Editor's note: This is an excerpt from From Seed to Success: How to Launch a Great Cannabis Cultivation Business in Record Timeby Ryan Douglas. Douglas is founder of Ryan Douglas Cultivation, a cannabis cultivation consulting firm. He was Master Grower from 2013-2016 for Tweed, Inc., Canada’s largest licensed producer of medical cannabis and the flagship subsidiary of Canopy Growth Corporation. He also has contributed to Cannabis Business Times.

Domestic expansion is the addition of one or more cultivation sites within the same state, province, or country. A cannabis business can expand by building new cultivation assets from scratch, or acquiring existing operations that are fully functional. However, entrepreneurs should determine whether they are legally permitted to expand their business before they establish high hopes for domestically increasing their cultivation footprint.

Do you have permission to expand?

The biggest deciding factor on whether or not to expand a cultivation business should be determined by regulations. If your existing license allows for more than one cultivation site, and you are now in a position to take advantage of that option, initiating an expansion project should be fairly simple. If your current license only allows for one cultivation site per license, expansion won’t be as easy. In this scenario, a cultivation business must either purchase an existing license or submit a new license application. Regulations governing these activities differ by state and country, and some jurisdictions prohibit the transference of licenses between companies.  

Expansion through building more facilities

If you’re considering expansion, then you’ve already been through the start-up process and you recognize the importance of proper land selection and facility design. Review Chapters Four and Five, or consult the site assessment checklist found in the Appendix to help expedite these processes.

Expanding to an additional site should be much faster than starting your first cultivation site. The buildout process will be the same, but the launch should be expedited. You can pull from seasoned personnel and previous experiences to help make the second launch much smoother. You already have protocols in place, and an entire staff trained on your company’s SOPs. You will have genetics that have been grown out several times and refined to varieties that are appropriate for commercial production. You’ll also be able to promote from within—moving lower-level employees up to management positions at the new site.

ALBANY, New York, Feb. 17, 2020 - PRESS RELEASE - Governor Andrew M. Cuomo today announced 30-day amendments to the Governor's proposal to establish a comprehensive adult-use cannabis program in New York. Specifically, these amendments will detail how the $100 Million in social equity funding will be allocated, enable the use of delivery services, and refine which criminal charges will be enforced as it relates to the improper sale of cannabis to further reduce the impact on communities hit hardest by the war on drugs.

"As we work to reimagine, rebuild and reopen New York, we're taking every opportunity to address and correct decades of institutional wrongs to build back better than ever before," Cuomo said. "We know that you cannot overcome a problem without first admitting there is one. Our comprehensive approach to legalizing and regulating the adult-use cannabis market provides the opportunity to generate much-needed revenue, but it also enables us to directly support the communities most impacted by the war on drugs by creating equity and jobs at every level, in every community in our great state."

Allocation of $100 Million Cannabis Social Equity Fund

Social and economic equity are the bedrock of Cuomo's proposal to legalize cannabis for adult-use and as part of that, his proposal includes a $100 million dollar fund to help revitalize communities that have been most harmed by the war on drugs.

Through this fund, qualified community-based nonprofit organizations and local governments would apply for funding to support a number of different community revitalization efforts, including, but not limited to:

• Job placement and skills services,
• Adult education,
• Mental health treatment,
• Substance use disorder treatment,
• Housing,
• Financial literacy,
• Community banking,
• Nutrition services,
• Services to address adverse childhood experiences,
• Afterschool and child care services, system navigation services,
• Legal services to address barriers to reentry, and
• Linkages to medical care, women's health services and other community-based supportive services

The grants from this program may also be used to further support the social and economic equity program.

Under the amended proposal, the Department of State would allocate the funding, through grants administered by Empire State Development Corporation, in collaboration with the departments of Labor and Health, as well as with the Division of Housing and Community Renewal, and the offices of Addiction Services and Supports and Children and Family Services. Final allocations and administration of funding would also be contingent upon approval from the Division of the Budget.

Enabling the Use of Delivery Services

The legalization of cannabis is expected to play an important role in helping rebuild New York's economy following the damaging effects of the COVID-19 pandemic. In fact, legalization is projected to create more than 60,000 new jobs and spur $3.5 billion in economic activity while generating an estimated $350 million in tax revenue once fully implemented.

Cannabis legalization also has the potential to have a significant economic benefit on distressed areas in New York, providing employment opportunities for all levels of the workforce. As social and economic equity are the bedrock of Cuomo's proposal, delivery services offer a low-cost entry point into the industry, particularly in communities that have been especially impacted by the war on drugs.

Recognizing this, Cuomo is amending his proposal to allow for the permitting of delivery services as a way to open up access to this new industry even further so more New Yorkers can participate as it grows. As part of this, local governments would have the opportunity to opt-out of delivery services occurring within their jurisdiction.

Criminality of Improper Sales

When establishing a new product market, as Cuomo's proposal does, there will inevitably be attempts by bad actors to skirt rules and commit fraud for their own financial gain. This makes it critically important to ensure that penalties are carefully calibrated to ensure that all those who wish to participate in this new market are operating on the same level playing field.

Cannabis, however, adds another complicating factor to this dynamic - years of outdated policies stemming from the war on drugs have disproportionately impacted communities of color. Already, New York has taken steps to decriminalize cannabis and as this new market is realized, and it's critical that criminal penalties are thoughtfully assigned, as to ensure that the progress which has already been made, is not inadvertently reversed.

As such, under Cuomo's amended proposal, specific penalties will be reduced as follows:

• Criminal sale in the third degree (sale to under 21 years old) will be made a class A misdemeanor
• Criminal sale in the second degree (sale of over 16 ounces or 80 grams of concentrate) will be made a class E felony
• Criminal sale in the first degree (sale of over 64 ounces or 320 grams of concentrate) will be made a class D felony

Cuomo's proposal builds on years of work to understand and decriminalize cannabis for adult use. In 2018, the Department of Health, under Cuomo's direction, conducted a multi-agency study which concluded that the positive impacts of legalizing adult-use cannabis far outweighed the negatives. It also found that decades of cannabis prohibition have failed to achieve public health and safety goals and have led to unjust arrests and convictions, particularly in communities of color.

In 2019, Governor Cuomo signed legislation to decriminalize the penalties for unlawful possession of cannabis. The legislation also put forth a process to expunge records for certain cannabis convictions. Later that year, Cuomo spearheaded a multi-state summit to discuss paths towards the legalization of adult-use cannabis that would ensure public health and safety and coordinate programs regionally to minimize the cross-border movement of cannabis products.

Building on that important work, Cuomo's proposal reflects national standards and emerging best practices to promote responsible use, limiting the sale of cannabis products to adults 21 and over and establishing stringent quality and safety controls, including strict regulation of the packaging, labeling, advertising and testing of all cannabis products. Cannabis regulation also offers the opportunity to invest in research and direct resources to communities that have been most impacted by cannabis prohibition.

Name: Thomas Vaughn

Location: Pauls Valley, Oklahoma

Title: Grower/Partner

One word to describe your cultivation style: Passion

Indoor, outdoor, greenhouse or a combination: Indoor

Can you share a bit of your background and how you and your company got to the present day?

I got started in Los Angeles, Calif., medical program in 2003 through 2010. I moved back to Oklahoma with no expectation of Oklahoma having a medical marijuana program. In 2018, S.Q. 788 passed and we built a team of like-minded individuals but with wide ranging skill sets and took off.

What tool or software in your cultivation space can you not live without?

Rhythm Environment Controls.

What purchase of $100 or less has most positively impacted your business in the last six months?

Without a doubt, Dramm Touch N Flow 30’’ Wand. We hand-water all of our plants, so the time savings that the Dramm provided us has been one of our best purchases of the entire adventure, regardless of price!

What cultivation technique are you most interested in right now, and what are you actively studying (the most)?

Organic living soil beds. Studying tissue culture a lot.

READ MORE: Resonant Cultivation Looks to Stand Out in Crowded Market

How has a failure, or apparent failure, set you up for later success? Do you have a “favorite failure” of yours?

Overlooking a small contingency detail can create massive failures.  Early on, we had a contactor go out on our HVAC unit and had not installed our controllers yet to shut the lights off at high temperatures. Luckily, we caught it early, but it could have been disaster. It was a detail we will not miss again.

What advice would you give to a smart, driven grower about to enter the legal, regulated industry? What advice should they ignore?

Pay attention to local laws and regulations. Watch mature markets to develop what will work in emerging markets. Prepare for adversity. Prepare for challenges and meet them with the same enthusiasm as you do the wins. Ignore the idea that there is only one way to do it. This is a relatively new industry and the ones that continue to innovate will be at the forefront.

How do you deal with burnout?

When you are passionate about your job, burnout isn’t as prevalent. We have so many projects we are currently working on that I couldn’t even think about burnout. We are having a blast continuing to innovate and push the Oklahoma market in the right direction. In cannabis, every day is something different, so complacency isn’t an option under our roof. Having a reliable, focus driven team helps. High-quality organic Resonant Cultivation cannabis helps as well! 

How do you motivate your employees/team?

We have a “No Bad Vibes” policy and our culture starts at the top. We communicate to our team the opportunity within the growing cannabis industry. For our employees who want to focus and learn, we communicate the chance to continue to grow in our company. We invest in our employees and their professional growth. It has been a joy to see them develop talents and skills that are valuable to the team. We communicate to the team the opportunity that we have to make an impact in the quality of life for our fellow Oklahomans with cannabis and that is enough motivation in itself.

What keeps you awake at night?

Timing, planning and scheduling of a plant that has its own schedule can keep me up at night.

What helps you sleep at night?

We installed a full system generator. In Oklahoma weather, you’d better be prepared!