After years of civil litigation, U.S. Customs and Border Patrol has relented in federal court: No, participating in the legal Canadian cannabis industry will not bar you from entry to the U.S.

This was a hard-won admission, however, given the long-running back-and-forth between Seattle law firm Davis Wright Tremaine and the attorneys for CBP. And the delay did not come without cost. Numerous Canadian citizens had been barred entry to the U.S., dating back to 2018, due to a vague and penalizing policy focused solely on their employment within the legal cannabis space.

Davis Wright Tremaine’s lawsuit set out in 2019 to identify that very policy. Where was it recorded? What did it really say? Who had authorized it? Cannabis Business Times, in fact, filed a similar FOIA request for those records on May 7, 2018. As of this writing, that request remains “under agency review.” 

But as the years wore on, the Davis Wright Tremaine lawsuit’s civil docket redounded again and again to unclear responses from CBP. The ongoing question, according to Judge Ricardo Martinez, was just how thoroughly CBP was searching its own internal records for a trace of this policy. As Martinez wrote in 2020: “On first look, and afforded the presumption of good faith, CBP's evidence appears to paint a clear picture of a reasonable and comprehensive response to Plaintiff's requests. However, the details are far hazier. Drawing reasonable inferences in favor of Plaintiff, the Court is left with too many questions to find that CBP's search was reasonable and adequate as a matter of law. First, CBP has not provided adequate detail of its search at almost every level.” 

This debate over the physical search for CBP’s own internal records lasted several years, cementing the skepticism that brought Davis Wright Tremaine to file the lawsuit in the first place.

“DWT doubted that the agency's position had any basis in law or that the agency was using its enforcement powers in a permissible way,” according to an update published by the firm. “Agencies like CBP lack the authority to make new law or issue decisions regarding the official U.S. response to changes in foreign law. 

“Following a successful summary judgment motion [in 2020], where the court found that CBP's justifications were inadequate, the parties entered discussions and DWT ultimately persuaded the agency to re-review the documents it provided. CBP recently produced a significant number of relevant documents and agreed to un-redact key portions of its internal Information Guide concerning ‘Legalization of Marijuana in Canada.’”

The CBP’s 2018 Information Guide is available here. 

Chief among its entries, as the Davis Wright Tremaine team wrote: “CBP's internal guidance acknowledges that foreign nationals who work in legal foreign cannabis industries are not inadmissible and should not receive a lifetime ban for attempting entry, assuming their visit to the United States is unrelated to domestic or cross-border cannabis operations.”

In other words, merely working for the legal industry in Canada is not sufficient as grounds for preventing entry to the U.S.

That acknowledgment contradicts past statements by CBP official Todd Owen and past actions by CBP, which detained and barred Canadian citizens from entry to the U.S. in the event they were found to have some financial connection to the legal cannabis industry.

And yet cannabis remains a federally controlled substance in the U.S.

The CBP Information Guide does go on to assert that non-U.S. citizens “entering the United States to engage in the marijuana business” may indeed be barred. With that in mind, the Davis Wright Tremaine team cautions Canadian citizens, who may still be questioned at the border about their intentions—business or otherwise—within the U.S.

The California-based cannabis company, Solful, is built on its philosophy of selling 100% sun-grown cannabis from small craft cultivators in Northern California. 

Eli Melrod, co-founder and CEO of Solful, explains that at the start of operations back in 2017, several people doubted the company's mission. But Melrod says he saw an opportunity to capitalize on the network of small craft farms in Northern California. 

Here, Melrod explains the idea behind the company's brand, as well as what led him to his career in the cannabis space.

Andriana Ruscitto (AR): Can you share a bit of your background and how you and your company got to the present day?

© Courtesy of Solful

Eli Melrod (EM): So, my personal journey with cannabis started when my dad was diagnosed with pancreatic cancer. He's a pancreatic cancer survivor. When I was 11 years old, my dad basically had six to 12 months to live. Fast forward a number of years, a couple of decades later, fortunately, he's still with us and healthy. Cannabis has been really an impactful part of his healing journey. … So anyway, I really saw that experience firsthand.

I grew up in San Francisco, went away to school for a bit on the east coast, and came back in late 2014 or early 2015. Then, I really could just see the writing on the wall that cannabis is getting legalized in California with the ballot initiative [in] 2016. I just got really excited about getting to join the space, something I really believed in, and frankly, I've always wanted to be an entrepreneur. I was always interested in business. So, [I] got involved in the space and began iterating on different concepts with a longtime family friend who ended up being my co-founder. … This was back in 2015. We got really excited about the concept for cannabis retail in California. [We] really understood that ... it’s the best opportunity to build a brand when you have that direct consumer relationship.

[We] wanted to do something that focused on small craft sun-grown cultivators. ... So, we decided to jump into that in 2016 and opened our first location in 2017. And then, just recently, in the last month or so ago, we opened our second [retail] location. Now, we're in growth mode after having a lot of success at our first location. 

AR: Can you describe the idea behind the Solful brand?

EM: It was a fundamental core of what we saw in the marketplace that didn't really exist. We have these really incredible networks of small craft farms in Northern California. 

When I went into most dispensaries back in 2015 and 2016, you really couldn't get access to that product, and it's really the same thing [today]. If you go into a dispensary [today] in California, the vast majority of the product is from large-scale production or a name-brand product versus craft production in California. That's what makes California cannabis so unique. ... We have an industry that's been here where folks have been [around for a while]. Some of the farms we work with are third- or fourth-generation cultivators, and they have incredibly unique genetics and practices. So, when I had the experience of getting up and visiting these farms, I was like, 'Wow, this cannabis is so much, frankly, better and more unique than anything I have seen in the marketplace.' So, it was trying to create and bring that to life in a store environment.

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

EM: We want to make sure that we're competitive relative to our peers. So, we do a lot of purchasing of other brands and products to make sure that we truly can stand behind the fact that we have the absolute highest quality on the market.

AR: How has a failure, or apparent failure, set you up for later success? Do you have a "favorite failure" of yours?

EM: Early on as a company, there were moments where we had opportunities to grow the company. Particularly early on in California's cannabis [industry], there was a lot of rapid growth. ... We decided after pursuing certain opportunities that they weren't going work for us financially. Sometimes that was a hard pill [for us] to swallow because we had so much effort and energy behind some of these projects. ... I think [long term] that sort of discipline had allowed us to thrive and be sustainable financially. And so, I think it's knowing when to [stop putting] resources towards something that's not a good path forward and a long-term path. [That] has been some of the most important lessons and moments I think in business.

AR: What advice would you give to a smart, driven grower about to enter the legal, regulated industry? 

EM: Know who you are. I think you need to be clear about what makes you different [and] what makes you unique. I think that the brands [and] the companies that do well in what's an extremely competitive marketplace in most states are people who have a clear definition of who they are, what makes them different, and how they stick to that.

AR: What advice should they ignore?

EM: People trying to say things like, 'This is just the way things are done,' or stuff like that. Always challenge that and think outside the box and be creative. Don't just accept the way things are done, so to speak, because some of the things we did early on that people thought were really unconventional have proven to be super successful. 

We were really clear about who we were and what we wanted, [and] who we wanted to be in the industry. For example, we only sell sun-grown cannabis. Most dispensaries, probably the vast majority of what they sell, is indoor grown. Early on people thought [our idea] was insane. There are people who said, 'You're going to fail at that.' and 'You should just be prepared now always to have a mix.' And we said, 'You know what? We want to be sort of the destination for this kind of product.' And it truly paid off. I mean, here we are five years later, and we're getting national recognition for the products we carry.

AR: How do you deal with burnout?

EM: I believe in what we're doing, and I know how each and every day we're delivering on our mission to our team and our customers, and all of our stakeholders. So, I think that in and of itself is energizing. At the same time, I definitely, like probably many entrepreneurs, have sort of that go, go, go mentality. I try to have the right practices, whether that's meditation, acupuncture, and different things [like that] that can be helpful. I think it's important to find ways to check out. For me, acupuncture has been beneficial. [It] forces me to get out of my head and into my body and things like that. For me, it's just finding those moments of trying to turn it off. Also, doing something you believe in, I think, allows you to always have energy, even when there's not a lot of gas in the tank.

© Courtesy of Brennan Park

AR: How do you motivate your employees/team?

EM: That for us is [something] we think about every single day. When we founded Solful, we thought about companies that have built an incredible brand and culture around their mission. Our mission [is] cultivating health and happiness in our community. For everybody at Solful we hire, the first thing we assess is, 'Does this person believe in our mission?' and 'Are they on board with what we're doing in the community and the impact we're making?' And so, we have a team of like-[minded] people who believe in what we do, and they see the incredible outcomes of the folks who are coming in and getting products that are making them healthier, happier people. We do a lot of work with different community groups.

And a lot of those are organizations [are ones] that our team will even bring to us, and say 'Hey, this is an organization.' For example, one of our team members, his partner, was going through cancer and there's this organization that was helping them manage the healthcare system and providing some financial resources and things like that. They were able to come to us and say, 'Hey, this is really meaningful to me. We'd love to do a campaign.'... Pretty much with every single marketing campaign we do, there's some kind of community impact component, whether that's partnering with a brand and making some sort of donation from proceeds, activating volunteers, whatever it may be. So, I think just living and breathing our mission is the best way to keep motivated. Also, offering [incentives like] robust compensation packages and benefits—all of those things. But, I think in many ways, it's believing in what people are doing every day that keeps people motivated and excited to come to work and make an impact.

AR: What keeps you awake at night?

EM: I think the challenge in cannabis is that the industry's fast-moving, and a lot of times, there are exogenous shocks that happen. Whether that's a regulatory shock, whether that's a vaping crisis, whether that's inflation, [increased] gas prices, and all the things we're dealing with now. It's just knowing that exogenous shocks can happen, and sometimes it could be like an earthquake. And that I think it just creates a dynamic that you have to be willing to be flexible and scramble all that.

AR: What helps you sleep at night?

EM: I think the other thing that helps me sleep at night is what we've been through. From COVID to, you name it, [we've] been through some of these shocks, and what always helps me sleep is that, at the end of the day, people will always use cannabis. Dynamics will change, but there will always be a tremendous amount of demand for cannabis products. 

If you can understand your customer and build a relationship with them, we found that people engender a lot of loyalty through these different exogenous shocks. I think we saw that through COVID. We were deemed an essential business in California. We stayed open through the whole pandemic, and for a lot of our consumers that meant being able to sleep at night or being able to manage their pain, or frankly, just having a way to unwind and take the stress away from everything that's going on in the world. I think that's a really meaningful relationship to have when you're providing that level of care for people. Cannabis really does have that level of impact on people's lives. It's very intimate to be selling people a product that helps people sleep better than they've slept in decades or helps them get out of pain or whatever it may be. So, I think that's what helps [us] sleep at night and knowing that [we're] helping a lot of people even on those days when it's really hard.

Editor’s Note: This interview was slightly edited for style and clarity.