After previously proposing a ban on all cannabis-infused hard candies and gummies in October, the Washington State Liquor and Cannabis Board (WSLCB) will allow the edibles to remain on shelves, as long as they adhere to new regulations aimed at lessening their appeal to children.
As of Jan. 1, 2019, all new edibles products—that is, those that are newly created and have not yet been approved by the WSLCB—must be manufactured, packaged and labeled in compliance with the new rules, which include updated warning statements and the inclusion of the universal marijuana symbol on all packaging.
As of June 1, 2019, the new packaging and labeling requirements must be implemented on all edibles products—including those that have already been approved by the WSLCB—although this deadline may be extended to Jan. 1, 2020, in the event the board approves the proposed extension. All edibles makers would then have to resubmit their products for approval by January 2020.
In the WSLCB’s Dec. 18 “Marijuana Infused Edibles and Packaging and Labeling Updates” webinar, regulators outlined the rule changes and laid out what the state’s cannabis businesses should know in order to remain compliant. Here are the key takeaways.
1. Edibles and their packaging cannot be potentially appealing to children.
The WSLCB is not cracking down on particular candy types, but will instead evaluate individual edibles products to determine whether they are potentially appealing to children and, ultimately, whether they should be approved for sale in the state.
When evaluating a product, the WSLCB will look at its appearance, similarity to other commercially available products that are marketed to children and color. The use of cartoons, bubble-type fonts, bright colors, a design or brand name that resembles a non-cannabis product that is marketed to children, symbols and celebrities that are commonly used to market to minors, and images of minors are prohibited.
2. The WSLCB has an approved list of colors and shapes for edibles and their packaging.
There state has outlined 16 approved colors for edibles and their packaging, which will be available on the WSLCB’s website in January. Acceptable colors include shades of white, cream, grey, black, tan and brown. Brightly colored edibles, packages and labels will not be permitted, and there are also approved shapes for products and their packaging.
There is an option to request changes to the state’s approved colors and shapes, and the board will review these requests on a quarterly basis, beginning in March 2019. If a new color or shape is approved, it will be added to the approved list.
In addition, the board has an approved appearance for marijuana leaves that can be used on edibles’ packaging and labeling—these cannot be cartoon-like, and they cannot include bubble fonts, which could be appealing to children. Examples of acceptable leaves will be available on the WSLCB’s website, and leaves approved for use on packaging can be exact replicas of the examples, or can incorporate similar elements to the examples.
Although packaging will now have to be muted and dull in nature, company logos are permitted, and companies can also include a color photo in a chosen accent color of the packaging, if desired. Packaging with a clear window is also allowed under the new regulations.
3. All edibles packages sold must include universal marijuana and Not for Kids symbols.
Edibles packaging must include the universal marijuana symbol and the “Not for Kids” symbol as of Jan. 1, 2019, in addition to being enclosed in child-resistant packaging.
The universal marijuana symbol (left) and "Not for Kids" symbol (right) will be required on all edibles packaging as of Jan. 1, 2019. Images courtesy of WSLCB.
Aurora Cannabis to Acquire Mexico's Farmacias Magistrales S.A.
Farmacias recently became Mexico's first and only federally licensed importer to date of raw materials containing THC.
EDMONTON, Dec. 10, 2018 /PRNewswire/ - Aurora Cannabis Inc. announced that, further to the company's press release dated Dec. 7, 2018, the company has entered into a Letter of Intent to acquire all of the issued and outstanding shares of Farmacias Magistrales S.A., subject to customary due diligence provisions, the completion of definitive agreements, and regulatory and government approval.
As previously announced, Farmacias recently became Mexico's first and only federally licensed importer to date of raw materials containing THC, gaining the necessary licenses, facilities, and permissions to import raw THC material, and manufacture, store, and distribute medical cannabis products containing over 1% THC. This transaction firmly establishes Aurora's first-mover advantage in one of the world's most populous countries, where more than 130 million people will have federally legal access to a range of Aurora's non-flower medical cannabis products containing THC.
Under the regulations governing the Mexican medical cannabis market, domestic cultivation, import or sale in Mexico of dried flower products is prohibited. Consequently, Farmacias is the only company to date with the ability to supply THC containing products, and the only THC-containing offerings available initially will be Aurora-sourced higher-margin derivative products.
Transaction Highlights:
Farmacias has been granted Mexico's first and only license to date to import raw materials containing > 1% THC, a rigorous and exacting process which took over four years to successfully complete.
Farmacias owns and operates a high-quality 12,000-sq.-ft. facility in Mexico City for the production of pharmaceuticals. The facility is licensed for the import of raw pharmaceutical ingredients, including cannabinoids (THC and CBD).
Nutraceuticals - protein powders and vitamin supplements.
Cosmetics - anti-aging creams, hair growth products, tanning lotions, etc.
Farmacias has developed adistribution network with an extensive potential reach across Mexico through approximately 80,000 retail points for the sale of CBD products, as well as 500 pharmacies and hospitals for the distribution of THC products.
Further licenses held by Farmacias enable the company to import CBD concentrate and produce medical and wellness products, and the transaction provides a powerful asset for Aurora in Latin America, complementing Aurora's large CBD production footprint in Colombia and Uruguay, through MedColombia and ICC Labs, respectively.
Dried flower containing THC is currently prohibited for domestic cultivation, import or sale in Mexico, creating a large potential market with strong barriers to entry, permitting only the sale of higher-margin derivative products.
Farmacias intends to use the imported THC and CBD concentrates to produce various cannabis oil products for initial introduction to the medical market. It furthermore intends to rapidly broaden its portfolio of products to include capsules, topical solutions, and sprays and various other delivery formats. Farmacias is currently licensed to manufacture, among others, oral, nasal, and suppository products.
Management Commentary
"This transaction positions Aurora with exclusive access to supply THC-containing medical cannabis to a large market of more than 130 million people, while also enabling us to capture the full margin of the medical cannabis we sell there," said Terry Booth, CEO of Aurora. "Farmacias has a large distribution network of both retail outlets and pharmacies, which will enable us to quickly scale up our operations across Mexico. Integrating Farmacias with our operations in Canada and Latin America will not only accelerate growth, it will build substantial long-term shareholder value."
Julio Sánchez y Tépoz, Secretary of the Federal Commission for Protection Against Health Risks (COFEPRIS), the Mexican government body responsible for medical cannabis licensing added, "We are pleased to have issued the first THC licenses in the country to Farmacias Magistrales, and we look forward to promoting the development of a tightly regulated medical cannabis industry that facilitates safe and effective access for the people of Mexico."
Neil Belot, Chief Global Business Development Officer for Aurora, noted, "Together, Farmacias and Aurora will be well positioned to become a key player in the development of the medical cannabis market in Mexico. We were impressed by the quality of management, assets and operations, and look forward to working closely with the Farmacias team to execute on our significant first mover advantage."
Cesar Vargas Dominguez, Commercial Director of Farmacias, added, "This transaction validates our work over the last four years toward obtaining a portfolio of exclusive licenses in Mexico, a complicated process which we have now completed successfully. Aurora is our partner of choice because of its production capacity, global reach, product quality, patient-first culture, and commitment to a science-based approach to medical cannabis. We look forward to becoming part of the Aurora family and executing on the Mexican medical cannabis opportunity."
Consideration to be paid for the acquisition of Farmacias will be in shares of Aurora and based on a valuation of the proforma distribution revenue projections of Farmacias. The consideration payable by Aurora also includes a contingent portion of up to 25 percent payable only upon the achievement of certain milestones over the next 12 months related to operational metrics, such as maintaining market share.
Courtesy of Chrissy Hadar
12 Cannabis Industry Power Couples
Profiles of business success and supportive partnerships.
The roots of the rapidly expanding cannabis market are found in smaller, quieter operations, often helmed by friends or a couple. Now, those early start-ups held together by close, loving bonds are often out front in the cannabis space; small companies have found their niche as the industry grows up around them.
At many of these companies, you’ll find couples working at the top of the business structure. Co-founders. Chief executives. Leveraging the strength of their personal relationships, these couples have made their business a more inviting and forward-thinking place to accomplish goals.
Here, we profile 12 couples and their cannabis businesses, with a look to what makes their enterprise work best.
Courtesy of Jesce Horton and Jeannette Ward Horton
Jesce Horton and Jeannette Ward Horton
Jesce Horton owns Saints Cannabis, a Tier 1 cultivation facility in Portland, Ore., and Saints Cloud, a vertically integrated facility currently under development. He is the past owner of Panacea Valley Gardens, a medical cannabis cultivation business near Portland, and Panacea, a separate, adult-use dispensary, which has since sold. He also founded the Minority Cannabis Business Association (MCBA), a nonprofit focused on increasing diversity in the cannabis industry.
Read Cannabis Business Times’ January 2017cover story on Jesce Horton here.
Horton’s wife, Jeanette Ward Horton, leapt into the industry after a career stint with Coca Cola, and is currently the vice president of global marketing and communications for MJ Freeway.
“I got educated on the plant, and on the medicine, and on the best of what cannabis culture is—activism and giving back, and building a better industry,” Ward toldBlack Enterprise. “I became a convert. This medicine will change the world.”
The couple recently started NuLeaf Project, a nonprofit organization that they operate together.
Brian Kraft
John and Amy Andrle
In 2009, John and Amy Andrle co-founded L’Eagle, a vertically integrated cannabis operation in Denver, Colo. The 10,000-square-foot grow facility produces the company’s flower, bubble hash and rosin, which are sold in its dispensary. The couple has remained focused on organic cultivation and clean cannabis, which they believe may help the cause for cannabis to be more formally recognized as a relevant and viable solution for many health conditions.
Read Cannabis Business Times’ October 2017 cover story on L’Eagle here.
Courtesy of Eric and Rachael Speegle
Eric and Rachael Speegle
Husband and wife Eric and Rachael Speegle operate Verdes Foundation, a vertically integrated cannabis company based in New Mexico. Founded in 2010, Verdes has a 22,000-square-foot production and cultivation facility in Albuquerque and medical dispensary locations in Rio Rancho and Albuquerque that offer flower, edibles, pre-rolls, extracts, vape cartridges and tinctures. The couple has focused on building relationships with its neighbors, as well as earning the trust of its patients by providing them access to knowledgeable people.
Read Cannabis Dispensary’s October 2018 cover story on Verdes Foundation here.
Courtesy of Kurt and Kerrie Badertscher
Kurt and Kerrie Badertscher
Kurt and Kerrie Badertscher are the co-owners of Otoké Horticulture, LLC, a cannabis cultivation consulting firm. They are the authors of “Cannabis for Capitalists,” as well as regular columnists for Cannabis Business Times.
Kerrie was once a Boulder County Cooperative Extension Horticulture agent for Boulder County, Colo., teaching others to become Master Gardeners. Her experience in horticulture has earned her the designation of Certified Professional Horticulturist (CPH).
Kurt complements Kerrie’s horticulture background with 36 years of experience in the R&D and IT fields. Many work flow, data collection and communication challenges faced in these industries are also prevalent in cannabis, allowing Kurt to advise Otoké’s clients accordingly.
Read Kurt and Kerrie’s most recent “Hort How-To” column here.
Jon-Michael Moses
Tony and Laura Toskov
Tony and Laura Toskov applied for a dispensary license in Maryland in late 2017, after 800-plus applications had been submitted and only 102 pre-approved licenses had been issued in the state. On Feb. 12, 2018, the couple’s Green Point Wellness opened its doors in Linthicum Heights and began offering more than 40 SKUs of flower, concentrates, topicals, transdermal patches and tinctures. The company’s 14 “dispensary agents” go through rigorous training mandated by the state and provide one-on-one attention to patients.
“Our approach is less pamphlets and signs and more customer service,” Laura said. “That goes back to our commitment to VIP treatment. You’re going to build a relationship with us.”
Read Cannabis Dispensary’s April 2018 story on Green Point Wellness here.
Jermaine Amado
Scott Durrah and Wanda James
Husband and wife Scott Durrah and Wanda James own and operate Simply Pure, a Denver-based, vertically integrated medical and recreational dispensary with four cultivation centers. The dispensary’s location in Denver’s LoHi neighborhood, coupled with its carefully curated product selection of flower, edibles, concentrates, vape cartridges, elixirs, tinctures, topicals, patches and pre-rolls, has made it popular among tourists.
Read Cannabis Dispensary's February cover story on Simply Pure here.
Courtesy of Brooke Gehring
Brooke Gehring and Max Cohen
Cannabis brought this power couple together. Max Cohen (The Clinic, The Lab, The Bank, The Clinic Consulting and Tribe) and Brooke Gehring (LiveGreen Cannabis, Patients Choice and The Live Green Group) uniquely are both founders and CEOs of separately owned, vertically integrated Denver-based companies, multiple brands, their own consulting firms, a charitable non-profit that contributes to the National Multiple Sclerosis Society and a CBD business.
Collectively, the couple supports each other's achievements by continuing to lead the industry by example as they consult and operate in markets across North America. It is never about competition, only collaboration, Gehring says.
After a battle with cancer transformed Scott Reach from being a grower and consumer “to actually really, really needing the plant,” he told us, the Colorado industry leader began taking an initial concept and building it into a global seed bank and cannabis brand. Before long, the wellspring of ideas that propped up his early interest in the plant evolved into savvy business acumen and market-leading institutional knowledge. Rare Dankness had become a force.
Scott and his wife, Pamela, now oversee a state-of-the-art cultivation facility and a renowned dispensary, House of Dankness, on the edge of Denver. Together, they’re an industry dynamo.
“The difference that she brought to the company was just a little calmer head and better business sense, and a little more professionalism than your typical grower,” Reach memorably told us in 2016. “At this point, man, I’m just a pretty face. The business is the way the business is because of her.”
Read Cannabis Business Times’2016 feature on Rare Dankness.
Jake Gravbot
Chris and Allie McAboy
Chris and Allie McAboy launched The Novel Tree together in November 2014. As an early entrant to Washington’s cannabis market, The Novel Tree, a recreational and medical dispensary, carved out a niche as a high-quality craft cannabis retailer in Bellevue (just across Lake Washington from Seattle).
“We’re looking really for the highest-quality products,” Chris told us in 2017. “We do a sampling program where we make sure the product checked out [for] one of our senior budtenders or management team who is really familiar with product quality, and we basically grade it based on criteria and go from there. If the product is right and the organization seems right, then we’re definitely open to further discussion with them about how we can … get them in our shop.”
Eco Firma Farms has its roots as a small medical marijuana operation run by husband and wife Jesse Peters and Kate Guptill. Now, six years after its 2012 founding, Eco Firma has become a leader in Oregon’s cannabis marketplace and an ardent support of green business practices. Looking back on the early days of his vision, Jesse told us earlier this year that he and Kate set out to create a company that could promote an industry-wide conversation on energy use. “I realized that if we were growing cannabis in a way that destroyed the planet for a profit, we were no better than an oil [petroleum] company,” he said.
The couple, with Eco Firma Farms as a foundation, went on to help form the Oregon Growers’ PAC and the Oregon Cannabis Alliance, with the goal of connection sustainable business models to public policy in the cannabis space.
“Our story began in Boulder, Colorado, a hotbed of innovation and free-spirited ambition,” Diane and Jay Czarkowski, founding partners of Canna Advisors, write on their website. Their company helped Colorado leaders draft pioneering adult-use cannabis legislation, and now Diane and Jay lead a team of respected advisers who work with policy-makers and cannabis businesses in new and emerging markets across North America.
Courtesy of Chrissy Hadar
Aviv and Chrissy Hadar
After co-founding Oregrown in 2013 with a group of friends, Aviv and Chrissy were given the following sage advice: Instead of viewing your constant discussions of work as a negative, like most people that work together do, falling into the “All we do is talk about work together” scenario, instead flip it to: “We are so lucky to have a deep, endless, perpetual conversation with each other.”
This piece of wisdom continues to ring true as the couple works together day in and day out.
Aviv (CEO) and Chrissy (Chief Brand Officer) like to say that Oregrown is their first child. The amount of attention the business needed in its first years of infancy, and the amount of attention the business still needs, requires them to act cohesively not only as bosses and authority figures but oftentimes as parents to a big, growing family. “Working together has only increased our love and respect for one another as we continuously push each other to do the best work of our lives,” Chrissy says.
This past year was a whirlwind for the cannabis industry, from the introduction of countless cannabis-related bills in Congress to the resignation of U.S. Attorney General Jeff Sessions. The 2018 Farm Bill federally legalized industrial hemp and signaled the beginning of explosive growth in the hemp-derived CBD market, which Brightfield Group estimates will reach $22 billion by 2022. At the state level, Arkansas quietly worked to roll out a medical marijuana program, while other states, like Missouri, passed ballot initiatives to legalize medical cannabis within their borders.
As we look ahead to what is sure to be a busy 2019, we rounded up Cannabis Business Times’ top 10 most-read articles of 2018.
10. Medical Marijuana in Missouri: A Tale of Three Ballot Initiatives
Missouri voters had three options to legalize medical marijuana during November’s midterm election: two constitutional amendments and one statutory amendment. While all three measures would achieve the same overall goal of legalizing medical cannabis, each outlined varying taxes and ways to regulate the program. Read more
Photo courtesy of Adobe Stock
9. Hemp-Derived CBD Will Outpace All Other Cannabis Markets, Projected to Hit $22 Billion by 2022
According to a report released by the Brightfield Group (https://www.brightfieldgroup.com/), the hemp-derived CBD market is expected to hit $591 million in 2018, and it may grow 40 times this size—to $22 billion by 2022—now that the 2018 Farm Bill has passed with a provision that legalized industrial hemp. The rapid growth will be supported by an anticipated explosion in distribution channels for these products in the next few years; chain retailers are expected to enter the market as soon as 2019. Read more
8. Here’s the 2017-2018 Federal Legislation That Could Affect Your Cannabis Business
Nearly 50 cannabis-related bills were introduced in Congress during the 2017-2018 session. Cannabis Business Times compiled a list of those bills, which, if passed, would reform federal policies on controlled substances, hemp cultivation, banking access and states’ rights in the burgeoning cannabis industry. Read more
After November’s midterm election, U.S. Attorney General Jeff Sessions submitted a letter of resignation at the request of President Trump. Sessions' time at the helm of the U.S. Department of Justice was marked most visibly to the cannabis industry by his repeal of the Cole Memo, which had previously guided states' marijuana regulations. Sessions’ chief of staff, Matthew G. Whitaker, became acting attorney general, and in early December, Trump announced his intention to nominate former Attorney General William Barr for the position. Read more
Photo courtesy of Calyx King Cannabis
6. Cannabis Cultivation: Slash Your Water Use by 50 Percent or More
As profit margins shrink and regulators zero-in on water waste and use, interest in water reclamation—the process of capturing and recycling wastewater for other uses—is growing. In our July 2018 issue, Cannabis Business Times spoke with four cannabis operations practicing or planning water reclamation for insights on their processes and lessons learned. Read more
5. Arkansas Prepares to Score Dispensary Applications in Next Phase of Medical Marijuana Rollout
Although legal troubles threatened to halt cannabis business licensing and the launch of Arkansas’ medical marijuana program earlier this year, industry advocates reported a relatively smooth and timely rollout in the Natural State in August, as a third-party, Boston-based consulting firm prepared to score dispensary applications. Medical cannabis will likely be available to patients in spring of 2019. Read more
Photo by Jake Gravbrot
4. The $25 Pound
In Cannabis Business Times’ July 2018 cover story, we spoke with Dan and Glen James of Bosmere Farms, who shared how some serious bootstrapping has allowed them to drastically cut production costs and compete in Oregon’s saturated market. The key, according to the James family, is cutting costs (including their costs of living) to the bare minimum and focusing their production on the extract market—exclusively. Read more
Photo courtesy of Viola Extracts
3. Police Raid Michigan Cultivation Facility; Business Owners, Investors React
Al Harrington, former NBA star and current investor in Viola Extracts, said his company was operating by the books when police seized its assets in May. On July 31, Judge Kenneth King dismissed the criminal charges against six Viola Extracts employees arrested during the police raid on the Detroit cannabis cultivation business. Read more
2. Introducing Acreage Holdings, the Quietly Growing Cannabis Corporation Joining Forces with John Boehner
Acreage Holdings grabbed the cannabis industry’s attention when it announced on April 11 that former House Speaker (and longtime marijuana prohibitionist) John Boehner and former Massachusetts Gov. Bill Weld were joining its board of advisors. But even before Acreage Holdings burst onto national headlines, the company had been quietly investing in 11 different state-legal cannabis markets. Read more
In Part III of a special extraction series, Cannabis Business Times’ columnist Mark June-Wells delved into ethanol’s properties, the different types of extraction strategies, safety considerations for ethanol systems and laboratory infrastructure considerations. Read more
Adobe Stock
Washington Cannabis Regulator Approves New Marijuana Candy Regulations
Washington state will not ban cannabis-infused candies and gummies, but there will be some changes coming to the treats.
Good news edible fans: Washington state will not ban pot-infused candies and gummies after all. But there will be some changes coming to the treats.
The Washington State Liquor and Cannabis Board finalized a policy on Wednesday which limits the colors and shapes that edibles can have, but doesn't forbid pot-infused candies, like an earlier policy did.
As expected, the new rules stipulate that pot companies to avoid bright colors, working instead with a "standard pantone color book that sets the list of colors and specified ranges within those colors" for both product and packaging.
Cannabis Business Times’ interactive legislative map is another tool to help cultivators quickly navigate state cannabis laws and find news relevant to their markets. View More
Melissa Schiller
Jesce Horton and Jeannette Ward Horton
