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A drug rehabilitation facility in Scottsdale, Arizona is using cannabis to treat people addicted to opioid-based painkillers, ABC15 reports. Physicians at Blue Door Therapeutics are recommending cannabis pills and patches to help with nausea from opioid withdrawal and help stabilize the patient’s underlying condition.

Doctors at Blue Door, however, are not encouraging their patients to use smoking as a delivery method because it’s harder for the physicians to monitor dosage.

“They have to meet the state’s criteria for participation in the program, and that it will be used responsibly and in a way that’s not habit forming,” Dr. Ravi Chandiramani, Blue Door’s medical director, said in the report.

The idea to treat opioid addiction with cannabis came after one of the center’s founders spent time at a medical dispensary where many of her patients credited cannabis for eliminating their need for painkillers.

One of Blue Door’s patients, a 63-year-old woman unnamed in the report, said she used oxycodone for six years during a series of knee surgeries, and with the help of cannabis capsules she was able to wean off the prescription drugs in six weeks.

“Every time I tried to come down on the pain pills, I needed another surgery, so I was hooked,” she said. “Blue Door and the medical marijuana is what saved my life.”

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A cigarette butt and several unsmoked cigarettes next to an ashtray.

Tobacco Lobby Pushing for Onerous Rec. Cannabis Role in Massachusetts

6/07/2017

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Cigarette wholesalers in Massachusetts are seeking to gain a foothold in the state’s nascent recreational cannabis industry, asking state regulators to require cannabis producers to sell all their products through them, according to a Boston Globe report. The wholesale companies argue that they already have the technology and know-how to safeguard products, making diversion more difficult.

Paul Caron, director of the Northeast Association of Wholesale Distributors, a tobacco trade group, said association members are “willing to collect all the taxes on behalf of the state and stamp any marijuana product being distributed for sale.”

“Rather than reinvent the wheel, let’s use the most successful, proven encrypted tax stamp program we have: the one assigned to cigarettes,” he said in the report.

Jim Borghesani, communications director for the Yes on 4 campaign, which led efforts to legalize cannabis for adult use in the state, said the “last thing” Massachusetts needs is “another three-tiered commerce system that gouges consumers and enriches middlemen.” He pointed to cannabis-specific systems utilized in other state programs as evidence that a three-tiered system is unnecessary.

If the tobacco companies get their way, Massachusetts’ cannabis industry would look similar to the state’s alcohol industry – wherein alcohol must pass through a wholesaler before making it to bars and package stores where it’s sold.

Will Luzier, another Yes on 4 official, said if the tobacco lobby gets their way, “dispensaries would have to sell the product they grew as a cultivator to these distributors, and then buy it back from them as a retailer on the other end.”

“I don’t see any sound public policy reason why it’s important to do that, other than to benefit the tobacco industry,” he said.

Caron, a former state legislator, has made the pitch to his former colleagues and Treasurer Deborah Goldberg, who will oversee the Cannabis Control Commission. Caron has also lobbied to be appointed as one of the three members of the commission.

A state Treasury official, who was unnamed in the report, indicated regulators are skeptical of Caron’s proposal because the system that handles tobacco products, SICPA, would likely not be a great tool for cannabis products – which aren’t as uniform as packs of cigarettes and subject to daily price fluctuation.

Recreational sales are expected to begin in Massachusetts the summer of 2018.

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A collection of young medical cannabis plants under a ceiling of purple LED lights.

Colorado Gov. Signs Bill Allowing MMJ Use for PTSD

6/07/2017

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Colorado Gov. John Hickenlooper has signed a bill granting individuals with post-traumatic stress disorder access to medical cannabis under the state program, according to a report from the ABC7. Colorado is the 21st state, along with Washington, D.C. and two U.S. territories, to allow medical cannabis treatments for PTSD.

The state Board of Health had previously denied adding PTSD to the medical cannabis qualifying condition list four times. The condition is the 10th to be added to the regime.

The Colorado Department of Public Health has been researching medical cannabis treatments for PTSD; one such study by the Multidisciplinary Association for Psychedelic Studies is being funded with a $2.156 million grant from the Public Health Department. That randomized, triple-blind, placebo-controlled study involves 76 U.S. military veterans. The MAPS study has been approved by the Drug Enforcement Agency and the Food and Drug Administration. In all, the state has earmarked $3.3 million for various medical cannabis studies.

In their final protocol study, MAPS estimates that 18 percent of Operation Iraqi Freedom veterans suffer from PTSD and another 75,000 to 225,000 service members will return from duty with symptoms.

In September, the American Legion’s Committee on Veterans Affairs & Rehabilitation called on the DEA to “license privately-funded medical marijuana operations” and reschedule the drug in order to increase access for veterans who are denied medical cannabis program access by federal Veterans Administration hospitals. In the resolution, the committee indicated they believe that medical cannabis is a viable therapy for treating PTSD and traumatic brain injury.

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Hawaii MMJ Operators Waiting for Regulators to Certify Testing Labs

6/07/2017

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Medical cannabis business owners in Hawaii are still waiting for regulators to certify laboratories to test their products, as the program infrastructure is in place but after more than a year sales have yet to occur, the Associated Press reports.

Helen Cho, director of integrated strategy for Aloha Green Holdings, said her dispensary in Oahu has cannabis stored and ready for sale. Maui Grown Therapies and Pono Life Sciences Maui LLC also have product ready for sale. Manoa Botanicals, another Oahu dispensary, indicated they are still cultivating plants which aren’t quite ready for harvest.

Cho said that Hawaii’s cannabis industry operators are becoming frustrated with regulators as companies are “continuing to spend money, but there’s no cash flow.”

“Every day we’re still operating a business, and on top of the overhead, cost of salaries, rent and utilities, every licensee is under some sort of construction,” she said in the report, adding that she is paying 30 employees. “We’re ready to go.”

Health Department officials are still expecting the state’s first dispensaries to be open sometime this summer but they want to be sure the cannabis supplied to patients is safe before they give a green light to the industry.

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Medical cannabis plants inside of a California home grow operation.

New Hampshire Gov. Likely to Sign Cannabis Decriminalization Bill

6/06/2017

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

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

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

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

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

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Ezra Soiferman: The World’s First Cannabis Artist-in-Residence

6/06/2017

by Ganjapreneur

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Ezra Soiferman is a Montreal-based professional photographer, documentary filmmaker, and has been the official artist-in-residence for Tweed — one of the largest cannabis brands on the planet — for almost one year. Ganjapreneur has also just learned that Ezra and Tweed are now talking about extending the residency past its originally planned early-July end date and discussing other projects for him within the company.

In the following interview, Ezra shares stories from his nearly completed first year of residency with Tweed. Whether wandering through the cannabis canopy in the former Hershey’s factory that Tweed purchased last year in Smiths Falls, Ontario, taking backstage photos at world-class concert events, or just hitting the street at sunrise to see what magical moments he might find that day — Ezra unveils some of these experiences below.

He has also included some photos from his residency for our perusal, which we hope you enjoy!

Ganjapreneur: Could you tell us the story of how you came to be the world’s first cannabis artist-in-residence?

Ezra Soiferman: Happy to! But first, a thank you for being interested in all this. It’s been such an adventure since the residency kicked off last July and each time I’m asked about it I pinch myself to make sure it’s really happening.

The very short answer to your question is that basically I just dreamed up the idea of a cannabis artist-in-residence, pitched it to Tweed, and they loved it and we kicked it into gear.

But there’s a whole backstory with me being both an artist – specifically a documentary filmmaker and street photographer – and at the same time a guy who’s been fascinated by all things cannabis for quite a while, and I guess it just made sense to Tweed to have someone like me around doing cool stuff.

My passion for cannabis began in 1993 when I co-directed Pressure Drop with Marc Ostrick as our NYU thesis film. That 18-minute short, about an elderly grandfather who tries cannabis for his glaucoma, opened my eyes to medical cannabis and set in motion a near 25-year fascination with the sheer versatility and seemingly infinite benefits of marijuana and hemp. The film played at over 20 film festivals and to our knowledge was one of the very first (if not the first) film about marijuana as medicine.

Over the years, I created or was involved with a whole bunch of cannabis-related film, photo, product or community projects. Also, on a daily basis I eat hemp, wear hemp, share hemp, and use it in some functional form or another. It never gets old, I’m always learning something new about it. People I meet are generally pretty interested in learning more and I’m always happy to talk further about it if they inquire.

One night in late 2015, a few nights before the release of my CBC Documentary Channel edibles film Grass Fed (which can now be seen on iTunes), I had an epiphany that a cannabis company needed to take on an artist-in-residence. It just popped into my head that this would be a novel thing for a company to try and that it would yield colourful and unexpected results.

The very first company I thought of was Tweed, Canada’s largest – and I think coolest – licensed producer. They have a fun, trendsetting and down-to-earth image and I’d followed their development from way back in 2013 when they were one of the first legal Canadian medical cannabis producers. I’d also had some exposure to the company when I filmed a pivotal scene from Grass Fed there with comedian and sciatica patient Mike Paterson, who visited Tweed to learn how his medicine was grown.

It was kind of a, “Well, someone’s going to get the honour of being first at something as wild as this and it might as well be me and the company in the cannabis space I dig the most” moment when I conjured up the residency. But I slept on the idea and the next day ran it by a trusted old friend who is almost never wrong in his predictions (aside from whether Trump would be elected) and he thought the idea was “genius” and that I was the perfect person for a position like this. I was, of course, very flattered but not convinced Tweed would ever go for an out-of-left-field unsolicited idea like this.

I screwed up the courage and the next morning couriered my pitch and some samples of my films and photos directly to the desk of Mark Zekulin, President of Tweed. A week later, I followed up by email and he told me he totally loved the idea and was running it up the flagpole internally. From there, things clicked into place and within a few months, I was up and running as Tweed’s first Artist-in-Residence. I’m still kind of in shock, but coping pretty well with it!

What has your day-to-day looked like with Tweed?

Basically, it’s much like any day in my career: lots of developing ideas on paper, connecting with fellow artists, editing photos and writing and answering emails from my desk at home in Montreal. But where things get a little, or a lot, more exciting, is that I now have a budget for travel to get out there and explore the world with my camera. Tweed’s support for travel and equipment too has allowed me to take the time to wander far and wide, gathering the images that have defined this residency. Some of my favourites of these shots can now be seen in my new video Ez in Res’.

I also make regular trips to shoot the gorgeous plants out at Tweed’s headquarters in the sprawling old Hershey’s chocolate factory in Smiths Falls, Ontario, which is a two-and-a-half hour drive from my place in Montreal, and at the Tweed Farms greenhouses in Niagara-on-the-Lake, Ontario.

Folks often ask if I have to live in the Tweed factory as an artist-in-residence, wondering if the words ‘in-residence’ are literal. Unfortunately, I don’t get to live amongst all those plants, but I do sing to them whenever I’m out there photographing them.

And I should note that I don’t just shoot cannabis-related images for this residency. I was firm in my original pitch to Tweed that the residency would also have me continuing to shoot my usual eclectic array of subjects. So, on any given day I’m still very much out there on the streets photographing people, cars, trees, flowers, murals, fire hydrants, alpacas in alpaca hats, and whatever candid, colourful or kooky subjects I cross paths with. That’s what I do best and love to do most. Hit the pavement and explore.

Ultimately, life is my true residency and the streets are my workshop. Tweed recognized and appreciated this and gave me carte-blanche to photograph and present whatever images I want to during the residency. Sure, they seem to like my “Macrojuana” cannabis close-up series best, but they’ve been really into my other stuff too. I’m incredibly grateful for this.

What’s been your most enjoyable experience so far?

There have been so many. During the residency, I’ve had the ability to travel to places like Nashville, New York, L.A., Boston, Phoenix, Vermont and Kingston, Jamaica, amongst others. One of the most memorable experiences I had so far was getting to meet and hang out backstage with Snoop Dogg, whose Leafs by Snoop line is sold to the Canadian market by Tweed. That one particular night was a birthday party for Snoop at a club in Toronto and he was there greeting fans and Tweed patients and I had the opportunity to photograph him there as well as at a show of his at a big amphitheatre downtown. The guy is larger-than-life but incredibly down to earth. I was really happy with how those shots came out and a few can be seen in my Ez in Res’ video too.

Were you nervous at all about pushback from society and have you ever encountered the “canna-bias” that often plagues the cannabis industry?

To be honest, I was a bit nervous about how this project would be perceived, but so far there’s been next to no pushback that I’ve heard of. What I mostly keep hearing from people I tell about the residency is that I have a ‘dream job’. This is very flattering. I take it to mean they don’t just see the job inherently as being a great one, or that they themselves would love to be doing it, but that it’s also a good fit for me. Ultimately, this is a validation of my original idea for the residency and a great compliment to me and the work I’m doing throughout the residency.

One of my prime motivations for the residency was to help further normalize the conversation about cannabis. When people tell me I have a dream job (which I can’t argue with at all) it goes a long way towards showing me that there is a place for cannabis in the world and that the arts, in turn, can have a place within the cannabis industry. This ‘three-way-street’ is what it’s all about for me: bringing the arts to cannabis and cannabis to the arts in these heady days of what I like to call the “Cannabis Big Bang.” There’s so much happening now throughout the marijuana and hemp constellation and my little artsy corner of that universe is a pretty cool place to be right now. I’ll keep beaming photos back from out here for as long as my batteries last!

What was the most challenging moment of your residency so far?

When I was photographing down in Kingston, Jamaica, in January, I had the incredible good fortune to find myself at a garden party at Bob Marley’s kids’ house. (I know, right?) They were lovely people and very welcoming. It was surreal. When the time came for the Marleys and all at the party to head over to a big outdoor Marley Brothers concert across town in Trench Town, we all hopped into cars and vans and drove – in a speeding caravan – across town. Our driver, Blaine Dowdle, was a total pro, but had trouble actually keeping up with the Marley van, which must have been powered by some type of supercharged hemp jet fuel.

Aside from an insanely windy cliff-side bus ride I took in Peru ten years ago, where I literally made peace with the fact that my life was about to end, this crosstown Kingston dash had to be the most hair-raising drive of my life. Not losing my mind or my lunch along that ride was by far the most challenging moment of my residency so far.

What’s your hope of what might come of this residency?

I really hope that my doing this sets an example for other artists to pitch themselves to other companies, cannabis-related or not, and try to entice those companies to take on artists-in-residence of their own. Tweed really understood my message that the world, now more than ever, needs more colour and that artists are the perfect vehicle to bring this about. Their support of my work and my career is incredibly heartwarming. I’m so fortunate to have their backing. I just hope there will be opportunities for other artists to be encouraged by other companies in similar ways. Corporations can sometimes feel faceless and soulless, and projects like this one, I humbly believe, can help bring a human touch to the big picture and the bottom line. I may have been the first artist-in-residence at a cannabis company but I definitely hope I’m not the last.

Any final thoughts?

Yes… Toke it easy!

Thanks again, Ezra, for sharing your great stories and photos and for giving us a look into the life of the world’s first cannabis artist-in-residence!

To learn more about Ezra Soiferman and his work, visit www.EzraSoiferman.com. Also, for a fun and faithful representation of Ezra’s first year in residency at Tweed, check out the Ez in Res’ video on YouTube.

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A dispensary employee in Washington D.C. holds a small pile of medical-grade cannabis.

Wisconsin Veterans Group Passes MMJ Resolution

6/06/2017

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Disabled American Veterans Wisconsin passed a resolution supporting medical cannabis access for Wisconsin veterans with service-connected disabilities, according to the Cannabadger’s Gary Storck. The resolution was drafted and presented by members of Wisconsin Veterans for Compassionate Care.

Steven Acheson, one of the resolution’s authors, said the adoption was needed because “veterans are prescribed opiates at nearly twice the rate of the general population, and overdose at 50 percent higher rates,” adding that if Gov. Scott Walker is serious about curbing the state’s opiate crisis “medical marijuana needs to be part of that effort.”

“We now know in states that have medical marijuana programs, opiate abuse and overdose deaths decrease dramatically,” Acheson said in the report. “A medical marijuana program in Wisconsin will have the largest relative net positive impact on the veteran community.”

In April, Walker, a Republican, signed legislation that allows for the use of low-THC CBD oil for any medical condition so long as the patient is certified by a doctor. Bills introduced in both the House and Senate to implement a more comprehensive medical cannabis regime were referred to the respective health committees in February.

The DAV Wisconsin resolution now heads to the National DAV Convention later this year.

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A pile of pharmaceutical pills spilled onto several $20 bills.

Insys Whistleblower Instructed to Lie to Boost Opioid Prescriptions

6/06/2017

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In an interview with NBC News, a former Insys Therapeutics sales rep turned whistleblower alleges that she was instructed to get the opioid-based drug Subsys to patients who should not have had access to it.

Insys donated $500,000 to Arizonans for Responsible Drug Policy – an anti-cannabis legalization group – during last November’s General Election. Arizona’s bid to legalize cannabis for recreational use was the only statewide cannabis-related referendum defeated by voters during the election. In March, the Drug Enforcement Administration approved the company’s cannabis-based drug Syndros for Schedule II status under the Controlled Substances Act.

Subsys is an oral spray that contains fentanyl, which runs anywhere from $3,000 to $30,000 for a 30-day supply.

Patty Nixon, the former employee who was fired after she stopped showing up to work due to guilt over the lying, said her responsibilities included contacting insurance companies on behalf of doctors and patients in order to get Subsys approved and paid for by the companies.

Nixon claims that her supervisor told her ways to trick insurers into believing the approval was “medically necessary” and she would make up oncology records that didn’t exist and provide insurance companies with specific diagnosis codes, whether the patient had the condition or not.

“What I did, I was instructed to do, I was trained to do,” Nixon said in the interview. “If I didn’t do it, I was going to be in trouble.”

Insys markets the drug – which is 100 times more powerful than morphine – as a breakthrough drug for cancer pain. The Food and Drug Administration approved the drug only for cancer patients whose suffering can’t be relieved by other pharmaceutical narcotics. In the last five years, almost $1 billion worth of Subsys has been sold.

In a statement, Insys said that there were “approximately 54,000 total” prescriptions of Subsys in 2015 and 34,000 in 2016, comprising less than .04 percent of all opioids in those respective years. In 2016, the company sold $240 million worth of Subsys.

“Accordingly, Insys does not believe it (or its fentanyl product Subsys) has contributed to the national, opioid epidemic in any material way,” the statement says, adding that the company “has a comprehensive compliance program in place with protocols and monitoring” to ensure compliance with regulations.

Former Insys CEO Michael Babich was indicted by a grand jury in December for racketeering, conspiracy, and fraud. Five other former company executives have also been indicted for racketeering. All have pleaded not guilty.

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Young cannabis leaves under a grow op's LED growlights.

Nevada Lawmakers Finalize Cannabis Taxes, MMJ Reforms

6/06/2017

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Lawmakers in Nevada are finalizing the rules under which the state’s recreational cannabis market will operate, passing a 10 percent sales tax on sales, and a 15 percent tax on both medical and recreational cannabis at cultivation, the Reno Gazette-Journal reports. Legislators removed restrictions for medical cannabis applicants in the state, eliminating the requirement for background checks and cutting the medical card fee in half – from $100 to $50 – while allowing the cards to remain valid for two years instead of one.

Medical cannabis taxes will remain intact at 2 percent at production and the point of sale.

Gov. Brian Sandoval estimates that recreational cannabis taxes will bring in more than $60 million in state revenue over the next two years.

Sen. Julia Ratti sponsored the legislation to keep the medical cannabis taxes the same and reform the medical card rules. The measure also includes language to cap the licenses fees allowed to be imposed on the cannabis industry by municipalities at no more than 3 percent of the establishment’s gross revenue. Local governments statewide will also receive $5 million for their resource expenditure.

“What’s important is that you’re creating that delta between medical and recreational costs – it’s keeping the cost down for medical,” she said in the report.

However, despite the progress made on the taxation side, bills allowing public consumption, adding opioid addiction to the medical cannabis qualifying condition list, and allowing registered medical cannabis patients to buy firearms died in the legislature.

Additionally, lawmakers approved a measure allowing blood tests to determine whether drivers are under the influence of cannabis, using a 5 nanogram threshold, and labeling requirements. Recreational cannabis licensing under Early Start provisions approved by the state Tax Commission are set to begin July 1.

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A street view in New York City, looking up between skyscrapers at clear blue sky.

New York PAC Forms to Push Legalization Convention

6/06/2017

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A political action committee has been formed in New York hoping to convince voters to convene a constitutional convention, which the group calls the “only viable and reasonable alternative,” to the state legislature for legalizing adult cannabis use, according to a NY Daily News report.

Jerome Dewald, a 66-year-old venture capitalist who is leading the efforts of Restrict and Regulate in NY State 2019, said that legislation to legalize recreational cannabis use in the state has been stalled by state lawmakers for several years.

In January, the “Marihuana Regulation and Taxation Act” was introduced in both chambers of the state legislature. The Senate version was referred to the Finance Committee, while the House version was referred to the Codes Committee. Neither measure has moved out of the respective committee.

“We simply don’t believe that (legislators) will achieve any objectively reasonable result in less than five years,” Dewald said in the report, adding that the group plans on sending representatives to festivals and other events, with a more traditional ad campaign launching in the fall.

State Sen. Liz Krueger, who sponsored the legalization measure in the Senate, said she has “no idea what kind of momentum” the campaign will have.

Under New York law, the question of whether to hold a constitutional convention must be put to voters every 20 years. If approved by voters, an election would be held next year to elect delegates for a 2019 convention.

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A cannabis worker holds in their hand a thin slab of concentrate.

DEA Seeks to Have Lawsuit Against ‘Marijuana Extract’ Rule Tossed

6/05/2017

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The DEA is moving to have a lawsuit dismissed that challenges their December rule change which applies a Controlled Substances Number for “marijuana extract,” according to a report from the Cannabist. The lawsuit contends that the change moves hemp-derived products into the definition, running afoul of the 2014 federal Farm Bill.

The lawsuit was filed on behalf of the Hemp Industries Association, Centuria Natural Foods, and R.M.H. Holdings Inc., by the Hoban Law Group. Patrick Goggin, an attorney for the petitioners, contends that the rulemaking process “is at the very least troubling and additionally there were intervening factors” between the time when the rule was proposed in 2011 and when it was finalized in 2015. Goggin also objected to the DEA claim that the new code applies “only to extracts derived from a plant of the genus Cannabis.”

“It’s a simple fix: Replace genus Cannabis plants with ‘marijuana plants,’” Goggin said in the report. “If you mean what you say, say what you mean. It goes back to the question: Why are you referring to it as genus Cannabis and the [Controlled Substances Act], which defines marijuana and not the genus Cannabis?”

Following the rule change, DEA Spokesman Russ Baer said the change actually makes researching CBD – which is often derived from hemp – easier and the rule gives “priority…to those researchers who are conducting research with marijuana extracts” which the code allows the agency to “track and prioritize.”

“The code helps … distinguish scientific research between marijuana on one hand and marijuana extracts on the other,” he said, although he declined to comment on the lawsuit.

According to the report, the DEA claims the petitioners cannot challenge the rule because they didn’t participate in the rulemaking process; the rule doesn’t impose new penalties or restrict business activities; and the argument that the rule conflicts with the Farm Bill is invalid.

Goggin said the DEA brief hinges on procedural arguments and the agency has “repeatedly misarticulated the intention of Congress in enacting the Farm Bill’s industrial hemp amendment.” He said a counter-response to the DEA motion would be filed in the next few weeks.

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Washington Moving to New Seed to Sale Traceability Software

6/05/2017

by Lukas Barfield

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Washington state’s legal cannabis market has seen many changes since its 2014 launch — however, what has been consistent is a legal obligation for companies to track cannabis from seed to sale. Now, Washington is set to upgrade its seed to sale tracking software to a familiar name that will accommodate the state’s growing cannabis market needs.

Although the contract has not officially been awarded, the WSLCB announced on May 31 they would be awarding the bid to Franwell. Their software, Marijuana Enforcement Tracking Compliance (METRC), is also used in Colorado, Oregon, and Alaska. Franwell was one of seven vendors who submitted bids and was chosen as one of three finalists who presented day-long pitches in late May to members of the Washington State Liquor and Cannabis Board (WSLCB). Additionally, some industry leaders were consulted during the proposal development phase.

According to WSLCB spokesperson Mikhail Carpenter, the cost and duration of the contract won’t be known until the contract is executed — but the initial cost is projected to be $2.4 million, with 40% of that already in the current fiscal budget and allocated for planning and procurement. Going forward, the agency will seek to partner with licensees to fund the new system by charging a one-time fee of $480 on licenses issued between July 2017 and June 2018. Starting in July 2018, licensees will see a 30% license fee increase from $1000 to $1300 to pay for system maintenance and upgrades.

The WSLCB hopes to have METRC in place by October 31, 2017. The new system will protect medical cannabis patient information by only recording price, quantity, recognition card number, and whether the item was medical cannabis compliant — METRC will not be connected to the Marijuana Authorization Database, a state-held record of patients who are authorized to use and potentially grow cannabis for medical reasons.

“Over the last four years we have learned a lot about this industry, including aspects of the industry that were unknown when the current traceability system was implemented. The number of changes we would like to make to the existing system is beyond the scope of our existing contract,” said WSLCB Director Rick Garza. “We need a system that will grow and flex with Washington’s maturing marijuana system.”

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Wild Goose Island in Montana's Glacier National Park.

Montana Set to Collect MMJ Sales Taxes

6/05/2017

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Beginning next month, medical cannabis sales in Montana will carry a 4 percent sales tax which could force officials at the Revenue Department to make changes to their infrastructure to accept large cash payments, according to a Billings Gazette report. Due to federal drug laws, most financial institutions won’t do business with cannabis companies, forcing them to rely primarily on cash to do business.

“We may have to do some changes to our physical buildings to be able to accept cash and maybe have some cash counters and that kind of thing,” said Department of Revenue Deputy Director Gene Walborn in the report, adding that the agency needs to change their computer system to be able to accept the payments.

Businesses, too, will have to adapt to the new policy as medical cannabis sales in the state were not previously subject to sales taxes. The legislature passed the new tax in April, which is designated to state regulators for setting up a seed-to-sale tracking and lab testing system and conducting site and shop inspections – none of which was required under the state’s previous regime but lawmakers added the program safeguards after voters moved to effectively re-legalize medical cannabis use after the legislature decimated the original 2004 program.

The 4 percent tax is expected to bring in $750,000. It will drop to 2 percent on July 1, 2018.

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The New York City skyline viewed from atop a Manhattan skyscraper.

New York Economic Development Fund Invests in MMJ Research

6/05/2017

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The Buffalo Institute for Genomics and Data Analytics (BIG), a University of Buffalo program, has partnered with MMJ International Holdings to research medical cannabis as part of the state’s Buffalo Billion investment program.

The partnership will see an $800,000 investment from the state for the program, which will conduct studies on the science of medical cannabis through patient clinical research and the operation of medical cannabis healthcare businesses.

Tom Ryan, MMJ International chief operating officer, said the partnership will “create jobs, generate economic opportunity, and strengthen the region’s role as a leader in the future development of cannabis medicine.”

“MMJ International Holdings is working to attract the talent necessary for its medical cannabis research businesses to continue to bolster the economic growth in upstate and Western New York,” he said in a press release. “This partnership is a great economic stimulant for Buffalo and MMJ International Holdings. This team will place Western New York in the forefront of medical cannabis research internationally.”

Circuit Clinical, another University of Buffalo company, will assist MMJ International with bringing new patients and physicians into medical cannabis clinical trials.

“Our goal is to develop scientifically validated cannabis medicines and to facilitate their transition from the laboratory to the market at lower costs,” MMJ International Chairman Timothy Moynahan said. “While the partnership is a business enterprise there is no doubt it has altruistic dimensions; to provide safe and efficacious cannabis medicines, that alleviate pain, replace opioids, and diminish or eliminate disease.”

The partnership could lead to the creation of more than 100 jobs over the next five years.

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The Maryland Capitol Building in Annapolis, Maryland.

Maryland High Court Temporarily Halts Decision to Prevent MMJ Licensing

6/05/2017

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Maryland’s Court of Appeals has blocked a Baltimore judge from holding a hearing which could have put the entire medical cannabis industry rollout in the state on hold, the Baltimore Sun reports. The lawsuit stems from the licensing process, which minority-led medical cannabis businesses contend didn’t follow the racial diversity provisions included in the law.

Last week, Circuit Judge Barry Williams issued a temporary restraining order to prevent the Maryland Medical Cannabis Commission from issuing any more cannabis cultivation licenses. Following the decision, attorneys for 13 of the 15 companies given preliminary approval stepped in to ask the Court of Appeal to stop the hearing so they could participate in the process. So far just one final license has been issued.

“Our clients played by the rules and have spent hundreds of millions of dollars,” said Alan Rifkin, a lawyer for the companies, in the report. “They have a right to be heard.”

The ruling will allow the licensing process to continue, for now, and some of the growers anticipate they could have products ready for patients by the end of the summer.

“We’re happy that we can move forward,” Jake Van Wingerden, chairmen of the Maryland Wholesale Medical Cannabis Trade Association and president of SunMed Growers said. “The battle is not over. We won a skirmish.”

Van Wingerden estimates that the companies – the majority of which have only been granted preliminary licenses – have already spent $150 million setting up their businesses.

None of the 15 companies approved by the MMCC are minority-owned; the state law requires that the commission “actively seek to achieve racial, ethnic and geographic diversity when licensing medical cannabis growers.”

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Secret Service Relaxes Cannabis Policy to Boost Hiring

6/04/2017

by Graham Abbott

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In an effort to swell the ranks of Secret Service officers, the agency is relaxing its rules about cannabis use because too many potential recruits were being disqualified by the agency’s strict drug policy, according to a CNN report.

The announcement came from the agency’s new director Randolph Alles on Thursday, 38 days after Alles was appointed to the position.

Following the rule change, the Secret Service will no longer automatically disqualify somebody for having used cannabis a certain number of times in their life; instead, candidates who admit to marijuana use will be judged based on how much time passed between their last consumption and the time at which they apply for the agency.

The change should allow for a younger generation of applicants, recognizing that cannabis has become much more prevalent and mainstream in modern society.

“We need more people. The mission has changed,” Alles said while announcing his plan to swell the agency’s ranks by more than 3,000 in the coming years. “It’s more dynamic and way more dangerous than it has been in years past,” Alles said.

The shift also puts the Secret Service — who is charged with protecting the nation’s heads of state and all of their family members — more in line with other federal law enforcement agencies. In 2014, the FBI relaxed its hiring policies related to cannabis use because all of the top cybersecurity specialists of our time were being disqualified.

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High Times Sold to Los Angeles Investment Firm

6/02/2017

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High Times magazine, a counterculture staple for 43 years, has been sold to Los Angeles-based investment firm Oreva Capital in a $70 million deal, according to a Forbes report. Oreva Capital is comprised of 20 investors, including Damian Marley, son of the late Bob Marley, and founded by Adam Levin.

Levin said the magazine’s value, “is in the brand and its identity.”

High Times-hosted events, such as the Cannabis Cup, represent 75 percent of the magazine’s revenue; Levin indicated that the new owners plan on hosting “even more events…like business summits.”

Longtime High Times employee Danny Danko said the deal will allow the publication to “go big and expand” on what the magazine has already been doing.

“I think we’ve always had big ideas at the company, but not everything could be accomplished. We were fairly small without a lot of resources,” Danko said in the report, adding that the new owners know it’s important to make sure that the core audience remains intact. “We’ve always had this underground mentality and grassroots organization, now we have the funding to go out and do bigger things.”

The new company will be called the High Times Holding Company, and Levin will become the chief executive.

“I think most would agree it was not executing business at max potential under the legacy framework established by the founders,” Levin said in a New York Times report. “We are going to build on the strong base they created to bring High Times from the authority in the counterculture movement to a modern media enterprise.”

End

A macro photo of a blooming cannabis flower.

Michigan Rec. Campaign Chairman Sees ‘Strong’ Chance for 2018 Success

6/02/2017

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Advocates in Michigan have renewed their bid to legalize cannabis for adult use after being shut out by politicians and courts in 2016 – and, according to MI Legalize Chairman Jeffery Hank, their proposal for 2018 is a “forward-thinking” initiative that draws on the “best practices” of other states.

MI Legalize has formed a coalition with MI NORML, the American Civil Liberties Union, the Marijuana Policy Project, and the Drug Policy Alliance for the 2018 campaign.

“It’s a pretty wide-open entry to the market,” Hank explained in an interview with Ganjapreneur, describing tenants of the plan allowing for four types of commercial cultivation licenses.

Under the proposal, four tiers of cultivation licenses allowing product sales are available to individuals 21-and-older: a single microbusiness license for 150-plant grows; and commercial licenses for 100, 500, and 2,000-plant grows, which businesses and individuals could hold up to five. The latter licenses would only be available to current licensed medical cannabis operators for the first two years, after which any other organization could apply.

The measure permits adults to possess up to 2.5 ounces of flower and 15 grams of concentrate in public, and 10 ounces of purchased flower within a home. Individuals would be permitted to grow up to 12 plants and possess the yield. The growing provision allows for outdoor cultivation out of public view and adults would be allowed to farm hemp without a state license.

The state’s medical cannabis regime would remain intact; however, consumer taxes would be dropped from medical sales. Recreational sales would carry a 10 percent excise tax, which, paired with Michigan’s 6 percent sales tax, brings the total taxes to 16 percent.

“We have provisions in the law to make sure that licenses are fairly distributed, particularly in communities that may have been disadvantaged in the past…think of the Detroit area,” Hank said. “We make sure those communities are included in the marketplace.”

Hank, an East Lansing-based attorney, said that the authors explored criminal justice reforms, such as expungement of old low-level possession charges, but after conferring with counsel determined that including such language could disqualify the petition as a whole because it would add a “second issue,” which is not allowed under Michigan’s ballot laws.

“We really wanted it in there – we really wanted it in there last year, too,” Hank said, adding that it “hurt” the petitioners to leave expungement out of the proposal. “We’re really sensitive this time to possible challenges because we had the state, basically, screw us last year with judicial chicanery.”

Last September, Michigan lawmakers passed sweeping legislation to reform the state’s “gray-market” medical cannabis industry – actually making the drafters’ job with the new adult-use proposal easier because state officials had already established some framework for cultivators, processors, transporters, dispensaries, testing laboratories, and transporters; including seed-to-sale tracking requirements. However, Hank said that ballot initiative also seeks to “correct” some of, what the coalition sees, as issues with the legislature’s reforms.

“We had to adapt to what the legislature did,” Hank said. “Also, last time the petition was drafted solely by MI Legalize…this time around we formed the coalition with those other groups so there was a bit of compromise, and give-and-take with the language, but we think we have put together the ‘new gold standard’ if you will.”

In order for the measure to qualify for the 2018 midterm election, petitioners need to gather 252,523 valid signatures – which for the campaign equates to “about 375,000 to 400,000” total signatures – within 180 days or by “October or November.” The 180-day rule was how the 2016 bid was pushed from the ballot. Right before the organizers handed in their petitions the legislature changed the law to add the 180-day signature collecting window. MI Legalize challenged the new rules but “didn’t get anywhere.”

“On June 7 – six days after we handed in our petition – the governor signed the law,” Hank said. “It was a crazy political battle – the state saw us succeeding getting marijuana on the ballot. They not only suppressed our petition but they actually changed the law to make it harder to petition. They removed the time we had to petition to make it more restrictive.”

In 2016, MI Legalize and their team of volunteers alone collected 379,000 signatures. Their newly-formed alliances have them confident that they will easily collect enough signatures within the 6-month window to succeed.

“We think we’re the first big state in the Midwest and if we go well then hopefully Ohio goes after that,” Hank said. “Hopefully these dominoes will finally fall.”

End

A stone fence on a grey day in Cambridge, Massachusetts.

Massachusetts Municipalities Passing Rec. Business Bans Despite Local Support

6/02/2017

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At least 81 Massachusetts communities have considered or already established restrictions on the nascent recreational cannabis industry, using moratoriums, zoning regulations, or outright bans to stem industry operations, WCVB-5 reports. According to the report, 33 towns in which voters favored legalizing cannabis for adult use in last year’s General Election have taken steps to bar cannabis business operations.

In total, 25 municipalities have enacted outright bans, and six of those voted in favor of legalization. Another 46 have enacted moratoriums; and voters in 27 of those communities approved legalization plans. Five other communities have imposed zoning regulations on cannabis businesses, and four of those towns voted in favor of legalization. Three other cities are considering actions to restrict recreational cannabis operations.

In December, one month after voters in the state approved the adult-use ballot question by a narrow 3.6 percent margin, state lawmakers moved to delay the opening of retail dispensaries from January to July 2018. A House and Senate Committee on Marijuana Policy was convened in February that could re-write portions of the law over concerns about public safety, tax structure, and the number of plants allowed in home grows.

In March, the legislature approved $300,000 for the implementation of the regime. The state Department of Revenue has estimated that the legal cannabis market could generate as much as $64 million in tax revenues during its first year.

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The flag of New Zealand flapping in the wind.

New Zealand Approves Plan to Allow CBD Prescriptions

6/02/2017

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Ministry of Health officials in New Zealand have announced that CBD products will no longer require individual approval from the agency for use, allowing it to be prescribed by physicians much like any other prescription drug, according to a Stuff report. Associate Health Minister Peter Dunne indicated the changes would take effect in about two months.

“Cabinet has now accepted my recommendation to make this change,” he said in the report. “Therefore, I am now taking steps to remove restrictions accordingly.”

During the announcement, Dunne noted that the move is unlikely going to lead to a deluge of patients getting CBD prescriptions right away as the CBD supplies are hampered by import and quality control issues.

Ross Bell, executive director of the Drug Foundation, called the move a “very good decision” but said that skeptical doctors, the lack of supplies, and the cost of the products would remain an issue as the products wouldn’t be subsidized by the Pharmaceutical Management Agency, or Pharmac, which decides which medicines are subsidized for use in public and community hospitals.

“For doctors to prescribe them they’re still going to need to source the product from overseas and have that imported into the country,” Bell said. “There remains skepticism within the medical profession around cannabis-based medicine, so a patient is still going to have to convince a doctor to do a prescription … they may not be willing to write that prescription.”

New Zealand has recently made it easier for patients to procure medical cannabis by allowing the Ministry of Health to sign off on applications instead of the Minister of Health personally. At least one company, Canada’s Tilray, has been given government approval to import cannabis oils that contain both CBD and THC to New Zealand.

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North Dakota Advocates Launch Rec. Petition Bid

6/02/2017

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Advocates in North Dakota are finalizing their draft of a ballot proposal to legalize recreational cannabis use for adults 21-and-older hoping to gather enough signatures to bring the issue to voters during the 2018 midterm elections, the Bismarck Tribune reports.

The drive is spearheaded by Dave Owen, a college student from Grand Forks, who said the group is working with lawyers to ensure the plan doesn’t run into the same problems as medical cannabis, wherein lawmakers this session moved to clean up language they found unworkable.

“North Dakota’s ready for recreational marijuana,” Owen said in the report. “We have to make sure we have an ironclad petition.”

Last year, a separate group made a similar push but did not gather enough signatures for the issue to appear on General Election ballots. In addition to creating a recreational cannabis industry, the new proposal will also include language to expunge low-level, non-violent cannabis charges from criminal records.

“We’re wanting to ensure non-violent offenders with pot charges don’t have … records and can’t get jobs,” Owen said.

Petitioners will have one year from the day the petition is approved to gather a qualifying number of signatures. Owens indicated he plans on submitting the proposal to the Secretary of State’s office in the fall.

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Getting Compliant: Quick Guide to Regulations for California Cannabis Entrepreneurs

6/01/2017

by Azam Khan

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Complex laws and regulations governing the cannabis industry present a host of challenges for entrepreneurs looking to operate in this space. Cannabis businesses in California have a short window of time — specifically, by Jan 1, 2018 — before they will have to be fully compliant with these regulations.

For many, the potential rewards of this emerging industry justify the effort and outlay required to establish a compliant cannabis operation. Given the federally illicit nature of the plant, however, an uncertainty always looms around cannabis, especially due to the multi-tiered nature of state and local laws and the overtly political nature of this industry. As a result, the ability for operators to produce, manufacture, distribute, or sell cannabis related products can only be done in strict adherence to local, municipal and state regulatory code — and in a manner that is nothing short of 100% compliance.

Cured branches of cannabis flowers that now await trimming. *Photo Credit: Sarah Climaco*

For starters, here is a list of various agencies that a California business owner could potentially contend with. To reach federal compliance, entrepreneurs must consider the following government bodies:

IRS
Occupational Safety and Health Administration
Department of Agriculture
Department of Labor
Environmental Protection Agency
Consumer Protection Act

To reach state-level compliance, the Medical Cannabis Regulation and Safety Act (MCRSA) and the Bureau of Medical Cannabis Regulations (BMCR) require the consideration of an additional six regulatory agencies:

California Department of Food and Agriculture
California Department of Pesticide Regulation
California State Department of Public Health
Department of Fish and Wildlife
State Water Resources Control Board
California Medical Board

Under the MCRSA, medical cannabis businesses in California will have to deal with regulations spanning lab testing, quality assurance testing, seed to sale tracking, packaging and labeling requirements, plant limitations, environmental restrictions, ownership restrictions and more. The initial rules released are not final and are undergoing a 45-day public comment period.

The same level of regulatory scrutiny should be expected for the Adult Use of Marijuana Act (AUMA, aka Prop 64), which was passed in 2016. MCRSA and AUMA differ in many places, including timelines, residency requirements, vertical integration restrictions and more. As touched upon briefly in a previous article, Governor Jerry Brown’s Budget Trailer Bill seeks to merge the MCRSA and AUMA to maximize public and consumer safety, favoring the AUMA’s liberal standards more.

For California specifically, medical and recreational licenses are set to be issued starting January 1st, 2018, although we won’t know much about the Adult Use of Marijuana Act until Governor Brown’s technical fix bill passes this summer.

Licensing will be controlled at the state level but enforced primarily at a local level, allowing local agencies to ban and/or restrict licensing as they see fit. To ensure compliance, businesses will need to take city and county ordinances, rules, and requirements into consideration — in addition to federal and state regulations. Whilst some of you may have licenses already, new operators will need to be thorough in preparing for the coming changes.

So what can businesses do to prepare?

If starting a new business

Start researching what regulatory and financial compliance will entail for your business license type. You will also want to understand the limits and restrictions on vertical integration with most cannabis business license types.

Next, identify municipalities that will issue cannabis permits as well as correctly zoned properties. For zoning, you have both state level and local issues to deal with. On a state level, you have an overarching regulatory body that makes the rules but doesn’t necessarily enforce them, relying instead on local lawmakers, police and fire departments to do so. You will want to establish relations with these people, which we will discuss later on this piece.

Once you have identified a location that’s zoned appropriately and meets state regulations, work on securing it but keep in mind that zoning laws can change. Also keep in mind specific zoning restrictions, such as the fact that if certain land is zoned as agriculture it does not mean it is necessarily zoned for cannabis. You will need a written approval from your local zoning authority to be included with your application. This approval is known as a ‘variance,’ which is basically like a zoning ordinance stating a land-use exception.

Additionally, some applicants will be required to demonstrate compliance with California’s environmental laws — this can be done through either a local permitting entity or via an Environmental Impact Report (EIR).

A cannabis worker pours a fresh batch of concentrate onto a sheet of wax paper for cooling. *Photo Credit: Sarah Climaco*

When securing a license, it is highly advisable to create a business plan that properly reflects local laws and regulations, to ensure you have the right to operate on the property, and to know who your neighbors are and if they approve of a cannabis business operating in their neighborhood — specifically related to odor, water use and the type of people it may attract if it is retail. Your attorney is your best guide for filling out an application, but understand that up to 25 percent of applications are thrown out before even being read if there are red certain red flags such as an improperly filled out application or a business plan that doesn’t reflect the rules.

Under the initially released MCRSA regulations, you will need to submit information about owners and business formation documents. If any owners have any serious convictions, they will need to be disclosed, so it’s recommended that you double check everyone whom you work with.

If you are working with investors, can you prove where their assets are coming from? Take a look at their legal history. Any felonies on their records will be will be a red flag and result in your application being disqualified as these state auditors are looking at hundreds of applications for reasons to toss them out. There are other nuances around investors, such as their ability to show that they can move liquid assets within 30 days — but we won’t dive too much into that here.

Priority licensing is available for those who have been in operation and in good standing with the local jurisdiction since Jan 1, 2016. This can be interpreted to mean that the commercial cannabis activity commenced in conjunction with the license type for which the applicant is applying. Being in ‘operation’ could mean that the client began engaging in transportation, distribution, testing and sale of the cannabis goods as authorized by the local jurisdiction. You will need to provide plenty of information to the authorities as aforementioned including proof of ownership or permission to operate on the premises in which you currently operate. If you think you can qualify, you may want to begin gathering all your documentations as soon as possible.

Establish good relations with local regulators

As part of your ongoing research, figure out who your local and state legislators, inspectors and regulators are. Connect with them and welcome them into your facility(s), letting your staff know ahead of time to be extra welcoming. Establishing a relationship with these parties is the best way to get leeway if the need ever arises.

The idea here is to have an attitude and culture of not breaking the rules and keeping compliance a priority. Get buy-in across your entire staff and adopt processes and software that keep you compliant. Once California’s seed-to-sale system is announced, you will want to make sure to submit all the information it will require, or use software that will automate the submission of your business information to these regulatory agencies on a continual basis.

Bagged cannabis flower is stored inside of a locked cage while it awaits either packaging for consumers or transportation to an edibles manufacturer. *Photo Credit: Sarah Climaco*

Learn who the lawmakers are, from the governor down to the people in charge of zoning. You will want to establish rapport with these law-makers and establish proper communication with them, instead of being frustrated when the tides turn. Familiarize yourself with lobbyists in the industry such as NCIA to NORML and MPP, and participate in these committees. Attend local events held by these groups so you can connect with players who know how the regulatory climate will evolve, and support measures that help the cannabis industry as a whole progress.

Stay up-to-date on regulations

As we keep mentioning, rules are constantly prone to change — sometimes even within days. You will have to take initiative to stay compliant instead of hoping that compliance updates find you. Stay up to date on any press release or change in FAQ on the state website and join any email lists you can as well.

Remain flexible and fluid as these laws evolve, treat compliance as an asset and start with a compliance-centric, SOP driven business model, which entails developing processes that keep your business structured and evolving them alongside regulations. Depending on your business model (retailer or producer) there may be an appropriate business software platform to help you run your operations while staying current with changing regulations.

Below you can see some compliance scores by state assembled by Adherence Compliance, who offers software that helps you self-assess your cannabis business and receive a compliance score.

Cannabis company compliance averages on a state-by-state basis, assembled and presented by Adherence Compliance

Don’t discount the importance of banking

Although California remains a cash-heavy state, you may want to start your search for local banking as soon as you can because it may impact your ability to secure a license. Credit unions are a good way to circumnavigate some of the big banks’ regulations, especially because they are local and community focused. The U.S. Treasury and Justice Dept. have stated in the Cole Memo that they aren’t going after financial institutions on a state level, so figuring out how to deal with money is very much part of compliance. If you are out of compliance with banking, it could open you up to a host of issues.

But is banking really an option for California cannabis entrepreneurs yet?

If you’ve been following the news, you’ll have noticed that President Trump and AG Sessions probably won’t do anything positive for the banking issue anytime soon. Banking rules for cannabis have not evolved much since 2014, which was when the DOJ and FinCEN at the Treasury Department issued a memorandum to create a civil structure allowing banks and credit unions to work with cannabis clients, but they had to adhere to regulatory obligations.

The larger banks simply don’t find the risk/reward to be worth it, but the smaller guys who suffered as a result of the financial crisis often do. As part of the FinCEN guidance, banks and credit unions must verify the compliance of their cannabis clients with state regulations. But since, in California at least, there haven’t been any laws set in stone, cities and counties have come up with their own hodgepodge of ordinances allowing for local banking leeway — but these have largely fallen short in helping financial institutions feel secure against FinCEN. In addition, FDIC would not renew an insurance policy if it seemed that an institution was working with cannabis businesses.

As compliance approaches, however, local financial institutions will be better able to defend their positions in complying with FinCEN and DOJ, and will be the early adopters to do so. These banks will need to develop cannabis specific operating procedures that ensures that they pay specific attention to cannabis businesses and can meet FinCEN guidelines.

Audit your financials

As mentioned earlier, organizations like NORML and NCIA can help you connect with reputable professionals who understand the tax code and federal law, specifically Section 280E, so that you can select a firm that has cannabis knowledge, such as the folks over at LIV Consulting.

Once you’ve shortlisted a few CPAs and maybe even selected one, work with them to identify risks of fraud and noncompliance that may not be obviously evident. Check to see that you are in alignment with local ordinances as far as tax is concerned — and continue to do so periodically as the requirements can change. If you have received a violation that you feel you should not have received, contest it sooner rather than later so you don’t pass the expiration of the statute of limitations for an appeal. Properly contesting penalties in good faith could help you reduce the fines you pay, which is another reason to keep you and your staff trained on the latest compliance requirements.

Moreover, be sure to file your taxes, even if uncertainty about the legality of your business is looming. Tax agencies are more than likely to audit you and hold you responsible for past-due taxes, even putting you at risk of non-compliance. Once 2018 arrives, cannabis businesses will have to pay mandatory taxes, including a 15 percent excise tax on retail sales, as a result of MCRSA giving counties the authority to tax all types of cannabis businesses. Meanwhile, however, the IRS still expects taxes to be paid — and you have until 2018 to get your taxes in order.

If you are behind on taxes, there are options available to help you. It’s recommended that you carry out a surprise audit where you play out a process and see how your staff responds. Take notes during this process and review it with a team. Without a plan, you risk becoming noncompliant, as even a 99% compliance level still isn’t fully compliant. It’s all or nothing — and that can spell the difference between a profitable business or one that gets shut down.

Maturing cannabis plants inside an indoor licensed grow op. *Photo Credit: Sarah Climaco*

Go the extra mile

From issues around transportation to extraction equipment setup to local permits, remember your footprint as a business. Get buy-in from regulators and the community so you can get support if things go awry. Find someone involved with legalization efforts such as NORML who has a list of lawyers in every state and talk to these people, as well as zoning people, regularly so you can see what they are looking for and get insight into staying on top of the latest rules.

Maintain a professional demeanor and shake the stigma around stoner-culture. Remember: you are representing the cannabis community at large, so prepare for changes and be amiable to them. Compliance is your number one priority and will be a certain percentage of your overhead, so embrace it with the utmost concern and keep your staff and standard operating procedures up to date.

It’s unclear how things will play out in California, but as 2018 nears, having strong industry relations, standard operating procedures, trained staff, audit-readiness, valid permits, compliant infrastructure and business software will help you navigate the gauntlet that lies ahead. We can always look to see how other states have carried out legalization and have a sense of what to expect in California. The more you stay involved, the better your chances are of coming out on top.

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Spark the Conversation: Joey Shepp, Humboldt’s Finest

6/01/2017

by Bianca Green

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