product. There was a very clean box of who would you put in front somebody before, where now, it’s getting a little bit more risky, quote-unquote. But that’s just what America looks like, so why not? We should have a gay person, a black person, an Arabic person. That’s who America is. We shouldn’t be scared to put these other people in front of the camera to claim your product. It shouldn’t always have to be a white American to sell America, to be Americana, quote-unquote, what Americana is. Black, brown, purple, red, whatever. That is Americana.

TG Branfalt: Do you think that it’s harder for black people who may want to get into the touching-the-plant side of it, the cultivation, as opposed to testing or other ancillary industries?

Antonio Frazier: Harder? I’m not really sure how to say it, because regardless of it all, it’s expensive, because all the rules, regulations, paper work. It’s really difficult, because if you don’t have the money for a lawyer, compliance, you’re not going to be legal enough. And if you’re in the wrong neighborhood, they’re going to look at you harder. I think regardless, coming into cannabis is more difficult than any other business. No access to banking, you can’t get loans, you can’t run payroll. All these expenses. Think about some of the original assistance from COVID, you had to have a bank account and running payroll in order to get it. Mostly, small business owners don’t run payroll. If you’re in cannabis, you can’t get banking. You’re triple-screwed. Not only are you down because everybody’s down, but then you can’t get relief.

I think it’s more about… That’s why I said the city and the states have to be involved, because you have to provide structure to protect them. You have to give them banking. If you declared someone an equity business owner and knowing the challenges of it, you should create a program that includes banking, resources, education, whatever it may be. You know they’re not going to be able to actually accomplish this stuff. They aren’t going to raise $20 million to be able to afford a whole team. No one’s going to give them money.

“What business experience do you have?” “Oh, I just got out of jail.” “Oh.” Come on. It’s a trap, which is why they call it the trap. That’s why you get rappers. There’s constantly some type of trap door to make it impossible for someone to actually rise above and stand tall, and that’s what we’re talking about, and that’s why we’re really trying to find different ways to ensure that those things don’t become traps.

TG Branfalt: I really appreciate how honest you’ve been throughout this conversation, man. I’m a white guy who lives in the middle of the woods, who has no interest in opening a cannabis business. To get your insight from your experience, who’s living it, I think it’s one of the most important conversations I’ve had on this podcast in a very long time.

Antonio Frazier: Thank you, yeah.

TG Branfalt: What I want to ask, just to close up, is what advice do you have for entrepreneurs who are interested in entering the lab side of the industry specifically?

Antonio Frazier: Oh, man. Don’t do it. Simple as that. I wouldn’t do this crap again right now. Knowing the things I’m dealing with and the unsavory practices that I have to compete with, it’s just too much to overcome. We’re seeing a bunch of labs right now actually go out of business because they can’t compete with some of the other people who are raising money or just doing dirty stuff.

What I’ll say to anybody, I know we’ve focused on black and brown, but I think the problem is really there for all colors. Obviously, black and brown people always have it a little bigger, but all people as well. I know a bunch of white people as well. I’ve sat in these meetings in city council so I could understand that stuff, and there were plenty of white people there as well that were literally just saying, “I can’t get a bank either. I have felonies, and every time I go somewhere, my felonies follow me as well.” Certainly, they become quote-unquote a minority. They feel what it’s like to be held against.

My biggest advice to anybody is just to go to your city council and demand these programs, because there’s opportunities, when they’re first being established, to get this stuff enforced and demanded. And quite frankly, they try to shuffle a lot of this stuff through. They’re quiet about it, simply because they don’t want you to think about it. They want to sing the praises of cannabis, that it’s coming, so you don’t worry about how it’s coming. You really have to be involved with the how, that you have to activate.

I think about the Black Panther Party. No matter how you may view them, I think about all these movements. What do you think of the Klan? Quite frankly, you have to be political. This country is so political, you have to get involved with exactly what is happening on the lawmaking side. And quite frankly, you now have an advantage in 2020 where one, black people can vote. You have access to polls. Obviously, there’s been some motives and things going around to discourage people to be able to vote, whether it be mail-in or whatnot. You have to realize that putting that effort in because of the power associated with voting. I know voting is a bit… I know the Electoral College is screwed up, I totally get it. I know it’s not the end-all, be-all to all of our problems. I’m not claiming voting is going to solve everything. I’m not one of those people either. But it’s a starting point.

Literally, from affecting the rules in L.A. to Sacramento in the DCC, I’ve learned that if you talk to them and you make sense, they have to listen. Hell, you elect them. You’re so powerful. We don’t get told how powerful we are. It’s interesting, going to Furman, the liberal arts school I went to, I remember hearing these kids being like, “Hey, you work for me!” And I was like, “Damn, that sounds like an asshole.” But I get he’s been taught his whole life that, “No, I put you here.” And it’s true. And as dirty as it sounds when it comes from the kid in Sperrys and a fricking Columbia fishing shirt, it’s true. We made fun of those quote-unquote Chads, but it’s true, though. They do work for you, and you need to put them to work and make sure that they’re doing the things that you want them to, and that they have to hear you.

You should write letters, too. We do a lot of that here as well. I have plenty of letter correspondents from the senators and whatnot that I’ve written to like, “Hey, this is a problem in your community. What are you going to do about it?” And sometimes, it’s not the best answer, but you get an idea where they’re at, and you can go see them the next time and follow up on it. Make them have a conversation. A lot of people don’t realize that you can drive a conversation through your local representatives, and local government is how you make change, also. The election, presidential Electoral College, that’s a pretty daunting task there, but your local election, you can make some serious waves.

As a Harvey Milk in San Fran for cannabis in general, the history of Brownie Mary and what’s happened in San Fran doing the Compassion Act. AIDS got us here. What blows my mind is that if it wasn’t for compassion in San Fran and NorCal and some of the AIDS compassion movement, cannabis probably would still not be legal. They’d probably find ways to make it legal, but the people that came together to say, “No, we need this,” made it the way that it was. That’s what people don’t realize, that history, all those things that have happened.

And I do want to make sure I clarify that I was not comparing the Black Panther and the Klan whatsoever. It’s on my mind right now. I know I mentioned them both at the same time, but only in the reflection of the political engagement required to actually get people’s attention. Sitting at home and tweeting about it isn’t going to get it done, so you’re going to have to eventually get up and go to the polls or go to your city council and make yourself heard.

TG Branfalt: You are a fascinating human being. I want to hang out with you. Before we wrap up here, I just want to ask briefly, did you expect to become this activist by coming into this industry?

Antonio Frazier: Absolutely not, man. This is honestly… And I’m also thankful that Aaron allows me to focus on that in the job, because he could easily have me focused on making more money, laboratory work, and whatnot, but no. This role is really what we realize is necessary to make change. I’m the president now, simply because I’m not operating. We had to find a title and things that make sense for what it is. Aaron said, “No, I want you to be an ambassador for the company. I want the president to be an ambassador for what we stand for, I want you to be in the community, and people to understand this is what CannaSafe is and cares about.”

It’s been this super encouraging or exciting benefit to this role, is that I get to suddenly affect people. That’s where I mentioned with the aerospace that was built to kill, but it’s true. I’m building fighter jets. We’re not shuffling aid over our fighter jets. It’s one of those builds where you realize what you’re really contributing, what energy you’re really putting out there. And when you can check it and say, “Oh, shit. Now, I’m giving a kid CBD oil, I’m giving someone’s grandmother access to legal medicine.” I think that is what makes me speak the way I do, understand the nation, the world the way I do, simply because I have to figure out how to move the needle.

Talking about it, running a business isn’t going to get it done, giving a check to a community isn’t going to get it done, so I’ve had to dig into how do you actually make change. Forcing my mother, before she passed, who was this huge activist — she grew up in Birmingham, Alabama in the 60s so clearly understood community activism and always reminded me of different things of how to make change. And I was involved with the community. I was a nerdy kid in a little student government thing, because she wanted me to understand how to make things…

I didn’t really get it. I didn’t use it, I didn’t do anything, unfortunately, with it in college. But now, I’m like, “Oh, duh.” Now, let’s just use the things that, fortunately, I had someone in my father and mother put these things into me. I’ve not used them before in the way they wanted me to, but now I am in a position of being a business owner and president, I’m going to use them now. Maybe better late than never. That’s the idea. Whatever. I was a college athlete, frat boy, so I had my fun. I wasn’t doing all the work my whole life, but now, I’m putting time in now. Trying to put time in.

TG Branfalt: And where can people find out more about you and about CannaSafe? Give us the social media and all that.

Antonio Frazier: Yeah, let’s do it. Www.csalabs.com for all your testing and education, all of our partners. We have a Physician’s Corner as well, so we’re not just about business. We also have real doctors giving you real opinions about how you can dose yourself.

Check us on Instagram. We are officially blue check-verified, one of the few cannabis businesses out there with the blue check. Super proud of that, super proud of being a community beacon on there. You can also find us on LinkedIn and everywhere, the Ganjapreneur, all these other good people doing good work. If people are doing good work, please connect us, and we’ll try to partner there. Everywhere that’s tied in. I would suggest Instagram, website, and all the good people out there.

I’m super excited about this. Hope it turns out well. I know I blab a lot. Hope I didn’t get too preachy. I am a Southern boy. I grew up in church, so excuse me if I ever get a little bit lengthy like that. But that’s just how I was taught to communicate, so I try to use some of that.

TG Branfalt: This has been a pleasure, man. This has been a pleasure. That’s Antonio Frazier. He’s the president of CannaSafe, a California-based ISO-accredited cannabis and hemp testing lab. Antonio, man, thanks so much. We could go on, and I would absolutely love to, but we unfortunately are out of time.

You can find more episodes of the Ganjapreneur.com Podcast in the podcast section at Ganjapreneur.com, on Spotify, and in the Apple iTunes store. On the Ganjapreneur.com website, you’ll find the latest cannabis news and cannabis jobs updated daily, along with transcripts of this podcast. You can also download the Ganjapreneur.com app in iTunes and Google Play and on Spotify. I think I already mentioned that. Anyway, this episode was engineered by Trim Media House. I’ve been your host, TG Branfalt.

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U.S. House Approves Cannabis Research Bill

The U.S. House of Representatives on Wednesday approved a bill to make it easier for cannabis research in states where it is legal, Politico reports.

The measure would amend the Controlled Substances Act to create a structure for, and remove limitations on, cannabis research. The bill directs The Department of Health and Human Services and Department of Justice to create a licensing program for additional federal cannabis producers. Currently, the federal government only allows the University of Mississippi to grow cannabis for research purposes. Once licensed, researchers would be allowed to submit their research to the Food and Drug Administration.

Additionally, the bill would speed up the wait times for cannabis research applications and reduce some regulations that researchers face when trying to get federal approval to study cannabis.

Last week, a lawsuit was filed on behalf of Dr. Lyle Craker, of the University of Massachusetts – Amherst, against the Drug Enforcement Administration, U.S. Attorney General William Barr, and Acting DEA Administrator Timothy Shea over the federal government’s failure to process cannabis research applications.

Dr. Sue Sisley, a cannabis researcher at Arizona’s Scottsdale Research Institute, is also suing the agency over its cannabis research policies.

The DEA said in March that it would issue new licenses for cannabis research after announcing plans to allow more cultivators in 2016. In 2019, then-Acting DEA Administrator Uttam Dhillon said that the DEA supports “additional research into marijuana and its components [and] believe registering more growers will result in researchers having access to a wider variety for study.” However, the DEA has still not issued any additional licenses.

In July, the House approved a highway infrastructure bill that included an amendment to give researchers a pathway to study cannabis products sourced from state-legal dispensaries; however, that language was removed in the Senate version.

Last week the chamber approved the MORE Act, which would end federal cannabis prohibition. The measure has an uphill battle in the Senate, which is currently controlled by Republicans. However, control of the Senate will be determined in two runoffs in Georgia next month.

The research bill was sponsored by Reps. Earl Blumenauer (D-Ore.) and Andy Harris (R-Md.) and received bi-partisan support in a voice vote.

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DEA Sued for Not Processing Cannabis Research Cultivator Applications

Dr. Lyle Craker, of the University of Massachusetts – Amherst, is suing the Drug Enforcement Administration, U.S. Attorney General William Barr, and Acting DEA Administrator Timothy Shea over the federal government’s failure to process cannabis research applications.

The Multidisciplinary Association for Psychedelic Studies (MAPS) says the administration of President Donald Trump and the DEA have “failed to process more than 30 outstanding license applications for over four years despite administrative guidance; the DEA’s announced plans; and the support of scientists, senators,” and the National Institutes on Drug Abuse. Craker is seeking federal approval to cultivate cannabis “to support safe and effective cannabis research,” according to the lawsuit.

Rick Doblin, Ph.D., founder and executive director of MAPS, suggested that had Craker’s initial application in 2001 “been processed appropriately, marijuana medicines would now be available through pharmacies, regardless of state law, with the strict safety protocols and dosing regularity people with compromised immune systems and serious illnesses need.”

“It’s hard to imagine the scope of suffering that people have had to endure because politics and fear override science for prohibition-minded officials like the Attorney General.” – Doblin in a press release

The lawsuit notes that Craker and MAPS had hoped to bring cannabis-based medicines to market under a nonprofit pharmaceutical model.

The plaintiffs also allege that the Trump Administration “secretly sabotaged” the federal Growers Program through a secret Office of Legal Counsel Memorandum.

“Rather than disclosing the shutdown or delays to the public or the applicants or their supporters in Congress – and rather than denying the applications for registration on the basis of the OLC Memorandum to permit judicial review – [Department of Justice] and DEA disclosed nothing and simply sat on the pending applications with no agency action or explanation,” the lawsuit says.

Upon approval of licenses, MAPS said, “it is anticipated that clinical trials to assess the safety and efficacy of cannabis will be initiated for dozens of conditions.” Craker and MAPS plan to develop cannabis medications and make them available through MAPS’s wholly-owned subsidiary, MAPS Public Benefit Corporation.

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Tim Fair: Vermont’s Path to an Adult-Use Cannabis Market

Vermont was the first state to legalize cannabis without relying on the ballot initiative process. The landmark bill, however, stopped short of establishing a regulated adult-use marketplace in the state, which has led to a lot of consumer confusion and resulted in a bustling cannabis gray market.

In this podcast interview, Vermont Cannabis Solutions founder Tim Fair joins our host TG Branfalt to discuss prospects for a future Vermont cannabis marketplace, the state of its medical cannabis and hemp CBD industries, the meddling of federal law enforcement agencies in local cannabis issues, and more.

You can listen to the interview below or through your favorite podcast platform, or scroll further down to read a full transcript of this week’s episode of the Ganjapreneur.com podcast.


Listen to the podcast:


Read the transcript:

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, there, I’m your host TG Branfalt and thank you for listening to the ganjapreneur.com podcast, where we try to bring you actionable information and normalize cannabis through the stories of Ganjapreneurs, activists, and industry stakeholders. Today, I’m joined by Tim Fare. He’s a friend of mine, a friend of the show now. It’s his second appearance. He’s a Vermont based attorney and founder of Vermont Cannabis Solutions. He advises canna-businesses in the state and also defends individuals accused of cannabis-related criminal offenses. How you doing man?

Tim Fair: Doing great. TG, thanks so much for having me on.

TG Branfalt: No, it’s always a pleasure to see you. You’re still in Burlington, while I have absconded deeper into the mountains. So we don’t get to talk or see each other that much anymore, but it’s great to have you on. We have a lot to talk about there’s a lot going on in Vermont, and you’ve done a lot since legalization. The gray market legalization has occurred in Vermont, but before we get into all that sort of stuff, remind people about your background and how you ended up in the space.

Tim Fair: Well, I graduated from law school in 2012, went into criminal defense. And prior to that, kind of my previous incarnation, I was pretty strongly into advocacy for drug policy reform. This is something that has always been a passion of mine ever since college back when I was 18 years old and attempted unsuccessfully to form a chapter of NORML at my community college in Long Island. This is something that I’m just been passionate about. I felt that the United States drug policy has been wrong. Viewing drug use and addiction as a criminal behavior, as opposed to a health concern. This to me just never died. And once I have the opportunity to go to law school and graduate and become an attorney, this was something I’ve had a passion for. So after a few years of learning the ropes, I made the decision to transfer to an area that I felt I could actually have an impact in terms of a … drug policy.

TG Branfalt: So I think the last time that we spoke, legalization was either on the verge or had just passed, but there was no implemented recreational market as you know, and most of our listeners know. And so what is your role been post-legalization in Vermont as it relates to advising businesses?

Tim Fair: Well, you’re exactly right. We passed legalization in 2018 here in Vermont and we legalized our possession of up to an ounce. We legalized home grow of up to the six plants to mature for immature. However, what we didn’t do was legalize any sort of tax and regulated system. So it’s legal to possess. It’s legal to consume. It’s legal to grow a little bit. It is not legal to buy or sell cannabis anywhere here in the state of Vermont. So over the past two years, we have been focusing on kind of two prongs, A developing of our hemp and CBD industry, which we have a thriving industry here in Vermont, thanks to so really great regulation from our department of agriculture, who really supports the industry while at the same time, trying to move forward a tax regulated bill so we can get the commercial marketplace here and that’s posed, of course, its own unique challenges.

TG Branfalt: Well, so let me stop you right there real quick. Just yesterday it came up in a committee, am I correct? And there’s still a pretty big gap there between… What’s the holdup right now?

Tim Fair: Lots. COVID, for one, and we just still don’t have a reconciled bill. There’s still a lot of resistance within our legislature. The speaker of the house, Mitzi Johnson, who happens to be a Democrat has never been on board with cannabis. She doesn’t like it. She’s never liked it. She doesn’t try to hide that she doesn’t like it. And she has really been a roadblock in getting this moved in a quick fashion, but we are seeing movement, basically this conference committee, which the job of this committee is to reconcile the Senate version and the House version of our tax and reg bill, which have very, very different provisions in them, to come up with one final bill, which would then get submitted to the governor. This committee was formed on March 13th, our legislature shut down to COVID on March 15th.

So there was some questions if they would ever have a chance to convene. Yesterday, they convened for the first time. They spent about three hours kind of discussing where the Senate was, where the House was, determined that there were some very big gaps in what they wanted to see, but the movement of just the committee meeting and starting to just work. That was probably the most positive sign we’ve seen in awhile. Two weeks ago. I would’ve said this bill is dead in the water. Now I would say, it’s not dead. It’s still in the water, but we at least see some signs of life.

TG Branfalt: Did lawmakers say anything to the effect during that committee meeting that the state was facing any sort of financial deficits from COVID, which most States are, especially, smaller rural States? Is that part of the impetus or is it just sort of trying to finally let the horse out of the gate?

Tim Fair: I think a little bit of both. The problem is that the state received from their tax department, a estimation of revenue from this bill, which in my opinion, was massively underestimated.

TG Branfalt: What was that? What was that?

Tim Fair: Massively underestimated.

TG Branfalt: What was the figure?

Tim Fair: They anticipate that it’ll take four years before we see any sort of return on the initial investment to get the program started? And they’re saying the amounts will be in one to two million in tax revenue a year based on 20 to 30 million of sales a year.

TG Branfalt: Meanwhile, just to sort of cut you off real quick. Meanwhile, Massachusetts is raking money from New Yorkers, people from New Jersey. So you’d wager to guess that that same sort of influx of out-of-state customers would be coming to Vermont.

Tim Fair: They extrapolate it out from Oregon sales based on one year and then factored in the population change, and taking it to none of the considerations that Oregon and Vermont are very different places.

TG Branfalt: Well, Washington is right there. There’s legalization and…

Tim Fair: Right. But unfortunately a lot of the legislators are using that base. So they don’t yet believe that there’s going to be the income that we believe there will be from this. But there is a strong understanding that the status quo just simply can’t exist. Again, we have this kind of very, very, very loose legalization law that leaves all a lot to be interpreted, a lot that is just not addressed, not answered. They talk about you can have an ounce of flower or five grams of hashish, nothing about concentrates, nothing about that. So what does that mean? Hash? We’re guessing it is, but there’s just a lot that is very unclear, which has made moving forward with our industry very difficult for entrepreneurs and small businesses.

TG Branfalt: So let’s talk a little bit about some of the sort of strangeness of the setup that you guys have there, you described the cannabis laws earlier. So criminally, what charges have you been hired to defend? Well, you have possession of an ounce. You can grow six plants. So you know what charges are state, local law enforcement officials are bringing against people under this regime?

Tim Fair: So it really is interesting. I don’t want to get too much into the weeds, but Vermont has 14 counties. Each County has its own elected state’s attorney. So you have 14 separate States attorneys, who have an unbelievable amount of autonomy to pursue the agendas that they feel are most important. So in certain counties, such as Chittenden here in Burlington, we’re not seeing a whole lot of state prosecutions for cannabis. In other counties with different minded States attorneys we are. So in the last year, just since legalization, I’ve had to defend a husband and wife, husband is a medical marijuana patient and veteran, Navy veteran with diagnosed PTSD and a hemp cultivator who was charged with felony cultivation for cultivating three, what the state police call mature plants, one plant over their limit, which technically isn’t even a felony. Yet him, and his wife, who nothing at all to do with his grow operation, were both charged with felony counts.

We had a great resolution on that. We ended up after quite a bit of back and forth getting the state’s attorney’s office to drop those charges, but not without a lot of work to get put in to convince them to do so. We’ve seen CBD oil manufacturers being arrested when law enforcement believes that what they’re putting together is illegal. There’s a lot of, I’m not going to say it’s intentional, ignorance on the part of law enforcement, but there was a lack of really a full understanding of the differences between hemp and marijuana, CBD and THC. There’s still a huge learning curve. And a lot of this law enforcement will just go in, proverbial guns ablazing. And that’s what we’re still dealing with because in this lack of regulation, there are so many open questions that it makes it very difficult for anybody to be operating on the right side of the law because some simply don’t know what the right side of the law is in a lot of occasions.

TG Branfalt: Well, so in one of the cases that sort of a, I don’t want to say it drew sort of national attention, but it did — there was so many moving parts — and it involved federal law enforcement officials. Am I correct?

Tim Fair: Absolutely.

TG Branfalt: We were talking about the case of a guy named Big John, well-known in the community has a skate shop. I don’t know if he ran for mayor, but people really want him to be made with sort of some of the graffiti you’ve seen, stuff like that. So tell us about that case, how the feds got involved. And it’s a really interesting case. There’s a lot of moving parts and the resolution you got was… I mean, goddamn. So just walk us through that, man.

Tim Fair: Okay. There are a lot of moving parts and I think before we can just jump right into it and kind of need to set the stage a little bit and understand the context of which this happened. John has run Riding High, which is a local skate shop, for the last almost 20 years. He’s amazing, and he has worked with now two generations of kids learning to skate. This has been a passion of his, but John’s their pro skater. He took a nasty, nasty fall, suffered a pretty significant TBI about a decade back, recovered, came back, stuck with it. He’s a great guy, and he happens to be a very strong advocate for cannabis. He believes it’s a healing flower. He believes that it helped him recover from his accident.

And he believes in the positive aspects of cannabis. He makes no hint of how, which unfortunately has resulted in quite a few run ins with law enforcement over the years, where one occasion police came into investigate the reports of a grow as there’s they’re in what as big John do? Big John pulls out of joint lights it up. They’re like, “Big John, you can’t do that.” Like, “Why, it’s my healing medicine.” And John, he wears his heart on his sleeve. He’s an amazing guy. So unfortunately this has created quite a record building up on him. Now, flash forward to 2018, where here in Burlington, legalization has passed and there was an incident with a retailer, not Big John, but another retailer up on Church Street, which is the main tourist drag of Burlington, an open-air pedestrian walkway with shops, decided to start selling amongst other things, marijuana, edibles, allegedly some other substances as well out of his shop on Church Street, directly across from city hall.

And this went on for quite a few months and it pissed a lot of people off. The state didn’t seem to be interested in prosecuting, and we can talk about why that is, but lo and behold, the state did not. And eventually the feds just decided they’d had enough. This was blatant. This was well-known. There were lines right out the door. It was under aged children were having access, no ID. There were reports of firearms being involved, and this was a mess. I don’t think anybody should ever be arrested for marijuana. This was a lot harder than that. So after that there was kind of a shock amongst the town like, Oh my God, this was going on. And it was at that time that I do believe roughly that the feds also began investigating Big John. Now Big John’s shop, Riding High, completely different part of town, down on Battery Street.

The allegations were that he was selling some cannabis out of his store as well. The fact showed that there was ID, there was never any sales to minors. There was never any firearms involved. There was never any other type of substances involved, but the feds decided to begin an investigation and conducted a 16-month investigation into Big John.

TG Branfalt: That’s a hell of a use of federal funds.

Tim Fair: Six undercover buys. You know what the largest buyer was? $40. $40 worth of marijuana was their big bust, several $20 sales. I believe it was a $30 somewhere. After 16 months, 6-7 undercover sales. God only knows how much surveillance time. Yep. A raid a Big John’s house, his business, his property up in upstate New York, and him on his longtime partner, Samantha, were both arrested by federal agents and charged with multiple felonies for a case that honestly, even in 10 years, the feds should never be involved in this. Never.

TG Branfalt: This is DEA?

Tim Fair: This was Northern Vermont drug task force.

So a combination of DEA and local, deputized law enforcement. So yeah, that’s in the middle of an opiod epidemic, in the middle of some really serious issues. This is how the US attorney’s office in Vermont chose to utilize limited resources. And the reality is that unfortunately, we were able to keep Samantha, who was charged with both conspiracy and production, possession of edibles, she started a CBD edible company. There are a couple emails that they claimed were THC. We kept her out. John ended up having spent eight months in pre-trial detention. If it wasn’t for COVID, he may not have gotten out. His was represented by my old mentor, my former boss, Paul Balk, incredible defense attorney. The two of us worked together. I represented Samantha. He was able to get John released on a COVID concern. And when we finally went to sentencing, we were able to get probation for both Big John moving forward, and Samantha, no additional jail time for John, which was an incredible outcome.

I do wonder if not for COVID, that we would have gotten that resolution, but we did. And in a way we hope that after a 16 month investigation, after the tens, maybe hundreds of thousands of dollars spent on this investigation to end up with two probation sentences. Maybe this might show the US attorney’s office that their resources would be spent in a different area. But it really does show that at this point in time, anybody is fair game. And one of the things we’ve seen as a result of this kind of half legalization measure here in Vermont is an explosion of the black and gray markets. Some people going into business, trying to be on the right side of the law. And then some people go into business with no interest of being on the right side of the law, just taking advantage of the opportunities that they see and this half-assed legalization.

TG Branfalt: So with the big John Case, do you think that this would sort of have any impact on how officials may go forward with investigations and things because of the outcome that you were able to get? These guys doing probation, they didn’t get a bigger fish out of all this, right? The result isn’t really sending a message to other people, right? Probation for many people may be worth the risk. What do you think about that?

Tim Fair: Absolutely. That is the hope. If there’s any silver lining to this type of situation, if there’s any good that can come from the unbelievable disruption and impact on John and Samantha’s lives, the unnecessary, unwarranted intrusion and impact on their lives, which was significant and substantial. If any good can come of this, it’s a hope that the prosecutors, the powers that be will look and see and go, “Wow, we spent a lot of resources. We spent a lot of money a lot of time, and this is what the end result was. Did we prove our case? Yes. Did they plead guilty to selling some small amounts of marijuana to adults? Yes. Great. Was that worth it?” Interesting, going back about a decade, decade and a half, if you remember operation Pipe dreams, the FBI spent the single most ridiculous use of money over a million dollars to prosecute Tommy Chong.

TG Branfalt: Well, I was working in the paraphernalia industry when that happened, and the simple fact that it sort of led to nobody being able to say the word bong. It’s ridiculous.

Tim Fair: True, but it also led to a stopping of those type of prosecutions.

TG Branfalt: That’s true.

Tim Fair: Because the amount of resources that were spent for the result, putting Tommy Chung in jail for a while a month or two, and over a million dollars on that particular investigation. So in a parallel, we’re hoping that that will be kind of this, whether it was 50,000 whether it was 100,000, we don’t know how much they spent over 16 months. But with seven buys, with the overtime hours, with the surveillance, it was significant for what ultimately ends up being two probation sentences. The powers that be, hopefully a little bit of common sense would say, “You know what, maybe our resources are better spent somewhere else.” That’s the hope. We have yet to the wait and see what happens. One of the things, however, that the chief justice, the judge, in this case, who was the district of Vermont chief federal judge, one of the things she said was this type of behavior was not legal under state law.

So I don’t want to hear that, and it wasn’t legal under federal law, but she made a point of emphasizing the fact that sales of marijuana still are not legal in the state of Vermont as justification for the investigation and for the prosecution. So this is, again, if we could legalize, if we could establish a taxed and regulated system, now people have a very clear line. They know what they can do and know what they can’t do. And entrepreneurs and business people like John and Samantha would have a route to be able to apply, receive, and get an adult-use dispensary license.

TG Branfalt: Well, is this the biggest issue facing current Vermont, legal operators, right? People who are operating in the hemp and CBD industry. Is this gray market even though it doesn’t really impact them legally because they’re operating within the confines of both federal and state law, is this still the biggest issue facing current Vermont operators? Or is there sort of something else that may be more of a factor, I guess?

Tim Fair: For right now, there is a pretty big distinction between our hemp and CBD industries and the potential adult use industry, and the hemp and CBD industries have their own issues. Most of those on the federal level. And that is the USDA regulations coming out, being just simply unworkable, they had put forth that there needs to be a 0.3% total THC threshold for hemp, which would include THCA. And don’t want to get too much into the weeds on this, but basically putting forth a regulatory scheme that is unworkable for any hemp farmers.

TG Branfalt: Well, didn’t Vermont propose a 1% limit on THC to be considered industrial hemp?

Tim Fair: Yes. And that is under the pilot program are currently operating for this year. Unfortunately, the authorization for that pilot program runs up October 31st. So that will be good for this season. And for everything harvested this season. A big question, and a lot of concern is what happens next season? Will USDA change this or not? Because again, our authorization to act under our 2014 pilot program ends on the 31st. Vermont is a very strong advocate of the 1% total THC standard, which I think is still ridiculously low. However, it is workable. That can be met. A 0.3 on total, it’s ridiculous.

You’ll have to burn every crop. So that’s kind of the big thing right now on the implementation of these USDA regulations, sampling, lab results, not having a robust laboratory system yet, not having any clear standardization for testing. Do we test wet, do we test dry? What’s 0.3? There’s still a lot of open questions within the hemp and CBD realm. So those are kind of separate from our adult use. And frankly, it’s interesting because the hemp and the CBD are looking more at the federal side, the USDA, because there have been regulations at the federal level, while our adult use industry is looking solely at state law, obviously because we have seen no federal motion there.

TG Branfalt: How tough has the last couple of years been for you as an attorney having to figure all this shit out as it comes along?

Tim Fair: I love it. It’s interesting. It’s challenging. Learning this stuff is not the bad part. I love that. Especially at least with tax and reg here in Vermont, the challenges are significant in terms of A, we’ve got 60% approval, but that leaves about 40% who are still opposed. So we have a very strong prohibitionist contingent here in Vermont, more than most people would think. And there’s also internal conflict within the community about S.54 in particular and our tax and regulated bill. There are a lot of cultivators who are very against any sort of regulatory scheme in this bill as well, for some, for very valid reasons and others for some misinterpreted reasons. So it’s kind of fighting a two-front war. We’re trying to explain and deal with the prohibitionists while at the same time, almost having a civil war within the own cannabis community about whether or not tax and regulate as it’s currently proposed is going to be good for the state. So that’s …

TG Branfalt: Do you mind telling me where you stand on it? Do you want to…

Tim Fair: So, as you may or may not know, Vermont was the first to pass legalization, legislatively. Since then, Illinois did as well, different set up than we have here. We didn’t get to do it by ballot initiative. We don’t have the option for ballot initiative. So as a part of any legislative solution, any laws that get passed in a legislative fashion requires compromise. I understand that, I do, there are going to be provisions that we’re going to have to hold our noses and accept in order to get it across the finish line. At which point, once we establish a cannabis control board, now we can start petitioning to try to make the changes that we need to. That is what I do believe needs to happen if we’re ever going to get it over the finish line. However, there is a strong contingent that says, no, we can’t fix it later.

We need to fix it first and pass a better bill. In an ideal world, yes. Is that legislatively going to work? It’s simply not. We have 40% of prohibitionists and in order to get the votes needed again, this is the legislative process and it’s not always great. And sometimes the compromises are not what we would ideally make, but I’ve also been working on this for almost four years. We really started trying to get a taxed and regulated system moved in 2016 for decriminalization. It took from 2016 to now to get a bill. If this bill does not pass, as many people want to kill the bill, we are looking at potentially two, three, maybe four years before we get another one.

TG Branfalt: Well, so in this upcoming election, it’s sort of a big deal for cannabis advocates in Vermont because it appears that Lieutenant Governor David Zuckerman is poised to challenge Phil Scott, a Republican. And anyone who has met Zuckerman knows that he is supportive of legalized cannabis, and he’s an agriculture guy, right? So if this doesn’t pass, wouldn’t the potential election of Zuckerman sort of break that stalemate?

Tim Fair: Well, we have to remember, the executive branch, the governor, we had the legislative branch is passing the laws. Will there be a stronger push from the executive branch and the governor’s office to get something done if David gets elected? Absolutely. Would it be beneficial to getting this done quicker? Absolutely. That is an uphill climb, unfortunately. I know David very well. I would consider him a personal friend. We’ve been friends for quite some time. I’ve supported him in his elections. I’ve turned on phone banking for him when he was running for Lieutenant governor. He’s a great guy. He’s an organic farmer. He is just the right values. But the reality is that Phil Scott, who is a Republican, is a very centralized Republican. He has disavowed Trump, and he has about an 83%, I believe right now, approval rating in how he’s handled the COVID pandemic.

TG Branfalt: 83%?

Tim Fair: 83%, he’s done a good job.

David needs to frame this election properly if he has a chance. And that is yes, Phil Scott’s done a good job and he’s done what any rational sane governor would do, which is listen to the scientists and implement what his department of health is telling him is the safest bet. With Republicans these days, that is incredible in and of itself to run the sentence, but not as anything special as anything that any rational person would do and frame the election is looking into the future.

Okay. Yes, Phil Scott has done a good job. Now, what he has not done is propose or come up or plan for how we are going to recover from this pandemic and from the impact that it’s had. And if David can frame it like that, not looking at the present, but looking into the future, putting forth a strategic plan of which cannabis legalization tax and regularization would be a central part of, I think it has a chance. But of course with everything going on right now, nobody has ever seen anything like this before with what we see in Washington, combined with the pandemic, combined with a uncertainty about what the next 90 days is going to bring between now and the election. I think there’s a lot of variables. And it’s really hard to predict, I think, much harder than in previous elections.

TG Branfalt: How did the local CBD businesses fair during the pandemic that did you guys see a whole lot get sort of shut down or decide to close their doors for good? What’d you see on the ground?

Tim Fair: We have seen a handful of brick and mortar shops closed down for good. Three-month shut down was incredibly detrimental to a lot of businesses. Most of the CBD shops here in Vermont had just sprung up within the last year.

TG Branfalt: Were they considered essential businesses during the shutdown?

Tim Fair: No. So medical cannabis dispensaries were, but CBD stores were not. So there was the brick and mortar shut down. And even now that Vermont is pretty much moved along with our reopening, brick and mortar retail is still taking a huge hit. One of the biggest group of customers for retail here in Vermont are Canadians, a lot of Quebecois and Canadian tourists would come down here to spend quite a bit of money. I would estimate close to a billion dollars a year from Canadian tourists. And of course the border has been shut. So that’s a huge percentage of revenue that has just been completely shut off, has not yet returned. And a lot of people are very skeptical about returning into a brick and mortar shops. So retail in general is taking a huge hit and especially some of the newer CBD stores too have taken a pretty big hit. The people who are doing alright are the ones manufacturing products and doing online sales. Those have seen, if anything an increase.

TG Branfalt: We’ve covered quite a bit of ground here, man. And like we’ve sort of talked about, the last couple of years, you’ve been learning all these new rules, regulations, laws, helping both businesses and individuals in criminal cases, advising businesses, and defending individuals. So right now when it comes to entrepreneurs, what’s your advice for them when it comes to sort of navigating an entirely new set of rules and operations?

Tim Fair: A, have a game plan, a solid game plan. Know why you’re getting into the industry, know what you want to accomplish and then be willing to pivot on a dime. Those are kind of the main rules right now. The successful businesses we’ve seen have had a good understanding of the regulatory framework, know what they can and cannot do and have operated within that framework. Though, businesses we’ve seen that have not been that successful are the ones, well, we’re just going to wing it and see what happens.

Certain cases, I guess that would be a good plan. In this particular industry, it’s just not right now. And an understanding that there are still a lot of unknowns, understanding of the federal/state conflict, which has created a lot of problems for hemp, CBD, and medical and adult use just straight across the industry, understand 280E, understand the legislative process and that things may not work. These are understandings that if people have and people are willing to listen and learn and incorporate into their business plan. And that brings success. Anything else? People lost a lot of money last year like you know, the hemp industry here in Vermont because they didn’t plan.

TG Branfalt: Yeah. And it was sad to see because it was such a robust industry. Everyone was really, really excited about hemp. And then, even in upstate New York and then the bottom sort of fell out. A, Lack of processing and demand and that sort of thing. And that’s a conversation for another time. So where can people find out more about you more about Vermont Cannabis Solutions, get in touch with you?

Tim Fair: Well, my partner, Andrew Subin, and I will be presenting it in NECANN, New England online cannabis conference, coming up next month, which we’re very excited about. You can find us at www.vermontcannabissolutions.com. And other than that, give us a call. 802-504-weed. We love talking about this all day.

TG Branfalt: Wait, wait, wait. What’d you say the number was?

Tim Fair: Our number. 802-540-weed, 9333. I know. We were really excited when they got us that number too, we didn’t ask for it.

TG Branfalt: You definitely asked for it.

Tim Fair: We didn’t. The customer service guy comes in and he’s got this look on his face and he’s like, “You guys are either going to love this or hate this. But I got you 540-weed.” It was amazing.

TG Branfalt: We should have led with that. One day, I think you’re going to have a Saul Goodman type commercial. It’s just going to be, 802, weed. It’d be fantastic.

Tim Fair: First of all, like we want to stay away from the pot leaves and the whole Bob Marley thing and try to be professional. And then he comes in, and we just could not. We’re like, “All right, we love it. It’s just inevitable.”

TG Branfalt: No, you could have a very straight-laced commercial. And then at the end to be like, “Oh, by the way, our number is weed.”

Tim Fair: I love it.

TG Branfalt: I’m going to produce this for you.

Tim Fair: We’ll be waiting.

TG Branfalt: This is Tim Fair. He’s a Vermont-based attorney, founder of Vermont Cannabis Solutions. They advise canna-businesses in the state of Vermont, and he also defends individuals accused of cannabis-related criminal offenses, super swell guy. Dude, it’s nice to have you on again. And hopefully, it’s not another year.

Tim Fair: TG, great to see you. And hopefully we’ll be able to meet and see in person before too, too long.

TG Branfalt: Thanks man.

Tim Fair: Thanks a lot, brother. Have a good one.

TG Branfalt: You can find more episodes of the ganjapreneur.com podcast in the podcast section of Ganjapreneur.com on Spotify and in the Apple iTunes store. On the Ganjapreneur.com website, you’ll find the latest cannabis news and cannabis jobs updated daily, along with transcripts of this podcast, you can also download the Ganjapreneur.com app in iTunes and Google Play. This episode was engineered by Trim Media House. I’ve been your host TG Branfalt.

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Curaleaf Reports Record Revenues, Names New CEO

Curaleaf reported record financial and operational results for the third quarter of the year with pro forma revenue of $215.3 million, and year-to-date managed revenue of $419.6 million, including third-quarter revenues of $193.2 million – a 164 percent increase.

The firm indicated an approximately $46,934,000 gross profit increase from cannabis sales from $42,735,000 in Q2 to $89,669,000 in the third quarter. The company also reported a 51 percent increase in adjusted EBITDA from $27,994,000 to $42,295,000 – representing a 305 percent year-over-year increase.

Joseph Lusardi, CEO said the company’s third-quarter results were “complemented” by its successful acquisition of Grassroots, which expanded its reach into six new states.

“As we head into 2021, Curaleaf remains incredibly well-positioned following the transformative legalization of adult-use cannabis in Arizona and New Jersey, and consequently the potential of future adult-use in New York, Pennsylvania and Connecticut. Each of these markets present an enormous opportunity for us, as the only MSO with a leading presence in every one of these states. Looking forward, we expect our growth will be driven by organic initiatives, increased capacity and dispensaries in key states and the roll out of adult use in Arizona and New Jersey.” – Lusardi in a statement

Lusardi’s run as company chief will end at the start of next year as the company also announced President Joseph Bayern would take over as CEO; Luardi will take on a new role as executive vice-chairman of the board starting January 1.

“With roughly two-thirds of the U.S. population now having legal access to medical or recreational cannabis, Curaleaf remains in the very early innings of its true long-term growth potential,” Bayern said in a press release announcing the c-suite change.

During the third quarter, Curaleaf’s recently acquired Select brand launched in three new states, the company opened two new dispensaries in Florida, and it completed its acquisition of Massachusetts-based Alternative Therapies Group.

The firm’s retail revenue increased by 206.5 percent to $135.3 million during the third quarter of 2020, compared to $44.2 million in the third quarter of 2019. The company’s wholesale revenue increased nearly seven-fold to $45.0 million during the quarter, compared to $6.5 million in the third quarter of 2019.

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Cannabis Officials from 19 States Create Regulators Association

Cannabis regulators from 19 states have formed the Cannabis Regulators Association (CANNRA) – an effort to link regulators across states to collaborate on industry policies and best practices. The nonpartisan group will share regulation resources and expertise on medical and adult-use cannabis and hemp.

The group’s founding members include regulators from Colorado, Delaware, Hawaii, Illinois, Iowa, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, North Dakota, Oregon, Rhode Island, Utah, and Washington state.

Norman Birenbaum, director of Cannabis Programs for New York State, will serve as the inaugural president of the association. Birenbaum previously served as the top cannabis industry regulator in Rhode Island before taking the New York job last year.

“The association will strive to create and promote harmony and standardization across jurisdictions which choose to legalize and regulate cannabis. [It] will also work to ensure federal officials benefit from the vast experiences of states across the nation to ensure any changes to federal law adequately address states’ needs and priorities.” – Birenbaum in a statement

The organization’s executive officers will include Andrew Brisbo, executive director of Michigan’s Marijuana Regulatory Agency; Jim Burack, director of Colorado’s Marijuana Enforcement Division; and Rick Garza, director of the Washington State Liquor and Cannabis Board, as vice presidents. Tyler Klimas, executive director of Nevada’s Cannabis Compliance Board will serve as secretary-treasurer.

In a statement, CANNRA said the group aims to “facilitate communication and information sharing between subject matter experts in regulatory approaches for industrial hemp, medical cannabis, and adult-use cannabis.”

“This will include exchanges with research organizations, public health officials, policymakers, legal authorities, advocacy groups, and cannabis industry participants,” the group said.

The group emphasized that it is not an advocacy group and would not take a formal position for or against legalization.

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More Americans Than Ever Support Legalizing Cannabis

68 percent of Americans support legalizing cannabis for adults, according to the latest Gallup poll. It is the highest recorded level of support for legalization since the pollster first started asking about the issue in 1969.

While cannabis legalization is particularly popular among younger generations, a majority of respondents from every age group including people 65+ supported legalization.

Additionally, an overwhelming majority of Democrats (83%) and independents (72%) prefer legalization to the status quo.

But, while support for legalizing has grown slightly overall, it was not across all demographics: support among self-described conservatives and regular (weekly) church-goers was just under 50%. Even among Republicans — who supported legalization with slim majorities from 2017-2019 — support had fallen below the majority threshold to 48%.

The latest poll was conducted from September 30 to October 15.

“In national polls and at the ballot box, the American public has spoken loudly and clearly. The overwhelming majority of Americans favor ending the failed policies of marijuana prohibition and replacing it with a policy of legalization, regulation, taxation, and public education. Elected officials — at both the state and federal level — ought to be listening.” — Erik Altieri, Executive Director of NORML, in a press release

In November, voters in New Jersey, South Dakota, Arizona, and Montana approved ballot initiatives to legalize adult-use cannabis. Ballot initiatives to legalize medical cannabis were also passed in South Dakota and Mississippi.

Before the election, the following U.S. states and jurisdictions had legalized adult-use cannabis: Alaska, Washington, Oregon, California, Nevada, Colorado, Illinois, Michigan, Maine, Massachusetts, Vermont, and Washington DC.

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New York Gov. Predicts Legalization Next Session as State ‘Desperate for Funding’

New York Gov. Andrew Cuomo (D) on Thursday said the upcoming legislative year is “ripe” for passing adult-use cannabis laws “because the state is desperate for funding,” according to a North Country Public Radio report.

“Even with Biden, even with the stimulus, we’re still going to need funding. I think we’re going to get there this year.” – Cuomo to NCPR

Former Vice President Joe Biden, the Democratic presidential nominee, has not formally won the presidency as of Friday morning.

Cuomo’s comments come just days after New Jersey voters approved a legalization ballot initiative and less than a month after Vermont lawmakers approved legislation to allow a taxed and regulated cannabis marketplace. Cannabis sales in neighboring Massachusetts launched in 2018 along with sales in Canada. The green wall is closing in on the state and paired with the budget shortfalls pressure is on lawmakers and Cuomo to, finally, pass the reforms.

After years of opposition, the Democratic governor changed his tune in 2018 following a Health Department report supporting the move; however, the State Senate was controlled by Republicans who would not back the reforms. Last year, Democrats took control of the chamber, giving them control of both the Senate and House, but lawmakers couldn’t come to agreements on how the funds would be earmarked and the session ended without a deal.

The Legislature appeared poised this year to approve a legalization measure – Cuomo had included it in his executive budget – but that push was derailed by the coronavirus pandemic as lawmakers refocused their efforts on other issues.

The state estimates legal cannabis tax revenues could reach $700 million annually but is projecting $59 billion in revenue shortfalls through 2022 due to the coronavirus pandemic.

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Feds Say Cannabis Employees are ‘Agricultural Laborers,’ May Unionize Under State Law

The Regional Director of the National Labor Relations Board (NLRB) for Region 1 – which covers most of New England – has found that the majority of employees at a cannabis cultivation and processing facility are “agricultural laborers” under the federal National Labor Relations Act (NLRA) and, therefore, not subject to federal labor laws related to unionizing, according to a JD Supra report.

The decision allows labor unions to organize workers under Massachusetts law rather than federal law. Under Massachusetts law, union recognition uses a simple card check. Agricultural workers are exempt from federal labor laws but some states – including Massachusetts – cover farmworkers, while other states deny unionization rights altogether to such employees.

The decision stems from the United Food and Commercial Workers Union, Local 1445’s, push to organize the cannabis cultivation and processing facility at New England Treatment Access’s (NETA) Franklin, Massachusetts facility. The union sought to unionize the employees under Massachusetts labor laws through the “card-check” method of organization instead of the secret ballot process required by the NLRA. NETA argued that the cultivation and processing employees were not agricultural laborers and were subject to the NLRA.

Following a review of the company’s processes, the regional director determined that workers involved in cultivation, growing, and harvesting – “primary agriculture” – and those employees working in roles closely related to primary agriculture – “secondary agriculture” – were exempt from federal labor law under the NLRA.

The director also determined that workers involved in research and development, and data analysis, were non-agricultural employees.

The decision allows a union to obtain agricultural worker recognition once it has obtained authorization cards signed by a majority of workers in a bargaining unit. Card signing often happens without employer knowledge and employers might not be aware of the effort until they are presented with the demand for union recognition.

The NLRB decision could influence cannabis-related decisions in other regions if petitions are brought to the board.

Just this year, workers at NETA, Sira Naturals, Mayflower Medicinals, Cultivate Holdings, and Curaleaf, have either voted to join a labor union or ratified a union contract. UFCW Local 1445 – which brought the petition to the NLRB – have organized workers at Mayflower, Cultivate, NETA, and Sira.

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Teddy Scott: The Complex World of Multi-State Cannabis Operations

After co-founding and leading Illinois’ PharmaCann for several years, Teddy Scott departed to found Ethos Cannabis, a multistate cannabis operator based in the U.S. Mid-Atlantic and East Coast regions.

Teddy recently spoke with our podcast host TG Branfalt about his experience and the complexities of founding and operating a multi-state cannabis company. Their conversation also explores the co-existence of corporate and craft cannabis, the rapid growth of cannabis business in the Midwest and East Coast regions of the U.S., the importance of effective social equity provisions, Teddy’s advice for industry newcomers and entrepreneurs, and more!

Tune in to this episode of the Ganjapreneur.com Podcast below or through your favorite podcast platform, or scroll down to read a full transcript of the interview.


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TG Branfalt: Hey there, I’m your host TG Branfalt and thank you for listening to the Ganjapreneur.com Podcast where we try to bring you actionable information and normalize cannabis through the stories of ganjapreneurs, activists and industry stakeholders. Today I’m joined by Teddy Scott, who is the CEO of Ethos Cannabis, a multi-state operator developing a vertically integrated retail-focused platform in the Mid-Atlantic and East Coast markets of the US. Teddy holds a PhD in molecular biophysics from the University of Texas, and a JD degree from the Northwestern University School of Law. He’s also worked in pharmaceutical research and practiced intellectual property law. He’s also an advisor to the University of Chicago’s Innovation Fund. That’s one hell of an intro. Lots of stuff going on there, Teddy, how you doing?

Teddy Scott: I’m doing great. Thanks, sir. How you doing?

TG Branfalt: I’m doing well, man. It’s great to have you on. You’re a really interesting cat just from your intro alone. And I did some research on you and I’m real excited to pick your brain a bit. But before I get the opportunity to do that, tell me about yourself, man. How did you end up in the cannabis space?

Teddy Scott: It’s an interesting story. It was one of those things you can’t script out. If you’d asked me 10 years ago, hell, even seven years ago, if I were where I am now doing what I’m doing I would have said you were crazy. I had a background in medical research, went to law school and was a corner office equity partner at a big national law firm, I was located in downtown Chicago. Knew virtually nothing about cannabis.

TG Branfalt: What did you know about cannabis then?

Teddy Scott: What I knew about cannabis was the same stuff that all the other people in this country that are ignorant to it, because of what they’ve been told and led to believe the misinformation for so long. That’s pretty much all I knew. I knew nothing about it. And what happened was it was an interesting time period. It’s really critical to remember, and it was January 2014. I’ll never forget it. I was at a point in my life that it was probably the right time for me. I had reinvented myself a number of times. But I’d gotten to a point as like, “What am I going to do next?” I had four relatively young children, “Gosh, I can’t really go off and do anything new. I need to just hunker down and just continue being a lawyer. And just once my kids are in college, I’ll look at doing something else.”

And what happened was, it was January 2014, a friend reached out to me. It was an email. I remember laying in my bed on a Thursday night, and an email came in. It was a physician friend of mine and said, “Hey, I know some people that are from Arizona, that are coming to Illinois to apply for medical cannabis licenses. And they’re looking to raise money, do you want to invest?” And it was just boom, it was an immediate thought of “No, I don’t want to invest. I want to look at this.” And I like to say all the time, if Google had not been around, I would not be where I am.

The power of the amount of information that is out there, podcasts that are out there that I started listening to. And the reason I did was, as I tell the story to people to remember. It was very fortuitous for me because that was January of ’14. And what had happened only a couple of weeks earlier, January 1, 2014. That was when rec sales started in Colorado. And I don’t know if you remember, but it was on the news everywhere.

TG Branfalt: Yeah.

Teddy Scott: And I think what happened was by being a lawyer I had a sense of the way laws are made, how they’re interpreted the way they evolve. They’re a measure of society. And I just had this sense that things were changing, you couldn’t help but see what was happening in Colorado a couple of weeks beforehand. And it just made me start looking. And that’s what you do as a researcher, I happen to have a PhD, it’s what you do you research, you dig in, you see a question you want to understand it. As a lawyer, that’s what you do.

And I just started digging and what happened within, it was probably a couple of days, it was very quickly after that, that I got that email. What I realized is, I was digging into what was known at the time about the science of cannabis. I was like, “Oh, my gosh.” Because I know very well what drug companies do, the types of discoveries they make. With my PhD, I very much understood how receptors work, how drugs work, interacting with them, and the effects that happen. And as I was looking at this, I was like, “Wow, there’s really something here. I don’t know the answer.” And quite frankly, I don’t think anybody does with specificity. But it looks like there’s something here.

TG Branfalt: What was the thing for you? You said that you didn’t really know much you start googling, you start researching. Once you noticed that there’s some interest there for you. What was the thing for you that the light bulb went off?

Teddy Scott: Yeah, there were a couple of light bulbs. And they happened really quickly, really, within just the first couple of weeks, I was looking at it. The one was, I’ll call it my passions, because at first it was intellectual. I was thinking of it as a technical lawyer, I was thinking of it as maybe a scientist, that’s very technical in nature.

The first was, as I was looking at it, and I was looking at just the science of it. One of the things that was interesting for me, or has made an impact on me is one of my clients, as a lawyer was an opiate manufacturer. They’re one of the good ones. There’s a lot of bad press out there, and well deserved, by the way, for certain companies out there. The one I was working with was ethical. They were spending tons of money, trying to find new opiates that weren’t addictive. Ones that could provide pain relief, but were not addictive.

And I knew very well, in a way that people in the country at the time. The opiate epidemic only became pop… No, I don’t want to say popular, I’ll say really well known in the last few years. But I was well aware of it going back quite a while. And so when I was looking at the science of it, what was known and just I was like, “Oh my God, this could be…” That was I was saying … I was like, “Wow, this could be an alternative, one of the solutions to fill in that gap for true chronic pain.” I mean, there’s hundreds of millions of people that are suffering from chronic pain and you have a choice of Advil, or Fentanyl. I mean, there’s a huge gap.

TG Branfalt: And it’s hard, right, to compartmentalize. Patients can’t tell doctors how they’re feeling pain oftentimes.

Teddy Scott: Well that’s a pain is a weird thing. The same thing might happen to you, to somebody else, you might think, “Eh, I’m okay. I can get by with a couple aspirin.” Like Jeff Sessions said a couple years ago, “Just take a couple aspirin.” But for somebody else they might be in agony. And what are you supposed to do? Are you supposed to say, “Screw you, deal with it?” Are you supposed to honor them and respect them and go, “You know what, you’re in agony, I need to try to help you.”

And what it helped that, that was one of two things. But what that did for me was it made it no longer technical in nature, intellectual in nature, it really personified it. And the sad thing for me personally, was very shortly after I started, it was before the company had got going, it was before we’d won any licenses. We were still in this planning stage. My father was diagnosed with his first of two primary cancers. He passed away a couple of years ago.

TG Branfalt: I’m sorry.

Teddy Scott: And it became really personal as I saw him, I’m from Texas, that’s where he was. And I saw him living in a state where it was illegal. And I mean, he was dying. He was in agony. And he was a physician. He was a physician. And he almost overdosed on opiates, just as he was trying to deal with the pain of the radiation therapy and just the pain of cancer. And he’s like to me, “Son, can you get me some cannabis?” I’m like, “Sorry, dad I can’t. Down here… I’m up there. You don’t live up there, where it’s legal or available.” And actually he was able to get some through sources, it was totally illegal down there. And it helped him, it helped him. It helped us reduce his opiates.

TG Branfalt: Had he done research, or it was a last-ditch effort for him?

Teddy Scott: It was a… Yeah, it was purely… He’s palliative care. He knows he’s dying, he’s just in agony. And it was purely just a last ditch effort for him. So that was one thing that made it… I mean, one thing I’ve said before, and it’s one of the things I’m very thankful for. And I’ve had a lot of… I’m very thankful in my life for my family, my education, I’ve had a lot of opportunities. But the one thing that was missing, I didn’t realize until I got into cannabis, I never had a cause. Something I really believed in. And this has really provided it for me.

And so that was one thing that… It’s easy enough, okay, people might chase money, or fame, or success, whatever it might be. It’s really powerful when you’re doing something beyond that, bigger than that. And cannabis has been that for me. And it became that, so that was one of those ah-ha moments really quickly. To be totally frank, when I first started looking at it, one of the first things I did was a spreadsheet model of a business model. And you could see big numbers and the dollar signs, that’s kind of that technical thing. But it quickly switched into this personal mission driven trying to do something. And so that was one thing, but I still didn’t know anything about cannabis. I just saw the potential for it.

TG Branfalt: Well, so let’s talk a bit about that your first roles, your first experiences with the company and where you are now. You started, or at least worked for a time as executive at PharmaCann, which is very well known. And now you’ve founded your own company, Ethos Cannabis. So what was the impetus or imperative, behind the founding of your own firm? Meanwhile, you’re at, or had been at one of the largest in the country? And how did the experiences differ?

Teddy Scott: Well, I actually founded PharmaCann, Ethos is my second company to really start. PharmaCann was the first one. So that January of ’14, what led to it, is me and a couple of co-founders, we founded PharmaCann. And so I was the CEO and one of the co-founders of PharmaCann. And so that was in 2014. We formed the company, we won our licenses in February of ’15. Myself and one of my co founders, it was a partner and me at my law firm, we quit and went to go work in the cannabis business.

TG Branfalt: You just quit.

Teddy Scott: We just quit. And I’ll just go back real fast, because it’s relevant to the transition, is that what happened in the beginning, I’m starting to think about getting into this. And I don’t know anything about cannabis. Well, that doesn’t make any sense. How are you going to start a business and you don’t know the actual… You don’t know the product. You don’t know the market. You don’t know anything about it. And there were two things. One was as I was saying Google and listening to podcasts. There’s a great podcast, Free Weed. I’m not sure if you’re familiar with it but I learned a lot from Danny Danko. The host of that, Free Weed. I learned a lot about cannabis from Danny Danko.

TG Branfalt: I learned about Danko from High Times Magazine. So when I was younger, and I would read High Times, and then he has a podcast much later anyway, it’s interesting.

Teddy Scott: Yeah. But the thing was, I went out to start to see operators in Colorado, California, wherever it might be. Just, I was like, “I got to find a partner because I don’t…” I’d never seen a cannabis plant.

TG Branfalt: Really?

Teddy Scott: Yeah, they’re unbelievable. It’s one of the craziest things. And as I went out there, that was the other ah-ha moment. There’s a thread of it all the way through today. As I was out there, I was touring, I won’t mention their name, but they were one of, if not the biggest operator in Colorado. I mean, they had tons of dispensaries and very well regarded. Very successful. But as I was watching their operations, how they were growing their grow facilities and the way they were doing things. As I was watching it, I went into that thinking, “I’m at a competitive disadvantage, because I don’t know cannabis.” But as I was watching them, I was like, “Wow, I actually have an advantage. They know cannabis right now. But they don’t know technology. And they don’t know how to run a business. They don’t know how to scale a business, huh, I know how to do that.”

And so that became really the big ah-ha moment. Beforehand, I had been thinking “Oh, I’m just going to start a small business.” But then I saw the opportunity to grow a big business. That I could see, or I thought what I saw and I’ve been right so far, is I thought I saw where cannabis was headed, that it was going to go from underground to a legal respected opportunity in business. Yeah, but at the same time, as that happened, look at any business. They start off manual, non-automated, unspecialized with technology. And what happens? They get more and more specialized, higher and higher technical, higher and higher quality, more and more reproducibility, innovation, iteration. That’s the way any business is. And I saw that.

TG Branfalt: Or they get pushed out for not doing those things.

Teddy Scott: Exactly. That’s the way it works. I’s an unfortunate thing. That’s why societies, you have to always have education, you have to have job training, you have to have advancement, because if you just keep doing the same old thing you’re going to get passed by. That’s just the nature of everything. And I saw that. And so that was really one of the key things that led to the founding of PharmaCann. And PharmaCann is not the only company that did it. We were in Illinois at the time, at that in 2014. And there’s tons of other companies that did the same thing.

Back in, I think it was ’15. I was talking to a very high up elected official in Illinois. And I was talking to him. And this was in early ’15. And I was like, “Do you know where the leaders of cannabis are going to be?” And he’s like, “I don’t know, Colorado, California?” And I’m like “I understand that you’re saying that, because that’s what everybody would say.” I was like, “That’s not it. It’s going to come here to Illinois.” He’s like, “What are you talking about? We don’t have anything, we don’t…” And I was like, “Where this industry is headed it’s no longer going to be these artisanal family, small business, it’s going to be big. It’s going to be sophisticated. It’s going to be corporate. That’s where it’s headed.”

And look at all these companies here in Illinois. GTI, Cresco, Verano, PharmaCann, Grassroots, I mean, those are big leading companies now. And go back to, I think it was 2015, I remember was like on the MJBizDaily, or one or maybe High Times what are the first billion dollar companies in cannabis going to be? And there wasn’t a single company from Illinois on there, now look at all those big companies. And there’s ones that are outside of Illinois but Illinois, I think it’s one of if not the highest concentration of big, well capitalized operating companies. And it’s all because of that Illinois was really at the precipice of when the wave changed from West smaller companies to these highly regulated sophisticated companies on the East Coast.

And so PharmaCann got started. And we started and as a basic strategy that I had at the time, and it’s not it’s not the same today, but it was back then is I would rather have hired someone that didn’t have cannabis experience, because what I was looking for is, do you know how to manufacture consistently? I’d rather you know how to grow acres and acres of poinsettias then to grow five marijuana plants? Okay the horticulturist that knows how to safely organically prevent pest and have a high degree of production and quality and consistency. That’s what I was looking for. Not someone that knew how to grow marijuana, and with the theory being, it may take some time. But the horticulturist can learn how to apply their experience to growing cannabis. But I can’t teach a master grower that can grow really good weed in their basement or in a small grow room. I can’t teach them how to grow hundreds of thousands of square feet in controlled environmental conditions, if that makes sense.

That was the basic and we as a company, myself and the other leaders we hired at PharmaCann, it took us a couple of years to figure stuff out, we didn’t know what the hell we were doing. I mean, the people that built our facilities when we built our first production facility we brought in all these engineers, and these architects and these horticulturist, and they’re doing their best to build this facility. But it’s never been done before the size, the people doing it have never done it before, you’re taking your best guess. But guess what, it’s a guess. You need to have some practice to learn and iterate. And so those first few years were spent just learning. People that had these skill sets to learn how to apply it to cannabis. And so, at PharmaCann like I said, the first few years were really spent learning and we thought that was okay, because the market in Illinois at the time was so small. And when we expanded to New York, once again, the market was so small.

The thought at the time was, “That’s okay, we got time. Yeah, we’re not going to go compete on the West Coast yet, because we’ll get killed if we go out there, because we don’t know what we’re doing yet. But give us a couple of years, and we’re going to pass them by, they know how to do it now. But they’re stuck. They’re plateaued. They don’t have the capabilities of getting better, but we do.” And that’s what happened. And we’re not the only one. That’s what the other big companies have done as well. They’ve had a long term view they’ve invested in themselves and their people, their systems, and they’ve learned.

TG Branfalt: So while we’re talking about the bigger companies and as you said a lot of those billion-dollar companies, they’re all multi-state operators who operate in the strict regulatory environments. And Colorado, California is a little more wild west, but what’s your response to those that criticize corporate cannabis, when I read the comments on the Facebook page on my story, which I don’t often, a lot of them anytime I write about sort about someone they consider corporate cannabis. I mean, it’s a call to arms.

But obviously as you said you put in however much money to build this state-of-the-art facility that’s never been done before. Which if you don’t have that financial backing is impossible to do. And not only what’s your response to those that criticize corporate cannabis, but what’s your take on the push to drive out or prevent such operators such as what’s playing out currently in Maine?

Teddy Scott: I’m not I’m not familiar with what’s going on in Maine. But I totally understand that criticism of corporate cannabis. I understand it, it’s deserved. But I think what people don’t understand is, number one, it’s a natural reality, okay? Everything, everything in life, whether you’re an athlete, you’re in business, no matter what it is, things get better. You have a choice, you can stay what you’re doing, or you can continue to grow. And anyone that was in this in the beginning, there were numerous cannabis entrepreneurs before I got into it, they knew much more about it than I did. they had a head start.

The question is, what do you do with your head start? Do you continue to grow and get better? Or do you stay where you are? It’s a lesson in life. It’s not just cannabis, it’s anything. And so that’s one thing. But the other thing I’ll say is, it’s unfortunate for those people that perhaps feel like they’ve gotten passed by, they were the ones that opened up the market. I mean, my myself and my other companies like us we’re standing on their shoulders, and we have to honor that, respect that. I mean, those men and women that were in this when I was in it, starting to look at it, in ’14 and ’15, they knew so much more than I did. I’ve learned so much from them. And I certainly honor them and respect that. And that I’m one of those corporate people, I would expect them to respect me for what I’ve done, and for we’ve done as well.

But then here’s the last piece. I don’t think they’re done. I think there’s always going to be a place for them. Yeah, they may not be CEO of a multi state operator, but do they really want to be? They still have an opportunity to continue doing what they’re doing and be successful. And I like to use analogies. But I think the alcohol, beer industry is a great example of you’ve got big corporate alcohol and beer. But guess what, there’s tons and tons of very successful popular micro brews. And I’ll bet you, if you ask anyone, I bet 95% of those business owners that have a microbrew or a brew pub I’ll bet you as 95% of them, would you give up what you’re doing to go work at InBev and be reporting to some bullshit corporate bureaucracy? They’d go, “Hell no, I’ll keep doing what I’m doing.”

And so there yeah, there’s that corporate world out there. But there’s always a place for people that are doing things on a smaller scale. And why? Because they’re able to establish a more one on one direct connection with their consumers. They’re able to pivot more quickly, they’re able to innovate in ways and do things that big corporate behemoths can’t. And so, I think there’s a place for both I understand the concern and the criticism that is out there with corporate cannabis, but here’s the problem. If you are not corporate cannabis, how in the world can you satisfy the safety standards, the accuracy standards of labeling to protect consumers? How can you ensure that you know the mold is not there? How can you ensure that the excipients that are going into your vape carts aren’t problematic? I mean, look at the vape crisis?

TG Branfalt: Yeah.

Teddy Scott: Okay. That right there is the perfect example of why you want corporate cannabis. Because these products, cannabis, rightfully so is talked about as a very safe product. Okay, and rightfully so. But there’s a big difference between bud and highly concentrated hydrocarbon extraction reformulated with all these chemicals. What is that shit coming from? How do you know the safety of that stuff? Yeah, you might see the raw cannabis and the safety profile for that is very different but oh, wait a second, there’s tons of examples of immunocompromised individuals burning cannabis inhaling-

TG Branfalt: Mold.

Teddy Scott: Mold and it killing them. Okay, how you protect that from happening? You have corporate cannabis. And so there’s a place for it. I’m not sure if that makes sense. I totally understand where they’re coming from and the criticism, but there’s a place for corporate cannabis and for the protection of the consumers that are out there. You want those protections in place, and it’s only corporate cannabis that’s going to be able to really meet those safety standards.

TG Branfalt: Well, especially on that scale. To your point, if you’re a mom and pop shop you might be making one-tenth of the product that a massive company does, and that’s to your scale. So you’re so they’re able to make sure that it’s safe by and large.

Teddy Scott: Yeah, it’s a little bit off topic, but it’s irrelevant. Like you can look at CBD right now. Everybody can tell CBD has a huge opportunity. But when you go into-

TG Branfalt: Gas stations.

Teddy Scott: You go into a gas station or a Bed Bath and Beyond Where the hell did that come from? Nobody knows.

TG Branfalt: And that’s a really wild thing, is it’s so much different from state to state that you can’t guarantee that the same label even is the same from state to state.

Teddy Scott: Yeah, I don’t know what’s going to happen. No one knows. But where it should happen is raw cannabis is closer to maybe produce there’s been intoxicants and that needs to be regulated. But when you start getting into the extracted products, man, the risk profile of extracted products, they’re log units, I mean, multiple, multiple higher factors of risk for the individual consumer with those extracted products.

TG Branfalt: I do want to backtrack a little bit you had said, when we first started talking about corporate cannabis that you’re aware that the industry is on the backs of those that came before and we have to talk about the entire industry is also based on a drug that is still predominantly illegal, illegal at the federal level. People still arrested for it, I think something like 85% of arrests in 2014 were nonviolent, nonproperty arrests, many of them for drug possession. And so and the industry is predominantly white, and male, for that matter. And in you with Ethos, working with social equity applicants in Illinois for those are not familiar social equity applicants, programs, different states have different rules, but by and large, it’s for communities that were most affected by the war on drugs.

You’re really the first quote, unquote, corporate cannabis CBD CEO, that I’ve had the opportunity to talk to that actually has one of the social equity applicants partnerships. Can you tell me about that? What does it look like in Illinois? Is it coming as quickly as people had hoped? I mean, the Coronavirus I know, set it back. And specifically, I’m more concerned about what your partnership looks like, and what is the hopeful outcome?

Teddy Scott: Yeah, I got into it. I was going to do it, regardless. One of the things I’ve been involved with for a while is mentoring people. And I mean, I think as being an entrepreneur is one of the greatest experiences I’ve ever had. And it’s a thing that not many people get a chance to do. And so really trying to help people, encourage them because it’s scary to become an entrepreneur. And I started helping, I get asked to talk to people a lot, and I usually do those things. And there was a Black lady that reached out to me wanting some further coaching. And I was like, sure. And as I was talking to her, it was back little more than a year ago. And it was back when Illinois was looking at putting the thing in place.

And as I was talking to her as I was like she was looking at doing a… Essentially, she wanted to help out. She had a business it was essentially job training and she wanted to job train African Americans to help them get into the cannabis industry as it was coming to Illinois, and I was talking to her and I was like, “Why don’t you start a dispensary instead, go to where the money is. And on top of that, if Illinois passes this law, it’s if it happens, social equity is going to be a big part of it’s going to be for people like you.” I mean, she grew up on the south side of Chicago. “And it’s going to be for people like you it’s like, go to where the money is, instead of being a staffing or training agency. Wouldn’t you rather be in the business?” She’s like that’s a great idea.

And I started meeting with her, just as a pure mentor. And it gave me the idea of wow, I could really help more, this could be scalable. This could be bigger impact, not just this one person, but bigger. And I went to my company, my new company, and I was like, “Hey, I’m going to help this person and maybe some others. But I think we should do it as a company. And it’s the right thing to do. It’ll be good for us as a company, it’s certainly not the best use of our capital, it’s not the best use of our time. But I’m a big believer in pay it forward, you do the right thing. It may be hard in the beginning, but it will be recognized, you’ll get rewarded for it later.

And that’s one of the reasons we went into it. But I also felt like, as I was talking to her at the time, reparations is a bad word to use, or it has been in the past, it’s being talked about in a different way now, but I was like cannabis, really, perhaps could be that driver, whether you call it reparations or not. It has an opportunity to be that. And as I was talking to her at the time, she had some relationships with the legislators and the Black Caucus here in Illinois. And I was like, “Hey, you should go and lobby, do your best. Go, go talk to your representative. And make sure they set this thing up. So it benefits people like you.” Because that’s the way politics works,  and it’s like to get this thing passed, it’s going to require the Black Caucus, well make sure the Black Caucus doesn’t vote for it until their community gets a piece of this, is able to get the upside on it.

And so back to your thing. Yeah. And in most of cannabis, just like most any other industry in this country, it’s dominated by white males. Unfortunately, that’s the systemic systems that have been set up, it’s going to take, my God, there’s no telling how long it will take to fix those problems. But hey, I think cannabis is really one of the first things that was and I think it’s just because we’re creating it from scratch, it’s like, “Okay, how we’re going to set up the rules of the game. So everybody wins?” Not just, I think I’m entitled to have some degree of winnings. I’ve worked hard. I’ve done a good job. I’ve put a lot of time and effort into it. But maybe we can set this thing up that more people than me can win it, if that makes sense. And so I think cannabis really has that opportunity. Yeah, could it be better? Could it be faster? Sure. But that’s the way it always is. As a lawyer, one of those things you learn is if you’re ever having a settlement, and two people walk out of there, and neither one of them is happy you had a good result. Because that’s just the way it works. It’s like if everybody gets what they want, that means somebody didn’t get what they deserve. And so you’re trying to find that middle ground to do as much good as possible.

And so we ended up working with five groups, where we’re putting all the capital to them, we did all the work, myself and my team [inaudible 00:35:37]. We do a good job of doing the applications. And we’re going to commit to funding them if they win these dispensary licenses. And we’re going to win in it as well. I mean, we’re a minority owner, but it’s still going to be their business, I talked to them all the time. And they’re looking to me to do stuff, I was like, “Hey, this is your fucking business. Come on. I’m here to help and help point but your business. Come on, where are we going to do it?”

TG Branfalt: A little bit tough love there.

Teddy Scott: Yeah, that’s the way it is. The goal is, we want them to build a successful business. Because they’ll get something out of it from a skill set, their pride, the people around them, and they’re creating these businesses. It’s not just a handout or a check, let’s build wealth, let’s build an industry that is inclusive of everybody of society. And so it’s a really good opportunity.

It’s unfortunate. I think the Illinois system, they did a really good job with it. No system is perfect. What I’m referring to is as a loophole, we’ll see what happens when those awards come out. I’ve actually tried to help them draw some attention to it. I hope it doesn’t work out this way, the craziness of it is the way those licenses work, you essentially get bonus points if you’re a social equity applicant, and everybody assumes those bonus points are so many that you probably need to be a social equity applicant to win. And the crazy thing about it is there’s three ways you can qualify. Two of those three you would look at and go yep, that’s social equity. Well, one of them, and I’m kidding you not. If I wanted to, if my company wanted to, we could have qualified, all we would have had to have done is go find 10 people from one of these areas, hire them, pay them minimum wage for a few months, we would have qualified. I don’t think that-

TG Branfalt: Seriously?

Teddy Scott: Yeah. And it’ll be interesting to see how the winners work. I’m hopeful that none of those people win. Because if they do, I think it’s taking away the opportunity from the people like what we have in our groups. And there’s tons of other groups that are like ours. These are the people that were on the wrong end, not only the war on drugs, but more problematically just the systemic racism in the country in general.

TG Branfalt: Yeah, one of the things we talked about New York briefly, but one of the things that was happening in New York for years and years was the stop and frisk, which basically the cops would say, pull whatever you have out of your pockets. And if you had a dime bag, now you have marijuana in public view, which is a crime. So we have a few minutes left here, what advice would you have for entrepreneurs? What’s your response to, I guess, the most common question that people who seek your counsel is?

Teddy Scott: The thing I always… To an entrepreneur. And it’s the one of the things I learned that was one of the most valuable lessons, and there’s a number of them, but from to an entrepreneur is, man, just start. The first time you start something, it’s really scary, anything you haven’t done before, you’re going into a new area for you, yourself. I mean, that’s really intimidating. Especially when you’re putting money on the line, maybe reputation, risk, whatever it might be. And it’s one of the reasons I try to mentor people so much is to help them, I think one of the most important things I do for them is help paint the picture to de risk it for them to make it not so scary, because at least for myself, anyway. I’m not saying it’s easy, being an entrepreneur is hard. It’s really hard, but it’s so rewarding, to see what you put into something. See the results of it. But also, once you get started, what I realized is the biggest battle is just fucking trying.

I mean, most people sit on the sidelines, and don’t try out of fear. I mean, naturally as people, we’re afraid of the unknown. And if you just try, you might fail, but you will learn so much in the failure, that the second time you do it, or the third time you do it, you’ll no longer be scared, you’re just continuing to do it. And eventually, I think it pops for them. And it may be not on the scale of maybe some other people, but in a scale that is rewarding, and is beneficial and what they were looking for all along.

And so that’s number one, the other one that I cannot say enough as well, is it is so important, people talk about it in culture, culture is so important. I did not realize how important it was. I thought mission, vision, values, all that stuff. I thought it was just hype, or not even hype, just it was just words on the wall. But what ends up happening is when you’re doing a business, I mean, you can’t do it yourself. Well there’s some businesses that are solo entrepreneurs or solo service providers. But most businesses are not that way. You have a collection of people and they have to work together. Well, how are they going to work together, If they’re being assholes to each other or treating each other badly? They’re being selfish. They’re being demeaning. Well, guess what? That business is not going to perform well.

And so when you’re starting the business, the mistake I made in the beginning was I looked for skill sets. I was talking about that earlier. I was looking for the horticulturist, I was looking for the scientist. What I did not appreciate his who were they as a person, because I’m going to be in the foxhole with them for years as we’re building this. And if we don’t get along and it’s not like we have to get along and be best friends.

TG Branfalt: Yeah.

Teddy Scott: But we have to have the same values because if they’re different, you’re going to have problems. And so those are the two things I tell entrepreneurs, try, don’t be afraid, just try, get going. Try it on one thing and chances are, it may not work, that’s fine, because you’re going to learn from it and the next time, the likelihood it works goes way up. But then that other one is, when you’re picking your co founders, when you’re picking those first people, look more than just their skills, look at them as people look at what’s important to you, what’s necessary for the business. And that’s more important than their skill set, you have to have the people all on the same page from a culture standpoint.

TG Branfalt: So this has been one of the most candid interviews that I’ve had with a CEO of your stature and I really appreciate how forthcoming you’ve been, super fascinating just story that I would love to sit here and learn more about for the next 40 minutes but we can’t do that. But I would love to have you on again and keep this conversation going. Where can people find out more about you and Ethos Cannabis in the meantime?

Teddy Scott: Sure, great and I would love to be back on, this has been fun. The company I’m CEO of is Ethos Cannabis, that’s the website ethoscannabis.com, we are in Pennsylvania and Massachusetts, a couple of sites open today in Pennsylvania, but there’ll be a large number of them open in the next six months and Massachusetts we should have four sites open in the next few months. We have an acquisition that’s pending regulatory review should happen in maybe a month for four dispensaries in Maryland. So that’s where we are right now — the DC area, the Baltimore area, Philadelphia area, soon to be Pittsburgh, the Boston area and have these licenses in application with our partners here in the Chicago area and also a license waiting on review in New Jersey. So there’s a lot happening.

TG Branfalt: You’ll be in my neck of the woods soon enough. I frequent dispensaries in Massachusetts and-

Teddy Scott: Oh okay yeah, great.

TG Branfalt: Yeah. I’m close enough to Massachusetts.

Teddy Scott: Yeah, first will be in Fitchburg should be open there relatively soon.

TG Branfalt: I’ll definitely have to head down there once it’s open.

Teddy Scott: Well, great. Well, let me know when you’re going to be there. I get up there and decent amount. I’ll make sure to try to get there to arrange that time to get to meet in person.

TG Branfalt: It’d be great to meet in person. This is been the Ganjapreneur.com Podcast podcast with Teddy Scott, he’s the CEO of Ethos Cannabis, a multi state operator. He’s got a PhD in molecular biophysics from the University of Texas, JD from the Northwestern University School of Law. Really great to have you on the show, Teddy, thank you so much.

Teddy Scott: No, thank you, sir. Thank you.

TG Branfalt: You can find more episodes at the Ganjapreneur.com podcast in the podcast section of Ganjapreneur.com on Spotify and in the Apple iTunes Store. On the go Ganjapreneur.com website you’ll find the latest cannabis news and cannabis jobs updated daily along with transcripts of this and other podcasts. You can also download the Ganjapreneur.com app in iTunes and Google Play. This episode was engineered by Trim Media House, I’ve been your host TG Branfalt.

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Police Break Up Interstate Cannabis Smuggling Group In Washington

State and federal law enforcement agents conducted a massive raid on an illicit cannabis operation last week in Washington state. Working together, the United States Postal Inspection Service, other federal agencies, and the King County Sherriff raided 27 homes in Skyway, Renton, Kent, Maple Valley, SeaTac, and other Puget Sound communities, according to KIRO 7 News

Agents found and removed processed cannabis, thousands of plants, and related documents from the homes. According to agents, the group’s illicit cannabis products were being mailed to nine states around the country including Illinois, New York, New Jersey, Pennsylvania, Kentucky, Massachusetts, Connecticut, Georgia, and Missouri. Of those states, adult-use cannabis has only been legalized in Illinois and Massachusetts.

“This is a particularly egregious ring. You’re talking about over the course of this investigation there are probably tens of millions of dollars of product that have been shipped to multiple states nationally.” — Tony Galetti, Inspector in Charge with the U.S. Postal Inspection Service, via KIRO 7 News 

Due to its designation as a Schedule I narcotic, cannabis remains federally illegal and cannot be shipped across state lines, even between states where adult-use cannabis has been legalized.

In 2019, Oregon passed legislation to allow for interstate cannabis commerce between states. The bill, which was approved last June, would allow Oregon-grown cannabis products to be shipped to neighboring states that have also legalized cannabis — Washington, California, and Nevada. Oregon-legal cannabis would not be allowed to cross into (nor fly over) states that have not legalized cannabis. The law, however, also requires the federal government to approve such transactions and there is currently no precedent or plan for doing so.

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Purdue Pleads Guilty to Criminal Opioid Practices

Purdue Pharma has pleaded guilty to illegally pushing its infamous OxyContin product and faces a potential $8.3 billion in federal penalties, the New York Times reports. Members of the wealthy Sackler family, which owns Purdue Pharma, also agreed to pay $225 million in civil penalties. Prosecutors with the Department of Justice, however, said that further criminal charges against Purdue executives and the Sacklers themselves were not yet off the table.

OxyContin — which was first released on the market in the mid-1990s — is widely considered an early driving factor of the ongoing opioid crisis that has killed more than 450,000 Americans. Purdue has been accused of pushing the addictive opioid too aggressively and with illegal marketing tactics that included financial kickbacks to doctors who overprescribed the drug.

Steve Miller, chairman of the board for Purdue, said, “Purdue deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice in the agreed statement of facts.”

The Sackler family issued a statement, however, that they “acted ethically and lawfully,” and that, “The board relied on repeated and consistent assurances from Purdue’s management team that the company was meeting all legal requirements.” The Sacklers — who are worth an estimated $13 billion, largely due to OxyContin sales — are also controversially seeking to have the family dropped from the litigation process as part of the Purdue settlement conditions.

The federal settlement is only the latest development in a large and crowded effort to hold Purdue accountable, which includes litigation from states, tribes, counties, and cities from around the US who claim the company’s aggressive marketing fueled the opioid crisis and resulted in massive costs related to health care, law enforcement, and unemployment. According to the report, however, the company is unlikely to pay anything close to the $8.3 billion settlement because it sought bankruptcy protection in light of the many lawsuits it faced.

Critics also suggested that the federal settlement was rushed to create a win for President Trump ahead of the upcoming election — Trump’s promise to address the opioid crisis was a big focus of his 2016 campaign.

“The D.O.J. failed. Justice in this case requires exposing the truth and holding the perpetrators accountable, not rushing a settlement to beat an election. I am not done with Purdue and the Sacklers, and I will never sell out the families who have been calling for justice for so long.” — Maura Healey, the Massachusetts Attorney General, via the NY Times

A final settlement for the individuals, states, tribes, counties, and cities who are also seeking compensation for the crisis could total more than $10 billion and is expected early next year.

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Washington Social Equity Program Off to a Bumpy Start

During the 2020 legislative session, the Washington State legislature passed HB 2870, making Washington the latest state behind Massachusetts, Illinois, and California to endeavor to create social equity provisions for the cannabis industry. The legislation was inspired by cannabis social equity movements from around the country and seeks to rectify the devastating effects that the “war on drugs” has had on communities of color, particularly African Americans.

Unfortunately, like other states, Washington is finding it difficult to dismantle institutional racism with the cannabis plant.

The social equity task force

Under the new law, Washington must establish a “Social Equity in Cannabis Task Force” (SECTF), which will make recommendations to the governor, before the state can implement any social equity provisions.

Slightly delayed by the coronavirus — Gov. Jay Inslee announced the SECTF members in July — the task force will hold their first public meeting on October 26, 2020. The task force is made up of members of the Washington State House and Senate, members of African American, Latin and Native American Communities, cannabis retail licensees, and representatives from several executive branch agencies, including the Department of Commerce who will oversee a 1.1 million dollar program designed to assist applicants in attaining a retail cannabis license.

According to government sources, the task force’s goal will be to, “…make recommendations to promote business ownership among individuals who have resided in disproportionately impacted areas of high poverty, to remedy the harms resulting from the enforcement of cannabis-related laws. The Task Force will work to center the voices of those who belong to communities that have been most impacted by enforcement of cannabis-related laws.” 

Although the COVID-19 crisis has delayed the task force meeting, the LCB recently held three (down from the initially proposed five) virtual “community meetings” in order to explain regulators’ role in the social equity program and to hear from individuals looking to obtain a social equity license. Scheduled for late September and early October, the three meetings highlighted current regulations and LCB responsibilities. At the second meeting, some attendees expressed concerns about the SECTF.

Aaron Barfield, founder of Black Excellence in Cannabis said in an email after the meeting, “The task force has no authority, only the power to make recommendations to the LCB. The LCB pushed forward the legislation that created the task force because it allows them to appear to be working on solving the problem they created without significantly changing the status quo.”

“There is serious concern that the social equity licenses will not go to the industry pioneers who have been fighting for inclusion, but to rewarding opportunists who supported the LCB legislation.” — Aaron Barfield, founder of Black Excellence in Cannabis, in an email

The dismantled medical cannabis system

Other concerns center on the narrow applicant criteria. According to LCB officials at the community meeting, “applicants must live in a disproportionately affected area” —  a term yet to be defined by the SECTF — or an applicant or an applicant’s family member must have been arrested for a cannabis crime.

At the community meeting, Barfield and other applicants said they already had successful cannabis businesses prior to 2015 but have been left out of the new system. One applicant at the meeting, who went by “Sammy,” said, “The LCB should fix the problems they have already created before starting a new program.” 

Barfield agrees. “The licensing issue has been extremely stressful and financially disastrous for many Blacks,” he said. “We went from running successful enterprises as medical cannabis providers to having our businesses hijacked and being told we had to run through an LCB obstacle course to get them back. An obstacle course that the LCB made impossible for us.” 

Barfield is referring to the 2015 merger of Washington’s state’s longstanding medical cannabis program and the adult-use cannabis system created under the state’s successful legalization initiative I-502. At the end of that process, the LCB withdrew nearly two thousand retail cannabis licenses. Several attendees at the meeting said many of these applicants were members of communities of color.

“Ultimately, we’d like to see cannabis taken out of the hands of the LCB as they’ve destroyed their credibility and proven incapable of regulating in an honest and fair manner. Cannabis should be regulated by the Dept of Health and the Dept of Agriculture and licenses should be much more widely available.”

Lacking producer/processor considerations

Others at the “community meeting” were concerned the new program only addresses retailers, not producers or processors. Dr. Darlene J. Conley Ph.D., a Black Tier 1 producer in Tacoma, WA who is still fighting to open her cannabis business, said at the meeting that, “Many African Americans have experience in growing and processing cannabis, not only retail.” In a communication after the meeting, Dr. Conley said she doesn’t think adding producers and processors to the social equity program would affect current licensees as many are only small producers like hers. She believes the LCB, similar to the retail social equity program, could make licenses available that were either revoked or never used.

In a letter to Gov. Inslee commenting on HB 2870, Dr. Conley explained why she believes communities of color were left out of the process. 

“Many African Americans and LatinX developed highly specialized skills learning to grow marijuana, but were not able to enter the legal market because of a number of factors linked to institutionalized racism in the economic and criminal justice system. Virtually all of the top growers and processors in the industry learned their craft when marijuana was illegal. However, because African Americans were disproportionately targeted for surveillance and arrest in their communities, they were ineligible to apply for licenses once the industry was legalized.” — Dr. Darlene J. Conley, in a letter to Gov. Inslee

Multiple studies corroborate Dr. Conley’s statement, including a study by the Multnomah County Health Department in Portland and the Oregon Public Health Division. The study published in “Substance Use & Misuse” in 2019 looked at cannabis arrests between 2012 (legalization) and 2015, showing that overall cannabis arrests have gone down in Washington for both Black people and white people since legalization. However, since the retail market opened in 2014, cannabis arrest rates for African Americans have doubled and African Americans went from being arrested 2.5 times more than their white counterparts to being arrested 5 times more.

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San Francisco Dispensary Employees Ratify Union Contract

Workers at San Francisco, California dispensary Stiiizy Mission have ratified a contract with the United Food and Commercial Workers Union. The deal includes a salary increase that averages $3 an hour over the three-year life of the contract, a pathway to full-time work, and employer-provided health insurance and retirement accounts.

The workers approved the contract unanimously.

Kat Gonzalez, a budtender at Stiiizy Mission, described the process as “long” but “worth it in the end.”

“It feels good to know we have a team like UFCW 5 behind us to protect our rights as workers and help us advance in our careers within the cannabis industry. Every position is important in cannabis and being a part of the union ensures that budtenders are the backbone of the cannabis industry. We are not disposable, and our jobs deserve protection; it feels great to have that recognized.” – Gonzalez in a statement

According to the press release, UFCW 5 represents hundreds of cannabis industry workers throughout the Bay Area. In California, cannabis businesses over a certain size must enter labor peace agreements.

The UFCW has also recently reached agreements with cannabis workers in Massachusetts and Illinois. The union says it represents more than 10,000 industry employees nationwide.

According to the UFCW website, the union represents workers at major cannabis brands, including Wonderland, The Joint, Mr. Nice Guy, NRX, Modern Buds, Long Beach Green Room, McKesson, Have a Heart, and Garden State Dispensaries.

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Adult-Use Cannabis Sales Launch In Maine

Adult-use cannabis sales begin today in Maine nearly four years after voters in the state approved the reforms. Recreational use customers can purchase up to 2.5 ounces of a combination of cannabis and concentrates, but no more than 5 grams of concentrates.

According to WGME, state budget experts predict adult-use sales will reach more than $250 million in Maine by 2025. The state is estimating $6 million in sales tax revenues from the space – set at 10 percent –  in the first partial year of sales along with $6.8 million in excise taxes, which only apply to growers on flower and seeds.

Currently, the state has licensed just five dispensaries for recreational sales in Bangor, Northport, Newry, and two in South Portland, the report says.

Thomas Winstanley of Theory Wellness, one of the license-holders in South Portland, said the company wants “to define what the future of cannabis can look like” and “help reverse the stigma” associated with cannabis.

While there are currently no testing requirements for the state’s medical cannabis products, adult-use products must be tested for potency and contaminants.

Kaspar Heinrici, of South Portland-based SeaWeed Co., said customers can “expect prices to be a little bit higher” due to testing costs and taxes.

Despite being legalized in 2016, the rollout of the adult-use program was delayed first by former Republican Gov. Paul LePage, who twice vetoed industry implementation bills, and then by the coronavirus pandemic.

New England now has two states with recreational cannabis sales – Maine and Massachusetts – while Vermont just legalized sales, which are not expected until 2022, after approving adult use and possession in 2018.

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Jon Lowen: How to Reach Cannabis Consumers with Targeted Marketing

Between regulations and the still-dwindling stigma from decades of prohibition, cannabis companies have an inherently tricky job when it comes to advertising and growing their customer base. In a recent interview, Jon Lowen of Surfside joined our podcast host TG Branfalt to discuss the nature of cannabis advertising, what differentiates cannabis marketing from other industries, and how they use primary data sets to identify and target new potential customers. Jon also describes what first drew him to the cannabis space, offers his advice for industry newcomers, and more!

Tune in below or through your favorite podcast media player. You can also scroll down to find a full transcript of this week’s episode of the Ganjapreneur.com Podcast.


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Read the transcript:

TG Branfalt: Hey there. I’m your host TG Branfalt and thank you for listening to the Ganjapreneur.com Podcast, where we try to bring you actionable information and normalize cannabis through the stories of Ganjapreneurs, activists, and industry stakeholders.

Today I’m joined by Jon Lowen. He’s the co-founder of Surfside, a direct-to-consumer marketing firm, whose mission is to build an ecosystem of products that make consumer acquisition smarter, faster, and more engaging for modern brands. How are you doing this afternoon, Jon?

Jon Lowen: Doing great. How about you?

TG Branfalt: I’m good. I’m good. As many of my listeners know, I’m actually a media studies professor. I have a master’s degree in communications, which includes a lot of sort of marketing stuff. So, this sort of what you do is in my wheelhouse a bit, but before we get into what you do, tell me about yourself, your background, and how you ended up in the cannabis space.

Jon Lowen: Yeah, definitely. So I always thought that I would be a doctor and then I switched to thinking I’d be in banking. And then the banking industry fell out right around when I was coming out of school. And I ended up at an ad tech company where we were focused on buying and selling ad inventory for hunting and fishing websites, and we called it a hook and bullet. And so that was my kind of entry into ad tech.

And working at a small startup became kind of my MO and my interests and where I really saw kind of the ability to build companies and build products was really interesting to me. And so I’ve ever since kind of been in the ad tech space and working at small companies, helping them grow.

Our latest foray was after the ad network business came along and programmatic kind of made those businesses a little bit more difficult, we ended up starting a location-based mobile company. So using location data to find targeted or to better indicate intent. So ultimately how can someone’s movement patterns or location that is being passed from their cell phones help you better identify users from an advertising perspective?

And from there I met my co-founder and we started Surfside and the genesis of Surfside ultimately was how can we take things beyond location? So location was a great signal for us, as the places you go, the places you visit is, like I said, a great indicator of intent but we wanted to know more about the consumer. And so we wanted to be able to bring in purchase data and behavioral data and psychographic data.

And we found that a lot of the businesses that we were working with wanted to be able to better monetize or activate their customer data, the data that they readily had access to. They didn’t feel like they were getting the value out of it. And so our mission was ultimately to start a company where we could work directly with brands, retailers, medium to small sized businesses just as much as the Fortune 500 and be able to offer this suite of services so that they could better action and take advantage of their customer data to make better business and marketing decisions.

And cannabis came along as one of our first clients. We had a former board member at one of our companies who entered the cannabis space and was looking for an edge in the marketing and data collection. And we started working with this company who ultimately is an MSO now and we got really interested in this space and we saw that, oddly enough, that the marketing was kind of limited to ad networks, something that I had done early on in my career and had seen how that technology has progressed over time.

And we saw a really clear path for what we were building around consumer identity and the ability to be very granular with our targeting, using location data that really hit all kind of the boxes when we talk about fulfilling and maintaining compliance and helping cannabis companies actually advertise at the scale that they’ve been lacking and targeting the right consumers, rather than just targeting contextually relevant websites.

And so Surfside was born. Well, the tech was born and we kind of pivoted and started focusing really solely on the cannabis space to be able to prove out the efficacy of the technology that we had built or had been building.

TG Branfalt: So you mentioned that the space lacks a lot of that sort of that marketing ability that a lot of other, I guess, normalized industries do have. So why don’t you explain briefly some of the differences, both policy and sort of actual between marketing cannabis, right, hemp products and the ancillary businesses that serve the industry.

Jon Lowen: Yeah. I would say that like, as far as the lacking of technology, it’s not out of a function of the technology’s not there. It’s a function of the people who kind of control the reigns of that technology or that inventory are not interested in the risk of working or allowing those types of brands or advertisers to use their software or use or have access to their inventory.

And so the early days was very much finding inventory partners that were willing to accept CBD, THC advertisers or even the ancillary businesses. And so once you kind of solve for the inventory supply, which was kind of, having been in the industry and been working with these vendors and inventory suppliers for a long time, we kind of had a leg up as far as our ability to have a prior relationship with them and being trusted allies with these different companies.

And so that gave kind of an inroad to prove out that these are quality companies there. Everything is going to be compliant as it pertains to the different legislation at a state-by-state or local level. And once you kind of provide that confidence and that trust, a lot of technology and a lot of capabilities really open up to you and you can start using, and we start building out really differentiated tech, not only for cannabis but that’s actually differentiated in other verticals as well.

And we’re starting to see actually some really unique things happening in the vertical that, and when we talk to our partners and other software and vendors that we’re integrated with, how they might be looking at other verticals, because what they’re doing is unique because of the complexity. The complexity and the nature of this business has kind of born some really cool things and some cool technology that might bear fruits in other industries.

TG Branfalt: And you mentioned sort of the policy differences. You and I are both in New York where we have medical cannabis and there’s, as far as I can tell, there’s no advertising of cannabis businesses allowed. However, when you drive on the thruway going towards Massachusetts in Albany, you definitely see on the billboards advertisements for Canna Provisions, let’s say, for dispensaries over the border. So, there’s obviously a learning curve, right? How do you navigate the various marketing restrictions on cannabis from state to state?

Jon Lowen: Yeah, so the first thing is we kind of bucket compliance in three different categories, creative, placement, and targeting. So, and to kind of answer more directly, it’s for us, we have intimate knowledge of all the different policies. As things are changing, we’re getting notifications and updates and constantly managing like kind of legislation as it pertains to the marketing and what we can and cannot do or can and cannot say.

But back again on those three different categories, it’s making sure that the creative is compliant and making sure that when we’re delivering an ad, every operator is going to be licensed in specific states, so ensuring that those ads only are being delivered in areas where they’re licensed.

And then from kind of the targeting and placement perspective, placement I mean, I kind of discussed before. It’s ensuring that the inventory that you’re delivering is going to be over-indexing for 21 plus. There’s kind of different percentages that those sites need to obtain in order to be qualified as compliant.

And then for us, we find that people really don’t talk about is the fact that targeting is a little bit more unique and that solving for creative, being able to understand whether or not your designers are putting in the right messaging and not targeting certain, making certain health claims or targeting minors, a lot of that is very controllable in your hands as far as the design perspective and understanding where your ads are being placed. You also have pretty direct control over when you’re talking about specific billboards or buying different websites or mobile apps.

But when it comes to targeting, ensuring that your ads are being delivered in the proper location, maintaining them within state lines, and then being able to ensure that you’re not targeting schools or public transit shelters and other areas that are kind of blacklisted or not allowed as it pertains to the targeting aspect of the compliance regulations, that kind of stuff, it takes a little bit more know withal and a little bit more expertise as far as being able to understand fraud, location data, making sure that the data that you’re receiving is relevant and accurate and precise.

And that comes into our past experience in being able to be kind of one of the experts in the location data field to make sure that the targeting is just as important as the kind of things that you will do at the onset of a campaign before it launches.

TG Branfalt: So you talk about all this data that you use to drive these sort of campaigns. Where does that data actually come from? And of the probably swath of data that you get, what data are you looking for and how do you actually leverage that?

Jon Lowen: Yeah. So for us, we wanted to move beyond the standard kind of available information that kind of is licensed out or sold or something that might be a little bit more readily available to all players in this space. So for us, we wanted to be very in tune and have the most intelligent and the most complete data set as it pertains to the cannabis consumer.

And in order to do that, that meant integrating with companies and platforms and businesses that had really good relationship with the consumer and so purchase data at the consumer level. And we have a number of different partnerships with POS systems, eCommerce platforms, marketplace specific brands, websites, and et cetera. So that we understand there are these offline behaviors of the cannabis consumer and the online behaviors and we bridge that gap and tie it back to this all anonymized, privacy compliant, taking into account CCPA and PII and HIPAA, all these different regulations so that when someone comes to us and wants to understand not only people who maybe recently visited a dispensary, but maybe specifically, “I want to target people who have an average basket size of over $150 and are buying edibles in the California market.”

And so like categorizing people by product category consumption, method, symptoms that they’re looking to treat, all in a compliant fashion gives you this really granular way to build out these audiences. And by tying to these different purchase points, it makes it really easy for dispensaries and brands to utilize existing software that they’ve implemented and being able to activate these learnings and these insights for their own business and media purposes.

TG Branfalt: So is there any data that you have access to that you choose not to use for sort of marketing purposes and if so, why not? And if not, why?

Jon Lowen: So, there’s a number of current and incoming kind of privacy and consumer regulations that come into play. Like you look at CCPA, you look at like PHI, any of the HIPAA Act and anything that is considered medical record. All that data is not usable.

And so in order for us to be able to use certain information, we have to obtain the consent from consumers. We’re obtaining consent from the different platforms and the different dispensaries or brands that we’re using for. A lot of the times when we’re working with the dispensary and they’re providing us data, they want to use it for their purposes only, and it’s not going to get merged, or it’s not going to get utilized by their competitors is ultimately their biggest concern.

And for us, in order to scale our business and in order to help them, like we’re not trying to create a marketplace where a customer can come in and necessarily buy their competitor’s data when it’s not in the best interest of our clients, it’s not in the best interest for us to help grow their business. And so that type of data is not available or not used. And then there’s obviously all the regulations around how and when it’s appropriate to use certain data based on the specificity or the legality of it.

TG Branfalt: So, I mean, as you said at the top you’ve been in this sort of marketing industry and you started in a niche industry, hunting and fishing, that’s not sort of a mass industry.

Jon Lowen: Bigger than you think.

TG Branfalt: Well, as opposed to groceries. I mean, I live in the Adirondacks.

Jon Lowen: Yeah.

TG Branfalt: I know how big the industry is, right? But I think that what I’m trying to get at is how much has sort of the data points or the information that you have access to as a marketer changed as data has become, right, everyone has a cell phone, it’s become a much sort of bigger element, right?

Jon Lowen: Yeah, definitely. The phone, in general, like consumption of your digital behaviors are growing every year and they’re not slowing down. So by nature, there’s going to be much more information that all these companies are going to have on users. Like the unpopular kind of view is the Internet’s free and it’s ad supported. So, do you want the content and the internet to be free, you have to kind of allow them to advertise to you and accept ads. And what they do, some companies do a little bit more with your data than others, and it’s kind of a gray area and that’s where you start seeing some of the CCPA come into play. We’re fully prepared and fully believe in kind of those consumer rights, as well.

But when it comes down to the different advances like mobile, like you discussed, that phone’s with you at all times. And there’s a number of different apps on that phone that are pinging for location and submitting and aggregating that to better serve you ads.

And in addition to that, cannabis is really unique in that every purchase, more often than not, requires you to provide your license and provide information, more information than you normally do at the point of purchase. So it allows for this ability to create a better graph or better understanding of who the customer is. And from a dispensary’s perspective, this is really valuable because, and even from a brand perspective, is that because you can start personalizing and building product geared towards the interests and what your customers are valuing.

And so you can start creating better user experiences. You can start creating better pricing structures and better products, but ultimately keep your customers coming back to your brand or to your dispensary. So it’s not all about kind of the targeting and the marketing aspect of it. It’s more about like, how can this data set and this information also help with brand and product development.

TG Branfalt: When you talk to dispensary owners or business owners, how frustrating, or is it frustrating for them sort of the rules that are in place as part of regulations? I mean, do they understand them or is it sort of one of those, like, “I can’t believe that we don’t have access to sort of traditional services.”

Jon Lowen: I think that, and I think that even like in March, March and April, we’ve seen that there’s pretty heavy swings and trends in the industry and demand fluctuates. And to date there hasn’t been a huge like, “Oh man, I really wish we had these different technologies or capabilities.”

I think that it’s coming to a point where more so now that we are beginning to see a lot of companies in this space trying to differentiate their marketing and get access to these new different technologies in order to expand their user base and to start being able to move away from the email marketing and the SMS, like the loyalty programs and the retention strategies that existed.

TG Branfalt: Okay.

Jon Lowen: So, it’s definitely been a bigger push we’ve noticed in the last six months to get into this customer acquisition. And even specifically with COVID the brands who primarily were using budtenders and dispensaries to educate and inform and reach consumers, they now with that kind of in-store pickup not being as required as it used to be and you start having states with delivery and curbside pickup, the brands are now realizing that it’s necessary to own that consumer relationship. And so being able to communicate directly with the consumer and handle that education is now a big push for them and using these different technologies is going to be key to that.

TG Branfalt: So I want to talk to you sort of about Facebook real quick. It’s the largest social network. Virtually everyone has a Facebook account and recently they updated their policies to allow for quote, “Verified cannabis companies to advertise,” sort of simple advertising. Have those, in your sort of expert opinion, have those guidelines that they’ve sort of offered for these verified cannabis companies, have those been effective to sort of changing the playing field a bit and how can a company best utilize that platform if they choose to use social media as a marketing media?

Jon Lowen: Yeah. So Facebook, Google, obviously the biggest, the most common question we get, we personally don’t manage those. If someone’s running SEO or running social campaigns, we personally don’t manage those campaigns or those tactics for them. More often than not, that’s handled internally or like a specialist group.

So, for us, our involvement, I always recommend it. Ultimately, you want to have a full funnel and a full media mix when it comes to your exposure and reaching clients. And if people are spending time on Facebook and Instagram or certain properties, then you want to be where they’re spending their time. For us, if they’re spending 50% of their time on Facebook and 50% of their time on every other app or website, that’s kind of the split between where we would execute on everywhere else.

And then there’s companies, and we manage a couple of Facebook campaigns that primary to us are core to our capabilities. But when we do, we’ve always known that these are going to start opening up and these are going to be channels that dollars are going to flow to. It’s just natural and it’s inevitable.

And so when we started the business, it wasn’t that we wanted to create a product or create a solution to compete with Facebook. We wanted to create a product and a solution that worked with them. And so how can we work with all media providers and all websites and all different kind of what we would call end points or destinations for where media can be delivered.

And that was around our concept of knowing the cannabis consumer so that when you go into Facebook and you run a campaign, you can start utilizing these audiences or these insights to better reach the known consumer.

So if you go into Facebook, they’re not going to necessarily have an audience that are an interest group for you that’s California edible buyers. And so having either your first party data or allowing us to help you activate that data in the platform for you, gives people more of a targeted audience rather than reaching the billions of people on Facebook. They can sub-segment and create more specific and relevant targeted campaigns through connections and platforms like Surfside.

TG Branfalt: So, you’re sort of the key holder to some questions that I do have about sort of that average cannabis consumer that you keep referring to. Is it people 18? Well, I mean, it would be 21 to 36 white male, is that demographic as is much purported?

Jon Lowen: So off the top of my head, I don’t have an answer on the specifics of like who is the cannabis consumer. What I would say is that when you look at demographic data in general, it’s important to look at it normalized or indexed against the average consumer.

And so if an audience or any population is going to be larger than in turn, like for instance, people always ask me, “Is the data sets that you have, is it primarily California?” Well, it’s not primarily California, but we have a lot more data than any other state in California, just because that’s where most of the sales are. That’s the biggest market.

And so if white males tend to be a very large proportion or percentage of the US then naturally you’re going to have a large proportion of that audience potentially as a segment in this business. But ultimately looking at how does that sample size, or how does that population index against the average consumer in the US is the way that we always like to look at things. And so how is your audience in California different than Massachusetts? Or how is your company, how is your business selling against certain demographics on a state-by-state or local level? We’ll always look at it against the baseline so you can really understand proportions versus indices.

TG Branfalt: Very fascinating stuff. It’s really, really great sort of explanation insight there. And then the other question, and you don’t have the demographics in front of you, but is flower still king? I mean, we read it all the time that flower concentrates are still about a third of sales in most states. Is flower still sort of king, I guess?

Jon Lowen: Yeah. So, actually kind of two points on that, ultimately is at Surfside we’re more focused on differentiating ourselves from kind of like the BDS Analytics or the Headsets of the world, as it pertains to kind of being like a market research company.

TG Branfalt: Okay.

Jon Lowen: For us, it’s about how can we help businesses manage and get the best use out of their data. So working with companies like that to turn it into consumer insights or providing other consumer behaviors tied to research reports or other information they may have. So, that’s why we don’t put out trend reports like a lot of these companies do, but as far as what we continue to see, flower is still a really big category. And there tends to be kind of some patterns emerging as the markets in each individual region or state mature and you start seeing like maybe people start in certain categories and then certain categories will grow over time as people begin to experiment with their preferred method of ingestion.

And so for us, what’s really interesting is being able to see those trends. Like if we’re seeing in Colorado, in a more developed state, that when flower used to be X percentage, and then over time, the beverage market is growing. Or like we’ve seen a lot of dissolvables come onto the marketplace. And so if that’s going to be a function of growth, like how do we take that information and understand the consumer? Like at what point in time, how many purchases, how many visits since they became a cannabis end market consumer does it take for them to move to these different product categories? Because then we can start using that information in order to properly market.

So, two dissolvables that comes to mind is you have like Caliper, that’s Stillwater and then like Chill. And at what point in time can we start taking data from California and understanding who that audience is? And then as someone goes into California or goes into Michigan, how do we use that understanding of that consumer to be able to build lookalikes and models, to be able to say, “All right, well, now this flower, this edible consumer is likely to be transitioning into exploring other forms of ingestion, and we should start serving them the dissolvable products now or the packets, powders.”

TG Branfalt: You’re a fortune teller.

Jon Lowen: We try.

TG Branfalt: In your opinion, we all get, so let me backtrack a little bit. I mean, we all get marketing emails, right? We all get SMS marketing, right? It’s sort of a bombarding thing. We’ve spam folders full of emails from any place we’ve ever bought anything in the last 10 years. And it gets inundating, right? So, in your opinion, what are the best practices for cannabis marketing to consumers without sort of the negativity that I think ends up spawning for everybody over time of the sort of inundation?

Jon Lowen: I mean, the first thing I would say is ultimately, I always say follow the numbers. So if you’re seeing drop off rates, if you’re seeing unsubscribes, it’s not necessarily about the open rates. More often, there was a stat that 99.99% of people are opening your SMS, but are they doing anything with it? Back when SMS and MMS messaging started, you were forced to open it to delete it.

TG Branfalt: Yeah.

Jon Lowen: So, it’s kind of an interesting step. But ultimately looking at those secondary metrics, are they driving sales? Are they driving visitation? So, don’t continue to do something that isn’t working and making sure you have that measurement and those metrics set up so you’re able to drive intelligent decisions, make those data driven decisions.

But then at the same time, a lot of these approaches if you put yourself in their shoes, you look at what’s logical, how would you want to be marketed to? And more often than not just having that kind of approach to things in conjunction with trusting the numbers and trusting what’s working is generally what we recommend. It’s don’t do something that would annoy you.

TG Branfalt: What sort of advice would you have for people who are just getting into the industry? I think they don’t have sort of that data that a company, a dispensary that’s been around for X number of years. What would you say to them, the sort of person who’s just entering to help them in their marketing journey, which is, I mean, just by this conversation, I mean, it’s very complex. It’s not just, “Here’s the ad,” right?

Jon Lowen: Yeah. We like to make sure. It’s like a iceberg or a duck. They look really calm on top, but there’s a lot going on underneath. For us, it’s we want to keep things as simple as possible and we’re able to, all of this data and all this information is what we use internally to make a brand or dispensary’s life super simple.

And so there’s different services available. As far as what I would recommend, it’s test, ask questions, don’t be afraid. Ultimately, obviously in my biased opinion is spend. You’ve got to spend a little in order to understand what works and what doesn’t. And then be quick. Be quick to make decisions. It’s be quick to make decisions, but ultimately understand that if marketing was a surefire way to success then everyone in the space would be printing money.

So, you have to iterate, you have to continue to trust the process and work. We recommend working with different vendors and working across different channels and experimenting. You still have to go out there and be present and communicate. It’s like other biz dev efforts as well. It’s not, you can’t just do one, can’t just have a website and hope people show up to it.

You’ve got to have some type of outreach and some type of methods. And the more channels and the more presence you have, ultimately, the more touch points with the consumer, it’s the more likelihood that those consumers are going to convert.

And making sure that you have a structure in place where you’re able to identify what’s working and what’s not is kind of our MO and that we want to ensure that you understand that every time that you communicate with a consumer that’s an influence point. And so we want to make sure that we understand what is that path to purchase. So even if you’ve got a website, if you’ve got a listing on Google or a social, you’re doing your tweeting, or you have an Instagram page or a Facebook page, every different touch point counts.

And even when you start adding in your billboards and your prints, and you’re doing events or conferences, there’s ways to measure the effects and the effectiveness of these different marketing components. So the more you can measure and the more you’re able to understand what’s working, what’s not working, ultimately the better decisions you can make. And relying on trusted and experienced companies will only make that easier for everyone.

TG Branfalt: And then finally, I just want to ask you just sort of by your background and you’re a reasonably young guy, I reckon, just by pictures and the sound of your voice, what was the biggest challenge for you entering this industry and getting to understand the sort of nuances because it’s got to be a pretty different sort of gig than you’ve done in the past?

Jon Lowen: Yeah. I mean, it’s not as complex or our last company. This is our third or fourth startup at this point, depending on how you look at it. We’ve had some startups sold into other startups and I count those as separate startups, but everything’s complex in its own way no matter what you’re running. Excuse me. We’re running into different issues. Like when it was hunting and fishing, you can’t advertise ammo and guns very easily. So dealing with compliance and dealing with these types of issues is maybe I’m drawn to them, these complex issues.

Google still, I don’t think, accepts any advertisements for guns and ammo so finding destinations and places where you can deliver those ads was very similar to what we had to do to start this business. And then when it’s location data, location data is like a hot topic right now and the usage of it and how it should be used in consumer privacy. And you have GDPR that started in Europe and CCPA in California and more regulation is coming. So there’s so much to me like when people ask that question, it’s not the first time we’ve got it.

But ultimately cannabis, I don’t really see to be as complex as HIPAA or CCPA or GDPR. When you’re trying to find the consumer when you’ve got access to billions of inventory and 240 million legal age consumers in the US and an infinite amount of creative possibilities to message them, making that right combination is the tough decision. Navigating the states and the handful of different regulations that each state has is albeit potentially manual. I know there’s companies that are trying to automate this process in a more technological way, but it’s not necessarily like our biggest issue right now.

It’s kind of, what we say is compliance is a requirement, not a feature. And so we want to make sure compliance is a standard. As legal as it is, it’s a legal requirement. So we’re going to make sure that everything’s compliant, but then it doesn’t equate to performance. And so we want to ensure that the performance is actually there and that’s where it gets difficult, guaranteeing performance and driving sales and visitation. That’s the biggest challenge for us.

TG Branfalt: Man. This is really, really interesting insight, man. And I really appreciate you coming on the show to really, I mean, dig into some of these issues. Where can people find out more about you, find out more about Surfside and your suite of offerings?

Jon Lowen: Yeah. So website’s surfside.io is kind of the best place to reach us. You could always email us, reach us at Twitter or LinkedIn. We’re very available. One of the things we pride ourselves on is my email’s jon@surfside.io. If you ever need anything, just email me direct or shoot me a call. We’re happy to connect and talk about the industry and the business and consult, just shoot the shit. So, we’re good either way.

TG Branfalt: That’s Jon Lowen, he’s the co-founder of Surfside, a direct-to-consumer marketing firm whose mission is to build an ecosystem of products that make consumer acquisition smarter, faster, and more engaging for modern brands. Thank you so much for taking the time to come on the Ganjapreneur.com Podcast, man.

Jon Lowen: Thank you. I appreciate for having me.

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’ll find the latest cannabis news and cannabis jobs updated daily along with transcripts of this podcast. You can also download the Ganjapreneur.com app in iTunes and Google Play. This episode was engineered by Trim Media House. Find us on Spotify at Ganjapreneur Podcast. I’ve been your host, TG Branfalt.

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Vape Lung Disease in the COVID-19 Era: Where Do We Stand?

It might be hard to imagine in the face of an ongoing global pandemic, but one of the top stories this time last year was the presence of a few thousand cases of a mysterious disease associated with vaping. By the time officials scrambled to learn more about an underground vape industry they had long ignored, the crisis had already taken hold around the country. But when COVID-19 took over the news cycle, the focus on EVALI — short for “e-cigarette or vaping product use associated lung injury” — took a back seat. The crisis, however, is ongoing.

The UK faced its first official vaping related death in July amid its response to the coronavirus pandemic and states like Utah and Minnesota have started seeing another influx of EVALI cases in hospitals. A total of 2,561 people were hospitalized due to vaping related lung injuries in 2019 and there were 55 confirmed deaths by December. These numbers may seem slight amid the deadly COVID-19 pandemic but, at the time, the EVALI vaping crisis was considered a national emergency.

Cutting agent culprit

In November, the CDC identified the use of a cutting agent called vitamin E acetate as the likely culprit behind the spate of vaping-related hospitalizations and deaths. But the crisis was already in full swing. EVALI patients were diagnosed with lipoid pneumonia, a condition that occurs after inhaling an excess of mineral oil. Vitamin E acetate, which is typically used to play with oil viscosity and has been approved by the FDA for use in lotion and other topicals, was consistently found at the primary injury site in afflicted patients.

The search for Dank Vapes

One of the first states to see a flush of patients with vape-related pulmonary issues was Ohio, where some patients voluntarily turned in cartridges they were using and most products were in turn traced to the legacy or unregulated markets. From there, multi-million dollar busts occurred in the Midwest along the I-80 in Wisconsin, Minnesota, Iowa, Indiana, and Illinois. As more hospitalizations rolled in, police, lawmakers, and citizens were all seeking a common thread. Crafty producers even managed to create off-brand versions of popular licensed vape manufacturers like TKO and Stiizy, but one brand — Dank Vapes — rose above the rest as it appeared to knit together the most cases.

Cannabis vape cartridges, some of which were purchased in bulk online and used to create unlicensed cannabis vape products.

With Dank Vapes’ flashy little boxes that so mathematically mimicked legal cartridge packaging and the slurry of easily accessible online markets, there were paths leading to the unlicensed operation everywhere. “Who created Dank Vapes?” was the question on everyone’s mind but the answer was obviously more complicated than the question implied — simply put, Dank Vapes appeared to come from … well, everywhere.

People in prohibition states could easily access Dank Vapes products online, making it particularly popular for people outside of state-legal markets. But Dank Vapes packaging, and other common black market cart packaging like Mario Carts, Exotic, and Dankwoods, could also be easily purchased online from overseas factories. And, with the ability to purchase extraction equipment and set up an illegal lab almost anywhere — coupled with easy access to professional-looking packaging and cartridge tech — it wasn’t long before the underground vape industry cast a deep and expansive net across the United States. Ultimately, getting started in dealing Dank Vapes was almost as simple as buying some for yourself.

By the time officials could muster a response, Dank Vapes’ production was on the decline but the renegade vaping brand had already shone its light on exactly how prolific the legacy market had remained despite legalization footholds around the country. Eventually, Dank Vapes sank back into the shadows but the damage was done.

Perhaps most frustrating, however, is that while the true origins of the contaminated vape products will likely be forever unknown, it stands to reason that federal legalization, coupled with reasonable regulatory guidelines, could have curbed the crisis from the very beginning.

Uncoordinated response

In response to the crisis, law enforcement shifted its focus to shutting down unlicensed dispensaries in cities like Los Angeles, where the unregulated market still thrived. Websites and social media pages that previously advertised and shipped out unlicensed cartridges eventually started to disappear.

Additionally, with the death toll climbing, many governors in adult-use states took action. Washington Gov. Jay Inslee banned all non-native vape additives including vitamin E acetate and plant-derived terpenes. In California, Gov. Gavin Newsom focused on quelling the unregulated market and recommended more education and warnings around the dangers of vaping. Massachusetts, on the other hand, opted to quarantine some 600,000 cannabis vaporizer products in December due to the ongoing confusion circulating those products, which were only just released from quarantine this week.

Today, even with vitamin E acetate having been identified as the culprit behind the EVALI crisis, many of the restrictive responses including bans on plant-derived terpenes and flavorings have remained in place.

EVALI vs COVID-19

As the COVID-19 pandemic tightened its grip on the world, medical professionals understandably shifted their focus to the respiratory virus, which happens to have very similar symptoms to EVALI. And, while the news cycles and national attention have obviously moved on, it’s very likely that EVALI never actually stopped presenting in hospitals. This is made extra complicated not only because the condition reflects symptoms of the coronavirus, but also because patients in prohibition states often remain reluctant to admit that they have been vaping cannabis. If THC use was legal and regulated, however, then patients would be more willing to share such activities with medical professionals.

A woman with green hair wears a face mask and smokes a vape.

Regulation remains the obvious, best answer

Last November, the CDC’s Principal Deputy Director Anne Schuchat quietly admitted that regulating cannabis vaporizer products, including lab test and labeling requirements, would help protect consumers from EVALI.

Legalization would also require regulatory bodies to focus on understanding the industry for the purpose of regulating the wholesale shipment of industrial goods, including vape technology. With those regulations in place, many legal companies would likely not have been forced to forfeit and quarantine their products, which led to compounded profit losses.

Ultimately, that lack of government oversight allowed for a blindspot in vape tech and hardware regulations. There may not have been a way to fully avoid the crisis but a country equipped with a legal and regulated marketplace for cannabis vape products would have been significantly better prepared for identifying the issue and taking action to keep the general public safe.

And, although the EVALI vape crisis must feel distant to most Americans after the wild and unprecedented year we’ve had so far, it’s never too late to get started.

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MAPS Still Waiting for DEA Cannabis Research License After 3 Years

The Multi-disciplinary Association of Psychedelic Studies (MAPS) publicly responded to the Drug Enforcement Administration (DEA) concerning new rules that guide the agency’s consideration of applications to “cultivate and provide” medical-grade cannabis to researchers and to the Food and Drug Administration for drug development.

MAPS partnered with Prof. Lyle Craker, Professor Emeritus of Botany and Plant Sciences at the University of Massachusetts, Amherst’s Stockbridge School of Agriculture, to submit two applications to the DEA for cultivating research-grade cannabis, aiming to break the National Institute for Drug Abuses (NIDA ) monopoly on research-grade cannabis. The association’s first application, submitted in 2001, was rejected; their application submitted in 2017 is still awaiting a decision.

“MAPS welcomes the opportunity to provide these comments in response because the Proposed Rules are centrally important to our work and our continuing efforts to obtain DEA Registration for Professor Craker,” a representative said.

The DEA announced the new rules earlier this year in March. If adopted, the rules will change how the DEA takes possession of and distributes cannabis grown for research and update the definitions for “medicinal cannabis” and “cannabis preparations” in order to “enable DEA to evaluate each of the 37 pending applications to grow marijuana for research under the applicable legal standard and conform the overall program to relevant laws,” according to a DEA press release.

In their public comment, MAPS is cautiously optimistic about the new rules.

“We strongly support and commend DEA for its Proposed Rules’ commitment to ending the NIDA monopoly system, and to grant additional DEA Registrations in order to facilitate and enhance privately funded commercial medicinal cannabis drug development. However, we also have significant concerns regarding whether DEA will follow through with effective and consistent implementation that actually enhances and facilitates the opportunities for commercial medicinal cannabis drug product development, including the whole-plant botanical drug development that MAPS has long sought to accomplish.” — Excerpt from the MAPS 2020 public comment

According to the DEA, there are more researchers registered to grow cannabis than any other Schedule I controlled substance. Due to the increase in researchers, the DEA has increased its cannabis “quota” from 472 kg in 2017 to 3,200 kg in 2020.

“MAPS has an immediate need for DEA licensing of Professor Craker to produce marijuana for an FDA-regulated study of veterans with PTSD,” the association said. “Other applicants have immediate needs of their own. U.S. businesses and jobs will be created by federal licensing of additional domestic marijuana producers for research and development into potential medical, commercial and industrial applications.”

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McConnell Attacks Pelosi for Claiming Cannabis Is ‘Proven’ Therapy

During a speech on Tuesday, Senate Majority Leader Mitch McConnell (R-Kentucky) threw shade at Speaker of the House Nancy Pelosi (D-California) over comments she made last week in defense of provisions giving the cannabis industry access to traditional banking services, Marijuana Moment reports.

During his speech, McConnell blasted House Democrats’ COVID-19 relief bill on Tuesday as a wishlist containing “strange new special interest carveouts” and said Democrats were refusing to compromise on the issue.

“[Speaker Pelosi] said that, with respect to this virus, marijuana is ‘a therapy that has proven successful.’ You can’t make this up. I hope she shares her breakthrough with Dr. Fauci.” — McConnell, on the Senate floor

Pelosi’s comments last week, however, argued against the notion that cannabis — which was accepted by every state-legal market except Massachusetts as an essential service during the pandemic — is unrelated to the federal government’s COVID-19 relief package.

“I don’t agree with you that cannabis is not related to this,” she said. “This is a therapy that has proven successful.” It is unclear whether she meant as a treatment for the coronavirus or as a general treatment for the many diseases and health conditions for which millions of U.S. citizens rely on medical cannabis to treat.

There have been at least two preprint studies (meaning they were published without undergoing the typical peer-review process) that suggest cannabinoids and certain terpene formulations could be effective at quelling an immune system response to the coronavirus that has proven fatal in some patients.

The disputed cannabis provisions include language from the SAFE Banking Act that was inserted after the GOP-controlled Senate sat on and refused to consider the standalone legislation for months.

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FDA Approves Epidiolex to Treat Tuberous Sclerosis Complex

The Food and Drug Administration has expanded the label for the cannabis-derived pharmaceutical Epidiolex to treat seizures associated with tuberous sclerosis complex (TCS) and allowing the drug to be used by patients one year of age and older.

The GW Pharmaceuticals drug is the only FDA-approved form of CBD derived from the cannabis plant. The medication was initially approved by the agency in 2018 for treating seizures associated with Dravet syndrome – or Lennox-Gastaut syndrome – in patients aged two and older.

GW CEO Justin Gover said the label expansion allows patients with TCS to “immediately” access the medication.

“This label expansion, including the expansion of the age range in all approved indications, further demonstrates that the FDA process can continue to enable broader patient access to appropriately tested regulatory approved cannabinoid medicines.” – Gover in a press release

Dr. Elizabeth Thiele, director of the Herscot Center for Tuberous Sclerosis Complex at Massachusetts General Hospital, said that nearly two-thirds of TSC patients develop treatment-resistant epilepsy and noted “a need for new options that may benefit these patients who often try and fail existing treatments.”

“Based on previous positive trial results in TSC patients, Epidiolex may become an important treatment option for patients,” she said in a statement. “It is a new tool in the toolbox for physicians and could meet a significant unmet need.”

In the U.S. about 50,000 people suffer from TSC along with approximately 1 million worldwide. About 85 percent of patients experience epilepsy and more than 60 percent do not achieve seizure control.

The drug is also approved in the European Union under the name Epidyolex. Regulators in Europe are currently reviewing the application to expand the label for TSC and lowered age range for patients.

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Cannabis Social Equity Program Offers Debt Instead of Equity

Editor’s note: this article is submitted by the Massachusetts Recreational Consumer Council, an organization advocating for restorative justice in the Massachusetts legal cannabis industry.

If we as a country dealt with the realities of racial capitalization, we would have a legal cannabis industry thriving as a free equitable market that prioritizes true craftsmanship and restorative justice. Instead we are pushing along state by state, choking for progress under the guise of social equity. As the country pushes forward, Massachusetts finds itself falling stagnant with liberal attitudes cloaking the truthful inequities of racial capitalization. Instead of moving forward with innovation, Massachusetts developed the legal cannabis industry to mimic other (broken) industries. These industries are reeling with the disasters of capitalism today. It’s apparent when you listen closely that Massachusetts is tone deaf in comparison to what the people who have suffered from the war on drugs are saying. What leads a state that prides itself on liberalism and innovation to fall so short in comparison to other states that have legalized and addressed the need to prioritize social equity in the cannabis industry?

Legalization Was Made Possible by the Traditional Market

The traditional market is a beautiful network of phenomenal spirits who understand the spirit of the cannabis plant and work to honor it. It is because of the traditional market you can gift up to an ounce legally in Massachusetts. It’s something the people championed for, like so many other things. And more could be legal but only if the traditional market is respected and consulted – not ignored, disrespected, preyed upon, and whitewashed. The Massachusetts legal industry is a sharp contrast to the traditional market in several ways including lack of access. The legal industry (in MA) has one access point and this access point requires millions of dollars in startup capital. This is by negligence. This is by capitalism. This is by design.

Across the state of Massachusetts, countless horror stories about the crushing debt of waiting for your license application to be processed by the Cannabis Control Commission can be heard. “LET THEM FEEL WHAT WE FEEL” Leah Daniels cried in dismay after waiting over 610 days for her application to be processed. After CCC Chairman Steve Hoffman attempted to turn a room filled with a majority of white cisgender men against a black woman in a plea of support for racial capitalism, the CCC has still failed to issue a public apology to Leah Daniels for its failed leadership in dealing with its own failures and miscommunication, even after the public outcry and headlines by local journalists. It’s apparent there is an extreme disconnect between the people and the legislators/regulators shaping our cannabis industry across the country, but this is especially true in Massachusetts. We must bridge this miscommunication TODAY.

How to Build an Equitable Industry

Only today is Massachusetts starting to have a serious conversation in regards to creating a social equity fund with bill s.2650 sitting before the Senate Ways and Means Committee pushing for traction to pass before the end of the July. Tragically, Massachusetts is still processing that it has already borrowed from the traditional market and chose to invest in the prison industrial complex, along with the rest of the country. The people who founded this industry have already paid the state of Massachusetts – with their lives. It’s time for Massachusetts to SHIFT and join the rest of the country by prioritizing social equity in the quest for a free equitable market.

Shifting requires acknowledging that debt is not equity. A loan is being dressed up and called social equity in Massachusetts through support of bill s.2650. Never is there an acknowledgement from the Cannabis Control Commission that loans are a form of borrowing that create debt, nor that the financial shortfalls of 10% set aside for social equity funds when it takes millions of dollars just to open one dispensary. It is alarming how basic banking practices are being spouted as progression and slapped with the social equity stamp for approval. How can you borrow from something you created and own? This is the insanity the legal industry in Massachusetts is proposing to the traditional market today. Instead of building debt Massachusetts needs to build bridges. There is no free equitable market without acknowledgement of the failures of racial capitalism.

Massachusetts is taking baby steps towards social equity and everyone across the country knows it. Bill s.2650 simply takes 10% of cannabis tax revenue and puts it towards a social equity fund with a social equity loan for social equity and economic empowerment licenses.  “In California, the Bureau of Cannabis Control awarded $10 million in equity grant funding in October 2019, and an additional $30 million in equity grant funding was awarded by the Governors Office of Business and Economic Development in April 2020” Shaleen Title tweeted in acknowledgement of social equity grant funding in other states.

Yet Massachusetts supports loans. Loans are debt. Massachusetts should be proposing grants but apparently grants are too radical for such a liberal state. “This bill would give the support needed to these entrepreneurs, in the form of loans. In addition, I support the amendments included in Sen. Collins recent Amendment 179 to S2842 that expanded the bill to include loan forgiveness and grants, as well as a stipulation that municipalities grant host agreements to one equity business alternating with one general applicant.” Senator Patricia Jehlen.

This amendment was struck down by the Senate and Bill S.2650 still has not been amended to include anything from amendment 179 of Bill S.2842 as of today. It’s been noticed that no cannabis non-profit nor Senator has made public statements to push support of amending s.2650 to include grants other than Massachusetts Recreational Consumer Council and Senator Jehlen. S.2650 should simply be amended to include a loan forgiveness program that SE/EE licensees automatically qualify for. Or even simpler: join the rest of the nation and offer grants. Either way, Massachusetts legislators and the Cannabis Control Commission need to SHIFT today.

The horror stories of securing your Host Community Agreements licenses with municipalities is never-ending. Bill s.2650 needs to address lack of protective language if it wants the funds to get out and not sit unused and poorly dispersed. In an interview with Enterprise news, entrepreneur and social equity applicant Vanessa Jean Baptiste stated “We don’t have many resources. As an economic empowerment applicant and criminal justice major, I want to help people affected by the war on drugs. It’s really not fair that people with connections can get licensed, and people without government connections have to deal with the black market, knowing that they can get arrested at any point in time.”

Including a 1:1 priority between General and SE/EE licenses on a state level would be one way to address the problem, as currently licenses are being dealt with on a municipal level and often utilize a pay-to-play system which further marginalizes our SE/EE applicants. There are federal investigations occurring in municipalities across the state of Massachusetts because of this issue. Ignoring its existence doesn’t achieve anything and only widens the systemic damage from the inequities of prohibition. The people have been championing for a 1:1 ratio for YEARS. End the corruption. Our legislators need to SHIFT today.

Follow the Money

Illinois devotes 25% of cannabis taxes toward social equity. In Massachusetts, it’s noted that the bill the CCC supports proposes a mere 10% of cannabis tax revenue. Keep in mind: it takes millions in startup capital to open one dispensary. There are 70 social equity/economic empowerment applicants with their licenses yet only 3 are open, with lack of startup funds being the number one barrier. Since the legalization of cannabis, millions of dollars have gone to pay police for traffic details at cannabis dispensaries, deemed mandatory mainly due to reefer madness mentalities. Zero dollars from cannabis tax revenue have gone toward areas disproportionately impacted by the war on drugs. 10% will assist only a few and ignore the hundreds. Who said that the people who lost the lives of loved ones, their community, & years of their own to the war on drugs only need 10% to successfully gain entry into the legal cannabis industry? Fuck liberalism. The people whose backs this industry STILL sits upon want their coins. All of them. They are not an afterthought. Our legislators need to SHIFT and amend 100% of cannabis tax revenue to the social equity fund.

It shouldn’t be hard to get social equity passed in Massachusetts, but this is a state that literally wrote into the legalization of cannabis that cannabis tax revenue would fund municipal police trainings. Prohibitionist indoctrination has shaped the legalized cannabis industry in Massachusetts from the start, and the failings of racial capitalization have already caught up with it. It will repeat over and over until there is acknowledgement. We cannot move forward until the issues on the table are addressed.

Take Action Now

The MRCC has proposed multiple amendments to the current bill that would work to address the institutional trauma of the drug war, create opportunities for impacted communities, and set Massachusetts up as an example for other states to follow.  Read about our objectives and learn more about our organization on our website, and if you believe that the people deserve an equitable industry, let the Massachusetts Senate Ways and Means committee know that you support our amendments by clicking here to call or send an email today.

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