Sean Hocking, Author at Green Market Report

Sean HockingSean HockingJanuary 29, 2020


Joshua has worked in the nascent Australian regulated cannabis sector and in this, the first of 4 articles he is writing for Cannabis Law Report, he looks at the realities of trying to value medical cannabis markets in Asian countries.

Authored By: Joshua Schmidt MBA


As we see cannabis and hemp companies rise and fall, hire and fire, what is evident is that the nascent nature of the global cannabis industry makes it one of intrigue and  immense potential too.

With the first green rush now abating and seemingly gone, my commentary isn’t disproving the “what”,  it’s more about seeking out the “how.”

Amidst the volatility of the global cannabis market, there is a need to understand more than just the quantitative aspects as each new jurisdiction is unique in its own right. After all, it is the regulators and health care practitioners that will dictate the ease of patient access in medical markets, not the ever-changing market estimates of size, patients and value provided by third party publishers who all gain their data from the same official and semi official sources.

So how does one see through the numbers when the numbers used in financial models are simply coming from intelligence reports?

A leading publication estimates that the value of a markets will reach a certain figure by 2024 or 2028, and these assumptions are being used to validate financial models, which are being presented to banks for financing.

It is interesting to note that Asia, which is projected to have a market value exceeding US$8.5 billion by 2024[1], is viewed as having strong export market potential for Australian producers, however the legalities of the region have yet to be established.

Furthermore, the Thai  central Government has seized control of the industry in that country, preventing foreign companies from entering the market. So, if Thailand is closed, what’s the real value to outside companies or service providers? And what if others follow suit? It’s time to dig deeper, and for that to be communicated.

So my question is then: with so much ambiguity and a lack of clarity around regulations, how much credence can actually be given to estimated value of Asian markets for Australian companies?

We need for companies to present the actual incentive to import Australian product into the region, and their strategy to achieve this. When speaking about the regulators, we need to understand the market specific conditions, and how companies can achieve their goals,rather than simply listing the value in market facing statements.

Rather than speaking to the mere value of particular markets or regions, and assuming a “slice of the pie”, it is important to understand the regulations within these regions, before simply figuring to attain a position within the market.

For both pundits and investors alike, it is about having more confidence in the market valuation and more importantly, their future returns.

The more we know, the more confident we can be.


In part ii of this series, I will look at the European marketplace, and the potential of the market, versus the reality.


Contact Joshua

Joshua Schmidt is a New York-based MBA and cannabis entrepreneur who has gained considerable experience working in the Canadian and Australian Cannabis industries, achieving company exit by acquisition in 2018 in Canada, before establishing and managing the intelligence framework for an Australian cannabis company.




Sean HockingSean HockingJanuary 21, 2020


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AUTHOR: Glenn Johnson





Niko Uman Borrero is the founder and Chief Executive Officer of Green Bee Farms, a holistic based cannabis consultant agency that specializes in helping cattle ranchers change their hayfields into hempfields and manage their cattle using high-intensity grazing practices. His mission is to “run a biodynamic farm that offers a variety of beneficial products to the community and helps teach people about the benefits of holistic sustainable living.”


I spoke to him to hear more about where he saw the industry heading. “My goals,” he explains, “are to bring regenerative cannabis to the market, to bring true medicine to the people where organic is organic. Where our fertilizers and our feeds are sourced within 250 miles from the farm, and to make our brand known as a truly holistic company.” 


Starting at a young age, Niko has always found himself in the garden. As high school came around he was first placed into a horticulture class where he wanted more from the program, progressing onto a school/work program that helped build one of the first carbon-neutral aquaponic facilities in the U.S.

I asked Niko, what do you want the consumer’s overall experience to be over the next 5 years with hemp, what trends are you seeing today?


“Hemp is a super plant, with all of its uses and possibilities, there’s no wonder it’s gaining traction quickly.  I want to see houses made using its fiber, bio-decomposable plastics in the packaging field, and fewer chemicals being used in the textile industry.” 


“If you take a look at the sustainable food market, it is already occurring, more people are choosing forks over knives, asking their supermarket for “natural alternatives” towards personal care products, consumables and the cutlery to eat said products. Even popular media channels like Netflix are delivering documentaries based on the need for a new culture. By living and working towards sustainability we can truly create a green future. Hemp will be one of the key materials to get us there.”


“We have the opportunity to leapfrog over cannabis,” he continued “once the market understands regenerative agriculture, and it may take a little bit, but once it gets going, with the proper application of sustainable practices, it becomes so much more than medicinal, the fabrications and myriad of applications for hemp that excites me. Consistently changing the way we create a symbiosis with  agriculture, one step at a time.”


According to the USDA Farm Agency 146,065 acres of Hemp were planted in 2019. This country in fact has a long history in Hemp pre-prohibition. Rudolf Diesel, the inventor of the diesel engine, designed it to run on vegetable and seed oils like hemp. Henry Ford constructed a car of resin stiffened hemp fiber, and even ran the car on ethanol made from hemp. Not only was the Mayflower equipped with hemp fiber products durable to make the fateful crossing, but it was also equipped with a supply of hemp seeds to be grown at the Pilgrims new home. 


Niko sees a future filled with Hemp products once again, “it’s the new categories that excite me: Plastics, hempcrete, paper in general…textiles there’s so many things you can do with it. Once Iowa grows it like they do corn then we’ll see bio-degenerative plastic, livestock feeds, and composite boards really hitting the market.”


“When talking about consumables, much like the wine industry and its focus on the uniqueness of terroir, and even French Appellations, we aim to mimic the wine model in hemp farming. Like growing hops for beer or corn for whiskey, we’re taking regional insights and applying them to hemp at many levels. In Vermont, for example, we’re ahead of the game, all organic sun grown, no foliar sprays of any kind, running 3.5 acres, it’s a lot of work that goes into it and we only have 3 people,” says Niko.


“The markets are changing and we aim to change with them. Survival of the most willing to adapt you could say. We’re working with a cattle farmer, and the milk market is terrible right now, he teamed up with us as a way to supplement his income and keep his cows on the farm. By teaming with us we had a direct supply to fertilizer, tractors, and someone who really knew there land. Together we can focus on quality and create a complete  full spectrum plant because we took such care from seed to sale. I want to bring in a high quality product, super high grade to the market.”


Shortly after legalization, Niko studied Agricultural Business and Organic Gardening at Colorado State University with an emphasis on hemp and cannabis. Because of federal guidelines, much of what he wanted to do was unavailable within the College, so he left to work for Way To Grow, Boulder. Here he talked with a variety of grow managers and was able to analyze specific soil and fertilizer “recipes” that companies manufactured and grow managers preferred. By being at the forefront of the legalization movement, it was a very free environment where people shared their tips and tricks on how they grew.


Realizing that most of the products listed as “organic” weren’t always organic, or cheap, Niko knew there had to be another way. It was during this time that he went down to Colombia to work for his uncle’s cattle ranch where they ran 400 head of cattle and roughly 20,000 tilapia.


It was here where basic things such as tape measures, drills and duct tape were not available and the most sophisticated tool they had was slow internet and a scale to measure the fish. This is the true reality for most farms in rural third world communities. So the question for him became, “how do we make fertilizers for the farm, on the farm?” This led Niko to books by Allan Savory, biodynamic tips by Rudolf Steiner, and Korean Natural Farming techniques being taught on Youtube by Erik Weinart and Chris Trump.


“With new ideas and collaborations, we can help the world by creating farms that are run by farms. We believe through mimicry there still is a lot to learn, from the way you move cattle, to the way you fertilize a plant. Mimicry is everywhere.”


Now that Niko has returned to Vermont he is currently helping dairy farmers progress there certified organic fields into Hemp. Using Soil tests, companion planting, local ingredients, and fermentations, he hopes to make Green Bee Farms a farm for the future with a copyable method that improves organic matter within the soil and changes the way commercial agriculture is run.

“With Indoor vs outdoor your yields are higher quality, and we need to build the capital for greenhouses, so we go slow and grow accordingly. We’ve bootstrapped most of this off of college funds, and we’re playing this for the long game. By showing people the power of regenerative agriculture and the symbiosis in nature, we can change the world for the better and create a greener future for everyone.”


I ended my conversation with him to ask — If you had three wishes for the industry, including the consumer in them—what three wishes would you make?


  1. There’s still a lot of education we have to do for consumers to have more of an understanding of how “every dollar counts” when they make day to day purchasing decisions. Think about it, you vote 3 times a day based on the food you eat, if you choose organic, grass-fed, biodynamic foods, more farmers will grow sustainably. In the larger sense, this is also tied into Congress and where farmer subsidies go. By giving subsidies for local farmers who regenerate the land,you are supporting a vibrant, robust, sustainable eco-system for the natural surroundings. And at the same time an educated consumer is getting healthier food, providing a true localized Economy that becomes self sufficient. 

  2. For the overall farming industry, there’s a lot of education and sharing to be done too. I would like more farmers to understand how their inputs affect their outputs. If you consistently feed a synthetic crop to your soil, you aren’t feeding the “soul” you are going directly to the crop and missing out on microbes, fungi, and the symbiosis held within the soil. We have to work on sustainability and process, share our knowledge and create systems that better everything around us.

  3. My third wish would be for more innovation, I wake up every day with the thought that each day is a blessing, and a new day to learn. If more people lived that way we would have a lot more Leonardo DaVinci’s and a lot less Paris Hiltons. 


To learn more About Niko and Green Bee Farms, including valuable resource lists, links and downloads of precious data on growing, visit For the products he helps grow, you can visit and give him a follow on


About Glenn Johnson

I am a Marketing, Branding and Communications Consultant w/ experience in high-touch luxury consumer marketing in the travel/hospitality, wine/spirits, fashion/beauty/grooming and Cannabis categories. My talents include Branding & Brand development, Business Building, Strategy and Brand Storytelling. I excel in working with Founders, funders, start-ups, and small brands and enjoy meeting and networking with interesting folks in the business.


CONTACT ME via email at:

Connect with me on LINKEDIN:

Sean HockingSean HockingDecember 27, 2019

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AUTHOR:  aBIZinaBOX Inc. CPAs – Jordan S. Zoot, CPA


The merriment of the holiday season has not overtaken California’s cannabis industry as 2019 comes to a close. The Legislature, Governor Newsom’s office, cannabis regulatory agencies (principally BCC, CalCannabis, CDPH, and CDTFA), law enforcement agencies, and a multitude of other groups and individuals interested in this industry have been confronted with the reality of a disaster. To paraphrase my father’s recurring admonition when something I attempted went wrong, “It is your own damn fault because you did not think it through.”


The LA Times published an article on December 24th that begins,


“Two years after California began licensing pot shops, the industry remains so outmatched by the black market that a state panel recently joined some legalization supporters in calling for significant changes — perhaps turning again to voters to address the problems. 

In its annual draft report, the Cannabis Advisory Committee warned Gov. Gavin Newsom and California legislators that high taxes, overly burdensome regulations and local control issues posed debilitating obstacles to the legal marijuana market.”

With tax revenue about a third of what was expected and with only about 800 of an anticipated 6,000 licensees open for business, the panel said, officials may need to consider “revisiting the ballot initiative process.

The 22-member advisory panel — made up of industry leaders, civil rights activists, local officials, law enforcement and health experts — noted that California is expected to generate $3.1 billion in licensed pot sales in 2019, making it the largest market for legal cannabis in the world. But nearly three times as much — $8.7 billion — is expected to be spent on unlicensed sales.”


The premise for the LA Times article is accurate. California’s cannabis industry is in a state of chaos. Proposition 64 was seriously flawed. The Legislature exacerbated the problems created by Proposition 64 by acting as a group of politicians instead of acting as thoughtful leaders acting in the interests of the public. California’s roll-out of regulation pursuant to this Proposition has been maladroit. We have discussed many of the reasons for these issues.


The reasons for the chaos that are described in the LA Times article reflect a superficial analysis. Excessive tax rates, burdensome regulations, and local interference are as much symptoms as they are causes. The transition from a “light touch,” locally regulated medical cannabis industry in California to a highly regulated, legal state-wide adult-use industry that preserved medical use rights was an experiment, at best[1]. Proposition 64 was an amendment to the California Constitution. Proposition 64 wholly preserved Proposition 215. The preservation of the rights granted California residents under Proposition 215 in Proposition 64 will have legal ramifications for the next 10 years at a minimum.


Proposition 64 established the foundation for a “dual control” arrangement for the regulation of California’s cannabis industry. Local governmental agencies have the final say on land-use, health and safety issues, and the ability to collect tax revenues from the industry, but all local authority was subject to a framework of a comprehensive, burdensome and poorly reasoned state-wide regulation of this industry. Never before has California put so much money and expended so much effort in a futile attempt to put lipstick on a pig and call it a movie star. Never before in the history of California has so much administrative empire-building occurred with so little justification.


Thousands leaped into this industry in anticipation of financial rewards. Hundreds saw similar opportunities in becoming “instant experts” on various aspects of the industry. Carpetbaggers arrived in California from far and wide. Some cities and counties in California developed policies and licensing criteria based on local criteria. Others contracted out these tasks to firms such as HDL[2] that oversold processes and programs for their own purposes. Local governments adopted unrealistic procedures and structures which were coupled with costs and fees that cannot be supported[3].


The contention tax rates are too high is a red herring. Consumers pay the taxes on cannabis. The controversy over tax rates reflected in the LA Times article is a dispute over the sharing of revenue between taxing agencies and those seeking to profit from the industry. Cannabis businesses that are properly structured, organized and operated can minimize the impact of high tax rates. Well advised and well-run cannabis businesses can readily compete with the underground cannabis industry. Similarly, excessive regulation and local control issues are red herrings.


It is a fantasy to view California’s cannabis industry as a $3.1B licensed market and an $8.7B unlicensed market as described in the LA Times article. Licensed and unlicensed are not the same groups as legal and illegal. Licensed and unlicensed are also not the same as tax-compliant and tax non-compliant.   How should a cannabis business that is operating in complete compliance with local ordinances and paying all local taxes but largely ignoring state regulation be characterized?


California will have a substantial underground cannabis industry for the foreseeable future. [[. California is likely to always have a significant truly illicit cannabis industry. We have no idea whether these two segments are included in the $8.7B described as unlicensed sales in the LA Times article. The Legislature and commentators as well as all of the “leaders” of the cannabis industry should ignore licensed and unlicensed as categories and focus solely on that activity defined in SB 94 as “commercial cannabis activity.”


The issues of “licensed or unlicensed,” “legal or illegal,” “tax-compliant or tax non-compliant” become far more difficult when solely commercial cannabis activity is examined. With regard to commercial cannabis activity, we prefer to use the terms “legal” and “non-compliant” as this collection of business activities in reality is a very broad Bell Curve. Few cannabis businesses are wholly compliant with all applicable laws and regulations. Most cannabis businesses comply with some significant number of the applicable laws and regulations.


California will have a substantial amount of commercial cannabis activity that is non-compliant as long as the delta for the distribution costs for the movement of cannabis on a commercial scale between cultivator and consumer justify the risks associated with non-compliance. It is not that cannabis taxes are too high, or that regulatory compliance is too costly or too complex, or that the behavior of the cannabis regulatory and tax agencies is too sloth-like[4]. Rather, it is all of the preceding at a state-level. We have written extensively regarding a number of these issues[5].


There is no “black” market of commercial cannabis activity in California. There are several classifications of commercial cannabis activity that fall into different shades of “grey.” There is no single solution to the many problems created by Proposition 64 and the Legislature’s establishment of a single regulatory structure for medical and adult-use cannabis. Superficial analyses such as the LA Times article contribute little toward solutions. Similarly, the Report of Legislative Analyst Office recommending a different tax structure simply adds complexity instead of offering solutions to existing problems.


William G. Panzer, an Oakland attorney who was co-author of Proposition 215, which legalized medical marijuana in California, called the current licensing system a “nightmare.”


“There is lots of talk about it,” Panzer said of a new initiative. “I love the idea, if there is financing. You are not going to get the problems fixed through the Legislature.”


Panzer, a criminal defense attorney who supported Proposition 64, said he expects the industry will pressure state lawmakers to consider additional reforms when the Legislature reconvenes in January.


“The only people making money in the cannabis industry these days are people putting on seminars on how to make money in the cannabis industry,” he said.



Mr. Panzer just hit it on the head. It is the National Cannabis Industry Association [“NCIA”]’s business model. A group that would rather continue to put on repetitive trade shows and seminars rather than expend the efforts on grass roots lobbying at the state level in California like the Cannabis Trade Federation [“CTF”] is doing at the Federal level in Washington D.C. However, California does not need another initiative. California has had far too many initiatives.


Well advised cannabis businesses that are properly structured and operated can compete financially with any of the non-compliant segments of California’s commercial cannabis industry. Some further tweaking by the Legislature may be appropriate, but we suggest the most significant action the Legislature can take is to insist that the various cannabis regulatory agencies make every possible effort to make it as easy as possible for cannabis businesses that desire to secure licenses to secure such licenses. The Legislature must demand these agencies eliminate or reduce all barriers to compliance with licensing requirements to the maximum extent possible. The mandate of Proposition 64 was to bring California’s existing cannabis industry into regulation rather than close out those involved in the industry and license an entirely new group consisting largely of opportunists.



[1] An excellent analysis of Proposition 64 is contained in Implementing Proposition 64: Marijuana Policy in California by the Stanford Law School Law and Policy Lab.

[2] HDL, formerly known as Hinderliter, de Llamas & Associates, The firm was founded in 1983 as a firm devoted to real property tax and sales tax assessments.  The underlying business model for decades appears to have been based on conducting audits for cities and counties to assist in ensuring such local jurisdictions were collecting the taxes due.

[3] See Cantonization – California – Cannabis for further discussion of the background.

[4] Bureau of Cannabis Control [“BCC”], California Dept. of Public Health [“CDPH”]Manufactured Cannabis Safety Branch [“MCSB”], California Dept. of Food and Agriculture [“CFDA”]CalCannabis, and the California Dept. of Tax and Fee Administration [“CDTFA”].

[5] Much of our content on the topics can be found in our blog repository on Cannabis Law Report.

Sean HockingSean HockingDecember 23, 2019

If you wish to re-publish this story please do so with following accreditation
AUTHOR:  aBIZinaBOX Inc. CPAs – Jordan S. Zoot, CPA

We are busy with a cross-country relocation, but we nevertheless felt compelled to make a quick comment in response to NORML’s knee-jerk December 23, 2019, post.

Tell Senator Crapo that a 2% THC cap is unacceptable and that banking reform can’t wait..

Senator Crapo is not a grinch. Senator Crapo is one of 536 politicians, or some comparable number of members of this particular species who reside in Washington, D.C. and who spend substantially all of their time pandering for votes. With respect to the SAFE Act, Senator Crapo is just developing a foundation for his political positioning.

The devil will always be found in the details of legislation such as the SAFE Act. Who knows where legislation in the United States such as the SAFE Act will go in view of the intense partisanship in Washington, D.C.? At this time Congress is being driven more by partisan political expediency than at any time in the last fifty years. Little or no consideration is given by any of those who purportedly represent the American public for the best interests of this constituency.

How long has it been since you have heard a prominent politician in Washington, D.C. say,


“I, and my party, have made some errors in our approach to this issue, and there is some significant merit to the approach urged by the other party, but . . . and for that reason I am going to devote my efforts to the development of the position that does the most to accomplish those changes that are in the best interests of all of the residents of this country regardless race, religion, age, sexual orientation, status, financial resources, or political power taking into account all of the relevant considerations.”


We agree banking reform cannot wait. The denial of access to banking to the cannabis industry – legal or illegal – is simply stupid. It always has been stupid. How can unreported income be tracked if the United States does not insist that criminals use banks? Well-advised, well-connected, financial criminals move millions of dollars around the world making it disappear untaxed. At the same time a West Los Angeles dispensary – legal or illegal – cannot open a bank account without lying, and thereby committing the financial crime of bank fraud. The justification for denying access to banking to the cannabis industry is merely one of many falsehoods perpetrated on the America public by Washington, D.C.


Please do not misunderstand our position. We are not supporters of the legalization of cannabis as it has been pushed forward by many of its supporters. Marijuana is a drug similar to alcohol and tobacco. The use of marijuana should be limited to adults. The use of marijuana should be regulated. We have always supported the decriminalization of the possession and use of marijuana. We have always supported the medical use of marijuana.


Look at Senator Crapo’s actions for what they really mean. Senator Crapo’s actions are nothing more than his political positioning to facilitate the financial interests that control most of the wealth in the United States in order to maintain control over this industry segment and the population it represents going into 2020. Senator Crapo has no moral or ethical motivation for his actions. Senator Crapo does not care whether the cannabis industry – legal or illegal – has access to banking. Senator Crapo is solely driven by what plays best politically for his interests.

Sean HockingSean HockingDecember 17, 2019


Sean HockingSean HockingDecember 17, 2019


Our Wall St contact tells us this report is a big topic of discussion on the street today. Published by Siegfried Eggert of Geoinvesting the report alleges a list of wrongdoings so egregious that it’s impossible to know where to start. Suffice to say that the precis reads like a crime novel plot, “Trulieve and its insiders are deeply involved in ongoing FBI investigations. CEO Kim Rivers and companies affiliated with her are mentioned in FBI subpoenas. Kim River’s husband, JT Burnette, is currently indicted for serious charges such as racketeering. Kim and her husband seem to be at the very center of a political crime ring in North Florida, that dealt in political favors and allegedly obfuscated government funds.”

Here are the report’s key points.

Our on the ground due diligence including drone footage suggest that the majority of the company’s cultivation space comes from hoop houses that produce low quality output that is prone to infestation and weather damage.

• We found extensive ties between Trulieve and ongoing FBI investigations into corruption in North Florida.

• Trulieve’s initial license approval stinks of corruption and involved multiple undisclosed conflicts of interest.

• CEO Kim Rivers’ husband, JT Burnette is at the very center of the FBI probe, he is the right-hand man of disgraced politician Scott Maddox, and an integral part to the criminal enterprise accused of charges ranging from racketeering to falsifying statements.

More On Kim Rivers – Click on Image

And hubby JT Burnette at Reddit

• Our research indicates that Burnette is Trulieve’s key construction partner. Burnette’s construction firms were also called out in the subpoena and are involved in scandals involving public funds in North Florida.

• There are several undisclosed related party transactions, where Burnette affiliated companies sold real estate to Trulieve at a huge profit. • Trulieve lies about the nature of its lenders, and depicts some of them as third parties that we could trace back to insiders. Also, all but one lender used shell entities that show no other activities.

• Given the opaque set up and lies Trulieve told about its financing sources we are deeply worried what Trulieve is hiding. Inkbridge, a lender of Trulieve that is controlled by Kim Rivers, is known for using government funds to finance ventures. There are also reports of shady foreign individuals trying to get a foothold in Florida’s medical marijuana industry. We ask: Where did the money really come from?

• The company’s portrayed profitability relies on mark-ups on their grown product, which we believe to be highly suspect in-light of our findings. Also, the company takes out tiny loans from insiders when it is supposedly swimming in cash.

• Trulieve is facing several economic headwinds, such as increasing competition. With the low-quality production facilities we uncovered, we believe Trulieve will not be able to compete.


The report is authored by investment analyst

Siegfried (Siggy) Eggert, Special Situations Equity Analyst (Visit Siggy’s Blog)

Siegfried Eggert joined the GeoInvesting Team as an analyst in the summer of 2016 as an Equity Analyst. He is responsible for generating and analyzing long/short special situation investment ideas, including spin-offs, tender offers, M&A, and bankruptcy proceedings. Siegfried has over five years of practical experience investing in small- and micro-cap companies and managing portfolios.

Before coming to the United States, Siggy was born and raised in Germany, and studied International Business in the Netherlands, Hanze University of Groningen, where he received his Bachelor of Arts with Honors, majoring in Finance and Accounting. Siegfried also spent seven months studying in Beijing at Beijing Technology and Business University, after which he received a minor in Asian Business.

Meet The GeoInvesting Team

Trulieve have already issued a press release response

Trulieve Responds to Short-Seller Report

| Source: Trulieve Cannabis Corp.

TALLAHASSEE, Fla., Dec. 17, 2019 (GLOBE NEWSWIRE) — Trulieve Cannabis Corp. (“Trulieve” or the “Company”) (CSE: TRUL) (OTCQX: TCNNF), a leading and top-performing cannabis company in the United States, today announced that it is aware of a short-seller report (the “Report”) released earlier today which contains several false, slanderous and misleading statements about Trulieve. Trulieve’s successful and profitable business model is supported by several respected and reputable analyst firms, and as a publicly traded company its financial activity is communicated regularly and accurately to the investment community.  The quality of Trulieve’s products and production facilities has never been in question, as evidenced by more than 230,000 satisfied customers in the Florida market. It appears today’s report is a disingenuous attempt to manipulate Trulieve’s stock price, and the Company is planning to pursue legal action against this outlet, which has no history or credibility in assessing cannabis companies.

Kim Rivers, the Chief Executive Officer of Trulieve, remarked, “We ask that our investors be aware that the Report reflects the opinions of an acknowledged short seller, whose sole interest is in profiting from a decline in the price of the Company’s shares. I have full confidence in our management team and their abilities to continue to serve our customers without being distracted by these baseless allegations. Trulieve reserves all of its rights to take appropriate legal action against those responsible for the Report.”

Rivers continued, “Trulieve sells high quality flower, cultivated in our indoor facilities, and was recently recognized by an award from the Cannabis Business Association of having the best flower in Florida. We stand behind the quality of our products and have a long-standing no-questions-asked return policy.  Trulieve set a record for flower sales in Florida just last week, capturing over 51% of the market.”

About Trulieve

Trulieve is a vertically integrated “seed-to-sale” company and is the first and largest fully licensed medical cannabis company in the State of Florida. Trulieve cultivates and produces all of its products in-house and distributes those products to Trulieve-branded stores (dispensaries) throughout the State of Florida, as well as directly to patients via home delivery. Trulieve also operates in California, Massachusetts and Connecticut. Trulieve is listed on the Canadian Securities Exchange under the symbol TRUL and trades on the OTCQX Best Market under the symbol TCNNF.

Forward-Looking Statements

This news release includes forward-looking information and statements, which may include, but ‎are not limited to, information and statements regarding or inferring the future business, ‎operations, financial performance, prospects, and other plans, intentions, expectations, estimates, ‎and beliefs of the Company and statements with regard to the Report and the Company’s response thereto. Words such as “expects”, ‎‎“continue”, “will”, “anticipates” and “intends” or similar expressions are intended to identify ‎forward-looking statements. These forward-looking statements are based on the Company’s ‎current projections and expectations about future events and financial trends that management ‎believes might affect its financial condition, results of operations, business strategy and financial ‎needs, and on certain assumptions and analysis made by the Company in light of the experience ‎and perception of historical trends, current conditions and expected future developments and ‎other factors management believes are appropriate. Forward-looking information and statements ‎involve and are subject to assumptions and known and unknown risks, uncertainties, and other ‎factors which may cause actual events, results, performance, or achievements of the Company ‎to be materially different from future events, results, performance, and achievements expressed ‎or implied by forward-looking information and statements herein. Although the Company ‎believes that any forward-looking information and statements herein are reasonable, in light of ‎the use of assumptions and the significant risks and uncertainties inherent in such information ‎and statements, there can be no assurance that any such forward-looking information and ‎statements will prove to be accurate, and accordingly readers are advised to rely on their own ‎evaluation of such risks and uncertainties and should not place undue reliance upon such ‎forward-looking information and statements. Any forward-looking information and statements ‎herein are made as of the date hereof, and except as required by applicable laws, the Company ‎assumes no obligation and disclaims any intention to update or revise any forward-looking ‎information and statements herein or to update the reasons that actual events or results could or ‎do differ from those projected in any forward looking information and statements herein, whether ‎as a result of new information, future events or results, or otherwise, except as required by ‎applicable laws.‎

The Canadian Securities Exchange has not reviewed, approved or disapproved the ‎content of this news release.‎

Lynn Ricci
Director, Investor Relations & Corporate Communications

Ryan Ferguson

Sean HockingSean HockingDecember 12, 2019


Authored By: Patrick McKnight


 Due mainly to legal reforms at the state level, 2019 legal cannabis sales are expected to generate over $10 billion in revenue. Products ranging from buds, oils, and tinctures are increasingly being used medicinally to treat chronic pain, cancer, terminal illness, and some stress-related mental disorders. Recreational use is becoming legal in a growing number of states.


Bankruptcy and the CSA

Thirty-three states have enacted some type of medical marijuana program. Eleven states have legalized the recreational adult-use of marijuana. Some industry analysts project revenue from legal cannabis sales will double over the next five years as more states seem poised to follow the trend towards cannabis reform.

Change at the federal level has remained elusive. Federal bankruptcy protection for business-debtors involved in the sale of cannabis products has not been forthcoming. The Federal Controlled Substances Act 21 U.S.C. §§801-904 (“the CSA”) remains a complete bar to any Chapter 11 protection.

Compliance with state laws is of little benefit when it comes to federal bankruptcy, banking, and tax codes. Cannabis start-ups are entering a potentially lucrative but risky new industry. Debtor-clients operate beneath this challenging additional layer of legal complexity.

Bankruptcy courts have consistently dismissed Chapter 11 plans for any business “involved” with the cannabis industry. Usually this exclusion falls under §1129(a)(3) which bars any plan “forbidden by law.” See In re Arenas, 535 B.R. 845 (10th Cir. BAP 2015); In re Medpoint Mgmt., 528 B.R. 178, 188 (Bankr. D. Ariz. 2015); In re McGinnis, 453 B.R. 770, 772 (Bankr. D. Or. 2011); In re Way to Grow, 597 B.R. 111 (Bankr. D. Colo. 2018); and In re Rent-Rite Super Kegs West, Ltd., 484 B.R. 799, 805 (Bankr. D. Colo. 2012).

This exclusion may have secondary impacts beyond the business owners themselves. Investors and creditors should take the lack of federal bankruptcy protection into account before deciding whether to contribute financially towards such an unprotected industry.

The U.S Trustee has consistently argued successfully that federal bankruptcy cases are inappropriate for businesses connected to the cannabis industry. Maintaining claims which involve conduct in violation of federal law would require a federal court placing an implicit stamp of approval on prohibited activity. The Department of Justice has likewise taken a hard stance against bankruptcy protection. Bankruptcy courts have agreed.


Is Change on the Horizon?

Some bankruptcy attorneys believe a May 2019 decision from the Ninth Circuit suggests the status quo may be changing. Garvin v. Cook Investments NW involved several real estate holding companies filing Chapter 11 in Washington State. One of these debtors leased land to a business which used the land to grow cannabis. The cannabis business-lessee was apparently in compliance with all applicable Washington State laws and regulations.

The U.S Trustee objected to the debtor’s plan even though it included payment of all creditors. The Trustee was concerned the debtor’s plan involved continuing to accept rent from the cannabis business. The Trustee argued confirmation of the plan was disallowed under the language of §1129(a)(3), “[t]he court shall confirm a plan only if all of the following requirements are met … [t]he plan has been proposed in good faith and not by any means forbidden by law.”

 The Ninth Circuit Court of Appeals ruled against the Trustee. According to the Court of Appeal’s interpretation, §1129(a)(3) “directs bankruptcy courts to police the means of a reorganization plan’s proposal, not its substantive provisions.” In other words, because the plan itself wasn’t made in an illegal manner such as fraud or duress, the Trustee could not rely on §1129(a)(3) to object to its underlying details. The Court of Appeals reiterated its holding was limited to procedural and not substantive standards.

 Despite making some initial headlines, Garvin remains the exception rather than the rule. In fact, just two weeks later a Michigan Bankruptcy court reached the opposite conclusion in a case involving similar facts. In In re Basrah Custom Design, 2019 WL 2202742 (Bankr. E.D. Mich. May 21, 2019), the court dismissed a case filed by a debtor corporation whose operations centered around manufacturing wooden furniture. The debtor also leased some property to a medical marijuana dispensary operating legally under Michigan law. The bankruptcy court dismissed the case but hinted it might have reached a different conclusion if the debtor had ceased any connection with the marijuana-related business.



Studies indicates that across the U.S economy 80-90% of new businesses will fail. Given the rapid rate of business formation in the cannabis industry, many of these “cannaprenuer” start-ups run the risk of failing to qualify for Chapter 11 protection. As the cases make clear, it’s not only growers and dispensaries who need to be concerned. Any debtor doing business with a cannabis business may also putting themselves at risk. This can include everyone from landlords to vendors.

 The cannabis industry may be the largest sector of the economy currently operating without the benefit of Chapter 11 protection. The incongruity between the evolution of state-level cannabis laws and the ongoing prohibition at the federal level raises a number of interesting legal questions. Federalism questions also arise involving compliance with federal banking and tax laws.

While many of these questions have merit, bankruptcy courts cannot be expected to function as the appropriate venue. Clients and other stakeholders shouldn’t expect a change in the status quo any time soon. While the reward of capturing an early-mover advantage in a rapidly growing industry may prove irresistible, businesses are well-advised to remain mindful of the potential risks.



Sean HockingSean HockingDecember 9, 2019

If you wish to re-publish this story please do so with following accreditation
AUTHOR:  aBIZinaBOX Inc. CPAs – Jordan S. Zoot, CPA

Our staff wrote this brief commentary as an observation relating to the state of California’s cannabis industry. The principles that produce financial efficiency for California’s cannabis industry are equally applicable in other states regardless of the status of cannabis as medical or recreational or both. Financially efficient operations are universally essential for success in business. We specialize in assisting in the creation of financially efficient business operations.


We want to first describe some of our qualifications for writing this article. As our regular readers know, we provide professional advice and assistance to businesses. We create financial efficiency through a minimization of the taxes local, state, and federal governments take from businesses. Government is the unwanted partner of every business. We developed a special interest in California’s cannabis industry because the total tax load approaches 50% of the total amount a consumer pays for cannabis.


Our interest in California’s cannabis industry extends far beyond taxes. We have a substantial personal and historical perspective relating to cannabis in California. Members of our staff have been involved in California’s cannabis industry since Haight-Ashbury was the place to be in the mid-1960s. Members of our team have witnessed both the damage and the benefit of cannabis. Members of our staff have observed first-hand the injuries the federal government has caused through misguided, oppressive, and racist policies relating to cannabis.


Cannabis is a dangerous drug. Greed is also a dangerous drug. The combination of these two drugs is the principal reason for the chaos in California ‘s cannabis industry. Of these two drugs, greed is the more dangerous. Greed is insidious. The impacts of greed are more difficult to contain. Greed has no redeeming aspects unless success in building an empire large or small is such an aspect. Cannabis in comparison has substantial value as a medicine.


First, a comment regarding greed. Greed for personal or political power is more insidious than the mere monetary greed. Monetary greed is a powerful force in California’s cannabis industry. Monetary greed, of course, goes hand in hand with political power. Many conservative politicians in California became quite amenable to allowing the cultivation, distribution, and sale of cannabis when it was coupled with the promise of substantial tax revenue. When political supporters were in-line to reap the financial benefits of legalization, the merits of legalization became obvious to the most conservative subject, of course, to appropriate regulatory control.


Before we get to the principal reason for this article, we must comment on an aspect of greed that is frequently overlooked as a cause of the chaos in California’s cannabis industry. Many have pointed out that one of the reasons for the chaos in the industry is excessive and oppressive regulations. Why did California adopt unnecessarily oppressive regulations? Greed. If success for CalCannabis were to be measured by the percentage of cultivators the agency has licensed, which is the proper measure for determining success for CalCannabis, the agency has wholly failed.


Why did CalCannabis fail? The actions of CalCannabis represent an overlooked form of greed – administrative empire-building. The more questions that must be answered to secure a license, the more boxes checked and the more documents that must be submitted, the more staff and budget is necessary for an agency to complete its regulatory task. Short-sighted and ill-considered decisions relating to California’s cannabis regulatory agencies started the ball rolling. The chaos will continue until sound leadership and an exercise of sound judgment coupled with appropriate funding, ends the empire-building and requires performance from California’s cannabis regulatory agencies.


CalCannabis failed miserably in its task. The Bureau of Cannabis Control (“BCC”) and the California Department of Tax and Fee Administration (“CDTFA”) performed almost as poorly. If, for no other reason, BCC deserves a “D-” for its failure to guide and direct CalCannabis.  BCC is the agency with overall supervisory responsibility for the regulation of California’s cannabis industry.  BCC is ultimately responsible for every error made in connection with California’s regulation of its cannabis industry.  BCC, of course, made numerous errors in judgment in its own right.


CDTFA deserves a “D-” for its failure to utilize its many resources. CDTFA is likely second solely to the IRS in its knowledge and experience relating to tax administration. CDTFA has a generally more talented staff than the IRS. CDTFA was tasked with the administration of two new taxes – Cannabis Cultivation Tax (“CCT”) and Cannabis Excise Tax (“CET”). Each of these new taxes differed in some respects from any other taxes administered by CDTFA.


CDTFA failed to devote the knowledge and experience available within the agency to the development of systems and processes specifically designed to address the unique aspects of these two new taxes. As a consequence, CDTFA is not receiving all of the CCT and CET it should be collecting. CDTFA is not receiving all of the CCT and CET that is being collected from cannabis consumers. Further, CDTFA cannot readily determine the source of the funds it is presently receiving as CCT and CET. CDTFA failed almost as badly as CalCannabis. Of course, BCC is ultimately responsible for the inadequate performance of CDTFA.


Enough ranting about the incompetence of California’s cannabis regulatory agencies.  Should we blame the Legislature?  No.  The Legislature is just a tool.  The Legislature responds to pressures that are likely to assure the reelection of legislators.  Should we blame Proposition 64?  No.  It is too late.  We opposed Proposition 64, but it passed notwithstanding our opposition.


If any group has principal responsibility for the chaos in California’s cannabis industry, it is the participants in the industry and its leaders. From outlaw growers to the most responsible dispensaries, the industry and the leaders of the industry are as responsible for the chaos as Proposition 64, or the Legislature, or the cannabis regulatory agencies, or local governmental agencies.


The participants in the industry will always follow a path of limited resistance. As long as it is far easier to make a living without being in full compliance with the law, many will skirt compliance with the law. It is leaders of this industry that have truly failed the industry. They have done so out of greed and self-interest. The leaders of California’s cannabis industry have failed to utilize the tools that are readily available. The leaders of the industry clamor for additional legislation to solve problems, but with every change comes additional complexity. Further legislation is not necessary. The tools for financially efficient, fully-complaint business operations are already available for the well-advised.


One of the reasons for writing this article is to point out  Legislature has made two significant changes to California tax laws relating to cannabis – SB 34 and AB 37.   AB 37 eliminates the partial conformity of California tax law with §280E. AB 37 will have a limited impact in the long-run. California’s limited conformity with §280E has only a limited impact on California’s cannabis industry for the reasons discussed in the paragraph that follows.


Tried and true tax avoidance techniques have always existed to minimize the impact of IRC §280E for the well-advised. Unfortunately for the industry, the leading tax advisors in the industry would rather “fight than switch.” A substantial part of the adverse impact of IRC §280E is easily avoided through appropriate accounting and record-keeping techniques. Additional aspects of the adverse tax impact of §280E can be prevented through changes to operating structures that can be utilized in many states, including California.


SB 34 eliminates CCT and CET for specific cannabis programs administered by local governmental agencies. SB 34 will have a substantial impact on how businesses operate in California’s cannabis industry in the long-term. SB 34 makes an important addition to the arsenal of financial advantages that flow from the movement of cannabis from cultivators to consumers as medical cannabis. We have pointed out on multiple occasions the economic benefits that exist from conducting cannabis activities in the medical space in California. SB 34 makes a significant addition to the advantage of medical cannabis for the well-advised.


The Legislature created Cannabis Cooperative Associations (“CCAs”), a special form of corporation, for California’s cannabis industry. CCAs provide a financially more efficient structure for the conduct of any commercial cannabis activity in California than any conventional business structure. Every California cannabis business should investigate how it can utilize the umbrella of a CCA to increase the profitability of the commercial cannabis activity for the owners. Few of the leaders of California’s cannabis industry have taken the time to carefully study this legislation. As a consequence, it will be several years before the benefits of this operating structure are generally understood in the industry.


We have yet to examine the operations of a California cannabis business for which we cannot create substantial financial benefits through adjustments to its systems and processes for the conduct of business.  Last week we visited a newly opened cannabis dispensary to examine its wares and observe its operations.  We purchased some cannabis in order to secure a receipt.  We estimate based on our casual investigation of this new dispensary that we can save the operators over $15K per month before taxes through some minor adjustments to the dispensary’s record-keeping.


California’s cannabis industry has entered into a period of survival.  There are far too many players at every level in California’s cannabis industry.  The legislation already exists for the well-advised to survive.  Additional legislation will merely prolong the period of failure for most who find they cannot succeed with the tools already available.


Sean HockingSean HockingNovember 24, 2019


If you wish to re-publish this story please do so with the following accreditation:

AUTHOR: Glenn Johnson



Shannon Swantek, CQA, Principal Scientist, CEO, Enlightened Quality Analytics


Building the bridge between brands and the marketplace through testing and the importance of good data.


From a branding and marketing standpoint, I’m convinced that until we bridge the science of the medical market with the consumer’s experience in the recreational market, ignorance will linger and the market will plateau with over-saturated brands and buzzwords that deflate the meaning of efficacy. As an example, look at the bubble of CBD in the last year to see consumers swooning over science that is yet to be regulated and false or misleading packaging that profligates on shelves across the US.

If left to their own devices in Cannabis, a mixed bag of state regulations will continue to confuse the market as they rush to implement policies that are challenging for business and almost impossible for the consumer to understand. We all have to do better.

At the forefront of the market, today are those that are working to create the standardizations and methodologies behind testing that will ultimately regulate that experience and allow consumers a greater understanding of what they’re purchasing.

I spoke with Shannon Swantek, the principal scientist behind Enlightened Quality Analytics about this to see her take on what’s happening today.


Shannon Swantek


QUESTION: What’s the state of the Cannabis business today?

 The state of the industry today is focused on legitimization. Attracting qualified investors, operating in established financial structures, and developing the good practices and control to compete with the well-established industries entering the market—all require small licensees and corporate franchises alike to mature quickly in almost every facet of their business.

Where it was once acceptable to cut some corners and operate “cart before the horse” due to the speed at which the dynamics were changing, businesses today must begin to establish credibility not only to their client-base but to the potential market at large.

QUESTION: Regulations, testing and brand messaging aren’t necessarily aligning in the market right now, is it? Especially in CBD/Hemp.


The general public is unaware of the lack of oversight in the CBD world and is, therefore, producing conflicting anecdotal storylines that the industry is poorly equipped to combat.

The data presented at the FDA hearings pointing to many “snake-oil” CBD products on the shelves that do not match their labels or contain adulterants or unwanted high THC levels highlighted the way this medicine is being undermined by poor customer experiences being linked directly to CBD itself.

QUESTION: Which we can see in the dangers of the current Vape crisis…

 The vape crisis indeed was light shined on the dangers of the unregulated market and the lack of data from the regulated market about each unique product, from source material to formulation testing to adequately defend immediately against their involvement. These events, amongst other drivers, have shown the obvious need to regulate product safety in CBD and THC products in a holistic and standardized way.

QUESTION: Talk to me about product risk in today’s market and the importance of self-regulation.

Product risk has largely gone uncaptured as the early state regulatory structures of “point of sale testing” with one-size-fits-all risk created a false sense of security for consumers. This created financial drivers that were myopically focused on passing these tests and getting the product on the shelves.

The reason the FDA regulated industries do not contain a point of sale testing schemes is that the unique risks of each product, e.g a topical versus a suppository, can only be understood and captured by the producers themselves.

The corporate management familiar with the practices of other industries is starting to finally convey the value of having Good Manufacturing Practices (GMP) and ISO compliant management systems beyond that of just meeting regulatory requirements.

QUESTION: How will this ultimately help the market?

By developing testing schemes at each point of product development, it is possible to more fully understand and optimize their product resulting in more cost-efficient manufacturing processes.

A need for data at all of these levels and data specific to product type drives more advanced methodology in the laboratories, often resulting in a better understanding of the matrix and more accurate data.

It’s an exciting time for the industry and those that are embracing the USDA, vape events, and FDA hearings as the catalyst that was needed to jump-start industry efforts globally into legitimacy.

QUESTION: Data will ultimately translate into the consumer’s experience, and elevate a greater understanding of efficacy and controls when it comes to purchasing products, correct?


The lack of education at every level of the industry, from regulators and prescribers to patients and customers, added to the misinformation that is constantly being disseminated as part of aggressive marketing practices, has been hurting the industry chances of success from the early days.

For example, creating strain names that do not match the genetics of a product, using undefined terms such as “solvent-less” and “full-spectrum” inappropriately, and touting “certifications” from groups that were not granted authority to certify by any overarching industry community allows the bad actors to differentiate themselves in misleading ways.

The lack of transparency and availability of product information as it pertains to formulations, ingredients and accurate label information robs the consumer of the knowledge needed to make informed choices. This makes brand loyalty an unpredictable goal and metric as it is unclear what is driving consumer choices through the early stages of industry development.

QUESTION: You’ve mentioned to me previously that as an industry, we must become informed, speak out against the rampant misinformation, and demand more as consumers from our producers—can you explain this more?

Due to the lack of quality management systems mentioned above, producers and processors are not soliciting feedback from their clients and do not have the ability to refine and optimize the formulation of their products to meet client needs when they are identified. This creates marketing and branding strategies that are disconnected from the actual market which results in factors such as “THC %” being the sole price point when it is well known that products with a diverse cannabinoid and terpene profile are more desirable to consumers.

In addition, the false sense of security and trust in product safety and control is largely created by a lack of education and available information on the regulatory and enforcement side.

With reliable sources of information being drowned out by industry “noise”, it is difficult to sift through the misinformation to find the science and data needed for regulators to crack down on false label claims, unregulated or unlisted ingredients, and just plain false advertising.

The lack of consumer confidence only furthers the ability for the bad actors of the industry to continue to keep the playing field leveled to their advantage as they understand that there is not reliable oversight and enforcement from the regulators, internally in the industry, nor from the market, they are trying to fool.

 QUESTION: You and your team at Enlightened Quality Analytics work across different categories, from Cannabis to Dietary Supplements, Pharmaceuticals, and Environmental fields, why is that important to you?

Enlightened Quality Analytics is joining the two pieces necessary for any long-term successful business by bringing technical and quality support to the cannabis industry in a holistic package.

The days of easy money and wild west operations have proven to be costly for the industry, not only in product risk but in operational costs and the often gross mis-valuation of businesses.

Organizations are running to keep up with demand and often grew so quickly that they did not have the time or resources in the beginning to build Quality Management Systems (QMS) with standardizing procedures ensuring they were producing their brand, in the same way, each time.

In addition, they did not create the tracking systems and records with the evidence to demonstrate that those procedures were effective in reaching the brand’s objectives. Without in-process testing to specifications, products can often be produced inconsistently producing large amounts of risk in product control

We have the top team of experts from each technical sphere in the industry with extensive backgrounds not only in cannabis but in the industries that cannabis businesses must start to emulate in order to flourish, such as the pharmaceutical, agricultural, and nutritional supplement industries.

Our team also has extensive experience and networks on the regulatory side of the business – having drafted policy and legislation at the state, federal and international levels.

FInally, we help organizations work with their laboratories for the right testing schemes, data quality objectives, and to produce data that can be validated in the event of litigation or dispute.

QUESTION: The Cannabis industry is evolving quickly for better or worse, how do you see it continuing as we look ahead toward more states coming online and eventual Federal regulation?


The industry is starting to understand that the requirements in a federal scheme will be very different than the “state by state” regulations that were put together, often hastily. This understanding is actually coming behind the realization that industry on an international level already demands quality management systems that are compliant to the same standards of mature industries.

These standards, such as ISO 9001:2015, ISO/IEC 17025:2017, and Good Manufacturing Practices (GMP) — the requirements put in place for consumer safety by the FDA for all consumable products from nutritional supplements to food — need to be in place for an organization to be prepared for the changes this dynamic market is facing.

External Quality Assessment (EQA), the method that allows for the comparison of a laboratory’s testing to a source outside the laboratory is very important. EQA supports businesses at every stage – from facility design review for cross-contamination risks to helping producers design testing schemes that help them understand their unique product, control it, and optimize it.

QUESTION: What’s an example of a company doing it right?

 e cannabis industry that you and I have been talking about. This success is based on product safety and making data-based decisions which is why he developed TagLeaf and why it continues to grow in functionality and support of the industry past laboratories and into all areas of quality. TagLeaf’s platform employs specific modules that ultimately work together, integrating regulatory, compliance, product quality, validation & verification, and track & trace technology, allowing industry participants to manage the entirety of their supply chain.

Most cannabis laboratories cannot afford the complex and expensive LIMS systems in the market. TagLeaf is making quality accessible with a better product that is actually priced so that all size players in the industry can afford to implement proper data quality practices. This increases the quality level playing field across the industry but is not prohibitive for smaller operations; flying in the face of industry culture that keeps IP close to the chest and furthering the idea that sharing technical advances only supports the progress of the whole industry.

I firmly believe this is the only viable way for the industry to move forward independently without interference from regulatory or big business interests. The drive for quality has to come from within.


For more about Shannon, visit


About Glenn Johnson

I am a Marketing, Branding and Communications Consultant w/ experience in high-touch luxury consumer marketing in the travel/hospitality, wine/spirits, fashion/beauty/grooming and Cannabis categories. My talents include Branding & Brand development, Business Building, Strategy and Brand Storytelling. I excel in working with Founders, funders, start-ups, and small brands.

CONTACT ME via email at:

Connect with me on LINKEDIN:


Sean HockingSean HockingNovember 8, 2019


Folium Biosciences, based in Colorado, is one of the US’s largest privately owned CBD processing companies. As the demand for CBD has risen from many sectors of the US & international economy over the last 36 months, so, it seems, has the desire to process business without the normal checks and balances.

After a CLR story published last month about owner , Kashif Shan, further irregularities and questions about Folium’s products and operational management have come to light.

CannTrust was a wake up for the regulated Canadian market will Folium be the same  for the USA as 2019 draws to a close. Colorado has long been regarded one of the the US’s better state markets for efficient compliance and good regulatory management by state and local authorities.

We ask, after the following revelations detailed below, if in the first 2020 sitting, CO legislators have to go back to the drawing board and effect a stricter regulatory and compliance regime than the state currently has in play.

Teri Buhl reports



Formulating Folium Finance: Australis Stock Hiked after Misleading Folium Announcement  

Colorado based Folium Biosciences, run by Kashif Shan, teamed up with Scott Dowty of publicly traded Australis ($AUSAF), to announce the launch of Folium Finance, April 2019.



Kashif Shan Folium Biosciences


Australis is a U.S. based spin off of Canadian marijuana grower, Aurora, with a strategy focused on investing in and acquiring cannabis related companies in the U.S.


Scott Dowty Australis (You Tube)


A press release issued by Folium April 3, 2019 said Dowty had served as a strategic advisor to create Folium Finance, a collection of financial products and services designed as a new means for cannabis start-ups to get banking services from non-traditional banks.  Except, according to two senior Folium employees involved in the transaction Australis at no time had anything at all to do with the creation of Folium Finance.


The press release was issued by Folium, not Australis, but contained within it, this quote from Australis.


“Our growing relationship with Folium Biosciences provides Australis and our brands access to the true global leader in the CBD space,” said Scott Dowty, CEO of Australis. “We firmly believe Folium Finance’s impressive and complete suite of financial service solutions is the industry game-changer.”


Australis stock price which had been trading around $.70 jumped to $1 $USD over two weeks after the press announcement. The sole purpose of the April press release was to announce the launch of Folium Finance.


Australis is listed on the Canadian Stock Exchange and was up-listed to the OTCQB earlier this year to trade on a U.S. based trading system called OTC Markets . The stock currently trades around 40 cents $USD.


Folium Finance was the brain child of Florida lawyer, Craig Brand, who had moved to Colorado to become the General Counsel of Folium Bioscience.


Craig Brand, Lawyer


Attorney Brand had an equity interest in a Loveland, Colorado hemp farm, called Space Cowboys before he became Folium’s general counsel. Brand also runs his own law practice that covers criminal and civil litigation under the business name, The Brand Law Firm with the Cannabis practice called Ganja Law.  According to people who have worked at Folium it was Brand, with the help of a former business development executive Dale Takio that ushered through the approval of Folium Finance by teaming up with a company called CannaSecure Alliance Partner. When John Schilhab, the head of CannaSecure, was contacted by Cannabis Law Report he said he has never met Scott Dowty and “didn’t know the man.” 


John Schilhab, CannaSecure

Dowty has refused to respond to multiple emails about the alleged misleading press release or what his exact role was at Folium Finance. When Folium was asked about the press release a local Colorado Springs lawyer  responded on behalf of the company threatening legal action if CLR wrote anything about Australis and Mr. Dowty’s relationship with Folium it could be considered putting the company in false light . The law firm also wouldn’t answer any detailed questions about Dowty or his CFO Michael Carlotti‘s exact role at Folium Finance. The attorney,  Justin Bailey of Sanders Law ,  did respond by email saying the transaction was private and as a result “the details CLR were seeking were protected by company confidentiality rules”.


Justin Bailey, Sanders Law Firm CO


According to two former Folium employees internal rumblings at the company this past spring were that Kashif Shan had stock or discounted warrants in Australis and the press release Folium wrote was used in the hopes of moving the stock price up. Cannabis Law Report has not been able to verify if Shan holds any stock or equity in Australis and Shan has refused to respond to any emails or calls for comment with regard to inquiries about Australis.


CLR has previously reported on Shan being accused in a lawsuit of financial misconduct involving moving money out of Folium into family bank accounts and not paying investors promised dividends or employees their equity.  Since then Folium and Shan have been sued by two more former staffers at Folium  in Colorado state court over alleged lies about equity ownership to induce top employees to work at Folium. The individuals suing Folium and Kashif Shan are: Dale Takio, Juanita Ramos, & Brandon Young. 


Folium indicates it employs around 200 people and is a vertically integrated cannabis company meaning they own, both, the farms that supply hemp and the processing facility to create what they label as THC-free wholesale CBD. This means the company sells CDB oil and other related products to retailers who then label and brand as their own products.



A local press story (* the story is  factually wrong because they report Diamond A owns Folium) has reported that a farm growing crops and hemp called Diamond A Farms out of La Junta and Rocky Ford, Co is the owner of Folium Biosciences. Folium sales people interviewed by CLR believed Diamond A is owned by Folium and were even asked to tell potential wholesale customers the Diamond A farm locations were Folium farms when clients came to visit the facilities. Folium’s website has a section talking about “our farms” but doesn’t list what the name of the farms are or provide links to their locations.


A records search in the Colorado government database  shows the required industrial hemp grower certificate is registered to Diamond A Farms. Colorado corporate registration records do not list an owner of Diamond A Farms only an agent named , Deborah L Bayles, who is a partner of local law firm out of Greenwood Village, Co called Stinson Leonard Street LLP.


Deborah L. Bayles, Partner Stinson


A subsequent search in the U.S. government federal vendors database that list companies approved to bid for government contracts shows Diamond A Farms is actually registered as a minority owned business with a Dianne Chavez as the owner. A minority owned business has to have a minority person (a women in this case) own at least 51% of the company to qualify for this status.  Dianne Chavez is the wife of Phillip Chavez who was listed as the original owner of Diamond A Farms before Folium showed up to grow hemp.



Bill von Gremp, a California M&A deal broker, who worked on the sale of a specialized hemp with a unique CBD to THC ratio from a Canadian company to Folium for their proposed Canada processing plant in Medicine Hat told CLR,


“Folium told us they wanted out of the grower business.

We tried to sell them the farm but Folium only wanted to buy the grown product.”



Von Gremp agreed to negotiate with Folium on behalf of the Canadian company, including dealing with Kashif Shan, after he was introduced to the company by NBA hall of famer Rick Barry von Gremp said the deal isn’t expected to go through now and he had concerns about Folium’s promise to share a percentage of profits which was part of the deal negotiations.


Rick Barry, NBA Hall of Famer


Part of Folium’s ongoing pitch and advertising to wholesale clients is that the company has a propriety processing method that removes all the THC from the hemp.




Cutting Corners, Sidestepping Regulatory Requirements


According to over half a dozen former Folium employees, interviewed by CLR, mis-truths are simply party of the company’s  corporate culture.


This includes buying hot hemp, meaning cannabis with THC above the Federal mandated minimum % , from a California grower in August 2018 when Colorado hemp supply was unavailable to Folium because of strained relationships with local growers who had experienced slow or non-payment for goods by Folium, according to two former Folium employees.


According to two former Folium sales people involved in the California transaction Kashif Shan (aka Kash) asked a Folium sales employee to locate and negotiate purchase of some out of state (CO) hemp. Folium would be unable to meet sales commitments if they could not get access to  hemp stock .


The Folium salesperson who has asked to not be named for fear of retribution said he / she helped broker the deal via a women named Kristyne Croce who was a hemp broker he / she met at a  hemp/cbd Las Vegas conference called Super Zoo earlier that year.  When reached by phone Kristyne Croce admitted to CLR that she brokered hemp for Folium but said she did not believe she brokered hot product. Croce said the transaction was private and would not explain further details about the deal.


Super Zoo, Las Vegas 2019


This salesperson was told by Croce at the conference  the product  to be purchased had already been tested at the Oregon farm and had the legal limit (.3%) of THC to be considered hemp. When the product arrived at the processing plant in CO, and Folium subsequently tested it, the flower came up as “way above” the legal THC limit; meaning the company had just purchased adult use cannabis and transported it across state borders . Folium subsequently cancelled the check that secured the deposit for the payment telling the Oregon farm they would be unable to use the product.   


But then, according to two former  Folium sales employees familiar with the deal, the cannabis was used anyway to process CBD oil and subsequently sold.


Folium Biosciences is a Colorado headquartered company specializing in the cultivation, extraction, and manufacturing of hemp-derived bulk CBD ingredients and finished products. We are the largest known fully vertical cannabinoid extractor and producer in North America, shipping wholesale CBD products including: Broad Spectrum hemp oil (with 0.0% THC), water-soluble CBD powder, water-soluble CBD liquid, nano CBD, and finished goods throughout the United States and much of the world. Our emphasis on research, product development and clinical science is reflected in our state-of-the-art extraction processes and advanced formulations, resulting in multiple pending patents.


Folium’s General Counsel, Craig Brand, told Cannabis Law Report this story just wasn’t true.  But according to the former sales person who helped broker the deal and another sales person who heard the conversation, a member of the legal team was very aware of the processing and acceptance of the “hot product” and told the sales person he’d take care of the non-payment issue and to stop communication with the farm that grew the hot product.


After Cannabis Law Report published our first story on the alleged problems at Folium  , a former graphic designer at the company, based out of the Colorado Springs office came forward to inform CLR that they, as a designer employed at the company, had been asked to doctor Certificate of Analysis reports by  Folium management.


These reports / forms known as COA’s are used by Colorado CBD processors to prove to retail clients that the CBD is the percentage level the company says it is and that the THC level is the required zero %.


The former employee, said he / she  was unaware of how the doctored reports were used after they were passed onto his / her superiors.


According to multiple Folium staff who spoke with CLR the person who requested the changed CAO reports was Jenna Lubenicki V.P. of operations. Lubencicki, when reached on her cell phone denied the accusation and demanded to know the name of the whistleblowers.


A current wholesale client, Holistic Hounds, in Berkley California, was contacted by Cannabis Law Report and said they had  never had any THC level problems with Folium because they did their own third party testing once the wholesale product was received.


Additionally a former NBA hall of famer who also  acts as a brand ambassador for Folium, Rick Barry, told Cannabis Law report when reached on the phone that he has “never had any problems with Folium’s products”. Barry did not confirm if he had done any third party testing on the product, on his own.


But, a former Folium sales person, Jean Paule Fekete , said he knew of at least one client that did third party testing and the CBD level on product received from Folium was much lower than the level she had been promised. As a result Folium eventually returned the client’s money after multiple complaints.


Former Folium employees have also informed CLR that fudged CBD or THC levels were the least of their worries when it came to the company’s day to day operations.


Instead, their real concern was Folium’s management’s lack of willingness to follow the necessary regulatory requirements to create safe process and disposal of chemicals used to create CBD products.


CLR has learnt Folium  has already suffered two explosions at their processing plant  which included a 911 being called on the night of July 23, 2017, according to an internal company email chain obtained by CLR that included Kashif Shan. One explosion involved an oven, the other a refrigerator, according to counsel Craig Brand.


According to an email obtained by Cannabis Law Report from the July 2017 event, Folium staff were informed that the incident would create a delay in the availability of their product because 20 kilos had been contaminated but the email didn’t inform staff of the severity of the explosion. The email did promise Folium would work on safety conditions for staff.


In July 2017 an email from a member of  the Fire Protection Engineer team of the Colorado Springs Fire department, Steven Smith, sent to Folium showed serious concern was expressed by the CO Fire Dept because they had been informed Folium was housing 3000-5000 gallons of ethanol  without the required permits.


Two former Folium employees involved in operational matters at the company told CLR they were asked on more than one occasion  to rent trucks and move the ethanol to a friend’s house when the fire inspectors or OHSA came through the Colorado Springs plant.


This, we have learned, happened regularly throughout  2017 and 2018. Additionally a former driver for the company said he / she was asked to move dangerous chemicals, without relevant paperwork, by  Folium executive, Brad Jones, but had eventually refused to comply with requests because the company was not licensed to transport chemicals.




The driver also added that Folium’s Rocky Ford location  was used to house the chemicals the company wanted to hide from inspectors.



20094 Hwy 60 Rocky Ford, Co 81067, Google Maps



In an exit letter obtained by CLR one employee wrote to Folium executives in 2018 highlighting the company’s modus operandi for transporting regulated chemicals


“I’ve been instructed on many occasions to move thousands of gallons of ethanol in rented trucks, off site, in preparation for Colorado Springs Hazmat/Fire and OSHA inspections.”


A review of the Colorado OSHA website that tracks inspections, complaints and violations within the state’s regulated cannabis sector show that Folium has been fined a number of times over the last three years.


In 2018 the fines were listed as ‘serious’ and involved problems with chemicals among other safety issues in the processing facility. This summer (2019) the Colorado division of OSHA had to go to federal court and get a warrant to enter the facility after attorney Craig Brand denied their entrance on a surprise inspection, according to the warrant application.  The warrant listed over a dozen serious concerns that related to employee safety. David Nelson, a manager at OSHA, wrote in the warrant,


“Employees are exposed to chemical and fire hazards due to inadequate storage, handling, use, and clean-up of flammable liquids, such as hexane.”


Attorney Brand told Cannabis Law Report he didn’t allow the OSHA inspection because he wasn’t on the premises at the time and was surprised they wanted to review an area that held what he called “our propriety equipment”.


OSHA subsequently obtained warrant approval and entered the facility over a week later. As recently as September 30, 2019 Folium has settled fines that OSHA listed as serious concerning the control of hazardous energy and other safety issues.


Folium CEO, Kashif Shan would not answer any questions about the OSHA inspection or the fines when approached by CLR.


Attorney Brand is no longer with the company and said he was not aware of the September 2019 fines.



Strong Arm Tactics to Silence Whistleblowers and Competitors

“Intimidation” is the word used by former employees when talking about how Kashif Shan operates the company.


Over a half a dozen former Folium staff interviewed by Cannabis Law Report  said false internal charges, from being accused of taking a range of  illegal drugs at work, threatening other employees during arguments, and sharing trade craft with competitors, were made up about them when Folium management wished to move them out of the company’s employ  after they made specific complaints about operational matters.


This approach to HR management was seen as an avenue  for Folium, as a company, to avoid unemployment tax payments.  It is also alleged that Folium attempted to make some staff, leaving the company at their own will, sign NDA’s with a promise of only a few weeks extra payout.  As a result Cannabis Law Report is not currently in a position to name former Folium employees interviewed for this profile.


Additionally, we have learnt, when the Folium’s former head of sales, Ryan Lewis, left the company to launch his own bulk business sales CBD company called Global Canabanoids in January 2018. There was, we learn, an aggressive pursuit by Folium management to gather “dirt” or information about Lewis to build a lawsuit, according to an email written by attorney Craig Brand and obtained by CLR. Lewis did subsequently  file an arbitration claim against the Folium but it was settled out of court and the settlement was not made public. Internal documents obtained by CLR show Lewis had been given 7 percent equity in Folium when he came on as a new employee. 

Ryan Lewis, Chief Business Developer of Global Cannabinoids, talks about the emerging markets for CBD and hemp-derived products.Global Cannabinoids is a high volume producer and distributor of bulk and wholesale phytocannabinoid-rich (PCR) industrial hemp—naturally high in CBD, CBG, CBC, CBN, CBDA, and terpenes.


But Kashif Shan’s negative reaction about Lewis leaving and taking Folium clients with him went much further, much much further. The following allegations investigated by Colorado Springs Police read more like a Scorsese movie plot line than the machinations of a CBD processing plant and white labelling outfit.


According to three individuals who either worked at the company or were employed on a consulting basis, they all confirm that they heard first hand from a Folium executive of an attempt in the summer of 2018 to hire a person and pay a six figure sum to kill Mr Lewis.


Cannabis Law Report has spoken with a lawyer who had verified that the Colorado Springs Police department investigated the case but no charges were brought.


It’s unclear if anyone at Folium was ever able to actually hire a person to undertake the murder for hire or if the offer was made in the heat of the moment anger and not intended to be carried out.  Kashif Shan would not respond for comment about the alleged murder for hire offer. Former Folium counsel, Craig Brand, told CLR that  the claim was “ridiculous”. Henry Baskerville  Ryan Lewis’ lawyer   called the  Colorado Springs Police Department when he heard about the murder for hire plot and asked if the CO Springs Police Department were investigating. The officer said yes but would not comment to Baskerville on who they were investigating.


Henry Baskerville, Fortis Law Partners. Henry Baskerville, recognized by Super Lawyers, Best Lawyers in America, and National Trial Lawyers, is an experienced trial lawyer who focuses on complex commercial litigation, cannabis law, white-collar criminal defense, government contracts, and construction law.


Cannabis Law Report also learns that Shan told a cannabis podcast in a rare interview in January 2019  that prior to Folium he was a tech entrepreneur in San Francesco.


But CLR has not yet discovered after months of relevant research the name of this technology company. Also  we have been unable  to locate where this “tech”company  was based and what work he and they undertook.


A separate USA court records search shows that Shan was president of a real estate services company prior to the 2008 financial crisis in San Jose, California. The company, Aidan West Financial Group, and Shan filed for personal bankruptcy as a result of the financial crisis. Court records show the trustee for the company had to file a claim of fraudulently transference against the company saying Shan allegedly moved assets out of the company prior to the bankruptcy. The claim was eventually settled.


Editor’s note: In the reporting and research for this story Teri Buhl was repeatedly threatened over the last two months when trying to reach current Folium employees to get their response for comment about accusation or their misconduct saying they would report her to the local police for asking questions. Buhl ignored their threats.
This week Buhl was served with a lawsuit (prior to story publication) claiming defamation for calling Folium staff for comment and conducting journalistic research. Law360 – a US trade publication for Lawyers wrote about the attempt to silence Buhl before the publication of this story
Please see / download document at


I’m a professional financial investigative journalist who has written for the Greenwich Time, Hearst CT Newspapers, Forbes Magazine,, The, New York Magazine, New York Post, Trader Monthly, Housingwire, ML-Implode, The Business Insider, Long Island Business News, Dealbreaker, New York Observer, Bitcoin Magazine, DealFlow Media, and more. For the last five years I have been a contributing reporter for Market Nexus Media who publishes a financial trade publication called Growth Capital Investor.

I earned my breaking/investigative news chops reporting during the financial crisis in 2008 for the Sunday edition of the New York Post. I was one of the first to report on the missteps at IndyMac that lead to government investigations and lawsuits against the banks founders. Caught hedge funds like Carrington Capital abusing investors without disclosing conflicts of interest with senior RMBS bond holders; they were sued by Wilbur Ross for Civil RICO. I exposed Bear Stearns misleading their own investors and monoline insurers on the quality of the loans in their mortgage-backed securities, which led to a fraud lawsuit against JP Morgan/Bear Stearns and the $13 billion settlement with the DOJ in 2013. Since 2010 multiple Wall Street firms, that my reporting warned about first, have been [JP Morgan, SpongeTech, Security Savings Bank, SAC Capital, Palm Beach Capital Management, New Stream Capital, NIR Group/Cory Ribotsky, Bear Stearns RMBS Traders, Mike Perry IndyMac CEO, Steven Muehler and the Nanocap MarketPlace, Barry Honig and The Frost Group] investigated or charged for financial violations by the FBI/SEC/State AG or shut down by bank regulators.

The Huffington Post named me the number three most dangerous financial journalist for being willing to challenge the establishment and inform readers best. I’m working on trade-marking “Smashmouth Journalism”

Read More About Teri’s Work At:

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