Search Results for "massachusetts"

An empty auditorium with red folding cushioned chairs.

Roger Stone Out at Cannabis World Congress & Business Expositions

Amid a boycott by the Minority Cannabis Business Association, a Change.org petition, and the loss of sponsors, and participants, Roger Stone will no longer be featured as the keynote speaker at either the Los Angeles, California or Boston, Massachusetts Cannabis World Congress & Business Expositions.

“The forums created by CWCBExpo are crucial to the growth and legalization of the cannabis industry and they supersede the distractions that have surrounded the events,” organizers said in a press release. “CWCBExpo is wholly committed to promoting diverse business and economic opportunities in the cannabis industry by providing a united and welcoming environment for its exhibitors, sponsors, attendees and speakers.”

Stone, the former campaign strategist for President Donald Trump, was invited to deliver the keynote after launching the bi-partisan United States Cannabis Coalition in June. However, his inclusion at the event was met with resistance due to previous “hateful” statements, including calling Rev. Al Sharpton, who is now the scheduled keynote speaker at the Los Angeles event, a “professional Negro.” Stone also served on the campaign of President Richard Nixon who famously launched the War on Drugs.

Stone has called the boycott an “agitprop astro-turf…smear campaign” levied by “the usual trolls and bots” including the founder of Media Matters for America Davis Brock “and his minions.”

Organizers have not announced who would replace Stone as the keynote speaker in Boston.

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A collection of medical cannabis clones inside of a commercial grow facility.

Connecticut Court Allows MMJ Patient Lawsuit Against Prospective Employer to Continue

A U.S. District Court judge in Connecticut has rejected a request to dismiss a lawsuit against an employer who rescinded a job offer after the applicant, a registered medical cannabis patient in the state who suffers from post-traumatic stress-disorder, tested positive for cannabis on a drug screening.

The employer Niantic Operating Company, doing business as Bride Brook Nursing & Rehabilitation Center, argued they had the right to withdraw the offer because federal law supersedes state law, therefore, the plaintiff, Katelin Noffsinger, had no grounds to sue the company for revoking the offer she had already accepted.

Bride Brook had claimed that they were protected from legal action under the federal Controlled Substances Act (CSA), the federal Food, Drug, and Cosmetic Act (FDCA), and argued that the anti-discrimination employment provision under the state’s the Palliative Use of Marijuana Act (PUMA) violated the Americans with Disabilities Act.

In his decision, Judge Jeffery Alker Meyer ruled that neither the CSA nor FDCA have jurisdiction over employment law; and the CSA “does not make it illegal to employ a marijuana user.”

“Like the CSA, however, the FDCA does not purport to regulate employment, and my focus here is limited to the validity of PUMA’s anti-discrimination-in-employment provision,” Meyer wrote. “Because [the provision] neither conflicts with nor poses an obstacle to the goals of the FDCA, I conclude that the FDCA does not preempt [the provision].”

Meyer called Bride Brook’s claims that PUMA violates the ADA “counterintuitive” and “crafted in order to make clear that the ADA does not extend its protections to persons who use illicit drugs or alcohol.”

“First and most importantly, the ADA explicitly provides that an employer ‘may prohibit the illegal use of drugs and the use of alcohol at the workplace by all employees,’” he wrote, noting that Noffsinger testified that she uses one Marinol capsule once-a-day before bed. “But the facts of this case do not involve any use of marijuana by plaintiff at the workplace, and PUMA explicitly declines to authorize such workplace use.”

The ruling allows Noffsinger to proceed with a lawsuit against the company. She is seeking damages for emotional distress and attorney’s fees.

This is the third case this year that a medical cannabis patient has found protections under their respective state medical cannabis laws. In July, the Massachusetts Supreme Court ruled that a registered patient terminated after failing a drug test for cannabis could sue the employer for handicap discrimination, and in earlier this month a New York City Office of Administrative Trials and Hearings judge determined that the Taxi and Limousine Commission could not revoke a TLC license from a registered medical cannabis patient.

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A large cannabis bud on a commercial, indoor plant.

Israeli and Canadian Firms Partner for Cannabis Production Plants in 4 U.S. States

Israel-based medical cannabis company Panaxia has partnered with Canada’s Bioceutical Corporation to set up four medical cannabis production plants in Arizona, Nevada, Maryland, and Massachusetts, according to a report from Globes. Last year, Panaxia set up a similar production facility in New Mexico, which went online in March.

The agreement will see Bioceutical Corp., which is traded on the Canadian Securities Exchange, will finance the project, provide the cannabis, and market the products. Panaxia will build and manage the plants and all of the other product inputs, save for the cannabis. According to the report, Bioceutical Corp. is already actively marketing products in Nevada and Arizona, and the two firms will jointly enter Massachusetts and Maryland.

Panaxia Managing Partner Advocate Assi Rotbart indicated that the company is already producing 10,000 units of sublingual tablets, oils, lozenges, and an inhaler per week at the New Mexico facility. Rotbart said the firm partnered with G.W. Pharma and Ultra Health in that venture.

“We discovered that we had incorrectly assessed the strength of the demand. The plant is now operating at full capacity… and we are in the process of expanding it,” he said in the report. “The factories that will be built under the new agreement will be much larger.”

Dr. Dadi Segal, founder and chairman of Panaxia, said the firm is also preparing to open a cannabis production facility in Israel under federal reforms.

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A New York City taxi cab.

New York City Judge Sides with MMJ Patient in Taxi License Dispute

New York City‘s Office of Administrative Trials and Hearings (OATH) has overturned a Taxi and Limousine Commission (TLC) decision to rescind a TLC driver license over a failed drug test for cannabis because the license-holder is also a registered medical cannabis patient in the state.

“It is undisputed that respondent’s drug test showed that he ingested marijuana. However, because respondent obtained the marijuana legally, as a medical marijuana patient certified by the New York State Department of Health pursuant to the New York State Compassionate Care Act … [TLC] has not established that his drug test is “failed . . . as a result of illegal drug use,” as required by [law],” Administrative Law Judge Faye Lewis wrote in the decision.

The petitioner, identified as W.R. in the documents due to “the sensitive medical and mental health information,” discussed in the report, did not dispute the drug test; testifying that he had taken medical cannabis capsules “several times a day” since April to treat debilitating pain from neuropathies and diabetes. The 59-year-old petitioner testified that he has not driven a taxicab for at least seven years due to his health issues but wants to retain his TLC license in order to resume driving when he is ready.

Further, Lewis wrote, that “the Compassionate Care Act deemed status as a certified medical marijuana patient a disability under the State Human Rights Law, affording further protections to an employee or licensee.”

“It appears that respondent would also be protected by New York City’s Human Rights Law, which generally provides greater protections than the State Human Rights Law.” Lewis wrote. “As discussed above, because respondent’s use of medical marijuana was legal, there is no basis under the TLC rules to find him unfit to hold a TLC Driver License. Revocation of his TLC Driver License solely because of his status as a certified medical marijuana patient by New York State would be inconsistent with state and city law, and contrary to the TLC rules which specify that a failed drug test is the result of illegal drug use.”

Last month, the Massachusetts Supreme Court ruled that an employee, registered in the medical cannabis program, fired over a failed drug test could sue the employer for handicap discrimination.

End


Holyoke Mayor Vetoes City Council-Approved Moratorium on Adult-Use Cannabis

Holyoke, Massachusetts Mayor Alex Morse has vetoed a moratorium on the recreational cannabis industry approved by the City Council, according to a MassLive report. In a letter to the council, Morse argued that the “only thing” the ordinance would do “is put the city at an economic disadvantage by dissuading interested investors” from considering starting their business in the town.

Morse, 28, has envisioned the cannabis industry providing jobs in Holyoke, encouraging cultivators to move into the vacant textile mills which comprise 1.5 million square feet of space.

“A moratorium that extends beyond the state’s (April 1, 2018) start date to receive applications will likely jeopardize the ability of businesses to secure licenses in Holyoke well beyond the July 2018 (legal sales) start date,” Morse wrote in his veto letter. “We run the risk of decreasing Holyoke’s competitiveness to attract this industry, decreasing opportunities for good, local jobs and new tax revenue.”

According to the report, Councilor at Large Rebecca Lisi said the city could save time by using the town’s already-established medical cannabis zoning regulations, and Morse agreed with her assessment. The council had voted for the moratorium 10-4, Lisi voted against the measure.

“From a land use and zoning standpoint, there is no difference between cannabis cultivation for medicinal purposes, for which we already have a robust special permit process, and recreational cultivation,” he wrote. “In both cases, the product goes through the same grow and processing cycle regardless of its intended end use.”

Morse urged the council to sustain his veto and, according to the report, the council will likely consider an override during its Sept. 5 meeting.

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Jon Gowa: Robotics in the Cannabis Industry

Jon Gowa is the founder and CEO of Bloom Automation, a company that is designing and creating robots in Colorado to assist the cannabis industry.

In this episode of the Ganjapreneur.com podcast, our host TG Branfalt and Jon discuss Bloom Automation’s participation in the Boulder Canopy startup incubator, the various robot designs they have tested and found most effective, what role robotics may play in the future of the cannabis industry, and more!

You can listen to the interview via the media player below or keep scrolling down to read a full transcript of this week’s Ganjapreneur.com podcast episode.


Listen to the podcast:


Read the transcript:

TG Branfalt: Hey, there. I’m your host, TG Branfalt and you’re listening to the Ganjapreneur.com podcast where we try to bring you the actionable information to normalize cannabis through the stories of ganjapreneurs, activists and industry stakeholders. Today, I’m joined by Jon Gowa. He’s the CEO and founder of Bloom Automations. Jon, you guys make robots.

Jon Gowa: We do indeed. We make robots to help the cannabis industry.

TG Branfalt: That’s the crux of what we’re going to get into a little bit later, robots, how do they work — but before we get into that, I want to know about you. Tell me about what you did before entering the cannabis space.

Jon Gowa: Great. I’ve been an engineer for about seven years now. I initially started out actually in agricultural robotics at a firm called Harvest Automation and there, we made robots that moved potted plants such as rose bushes.

TG Branfalt: How did you decide to enter the cannabis space and did you use your previous experience to build this tech?

Jon Gowa: Yeah. Definitely, I would say I was inspired by my previous experience and honestly, one day, I was watching television. I believe it was a CNBC program about the cannabis industry and saw a particular task, this task of trimming and thought that might be something perfect for robots.

TG Branfalt: Again, we’re going to talk about the robots but I want to talk about a couple other things first. I want to talk about the accelerator program that you guys are involved in, the Canopy Boulder program.

Jon Gowa: Absolutely.

TG Branfalt: What was your application and pitch process like to get involved with that program? How did you discover it?

Jon Gowa: Okay. Canopy Boulder, we discovered it through the ArcView program and we were at one of their conferences, Canopy Boulder was set up with impressive booth and a list of companies that were at this investor forum. We got to know them. We got to know Micah. He said, “Why don’t you apply?” Later, last fall, I was in Boulder and actually met again at Canopy, learned a little bit more about the program, about their alumni and found it a fascinating opportunity.

TG Branfalt: What was the application and the pitch process like for you guys? Was it the Shark Tank experience? Were you in front of a bunch of people and …

Jon Gowa: Although we have had that experience on stage at ArcView, the Canopy Boulder application was a little more friendly. You mainly filled out a lot of forms online and wrote about exactly why you’re in the industry, where your goal is, and really pitching from there.

TG Branfalt: Why did you choose an accelerator program over other ways of finding investments such as finding direct investors or venture capitalists?

Jon Gowa: Great question. I think for us, it was more about getting really immersed in the industry. Although laws are changed in Massachusetts where I’m from, things are really developed out here in Colorado. To actually get to know industry professionals, get to know hopefully our potential clients and what their needs are, it seems like a good idea to come out here.

TG Branfalt: The Canopy Boulder experience and the culture, what’s that like working so closely with other companies who are designing their own tech or doing something entirely different and working with a lot of people who have very broad knowledge base?

Jon Gowa: Exactly. I would say it’s absolutely fascinating. We get to work, exactly like you say, with companies that have such varied skills. In this environment, it’s not so much competitive as it is collaborative. When I needed help working on the website, Henry from Cannabis Big Data knows all about website, all about analytics and was able to get me up and running in honestly 30 minutes, something that would have taken us weeks and more. Yeah, they have that kind of collaboration and everyone working towards the same goal, granted they’re on the same company … on different companies but we’re like working towards the same goal in the same industry.

TG Branfalt: I had an interview with the CEO of the San Diego Canopy and he appeared on the podcast. He said that one of the goals for their program, and they specifically bring in a lot of tech projects is they’re not looking for something that reinvented the wheel, so to speak. They’re more interested in picks and axes rather than gold so they don’t have any companies that touch the plant, that sort of thing. In Boulder, do you have the same experience in that program where it’s more picks and axes as opposed to the gold, if you will?

Jon Gowa: We do. We do have that same experience and the same criteria for it to be an ancillary company. I think that’s interesting and it’s also … because we’re all ancillary companies, we’re tied in that sense. Our clients are all similar so it’s really … it’s kind of a good thing for our company.

TG Branfalt: Tell me about your company. Tell me about Bloom Automation. You have robots. What do these robots do? Who’s using them?

Jon Gowa: Great. We have robots and it’s mainly aimed at the task of trimming which is after you harvest the cannabis, you have the flowers and then you have the sugar leaves and the fan leaves or the water leaves. Although the leaves are still valuable, you want to remove those and separate them. There’s numerous ways of doing it. Typically, it’s hand-trimmed or there’s some large machines that trim it but these machines are a little bit more coarse, so to speak. We’re looking at robots that could use cameras and they actually look at the cannabis and understand each different plant, each different branch and are able to cater that when it goes to actually trim and operate on that branch.

TG Branfalt: These aren’t like humanoid robots, right, that are holding scissors and doing this? These are more production style robots?

Jon Gowa: I would say it’s somewhat of a mix, so our next generation robot, it does wield a pair of shears, they look quite like a regular scissors and it uses an articulated arm that enables it to be more dexterous. Meanwhile, our initial prototype which is online and functioning right now like you said, looks more like a production piece of equipment, even kind of like a 3D printer. The robots are changing in form.

TG Branfalt: Already?

Jon Gowa: Already to kind of make sure we’re precise, as precise as a human and as we learn different capabilities and restrictions of a particular robot or system, we’re adapting to this.

TG Branfalt: I read that the automation increases security. I was wondering if you could just tell our listeners how automation does increase security and why.

Jon Gowa: Automation can certainly increase security by … It’s a more controlled environment. Certainly, if you have conveyor belts, you have your product going from one conveyor perhaps through a robot, it’s all controlled. It’s very unlikely you’re going to lose any product particularly with all the cameras, automated cameras. For that reason, you have a good control of your product throughout the entire process whether it’s trimming or going through packaging. Automation can certainly help.

TG Branfalt: You had mentioned earlier that your tech is already sort of evolving. Give me some sort of specifics about what has happened since the early test phase to now.

Jon Gowa: Exactly. Early on, although we’ve always used cameras, we had numerous different sensors like touch sensors and other sensors but now, we rely completely on cameras. What’s changed is in the beginning, the robot was a lot more cumbersome, so to speak. Sometimes, it ate an entire flower without really knowing it. Now, we’ve refined that algorithm much, much further. It knows exactly where each leaf is. It no longer has false positives or false negatives and it’s certainly more precise and more efficient. In fact, it’s almost 10 times faster than when we started.

TG Branfalt: Tell me how much product it can go through and how accurate is it.

Jon Gowa: Okay. We’re aiming for the production model to go through at least a quarter pound dry equivalent per hour. That would represent the equivalent of perhaps one to two hand trimmers. The accuracy is quite good. We’re at about 80% right now but we really want to hit that 95% threshold which is, it starts looking exactly like a hand-trimmed product. It’s very precise.

TG Branfalt: How far are you away do you think from hitting that 95% goal?

Jon Gowa: We have beta testing to begin at some cultivation sites across the country, about six of these sites. From there, that’s where we really start to gather data so we’ll see how are these actually performing in real life, what is the accuracy that the cultivators are reporting because it is something of subjective matter and from there, we’re going to make incremental improvements until we hope we get to that 95%.

TG Branfalt: What do you mean by it’s subjective? What does that mean when you’re dealing with data? Data is not really subjective.

Jon Gowa: Right. For accuracy, some would say some cultivators prefer a closer cut where perhaps you’re trimming the sugar leaves very down low, of course, getting all the crow’s feet but other trimmers, especially when the product is wet, might consider it okay to leave some sugar leaf because it still has product on it, active product. I think it depends on cultivator to cultivator. That’s actually something we want to program into the robots. This is one of the levers they can pull but we want to make sure when they pull that lever, they’re getting a desired outcome.

TG Branfalt: The system is adaptable.

Jon Gowa: That’s correct. There will be some tunability whether they want, like I said, a closer trim or perhaps a looser trim and that can be for numerous reasons from speed to, of course, just how they like their product.

TG Branfalt: That’s really cool stuff. We got to take our first break. I’m TG Branfalt. This is Ganjapreneur.com podcast.


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TG Branfalt: Hey, welcome back. It’s the Ganjapreneur.com podcast. I’m your host, TG Branfalt here with Jon Gowa, CEO and founder of Bloom Automation. Before the break, we’re talking a bit about how the robot works but there’s going to be … You’re definitely going to get some voices who are saying that one of the benefits of legalization is job creation. A February report from New Frontier estimated the cannabis space to create 250,000 jobs by 2020 while manufacturing, government and utility jobs decrease by 814,000, 47,000 and 383,000 respectively. What is your response to people who might see your robots as a threat to job creation in the cannabis space?

Jon Gowa: Yes. The robots and automation in general really works to increase efficiencies. Often, what occurs there is as opposed to eliminating jobs,
you’re actually creating more jobs such as everything … The robot needs an operator. These current robots, for example, don’t feed themselves. Branches need to be fed in. Then, of course, there’s robot technicians, robot programmers and a number of jobs that are actually on-site jobs that will be created. What we like to look at is the efficiency improvements that these robots can provide employers and enable them to employ even more people whether it’s down the line or actually helping the robots.

TG Branfalt: Well, and tech companies need a variety of talent as well. What are you guys going to be looking for as you expand in terms of talent?

Jon Gowa: Certainly. Everything from, of course, programmers who are experienced in robotics and specifically vision to then we would need robot technicians across the country because robots, they break down like any piece of capital equipment or any piece of equipment really. We will be wanting to train particularly people that are familiar with other equipment in the cannabis industry whether it’s they’re trained on lighting equipment, dehumidification equipment. We’ll be looking for those same people and hopefully train them how to work on the robots so that we have technicians capable all across the country and when a cultivator needs them, they can go out and service the robots and of course, individuals that would operate the robots and then, we are planning on United States manufacturing so we’ll need an army of assembly technicians as well.

TG Branfalt: So far, have you been able to find qualified people to do the jobs that you’re looking for and if so, what sectors are they coming from?

Jon Gowa: Great question. For example, we’ve been looking for contractors that are familiar with cameras and how cameras integrate with robots and typically, that’s in automation field. We found contractors everywhere from Denver to San Diego to Tampa, Florida who all not only have an interest in the field but have a strong interest. They see it as a growth industry and have said that there’s request from other people, from cultivators themselves. We’ve had very good response honestly from vendors and industry professionals outside of the cannabis industry.

TG Branfalt: What other functions might robots be able to perform in the cannabis supply chain?

Jon Gowa: We’ve already seen some equipment whether you would call it an automation equipment or robotics, that help package cannabis, help package flower. One of the things I know that’s being looked at is packaging concentrate products. No pun intended but it’s really a sticky process and … yeah.

TG Branfalt: I love puns.

Jon Gowa: It’s tough to really … The process is called gramming and I think it’s pretty tough to do manually.

TG Branfalt: That’s something that people might be looking towards robots for or are they already being utilized?

Jon Gowa: They’re not being utilized but they are looking towards that, just one example, to help packaging, help packaging efficiency, consistency so that every time you look at the product, it’s consistent to what you expect.

TG Branfalt: When you approach a cultivator and you tell them, “Hey, I’ve got these trimming robots,” what’s their reaction?

Jon Gowa: Generally, their reaction is fairly positive. I think trimming is often seen as one of not the most desirable jobs in the industry. What we hear from cultivators is they love their great trimmers but all their great trimmers want to do is move up to that next level where they’re no longer trimming, so it’s difficult for them to find good trimmers and if they could instead operate robots that would really equate to this quality, they would love to do so.

TG Branfalt: How much training would somebody who’s trimming by hand now need to operate one of these robots?

Jon Gowa: Certainly, I think a large population of the trimmers right now are of the age that they’re quite familiar with technology and the robot’s operated through a touch panel control. It’s fairly intuitive. It’s a small combination of mechanical, just how you load the branches and then simply following kind of on-screen instructions. I think they would get sort of used to the errors that might happen with the robot and learn how to adjust those pretty quickly. It’s very similar to how humans work with robots in the automotive industry. It’s pretty collaborative.

TG Branfalt: You don’t need to have like an engineering degree or something to operate these?

Jon Gowa: No. Absolutely not. We really would count on those hand trimmers and other employees to assume these roles.

TG Branfalt: We got to take our last break. When we come back, we’re going to talk about something you and I both know a little bit about and that’s cannabis on the East Coast. Before we do that, we’ll take a break. This is the Ganjapreneur.com podcast. I’m TG Branfalt.


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TG Branfalt: Welcome back to the Ganjapreneur.com podcast. I’m your host, TG Branfalt with Jon Gowa, CEO and founder of Bloom Automation. You had mentioned earlier you’re from Massachusetts. I lived in New York for years and years. I spent tons of time in Massachusetts and I was stoked and maybe a little surprised when they passed cannabis legalization last November. It was a huge domino that toppled in New England because of Boston and the power politics that are played, I’m certainly sure you know, in Massachusetts. Were you confident going into that vote? What were your feelings as a native going into the November election?

Jon Gowa: No. I was hopeful but I wouldn’t say I was completely confident. I knew in the earlier polls, it was somewhat split but at least we had passed medicinal and then decriminalization. I was hopeful we would follow suit and certainly pleased with the outcome there.

TG Branfalt: Do you have the same sort of feeling that I do that it was kind of the first domino? I mean that and Maine, that I mean it was a simultaneous thing but to me, New England or I’m sorry, Massachusetts is sort of the bigger of the two fish if we’re frying them. Do you kind of get that sense as well that … I mean now, we got Vermont who just, the legislature passed, strange legalization bill. Delaware is working on it. I hear Rhode Island but do you think that it took Massachusetts to kind of get that ball rolling?

Jon Gowa: Personally, I do think it did take Massachusetts to really get everything rolling. I think just as other states have looked to Colorado including Massachusetts, I think other New England states will continue to watch Massachusetts as the legalization plays out.

TG Branfalt: Well, and there’s been some setbacks. The legislature delayed implementation from January to July 2018. Several municipalities have enacted either moratoriums or total bans. They have approved the funds for the program which is a start. How confident are activists and canna-business owners in Massachusetts that the state will meet that July 2018 deadline? What are your concerns about the law if any or its implementation?

Jon Gowa: I certainly hope that the law is implemented. As you said, it was supposed to be in January. I certainly hope in July, I think the voters have voted. The time has come but the cities that haven’t, for the cities that haven’t or that have pushed back, I think they’re losing out and I’m sure eventually, they’ll turn, just like some cities here in Colorado have. Then, yeah, I’m not 100% confident on the actual meeting the timeline. It’s really, I mean … yeah.

TG Branfalt: Finally, what advice would you have for entrepreneurs, specifically those interested in entering the tech sector?

Jon Gowa: Great. I think there’s ideas. There’s thousands of ideas but really, I would say building your team, whether it’s just you and a partner or you and two partners, building a team where you really complement each other and then really looking at your opportunities, so if you have an idea and you have a prototype, then maybe you start looking for some investment but otherwise, these incubators are really … It’s a really good opportunity to get to know the entire industry, get to know venture capital. Myself, I’m not an MBA but this is kind of like a mini-MBA. I would certainly advise that to any entrepreneur whether you’re an engineer or not, or a business professional or not.

TG Branfalt: Finally, can you tell us where we can find more about your product?

Jon Gowa: Absolutely. On our website at bloomautomation.com and of course, at our Twitter, @bloomrobots. Both is a great opportunity to learn more.

TG Branfalt: Awesome, man. Well, thank you for taking the time out to be on the show. It’s really cool tech that you guys are rolling out and I really can’t wait to see how it exactly develops. That’s, I think, going to be a really fascinating thing to keep my eye on.

Jon Gowa: Yes. Thank you really much, Tim. I love the show and I’ll be anxious to hear more from you.

TG Branfalt: Thanks so much. You can find more episodes of the Ganjapreneur.com podcast in the podcast section of Ganjapreneur.com 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 Jeremy Sebastiano. I’ve been your host, TG Branfalt.

End


An official NBA Spalding basketball sitting on some grass on a sunny day.

NBA Commissioner Defends Cannabis Ban, Cites State Law Discrepancies

In an interview with the Players’ TribuneNBA commissioner Adam Silver indicated he doesn’t “see the need for any changes” in the league’s cannabis policy “right now” because of the patchwork of cannabis laws state-to-state throughout the U.S.

“…As you know, our players are constantly traveling, and it might be a bit of a trap to say we’re going to legalize it in these states, but no, it’s illegal in other states,” Silver said in the interview. “And then players get in a position where they’re traveling with marijuana, and we’re obviously getting into trouble.”

The NBA is home to eight teams in states with legalized adult cannabis use, including the Washington Wizards from Washington, D.C.; four teams hail from California, one from Colorado, one from Massachusetts, and one from Oregon.

While the league still suspends players for cannabis use, the ban is limited to five games. Earlier this year, Steve Kerr, the coach who last season led the Golden State Warriors to a championship — their second in three years — admitted to trying medical cannabis to ease chronic back pain; however, he said “it didn’t work” for him.

Kerr added that he believes “it’s only a matter of time” before medical cannabis is an accepted therapy in all of the major sports leagues because, eventually, “the education will overwhelm the perception.”

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The Maryland Capitol Building in Annapolis. MD.

Some Maryland MMJ Application Reviewers Had Ties to Applicants

The Maryland Medical Cannabis Commission is investigating potential conflicts of interest by those who reviewed the state’s medical cannabis applications after an investigation by the Washington Post discovered several of the “independent experts” had ties to companies whose applications they reviewed.

The applications were reviewed by Towson University’s Regional Economics Studies Institute, who oversaw 20 experts scoring the applications. However, the state Department of Legislative audits criticized the commission for using the institute because they, after an audit, concluded that the deal between the university and the MMCC circumvented “competitive procurement” standards resulting “in a lack of assurance that these services were obtained at the most advantageous cost to the State.”

According to the Post review, Julia Germaine, co-founder of Massachusetts’ Temescal Wellness, was among those reviewing applications and on an affidavit indicated she has “no known relationships” with individuals applying for a cannabis license; however it was later discovered she reviewed the application for Temescal, submitted by Ted Rebholz, a director and consultant, and her husband Nial DeMena, the co-founder of her Massachusetts company. Two heads of a Washington D.C. dispensary were also present on the panel and their business partners were among those seeking to expand into the state market – one disclosed the relationship, the other did not. Germaine claims she didn’t know her husband was a part of the Temescal application, and her husband claims he didn’t know she was an evaluator.

Daraius Irani, director of the RESI said the institute “took every step to ensure a fair process,” adding that while “it is not a conflict of interest simply to know someone professionally” working in the industry, Germaine “would have not have been an evaluator at all” if she had disclosed her husband was the general manager and she was affiliated with a potential licensee.

Patrick Jameson, the executive director of the MMCC, said the body “takes its role concerning the integrity of [the program] and fair application process very seriously and has been closely monitoring any and all situations of non-compliance to ensure the public trust.”

“The Commissioners will evaluate all available background investigation information prior to their deliberative process before issuing any licenses,” he said.

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Maine Lawmakers Propose Doubling Adult-Use Tax Rate

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

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

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

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

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

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

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The New Hampshire Capitol Building on a sunny day in Concord, New Hampshire.

New Hampshire Gov. Signs Cannabis Decriminalization Bill

New Hampshire Gov. Chris Sununu has signed legislation reducing penalties for possession of small amounts of cannabis, and with it effectively decriminalized low-level cannabis possession in New England. The measure makes possession of up to three-quarters of an ounce of flower and up to five grams of hashish by adults 18-and-older a violation rather than a misdemeanor.

New England includes Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. Last November, voters in Maine and Massachusetts both approved adult-use measures, while possession of less than an ounce of cannabis is a simple violation in the remaining states. New Hampshire was the only holdout in the region.

New Hampshire’s law specifically prohibits police from making any arrests for a cannabis possession violation, and offenders under 18 caught possessing less than the threshold would be subject to a delinquency petition, WMUR-9 reports.

Adults found possessing above the threshold will be fined $100 for the first or second offense and $300 for subsequent offenses within a three-year period. A fourth offense will result in a misdemeanor charge. Money collected from fines will be deposited into the state fund for alcohol and substance abuse treatment.

Justin Strekal, NORML political director, said the measure allows the state to “join the chorus of states that recognize the baseline level of dignity for its citizens and tourists” who choose to use cannabis.

“Soon, throughout New England, individuals will be able to freely travel without the threat of jail time for possession of marijuana,” he said in a statement.

Sununu previously called the legislation “common sense marijuana reform.” The bill takes effect in 60 days.

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An indoor grow site licensed under Washington's I-502 adult-use cannabis marketplace.

MassRoots to Acquire Cannabis Compliance Firm Odava

Cannabis social media and technology platform MassRoots, Inc. has agreed to acquire regulatory compliance firm Odava, Inc. for cash and shares of MassRoots common stock. Currently, Odava offers its point-of-sale and end-to-end regulatory compliance services to dispensaries in Oregon, and MassRoots plans on expanding those services to Colorado and Alaska this year, and to California and Florida in 2018.

Additionally, the company anticipates rolling out the platform in Nevada, Massachusetts, and Maryland.

MassRoots CEO Isaac Dietrich said the company plans on using their current resources and relationships to “grow the number of dispensaries utilizing Odava from dozens to hundreds by early next year.”

“This acquisition expands MassRoots’ offerings to dispensaries to include point-of-sale and regulatory compliance software, consolidating the most important operations for cannabis businesses into one central platform,” he said in a press release. “In the near future, we believe a significant percentage of all transactions occurring in the regulated cannabis industry will occur on our platform.”

The deal will see the two founders of Odava, Scott Kveton and Steven Osborn, paid $35,000 in cash and move into roles with MassRoots, where they will receive a $50,000 bonus after one year of continuous employment, according to MassRoots’ July 5 corporate overview documents. Current Odava shareholders will receive 3,250,000 shares of MassRoots common stock.

MassRoots’ Board of Directors has approved the deal.

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A large, trimmed cannabis nug lying sideways on a wooden surface.

Nevada Rec. Sales Reach $3M in Four Days

Cannabis sales in Nevada are already booming, as retail sales have exceeded $3 million during the first four days, according to a Las Vegas Sun report. That equates to nearly $500,000 in state tax revenue putting the state on track to achieve $30 million over the next six months of sales, the Nevada Dispensary Association estimates.

The tax rate for recreational cannabis sales in Nevada is 33 percent to 38 percent, depending on the municipality.

“We had a higher demand than everybody initially thought,” said dispensary association director Riana Durrett in the report. “It shows this market really exists.”

Nevada was one of four states to legalize adult-use cannabis during last November’s general election, and thanks to Early Start provisions by the Tax Department, the state is the first of the four to roll out the new regime.

California’s Bureau of Medical Marijuana Regulation Chief Lori Ajax, whose agency is responsible for devising regulations for the industry, said that she fully expects to meet the Jan. 1, 2018 deadline set forth by Proposition 64.

Lawmakers in Maine passed legislation in January to delay the rollout of the voter-approved program by three months, from January 2018 to April 2018. Despite the legislature-approved delay, other lawmakers have introduced legislation to allow early sales at currently licensed dispensaries. The personal possession and home-grow provisions included in the recreational law, however, were unaffected by the legislative action and took effect on Jan. 30.

Massachusetts lawmakers also passed legislation delaying the implementation of the voter-backed regime from January to July 2018, and have been crafting changes to the law ever since. As of June, at least 81 Massachusetts communities have considered or enacted bans on the industry, including moratoriums and zoning regulations to prevent cannabis business operations. However, portions of the law allowing adult cannabis possession and home-grows took effect Dec. 15.

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Looking down the line of a commercial cannabis grow operation in Seattle, Washington.

Kush Tourism: Teaching Tourists About Seattle’s Cannabis Industry

Nestled in the Cascadian, ‘coffee corner’ of the United States is Kush Tourism — a cannabis tour company based out of Seattle, Washington.

Kush Tourism was founded by Chase Nobles and Michael Gordon. They have built their company from the ground up with the base idea of offering a comprehensive seed-to-sale tour of the local cannabis industry — and we recently had the chance to spend a day with the team that makes up Kush Tourism and learn what they’re all about.

Jeffrey Leonard, Master Grower at Dawg Star Cannabis, addresses our tour inside of a fully operating I-502 grow room.

Currently, they only operate in Washington state, although there is interest in making partnerships with similar operations in other legal states. “The tricky part is understanding the different state laws,” said Matthew Bentley, tour manager for Kush Tourism. So, for now, their focus is promoting the Seattle market.

The tour covers the beginning of the growing process and the differences between strains during their early lifecycle.
Another part of the tour delves into the complexity of plant genetics, showing tourists the different important stages of plant growth.

People who are interested in these cannabis tours range from young couples visiting from both legal and illegal states to elderly women and golfing gentlemen. And that is the point — to offer a quality experience to both cannabis enthusiasts and to those who are just curious. On the trip we attended, there was a couple from Atlanta, Georgia and another couple from Massachusetts.

Our seed to sale tour begins and ends at Diego Pellicer, a high-class retail shop in the SoDo district of Seattle, where participants are provided with a parking pass to park at the shop while they’re touring. (Fun fact learned from the tour: SoDo in Seattle means South of the Dome, not South of Downtown. Named after the once-standing King Dome, which is now home to the Century Link Field.)

Under the canopy of a licensed I-502 production room.

The tour shows visitors how Washington fell in love with cannabis, and how the state began the process of transitioning into a legal industry. In the midst of the tour, you will also get a nice overview of Seattle history as well.

But there is, of course, a catch: you cannot legally smoke or consume any cannabis on the tour or anywhere beyond that. “The most difficult part is dealing with the smoking laws,” said Bentley. “It’s a Class C felony to consume cannabis on our tour because we have made a money exchange for the tour.” Basically, if you’re a visitor Washington state, you cannot legally consume cannabis unless you’re in someone’s private residence — that means no public consumption, and you can’t even smoke in your hotel room.

Jeffrey Leonard explains the importance of the drying process. This is typically where the most expensive mistakes are made in the industry.
Cannabis budtender Jake Dimmock addresses the tour, explaining some of the exciting innovations made by entrepreneurs in the world of cannabis.

At the beginning of the tour, we had a lovely introduction from Diego’s legendary budtender Jake Dimmock. From this point, we all loaded in the Kush Tourism van, which was loaded with snacks and water, and headed to the next stop. We found ourselves in Chris Drags’ glass studio in Westlake, Seattle.

A professional prepares his workstation before diving into a demonstrative glass blowing session.
Working on a piece of glassware.

Drags is an Italian glassblower by trade. “And if you know Italian glassblowers, you know it’s not easy for them to tell you their secrets,” Bentley said. “He truly goes beyond just blowing pipes.”

Glassblower Chris Drags explains to the tour some of the process going on behind him while one of his peers continues to work on a pipe.

At this part of the tour, we had frontline views of glass blowers blowing pipes while Drags explained parts of the process. One of the members of the tour even bought the one that was blown before us and had it sent home to them.

A look at some of the finished products during the glass blowing section of the tour.

The next spot that we went was Dope Award-winning producer/processor Dawg Star Cannabis. They became connected because Dawg Star had reached out to Kush Tourism, and they were wanting to share their process and their love for cannabis with the public.

A worker tends to some of the taller, more mature cannabis plants inside of a cannabis cultivation site.
The smell of cannabis can be truly overpowering in a grow room that’s brimming with this much bud.
Close-up look at some of the mature plants under the glow of indoor lighting.

“Because of their head grower’s knowledge of environmental and pest control, they are able to welcome visitors,” said Bentley. An emphasis on preventative control allows for Kush Tourism to bring visitors into their facility without risking their ability to produce premium cannabis.

Cannabis plants’ fanning leaves reaching out towards the light.
The Kush Tourism tour gives you a chance to get up close to cannabis plants of the highest quality.

This allows the tour to see first-hand what a Tier 2 I-502 grow operation looks and smells like. We were able to get a full tour from their clones to their finished product, with detailed explanations of the whole process in between. We even got to learn the story behind their brand name and their packaging choices.

Next, we were taken to our final stop, Vela, a retail store that is unlike any other in the state of Washington. This is the Apple Store of cannabis shops in the Seattle area — and it’s more than just a pot shop. Technically, they’re three different businesses with three different licenses: a retailer, a producer/processor, and an extraction lab. And they all share a building with windows for walls. Visitors are able to walk down a hallway and see joints being rolled on one end, while an extraction lab is operating on the other side.

Observation window at the grow lab at Vela.
Fellow tour attendees peering through a window display inside Vela.

Their main mission between the three different businesses is to educate the public on various aspects of the cannabis industry while being able to show what they’re talking about. Additionally, with access to an extraction lab, they are able to explain terpene profiles and their effects more in-depth than most stores. They have a terpene smelling station right on their sales counters, to give shoppers firsthand experience of terpene profiles.

Jeffrey Leonard addresses our tour group.

Once we were done making our purchases, we all loaded back up into the Kush Tourism van and headed back to our first location, Diego Pellicer, and concluded the tour. Although we all were sad to leave, it felt like a robust cannabis experience that would be attractive to anyone curious about Seattle’s booming cannabis industry.

Beyond their tours, the team behind Kush Tourism is also working on many other projects, too. Recently, they just concluded their first Kush Marketplace event.

“This was the first event [in the state] where [cannabis] product was able to be displayed,” said Bentley. The event was an industry event where those with retail and producer/processor licenses were the only people able to attend, Allowing producer/processors to present their product to retailers in a speed dating-type setup. The end result was a hit, and we look forward to what else the Kush Tourism/Kush Marketplace crew has to offer in the future.

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Jeffrey Hank: Pushing for a Michigan Adult-Use Victory in 2018

Jeffrey Hank is the founder of MI Legalize, the Michigan advocacy group that is spearheading efforts for a 2018 bid for the statewide legalization of adult-use cannabis. Michigan is one of the last major states capable of enacting change via voter initiative that hasn’t yet overruled the prohibition of cannabis — this means that a successful legalization initiative there would be a huge victory in the ongoing battle to reform cannabis laws.

In this episode of the Ganjapreneur Podcast, Jeffrey joins podcast host TG Branfalt to talk about organizing petitioners and activists in their effort to cement their initiative’s place on the state’s 2018 ballot, the history of Michigan’s uniquely difficult citizen initiative process, the state of cannabis reform as it stands throughout the Midwest, how the ongoing efforts in Michigan may influence neighboring states and the federal climate in regards to cannabis legalization, and more.

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


Listen to the podcast:


Read the transcript:

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

Today I’m joined by a fellow Michigander, Jeffrey Hank. He’s the founder of MI Legalize. How are you doing this morning, Jeff?

Jeffrey Hank: Hey, doing great. Thanks for having me on.

TG Branfalt: Hey, man, it’s a pleasure. I had a chance to talk with you a few days ago for an article and now here we are on the podcast. Before we talk about MI Legalize and that whole movement, why don’t you tell me about your background. Who is Jeff Hank? How’d you end up on the forefront of the legalization movement in Michigan?

Jeffrey Hank: That’s a good question. I ask myself that a lot. How I got involved, in a nutshell … and I’ve always been a cannabis enthusiast. I’ve always believed that marijuana should be legal ever since I was a kid. I wrote a paper in eighth grade about it, actually, and back then it was really hard to get information about anything. I had to try to get my dad to go the local bookstore and pick up a copy of High Times, and that was back in the day where High Times was behind a sheet, like it was almost pornography.

TG Branfalt: Yeah.

Jeffrey Hank: You know? Now things have changed so dramatically, but I think what really got me into it was about eight or nine years ago when I started practicing law, and I just had a natural sort of drawing to marijuana law … And, you know, a lot of people I knew were getting in trouble with it, and just seeing the injustices in the court system. So, I got really active right when Michigan’s medical marijuana act first came into place doing both the business end of things, but also criminal defense law. I transitioned more towards the industry side of things now, thankfully, because we’re scaling back a lot of the criminal aspects of these things.

It was just a number of things that led me to think that something had to be done, and then I got involved politically. I ran the East Lansing decriminalization campaigns. These were small grassroots campaigns. Lansing was 2014, and … Well actually it was 2013. East Lansing was supposed to be 2014 but it got bumped to 2015. We actually had to litigate it to get in on a ballot in East Lansing. Each of those elections we won with 65% and 67% support of the people, and those authorized, at the local levels, the Lansing and East Lansing anyway, the use, possession, transfer, and transport of an ounce for adults twenty-one and over.

So, I got involved in that and then at about the same time I had a friend who was one of the Okemos 7, a medical marijuana compliant facility here in the Lansing area, and they were busted by the Feds and he got sent off to prison in West Virginia. I’ve had clients who I believe actually … I had a client I think died once, an elderly client who died of the stress of being prosecuted over petty marijuana violations.

So, you know, you see that stuff time and time and time again, and you know from your own personal experience how safe and useful and even fun or medically healing cannabis can be, and you know it shouldn’t be illegal. I felt, as a citizen basically, I had a duty to do something more about it. So a couple years ago I began to try to organize these other activists statewide. In Michigan we have a particularly active group of people who have decriminalized or legalized at least 21 cities at the local level.

So there were all these people out there doing these things in Saginaw and in Jackson, and Flint and Grand Rapids, but there was no state organization organizing everybody to do something. And looking at it and talking with people, it was a real daunting task. Nobody wanted to take on this major project which had never been done. There was sort of a conventional wisdom that you needed a million or 2 million dollars to even bother attempting to try to make the ballot, so if you didn’t show up with that money to some of these cannabis activists, basically they just discounted the idea that a statewide ballot initiative would ever be possible.

So, I kind of had been going through this over the years and being involved both as a lawyer and as a political activist, and finally things just all kind of came together in one strange way or another. I ended up as the Executive Director of MI Legalize, and the story kind of goes on from there.

TG Branfalt: So let me ask about your law school experience a little bit. You said that you had ended up working specifically on cannabis issues. Was there anything in your law school training that prepared you for that, or was that something that you really undertook on your own accord?

Jeffrey Hank: Yeah, it was really on my own accord. We rarely discussed marijuana in law school. When we did and I had a chance to opine on it, I would always say that marijuana laws were unconstitutional. So, I just had that disposition, and having a lot of friends into cannabis, looking to get in the industry end and also just getting in trouble, it was just sort of natural. People would come to me for legal assistance and then it became a career. So, nothing in law school prepared for whatsoever. I don’t know if that’s changing these days, but I’m kind of hoping it is, that in the next few years they’re not even talking about marijuana being a crime in law school.

But yeah, it was all … everything I got into was sort of on my own in conjunction with other people, and sort of just evolving with this cannabis culture. I just said a few minutes ago, I remember back in eighth grade where it was hard to get a copy of High Times locally. There was like two bookstores that had it, and you wouldn’t even want to go to a grow store because if you went to a grow store, you’re probably under the surveillance of the police. You know? But in that short period of ten, fifteen years, the culture’s changed dramatically, where even though in Michigan 20,000 people a year are still arrested for marijuana, there’s a lot of people who feel and act almost like cannabis is legal, particularly with the medical situation. Now of course, it’s not, but that’s how rapidly the consciousness is changing, where these things are sort of open now. So I’ve just kind of evolved along with that, with the cannabis culture, like so many other people.

TG Branfalt: So why don’t you give me a brief history of cannabis policy in Michigan. We have medical out here, but it’s kind of a gray market. It was … They’re putting legislation to fix that. So why don’t we just start with a brief history of cannabis policy in Michigan, and what the medical marijuana laws are and how those are changing because of legislative action.

Jeffrey Hank: Right. So if you go way back, you can go back to John Sinclair days where he was actually in prison for selling two joints to an undercover officer. The Michigan Supreme Court struck down the law and for a short period of time, there were no laws against marijuana in Michigan, and that was the genesis of the Hash Bash in a nutshell.

Flash forward to 2008 … You had Michigan’s Medical Marijuana Act come into place, which really changed everything in a good way, really. There’s still been a lot of problems with it, but it opened the door. And a lot of people don’t like that. There are people who supported marijuana as medicine and there are other people who said, “Look, this is the way legalization comes.” And you know, when I voted for it back in 2008, I thought that … that, hey, I’m happy to vote for this because I’m hoping that legalization does come.

So we had several years of a wild west, if you will, for lack of a better term, where the state didn’t really know how to handle it, local governments didn’t know how to handle it, and it was sort of wide open to anybody to just do what you wanted to do within the confines of the law, which were very vague and gray, as you said. That’s caused a lot of problems. For some people it’s been a blessing, for other people it’s been a curse. Law enforcement … if you happen to get in on the wrong end of the gray area of medical marijuana, you know, it can ruin your life.

So we’ve been through this for years and years. Last year, the state enacted this new Medical Marijuana Facilities Licensing Act along with a couple other supportive acts, which will license these five categories of cannabis commerce businesses, cultivation facilities, processors, safety compliance facilities, which are like testing labs, transporters, and provisioning centers, which are often called dispensaries colloquially.

So, that’s kind of where we’re at. You know? It started with the Medical Marijuana Act that did not have any sort of framework for commercial dispensaries, so … We’ve had dispensaries in Michigan for quite some time, but they operate in this legal gray zone, and now that’s being clarified.

TG Branfalt: How did you guys react to the legislative action?

Jeffrey Hank: So, for MI Legalize it was a strange, strange day because we had … On June 1st 2016 we turned in 354,000 signatures, which should have been enough to put us on the Presidential Election ballot where President Trump was elected this last year. We were kept off the ballot by the state, and we litigated that all the way to the United States Supreme Court and did not get any relief. However, the Michigan Supreme Court … The biggest day really was September 5th and 6th or so when the Michigan Supreme Court made its ruling to keep us off the Michigan ballot. That was sort of the last big chance for us to be on the ballot. The U.S. Supreme Court would have happened after the fact, probably, and it would be 2018. So, that very next day … Literally after eight or nine years, almost, of no action by the legislature, no concrete action to actually create a regulatory system for medical marijuana … The day after we were denied by the Michigan Supreme Court, the state Senate, run by conservative Republican legislators, pushed out this bill.

So, it was a strange day. On the one hand we celebrated it because it was a step forward for many people, but I describe it personally as akin to the people being robbed of their election the day before, and then the next day the king and his minions throw out some bread crumbs to the peasants. We were supposed to have a law which would have completely legalized marijuana, which would have created this regulatory basic skeleton structure for a system, which didn’t have secure transportation of marijuana or a lot of this other heavy bureaucracy.

So for us, it was like … It’s hard to describe, because on one hand you’re happy to see that things are moving forward. I mean, we went from a law which allowed people to grow 12 plants personally or 12 plants as a caregiver for a patient who … You could apply for a 1500 plant license, and as of now there’s no restriction on how many of those licenses you can have. So, yeah, you get excited and happy to see that maybe people are going to be growing 10,000 plants or something. That’s great, and it’s going to take people out of the legal gray zone, but it wasn’t the way we would have drafted the law. And statements were actually made that because we were not going to be on the ballot now, some of these Senators actually felt comfortable moving forward because we wouldn’t have had these conflicting laws.

So it’s a very strange scenario. I have the word to describe it … It’s hard. It’s really hard to say it. I’m trying to think of the right word. It’s bittersweet, perhaps, is the word, because you’re happy on the one hand, and on the other hand it’s kind of a slap in the face. But that was an initial reaction the morning after we had just been denied by the Supreme Court, which was a serious blow not only to MI Legalize and myself, but everybody else who worked very hard to make this happen.

TG Branfalt: So why don’t you briefly tell the listeners about, in a nutshell, the 2016 campaign that was thwarted in the courts and by legislative action, because I think that it’s important that people understand exactly what happened to a campaign that had the petition support. It had the signatures.

Jeffrey Hank: Right. So, it’s a long story, but to … You have to have the history to really understand it. So I’ll try to make this as quick as possible. Going back to the 1963 Michigan Constitution … Citizens in Michigan had a right to place constitutional amendments or statutory initiatives on the ballot, and there was no time period restriction on their ability to do so. If there was any, it was the period between gubernatorial elections, which is four years. That’s the way petitions were done in Michigan until approximately 1972 when there was a woman in Grand Rapids who came close to succeeding, putting an initiative on the ballot that would have restricted legislator pay and pensions. And as a result of that, the legislature actually changed the law at that time to allow for only 90 days to petition. So you went from either a four year …

TG Branfalt: Wow.

Jeffrey Hank: … if not infinite time to 90 days. It caused a big brouhaha at the time. It was done by legislators
to stop a petition that was going to take away their pay, basically. Around that same time period, Michigan’s famous Attorney General, Frank Kelley, who’s called ‘the people’s Attorney General’ because he served here so long and he had so many substantial civil rights issues come about during his tenure … Frank Kelley issued an Attorney General’s opinion declaring that law unconstitutional … saying that the legislature could not limit the time period for Michigan citizens to petition. So for 13 years the state didn’t enforce that law and people had this longer time period to petition.

So flash forward to 1986, and there’s two more petitions that are sort of controversial to the political establishment. One was to enact a death penalty in Michigan, which … We were the first state in the Union to ban the death penalty. We’ve never had the death penalty at a state level in Michigan. The other was to allow citizens to vote on utility rate increases, which the power companies didn’t like. So, Consumers Power Company actually sued and they went to the Michigan Supreme Court to enforce this new law, which said that a signature over 180 days had to be validated again to prove the person was a registered voter. So you could petition beyond 180 days, but you just had to go through a separate validation process. So for 13 years that law was not enforced, Consumers Power sued to get it enforced and kept these things off the ballot.

In that same year, 1986, Michigan’s Board of Canvassers came up with a rule, their own policy, on how you validate those signatures, and they had two ways to do it. You can either get everyone to sign again, sign an affidavit saying they’re registered to vote, or you would go to the local clerks, of which there are 1500 in Michigan, and have them validate the voters’ signatures. So for 30 years, nobody tried to do this. We looked at it and we said, “Look, we’re a grassroots campaign.” … And to make the ballot in Michigan, and there were 13 campaigns that tried to do so last year … Nobody made it. That’s how hard it is to do because it normally does cost a couple million dollars. It’s very hard to have a dedicated group of citizens work full time for six months all across the state.

So we looked at it and we said, “Well, this is interesting. The law gives us this option. No one’s tried it in 30 years because it was so hard to do.” But what we were able to do was we hired some consultants and some computer people, and we were able to use modern technology, basically, and a lot of elbow grease, and actually verify every single signature.

TG Branfalt: Wow.

Jeffrey Hank: So when you turn these signatures in to the state, they only do a sample and they check 500 to 4,000 of them to do a sample to see if they’re valid. We checked every single one of them in preparation to have these local clerks do it, and we went to the Bureau of Elections and we actually testified, and we testified in the Legislature about this … Once the state realized we were about to qualify, the Legislature again decided to change the law. This is 30 years later now where they began to decide to try to restrict it to just a firm 180 days, which means we would lose approximately five months worth of our signatures. So we continued to lobby the Board of Canvassers to change this rule. We went to them and we said, “Look it, you know it doesn’t make any sense for us to have everybody to sign an affidavit again. We might as well have them sign the petition again.” Except in Michigan, it’s a crime to sign a petition twice …

TG Branfalt: Ahh …

Jeffrey Hank: So we’re not going to tell people to do this and possibly go to jail. The Bureau of Elections agreed with us, and they said, in writing, under oath, we had more than 180 days to petition. So we then said it’s very laborious also to go around to 1500 local clerks and have them validate all these signatures, especially when Michigan law provides for a centralized database, which wasn’t created until 1998.

So basically, we kind of came along, we put these different laws together and the pieces of this technology, and we realized that no one had just tried to do this because they thought it was too hard or too difficult, or maybe just were unaware of it. That was more likely. Most people didn’t realize you could even do this. And when we showed we could do it with the technology, they shut us down. They not only did not … The Bureau of Elections staff actually recommended three different new rules, which would have made it easier for us to validate these signatures, because everyone acknowledged it was kind of absurd and almost impossible to do. And that’s how it was designed in the 1980’s. It was designed to make it impossible to do, so nobody did it.

Well, we figured out a way to do it, and the result was the Board of Canvassers … It was a four person appointed board, two Republicans, two Democrats … They split 2-2. The Democrats supported changing the rules, the Republicans didn’t, but when it came down to it, because it’s a 2-2 split, no action occurs. So they never adopted a new rule. At that same time, the Legislature passes a new law. Six days after we submit our signatures, Governor Snyder signs it, and it’s used as basically a justification not to count our prior signatures, not to create a new rule for us to do it.

So a lot of people get confused about it, and the media will sometimes report that we didn’t do it in enough time or we didn’t have enough signatures, or whatever. That’s not true. We did have enough signatures and we did do it in enough time. The law actually didn’t go into effect until six days after we turned our signatures in, so it’s not really accurate to say that new law prevented us. It basically, though, was used as a justification for the Board of Canvassers to not take any action to count our signatures. So we filed the lawsuit and the first judge of the Michigan Court of Claims, which are not required to give you a hearing, they didn’t even give us a hearing despite these hundreds of thousands of Michigan … We had over 100,000 extra signatures we submitted …

TG Branfalt: Wow.

Jeffrey Hank: … and we didn’t even get, with five lawyers on the case, we didn’t even get a minute in front of the judge. The judge sits on the case for two months, and then denies our case, says we make a good argument, but fails to address any legal issues we bring up. And of course, we appeal it all the way up to the U.S. Supreme Court and never get any relief.

So, you know, very frustrating when you put all this work in, spend a lot of time, money and energy. But the great thing about that, TG, is it brings us to where we are now, because having done all that, we’re prepared to go forward and we’ve established this network and this experience and all these activists statewide have been brought together. People know each other now from the UP to Detroit and from Grand Rapids up north, down south, east and west. We’re connecting people, and people … Now that we’re on this new petition, we even have … I say this all the time. I have little old ladies who will come up to me, sometimes in the grocery store or something, and they’ll say, “I saw you on TV last year. I remember what they did to you. I remember what the Governor did to you,” or whatever, and they’re saying, “I don’t even support marijuana necessarily, but that’s not fair play.” And they’ll want to sign the petition this time around.

And the other amazing thing about it is … You know, the state delayed us now for two years. I think we’re going to be on in ’18. I think we’re going to win in ’18, but they put this idea now in so many people’s heads that they don’t play fair and that they’re trying to suppress progress on marijuana law … That I think you’re going to see above a 60% yes vote if not 70% by the time we get to 2018, because people are tired of Michigan government, they’re tired of both parties and getting jerked around, and this is a perfect example of our democracy being sort of undercut.

I mean, we led a true citizens-led campaign. One of the fair criticisms people can make about us is that we were disorganized or that there wasn’t a central sort of process. I get that finger pointed at me a lot, which is okay, but I like to tell people, “You know, well, that’s because we weren’t a multi-million dollar campaign funded by some billionaires or by the Koch brothers or by organized labor or somebody.” We were a true citizens group, and there hasn’t been a true citizens group that’s filed a petition in Michigan in decades, because it’s so hard to do and it takes so much money. Now, we did raise some money and we had one substantial large donor that helped us get to that point, but it was all done by blood, sweat and tears. And because of that, I believe we have created the conditions amongst the Michigan public that they’re ready for this, and they’re even more ready for it because of what they saw happen.

And you know, this all ties into bigger picture issues of trusting the state and the Governor and Flint, and all these other things. So I could go on and on and on but … That’s where we got to where we’re at today and people are really excited now. We had no help from national groups and as a result of what we did last year, a lot of people had said Michigan was on schedule with the national groups for 2020. We bumped that up to 2018. We’re one of the last big initiative states. There’s only 24 states in the country which have the initiative process, and when it comes to marijuana, most of the big ones have already gone … Florida being the exception, but Florida requires a 60% vote of the people to change the law. They just squeaked medical by recently, so I imagine you’ll see Florida and Ohio coming up in 2020, if not before then.

But Michigan is sort of the target, if you will, for people who support cannabis reform, and probably will become the target for some opponents also now, because we’re the last big state save Florida and Ohio, which are not teed up right now. So, we showed the country we’re ready, we got a lot of great support from people, everybody from … Moral support … You know, we didn’t have the financial support, but everybody from Tommy Chong to Willie Nelson … Willie Nelson’s got a great video out called ‘I’m Not Dead Yet’. He’s drinking out of an MI Legalize coffee mug in the video, and he’s in Southern Living magazine doing interviews drinking out of it.

TG Branfalt: That’s great.

Jeffrey Hank: We had Tommy Chong show up at the Hash Bash, and DJ Short and … All these other cannabis personalities saw what happened here, and DJ Short who has given some of my favorite public talks on this … He even did a speech at Hash Bash this past year, and he talked about Michigan in particular. We try to create a model here, and we look at this sort of like the cannabis industry is at a crossroads. We try to prevent the Responsible Ohio type situation here in Michigan. There were similar people who wanted to create a very exclusive market. We call it sort of monopoly market type provisions. You know, having ten or twelve big growers in the state … We want the exact opposite here. We want everybody to be able to participate in this if you’re an adult.

We fought very hard for that, and so we kind of like at Michigan as a litmus test. We could see states going towards very restrictive models of control, even the state owning dispensaries and things like that … Places like Pennsylvania, that’s how they handle alcohol. And then you have states doing CBD or smokeless-only products, so all these reforms could go one way or another. They could go towards that very tight, regulated model, or they could go towards more what we like to call a people’s model. And that was our goal. So we hope that with Michigan … We try to be careful how we talk about this, but since I’m talking to you here at Ganjapreneur and your listeners are hopefully mostly pro-cannabis … We believe this is the best cannabis law to date in the United States for several reasons.

TG Branfalt: I want to talk to you a bit more about some of the details on the ballot, and then some of the pitfalls and what goes on with the whole process, but before we get into all that I want to take a short break. This is Ganjapreneur.com podcast with TG Branfalt.


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TG Branfalt: Welcome back to the Ganjapreneur.com podcast. I’m your host, TG Branfalt here with Jeff Hank, founder of MI Legalize. Before the break, you were talking about the new push in Michigan, your new ballot initiative. Before we get into the details of that initiative, can you tell me more about the process? I see all the time on Facebook you guys are offering training courses and meetups and things like that, so what are these training courses like and what do you guys, you know, discuss when you get together?

Jeffrey Hank: Yeah, absolutely. We’ve got a great team of people working on this, and some of them are volunteers, a few of them are staff. What we learned is that everybody … so many people want marijuana to be legalized. The problem is getting people actively engaged to work to make that happen, or getting them to write the big checks necessary to pay someone else to do the work. Because it just can’t … I don’t want to say it can’t be done by volunteers, but it is an enormous task, which is really more suited to almost a corporate model of running a campaign. You have to have bodies in the street, working. So those people who are doing that have to be efficient and they have to be trained well. We lose a lot of signatures from people just because they don’t know how to petition. It’s not something that most people do. Everyone’s aware that you can petition, but most people haven’t actually done it, and it’s an interesting thing, but once you learn how to do it, it’s pretty straight forward and easy.

TG Branfalt: What does someone need to learn?

Jeffrey Hank: It’s just the basics. So in Michigan, we have 83 counties. Every single county has to have its own petition sheet, so if you live in Wayne County and I live in Ingham County, Detroit and Lansing, we don’t sign the same petition sheet. So a petitioner has to, in theory, have up to 83 different petition sheets for every Michigan county there is. You have to make sure it’s filled out properly and signed and dated properly and all that kind of stuff, so we just lose some potentially good signatures from errors on petitions that could be avoided. So one of the things we’re trying to do is to train these grassroots volunteers to accurately fill out petitions.

Then also, just to make sure that they’re aware of the law. It cracks me up because people always love to talk about the law and what we’re doing or whatever, but I find most people haven’t actually read it. So we just want to make sure that our petitioners who are out there on the street talking to people understand the nuances of the law, because you do get people who are very interested, very curious. They may even want to read it on the street, and they may have questions. So we just try to make sure everybody’s well informed, and you know, there’s a …

Since our petitioners are volunteers … There’s sort of a black stain on the industry of professional petitioning, where some of these professional petitioners who work for money, they really misrepresent the petitions on the street. They’re out there to try to get as many signatures as they can as fast as they can by any means necessary, and that’s sort of due to the timing and what you have to do. I’m not making an excuse for it, but they’re desperate to get those signatures, because if they don’t, they’re not going to make the ballot.

TG Branfalt: That can lead to legal challenges by district attorneys who say that they were misrepresenting what the petition does. That’s happened in other states.

Jeffrey Hank: Yeah, that’s absolutely right. So we’re trying to prevent that kind of stuff. This is about legal compliance, but it’s also about educating the citizens, because if we have a couple hundred people out there every day and they’re interacting with a couple people themselves every day, it starts adding up over time. So we want people, when they’ve talked to a petitioner, to feel like they’re getting told the truth, they can get any information they need, and that’s really important because we want those people not only to sign the petition, but to come out to vote. We want them to tell their friends and neighbors and all that. So we really look at this as a … It’s not just a smash and grab campaign, this is serious hearts and minds, each one teach one. Every person that can be educated on this issue or has a good interaction with us or somebody working on the campaign generally, hopefully is converted into an actionable voter later on and a proponent for the cause.

What we find is … You have a percentage of people and it’s hard to put a number on it, but let’s just say 30-40% of people, who are probably just going to vote ‘no’ on marijuana. Unless you can have a good conversation with them and educate them in a respectful way, you’re not likely to change their mind. So what we try to do is … We’re not trying to force anybody or argue somebody through some forceful persuasion, but we want to educate people, and we think if we do that politely and nicely and in the right way, one by one we’re going to start making that number lower and we’ll win. So that’s the purpose behind it.

You know, one of the things we got … A lot of people last time didn’t have that training, or they complained, like they didn’t know where to get petitions. So we just spend a lot of time right now making it publicly known if you want to petition, you can come to all these meetings. We have people up in the upper peninsula right now, all over the state. We’re trying to go to every area so anybody who wants to learn how to do this, anybody who’s never done it, has that opportunity and can get informed. That’s really the purpose of it.

TG Branfalt: So the ballot initiative … You’re trying to legalize adult-use cannabis, as has been done in Colorado, California, Massachusetts, Maine, Washington, Oregon. So since you guys have these other sort of laws to work with in other states, how do you determine what the best practices are for your petition?

Jeffrey Hank: Right. Well, we took a lot of what we did in 2016. That was sort of our starting template as MI Legalize. Now, what was different about this petition and the last one is we solely wrote the last one on our own, and that was done by an elected committee of Michigan activists and lawyers and what not. This time we worked with some other groups including Michigan NORML, Marijuana Policy Project, The Drug Policy Alliance, the ACLU of Michigan, and various trade and industry groups. So we kind of took a mishmash of …

Okay, what did MI Legalize have in its petition last time and what are the most … You know, we created our first petition based on popular consensus. We didn’t do things like, “Oh, this is just popular, let’s do it,” but we actually tried to say what is it that your average person would be willing to accept, and what would your cannabis industry people be willing to accept as a ground floor. We spent two years doing that, so we had a pretty good idea of what people in Michigan are willing to accept, and it’s fascinating because you can look at these other states … And you can talk to someone from some state where they’re only allowed to grow four plants, and maybe a lot of the people think that’s an acceptable amount for a personal home grow. But here in Michigan, people are so used to the Medical Marijuana Act that they think having 12 or 72 plants is the bare minimum, right? So we just have certain local conditions that have caused people to take certain policy positions.

So we took what we could from MI Legalize, which was still relevant and which was crafted before the state passed its own regulatory structure, so we had to adapt to that. Then we used the expertise of the national groups to say, okay, what worked in November 2016 in the states that won … What led to Arizona being the one state that failed, and how can we try to avoid all those mistakes in Michigan? One was first just not having two petitions, so we had to work really hard in a coalition to come up with one petition we could all support, which thankfully did happen. And the rest was just looking at, state by state, what’s best.

At MI Legalize we come from the activist quilt of the cannabis family, if you will. So for us, we’re about principle. So we argued very hard on these things of … You have to have at least 12 plants per adult to be able to grow. We have to have higher possession limits than these other states. We want a no possession limit. We wanted strong possession limits for keeping the fruit of your own harvest. We wanted good penalties being only civil infractions rather than crimes. We wanted to make sure you could grow hemp without a bunch of state interference. So we kind of looked at how these things played out in other states, and we know that we’re still almost a year and a half away from the elections, so how can we create something, hopefully, that had the things that were already popular in Michigan but, to the extent we could, foresee what the arguments of opponents and other people may be up to 2018. We know most of those from the other states and dealing with What About the Kids and edibles and driving.

So we tried to get a little more ahead of those issues than we did last time, and I think what we came up with was a law that prevented the monopoly market, Responsible Ohio type stuff. We have this micro-business proposal which would allow any adult over 21 to apply for a license to grow up to 150 plants, and you could sell directly to consumers. That was designed, in part, as a way for people who were caregivers and who may be moving into a market but not necessarily moving into the full larger medical cultivation market or something, to be able to basically double the production they currently do and to be able to serve adults as well.

We kept the Medical Marijuana Act untouched. It’s a big deal here locally. Nobody wants their rights under the Medical Marijuana Act, which are pretty broad, to be infringed by this new law. So the Medical Marijuana Act and your rights as a patient and caregiver are still protected. I’m probably leaving out a bunch of stuff, but that’s what we looked at as the best practices. We said we want to push the limits on civil liberties as far as we can go compared to other states, which we did, and we want to make sure that it’s as fair and open a market as we possible can make it.

TG Branfalt: Did you guys include so-called equity rules that would require licenses to go to underserved communities such as those in Detroit?

Jeffrey Hank: We did. It’s not a firm requirement, but it is in the law that the State Department of Licensing and Regulatory Affairs is supposed to look at exactly what you just said, and that has in mind particularly minority communities in Detroit and maybe Flint … anywhere, really … but to make sure that people who have been disproportionately affected by cannabis laws are not kept out of this market. So those rules … We didn’t specifically craft the details of them, but the provision is in there for LARA, the state agency, to implement those and to study and report on this issue over time. So if we get a year or two into this and it’s clear that minority applicants are not receiving licenses in proportion to the population or something like that, then the state can remedy that.

So yeah, that was really important, and the other big one was the expungement of past criminal records, which we fought really hard to put into the law and we studied it for months. There were so many legal concerns, and this is why we didn’t put it in in 2016. We all wanted it in there. That’s a big piece of it, and it’s very popular too, even with people who don’t support cannabis. At the end of the day, there are so many legal concerns over it, and after having been through what we went through last time, to be honest we’re a little nervous about legal challenges. So we thought, okay, if we spend another million or two dollars and work our asses off again for another six months on this and then we’re kept off the ballot again because of one provision in the law …

Expungement in Michigan is an odd thing because Michigan’s petition laws … We don’t have a single subject rule here, but we have this other thing called multi-object or multi-title challenges, and unlike other challenges to laws, if they were to find that provision unconstitutional or unlawful for whatever reason, it actually would potentially invalidate the entire initiative. In some situations when you have an unconstitutional or unlawful provision, that provision is severable. So basically, that provision won’t apply but everything else does, but because of this concern that it would actually tank the whole initiative, it was too big of a concern. So that was a real let-down for us, but we … The social justice issues were very much on our mind, and that’s one of the reasons we fought so hard to try to have an open market and have low barriers of entry so that it wouldn’t just be millionaires and what not getting into this market.

TG Branfalt: Now I know that you’re entrenched with this current campaign, but is expungement of low-level cannabis possession crimes or what have you, is that something that could be another ballot push in the future?

Jeffrey Hank: Yeah. In fact, we even talked about … We even thought about doing it this year, but we were concerned that it was taking on too much at once. So part of the MI Legalize goal, and this is something we’re discussing internally, is what’s next? We started out with a goal of legalize cannabis in Michigan as our sole purpose. We work with all these other groups, we support things, but that’s really our purpose … But we’re looking at this as now, not only may we end up morphing into an organization that supports candidates and local ballot proposals, but perhaps we do another ballot proposal in 2020, which would be the expungement of criminal records. That’s part of the reason why we’re trying to train all these grassroots people, because we want this to be an investment in the people of the state of Michigan, not just a one and done campaign. We want these people to be here for the long term, because the implementation period of this law … It’s going to be several years of battles, likely, at the local level.

So by 2020, maybe that will be our next primary focus … will be the expungement. There’s also a school of thought that the legislature has to have, and other states may address this issue for us once we legalize cannabis. So it’s definitely on the table for discussion, and depending on what happens, that may be the next big project.

TG Branfalt: I want to talk to you a bit further about cannabis policy in the Midwest, but before we do that we’ve got to take our last break. This is Ganjapreneur.com podcast. I’m TG Branfalt.


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TG Branfalt: Welcome back to the Ganjapreneur.com podcast. I’m your host TG Branfalt, here with Jeffrey Hank, founder of MI Legalize. So, talking about cannabis policy in the Midwest, it seems that Michigan’s leading the way … Wisconsin, they have the CBD-only law … Indiana, same sort of limited medical cannabis regime … Ohio we had discussed, they had that Responsible Ohio ballot question that was defeated a few years ago. I mean, it was primarily over concerns that it was a monopoly-type law and activists didn’t like it.

So, looking at the Midwest as a whole, the odds are good that Michigan is next … does legalize. They’d be the first state in the Midwest to have adult-use cannabis. What would happen next? Ohio, again, came close. Wisconsin, Indiana … their laws are so far behind the rest of the country … Is there any chance there? What are your feelings about the Midwest?

Jeffrey Hank: Yeah. Well, it’s fascinating because when we started this a few years ago, we started … One of our talking points was, to the north of us in Canada it’s going to be legal, because Trudeau had announced it at that time, and to the south of us we thought that maybe Responsible Ohio would pass. It was astounding to see the voters reject it so hard, and as you mentioned, it wasn’t because of cannabis, it was because of the monopoly market type stuff. So the Midwest got a two year or three year delay because of Ohio and Michigan, unfortunately. We could have popped this whole thing off much earlier.

Now, I’ve been up over to Ontario and Toronto … I have family there and what not, and it’s a great cannabis culture there, too … And so we’re seeing some of that is influencing us here, in Michigan anyway, and will probably continue to do so. The Canadian operators are all over Michigan right now seeking to get into the industry here, and they’re kind of ahead of us a little bit, too. So I think you’re going to see a press, assuming Michigan goes, for these other states to move. There’s whispers that the Illinois legislature could do something about this. I think you will see Ohio go with the initiative process. Maybe they’ll get something together even for next year. I’m not aware of that, but I’ve heard rumors of it, and I know by 2020 there’s national groups planning to go there and all that.

So hopefully, we will set the stage here in the center of the country, for a model for the surrounding states to emulate … And hopefully, again, like you said a minute ago, the entire country’s going to have to decide these things on a state by state basis unless the Feds change the whole game. So we’re hoping that we will inspire other activists in other states to look at what we did here in Michigan as a model, and to really fight hard and believe that you can do it. And it takes a lot of work, but if you bring people together and you have a good plan, and you spend the time, it can be done. So I hope that we inspire people more than anything else to push for the things that they actually want to see, because one of the things I’ve found out …

I like to talk about little old ladies, but I talked to a lot of little old ladies, and they’re some of my favorite constituents because they’re usually pretty simple, factual type people and they’ll say, “I remember when marijuana wasn’t illegal, and I’ve been watching it for 60 years and this is ridiculous.” You know? They’re just so straightforward about this, and I think that when that kind of demographic is ready to vote for this, we’re going to win and we’re going to change things.

So as people are seeing … One of the things that we’ve noticed even recently in surveying the Michigan public, is they look out west or they look to Massachusetts or Maine or whatever, and they say, “Everything’s fine.” It was one thing when it was just Colorado, but now you have all these other states and we’re kind of scratching … You see politicians even scratching their heads and saying, “All right.” Just the reality of it being in your face and people knowing someone who lives in California or Nevada or wherever, and seeing all these reality TV shows and … I mean, it’s become mainstream and you’ve got Snoop Dogg and Martha Stewart making jokes on their cooking show. I just think your average person, and even little old grandmas and stuff, are seeing this and they realize it’s fairly inconsequential.

It’s not inconsequential in the fact that it’s helping people when we legalize, because the most dangerous thing about cannabis is being arrested with it, but … They’re realizing that it’s not this reefer madness thing, right? And more than anything we can even do, it’s just these natural things playing out that is changing the general consciousness.

So I’d like to think we’ll lead the way here in Michigan and, again, that other people will look to us and push back on these things like CBD-only or non-smokable forms only. Florida and Texas are the big states to look to, I think, coming up in the near future. Texas still arrests 70,000 people for marijuana. They don’t have the initiative process, however there’s legislators down there in Texas with that Libertarian streak, and I think if Michigan can go and we can get one or two other Midwest states to go, and you get one of those other big states, whether it be Florida or Texas or maybe even New York or something, at that point … I don’t have a crystal ball, but I’ve got to imagine the rest of the country will follow suit for the most part, or it’s going to eventually cause action at the federal level.

What I hear, right now anyway, is all those west coast states and Maine and Massachusetts, you know, all their congresspeople are clamoring to solve the banking problems and they’re clamoring to solve a lot of these other regulatory issues that are holding up the normalization of cannabis commerce. If that stuff gets solved in the next year, we don’t have to deal with any of it here in Michigan. It all hopefully will be resolved by the time we’re on the ballot, and I think if those things are resolved federally, everything will just fall into place. Maybe that’s too rosy of an assessment because nothing’s guaranteed, but it just seems like the trend is finally headed in the right direction. The cat’s out of the bag, if you will. So that’s really my goal here, is to make sure we win and hopefully provide a good model for people elsewhere to learn from our successes, but also our failures.

TG Branfalt: So what advice do you have for advocates in the few states with initiatives processes that might attempt to undertake this initiative push?

Jeffrey Hank: Plenty of advice, but to start … You know, start early. Start in plenty of time, do your research on what are laws in your individual states, and then start organizing. And you have to look at this … How we started … We tried to unify and organize the cannabis community to the extent we could, which … We could make all sorts of jokes about that. I kind of like to refer to it as herding stray cats, because cannabis people are passionate people. They have strong opinions and I’m one of those too, but we have to realize that when you’re crafting an initiative or a law, no one … Unless you’re the sole person writing it, no one’s going to get exactly what you want.

So try to start with the base. You’ve got to have the base, and if you can get a large enough portion of the base to agree on some policy, you know … Get a few experts to help craft the language and make sure you craft good language, and then make sure you get an election law lawyer to look it over to make sure it’s kosher with your state election laws. And then spend the time going around and trying to make an inclusive organization that brings people in. If you have a good plan and you have an open door, I think you have the basis for a recipe for success.

The hard part is doing all the work or raising all the money. Now, with most of these states already … a lot of the big states already legalizing and you’re seeing this next circle come up, I think you’re going to find more and more money pouring into these things, because industry people who want to support it are going to be making more money, particularly if they’re in an illegal state right now. They’re able to then see the benefit of investing in a political campaign to change laws to open the doors for business. So I think money will be available for people moreso in the future than it was for us last time, or maybe when there’s six or seven campaigns at once versus if there’s only one or two.

So in a nutshell, it’s just do your due diligence and try to do the best you can to overcome whatever personal dramas you have. That’s something that I know I’ve heard … Have led to some of their problems in Ohio. There’s so much infighting and drama within the cannabis community that they couldn’t put forward a unified effort. We’ve had things like that happen in Michigan, where we have people who ought to be on the same side generally attacking each other, kind of like the … Perfect is the enemy of the good, or the good’s the enemy of the perfect, however you want to say it. You’re not going to probably get that with a ballot initiative. So put together the best plan you can that you think the voters in your state would be willing to enact, and go for it. And don’t be afraid to fail, and don’t listen to anybody who tells you you can’t do it.

If … When I started this thing up, and it wasn’t just me … There were a lot of other people involved … I can’t tell you how many people we went to and they just didn’t want anything to do with it because they just thought it was such a daunting task. You just have to be stubborn and you just have to have tunnel vision, and you just have to realize what your mission is and you just have to go for it. And those people who … It’s like Field of Dreams. If you build it, they’ll come. If you build a good law with an inclusive organization and you’re not full of drama, I think people will be attracted to it and they’re going to be willing to do the work.

That said, it’s a lot of work, so take your time to do it. A lot of political experts tell me it takes two or three attempts at the ballot, sometimes in states, to get something passed. And that’s not just marijuana, that’s ballot initiatives generally. We’re probably at a time now where if you have a good marijuana plan and you put it before voters in most states, you’re going to have majority support. So if you can keep those parameters in mind, you should be successful. And if anybody is really serious about running a statewide campaign and wants to talk personally, feel free to shoot us an email at info@milegalize.com … I-N-F-O … And we’d be happy to have a conversation if you need help, particularly if you’re a grassroots group.

TG Branfalt: Well I want to thank you for taking the time to come on the show, and you’re really a fountain of knowledge, especially when it comes to the balloting process and … I really want to wish you guys the absolute best of luck here in Michigan, and hope that the next interview that we have, it’s no longer a theory … that we’ve actually gotten to an adult-use market in Michigan.

Jeffrey Hank: Right. Thank you. Thank you very much.

TG Branfalt: You can find more episodes of the Ganjapreneur.com podcast in the podcast section of Ganjapreneur.com 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 Jeremy Sebastiano. I’ve been your host, TG Branfalt.

End


Spark the Conversation: Sabrina Fendrick, Berkeley Patients Group

Sabrina Fendrick is the Director of Government Affairs for Berkeley Patients Group, a licensed medical cannabis dispensary serving patients throughout the greater Berkeley area.

Prior to working at BPG, Sabrina spent seven years at the National Organization for the Reform of Marijuana Laws (NORML) in Washington D.C. In 2010, she founded the NORML Women’s Alliance — the first nationwide women’s outreach organization in the cannabis space — and she was a founding advisor for Women Grow. She is a member of the Students for Sensible Drug Policy Advisory Council, sits on the Marijuana Majority Advisory Board, and is a member of the Council for Responsible Cannabis Policy’s National Packaging and Labeling Standards Committee.

In this episode of the Spark the Conversation podcast, Sabrina joins host Bianca Green for a discussion at the Emerald Cup about the state of the industry, the history of cannabis activism, her work to educate lawmakers about the realities of cannabis, and more.

Listen to the podcast (recorded live at the Emerald Cup) below, or continue scrolling down to read a full transcript of the interview.


Listen to the podcast:


Read the transcript:

Bianca Green: Welcome to the Spark the Conversation podcast in partnership with Ganjapreneur.com. I’m your host Bianca Green. Thanks for so much for tuning in today. I have the pleasure of sitting down in our Emerald Cup series with a dear friend and fellow drug war veteran, Sabrina Fendrick, who works at Berkeley Patient’s Group as the Director of Government Affairs. Prior to her work at BPG, she spent seven years at the Washington DC-based NORML, National Organization of the Reform of Marijuana Laws. In 2010, Sabrina founded NORML Women’s Alliance, which I think was a huge stepping stone to females coming out of the closet as consumers, advocates, and entrepreneurs. It really helped solidify that we were a part of the movement. That was in 2010.

She also did the first nationwide women’s outreach organization in the cannabis space and was a founding advisor for Women Grow; which a lot of women entrepreneurs are very familiar with Women Grow. She is a member of Students for Sensible Drug Policy Advisory Counsel and she sits on the Marijuana Majority Advisory Board and is a member of the Council of Responsible Cannabis Policy’s National Packaging and Labeling Standards Committee. As a consumer, we get our medicine and we buy it, but there’s a lot of behind the scenes that go into actualizing how the processes go down, and Sabrina’s been a huge integral part of, not only the advocacy side of it, but the industry building side of it. I’m excited for you guys to hear our conversation because she’s an overall badass, really dedicated obviously to the movement and a very, very dear friend.

Hi this is Bianca Green. I’m here at the Emerald Cup, live with Sabrina who is the Director of Government Affairs for Berkeley Patient’s Group. Welcome, Sabrina.

Sabrina Fendrick: Thank you for having me.

Bianca Green: I love you, first of all. That is very true.

Sabrina Fendrick: I love you too.

Bianca Green: Thank you. You have been a female advocate in this crazy movement for a lot of years. I would really love to give our audience some of your background so that they know kind of what a badass I’m sitting talking to right now. Why don’t you tell us how you got into drug policy reform.

Sabrina Fendrick: Well, initially I had an interaction with law enforcement in college in Virginia and that’s sort of what really turned me on to understanding why is this illegal in the first place. I started researching and the more  I researched, the angrier I got. I was just like, this is the most fucked up shit ever. I don’t know if we’re allowed to curse.

Bianca Green: Yes, you are. Yes, especially if you’re an advocate-

Sabrina Fendrick: Okay.

Bianca Green: -in drug policy reform.

Sabrina Fendrick: Okay, good, because I curse a lot.

Bianca Green: It’s almost like you need to curse, right?

Sabrina Fendrick: Yeah.

Bianca Green: In the Culture High I’m in four scenes and I say fuck in three, okay?

Sabrina Fendrick: Okay. Yeah. Good.

Bianca Green: Sometimes it gets the point the across.

Sabrina Fendrick: It’s for emphasis.

Bianca Green: Yeah. Yeah. It is. It is.

Sabrina Fendrick: Yeah. I changed my senior thesis in college my senior year from this foreign affairs analysis to the history of marijuana prohibition and the evolution of government-sponsored reefer madness propaganda. From the beginning of it being illegal up until modern day and how they, before it was sort of like marijuana makes you crazy and rape women and all this insane shit, then it goes to-

Bianca Green: Literally insane shit.

Sabrina Fendrick: Literally insane shit and marijuana just makes you lazy and lethargic, and oh it’s a gateway drug and just how they keep changing it with what the public will buy. I was just lucky enough to be from DC, so I moved home after college and MPP is actually the first place I worked.

Bianca Green: Really? I didn’t hear about that?

Sabrina Fendrick: Yeah. I was a temp at MPP.

Bianca Green: Okay.

Sabrina Fendrick: I stuffed envelopes.

Bianca Green: Awesome.

Sabrina Fendrick: I was 22-23-years-old.

Bianca Green: For some people who don’t know, MPP is the Marijuana Policy Project, which is basically … Is it a project of Drug Policy Alliance?

Sabrina Fendrick: No.

Bianca Green: It’s an affiliate?

Sabrina Fendrick: No. They just work together.

Bianca Green: Okay.

Sabrina Fendrick: No, it’s independent.

Bianca Green: Okay.

Sabrina Fendrick: Yeah. That was in 2008 in the beginning, early spring of 2008. I saw that NORML, I actually randomly found it on Craigslist, that NORML was hiring. I applied for a job at NORML. The position I ended up getting wasn’t one they were hiring for.

Bianca Green: Really?

Sabrina Fendrick: They just created a new position for me-

Bianca Green: That’s awesome.

Sabrina Fendrick: -which was Assistant to the Executive Director, Allen St. Pierre.

Bianca Green: Wow.

Sabrina Fendrick: Yeah. That’s how I started. 22, I think 23. It was right after my 23rd birthday.

Bianca Green: Wow. I forget you’re so young. Not because you don’t look it, but I just yeah.

Sabrina Fendrick: That was a long … It was almost 10 years ago now.

Bianca Green: Yeah, yeah. Wow.

Sabrina Fendrick: It was a really long time. Bush was still President.

Bianca Green: Wow.

Sabrina Fendrick: Yeah.

Bianca Green: Yeah.

Sabrina Fendrick: That’s how long … It was the primaries-

Bianca Green: Okay. There’s some context. Okay.

Sabrina Fendrick: -but it was Bush was still President. You weren’t talking about legalizing pot then. Nobody was having that conversation. It was just stop arresting people.

Bianca Green: Yeah.

Sabrina Fendrick: Nobody could have imagined back then that this is where we would be now-

Bianca Green: Sure.

Sabrina Fendrick: -and you would have this many states with legalized marijuana for adult use. It’s incredible how fast it happened.

Bianca Green: Yeah. What do you think played into that?

Sabrina Fendrick: I think it was a variety of things. I think the internet actually had a lot to do with it. I think people on social media, actually Facebook and all those sort of online organizing tools, created a place for all these people that were like-minded in this issue, were able to sort of come together on finding each other in these networks, in these forums and communicate and spread information. You were actually for the first time able to really challenge the traditional media, because all they put out there was no real legitimate articles. It was just sort of jokey, stonery. It was just something you would laugh at.

Bianca Green: Yeah.

Sabrina Fendrick: Oh, these stone- Obama, when he first came into office started this sort of we the people-

Bianca Green: Campaign?

Sabrina Fendrick: It was a campaign where it was on their website and you would send in your questions. You could ask him anything and then people would vote the questions up. The top questions he would answer them in a public forum. He did it on YouTube. He did one with CNN, he did a variety of them. Pretty much every single time, the top question was, will you legalize marijuana?

Bianca Green: Yeah. I remember that.

Sabrina Fendrick: This is the very beginning. This was right when I started the NORML Facebook page. It was something I pushed really, really hard and was like share with everybody. This is the only way we can actually get him to say something about it. One or two times they actually took it out. They said it was inappropriate. It was an inappropriate question. Now, when you have Obama saying that marijuana is becoming as legitimate it should be treated like alcohol, just to see how far we’ve come from that.

Bianca Green: Yeah. In such a short amount of time too.

Sabrina Fendrick: In such a short amount of time.

Bianca Green: It’s one of the fastest social justice reform revolutions that has ever really happened.

Sabrina Fendrick: Yeah. Well, at least in its what I think is coming to fruition, I hope, but it’s actually been going on for 50 years.

Bianca Green: Sure, yeah.

Sabrina Fendrick: Now it’s just speeding up like light speed. It was very slow and incremental with its hiccups and challenges throughout the years. Who knows what’s going to happen now with Trump and Sessions and all of that? That’s just the new … Activists have never had it easy and so it’s just more of making sure that we find the stability and security and legitimization to keep on keeping on.

Bianca Green: When people get too celebratory, I’m like, I appreciate your enthusiasm and I’m all about celebrating, but I’ve seen people believe that cannabis legalization has been imminent in the past. My uncle and some of the partnerships that he had, people really believed that some of the times were changing. Tell me about, in the sixties, I don’t know if this is a rumor or if this is a reality, but somebody recently told me that in the sixties, marijuana was legalized for like three years and … Yeah, yeah.

Sabrina Fendrick: Federally?

Bianca Green: Yeah.

Sabrina Fendrick: I’ve never heard that.

Bianca Green: Okay. We need to look into that.

Sabrina Fendrick: Yeah.

Bianca Green: It was a very credited source-

Sabrina Fendrick: Interesting.

Bianca Green: -and I think that I need to find out what that information is. Anyway, and then-

Sabrina Fendrick: In the sixties?

Bianca Green: Yeah. They went back and put it back into prohibition.

Sabrina Fendrick: I don’t think so.

Bianca Green: Okay.

Sabrina Fendrick: I’m not sure, but I feel like I would know that.

Bianca Green: Yeah, you would. That’s why I asked too. You never know. I’ll definitely see if I can’t find-

Sabrina Fendrick: The Nixon Commission was in the early seventies.

Bianca Green: Yeah, but that was after. The early sixties was-

Sabrina Fendrick: The early sixties … Yeah.

Bianca Green: -just kind of a different time. Anyway, I think that I’ve just seen so many opportunities where people thought it was a shoe-in. Just the same way people thought that Hillary was a shoe-in and didn’t even bother voting. There’s all different things that people don’t take responsibility for. From my perspective, what I do with Spark the Conversation, is make consumers advocates. What do you think that people can do to get more involved from a consumer advocacy perspective being that you handle government affairs? What can people actually do to become more active in advocating for their freedom to consume the plant and have access to it? Those are really big deals.

Sabrina Fendrick: They are. They are and I definitely have got that question a lot. I think there’s different layers to it. It depends on so many factors. Your time ability, how far you’re willing to put yourself out there, how publicly you’re willing to put yourself out there, but even down to the basic person who doesn’t have the capacity to join a local organization or go to protests or write letters to the editor. The most important thing and the easiest thing is to just talk to your friends and family.

Bianca Green: Yeah.

Sabrina Fendrick: Honestly, that is-

Bianca Green: That’s what I was thinking.

Sabrina Fendrick: -really what has, I think, been a huge part of what’s changed the public’s perspective on marijuana legalization, because that was a message that we pushed online.

Bianca Green: Yeah.

Sabrina Fendrick: Talk to your friends and talk to you family.

Bianca Green: Change the stigma.

Sabrina Fendrick: Everybody loves somebody who smokes marijuana.

Bianca Green: Yeah.

Sabrina Fendrick: That person has a responsibility to educate those people around them about how important it is that this is a social justice, a criminal justice issue and they really need to understand the history and the implications of current policy and the potential for change.

Bianca Green: The social media revolution really helped change the stigma of cannabis-

Sabrina Fendrick: Absolutely.

Bianca Green: -and the people who use it. I know when I was running The High Times Instagram and their social media, a lot of people were still leery about putting their faces on it. I started to encourage patients, because they’re consumers, right?

Sabrina Fendrick: Yeah.

Bianca Green: To just get out there and be-

Sabrina Fendrick: Yeah, get out there.

Bianca Green: -a part of it.

Sabrina Fendrick: That’s the next layer.

Bianca Green: Yeah.

Sabrina Fendrick: Absolutely.

Bianca Green: It’s super important. That’s the thing that I say with Spark the Conversation all the time. It is not illegal to have a conversation so-

Sabrina Fendrick: Exactly.

Bianca Green: -start there. Start there.

Sabrina Fendrick: First amendment exists for a reason.

Bianca Green: Start there.

Sabrina Fendrick: Yeah.

Bianca Green: Everyone has to have a starting point.

Sabrina Fendrick: Have a conversation.

Bianca Green: What’s it like? What does your job entail at Berkeley Patient’s Group? What does it mean to even be Director of Government Affairs? It’s a niche industry, I guess, right? You’re dealing with things that if you worked for Nike, this position might not necessarily exist, right?

Sabrina Fendrick: Well, it’s sort of … I’m sure Nike actually has one, because any corporation or industry that wants to be able to sort of take part in the shaping of policy that impacts their-

Bianca Green: Business.

Sabrina Fendrick: -business is going to have somebody there just sort of keeping an eye on what’s going on-

Bianca Green: Sure.

Sabrina Fendrick: -sort of trying to educate the lawmakers who deal with a gazillion issues. Marijuana’s not their main thing and they don’t know anything about how to run a business or what the marijuana industry is facing and their challenges. They honestly need people who can articulate that perspective to them so that when they start to craft these laws and these regulations, on every level: local, state and Federal. Not so much … I mean Federal is taking longer, but you just need to be able to show them what sort of the impact and the implications of these regulations will have on the businesses as they currently exist and as they continue to grow or as they will exist under the new regulations.

Bianca Green: Yeah.

Sabrina Fendrick: It’s a lot of educating. It’s a lot of educating and a lot of just sort of-

Bianca Green: You educate lawmakers?

Sabrina Fendrick: Educate lawmakers.

Bianca Green: Yeah. You lobby for permanence and different types of things like that.

Sabrina Fendrick: Yes. Then that’s the second part is it’s an interesting time. I think sort of the nature of what I do is not exactly the nature of what a Nike government affairs person would do because-

Bianca Green: Sure. Shoes aren’t illegal.

Sabrina Fendrick: Right. Exactly. I was going to say the policy and the business are very intertwined and you have to just be really on top of sort of what the local regulations are if you even want to get a permit and be a part of that whole process-

Bianca Green: Yeah.

Sabrina Fendrick: – to even put in a permit application. Yeah, they sort of go hand-in-hand. Just keeping an eye out on what’s going on and what jurisdictions and municipalities are doing. Where would it be a good place to look into and where wouldn’t and what’s in the pipeline?

Bianca Green: What do you think some of the greatest things that are going into reform right now are? Is it education? Is it regulation and compliance? Permitting? What do you think is the tipping point as-is? I mean, we see 64 and we see this whole new field of opportunity, but how do you think that that’s the most … What do you think is next basically for a government relation opportunity to help influence and create and shape new laws under 64 and MCRSA? Merging your business into a model that has recreational and medicinal opportunities? You guys are a dispensary so you’re a retail operation, but what are we looking at?

Sabrina Fendrick: That part, it basically depends on the local jurisdiction.

Bianca Green: Okay.

Sabrina Fendrick: That’s where the local government affairing occurs. I go to these Berkeley Medical Cannabis Commission meetings every month and they’re a sort of appointed group of individuals who create proposals, suggested ordinances and model language for the city council to consider on different aspects of the industry and on the commercial operations. Keeping on track of that and seeing sort of where they are kind of determines where everything is. Sometimes the city council will just pop a random thing or two in that they want to do and sometimes you know and sometimes you don’t, but that’s local politics. Local politics versus state politics versus federal politics-

Bianca Green: They are so different.

Sabrina Fendrick: -is so different. It’s so different. In DC, I was very much on the sort of federal-state.

Bianca Green: Sure.

Sabrina Fendrick: I wasn’t local. I was not involved in … In DC and surrounding areas, the local politicking only is important in places what are called home rule states, versus Dillon rule states. Home rule states, the localities can basically create their own rules and laws, where you’ll have one city sort of deprioritizing or decriminalizing marijuana or not arresting, where another won’t be and they can just have all their ballot initiatives and all kinds of stuff like that. In Virginia and a lot of other places, they’re mostly western states that have that option, but not all. There’s Massachusetts has it, Florida has it. In Dillon rule states the localities have to go with what the state law says. There’s not local control. I tried in, of course, the county I lived in in Virginia. I was like I’m going to try to decriminalize it over here.

Bianca Green: Of course you did.

Sabrina Fendrick: Let’s start with Arlington.

Bianca Green: You’re the bad ass that way. I love that. Arlington, you just decided to take on legalization.

Sabrina Fendrick: Yeah. I was like why not? It’ll be a pet project.

Bianca Green: I love that. In Arlington, Virginia.

Sabrina Fendrick: I met with the head of the County Board, who I went to high school with his kids so we kind of knew each other. Really sat down and talked to him and he said, “No, Dillon rule was like every other word.” Which is actually not entirely true. I started really researching it and realized that there were places. Right now Charlottesville tried to do it a couple years ago and it was weird, but now it sounds like Newport News, Norfolk and Virginia Beach area have done it.

Bianca Green: Wow.

Sabrina Fendrick: It really doesn’t actually have to be a law, but it can just be sort of like a policy based on the police chief or the city attorney can just say this is your lowest priority, we’re not going to prosecute these cases. That’s the only legal explicit way, but then you have when you’re determining how to prioritize enforcement-

Bianca Green: Sure.

Sabrina Fendrick: -of society-

Bianca Green: Yeah. Yeah.

Sabrina Fendrick: -that falls to the bottom and you put that where earlier it didn’t.

Bianca Green: It’s crazy because I don’t think most of the consumers know what goes on to get product to them, right?

Sabrina Fendrick: Seriously. I do too. I always tell people marijuana didn’t legalize itself.

Bianca Green: Me too. You and I have so many parallels. That’s one of the reasons why I love you, not that I love myself, but it’s good to find people who have like-minded visions because not everyone thinks that way. People are like, “Weed is legal.” I’m like, “But, you know … ”

Sabrina Fendrick: It’s legal on the backs of so many people who have put in so much blood, sweat and tears and risked so much.

Bianca Green: So much. What do you think the regular, everyday consumer can do, really, to be more advocates? I know you mentioned online opportunities to share information, which I always encourage and that’s one of the things that why we created Spark the Conversation is to do just that-

Sabrina Fendrick: Yeah.

Bianca Green: -have people get online and share information with their family and friends. I always say it’s not illegal to have a conversation. How else can people be active either locally, statewide or federally? Because we need more support. I would say one thing off the top and I try to always encourage people is to donate-

Sabrina Fendrick: Absolutely.

Bianca Green: -to organizations that are leading the change, but is there anything else that you would add other than donating-

Sabrina Fendrick: Yeah.

Bianca Green: -and getting on Facebook?

Sabrina Fendrick: Right.

Bianca Green: What are actual actions that people could do?

Sabrina Fendrick: I understand, donating especially for a majority of the public, it’s hard. People are on budgets and the thing I identify with this cause versus maybe other more corporatized causes is that we may not have a lot of financial resources, but there is a lot of human resources. It’s the human resources that are sometimes worth more than the financial resources. If the people can’t do that, can’t donate the money, then they can contact their local government office, their local county commissioner or their state representative on a local level or on a federal level and meet with them and really talk to them.

Bianca Green: Why it’s important. What do they talk to them about though? When they get there or they make the contact-

Sabrina Fendrick: Well, what are they passionate about? Everyone has as different reason for the most part as to why they think it should be illegal, or legal, excuse me.

Bianca Green: Yeah.

Sabrina Fendrick: Well, that too. Absolutely. That too. I think the way you talk to them is what you feel most passionately about because that comes across-

Bianca Green: The most authentic.

Sabrina Fendrick: -the most authentic way.

Bianca Green: Yeah, it’s so true.

Sabrina Fendrick: If it’s for medicine and you just want access to medicine, then that’s your angle. If you or someone you love got caught up in the criminal justice system, then that’s your angle.

Bianca Green: Yeah.

Sabrina Fendrick: There’s so many reasons marijuana should be legal and so many reasons it’s current illegal status fucks up society-

Bianca Green: True.

Sabrina Fendrick: -there’s a whole menu of things that you can go from. If you had to pick, go with the one that you’re most passionate about and get educated on it.

Bianca Green: Yeah.

Sabrina Fendrick: Especially also follow what’s going on in your local government in terms of marijuana, because there might be something in the pipeline. If they are having hearings and they all have to have public hearings when these laws are being created. Well, I don’t do sort of the national stuff anymore, but if there are places that are looking to make it stricter or change certain policies that are working or more progressive, then know when those public hearings are, show up to them and speak at them. Write letters to them, do all of that. You just have to get a huge turnout to all of these things so that they know that there’s people that are watching. Their constituents are there, they’re paying attention, they know what they’re doing and you don’t always win, but you certainly make a statement and the lawmakers and elected officials have no choice but to recognize you’re there. Your existence and the fact that you could potentially affect their position.

Bianca Green: Yeah. It is important that we fight for our civil liberties.

Sabrina Fendrick: Yeah.

Bianca Green: I really enjoy this narrative that we’re talking about because I rarely hear people talking about this anymore.

Sabrina Fendrick: Yeah.

Bianca Green: Drug policy reform has kind of been slid under the rug with legalization and the new opportunities coming about. The drug war is still far from over and a lot of people don’t understand the small different nuances of difficulties that businesses go through. What’s next for Berkeley Patient’s Group and why Berkeley Patient’s Group? What is it about that particular retail outlet that drew you in? What are you guys’ plans for 2017?

Sabrina Fendrick: That’s a lot of questions. I would say when I was coming to the point where I was … Well, how do I say this? I was deciding what direction to go in my life and I was living in Colorado and becoming very familiar with the industry and somewhat disillusioned with the industry. I really was not a huge fan of how I saw things unfolding and decided that I really needed … If I was going to be somewhere and stay in the industry, it had to be somewhere that I knew was actually passionate about drug reform, the cause and really had deep roots in that whole movement. That was the only way I would stay. I was very familiar with Berkeley Patient’s Group because they have been sponsors of NORML conferences forever.

Bianca Green: Yeah, yeah.

Sabrina Fendrick: They’ve single handedly started non-profit groups, kept them afloat. Probably one of the groups that’s had the biggest impact on sustaining these organizations. That ethos that I knew existed with that organization was something that I could believe in and work for. That’s why I was interested. Really, it was going to be Berkeley Patient’s Group or I was going to find another cause.

Bianca Green: Yeah. Really?

Sabrina Fendrick: I do think that it was an interesting transition going from the movement, activist word to the industry world. I don’t think this is as like industry as others are, just because they have those deep, deep roots in the movement.

Bianca Green: Yeah.

Sabrina Fendrick: They come from the movement so that’s part of the philosophy. Just really coming to the understanding that the whole evolution and creation of these regulations and these new policies of how you’re actually going to contain and control a regulated industry is literally what the movement has been fighting for, it’s just the other half of it. You have to make sure that the regulations work so that we can prove that marijuana legalization is actually good public policy. I think it is almost equally important to make sure we do it right, because we’ve been fighting to do it. Now we have to make sure we do it right. That’s how I feel like I’m contributing to the movement through what I do in that capacity in ensuring that the industry, the movement and the space is sustainable and will be able to withstand the scrutiny that may or may not come. Being able to just show that cannabis businesses can have a positive impact on society and the sky is not going to fall.

Bianca Green: The sky is not going to fall. Sabrina, the industry and the community is lucky to have you. You are a pioneer and all of your contributions have been really, really, really great to seeing this whole concept that we can be conscious cannabis consumers, we can be articulate and have the opportunity to, not only advocate, but put that advocacy into the business models of businesses that either already exist or are coming the industry. That’s really important and you do it very well and very gracefully.

Sabrina Fendrick: Thank you.

Bianca Green: I’m not only glad to know you, I’m glad that you came on the podcast today. Let our audience kind of know where they might be able to find you, information about Berkeley Patient’s Group.

Sabrina Fendrick: Well, thank you very much. It’s an honor to be on this show and thank you for what you’re doing, because I think it’s very important too.

Bianca Green: Thanks.

Sabrina Fendrick: Yeah. Well, okay so you can find me online.

Bianca Green: Okay.

Sabrina Fendrick: Social media. I’m on Facebook. Sabrina Fendrick. I don’t know what my actual-

Bianca Green: Instagram handler is?

Sabrina Fendrick: Well my Instagram handler is Sabrina but it’s not … Let’s just be honest, I’m not really on there all that much. You’re more than welcome to follow me.

Bianca Green: But Berkeley Patient’s-

Sabrina Fendrick: I’ll try to do better.

Bianca Green: Okay.

Sabrina Fendrick: Berkeley Patient’s Group is Mybpg.com.

Bianca Green: Great.

Sabrina Fendrick: All the hashtags and codes are mybpg.

Bianca Green: Awesome. Thank you Sabrina for joining us at the Emerald Cup live, literally. We are in this awesome space.

Sabrina Fendrick: The awards are happening right now.

Bianca Green: The awards are happening right and it’s exciting.

Sabrina Fendrick: Yeah.

Bianca Green: Sparking the Conversation for our awesome media partners Ganjapreneurs.com. Thank you, again, Sabrina from Berkeley Patient’s Group.

Sabrina Fendrick: Thank you so much for having me.

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

End


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

Venture Capital Firm Agrees to Acquire New York MMJ Licensee

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

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

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

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

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

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

End


Kristi Knoblich Palmer: Navigating New Regulations in California

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

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

Listen to the podcast interview below, or continue scrolling down to read a full transcript of this week’s episode.


Listen to the podcast:


Read the transcript:

TG Branfalt: Hey there. I’m your host TG Branfalt and you’re listening to the Ganjapreneur.com podcast where we try to bring you actionable information and normalize cannabis through the stories of ganjapreneurs, activists, and industry stakeholders. Today I’m joined by Kristi Knoblich Palmer. She is the chief operating officer of Kiva Confections and the founder of the California Cannabis Manufacturers Association.

How are you doing this morning, Kristi?

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

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

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

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

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

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

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

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

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

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

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

TG Branfalt: As do I.

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

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

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

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

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

Kristi Knoblich Palmer: We did, yes.

TG Branfalt: And what was the response?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

Kristi Knoblich Palmer: Correct.

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

Is staffing a concern right now or … ?

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

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

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

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

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

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

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

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

Kristi Knoblich Palmer: Mm-hmm (affirmative).

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

TG Branfalt: You’re absolutely welcome.

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

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

End


Medical cannabis plants inside of a California home grow operation.

New Hampshire Gov. Likely to Sign Cannabis Decriminalization Bill

Cannabis decriminalization is headed to New Hampshire as a bill to do just that has passed the Assembly and is moving to the desk of Gov. Chris Sununu, who has publicly supported the plan and will likely sign the reform bill, the Concord Monitor reports.

The measure will spell the end of criminal possession charges for adults caught possessing up to three-quarters of an ounce, making it a violation carrying a $100 fine for the first three offenses. Additional offenses within a three-year period will be subject to misdemeanors and higher fines.

Democratic Rep. Renny Cushing, a long-time proponent of cannabis reforms in the state, said it “makes no sense” for New Hampshire to be jailing people for cannabis possession while other New England states, namely Maine and Massachusetts, are rolling out adult-use programs.

According to a report by the American Civil Liberties Union of New Hampshire, the state spent more than $6.5 million enforcing cannabis possession laws in 2010 and black people were 2.6 times more likely to get arrested for possession than whites.

Another bill adding chronic pain and post-traumatic stress disorder to the state’s medical cannabis qualifying conditions list is also in the hand of the Democratic governor but he has not indicated whether he would sign the legislation.

End


View from under the canopy of a licensed indoor cannabis grow operation.

Nevada’s July 1 ‘Early Start’ Launch May Face Delays

A recent complaint filed by Douglas County attorney Jim Hartman may delay Nevada’s Early Start adult use cannabis regulations — adopted on May 8 by the Nevada Tax Commission — by up to two months from the July 1 target date.

According to a Las Vegas Review-Journal report, Hartman filed an official complaint last Wednesday with the Nevada attorney general’s office. In the complaint, which he had threatened to file during the May 8 meeting, Hartman argued that the May 8 meeting’s agenda broke state law because it “did not reference ‘marijuana,’ ‘early start’ or ‘Question 2.'”

Commissioners at the meeting chose to adopt regulations for the Early Start market anyway, saying at the time that they did not believe their agenda violated the law.

However, if the tax commission’s agenda is found to have violated state law, commissioners would have to revisit the agenda item on June 26 — which could mean a two-month delay for Nevada‘s adult use cannabis regime.

The Nevada Tax Commission began accepting applications earlier this month from existing medical cannabis companies to be the first participants in the state’s adult-use market.

Eight U.S. states (Alaska, Washington, Oregon, California, Colorado, Nevada, Maine, and Massachusetts) and Washington D.C. have legalized recreational cannabis.

End


The Connecticut Capitol Building during a pink-toned sunset.

Connecticut Dems Add Cannabis Revenue to Budget Proposal to Keep Issue Alive

Democratic lawmakers in Connecticut have included funds from a theoretical recreational cannabis program in their budget recommendation in an effort to spur conversation about legalization and how the industry could help balance the budget, according to a Hartford Courant report. The state’s nonpartisan Office of Fiscal Analysis found that a legal model similar to Colorado would be worth about $64 million in state tax dollars its first full year, while a program more similar to Massachusetts would generate more than $30 million in year one.

The agency reported that the costs to implement a Massachusetts-like model would run the state $4.2 million, while a Colorado model would cost $9 million.

In March, the General Assembly Public Health Committee debated a legalization bill but did not vote on the measure by its deadline. The Judiciary Committee also failed to put the matter to a vote.

Cannabis does have some high-powered proponents in the General Assembly, including Rep. Melissa Ziobron, the ranking House Republican on the budget-writing committee, and Senate President Pro Tem Martin M. Looney, a Democrat. House Democrats would likely need some support from their Republican colleagues if the bill were to make it to a floor vote because they do not have enough votes in their 79-member caucus to pass the measure – which would need 76 votes in the 151-member chamber.

Gov. Dan Malloy also stands in the way – he has called cannabis industry dollars “blood money” and would probably veto any legalization measures. The Democrat proposal will not be included in any budget bills voted on by the General Assembly.

End


The Vermont Statehouse in Montpelier, Vermont.

Vermont Senate Passes Compromise Cannabis Bill, House Extends Session

Vermont’s legislature could take up cannabis legalization before this session ends after all, as the Senate passed a compromise bill on Friday which could be taken up by the House on Wednesday, the Associated Press reports. Last week, the chambers passed separate measures that were too far apart – the House version would allow adult possession and cultivation, while the Senate version would implement a taxed and regulated regime.

The legislature was set to adjourn on Saturday, leaving both bills in limbo, however Democratic House Speaker Mitzi Johnson said the chamber would reconvene on Wednesday. It’s not clear whether the House will take up the compromise legislation; which would legalize possession of small amounts and limited home grows by adults beginning in July 2018. In the meantime, a commission would develop a tax-and-regulate scheme and present it to the legislature next year.

Sen. Dick Sears, a pro-legalization Democrat, called the compromise “a way for Vermont to join two other New England states (Massachusetts and Maine) to have a legalized, regulated seed-to-sale system at some point in the hopefully near future.”

The measure passed the chamber 20-9. However, Gov. Phil Scott, a Republican, has not supported any plan legalizing cannabis and there is no guarantee he will sign the measure if it makes it to his desk.

End


The Colorado State Capitol Building in Denver, Colorado.

Colorado Lawmakers Back Off Plan to Legalize Cannabis Clubs

Colorado lawmakers have backed away from a plan to legalize social cannabis clubs statewide following disapproval voiced by Gov. John Hickenlooper, who said that the move could attract a crackdown from the Trump Administration, according to an Associated Press report.

The proposal originated in the Colorado Senate, where it was approved last month with bipartisan support, but House lawmakers ultimately turned down the measure.

Gov. Hickenlooper said last month that he would veto any cannabis club measure allowing indoor smoking that came across his desk, arguing that “given the uncertainty in Washington … this is not the year to be out there carving off new turf and expand markets and make dramatic statements about marijuana.”

There are currently an estimated 30 cannabis clubs active in Colorado, all of which exist as private clubs operating under a patchwork of local laws.

The social use measure would have been the first statewide acceptance of social cannabis clubs.

The legislature’s retreat, however, demonstrates the uncertainty felt by lawmakers in legalized states about the Trump Administration, who has so far refrained from making a firm statement one way or another about its stance on the cannabis legalization laws that have been passed in Colorado, Washington, Oregon, Alaska, California, Nevada, Massachusetts, Maine, and Washington D.C.

Colorado lawmakers passed a measure earlier this month to ban cooperative cannabis grows in the state, which had allowed people to assist others in the home-growing of cannabis.

End


David Barakett: Growing a Multi-State Dispensary Chain

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

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

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

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


Listen to the podcast:


Read the transcript:

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

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

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

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

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

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

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

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

TG Branfalt: What state was your first dispensary in?

David Barakett: California.

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

TG Branfalt: It was built on adversity.

David Barakett: Exactly.

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

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

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

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

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

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

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

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

David Barakett: All right. Thank you very much.

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

End


Hadley Ford: Choosing the Right Cannabis Investments

Hadley Ford is the co-founder and CEO of iAnthus Capital Holdings, a cannabis finance and investment firm with active partnerships in four different legal U.S. markets.

In the following interview, our podcast host TG Branfalt interviews Hadley about his life before entering the world of finance, which included five years spent in communes and hitchhiking around Europe and the United States. The two also discuss cannabis companies trading on the Canadian stock market, the many investment opportunities found in cannabis, strategies for choosing the right state market for an investment, and much more!

Listen to the interview below, or keep scrolling to read a full transcript of this podcast.

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


Listen to the podcast:


Read the transcript:

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

Today, I’m joined by Hadley Ford, co-founder and CEO of iAnthus Capital Holdings. How are you doing today, Mr. Ford?

Hadley Ford: Very well, TG. Thanks for having me on.

TG Branfalt: Absolutely. It’s a pleasure. I start these interviews with talking about the background of my guests. But, through my research I found an article that talks about your experience in Europe. So, before we get into your background, why don’t you tell us about what you did in Europe.

Hadley Ford: About my checkered past, “Come the revolution.” I was an aspiring chemical engineer at the University of Rochester and was thrown out of that school. That’s a story for another time with a beer in front of us or something else to consume. I then spent the next five years hitchhiking around Europe and the United States living in communes with hair halfway down my back and “Come the revolution” and all that good stuff. I had to find a way to support myself so I was a street performer as a juggler and did some big form magic, as well, pulling ropes through people and things like that. Just sort of lived outside the grid for five-ish years.

TG Branfalt: So, now you’re applying a sort of magic to a whole new industry.

Hadley Ford: (Laughs) And a lot of juggling, a lot of juggling as well.

TG Branfalt: Of course, of course. So, now can you tell us how you ended up getting into the financial and healthcare industry?

Hadley Ford: It’s the usual path of anyone who’s going to go work on Wall Street that you have to be a long-haired anarchist living in communes. It was quite a turnaround. I had thought that was the path I was going to be on for the rest of my life, but life had different aspirations for me. Sort of one turn at a time occurred and I found myself back in the United States and I found myself taking night classes up in Boston, at Boston University. And I stumbled into some accounting classes, and I liked that and the next thing you know I was a Finance major at Boston University. After that I became a research analyst at Fidelity. And I went back to business school at Stanford and was recruited out at First Boston, got recruited away to join Goldman, then worked at Goldman really on both the principal side for awhile and also the corporate finance and M&A side, mostly in media and telcomm.

And then I left that and did a little content delivery start-up and competed against Akamai. Sold that company and then re-joined Bank of America as head of the tech group out of New York. And, did that for about three years. I got a phone call from an old client of mine at Goldman; he claimed his father had found a way to cure cancer, and would I sit down with him and figure out how he could finance that? So I sat down and I was so enamored of both of his father and the business plan, that I quit my job at Bank of America and the plushly appointed offices there, and waded into start up a company called Procure Treatment Centers which ultimately became the largest provider of proton therapy in the world. We raised about $800 million privately and saved thousands of lives.

Unfortunately, we depended very heavily on debt capital for the growth of that company. The debt crisis hit; we didn’t have access to growth capital. We ran it as an operating company for three or four years. And then I wanted to do something that was more growth-oriented. So, had an amicable separation and went off to see what the next big opportunity could be.

Around that time, I got a phone call from a guy I’d done a lot of business with when I was at Goldman. Actually, had invested in his company and taken him public, sat on his board. He called me out of the blue and said “What are you doing?” I said I’m looking for the next big thing. He said “I found the next big thing.” I said “What’s that?” And when I’d dealt with him before, he had been emerging telcomm, he’d done some internet stuff, he’d done some virtual currency companies. So I was expecting 1s and 0s.

Instead, he says “Cannabis.” And I laughed. And he said “Why are you laughing, it’s a $50 billion industry we went from black to white.” And I said “I’m laughing because my brother is already the largest provider of medical cannabis in New Mexico and my sister’s one of four licensed operators in Vermont. It’s kind of the family business. And he said “Well, you’re an entrepreneur. Why aren’t you in the family business?” And I said “Well, I’m not really convinced that there’s a national opportunity right now. It’s a very good business on a local basis. You get a license and you finance it with your friends and family and you’ve got a good business. You join the country club and it’s very respectable. But how do you scale that? You can’t ship product across state lines. You can’t even get a trademark or a copyright on your name. I don’t know how you scale it nationally.”

So, this fellow, Randy, who is now my partner, said “Well, we always liked working with each other. Why don’t we figure something out?” So we traveled around the country. Went to conferences. Met with operators. And determined two things, which we may have been able to determine in an afternoon with a six pack. But, the first is that there’s no regular way institutional capital available to the cannabis entrepreneur in the United States. So, if you are fortunate enough to have a license, you had no access to institutional capital for starting your business, growing your business, buying out your partner, or, if you wanted to sell your business, be acquired and have acquisition finance, either.

The second piece is because you don’t have access to institutional capital, you didn’t see all the usual camp followers you’d see in a growth industry. You didn’t have, you know, a lot of accountants, lawyers, consultants, advisors who are there. So, you had this weird anomaly where the entrepreneur has a license but has none of the usual factors of company-building available to him or her.

We thought, “That’s sounds pretty easy.” We’ll just set up a little merchant bank. We’ll raise $200 or $300 million. Charge two and twenty. And, we’ve both built big companies. We’ll go in and help people build companies and provide financing for it. But, for the same reason that Citibank wasn’t going to write a prime plus two loan for someone’s greenhouse, you weren’t going to get CalPERS or Toronto Teachers to give you a $30 million blank check into a $300 million fund. So, we kind of scratched our head about the supply side of the equation for awhile and then we discovered the Canadian public markets, which are really the only capital markets in the world, public or private, that has shown a willingness to provide financing for cannabis operators.

Now, there happened to be Canadian operators and there happened to be Canadian investors, but our supposition was that we could structure something, raise money publicly in Canada, educate the investor there about the opportunities in the U.S., and then flow that money in to support the U.S. cannabis entrepreneurs. That’s sort of the CV that gets me from juggling in Europe and living in communes all the way to providing institutional capital for entrepreneurs in the cannabis space today.

TG Branfalt: So, let’s get right into some of the financials here. What is the importance of harnessing the right skills to support a diversified portfolio of cannabis industry investments for shareholders?

Hadley Ford: Well, I think, you know, if you’re an investor … A sort of public market security investor and you say “Gee, I see this tremendous growth opportunity where, you know it’s really unprecedented where you’ve got a $50 billion market that’s … Think of that reservoir of cash and someone opens up this sluice gate and all that cash is flowing from illegal owners to entrepreneurs who’ve been licensed with background checks, it’s sort of a built-in 30% growth for the next 10 years.

But, there’s no real way for the public investor to sort of access that growth opportunity. So, you’ve got to say “What public companies are there that I can invest in?” Well, you can invest in the Canadian guys, but they don’t have any real exposure to the U.S. market. And then you look at the U.S. public stocks and you’ve probably got 250 companies that used to be Joe’s Mining Company that renamed themselves Joe’s Cannabis Company. And, then you’ve got sort of a handful of companies that are, you know, what I would call operating companies with management teams and operations that are kind of small cap. What you want to make sure from an investment perspective is that those management teams actually have the appropriate backgrounds and excellence and skill sets that you can trust them to actually go execute and make a dollar for you from an investment perspective.

So, what we offer the retailer/institutional investor, from a public security perspective, is a team that has actually worked within the world of finance and corporate governance and regulation and real estate. And, I think people can take great confidence that, when we diligence something or structure something, that it’s being done in the same form or fashion that they would expect someone from Sand Hill Road or Wall Street to do.

So, from an investment perspective, you know I think it provides security that the cash you’re putting to work is going to be put to work in a prudent and effective manner. So, it’s really, you just want to see all those skill sets, if someone’s actually going to be investing money in cannabis, you want to make sure they have the background of diligence and modeling and legal and regulatory and documents and all that sort of good stuff.

Because our view is cannabis expertise are kind of the table stakes, right? You’ve got a vast network of people who help us diligence the cannabis piece of it. But, then the value-add piece becomes “How do you deal with regulation, real estate, making sure you have enough money to build your model out, things like that?” And, that’s the expertise we bring to the table.

TG Branfalt: How much in the early going did you rely on your family to help you navigate this industry?

Hadley Ford: 100%. I mean, it’s a brand new industry. You just really have to have someone you can trust who can educate you on the ins and outs and quirks that are kind of the daily stuff you face in the cannabis industry. So, the idea that I actually had family members that were in the business and they could help get me up to curve on things you have to be aware of and think about was invaluable. And that also allowed us to have that as a launching pad from an investment perspective to raise the initial capital. Because, it’s nice to have a good idea, but it’s a lot better if you actually have some investments that you’re already making.

So, you know, I would say that, without their involvement, there wouldn’t be an iAnthus. It was a nice intersection point or Venn Diagram, as it were, where I had two siblings who were cannabis experts and they had a sibling who was a financial expert. And that’s a nice combination. It’s a confluence of events that was very fortunate for both them and for me.

TG Branfalt: So, moving to kind of a bigger picture, what’s your take on the experience of innovative industrial properties. There’s that real estate investment trust that was focused on cannabis industry properties, you know they were approved for a listing on the New York Stock Exchange in November. They had to reduce that IPO goal from $175 million to $100 million; they cut their number of shares offered by more than half, from 8.75 to 4 million. Why do you think that this failed to gain the traction that it anticipated on this major market?

Hadley Ford: You know, I’d say a couple of things. I’d say one of the big positive … And I was surprised, right, that the New York Stock Exchange approved it for listing. I mean, that is a great vote of confidence for the future of cannabis and the capital markets because, you’re probably aware that NASDAQ has repeatedly denied listing applications to their exchange.

And, ultimately, the Canadian market is a fine place to raise capital now, but the U.S. market is going to be vast and large and need a lot more capital than probably Canadian markets can provide over time. So, you do need to have a working capital market, public market, down here in the U.S. to effectively support the growth of the industry.

So, I think that is a great positive takeaway. Now, technically, why would they go from 175 to 100? Well the people who are involved in innovative industrial had had great success in the past in other industries. In healthcare REITs and things like that. And, I think, probably their anticipation was that you’d have much more institutional participation in a deal. Now, I didn’t see the book and how it was allocated, but my guess would be they had zero institutional interest. Very hard to do an all retail deal of $175 million. Matter of fact, I was talking to people about the deal before it actually went out in the market or before they tried to price it. And I think everyone was of the same view that, from just a pure retail allocation, they were going to be well south of $100 million or being able to get capital out of the market.

So, it wasn’t a surprise to me or really any of the bankers who were watching the deal that it didn’t raise the type of capital it wanted to originally. But, I think, what it did do, was set precedent that there’s an actual cannabis business model listed on the New York Stock Exchange and it’ll be up to them to execute. And, if they execute, I think they’ll be able to raise more retail money. And my expectation would be that, sometime in the next year or two, you’ll start to see institutions play as well, as they become more comfortable with the concept of cannabis within the public markets in the U.S.

TG Branfalt: Do you feel that this political climate is safe to invest in? We’ve got Jeff Sessions who has been an outspoken opponent of legalization, and there’s really been no movement on a federal level for a comprehensive medical program or any sort of major reforms. So, what is your feeling about this political climate in terms of investments?

Hadley Ford: Well, I’m kind of torn. Because, as a provider of capital, I like people to think it’s a wild and dangerous place so it keeps out other providers of capital. But, rather than play the game theory and say yes, it’s very dangerous, don’t come into it, I’ll give you the straight up thought of how I think about it. Because I get this question all the time.

I don’t lose any sleep over it. Let’s call a spade a spade here. I mean, it’s against the law at the federal level. If you go back and look at what Loretta Lynch or Eric Holder said about cannabis in their confirmation, actually worse than what Sessions said. At least Sessions showed some … You know sort of said “OK, there’s the Cole memo and I have to undertake my sworn duty to enforce the laws of the United States.” But it’s a matter of resources and the Cole memo is informative. Go back and look at what Loretta Lynch said. She said “It’s against the law and where we see cannabis, we see violence.” It would make your feet go cold. Frankly, the Obama administration weren’t great friends to cannabis. Eight years, I didn’t see anything get rescheduled or descheduled or decriminalized.

The Cole memo came out, and that was nice. But there was no, as you point out, proactive movement in that direction. And, frankly, I think if you go back and look at what the industry thought about the Obama administration’s view on cannabis, I think there was great disappointment that there wasn’t a more proactive stance. I don’t have any expectation that the Trump administration is going to be proactive, but I don’t have any fear that they’re going to send the Feds in to shut stuff down. I just think it’s way down the list of things that are important to the administration and I do think that many within the transition team and many of the appointees are states rights and that’s the way it’s going to go. I expect, for the next four years, you’re going to have this uneasy peace between the Federal government and the states, but that’s going to be business as usual.

There has been sort of a little pause, from at least my understanding … We’re not in the business of raising private capital, but a lot of the guys we’re talking with are, and they sort of give us feedback that there’s been a little bit of pause in the ability to raise private capital. But I don’t think anyone thinks you’re going to see a proactive roll-back of anything at this juncture.

TG Branfalt: So, I want to talk to you a bit about the Canadian government that is being proactive. But before we get to that, we’ve got to take a short break. This is the ganjapreneur.com podcast. I’m TG Branfalt.


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TG Branfalt: Hey, welcome back to the ganjapreneur.com podcast. I’m your host TG Branfalt here with Hadley Ford, co-founder and CEO of iAnthus Capital Holdings. Before the break we were talking a bit about the U.S. Federal government and their inaction under the Obama administration and what we expect to see under Trump.

But your company, as you mentioned, you’re publicly traded in Canada. The Federal government there is expected to announce legalization plans this spring. What do you anticipate, not just the market, but the regulations looking like under Canada‘s plan?

Hadley Ford: You know, that’s a great question. We’re publicly listed up there. We focus primarily on the U.S. markets. I don’t pay too much attention to investment opportunities up there, but I’m generally aware of what’s been going on. I was actually at a conference where this very question came up. I think, first off, it’s probably going to take longer than what people are anticipating. People are saying “Oh gee, it’s going to be very quick.” My guess, it’s going to take a year or two to work through Health Canada and all the regulations and all.

My expectation is that the government is going to have a bigger role in it than people anticipate. I’m not Canadian but I spend a lot of time up there and you know, you see the government has a hand in the sale and distribution of alcohol for recreational use. My guess is they’re going to want to play a role like that from the cannabis perspective as well.

I also think, if they have the same type of stringent production and oversight requirements they have from a medical perspective, that they may have some pricing issues and concerns from the recreational perspective. It may just keep the price at a rate that doesn’t displace the black market. We’ll see. It will play out through time. It’ll be absolutely fascinating to see how the politics are played and who gets to capture the margin and what regulations get laid out on the production side of it.

And, I do think, from a capital formation perspective, anything that increases the interest from a Canadian perspective, increases number of investors who are actively participating in the market up there, helps reduce our cost of capital and allows us to make that money available to the U.S. entrepreneur. So, in a strange way, anything that’s bullish and positive in Canada, it will have a positive effect on the cannabis entrepreneurs down here as it sort of trickles through the capital markets.

TG Branfalt: Do you think that it might force the hand of the U.S. legislature, because now you would have our neighbor with legal, adult-use cannabis?

Hadley Ford: Yeah. You know, I think all these flags that get planted are all part of a general trend … Whatever analogy people use, “Genie out of the bottle,” “Rock rolling downhill” … You’ve got upwards of a quarter of the United States will now have access to full adult-use cannabis when the regs get written over the next year or two.

You kind of run through all the different stages. You have full medical programs or high CBD programs and you have close to 90% of the U.S. population has access to some form of cannabis. You know, it can only be helpful to that direction if a well respected northern neighbor, our largest trading partner and someone who’s been an ally of the United States for 150 years is going to be moving in that direction. That’s only a positive. So, I think, if this continues to move in that direction, I don’t know that they go full-rec for the whole country and all of a sudden the U.S. is going to be doing the same thing. But, it’s clearly a positive indictor and keeps the momentum going the right way.

TG Branfalt: So, in what U.S. states have you made investments?

Hadley Ford: We are in Vermont, New Mexico, Massachusetts and Colorado. On any given day, we are in discussions in a half dozen other states.

TG Branfalt: And, Massachusettsrecreational program is expected to be huge due to its proximity to New York City. And Boston is supposed to be a huge market. Colorado is just rolling … So, why don’t you tell me a bit about New Mexico and Vermont. Vermont is such a small state that, as an investor if you’re aiming at a big money market, it kind of seems counter-intuitive.

Hadley Ford: Well, yeah. We typically look for things that I would call oligopoly situations. And that can be set up either in a town or a region, a state, it can be a license holder in a limited license market, it could be a market share leader in a more competitive market. But we look for situations exactly as you point out, where there’s a big growth opportunity and good returns on the capital we put to work. So, if you look at Vermont, the medical market is nothing to write home about from a size perspective. You’ve got 3-ish thousand registered patients and 4 licensed operators who are divvying that up. But, if you look at it from a full recreational perspective, Rand came in and did a study for the state and estimated the in-state market to be $100 million.

Now, if the full-rec program … They don’t have a referendum process and Massachusetts has to go through the legislature there. But, every time that’s been put forth, last year, year before, it’s made it through the Senate and bogged down in the House. At some point, Vermont will be full-rec. I think it polls 80% among the population and, if you’re one of a limited number of license holders, in every form of the bill and every anticipation is that, if you have an existing license, you’ll be able to participate in the new market. And probably have either an explicit or implicit head start because you already have infrastructure and grow and processing and locations in place. $100 million market, four license holders? That’s a pretty big market. That’s a good opportunity. Plus 13 million tourists go to Vermont every year. So, we like the returns.

Obviously the returns in bigger markets can be bigger. So, you look at a New Mexico, 2 million residents, same type of thing. We’re invested with the market share leader there. There’s good growth, and I think, ultimately, that’s probably a full-rec state. Sort of unclear when that happens, although probably it is more likely now that the House of Representatives is now Democratic rather than Republican in the state.

And then you look at a state like Massachusetts. You kind of have the best of all possible worlds. You have a much larger market, 6-7 million person population, 40 million people within a 250 mile drive of Boston. And, just because of the way the state’s put the process in place, limited number of licenses. So, that’s an ideal market and value creator for us.

Colorado, a different opportunity completely. You’ve got, from a regulatory perspective, the most mature market in the United States. You’ve got $1.2 – $1.3 billion of legal sales in the last 12 months. You’ve got 600 store fronts, maybe 400 operators that control that, a very fragmented market. So, we think there’s great opportunity if you have the capital to actually help consolidate and grow that market. And, that’s how we view Colorado.

So, we’re opportunistic on how we put our capital to work. That’s four different markets with four different opportunities, but I think they all come down to the same piece. Can we put money to work? Is there an oligopoly type situation we could take advantage of? Are we going to have good returns for our shareholders’ money? And the answer in all four of those markets is “Yes.”

TG Branfalt: So you had mentioned this oligopoly system … Would you say this is the best system for investment compared to, say, a Michigan market which still kind of operates in a gray sort of sector?

Hadley Ford: Yeah. We won’t invest in a state unless it has a good state regulatory structure that we think abides by the Cole memo. So we haven’t made investments in California or Michigan. There’s just too much risk around that from our perspective. It sounds funny … Here we are investing in something federally illegal and we’re saying “There’s too much risk.” But, even under the Obama administration, which is supposed to be this friendly counterpoint to Trump, the Feds were very active in hassling people in both those states and people went to jail in both those states under the Obama administration. That’s not a good headline for us to take our investors’ money, invest in something, then have it shut down because they’re not abiding by the Cole memo.

So, until someone actually drafts the full state regs, we’re going to be on the sidelines. It doesn’t mean we’re not looking. We probably have active conversations in those states on a weekly basis. We kind of know the players. We kind of know what we would do. But we want to wait until the path is set within the constructs of the Cole memo.

TG Branfalt: I want to talk to you a bit more about Vermont. But before that, we’ve got to take one more short break. I’m TG Branfalt, this is the ganjapreneur.com podcast.


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TG Branfalt: Hey welcome back. I’m TG Branfalt. This is the ganjapreneur.com podcast. I’m here with Hadley Ford, co-founder and CEO of iAnthus Capital Holdings. Before the break, we were talking about the states in which you have invested in and your reasoning for making those investments. I’m sure that you’ve spoken to a lot of people in Vermont. You have investments there, your sister runs a dispensary there. What are people expecting in terms of recreational legalization? I know that the last bill was seen by many as flawed which is why it wasn’t passed. Not because it was recreational, but because the bill was bad. So what’s your sense from talking to people on the ground?

Hadley Ford: Well, you start from the people, right? I go back to my “Come the revolution” days. The people want it. It polls 80% “Let’s go full-rec.” And the rest of it, I forget the author that said this but, “You never want to watch sausage or laws get made.” It’s political horse trading. They don’t have a referendum process in Vermont. It’s one of 14 or 15 states that don’t have that process to change the law. So you have to go through the legislature.

And it’s just horse trading, right? I mean, it almost doesn’t have anything to do with cannabis at some juncture. You need votes at the committee level and you need votes in the House and you need votes in the Senate. I was up there last year testifying and in the halls of power, and people were making trades. “I’ll vote for you on this if you vote for me on that.” It’s just political machinations as usual. My expectation is eventually you will have a bill. It’ll get passed. I don’t have a particular view on what that will look like. Because I don’t know what deals and trades get made. Someone needs a bridge in their town and that’s how you get their vote. But, I assume it will be full-rec at some point. I don’t know what the odds are this year. There are people putting forth forms of the bill. But you’ll get something this year or next year.

I think when you talked before about pressure surrounding governments, whether it’s Canada to the north of them or Massachusetts to the south of them, eventually I think the pressure will come down on the politicians. They have to do something. And they will.

TG Branfalt: Changing gears a little bit, I want to talk to you about the role that big business should have in the cannabis space. I have a lot of conversations with a lot of people and the overwhelming sense that I get is there were a lot of activists who stuck their neck out on the line and got arrested in the early days of this market. So they have a lot of fear about big business entering the cannabis space. Some of these fears are valid, and some maybe not so much. But you’ve worked on Wall Street and in the healthcare sector, both certainly big business. Is this something that should worry current industry professionals and what role should, or do you see, big business having in this space?

Hadley Ford: I’m not sure really what that means. I hear that “Big Weed,” “Big Business” and I was up in Vermont testifying in front of the Senate committee and they said “We’re worried about Big Weed. You’re Big Weed.” I’m just one guy. My brother and my sister are in the business and they said “Hey, we need money.” And, okay, I know how to raise money; I’ll see if I can get you some. Is that Big Weed? That would be like if they called up and said “Hey we need computers” or “We need a car.” Capital is just one factor of success when you’re an entrepreneur. It’s an absolute necessity. And I think a lot of entrepreneurs understand that. They need the capital.

And I think the worst thing you can do, and I think you could go find this. I think it’s on record. When I was talking to the Senate committee I said “The worst thing you can do if you want to have a strong, vibrant cannabis business and allow entrepreneurs who have a passion and love for this to be successful, is to not give them enough money.” Because an under-capitalized entrepreneur is ripe for the picking from Anheuser-Busch or Phillip Morris. Right? If you’re under-capitalized and you can’t compete, you’re in a bad competitive position. But, if you have unfettered access to capital and you’re living in Vermont or Colorado or Massachusetts, you can build a real business. Because these other guys aren’t there yet.

Anheuser-Busch and Phillip Morris and KKR and Goldman Sachs, they’re not there. The big banks, the big operators, the big consumer goods companies aren’t there. So, now is the time for the cannabis entrepreneur to build a lasting network, a lasting brand, a lasting business with great customer and patient care. But you can’t do that unless you have capital. So, I think having less restrictions on the capital aspect of it, less restrictions on that ability for the entrepreneur to tap into money is very bullish and is in keeping both with my own background of going back to the initial question of being a street performer and I think it’s in keeping with the original people on the front lines here who tore down the walls and allowed cannabis to become the business it is today.

The money piece makes it a level playing field against the big boys and they should be welcoming of anyone who can provide capital in an industry in support of the entrepreneurs today. Because now is the time to build a lasting business. Before the big guys come in. Did that answer your question?

TG Branfalt: Absolutely. Were you, as a person who provides capital to smaller operators, if say, a Phillip Morris or an Anheuser-Busch were to enter the space in one of the states where you have investments?

Hadley Ford: That’s a good question. It depends how they entered. I do think that cannabis today is so fragmented and still trying to figure out the business models, that the craft end of it still has a lot of value. And, I think it would be tough for those guys to come in and compete on that craft basis today. I also don’t think that those players would have any advantage of scale today because there’s really no scale players. I think, if you had a really good, strong operator, and that’s what we think our partners are, we’d probably write more checks in support of them so they could compete on the margin against those guys.

I think the bigger thing that would be worse for our business model, is if we woke up tomorrow and Trump completely de-criminalized it and Citibank was offering Prime plus 2 loans. Now, that would be very beneficial to the partners that we have already, because now they would have access to debt capital and cheap rates and could grow a lot faster. But, it would probably limit the opportunities for us to put capital to work. Right now, essentially, when people need capital, we’re providing the entire capital structure for them.

I think if Citibank were lending a lot of money, we’d only be providing the equity piece of the capital structure. There’d be levered returns so our returns would probably be better, but there would be smaller checks that we’d be writing. So, if someone needed $7 million to build out the operation, right now we would give them the whole $7 (million) and we’d get a nice return on the $7 (million). If Citibank were around, maybe Citi bank gives them $5 (million), we’d only provide $2 (million). Now we’d get a better return on that $2 (million) because it would be a levered return, but we’d only be putting $2 million to work instead of $7 (million).

But, I have no illusions that the market’s going to be free of competition in the long haul and, as I go back to our point, pick your management team, we’ve got a pretty smart team and have been very successful in a lot of industries. I think we’re very flexible and can move quickly. It’s a huge market and we’ll figure out a way how we make money.

TG Branfalt: What advice would you have for the greenest, no pun intended, inexperienced investor?

Hadley Ford: From a public perspective or a private perspective? Or both?

TG Branfalt: Both. Let’s start with public.

Hadley Ford: From a private perspective, be prepared to do a lot of work. Don’t just throw your money into something. This is a real business. It is complicated, it’s tricky. You’ve got a lot of regulatory piece. So, unless, you’re prepared to hire lawyers and accountants and spend a couple of months making sure the Ts are crossed and the Is are dotted, probably not a place to wade in from a private perspective. A lot of guys do. Some will make money and some will lose money. I think if you’re serious about getting a return and you’re allocating some portion of your portfolio to it, you should expect a lot of ancillary expenses around your diligence process that you wouldn’t get if you were investing in the local bakery or something.

I think from a public perspective, it’s such a nascent industry that you really want to understand who the management team is that you’re backing. You look at the United States and, I haven’t counted them up recently, there’s probably 300 companies that align themselves with being in cannabis. I think you could probably take 250 or 270 of those and say they’re probably not worth looking at. They used to be a mining show and someone wrote a business plan and changed the name.

And, then you’ve probably got a dozen or two guys that have real businesses that have revenue derived from cannabis. I would look at the management team. I think the market opportunity is still huge. If you pick the right management team, from a public perspective, they’ll figure out a way to make money for you.

So, do that work. Go online. See what the names are. Google them up. Make sure they have a background of excellence and a background of success. See if their backgrounds actually fit to what they’re saying their model is. You look at us, not to use it as a way to tout our own stuff, but we say “We’re financing cannabis.” Okay, who do we have on our team? Guys who worked in finance and law and real estate and that kind of fits with the model. Do they have a track record of excellence? Yes, they’ve been successful in multiple other forays in their careers. That gives you a level of comfort in a very nascent business.

No one’s got a penny or track record in cannabis that you can validate from a public disclosure perspective, so you are taking a little bit of a flyer on that. I think understanding the team and pitching that team is probably the starting point for how you want to invest on the public side.

TG Branfalt: Let me ask you. Where do you see the cannabis industry, say, by 2020?

Hadley Ford: I don’t anticipate anything in the next four years, three years, at the federal level that’s going to change things. I think you’ll continue to see certain states move toward medical that haven’t. They’ll put a vibrant program in place. You’ll see additional states adopt full-rec. You already have people talking about it in Rhode Island and Maryland and Vermont. So you’ll continue to see that trend as we go forward. I think you’ll also see, maybe this is just believing my own rhetoric, but I think you’ll see a loosening of some of the constraints around capital in these states. A lot of the states say “Gee, you can only control this number of licenses, you have to be a resident of this or that.” They put all these factors in from a capital perspective because they’re worried about, I don’t know what they’re worried about. I guess Big Weed coming in.

But, I think, ultimately, we’ve seen a trend that way too. You had ownership restrictions in Washington, they fell away. You had very stringent restrictions in Oregon and they’ve loosened those. Colorado has moved, you used to have to be a Colorado resident, now you can be a U.S. resident. So, I think, as people recognize, as the politicians and regulatory overlords recognize the benefits, not just the social aspects, but the economic aspects of jobs and taxes that cannabis brings to a state, they’ll say “Gee, it’s silly to put restrictions on the capital.”

As an analog, I would look to California and Silicon Valley. They have no restrictions on capital there. And they’ve created just a huge engine of growth and economic development with tech investment. There’s no reason Denver shouldn’t play that same role within cannabis other than the fact that public companies can’t invest in companies in Denver. Whereas, if they had that restriction removed, I think you could go from 18,000 employees in cannabis in Colorado to 36,000 or it could look like the Sand Hill Road of cannabis.

I would see that trend continue. You might, if this guy O’Neill gets appointed head of the FDA, maybe there’s a re-scheduling of cannabis so you’re going to see more research done in the United States. That would be, I think, a very positive strength. I think the rescheduling might change the 280e tax situation that we have. Which means there would have more cash available for reinvestment at the operating level just from your own operations rather than shipping it off to Washington. And, I’d see that could be possible in the next four years, as well.

I do think it will stay a states rights issue. I think different states will develop different ways of overseeing and regulating it. And the states have been pretty good about copying each other. Guys from Massachusetts go on a junket to Colorado and learn. So, I think you’ll see best practices from a regulatory perspective propagate between all the states as well.

It’s a great, grand experiment. I don’t want to sound like I’m getting on a soap box saying how wonderful it is. Because there’s a lot of stuff that needs to be fixed. But, you’ve got a lot of states that are experimenting a lot of things. You’ve got a lot of entrepreneurs that are experimenting a lot of things. The best will rise to the top. And I think people won’t be shy about copying it and we’ll ultimately meander towards a very functioning, widespread market with capital available for entrepreneurs to build great businesses. That’s the trend and I expect that to continue for the next four years.

TG Branfalt: For everyone involved, we all hope that trend continues as well. My own fears about descheduling … Sort of thinking that it will allow the Big Pharma to enter the market. But that’s a conversation for another time, I think.

Hadley Ford: Hey, look. Big Pharma, they’re not going to be interested in the recreational market. They’re going to be interested in developing big medicines that can help people. A lot of these medicines take hundreds of millions of dollars to develop. So, I’ve got to tell you. People think of me as Big Weed; I don’t have hundreds of millions of dollars to throw at a drug. So, if you want to make society a better place, come up with something that’s just a great use of one of the 70 cannabinoids in the plant to solve some terrible disease. That takes money. So, I’m not averse to doing it. You don’t want people to corner the market around it. But, if you can develop the life-saving drug and it takes that kind of money, let someone come in and have that money. And it would be on a regulated basis, just like Pharma is, and let them develop it. That could be beneficial. So long as they don’t have a monopoly, it’s okay.

TG Branfalt: Well Hadley, I want to thank you so much for the opportunity to chat with you. This has been a really, really enlightening conversation for me and a lot of people who may not understand the finance side of it, and who are afraid of people with your background getting into the industry. I think you’re helping to quell some fears by being kind of on the forefront on this issue. So, I want to thank you so much for joining me on today’s episode.

Hadley Ford: Thank you so much for having me on. It was a pleasure. I enjoyed it greatly and, hopefully, you’ll have me on again sometime in the near future.

TG Branfalt: I certainly hope so.

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

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