Ganjapreneur.com

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In their first foray into Latin America, British Columbia, Canada-based Cannabis Wheaton Income Corp. is set to acquire Uruguayan hemp producer Inverell S.A. in a deal worth $15 million. Inverell is licensed in Uruguay to cultivate and harvest a proprietary hemp strain containing 0.5 percent THC and 8 percent CBD.

Inverell also owns a genetic bank with three additional hemp strains with differing levels of THC and CBD. It currently operates 16 hectares (about 1.72 million square feet) and has another 574 hectares available for cultivation.

“This transaction helps us secure a significant amount of CBD-rich hemp production that can be exported to other federally legal jurisdictions for further processing into nutritional and pharmaceutical products. We expect to see a significant increase in global CBD demand over the course of the coming years and believe that low-cost jurisdictions with favorable climates for outdoor cultivation will be key sources of CBD supply. As we continue to execute our international strategy, we are thrilled to have identified Inverell as our first international production operation.” – Hugo Alves, Wheaton president, in a press release

Upon closing of the deal, Wheaton will pay $2 million in cash, $3,562,500 in Wheaton common shares, and $9,437,500 upon successful registration of Inverell’s genetics and successful exportation of CBD products.

Inverell founder, Dr. Raúl Urbina, will remain as CEO and head the Innovation Department.

End

Montana Health Department Lowers MMJ Provider Fees, Sets New Testing Rules

1/31/2018

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Montana’s Department of Health and Human Services has made several changes to the state’s medical cannabis program, including lowering the fees for providers, implementing labeling requirements, and bolstering product testing rules, MTN News reports. The new testing rules will now require mandatory product testing instead of randomized testing protocols.

Provider license costs for those with 11 to 49 patients were reduced to $2,500; costs for providers with fewer than 11 patients will pay $1,000; and providers with more than 49 patients will pay $5,000. November’s draft rules from the department outlined a fee scheme that would have required providers with more than 10 patients pay $5,000, while those with fewer than 10 pay $1,000.

The rule changes also allow minors to participate in the medical cannabis program; however, their parent or guardian must make purchases by proxy.

Elizabeth Pincolini, owner of Alternative Wellness Montana, offers a mixed reaction to the changes, contending that random testing “is a much better way to catch pesticides” and mandatory testing is “expensive.”

“I think overall, the rules are doable for most. I expect some changes and tweaks to the rules as the program rolls out and we find things that need adjustment, but I think that is fairly typical for any new program.” Pincolini, to MTN News

The changes to the program are part of a 2016 voter-approved medical cannabis initiative, which was necessary after lawmakers had all but shut down the state’s program.

End

Aerial view of the airport in Iqaluit, Nunavut, Canada.

Canadian Territory of Nunavut Releases Cannabis Policy Draft Rules

1/31/2018

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The Government of Canadian territory Nunavut has released their draft rules for cannabis regulation, setting the legal purchase and possession age at 19 and keeping the possession limit at 30 grams – in line with federal proposals. The rules also provide landlords the ability to ban smoking or growing cannabis on their properties but suggest that localities not pass “dry” ordinances.

“Currently, the GN is proposing to not prohibit cannabis entirely in communities. That is, under this proposal there would be no ‘dry’ communities. This approach flows from the idea that prohibition does not work, is difficult to enforce, encourages and supports an illegal market, and may actually be worse for Nunavummiut.” – Government of Nunavut in the draft rules

The regulations propose not opening any physical retail shops in 2018, which would be government-run, but would allow sales to commence online or by phone once the federal government rolls out the program.

Due to the cold clime, the government does not anticipate that there would be any large-scale production in the territory, and since the “lack of road and rail connections among communities and to the rest of Canada is unique” the government is considering allowing citizens to import products from licensed producers which would increase access to “a wider range of cannabis products than the [Nunavut Liquor Commission] is likely to offer on its own.”

According to a December survey by the government, 75 percent of Nunavut residents support cannabis legalization.

End

Jesse Peters: Responsible Cannabis Business Practices

1/30/2018

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Jesse Peters is the owner and CEO of Eco Firma Farms and is a founding member of the Oregon Cannabis Association.

In this Ganjapreneur.com podcast episode, Jesse joins our host TG Branfalt to talk about Eco Firma’s longterm goal of becoming 100% carbon neutral, some green energy solutions that other cannabis companies can consider to follow in their footsteps, how the cannabis industry needs to take responsibility in lobbying for better regulations and working more closely with regulators and lawmakers, and more!

You can listen to the interview via the media player below, or scroll further down to read through a complete transcript of the 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 delighted. I’m joined by Jesse Peters, he’s the CEO of Eco Firma Farms, and he’s a founding member of the Oregon Cannabis Association. How are you doing this afternoon, Jesse?

Jesse Peters: Good, good, how are you doing, Tim?

TG Branfalt: I’m all right, man, as I said, I’m thrilled to have you on the show, we’ve got a lot to talk about, but first, I want to talk about you. You have an interesting background, you are a 22-year Marine Corps vet, 10 years as a professional firefighter. How did you end up from those two sectors into the cannabis space?

Jesse Peters: Honestly, I didn’t really come from those two sectors in the cannabis space. I’ve always been on the cannabis space, and went into those two sectors in life. To an extent, I was born into this industry. My mom took the misdemeanor, and my dad took the felony for the five pounds that were under my crib when they brought me home from the hospital. That’s where our established in 1974 comes from. It was just always a piece of my life. I’ve always been a part of cannabis in a real small way, and then, as I got older, I just lived in both worlds.

I went to school, I went to college, I joined the Marine Corps, I got a job as a firefighter, and I also was in the cannabis space doing cannabis things that most cannabis people have done for a very long time. Years ago we started figuring out that it was going to be legal in our lifetime, and we needed to make a decision on which route we wanted to take with it, and taking the route of developing a company, and trying to participate heavily in the end of prohibition, and still be a successful business was the route we chose.

TG Branfalt: How long ago was it that you started Eco Firma?

Jesse Peters: Eco Firma was registered as a company in, I want to say 2013. We started Eco Firma as brand back in about 2011, 2010 actually, up in Seattle, when it just … It was one of those things where you start going into dispensaries, and you realize that it’s still really raw, it’s just random people coming through the door with Ziploc bags, or sandwich bags, or garbage bags full of cannabis. To me, the only to stand out there was to start to represent something.

We decided, you know, we’re going to create a business name, and we’re going to actually start giving test results, and doing terpene profiles as soon as they came online and we were allowed to do with no requirements. We wanted to be presentable and just have that leg up on the competition that I was facing in the dispensaries. As we did that and started getting really specific with strains and really specific with branding and trying to offer more to drive traffic to your dispensary made things appropriate for us to start to function like a business, and to be able to earn that business of that dispensary. If you’re going to turn it into a business, then you’ve got to turn it into a business, so what’s what we did.

TG Branfalt: One of the principles of your farm is this idea of total carbon neutrality. Can you just describe to the listeners what that is first, and why you decided to bring your farm in this direction, and why it was important to you?

Jesse Peters: Yes. Total carbon neutrality is the ability to say that we put absolutely no extra carbon into the atmosphere. Any CO2 emission, the power that we use creates CO2, recycling, garbage, we want to create zero CO2. We want to leave the planet better than we found it. We want to leave our property better than we found it. We want to be neutral balance with how the planet should function. It started with we looked into green energy and actually have the ability to take on 100 percent wind power, which totally blanked our power for carbon neutral. We took the first 90 percent out right then, the ability to go carbon neutral. We were, as far as I can tell, the first company in Oregon to actually get an award from Portland General Electric as a cannabis company for our efforts. We get fact sheets every year that show the equivalency of how many cars we’ve taken off the road and how many trees that we’ve planted.

Once we hit that, it’s when it occurred to me, you know, I want to be 100 percent clean, so what else can we do? How do we get better? How do we tidy up that last 10 percent? That last 10 percent is a big hurdle. There’s a lot of pieces to go down that rabbit hole with. If we produce any garbage, where does that garbage go? There’s a truck that shows up here that picks that garbage up that burns fuel, so how do we get rid of all our garbage? How do we do only recycling? How do we get rid of if we use an electric forklift instead of a gas forklift that’s charging off of our carbon neutral power? I think you can rapidly see how fast that last 10 percent is a big endeavor, and so we’re trying to bite it off in appropriate stages and chunks, but being able to get rid of our power was a big deal. The next step is that we’re actually going to put a solar array up and start trying to feed back.

TG Branfalt: In addition to those couple of ways that you mentioned, what are some, I guess, more simpler ways that operators in this space can work to reduce their own carbon footprints?

Jesse Peters: You know, I would say, for one, look into green energy. That is, by far, the biggest. A lot of states have an option for you on your power bill that you can just call the phone number and ask, “Hey, I really want to look into green energy options.” That’s a big step. It doesn’t cost that much more capital to be able to do it. Every company in every state is a little different, and some have the option and some don’t. Fortunately, here in Oregon we have a great option. If you don’t have that option, then you’ve got to start looking towards all the little things. Start small. Set up a really good recycling program, maybe some incentives for your employees. Make it really easy to recycling, separating the glass, putting out containers, all the small pieces. Look into don’t use bottled water. Make sure that if you do have people that bring in bottled water, that you have a recycling receptacle there for the bottles. Buy your staff water and put it in the facility. Buy them containers that they can carry their water in. Look around your office at the things that you’re throwing away that you waste and see what could be replaced. You can start that small and then just build on it.

TG Branfalt: That’s really great to hear that from somebody who has a big operation and is so active in eliminating the carbon footprint. I know that as California comes online, there’s a lot of sort of chatter about the water use and the energy use in a state that’s already sort of strained in that regard.

I want to talk to you a bit about the Oregon Cannabis Association and your role with that. When did you realize that the time was right for a dedicated industry association, and how difficult was it for you to get, now you have more than 100 businesses on board?

Jesse Peters: Really, the credit for that realization goes to Amy Margolis. Amy Margolis was an attorney in the space early on. I think we’re approaching … She’s been in this space for a very long time. For the Cannabis Association, early on three or four years ago, it occurred to Amy that we needed an association, that there were a lot of us out there that were still in that world of being very reclusive. It’s the world we came from. Being that she knew all of us and many of us used her as our legal advice, she brought up to a group of about eight of us that we should all come together as the Cannabis Association. She actually had reached out to Matt and Meagan Wallstater, who own a dispensary called Pure Green here in Oregon. Matt and Meagan, it was also a dispensary that we marketed to, and so they approached me and said, “Hey, we’re putting together this group.”

At the time, we didn’t really know what it was. It was just let’s put eight of us in a room, and nine of us, and 12 of us, and let’s talk. I’m not going to lie to you, there’s a lot of ego that comes out in those first talks, a lot of posturing that was really interesting. There was some really entertaining conversations that went down, and then everybody really fast got comfortable with each other and you can start to see a divide. There’s staunch competitors that view everyone as their competition, and then there’s those of us that are in cooperat-ition. We’re stronger, as a whole, especially as such a young industry that does not have those heavy corporate influences quite yet. If we band together, we might be able to sustain and create rules and create and industry where we do have staunch pesticide regulation and staunch mitigation for things like water usage and things like power usage. We can set up an industry that doesn’t look as much like our food industry.

As we kind of went down that path, we looked towards legislation and how do we lobby for free market space so that small businesses can attempt to thrive? How do we try to make sure the medical program doesn’t die? You start realizing that as the association grows and more and more members join, that you have to start separating things out. You form a board and you bring on a separate wing that is just the political action committee. Slowly, but surely it has been morphing and growing into, at least here in Oregon, a movement that I hope to see progress throughout the country.

TG Branfalt: When you mentioned the lobby, you mentioned the Oregon Cannabis PAC, the political action committee. When did you decide the time was right for that project?

Jesse Peters: Once again, definitely not me deciding. This was a … That room, that group of eight, that turned to 12, that turned to 50 and Amy Margolis and all of the members within it, all of us discussing the fact that we should go to DC and lobby for things like the big ticket items, like banking reform and tax reform. There’s a lot of pieces to bite off here. There’s a lot of prohibition. There are people still going to prison for long periods of time. How do we … In a state where we can dedicate some of our resources, financially, into a lobbying effort to help states that still need to get past that, how do we participate? How do we use those resources in a way that benefits the industry as a whole throughout the country? That’s really where it was born from, and we’ve just kind of been going from there, winging it, for lack of a better term.

TG Branfalt: Are you guys seeing donations from companies outside of the cannabis industry, with regard to the PAC, yet?

Jesse Peters: Not quite. We’re getting just a little bit here and there. We’re starting to see ancillary companies come in and we’re just starting to reach out to those ancillary companies, because, to be honest, it takes a lot of revenue being generated in a legal market before you start to see companies that supply CO2 or make the equipment that goes into extraction equipment that sees a large enough market share that they are willing to put some capital into it to help support that revenue stream for their company. It needs to obviously hit a specific number for their ROI to be justified. Once again, in a legal state, as you see these things come online and that revenue stream becomes appropriate, you kind of need a group to hit them up, otherwise they’ll skate along and us, as cannabis companies, will continue to fund our own events to try to get our names out there until we can get to a point where it is not financially responsible as company for me to advertise to a bunch of other companies in my same space that already know who I am.

Why don’t we reach out to companies that make nutrients or companies that make lights, Gavita, Advanced Nutrients, Biobizz, start reaching out to them that are still in the space, but in a larger capacity, and then slowly but surely, we reach beyond that into companies that provide signage and banners, or companies that do printing, or companies that provide CO2 or gasses to the industry. I think that, from there, you can start to span wider and wider to try to bring that capital in to support our cause.

TG Branfalt: What’s your relationship like with the lawmakers in your state specifically?

Jesse Peters: It’s been good. The hardest part, I would say, for the lawmakers, and for us, is that they have a very fractionated voice coming at them from many different associations, many different organizations, many of their constituents that all have their own pieces that they want. Of course, outside of that, you’ve got some very self-motivated interest groups that can put capital into this space and lobby for their own specific purpose. If you’re a legislator, it gets murky. If you’re a rulemaker, it gets murky because who has got a hidden agenda? What agenda do I want to follow? What benefits my constituents the best?

For us, fortunately, here in Oregon, we’ve got lawmakers that are, for the most part, really supportive of this industry, but they’re also very new to it. I would say to California and other states as they come online, you’re going to see a lot of rules that don’t make sense. My advice is definitely don’t attack your legislator. You want to work with them, because they want to work with you. It’s just a really difficult job. But when the rules first come online, comprehend that they’re going to be the hardest, most likely, that they’ll ever be, because they’ve got to cast a wide net and then, slowly but surely, a good organization, with a good mission statement, can slowly start to narrow that reach and make legislation and help work with legislators to make rules that are beneficial to companies and allow for a thriving market.

TG Branfalt: I want to talk to you a bit more about your lobby efforts in DC, but before we do that, we’ve got to take a 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 Jesse Peters, CEO of Eco Firma Farms. In June, members of the OCA went to lobby in DC and came away with four takeaways: the Trump administration has bigger fish to fry, GOP freshmen realize that the War on Drugs is lost, the industry needed more representation from both lawmakers and from operators, and Congress is not “just blowing smoke” when it comes to diversion of product and recognizing the benefits of a taxed and regulated industry. That’s a lot of stuff that you guys sort of came back with in your sort of report. What’s your game plan for addressing some of these issues? Are operators in your state actively prepping for any sort of federal crackdown?

Jesse Peters: To answer the last part, prepping for a federal crackdown, to be honest, until it’s federally descheduled, you should always be prepping for a crackdown. You never really know, but I think those of us that have been in this space a long time comprehend that it’s the risk of doing business, and there’s a benefit to it as well. That risk keeps a lot of the big corporations out and gives us the opportunity to get a head start, to set up and thrive. If you’re risk adverse, this isn’t the space for you. That being said, to be prepared for a crackdown is nothing more than to say, “I comprehend that someone might kick my door in tomorrow.” Other than that, on the larger scale, it’s like shooting a BB gun at a freight train. At this stage, and especially with California coming online, it’s not at the forefront of our concern.

When it comes to kind of the large agenda facing at least the OCA at this stage in the game, looking towards Capitol Hill, there’s good and bad with it. This new administration is definitely not our friend. Jeff Sessions has been extremely vocal about his intent over the years. We could go really far down the rabbit hole politically with this if we wanted to, but on the optimistic side, there is a grumbling here that requires action from our representatives in the Senate and in the House. It was really nice, for the eight years of Obama, to pretty much feel like we’re status quo and we don’t have to really worry, but on the same hand, we were at the bottom of their agenda list. Now that we have an administration that has come out to basically actively pursue negative regulation in our realm, it is forcing a lot of our Congressional leaders to stand up and start actually making laws to prevent that.

In the boomerang effect with this administration, there’s potential for us to still get a little benefit there. It’s definitely not a reason to stop fighting. It’s by far not a reason to stick your head in the sand. Now is the time that, in a country where more Americans approve of cannabis than apple pie, we’ve got the numbers behind us. We just need to get that voice directed towards our leadership, because the midterms are coming and there are a lot of people that are spooked for their jobs, so they’re listening. It’s on us to take advantage of that.

TG Branfalt: So let me ask you this. What is stopping the … What is the driving force behind the prohibitionists in your sort of experience as somebody who has went to DC, who has lobbied, who has these military ties? What is the issue here? What is your sense about what is stopping them from just allowing it to become legal in their state, or pressing for federal deschedulization or reschedulization. I’m a deschedule guy. What is your sense about all this?

Jesse Peters: Yeah, I’m a deschedule guy as well, by far. You know, honestly, I think, for me, it’s the squeaky wheel gets the grease. When we go all the way down to things at the county level, when we go to a county meeting to actively pursue things like processing or extraction on EFU land, when you show up, you’ve got two or three or five people from the cannabis industry that are trying to speak in an educated manner about how the revenue and the tax model and the regulation can benefit the society, and then you’ve got 50 anti-cannabis people who tend to be in more of a retired age of life and have the time to come down to this and print banners and print signs and be very loud and lobby very heavily against any cannabis descheduling or against beneficial regulation.

If you’re sitting there as a councilman or as a Congressman, and you’ve had 300 phone calls against and three phone calls for, it seems to you as though this is not as popular an issue as you think. Well, the reason you only get three phone calls for is because most of us are working to build a business and don’t have the time to attack this from every angle. I think it’s a perception issue, honestly. It’s a perception at the legislative level where you have a louder voice from a smaller group, and that changes your perception of what is really going on in the country.

TG Branfalt: You mentioned a louder voice from a smaller group. I want to talk to you quickly about some of these veterans access issues. You’re a veteran yourself. The VFW has come out and they have supported medical cannabis access for veterans. There’s not a legal state that a veteran can walk into their VA, even if it’s legal in their state, and say, “Hey, we need to explore medical cannabis for my chronic pain, my PTSD or what have you.” Can you tell me a bit more about, from a veteran’s point of view, how important this issue is or is going to become as the market matures and as we get more research?

Jesse Peters: Yeah, I think it is a tough nut to crack, and it’s also, to me, one of the most ridiculous arguments out there. You’ve got groups like Grow for Vets and Weed for Warriors that are really working extremely hard on these issues. The fact that you can go out and be shot at for your country, that you can come home a different human being, and yet you’re not responsible enough to consume cannabis, yet you can become addicted to a host of medications that are freely given out is ridiculous. It’s a conversation that shouldn’t even be a question. It’s a no vote out of a Congressman or a Representative that should be staunchly … It should be … How do I say that? It should be looked at very seriously, because it’s not an issue that should be swept under the rug or pushed off to the side.

That being said, medical research is … No matter what we do, obviously as this industry grows, medical research is going to grow with it. In what direction … Is Pfizer looking for their next big moneymaker? Do you want to go down the rabbit hole of conspiracy and addiction and how do we manipulate that, as a drug company, for profit? I think everybody has a statement they can make there. I think it’s the base issue. I think it’s really easy to cloud, and I think it’s the base issue. There are veterans that need access, or prefer access to cannabis, rather than access to narcotics or anti-depressants. There is absolutely no reason why that should be denied whatsoever. End of story. Everything else is just noise.

TG Branfalt: You’re very passionate when you speak about that, and I really appreciate your candor in addressing that issue. I want to talk to you a bit more about Oregon and some new rules that took effect there, but before we do that, we’ve got to 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 here with Jesse Peters, CEO of Eco Firma Farms and one of the founding members of the Oregon Cannabis Association. In Oregon, you guys face rule changes all of the time. How does your company deal with this evolving regulatory structure?

Jesse Peters: Yeah, I would advise anyone who is coming in to a recreational market or even coming into a medical market, you need to get very seriously involved with the legislature and the rulemaking authority. Start making friends, start being well known, because you’re going to see a system get set up and they’re going to create rules for the entire year leading up to it, like California has been doing, and then it’s going to come online and all of those complaints from the city, from the municipal, from the county, from the state, from the testing labs, all those lobby groups, all those special interest groups, they’re all going to jump in and they’re going to want to change rules.

To be honest with you, sometimes those rules wind up going backwards. We’ve dealt with it here where we’ve had testing regulation come in and go in a direction that made testing so difficult that it coffin-nailed our industry for about four months. Then you see the legislature realize that and the rulemaking authority realize that and then they come back and change them again. The hard part about that is those rule changes, for small businesses, mean you have to throw away $25,000 worth of packaging because you had it made for one set of rules and now it’s made for another set of rules. You have to change your strategy for your lean flow at your facility. You need to add $50,000 worth of security system. It’s an ongoing methodology to refine rules. As I said, it’s the worst it is when it comes online and it’s only going to get better, but that graph is not linear. That graph goes up and down. As that regulation gets easier, there are peaks and valleys there that make things better or worse as you go. If you are not there advocating appropriately, with support, your life is going to be very difficult.

TG Branfalt: Are things stabilizing as far as regulations go?

Jesse Peters: They are, actually. You know, we’ve kind of reached a point right now where we’ve hit regulation that everyone can live with for now. It’s almost like a regulatory exhaustion where you get to a certain point where everyone, from the legislature to the governing bodies to the companies, say, “Okay, give me five minutes to just operate as we are and let’s reevaluate and let’s attack some of these small issues first and just let’s make this a little easier.” The constant ebb and flow on a large scale is exhausting, and so we have hit a set of regulation that we can, for the most part, live with for just a minute before we come back at it and try to make it better again. Some of the hardest parts are states that have medical and recreational programs, because the medical programs take a real heavy beating.

For some of those issues, it’s understandable for the state. They have a new administration. They need to meet Cole Memorandum regulation. They need to be able to show to the Attorney General that they are putting forth rules to help the diversion of cannabis out of state so that they can keep their rec program moving and keep the industry moving. Conversely, you need to work in a system that still benefits patients and doesn’t block them out from the medication that they have lived on for so long and the producers that are good players acting within that regulation appropriately to take care of those patients. It’s a very … They’re very muddy waters and it is a very slippery slope, and dealing with this administration within that is extremely difficult.

Like I said, trying to think of all these issues in the big picture for the greater good of the industry, medical and rec, is going to suit you best with a really well formulated plan of how to address these issues. Don’t leave it in the hands of your legislators to figure it out, because they’re not from this space, they don’t know. They need your help, but they need it in a very articulate, well thought out manner that addresses those issues, and we’re the ones that know that, so help them.

TG Branfalt: I want to move on a bit. I watched your Toke Talk in April. During that, you sort of pleaded with your audience to get off of social media if you’re in the cannabis space. Personally, I’m a reporter in this space. My Facebook is private and guarded, I don’t have Twitter, I don’t have Instagram, and people shout at me about my brand, or whatever. Is this what you’re advocating, for people to just get off of these social media platforms, or are you more saying hire someone to manage your social media so you can focus on your business?

Jesse Peters: A little bit of both. Yes, as a business, do not … Social media is your friend. Definitely if you can afford it, and even for your own mental health, hire someone to handle your social media and engage with it appropriately, but it’s kind of that adage, if you do an article, don’t go read the comments. You’ve got to stay away from it. It’s hard when you’re a small, struggling business to then jump onto Facebook and Instagram and you see all the other companies that are doing their marketing on social media. It makes you feel very small. It makes you feel like you’re not making it. I’m not making it. I’m not there. I’m not progressing. It can get really consuming. There’s proven fact for serotonin and social media and instant gratification and dopamine and you then add in your business structure, your personal business structure, and you’re watching these other companies that are touting to be what they want to be, that they’re living their company on social media the way a lot of people live their life on social media. It’s exhausting. Eyes on your own paper. Social media is great for advertising and you need to use it appropriately, but do not let it consume you and depress you as you move forward and work to build a business, because it will do exactly that.

TG Branfalt: So in your state, do you guys have a lot of advertising options? I know in lots of medical states there’s no advertising, such as New York. I know for a lot of people that’s all they have, really, is social media, internet ad buys. Do you guys have a lot of these sort of more traditional options in Oregon?

Jesse Peters: We do. We’re allowed print ads. We’re allowed billboards.

TG Branfalt: Do you find these effective, the traditional ways?

Jesse Peters: To an extent, yes. The ROI is a little difficult to track right now in some aspects, so some of it is just more brand recognition and your marketing strategy for how well you want that brand recognition, but it’s twofold. You need the brand recognition for the B-to-B, but you need the brand recognition for the B-to-C so the C goes into the dispensaries and asks specifically for your product. In a market that is as young as the market we’re in, that is a really difficult thing to track. You know, the most success in small market marketing, like the cannabis industry, especially if you’re a smaller company, is that guerrilla marketing, that person-to-person, on the ground, sticker placement on the drive-through at Taco Bell, the giving away of stickers in the right scenarios. There’s a million guerrilla marketing tactics you can use that are extremely inexpensive that can help get your name out there. At the end of the day, the reality of it is it’s a lot of work. It’s a lot of creative time and a lot of work and you’ve just got to put your head down and get to it if you want your name out there and that’s all there is to it.

TG Branfalt: I love the idea of guerrilla marketing. I saw a lot of that, actually, in Michigan where they had a gray market and very limited, in terms of … The businesses, the dispensaries weren’t even licensed, but when I went to Cannabis Cup, they were just handing out stickers left and right and then a couple of days later, I see those same stickers all over Detroit. It wasn’t for dispensaries, it was for brands to your point. What is next for Eco Firma? You guys are … You’ve been doing this since 1976. What’s next for you guys?

Jesse Peters: Yeah. Making sure that everything is just clear out there, ’74 is the year I was born, so it just kind of goes more around the anecdotal story. We’ve been doing this for a very long time, but not since I was a baby. I don’t want to mislead anybody.

What’s next for us? You know, just like everybody else in this space, expansion. We want to go down that whole large scale vertical integration track. We want to coordinate and bring together the companies that are the best of the best. We want to potentially consolidate with those that make really good partners here and in other states that maybe need a little help, and maybe they’re the right player. There’s an unknown quantity — a large unknown quantity of businesses out there that I think probably are really good operators, but no one has heard of and may not, if they don’t get the right boost. We’re going to look down the track at those opportunities to build as a brand, to build as a company. We’re bicoastal now. We’re here. We’re in Maine. We want to span out to California. We want to span out to Nevada and Arizona. We have a lot of opportunities on our very short horizon that we’re looking at.

We, like everyone else, we want to make a real big dent. We want to be really well known on a national level. I think it’s an appropriate goal and we want to do it right. We want to be clean. We want to be good partners. We want to be good neighbors. We want to be good humans. I had a good friend from TJ Gardens say to me one day, on a plane, “I don’t want $100 million. I want to make 100 millionaires.” I like that theory. I want to do that.

TG Branfalt: So what’s your advice for entrepreneurs, people who might not be in this space yet, or just people who are looking to make their own dent?

Jesse Peters: Run. This is a great space to be in. It is an extremely difficult space to be in. Do not come into this lighthearted. Do not come into this halfway. Do not come into this thinking that you’re going to jump up out of nowhere and take four plants in your basement or a couple of lights and just go find someone to hand you a million dollars. This is a really, really tough space, and if you’re going to come into it, you need to come into it full bore, guns blazing and ready to work long days, long hours, very little vacation. It’s hard work, but it’s gratifying work, because as you expand, you get to bring people into your fold and employ people and partner with people that their goals, their life, their career hinges on your company’s success. It’s really gratifying to be able build a really big, well functioning team and work within that space. If you are risk adverse, lighthearted or not ready to work that hard, this might not be the space for you. If you are and you are just starting out, or you’ve been doing this a while, but you’re ready to come at it, don’t hold back. You need to come at this full force. That would definitely be my advice.

TG Branfalt: That’s really, really great advice. I hear that echoed a lot where a lot of people enter this space thinking they’re going to be a millionaire in six months and that’s just not the case. You’ve echoed what I’ve been hearing, as a guy who has never grown a plant in his life, from other guests and other interviews I’ve done. Where can people find out more about you and more about your company?

Jesse Peters: You can find us, obviously, on Facebook, Twitter, Instagram, Eco Firma Farms. You can find us on our website at EcoFirmaFarms.com. You obviously can find information on the Oregon Cannabis Association at ORCannabisAssociation.org. We’re also members of the Craft Cannabis Alliance. You can reach us through any of those avenues. You can email us at info@EcoFirmaFarms.com. And you can listen to our podcast and search us on the Googler.

TG Branfalt: Well, Jesse, I really appreciate you taking the time out. I know you’re a super, super busy guy, and this has really been a fun conversation. You have a lot of experience that I haven’t had on this show before, so I really appreciate you taking the time.

Jesse Peters: I greatly appreciate you giving me the time. I really respect what you guys do out there. I appreciate it, Tim.

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 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 Trim Media House. I’ve been your host, TG Branfalt.

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Florida Lawsuits Against MMJ Home Grow & Smoking Bans Move Forward

1/30/2018

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The lawsuit against Florida’s medical cannabis smoking ban will move forward after a judge declined the state’s request to dismiss the case, according to a report from WTSP. The suit was filed by attorney John Morgan – who authored the voter-approved medical cannabis expansion law and was its primary financial backer – on behalf of several eligible patients.

The decision, rendered by the Second Circuit Court on Jan. 24, comes one day after the Thirteenth Circuit declined to dismiss a case contending that the state’s medical cannabis home grow ban is unconstitutional. That case, filed by strip club entrepreneur and registered patient Count Joe Redner, will go to trial.

In their bi-weekly update, officials say that those suits, along with at least two others, have “significant impact on the [Department of Health’s] ability to implement certain requirements” of the reformed medical cannabis program.

Tom Quigley, a representative of the Florida Cannabis Coalition said that the lawsuits have not only stalled the rollout of the revised medical cannabis regime but, if the smoking ban is upheld, it could impact efforts to legalize cannabis for adult use in the state.

“It would cause people to have to advocate and file additional lawsuits, which is really not needed because the amendment to the constitution has given these rights. This is a joke to the rest of the country that cannabis cannot be smoked… the process is slowed down and the patients are suffering right now.” – Quigley, to WTSP

According to Jan. 26 data from the state Department of Health, there are 71,720 registered patients throughout Florida; however, there are just 27 approved retail dispensaries and 13 approved medical cannabis treatment centers.

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Virginia Lawmakers Kill Cannabis Decrim Bills; Advance Expungement Proposal

1/30/2018

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The Virginia Legislature has killed two bills aiming to decriminalize cannabis possession in the state but a measure allowing first-time offenders to expunge their records passed the Senate Courts of Justice Committee, the Richmond Times-Dispatch reports. Last week, House Republicans on the Courts Committee voted down a measure by Del. Steve Heretick that would have decriminalized possession of a half-ounce, while, on Monday, a similar measure proposed by Sen. Adam Ebbin was defeated by the Senate Courts committee across party lines 9-6.

However, the Senate Courts Committee unanimously passed Sen. Thomas Norment Jr.’s expungement proposal, which would also remove the 30 days in jail allowed under current law for first-time cannabis offenders. The $500 fine would remain. The measure calls for a $300 expungement fee, which would be directed to the state’s Heroin and Prescription Opioid Epidemic Fund. That measure was referred to the Senate Finance Committee.

Claire Guthrie Gastañaga, executive director of the Virginia ACLU, supported Ebbin’s bill; however, opposes Normant’s, calling it “the illusion of progress,” adding that many people would not have the money to pay the expungement fee and the state would likely incur additional costs, having to set up new systems for the expungement program that don’t already exist.

While the decriminalization measures were supported by Gov. Ralph Northam’s administration, they were opposed by the Virginia Association of Commonwealth’s Attorneys.

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An indoor, commercial-grade cannabis grow based in Washington state.

Arizona Bill Would Require MMJ Testing, Reduce Patient Card Fees

1/30/2018

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A measure introduced in Arizona’s Senate would require medical cannabis testing for mold and agricultural chemicals and reduce the annual fees paid by cardholders from $150 to $50, and just $25 for a renewal. The measure, introduced by Republican Sen. Sonny Borrelli, would use $2 million from the state’s medical cannabis fund to test the products.

The legislation has received bi-partisan support, counting 78 of the state’s 90-member Legislature as co-sponsors, including leaders from both the House and Senate. The measure would require the Department of Agriculture to do the testing.

In a statement to ABC15, the Arizona Dispensary Association applauded the move.

“SB 1420 may mark the beginning of a seismic shift for medical cannabis in the state. The sponsor is a senior Republican, a committee chairman, and a conservative. The fact that he is leading the way on these improvements to the program is a terrific starting point and a remarkable example of what can be accomplished when the state’s leadership and the cannabis industry are working together.” – Joe DeMenna, ADA spokesman

According to the report, the legislation, eventually, could lead to potency testing by appropriating funds from the medical cannabis fund, which currently has about $35 million available.

The measure would need to be approved by three-fourths of the Legislature because it amends a voter-approved law. It is on the legislative calendar for Jan. 31.

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Macro photograph of a fan of hundred dollar bills.

Canopy Launches Venture Fund Targeting Growth Stage Ancillary Cannabis Companies

1/30/2018

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Boulder Colorado-based venture capital firm Canopy is launching a $50 million fund targeting growth stage ancillary cannabis companies raising bridge, series A round, and follow-on funding. The fund, Canopy Ventures I, will complement the firm’s existing accelerator and seed stage funds.

“We’re providing smart money to great companies with a proven model. One area where Canopy provides a distinct advantage is our ability to not only contribute money, but to also provide strategic insights, valuable introductions and hands-on support for the long term.” – Micah Tapman, managing director of Canopy, in a press release

Jamul Jadamba, managing director of Propagule, LLC, and one of the initial investors in Canopy Ventures I, said the company “invested in the fund because it has the right strategy and the Canopy team has the expertise, experience and access to execute it.”

“On the macro level, we recognize the historic opportunity presented by the legal cannabis industry. We believe that legalization in North America and across the globe is a secular trend that makes moral sense and has become irreversible.” – Jadamba, in a statement

Canopy has secured initial financial commitments for the new fund, preparing on making the first investments from the fund in the late first quarter, and plan to raise the rest from accredited individual investments and family offices.

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Activist Dennis Peron, Who Sparked California’s Medical Cannabis Movement, Dies at 72

1/29/2018

by Graham Abbott

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Medical cannabis activist Dennis Peron, who is often credited as the “father of medical marijuana,” passed away on January 27 in a San Francisco hospital, according to the San Francisco Chronicle. A long-time cigarette smoker, he was suffering from late-stage lung cancer.

Mr. Peron was best known as a cannabis and gay rights activist. Originally from New York, Peron was drafted in 1966 into the Air Force and served in Vietnam — he came to San Francisco after the war.

Peron was among the earliest voices to argue in favor of medical cannabis after noticing first-hand the plant’s effectiveness in treating AIDs symptoms — his then-partner, Jonathan West, was claimed by the AIDs epidemic in 1990. In 1991, Peron spearheaded medical cannabis reforms in San Francisco, then took the movement statewide in 1996, making California the first to allow the medical use of cannabis. He was also founder of the country’s first medical cannabis dispensary, the San Francisco Cannabis Buyers Club.

“The city and the country has lost a cannabis leader who lived life on the edge,” Terrance Alan, a member of the San Francisco Cannabis Commission, told the Chronicle. “He lived his whole life on the edge, and that’s what allowed us to lead in cannabis. Not many people would have had the courage at the time that he took up the mantle.”

Prior to his death, Peron had been living in the countryside with husband John Entwistle, growing and giving away medical cannabis.

Editor’s note: A previous version of this article incorrectly stated that Mr. Peron was 71 when he passed away — he was 72.

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Interior chambers of the New York State Capitol Building.

New York Lawmakers Introduce MMJ for Opioid-Use Disorder Bills

1/29/2018

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Legislation to add opioid-use disorder to New York’s medical cannabis qualifying condition list was approved 21-1 by the Assembly Health Committee last week, moving next to the chamber floor for a vote. A same-as bill in the Senate was sent to its Health Committee on Jan. 25.

In the House, the measure is sponsored by Democrat Assemblyman Daniel O’Donnell and carries 10 co-sponsors. In the Senate, the legislation is sponsored by Democrat Sen. Diane Savino, a longtime champion of medical cannabis reforms in the state.

“If we can find a way to help people have productive lives after they’ve been exposed to the horror of addiction, why would we stand in the way?” – Sen. Savino to the New York Daily News

Senate Health Committee Chairman Kemp Hannon, a Republican, told the Daily News that he would consider supporting the legislation but needs more information about how cannabis would be used as an exit drug for individuals addicted to opioids, but the details could be “something that [the legislature] develop” as the bill moves forward.

In New York, non-smokable medical cannabis products are available for patients suffering from cancer, HIV and AIDS, multiple sclerosis, post-traumatic stress disorder, epilepsy, and Huntington’s, Parkinson’s, and Lou Gehrig’s diseases.

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Oregon Cannabis Regulators Up Penalties for Sales to Minors

1/29/2018

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A temporary change in Oregon’s penalties for selling cannabis products to minors took effect last week, providing higher fines and cannabis worker permit suspensions for employees who knowingly sell cannabis to individuals under 21-years-old. The new rules up the fine from 1,650 to $4,950 and the permit revocation from 10 days to 30.

The Oregon Liquor Control Commission will review compliance activity for six months and determine whether to make the rule permanent.

“There’s no margin for error on making sure that marijuana doesn’t get in the hands of minors – period. The integrity of Oregon’s regulated system depends on industry compliance across the board.” – Paul Rosenbaum, OLCC commission chair, in a press release

The changes also increase the penalties for multiple violations; providing a 30-day retail license suspension for two violations in two years, and a complete license revocation for three violations in that span. Under the previous regime, two violations in two years would have led to a 10-day license suspension, three would have led to a 30-day suspension, while a fourth would have revoked the license entirely.

In a Jan. 14 op-ed in the Oregonian, U.S. Attorney for the District of Oregon Billy J. Williams said that the state’s recreational cannabis program has a “massive overproduction problem,” pointing to the more than 2,600 pounds of cannabis seized by postal agents in the state and more than $1.2 million in cash tied to illicit sales.

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Aurora Sky Facility Receives Health Canada MMJ Cultivation License

1/29/2018

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Aurora Cannabis Inc. has received a cultivation license from Health Canada for its under-construction, 800,000-square-foot facility at the Edmonton International Airport, dubbed Aurora Sky. The facility will be able to produce more than 100,000 kilograms (220,462 pounds) of cannabis annually.

“The licensing of Aurora Sky is a game changing milestone for the cannabis industry and an exciting inflection point in Aurora’s corporate development. This is our second new facility to receive a cultivation license in three months – a true testament to Aurora’s industry-leading ability to execute. The additional cultivation capacity will allow us to further expand our domestic and international market share very quickly, and is expected to significantly accelerate revenue growth this year.” – Terry Booth, Aurora CEO, in a press release

The company intends to transfer genetics from its Cremona, Alberta facility – Aurora Mountain – and begin its first growing cycle at Aurora Sky within the next week. The first harvest is slated for the second calendar quarter of this year.

This is the latest big win for the producer as Canada moves forward with broad legalization plans. Last week, Aurora came to ‘friendly’ terms with CanniMed in an $852 million deal that, if approved, will create the most valuable cannabis company in the world. CanniMed was the target of a hostile bid by Aurora before coming to terms with the company. Earlier this month its European arm, Pedanios GmbH, won a contract with the Italian government to provide medical cannabis to the federal government-run program.

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A large, indoor cannabis grow operation.

Canadian MMJ Producer Aphria to Acquire Nuuvera for $826M

1/29/2018

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Canadian medical cannabis producer Aphria Inc. is set to acquire Nuuvera Inc. for $826 million as part of its efforts to expand into Europe, Africa, and the Middle East, where Nuuvera already has a strong presence.

Aphria will pay $8.50 per share to Nuuvera shareholders – a 21.4 percent premium over the stock’s Friday close price. The price represents a 30.5 percent premium over Nuuvera’s 10-day weighted average stock price.

Nuuvera has relationships in Germany, Italy, the United Kingdom, Spain, Israel, Malta, Lesotho, and Uruguay, while Aphria currently has agreements in Australia.

“This transaction, which builds on a long-standing relationship between the two companies, brings together our top tier ability to grow high-quality cannabis at a low-cost with Nuuvera’s expansive international network, expertise in processing, and access to industry leading technology.” – Vic Neufeld, Aphria CEO, in a press release

The deal still needs final approval from the Superior Court, two-thirds vote from Nuuvera shareholders, and approval from the Toronto Stock Exchange.

It’s the second major merger of Canadian cannabis companies in a week — last Thursday, Canadian producers Aurora Cannabis and CanniMed announced an $852 million deal, lauded as the richest in the cannabis industry to date. The moves come less than six months before Canada is expected to roll out federal recreational cannabis legalization.

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Large plastic bags of trimmed cannabis product.

Per-Pound Cannabis Prices Drop in First Month of 2018

1/26/2018

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According to Cannabis Benchmark’s U.S. Spot Index, the price-per-pound of cannabis has fallen 3.5 percent from Jan. 12 to Jan. 19, to $1,292, representing a spot price-per-gram of $2.85, with a simple average price of $3.20.

The report indicates that the drop “was driven primarily by significant week-over-week decline in wholesale rates in Oregon, though most of the major Western markets saw decreases in their composite prices, with Colorado the only exception.”

In Washington, prices fell to $1,004 per pound – the lowest price Cannabis Benchmarks has found in three years tracking industry price trends. Indoor-grown products remained the highest priced at $1,571 per pound, followed by greenhouse-grown ($1,216), and outdoor ($948). Last week, the firm reported an 11 percent decline in per-pound prices “due both to decreases in the volume-weighted average rates for indoor and greenhouse product, as well as the fact that low-priced outdoor flower, despite experiencing a small week-over-week price rise, constituted a larger proportion of the total volume that was reported to be traded nationwide.”

In an interview with The Cannabist, report author Adam Koh indicated that the recent decision by Attorney General Jeff Sessions to rescind the Cole Memo has not led to “any sort of material alteration to supply and demand.”

“The way it could possibly affect the market is if businesses were actually raided or shut down. Then you might have people unwilling to trade wholesale. Obviously a dispensary wouldn’t to want to take in inventory if there was a credible threat of being raided with significant amounts of cannabis on hand.” – Koh, to the Cannabist

Koh suggested that prices could continue to decline throughout the first quarter of this year.

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Photograph of Capitol Hill in Washington D.C. distorted by a "fish-eye" lens.

Congressmembers Send Letter to Trump Asking for Cole Memo Reinstatement

1/26/2018

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Fifty-two members of Congress have sent a letter to President Donald Trump urging him to ask Attorney General Jeff Sessions to reinstate the Cole Memo.

“As a candidate, you stated: ‘I really believe we should leave [marijuana] up to the states’ and that ‘it’s got to be a state decision.’ We trust that you still hold this belief, and we request that you urge the Attorney General to reinstate the Cole Memorandum. This step would create a pathway to a more comprehensive marijuana policy that respects state interests and prerogatives. On behalf of the communities we represent, we hope you appreciate the critical nature of this issue and take immediate action.” – Congressional letter to Trump

The bi-partisan letter, dated Jan. 24, includes signatories from states that have legalized the medical and/or recreational use of cannabis and Washington D.C.

In his directive rescinding the memo, which barred the federal government from interfering in state-approved medical cannabis programs, Sessions said that U.S. prosecutors “should follow the well-established principles that govern all federal prosecutions.”

In their letter to Trump, the members of Congress warn that Sessions’ guidance “will have a chilling effect across the country in states that have worked tirelessly to implement voter-approved laws, creating legal uncertainty.”

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France Reduces Penalties for Low-Level Cannabis Possession

1/26/2018

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The French government has announced that low-level cannabis offenses will now be met with fines of 150 to 200 euros, but ruled out broad decriminalization, France24 reports. Interior Minister Gerard Collomb said that while on-the-spot fines would be the new law of the land, further action against offenders would remain an option.

According to the report, in 2015, 140,000 people in France were arrested for drug offenses, with just 3,098 sentenced to incarceration. The move is expected to free up police.

“In the past, police officers and judges would spend a lot of time on procedures which ended in formal warnings being given, so it didn’t serve any purpose.” – Parliament Speaker François de Rugy, to BFMTV/RMC, translated by France24

The reforms were originally pushed in May by President Emmanuel Macron who has suggested capping the fines at 100 euros. Earlier this week, the government issued a report which included the new fine scheme. During an appearance on French radio on Monday, Finance Minister Bruno LeMaire pointed out that France has the highest rate of cannabis consumption rates in the European Union but still had “the harshest laws in Europe.”

Germany, Belgium, and Italy are among the bloc nations that have decriminalized cannabis possession.

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Indiana House Passes Resolution to Study MMJ

1/26/2018

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Indiana’s House has unanimously voted to study medical cannabis legalization before next year’s session, the Indy Star reports. The resolution was offered by Majority Floor Leader Rep. Matt Lehmen – a sign that the reforms have a shot at being considered next session.

Since the measure is a resolution, it does not need to be voted on by the Senate; instead, if three of the four legislative leaders from both parties agree to the study, it will be assigned to a committee in the summer. According to the report, Minority Leader Rep. Terry Goodin, House Speaker Brian Bosma, and Senate Democrat Leader Sen. Tim Lanane indicated they would support the study.

Bosma, a Republican, does not support medical cannabis legalization but said his “mind could be changed, but it’ll be based on facts not opinions.”

“Honestly my opinion about the advisability hasn’t necessarily changed but my opinion as to whether or not we need to study the issue likely has. Our own surgeon general called for a study of the issue. So I think we need to take a look at the effects and I support a study.” Bosma, at the start of session, via the Indy Star

Neither Gov. Eric Holcomb nor Attorney General Curtis Hill support the reforms. According to the report, the Senate does not plan on studying the issue.

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Darcy Bomford: Acquiring a Cannabis License in Canada

1/25/2018

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Darcy Bomford is the CEO of True Leaf Medicine International, a Canadian company with one department in the national medical cannabis program and another that manufactures hemp-based wellness products for pets.

In this interview, Ganjapreneur.com podcast host TG Branfalt talks with Darcy about Canada’s medical cannabis program, the strict licensing process that producers undergo there, and what the country’s impending adult-use marketplace is expected to look like. Darcy, a career entrepreneur who launched his first company in the pet supplements industry, also explains how he has applied his experience in the pet products industry to the cannabis space and how he was inspired by the devotion of pets to “return the love” by creating wellness products for both people and their four-legged friends.

You can listen to the interview via the player below, or scroll down to read through a complete 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 are 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 Darcy Bomford, he’s the CEO of True Leaf Medicine International. He’s from Canada, who are ready to nationally legalize cannabis, a move that advocates and entrepreneurs here in the states are and will be watching rather closely. But before we get into all of that I want to thank you for coming on the show Darcy, how are you doing this morning?

Darcy Bomford: I’m doing great. Thanks Tim, it’s a pleasure being here.

TG Branfalt: It’s great to have you, we have a lot of stuff that we’re going to have to hash through. But before we do, I want to get to know you, man. What’s your background? How’d you end up in the cannabis space?

Darcy Bomford: It’s interesting actually. My background is primarily in the pet industry, which is a little different. When I was a kid I always loved pets and I worked for a vet and decided early on, I think 18 years old, to be an entrepreneur and not a veterinarian because I liked the business side of things better than the medical side.

I started a little pet supplement company, which morphed into a pet treat company, and I eventually built that into a fairly large company. Not huge, but we were doing somewhere around 7, 8 million a year. And we had a nice little plant in Canada and we had two plants in the U.S. that primarily made natural baked dog biscuits. And it was a great business.

Unfortunately I lost that to investors — sometimes high finance goes good, sometimes it goes bad. And unfortunately I ended up losing it to a group of investors who then took over the company and went their own way with it. And at that point in time, which was 2012, I had actually one year non-compete. So there I was with 25 years in the pet industry and couldn’t go back into it, and at the same time the federal government in Canada announced these new rules around the production and sale of medicinal cannabis. And I thought, wow, with my manufacturing background and I knew how to make and market product, I knew about quality control.

And in the back of my mind I always thought that hemp and cannabis could be a very unique ingredient for pets as well as people. So I kind of paid attention to that, but I ended up being one of the very first applicants in Canada under the folks called the MMPR program at that time. We were number 48 to apply. And so we got going that way and ended up getting into the queue with a bunch of other companies. And unfortunately the prime minister at that time was very anti-cannabis, and there’s so many applicants that the system kind of got carried away so they slowed down the entire approval process and we ended up stalled. We had no idea when we were going to get our license and we ended up at that point in time, about a year and a half in, going back into the pet industry. That’s how we launched True Leaf Pet. So we launched hemp supplements for pets while we were waiting for our medicinal cannabis license to come through.

And here we are today. We have two divisions; True Leaf Pet, which still markets hemp based supplements for pets using hemp seed. And then we have … we have on the medicinal side, our license from Heath Canada is now really going through the stages because of our new prime minister and we’re getting close to approval.

TG Branfalt: So, do you guys, you said that you use hemp seed and stuff for the pet treats, are you allowed to or do you use CBD?

Darcy Bomford: No, I know. Early on we realized that any kind of the leaf material from hemp, we were going to run into regulatory issues on the pet side. But we also recognized that hemp seed by itself is really, there’s a ton of value there, and it has some active ingredients that still support some of these functions that are really popular with pets. Like for example, Omega-3, -6, and -9 and some other ingredients in hemp seed oil help support the body’s fighting inflammation, so they’re being used for hip and joint product. And we also have another formula that’s for calming and another one for immune heart support.

So we use hemp seed as the base active ingredient but we also add other well known active ingredients like tumeric and some other hip and joint products and calming ingredients to support the hemp. And the big reason for that, Tim, is that we wanted to be 100% legal in everything we do. And in the pet industry, there’s a ton of regulation there. It’s not easy just launching just a regular product even without hemp. So we have to comply to all these state rules and sort of an overarching body that manages the pet industry called AVCO. So we specifically developed our formulas with hemp seed so that we could find a legal pass to market from the beginning.

TG Branfalt: And can you briefly tell me about the hemp laws in Canada?

Darcy Bomford: Yeah, as you know in the states there’s a lot of CBD products that are being sold online and in, sort of, I guess hemp friendly states or medicinal cannabis friendly states. But in Canada, CBD is a controlled substance. It’s right along with THC. And it’s unfortunate because, of course, CBD is non-psychoactive. But it’s more strict up here, you don’t see a lot of online sales of CBD products. CBD products from the U.S. were initially coming through but now they’re being stopped at the border from the U.S., and they’re still very strict about it. You see the odd dispensary with CBD products but it’s sort of in the gray area.

TG Branfalt: What about, are you allowed to grow hemp itself throughout the nation? Because here it’s state by state and it’s very, very limited.

Darcy Bomford: Yeah, well Canada’s actually the number two country in the world for hemp seed production. And you are allowed to grow it but you have to destroy the leaf and you can’t use the bud, of course. It’s easier, like you can apply to Health Canada for a license to grow hemp outdoors, you still have to go through a security check and a few other issues, right. But it’s relatively easy, especially compared to the U.S. where it’s technically it’s, at a federal level, it’s still difficult to grow hemp as a hemp farmer.

TG Branfalt: And now, for those of us that are unfamiliar, can you sort of explain Canada’s medical cannabis system as it exists right now?

Darcy Bomford: Currently, it’s now called the ACMPR, which is the Access to Cannabis for Medical Purposes Regulations. And it allows applicants once they’re approved to actually grow cannabis under strict regulatory conditions, so you have to provide security and have security on your site, you have to have a vault, all your personnel that touch the final product have to have high level security clearance. And then you’re allowed to actually sell online to consumers that have a medical document, so like they have to have a physician or a healthcare, like a nurse practitioner sign a document that lays out the indication and the amount of product the can use on a daily basis. And then licensed producers, once they accept this medical document, which I guess you could call a prescription although it’s not technically called that, then they can actually ship dried cannabis or cannabis oil directly to your house. And I think that’s probably the only way, actually, that it’s available for sale right now. Or through a-

TG Branfalt: So is that why you see police raiding dispensaries, because they’re technically not legal?

Darcy Bomford: Yes, because the source of the material in a lot of these dispensaries is questionable. A lot of them are being supplied by people that had a prescription or an agreement under the old program that allowed them to grow cannabis for their own personal use. Technically you’re not allowed to sell it. So there’s sort of a gray area there where we have all these old licenses under the old medicinal cannabis program in Canada, that people are growing product and then they’re technically selling it to the dispensaries and then the dispensaries are selling it to consumers. And it’s all outside of the current license producer program, which technically makes it illegal.

But, you know, we’re in this state of flux now where we have this little program, and then you have the new program, and then you have recreational legalization coming around the corner in July. So for that reason I think law enforcement is really, you know, they’re not cracking down on a lot of the dispensaries although they have shut some of them down, but they’re not being overly onerous and charging people. They’re just simply … The bad ones are out of business at this point in time, I guess.

TG Branfalt: So before we get into some of these details of the forthcoming legalization effort, is there, what’s the opinion of your current operators? How will this regime, how might it affect the current medical cannabis system?

Darcy Bomford: Well that’s a good question because federal government now has basically said that licensed producers, under this new regime, will be the suppliers of both markets. So as a licensed producer, you’ll be able to grow and sell product in the medicinal space or in the recreational space. And they’ve also applied the same level of taxation to both products. So you’ve seen in the U.S., some states had both programs running at the same time, then they would tax medicinal at a lower rate. And then of course all the rec users ended up going to the medicinal space and then the whole thing kind of didn’t work very well.

So Canada, in some respect, they’ve gone around and they learnt from America and I guess Holland and stuff. And they’ve come back to Canada with a system that they think will work better. So they are basically treating medicinal and recreational the same, from what we can tell. There’s still some rules that have to come out but that’s the way it appears it’s going to happen.

TG Branfalt: I want to get into some of the details of what has been announced, but before we do that we gotta take a 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 Darcy Bomford, CEO of True Leaf Medicine International.

So, before the break we were talking about how the pending legalization could affect the medical cannabis industry in Canada. So some of the rules have already been released, so I sort of want to start with the price point that the government has set. They’re talking about what would be $7 Canadian, $10 a gram American. How does having this potential cap on prices impact the legalization from an operations standpoint? From a business standpoint?

Darcy Bomford: Yeah, they’ve been talking about capping it, and I think that was one or two provinces were talking about that, and I hope it doesn’t happen. And some of these announcements have come out and then as they get feedback from people in each province they change them, so I hope that’s the case now because ideally the market should decide the price. They have talked specifically about the level of taxation, which some people may be confusing both as the same but it’s $1 a gram and/or 10%. So whatever is higher. So for example, if all the feds have said if it ends up being $15 a gram retail, well they’re going to take $1.50 a gram as a tax or a minimum of $1.

I don’t think they’re going to actually cap the retail price, and from the producer’s point of view it’s good, obviously, because you have to be able to produce the product and distribute it efficiently.

TG Branfalt: So at that price point … And if that were the price point in U.S. states, for example, I can tell you that it would have an impact on the black market, that’s roughly half of what the illicit market prices are, especially on the East Coast where I’ve spent most of my time. Do you think that that price point, will it help stem the illicit market in Canada?

Darcy Bomford: Yeah, I think our prices must be less than yours because $10 a gram, I think even on the black market side, is fairly high. So I don’t think it’ll hurt because, yeah. Cost to produce, we’re projecting somewhere around $2 a gram, which is high because we really have to be focused on quality control and security. So our cost to produce are higher and we don’t have a huge footprint. The black market, we’ve heard indications of somewhere around $1 a gram or less for a quality grow operation. So even at $10, there’s still good room there for margin. The retailer’ll take half and then the distribution cost to get it to the retailer. So even at $4, if we handed out $4 to the manufacturer, that’s still a 50% margin, which is pretty good.

TG Branfalt: Okay. Much like in the states there’s, you know, the federal rules, which cannabis is federally illegal, we don’t have a medical program. There’s also the state rules, which is why we have legalization in Colorado and Massachusetts and so on and so forth. So you guys also have some proposed federal rules and also provincial rules. We’ve gotten some here and there, we don’t have all 13 yet, but what are the ramifications of allowing the provinces to create their own regulations? From an operator’s standpoint, is that a good or a bad decision?

Darcy Bomford: Yeah, good question. It’s a little different in Canada. If you can imagine Trump saying to all the states, “Look, we’re going to allow recreational nationwide whether you like it or not. So it’s up to every state to decide how they want to distribute.” That’s basically what our prime minister is saying to the provinces.

So he’s saying, “Look, we’re going to allow the national sale of recreational cannabis, and by the way, that also means online sales. And/or each province has to decide on their own how they’re going to distribute and provide their own tax structure.”

So from our point of view as a producer, we’re going to be focused on building our brand online so the minute that recreational comes around, we’ll be able to sell nationwide online. So there’s no restrictions there. However, at the provincial level, you’re right, every province is unfortunately sort of customizing their regulations.

B.C. is kind of like California, you know, it’s sort of the bellwether province, a lot of trends start here. People are more relaxed, laid back, it’s the west coast lifestyle. There’s a ton of dispensaries in B.C. already, I think there’s 12 in my little town of 40,000 people.

TG Branfalt: And they allow them?

Darcy Bomford: Well, they’re still under this sort of gray area. Technically, they are illegal. But I think what’s going to happen is our province, they’re going to allow a private and public model, so the distribution of cannabis will most likely be controlled by the liquor board. And the liquor board will then sell product to either their own government run stores or to dispensaries or private model. So we’ll have probably a combination of both, a hybrid model.

Ontario, unfortunately, has chosen to just do government run cannabis dispensaries, which is crazy. I think they’re talking of only 150 for the entire province. So we’ll see what happens. It’s a brand new industry, first in the world really to do this, so there’s a bit of a learning curve, but I’m confident that Canadians will be able to figure it out.

TG Branfalt: If you were to sell online, for example, you said that you were at maybe a $2 a gram price point and you’re able to sell online, that’s going to … Right, you’re not going to have to distribute it, you’re not going to have to send it to a liquor-run distributor and then put it out there, you’ll be able to sell directly to consumers that way.

Darcy Bomford: Exactly. Exactly. And that was a key point of Prime Minister Trudeau’s strategy is, you know, he’s not going to hamper the industry even if the provinces technically don’t get their act together. We’ll be able to sell online immediately, as soon as recreational comes around. And under the current program, under the medicinal program, that’s primarily how it’s distributed, directly to the patient.

TG Branfalt: That’s really interesting. Because that’s gotta be sort of exciting because you cut out three middlemen with one swoop.

Darcy Bomford: Yeah, exactly. That’s where the most margin is. And you know what? The whole world is going online, right? Even in the pet industry. I’ve been saying this for years. The pet industry is in a pivotal moment of change right now because the consumer is going online, and they’re buying their pet products and getting them delivered directly to their house. And it’s the same with other industries, and for sure cannabis is going to be a big one because it doesn’t weigh a lot but it’s very expensive. So it’s perfect for the online model.

And the guys that are killing it in the industry right now have a good online brand, a website, and they have influencers that follow the brand and talk about it and believe in it. They have quality product. And that’s where we’re heading with True Leaf.

TG Branfalt: So I want to talk to you a bit more about the regulations and how you’ve taken this experience, an entirely different industry, and applied it to cannabis. But before we get into that, we gotta take our last break. It’s 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 Darcy Bomford, CEO of True Leaf Medicine International in Canada.

So before the break, you had mentioned the decision for some provinces to begin to use liquor boards to control the supply. And some provinces are going to allow private retailers, you mentioned British Columbia, there was another one that I can’t think of who it was off the top of my head. But the majority that I had seen was they were going to do a state-owned retailers of cannabis. What’s your opinion on these two models? I know earlier you said the free market should sort of run this thing, you know, so … Just kind of, what’s your opinion on these two models?

Darcy Bomford: Well I think the most important thing is that the supply to these two models should be a quality, standardized supplier, meaning licensed producers. Because Canada’s system, the one that we’re going through, it’s unbelievable how strict it is. The quality control is absolutely key and the most important thing is we have to test for pesticides before the product’s shipped. We have to test for CBD, for THC, mold, E. Coli, salmonella, moisture. So because of these requirements, it ensures that the absolute highest quality product goes into the market. So, that’s the first part. So, whoever’s selling the product should have to buy it from a supplier that has to go through these strict quality control measures.

The second part is, you know, liquor and marijuana probably shouldn’t be mixed, so selling both in the same store I think is a big mistake because your really sending the wrong message to people that are drinking. So if the government feels they can do a better job at retailing it, well I guess that’s their prerogative. But I still think the government should provide some overarching regulatory control on the supply and the retail of it, well I think the private model probably makes more sense. Whether that being dispensaries or, you know, what we’re focused on really is the naturopathic doctor clinics. We’re focused on marketing the product to them so they can provide it and natural alternatives to some of the harsher NSAIDs and pharmaceutical drugs that people are taking. That’s our focus.

TG Branfalt: There’s been some stuff that I’ve read, some conservative lawmakers in Canada are seeking to push back the legalization, claiming that they need more time to debate the bill. Do you think that this is something that could happen? Do conservatives have enough stroke in Canada to be able to derail this legislation?

Darcy Bomford: I don’t think so. I think they’d be crazy to do that because clearly the Canadian population is in support of legalization. And I don’t think they can actually block it at the senate level. I doubt that’s going to happen, you know they’re talking about it now but I think it would be suicide on their part.

TG Branfalt: Interesting. And then briefly I just want to back up way, way back a little bit. How did you sort of leverage your experience in the pet industry into the cannabis market? Because there’s so, I mean you don’t think … it’s just not something you sort of put together, right? So how’d you leverage that experience, man?

Darcy Bomford: Well I’m an entrepreneur, and what I’ve learnt with my career, well first of all you never give up. That’s what it’s all about. And second of all, you have to get the right people on the bus. And I may not be a cannabis expert, but if I can find people that believe in the vision and can share it, that’s totally key to creating something that has value.

And our values are unique in the fact that what we brought to the company, it sort of relates to pets, too. Our tagline for the company is ‘return the love.’ So on the pet side it’s all about returning the love that you get from your pet. And I don’t know if you have a dog or not but, I mean, that is the best thing about having a dog is the unconditional love that you get from them every second. And that’s our tagline for the pet side of the business and you know what? On the medicinal side it’s the same thing. It’s returning the love to yourself for quality of life. We need to treat ourselves better; natural products instead of pharmaceuticals. Treat mankind better. So it’s an overarching, bigger message that we’re really trying to get across. It’s a long term vision about unconditional love and returning the favor, the golden rule, right?

So we’re pretty excited about what we’re doing and I’m confident that we can bring some, or we are actually bringing in some unbelievable talent to our company. We’re creating a brand that really is going to resonate with our target market, so we’re pretty excited.

TG Branfalt: That’s a really cool mission, man. I admire your passion for helping others. But you know what they say about Canadians, right? That you’re all super nice and …

Darcy Bomford: I didn’t say “eh” during our interview.

TG Branfalt: I was hoping. I’ve been waiting here the whole time just …

Darcy Bomford: I’ve been training myself for years.

TG Branfalt: So before we go, man, what advice would you have for entrepreneurs? Maybe those not even just looking to enter the cannabis space but, you know, just entrepreneurs in general.

Darcy Bomford: Yeah, you know what, never give up and really believe in your passion. And probably more importantly is you gotta ask yourself why you’re doing it. Why are people buying your products? They’re not buying what it is, they’re buying your products because they want to believe in your passion, they want to share your passion and what you’re doing. And unless you can really communicate that with everything you do, your product’s probably not going to work, it’s not going to resonate. If it’s all about money or selling the cheapest or doing something one better than the competition, you’re just another ‘me too’ company. But if you can really create a reason why people should buy your products, you know what, I buy this, I buy Apple because it’s cool. I buy this because, man, the person behind it, that person’s a cool person. I believe in his values and what he stands for. It’s not about money it’s more about passion and belief and you gotta believe in yourself. Never give up. That’s the biggest.

TG Branfalt: And then, where can people find out more about you, man? Where can people learn more about your passion?

Darcy Bomford: Trueleaf.com. Yeah, it’s all there. True Leaf Pets are different division but you can find it all there.

Another thing we’re doing right now that’s really cool is we’re the first company from Canada to do crowdfunding, equity crowdfunding in the U.S. We’ve been working on this for 11 months and we’re now able to sell equity in our company to the same people that are buying our pet products. You can buy as little as $350 Canadian, eh, worth of equity in our company. And we talked about online, right? The capital markets are going online too, and this is the beginning of it, this regulation A plus crowdfunding allows anybody to click on a website and buy equity. You don’t have to go through a broker, you don’t have to talk to anybody else, you just have to believe in the brand. And you can own a piece of a company.

So, pretty cool. We’re just doing that now, we’re hoping to close next week on ten million bucks. That’s our goal and that’s going to allow us to continue our vision on both the cannabis for people and pets.

TG Branfalt: Awesome, man. Congratulations. We’ll definitely have to check back with you in a week and see how that panned out.

Darcy Bomford: For sure. Yeah, we’re going to hopefully close it soon. We might be halfway there before Christmas and we’ll finish it off in January, but the response to our whole crowdfunding thing has been unbelievable and we’re just so blown away by it. And it really shows that people love pets and they believe in cannabis. It’s here to stay, that’s the big message for everybody. All the big regulators out there, it’s here to stay. People believe in it, it’s not going away. So it’s pretty exciting times we’re in right now.

TG Branfalt: If you’re in Canada and the U.S., we’re all about to get shut down by Jeff Sessions, every single one.

Darcy Bomford: You know what Tim, it’s going to work out. I have confidence. They’ll see the value there eventually.

TG Branfalt: Oh, you friendly Canadians. So, dude, I want to thank you for taking the time coming on the show. Super cool guy, I’m going to probably check out this equity website as soon as we hang up here. But definitely, keep me in the loop on what you guys are doing, it’s really cool. And thanks again for being on the show.

Darcy Bomford: Absolutely, my pleasure, Tim. Thank you very much. Take care.

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 Trim Media House. I’ve been your host TG Branfalt.

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A personal cannabis grow inside of a closeted grow tent.

NBC News/WSJ Poll: 60% of Americans Support Cannabis Legalization

1/25/2018

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An NBC News/Wall Street Journal poll found that 60 percent of Americans support broad cannabis legalization, with people 18-34-years-old and Democrats leading the way with 73 percent of each demographic supporting the reforms.

Sixty-seven percent of respondents aged 35-49 supported legalization, along with 64 percent of Independents, and 54 percent of those aged 50-64. Support dropped off among Republicans, 43 percent, and seniors – 38 percent. Support among individuals who voted for President Donald Trump was just 37 percent.

While the majority of both male and female respondents supported legalizing cannabis, support was greater among men, 64 percent, than women, 57 percent.

Interestingly, respondents ranked cannabis lowest risk among tobacco, alcohol, and sugar. Just 9 percent indicated that cannabis was the most harmful of the four substances, followed by sugar (21 percent), alcohol (24 percent), and tobacco (41 percent).

The survey found 31 percent of respondents would “actively support” a legalization law, and 29 percent would “favor but not actively support it.” One-fourth indicated that would oppose the law “but not actively try to have it overturned,” while 14 percent said they would actively seek to overturn it.

A nationwide Gallup poll from October found a record 64 percent supported legalization with 51 percent Republican support.

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California Growers Association Sues California Over Large-Scale Cannabis Cultivation Concerns

1/25/2018

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The California Growers Association is suing the state, contending that the Department of Food and Agriculture defied the will of the voters by permitting large-scale commercial cannabis farms, the Sacramento Bee reports.

According to the report, the suit states that Prop. 64 was intended to “ensure the non-medical marijuana industry in California will be built around small and medium-sized businesses by prohibiting large-scale cultivation licenses for the first five years.” Association President Hezekiah Allen said such size caps will help prevent the industry from becoming “Big Tobacco 2.0.”

“Approving large cultivation operations in 2018 will significantly reduce the ability of small and medium businesses to compete economically in the regulated market. As a result, more small and medium cultivators will choose not to enter the regulated market and will instead stay in the illegal market.” – California Growers Association lawsuit

The original initiative text called for all grows to be less than 1 acre until 2023. The Food and Agriculture’s emergency rules, released in November, allow for a single business to apply for an unlimited number of small cultivation licenses. The suit argues that the rules represent a loophole that effectively allows large-scale cultivation.

The final rules are expected later this year.

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Massachusetts U.S. Attorney Won’t Rule Out Federal Charges Against Canna-Businesses

1/25/2018

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Massachusetts U.S. Attorney Andrew Lelling, who was appointed by President Donald Trump and assumed office in December, told reporters yesterday that while opioid crimes are his top drug enforcement priority, he could not rule out bringing cases against canna-business operators and employees, the State House News Service reports. The comments come less than a month after Lelling released a memo saying he could not “provide assurances that certain categories of participants in the state-level marijuana trade will be immune from federal prosecution.”

Moreover, Lelling said that while members of the state’s Cannabis Control Commission have sought to meet with the prosecutor, the Justice Department “won’t allow” him to meet with the agency responsible for drafting the rules for the voter-approved adult-use cannabis industry.

“This office will pursue federal marijuana crimes as part of its overall approach to reducing violent crime, stemming the tide of the drug crisis, and dismantling criminal gangs, and in particular the threat posed by bulk trafficking of marijuana, which has had a devastating impact on local communities.” – Lelling, during a press conference

Lelling, however, noted that he doesn’t believe Attorney General Jeff Sessions wants to micromanage state prosecutors, but that his office should pursue “ambitious cases.”

Earlier this month, 19 attorney generals from 17 states, Washington, D.C., and Guam – including Massachusetts’ Maura Healey – sent a letter to members of Congress urging them to advance legislation that would allow cannabis operators to access financial services.

Adult-use sales in Massachusetts are expected to begin in July.

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Canadian MMJ Producers Aurora and CanniMed Come to Terms in $1.1B Deal

1/25/2018

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In the most valuable cannabis industry deal to date, Canadian medical cannabis producers Aurora Cannabis Inc and CanniMed Therapeutics have entered into a support agreement that will create the most valuable cannabis company in the world. The deal, which comes months after Aurora set in motion a hostile takeover bid of CanniMed and led to the target adopting a shareholder rights plan – or poison pill – to thwart the sale, is worth C$1.1 billion ($852 million).

Under the deal, CanniMed shareholders may receive 3.40 Aurora shares or a combination of cash and shares. The share offers, at $43.00, represent a 181 percent premium over the closing price of CanniMed shares on Nov. 14, 2017.

“We are very pleased to have come to terms with CanniMed on this powerful strategic combination that will establish a best-in-class cannabis company with operations across Canada and around the world. Market recognition of Aurora`s continued performance and strategy execution since we first announced our intention to acquire CanniMed allows us to share that benefit directly with CanniMed shareholders by increasing the offer price, as well as by offering a cash component.” – Terry Booth, Aurora CEO, in a press release

The deal will force CanniMed to terminate its agreement to purchase Newstrike Resources, which will result in a $9.5 million break fee paid to Newstrike.

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Two plastic baggies of cannabis sit on a wooden surface.

Michigan Treasury: Patients Must Pay 6% Tax on Products Bought from Caregivers

1/24/2018

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