Adult-use cannabis is entering its fifth year of voter-approved legalization in California, but the illicit market has continued to soar because of constraints associated with licensing and regulations required by state law.
State Sen. Nancy Skinner introduced legislation Feb. 11 to loosen some of those constraints by expanding resources to help city and county governments that don’t have the wherewithal to oversee legal cannabis operations, she said in a release about her bill. S.B. 398 would allow local jurisdictions access to a state program that would manage certain bureaucratic functions for them, like enabling businesses to obtain licenses through the state.
“Californians legalized cannabis four years ago, yet the state is still plagued by a multi-billion-dollar illicit cannabis market,” Skinner said in the release. “Why? Too many cities and counties don’t have the bandwidth to set up cannabis licensing and regulations. S.B. 398 will help cities and counties greenlight legal cannabis by allowing cannabis businesses to get their local licenses through the state.”
In November 2016, Californians approved Proposition 64, The Control, Regulate and Tax Adult Use of Marijuana Act, by a 57.1% majority, legalizing adult-use cannabis statewide. The proposition was intended to reduce the illicit market with an above-ground legal playing field that ensures the production and sale of safe, regulated cannabis, Skinner said.
But the Legislative Analyst’s Office (LAO)—a nonpartisan fiscal and policy research institute for California’s legislature—estimates that adult-use cannabis businesses operate in less than one-third of jurisdictions statewide, which, in part, is because of the complicated regulatory framework Proposition 64 requires local governments to administer, the congresswoman said.
According to a 2020 study prepared by Applied Development Economics, Inc., a consulting firm based out of Lafayette, Calif., the state’s taxable retail cannabis sales totaled about $2.1 billion in 2019, based on excise tax receipts. Meanwhile, the addressable cannabis market (legal and illegal cannabis sales) in California totaled about $7.9 billion, according to the study. Take the difference between those two figures, and the illegal cannabis market made up about three-fourths of the existing cannabis sales at that time.
By relieving cities and counties of regulatory responsibilities, if they opt to take part in the state program, S.B. 398 is designed to grow the state’s legal cannabis market and boost cannabis tax revenues while slashing the illegal cannabis market, Skinner said.
According to the LAO, California collected roughly $900 million in cannabis tax revenue in the past year. If signed into law, Skinner’s proposed legislation is expected to generate up to an additional $1 billion in state revenue, with a portion of the state tax on cannabis sales slated to be shared with the cities and counties that decide to take part in the state program, according to the release.
“Prop. 64’s good intentions to bring cannabis sales above ground and generate healthy tax revenues are undermined when cannabis businesses can’t get a license,” Skinner said. “With S.B. 398, California will be able to deliver on Prop. 64’s promise.”
InSpire Launches Cloud-Based Grow Room Controls and Automation for Commercial Cannabis Cultivators
Scalable, secure enterprise solutions offer full control and integration with HVACD systems to help cultivators improve yield, save time and reduce costs.
SAN FRANCISCO, Feb. 16, 2021 — PRESS RELEASE — InSpire Transpiration Solutions, a leading heating, ventilation, air conditioning and dehumidification (HVACD) products and services provider focused on controlled environmental systems for indoor horticulture, introduced its new Integrated Room Automation systems to bring cannabis cultivators unprecedented levels of environmental monitoring and control. InSpire’s integrated cloud-based controls for HVACD systems allow growers to leverage advanced crop steering techniques with real-time dashboards and control from any device.
Integrated Room Automation helps cultivators maximize plant biomass and phenotypic expression, strengthen top-line performance and mitigate risk. Combined with InSpire’s plant-centric HVACD systems, cultivators can achieve 24-hour vapor pressure deficit (VPD) control and greater resistance to pathogen introduction and expression.
“Historical wisdom and technology provides a very solid foundation on which to build, but we can’t ignore that the commercial cannabis industry is rapidly evolving,” said Adrian Giovenco, CEO of InSpire Transpiration Solutions. “It is becoming increasingly important for legal cannabis cultivation operations to leverage cutting-edge strategies in order to maximize profitability. When growers can monitor, control and analyze a full range of environmental data, they can drive yields and innovate in ways that will move the entire industry in exciting new directions.”
InSpire’s Integrated Room Automation provides cannabis cultivators with the ability to:
Leverage environmental crop steering techniques with real-time control
Optimize plant performance with transpiration and carbon assimilation insights
Monitor moisture content of harvested flower during the dry/cure process for consistent product weight and quality
Schedule temperature and relative humidity setpoints, plus automate light schedules and carbon dioxide enrichment by room to optimize phenotypic expression run after run
Access a fully functional IOT platform with customizable alerts and bank-level security from anywhere in the world
“Integration like this is essential for success,” Giovenco said. “Using independent units to heat, cool, dehumidify and clean the air leads to high operating costs, prevents plants from reaching maximum metabolic rates and puts the entire operation at risk of pathogen contamination. Cannabis operations can successfully meet their [key performance indicators] by implementing repeatable, precise environmental control for greater consistency in product quality, optimized phenotype and chemotype expression.”
VALLEY VIEW, OH (February 11, 2021) – Cannabis Business Times, Cannabis Dispensary and Hemp Grower magazines, owned by B2B publishing company GIE Media, Inc., announces the hiring of Anthony Lange as Associate Editor and Andriana Ruscitto as Assistant Editor to support the rapidly growing media brands.
Under the direction of Digital Editor Eric Sandy, Lange and Ruscitto will contribute primarily digital content to support the brands’ ongoing rise in web traffic, with additional contributions to the brands’ print magazines.
Anthony (Tony) Lange has been hired as Associate Editor for Cannabis Business Times, Cannabis Dispensaryand Hemp Grower, where he will contribute both digital and print content. He spent the past decade working in the weekly newspaper business, contributing primarily to the Chagrin Valley Times as a beat reporter, sports editor, photographer and page designer. Before that, he was a staff assistant for a congressman in the U.S. House of Representatives in Washington, D.C., where he drafted responses to constituent letters and aided the communications director. Lange is a graduate of Kent State University with a Bachelor’s Degree in Journalism.
Andriana Ruscitto has been hired as Assistant Editor for Cannabis Business Times, Cannabis Dispensaryand Hemp Grower magazines. Before joining GIE Media, Ruscitto attended Kent State University, where she worked in the university communications and marketing department, writing stories for the Kent State Today. Ruscitto graduated from Kent State in December 2020 with a Bachelor of Science degree in Public Relations and a minor in Marketing.
“We are excited to have Anthony and Andriana join our talented team of editors,” Editorial Director Noelle Skodzinski said. “They both bring unique experience and skillsets that are extremely valuable in serving the audiences of the Cannabis Group media brands. We look forward to seeing their careers flourish at GIE Media.”
“Tony and Andriana are coming on board to help accelerate even further the rapid growth in web traffic we have seen across all three media brands they will be working on,” said Sandy. “We are excited to tap their reporting skills to cover an even greater number of stories critical to our audiences at Cannabis Business Times, Cannabis Dispensary and Hemp Grower.”
GIE Media is currently seeking a Senior Editor for Cannabis Business Times and Cannabis Dispensary magazines. Click here for more information.
ABOUT CANNABIS BUSINESS TIMES
Cannabis Business Times was founded in July 2014 and is owned by GIE Media Inc. Its focus is to help accelerate the success of legal cannabis cultivators by providing actionable intelligence in all aspects of the business, from legislation, regulation and compliance news to analysis of industry trends and opportunities, as well as expert advice on cultivation, marketing, financial topics, legal issues, business management and more. Cannabis Business Times focuses strictly on the business of legal cannabis for medical and recreational use and aims to provide timely information—through its website, e-newsletter, mobile app, print magazine, Cannabis Conference and virtual education—to help the reader make timely, informed decisions to help them run their businesses better and more profitably.
ABOUT CANNABIS DISPENSARY
Cannabis Dispensary is the industry’s first true B2B media brand dedicated entirely to the retail and ancillary business segments of the legal cannabis market. Launched in November 2017 and owned by GIE Media Inc., Cannabis Dispensary is quickly becoming cannabis retailers’ go-to source for business and legislation news. In addition to industry news, Cannabis Dispensary provides dispensary owners/operators with actionable intelligence that they can use to make their businesses stand out in an increasingly competitive market.
ABOUT HEMP GROWER
Hemp Grower’s mission is to support legal hemp cultivators by providing actionable intelligence in all aspects of the business—from regulatory news to analysis of industry trends and business strategy, as well as expert advice on cultivation/farming, extraction, marketing, financial topics, legal issues and more. Hemp Grower focuses strictly on the business of legal hemp and aims to provide timely information—through its website, e-newsletter, print magazine, annual Cannabis Conference and virtual education—to help the reader make timely, informed decisions to help them run their hemp businesses more efficiently and more profitably.
ABOUT GIE MEDIA, INC.
GIE Media, based in Valley View, Ohio, was founded in 1980 and has grown over 36 years into a leading marketing and communications business-to-business media company serving 18 industries. The company goal of Group Interest Enterprises is to publish the highest quality business magazines, websites, e-newsletters, conferences, reference books and other forms of business media in growth industries, with a quality standard based upon editorial value and market leadership. The company employs more than 100 editors, publishers, sales representatives, marketers and other professionals.
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Working in Cannabis: What You Should Know
Industry professionals share their insights on what they wish they knew before entering the cannabis industry.
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.
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
Oliver and her daughter
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
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.
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
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.
The Green Lady Dispensary Navigates First Year in Nantucket in the Age of Social Distancing: The Starting Line
The vertically integrated company has dealt with Massachusetts’ vape quarantine and coronavirus-related shutdowns, and is now looking ahead to what it hopes will be a normal tourist season this year.
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.
“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?’”
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.”
Legislative Map
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