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AvatarHeather AllmanFebruary 8, 2020
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17min2890

Cannabis sustainability has a long, winding road ahead before perceptible change occurs and progress slowly begins. As a society, we are obsessed with “green,” regardless of your definition: money, cannabis, recycling, or our politics. “Green is the new black,” as the colloquial adage goes, and a black stain is exactly what the Cannabis industry is currently leaving in its massive wake. The need for renewability, recyclability, and regulation is desperately required in all aspects of the cannabis production and process, from cultivation to end user.

There are comparable examples in the business and societal spheres, however, such as in the booming boutique industry. Consumers demand cleaner, greener operations and solutions at the corporate level and some companies deliver.

For example, D’Loraine Miranda announced proud news on February 4, 2020:

Bare Market, Toronto’s Package-Free Shop, is Finally Open and here’s what you need to know about the incredible new space.”

What is “Bare Market, you may ask?

“Back in 2012, Dayna Stein noticed a gap in the Toronto market for some of the most in-demand items as of late: package-free goods. “It was impossible to find all the things I would need in a day without the excess packaging,” she says. Fast forward eight years later and Stein has finally found a permanent home for Bare Market — her package-free shop offering everything from beauty products to household cleaners in bulk — which is now open to the public.

Prior to securing the east end locale, Stein had been operating Bare Market — which officially launched in 2018 — via pop-up shops around Toronto. The events proved to be incredibly successful, which should come as no surprise, given the increase in environmental awareness and a push towards reducing our waste in any way possible. As a result of these 65 pop-ups, Bare Market was able to help reroute more than 7,300 containers from ending up in landfills.

While this may seem like a minuscule number compared to the reported 120 billion units of packaging the cosmetics industry churns out per year, it’s a step in the right direction. In fact, the number of beauty brands opting for more sustainable packaging options (read: recyclable; refillable) appears to be on the rise.

Setting foot into Bare Market’s new 2,800 sq. ft. home is like walking into an airy, Goop-inspired version of Bulk Barn. The space is outfitted with sleek display tables and wood shelving stocked with body care products, household cleaners and dry foods (everything from tri-colour quinoa to potato chips), all in bulk.

However, unlike anything and everything Goop:

Miranda explains that their company “uses waste as a lever to start a dialogue around larger and more complex environmental and social issues…that means encouraging shoppers to bring in any container they have on hand, as long as it’s clean, dry and not chipped. Meaning, yes, there’s absolutely no shame in bringing that old yogurt container you dug out of your stash or an old Ziplock freezer bag. The shop also stocks an assortment of branded reusable bags and containers, should you wish to purchase your own or borrow one for a small deposit.”

In keeping with the no-waste ethos, their cafe does not offer disposable cups —  for a pleasant change!

“You either bring your own cup, or you can borrow a travel mug for a $5 deposit, part of the Reego reusable cup program offered in select Toronto cafes. She plans on also using the shop to host workshops, events and panels in order to further the discussion around sustainability and zero-waste.

Dayna Stein closes with a powerful statement: “Our business is truly about community building and taking collective action.”

Then there’s the bursting cannabis industry, filled with all its technology and compliance –yet void of any measurable reduction in the collective carbon footprint. I’ve talked in my previous series about the lack of recycling for collection for unused product and used packaging in the cannabis sphere. This must change sooner rather than later if we are to truly “succeed” in this industry by drastically reducing our joint cannabis carbon footprint in a modern society sharply focused on all things green, no pun intended.

For now, take comfort in the fact that at least CARTS FOR THE ARTS is taking action and collecting vape cartridges and making beautiful art out of them, as seen in the article below:

CARTS FOR THE ARTS: DISPOSABLE VAPE CARTRIDGE – A WASTED PROBLEM

Like coffee pods, disposable water bottles and plastic straws, vape-related waste is attracting attention. It is not surprising given vaping’s surging popularity, but no one wants to see industry growth hindered or environmental responsibility unfulfilled. We would like to think that the industry is caring, environmentally conscious. But are they? From patron to manufacturer, to dispensary what can they do?

Recycling vape cartridges, batteries and disposables isn’t as easy as it could be. Carts for the Arts seeks to raise awareness to the fact that we need better legislation and better awareness to help the industry as a whole become more sustainable.

The ‘Carts for the Arts’ exhibit premiered at the UpcyclePop Holiday market event on December 15th 2019, which is a holiday event and market for upcycled and repurposed items that hosts live performances, interactive art , creative stations for kids and an art gallery exhibit or two.

Carts for the Arts exhibited in the large Gallery Suite along with an expert  panel disscussion on the topic of the tsunami of waste consistantly growing from single-use cartridges, batteries, and packaging currently produced in the cannabis industry.  Carts for the Arts seeks to create awareness through art exhibits and panel disscussions while driving stakeholders to convene and work together. Legeslation must change to enable closing the loop with a zero waste mindset, manufactures must start considering how they can begin to redesign their products and brands must find a better way to introduce their product other than disposables.  and begin research and development with manufacturers to redesign with reuse and and zero waste in mind. 

This is a new and rapidly growing industry, if we all put ourminds together now, then maybe, just maybe the cannabis industry could come ahead and be the designated leader in sustainabilty for other industries to follow.

SOLUTION LEADERS

  1. https://canna-coop.com/
  2. https://www.nsaction.us/
  3. https://www.bigkarma.us/

IN THE PRESS

Up Kindness is calling attention to the challenges surrounding vape cartridge recycling with an upcycled art exhibit, and brainstorming solutions through panel discussions. Cannabis Business Times – December 19, 2019 

Disposable vapes and cartridges reach new highs every day, and with them an enormous amount of post-consumer waste. According to BDS Analytics, vape cartridges are the fastest-growing sector of California’s $2.5 billion cannabis industry. Millions of power supplies and cartridges are produced every year, and California is expected to account for nearly one-fourth of all cannabis sales in the U.S. by 2024.  The Leaf Online – December 10, 2019

As you toss your used-up cannabis oil vape cartridge in the trash, you might wonder, can I recycle that instead? The short answer is no—and with the popularity of vape pens steadily rising, that’s a problem.

Reports show that concentrate sales are expected to overtake flower sales by 2022, with a large majority of these oils being consumed through pre-loaded vape cartridges.  Read more on leafly.

With so many different iterations of disposable vape pens flooding the market, environmentalists and concerned consumers are cringing about the inevitable flood of post-consumer waste these products are causing. The cannabis industry is growing, and its garbage problems are growing right along with it. Read more on Forbes

Upcycle Pop is a program of  the nonprofit – Up Kindness – DBA, The Atrium – A creative Innovation Center for Sustainability. Lets make human kind a net positive to this planet and build a kind and sustainable future.

Contact:

UPCYCLEPOP LAB, 7300 Folsom Blvd #101, Sacramento CA 95826, 916.642.9415

SUSTAINABLE CANNABIS COMPANIES 2019 DIRECTORY

  1. Sungrown Packaging and Higher Standard Packaging from recyclable and compostable materials
  2. HISIERRA sustainable dispensary exit bags from renewable plant-based materials from their fossil-fuel free facility.
  3. Regenerative farming methods; many cannabis companies are going beyond sustainability using such methods.
  4. Flow Kana “beyond-organic” and sustainable cannabis; partner with veteran farmers that grow small batches of sun-grown cannabis.
  5. Eel River Organics organic and sustainable marijuana farming methods and outdoor-grown cannabis; dry farming is as close to zero-waste and biodynamic as is currently possible.
  6. L’Eagle only adult-use, indoor grown cannabis grower with a Clean Green certification.
  7. Terrapin Care Station
  8. Bird Valley Organics ancient Hugelkultur technique.
  9. Swami Select
  10. Catalyst Cannabis Co
  11. Raw Garden concentrates, labeled Clean Green.
  12. Sana Packaging
  13. Hemp Wick—exactly what the name implies; produced by many different brands and companies.
  14. Puffco—high-quality, non-toxic, long-lasting vaporizers; refill chamber for hash oil that does not come from traditional cartridges.
  15. Phuncky Feel Tips
  16. Marley Natural
  17. Sunrise Mountain Farms, a clean, sustainable approach to producing cannabis alongside naturally thriving wild elderberries (Sambucus).
  18. Papa & Barkley’s; company’s pre-existing, small-holder agricultural ecosystem (think Dr. Bronner’s) which is 100% free of the harmful pesticides, herbicides and fertilizers necessitated by Big Ag, makes the need for a Big Ag cannabis takeover in California completely obsolete,” according to CEO Michael Steinmetz, who believes the cannabis industry at large, needs to “prioritize environmentally responsible practices and source from sustainable resources.” 
  19. Canndescent; invested a combined $3.75m to retrofit its inimitable 11,000 square foot warehouse for solar and cannabis production; CFO Tom DiGiovanni reports they want “to help the ‘green’ industry to go greener” by accelerating the adoption of solar power and “green door” practices within the cannabis industry.

 


AvatarHeather AllmanFebruary 7, 2020
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4min1300

If you own or manage a marijuana dispensary or adult-use store, hiring a highly competent and motivated staff can greatly improve your bottom line. Identifying and understanding the full scope of your needs prior to getting your business up and running is imperative to having an efficient and productive business.

“As well as needing competent employees, you need to hire a team with a strong work ethic and the desire to succeed. Employing a staff that goes above and beyond the basic essentials to running an efficient retail business and hiring a knowledgeable staff that engages in outstanding customer service should be your ultimate goal. Your budtenders should not only know the various strains and products inside and out but also should know retail—because as well as being an exciting and relatively new type of business that caters to marijuana consumers, cannabis dispensaries are retail businesses, and the basic principles of running a successful retail business apply. A dispensary staff must never lose sight of that fact.

The structure of your dispensary operation will have several levels to keep operations running smoothly. An incoming budtender who performs well should expect to earn the opportunity to eventually become a lead budtender with increased responsibilities like training and shadowing new employees on the job.”

 


AvatarTeri BuhlJanuary 29, 2020
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27min3620

Authored By: Teri Buhl

Veteran DOJ prosecutor Ken M. Harmon thought he had scored a big criminal case against two cannabis businessmen for the Department of Justice in the early days of pot stocks trading on U.S. stock markets.

Ken Harmon

 

He personally led a raid of Colorado based Fusion Pharm in 2014 off a warrant that said the DOJ thought the company was, amongst other things, really growing and selling cannabis and booking it as revenue for their Pharm Pods products which would mean Fusion Pharm was nothing more than a publicly traded Ponzi Scheme that was making false statements about their financials in filings with regulators.

The SEC subsequently halted the stock for two weeks in mid-2014 and eventually in September 2016 the two Colorado men who built the company, Scott Dittman and William Sears, were indicted on multiple charges of conspiracy to commit securities fraud, wire fraud, and mail fraud.

 

Scott Dittman Explains Pharm Pods Video

 

Dittman and Sears are set to be sentenced this week and are facing years in jail while at the same time filing motions with the Colorado Federal Judge, William J. Martinez, showing some alarming behavior by the DOJ prosecutor Ken Harmon which was discovered after they had made plea deals.

In 2016 Assistant United States Attorney (AUSA) Ken Harmon was able to freeze Dittman and Sears funds and threatened that their families would lose their homes if they didn’t cooperate with authorities. The government estimated the securities fraud constituted $US12 million and Sears had $US9 million in an account for them to grab off of stock sales.

Harmon was confident he had a rock star case. But now, new court records show behind the scenes the DOJ’s case was falling apart.  Issues included the FBI agent, Kate Egan-Funk, lying about her credentials as a registered CPA in Colorado, to obtain the initial raid warrant

 

Kate Funk search warrant application

 

……..and, also confidential informant, Chris Haddad, misleading the bureau about the company growing and selling marijuana and misleading the government about Fusion’s sales figures.

Additionally, South Florida based securities attorney, Fred M. Lehrer, who wrote many of the company’s OTC filings, disclosures and most opinion letters for free trading stock appears to have gotten a major hall pass from the DOJ for his alleged role with Fusion Pharm. In fact, the defendants learned AUSA Harmon had not disclosed that he previously worked with attorney Fred Lehrer for a year when they were both working with the DOJ in South Florida. Attorney Lehrer was hired as corporate counsel for Fusion Pharm around August 2013 and also represented Billy Sears marketing and sales company Meadpoint.

 

 

Fusion Pharm began in 2010 building portable containers that grow produce like lettuce. As new cannabis-friendly legislation paved a way for legitimate products related to marijuana their principal business was the development, manufacture, and sale of steel shipping containers retrofitted and refurbished for use as hydroponic growing pods, branded as “PharmPods,” for indoor plant cultivation, primarily cannabis. Via a reverse merger, the company went public in February 2011 trading under the symbol $FSPM. The cannabis stock was stuck below a dollar trading with low share volume for the first few years but in January 2014 the stock took off and with millions of shares trading, eventually soared to a high of $9.

 

 

 

During the stock run attorney Fred Lehrer, who according to Billy Sears received stock as part of his compensation, was also responsible for advising the company on disclosures and OTC filings. On May 16, 2014 the SEC halted the stock. The same day the FBI raided the Commerce City, Colorado offices of Fusion Pharm taking computers, books and records from the property and also looked for cannabis which they never found. According to a person who worked for the company at the time; a few weeks before the raid attorney, Lehrer had called Fusion’s CEO Scott Dittman, sounding intoxicated, and said he was ‘getting concerned’ about the company disclosures.

Fusion’s stock was able to continue trading on the grey markets and no charges were brought by the SEC or the DOJ until two years later. In the spring of 2014 cannabis stock analyst Alan Brochstein wrote that he had noticed an SEC agenda of shutting down cannabis stocks without any charges being filed. Seven cannabis companies had been halted that spring while the Benzinga 402 Marijuana index showed a 300% increase from 2012 to spring 2014. The SEC halt of Fusion Pharm for alleged accounting irregularities and the FBI raid of Fusion Pharm, which was disclosed in filings, effectively shut down this early-stage marijuana business in mid-2014. A review of government testimony, internal emails, communication with the DOJ attorneys and recorded conversations with company executives and their attorneys by Cannabis Law Report show all the SEC had was really Section Five violations for the sale of unregistered securities.

But AUSA Harmon managed to persuade the Fusion executives to plead early by seizing assets, a move that could be appealed because the FBI agent, Kate Egan-Funk, lied in her warrant report.

And a well-respected lawyer in the microcap space even wrote a whistleblower letter…

 

PP-Brenda-to-Matt-Kirsh

 

…to the head of the DOJ in Denver, Matthew Kirsch, in April 2017 to warn him of what looked like judicial misconduct by AUSA Harmon. The letter also included documents that showed how attorney Lehrer made alleged false statements in SEC interviews and never disclosed his conflicts of interest to Fusion Pharm. The whistleblower also called the SEC lawyers on the case.

Ken Harmon left the DOJ in the middle of Fusion Pharm case in December 2017 after working for the government for 28 years mainly on financial fraud cases. A current review of his LinkedIn profile shows he didn’t leave for a big law high paying job immediately. Instead, in an odd move he set up a one man private practice.

Then, in December 2018 he finally got a job at a mid-tier Denver firm, Springer & Steinberg, known for  ambulance chasing cases in personal injury law. Rumors swirled in the Denver legal community that Harmon had been forced out of the DOJ.

When reached for comment Harmon told Cannabis Law Report that this was not true, stating, he had been planning on retiring for a while and was trying to wait till the Fusion Pharm case ended but it kept dragging on so he left the department. Harmon also claimed he had multiple good job offers while planning to leave the DOJ but his LinkedIn profile doesn’t show he secured those jobs.

Not totally Innocent

Fusion Pharm, also, wasn’t totally forthcoming to investors in OTC filings or their press releases. The fact that Billy Sears had a prior criminal record for a securities violation and served 30 days in jail was never disclosed.

On paper Sears was paid as a sales consultant for the company and initially owned the sales distribution company Meadpoint. He then transferred the company into his mother’s name but kept his name of the broker account at Scottsdale Advisors. Emails showed attorney Lehrer warned Sears and the company CEO Dittman about what role Sears could and could not have regarding management decision to keep his consultant status. The DOJ brought in undercover agents posing as investors and even recorded Scott Dittman calling Sears his partner and co-founder of the company.

On top of that, the llcs that made convertible debt deals with Fusion should have been disclosed as converted stock going to Sears as an affiliate of the company because he is the brother-in-law of Dittman. Investors had the right to know someone with millions of converted stock was also a family member and not a true independent non-controlling investor in the company. The government also initially charged Sears with making fake convertible debt loans. Meaning they thought Sears never loaned real money to the company but still got converted stock. AUSA Harmon and his team latter learned that was wrong the company did really receive cash for the convertible debt deals.

Another theory the SEC brought in their parallel case was that Sears had sold his convertible stock and then used that cash to give it back to the company to book as sales of the PharmPods. But that theory came up as questionable also. On advice from attorney Lehrer, Sears through his sales and marketing company bought all the pods and then resold them at a markup. Sears says he was advised by Lehrer that the money from stock sales could only be used to put back in the company for equipment purchases and not operations which is what they did. A third party investigator then verified the over 70 pods Sears sold went to actual customers.

To get the convertible debt free trading for Sears to sell, a prior lawyer for the company agreed to backdate the notes. An illegal move that landed attorney, Guy Jean-Pierre, with an indictment and was found guilty on 28 counts of securities, wire and mail fraud. Haitian-born, he earned his law degree at Columbia. Guy Jean-Pierre also wrote numerous false opinion letters from 2011 to beginning of 2013 but not at the time the stock was flying high in 2014.

 

 

 

 

 

Additionally attorney Lehrer allegedly misled the SEC in interviews about how and when he learned prior counsel and corporate secretary Guy Jean-Pierre had been fined by the SEC for previously false opinion letters in another case years before. Lehrer knew about Guy Jean-Pierre because he actually worked with his ex-wife, a lawyer, to make a whistleblower report to the SEC. When Lehrer came on-board as counsel he could have advised the company to contact the SEC and report that the company could have unregistered securities issued and could need to restate filings. But that never happen.  

 

Why the DOJ didn’t charge Lehrer even though he also allegedly wrote false opinion letters like Jean-Pierre has never been explained. Or why the SEC ignored the whistleblower letter and told one of Dittman’s defense lawyers it didn’t matter because in their eyes the case was closed after Sears and Dittman plead is concerning. According to emails with Sears’s lawyers and the DOJ, AUSA Harmon had warned Sears he couldn’t talk to the whistleblower because that person could be called as a witness against Lehrer who ‘could be a target of the investigation’. This move by Harmon is highly questionable since Lehrer was never charged and the SEC never filed a case against him. Keep in mind the whistleblower had outed Harmon for his likely conflict in the case because he had a prior working relationship with attorney Lehrer.

 

Harmon was equally combative when first contacted by Cannabis Law Report demanding to speak with the publisher instead of answering simple questions. It took four follow up emails to get him to answer why he left the DOJ and admit he had worked with Lehrer. He also said that he heard Billy Sears was making defamatory statements about his work on the case. When we kept asking about problems in the case he deferred to the DOJ and said call the current staff at the agency. Harmon knows the DOJ doesn’t comment on open cases except in press releases.

Sears who pled guilty to conspiracy to commit securities fraud and a tax violation is facing up to eight years in jail. He will be sentenced Thursday January 30, 2020 and says he plans to file an appeal after sentencing. Dittman has his sentencing the same day and faces up to five years in jail for his plea of conspiracy to commit securities fraud. Dittman would not return a call for comment. Guy Jean-Pierre was sentenced to 84 months in jail on Wednesday, January 29, 2020.

Attorney Lehrer told the SEC in interviews he wouldn’t be writing any more opinion letters for publicly traded companies but has no official ban on him and is believed to be continuing that work for microcap companies. Lehrer, through his counsel, didn’t respond to the allegations made by Dittman and Sears in recent court filings of his alleged role in the scheme and wouldn’t answer any detailed questions for Cannabis Law Report.

UPDATE 1.30.20 12:25pm –

After the story was published Lehrer’s attorney and friend James Sallah has finally decided to respond for Fred to our questions. Fred now says he did not receive any stock or warrants for his work writing opinion letters for Fusion Pharm and never had beneficial ownership of Fusion Pharm stock.

Cannabis Law Report reviewed an email sent by Fred Lehrer to Billy Sears on August 28 2013 that said he would require a block of stock from 200,000 to 400,000 shares as part of his compensation as corporate counsel for legal work to do registration statements.

Lehrer said today that transfer agent records show there was no stock transfer in his name. Lehrer was not able to provided CLR with copies of these transfer agent records.

Fred Lehrer also wants to point out he cooperated with the SEC and DOJ investigation.

UPDATE 1.30.20 5:20pm –

Scott Dittman the CEO of Fusion Pharm got the maximum sentence, five years in jail, with three years probation upon release.

The monetary penalties are $1.1 million for Dittman who has to report to prison in Eastern Pennsylvania on March 5, 2020.

UPDATE 1.13.20 –

William (Billy) Sears was given the max sentence of 96 months, eight years, for both counts and three years of probation upon release. His personal monetary penalties are $1,160,160.81 and for the tax evasion charge, he is ordered to pay restitution of $2,433,818.00.

Sears was remanded to prison at his sentencing because the DOJ lawyers complained to the judge about Sears creating a website with discovery evidence about his case called Colorado Corruption, which included photos of FBI agent Kate E. Funk, her husband and some children at their wedding. The photos [exhibit 16] are public on the photographer,s website and could be considered fair use assuming the photographer didn’t argue copyright.

Additionally the DOJ argued Sears violated his bond because he did not get permission from pre-trial services to start a new business. The DOJ argued a business called Montverde Partners LLC, which is not registered with the state of Colorado in Sears name, was really his business. And the DOJ found another business called BJ’s Rocks LLC they said belonged to Sears. Sears had previously been charged on two other cases in New York and Florida unrelated to this case which the judge took into account.

The current DOJ lawyers on the case are: Robert Brown, Jeremy Sibert and Tonya Andrews. When I reached DOJ press person Chris Larson this morning and asked about the sentencing he bragged that it was a good outcome because the defendant ‘got a lot of months’.

Peter Bornstein, Sears attorney, told Cannabis Law Report, that he will still try to appeal the judge’s denial of his motion to change Billy Sears plea.

FURTHER MATERIALS

 

I’m a professional financial investigative journalist who has written for the Greenwich Time, Hearst CT Newspapers, Forbes Magazine, Fortune.com, The Atlantic.com, 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, SIRF.org 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: https://www.teribuhl.com/about/


Gretchen GaileyGretchen GaileyJanuary 29, 2020
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3min2770

Governor Andrew Cuomo (NY) announced his plans to legalize cannabis for adult use in his state budget speech last week. He made the announcement with such enthusiasm some think legalization is an actual possibility this year. A major stumbling block in 2019 was sorting out the social and criminal justice issues that come with cannabis legalization, it will be so again this year.

Can the Empire State overcome the usual pitfalls and set up a market that will finally address those disproportionately affected by the War on Drugs?  Unlikely.

If we look closely at the Cuomo cannabis plan there are red flags. According to Cuomo’s budget, “the program will limit the number of producers and retail dispensaries to guard against a market collapse.” 

That may sound good but time and again states that have limited licensing markets face serious product shortages, increased consumer cost, and greater startup expenses that ultimately keep illicit markets going. 

Fewer licenses at higher costs mean fewer entrepreneurs. In many markets the initial capital requirements are so high minority entrepreneurs can’t compete. 

Cuomo says that he wants to “encourage equity through craft growers and cooperatives, and provide training and incubators to ensure meaningful and sustained participation by communities disproportionately harmed by cannabis prohibition.” If you read between the lines, that means the minorities who cannot meet the state’s high standards for a license will be thrown a bone and be allowed into a collective of other potential unworthy license holders who won’t be able to compete with the deep pockets of more established brands. None the less, come election day, it may seem to some that the Governor kept his promise for social and criminal justice.

The budget also says, “the Office of Cannabis Management will administer social equity licensing opportunities, implement an egalitarian adult-use market structure….” 

The fastest way to develop an egalitarian cannabis model is unlimited licensing, low barriers to entry, access to capital, ending “grandfathering” of medical market license holders, and a strict government agency that ensures access to minority entrepreneurs and polices abuse like shell companies scooping up licenses. 

While a truly free market is the American way, that free market needs to be tempered with reasonable regulation.  However, that regulation should not limit the number of licenses, or make licenses inaccessible to less established entrepreneurs.


Sean HockingSean HockingJanuary 29, 2020
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6min3990

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.

joshua.schmidt(at)vinnovatepl.com

 

[1] https://prohibitionpartners.com/2019/05/10/three-things-we-learned-from-the-asian-cannabis-report/

 


Debra BorchardtDebra BorchardtJanuary 22, 2020
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5min4070

The NERA Economic Consulting (www.nera.com) recently published a report that noted a trend in cannabis class action lawsuits being filed for 2019. The report wrote, “Between July and December 2019, six cases were filed on behalf of investors in the cannabis industry alleging either (1) failure to disclose weak demand for the product or the expected decline in revenue and profits or (2) misrepresentations related to quality of the product, the status of inventory, or markup on biological assets.”

These are the companies in which cases were filed in the 2nd Circuit Court:

India Globalization Capital, Inc.     Filed on: 02 Nov 18 Pending
CannTrust Holdings Inc.                 Filed on: 10 Jul 19 Pending
Sundial Growers Inc.                         Filed on: 25 Sep 19 Pending
HEXO Corp.                                       Filed on: 26 Nov 19 Pending
Trulieve Cannabis Corp.                  Filed on: 30 Dec 19 Pending

In the 3rd Circuit Court were:

Canopy Growth Corporation          Filed on: 20 Nov 19 Pending
Aurora Cannabis Inc.                       Filed on: 21 Nov 19 Pending

In addition to the suite that NERA mentioned, Charlotte’s Web Holdings Inc. and Infinite Product Co. are both dealing with proposed consumer class suits in California. These cases are alleging the companies improperly marketed products made from CBD. The suits were sparked by Warning Letters published by the FDA in November. They allege that products made by both Charlotte’s Web and Infinite did not abide by the FDA regulations and, as such, violate California law.

The cases are Dasilva v. Infinite Product Co., C.D. Cal., No. 2:19-cv-10148, complaint 11/27/19; McCarthy v. Charlotte’s Web Holdings, Inc., N.D. Cal., No. 5:19-cv-07836, complaint 11/30/19.

Charlottes Web had labeled their products as dietary supplements, which seems to be what the FDA took issue with. The FDA has written, “Based on available evidence, FDA has concluded that THC and CBD products are excluded from the dietary supplement definition under section 201(ff)(3)(B) of the FD&C Act [21 U.S.C. § 321(ff)(3)(B)]. Under that provision, if a substance (such as THC or CBD) is an active ingredient in a drug product that has been approved under section 505 of the FD&C Act [21 U.S.C. § 355], or has been authorized for investigation as a new drug for which substantial clinical investigations have been instituted and for which the existence of such investigations has been made public, then products containing that substance are excluded from the definition of a dietary supplement.”

The Infinite Products situation is a little different. That company included marketing statements like “CBD can alleviate some symptoms of autism, that cannabinoids have been found to inhibit the growth of cancer cells, and that, because of opiods’ addictiveness and painful withdrawal symptoms, people have moved to using CBD.”

According to NERA, in all class action cases, the median settlement value was $12.4 million, the highest since 2012, indicating that more cases are settling for higher values than in previous years. “The Aggregate NERA-defined Investor Losses for filed cases decreased from 2018’s record high of $929 billion to $519 billion, largely due to a decline in cases with Investor Losses of $5 billion or more. However, aggregate Investor Losses for cases with losses of $5 billion or less was $173 billion, the highest this decade.”

 

 


Sean HockingSean HockingJanuary 21, 2020
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19min6700

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AUTHOR: Glenn Johnson

PUBLISHER: CANNABIS LAW REPORT

 

THE EVOLUTION OF FARM TO TABLE FOR CANNABIS & HEMP

 

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 https://greenbeefarms.org/ For the products he helps grow, you can visit https://greenbeepharms.com and give him a follow on https://www.instagram.com/greenbeepharms/

 

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: glenn.johnson@gmail.com

Connect with me on LINKEDIN: https://www.linkedin.com/in/glenn-johnson-8018944/


Gretchen GaileyGretchen GaileyJanuary 15, 2020
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3min2450

Editor’s Note: This is an opinion guest post. 

In my last post, I promised a whole other can of worms on how impeachment will impact cannabis and I am a woman of my word. As I stated before, once the trial begins in the Senate, all Senators must be in their seats for the duration of the trial to hear the entirety of the case. This means that several the pro-cannabis Democratic candidates are going to be sitting on the sidelines for the earliest races in the primary calendar which often decides who is going to be the presidential nominee.

Four of the remaining candidates and a few frontrunners, Senators Bernie Sanders, Elizabeth Warren, Michael Bennet, and Amy Klobuchar, will not be able to campaign and participate in the Iowa Caucus or the New Hampshire and South Carolina primaries because they will be sitting in their seats listening to arguments on abuse of power and obstruction of Congress. 

While all those races could be cause for concern, we truly need to just look at Iowa to determine the possible fate of cannabis.  Iowa has been a strong indicator of who will be the Democratic nominee and it will be impacted by the upcoming hearing. The latest Real Clear Politics poll has the race neck and neck between former Vice President Joe Biden, Senator Bernie Sanders, Mayor Pete Buttigieg, and Senator Elizabeth Warren. 

If Senators Warren and Sanders are unable to campaign in Iowa then that leaves the door open for Biden and Buttigieg to pick up the momentum they need for the win. Buttigieg had not said much on the cannabis issue, which I’m sure is tactical given his hopes of winning over more conservative voters in the Midwest. Time will tell with his campaign.

Meanwhile, Biden is by far the worst possible nominee for the cannabis movement. He has been a staunch opponent to legalization for years and helped to create the Office of National Drug Control Policy and drafted the legislation, The Violent Crime Control, and Law Enforcement Act of 1994 which has led to massive numbers of incarcerations, not to mention that the term “gateway drug” is still in his vocabulary.

According to polling site FiveThirtyEight, Biden will take Iowa and if that’s the case, then that’s the federal ballgame for cannabis – if Biden beats Trump.  If Trump comes back around for another term, that’s a whole case of worms for cannabis.

 


Gretchen GaileyGretchen GaileyJanuary 7, 2020
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3min9181

With the start of a new legislative session kicking off this week, cannabis enthusiasts are hopeful for a year of progress on cannabis bills like the SAFE Act to jumpstart the industry out of its current lull and bring more legitimacy to its legalization movement. Well, keep waiting.

Despite Congress’ holiday break, President Donald J. Trump has been impeached by the House of Representatives and the Senate is going to have to act at some point, leaving cannabis and every other possible issue on the back burner. I take that back, cannabis won’t be on the back burner, it won’t even be in the kitchen.

When Speaker of the House Nancy Pelosi’s stops stonewalling Senate Majority Leader Mitch McConnell and turns over the Articles of Impeachment, which many expect will happen this week, Senate rules state that the trial must commence the next day by 1 pm and all Senators must be in their seats for the entirety of the trial. Meaning – all other legislative business in the Senate comes to a standstill and cannabis is an afterthought.

If the Senate trial is anything like President Clinton’s trial which went for six weeks, all of January will be sucked up and run us deep into February, (which opens a whole other can of worms for cannabis that I’ll come back to in a later post, stay tuned.) Congress will want to get back to its actual legislative priorities, the U.S.-Mexico-Canada Agreement, surveillance reform, funding the government and not to mention, now a potential war with Iran. Cannabis is nowhere on this list, especially in the Senate where it needs to find support.

While it may seem that Trump and McConnell want to bring the Senate trial to a quick close and end this “witch hunt,” it’s in the President’s and the Republicans’ best interest to drag it out and use it for every ounce of PR fuel that it’s going to provide for the upcoming election. In the meantime, cannabis bills will be set aside, and their fate sealed like 96% of all other legislation introduced during a Congress – a slow, quiet, unnoticed death.

All legislative actions can be followed at no cost under the Legislation tab on the home page of the Green Market Report.


Sean HockingSean HockingDecember 27, 2019
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17min5110
If you wish to re-publish this story please do so with following accreditation
AUTHOR:  aBIZinaBOX Inc. CPAs – Jordan S. Zoot, CPA
PUBLISHER:  CANNABIS LAW REPORT

 

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.

 

Ding…Ding…Ding!

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.

 

SOURCES / REFERENCES

[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.



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