Cannabis Start-Up Competition at Boston University

Cannabis Start-Up Competition at Boston University

Boston University’s BUzz Lab held a Cannabis Start-Up Competition at the school’s Questrom School of Business this past Tuesday, November 14th.

175 people showed up to participate in the Shark-Tank-style competition, which was open to all Boston University students and alumni who had an interesting new idea or business venture in the burgeoning cannabis industry. The winners were awarded $10,000, a booth at the upcoming December Harvest Cup cannabis-industry event in Worcester, MA, and advisement from Green Lion Partners, a business strategy firm in Denver focused on early stage development in the regulated cannabis industry. GLP has worked with over a dozen successful cannabis startups, runs three of its own startups, and was founded by two Questrom alumni, Jeffrey Zucker and Mike Bologna.

Flyers and promotional materials for the competition state “Cannabis is the fastest growing industry in the US and is expanding all around the world. It’s rare to be in an industry where you know there are established customers even in markets that aren’t yet developed. Beyond the incredible opportunity though, there are millions of redacted patients that need better access to their redacted medicine and many people in jail for growing plants who don’t deserve to be there. For us, the bottom line is: people are consuming this herbal medicine everywhere, why not make it safe, regulated, and taxed. States like Colorado and Oregon are showing tremendous benefits a sustainable market framework can provide.”

They also clarify that the venture can be established and not created specifically for the competition. In the guidelines for the competition as a whole, BUzz Lab and GLP were clear that they were not looking for non-innovative vaporizers, band-aid solutions to any issues that will be solved with full legalization (such as bank solutions), and copies of companies or products that are already out in the market. They also touch on branding, warning startups to stay away from saturated cannabis leaf symbols and stereotypical “stoner” images in an effort to continue to move the perception of the cannabis industry forward in the world.

This competition was looking for “ancillary” cannabis companies, meaning they are not growing and producing cannabis itself, but are supportive and involved in the cannabis industry in other ways, such as software, research, tools, accessories, and other supporting elements within the industry.

People and companies selected to compete in the Cannabis Start-Up Competition were required to have the following materials ready for review and discussion, along with being able to discuss their impact on the industry, branding, investor opportunities, scalability ideas, and marketing plans.

  • A clear and concise one-page business summary
  • Pitch deck
  • Supplemental financial information
  • BUzz Lab Application
  • A  Social Component – “Policy reform and social responsibility are an important aspect of the cannabis industry. It’s imperative for new companies to have a plan for how they will integrate supporting the cause into their business models.”

The winner of the competition was the think tank–like Cannabis Center of Excellence, founded by Marion McNabb and Randy MacCaffrie. McNabb came up with the idea for CCoE while earning a doctorate at the BU School of Public Health, where she learned how to do research and then put it into practical application. She says, “We need to advance the research related to cannabis. We need to develop public health programs and train clinicians and study that over time.” Her company’s vision is to support Massachusetts to be the leader in designing, documenting, and scaling Cannabis industry best practices. This includes advocacy for cannabis research, networking events, and documenting best practices within the industry.

GLP founder and BU alum Jeffrey Zucker decided it was time to bring this type of competition to BU after adult-use recreational cannabis became legal in Massachusetts at the end of 2016. “I want BU to be on the forefront of cannabis education and show they realize it’s an industry that is coming,” he says.

Guidelines for the Recommendation of Cannabis for Medical Purposes

Guidelines for the Recommendation of Cannabis for Medical Purposes

Just this week in California, the State of California, the Department of Consumer Affairs, and the Medical Board of California released their “Guidelines for the Recommendation of Cannabis for Medical Purposes” and sent them out to hospitals and medical cannabis companies and dispensaries.

As a medicinal provider, Humanity has received their copy and we would like to go into some detail about the report so you understand it thoroughly.

The Medical Board of California begins with a preamble assuring physicians that they are not going after them, even if a complaint is received, just for recommending or prescribing cannabis to their patients. “The Board wants to assure physicians who choose to recommend cannabis for medical purposes to their patients as part of their regular practice of medicine, that they will not be subject to investigation or disciplinary action by the Board if they arrive at the decision to make this recommendation in accordance with accepted standards of medical responsibility.”

These new guidelines are a continuation and refinement of Proposition 215, passed on November 5, 1996, which became known as the Compassionate Use Act and was meant to ensure that very ill California resident  could have the right to obtain and use cannabis for serious diseases like cancer, AIDS, migraines, and other illnesses it can help with, and also stated that neither the patients nor the doctors would be “subject to criminal prosecution or sanction.”

As they say, this book of guidelines is not a mandated standard of care, they are simply guidelines and suggestions and can be different for individual patients.

What is the Medical Board of California?

According to their website, “The mission of the Medical Board of California is to protect health care consumers through the proper licensing and regulation of physicians and surgeons and certain allied healthcare professions and through the vigorous, objective enforcement of the Medical Practice Act, and to promote access to quality medical care through the Board’s licensing and regulatory functions.”

In practice, what does this mean? Through the MBC, you can check up on your doctor’s license and see their status with the Board and search through scanned, public-record documents relating to administrative actions taken by the Board against licensed and unlicensed individuals, including public letters of reprimand (posted for 10 years), citations (for 3 years), and suspensions and other enforcement actions.

You can also use their site to file a complaint against your physician, look up outpatient surgery requirements, and find any and all forms you may need relating to your healthcare.  

All in all, the MBC is the authority of healthcare professionals in California and are there to protect YOU as the patient through regulations and guidelines.

What do the new guidelines entail?

The new guidelines for the recommendation of cannabis for medical purposes covers the following:

  • Patient-physician relationship: Emphasizing the need to establish and document and appropriate and trusting relationship with patients.
  • Patient evaluations: Discusses what makes up an adequate full evaluation and how important it is to document it and reminds doctors that recommending cannabis as a medication without a thorough exam and medical reason constitutes unprofessional conduct.
  • Informed and shared decision making: Makes sure that doctors are sharing all risks and benefits of cannabis use with their patients and making the decision together.
  • Treatment agreements: Discussing the importance of written treatment plans with objectives, and being sure it is individualized to the patient. This includes any other planned treatments and the duration for cannabis use, no longer than 12 months.
  • Qualifying conditions: This states that recommending cannabis is at the discretion of the physician, but reminds them that there is a lack of evidence for the efficacy of it for some illnesses and diseases. It is highly recommended that in all cases of recommending cannabis use, that the doctor is basing the determination on clinical trials, medical literature and reports, and other physician’s experiences.
  • Ongoing monitoring and adapting treatment plans: Emphasizes the need for the physician to regularly and consistently assess the patient’s response to cannabis usage as treatment and its effect on the patient’s overall health, and revising the treatment plan as needed.
  • Consultations and referrals: This guideline reminds physicians that in some cases they may want to consult with or refer their patient to a specialist, especially in the case of one with substance abuse history or mental health disorders.
  • Medical records: Discusses the need for accurate record keeping of patient records and how every entry must be dated and signed, as well as lists the necessary information which should be in each patient’s records.
  • Physician conflicts of interest: Explains that it is illegal to recommend cannabis from a facility which the doctor or their family has any financial interest in, and explains it is a misdemeanor, considered ‘unprofessional conduct,’ and is punishable by up to a year in jail and a $5000 fine. Physicians are also not allowed to have their offices located at a dispensary or cannabis cultivation center, and they cannot be a direct or indirect employee of them.

You can find the full guidelines here.

Oh, Oh, Ontario

Oh, Oh, Ontario

Canada’s Senate & the Cannabis Deadline

Canada’s Prime Minister Justin Trudeau is still promising a July 1 deadline for recreational cannabis legalization, but both Liberal and Conservative senators appointed by various PMs are not certain the deadline is attainable.

Independent Senator André Pratte said getting the legislation right is more important than the deadline, CBC News reports. “The deadline is a political deadline. It’s not a court that imposed that deadline. It’s the government that set that deadline. We have to take it into account, but we also have to do our job seriously and that’s what we’ll do,” Pratte recently said.

Once the elected members of the House of Commons pass Bill C-45 – which is expected to happen before Christmas this year – the marijuana legalization bill heads to the Senate for their perusal.

Tony Dean, the senator sponsoring the bill, is promising to keep the bill on schedule, but as Conservative Senator Ghislain Maltais sums it up, “There are 95 senators and as many opinions.”

Marijuana Business Daily explains:

  • Senators have the ability to hold up and revise legislation, but rarely ever reject it.
  • Senators are appointed by prime ministers and serve until they reach age 75.
  • Canada’s unelected and unaccountable senators are tasked with studying and sometimes amending legislation already approved by the elected members of the House of Commons.
  • Trudeau famously kicked all 32 Liberal senators out of the Liberal caucus in 2014 in a bid to reduce partisanship.

Oh, Oh, Ontario

Canada’s province of Ontario is proposing the Cannabis Act, 2017, which was presented by Attorney General Yasir Naqvi in Queen’s Park on Wednesday, November 1.

The Ontario government has a goal of overseeing cannabis sales and distribution in the province and shutting down the province’s popular but illegal dispensaries. The Cannabis Act, 2017 follows through with legislation that gives the provincial government full reins of the cannabis industry.

As reported by Leafly, the legislation would safely regulate the use and distribution of recreational cannabis when it is legalized by the federal government in July 2018 and would support the province’s safe and sensible transition to the federal legalization of cannabis. One specific note, the provincial government announced that it will stamp out the province’s black-market dispensaries by “introducing new provincial offenses with strict, escalating penalties.”

Under the new regulations, recreational cannabis in Ontario will be sold online and in 40 storefronts, all open and ready by the Canada Day legalization deadline, with plans for expansion to 150 stores across the province by 2020.

From the Ontario Newsroom press release, the proposed legislation would:

  • Create a new provincial retailer, overseen by the Liquor Control Board of Ontario (LCBO), to ensure safe and socially responsible distribution of recreational cannabis through stand-alone stores and an online order service. Under the proposed approach, approximately 150 standalone stores will be opened by 2020, including 40 stores by July 2018 and rising to 80 by July 2019. Online distribution will also be available to service all regions of the province.
  • Protect youth by setting a minimum age of 19 to use, buy, possess and cultivate cannabis in Ontario.
  • Focus on harm reduction by allowing for the diversion of people under the age of 19 from the justice system into programs focused on education and prevention, avoiding unnecessary contact with the justice system.
  • Ban the use of cannabis in public places, workplaces and motor vehicles, similar to alcohol.
  • The Smoke-Free Ontario Act, 2017 will be updated to include vaping and e-cigarettes, in an effort to protect people from secondhand smoke. It currently regulates medical cannabis use and tobacco products.
  • Help eliminate the illicit market including illegal storefront dispensaries, by introducing new provincial offenses with strict, escalating penalties.
  • Keep Ontario’s roads safe by establishing even tougher drug-impaired driving laws, including a zero-tolerance approach for young, novice, and commercial drivers.

Ontario is continuing to move forward with plans to help and protect young people with a public information campaign to raise awareness of the new rules and when they will be in effect. They are also looking to prevent and educate young people under the age of 19, as opposed to putting them through the criminal justice system or be on their record.

Ontario is also looking to keep a low price point for all strains of cannabis, to further deter buyers from going to the black market. The price could be as low as $10 per gram.

Ontario Premier Kathleen Wynne stresses that the government would not be making huge financial gains from cannabis sales. “This, actually, isn’t about money from my perspective,” Wynne told the Toronto Star. “This is about making sure that a substance that needs to be regulated is regulated in a safe and responsible way. And that’s exactly the approach we are taking.”

Gossamer: The New Face of Cannabis Media

Gossamer: The New Face of Cannabis Media

Greenwave Advisors recently released a report saying that the cannabis industry is up 35% year over year, with approximately $6.5 billion in recreational marijuana sales in 2016. Not to mention, the market for CBD is projected to reach $2.1 billion by 2020, almost ten times its value of $202 million in 2015, according to a 2016 report released by the trade publication Hemp Business Journal. Well over half of the states have legalized marijuana in one form or another, up to 29 now (plus DC), with more on the way.

As Business of Fashion states, “It was only a matter of time, then, that a media company with a fresh take on the rapidly growing industry would aim to disrupt the market.”

Say hello to Gossamer. It is a lifestyle and cannabis publication which has just launched on Friday, October 27th, 2017. The two co-founders, Verena von Pfetten and David Weiner, say they plan to examine and write about travel, food, and general culture through a “green lens.” They are launching this new publication for their peers, saying that their generation consumes marijuana, but does not define themselves by that alone. It is simply a part of life.

“We tend to sort of joke that cannabis is the least interesting part of cannabis,” Verena said. “Everything that happens before during and after is a lot more compelling to us.”

Verena and David met 10 years ago while they were both working for the Huffington Post and their media and branding experience meant they know what it takes to bring this new venture to life. Verena has experience as a brand consultant and former digital editorial director of Lucky Magazine, while David was a digital strategist and former chief creative officer of Digg, among other roles. They are launching Gossamer following a “sustainable and scaleable” rubric that prioritizes engagement overreach.

Verena and David are excited to be launching a publication that doesn’t turn cannabis into the stereotypical “pothead” or “stoner” motif that is seen in so many places in the media, from “That 70’s Show” and Netflix’s “Disjointed” to the movie “Pineapple Express” and more.

Fashion, Beauty & Cannabis

The fashion industry specifically seems to agree and be taking notice. Major labels like Alexander Wang, Creatures of the Wind, Baja East, and Jeremy Scott are incorporating cannabis motifs into their work. And just in March of this year, Clement Kwan, former Yoox Corporation president, launched Beboe, a luxury marijuana brand, with tattoo artist Scott Campbell. Companies like Marley Natural, named after the late Bob Marley, are already producing more than just apparel, and have lines of personal care products and accessories. Marley Natural was launched in February 2016 by Privateer Holdings, a cannabis-focused private-equity firm that has raised $122 million in funding and is based in Seattle, Washington.

The beauty industry is also getting involved. Longtime fashion editor Claudia Mata of Sausalito, California, is a newly minted entrepreneur on the cusp of launching Vertly Balm, a luxe beauty line infused with CBD and THC.  And Toronto-based physician and cannabis expert Dr. Andrew Kerklaan started his own line of CBD and THC wellness and beauty products this past summer.

Opportunities for the luxury industry, in general, to capitalize on the continued and seemingly inevitable legalization of marijuana go far beyond incorporating a cannabis leaf into clothing designs. One such foray has been into accessories like vaporizers and pipes, now being reimagined through a high-design lens. The same way flasks and cigarette cases have had designer makeovers previously, it is very likely that pro-cannabis fashion brands will begin to create paraphernalia of their own (if they haven’t already) and continue to be able to market themselves as cutting edge.

In addition, liquor and wine companies, such as Diageo, which owns Bulleit and Cîroc, and LVMH, which owns Moët & Chandon and Veuve Clicquot, may be interested in branded marijuana as new revenue opportunities soon, especially as alcohol sales plateau or even decrease in the west, like how they dropped a bit in 2015 for the first time in 15 years. In fact, at the end of 2016, Constellation Brands CEO Rob Sands was in the news telling Bloomberg that they were investigating opportunities in the marijuana industry. “We’re looking at it,” he said. “Why wouldn’t big business, so to speak, be acutely interested in a category of that magnitude?”

Gossamer is not the first in this media space. High Times is the most well-known brand in the cannabis media space and was recently sold to private equity firm Oreva at a $70 million valuation. Soon after, Oreva merged with Origo and this second acquisition is making High Times valuation go way up. They plan to be listed on NASDAQ before the end of the year at $250 million.

“The market is enormous and underserved and misunderstood, and I think we are all influenced by decades-old stereotypes of who consumes cannabis,” says Gossamer investor Teddy Goff, a partner at digital strategy firm ‎Precision Strategies. “[Gossamer] is a media brand that is not doing click bait, that is not trying to be cheap, is not trying to be too disposable, but is actually investing in beautiful design…and real journalism that reflects a certain taste and a certain level of quality.”

Gossamer is planning to start with newsletters, Instagram events, and live events right away, and a print publication issue coming out twice per year starting next year in 2018. A newsletter series that is already in the works will feature interviews with people David and Verena think would be interesting dinner party guests, from both in and out of the cannabis space.

For now, Gossamer intends to generate revenue through commercial partnerships and just wants to stay focused on finding and keeping a loyal, dedicated audience. In the future, they intend to have physical products for sale.

In discussing challenges in finding corporate partners and brands to advertise with them, Verena says, “Gossamer is elevated and sophisticated enough to not feel like they are doing something illicit or illegal.” And explains that they intend to really take care of brands and alleviate concerns. They are currently talking to hospitality, fashion, and liquor brands.

Cannabis Job Board

Cannabis Job Board

We recently discussed the U.S.-based and Canadian universities starting to offer cannabis courses and certificates to teach a new generation of workers the legal ins and outs, horticulture, and even marketing within the cannabis industry.

More of the world is recognizing its benefits and legalizing marijuana each week. Just last week, New Zealand confirmed their newest Prime Minister, Jacinda Ardern, who says she is going to hold a public referendum on whether to legalize recreational marijuana for personal use at some point over the next three years. The Associated Press reports that “The referendum would make New Zealand the first nation to hold a countrywide vote on legalizing marijuana.”

Cannabis for both medicinal and recreational use is clearly here to stay and is slowly moving across the world.

But once we have trained and educated cannabis specialists, how do they find jobs? And how can the cannabis industry as a whole bring hiring into the 21st century?

Enter: Vangsters

Cannabis Job Board

24-year-old Karson Humiston is the founder of Vangsters, the first cannabis-specific online job board and aggregator for employers and potential candidates to post and apply to jobs. Like most job boards, it is free for candidates to look for and apply to jobs, and the employers pay $69 per month to post unlimited job ads.

In 2015, Karson was about to graduate from St. Lawrence University and decided to attend a cannabis trade show in New York. Companies were talking about jobs being available in lesser-known parts of the cannabis industry, like needing marketing interns and retail associates, and Karson wanted to help them fill those jobs with interested and qualified young people.

“The types of positions that were available in the cannabis industry, even in 2015, blew my mind,” she tells CNBC Make It. “So I decided to start a business, which used to be called ‘Gradujuana,’ where we would connect college students and recent grads with jobs in the emerging cannabis industry.”

Putting her idea into action immediately, Karson came back to the trade show the next day with brand new business cards and started advertising her business. She told companies that she could find them interns and recent college graduates, and she generated enough interest and follow up conversations to know this was a viable idea.

Karson relocated to Denver, Colorado, where many cannabis companies were located, to build her business from the ground up. That July, Karson got her first signed client, O.penVape, who needed an Accounting Intern. Karson offered them an unbeatable deal: She would do the recruiting, interviewing and reference checking for $500. They signed.

Karson did not have any experience in recruiting agencies and was unaware that many in the industry were charging 20% or more of the annual salary for the recruiting fees. Her next break came in late August 2015, when she connected with business consulting firm Canna Advisors, who said they would no longer pay other companies the high 20% fee, and offered her a starting deal of $2000 per position she filled. She started with three open roles: Project Manager, Technical Writer, and Executive Assistant.

“At this point, I had this coming-to-Jesus moment that I needed to go out and hire other people who had experience in recruiting, who had experience in client acquisition — and that’s really when our business started taking off,” she says. As of now, her company has 25 employees.

In 2016, as the company started to fill more senior-level positions, Karson changed its name from Gradujuana to Vangst Talent Network. “Vangst means ‘catch’ in Dutch,” says Humiston, “I’m part Dutch, and the idea was we were catching the top talent, and it wasn’t just interns and recent grads.”

As Vangst Talent Network continued to grow quickly and fill more positions in the industry, Karson created and held a Cannabis Career Summit in Denver in 2016 and then launched Vangsters, the first cannabis-centered online job board, just this summer in August 2017.

Currently, there are 12,000 candidates, 53 companies, and roughly 200 job openings on the platform, and Karson says one of her biggest challenges is helping companies overcome the stereotypes associated with the industry.

“Convincing people to leave being a manager at Neiman Marcus or Chanel to manage a dispensary is a transition, and people aren’t exactly comfortable with the industry yet,” she said to CNBC Make It. “So, as a company, we have an obligation to educate our candidates on the industry, on where the industry is going and where the opportunities are.”

Considering that by 2026, the marijuana industry is estimated it will be worth $50 billion annually, Karson has created a necessary platform and is pioneering a way for cannabis companies to get top talent in today’s competitive market and continue to show their validity to a sometimes skill skeptical populous.

Natural Disasters & Cannabis Crops

Natural Disasters & Cannabis Crops

MMJ Devastated in Puerto Rico

It has been almost a month since devastating Hurricane Maria hit Puerto Rico on September 20th with winds of up to 200 miles per hour, heavy rain, and causing flooding and devastation throughout the island. The number of deaths is above 44 and it is said to have caused over $100 billion in damage.

Some of that damage includes PR’s medical marijuana industry. Not one outdoor marijuana cultivation facility survived the disaster, though a few physical dispensaries are continuing to operate and serve patients for as long as their stock allows. As the damage is assessed, it is important to remember that the medical marijuana industry does not receive or qualify for any federal aid due to very strict restrictions.

This is a huge setback to the medical marijuana industry, which PR was hoping may help them with their $72 million debt and assist them out of economic crisis. Those goals, at least for medical marijuana, are now pushed back a minimum of six months.

“We were expecting a lot from this industry,” Ingrid Schmidt, the president of the Puerto Rico Medical Cannabis Association, said to NBC News. “It’s the only industry that was creating jobs and a lot of hope was put into this industry because it was critical to the financial circumstance that our island is going through.”

After the devastation, the board of Puerto Rican Department of Cannabis approved an emergency rule that allows medical marijuana patients to go to any open clinic and dispensary and not the single assigned one from previous rules. This new temporary rule is allowing people to get the medication they have come to depend on.

Medical marijuana is legally used in Puerto Rico to address more than a dozen conditions, including Alzheimer’s, cancer, Lou Gehrig’s disease, Parkinson’s, rheumatoid arthritis, Crohn’s disease, epilepsy and more, and PR has over 12,000 registered patients, with original estimations to be around 100,000 over time.

According to MJBizDaily on October 11, there were 8 or 9 total indoor cultivation facilities still operating and 19 of 29 dispensaries, but they were still operating with the help of water tanks and diesel generators. Over a quarter of the island was without potable water and over half still without electricity.

According to reports from people on the ground (as of 10/11/2017):

  • 5% of the electricity is back on the island, mainly in hospitals, the airport and some government buildings.
  • 40% of the 3.4 million people on the island have no access to running water.
  • Only 20% of internet and cell communications are back online.

Wildfires Destroying Operations in California

Wildfires are continuing to rage through Northern California, and have already destroyed over 200,000 acres of land, including devastating vineyards in Napa and Sonoma, and scorching some of the largest marijuana operations in the state, especially in Sonoma and Mendocino counties.

“We have a lot of people who have lost their farms in the last 36 hours, and their homes,” said Tawnie Logan, chair of the Sonoma County Growers Alliance on Tuesday. She knows of a $2 million crop in a Santa Rosa greenhouse that was reduced to ash last Sunday night.

The New York Times reports, “Hezekiah Allen, the executive director of the California Growers Association, said Thursday that at least seven farms had been destroyed, and that he expected the number to “increase significantly” as people returned to their homes. Tens of thousands of cannabis growers live in Northern California.”

One of the devastated counties, Mendocino County, is one of three counties in California that make up the “Emerald Triangle,” the locations where much of the entire US’s marijuana is cultivated and produced. The San Francisco Chronicle says “Unlike wineries, cannabis farmers generally cannot obtain crop or fire insurance. Those that do find insurance pay exorbitant rates for skimpy coverage.”

Humboldt and Trinity counties make up the other sides of the triangle, and all three are located in the gorgeous forests on mountainsides of Northern California.

California is America’s largest domestic cannabis producer, growing an estimated 13 million pounds per year, and about 80% of it is shipped out of state. With the weather patterns locally, most of the crops are grown outdoors, planted in the spring and harvested in autumn when the flower is ready.

California just voted to legalize recreational marijuana back in November 2016, and these fires have come right “in the toughest year in decades, because the entire cannabis industry is in the process of seeking local and state licensing under legalization Proposition 64,” Logan said. Some of the cannabis companies have spent hundreds of thousands of dollars in getting the necessities needed to get a license and with so much destroyed, including warehouses and storage facilities in addition to the farms, these companies can’t have insurance to cover the costs and many are losing their life savings as well as their livelihoods.

Turning to the Black Market in New York State

Turning to the Black Market in New York State

New York State’s medical marijuana program is growing very slowly. According to the Democrat & Chronicle, some counties have made very little in revenue, such as Westchester County, which only got $18,000 for the first six months of 2017. Similarly, Monroe County has made only around $80,000 in tax revenue since the NY State’s medical marijuana program launched in 2016. Ulster County made just $3,800 in tax revenue in 2016 and only $12,000 so far in 2017, dismal numbers, and is also home to a dispensary.

In the state of New York, 45% of the tax revenue from the state medical marijuana program is to be distributed to the counties in which the dispensaries are located. There are five growing and production facilities and 20 dispensaries around the state. And according to the state Comptroller’s Office, the county’s’ share worked out to just $263,065 during the entire period of April 2016 to March 2017.

Jill Montag, a spokeswoman for the Department of Health said in a statement, “New York state’s Medical Marijuana Program has always been about patient care, not profitability or tax revenue,”

Why is there so little money?

Well, New York started with only ten dispensaries and limited interest from the state’s doctors to be involved in the program, which was then expanded to 20, despite pushback from the original 10, claiming there would be even less demand.

New York is very strict regulations and rules surrounding who can get medical marijuana and from where making it even more difficult. In December 2016, New York attempted to mitigate that by adding “chronic pain” to the list of 10 other eligible conditions and allowed nurse practitioners to certify patients for medical marijuana usage, but there is still a lack of sales.

The lack of significant revenue is a concern, though the numbers have gone up slightly. The five facilities generated a total of $16.6 million between April 2016 and August 2017, but $8.4 million of that was from April 2016 through March 2017, a total of about $700,000 per month. Over the next several months, sales improved significantly, another $8.2 million from April to August of this year, making it an average of $1.64 million per month, and the number of certified doctors and patients is rising. Not great, but better than previously.

The Black Market

Even though New York is slowly approving new doctors and allowing additional medical issues and conditions to be eligible for medical marijuana, New York residents are still finding the state’s medical marijuana to be somewhat difficult to locate and get, expensive, and payable only in cash.

Reported by SILive, one anonymous man has significant chronic pain from an accident two years ago and purchases his legal medical marijuana in Manhattan, but each pill only relieves his pain for about two hours. He takes the pills twice per day and it costs him $400-500 per month.

Medical marijuana is not covered by insurance and cannot be purchased with a credit card. Aside from price, Empire State NORML’s Doug Greene has also heard many complaints about the paperwork surrounding being approved and the quality of the product once they get it. “There are vape pens you can get for $30 or $40 in a state like Colorado that you can get for $100 here for an inferior product,” says Greene.

It is any surprise that many users have felt the need to purchased marijuana illegally?

It is less expensive and easily attainable, and while some New Yorkers prefer the dispensaries practices of screening and verifying safety, it really often comes down to the cost.Some insiders say that things will change when dispensaries in New York are allowed to sell a smokable cannabis flower, but right now that is not happening.

New York is continuing to try to firm up regulations and make adjustments to make more money and tax revenue and allow for more patients and doctors to be registered and get access to medical marijuana, but right now only time will tell if new rules are effective.

Photo by Nicolai Berntsen on Unsplash

Cannabis IP Problems

Cannabis IP Problems

Intellectual Problems

Patents and trademarks are still legal gray areas in the cannabis industry and can present new and difficult problems and challenges. And as the cannabis industry continues to grow, both worldwide and here in the United States, issues with intellectual property will continue to crop up.

Marijuana operators, growers, and inventors are attempting to put together state-level patents working with city and state lawmakers, and even relying on a “common-law” trademark, which basically just allows a company to “possibly” seek protection against competitors with similar names or logos later.

Why do they have to resort to this and have no protection for their intellectual property, as any other business in the U.S. would expect?

Because the U.S. Patent and Trademark Office has not awarded a single patent to cover cannabis genetic material, despite hundred of patent applications for cannabis strains and products have been filed.

Despite the fact that the U.S.P.T.O. has long given out patents for growing specific genetic material, such as GMO types of soybeans, corn, and many more crops.

They also cannot receive trademark protection, because of marijuana’s status as a Schedule 1 controlled substance. As it is still federally illegal, on a nationwide level, cannabis companies are out of luck and unprotected against competition and intellectual property theft.

MJBizDaily reports, “the Trademark Trial and Appeals Board of the U.S. Patent and Trademark Office ruled that owners of state-licensed marijuana retailers can’t receive federal trademark protection on marks that are connected to cannabis sales because marijuana is illegal under federal law.”

Some Recent Cases

As of January 2017, a well-known company making marijuana utensils, Roor, had filed 200 lawsuits to protect its trademark. Smoke shops in California, Florida, and New York were reportedly selling counterfeit products with the Roor company’s name and logo.

According to the Associated Press, Roor, the German company, and its American licensee, Sream, of California, hold U.S. Trademark No. 3675839 to protect its fashionable pipes and bongs sold with the Roor mark, which is the word “RooR” with the second “r” capitalized and facing backward.

Even though they currently hold a trademark, it can be difficult or even impossible to prosecute counterfeiters, since utensils used to consume cannabis are federally illegal and cannot be trademarked.

But that doesn’t stop people from trying to bring suits against companies for infringing on their intellectual property and trying to protect their company.

Headspace, based in southern California, is a multi-million dollar company which produces marijuana oils. It’s product “The Clear” is sold in seven states, and their brand is well-known. Headspace filed a trademark suit against Podworks, based in Washington state, over their product Top Shelf Clear.

Headspace claims that Podworks is illegally using The Clear’s name by simply removing the article. “We take a lot of pride in the proprietary nature of what we do,” said Chris Barone, CEO of Headspace International. “We’ve got a lot of time and money invested into what we’re doing.”

Podworks owner Thomas Worth said his product is called “Top Shelf Clear,” not just “Clear,” and that he has a legal trademark for his product’s name and does not plan to give it up. This could be a landmark case for the cannabis industry.

Famous Names in the Game

Rapper Snoop Dogg got in a trademark infringement fight in 2016, over whether his “Leafs by Snoop” product line, including marijuana strains and merchandise such as clothing, infringed on the NHL team, the Toronto Maple Leafs trademark. Snoop did file a federal trademark application as far back as January 2015, but dropped it in November of that same year, as it was not going through.

The newest celebrity in this fight is on the opposite side. Jessica Alba is suing Honest Herbal, a three-year-old Colorado-based company that makes nutritional supplements from CBD oil. Alba claims that they are infringing on her trademark of LA-based The Honest Company. Her attorneys argue that Honest Herbal is attempting to confuse consumers and “profit from the goodwill and consumer recognition associated with The Honest Co.” The Honest Company lines include Honest Baby, Honest Beauty, and Honest Man.

What are your thoughts? As with any other plant and logo, we think cannabis companies should be able to get federal trademarks and the protections associated with that. But in the meantime, these landmark cases will help determine future litigation in the marijuana industry. And as the industry continues to grow worldwide, we will be seeing more and more of these.

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Cannabis University Courses

Cannabis University Courses

Niagara College, in southern Ontario province of Canada, is going to offer a one-year post-secondary credential in the production of commercial cannabis. They say the graduate certificate program will launch in the fall of 2018 and aims to prepare students to work in the licensed production of cannabis, which includes marijuana, hemp fiber, and hemp seed.

This certificate program was recently approved by the Ontario Ministry of Advanced Education and Skills Development. Niagara’s president, Dan Patterson, says the program is meant to address a growing labor market need in the wake of legislative changes in Canada and abroad and will conform to all regulations and requirements.

The first students, who must have previously earned a diploma or degree in horticulture, agricultural sciences or related fields to qualify for the program, will be part of Niagara’s class of 2019. They sat this course is the first of its kind in Canada, and that consultations with growers identified a growing demand for skilled workers, especially those who understand the legislation at home and abroad.

Though Niagara College may be the first to offer a post-grad certification program, they are far from the first North American college or university to be offering classes to fill a growing need in the labor market of cannabis production.

Other College Courses & Options

About a year ago, in October 2016, Business Insider and Reuters reported that French-language College Communautaire du Nouveau-Brunswick in the Canadian province of New Brunswick planned to launch a horticulture program on cannabis cultivation to prepare students to work at local marijuana companies. Two months prior, in August of last year, the New Brunswick government invested just over USD $3 million in a local medical marijuana company, creating over 200 jobs in the province of only 750,000, which has reportedly been suffering from a weak economy.

Canadian Liberal Prime Minister Justin Trudeau campaigned last year on a promise to legalize recreational marijuana and he has followed through, introducing legislation earlier this year. Recreational-use marijuana is expected to be legalized by Canada Day 2018 (July). Medical marijuana has been legalized nationwide previously, and many medical cannabis cultivators and distributors have been looking to the future and expansion for recreational use.

The United States has started offering some courses here and there. Most notably, according to Wikipedia, Oaksterdam University in Oakland, CA, is recognized as America’s first cannabis college. The educational facility was founded in November 2007 by medical marijuana activist Richard Lee to offer quality training for the cannabis industry, with a mission to “legitimize the business and work to change the law to make cannabis legal.” The university’s curriculum reaches all aspects of the medical marijuana industry, from horticulture to legal issues, politics, history, civics, economics, extracts, topical applications, business management, dispensary management, delivery business, cooking with cannabis and much more.

The Cannabis Career Institute is a business training center founded by Robert Calkin, a lifelong advocate of cannabis legalization and medical marijuana, in 2009. He has been in the cannabis industry for over 30 years, including as a consultant on the television show “Weeds” and a Professor of Delivery at Oaksterdam. Robert founded CCI to provide a support system for people trying to start their own medical marijuana businesses, creating a curriculum focusing specifically on compliance and how to create and market brands.

The Cannabis Career Institute and Dunlap-Stone University in Phoenix, Arizona, has a 3-credit-hour course called The Modern Cannabis Industry. According to their website, the course “is an elective in the Bachelor of Science in Healthcare Administration degree program, explores the modern cannabis industry from the perspective of the emerging industry and its career possibilities. It briefly discusses the history of cannabis in the U.S., including the myths and stigma associated with the plant. It examines the recent phenomena of medical usage and scientific discoveries related to cannabis and its derivatives. Emphasis is placed on understanding the various emerging career opportunities within the industry for those who possess the requisite skill sets. The course also examines the current legal issues and other challenges facing this growth industry.”

While OU and CCI are cannabis-centric institutions, more mainstream universities are providing courses. These include “Business and Law of Marijuana” at Hofstra University in New York, “Marijuana Law and Policy” at Vanderbilt University in Tennessee, and “Business Opportunities Related to Marijuana Legalization” at Anne Arundel Community College in Maryland.

Courses like these and placing importance on educating the next generation of cannabis workers is extremely important. We want capable, intelligent, interested, educated people as the driving force behind regulations and the general cannabis industry. As marijuana legalization continues to become the norm and press forward, classes that teach people the realities of the cannabis industry help companies find employees who are already familiar with the marijuana business and the issues it faces through state and federal regulations, pressures, and more.

What are your thoughts on university and college courses in horticulture, marijuana production, and the law?

CA Bans MMJ Delivery by Drone

CA Bans MMJ Delivery by Drone

New Delivery Regulations for CA

Last week, California’s Bureau of Cannabis Control released a new set of regulations for how cannabis deliveries are made, including for commercial companies, throughout the state.

This very long document, which you can find here, states that in order to deliver cannabis, unmanned vehicles cannot be used and special protections must be made.

The Bureau of Cannabis Control ruled that deliveries must “be made only in person by enclosed motor vehicle,” ARS Technica reported, noting that “unmanned vehicles” such as self-driving cars also are likely to be banned.

“Transportation may not be done by aircraft, watercraft, rail, drones, human-powered vehicles, or unmanned vehicles,” is how it is worded in the regulations. This means bicycles, motorcycles, pontoon boats, windsurfing, and paper airplanes are definitely out.

And it definitely bans drones. Several tech startups, such as Eaze, MDelivers, and Trees Delivery had all been hoping to utilize and perfect drone delivery for legalized cannabis.

Drones may have been a farfetched delivery option anyway since federal aviation rules require that aerial drones fly within a pilot’s sight.

Drones are considered one of many types of “unmanned aircraft system” by the Federal Aviation Administration (FAA), which is the division of the Department of Transportation that inspects and rates civilian aircraft and pilots, enforces all the rules of air safety, and installs and maintains air-navigation and traffic-control facilities.

An unmanned aircraft is defined by the FAA as “an aircraft that is operated without the possibility of direct human intervention from within or on the aircraft (Public Law 112-95, Section 331(8)).”

And Congress has defined a “model aircraft” as a UAS that meets all of the following:

  • Is capable of sustained flight in the atmosphere
  • Is flown within visual line-of-sight of the person operating it
  • Is flown for hobby or recreational purposes

This definitely includes drones, so potential deliveries outside sight range by drones may never have been a viable option for the marijuana sector.

How Can it Be Delivered?

Legal cannabis delivery can’t just be made by your local teenager in their mom’s Honda. As the new regulations state, deliveries must be made with enclosed automobiles that have GPS locators which the store can use to track its location, and inventory can’t be left unattended in motor vehicles unless the vehicle has an active alarm system.

This means that you likely need at least two people on deliveries, you’ll have to install or activate GPS tracking on your vehicle and make sure to install and use the alarm system. What does this mean for delivery trucks for large-scale quantities?

Though you can order other medications through the mail, marijuana is currently not allowed to be delivered through the mail, either.

Drones may be the least of the issues. These new rules are so specific that a convertible car would not be able to make deliveries, and in many cities, bicycles and moped drivers make document and food deliveries faster than a car would be able to.

Cannabis Cash

As the cannabis industry continues to grow and is one of the fastest-growing sectors in our economy, these growing pains are going to continue to happen.

Cannabis is a cash-only world right now, with banks, credit unions, and more refusing loans. While it is a growing and profitable industry, large companies are not willing to invest in what is still an illegal product in much of the country.

Some are taking advantage of this, creating new cryptocurrencies within the cannabis industry to compete with bitcoin.

Forbes did a recent story on Paragon, a company launching yet another new cryptocurrency called ParagonCoin, and reported, “Blockchain and cannabis industry watchers believe that cryptocurrencies could be a game changer for the marijuana sector. In recent years, a number of weed coins have proliferated, including HempCoin, CannabisCoin, DopeCoin, and PotCoin, each taking a slightly different approach to solving the cash dilemma. “Once, virtual currencies and weed belonged together on the dark web,” said Lionel Laurent in a recent Bloomberg Businessweek article, “Now, they’re being pitched as asset classes on track for mega-growth.””

Whatever happens next, the cannabis industry in the U.S. is continuing its booming growth, which means that regulations, innovations, and more have to keep up or will become obsolete.