Marijuana Venture

WWW.MARIJUANAVENTURE.COM VOLUME 2 / ISSUE 6 M A R I J U A N A

THEVENTURE JOURNAL OF PROFESSIONAL CANNABIS GROWERS AND RETAILERS

THE NEW LOOK OF MARIJUANA CHANGING INDUSTRY STEREOTYPES

GREENHOUSE TECHNOLOGY What you need to know before buying your grow facility SAVING THE LIFEBLOOD Water is becoming a precious commodity for cannabis growers

JUNE 2015 $6.99 THE CASH-ONLY INDUSTRY Companies rush to fill banking void

A MESSAGE FROM THE PUBLISHER When it comes to weed, what’s in a name or look? Medicinal products obviously shouldn’t be named ‘crack’ re we crazy to Aput a couple of THE LEGAL good-looking business people with a red Fer- MARIJUANA rari on the front cover BUSINESS IS READY of a marijuana magazine? Maybe ... if we TO LOOK AND ACT PUBLISHER buy into the traditional view that our audience should be — or is LIKE IT’S A REAL GREG JAMES — made up of counterculture folks who de- [email protected] cry yuppie toys and symbols of self-indul- BUSINESS. EDITOR gent excess. On the other hand, maybe we GARRETT RUDOLPH do, you’ll find enough contradictory infor- at Marijuana Venture just think it’s time to [email protected] go full-bore into accepting the simple fact mation to make you more confused than a that most people entering the legal, recre- homeless person on house arrest! For ex- SALES MANAGER ational marijuana business are really doing ample, OG Kush is said to treat headaches, LISA SMITH it because they want to make money, and but then just below the ailments it treats, [email protected] don’t have a problem admitting it. in the section that covers possible negative Sure, the Ferrari is probably a bit much, effects, it lists — you guessed it — head- STAFF WRITERS and we fully admit that it’s unlikely that aches! CHRIS BAYLEY many in the nascent pot industry are go- The other funny thing is how several PATRICK WAGNER ing to be able to afford one any time soon. hundred strains of marijuana, with several CONTRIBUTORS However, the point we’re really trying to hundred often silly sounding names (Jack Marguerite Arnold Rachel Kurtz make is that the legal marijuana business is Kevorkian, Ray Charles, Charlie Sheen) Joy Beckerman Jennifer Martin ready to look and act like it’s a real business can produce several hundred different Stephanie Boehl Armando Perez Rachel Cavanaugh Karli Petrovic with well-dressed, diverse business people types of high. I fully expect that I’ll get Vicki Christophersen Aaron Stancik who are ready to drive it beyond the often some negative feedback for saying this, Alexa Divett Jana Weltzin comical stereotypes that many Americans but I just don’t buy that 400 strains of pot Matt Goldberg Jerry Whiting Neil Juneja think of when they hear the word marijua- get you high 400 different ways any more MARIJUANA VENTURE VOL. 2, ISSUE 6 na. Their attitude might be summed up as, than I’d believe that 400 different bottles of Marijuana Venture (ISSN #2376-0710) is published “It’s legal, we’re here to make money, and wine get you drunk 400 different ways. To monthly by MJ Directions LLC. PO Box 1419, Renton, WA, 98057. Phone: (425)281-1348. Website: www.mari- you need to get used to that!” me — and I’ll guess most people — you juanaventure.com. Copyright 2015 by Marijuana Venture. Speaking of stereotypes and perception, get drunk on booze, and stoned on pot, and All rights reserved. Reprinting, in whole or in part, is expressly forbidden without written permission from the I recently spent some time looking through that’s pretty much it. Creating nutty names publisher. the Leafly website. Call me what you will, that sound dangerous, and then trying to ADVERTISING but I’ll say this anyway: What are they promote them as medicine makes little For advertising rates, call (425)281-1348 or email Greg@ thinking? Here’s a website, supposedly sense to me if the goal is to go mainstream MarijuanaVenture.com. and create acceptance in a country that’s al- SUBSCRIPTION SERVICES owned by a big investment company, that For subscription services, please call (425)281-1348, visit lists cannabis strains with names like Green ready bombarded with commercials for an- www.marijuanaventure.com or email Editor@Marijua- naVenture.com. For change of address, please include the Crack, Durban Poison, Brain Wreck, Death ti-bacterial soap, and cold and flu remedies. old address and new address, along with an address label Star, LSD and Green Goblin (to name a We seem to be constantly subjected to fear- from a recent issue, if possible. Please allow up to three weeks for address to be changed. If an address is not up- few) as cures — or treatments — for cer- based messages that make us hyper-aware dated when the magazine is mailed, we are not responsible tain medical conditions. I’m serious. Does of all the dangers surrounding us. Having for delivery of your magazine. If the Post Office alerts us that your magazine is undeliverable, we will suspend our Leafly really expect mainstream America a medicine called Durban Poison or LSD subscription until a correct address is received. to take medical marijuana seriously when doesn’t seem to me to be a step in the right Marijuana Venture assumes no responsibility for any it’s promoting “medicine” that goes by the direction. claims or representations contained in the magazine or in any advertisement. All materials contained are for ed- name of Green Crack or Durban Poison? ucational purposes and intended for the legal marijuana And, as if that’s not bad enough, when GREG JAMES business where allowed by state law. Marijuana Venture PUBLISHER does not encourage the illegal use of any of the products you start to really look into what the strains contained within.

2 | Marijuana Venture // June 2015 (503) 477-8284

TABLE OF CONTENTS

About the cover: Cannabis industry entrepreneurs Jim Makoso and Danielle Rosellison pose for a photo as part of Marijuana Venture’s New Look of Marijuana feature. Above, The Novel Tree’s Allie Charneski and Chris McAboy join Rosellison and Makoso. Photos by Garrett Rudolph and Greg James. More on Page 40.

FEATURES 34 | Ohio Movement 60 | Bruce Barcott 94 | Conserving Water The Buckeye State could be a lynchpin ‘Weed the People’ author speaks with In the midst of major drought, growers in the legalization movement, but what Marijuana Venture about regulations are looking for innovative ways to save model will emerge as the leader? and the future of the industry on their utility bills 40 | The New Look 78 | Fire Code 100 | Vibronic Wheels The emerging world of legalization has Compliance requires more than just a Inventor William Back brings industrial business leaders moving away from license, particularly when it comes to hemp and the skateboard industry cannabis’ counterculture past product certification together with revolutionary product 54 | Managing Cash 82 | Greenhouses 104 | Doug Fine Banking remains murky, but emerging What growers need to know before Author and activist speaks with companies are helping businesses move investing capital into a greenhouse Marijuana Venture about Oregon, away from the cash only model for a cultivation facility Kentucky and the importance of hemp

GUEST COLUMNS 116 | Jerry Whiting 118 | Alexa Divett 120 | Armando Perez 122 | Vicki Christophersen

OPINIONS Page 20 2 | Message from the Publisher 124 | Letter from the Editor MJVenture

Marijuana Venture’s goal is to provide the best information possible to the legal, licensed, commercial marijuana business. Our belief is that a great business publication will help professionals in MISSION the industry create more efficient and profitable businesses.

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CANNABIS CALENDAR

50 seminars led by industry experts in their fields. NCIA’s national show draws People interested in speaking at Canna- Con must submit a proposal no later than May 4 at 9 a.m. More information: www. industry’s best to Denver cannacon.org. DENVER — More than 2,000 attendees market to industry leaders like Wells Fargo are expected at the second National Canna- and BMW. June 18-19: The International Cannabis bis Business Summit and Expo. The event The show promises to be one of the most Association will host the second Cannabis kicks off June 29 and will end July 1. The diverse gatherings of 2015 and should pro- World Congress and Business Exposi- event, hosted by the National Cannabis In- vide a unique opportunity for business pro- tion at the Javits Center in New York. dustry Association, will be held at the Den- fessionals to meet and network outside of The event will bring entrepreneurs, busi- ver Convention Center. their usual market. ness professionals and lawmakers together Photo by Patrick Wagner/Marijuana Venture Topics will include infused products, This is only the second stop for the with cannabis industry veterans at the larg- cultivation management, policy and regu- Green Festival, after Washington DC the est marijuana-related business show on the lation, emerging trends and more. show will head out west to Los Angeles at East Coast. Organizers are planning to have The show is expected to have more than the LA Convention Center for September more than 150 exhibitors and 50 speakers 100 exhibitors, 70 speakers, 55 educational 25-27, then a couple months later in San at the two-day event, geared to help aspir- sessions and 10 hands-on workshops. Francisco’s Cow Palace on November 13- ing entrepreneurs understand what it takes More information: thecannabisindustry. 15 and then concluding with its first ever to succeed in this rapidly growing industry. org. show in Portland, Oregon on December Speakers will include Ryan Hurley, a 11-13 at the Oregon Convention Center. partner at Rose Law Group, Andy Joseph, MORE EVENTS: More information: www.greenfestivals. president of Apeks Supercritical, and Dean June 5-7: The 11th annual Green Festi- org. Guske, a CPA with more than 30 years of val will take place in the D.C. Convention experience. Center in Washington, DC. The Green Fes- June 11-13: CannaCon is preparing for More information: internationalcanna- tival is the longest running event focused its third show this year to be held in Denver bisassociation.com. on green living, environmental action and at the Colorado Convention Center. Show sustainability in the United States. organizers are looking to host 10,000 at- June 19-20: The Colorado Springs The event regularly draws more than tendees and more than 300 vendors at the Event Center will become home to the U.S. 20,000 attendees and features vendors 100,000-square-foot venue. Cannabis Expo in Colorado Springs, Col- from industries such as the legal cannabis The show also will be hosting more than >> CONTINUED ON PAGE 10

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CANNABIS CALENDAR

<< CONTINUED FROM PAGE 8 served for industry insiders only. The fol- ents and more. orado. The two-day expo promises to bring lowing day will be open to the public and In association with Seattle Hempfest, the together more than 30 speakers and 120 will also host a job fair where new talent Alaska Hempfest 2015 will be a three-day exhibitors to discuss and review the chang- can be hired and contracted. “protestival” in Alaska. ing landscapes of industrial hemp and More information: www.indoexpoco. The event is a free political and educa- marijuana. In addition to the networking com. tional gathering to discuss the legislation opportunities, the expo will feature several and policies that will be shaping Alaska’s seminars and educational opportunities for July 18-19: On the first stop of its five- future. Currently the show is still waiting prospective and existing growers, retailers city tour across Washington, Colorado and to confirm a set date and location. and processors. Oregon, THC Fair will be touching down More information: www.hempfest.org. The show is reserved for attendees 18 at the Oregon State Fair and Exposition and older. Tickets are $30 at the door or Center in Salem, Oregon. The show will be Aug. 21-23: Hempcon will hit Wash- $25 in advance. a primarily B2C event built to service the ington this summer with a show that will More information: http://www.uscanna- population in the area. The event will be feature hundreds of exhibitors, competi- bisexpo.com. hosting the industry’s first “Sample Trea- tions and seminars as the cannabis industry sure Hunt” where attendees can obtain an floods the Washington State Fairgrounds in June 20: The MJBA Job Fair will expo wristband and punch card that allows Puyallup. open its doors to the public for a one-day them to visit local dispensaries to get free The series will continue with shows at event at the Spokane Convention Center in samples over the course of two weeks. the Denver Merchandise Mart on Oct. 9-11, Spokane, Washington. The event looks to A portion of the show will be directed at and the National Orange Show (NOS) in connect Washington State’s top employers the B2B market, inviting business profes- San Bernardino, California on Nov. 6-8. with job seekers interested in joining the sionals to continue to develop the Oregon, More information: hempcon.com. fast-growing marijuana marketplace. Washington and Colorado markets. This event is free to enter so those look- More information visit: www.THCfair. Sept. 16-18: The second stop for the ing to network only need to bring their com. International Cannabis Association’s Can- resumes and be prepared for a full day of nabis World Congress and Business interviews for numerous job openings. July 25-26: Maximum Yield brings to- Expo will be at the Los Angeles Conven- More information: https://mjba.net/ gether several industry leaders for the 2015 tion Center in California. Los Angeles Indoor Gardening Expo The fall event will host the same inter- June 26-27: High Times, the famed can- which will be held at the Los Angeles Con- ests as its east coast counterpart with a fo- nabis culture magazine, keeps its Canna- vention Center. cus on industry professionals, lawmakers bis Cups on the road and headed to North- The weekend event will be divided into and entrepreneurs. ern California near the end of June. The two sections — Saturday is dedicated to The show has booked more than 150 ex- event will feature the usual festivities, like industry only and will host a VIP semi- hibitors and educational partners alongside competitions, vendors and entertainment nar, expert panel discussion and a six-hour a variety of guest speakers that have yet to in sunny Nor-Cal. networking period; Sunday will be open be announced. Details on the show location and per- to the public and industry alike. Those fa- More information: www.cwcbexpo. formers are still pending for the Nor-Cal miliar with the show format know that it com/los-angeles-show. show as well as the next few stops in Port- is aimed at the indoor grower community land, Oregon, Clio, Michigan and South- and that marijuana discussion is typically Nov. 11-13: The fourth annual Marijua- ern California. prohibited. na Business Conference and Expo will More information: www.cannabiscup. More information: www.indoorgarden- hit Las Vegas for a three-day, business-on- com. expo.com/show-info-los-angeles/ ly event that is expected to have more than 1,500 attendees, an estimated 125 vendors July 11-12: The Indo Expo Trade Aug. 15-16: Hempfest weekend in Seat- and 70 expert speakers, including dispen- Show will be at The Denver Mart Expo tle just got a whole lot busier with the in- sary owners, private equity leaders and top Building for two days in July. The trade troduction of the Hempfest Business Show lawyers. The show will be hosted at the show aims to cement relationships between at the Seattle Center Exhibition Hall. Rio Hotel & Casino in Las Vegas. growers, manufacturers, wholesalers and This inaugural event is about creating an Consumers and the general public are retailers by providing a networking event environment where Washington’s flourish- not invited to Marijuana Business Confer- that will allow the new and old to construct ing medical and recreational cannabis in- ences. new ideas, exchange information and forge dustries can flourish and mature. More information: https://mjbizconfer- new partnerships. It will run concurrently with Seattle ence.com/fall-2015-las-vegas. The expo will be bringing together local Hempfest, which will be taking place just and national industry leaders from around minutes away. Vendors will display the To submit events for consideration in the country for their two day, weekend latest in cultivation equipment, packaging, Marijuana Venture’s calendar, send an event. The first day of the show will be re- marketing, web design, insurance, nutri- email to [email protected].

10 | Marijuana Venture // June 2015

BUSINESS PROFILES

Inside one of Big River Farms’ greenhouses.

Company: Big River Farms Big River Farms Location:Ford, Washington Eastern Washington grower puts greenhouses to work Employees: 5 Growing style: Greenhouses with By Garrett Rudolph metal halide supplemental lighting

FORD, Wash. — Big River Farms may nabis growing pains. Growing medium: Soil Photos courtesy Big River Farms not have the canopy size that some of its “The biggest two (obstacles) in my large-scale Eastern Washington compet- opinion were the steadily dropping price about a dozen marijuana retailers, mostly itors have, but the family-run business in product and the fact that we’re getting located in Eastern and Central Washington. utilizes six greenhouses to allow for year- taxed up the wazoo,” Hupp said. “It makes So far, it’s been packaging mostly flower, round cultivation, in addition to making use it a lot harder to operate at a profit.” while sending some of its product out for of the sun. Big River Farms also faces the challenge extraction into oils by other processors. The farm is owned and operated by of getting by on a small full-time staff — Hupp said there’s talk of getting a butane Kameron Hynes and the Hupp family. Dick just five people, including the owners, run extractor to make some oils on their own. and Juanita Hupp were the licensees, while the day-to-day operation of about 6,000 The most valuable asset of the grow oper- their son, Jesse, is involved in the day-to- feet of growing space. ation is the six greenhouses that measure 20 day operations. “The workload is pretty heavy,” Hupp feet by 50 feet, with high ceilings that allow “Like all things, it’s kind of a struggle,” said. “It’s 24 hours a day and seven days a plenty of room for supplemental lighting. Jesse Hupp said. “We’ve had better months week for some of us. The other guys work The greenhouses can be layered to provide and worse months. There’s a lot of com- 8s every day, sometimes 10-12 hours a day enough insulation to grow year-round, even petition right now, but all in all, the future when we need.” in the midst of wintry snowfalls. looks good as far as I’m concerned.” Hupp said the competition among grow- The team has been able to operate almost Big River Farms received its license in ers in Eastern Washington is pretty fierce, entirely without running lights since early the summer of 2014 and has withstood the which keeps the prices pretty low. Big May, except on days that are particularly ups and downs of Washington’s legal can- River farms currently sells its product to >> CONTINUED ON PAGE 16

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BUSINESS PROFILES

<< CONTINUED FROM PAGE 14 dark or dreary. “I have been really impressed by these greenhouses,” Hupp said. “You get the sun, and you get the control. You get the best of both worlds. It’s awesome. “We can use the sun to the best of our ability, as long as it’s available, and still have a functional room through the winter.” The biggest challenge during the winter months was snowfall and possibility of a catastrophic pile-up of snow, Hupp said, but the team was mostly able to escape the cold stretch unscathed. “If they’re going and they’ve got heat, they kind of melt most of (the snow) off,” he said. On top of the challenge of having a small staff, Big River Farms employees have har- vested all their cannabis by hand. “I never thought I’d get tired of looking at it,” Juanita Hupp joked.

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BUSINESS PROFILES

Clockwise, from the bottom: Denver Relief’s waiting room, retail space and product.

Companies: Denver Relief and Denver Relief Consulting Location:Denver, Colorado Employees: 31

Denver Relief into charity with Denver Relief’s Green Industry cornerstone evolved from a delivery service Team, an organization dedicated to community services like feeding the home- By Patrick Wagner less, wheelchair and bike repair, produc-

DENVER — Ean Seeb, like many oth- “We started with $4,000 dollars and ing organic produce for food banks and Photos courtesy Denver Relief ers, came into medical cannabis on acci- half a pound of cannabis,” Seeb said. “We even cleaning up after the annual 4/20 dent. More specifically, by a ski accident bought a phone number from the phone celebration in Denver’s Civic Center that left him with permanent nerve dam- company, ported it to a cell phone and Park. age and few effective treatment options. started a delivery service.” “It complements our business. We got A decade later Seeb found relief through After making $10,000 in their first into this business because we want to medical marijuana and has been an active month, the trio realized that their delivery help people and we have a vested interest member of the industry since. service may need to evolve into some- from a humanistic standpoint to leave the Through contacts in the industry, Seeb thing larger. world in a better place than when we got met partners Kayvan Khalatbari and Nick Denver Relief’s retail space officially here,” said Seeb, who is also chairman of Hice. opened up the first week of 2010 and has the National Cannabis Industry Associa- The trio each brought a different exper- remained there ever since. Today, Denver tion. tise to what would become one of the cor- Relief services both medical and recre- “A couple of years ago, there was noth- nerstone medical marijuana companies ational customers while also operating its ing in place to normalize the industry and in Colorado. There was the experienced sister company, Denver Relief Consult- keep that black eye from growing big- business owner (Khalatbari), a master ing, which has helped establish more than ger,” Khalatbari told the Denver Post in grower (Hice), and a seasoned caregiver a dozen cannabis operations. Each origi- a 2013 story. “People were still operating (Seeb) with a sizeable number of clients nal member of the team still plays active as if it was really underground, and once and Denver Relief hit the ground running roles in the consulting aspect. we got in we didn’t want to be lumped in in 2008. The group’s ambitions also extended with those people.”

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BUSINESS PROFILES

Company: Green Lady Marijuana Location:Olympia, Washington Employees: 11 Top vendors: About 15 local vendors in Thurston County Most popular products: Flower

Green Lady Marijuana Will your business be next? Retailer sits in the shadow of state’s governing agency Interested in having your business By Patrick Wagner profiled in Marijuana Venture? Each month, magazine staff will feature OLYMPIA, Wash. — Business owners in located in the shadow the LCB’s headquar- different growers, retailers and Washington’s recreational marijuana indus- ters, Russo said it’s been an ideal location. specialty businesses in a short profile try have grown accustomed to the Liquor Russo, a former high school teacher, said section. For more information, or to Control Board looking over their shoulders the store has regularly been visited by the pitch a company to be featured, send constantly. top brass within the Liquor Control Board, an email to Editor@ But at Green Lady Marijuana, co-own- as well as visiting FBI agents. MarijuanaVenture.com. ers Cj Russo and Mike Redman have had He said those visitors have never been to deal with the LCB both as the governing antagonistic, mostly being drawn into the centers were further compounded by local agency for cannabis in Washington, but also retail store by the same curiosity that in- ordinances in Olympia. as neighbors. spired Russo and Redman to venture into Green Lady Marijuana is not the first “I think that’s the story, that we’re right the business themselves. business venture between Russo and Red- next to the Liquor Control Board,” Russo “It was the historic nature and opportuni- mond. The duo originally opened Oly Float, said. “Our property is adjoined with theirs. ty that brought me to it,” Russo said. “The a flotation therapy center, several years be- Mike and I welcomed it from the onset, be- location itself came to us last minute as an fore they opened the cannabis retail store in cause our goal is to do the right thing and to 11th-hour deal.” August 2014. Since then Russo has stepped be in good standing.” Russo had several locations scouted for away to focus solely on the retail operation. “We’re happy to be their guinea pig,” Green Lady Marijuana, but none of them “Since starting this, I have sold my shares Redman told The Olympian in an interview were particularly enticing. The state laws in Oly Float because I had a few other irons prior to opening the retail store. that often make it challenging to locate in the fire and didn’t want it to be pulled in Although it might seem intrusive to be marijuana businesses near metropolitan too many directions,” Russo said.

20 | Marijuana Venture // June 2015 INSURANCE REQUIRED BY THE STATE

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Bloom 2-2-4 Organic & Natural Bloom 2-2-4 is a liquid fertilizer produced by West Coast Hor- ticulture that is designed to be ideal for cannabis production. Plants grown with this formula produce large, aromatic and potent flowers, CEO Charles Goldwasser said. Bloom 2-2-4 contains an ideal ratio of nitrogen, phosphorous and potassium, as well as humic acid, amino acids and sugars. Naturally-occurring sugars provide food for beneficial soil microbes. This fertilizer is derived from plant sources and contains no animal byproducts or pathogens. When mixed with most water sources, it is not necessary to adjust pH prior to application, making it easy to use. Bloom 2-2-4 is fully compliant with organic production standards and listed starches break down into simple sugars when organic material is composted or with the Organic Material Review Insti- and the proteins break down into pep- completely broken down. Organic & Nat- tute (OMRI). tides. Peptides are broken down further ural Bloom 2-2-4 is different from liquid “The product is made using a unique into amino acids and those are broken compost in that it also contains essential fermentation processes that turns grains down into different nitrogen compounds, macro and secondary minerals that the into a sweet-smelling liquid fertilizer,” ammonium nitrogen and nitrate nitro- plant uses to build tissue. Goldwasser said. “The process takes a gen, which are the primary forms of ni- Bloom 2-2-4 can be purchased along- number of weeks. During the fermenta- trogen that plants can absorb.” side several other nutrients and agricul- tion process, enzymes are produced that The humic acid is produced naturally tural aids through the West Coast Hor- break down the grains and convert the by the fermentation process that breaks ticulture website, or by request at local minerals they contain into a liquid fertil- down the plant material until it cannot be hydroponics retailers. izer. broken down anymore. In nature, humic More information: westcoasthorticul- “When the grains are fermented, the acid is the black residue that is produced ture.com.

Kush Bottles Kush Bottles has expanded its market Spotlight photos courtesy West Coast Horticulture, Kush Bottles, IntelliChoice Energy share by acquiring Dank Bottles of -Col orado and giving the company a better presence throughout the Midwest and Eastern U.S. The acquisition will keep Dank Bottles’ founders, Bryan Sullivan, Justin Jones and Greg Gamet as the operational leads for Colorado and will have the trio undertake new national roles for their parent company. “Through this acquisition, we are able to fully integrate the Dank Bottles team and resources into our company, including their warehouse and extensive distribution network,” said Nicholas Kovacev- “This gives us a tremendous advantage, customized packaging solutions that are ich, co-founder and CEO of Kush Bottles. as shipping costs and delivery times will certified to be child resistant in- accor The acquisition of the Denver distribu- go down for many of our customers in the dance with the Consumer Product Safety tion center allows Kush Bottles to expand Midwest and Eastern United States,” Wu Commission. services farther east as the cannabis in- said. More information: www.kushbottles. dustry grows, president Ben Wu said. Kush Bottles is one of the leaders in com.

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Twenty-four Nextaire units mounted to a rooftop. Below: IntelliChoice Energy uses a demo trailer to show the Nextaire units to prospective clients across the country.

Nextaire One of the biggest challenges of running an indoor agriculture enterprise is the cost of electricity. Between the ex- pense of operating grow lights and the massive cooling needs, utility bills can cost indoor growers a fortune. In many cases, commercial buildings are not set up to handle that kind of an electrical need and might even require upgrades prior to housing a grow operation. That demand, in turn, creates a voracious units can handle up to 33 separate and However, IntelliChoice Energy is bring- need for cooling. distinct zones. They’re also extremely ing new heating and cooling technology In typical commercial settings, such as quiet — they operate at 59 decibels — to the cannabis industry and could help office buildings or warehouses, Cole said about 10 decibels less than a typical con- growers slash their electricity bills sub- the Nextaire units cover about 300-400 versation. stantially. square feet per ton of cooling. For an additional cost, IntelliChoice By running off natural gas, the Nextaire “The eye opener for us was that ratio offers remote monitoring that can alert system can greatly reduce growers’ reli- had to be reduced to 50 square feet per selected individuals in the event there’s ance on electricity for their heating and ton for a marijuana grow facility, be- ever a malfunction in the cooling system. cooling needs. The Nextaire unit features cause of how extensive the cooling needs IntelliChoice Energy was founded in an engine that was developed and man- were,” Cole said. 2009 and is based in Las Vegas. ufactured by a subsidiary of Toyota, “so Maintenance is already built into the Prior to servicing the indoor agricultur- the quality is exceptional,” CEO John Cole price of the units at 10,000, 20,000 and al sector, IntelliChoice has been used in said. “And the nice part is that the electri- 30,000 operating hours. Meanwhile, its commercial buildings, schools, prisons, cal draw of our system is only a 20-amp variable refrigerant flow (VRF) is a more office buildings and other large-scale single-phase breaker per unit. So there’s efficient method of delivery, in addition buildings across the nation. IntelliChoice very little draw related to our systems.” to improving the maintenance needs and first got involved in the cannabis industry The Nextaire systems do cost more ini- longevity of the equipment, Cole said. as Nevada was legalizing medical mari- tially, Cole said, but most customers see The Nextaire units also allow for multi- juana. The company, which was founded the cost benefits pretty quickly. zone temperature control: the 8-ton units in 2009 in Las Vegas, quickly responded Most cultivation facilities generate a can cover 17 separate and independent to inquiries from contractors looking for tremendous amount of heat, due to the zones as long as there is an air handler different options for grow room HVAC. hundreds or thousands of grow lights. and thermostat in each room; the 15-ton More information: iceghp.com.

24 | Marijuana Venture // June 2015

Blowing smoke MARKET WATCH A look at business metrics from Washington’s legal cannabis “At least our other protestors had God on their side. These market, based on information guys had nothing” from Tetratrak.com. Ian Eisenburg, owner of Uncle Ike’s, referring to medical marijuana protestors outside his recreational store in Seattle. Uncle Ike’s had previously been the target of protestors from a nearby church. Source: Seattle Times. 63-69% “The biggest two (obstacles) in my opinion were the steadily In 2015, 63-69% of all produced flower is sold every dropping price in product and the fact that we’re getting week through retail stores taxed up the wazoo.” Jesse Hupp, employee of Big River Farms, talking about industry challenges. Source: Interview with Marijuana Venture. 80% “This movement is really a long time coming, and it’s getting Percentage of retail stores’ legs — longer legs.” revenue from selling flower, Actor Morgan Freeman, on ending marijuana prohibition. since Washington’s retail Source: The Daily Beast. market opened in July 2014

I just put an ad up offering downtown office or retail space to rent during the week. I’ve been overwhelmed by 10% responses from cannabis dispensaries and other industry Percentage of retail stores’ revenue from selling edibles, folk who seem CRAZY to get into my space. Seriously, every since Washington’s retail guy in the industry has emailed me this week ... I couldn’t market opened in July 2014 figure out why my ad was getting so many hits from that niche and then I realized my address is 420 SW Washington. Rachel Cavanaugh, photographer and freelance writer. Source: Email to Marijuana Venture $1 Flower being sold in the “Prohibition is not a Republican principle. Think about it.” Seattle retail market averages Jane Bock, member of Texas’s Pachyderm Club, regarding a changing tide about $1 more than that in the toward cannabis in Texas. Source: KHOU. Tacoma and Spokane markets “It is the last domino that has to fall for us to be treated like any other business in the country. We’re not a black-market $3 cocaine dealer. We’re totally on board and on the level. Flower being sold in the We’d like to be treated as such.” Bellevue retail market Tim Cullen, owner of Colorado Harvest Company, on the pervasive federal averages about $3 more than taxes that have been crippling marijuana businesses. Source: New York Times. that in Seattle

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Marijuana Venture sought out a Living the group of professionals to tell the trials and tribulations of everyday DREAM life in the legal marijuana industry.

then placed an emergency moratorium the policy makers are not being held Washington but informed us we are “quasi-vested” accountable to implement the system. so we pushed forward to obtain our The industry has a huge challenge this Bud Company building permit. Then, on May 6, the year to discover how our local represen- county permanently banned our zone. tatives feel about cannabis businesses Shawn DeNae Do we stay in an area that does not want setting up shop in their area. We need Advisor us? In the meantime, the Liquor Control to recognize the progressive “friend- Producer/Processor Board has sent out 60-day letters: “Get lies” and help keep them in office while finally inspected or else…” exposing the canna-biased politicians So, at this late stage, we are still open and vote them out! I encourage you to he saga continues. It’s like a game to other back-up plans. It is an emotion- link arms with a pal and start attending of Survivor: Outwit, outlast, out- ally-exhausting roller coaster laced with your local council’s meetings, then share Tplay. However, this version of Sur- business plan fatigue. (At least we get to names of politicians that do not support vivor is how to do that and balance be- eat more than rice and have good ganja the cannabis industry through social me- tween the state law, the local ordinances to help ease the stress!) dia, such as the I-502 Google Group for and the Liquor Control Board rules, all What I have learned during this past those in Washington. Let’s blind-side a within the confines of budget, location, year is how vitally imperative it is to few politicians! goals and lifestyle. have an alliance of cannabis-friendly Just like a player on Survivor, I am We wake up each morning with a ba- folks representing at the local levels. We blessed to have this opportunity to play sic game plan and often, by night fall, lost the alliance of our main supporter in the legal weed-making game and I’m new data has come in to alter that plan, in Snohomish County, council chairman in it to win it. by either a small tweak or a 180-de- Dave Somers, probably because he felt Let’s form strong alliances and prove gree turnaround. Take the Snohomish the righteous NOPE NIMBYs (No Oper- that the cannabis community and sup- County R5 land-use issue. We bought ational Pot Enterprises plus Not In My portive businesses have the power to properly-zoned land thinking we could Back Yarders) would better support swing votes because none of us hold an build some simple agricultural build- him for his bid for county executive. immunity idol. ings, but the planning department soon His last-minute vote in favor of the ban announced it would hold us to more blind-sided the R5 Cooperative, which Shawn DeNae is CEO of Washington Bud expensive commercial codes. So we re- had worked so hard to educate the coun- Company, an aspiring applicant for a produc- duced our building needs to fit the bud- cil over the past eight months. er/processor license. She is one of the found- get, which caused a change of plans with Even though the majority of Wash- ing members of the Marijuana Business Asso- the Liquor Control Board; the county ington voters want legal cannabis sales, ciation Women’s Alliance.

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LIVING THE DREAM

them. With this regulatory power, the fed- Farms, a management firm building the Brooke Law eral government has a responsibility for nation’s first marijuana facility on tribal protecting the tribes, including protecting land, to express interest in the cannabis Group them from encroachment by the states industry.” and the citizens of the United States. Be- While many tribes are cautious, the re- Michele Brooke cause of the federal government’s unique cent attendance numbers of conferences Pasadena, Calif. relationship with the tribes (and -the de around the country where financial pos- sire by some states to partner with tribes sibilities in cannabis are being discussed Attorney for financial gain related to the cannabis make it clear that some tribes are serious- industry), it will be interesting to see how ly considering whether cannabis (or indus- arly this spring, I joined others who these business relationships evolve. trial hemp) production could be their very spoke at a marijuana conference in On Oct. 28, 2014, the Department of own “green rush.” The interest in working San Diego, California, titled “Marijua- Justice (Monty Wilkinson) issued a mem- with Native American tribes comes as no E orandum making a federal government surprise, especially where we see such na: The Next Big Thing in Native American Economic Development?” policy statement regarding “Marijuana financial potential in this industry — and Our panel lectured on what some be- Issues in Indian County.” In essence the many states and local governments with- lieve to be a policy shift by the Depart- memorandum permits Indian tribes to be in states are not taking a progressive ap- ment of Justice in regards to the- fed cannabis purveyors, despite state law. The proach to this industry, mainly because eral government’s enforcement of the memorandum cautions only that Indian of the federal posture on cannabis. If the Controlled Substances Act and other drug tribes must concern themselves with the tribes are successful, the states that are enforcement laws on native lands. same eight concerns the federal govern- prohibiting or unreasonably stifling- com The federal government and Indian ment has articulated to the states, includ- mercial opportunities, could find -them tribes have a unique legal relationship ing preventing the distribution of marijua- selves in an unenviable position. The that is deeply rooted in American history. na to children, preventing revenue from conference I participated in included a It is generally recognized that tribes are the sale of marijuana from going to crim- showing of top-name sponsors and in- self-governing sovereign entities. Howev- inal enterprises, gangs and cartels, and a vestors clearly poised to do business with er, this sovereignty is subject to the regu- prohibition on firearms at locations where entrepreneurial tribes entering this “bud- latory powers of Congress. So the power cannabis is cultivated and distributed. ding” industry. to deal with and to regulate tribal affairs In a Huffington Post blog published Feb. is entirely federal — meaning, the states 4, 2015, it was revealed that over the past Michele Brooke is an attorney in California do not have power to regulate the tribes month, “more than 100 Native Ameri- who practices civil litigation and civil cannabis unless Congress delegates that power to can tribes have reached out to FoxBarry law (www.brookelawgroup).

We had to be better and more professional Our local Bellingham Chamber of Commerce Trail Blazin’ than anyone would have expected. We wear has embraced our industry by taking a neu- professional attire, come presentable, mem- tral stance: The people voted, our members Productions orize 59-second elevator speeches and fol- have a business license, and it’s not our job low up every contact with a “great to meet to discriminate. Danielle Rosellison you” video or email. Through tenacity, cheerfulness, and pro- Bellingham, Wash. In the beginning, I’d say a third of the busi- fessionalism, we are changing the perception ness owners we met were excited, a third from anti to neutral in nature. Now those Tier 2 Producer/Processor wanted nothing to do with us, and the other who were against cannabis before, due to a third responded to our emails with “I sup- lack of understanding, are now nonaligned e’re lucky in this industry. On top port what you’re doing, but I can’t be public because “they know someone who does of issues ranging from a lack of about it.” We began to volunteer at chamber the weed thing” and we’re nothing like Wbank accounts and financing -op events. And slowly — ever so slowly — we they thought we would be. So, the moral tions, producing and distributing a Schedule began to make progress. of the story is: Do your part! Join your local 1 narcotic, and being a start-up company Our mission is not to push cannabis down chamber of commerce. Volunteer at local with none of the usual resources available, the throats of the community. Rather, it’s to non-profits while wearing a shirt with your we have an added bonus: 70 years of misin- be visible in the business community as just company logo (preferably non-profits that formation distributed to the general Ameri- another business. If you take the product your local government officials are partial can public. Don’t you feel special? out of the equation, we’re no different than to) and help change the public’s perception Community outreach is important in any any other entrepreneur working toward the of the cannabis industry. Think of it as an in- industry, but it’s particularly important for American Dream. The biggest issue we’ve vestment in the future of your business. At those in the cannabis industry. Thus, join- seen is a lack of education; an amazing- the very least, it can’t hurt to put yourself out ing the local chamber of commerce was a ly large number of people have never seen there and get involved with your community. no-brainer for our company. When we joined cannabis, much less tried it. The whole idea in the beginning of 2014, we knew there is so foreign to them. Since many have been Danielle Rosellison is an investor with Trail would be moral resistance and obstacles to indoctrinated with the idea that “drugs are Blazin’ Productions, a state-licensed producer/ overcome. We had to make an impression. bad,” they have no idea how to react to us. processor in Bellingham, Washington.

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LIVING THE DREAM

Pure Green Meghan Walstatter Portland, Ore. Dispensary

very retailer in the cannabis industry prepares for 4/20 with par- Eties, sales and promotions. It has evolved into our own version of Black Friday. This year I called it Green Mon- day, combining a celebration of cannabis culture and the biggest retail day of the year. At Pure Green, we celebrate five days of 4/20 with great sales and promos, in-store vendor hours and our annual raffle. We had to make quick decisions and work as a team in order to serve the The owners of Pure Green, a medical dispensary in Portland, Oregon, used 4/20 as a way to most amount of patients we have ever prepare themselves for the upcoming recreational market. The rush of customers was a tool seen. the business could use to understand where it would need more employees, more registers and Fortunately, we will be able to use this making improvements in terms of organization. experience to guide our company and navigate the changes necessary to com- After all, who doesn’t love thousands highest day. We keep calling this our pete in a recreational market. and thousands of dollars of products slow rec day. given away for free? PLANNING In order to not bombard our follow- LESSONS LEARNED We started planning our five days of ers on social media, we created a post Every day I remind myself there are no 4/20 events in February. First, we re- schedule. In addition to the raffle and problems; there are only opportunities viewed our last year’s specials to see if specials above, we extended our Sunday to find solutions. We will use our slow any were worth reviving. We created a hours, sponsored a reggae concert with rec day to inform our decisions about money-back special: spend $400 and get Don Carlos, and hosted vendors in the changes to our staffing and retail floor to $20 back. store on multiple days and our annual support a true recreational market, not This was available all five days after raffle. just a dry run. being a single-day special in 2014. Next, We had a total of eight posts highlight- We need more registers, a more effi- our management team created different ing the various promotions we offered. cient use of space on our retail floor, in- daily specials for our main product lines We created a complicated but effective cluding prepackaging our flower, and the Living the Dream photos courtesy Shawn DeNae, Pure Green including edible four-packs of mix-and- schedule to get the word out about our creation of an express lane. Due to the match products. Finally, our most popu- promotions without saturating our- so amount of patients served, none of our lar special from last year was reused for cial media outlets. regular side work was touched. We plan the “holiday” itself — four grams of any on creating processing shifts for rolling strain for $20. These weekly and daily GREEN MONDAY joints, gramming concentrates and pre- specials were designed to bring consum- Our doors opened at 11 a.m. to a line packing our weed. ers in the doors. of 20 people outside. Right away, we Our floor staff will need to double, Every patient who came into our store needed two people to help with our maybe triple. This is assuming we will be during the five days of 4/20 received a check-in process so I grabbed my laptop able to co-locate medical and recreation- ticket to our annual raffle. Donations and made an impromptu desk. al. If we can’t co-locate, then we need to were collected from various vendors, There are only two POS stations on decide between converting our existing a medical card clinic and a testing lab our retail floor so we are limited to how store or opening a second location. Ev- donated gift certificates while two local many people we can send back at a time. ery day new solutions are offered to all grow stores donated a $600 light and a We had three to four people on the re- of us in the cannabis industry, if you look nutrient basket that came with free ge- tail floor at all times but they backed up at it right. netic sex testing. at the registers. Pure Green donated an edible and a My husband and I were on the floor Meghan Walstatter and her husband, Matt, dab basket, loyalty points and a gift cer- the entire time we were at the shop, own Pure Green, a licensed medical dispensa- tificate. We had more than 50 prizes -in which is a rarity these days. We saw 165 ry located in Portland, Oregon. She is a found- cluding 30-plus mixed gift bags. Patients patients that day which is 60 more peo- ing member of both the Oregon Growers PAC love our raffle. ple than we have seen on our previous and the Oregon Growers Association.

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As goes Ohio... So goes the nation Ohio could be the battleground state for the tipping point of cannabis legalization, but how will new legal precedents change the industry landscape? By Marguerite Arnold

34 | Marijuana Venture // June 2015 arijuana legalization battles are Mbreaking out all over the United States right now. The long-term prospect of the industry may appear rosy. However, the daily grind for most on the ground is a strange one. Politics and business are mixing in the cannabis business like no other. Many successful businesses in the vertical, like the dispensary and news aggregator Weed- maps, are putting profits into changing the laws. The group recently donated $2 million to the California recreational effort in 2016. In Ohio, however, things have got- ten downright confusing. Four of five different proposals to change the state constitution to legalize pot are competing for dollars, signatures and backing for voter initiatives that could appear States that have legalized cannabis for recreational use on state ballots as early as this Novem- ber. Every single effort to change the are shown in green, while medical marijuana states law has failed in the state since 2011, are in blue. Ohio, always a lynchpin during presidential primarily for lack of funding. elections, could be a key state for cannabis legalization. >> CONTINUED ON PAGE 36 It is marked in red.

www.marijuanaventure.com | 35 << CONTINUED FROM PAGE 35 a “constitutionally-created cartel,” could while the reality is that we need to end Four of the new organizing efforts in the change the face of reform and the industry marijuana prohibition for reasons of civil state are the more traditional campaigns to forever. liberties, racial equality, civil rights, fiscal legalize and regulate the industry through According to Kris Krane, the co-found- responsibility and personal freedom.” third-party nonprofits. The last group, er and managing partner of 4Front Advi- According to industry advisor and however, ResponsibleOhio (responsibleo- sors, an investment firm that specializes mentor Leslie Bocskor at Electrum Part- hio.org), is the most controversial. In ex- in the cannabis space, “This has become a ners, “There are many who are calling change for funding what is expected to be major source of controversy among mari- this a pay-to-play move to change the a $20 million campaign to pass a proposal juana reform activists. While we all agree state’s constitution for profit, including, of that would create the groundwork for a that we want prohibition ended and for course, those who are backing other more fully regulated recreational and medical nobody to ever be arrested for marijuana traditional initiatives where nobody gets industry, private investors would also re- offenses, there is real disagreement about an automatic piece of the pie in the leg- ceive 10 permanent growing licenses. In whether or not this is an acceptable way islative change. I think that Ohio is ready mid-March, the petition was certified by to go about it. It is a legitimate concern to evolve on this issue, and a group real- the Attorney General’s office allowing the that this initiative would essentially write ized the economic benefits that could be group to start gathering signatures for the a state-mandated monopoly into the Ohio gained if they can get complete control.” fall campaign. constitution.” Bocskor believes this proposal creates The investors behind the effort include Krane believes that no matter how large challenges to the industry, not the legendary NBA star Oscar Robertson, well-funded the effort, backlash from the least of which is an immediate similarity Frostee Rucker, an NFL defensive end for industry or consumers could kill support to “Big Tobacco.” the Arizona Cardinals, Sir Alan Mooney, for the initiative before it ever gets to the More worrisome to cannabis entrepre- a minister and board member of the Ohio ballot. neurs, however, is that the model “works County of Churches who trains financial “It is a positive thing to see new donors against the idea of an open market that advisers, and two executives of DMP In- to this issue, but there are legitimate con- leads to innovation, market efficiencies, vestments, a payday lending company. cerns about whether this goes too far,“ and ultimately this approach will handicap Although the effort was modeled on the Krane said. “This will likely lead to some the citizens of Ohio and the consumers in campaign to legalize casinos within the voters voting against the initiative be- its market by having such a protectionist state, the impact of what both legaliza- cause they see it as a giveaway to the 1%. and isolationist model,” he said. tion supporters and opponents are calling This initiative plays into that narrative, >> CONTINUED ON PAGE 38 Packaging is the Perfect Finish to Your Brand Packaging is the ﬁnal element to present your product effectively. WS Packaging is the single source to help you differentiate your brand and products.

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36 | Marijuana Venture // June 2015

<< CONTINUED FROM PAGE 35 medical market with reciprocity with all to run a ballot initiative, so it is not sur- He also specifically referenced the other programs. This is how it should be prising that other grassroots initiatives downstream and unintended consequenc- done.” have failed to raise enough to make the es of such issues in the first two recre- According to Krane, “Small entrepre- ballot,” he said. “Crowdfunding has not ationally legal states. neurs have reason to be concerned about proven an effective method of fundrais- “Look at the problems that exist in the Ohio initiative, if it winds up turning ing for initiative campaigns in the United Washington State and Colorado where a into an industry trend.” States.” much simpler limit was instituted regard- That said, Krane also believes that no Many, like Krane, see ResponsibleO- ing residency and ownership,” he said. “It matter what happens, the nationwide fall- hio’s commitment to legalization as a Photo by Bob Hall/Wikimedia Commons becomes a magnet for operators looking out in other state initiatives will be lim- business decision, based on a perceived for loopholes rather than just doing busi- ited. opportunity, in an off-presidential year, to ness with a level playing field.” “It is important to note that this kind of try to create market share. Bocskor has been intimately involved initiative would not be allowed in most “The backers of this initiative likely saw in the creation of state regulations in Ne- states — only those that have the ballot this void in any serious efforts to make the vada, where he also served as the found- initiative process for amending the state ballot and decided to jump in themselves ing chairman of the Nevada Cannabis In- constitution,” he said. “This could not this year,” he said. dustry Association. happen in more traditional initiative states And for all the fuss, this is far from a “The unintended consequence for Ohio where initiatives are passed as new laws, done deal. As Krane predicted, both the is that it will incent innovators, entrepre- nor would it be realistic to pass through a successes as well as pitfalls presented by neurs and investors to put their money, state legislature. the ResponsibleOhio model may focus the time and operations elsewhere,” he said. “So this is a phenomenon that may be attention of the national reform groups, “Here in Nevada we created a regulatory limited.” who have so far sat on the sidelines. framework that has invited more outside However, Krane believes the reason “It is possible that national organiza- investment and operators to come to the that ResponsibleOhio has found the sup- tions and national donors may look to state, boosting our economy, than any port it has is based on a number of factors Ohio as a realistic state to target for anoth- other market to date. We allowed outside that so far have proved to be intractable er initiative in 2015 that would be drafted ownership, a merit-based system for li- barriers to legalization advocates. in a way that was more likely to pass,” he censing, for-profit entities, and have a “Ohio is a particularly expensive state said.

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THE

NEW OFLOOK MARIJUANA BY GARRETT RUDOLPH

ver the past couple years, marijuana has been Oin the process of a mainstream makeover. As acceptance of cannabis, both for medical and recreational uses, hits unmatched levels in the United States, the old stereotypes associated with marijuana counterculture are disappearing quickly. Nowhere is this more evident than with the entrepreneurs who are at the forefront of marijuana’s transition from demonized DEA target to legitimate business venture.

40 | Marijuana Venture // June 2015 (888)626-3271 << CONTINUED FROM PAGE 40 The lazy, stoner/slacker image is being replaced by this new wave of cannabis entrepreneurs, who are hard-working, indus- trious and conscious of how public perception could be the difference between long-term success and a short-lived blip on the radar. More and more companies understand that looking like a real business is a key first step to being treated like any other industry. “The norm has really changed in 2015,” said Megan Stone, founder of The High Road Design Studio. “It was like overnight, people all of a sudden got it.” Stone’s business focuses on designing cannabis retail operations, but the “new look of marijuana” has encompassed every aspect of the industry.

RETAIL Retail design is about more than just the look of a store. Function is equally important as form, Stone said. “There’s a great Steve Jobs quote I use all the time: ‘Most people think design is how it looks but if you dig deeper, design is how it works.’ It’s hard to design a space if you don’t understand everything about how it works,” she said. Stone first began working in the industry in California, while she was attending design school. She was initially a patient and later an employee at Orange County’s Pa- tient Care. The owner put her design skills to work with a “really basic remodel” in 2010 — a fresh paint color, new flooring, a better layout and new display cases. “The impact it made, not only on our business, but on the reaction and experience for the patients was huge,” Stone said. “People were calling us the Tiffany’s of dispensaries. I think that’s an exagger- ation, but comparably speaking, we were offering the best experience around with such little effort.” But at the time, California’s medical marijuana industry was on shaky ground. Dispensaries were being shut down left Megan Stone is the founder of The High Road Design Studio, which caters to cannabis dispensa- and right by the federal government. Busi- ries and retail stores. ness owners didn’t want to invest money in a space that might not last more than a By the time Stone finished her school- cently implemented its medical marijuana few months, so the market for retail design ing in 2013, she wanted to stay in the can- program and founded The High Road De- in the cannabis space was non-existent. nabis industry. At the time, there were no sign Studio. Besides, most business owners were mak- design firms or architects that specialized Business was slow initially, but as the ing plenty of money at the time — there in cannabis. industry matured, Stone began to con- was no incentive to move away from a So she started her own. nect with retail store owners who were proven formula. She moved to Arizona, which had re- >> CONTINUED ON PAGE 44

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The Minerva Canna Group Dispensary. Below: A concept rendering of Tru Med’s concentrate bar, an upcoming project of The High Road Design Studio.

<< CONTINUED FROM PAGE 42 looking to separate their brands from an increasingly-crowded market. Her work with Minerva Canna Group dispensary in Albuquerque, New Mexico drew national acclaim from both the cannabis and design worlds. “My clients have gone from being non-existent to really understanding that Photos courtesy The High Road Design Studio they don’t have the time to figure this out for themselves,” she said. “Marijuana is becoming a commodity, and how else are you going to differentiate your retail store from the retail store down the street or right next door to you if you’re not offering a different experience.” Part of the paradigm shift comes from a changing clientele. The micro-business model is slowly giving way to those who have been successful in the cannabis in- business to be. While her design style es- you have with the liquor industry,” she dustry for several years and are looking to chews over-stereotyped images like pot said. “You have your stodgy corner liquor expand and set themselves apart from the leaves, Bob Marley and green crosses, that store, but you also have your really high- competition, or to people who have been look might still be right for some opera- end, exclusive, boutique wine bar.” successful in other avenues of retail and tors. When Chris McAboy and Allie Char- are bringing that experience to cannabis. “I don’t think we’re going to completely neski went through their own process of When it comes to design, two keys for see the old guard go away, but I just think designing The Novel Tree in Bellevue, any business owner are knowing their cli- we’re going to see so many different seg- Washington, they tailored the look and feel entele and knowing what they want their ments within this industry, similar to what >> CONTINUED ON PAGE 46

44 | Marijuana Venture // June 2015

Allie Charneski and Chris McAboy, owners of The Novel Tree, used reclaimed wood and open space to give their retail store the right feel for its target demographic.

<< CONTINUED FROM PAGE 44 directly toward the clientele of the area. Bellevue happens to be one of the higher-income cities in Washington, so the couple incorporated an upscale look with an open floorplan. “When it came down to getting all the details, we knew that we were creating something specifically for Bellevue and that our store wouldn’t necessarily work in small towns,” Charneski said. They wanted to “keep it cozy and a little bit industrial without going overboard,” Charneski said. “I’m happy with the balance we’ve come up with.” The display cases and interior walls utilize reclaimed wood that came from an old warehouse in the Sodo District of Seattle, giving The Novel Tree a link to Washing- ton’s logging history. The open floorplan was done to set the >> CONTINUED ON PAGE 48

46 | Marijuana Venture // June 2015

The Trail Blazin’ team includes Justin “Juddy” Rosellison, Krista Carter, Kristin Kato, Sheila Hirsch, Scott Kirk and Kelsey Briscoe.

<< CONTINUED FROM PAGE 46 cannabis retailer apart from medical dispensaries that often feature a waiting room or front lobby that’s completely separate from the actual retail space. “We wanted to make sure that no matter where you’re at in the store, you don’t feel pushed to go one way or another,” Charne- ski said. “It’s very user-friendly and very newbie friendly in that regard.” Those not familiar with The Novel Tree may recognize it as the backdrop of videos that Leafly has produced. To the unfiltered eye, “They came in and used our shop as the LEDs produce an green screen for a series of information- unmistakable red/ al videos they’re doing,” Charnesksi said. violet color of light. “We were very, very excited to be chosen to do that.” to public perception. voted mothers and busy business women, Danielle Rosellison, of Trail Blazin’ who understand the challenges of operat- PRODUCTION Productions, and Lynsee Swisher, of Nine ing in a space still deemed illegal by the Most production facilities operate out Point Growth Industries, spend a great federal government. of sight from the public. They’re hidden deal of time working to interact with lo- When Rosellison has met with various away in warehouses located within indus- cal community members, business leaders individuals, she often surprises those out- trial districts, or they’re farms and green- and government officials to make sure the side the industry with the company’s level houses that blend in with other agricultural cannabis industry is well-represented and of professionalism. businesses. dispels the myths associated with more Trail Blazin’ Productions joined the lo- But that doesn’t mean they’re immune than 70 years of prohibition. Both are de- >> CONTINUED ON PAGE 50

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One of Trail Blazin’ Productions’ LED-lit grow rooms.

<< CONTINUED FROM PAGE 48 business to an above-board, legitimate, li- cal chamber of commerce to interact with censed, tax-paying business. the business community in the region. By Trail Blazin’ Productions was among the end of the first meeting, some of those the first businesses in the state to submit that were neutral had shifted more in favor its application to the Washington State of the cannabis industry. Some that were Liquor Control Board in 2013. Danielle anti-cannabis had softened their negative Rosellison, along with her husband, Justin outlook somewhat. “Juddy” Rosellison, and business partners Photos by Garrett Rudolph/Marijuana Venture “You look like such a normal person Kelsey Briscoe and Scott Kirk made a de- … I want to talk to you about this whole cision that they wanted to run the business marijuana thing,” Rosellison remembered with an environmentally-friendly mindset hearing one lady say. from the very beginning. The same happened when Trail Blazin’ “This is important to us because we are invited the local fire chief for a tour of the aware of many other industries that have facility. The chief’s reaction was, “This is conducted their business without any re- not what we expected,” Rosellison said. gard to the environmental disasters that That reaction is invaluable in building they leave behind, and that just doesn’t relationships with the community and sit well with us,” Juddy Rosellison said. marketing the entire industry as being no “We saw this as an opportunity to lead by different than any other business. When example and to try to ‘set the bar’ of stan- Danielle Rosellison, of Trail Blazin’ Productions, members of Trail Blazin’ volunteer during and Lynsee Swisher, of Nine Point Growth dards at our level, and hope that everyone city clean-up efforts, they wear shirts that Industries. would rise up to it.” say “Cannabis Community” on the back, Once Trail Blazin’ Productions commit- putting a positive, community-minded in the industry,” Swisher said. “There’s so ted to an all-LED growing facility, every- vibe on the industry as a whole. much one foot in front of another. It really thing else fell into place, he said. But Rosellison and Swisher are careful takes a business professional to do what When the growers talked to other in- about managing expectations. Acceptance we do. You have to be organized, adapt- dustry professionals about LEDs, the ini- of the cannabis industry is sure to be a able, flexible.” tial reaction was one of shock and doubt, slow-moving process. There’s a certain mindset necessary in Rosellison said. He said people told them “It takes time, and it takes everybody transitioning from an illegal, underground >> CONTINUED ON PAGE 52

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<< CONTINUED FROM PAGE 50 that LEDs wouldn’t be successful. Stick- Vuber Technologies founder Brandon ing with HID lighting was safer in terms Gallagher. of the investment, but more expensive in terms of electricity consumption. “We chose to make environmentally correct decisions in order to be comfortable with ourselves,” he said. “The folks at PSE (Puget Sound Energy) are super stoked with the decisions that we’ve made, and we’re going to be working together to share our experiences throughout the industry. But other than that, we’re focusing on how good the product is, not necessarily how we do it. That time will come.” The team was originally willing to accept a 15% reduction in yield as it made the LED transition. Although too early to say for sure, Rosellison said the yield in flower has been excellent, but the total can- “People love the technology side of it,” ic, display knowledge about Vuber’s prod- nabinoids have been almost 20% higher, as founder Brandon Gallagher said. “Even ucts and those of competitors, and perhaps well, though there’s not that much technology most importantly, to be on time for meet- And the electricity savings has been involved, it’s still fun to them. It’s new. It’s ings. nothing short of remarkable. Trail Blazin’ like a gadget. I had one customer refer to it “We don’t want to be put in that stoner Productions was able to save about 55% as being like an iPhone for pot.” category,” Gallagher said. “We try to al- on electricity consumption, resulting in an ways be on time. We try to promise what 80% savings on air-conditioning needs and we can deliver. We promise small and de- 50% less nutrient and water consumption. liver big.” The team is working on a water recy- In many instances, the sales people at cling system that could reduce water usage Vuber are the face of the company, so it’s by another 70%, Rosellison said. vital that they’re able to represent the com- Stereotypes can’t be changed overnight, pany well. but legalization is helping put a new look “We’ve done virtually no marketing, ex- on cannabis. cept through the sales people,” Gallagher “A majority of the smart, productive and said. “It’s just about having boots on the responsible users out there have chosen to The Vuber Comet ground. Our sales people are out there all stay in the bathroom — or closet if you the time.” will — about their usage in order to avoid The company tagline — “fun, discreet the stereotype, and now it’s time to come Gallagher had been selling vaporizers and guaranteed” — emphasizes the draw out of the bathroom to show that there is a for another company before launching Vu- for the entire vape pen industry. It’s far very broad spectrum of intelligent and pro- ber in early 2014. The company has been more inconspicuous than using a lighter ductive cannabis users, and that the stereo- developing a variety of different products, and smoking out of a pipe, where every- type needs to be diluted,” Rosellison. including the Comet, Cosmos and Atlas. body can see and smell what’s going on. The first order was placed in February “It’s not only discreet in a way that CONSUMER PRODUCTS 2014, shortly before Jim Makoso joined you can literally smoke it anywhere, and Everything about cannabis is evolving the small team to head up business devel- it’s vapor, so you don’t get the marijuana with the 21st century, including how peo- opment. scent, but it’s also very simple, button-less ple consume it. As the saying goes, this “The biggest thing we prided ourselves and fun,” Gallagher said. “A lot of canna- isn’t your father’s marijuana. on was customer service,” Gallagher said. bis users are switching to that because it’s It’s not to say that joints and bongs are “I think that’s the biggest reason we did so so discreet and fun, and they just love the ever going out of fashion, but they’re kind well.” idea of it.” of the marijuana equivalent of bulky, out- With so many different vape pen options Vuber also gives a lifetime warranty on dated flip phones. Companies all across the on the market, Gallagher understood that its products. nation are diving into the vape pen market, customer service and having exempla- Since gaining popularity in Washing- trying to gain a foothold in an increasing- ry sales people would be keys to Vuber’s ton’s medical and recreational marijuana ly-crowded market. growth. markets, Vuber has been expanding into Seattle-based Vuber Technologies is one Gallagher put his sales background to other cannabis markets as it seeks out ven- of the fast-rising contenders for vape prod- work, training the company’s sales people dors and partners in California, Colorado, ucts. to be professional, have a strong work eth- Nevada and Arizona.

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Cash management and the cannabis industry Strict banking regulations and seed-to-sale tracking make compliance a challenge By Garrett Rudolph he lack of traditional banking in the principle in mind: Remove the cash from Consumers can sign up for an account Tcannabis industry, coupled with strict what is largely considered a cash-only in- at participating retail stores by purchas- rules regarding accounting, record keep- dustry. ing a PayQwick card preloaded with $50 ing and seed-to-sale tracking has made it That concept opened the door to a great or $100, or signing up online (www.pay- vitally important for marijuana businesses business opportunity, but it’s also a neces- qwick.com). The card can be used imme- to partner with vendors that can not only sary step for the future of the cannabis in- diately to make purchases from marijuana fulfill their cash management needs, but dustry, said PayQwick CEO and president retail shops. There’s also a smart phone also help with the monumental task of Kenneth Berke, who also pointed out that app that can be used to make payments in staying in compliance. most problems in the cannabis industry lieu of using the PayQwick card. This month, Marijuana Venture contin- stem from large amounts of cash. When customers needs to add more ues its ongoing series on companies that “It’s too enticing for criminals,” he said. money to their cards, they can do so on- serve the cash management, point-of-sale The PayQwick system works similarly line with a simple e-check from their bank and compliance aspects of the industry. to prepaid gift cards offered by many ma- account. jor retailers. It has applications for every When people purchase marijuana at PAYQWICK level of the cannabis industry, from pro- retail stores, money is transferred from PayQwick was founded with a simple ducers to retailers to consumers. >> CONTINUED ON PAGE 56

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<< CONTINUED FROM PAGE 54 The strict regulations are what have al- the customer’s account to the retailer’s lowed PayQwick to service Washington’s account. The benefit for consumers is recreational cannabis market. Berke said that they don’t have to bring cash every he’d like to expand the company into oth- time they shop for cannabis, plus there’s er markets, but so far only Washington has the Rewards Qwicker program that gives enough controls in place to make it fea- customers points that can be redeemed for sible. merchandise and discounts. “Colorado is still a little bit of the Wild, For retailers, they can use the money in Wild West because it doesn’t have the their PayQwick account to pay vendors, traceability system,” Berke said. “One of make ACH transfers, transfer money to our main benefits is that we make sure their bank account or even pay their excise every dollar deposited into a PayQwick taxes. account comes from the legal sale of mar- “Most importantly, we think is that the ijuana. Every dollar going through the retailer can now purchase marijuana in- PayQwick system can be tracked back to ventory from a producer/processor who legitimate marijuana sales. In Colorado, has a PayQwick account,” Berke said. they don’t have that traceability system. Producer/processors, although not deal- They still have a budtender pulling it out ing with the general public, can also sign and putting it on a scale, so you can’t track up for accounts to pay for supplies and ac- it.” cept payments from retailers. PayQwick is a federally-registered There’s no monthly subscription and no money services business, as well as being minimum terms. The only equipment need licensed by the Washington State Depart- is a tablet/computer and a card reader, ment of Financial Institutions. which PayQwick supplies to the business- Although the business has been devel- es. There are no set-up fees for retailers or oped out of the lack of traditional banking producer/processors. PayQwick makes its open to the cannabis industry, Berke be- money from fees charged when customers lieves PayQwick is more than just a stop- Photos courtesy PayQwick, Green Bits swipe their card, similar to credit card pro- gap solution until more banking options cessing fees. come along. Businesses must submit an application “We think it’s long-term,” he said, point- to open a PayQwick account. PayQwick ing to PayQwick’s compliance programs does a full audit and inspection of the busi- for the Bank Secrecy Act, Anti-Money ness to make sure it’s compliant with state Laundering and Initiative 502. and federal regulations. “That’s never going to go away, and On top of the PayQwick account itself, that’s a lot of brain damage for a bank to the company’s due diligence also makes try to go through,” Berke said. it so merchants can get bank accounts through PayQwick’s partnership with GREEN BITS banks, Berke said. About the time Washington and Colo- Business owners in the cannabis space rado voters approved legislation to allow often lament the heavy regulations that the production and sale of marijuana for have been put in place by governing state recreational use, Ben Curren was kicking agencies, but Berke, a longtime attorney around a few ideas for his next project. by trade, looks at it differently. Curren’s background was in writing “The more regulation, the better,” he software. In the summer of 2012, GoDad- said. “It helps the industry.” >> CONTINUED ON PAGE 58

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<< CONTINUED FROM PAGE 56 dy had just bought Outright, the web- based accounting software company Cur- ren co-founded. He began researching the cannabis industry and seeing a need for software solutions for the amount of compliance required with tracking and accounting. “It seemed like a perfect match for my background,” Curren said. He launched Green Bits in May 2014, had his point-of-sale system installed at the first store in July, and just one year af- Budtender Jimmy Lee (right) rings up the first ter the formation of the company, has cor- sale at The Cannabis Corner using Green Bits nered a significant portion of the -Wash point-of-sale software. ington retail market with his software. The Green Bits software allows retail industries, if they fit with Green Bits’ for- store employees to sell product and pro- ward-thinking approach. cess payments, while keeping the opera- As Washington’s market has matured, tion in compliance with the seed-to-sale Curren has paid a great deal of attention tracking requirements for Washington’s to the best practices within the state’s re- recreational market. tail market, and in particular, areas where Curren developed the software by look- retailers face challenges with staying in ing at best practices of other retail indus- compliance. tries and incorporating them into an au- One of the most common areas state-li- tomated service for the cannabis industry. censed businesses fall out of compliance Green Bits helps train store employees is with receiving product, he said. A lot of about best practices in cash management, problems are caused by different lot num- changing shifts, counting cash, tracking bers, even if the product is the same. For sales and inputting data into QuickBooks instance, one-gram packages that seem to accounting software. be exactly the same product could in fact “Behind the scenes, when product is have multiple different lot numbers. being sold, the system is always commu- Counting those packages and entering nicating with the state’s traceability sys- them into inventory requires a great deal tem,” Curren said. “They don’t ever have of organization and making sure the ship- to do tracking of their products, it’s fully ment aligns properly with the manifest. If integrated and updates as they sell.” there’s a mistake on the manifest, the state Currently, the point-of-sale software is wants the producer/processor to return to highly specific to the Washington market, headquarters, fix the manifest, place the Photo by Garrett Rudolph/Marijuana Venture but Curren is refining the product and product back in quarantine, and remake preparing to bring it into other markets the shipment another day. Therefore, mis- around the country. takes can be very costly in terms of turn- “We don’t want special software for around time, employee wages and gas, every state,” he said. “We want it to be Curren said. one software with the same best practic- Another challenge of staying in compli- es, with different compliance features that ance is that the state’s accounting system can be plugged in for different states.” is extremely strict, he said. Excise taxes Part of the reason Green Bits hasn’t ex- basically have to be calculated to the pen- panded into other states yet is the level of ny in the cannabis industry, whereas other regulation. businesses are often allowed some wiggle He sees lot number tracking and trace- room. ability, similar to the way Washington is “Your record-keeping has to be pretty set up, as the future of the industry. Colo- much exact,” Curren said. rado, at the moment, does not require the Green Bits has features that help retail- same level of seed-to-sale tracking, while ers reconcile their cash with QuickBooks, the Oregon and Alaska programs have yet as well as reconciling their sales with the to come online. Curren said the compa- state, Curren said. ny will consider other markets, such as “All three always get the same type of those in the states with regulated medical transactional record,” he said.

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60 | Marijuana Venture // June 2015 A look into the past, present and future An interview with Bruce Barcott, author of ‘Weed the People’ By Greg James and Garrett Rudolph

ruce Barcott’s latest book delves into Bthe earliest days of legal cannabis in Washington and Colorado, creating a unique, intimate storyline even for those who experienced the movement first-hand. “Weed the People” follows the journey of not just the business people that brought recreational marijuana into the headlines of mainstream media, but also the author’s own journey from initially reluctant supporter of Washington’s Initiative 502 to becoming a medical marijuana patient himself and an advocate for legalization. He addresses both the hypocritical history of marijuana in the United States, as well as what the future holds. Barcott, whose other books include “The Measure of a Mountain: Beauty and Terror on Mount Rainier” and “The Last Flight of the Scarlet Macaw,” recently spoke with Marijuana Venture about his effort to chronicle the cannabis industry.

Marijuana Venture: What were some of the things that struck you most as you were doing research for ‘Weed the People?’

Bruce Barcott: The most obvious thing to learn from Washington and Colorado comes under the heading of how states issue licenses to grow and to sell, but especially to sell. Both Colorado and Washington, they have set up the regulatory scheme and they issued licenses. The growing end is not that difficult in terms of people apply- ing for licenses. They have an idea of how to grow pot or at least some agricultural up and running in the med system. And in chance of getting financing or no connec- product. Washington, we basically hadn’t regulat- tion or experience in the cannabis world The problem came in Washington with ed medical and we was asked everybody at all. this idea that we should put everybody’s to put your name in and if you’re lucky, That’s the thing that has to be fine- name in a hat and draw it in a lottery. you’ll get drawn at random. That just tuned — it’s not just the fine-tuning, it’s Colorado had the advantage of already hasn’t worked out well at all. the large tuning that I really try to empha- regulating its medical marijuana system, A little over a hundred retail shops have size, especially when I talk to people in so that it had a framework already up and opened and more than 330 actual licens- Oregon and Alaska and Washington, D.C. running, and it had experience with most es or people who hold licenses, which is and we’re all sort of expecting and hop- of the players in the business and knew really a poor reflection of how the whole ing California will come on line at the end who the good actors were. thing worked out. I call them ghost licens- of 2016, so figure out how to issue these And so the first recreational sales licenses. They’re floating out there, held by peo- licenses whether it’s to people who are es went to those people who were already ple with little to no retail experience or no >> CONTINUED ON PAGE 62

www.marijuanaventure.com | 61 << CONTINUED FROM PAGE 61 Welcome to the era of legal pot shops, cannabis farmers, and brand-name already in the business or there’s a judg- marijuana. Welcome to the interregnum between criminal and customer. Wel- ing system or scoring system where the come to a world where potency is calibrated in percentages and milligrams state can look through these applications which are measurements sort of like alcohol proof but really in so many ways and give them a sharp eye and say “Look, not. Welcome to the end of stoner culture with its glorious tie-dyed shagginess these people have experience in business and half-clever puns and propensity to turn any word, really any word at all, and a far better shot of actually realizing into a slang expression denoting cannabis or the ingestion of same. Welcome to this enterprise.” the telltale odor of the skunk of the botanical world. Welcome to government I think fairness overwhelmed us in this pot inspectors and gainfully employed budtenders with health insurance and situation and I hope it doesn’t do that to 401(k)s. Welcome to professional marijuana critics and cannabis connoisseurs other states. who lord it over the rest of us with their insufferable haute-pot snobbishness. Welcome to ornery old men who were once outlaw pot growers but are now MV: Most industries in the U.S. don’t al- just cranky farmers. Welcome to marijuana millionaires, may they spend their low vertical integration. The Washington winnings wisely and not squander them on jade-inlaid leaf-shaped swimming system is slow and clunky, but we won- pools, although that would be kind of cool to see. Welcome to the beginning der if that might be better for the con- of the end of Mexican drug cartels, the War on Drugs, mandatory minimum sumer down the road. sentences, and ten years in prison for a single joint. Welcome to the moment a political movement gives birth to an economic awakening. Welcome to unin- Barcott: I know one of the reasons Wash- tended consequences and unforeseen problems and maybe, just maybe, wel- ington wanted to do that was that for the come to common sense and sanity. Liquor Control Board, that was where Welcome to the future. their experience lay. It was with separat- — Bruce Barcott, “Weed the People” ing producers from retailers. Colorado obviously started at the opposite end of the these laws. We’re don’t get the 1.0 or 2.0, first being approved by voters back in spectrum. I think you had to grow 70% of the smoothed-out version with no bugs. 1998? your own products to begin with in Colo- Our laws are buggy to begin with because rado, but they’re opening that up now and we’re creating this from scratch. We’ll see Barcott: I think it was the growth of the I think you’ll see more and more natural how this new law goes over the next year. concept of the collective garden and what specialization. People who love to grow We may need to come back to the Legisla- that could be. We reached a point, I think it and love to produce, that’s what they’re ture a year from now and fine-tune it, but was 2010 or 2011, when the state Legisla- into. People who are great at retail, that’s we have to take these big bites at it right ture actually cast a bill to regulate medical what they’re into. now and just try to get it up and running. marijuana and Gov. (Christine) Gregoire There are some folks that can pull off I’ve got a medical card and I want the just could not bring herself to sign it. both, like with the guys at Medicine Man dispensaries and growers under state reg- She said at the time that she couldn’t Denver, Pete and Andy Williams. That op- ulation. I want some sort of assurance the sign it because she felt she was putting eration kind of works because Pete is all product they’re putting out there is the Washington State employees in harm’s about the growing and Andy is all about product they claim. way in terms of opening them up to fed- the retail and he’s the face man. He’s the As a person, then, who also wants to see eral charges. guy the public meets. the 502 system succeed, I don’t want dis- But I don’t believe that at all. Colorado Photo on previous page by John Keatley/courtesy Time Inc., book cover courtesy Time Inc. But it’s hard to find that in one person. pensaries to be able to undercut the people had its own system up and running fine. It will be interesting to see how that who are playing by the rules and paying I think she just could not bring herself shakes out. I would put my money more taxes. to do what she saw as legitimizing some- on a natural separation between growers I met plenty of people who are legiti- thing she did not believe in. Sadly, I be- and retailers. mate patients and do find real medical help lieve it was the wrong decision. It did a in various forms of cannabis and need it, disservice for the state. MV: Since ‘Weed the People’ was pub- and it’s truly a good thing for them. At I supported her in 95% of her policies, lished, Gov. Jay Inslee signed into law a the same time, in too many dispensaries but not that one. major overhaul of Washington’s medical there are these sort of whacky products marijuana system. How much have you out there that are unregulated. They don’t MV: What are you working on now? paid attention to that and what are your show medical marijuana in the right light What’s your next book? thoughts about the new legislation? or even the correct light. As they come under a regulated system, Barcott: I don’t know what my next book Barcott: I was really glad to see the line- those crazy names and whacky products is yet. I would like to continue writing in item vetoes he enacted prior to signing and flavors will be filtered out of that sys- this area. There are just so many fascinat- the bill. It’s an imperfect bill, but it had tem. The basic name products that patients ing tendrils that creep out from legal mar- to happen. I really believe we had to bring need will still be available. ijuana, from the politics and economics these two systems together under one roof, of it to the social and cultural aspects. So under one regulatory scheme. MV: How did Washington’s medical in- I’d like to find a way to continue writing We’re getting the beta version of all dustry develop into what is today, after about it, but we’ll see.

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LEGAL PAGES

While transfers between growers and licensed dispensaries need to be document- Despite pushback, Oregon ed to provide a paper trail of how much is transferred, there is no requirement to similarly document all of one’s produc- aims for harmony in market tion in the aggregate. It is necessary to track marijuana pro- Commercial-scale medical production must be regulated duction more rigorously. Some medical By Matt Goldberg producers bristle at the prospect of seed- espite months of or failure of Oregon’s recreational sys- to-sale tracking systems for their gardens. Dwork, the Oregon tem. Significantly, those people will have the Legislature’s Joint • An unacceptable percentage of ability to use some less onerous form of Committee on Imple- Oregon’s current medical marijuana tracking, under current legislative pro- menting Measure 91 production ends up outside the sys- posals, as long as they are willing to con- could not pass a final tem. Earlier this year, the Oregon Liquor cede on the size of their gardens. Current version of its bill in- Control Commission (OLCC) got a lot of proposals would restrict growing in resi- tended to “harmonize” attention with its statistic that 75% of Or- dential areas, limit total plant counts for medical and recreational marijuana, leav- egon’s medical marijuana ends up in the new medical growers, and grandfather ing individual legislators to push such black market. Though the OLCC did not in certain growers (depending on when legislation forward outside the auspices release its methodology for calculating they started growing and where they do of the committee. that figure, this criticism misses the point. it) with a 96-plant maximum. These legislators want to avoid what Growers can quibble with plant counts happened in Washington, which did not AN UNACCEPTABLE if they want, but the reality is that we pass legislation addressing the relation- cannot allow commercial-scale grow- ship between medical and recreational PERCENTAGE ing without seed-to-sale tracking or its until almost three years after Initiative functional equivalent and expect not to 502 passed. It is hard to imagine that there OF OREGON’S raise holy hell with the Feds. That means wouldn’t be a more robust marketplace growers who want to remain purely med- under I-502 at this point had the inexora- CURRENT MEDICAL ical and outside the OLCC tracking sys- ble union of the two systems taken place tem must accept a ceiling on the size of before the measure was implemented. MARIJUANA their gardens. Put another way, producers Oregon’s legislators may have the ben- who want to grow in big warehouses and efit of hindsight as they develop a plan to PRODUCTION ENDS try to make a lot of money doing so must bring medical and recreational together UP OUTSIDE THE accept that they will be licensed by the from the outset, but that does not make OLCC and heavily regulated. the task any easier. The Joint Committee SYSTEM. • It simply is impossible to have two spent the better part of the 2015 legis- separate commercial systems operat- lative session fielding vociferous -com Even if the OLCC is wildly off in its es- ing in parallel, one for medical and one plaints from a segment of the medical timates, say, by as much as 200%, we for recreational. States that already have marijuana community that were outraged would still be left with a full 25% of Ore- legislation in effect for both medical and by the committee’s proposals to reduce gon medical production ending up outside recreational — namely Colorado and now plant counts and bring additional report- the system. This is patently unacceptable Washington — allow (or will allow) rec- ing requirements to medical production from the perspective of building a bona reational retail outlets to cater to patients. and processing businesses. fide legal cannabis industry. Allowing Patients have (or will have) access to cer- This opposition has been grass roots this to continue is probably the best way tain products that might not be available in the sense that many individuals have to invite unwanted federal attention on to recreational users and tax breaks when written and called legislators to complain Oregon and the question of whether we purchasing their medicine. Recreational about the legislation, and have traveled are sufficiently regulated to be in keeping producers and processors are free to de- to committee meetings in Salem, but it with the Cole Memo’s prescriptions. sign and develop products specifically has also been highly organized through • There is only one way to stem the with patients in mind. social media by people who are very flow of Oregon medical marijuana out The model that inevitably is on its way much in the business of medical marijua- of the system: Regulate it more heavily. out is allowing growing under Oregon’s na. Though the rhetoric of these debates Oregon’s medical growers and processors medical law on a commercial scale, with tends to gravitate toward often overblown are, comparatively speaking, largely un- little to no regulation, and with no taxes concerns for patient access, there are nu- regulated. being paid to the state, while at the same merous other issues in play — issues that No one knows how much these busi- time trying to create a heavily regulat- will play a huge role in the future success nesses produce or where it all goes. >> CONTINUED ON PAGE 66

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<< CONTINUED FROM PAGE 64 ed and taxed recreational system where growers with commercial-scale operations are meticulously tracked. The real way to preserve a medical marijuana system and give it integrity is to prevent growers from producing commercial quantities of marijuana in a mostly unregulated environment at odds with the federal anti-prosecution guidelines. This places the entire legal cannabis industry at risk. It does not help patients nearly as much as it helps certain growers stay in the business of commercial marijuana production without having to abide by the type of regulation that is increasingly becoming de rigeur for the industry. • The best way to create a medical system that truly is patient-focused is to curtail the practice of giving tens of thousands of patient authorizations to individuals on account of nebulous conditions like chronic pain. As of April 1, 2105, according to statistics from the Oregon Health Authority, 93% of the 71,317 registered patients have severe pain as at least one of their qualifying conditions, compared to, for example, cancer (5.4%) or PTSD (5.9%). In light of these figures and the known diversion of some significant portion of medical marijuana production to the black market, is it any wonder that legislators and regulators see the re-envisioning of the current medical system as a necessary step toward a robust legal cannabis marketplace? A renewed focus on those patients with debilitating conditions who must have access to their medicine without all the ENTER THE bells and whistles of regulated recreational marijuana is the best way to pro- tect patients’ rights. For this purpose, the M A R I J U A N A medical system does not need large commercial-scale grow operations. The soon- er people in the business of medical marijuana come to terms with these realities, the better off we all will be — patients, VENTURE consumers and businesses, alike. An in- PHOTO CONTEST dustry that gets shut down by the federal government because of leakage and lack We want to see your biggest and most beautiful plants! Send us photos of of regulation is not going to provide a fu- your monster plant or garden, and at the end of the season, the best of the ture for any of us. best will be selected for a number of cash and advertising prizes. Photos must be high-resolution and allowed to be published to qualify for a prize. Matt Goldberg is an attorney at Cannabis Lawyers NW, LLC (www.cannabislawyersnw. For more information, or to submit an entry, email com). His firm advises cannabis businesses in Oregon and Washington on business law, [email protected] real estate transactions and regulatory compliance.

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a federal bank holding company due to a variety of tax and business structure ben- Many complications, but efits. Currently, approximately 80% of all banks are controlled by holding companies (Board of Governors of Federal Re- few solutions in banking serve System, 100th Annual Report 281). Federal bank holding companies are sub- Even state-chartered banks often rely on Federal Reserve ject to federal regulations pursuant to the By Jana Weltzin Bank Holding Act of 1956. ue to the lack of must follow state law. The point is that the federal government Dtraditional bank- Now, given this distinction the answer has made itself indispensable to state finan- ing services, cannabis would be simple, right? Cannabis busi- cial institutions, tying essential banking business owners are nesses should only do business with state services and benefits with strings to feder- faced with a cash man- chartered credit unions. Unfortunately, it’s al regulations. A state financial institution agement and securi- not that simple. In a perfect, truly dichoto- would have to forgo pillars of the banking ty disaster. Cannabis mous world this would solve the banking structure to avoid federal regulation and appears to be the only issue, but in reality, state and federal finan- would be unable to provide a whole host state-sanctioned business whose financing cial institution regulators do not operate of necessary banking services. Between ability is restricted to private individual completely separately and it is common the “coordinated” dual enforcement ef- loans that are usually unsecured and sub- practice for federal and state regulators forts, federal deposit insurance, federal ject to extremely high interest rates. What to coordinate their enforcement efforts. holding company regulations, and feder- other market faces this type of service dis- Additionally, state financial institutions ally administered payment systems, it is crimination? almost always utilize some federal benefit clear federal oversight is prevalent even in The consequences of such discrimina- that subjects them to state-chartered credit tion are a lose-lose for all. The state los- federal regulation. WHAT OTHER unions, which leaves es out on potential tax revenue as cash is State-chartered fi- cannabis banking more difficult to track; states will have to nancial institutions MARKET FACES possibilities severely spend more money on police services to often utilize the fed- restricted. deter robberies; cannabis businesses are eral deposit or share THIS TYPE To fix this issue, unable to utilize banking services to track insurance, and/or the cannabis indus- money in and out; they have to expend become members of OF SERVICE try either needs to more money on security and onsite vaults; the Federal Reserve change federal law, large stockpiles of cash at the businesses System. Federally DISCRIMINATION? or support a state fi- puts employees at risk of being a target chartered credit unions are regulated by nancial institution (likely a brand new fi- for criminals; and banks lose out on a sub- the National Credit Union Administra- nancial institution) that does not partake in stantial amount of business. Also, because tion, while state-chartered credit unions any of the federal services or memberships the opportunities for traditional lending are regulated at the state level. Although identified above. Banking at such an insti- services are nonexistent or very limited, not formally part of the Federal Reserve tution would not be without its risk — it’s private individuals who do loan funds to System, these institutions are subject to likely to not be insured or to offer all the cannabis-related companies could easily system regulations, including reserve re- checking, wire and currency services that have connections to crime groups or mo- quirements. are basic at most institutions. However, tives that implicate the Cole Memo prior- Therefore, even state and federally char- such a bank would likely be successful and ities. Therefore, the federal government is tered credit unions can become subject to heavily utilized in markets where cannabis undermining its own priorities by restrict- the Federal Reserve’s requirements if the legalization has occurred, prompting oth- ing the ability of cannabis companies to credit union opts to utilize the reserve’s er financial institutions to put substantial do business with regulated financial insti- benefits (subject to certain requirements pressure on federal lawmakers so that they tutions. and restrictions), such as the centralized can get a piece of the cannabis banking Is there a solution? Not yet, but hope- check collection system that state financial action. fully soon. institutions obtain security and benefits Under the dual federal and state bank- from, and/or becoming a member of the Jana Weltzin is a member of Rose Law ing system, a credit union can generally Federal Reserve. Both subject state insti- Group’s medical marijuana and zoning/land choose a federal charter or a state charter tutions to federal regulation. The Federal use departments. She advises clients in the from a state credit union regulator. The- Reserve provides vital payment services, cannabis industry in Arizona and Alaska. Rose Law Group assists its clients with busi- oretically speaking, a credit union that such as a centralized check collection sys- ness structure, compliance with state and local chooses a federal charter must follow fed- tem and coin and currency services. laws, zoning approval and use permits, site se- eral law and a state-chartered credit union State financial institutions often utilize lection, and product regulations.

68 | Marijuana Venture // June 2015 GOT NO PLACE TO GROW? PRODUCTION SPACE FOR LEASE IN BENTON COUNTY Some of the lowest power costs in the state ($.0684/KWH) 3-phase power, natural gas and a private well on site 6+ acres for indoor building or outdoor greenhouse I-502 and county approved, zoned heavy industrial On-site processor to purchase all your products Exclusive space for Producer Only licenses Very competitive grow space pricing CALL NOW! WE ARE FILLING UP FAST! Call (509) 205-1457 or email [email protected] LEGAL PAGES

of products. Theoretically, with enough raw materials, a processor could have an ample What opportunities are the supply of product in every recreational store in the state. And there are even gaps in the current product offerings, meaning oppor- best bets in legal cannabis? tunities for entrepreneurs. In addition, the brand truly carries well here. Name brand Washington processors aren’t tied to canopy limitations Cheerios are twice as expensive as the ge- By Neil Juneja neric O’s, yet the two products are exactly friend living in must conduct some difficult accounting the same. AUruguay recently and work toward economies of scale. Even reached out to me with worse, drought, mites and other unpredict- RETAILER the intention of entering able events have the potential to wipe out The availability of retail licenses, unlike the marijuana industry. an entire crop. producer and processor licenses, is very He wanted to know The only way to beat the average com- limited. A government-designed oligopo- how to be successful modity price is to develop a brand that cus- ly creates an interesting set of economics. in a country basking in tomers desire. Yet, the limited canopy al- And yet, recreational marijuana retailers post-prohibition, yet filled with poor-qual- lowed under a license hampers a producer’s are analogous to liquor stores. The main ity cannabis. I explained that the true key ability to maintain difference is price to doing well in the marijuana industry, or a supply in many GROWING A and location, so any new industry, is to understand the mar- stores. The marijua- profit margins will ket, the legal and regulatory landscape, and na brand loses value COMMODITY LIKE be squeezed. One to remain quite nimble in entrepreneurship if the product isn’t may travel an ex- direction. available on store APPLES IS A GREAT tra mile for a liquor As Washington’s system for legalized shelves at all times. store with a bet- cannabis continues to develop with new Growing a com- GIG IF YOU CAN GET ter selection and a legislation, new license possibilities, and modity like apples is YOUR COSTS DOWN. knowledgeable and a slightly-settled market, the question be- a great gig if you can pleasant staff, but comes: what area of the recreational mari- get your costs down. Now, so is marijuana. it is doubtful one would travel far outside juana market is the best bet? This is not to say that there aren’t some of their neighborhood. The right shop in a people doing well in the current market and population center or with limited regional PRODUCTION many more will come and do well, like any competition will do well. The rest will di- Growing weed was always profitable pri- business, but with a low bar to entry and so vide the market into roughly equal portions. or to the implementation of Initiative 502 in many competitors swarming into the bub- A retail license allows for predictability Washington and Amendment 64 in Colora- ble, competition is fierce. in revenue, once the market settles down. do. Much of the profit was due to the risk of However, a person can only be on the li- criminal prosecution — the so-called “pro- PROCESSOR cense of three retail stores. No empire was hibition premium.” The risks also created Processors can package flower, process ever built on three liquor stores. And with a barrier to entry, thereby reducing com- oils and make infused products. Edibles are Senate Bill 5052 allowing for additional re- petition. Further, the market was not fluid the fastest-growing segment of this license tail licenses to be issued, this market will because access to the product was limited. type. It makes sense. When a cannabis nov- be further fractured with the entry of addi- Finally, some of the ordinary costs of do- ice enters a store, they are assaulted with a tional shops. ing business didn’t exist as they do today, diversity of products. Figuratively, a kid in including taxes, insurance, advertising and a candy store. There are many flowers, oils, CONCLUSION marketing expenditures. vape pens and dabs. Oils look rather similar In the Washington market, if you want Now that the cultivation of cannabis is on the shelf. So do vape pens. Even flowers to build an empire, concentrate on unique in full swing, with all of the lovely regu- become a sea of indistinguishable green. edibles. However, the key to any business lations and taxation that comes with it, the But in edibles, there is true diversity in rising above the competition is to develop a economics are rather different. Cannabis is products. So many options — candy, cook- quality brand and develop an excellent rep- still the most expensive crop in the world, ies, fruits, lozenges, tonics, breath-strips, utation with your customers. pound-for-pound, but it is not as profitable energy shots, chocolates, teas, and even as it once was. With only about 400 of a an infused coffee pod! There is a healthy Neil Juneja is the founder and managing part- possible 2,300 producer licenses issued in markup and a uniqueness to many of the ner at Gleam Law, a full-service cannabis-law Washington at the time of this printing, we products. practice with offices in Washington and Oregon. are already seeing the effects of excessive Processors are not limited to a finite He is a registered patent attorney and focuses on agricultural supply. The economics don’t amount of product they can grow — a intellectual property and cannabis law. He can work as they once did and now cultivators licensee can process unlimited quantities be reached at [email protected].

70 | Marijuana Venture // June 2015

LEGAL PAGES

Medical overhaul changes Senate Bill everything in Washington 5052 rundown State adopts first major changes to system since 1998 By Rachel Kurtz By Stephanie Boehl enate Bill 5052 has drastically al- e all knew it was Liquor Control Board to the Liquor and Stered medical marijuana in Washing- Wcoming ... we just Cannabis Board). ton State and made changes to the legal, didn’t know when. The In addition, effective immediately, per- adult-use marijuana laws. Here’s a sum- wait and uncertainty sons under the age of 21 are prohibited mary of some of the is over. On April 24, from participating in collective gardens; basic changes. Washington Gov. Jay although, a designated provider may pa- • Changes the Inslee signed into law triciate in a collective garden on behalf of name of the Liquor Senate Bill 5052, insti- a patient under the age of 21. Control Board to Li- tuting a major overhaul of the state’s med- Although the law is expansive, it is im- quor and Cannabis ical marijuana laws. portant to note that it does not touch upon Board, while main- Seventeen years ago, Washington rec- a number of extremely important issues taining the LCB ac- ronym. ognized the medical use of marijuana facing Washington’s marijuana industry. • Adds “marijuana concentrates” to with Initiative 692, the Medical Use of For example, it does not grant tax relief marijuana law. Marijuana Act. Despite ongoing efforts to to patients purchasing medical marijua- • Establishes a merit-based system for further regulate the industry, most notably na at retail stores. In addition, it does new applicants based on past medical in 2011 with SB 5073, the state’s medical not reform the state’s marijuana excise marijuana experience, with priority giv- marijuana laws remained tax, nor share revenues en to those who previously applied for vague, largely unregulat- from the marijuana tax FUTURE licenses under Initiative 502. ed, and more importantly, with cities and counties. • Creates “medical endorsements” for afforded patients little These issues, and many MARIJUANA retail stores that take certain steps to get protection from state civil others, are addressed in the endorsement, including training their and criminal enforcement LICENSES WILL HB 2136, which, at the employees on medical marijuana. action. BE ISSUED time this article was pub- • The LCB will determine the addi- In contrast, the state’s lished, was still before the tional number of stores with medical en- recreational laws, passed UNDER A NEW, Senate. dorsements needed to serve patients, and in 2012 under Initiative the additional amount of canopy needed, 502, created a highly COMPETITIVE, MEDICAL MARIJUANA if any, to provide enough marijuana to regulated industry which Under the new law, those retail outlets. Current state-licensed legalized the manufactur- MERIT-BASED who may grow and sell producers can increase their canopy if ing and sale of state-li- medical marijuana? designating it “medical.” If that doesn’t censed marijuana. APPLICATION By July 1, 2016, col- cover the additional canopy needed, the This discrepancy in lective gardens, medical LCB can open up the application window state oversight and legal- PROCESS. access points and dis- again. ization between medical pensaries are prohibited. • Stores with medical endorsements can and recreational marijuana is now over. At that time, patients may only purchase sell to patients and give away free mari- SB 5052 incorporates medical marijuana medical marijuana from a licensed retail juana to patients and providers. into the already existing laws and rules store with a medical endorsement issued • The stores will issue “recognition regulating the state’s recreational indus- by the LCB. cards” and add patients to a new volun- try. In order to accommodate the medical tary patients database (that goes into ef- demand for marijuana, the new law in- fect July 1, 2016) for those patients who SUMMARY structs the LCB to evaluate and increase request to be added. The simple takeaway from SB 5052 is the number of licensed retail stores, • Stores cannot allow doctors to issue that by the summer of 2016, anyone mak- which is currently set at 334. It is un- authorizations on site. ing money on the sale of medical marijua- known when the new license window • Mandatory employee training on na will have to be licensed by the Wash- will open and how many licenses will be medical marijuana. ington State Liquor and Cannabis Board available. These important questions will • Patients 18-21 are allowed; patients as a producer, processor or retailer (the be answered in upcoming rulemaking by under 18 allowed with designated provid- new legislation changes the name of the >> CONTINUED ON PAGE 74 >> CONTINUED ON PAGE 74

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<< CONTINUED FROM PAGE 72 the LCB. << CONTINUED FROM PAGE 72 it with the state. Only four patients (and The bill also allows four patient/provider who must purchase it. each of their plant limits) are allowed per er cooperatives to collectively grow and • All retail outlets can sell products that cooperative garden. When a patient leaves, share medical marijuana. However, due test at 0.3% or less THC. another one can’t join for 60 days. It must to the restrictions imposed on such coop- • PTSD and traumatic brain injury add- be located at a domicile. eratives, this type of collective growing ed to the list of qualifying conditions to No monetary contributions are allowed, will likely be impractical for most pa- obtain a medical marijuana authorization. but each patient must somehow contribute. tients. • Further limits the doctor/patient rela- One per tax parcel. No patient under 21 but Finally, under the law patients may con- tionship and puts major restrictions and their designated provider can be a member. tinue to possess small home grows. Home extra bureaucracy on doctors. This is the • For patients, no more than 15 plants grows may range from four to 15 plants. end of cannabis specialty clinics, where per housing unit, regardless of how many Patients not registered with the state (dis- most patients need to go to get autho- patients are living there, other than a co- cussed in detail below) are limited to four rized because their regular doctors are operative. Production and processing must plants. Registered patients may grow six too scared, or are flat-out banned by their be hidden from view of public/neighbors, plants, or up to 15 plants if a health care hospital, to write authorizations. Most of including smell. professional expressly authorizes such those doctors actually refer their patients • LCB must create rules for patients and additional plants. to these specialty clinics because they providers to be able to make concentrates know their patient needs marijuana but and marijuana-infused products. they are unable, or unwilling, to write the • Creates a “medical marijuana consul- LICENSING authorization themselves. tant” certificate that shows people have The LCB will evaluate and increase • Limits possession by patients to three specialized training to be medical marijua- the number of licensed retail stores to ac- ounces of useable marijuana, 48 ounces na professionals. This is not required for commodate medical demand. Similarly, of marijuana-infused solid product, 216 a retail store with a medical endorsement the law instructs the LCB to increase the ounces of infused liquid product, 21 grams — the training for the endorsement is not statewide plant canopy limit (currently at of marijuana concentrates, but only if they as intense. 8.5 million square feet) to accommodate are registered with the database. Patients • The Department of Health will study medical demand. not registered in the database are held to and develop recommendations on “medi- The LCB may reopen the licensing the same limits as all adults — one ounce cal marijuana specialty clinics.” window for producers if the current num- of useable marijuana, 16 ounces of mari- • The collective garden law will be re- ber of licensed producers cannot accom- juana-infused solid product, 72 ounces of pealed July 1, 2016, which applies to dis- modate this increased area. infused liquid product and seven grams of pensaries/access points (per Sections 49 Future marijuana licenses will be issued marijuana concentrate. and 50). Starting immediately, patients under a new, competitive, merit-based ap- • Patients registered in the database can under 21 can no longer participate in a col- plication process. Under this process, the grow six plants and possess eight ounces lective garden but must have their desig- LCB will give preference to applicants from those plants, although doctors can nated provider (parent or guardian) be the that have the following experience and authorize a patient be allowed to grow up member. qualifications: First priority is given to to 15 plants. The sections vetoed included provisions applicants who (1) Applied to the LCB for If not entered into the database, pa- that would have added criminal penalties a marijuana retailer license prior to July tients cannot obtain marijuana designated (including a felony if you could not show 1, 2014; (2) Operated or were employed as “medical” from retail stores, and only that the marijuana you possessed came by a collective garden before Jan. 1, 2013; grow four plants and possess six ounces from a licensed retailer), precluded hospi- (3) Have maintained a state business li- from those plants. These patient limits go tals from limiting or banning doctors from cense and a municipal business license, as into effect July 1, 2016. issuing marijuana authorizations, removed applicable in the relevant jurisdiction; and • Patients not entered into the database marijuana from the state’s Schedule I, and (4) Have had a history of paying all appli- would not have arrest protection but would required that House Bill 2136 be passed cable state taxes and fees. Second priority maintain an affirmative defense, if they for this to pass. HB 2136, altering the tax is given to applicants who meet condi- present their authorization paperwork to structure for marijuana businesses, is ex- tions two through four listed above. Third the law enforcement officer questioning pected to pass in the special session. priority is given to all other applicants. them. SB 5052 repeals RCW 69.51A.047 “Medical” marijuana will be regulated that allowed patients to maintain an affir- Rachel Kurtz is an attorney at Gleam and tracked independently from “recre- mative defense, and their right to remain Law, and is currently engaged in Oregon’s ational” marijuana. The Department of silent, if they did not register or present legislative process for Measure 91. She is Health and the LCB will adopt rules and their paperwork upon questioning. the speaker coordinator for Hempfest, and requirements specific to medical -mari • Patient cooperative gardens are al- on the board for the Center for the Study juana sold to patients. Such rules include lowed as long as they are located at least of Cannabis and Social Policy. She can be >> CONTINUED ON PAGE 77 one mile from a retail outlet and register reached at [email protected].

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<< CONTINUED FROM PAGE 74 the plants). the qualifying conditions, such as cancer, THC and CBD concentration, labeling, However, a home grow without a rec- intractable pain, glaucoma, etc. However, prohibition of product that is smoked, ognition card is still technically illegal intractable pain will likely only qualify including paraphernalia associated with under state law. Such patients are only af- if such pain significantly interferes with smoking, testing and extraction require- forded an affirmative defense should they daily living. On the other hand, the law ments, safe handling requirements, and be charged with a violation of the state’s increases the pool of qualified patients by required training of employees. uniform controlled substances act. adding traumatic brain injuries and PTSD With regard to medical home grows, to the list of qualifying conditions. REGISTRY there is a limit of 15 plants per household, The new law also imposes additional The new law establishes a voluntary regardless of the number of patients/pro- limitations on a health care profession- state registry for medical marijuana pa- viders living there. In addition, growing/ al’s ability to authorize the medical use of tients. Patients registered in the state data- processing of plants at home cannot be marijuana. base, and issued a recognition card, may readily seen or smelled from a public Finally, SB 5052 does not grant patients possess three times the recreational limit place or neighboring private property. tax relief on purchases of medical mari- plus a home grow. Recognition cards will juana from retail stores with a medical be issued by licensed retail stores with a FUTURE endorsement. Such tax relief is addressed medical marijuana endorsement. It is difficult to say how the new law in HB 2136. If the legislature fails to pass If a patient has an authorization from a will affect the size and demand of Wash- tax relief to qualified patients, it is like- health care professional, but is not regis- ington’s medical marijuana market. The ly many patients will acquire medicine tered in the state database, he or she may law limits the pool of qualified patients through other means, including home possess the recreational limits, in addition by defining a qualifying terminal -or de grows and four-patient cooperatives. to a small home grow. This includes: one bilitating condition as “a condition severe ounce of useable marijuana; 16 ounces of enough to significantly interfere with the Stephanie Boehl is a Washington attorney infused solid; 72 ounces of infused liquid; patient’s activities of daily living and abil- and co-owner of KB Law Group. She advis- seven grams of concentrates; and a four- ity to function.” es on marijuana regulatory compliance, state plant home grow, plus an additional six This severity may be objectively satis- taxes and general business matters. She can be ounces of useable marijuana (yield from fied if the patient is diagnosed with one of reached at [email protected].

www.marijuanaventure.com | 77 Fire code compliance for legal grow ops Unlike underground growers, today’s cultivators need to be well-versed in acquiring permits By Jennifer Martin tate-legal cultivation operations are up in the past. Extra costs will come in the fumigation, CO2 enrichment, and chemi- Sand running in Washington and Col- form of permits, automated air-quality cal and pesticide use. Wastewater is often orado, and knowing what legal growers tracking and ventilation equipment, extra also regulated, but this is usually handled have learned from safety inspectors can exits, added electrical outlets (no exten- through a different department. This is all save growers time and money as they sion cords allowed!), sprinkler systems new territory for regulators, so the rules build and develop their own legal cultiva- and reporting responsibilities. If a system should be considered a work in progress, tion operation. is designed smartly, investors can make and grow site managers need to stay in Regulations vary from one municipality that money back over time in the savings regular communication with inspectors in to another, but compliance issues are to be from a good HVAC system and efficient order to help develop and respond appro- expected in any licensed grow operation lighting technologies. priately to this quickly evolving industry in the U.S. Of course, regulations always Besides the basics of safety and acces- and all of its unique circumstances. cost extra money, especially during setup, sibility, fire department inspectors are The application process for a legal grow so figure in an extra 30-40% in initial in- beginning to take on some special respon- operation usually requires detailed infor- vestment cost to cover all the bases that sibilities that relate specifically to mari- mation from the licensee relating to how underground growers might have avoided juana grow sites, including odor control, >> CONTINUED ON PAGE 80

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<< CONTINUED FROM PAGE 78 all of the safety and energy-related issues will be handled, so many decisions must be made and explained long before a new site is built out. While the state regulations will spell out most of the details, a few are left unmentioned, both because they are considered obvious by regulators and because, historically speaking, cultivation equipment manufacturers have not been accustomed to playing by the same rules as manufacturers of equipment for legal commercial industries. One significant example of this is UL listing. Household appliances are common places to see this term, but many people have not realized its significance. UL (Un- derwriters Laboratories) is the certifying body for electrical products in the U.S. (other countries have their own specifi- cations), and fire departments usually require this certification for the approval of commercial projects. It ensures the safety of the product for general use. Most cultivation equipment, particularly lighting, is not UL listed. Why? Because getting UL certification costs money, and 99% of the cannabis cultivation market hasn’t been concerned with it due to the fact that fire The UL logo, such as this one on a refrigerator, is common among household appliances, but inspectors haven’t been involved in — or much of the cannabis industry hasn’t caught up to these standards yet. allowed to inspect — grow operations until recently. nents that are UL listed, but the system as of equipment malfunctions. Thus, they set Most digital ballasts are not UL listed. a whole is not. Be sure to ask that question maximum allowable levels of CO2 and A few brands are an exception to this, and before making a purchase and get a second ozone that can be present in a room, and those are the ones that should be looked at opinion from the inspectors. require monitoring and automated ventila- for commercial growers. Besides having all the right construction if those levels are exceeded, as well as For lights, and for any other equipment tion, engineering and equipment, be pre- signage that warns everyone of the use and that plugs into the wall, ask the company pared for all sorts of rules relating to the risk related to such substances. about UL listing before investing in their substances your plants are being treated Each state has its own list of approved products. You don’t want to drop a big with or otherwise exposed to. As men- pesticides, herbicides and fungicides, chunk of change on lights and then have tioned earlier, the substances that go down and rules are regularly being drafted and amended as it relates to cannabis as a con- BE PREPARED FOR ALL SORTS OF RULES sumable product. Check state guidelines for more information. RELATING TO THE SUBSTANCES YOUR Sorry underground growers. We have entered the era of regulated cultivation. PLANTS ARE BEING TREATED WITH OR Things won’t be as cheap, easy or profit- OTHERWISE EXPOSED TO. able as they used to be, but at least we can have more faith that the crops being pro- the fire inspectors reject them. Many com- the drain are in one category, usually reg- duced are consistent, safe and healthy for panies that are not currently UL listed are ulated by the water department, and the everyone to consume. ready to jump on board as soon as the mar- substances used in the air that can affect ket demands it, so it’s really worth hav- worker health are in another category that Jennifer Martin is the winner of the 1998 ing a conversation with them if the light is regulated by the fire department. These San Francisco Bay Area Cannabis Cup, and is include pesticides, herbicides, fungicides, you love isn’t yet listed, especially for a a pioneer in the US marijuana clone industry. large-scale project. The companies might ozone, CO2 and other fumigants. She currently speaks at national conferences want your business badly enough to jump The fire department needs to make sure and consults for the legal cannabis industry. through the hoops in short order. workers and visitors are safe during times She can be reached through her website Mari- Some companies might have compo- of normal operations, as well as in the event juanaPropagation.com.

80 | Marijuana Venture // June 2015

Growing in the Greenhouse Selecting the perfect structure and best equipment starts with understanding your needs and sticking to a plan

By Karli Petrovic

82 | Marijuana Venture // June 2015 CALL (253) 301-3439 THC Law Firm has represented more than ninety I-502 businesses across Washington state. Marijuana law is what we do!

Our Services Include: • Drafting I-502 Documents • In-House Counsel • Fighting Moratoriums • Step-by-Step Licensing Package • Liquor Control Board Appeals • On-Site Full Compliance Audit • Lawsuits Against the LCB

Chris Crew, Attorney at Law

• Lead Counsel for the CALL TODAY Marijuana League • Lead Speaker for for experienced Marijuana Workshops marijuana legal advice

LAKEWOOD LOCATION RAYMOND LOCATION (253) 301-3439 3815 100th Street SW • Suite 2B 310 Commercial Street Lakewood, WA 98499 Raymond, WA 98577 www.THCLawFirm.com Photos courtesy Horticultural Services, FarmTek and Forever Flowering Greenhouses

A Forever Flowering Greenhouse with the sides rolled up to let fresh air in. The previous page shows a Forever Flowering Greenhouse in the middle of construction.

here’s more than one way to grow SELECTING A STRUCTURE 100% perfect. Mold and bugs will down- a plant. To grow a top-notch crop, Some growers can successfully produce grade the product, so high-grade products Thowever, it’s important to invest a crop in any structure or environment, require high-grade controls. That’s also in the right structures and equipment for but most greenhouse manufacturers agree why it’s a good idea to talk with a green- your production needs. that’s not the best approach for a cultiva- house sales representative about your lo- Assessing those needs means consid- tion facility. cal climate and how much you’re going ering three main factors — your climate, “If you’re looking to grow a very to grow. ” your budget and your production goals, high-quality product, strict environmental Guntermann also warns growers to prior to making a capital investment. controls are necessary,” says Chris Gun- think about the operation as a whole and Here’s what the experts had to say about termann, an Oregon sales representative consider what type of equipment will be selecting the right greenhouse and acces- for Horticultural Services. “There’s a inside the greenhouse. “You don’t want to sories for your operation. big difference between 90% perfect and >> CONTINUED ON PAGE 86

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<< CONTINUED FROM PAGE 84 put $50,000 worth of equipment into a $2 per square foot structure,” he says. “That’s like putting a diamond in a plastic bag.” When it comes to budget, the right structure can save growers from investing in additional environmental controls systems. This enables producers to grow more and earn more without spending more. SPEND YOUR MONEY WITH SOMEONE WHO KNOWS WHAT THEY’RE DOING Three different views of a FarmTek greenhouse. AND WILL BE CONDUCIVE TO YOUR PROFITABILITY. “The greenhouse is designed to ef- ficiently provide the desired level of climate control and natural light trans- mission, thereby optimizing the plant production-to-cost ratio,” says FarmTek greenhouse specialist Zachary Carr. “The greenhouse must be designed appropriate- ly if the grower is to attain his goal and maximize profits and cost savings.” Carr says growers also need to weigh the pros and cons of the manufacturer, the sales representative’s knowledge and the quality of the greenhouse. “Is the manufacturer comfortable working with the cannabis industry?” he asks. “Spend >> CONTINUED ON PAGE 88

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An exterior look at a greenhouse made by Forever Flowering Greenhouses.

<< CONTINUED FROM PAGE 86 options like c-channel and roll-formed For optimal performance, Jonathan your money with someone who knows framing. Valdman, president of Forever Flowering what they’re doing and will be conducive The framing, though, is only part of the Greenhouses, advises customers to invest to your profitability. Look at the - manu equation. Size matters, too. in a greenhouse with a ridge vent and roll- facturers warranties and ask about metal “Most customers are using a 30-foot up side walls. This allows the grower to quality.” wide greenhouse so that they can get the reap the benefits of passive cooling and With respect to metals, Carr says it’s required height,” the OBC Northwest avoid purchasing a costly cooling system. important to purchase a greenhouse with team says. “When selecting a greenhouse, “It’s similar to when your car becomes a galvanized steel frame because of its su- the pros and cons are about understanding a hot box in the sun,” he says. “You roll perior corrosion resistance and strength. greenhouse performance and what levels down the windows and get the passive He also recommends frames with galva- of performance will be acceptable to each cooling. Lots of people use exhaust fans nized steel tubing, instead of lower-cost individual grower.” >> CONTINUED ON PAGE 90

88 | Marijuana Venture // June 2015 www.marijuanaventure.com | 89 The functionality of a Forever Flowering Greenhouse.

<< CONTINUED FROM PAGE 88 we want as much consistency as possible. and cooling systems can increase a grow- but end up pulling hot air in and pushing That’s why we really focus on the passive er’s control over fickle Mother Nature. it back out. Another thing people try to do cooling from this type of greenhouse.” As with the structure, growers’ needs can is introduce evaporative cooling systems vary wildly from one part of the country or wet walls and close everything up. This CHOOSING THE CONTROLS to another. One of the main things manu- introduces a lot more humidity, and when As Valdman mentions, growers con- facturers suggest investing in is a first-rate air moves from one side of the greenhouse cerned with quality need to go beyond the greenhouse covering that won’t create to the other side, they end up getting in- greenhouse when outfitting their opera- hotspots in the growing environment. consistencies in the crops. In this business, tions. Covers, shades, lights, and heating >> CONTINUED ON PAGE 92

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<< CONTINUED FROM PAGE 90 “For coverings, we’re recommending high-diffusion glazing or canopies on the crop,” Guntermann says. “Most people are going with single or multiple glaz- es. Diffused options let in more light but bounce it around.” Valdman adds that a cover should filter out harmful UVB rays, too. With the right covering, growers might not even need shade cloths to block out excess light. However, that advice doesn’t apply for places where the temperature rises well above 100 degrees. In those cases, Gun- termann suggests using a cloth that will reduce the light level and cut the heat. “We recommend not to use black shade, which just makes the greenhouse hot,” he says. “There are reflective white or alumi- nized cloths that reduce the temperature, so the plants grow cool and bright instead of hot and dark.” Like shade cloths, many equipment decisions are really business decisions. This is the case with supplemental lighting. Above: A look inside one of FarmTek’s Pro Solar Star Series 1000 arch-type greenhouses. Below: An inside look at a greenhouse constructed by Horticultural Services. Most greenhouse experts “Supplemental lighting allows day agree that the equipment used inside a greenhouse is just as important as the materials used to length to be extended during the short construct the facility. daylight periods of the growing season,” OBC Northwest says. “There are great grow lights on the market, but even the best do not produce the same spectrum of light as the sun. During long day length periods, the sun is the best light for pho- tosynthesis. A grower’s best option is to harness the attributes of both supplemental and natural light.” Guntermann adds that this can be an issue for growers who choose to produce cannabis year-round. “During the winter months, you might get sunshine, but it will be low in the sky and go down early. This means your product will grow super slow. For comparison, tomatoes and cucumbers need extra light, and cannabis is nothing more than a fan- cy food crop. It’s not much different than broccoli.” While a grower can always choose to invest in additional controls or automated systems, these decisions will be based on environmental, budgetary and production considerations. The best advice is simply not to try to make all these decisions alone. “Greenhouse growing can be a re- ‘plan your work and work your plan.’ Set selves or require. Develop a support net- warding opportunity but can be a bit im- parameters of expected results and put in work of those that can provide results. posing when it gets dissected into all the place the necessary elements to achieve Surround yourself with professionals, conditions that impact results,” the OBC them. Refinements and changes are then know your fellow growers and share ex- Northwest team says. “A good saying is introduced as conditions present them- perience freely.”

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SAVING THE LIFEBLOOD BY RACHEL CAVANAUGH

alking about ways to conserve water isn’t just for hippies and eco-activists anymore. T The water crisis in California continues to mount, and states all across the Western U.S. are bracing themselves for the effects of critically low snowpack in the mountains. The drought has slowly forced cannabis growers to consider how the escalat- ing shortages could impact their crops and take a deeper look at water-saving techniques and technologies. “I think that the awareness is just now hitting everybody,” said Jeff Stockdale, chief operating officer for Ambient Water Corp. “There are a lot of people looking for solutions and just now starting to budget for the potential impact of our changing water situation.”

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From top to bottom: A potted flower sits on a Grower Mat; Ambient Water’s machinery; the SmartBee water controller.

<< CONTINUED FROM PAGE 94 Based out of Spokane, Washington, Am- bient Water creates systems that produce clean water by taking moisture from the air and turning it into potable water. The firm has been marketing this technology, which it calls “atmospheric water generation,” to commercial and residential markets for years. However, it is currently developing a new product with specific applications for cannabis growers. The new system, scheduled to be on the market by mid-summer, will apply the same technology used in the residential units to create a closed-loop environment for greenhouses. The system will harvest the internal humidity of the greenhouses and convert that moisture into water to be used to irrigate Photos courtesy Grower Mats, Ambient Water, Smart Bee Controllers the plants. “By harvesting humidity that the plants are naturally creating through their transpi- ration process and reusing that water for irrigation, we’re dramatically reducing the amount of outside water that is required in that operation,” Stockdale said. Ambient Water is just one of many companies developing and marketing water-saving innovations to the cannabis industry. Another technology on the rise is wireless gardening systems. These systems go a step beyond basic timed irrigation methods, allowing growers to micro-control how and when they water their plants, monitoring the irrigation from their phones or other wireless devices. The vigilance >> CONTINUED ON PAGE 98

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<< CONTINUED FROM PAGE 96 comes from moisture sensors that growers install around the plants to measure water content. SmartBee Controllers offers a system that uses a web-based app to monitor and manage water content. Jason Hadley, a spokesman for the firm, says the technology was designed “by growers, for growers.” In addition to irrigation, it monitors factors like lighting, humidity, CO2 functionality and temperature. Growers can set up programmed actions to account for varying grow room conditions for maximum control. A feature SmartBee calls its “water content sensor module” uses probes around the plants to measure the average water content of the grow area, as well its root zone temperature. Users can determine high and low points for optimal water levels and then use a slider on the app to adjust them. “If your water content falls below into the danger zone you can set it up to auto- matically initiate a watering,” Hadley said. “On the other side, if your water content is too high and you’re approaching a timed watering, it will cut off that watering.” The company also offers a handheld me- ter that growers can use to spot check areas that don’t have probes. “You’re able to gauge exactly what your plants need so you don’t under or over water,” Hadley said. All of this contributes to preventing water waste and maximizing water efficiency. Another water-saving irrigation method on the rise in the use of capillary mats. Photos by Garrett Rudolph/Marijuana Venture and Tropf Blumats These are essentially bottom-feeding irrigation systems that sit underneath the plants and provide water from the ground up. “You water the mat and the mat waters the plants,” said Ryan Croy, a sales representative for Grower Mats, which is a An Eastern Washington grower uses an automated timer to keep a consistent watering schedule. branch of parent company WaterPulse. Croy said the water-saving benefits of ing techniques that can help growers re- Bayley also pointed to soil management the grow mats are significant. duce their water footprint. as an excellent technique for reducing over- “By doing this you use a tremendous One step when working outdoors is to all water usage. Planting mixes are quite amount less water,” he said. plant directly into the ground rather than effective at controlling the rate at which Croy said the mats are especially pop- into containers, said Chris Bayley, owner water seeps into the ground, and adding ular with cannabis growers because they of the consulting company Hortistruc- water polymers helps the soil release the also reduce standing water, minimizing ture. The method mitigates water wasted water more slowly. Biochar, a carbon-rich root rot and other problems associated with through evaporation. type of charcoal, is particularly effective, excess water. “The evaporation rate just out of the he says. Beyond emerging technologies like container with the sun beating down on it Jennifer Martin, an independent culti- grow mats, wireless irrigation and humid- is just tremendous,” he said. “The plants vation consultant with MarijuanaPropa- ity harvesting, there are also basic garden- just use so much more water.” gation.com, said water consumption can

98 | Marijuana Venture // June 2015 be reduced by growing indoors whenever let alone the United States? We think in possible. Although the plants are in con- Washington State we’re okay. We’ve got tainers, they tend to be smaller and in con- mountains, we’ve got snow. ... Well guess trolled container sizes, she said. what? It’s not self-contained. We’re all af- “The water stays in those containers fected by this and we’ve all got to pitch in for some period of days,” Martin said. and figure out how to solve some really “Whereas outdoors you’ve got much larger hard problems.” plants that are exposed to hotter tempera- Croy agreed, noting that a unique chal- tures and the hot sun on them so they use a lenge to the water scarcity issue is that lot more water per plant. The water doesn’t there aren’t any alternative methods to ob- stay contained because the plants aren’t in tain the resource. pots.” “Desalination is expensive and not very Drip irrigation is another easy way to practical,” he said. “You can’t ship water conserve water, she says. Instead of flood- to somebody. And the ground source wa- ing a plant and having “a bunch of extra ter that people are drilling to get for wells water that completely drenches it,” Martin is depleting at a very rapid rate. In addi- said to add water only as needed. tion to that, the demand is growing. So “It takes somebody trying to be con- we have a decreased supply of water with scious about water before they are using an increased demand. ... It’s just a perfect considerably less,” she said. “But it defi- A Tropf Blumat automatic irrigation system be- storm.” nitely can be done.” ing utilized in a greenhouse for growing vege- He added that for cannabis production Whatever the strategy, the consensus tables. especially, it is the only necessary compo- among industry experts is that a thorough, ed with the current water shortage. nent that can’t be made artificially. well-planned irrigation strategy is neces- “It’s a list that’s longer than your arm of “It’s the only element of growing that sary for a successful grow operation — not all of the problems that are now being per- they can’t just create, that’s not artificial,” to mention for the public water supply at ceived,” he said. he said. “They can make the light. They large. “If we lose a significant portion of the can make the soils. They can make every- Stockdale pointed to the mass quantity agriculture that comes out of California, thing else. ... The water is the only source of news stories right now that are associat- what’s the impact on the rest of the world, that is not replaceable.”

www.marijuanaventure.com | 99 ROLLINGINTO THE 21ST CENTURY Inventor William Back is helping lead Vibronic Wheels toward a hemp revolution By Joy Beckerman he tagline “Rolling into the 21st cen- tion, and for custom wheel designs with Ttury” couldn’t be more fitting for Vi- interchangeable inserts that allow for bronic Wheels, the Ohio-based company personalization such as a laser-engraved that unveiled its hemp rubber roller skate name or even the insertion of diamonds. and skateboard wheels recently in Den- Rubber-Tech was founded by Forest ver. Back Sr. in 1972 and three generations Vibronic Wheels is a small, fami- of Renaissance men and strong business- ly-owned skate company that designs, women in the family have carried on his manufactures and distributes techno- tradition. logically advanced skateboard parts and The newest inventor in the family, Wil- wheels using materials such as titanium, liam Back, is responsible for Vibronic’s carbon fiber, and most recently, industri- research and development with industrial hemp. Vibronic Wheels, a division of al hemp, but it was the work of another Rubber-Tech, is a recognized authority Ohio native — Don Wirtshafter — that in the skateboard industry, widely known sparked the original idea. for precision, state-of-the-art composi- >> CONTINUED ON PAGE 102

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WHAT FIRST GOT ME THINKING ABOUT THE USE OF INDUSTRIAL HEMP WAS AN ARTICLE I READ SOMETIME AROUND 1994 OR 1995 ABOUT THE OHIO HEMPERY...

<< CONTINUED FROM PAGE 100 Wirtshafter, an attorney and eco-social justice activist, was largely responsible for pioneering the revival of the hemp industry in the U.S. by providing hemp textiles, seeds, oil various manufac- tured goods starting in 1990. The Ohio Hempery shut down in 2002, but its impact was already made on Back. “What first got me thinking about the use of industrial hemp was an article I read sometime around 1994 or 1995 about the Ohio Hempery and the different products (Wirtshafter) was selling,” Wil- liam Back recalled. “I had just started working with my family at Rubber-Tech, and I was looking for ideas when I came across the article,” he said. William is following directly in his father’s footsteps. Forest Back, Sr. is a self-taught genius Photo courtesy Vibronic Wheels who has been issued four U.S. patents, including a magnetic tape cartridge and system, a disk drive assembly with vibration dampening pivot, and — you guessed it — a technologically-advanced skate wheel. “My father and the rest of them were starting to play with wheels a little bit back there in the barn, and I needed an idea. The tensile strength of hemp is stronger than other crops, and easier on the Earth,” William said. “I thought that would be a good sell. Henry Ford proved that hemp is stronger than steel back in the ‘40s when he made a bio-composite car using hemp. Anyway, the renewable/ sustainable aspect intrigued my father. “He’s a visual guy. I had to make the first hemp-incorporated wheel myself and show it to him to get him to sign off on it

102 | Marijuana Venture // June 2015 for Rubber-Tech R&D. He’s always try- Coal products are the most durable, but as the “backwasher,” which can still be ing to reinvent, improve and make things they’re made from coal. We’re trying to found in some form in nearly every bar work better, so of course, he had feed- offset this carbon footprint through the in America. James died shortly after Wil- back.” use of hemp. We’re continuing to try to liam was born. William and his father have experi- increase the amount of hemp that’s in “My mom, Barbara, helps out with ev- mented with nearly all parts of the indus- there, and we’d like to get the content up erything and was the vice president. My trial hemp plant, from the protein to the to 40-50%.” sister, Leah, is our executive liaison, and seed oil to the inner woody core of the Proving himself and demonstrating my brother, Forest, Jr., takes care of our stem (known as hurd or shiv). A close in- his ingenuity in the family business was sales department. Forest, Sr. is my father spection of the latest version of Vibron- important to Back. As a young man, in- and he’s just pretty amazing. He does ev- ic’s hemp rubber wheel, which contains ventiveness came naturally to him and he erything around here.” a little more than 10% hemp at present, took inspiration from his family’s work William and his family are optimistic looks to the naked eye as though crushed ethic and ingenuity. about the changing political climate con- hemp seed hulls may be a part of the rec- “My grandma Irene started the com- cerning industrial hemp cultivation in the ipe. pany with my grandpa, James, in 1953,” U.S. With the federal passage and sign- William is excited about what the fu- he said. “She was the hardest worker I’ve ing into law of the Legitimacy of Indus- ture holds for hemp wheels. ever seen. She worked 12 hours a day for trial Hemp Research amendment within “Now that we’ve introduced the prod- 58 years until she was 90 years old, and the Agricultural Act of 2014, Vibronic uct to the market, we’re getting ready to she ran circles around the 20-year-old is looking forward to a supply of Amer- collect hard data and get real facts. Until workers. ican-grown industrial hemp in the fore- now, we’ve been limited to field experi- “My grandpa had a bunch of patents seeable future for its rubber wheels. Wil- ence and feedback from the field — all of back in the early ‘50s. He started out in liam knows and feels strongly that hemp which has been great,” he said. “They’ve his two-car garage working for McCauley “needs to be legalized federally, and it been happy in the field so far. We’re painting propellers, and went on to invent needs be legalized in the state of Ohio. also working on hemp rubber longboard from there.” We would love a local source of hemp.” wheels, and hope to release those this William’s grandfather, James Back, summer. was issued three U.S. patents, including Joy Beckerman is the president of Hemp Ace “Durability is a major concern for rub- one for the invention of a dual-side-bris- International and president of the Washington ber skateboard and roller skate wheels. tled glass washing device often known chapter of the Hemp Industries Association.

www.marijuanaventure.com | 103 Talking HEMP with author and activist Doug Fine by Patrick Wagner

s a journalist, Doug Fine has report- Aed from the war-torn countrysides of Rwanda, Laos and Burma for outlets like the Washington Post and U.S. News & World Report. Now, as an established author, Fine lives a quieter life among his goats in New Mexico — at least when he’s not campaigning for legalized hemp across North America. Fine first planted his roots in hemp back in 2010. Already a noted journalist and author, he specialized in sustainable living with his first two books, “Not Really an Alaskan Mountain Man” and “Farewell My Subaru.” His first book, “Not Really an- Alas kan Mountain Man,” was a critically-ac- claimed first-person narrative about moving from the densely-populated East Coast suburb of Long Island, New York Author Doug Fine enjoys the fruits of the 2014 Kentucky hemp harvest. to surviving in the rugged, wild frontiers of Alaska. It was a conversation that he own value added economies and products While visiting the experimental farm- continued in his second book, “Farewell while using the leftover biomass of the land, Fine saw that the farmers were using My Subaru,” where Fine discusses living plant for energy. a variation of centralized processing that without petroleum but maintaining digi- “That took me to an experimental and was more standardized and allowed for tal-age comforts. successful program in Northern Califor- better bookkeeping and branding; it was This research path led Fine to his next nia, in Mendocino County, a sheriff-en- an overall superior model. The farmers books, “Too High to Fail,” and “Hemp- dorsed program, where farmers were pointed out to him that the cellulose stalks bound,” wherein he discusses his tri-crop- growing (cannabis) outdoors in a way that of the plant were not being marketed and ping hemp model, which would allow was very ecologically sustainable,” Fine under the right circumstances they could for farming communities to have their said. >> CONTINUED ON PAGE 106

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<< CONTINUED FROM PAGE 104 be used as a source of renewable energy. “I came to hemp as a way to use the biomass of the cannabis plant for sustainable energy,” Fine said. “Those of us that believe that cannabis’ return is good for the planet, good for humanity, good for society; we also mean that we’re going to do business in a different way, in a way that is not screw-your- neighbor, cutthroat stuff, pure shark tank kind of capitalism but more — when possible — collaborative.” Marijuana Venture caught up with Fine recently at the Oregon Hemp Convention, where he spoke about bringing industrial hemp back into production in the United States.

Marijuana Venture: Why Ore- gon? Is it just the legality being changed or is there more to it?

Doug Fine: Well there is more to it because I wouldn’t necessarily say only Oregon for hemp; I have two hemp proj- all sides of the coin. When you’re talking should be just as easy to grow or eas- ects that I am involved in this year, one in about psychoactive cannabis being in the ier to grow than any other crop — apples, Oregon and one in Kentucky. economy, that’s about lowering crime, corn, soy, wheat, whatever. The reason why I am bullish about Or- about better public safety and about a Luckily we have S134, a federal bill go- egon hemp is because Oregon as a brand good economy; with hemp it’s about nutri- ing through now, sponsored by both Ore- is about sustainability, progressiveness, tive foods, it’s about healthy farming com- gon senators and both Kentucky senators. next-generation capitalism. In other words munities, all the things that we all want for Two Democrats, two Republicans and a Photos courtesy Doug Fine we can still make a profit but it’s what I our children. So the reason why? Well I al- whole bunch of other senators and con- call ‘What would Dr. Bronner’s move be?’ most look at myself as a conservative and gress people are on board and that would In other words, good for the customer, a patriot; I want to do good things for the remove cannabis with low THC from the good for the company, good for humanity, communities and the American economy, purview of the Justice Department and good for the planet and that’s what I think but also for the planet and for the future. into the USDA, and that is obviously what Oregon is. So I don’t think that hemp is is going to happen and what needs to hap- limited to Oregon. I think there are hemp- MV: What does Oregon need to do in or- pen and it needs to happen right away. But tations everywhere, but Oregon has the der to make its venture into hemp pro- here we are, right now at this intermediate hemp laws in place and the culture and duction successful? stage. political support to be a leader. So the short-term issue, what needs to Fine: There’s a short-term answer and a happen for Oregon farmers to be success- MV: You were a speaker at the Oregon long term answer. The short-term answer ful this year, is we need to be able to import Hemp Convention. What were you hop- is what we’re speaking about right now in seeds and get farmers planting. The longer ing to achieve? the spring of 2015, a month before plant- term, it’s like any developing industry – ing season. We’re living in this weird in- Apple computers didn’t happen by itself; Fine: I’m an advocate for the return of the termediate zone where hemp is federally it’s about providing good quality products, cannabis plant to the above-ground society legal only for research connected to the it’s about finding demand and it’s about a because I believe first and foremost that state agricultural program. So that is com- dedicated people that have business sense. it’s going to make a better world and a bet- plicating the seed importation process. It’s People who know about an agricultural ter future for my family and my children, complicating the permitting process. It >> CONTINUED ON PAGE 108

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I DON’T THINK THAT WE’LL NEED DELINEATIONS BASED ON THC. WE’RE GOING TO TALK ABOUT THE MARKETS AND VALUE OF THE DIFFERENT PARTS OF THE PRODUCT.

<< CONTINUED FROM PAGE 106 product were also talking about value added and marketing and all of that good stuff first. Long term we need to find out what the markets are and develop them. We already have an existing market — the Canadians are close to about a billion dollars a year in their seed oil market. We know what to do to proceed. We know about nutraceuticals. People today talk to me about CBD, but to me it’s about more than just that one cannabinoid. The market for nutraceuticals is very fast growing and farmers in their early years need to focus on the existing markets but also need to build new ones from fibers and from seeds.

MV: Moving forward as an industry, how much social distance should hemp have from marijuana, if any?

Fine: I believe that cannabis is all one plant. The focus on THC or psychoac- tivity is a relic of the Drug War and it’s something that we live with today, but it’s something that I don’t really think that we’re going to be talking about in 10 to 20 years. If the cultivar is fantastic for fiber, if it makes durable, waterproof shirts, then who cares what the THC level was in the flower, you’re not harvesting the flower in the shirt. So I don’t necessarily think that there needs to be a distinction at all between the types of plants. That said, just a few years ago, you were taking a risk with your personal liberty if you were

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108 | Marijuana Venture // June 2015 Call: 541-210-2376 An aerial view of the University of Kentucky’s 2014 hemp crop.

<< CONTINUED FROM PAGE 108 eations based on THC. We’re going to many other places. advocating for psychoactive cannabis. talk about the markets and value of the Their government, top to bottom, espe- Photo by Matt Barton/UK College of Agriculture Communications Department People thought that you were some sort different parts of the product. cially their agriculture commissioner, Ja- of illegal drug user or something. mie Comber, is totally on board and they The fact that we are far enough along, MV: What’s the environment like in Ken- are making it happen. I’m excited to be just a few years later, that we can even tucky? involved in a tri-cropping project there have this conversation is a good sign. But this year. there is a certain segment of the popula- Fine: It’s incredibly good. The state has a tion that I often think of the analogy of heritage that people remember. MV: What can we learn from the inter- the Israelites escaping from Egypt and People are still living from back when national hemp producers? getting to the Promised Land. Is some- hemp was the biggest industry in Ken- body that grew up with a slave mentali- tucky and Kentucky hemp was the best Fine: Europe and China are ahead of the ty ready for the Promised Land? I like to in the world. Everybody remembers it. So game in fiber and China is ahead of the think so, but not everybody is ready, so as the most conservative Republicans and game in seed and everything related to long as we have these delineations where the most progressive Democrats are on seed oil. So if we take the knowledge a state like Indiana or like Tennessee feels board. base that the Chinese have with fiber and the need to say, ‘No, no, we are only sup- It’s like what the Rastafarians call ‘the the knowledge that the Canadians have porting this version of the cannabis plant,’ healing of the nation.’ You can’t find with seed oil, then we can implement this then fine, if that’s how they need to talk somebody in Kentucky that is not on tri-cropping. We can take American inge- about it. board with their hemp revolution. nuity and produce for many markets more But I don’t think that we’ll need delin- That’s why they are a year ahead of >> CONTINUED ON PAGE 112

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<< CONTINUED FROM PAGE 110 than any other part of the world is doing now. So we have a lot to learn from the folks that are ahead of us and thank God for the Canadians growing GMO free hemp for 16 seasons now. This is their 17th season. We need to learn from them on the seed oil side and from Europeans and the Chinese on the fiber side, especially for processing. Processing is what they know. Anyone can throw a seed in the ground, it’s about what they know about processing and the real products that are needed in the market.

MV: Since the law limits hemp production to research, how can future hemp Busy at work in the field, Doug Fine carefully inspecting industrial hemp crops before turning farmers go forward while under the re- them over to harvest. search impediment? sales research, as will Oregon and many tivars work where? That is important too. other states that are coming online. What kind of soil quality do you want? Fine: Research cultivation of hemp is the Basically it means that you can sell it That’s important. law of the land now federally. So the main and pocket the money, but you are re- You can also sell and market it in Ken- thing that we can do is pass full legaliza- searching the markets and developing the tucky, so in my mind, the research imped- tion of hemp and get past this research markets which is legitimate research, it iment isn’t that big of one. It just makes phase. The only thing that is federally really is. it harder to get seed, so we need to get legal now is research, but Kentucky in- In other words, we usually think of re- beyond research and move to full com- terprets research to include marketing and search as agronomic research: Which cul- mercial cultivation.

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GUEST COLUMN Dreams and fears that make for sleepless nights The future holds plenty of question marks for the industry By Jerry Whiting es, legalization has taken root in four to pay taxes. There’s no way a non-native Ystates and the District of Columbia, business owner can beat Native American medical marijuana is legal or becoming businesses on price. As long as consumers legal in nearly 30 states and counting, and go to the reservations, pot will never be decriminalization is becoming more wide- cheaper. Who needs casinos when you can spread every day. offer cannabis spas? While all of this is good news and not to • 2016 puts someone else in the White be underestimated, there are several things House: President Obama is strongly am- that keep this cannabis business owner bivalent about legalization at best. Despite awake at night. his personal history with our favorite plant, • The Schedule 1 status doesn’t he has not been a strong ally or proponent change: As long as cannabis remains of legalization. classified as a Schedule 1 drug the Feds What’s disturbing is his candidate to have power over can- replace Eric Holder as nabis. This drives not SCHEDULE 2 IS attorney general. Hold- only the DEA, but the er spoke openly about IRS, FDA and numer- NOT A WORKABLE the racial imbalances ous other agencies. inherent in the War on Let’s not forget that ALTERNATIVE TO Drugs. However, his banks are off limits likely replacement, as well. Being Sched- SCHEDULE 1. Loretta Lynch, is out- ule 1 gives states and municipalities a spokenly anti-legalization. Obviously, finger-pointing excuse: “It’s not us. We’d the 2016 race is a long ways off and too love to, but the federal government has close to even speculate about, but by the tied our hands.” time Obama’a successor takes the oath of • The Schedule 1 status does change: office, he or she will be confronted with Schedule 2 is not a workable alternative to even more states whose voter-approved Schedule 1. Cannabis doesn’t belong on laws conflict with federal law. the schedule list at all. We all know that I see popular support swinging quickly it’s a legitimate and effective botanical toward a more measured and thoughtful pharmaceutical. Alcohol and tobacco ar- approach to cannabis. I hear frank and en’t on the schedule list and they’re way honest discussions of cannabis as medi- more harmful than marijuana. Taking can- cine able to address a wide range of disor- nabis off the schedule list will liberate it ders. Despite the issues above, I sleep well for both medical and recreational use. Ev- at night knowing that the challenges ahead erybody wins! will soon be behind us. • Native tribes enter the market: The Department of Justice recently declared Jerry Whiting is the founder of LeBlanc that Native American tribes are sovereign CNE, growers and brokers of medical cannabis nations and therefore free to grow, process and vintage heirloom strains. He has a back- and sell cannabis on reservations, as long ground in acupuncture, massage and natural as they adhere to the Cole Memo. healing. LeBlanc has an extensive collection of CBD-rich strains, including a seed bank as Not only does this mean that the 566 well as live plants. LeBlanc sponsors a hemp tribes recognized by the Bureau of Indi- breeding project, does research into the rela- an Affairs on the 310 reservations in the tionship between cannabis chemistry and ge- U.S. could potentially make cannabis legal netics, and processes whole plant tinctures and in all 50 states, but the tribes don’t have other cannabis preparations.

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GUEST COLUMN How to build a successful brand with staying power Branding is more than just a great logo — but that helps too By Alexa Divett s attitudes and of a dispensary to let the public know that Apolicies contin- you have medical marijuana for sale, a ue to shift in favor of single pot leaf or green cross as your logo medical and recre- will almost certainly guarantee that you ational marijuana, we get lost in the crowd. There are a lot of will see more and more creative ways to use a green cross or pot marijuana businesses leaves within your logo, but using them as entering the market- a stand-alone piece is not a good way to place. Inevitably this means an increase in build a unique brand identity. competition and a greater need for you to • Hire a professional freelancer or de- appeal to your target audience with a clear sign firm. High quality design will make and concise brand strategy. you stand apart from your competition. It Branding is one of the most important may be tempting to cut corners and hire aspects of any business a family member or friend and an effective brand HIGH QUALITY with limited experience. strategy will give cannab- They might be able to do usiness owners a major DESIGN WILL design work on the cheap, edge in the increasingly but you will absolutely competitive market. MAKE YOU get what you pay for. What exactly does Remember, if your “branding” mean? Simply STAND APART brand identity looks poor- put, your brand is your ly thought out, your cus- promise to your customer. FROM YOUR tomers will view your It tells them what they can product or service in the expect from your products COMPETITION. same way. or services and what makes you different • Get a great logo and use it every- you from the competition. where. Work with your designer to create So, how do you build a successful can- brand standards for your marketing mate- nabis brand that will stand the test of time? rials so you can use your logo everywhere • Take time to discover what makes with consistency. you unique and special. Work on creating • Integrate your brand. Branding ex- your “unique selling proposition” (USP) tends to every aspect of your business by figuring out who you are, why you are from how you answer your phones to what unique and what you have to offer that is your salespeople wear at work to your different and better than your competition. email signature. Again, the key here is From the customer’s perspective, your consistency. USP is the answer to the question, “Why • Be true to your brand. Customers should I buy from you?” won’t return to you, or refer you to some- • Define your target audience.Who do one else, if you don’t deliver on your you want to target with your branding and brand promise. messaging? Who is your ideal customer and what exactly are they looking for in Alexa Divett is the co-founder and market- your marketplace? Once you can answer ing director of Maya Media Collective (www. these questions you can begin to work on mayamc.com), an Oregon-based marketing and creating a brand identity that will appeal design firm that specializes in the cannabis in- to them. dustry. She and her team help brands achieve • Avoid the urge to follow the crowd. their goals through education, thoughtful design While a green cross may be useful outside concepts and inventive marketing solutions.

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company that rented, sold or modified the truck, your hourly employee who knows GPS technology brings when that truck is leaving and where it is going. The protection of transported assets is big business, and that’s because it’s added security to industry a big risk. If you are renting your truck, then don’t just schedule it for the day you High-value products create element of risk for transporting need it, create diversion and doubt in the By Armando Perez eyes of whoever may be watching. This magine you have obvious and most likely. Therefore it is may sound silly, but diversion is the sec- Igone through all the one we should spend the most time on. ond-most important tactic in the world of the trouble, heartache, The Transported Asset Protection Associ- protecting transported assets. headache and “bank- ation has defined the riskiest part of any What’s number one? Well, let’s just say ache” that it takes transport to be the 50 miles immediately you can’t steal something if someone is to become a state-li- after leaving your origination point and always watching it. GPS has reached the censed cannabis pro- the 50 miles before your arrival point. You point where a logistics-focused GPS track- ducer, only to have all should be concerned, because for most ing provider can alert key people of trou- your hard work disappear in the middle people reading this, that ble as it is happening of a shipment. At the end of the day, ev- 100-mile stretch is your ONE CARLOAD and alert authorities of erything you have invested boils down to entire cargo route. And the exact location. But what is protecting your product from the if you haven’t managed OF HOODLUMS better even than that is point it leaves your operation to the point to solve the banking alerting the key people your buyer takes possession. problem, it could also CAN TAKE YOUR that the cargo or driv- This final step is the most vulnerable include your entire trip er is doing something step in any logistics process. When the to pay your tax bill in VALIDATION AND considered high-risk cargo is as highly valued as marijuana or cash. before anything hap- cash, the risk represented by that last mile Rest stops and fuel TURN IT INTO A pens. is enormous. It’s not just the risk of loss, stops are the next big NIGHTMARE. This means not only but what that first shipment represents that risk factor. When a using tracking on the is also so important. That first shipment is transport is stopped, the cargo is at signif- truck itself, but also embedding the cargo the justification, the legitimization of all icant risk. If that stop is scheduled and un- and creating automated alerts that trigger your efforts and the final hoorah moment necessary with proper planning, then this if any specific high-risk circumstances are preceded by an incredibly trying process practice should be stopped immediately. met, including deviation from the specif- of charting uncharted territory. Get fuel before starting your trip, carry ic route for that day. Big Pharma’s use of You’ve finally got cash flow; you can extra fuel on the vehicle and don’t allow these systems has helped it reach critical live to the next crop and maybe even make scheduled or unscheduled stops when mass, bringing the cost down to an afford- a little profit if you’re lucky. But you can transporting inventory or cash. able level for small businesses involved in only do that if your shipment makes it If the vehicle is forced to stop in transit, transporting high-value cargo. As much as where it’s supposed to go. One carload then get it to another vehicle immediately diversion is a proper tactic for preventing of hoodlums can take your validation and and keep it moving. theft of cargo, it is also the key tactic to turn it into a nightmare. It’s time to get to The third important risk factor is the pre- initiate the theft of cargo, so we must be know the ins and outs of supply chain se- dictability of the route. Act as if someone vigilant of even trusted employees to en- curity and mobile asset tracking. is always watching what you are doing, sure the safety of what could be an entire There is so much more to running a suc- because chances are, some of you reading year worth of profit in one truck-load. cessful and secure marijuana business than this may have already been cased. This is Simply getting the industry to start the product itself. Getting your operation not a tactic to create fear, this is a wake-up talking about the risk of moving product off the ground was just the first step. If you call to heed the lead of Big Pharma and ac- will be a step in the right direction and thought complying with the state’s surveil- knowledge the risk in transporting expen- a sign that this industry and its business lance regulations were tricky, wait until sive controlled substances. If someone is owners are maturing. you get into the world of protecting your watching your transport habits, you need investment on the open highway. News to make sure to create multiple routes to flash! The bad guys don’t care what reg- the same destination. Make sure the cho- Armando Perez is the general manager of ulations you do or do not follow — they sen destination is known by as few people CCTV Dynamics (www.i502CCTV.com), a sur- just want to take everything in that truck! as possible. veillance equipment distributor with a focus on First let’s identify the risk factors. We However, hijacking is not the only thing system design and custom security camera sys- will specifically be dealing with hijacking. to be concerned about. You should also be tems, as well as offering a marijuana-specific This is not the only risk, but it is the most concerned about the driver of the truck, the GPS tracking service called WEEDWatchGPS.

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ers. For more detailed rundowns of SB New legislation represents 5052, see the articles on Page 72 by attor- neys Stephanie Boehl and Rachel Kurtz. There is controversy among some who victory for rec market have enjoyed the perks of an unregulated marketplace for so long. But no one can Policy changes still needed to strengthen the industry disagree that the progress the cannabis in- By Vicki Christophersen dustry has made to date would have been he regulated can- Rampant, unregulated collective grow unheard of in the not-so-distant past. Tnabis industry in operations will become a thing of the Elected leaders like Gov. Inslee, Sens. Washington has cov- past. This is a win for fair competition, Ann Rivers and Brian Hatfield and Reps. ered a great deal of but it is also a win for consumers and pa- Eileen Cody and Joe Schmick have ground in the past few tients who deserve greater access to a safe shown courage and leadership this ses- months and marked product. sion in working to support a regulated some major mile- • Legitimate patients may still partici- marketplace. stones. pate in collective grow efforts. The state During the special legislative ses- License holders enjoyed the media at- has capped such operations at a maximum sion, Rep. Reuven Carlyle is working tention celebrating the first 4/20 support- of four authorized patients and 60 plants to streamline the industry’s tax structure ed by a regulated cannabis marketplace in solely for personal use. amidst a very heat- Washington. They earned the support of These new regulated WE NEED OUR ed public discussion important community voices both in the gardens must be regis- concerning the state’s cities where they do business and with tered with the state and INDUSTRY TO budget. The regulat- policymakers in Olympia. may not be within one ed marketplace cannot And they’ve seen Gov. Jay Inslee sign mile of a licensed retail CONTINUE succeed without con- Senate Bill 5052, the Cannabis Patient store. SPEAKING sistent enforcement of Protection Act, into law, marking the • A voluntary state new regulations and we beginning of a single regulated, quali- registry gives legiti- WITH A CLEAR, will turn to policymak- ty-controlled and safe cannabis market- mate patients access to ers at all levels of gov- place for all. local sales tax breaks PROFESSIONAL, ernment to make this Each one of these events was a testa- while also protecting transition as smooth as ment to the determination of a growing, retail license holders UNITED VOICE possible. dedicated number of professional busi- from bad actors trying The policy challeng- nesses and each milestone represents the to get cannabis at re- IN OUR LOCAL es that face the industry arrival of legal cannabis as an established duced cost. are still ahead. driver of our economy. At the Washing- Legitimate patients COMMUNITIES But we look forward ton CannaBusiness Association we were may also possess three to any measure that proud to represent license holders fight- times the amount of AND WITH STATE strengthens a safe mar- ing to achieve critical reforms, but there cannabis as a non-med- POLICYMAKERS. ketplace for consumers is much work ahead, including unfinished ical consumer and, and that better estab- business to streamline the tax structure through the same voluntary registry, grow lishes connections in our communities for our industry. up to six plants at home for their person- that prove that legal cannabis businesses Public policy can be exhausting work, al use. No individual has to belong to the can be good neighbors and citizens. In but it isn’t without rewards. The new state state registry. the months and years ahead, and in future policies enshrined in the Cannabis Patient However without registering, a patient legislative sessions, we will welcome Protection Act align with the values vot- cannot get the tax break. new members and the opportunity to col- ers endorsed when they approved Initia- Taken as a whole, this regulatory struc- laborate with our peers in this industry tive 502 and help solidify the foundation ture will dramatically raise the safety and and others. of the legal cannabis marketplace. quality of all cannabis products so that For now, we can watch other places The Cannabis Patient Protection Act patients and consumers alike have the around the country embark upon the trail codifies a regulated marketplace for all information they need to make a smart, that Washingtonians built and begin to cannabis businesses in Washington State. safe choice in every interaction with our ready ourselves for what’s next in the new Here are some highlights: industry. environment of a single, regulated system • Going forward, retail license holders Our work is not done. We need our infor cannabis in the Evergreen State. can sell products for recreational use or dustry to continue speaking with a clear, medicinal use, following strict guidelines professional and united voice in our local Vicki Christophersen is the executive director for labeling and testing. communities and with state policymak- of the Washington CannaBusiness Association.

122 | Marijuana Venture // June 2015 NOT JUST POT 46 years experience solving a wide variety of legal problems in administrative, state and federal courts, including appeals.

LAW OFFICE OF JEFFREY STEINBORN 206-622-5117 [email protected] www.steinbornlaw.com A LETTER FROM THE EDITOR

for spite or for the sake of saving money. The new bill creates “medical endorse- Will future states heed ments” for retail stores that take certain steps to get the endorsement. I’ll be the first to admit that I don’t lessons from Washington? understand the concept or need for medical endorsements. What purpose does it Recreational and medical markets both suffer from infighting serve to add another layer of licensing to nregulated med- to see a marketplace that’s even less divid- the process — other than giving the gov- Uical marijuana is ed than that, and I think it would benefit ernment total control over cannabis? The coming to an end in both consumers and businesses. concept of mandatory training for employ- Washington. While the I’d like to see stores that stock a wide ees at shops with medical endorsements is immediate impact of variety of products ranging from the pure- laughable, and raises more questions than this major change is ly recreational to the purely medicinal, and it answers. going to be felt on a they should all be available at the same lo- Who is going to handle this training? local level by licensed cation. And it makes sense to give a tax Is this an opportunity for a private com- businesses, unlicensed dispensaries and break to legitimate medical patients, or in pany like Oaksterdam or Cannabis Train- cultivators, recreational consumers and some cases, even allow for free cannabis ing Institute to score a government con- medical patients, the national implications will reverberate through any states where recreational cannabis could be legalized in the near future. So far, medical marijuana has been the necessary stepping stone for states that have made the jump to full recreational. So some of the most likely states that could legalize recreational marijuana in the 2016 election — California, Arizona, New Mexico, Nevada, Massachusetts and Maine, just to name a few of the likely suspects — will have to contend with the same question Washington did, and which Oregon seems to be struggling with as we speak. What should happen with the medical marijuana industry once voters have ush- ered in the age of recreational? With so little information to go on, it’s impossible to say for certain. However, it seems untenable for a state to have two to be given to people with qualifying con- tract to teach students about the difference competing programs operating simultane- ditions or financial situations. between indicas and sativas? (Students ously. As a sports fan, it makes me think Prolonging the inevitable by maintain- who probably already know the difference about the United States Football League ing there must be a separation between between indicas and sativas, no doubt.) trying to go head-to-head with the Nation- medical and recreational seems like a sure If not a private company, then surely the al Football League back in the 1980s. One way of fostering divisiveness, resentment Liquor and Cannabis Board will have to league is destined for failure. In the case and complications, just as the split has hire a specialist. of medical versus recreational, I think the done in Washington. If nothing else, I’m excited about the entire cannabis industry loses. Senate Bill 5052, the piece of Washing- prospect of hearing a government em- Everything that happens in Washington ton legislation that will enjoin the medical ployee explain the medical uses of Green and Colorado is being watched and an- and recreational sectors, and will put the Crack or Jack Kevorkian (yes, crazy strain alyzed by the rest of the nation. It’s one first true regulatory system in place for the names were a topic of conversation at our of the grand social and economic experi- state’s medical program since its 1998 in- office for a good chunk or the month). ments in history. ception, is far from perfect. Colorado’s system looks to be the front- In all likelihood, it will send some con- runner — retail stores can be medical, rec- sumers back to the black market as they GARRETT RUDOLPH reational or both. Ultimately, I would like shun the taxed and regulated system, either EDITOR

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