Editor’s Note: There is no denying that the cannabis industry is rapidly growing and evolving, leaving many in the industry to have to continuously adapt to the ever-changing landscape.  I interviewed three professionals with a well-built background in cannabis who share their experiences, lessons learned, insights and tips on working in the cannabis industry.

Tips from Crystal Oliver, executive director for the Washington Sungrowers Industry Association (WSIA) and co-founder and former owner of Washington's Finest Cannabis. Oliver shares her personal experiences and lessons learned as a small business owner in the cannabis industry with Cannabis Business Times.

RELATED: 6 Cannabis Business Lessons We Learned Too Late

I wish I knew...

1. The value of hiring a professional lobbyist compared to the price you pay for bad policy.

The saying, "If you're not at the table, you're on the menu," comes to mind when I reflect on the evolution of cannabis policy in Washington. Early on, other farmers and I focused on community organizing and advocating for ourselves. What we lacked in experience, we made up for in passion, but this did not always translate to policy wins. We often knew why a policy proposal would hurt our businesses but getting legislators and regulators to listen to us and modify their approach was incredibly challenging.

Washington's independent cannabis farmers suffered through several legislative sessions, where bills passed damaged our business prospects before the WSIA held its first Sun Cup competition/fundraiser in 2018 and hired contract lobbyist Bryan McConaughy. The difference in having a professional, experienced lobbyist made our ability to block bad bills from becoming law and favorably amend other bills cannot be overstated.

Had I fully understood how impactful being represented by a professional would be, I would have done whatever it took to fund a lobbyist immediately. I would have considered it a cost of doing business rather than a nice-to-have. As an emerging industry, the winners and losers are often decided in government agency meeting rooms and state capitals. You must be effectively represented in those spaces if you want to secure your future.

2. The challenges of living without access to affordable and traditional financing.

When I first started my farm, I knew I could not access small business startup funding from my bank. So, I chose to use my savings and income from my corporate day job. I later left my day job to focus on cannabis farming full-time, not realizing that relying solely on cannabis-related income would render me ineligible to secure any loan from a traditional funding source. It was a little shocking when I discovered that my credit union would not issue me a loan to purchase a new vehicle despite having good credit, low debt and sufficient income. As a result, I have had to save and pay cash for vehicles purchased since becoming a cannabis farmer. In hindsight, I should have worked harder to maintain a non-cannabis-related income stream.

3. The reluctance of policymakers to address inequities in the marketplace.

For example, allowing direct farm sales would better distribute the industry's economic benefits throughout the supply chain by empowering small independent craft producers. Still, policymakers hesitate to distribute power away from those who already hold it. On more than one occasion, I have been advised that I need to get buy-in from those who benefit from the existing inequities in the marketplace to secure policy reform.

It is impossible to convince those who benefit most from an unfair system to agree to changes that would help others. In Washington, we have been fighting for direct farm sales for several years now <https://www.cannabisbusinesstimes.com/article/washington-cannabis-growers-direct-sales-customers/> without much progress due to our legislators' fear of disrupting the status quo. I naively believed that legislators would place greater value on fairness and thought we would secure farm-direct sales after a few years. I remain hopeful that emphasis on equity for BIPOC communities may lead to reassessments of our marketplaces' overall structure, which centermost of the market power in the hands of a few well-capitalized interests.

Courtesy of Crystal Oliver

4. The difficulties of owning and operating a small business when your children are not permitted to step foot on the premises.

I was pregnant when I planted my first state-legal cannabis plant in 2014, and my daughter was born one month before our first state-legal harvest. When we decided to have a child shortly after applying for licensure, I envisioned tending my cannabis field with my baby in a sling or back carrier like the other organic farmers I knew. I understood that farming would be hard work and knew that working where I lived with my family in rural Washington would be a dream come true. Unfortunately, the rules surrounding marijuana cultivation in Washington prohibited individuals under 21 from setting foot on the licensed premises. My children were not allowed to enter the building or the fenced-in area of our property, where our cannabis business was located. Over the years, this created many challenges for our family. My husband and I had to alternate who was working so that one of us could supervise the children, causing long days for us both. Our children grew to resent our business because it took up so much of our time and separated us from them.

It was not until the COVID-19 pandemic shut down schools that we could convince the Washington Liquor and Cannabis Board (WSLCB) to grant leniency and allow children and grandchildren of licensees under 16 to be in the licensed premises, provided they did not engage in any work. t has been a blessing for farmers to have their children allowed on site, but it is a painful reminder of the time we have missed out on over the last six-plus years. I regret not considering how impactful it would be not to bring my children to work with me as a small business owner.

Tips from David Holmes, founder and CEO of Clade9. Holmes entered the cannabis industry nearly 20 years ago, back when cannabis was just starting to become medically legal in a few states. His self-starter and self-educating attitude helped guide him; however, he tells Cannabis Business Times that there are a few things he wishes he would have done differently before entering the ever-changing cannabis industry.

I wish I knew…

1. The advantage of having an education in business.

I am a trained mathematician, as I have a master’s degree in math, but I never took traditional business courses. Others have mentored in business and learned things, but I kind of had to learn everything on my own. I wish I had more support; that would have been super powerful. Especially having been in cannabis in the late ’90s, I have never really had a huge advantage having both skill sets; learning how to grow cannabis and have business training. 

I had to learn over the years, and I have picked up a lot. The first time I had to formally negotiate a contract to cannabis entrepreneurs to negotiate a business deal was when I thought, “I wish I were trained formally in business.” I think everyone learns by doing it but having said that, having formal training or maybe just being in another business industry would have been very valuable.

Courtesy of David Holmes

2. The value of having a background in agriculture as a cultivator.   

Being a cultivator, I wish I would have gone to school. I am glad I got a degree in math, there is no question about it, but I also wish I would have studied agriculture, precisely controlled environment agriculture, as my focus is cultivation breeding. It took me many years to learn controlled environment agriculture in Canada, without any formal training, so I self-taught.

For example, I did not understand all the variables that I needed to look at to grow consistent crop quality, like thinking to myself, “Oh, shoot, next time I should look at humidity, I wasn’t looking at that the first time.” A lot of failures led to light bulbs going off, saying, “Hey, I need to know more about that because that’s what hurt me last time.” Doing that for over 15 to 20 years, you learn a lot, but if I had formal training, I would have thought of those things all together right away instead of learning over time.

3. The benefit of entering the industry with a different mindset.

I wish I would have known cannabis was going to be an industry because when I got into it, it really was not an industry. If I had known it would be where it is, I would have approached it a lot differently. It was medical in California, but it was a total gray area, and it stayed that way until 2017 or 2018. Most cannabis entrepreneurs in California have been in the industry for a lot longer than in other states, especially on the east coast. In a lot of their minds, they are probably thinking, “I wish I would’ve known this was going to be this big of a deal nearly ten years ago."

Tips from Loren Picard, CEO of High Desert Flower Inc. in Oregon. Picard started as a financial and corporate operational consultant in the cannabis industry nearly four years ago. Within a couple of months, he was asked to be his client firm’s CEO. He shares what he's learned throughout his last four years in the industry with Cannabis Business Times. 

RELATED: 6 More Lessons We Learned From Our Cannabis Business

I wish I knew…

1. How underprepared states were for cannabis legalization.

I have been around a little over four years in the industry, starting in late 2016, with other states having legalized before and since, and I did not have a long runway to get up to speed. It takes a year or so after each state legalizes to implement its enabling regulations. That seems to be plenty of time for states to learn from other states’ successes and failures and should lead to some semblance of consistency across state jurisdictions. Unfortunately, the result has been a patchwork of rules and regulations within and between the states resulting in most states woefully underprepared when their respective licensing processes began. We had an operation in California, which we sold, and then grew a vertically integrated operation in Oregon, and how the two states’ regulators looked at the cannabis world was completely different.

Courtesy of Loren Picard

2. The difference between the economics of capped and un-capped states.

Oregon started as an uncapped state, but in June 2018, they just stopped taking applications, and it suddenly became a capped state. In hindsight, I should have thought about the whole idea of licensing as a way a firm could build value before June 2018. You could have created a lot of value by getting control of one small location (leased or purchased) and applying for multiple licenses and just put the licenses into operation when it made sense; some may not have been put into operation at that location. You would then have the flexibility to move the licenses to an optimum location with or without bringing in partners.

Obviously, there are nuances to this strategy that need to be thought through to make it worthwhile, but it was a viable long-term strategy. That would be a strategy I would do today in an uncapped state if the license costs are reasonable. If they are a hundred thousand apiece, no, but if they are a couple of grand, it could be worth it. Even if a state never caps their license issuances, there are only so many good qualified real estate locations in any state for a cannabis business. Eventually, licenses will be capped by a lack of suitable sites.

3. How little economic taxing authorities understand.

The whole idea that you cannot put up to 50% combined tax rates, including at the local level, on top of cannabis retail prices and expect to make any movement on shrinking the [illicit] market, I think, was a mistake. I think there should have been a long ramp-up of minimal taxes to pay the regulatory and enforcement agency’s overhead on top of the already collected application and license issuance fees, then start ramping up over time as the [illicit] market shrank in size.

Photo courtesy of The Green Lady Dispensary.

While everyday challenges are commonplace for businesses in the federally illegal cannabis industry, The Green Lady Dispensary has perhaps had to clear more than its fair share of hurdles in its roughly 18 months of existence, although the vertically integrated company has found a way to thrive in the tourist destination of Nantucket, Mass.

“It was quite a year,” owner Nicole Campbell tells Cannabis Business Times and Cannabis Dispensary, referencing not only the COVID-19 pandemic that has impacted so many businesses, but also Massachusetts’ vape quarantine.

The Green Lady launched into the state’s adult-use cannabis market August 2019, and could be open by appointment only during those first few months. The company’s retail store celebrated a soft opening at the end of the tourist season, and a month later, Massachusetts Gov. Charlie Baker instituted a four-month ban on vape sales statewide in response to the outbreak of vaping-related lung illness that shook the nation that summer.

Still reeling from that setback, The Green Lady then had to shut down for nearly two months at the onset of the COVID-19 pandemic last spring, when adult-use cannabis businesses were not declared essential during Massachusetts’ coronavirus-related shutdowns.

“It was a really rough time,” Campbell says. “Even when we got to finally open back up, which I think was May 25, … June was still soft because people didn’t know what to do with themselves with COVID. They didn’t know, ‘Should I go somewhere? Should I stay home? What should I do?’”

RELATED: Massachusetts Cannabis Industry Braces for Reopening and Relief

Although business started to pick up in July and August, The Green Lady was still sorting through the vape ban. It took the company roughly six months longer than the state’s other cannabis retailers to get vape cartridges back on its shelves, Campbell says, due to its location on the island.

Photo courtesy of The Green Lady Dispensary

Nantucket is located roughly 30 miles off the mainland in federal waters, and The Green Lady is not allowed to send any cannabis products off the island for testing. The company must be fully vertically integrated and test its own products, and it took an additional six months for regulators to approve its plan to test its vape products to ensure compliance.

Finding the Silver Lining

Despite all of these challenges, Campbell says there is a lot to be happy about as The Green Lady heads into 2021 and its second full tourist season.

“One thing I have to say is I’m so proud of all of our retail workers and how hard they work,” she says. “They are so diligent.”

The company installed plastic barriers at the counters in its dispensary to help separate retail staff from customers during the ongoing pandemic, and lines have been drawn on the ground to promote social distancing. The staff wears masks and gloves, and cleans and sanitizes high-touch surfaces in the dispensary regularly.

Massachusetts has allowed cannabis retailers to offer curbside pickup during the pandemic, and Campbell says many of The Green Lady’s customers took advantage of curbside services last summer.

Its location in a tourist destination allows The Green Lady to be many visitors’ first experience with legal cannabis, Campbell adds, which is a responsibility that the company doesn’t take lightly.

“All of our budtenders in our retail store really take it seriously that they are the first opportunity for so many people to purchase cannabis legally,” she says. “People come from all these states, … and I think that’s one of the best parts of this job, is just getting to meet all different kinds of people.”

“Nobody leaves Nantucket without a T-shirt that says ‘Nantucket.' Now, they can buy T-shirts that say ‘The Green Lady Nantucket.’"

- Nicole Campbell, owner, The Green Lady Dispensary

Customer education is an important component of The Green Lady’s business, Campbell says, and the company is currently creating videos to educate its customers on vertical integration and The Green Lady’s craft approach to cannabis.

“We craft cultivate all of our own cannabis here, right on site,” she says. “We hand-trim everything. We have a very close-knit group of people, so the retail [staff] will go over into the trim room and talk to them about what kind of flower they want to put on the floor. Do they want to have some indica? Do they want to have some lower THC or CBD [products]? It’s just very intimate and hand-crafted.”

The Green Lady has an on-site kitchen where it handmakes its edible products, which include fresh-baked brownies and chocolate chip cookies.

“It’s really special to be able to get these fresh-baked, handmade products,” Campbell says. “I’ve eaten a lot of edibles in other states, and they’re trying to manufacture products that go wholesale to many different stores, so they don’t have that right-out-of-the-oven taste.”

Edibles were very popular at the beginning of the COVID-19 pandemic, she adds, speculating that perhaps customers wanted to smoke less due to the respiratory concerns associated with the coronavirus.

Better Days Ahead

The Green Lady currently holds cultivation, product manufacturing and retail licenses in Massachusetts’ adult-use market, and is working to add medical licenses to its portfolio to better serve the state’s patient base.

The state allows patients enrolled in the medical cannabis program to use telemedicine for their appointments, which Campbell says is increasing patient access, especially on Nantucket.

Massachusetts also recently passed new regulations that allow cannabis businesses to sell merchandise.

“Nobody leaves Nantucket without a T-shirt that says ‘Nantucket,’” Campbell says. “Now, they can buy T-shirts that say ‘The Green Lady Nantucket.’ We’re very excited about being able to sell hats and T-shirts. They have very specific rules. … You can promote your company, but you can’t promote cannabis or cannabis use.”

Looking ahead, Campbell hopes Nanucket will have more of a traditional tourist season this summer as the pandemic hopefully gets under control in the coming months.

“I really hope that this summer can be more of a normal summer for Nantucket, not just for us, but for all the companies on the island that are struggling or are having a hard time,” she says. “It’s hard on restaurants. It’s hard on shops. … I’m really hoping it’ll be a normal summer, and if it is, we can participate in that and have more events ourselves. I’m just hoping that things can go back to normal on the island and people can come back out here and enjoy themselves the way they usually plan their vacation or their trip.”

In the longer-term, Campbell is also keeping her eye on policy reform efforts at the federal level, especially since President Joe Biden has taken office and the Democrats have taken control of Congress.

“I’m hoping that this next year, or over the next four years, that some positive cannabis legislation goes through,” she says. “I think this is the best scenario going forward for some positive regulation changes to be enacted. I’m really hopeful about that, but I don’t know if they’re going to do it right away. I think they’ve got their hands full at the moment, but they could put some positive bills through and some of those bills could be positive for The Green Lady. Maybe one day, we can ship cannabis on or off the island.”

Virginia, once a conservative stronghold, positioned itself to make history this month by becoming the first traditionally “Southern” state to legalize cannabis, possibly as soon as this summer. On Feb. 5, both chambers of the state’s General Assembly passed their own legalization bills that would also establish a state-run market and licensing system.

But Virginia is running into some of the same challenges as other states pursuing legalization: disagreements over license types, penalties for minors and the timing of the law’s implementation. Industry advocates are also concerned that more conservative elements of the state legislature will prevent equitable legalization in Virginia.

What’s happened so far?

Part of the state’s decriminalization bill signed by Democratic Gov. Ralph Northam in May 2020 directed the legislature to create a work group to study the possibility of legalization. Last month, Northam unveiled a legalization bill co-sponsored by multiple state legislators.

Two separate state legislative bills to legalize cannabis—HB2312 in the House and SB1406 in the Senate—have already passed. But the differences between the two bills must be resolved into a single resolution for Northam to sign. And that’s where things get tricky.

Where are things now?

“We’re at crossover. … The next thing that comes is conference,” said Chelsea Wise, founder of advocacy group Marijuana Justice, in a phone interview with Cannabis Business Times and Cannabis Dispensary.

She explained that the conference stage will involve private meetings between delegates from both the House and the Senate to resolve issues between the two bills, as well as changes to Northam’s initial legislation.

“We have two different versions of the bills and they are very different,” Wise said. She highlighted the ideological contrasts between the state’s relatively progressive House and its more conservative Senate. “[The State Senate] thinks we are moving too fast too soon.”

Wise and others have highlighted several key issues that need to be addressed for the state to achieve equitable legalization.

Social equity funding

Under the bill’s current structure, 30% of tax revenue from legal cannabis sales in Virginia would go to the state’s Cannabis Reinvestment Fund, a program to provide scholarships, training and workforce development opportunities in areas hit hardest by prohibition. Wise and other advocates like the ACLU of Virginia believe that figure is not high enough.

“We have taken livelihood from people, and that means we owe people money. … Only allocating 30% of the tax revenue to our reinvestment fund is an offensive offer,” she said. “We are pushing for 70% of those tax revenues to go back into the communities for grants, loans, for programs. … If we can’t even allocate at least a majority of the tax revenue to the people we have harmed now for generations, we are not actually serious about reconciling anything with Black people here in Virginia.”

Underage penalties

Early versions of the bill required that people who are under 21 and caught with cannabis must pay a fine and attend mandatory substance abuse classes. Some believe that the penalty for underage possession should be in line with the state’s penalties for underage possession of alcohol, currently punishable by a Class 1 misdemeanor. Other legislators believe that type of alignment is too harsh.

“We need to get that kid into some help, into some counseling—not jail,” said State Sen. Creigh Deeds, speaking about minors who are caught with cannabis.

State oversight of the industry

Northam has been vocal about wanting to achieve legalization during his term, which ends in January 2022. But the clock is ticking: State law in Virginia mandates that governors cannot serve consecutive terms, giving Northam less than a full year.

Northam’s plans are complicated by state senators calling for extra time to create a new commission specifically to regulate Virginia’s cannabis industry. Under Northam’s initial proposal, that role would fall to the state’s Alcoholic Beverage Commission (ABC), which regulates and operates Virginia liquor sales through state-run stores.

“I think we’re taking a responsible course. This is something that won’t happen overnight,” said State Sen. Adam Ebbin, sponsor of the Senate’s legalization bill.

“This thing is a 1,000-pound monster with tentacles that reach everywhere,” agreed State Sen. Scott Surovell during a subcommittee hearing. 

“We are supportive of the idea of an independent agency versus the ABC,” Wise said. “Our ABC is mostly law enforcement, like many others, … but the fact that it’s going to take so long is an issue.”

Legalization start date

Both the House and Senate bills wouldn’t allow recreational sales in Virginia until 2024. But Marijuana Justice and other advocacy groups are asking the General Assembly to speed up the legalization of simple possession in order to cut down on the number of Virginians getting arrested for cannabis. Virginia passed a decriminalization bill last year reducing the penalty for possessing an ounce or less to a $25 fine. Under legalization, that same amount would be completely legal, while possessing between an ounce and five pounds would result in a fine.

Like many other states, people of color in Virginia—particularly African-Americans—are arrested for cannabis far more frequently than other races.

Data from Virginia State Police indicates that while Black people comprise less than 20% of the state’s population, they account for over 45% of first-time cannabis arrests and nearly 53% of all subsequent offense arrests for possession of marijuana.

“If this legislation is to prioritize stopping the harm of arresting Black Virginians four times the rate of white Virginians for marijuana crimes—if we really want to stop that, we need a July 1 enactment date of legalization,” Wise said.

Vertical integration

Under the vertical integration model, a single company owns every part of the cannabis business, including grows and dispensaries. Supporters of vertical integration generally argue that it keeps costs down for consumers, adds efficiency to the market and upholds capitalistic principles. Opponents say vertical integration shuts out small operators who can’t afford to spend six or seven figures in licensing fees and overhead.

In Virginia, Northam’s initial proposal allowed for vertical integration, which is currently mandated in the state’s limited medical cannabis program. The House bill limits the practice by restricting companies to only one type of license. The Senate’s version allows for vertical integration but charges a $1-million licensing fee to help support the state’s cannabis equity programs.

Wise said that the debate doesn’t have to be black and white. She believes the state can benefit from vertical integration in the industry’s early stages, while providing opportunities to small entrepreneurs as things grow.

“What we’ve been really talking to the legislators about is yes, banning vertical integration—with some exceptions,” she said. “The medical industry is setting up, they could be the first providers, with some guardrails … [like] a sunset provision that once adult-use sales start, the would be backed out of the market.”

What happens next?

Once the General Assembly is able to work out the issues between the two versions of the bills, a final version will be created and voted upon. After approval, it will be sent to Northam’s desk to be signed into law.

Last week, Marijuana Justice and 23 other organizations—including prominent groups like the ACLU of Virginia, Minorities 4 Medical Marijuana, and the Drug Policy Alliance—sent a letter to governor Northam and state legislators laying out specific criteria to “legalize in a way that rights the wrongs of the disparate impact the War on Drugs has had on Black and Brown communities.”

“I would say that we would probably know more at the end of February, at least where the bills are [after] conference,” Wise said. “From there, we’ll decide if this bill is what we want or not what we want. I think we are going to see a big fight, just like every other state.”

Washington, DC - This Presidents Day, the National Organization for the Reform of Marijuana Laws (NORML), along with a coalition of business groups and criminal justice reform advocates, is calling upon President Joe Biden to follow through on his campaign commitment to expunge the criminal records of those with non-violent cannabis convictions.

“President Biden was crystal clear on the campaign trail that his administration would prioritize criminal justice reform, and he explicitly highlighted his desire to 'zero out' the records of those suffering from the stigma of a federal marijuana conviction,” said NORML Executive Director Erik Altieri. “Following through on this campaign promise would be an important first step in remedying the past wrongs associated with nearly a century of marijuana prohibition and healing the wounds of the many Americans who have needlessly suffered under this failed public policy. In 2021, it is readily apparent that the criminalization of cannabis, and the lifelong lost opportunities that come with a criminal marijuana conviction, causes far greater harm than the responsible use of cannabis itself.”

You can read the full letter here.

U.S. Reps. Earl Blumenauer (OR-03) and Barbara Lee (CA-13), co-chairs of the Congressional Cannabis Caucus, also called on President Biden to grant executive clemency to all non-violent federal cannabis offenders.  

“Even before Congress sends President Biden a marijuana reform bill to sign, he has the unique ability to lead on criminal justice reform and provide immediate relief to thousands of Americans,” said Reps. Earl Blumenauer (OR-03) and Barbara Lee (CA-13), Congressional Cannabis Caucus co-chairs leading an effort on Capitol Hill to promote pardons to all non-violent federal cannabis offenders. "We urge President Biden to grant executive clemency for all non-violent cannabis offenders and look forward to working with him and the incoming Attorney General on quickly making this a reality.”

Blumenauer and Lee—who are continuing to build support on Capitol Hill for clemency for non-violent federal cannabis offenders—plan to send a formal letter to the Biden administration in the coming days.

NORML maintains that the establishment of a process to facilitate the review and expungement of past records is a necessary element of cannabis policy reform:

Millions of Americans, a disproportionate percentage of whom are young people and minorities, have been subject to a cannabis-related arrest and criminal conviction.

Branding these individuals, many of whom are at an age when they are just beginning their professional careers, as lifelong criminals result in a litany of lost opportunities including the potential loss of employment, housing, voting rights, professional licensing, and student aid and serves no legitimate societal purpose. The imposition of such lifelong penalties is even more punitive in instances where the criminal conviction is related to behavior or activities that have since been legalized and regulated.

There is legal and scholarly support for the administration’s use of blanket pardon powers. Such actions were previously taken by Presidents Ford and Carter.

“One of the most common uses of systematic pardons in U.S. history has been to heal the wounds of war at home,” Charles Shanor and Marc Miller wrote in the 2001 paper, “Pardon Us: Systematic Presidential Pardons.” “For many years in the United States, we have been engaged in a war on drugs. Whatever the judgments of history about the virtue, the wisdom, or the success of this war, it has produced some laws and some sentences that are widely perceived to be unwise and unfair.”

NORML simultaneously released a petition calling upon Americans of all political stripes to join in the call for presidential pardons. You can view that petition here.